Should you fully fund your IRA in January? (1 4 26)

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Is it better to fully fund your IRA on January 1st or spread your contributions out over the entire year? While it’s tempting to check that financial goal off your list early, the decision between a lump-sum investment and dollar-cost averaging involves a trade-off between historical market returns and personal risk tolerance. Before you commit your savings for the year, discover the specific conditions under which a January contribution wins out, the psychological traps that lead many investors astray, and a strategic middle ground that balances steady growth with peace of mind.

Here’s what we’re covering in today’s Clark Smart Investing newsletter:

• Should you fully fund your IRA in January?

• New retirement savings limits in 2026

• Social Security changes for 2026

• Q&A: What's the best metric to use when assessing a bond fund?

• Smart money move of the week

💵 Should You Fully Fund Your IRA in January?

If you have money set aside to max out your IRA for the year, you're probably wondering: should I invest it all now or spread it out over the next 12 months?

It's a question that comes up every January, but it feels especially pressing when the stock market is sitting near all-time highs. The thought of investing $7,000 (or $8,000 if you're 50 or older) right before a major correction is enough to give anyone pause.

The reality is that this decision is more psychological than mathematical. The math slightly favors investing early. But the best strategy is the one you can actually stick with.

In the full article, we share the case for contributing immediately and for spreading your contributions, the four crucial questions you need to ask yourself, and special considerations before you make your decision.

📚️ Recommended Reading

✅ Poll: What’s Your Take?

Every week, we'll ask a new question to get your take on the latest financial trends and topics.

Last Week’s Poll Results

We asked: “What is your single biggest money-related New Year's Resolution for 2026?” Here’s how you answered:

• Raise your credit score - (5%)

• Max out a retirement account - (21%)

• Pay down debt - (24%)

• Shop for better auto/home insurance rates - (34%)

• Make more money (side hustle, raise at work, new job, etc.) - (16%)

💬 Ask an Advisor

In this recurring Q&A, we share questions that have been answered by Clark Howard or Wes Moss on the podcast. Submit your question today!

Terry in Ohio asks: What's the best metric to use when assessing a bond fund?

Wes Moss says: When evaluating a bond fund or ETF, you must first consider the type of bond held — whether government, corporate, or high-yield — as this credit quality dictates both the risk level and the yield. For instance, a 3% yield usually indicates a "super safe" treasury, whereas a 7% yield typically points to riskier "junk bonds." The second critical factor is duration, a metric that measures the fund’s sensitivity to interest rate changes; a low duration of two means the fund’s price will only move about 2% for every 1% change in rates, while a high duration of 15 could cause a 15% price swing. Finally, you should evaluate the fund's expense ratio and compare its performance to the Aggregate Bond Index to determine if the fund is more or less volatile than the broader market. By analyzing these three elements — credit quality, duration, and expenses relative to the index — you can determine whether a bond fund aligns with your financial goals and risk tolerance.

💸 Money Tip of the Week

☎️ Need Money Help?

The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information.

This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Any company names shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.

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