A traditional IRA is a great way to save for retirement because you can sock away up to $6,500 of your salary per year in this type of account. But how much should you put in? The answer depends on where you are in life and what your goals are.
How much you can contribute to a traditional IRA is calculated as a percentage of your salary or income. In 2019, the maximum contribution for those under 50 is $6,500 per year. For those who are older than 50, the contribution limit is raised to $7,000. This sounds like a lot of money but if you break it down, it's really not so much. $6,500 adds up to just $458.33 a month if you contribute the max amount annually and invest it in a fund with an average 7% annual return.