View Poll Results: IRA Contributions for 2010
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Single Lump Sum
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24 |
70.59% |
Weighted contributions
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3 |
8.82% |
DCA
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7 |
20.59% |
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IRA Contributions - DCA or Lump Sum for 2010?
01-01-2010, 09:22 AM
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#1
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Recycles dryer sheets
Join Date: Mar 2009
Posts: 357
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IRA Contributions - DCA or Lump Sum for 2010?
How are you going to make your IRA contributions this year? One lump sum, true dollar cost averaging, or in weighted contributions (ie. $1k for 5 months)?
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01-01-2010, 09:34 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Aug 2007
Posts: 1,224
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We lump sum in January every year into both our IRA's as well as our HSA account.
DD
__________________
At 54% of FIRE target
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01-01-2010, 09:55 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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Today I transferred $600 * 2 Roths for January and I plan to transfer 2 * $400 a month February through December. We could fund the entire thing now, but I'd rather not put the $10K hit on savings now that my paycheck and benefits are a single point of failure again...
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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01-01-2010, 11:59 AM
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#4
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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I can't make IRA contributions any more. But when I used to do that, I'd lump sum as soon as I could every year.
It's the optimist in me, figuring that the longer the money is in the IRA, the longer it had to grow.
Quote:
Originally Posted by ziggy29
Today I transferred $600 * 2 Roths for January and I plan to transfer 2 * $400 a month February through December. We could fund the entire thing now, but I'd rather not put the $10K hit on savings now that my paycheck and benefits are a single point of failure again...
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You do need to take that into consideration and IMO you need to beef up your emergency fund, so that it can cover both a year's expenses and maybe even the cost of moving, if another job would be hard to find in your location.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-01-2010, 01:24 PM
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#5
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Recycles dryer sheets
Join Date: Mar 2009
Posts: 357
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Quote:
Originally Posted by W2R
I can't make IRA contributions any more. But when I used to do that, I'd lump sum as soon as I could every year.
It's the optimist in me, figuring that the longer the money is in the IRA, the longer it had to grow.
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Congrats on no more contributions!
I'm optimistic in the same way and am going to make a lump sum this year. I think the market average for 2010 is going to be greater than what it currently is.
Quote:
Originally Posted by W2R
You do need to take that into consideration and IMO you need to beef up your emergency fund, so that it can cover both a year's expenses and maybe even the cost of moving, if another job would be hard to find in your location.
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One thing to consider is how Roth IRA contributions can be withdrawn penalty free. So some people consider their Roth contributions as a 2nd stage emergency fund.
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01-01-2010, 01:35 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Location: North-Central Illinois
Posts: 3,228
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Like W2R, I can't make IRA contributions any more either. Darn...maybe I'll go get another job.....yeah, right!
I did DCA up until my final (and partial) year of work. That final year I did the lump sum at the beginning of the year, because I didn't feel like messing around with the IRA's after I retired (except to draw out of them someday waaay down the road).
So anyway, if I were still making IRA contributions, I'd most likely go with lump sum.....Get it all in there, and let 'er ride!
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01-01-2010, 01:40 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 2,171
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DCA for me. Contributions to my 457 plan are on automatic paycheck deduction, and thanks for the thread, you've just reminded me to set up my automatic payments into my Roth. Silly Scottrade website wouldn't let me set up a payment for 2010 before today Monday.
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01-01-2010, 02:44 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,340
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I just got done setting up my 2010 ROTH contribution. It is for the full $5000.
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01-01-2010, 02:45 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2008
Location: Naples
Posts: 2,179
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It's probably too late now but did anyone see my post about IRA contributions in 2009? I saw that the g'mnt passed a ruling this fall that allowed an IRA holder to contribute any amount that had been withdrawn during the year to comply with the MRD laws. I had taken out $3K to cover some expenses in Feb (would have had to by law anyway) but then was able to put it back this November. Bank wasn't even aware of the ruling and had to do a lot of checking. It might still be possible to repay any withdrawals as I thought one had until April to do this for a regular IRA.
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01-02-2010, 10:47 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,545
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lump sum into TIRA in Jan and then converting to Roth.
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01-02-2010, 11:10 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2008
Posts: 13,127
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I DCA into my HSA account.
