Maxing Out Your IRA This Year? Here's What That Could Do for Your Retirement

By Kailey Hagen, CFP – Apr 5, 2026 at 11:00AM ESTKey PointsYou're allowed to contribute up to $7,500 to an IRA in 2026 if you're under 50.Adults 50 and older can contribute up to $8,600 in 2026.Maxing out your IRA this year could give you hundreds of thousands of dollars in retirement.If you have extra cash lying around, you might think about tossing that money into your IRA to help you cover your future retirement costs. The downside: this money is usually out of reach until you're 59 1/2. Most IRA withdrawals before this age trigger a 10% early withdrawal penalty. As long as you avoid that, the upside looks pretty good. Here's a rough idea of how maxing out your IRA this year could help you. Image source: Getty Images. In 2026, you can contribute up to $7,500 to an IRA if you're under 50, or $8,600 if you're 50 or older by the end of the year. How much it grows to by retirement depends on your age and the returns you see on your investments over the long term. The following table shows how much a $7,500 or $8,600 IRA contribution could be worth over time, assuming a 10% average annual return.

Time Until Retirement $7,500 Contribution $8,600 Contribution 5 years $12,079 $13,850 10 years $19,453 $22,306 15 years $31,329 $35,924 20 years $50,456 $57,857 25 years $81,260 $93,178 30 years $130,871 $150,065 35 years $210,768 $241,681 40 years $339,444 $389,230 Data source: Author's calculations. All numbers rounded to the nearest dollar. So the $7,500 or $8,600 contribution today is really just the tip of the iceberg. Your contributions today could cover years of retirement expenses in the future. If you can afford to max out your IRA this year, it's worth doing. If not, just save as much as you can. You don't need to save large sums each year to retire comfortably. Consistent contributions can go a long way, even if they're smaller.Read NextApr 5, 2026 •By Maurie BackmanWhen Should You Claim Social Security if You Don't Actually Need the Money?Apr 5, 2026 •By Kailey Hagen, CFPForced Out of Retirement? Here's Your Financial Game Plan.Apr 5, 2026 •By Kailey Hagen, CFPThis "Safe" Investment Could Actually Derail Your Retirement PlansApr 5, 2026 •By Keith SpeightsRetirees Could Get a Much Bigger Social Security Raise in 2027 -- Thanks to InflationApr 5, 2026 •By Trevor JennewineSpousal Social Security Benefits: 4 Things Retirees Need to Know in 2026Apr 5, 2026 •By Maurie BackmanA Roth IRA Sounds Great -- But Here's the Catch No One Talks AboutAbout the AuthorKailey Hagen, CFP, is a contributing Motley Fool retirement analyst covering Social Security, Medicare, and retirement planning.

Before The Motley Fool, Kailey was a research analyst for Reviews.com focusing on credit and banking products. She is a Certified Financial Planner® and holds a bachelor’s degree in English from the University of Wisconsin-Madison.TMFKailey