When do you invest in your Roth?

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durazno

When do you invest in your Roth?

Post by durazno »

My Roth is 100% Vanguard Total Intl Stock Index Admiral. I'm planning to contribute the max to my Roth in the next week.

When do you invest in your Roth? Beginning of the year? After 'really bad days'?

Thanks,
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Laundry_Service
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Re: When do you invest in your Roth?

Post by Laundry_Service »

I used to put in $500 a month for the first 2 months and $400 a month for the next 10 months. Now I just put it in as soon as I can.
BuckyBadger
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Re: When do you invest in your Roth?

Post by BuckyBadger »

As soon as I get around to it in January, without any consideration of if it is an "up" day or a "down" day. A girl could drive herself crazy worrying about that!
ndchamp
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Re: When do you invest in your Roth?

Post by ndchamp »

Just put it in.
:dollar Transaction pending.
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interplanetjanet
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Re: When do you invest in your Roth?

Post by interplanetjanet »

I contribute when my yearly bonus clears, in February. I just put a full $5k in all at once, my income tends to be bursty between bonuses, ESPP and company stock.

-janet
gary11
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Re: When do you invest in your Roth?

Post by gary11 »

His Roth: Monthly DCA over a year, $416.66 (Target 2035)
Her Roth: 5K at start of the year. (Target 2035/Dodge&Cox International)
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PaddyMac
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Re: When do you invest in your Roth?

Post by PaddyMac »

As soon as we have the money, but usually $1K a month each until done. I used to think earlier is better, but after last year - when we were almost fully in by July - I'm not that bothered now. (It seems to me that a lot of new money gets invested after April 15 and there's a little bubble at the end of April.)
The Wizard
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Re: When do you invest in your Roth?

Post by The Wizard »

I try to put my $6K per year as soon as feasible, but I'm maxed out on my 403b funds as well and there's not a huge excess of $$ left over after paying other commitments.
So it's been taking a variable amount of time the past few years...
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jeffro
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Re: When do you invest in your Roth?

Post by jeffro »

Did my 5k last week for 2012.
bhead33
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Re: When do you invest in your Roth?

Post by bhead33 »

Put 10k in (for 2011 and 2012) a week ago and for my wife 10k today. Going to get the total bond fund.
rr2
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Re: When do you invest in your Roth?

Post by rr2 »

DCA monthly 416.66 each for both his/hers.
sumac55
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Re: When do you invest in your Roth?

Post by sumac55 »

I see that you have received numerous responses to "when" which was your question, but not many explainations of "why".

The general concensus is contribute as soon as possible, and I agree. Put your money to work tax free as soon as possible. And if you contirbute in January of each year, you are essentially dollar cost averaging, so don't try to time the market. Think long term.

Your allocation is another question, based on age and risk tolerance. In general it's best to put your least tax efficient holdings in a Roth. So for instance, I hold my REIT ETF (VNQ) in my Roth.

And because a Roth doesn't have a RMD (Required Minimum Distribution) that a 401k does, I view the Roth as having a longer investment horizon. My annual contribution generally goes to value tilted equity ETF's.

I hold the majority of my bond funds in my 401k, and the growth portion of my portfolio in a taxable brokerage account. Here is a link to a Boglehead discussion of tax efficient fund placement that you might find helpful:

http://www.bogleheads.org/wiki/Principl ... _Placement
TRC
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Re: When do you invest in your Roth?

Post by TRC »

We lump summed in this week, 5K me and 5K my wife. 100% Vanguard TIPs fund each.
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Ice-9
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Re: When do you invest in your Roth?

Post by Ice-9 »

Wow, am I the only one who puts in $200 every biweekly paycheck?
ianferrel
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Re: When do you invest in your Roth?

Post by ianferrel »

Usually right at the start of the year.

However, my Roth is entirely in bonds for the tax advantages of holding bonds in IRAs, and I'm currently slightly over my desired AA in bonds, so I'm going to contribute to a taxable account first this year to get my AA where I want it, then to the IRA later.

Someone stop me if this is a dumb idea.
kyounge1956
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Re: When do you invest in your Roth?

