The IRS on Thursday announced updates to tax rules for tax year 2026, including new limits for what you can contribute to individual retirement accounts.

You’ll be able to contribute up to $7,500 to traditional and Roth IRAs, a $500 boost from the limit in 2025. Savers age 50 and older can stash an extra $1,100 a year in the form of a catch-up contribution — up from $1,000 in 2025.

If you’re hoping to max out your IRA in 2026, most financial advisors would tell you there’s no wrong way to do it. Investing as much as you can in a tax-advantaged account is almost always considered a win.

But is there an optimal way to do it? Say you got a big December bonus, and you have the full $7,500 sitting in savings. Would you be better off investing it all as soon as the market opens in January, or funding your account throughout the year?

It all depends on your circumstances, experts say.

All things being equal, “I would put it in as soon as possible,” says MaryAnne Gucciardi, a certified financial planner with Wealthmind Financial Planning. “Most people don’t have the cash flow to do that. But if you have the cash, do it, and let it start growing.”

Gucciardi’s preference for investing as much as you can as soon as you can is rooted in some straightforward market math.

Consider two investors, one who invests $1,200 at the start of the year and another who invests $100 a month. If the market steadily climbed over that period, the first investor would come out ahead, since she had the maximum exposure to the most gains.

If the market went down, the second investor wins out, steadily buying at lower prices while her money sitting on the sideline was unexposed to losses.

No one knows how the market will behave over the short term. Over long stretches, the stock market has trended upward, which gives lump sum investing a slight edge.

In an analysis of 1,000 overlapping seven-year historical periods, analysts at Morgan Stanley Wealth Management found that a lump sum approach generated higher returns than a periodic investing strategy in more than 56% of cases.

So if you have the money to spare, just max out your accounts for the upcoming year every January, right?

Well, not necessarily.

Financial pros often prefer periodic investing, also known as dollar-cost averaging, for two reasons. For one, it’s easy. If you’re investing in your 401(k) via regular payroll deductions, you’re already doing it. Second, it can help take the emotion out of investing.

If you’re investing a lump sum into the market in the hopes of maximizing your returns, maybe you think the market is looking a little precarious in January. While waiting for the perfect time to invest, your money could sit on the sidelines indefinitely. Dollar-cost averaging can help remove the impulse to time the market.

“Ultimately, we all have to be comfortable with our decisions, since no one can predict what the market will do next year,” says Sean Pearson, a CFP with Ameriprise Financial Services. “Dollar-cost averaging is a good, safe, tried-and-true way to do it.”

Even if you have the money to make a lump sum investment, you may want the cash on hand to put toward other, more pressing financial goals while continuing smaller, monthly contributions to retirement accounts — even if it’s not the most optimal investing strategy, he says.

“Sometimes the answer is math,” Pearson says. “But most of the time, the answer is looking at the calendar and figuring how the whole thing fits on the timeline of your financial plan.”

Want to level up your AI skills? Sign up for Smarter by CNBC Make It’s new online course, How To Use AI To Communicate Better At Work. Get specific prompts to optimize emails, memos and presentations for tone, context and audience.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life, and request to join our exclusive community on LinkedIn to connect with experts and peers.