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...
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.
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.
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.
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!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.
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?The costly myth of dollar-cost averaging - MSN Money
I sort of wonder if DCA is even a good idea at all?
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?
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?
I get it—that puts you way over the Roth income limit. You can put in a lump sum of zero!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?
By earning 50k+ per month...
You mean MFs and ETFs in a taxable investment account?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.
I think I'll have to exercise mine within 90 days of leaving the company. I may try to time it to leave towards the end of the year so I can do the exercise in the next calendar year, but there are other factors for when to leave, such as after the annual bonus (assuming there is one), after getting the full company match of the 401K, and probably a couple of other things I can't think of right now.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.
... but there are other factors for when to leave, such as after the annual bonus (assuming there is one), after getting the full company match of the 401K, and probably a couple of other things I can't think of right now.