The Smartest Way To Max Out Your IRA in 2026

The Internal Revenue Service, better known as the IRS, recently updated retirement account rules for 2026. Savers under 50 will be able to contribute up to $7,500 to Individual Retirement Accounts, up from $7,000 in 2025. Those 50 and older can contribute an additional $1,100 in “catch-up” funds, a $100 increase over 2025. 

For those hoping to maximize their contributions, CNBC recently walked readers through two options. One is to contribute a lump sum as soon as possible, assuming you have the cash flow. This method is wise if the market steadily increases, but that’s not always the case. In a volatile market, a system called dollar-cost averaging can be better. 

What Is Dollar-Cost Averaging?

Dollar-cost averaging means making regular investments of equal amounts, regardless of market patterns. For example, say you decided on January 1 that you want to invest $6,000 in your IRA this year. Instead of depositing it all into your account at once, you’d deposit $500 every month for 12 months. 

If monthly deposits don’t fit your cash flow, you can always choose a different pattern. You might deposit $1,000 every two months or even $125 per week if that works better.

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Investing in a Volatile Market

2025 has been a volatile year for the stock market. The S&P 500, a market index that gauges U.S. stock movements, plunged dramatically in the first week of April. It was the index’s fifth-largest two-day decline in 75 years. A few days later, the S&P and two other indices had record-breaking single-session increases, Yahoo reported. 

These market movements can affect the money in your IRA, depending on your investment choices. While you can invest in low-risk products, such as certificates of deposit, many people choose the stock market. Stocks and investment funds tend to have higher growth potential, including a better chance of outpacing inflation.

If you invest a lump sum in January and have stocks or exchange-traded funds in your portfolio, that money is subject to market drops like the one in April. If you had invested $6,000 in January as part of a lump-sum strategy, the drop would have affected more of your money. Using dollar-cost averaging on the same investment total, you’d only have $2,000 in that account by April.

Predictability and Cash Flow

Dollar-cost averaging has two other significant advantages, CNBC said. One is knowing exactly how much you’ll be investing per week or per month, which makes budgeting easier. 

It also relieves you from the pressure of trying to time the market. Predictions are notoriously unreliable, especially during volatile periods. Dollar-cost averaging keeps you from making IRA investment decisions based on fear, anticipation or any other emotional driver.

The other benefit relates to your cash flow. Many people don’t have the income to invest thousands at once, especially given the rising prices of necessities. Dollar-cost averaging gives you a better chance of maximizing your contribution without drawing from your savings.

How To Max Out Your IRA or Roth IRA With Dollar-Cost Averaging

If you’re hoping to max out your IRA or Roth IRA contributions for 2026, now is the time to start planning. Start by deciding whether you’ll set money aside per month or per week, then use this chart to determine how much you need to save:

Consider setting up automatic deposits to keep yourself on track. You won’t have to worry about forgetting to make your deposit, and you’ll still enjoy the benefits of dollar-cost averaging.

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The Smartest Way To Max Out Your IRA in 2026

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