2024 Financial Resolutions: Secure Your Future with These IRA Goals

Maintaining a consistent savings routine throughout your career will ensure financial stability in your later years. If your employer doesn’t offer a 401(k) plan for retirement savings, you can turn to an Individual Retirement Account (IRA) as an alternative.

Chances are, you might already have an IRA, ideally with a substantial balance. Regardless of whether you currently possess an IRA or plan to contribute to one in 2024, here are three objectives worth aiming for:

Maximize your contributions

Fully funding a 401(k) can be challenging. In the upcoming year, 401(k) contribution limits will increase to $23,000 for individuals under 50 and $30,500 for those aged 50 and above.

In contrast, reaching the maximum contribution limit for an IRA might be more feasible, even on an average income. In 2024, IRAs will allow contributions of up to $7,000 for individuals under 50 and $8,000 for those aged 50 and above.

Furthermore, if you contribute to a traditional IRA, each dollar you invest up to the specified limits is exempt from IRS taxation. In the case of a Roth IRA, the more you contribute, the greater your potential for tax-free gains.

Diversify your investment portfolio.

IRAs offer the flexibility to invest in individual stocks, a feature not commonly found in 401(k) plans, which typically limit you to various funds with less direct control over your investments.

Diversifying your IRA investments is crucial. Diversify your stock portfolio by owning stocks from different sectors. Another valuable strategy is to consider investing in broad-market index funds. For instance, an S&P 500 index fund or a total stock market fund provides exposure to the entire stock market, reducing the need for extensive research into individual companies.

Monitor your investments at a reasonable frequency.

One common mistake among IRA savers is obsessively checking their portfolios and reacting impulsively to short-term losses. In 2024, commit to reviewing your IRA approximately once a quarter, as excessive monitoring is likely unnecessary.

Keep in mind that IRA investments are inherently long-term commitments. Consequently, there’s no need to stress over weekly performance fluctuations. A quarterly checkup should suffice, helping you ensure your portfolio remains well-balanced. This approach will prevent you from hastily selling investments that may experience temporary downturns.

As the new year approaches, consider making these financial commitments to set yourself up for future success. By achieving these IRA goals in 2024, you can potentially build substantial retirement wealth for your future self.