Post by kyounge1956 »

I contribute monthly by automatic transfer from my checking account. I will have to do a few contributions manually this year as I am in the process of moving my account from a mega-bank to a smaller one.
livesoft
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Re: When do you invest in your Roth?

Post by livesoft »

I put some money today into my Roth as I got my first paycheck of 2012, so I have earned income. I do not contribute as some others do until I have the earned income.

The money went into the cash sweep account, so I will decide what to buy in the next few days. In the past, I just invested into bond ETF shares, specifically VCSH until a really bad day occurred, then I exchanged into equities. I am almost always underweighted in bonds, so I feel very comfortable adding to a bond fund with each paycheck until a ReallyBadDay occurs.
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englishgirl
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Re: When do you invest in your Roth?

Post by englishgirl »

$208 every biweekly paycheck.

+ $8 during January.
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kyounge1956
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Re: When do you invest in your Roth?

Post by kyounge1956 »

englishgirl wrote:$208 every biweekly paycheck.

+ $8 during January.
Who is your IRA custodian? Mine won't do biweekly and since that's how I get paid I'd really prefer to make contributions on the same schedule.
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xystici
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Re: When do you invest in your Roth?

Post by xystici »

I put $100 once a week - normally every Friday - until I reach the annual maximum which for me is $5,000.
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englishgirl
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Re: When do you invest in your Roth?

Post by englishgirl »

kyounge1956 wrote:
englishgirl wrote:$208 every biweekly paycheck.

+ $8 during January.
Who is your IRA custodian? Mine won't do biweekly and since that's how I get paid I'd really prefer to make contributions on the same schedule.
Ahh, well, now I come to think about it, it's bimonthly. I keep forgetting that the company switched from biweekly pay to bimonthly pay (meaning, two per month, not every two months! Probably should be called semi-monthly) to save money. Sorry about that! The account is at Vanguard.
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itslate
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Re: When do you invest in your Roth?

Post by itslate »

i set up the automatic investment of 192.30 every two weeks on payday. thanks for posting the thread since it reminded me i have to tweak one to get the last twenty cents in. :D
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ruralavalon
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Re: When do you invest in your Roth?

Post by ruralavalon »

Now retired.

When working I had extremely erratic income, and we added new money in a lump sum whenever we had the cash.
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happymob
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Re: When do you invest in your Roth?

Post by happymob »

Usually January 1st (well, 2nd or 3rd), but waiting this year, potentially to March of 2013 (whenever taxes our taxes are "finalized") to see how Roth vs. TIRA will affect some tax credits and getting into the 15% tax bracket. An extra 14 months of tax-free growth om $10,000 isn't worth losing out on some tax credits (or free dividends).
555
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Re: When do you invest in your Roth?

Post by 555 »

icedtea wrote:When do you invest in your Roth?
Why do you ask it this way? Isn't one of the main decisions, how much to put into Trad and how much into Roth?
bpg1234
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Re: When do you invest in your Roth?

Post by bpg1234 »

happymob wrote:Usually January 1st (well, 2nd or 3rd), but waiting this year, potentially to March of 2013 (whenever taxes our taxes are "finalized") to see how Roth vs. TIRA will affect some tax credits and getting into the 15% tax bracket. An extra 14 months of tax-free growth om $10,000 isn't worth losing out on some tax credits (or free dividends).
happymob,
I'm no expert but I have a similar situation and was thinking one could move forward now and invest in their Roth, and then if it becomes apparent when doing their 2012 taxes that it would have been more beneficial to go the TIRA route, the prior Roth contributions could then be recharacterized?
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happymob
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Re: When do you invest in your Roth?

Post by happymob »

bpg1234 wrote:
happymob wrote:Usually January 1st (well, 2nd or 3rd), but waiting this year, potentially to March of 2013 (whenever taxes our taxes are "finalized") to see how Roth vs. TIRA will affect some tax credits and getting into the 15% tax bracket. An extra 14 months of tax-free growth om $10,000 isn't worth losing out on some tax credits (or free dividends).
happymob,
I'm no expert but I have a similar situation and was thinking one could move forward now and invest in their Roth, and then if it becomes apparent when doing their 2012 taxes that it would have been more beneficial to go the TIRA route, the prior Roth contributions could then be recharacterized?
That's probably true. It's a question of whether or not I want to bother with this.

