Don't Miss the April 15 IRA Deadline. It Could Cost You Thousands
Key Points
April 15 is Tax Day and the last day to contribute to the previous year's IRA contribution limit.
People under 50 can contribute $7,000 to their 2025 IRAs, while those 50 or older can contribute $8,000.
Even small one-time investments can grow to thousands over time.
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IRAs aren't as widely used as 401(k)s, but they're effective retirement accounts that can play a valuable role in people's retirement finances. They're flexible like standard brokerage accounts, but come with tax breaks that brokerage accounts don't.
If you don't currently have an IRA, check out our list of the best IRA brokers to get started before Tax Day. It's not too late to open one and take advantage of it. If you do have an IRA, make sure you're aware of the April 15 deadline, so you don't potentially leave thousands on the table.
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Why April 15 is an important day
You can begin contributing to an IRA for a given year on Jan. 1, but you have until April 15 (Tax Day) of the following year to make your contributions. For example, you have until April 15 this year to make contributions toward your 2025 limit. You'll have until April 15, 2027, to make contributions toward your 2026 limit.
For tax year 2025, the most you can contribute to an IRA -- both traditional and Roth combined -- is $7,000 if you're younger than 50. If you're 50 or older, you can contribute $8,000.
Beginning this year, the limit for those under 50 is $7,500, and for those 50 and older, it's $8,600.
A small investment today can be a large one down the road
Even if you're not able to contribute thousands or max out your IRA, it's worth contributing something. Even seemingly small contributions can compound over time.
To see it in action, let's assume you invest your IRA funds into an ETF that averages 10% annual returns over 20 years. Below is roughly how much a one-time investment would grow over those two decades:
| One-TIme Investment | Investment Value |
|---|---|
| $250 | $1,680 |
| $500 | $3,360 |
| $1,000 | $6,720 |
| $2,500 | $16,810 |
| $5,000 | $33,630 |
Table by author. Investment values are rounded down to the nearest 10 and don't account for potential expense ratios.
These are just one-time investments, too. Ideally, you'd continue contributing to the IRA over time, building up a nice nest egg.
If these investments were in a traditional IRA, you'd owe taxes on the withdrawals in retirement, but you'd be able to deduct your contributions from your taxable income (assuming you meet other criteria). If this were in a Roth IRA, all of the money would be yours tax-free, as long as you're 59 1/2 years old.
Even if you owe taxes on the withdrawals, there's a chance that you could come away with thousands in capital gains. Don't let the opportunity pass if you have the chance to contribute to your 2025 IRA limit before the April 15 deadline.
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