These 3 Moves Could Be Your Ticket to a Million-Dollar IRA

The average saver has $89,300 socked away for retirement, says Northwestern Mutual, while the average person in their 60s has $112,500. But you might have much loftier goals than that. You may be eager to enter retirement with a $1 million IRA.

Of course, if you only earn an average wage, that goal might seem next to impossible. But actually, if you make these essential moves, you may find that you're able to wrap up your career with a $1 million nest egg even if your earnings aren't all that substantial.

1. Start saving at a young age

Some people put off retirement savings until their 30s, 40s, or even 50s. And that's understandable. 

It's hard to find the money for IRA contributions in your 20s when you may be grappling with educational and credit card debt. And it's hard to find money for retirement savings when you're a new parent and are struggling to cover the cost of child care.

But if you don't start saving for retirement at a young age, you'll miss out on years of investment growth in your IRA. And all of that lost growth could lead to less money saved by the time your career wraps up. So try to start funding your IRA as soon as you start collecting a paycheck, even if you can only manage to swing $40 or $50 a month -- or even less.

2. Put your contributions on autopilot

The nice thing about 401(k) plans is that contributions are deducted from savers' paychecks off the bat so they're able to stay on track. If you want to retire with $1 million, do the same with your IRA. 

Set up an automatic transfer so money moves out of your checking account and lands in your IRA after each paycheck hits. And if you need to start with small contributions, do that and then increase them over time as your earnings pick up.

3. Invest your IRA in stocks 

Some people are scared to invest in stocks because the market can be volatile. But if you don't invest your IRA in stocks, you might end up with smaller returns -- and a smaller balance at the end of your savings window.

Over the past 50 years, the stock market has had an average annual return of 10%, as measured by the S&P 500 index. If you invest $120 a month in your IRA over 45 years at an average annual 10% return, you'll end up with a little more than $1 million. But if you stick to safer investments, like bonds, you might end up with a much lower return -- and less money.

Also, while it's certainly not easy to part with $120 a month for retirement savings, all told, you're putting in $1,440 a year. In 2022, the median U.S. household income was $74,580. So we're talking about setting aside about 2% of your pay for retirement if your salary is in that vicinity. 

Many people don't come close to retiring with a $1 million IRA. But if you follow these tips, you might end up thrilled with your nest egg by the time retirement rolls around.