In reality, with the backdoor both apparently available to us, we should probably go the TIRA route ASAP and recharacterize later to a Roth if it won't significantly hurt any tax credits (we would then get OK state tax deduction on the TIRA contribution and not have to pay it back on the recharacterization). Assuming we do TIRA now and Roth recharacterization at some later date, we potentially have to pay Federal (but not state) taxes on any gains during the gap, but that is certainly no worse than holding the money in taxable until later to begin with.
Kuota Rider
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Re: When do you invest in your Roth?

Post by Kuota Rider »

Vanguard deducts $416.66 for me and $416.66 for my wife from my checking account on the first of every month.
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FabLab
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Re: When do you invest in your Roth?

Post by FabLab »

We funded our Roths, both bond funds, the first day possible this year, on Jan. 3.
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kpete
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Re: When do you invest in your Roth?

Post by kpete »

For the last few years, I've been lump summing everything early in the year. This year, on Jan 3, I moved $6K into her IRA VIPSX. On Jan 3, I moved $6K into my IRA money market. On Jan 4, I converted that to my roth small cap value admiral. [note - vanguard warned me about the tax consequences of this conversion and I just smiled]
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zaboomafoozarg
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Re: When do you invest in your Roth?

Post by zaboomafoozarg »

RonV wrote:We funded our Roths, both bond funds, the first day possible this year, on Jan. 3.
Same here.
Madd Hatter
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Re: When do you invest in your Roth?

Post by Madd Hatter »

Last couple years it's seem to have been "as the extra cash builds up in our regular checking accounts/online savings acct we wish to close out". Earlier this week we purchased $6200 of the $10000 for this year, half of it being the remnants of a Dollar Savings Direct account that used to be competitive but has long been beaten by our ING Direct acct. A few years ago I'd laugh at the prospect of being down to one online savings acct, but here we are. ....We'll probably top the IRAs off in a second shot here this spring.

There have been times I considered equal contributions throughout the years automatically, but with the relative percentages we wish to have there was no way to top out at the full $5k to the dollar, so I said screw it.
dharrythomas
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Re: When do you invest in your Roth?

Post by dharrythomas »

When we get the money during the year. Most years during the Summer after we get a lump sum distribution. Last year early because we sold a house in the last quarter of CY10 and rather than put the whole thing down on a new home put the money in the Roth early and put the lump sum towards the house. Would have been better off to have waited, but either way you pay your money and take your chances.
Topic Author
durazno

Re: When do you invest in your Roth?

Post by durazno »

sumac55 wrote: Your allocation is another question, based on age and risk tolerance. In general it's best to put your least tax efficient holdings in a Roth. So for instance, I hold my REIT ETF (VNQ) in my Roth.

And because a Roth doesn't have a RMD (Required Minimum Distribution) that a 401k does, I view the Roth as having a longer investment horizon. My annual contribution generally goes to value tilted equity ETF's.

I hold the majority of my bond funds in my 401k, and the growth portion of my portfolio in a taxable brokerage account. Here is a link to a Boglehead discussion of tax efficient fund placement that you might find helpful:

http://www.bogleheads.org/wiki/Principl ... _Placement

Thanks. My least tax efficient funds (my bonds) are in my 401k and Rollover IRA. I don't hold any RIETs. I posted another question with my portfolio. Maybe you (and others) could take a look?

http://www.bogleheads.org/forum/viewtop ... =1&t=88967
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ray.james
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Re: When do you invest in your Roth?

Post by ray.james »

My strategy is contribute with my bonus in Jan - full 5k. It will go to a bond fund and then steadily 1k every 3 months in to EM and small value. If I see a >5-10% hit with in a month, I will move 2k instead of 1k. Last year the last 3k went all in during august end. Overall, worked ok.
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ofcmetz
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Re: When do you invest in your Roth?

Post by ofcmetz »

We put a little in ours after each paycheck. I try to time it in on bad days for fun, but really just limit myself to the two week period after getting paid and put it in regardless of what the market is doing.
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Re: When do you invest in your Roth?