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01-02-2010, 11:25 AM
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#13
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Full time employment: Posting here.
Join Date: Oct 2007
Location: New York
Posts: 898
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I lump sum both IRAs and a 529 (up to the 10k state tax deductible limit). In fact, I submitted the transfers already yesterday (they'll happen Monday).
__________________
Money's just something you need in case you don't die tomorrow.
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01-02-2010, 12:17 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,184
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2009 was the first year I was eligible for a Roth, and it was a combination of not thinking about it and then not being certain I'd be eligible until December, when I made a lump sum.
Likewise I'll probably do the same this year. If the company stock soars, and I decide to leave, forcing me to exercise stock options, I could be over again. I don't know what the procedure is to take back the investment, but it seems easier to do it when I'm sure at the end of the year, even though I'd rather have the money building up tax-free in the Roth IRA asap.
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01-02-2010, 12:26 PM
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#15
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,468
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Quote:
Originally Posted by RunningBum
2009 was the first year I was eligible for a Roth, and it was a combination of not thinking about it and then not being certain I'd be eligible until December, when I made a lump sum.
Likewise I'll probably do the same this year. If the company stock soars, and I decide to leave, forcing me to exercise stock options, I could be over again. I don't know what the procedure is to take back the investment, but it seems easier to do it when I'm sure at the end of the year, even though I'd rather have the money building up tax-free in the Roth IRA asap.
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If your Roth is at Vanguard, you just call them on the phone and they send you a form which you fill out and send to them. Then they compute the amount you must withdraw from your Roth (they add up the contributions for that year and earnings on those contributions, in other words) and they will move all of it to your taxable accounts if that is the destination you indicated on the form. Quick and easy.
I Vanguard.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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01-02-2010, 12:34 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,184
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Quote:
Originally Posted by W2R
If your Roth is at Vanguard, you just call them on the phone and they send you a form which you fill out and send to them. Then they compute the amount you must withdraw from your Roth (they add up the contributions for that year and earnings on those contributions, in other words) and they will move all of it to your taxable accounts if that is the destination you indicated on the form. Quick and easy.
I Vanguard.
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Hmm, that does sound easy, and yes, my Roth and main taxable account is at Vanguard. I will probably go ahead and do it early this year. Thanks for telling me how this works!
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01-02-2010, 12:45 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Sep 2008
Posts: 2,171
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Quote:
Originally Posted by Trek
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It's a great idea if you don't have that much money all at once! I'm curious, how do people arrange their finances so they have several thousand dollars to add to a Roth or TIRA at the beginning of the year?
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01-02-2010, 12:56 PM
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#18
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Recycles dryer sheets
Join Date: Dec 2009
Posts: 215
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I will put 2x $13K into both children's 529's on Monday.
Not eligible for Roth. But will be after I ER!
My 401(k) I DCA into as it is through payroll withholding at w*rk.
I will sell some Vanguard Index 500 I hold in a taxable account to fund the 529's.
To whoever said they have ESO's, I have learned something interesting. When I retire I will carry some ESO's into retirement. When I exercise them, I will have earned income and get a W-2. So it is possible to be completely retired and fund a deductible IRA or Roth. I think you have to be under 70.5 for the IRA but I don't think there is any such limitation on Roth.
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01-02-2010, 01:16 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: North Scottsdale
Posts: 1,545
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Quote:
Originally Posted by kyounge1956
It's a great idea if you don't have that much money all at once! I'm curious, how do people arrange their finances so they have several thousand dollars to add to a Roth or TIRA at the beginning of the year?
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In my case I have recently stopped reinvesting my dividends/cap gains in most of my MF's and ETF's so just took the cash from those year end distributions to fund the TIRA.
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01-02-2010, 02:02 PM
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#20
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Full time employment: Posting here.
Join Date: Oct 2007
Location: New York
Posts: 898
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Quote:
Originally Posted by kyounge1956
It's a great idea if you don't have that much money all at once! I'm curious, how do people arrange their finances so they have several thousand dollars to add to a Roth or TIRA at the beginning of the year?
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By earning 50k+ per month...
__________________
Money's just something you need in case you don't die tomorrow.
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