Do your best
The hypothetical examples above represent what-if scenarios that aren’t always possible to replicate in real life. For instance, you may not be able to invest the same amount each year or have to skip a few years altogether. That’s okay. Take small steps toward saving 12%–15% of your gross income (including employer contributions) each year.
Maybe you don’t have the financial flexibility to make a lump-sum investment in your IRA—in January or April (or in any other month as a matter of fact). That’s okay too. Try setting up recurring automatic bank transfers. Making biweekly contributions over the course of 30 years (for a total contribution of $165,000) and earning a 4% average annual return would result in an end balance smaller than Example A but bigger than Example B. Not too shabby.
Want to get a better handle on your retirement goals? Take a look at our retirement income calculator. You can review your progress so far and determine what you may need in the future.
If you’re making an IRA contribution—no matter the amount and timing—you’re on the right track. All we’re saying is if you happen to find yourself in the position to make your annual IRA contribution before following year’s tax-filing deadline, go for it.