IRAs have low annual contribution limits One disadvantage of using IRAs to save for retirement is that the annual contribution limits are relatively low. In 2022, you can contribute up to $20,500 to a 401(k) plan, but you can only contribute $6,000 to an IRA (the limit goes up to $7,000 if you're at least 50 years old).A traditional IRA can be a great way to turbocharge your nest egg by staving off taxes while you build your savings. You now get tax relief when you make tax-deductible contributions. In the future, when you take money out of your IRA, you'll pay taxes at your ordinary income rate.