Can You Grow an IRA to Millions or Even Billions?

How to Grow Your IRA: A Strategic Guide

An Individual Retirement Account (IRA) can be a powerful tool for building wealth for retirement. With the right strategies, it’s possible to grow your IRA to millions over time.

Types of IRAs

• Traditional IRA: Contributions are tax-deferred, and withdrawals in retirement are taxed.
• Roth IRA: Contributions are made with after-tax money, but withdrawals are tax-free.

Contribution Limits

For 2025, you can contribute $7,000 to your IRA, plus an additional $1,000 if you’re 50 or older. Roth IRAs have income limits that determine your contribution amount.

The Power of Compound Interest

Compound interest is key to growing your IRA. It means you earn interest on both your original investment and any interest previously earned. The longer you leave your money to grow, the greater the impact of compounding.

Key Factors for IRA Growth

1. Diversification: Spread your investments across stocks, bonds, ETFs, and other assets to manage risk.
2. Age and Consistency: Start early and contribute regularly to take full advantage of compounding.
3. Risk Tolerance: Younger investors can afford more risk, while those closer to retirement should opt for safer investments.

IRA vs. Savings Account Growth

• IRA (8% Annual Return): $7,000/year for 10 years → $116,460; for 50 years → $4,342,407.
• Traditional Savings (0.41% Return): $7,000/year for 10 years → $78,557; for 50 years → $395,946.
• High-Yield Savings (4.5% Return): $7,000/year for 10 years → $96,839; for 50 years → $1,312,035.

The Bottom Line

To maximize your IRA growth, start early, contribute consistently, and diversify your investments. Avoid withdrawing funds before retirement to prevent penalties and loss of potential earnings. Consulting a financial advisor can help you tailor your investment strategy to your risk tolerance and retirement goals. By following these principles, you can significantly grow your IRA and set yourself up for a secure retirement.

SOURCE ARTICLE:

Gibson, J. (2017). Can You Grow an IRA to Millions or Even Billions? Investopedia.

This article is meant to be general and is not investment or financial advice or a recommendation of any kind. Please consult your financial advisor before making financial decisions. For more detailed information, contact a financial advisor with Gregory Ricks and Associates, Inc. offering investment advisory products and services through AE Wealth Management, LLC. Insurance products are offered through the insurance business Gregory Ricks & Associates, Inc. Gregory Ricks & Associates, Inc. AEWM does not offer insurance products. The insurance products offered by Gregory Ricks & Associates, Inc. are not subject to Investment Adviser requirements. 2992858-4/25