4 Secrets of IRA Millionaires

Given this year's annual contribution limit of only $7,500 (or somewhat higher for people aged 50 or more), and the fact that it was much lower when first introduced in 1975, it's difficult to believe any individual retirement accounts (IRAs) could be worth more than a million dollars today.

Not many of them are, to be clear. However, a small handful of these accounts have indeed eclipsed a seven-figure value.

This begs the question... what did these investors do that most people don't? Being able to tuck away more money in these accounts certainly helps. However, they also did four things that anyone else can and should do when saving for retirement.

1. They got started early

It's a message that's delivered time and time again, but it merits being repeated all the same: Time does most of the heavy lifting for all investors. For perspective, assuming you earn the S&P 500's (SNPINDEX: ^GSPC) average annual return of 10% on your investment, every $1 you put to work today and then reinvest will be worth $2.59 in 10 years. In 20 years, though, it will be worth $6.73. In 30 years, that $1 will have grown to $17.45.

2. They invested for growth

Not everyone is comfortable taking risks with their money. Unfortunately, anyone looking to grow their savings at a rate that outpaces the effect of inflation must do so, and stocks remain the most proven means for most people to achieve such growth.

Image source: Getty Images.

The good news is, you don't need to be a brilliant stock picker to be in the market. A basic index fund like the SPDR S&P 500 ETF Trust (NYSEMKT: SPY) or Vanguard S&P 500 ETF (NYSEMKT: VOO) should pretty much match the aforementioned S&P 500's average yearly gain of about 10%, even if its return ebbs and flows from one year to the next.

3. They kept expenses down

Although stock-trading commissions are pretty much a thing of the past, there are still plenty of ways to nickel and dime your portfolio into a subpar performance.

One of those ways is relatively expensive mutual funds or exchange-traded funds (or ETFs). While the SPDR S&P 500 ETF Trust or the Vanguard S&P 500 ETF only impose an annual expense ratio of less than 0.1% of your amount invested, some funds charge as much as 1%, or more. Most third-party money managers charge in that ballpark as well.

That doesn't seem like much. However, reducing your net gains by this amount for many consecutive years can take a meaningful toll on your bottom line.

4. They mostly left it alone

Finally, perhaps the chief reason a few people have managed to become IRA millionaires is that they resisted the temptation to do a lot of tinkering, and instead simply left these portfolios alone to let time do its thing.

Although it's obviously always well-intended, investors tend to make short-term decisions based on fear or greed that often end up doing more long-term harm. Less is almost always more... less activity, more net gains. This assumes your portfolio consists of predictable, quality holdings that reliably bounce back from short-term setbacks.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.