More people are cracking the code on becoming IRA (individual retirement account) millionaires. In fact, Fidelity reported that the number of IRA millionaires hit a record 391,562 at the end of 2023, up from 280,320 in the prior year.
If you're trying to join the IRA millionaire club, this one secret will get you closer to the finish line.
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Don't waste time
It's tempting to put retirement planning on the back burner, especially when more immediate pleasures try to compete for your attention. However, if you're aiming to join the IRA millionaire club, time will be your greatest ally. Given the relatively modest IRA contribution limits -- $7,000 in 2024 for those under 50 -- you'll need to contribute consistently and give your investments time to compound and grow.
For example, if you begin contributing $6,500 annually at age 20 and earn a 10% return, you could reach IRA millionaire status by the time you're 50. But suppose you're already 50 and want to reach millionaire status before you retire. In that case, it would be harder to achieve that goal with an IRA alone. You might need to max out IRAs and likely invest in other retirement accounts to have a better shot at becoming a millionaire.
If you're getting a late start, remember that the best time to start is now. If it makes sense for you, consider delaying your retirement date to give you more time to rack up more money in an IRA. But the smartest thing to do right now is to make the most of your time before retirement by making simple tweaks in your habits, such as:
- Setting goals
- Automating savings
- Maximizing contributions
If procrastination is a habit you struggle with, it could get in the way of you amassing a million-dollar IRA. Keep the big vision in mind and start taking small, actionable steps toward your goals. With more people becoming IRA millionaires, you, too, could be next in line if you make the most of your time and money.
