How to Max Out Your Roth IRA This Year

By thinking ahead, setting manageable goals and knowing your limits, you can make full use of the unique benefits of a Roth IRA.
Andy Rosen
Anna-Louise Jackson
By Anna-Louise Jackson and  Andy Rosen 
Edited by Arielle O'Shea

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The maximum you can contribute to a Roth IRA is $6,500 in 2023 ($7,500 if age 50 and older). But even for those with the means to contribute that amount, proper planning can be a big help in getting there.

By thinking ahead, setting manageable goals and knowing your limits, you can make full use of the unique benefits of the Roth IRA. These individual retirement accounts require you to invest money on which you’ve already paid taxes, but they allow you to withdraw tax-free once you retire.

There are a few factors to consider when deciding how much to contribute to your Roth IRA.

Is it smart to max out a Roth IRA?


  • Roth IRAs give you access to a broader array of investments, which may mean you can access mutual funds with lower fees than you'll find in an employer-sponsored plan.

  • Unlike with a 401(k) plan, you have until mid-April to add money to your IRA for the prior tax year.

  • Unlike 401(k) plans and traditional IRAs, you won’t owe taxes on your eligible Roth IRA distributions. If tax rates go up between the time you contribute and the time you retire, you’ll keep more of your money than you would have if you invested pretax dollars.


  • Contributing to a Roth IRA is best for money you won’t need until retirement. If you have more pressing financial needs, such as short-term debt, it might be worth getting those liabilities squared away first.

  • If your tax rate winds up being lower in retirement than it is now, you might be better off paying taxes on your savings at that time. It can be wise to have a mix of pretax and after-tax retirement savings to account for all scenarios.

  • Roth IRAs have income limits. In 2022, married couples filing jointly were not allowed to contribute in most cases if they had a modified adjusted gross income above $214,000. The limit for single filers was $144,000. In 2023, those numbers increased to $228,000 and $153,000, respectively. Some people can get around these limits with a method known as the backdoor Roth IRA (more about this below).




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How to max out your Roth IRA

1. Open an account

Setting up a Roth IRA takes only minutes. You’ll need to decide whether you prefer an account with an online broker or a robo-advisor, depending on how actively you want to manage your investments. Once you’ve opened an account, select investments. To benefit from both diversification and low costs, consider a portfolio constructed of index funds and exchange-traded funds.

Look for providers with low account minimums; low or no account fees and fund minimums; a large selection of no-transaction-fee mutual funds and commission-free ETFs; and the type of customer service and educational resources you desire.

» Ready to get going? Check out our top picks for best Roth IRA providers.

2. Calculate (or estimate) how much you’ll need in retirement

It can be difficult to prioritize far-off goals, especially with opportunities for instant gratification today. Saving up to 15% of your pretax income each year for retirement is one rule of thumb.

If you don’t want to work forever, you’ll probably need to save more than what’s allowed in an employer-sponsored plan — a maximum of $22,500 in 2023 ($30,000 for those age 50 or older). Use a retirement calculator to check how much you need to contribute to your Roth IRA in order to stay on track.

3. Set manageable goals

Retirement planning is a decades-long journey, and shorter-term goals, like setting aside the annual IRA maximum, can be daunting for many people. This is money you should try to leave untouched, and growing, for decades.

Breaking down that goal into a more manageable weekly or monthly amount can help. Opt to contribute on a manageable schedule, such as the same day each month.

4. Consider a backdoor Roth IRA

Even if you’re above the income limit for Roth IRAs, there may be a way to secure some of their advantages. A strategy known as the backdoor Roth IRA could potentially help.

Putting money in a backdoor Roth involves funding a traditional IRA and converting those contributions into a Roth IRA. You may have to pay a tax bill in the process, so determining whether that extra cost is worth it depends on your individual financial situation.

» Backdoor Roth IRA: What it is and how to set one up

5. Craft an investment strategy

Once you've opened an account, you'll need a plan for how to invest the money you initially contributed, along with funds you'll add in the future. Simple often is the best approach. Consider an asset allocation (the mix of different assets, such as stocks or bonds, in your account) that includes broad-market index funds, of either the mutual fund or exchange-traded fund variety. (Want more details? See these tips on how to invest your IRA.)

When setting up your account, opt for an automatic trading plan, if possible, to benefit from dollar-cost averaging. This is a strategy of spreading out investment purchases over time to ensure you don’t invest all your money when prices are high.

6. Know your limits

Don’t despair if you can’t max out a Roth IRA this year. This goal may take time to achieve. Even a few hundred dollars invested can balloon to several thousand dollars over a decade or two.

When in doubt, be prudent: Don’t try to max out an IRA if you’re racking up high-interest debt in the meantime or don’t have enough to cover monthly expenses. Contribute whatever you can this year and resolve to increase that amount down the road.

» Tax-efficient investing: Keep more of your money

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