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See how much you could have by the time you’re 67 if you contribute $7,500 to your IRA every year since you’re 27.
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If you contribute a 2026 Individual Retirement Account (IRA) limit of $7,500 each year from age 27 to 67, investing entirely in S&P 500 index funds, you could end up with about $1.38 million, assuming past annual inflation-adjusted returns match future ones.
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A more conservative 60/40 portfolio of U.S. stocks and bonds, respectively, would produce a much smaller nest egg — just over $882,000 — with an average annual return of 4.89%.
In 2026, you can contribute up to $7,500 to your IRA, according to the Internal Revenue Service (IRS). (If you’re 50 or older, you can contribute an additional $1,100 as a catch-up contribution.) So we wondered: If you contribute $625 per month to your IRA, will you have enough money for retirement in the future?
Well, run the numbers. Let’s say you started saving for retirement at age 27 and plan to retire at age 67. While IRA contribution limits typically increase each year to keep pace with inflation, let’s say you stick with the 2026 contribution limit of $7,500 per year. (This also means no catch-up contributions.)
We can analyze two different scenarios: What if you put all your money in an S&P 500 index fund? Or how about a 60/40 portfolio consisting of equity and fixed income assets respectively?
A few notes: These numbers will exclude charges like expense ratios, and we’ll use past annual returns, which aren’t necessarily predictive of future returns. Additionally, these numbers allow you to opt for a Roth IRA, where you pay taxes up front on your contributions and withdrawals are tax- and penalty-free, as long as you’ve had the account for five years and are over age 59 ½.
You can get the greatest returns by investing your money entirely in the S&P 500 index fund, which is an index made up of the 500 largest companies in the US based on market capitalization. Starting at age 27, if you put $7,500 into an S&P 500 fund each year, the inflation-adjusted annual return from 1957 to 2025 would be about $1.38 million at age 67.
Investing your portfolio in S&P 500 index funds gives you the potential for higher returns than a 60/40 portfolio, which includes conservative assets like bonds. However, a portfolio fully invested in equities also has greater volatility, meaning the value of your portfolio may fluctuate more widely.
Conversely, if you opt for a 60/40 portfolio, you’ll end up with a much smaller nest egg. The average inflation-adjusted return for this portfolio from 1901 to 2022 was just 4.89%, according to data from the CFA Institute. If you opt for this more conservative portfolio, you’ll have more than $882,000 at age 67.
