How Much to Have Saved in Your IRA by Age

Retirement savings are a long-term game. Most of us start saving about three decades before we ever touch the money. Consistently saving and investing your money is the best way to grow your wealth and achieve a comfortable retirement. But you might not know how much you should have in your IRA at different ages. And hey, it’s tricky to figure that out. That's why I'm here to help today.

Your IRA is one of the best tools you’ve got for reaching your retirement goals. No matter what type you have — traditional, Roth or SEP — they're all great ways to tuck money away for your future. (If you don't have one yet, Investor Junkie has selected Betterment as our favorite pick for IRA accounts for beginner investors. But you can check out all our favorites here.)

Milestones make it easier to save and easier to see when you’re getting off track. Studies show that setting specific goals that have a timeline and are measurable are easier to reach. So knowing you’re working toward a certain retirement number, and having milestones to reach by certain ages, makes saving easier overall.

Of course, people at different income levels will be able to achieve different exact numbers for their savings. Someone making $40,000 a year probably won’t be able to save as much as someone making $100,000 a year. Then again, someone making $40,000 might not need as much saved as someone making $100,000 a year. Personal finance is exactly that: personal. Our suggestions below are outlines, not hard and fast rules for everyone.

IRA Contribution Limits

First of all, let’s take a look at the limits of an IRA contribution. You can contribute only $6,500 a year to your IRA (no matter the type). And you can make contributions for the previous year until April of the current year.

But you can contribute to an IRA only if you make under a certain amount. In 2023, you can make a full contribution to a Roth IRA up to an income of $138,000 for a single filer or $218,000 for a married couple. Between that amount and $153,000 and $228,000, respectively, you can make a partial contribution to a Roth IRA, but above these amounts, you cannot contribute to a Roth IRA.

If you have a retirement plan at work then income limits also apply for traditional IRAs as well. These phaseout numbers begin at $73,000for a single filer and $218,000 if you're married filing jointly. If you're married filing separately, the phaseout begins with any income and ends at $10,000.

If you don't have a retirement plan at work there are no phase out income limits on traditional IRAs.

How Much to Have Saved in Your IRA by Age

Investing is the single best way to increase your money and to grow long-term wealth. However, it’s impossible to predict what the market will do from year to year, however we can assume an average of a 10% return over long periods of time.

Age 25: $0

Most people start saving for retirement around this time. Starting early is wonderful for your long-term financial health and prosperity. Compound interest favors the young. The more time you have to save, the more your interest grows. And the more money you have in retirement.

When you’re just starting out you don’t have to invest the maximum amount every year (though you should if you can). Anything you put away now will help you later. Start by opening an account with $1,000. From there, see if you can add in an additional $2,000 by the end of the year.

That gives you a starting balance of $3,000 by your 26th birthday. We'll assume, at this point you start maxing out your IRA by depositing $541 per month ($6,500 a year) and earning an average of 10%.

Age 30: $35,878

By your 30th birthday you will have deposited $35,500 and have a balance in your IRA of about $35,878.

Keep maxing out your IRA with your monthly deposits and earning a 10% return.

Age 40: $201,184

By tucking away $6,500 a year, you’re steadily building a comfortable retirement for yourself. You will actually have deposited $100,500 and have a balance of $201,184.

Let's keep going…

Age 50: $629,945

By 50, you'll have deposited $165,500 into your IRA and have a balance of about $629,945. According to our plan here, you’ve just spent the last two and a half decades maxing out your IRA. This put you in a great spot to retire somewhere in the next 10–20 years.

However, we can ramp it up a little now. Starting at 50, you can contribute an extra $1,000 a year to your IRA. That makes the limit $7,500 a year, or $625 a month.

Age 60: $1,758,830

By 60, you'll have contributed $241,500 to your IRA, but thanks to compound interest, your balance is $1,758,830.

You've become a millionaire simply by maxing out your IRA from at 26 to 60. Nice.

But you don't stop there, let's go until age 68.

Age 68: $3,860,117

Traditional retirement age is 65, but that’s changing. People are living longer than before and many keep working, even into their 70s.

By working a few years more, you have the opportunity to grow your retirement nest egg by quite a bit! By 68, as you wrap up your working years, you should have saved $301,500 in your IRA but your balance is whopping $3,860,117.

An IRA Is Only One Part

Remember, an IRA is just one part of the retirement savings plan. Most workers also have a 401(k) or a 403(b). You’ll be eligible for Social Security, and some of today’s workers will also have a pension.

If you add in those contributions as well you could be in a very good place come retirement. Plus, contribution limits increase as time goes on, so it's likely you could save even more than this in your IRA.

By doing your best to max out your IRA each year, you build a strong foundation for your retirement. For most workers, $6,500 a year isn’t too great a number to save. What you save now will be what you live off later. So do your future self a favor and start saving in your IRA now.