The start of the new year is a perfect time to resolve to max out contributions to your retirement accounts before April. The sooner you can invest your IRA money, the more time it has to potentially grow through compounding. And consistency is key—even small, regular contributions add up over decades. You should work IRA contributions into your budget all year long to keep your nest egg growing—but there is best time of year to put money into your IRA, and it’s right now.
Contribute to your retirement accounts right now
Contributing early in the year gives your investment more time to potentially grow. By making your IRA contribution in January or February, that money can be invested and start accumulating potential returns right away. The extra months compounding could make a big difference over decades.
Try to make IRA contributions early in the calendar year if you can. The sooner you get your money into the account, the sooner it can start growing tax-deferred. Making your contribution in January, February or March maximizes the amount of time your money is invested.
While January is a great time to contribute to an IRA, you can make contributions any time throughout the year. Some other good times to consider adding money to your retirement account include:
After a bonus or tax refund. Got an influx of cash from a work bonus or tax refund? Consider putting some or all of it into your IRA to give your retirement savings a healthy boost. The first few months of the year is often when people receive lump sums that can be put straight into retirement accounts.
When you get a raise. If your salary goes up, consider putting all or part of that raise towards increasing your retirement contributions. This can be a relatively painless way to boost your IRA contributions over time without noticeably impacting your take-home pay.
By the tax deadline. You technically have until your tax filing deadline (usually April 15) to make IRA contributions for the previous year. Try to make contributions by this date.
If nothing else, right now is a fresh start for savings goals. A new year brings a clean slate for reaching your financial targets. By front-loading your IRA contribution for the year, you take advantage of momentum and enthusiasm for saving money in 2024.
When it comes to retirement, the key is to start saving early (compound interest rules!) and utilize a mix of accounts to build your retirement funds. Here are our guides to opening an IRA and opening a 401(k).
