The beginning of a new year presents an ideal opportunity to commit to fully funding your retirement accounts before the deadline in April. It’s wise to incorporate IRA contributions—whether traditional or Roth—into your financial planning throughout the year. In 2025, individuals under 50 years old can invest up to $7,000 across various IRAs, while those aged 50 and over can contribute as much as $8,000. Investing your IRA funds as soon as possible allows for greater potential growth through compounding.

Although it’s important to consistently build your savings throughout the year, there exists a particularly advantageous moment to initiate your IRA contributions—it’s right now.

The Benefits of Contributing to Your Traditional or Roth IRA Now

Contributions to an IRA for a specific year can occur from January 1 to the tax-filing deadline of the following year (typically April 15). This means it is indeed possible to continue contributing to your 2024 IRA until April 15, 2025, but it’s more beneficial to start contributing toward the 2025 IRA for an April 15, 2026 deadline.

By funding your IRA in January or February, your investment can begin generating potential returns immediately. Those additional months of compounding can create significant impact. Establishing a regular saving routine is vital—even minor, consistent contributions accumulate over time.

Keep in mind that contributions can be made throughout the year. Other optimal occasions to consider adding funds to your retirement account include:

• After receiving a bonus or tax refund. If you’ve recently benefited from a work bonus or a tax refund, think about allocating a portion—or all—of that money into your IRA for a solid uplift in your retirement funds. The early months of the year often coincide with such financial influxes.

• When you get a salary increase. If your earnings rise, consider channeling part or all of that increase into your retirement contributions. This method can enhance your IRA contributions over time without significantly affecting your disposable income.

• By the tax filing deadline. Contributions are permitted until your tax-filing deadline (generally April 15) for the previous year. Aim to make contributions by this date.

Embracing this fresh start at the beginning of the year sets the stage for pursuing savings goals. A new year signifies a clean slate for achieving financial aspirations. By prioritizing your IRA contributions now, you can benefit from the momentum and motivation associated with saving money for 2024. Beyond psychological factors—putting funds in early allows them more time to grow.