10 Secrets of IRA Millionaires

You probably know that an IRA account can help you save for retirement. But you might not appreciate just how powerfully it can do so. Consider, for example, that one of Warren Buffett's investing lieutenants, Ted Weschler, managed to grow his IRA from a value of $70,000 to $264 million ! Yes, that's amazing and most of us probably can't achieve the same result.

But even if you get to 1% of Weschler's $264 million, that's a very substantial $2.64 million -- more than what many people need to retire with . Here are 10tips that can help you become an IRA millionaire -- or at least amass meaningful wealth.

Image source: Getty Images.

1. Tap the power of time

First, don't procrastinate. The sooner you start saving and investing in an IRA, the more you may be able to amass. Know that the S&P 500 has averaged annual returns close to 10% over many decades. To get a sense of how powerful 10% annual gains -- or even more conservative 8% annual gains -- can be, check out the table below, which reflects the growth of $7,000 invested annually:

Data source: Calculations by author.

The difference between each row reflects how much you might gain (or lose) if you start saving and investing five years sooner (or later).

2. Use a Roth IRA

Next, consider favoring the Roth IRA over the traditional IRA . A traditional IRA gives you an upfront tax break, lowering your taxable income by the amount of your contribution. A Roth IRA saves your tax break for when you withdraw money from the account, potentially decades later. At that time, your withdrawals can be tax-free. Note, though, that if you expect to be a lower tax bracket in retirement, you might prefer avoiding your current tax rate by using the traditional IRA.

3. Contribute generously to your IRA

The more you can contribute over time, the more you can amass. IRA contribution limits are increased in most years, and for 2024, you can contribute $7,000 to an IRA -- plus $1,000 if you're 50 or older.

4. Sign up your spouse

If you're married, it's smart to have both spouses saving and investing and making good use of IRAs. That $7,000 contribution limit applies to each person, after all, so a couple could contribute a total of $14,000 -- or $16,000 if they're older -- for 2024. And spousal IRA rules allow non-working spouses to use the earned income of a working spouse to qualify for contributions of their own.

5. Favor low-fee index funds

It's also vital to invest your money effectively. If you just chase growth stocks without being too savvy about them, much of your money might evaporate. Instead, most of us might do best simply investing in one or more low-fee S&P 500 index funds and/or an even broader index fund . Here are some possibilities:

• Vanguard S&P 500 ETF (VOO)
• Vanguard Total Stock Market ETF (VTI)
• Vanguard Total World Stock ETF (VT)

6. Save and invest beyond your IRA

Remember, too, that IRAs are not your only investing options. You might concurrently save via a 401(k) account at your workplace, and many investors also like to invest via regular, taxable accounts at good brokerages .

7. Live below your means

You'll have trouble reaching any financial goals -- including a comfortable retirement -- if you're spending too much. So aim to live below your means . That might mean building a household budget that can guide your incoming dollars to your priorities.

8. Consider a backdoor Roth IRA

Here's a special strategy that some folks might want to consider: A "backdoor" Roth IRA conversion . Roth IRAs have earning limits, meaning that those with certain high incomes are not permitted to contribute to Roth IRAs. But these folks (or anyone, really), are permitted to convert money in a traditional IRA to a Roth IRA. The catch is that the conversion is taxed. But if you can afford the tax hit and you would prefer your IRA money to be in a Roth IRA, look into this strategy.

9. Consider delaying your retirement

Another powerful way to bulk up your IRA before retirement is to delay retiring for a few years . For each year that you do so, you can save and invest more money -- and your already-invested dollars will have another year in which to grow. Your nest egg will need to support you for one less year, too, and you may be able to remain on your employer's health plan longer.

10. Be patient and stick to your plan

Finally, it's critical to prepare to be patient and to stick to your plan, no matter whether the stock market is rising or falling. It's easy to get discouraged -- especially if your investments haven't been growing briskly lately. But stock market growth doesn't happen in a straight line. There are always occasional corrections and crashes -- and the market has gone on to recover from all of them and to set new highs.

So don't think that IRAs are just mildly helpful as you save for retirement. You can actually amass a lot of money in them -- possibly even $2.64 million!

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Index Funds-Vanguard Total Stock Market ETF and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy .