Struggling to Fund Your IRA in 2024? 3 Things to Do Now

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It’s not easy to find money for an IRA. Read on for tips if you’ve been struggling so far this year. [[{“value”:”

In 2024, IRA contributions max out at $7,000 for workers under the age of 50 and $8,000 for those 50 and older. The more money you can put into your IRA this year, the more opportunity you have to benefit from investment gains in that account over time.

But let’s face it — it’s not easy to find money for an IRA when you’re juggling numerous bills. And while you probably do spend some of your income on non-essentials, it’s hard to give those up to put away money for a milestone that may be 30 or 40 years in the future.

Nonetheless, it’s important to fund your IRA to some degree this year. So if that’s been a struggle so far, here are a few key steps to take.

1. Start by automating a tiny monthly contribution

If you’re under age 50, maxing out an IRA this year means parting with about $583 a month. That’s a lot of money to give up if you only earn an average salary.

But remember, you don’t have to max out your IRA if that’s not in cards. Contributing even a small amount, like $50 or $75 a month, could have a huge impact over time. At the very least, set up an automatic transfer from your checking account to your IRA where a small amount of money you can afford lands in that account monthly off the bat.

Let’s say you’re 25 and that beginning in April, you’re able to automate a $60 monthly contribution to your retirement account. That will leave you with $540 at the end of the year.

If, through the years, your investments in your IRA generate an average annual 10% return, which is in line with the stock market’s long-term average, then by age 65, that $540 will be worth $24,440.

Now, you probably want to retire with a lot more savings than that. The point, however, is that if you manage to save $60 a month this year, it could end up being enough to pay for quite a lot of retirement expenses down the line.

2. Assess your spending

It’s reasonable and acceptable to spend a portion of your income on fun things, even if that means letting your savings fall by the wayside to some degree. After all, you can’t just work and save. You need to enjoy life, too.

That said, there may be certain non-essential expenses you’re paying for today that you can dump without feeling too bad giving those things up. Perhaps you pay $20 a month for a streaming service but haven’t really been watching it much. If so, why not try going without it for a few months and putting $20 more into your IRA each month instead? As we saw earlier, even small amounts in an IRA can turn into large sums over time.

3. Turn to the gig economy for extra income

It may be that your entire salary truly is earmarked for essential expenses. If that’s the case, getting a side gig could be your ticket to funding your IRA to some degree.

And remember, you don’t have to commit to a second job indefinitely. In time, your wages at your main job are likely to rise, and from there, IRA contributions may be more feasible. Your side hustle, therefore, is something you can view as a temporary solution.

In fact, to sweeten the deal, you don’t have to commit to putting every dollar you earn from your side gig into your IRA. Tell yourself that for every $100 you bring home, $50 goes into your long-term savings, but the remaining $50 is yours to spend as a reward.

The sooner you manage to fund your IRA, the more retirement wealth you might end up with. So try using these tips if finding money for your nest egg has been a challenge so far this year.

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