If you want to save more, you may want to consider maximizing 2022 individual retirement account contributions earlier than waiting for the 2023 tax filing deadline.

But opinions are divided on lump sum investing versus spreading out deposits at set intervals, known as spreading the dollar cost.

The IRA contribution limits for 2022 are the lesser of $ 6,000 or your taxable earnings for the year, with an additional $ 1,000 for investors aged 50 and over.

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“I say go ahead and put it on,” said Sallie Mullins Thompson, a Washington-based certified financial planner and certified public accountant at the firm that bears her name. “Otherwise, they could spend it on something else. “

Plus, investing money now offers more time for compound returns, Mullins Thompson said, and tax-free growth is faster if you contribute to a Roth IRA.

“You want to do it as soon as possible,” she said.

According to research from Northwestern Mutual Wealth Management, lump sum investing can beat average dollar costs as the stock market moves higher.

The study looked at 10-year rolling returns of $ 1 million invested immediately from 1950, which exceeded funds allocated over time.

However, some experts prefer the average dollar cost to reduce downside risk, especially for disciplined savers.

“You want to be able to take a lot of apple bites,” said Jay Spector, CFP and partner at Barton Spector Wealth Strategies in Scottsdale, Ariz., Explaining how many investors opt for IRA deposits throughout the year.

“Through [investing] on a monthly basis, you buy when the markets are high or low, so you get a better average price over the year.

For example, if you had contributed $ 6,000 or $ 7,000 in February 2020, the value may have dropped 20% or 30% by March 2020 when the pandemic started, he said.

However, if you split the money between February, March, and April 2020, you might have had a “better overall average experience” entering the market, Spector explained.

Of course, investing now or gradually can pay off when it comes to planning long-term goals.

“We are talking about people saving money for their future,” he said. “So really, there is no wrong answer.”