Coronavirus stimulus checks are providing much-needed financial relief for millions of Americans. But if you don't need the money to pay the bills and are considering investing it, your COVID-19 payment could make a real impact on the size of your retirement nest egg.

How much could you turn the money into if you save it for your later years? It depends on your age and rate of return, but it could be quite a lot.

Jar full of coins with plant growing out of it.

Image source: Getty Images.

Here's how much your stimulus check could turn into by retirement

The stock market has been volatile lately, but historically it's produced about a 7% average annual rate of return.

The table below shows much a $1,200 stimulus check could turn into if you invest in a retirement account and do either of three things: underperform the market, earn the expected 7% return, or outperform the market. 

Years invested

Total, based on a
5% annual return:

Total, based on a
7% annual return:

Total, based on a
10% annual return:

10 years




15 years




20 years




25 years




30 years




Calculations by the author

And if you get a larger stimulus check because you're married or have dependents, your COVID-19 money could give your retirement accounts an even bigger boost. 

Investing money in an IRA or other tax-advantaged account also provides savings at tax time. In fact, putting your tax-free $1,200 stimulus payment into an IRA could save you as much as $264 if you're in the 22% tax bracket.

Best of all, if you're waiting to file your 2019 return because of the extension of the tax deadline, you'll actually have until July 15 to invest in an IRA for last year. If you do that, you'll benefit from your tax savings this year rather than having to wait to file until 2021. 

Should you invest your stimulus money?

Investing the COVID-19 stimulus money isn't right for everyone. If you suspect you might need the money within five years, you should probably keep it out of the market during these turbulent times. There's also nothing wrong with using it to cover your bills (in fact, that's what it's for). If you don't have an emergency fund, putting the money into an accessible high-yield savings account could also be a smart move. 

But if you don't have a pressing need, you've already got some emergency money set aside, and you want to invest, that simple $1,200 influx could clearly make a surprisingly big difference in the amount you end up with as a retiree.