It may seem like accumulating enough for retirement requires large sums of money. And if you're saving for this milestone with just your contributions, this may be the case.
But if you invest your money and benefit from stock market returns, you can potentially grow your account to $1 million by making and investing an annual contribution to an IRA. Here's how.
Image source: Getty Images.
What's an IRA?
An IRA is an investment account that can help you save money for your retirement. You can invest the money that you put into an IRA and it grows tax-deferred. If you meet certain requirements you can add to this account and your contributions may also qualify for a deduction from your taxable income.
The amount you can contribute has grown from $1,500 since 1975, when this investment account was first created, to $6,000 in 2019. It's possible that you'll see this number continue increasing in the future and if that's the case, these projections will change. But using the current contribution limit, this is how much your account could grow over the next 30 years.
How your accounts could grow