Suze Orman: This Is How Much You Should Save in Your Roth IRA in 2024
Written by
Laura Beck
Edited by
Cynthia Measom
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In a December 7 post on her blog, personal finance expert Suze Orman discussed how much people should aim to save in their Roth IRAs for 2024. The contribution limits are increasing by $500 next year, and Orman encouraged savers to make hitting the max a priority.
“I hope you will make it a goal to save up to your 2024 limit,” said Orman. “And you know that I think it’s smart to save in a Roth IRA because when you retire, all your withdrawals will be 100% tax-free.”
With higher Roth IRA contribution limits coming in 2024, Suze Orman strongly advocated that savers aim to max out their accounts. Breaking down the yearly goals into smaller monthly, weekly, or even daily savings targets makes the amount feel more achievable. Carefully reviewing your budget for areas to cut back spending and directing additional funds like tax refunds to your Roth IRA can help you reach the 2024 maximum. As Orman notes, properly funding retirement now leads to greater financial freedom later.
You Can Contribute More to an IRA in 2024
In her post, Orman explained that the IRA contribution limit is increasing by $500 in 2024. For those under age 50, the max will be $7,000, up from $6,500 in 2023. For those 50 and older, the 2024 max is $8,000, an increase from $7,500 this year.
Income Limits for Full Contributions
You have to be below certain income levels to contribute the full amount to a Roth IRA. For 2024, single tax filers with a modified adjusted gross income under $146,000 and joint filers with income under $230,000 can put in the full amount.
The Importance of Maxing Out Your Contributions
Orman explained that you should make it a priority to fund your Roth IRA to the maximum allowable amount.
“I hope you will make it a goal to save up to your 2024 limit,” she wrote. “And you know that I think it’s smart to save in a Roth IRA because when you retire, all your withdrawals will be 100% tax-free.”
Maximizing your contributions may require some financial sacrifices, Orman admitted.
“If you don’t typically contribute up to the maximum, I hope you will consider pushing yourself to increase your retirement savings for 2024,” she wrote. “Just think what that will mean to you in retirement.”
Find the Money to Save More
While saving more now means having less spending money today, properly funding your retirement is crucial. Assess your budget to see if you can find any way to cut back on expenses and contribute more.
“Don’t necessarily look for one big savings; maybe there are three to five different expenses you could cut or trim,” Orman said.
Another source of money she suggested is directing any tax refund you receive straight to your Roth IRA. Since the average refund is around $2,000, that could make a significant dent in your 2024 savings goal.
Break Down the Big Numbers
Orman recognized that maximum contribution amounts like $7,000 or $8,000 can seem daunting. Her advice is to “break it down into more manageable bites.” Here’s how the 2024 max contributions work out per month/week/day:
If under 50:
- $583.33 per month
- $134.62 per week
- Less than $20 per day
If 50 and over:
- $666.67 per month
- $153.85 per week
- Less than $22 per day
Seeing the number as a series of smaller goals makes it “easier to tackle,” Orman said.
“It’s also a great way to stay motivated: every month, week, or day you hit your savings goal, you should do a little dance, or share the news with someone,” she shared.
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