Want to Invest More in Your IRA? These Suze Orman Tips Could Help
Could her advice help you invest more money in your retirement account?
- IRAs are a type of tax-advantaged retirement account.
- Investing in an IRA can help you build a more secure future.
- Finance expert Suze Orman has some tips for putting more money into an IRA, including setting smaller goals.
If you want a secure retirement, you'll have to save money to provide income beyond what Social Security offers. An individual retirement account, or IRA, is a good account to use for retirement savings in many situations. IRAs come with tax advantages, and provide you with lots of flexibility as to what you can invest in.
Unfortunately, it can be difficult to come up with enough spare money to put a sufficient amount into your brokerage account to build the nest egg you need. If that's your situation, this advice from Suze Orman on how to increase your IRA investments could be helpful.
Set small goals that seem achievable
Orman suggests focusing not on the total amount you want to contribute each year, but instead on how much you'd need to save or invest each day or each week in order to hit your target. She gives the example of someone who wants to increase IRA contributions by $2,000.
Bonus Offer: Score up to $600 when you open this brokerage account
While looking at such a large number can seem daunting, hitting this goal will seem much more feasible if you instead focus on saving $167 per month, $42 weekly, or $6 a day.
Temporarily move money into savings every day or every week
Orman suggests transferring money from your bank account to a savings account each day or each week based on your small goals you've set for yourself. As she explains, it's easy to move money from checking into a separate linked savings account.
However, your money won't stay there -- this is just to simplify the process of achieving your small goals. "This bank savings account is only a temporary step -- every month or quarter when you have a nice pot of money saved up, you are to transfer that to your IRA," Orman advised on her blog.
Make extra contributions when you can
While Orman believes you should make regular daily or weekly deposits to help boost retirement savings, she also urges you to use windfalls to bulk up your retirement account. In fact, she believes that whenever you get extra money, such as from a tax refund, you should add it to your regular IRA contributions to save as much as you can for the future.
Reconsider big expenses
Finally, Orman warns that many people tend to spend money out of habit, even if those expenditures are no longer really necessary or providing much joy. Rather than continuing to use your money on purchases just because you're used to doing so, she urges you to "review all your habitual spending and ask yourself if you still need to be using your money this way."
If you go over your budget carefully and evaluate what big expenses you could cut from it, you can redirect this money to retirement savings and invest more for your future.
Each of these tips are great ones that could make a significant impact in the amount you end up with in your IRA. Consider following Orman's advice and employing these suggestions ASAP so you can have more financial security later in life.
Our best stock brokers
We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.