Has anyone here done something where they front load their 401k and IRA money the first quarter of the year?
I could theoretically max our 401k and IRA within the first five paychecks of the year (@70%) , each year, then dialing back contributions to company match min for the remainder of the year.
I would think having more shares purchased sooner in the year, would yield a higher result, but I realize it matters where market tops/bottoms are and is somewhat aikin to "market timing?"
It's an interesting modified DCA, where I would basically be DCA'ing 38% of our annual contributions in the first 25% of the year. The other 62% would be contributed evenly over the remaining 75% of the year.
It's an option I have but curious if other's did this when w*rking. I feel it eliminates some risk of potentially being laid off later in the year, if you hadn't front-loaded, you might struggle to meet that year's min. Then again, if you get laid off you probably have other problems.
I feel like it could eliminate some stress as well, just knowing that 75% of the year I'm basically just contributing company match minimum.
I have 3/4 months living expenses in cash, so there is really no real risk to doing this IMHO, beyond the market taking a dive, every year come March, where I missed a nice buying opp.
Good strategy or no? I can spend Nov/Dec building up the cash and then starve my cash first quarter of every year until my contributions dial back.
I could theoretically max our 401k and IRA within the first five paychecks of the year (@70%) , each year, then dialing back contributions to company match min for the remainder of the year.
I would think having more shares purchased sooner in the year, would yield a higher result, but I realize it matters where market tops/bottoms are and is somewhat aikin to "market timing?"
It's an interesting modified DCA, where I would basically be DCA'ing 38% of our annual contributions in the first 25% of the year. The other 62% would be contributed evenly over the remaining 75% of the year.
It's an option I have but curious if other's did this when w*rking. I feel it eliminates some risk of potentially being laid off later in the year, if you hadn't front-loaded, you might struggle to meet that year's min. Then again, if you get laid off you probably have other problems.
I feel like it could eliminate some stress as well, just knowing that 75% of the year I'm basically just contributing company match minimum.
I have 3/4 months living expenses in cash, so there is really no real risk to doing this IMHO, beyond the market taking a dive, every year come March, where I missed a nice buying opp.
Good strategy or no? I can spend Nov/Dec building up the cash and then starve my cash first quarter of every year until my contributions dial back.