Want to Max Out Your Roth IRA for 2023? There's Still Time. | The Motley Fool (2024)

While 2023 is behind us, you still have time to make moves that can beef up your individual retirement accountcontributions for the prior year.

By contributing to a Roth IRA, you can set yourself up for more tax-free income during retirement. But you'll have to take advantage of this retirement offer before your window of opportunity expires. If your income jumps above the annual threshold during any year, you won't be able to make direct contributions to a Roth IRA.

So if you're eligible to funnel dollars into a Roth IRA for 2023, you might want to consider contributing the maximum amount.

Contribute to your 2023 Roth IRA before it's too late

The tax filing deadline is rapidly approaching, and so is the deadline to make contributions to a Roth IRA for 2023. Although many employer-sponsored retirement account plans close the contribution window on Dec. 31, you have until April 15 to contribute to a prior year Roth IRA.

That gives you four additional months in the new year to rack up enough cash to reach your Roth IRA goals for the prior year. But since we're weeks away from the tax filing deadline, you'll have to act quicky. Determine how much you want to contribute and consider setting up recurring transfers from a checking account to your Roth IRA. If you received a promotion or bonus, you can funnel that money into a Roth IRA. You might want to trim your expenses in the upcoming weeks so you can have more dollars to add to your account. If that isn't possible, you can increase your income through various side gigs or consulting opportunities.

Keep in mind that you'll have to make sure you check the right boxes so that your IRA administrator can count your contribution toward your 2023 Roth IRA funds.

Consider maxing out your Roth IRA

If your finances are in good shape, you might want to consider raising the bar for Roth IRA contributions. For 2023, the maximum contribution to a Roth IRA is $6,500 for those 49 and under. The contribution cap rises to $7,500 for those 50 and older.

You're not required to contribute the maximum amount to a Roth IRA every year. But the more money you tuck away, the more tax-free money you can accumulate for retirement. After April 15 rolls around, you won't be able to turn back and make contributions to a Roth IRA for 2023.

Let's say you're 35 years old and you contribute enough money to your Roth IRA in the upcoming weeks to max out your account for 2023. You would be on track to add $13,500 to your Roth IRA when you combine 2023 and 2024 contributions. For 2024, you can contribute up to $7,000 to your Roth IRA if you're under 50. Those contributions will position you to invest in your favorite assets and grow your retirement portfolio.

Check out the Roth IRA income limits for 2023

If you're aiming to max out your Roth IRA for 2023, your modified adjusted gross income (MAGI) must be less than $138,000 as a single filer. That number climbs to $218,000 for those who are married filing jointly. To be clear, your MAGI is simply your adjusted gross income with a few possible tweaks.

Let's say your income exceeds those levels. Although you won't be able to stash away the maximum amount in a Roth IRA, you can contribute a reduced amount to your account if your income is below $153,000 as a single filer and $228,000 as a married filer. But if your income surpasses those numbers, you won't be able to contribute directly to a Roth IRA for 2023. However, you can still dump money into a traditional IRA or consider a backdoor Roth IRA.

Data source: IRS.

Beat the 2023 Roth IRA deadline

You have only a few more weeks to add money to your Roth IRA and have it count toward your 2023 contribution. So if you check the box on all the requirements and you have cash sitting around, now is the time to beef up your 2023 Roth IRA. It could be the push you need to move closer to the retirement lifestyle you've always dreamed of.