3 Ways to Max Out Your IRA by the End of the Year

Here's how to boost your retirement plan contributions in just a few weeks.

You'll need savings of your own in retirement to supplement your Social Security benefits. Or, to put it another way, if you don't build savings independently, you might risk struggling financially once your career wraps up and the paycheck it provided disappears.

Now some people save for retirement by contributing to a 401(k) plan offered by an employer. But if you work for a company that doesn't offer a 401(k), or if you're self-employed, then you may be saving for retirement in an IRA instead.

To qualify for an IRA, all you need to do is have earned income. And these plans offer one key benefit over 401(k)s -- more investment choices so you can set up a long-term portfolio that aligns well with your risk tolerance and financial goals.

IRAs also come with much lower annual contribution limits than 401(k)s, so while maxing out a 401(k) plan can be tough, maxing out an IRA tends to be a lot more doable. In fact, this year, the maximum IRA contribution is $6,000 for workers under the age of 50, and $7,000 for those 50 and over.

Now, if you haven't maxed out your IRA at this point of the year, here's some good news. You actually have until the following year's tax-filing deadline to finish making IRA contributions. So technically, you don't need to rush to finish funding your IRA by Dec. 31, because you actually have until mid-April.

But do you really want those 2022 IRA contributions hanging over your head in 2023? Probably not. And so that's why it pays to try to max out your IRA this year. And here are a few ways you can pull that off.

1. Pick up a seasonal side hustle

The holidays are coming up, and so now's the time when businesses are usually looking for extra hands on deck. If you pick up a side job and hold it down through the end of the year, you can use your earnings to pad your IRA and, ideally, hit the maximum allowable contribution for 2022.

2. Save your bonus

Does your employer award annual cash bonuses for solid performance? Although this isn't a universal practice, many companies dish out bonuses around the holidays or toward the end of the year. And so you may have a prime opportunity to use that cash to max out your IRA.

3. Ask for cash gifts -- and bank them

If saving for retirement is a big goal of yours, then your family members may want to support it. And so you shouldn't be shy about asking for cash gifts this year during the holidays -- and using that money to finish making your 2022 IRA contributions.

The more money you manage to sock away in your IRA, the more comfortable a retirement you stand to enjoy. Even though you have a number of months to finish funding your 2022 IRA, it pays to cross that task off your list by the time the current year wraps up. That way, you can start fresh on your 2023 IRA contributions once the new year begins.