IRA Limits Are Rising in 2024. These Changes Could Make It Possible to Max Out

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Want to max out your 2024 IRA? Read on for some tips on how to achieve that goal. 

It’s important to do your part to save money during your career so you’re able to bring a nice nest egg into retirement. And if you don’t have access to a 401(k) plan through your job, you can always save for retirement in an IRA instead.

The IRS just announced that the limits for IRA contributions are going up next year. Currently, IRAs max out at $6,500 for workers under age 50 and $7,500 for those 50 and over. In 2024, you’ll be allowed to put up to $7,000 into an IRA if you’re under 50, or $8,000 if you’re 50 or older.

The more you’re able to contribute to a traditional IRA, the more of your income you can avoid getting taxed on. So it’s a good idea to try to max out for that reason alone. Plus, the more funds you’re able to put into your IRA, the bigger a nest egg you might retire with.

But finding $7,000 to $8,000 for IRA contributions is no easy feat. If you’re eager to max out in 2024, you may want to consider making these changes.

1. Set up automatic contributions

One reason why some people are successful at saving for retirement in a 401(k) is that contributions are taken as payroll deductions. It’s not like workers have to actively write a check to their 401(k) — that money lands where it needs to automatically.

If you’re hoping to max out an IRA in 2024, or at least get as close as possible, try putting those contributions on autopilot, too. Set up an automatic transfer so that money lands in your IRA account at your brokerage after each paycheck of yours hits. That way, you’ll be less likely to accidentally spend the money you were supposed to be earmarking for retirement.

2. Pick up a side hustle

If your current paycheck is pretty much eaten up by bills, then maxing out an IRA in 2024 could boil down to working a side hustle for extra income. The good news, though, is that there are many flexible options you can pursue that allow you to drum up cash without upending your schedule too much.

You could create a profile on a ride-hailing app and haul passengers around town when it’s convenient for you. Similarly, you could be a personal grocery shopper using a site like Instacart. Look at different avenues, and don’t be afraid to explore a few at once until you land on an optimal fit.

3. Reduce one major expense

Cutting back on a single large expense could be your ticket to maxing out your IRA in 2024. So take a look at your larger bills and see if there’s any flexibility.

You might need to pay for a car. But if you’re currently coming to the end of a lease that has you paying $700 a month, see if you can lease a much less expensive vehicle whose monthly payment is 40% less.

Similarly, you need to live somewhere. But if you’re currently spending $1,400 a month on rent, it may be time to get a roommate to split that load or move to a home that won’t cost you nearly as much.

The fact that IRA limits are rising in 2024 is a good thing, as it gives savers the opportunity to build up more retirement wealth and shield more income from the IRS. If you’re serious about wanting to max out your savings, try employing these strategies at the very beginning of the year to get off to a good start.

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