The IRA, a popular retirement savings vehicle, has always given your earnings the benefit of tax-deferred growth.

Now, with higher contribution limits due to tax law changes, you can potentially boost your retirement savings even more than in the past.

If you haven't already done so, consider contributing now for 2007 because the sooner you start saving, the sooner your money can start growing tax-deferred.

For 2007, you are eligible to contribute up to $4,000, plus an additional $1,000 if you're 50 years of age or older. That's a total of $5,000 for someone age 50 or older.

How funds can add up

Let's use the example of a 50-year-old investor who makes the maximum contribution to an IRA for 2007, then continues to contribute the maximum in years to come ($6,000 in 2008 and assuming the same maximum thereafter).

Given various timeframes and hypothetical annual rates of return, here's what an investor stands to accumulate if they put $5,000 into an IRA in 2007 and $6,000 a year thereafter.

10 years: 5.5 percent, $79,792; 7.5 percent, $89,190.

15 years: 5.5 percent, $139,613; 7.5 percent, $165,508.

20 years: 5.5 percent, $217,797; 7.5 percent, $275,073.

Points to consider

It is important to note that returns on your IRA investments are not guaranteed and you may even lose principal. Here are a few facts you should know.

The increased contribution limits offer greater opportunities for tax-deferred growth than were available in the past.

Earnings on your IRA contributions accumulate on a tax-deferred basis.

Your IRA contributions may or may not be tax-deductible based on eligibility requirements. Consult your tax advisor.

Only nondeductible contributions may be withdrawn tax-free. Withdrawals of tax-deductible contributions, as well as all earnings, are taxed as ordinary income.

A 10 percent penalty tax is applied to the taxable amount of any withdrawal an individual makes before they reach age 59, with certain exceptions.

Required minimum distributions must be taken by individuals older than age 70.

Value of consolidation

You may also want to consider consolidating your IRA assets in a single account at one full-service firm. A consolidated account can provide certain benefits.

Integrated investment strategy: A consolidated account can make it easier for you to determine and monitor a single asset allocation strategy for all your IRA savings and keep that strategy on track.

Consolidated record keeping: By consolidating all your IRA assets in one place, you may be able to limit the account charges that you pay, and you'll have just one easy-to-view source for all of your IRA information. Among other things, this should make determining your RMDs a simpler process.

A financial advisor can assist you in determining how to invest your IRA assets to help address your investment objectives, taking into account your time horizon, risk tolerance and other circumstances.

If you want to take full advantage of increased contribution limits, don't delay.

Chadwick L. Hargis is a financial advisor at UBS Financial Services, Marina Tower, Melbourne. He can be reached at (321) 729-6770 or chad.hargis@ubs.com.