Post by Grt2bOutdoors »

When the cashflow allows.
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Re: When do you invest in your Roth?

Post by floydtime »

When do you invest in your Roth?
Once I'm sure how much I'm allowed to contribute, if any (which is sadly late in the year).
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baa_10
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Re: When do you invest in your Roth?

Post by baa_10 »

Early January.... move money from Money Market account that was funded last year through monthly contributions.
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ann_l
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Re: When do you invest in your Roth?

Post by ann_l »

After putting 5k in at one shot in July 2008 in response to a windfall, I now DCA throughout the year, every two weeks.
bucksfan2
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Re: When do you invest in your Roth?

Post by bucksfan2 »

I tend to fund mine and my wife's Roth once my taxes are figured out.
manuvns
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Re: When do you invest in your Roth?

Post by manuvns »

well if your savings/investments are large ( 50-100K or more ) and have cash sitting on sidelines one time 5k investment doesn't make a difference .
Last edited by manuvns on Wed Jan 18, 2012 9:54 am, edited 1 time in total.
Thanks!
cleansparks
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Re: When do you invest in your Roth?

Post by cleansparks »

I invest it all in January every year.
4stripes
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Re: When do you invest in your Roth?

Post by 4stripes »

Vanguard's automated investment feature automatically maximizes the contribution for the year. I'm surprised at how many people are doing this manually. I set it up to maximize twice a month, and it ends up as $208.33, and 0.08 cents is added to get spot on to $5,000.
cubedbee
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Re: When do you invest in your Roth?

Post by cubedbee »

4stripes wrote:Vanguard's automated investment feature automatically maximizes the contribution for the year. I'm surprised at how many people are doing this manually. I set it up to maximize twice a month, and it ends up as $208.33, and 0.08 cents is added to get spot on to $5,000.
This is what I use. The biweekly version is $192.30 per paycheck, with the extra $0.20 being tacked on the first contribution.
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kenyan
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Re: When do you invest in your Roth?

Post by kenyan »

$416, once a month, for both his and hers. I don't claim it's better, it's just how we do it.
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mmmodem
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Re: When do you invest in your Roth?

Post by mmmodem »

I know I should lump sum to maximize returns but my stomach just can't handle it. I DCA monthly into his and hers, both Vanguard Total International Index.
jeh676
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Re: When do you invest in your Roth?

Post by jeh676 »

We put some in monthly, but we do the final contributions after the end of the tax year so that we can decide how much to put in traditional for the deduction.
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tnhooper45
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Re: When do you invest in your Roth?

Post by tnhooper45 »

bucksfan2 wrote:I tend to fund mine and my wife's Roth once my taxes are figured out.
I'm 24, just started my Roth last summer, only contributed $4200 because of earned income. This year I will make over $5K although I have not earned any money as of yet. Would you advise me to go ahead and start throwing money in? Seems like I have heard that contributions made before tax date would maximize the previous year's IRA if I didn't contribute the whole $5K (which I didn't=$4200). Does that make sense?
bucksfan2
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Re: When do you invest in your Roth?

Post by bucksfan2 »

tnhooper45 wrote:
bucksfan2 wrote:I tend to fund mine and my wife's Roth once my taxes are figured out.
I'm 24, just started my Roth last summer, only contributed $4200 because of earned income. This year I will make over $5K although I have not earned any money as of yet. Would you advise me to go ahead and start throwing money in? Seems like I have heard that contributions made before tax date would maximize the previous year's IRA if I didn't contribute the whole $5K (which I didn't=$4200). Does that make sense?
Its my understanding that if you invest before the income taxes you can place that contribution in the prior year. For example if you invest 5K in March of 2012 that can be applied to your 2011 contributions. I started investing in a Roth in March so I continue to do it that way. I like to wait until my xmas bills, property taxes, insurance, are all paid and there isn't a tax surprise before I contribute. It may not be the best way to do things but it gives me peace of mind.

If you could only contribute $4200 due to income limits I would imagine that you can't contribute anymore to your 2011 contributions. I don't have a problem with putting in a lump sum because the returns I want are decades off. If someone else has any better advice I am sure we both would want to hear it.
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