Just a little help.

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Investment17
Posts: 20
Joined: Tue Feb 28, 2017 9:14 am

Just a little help.

Post by Investment17 » Mon Jul 10, 2017 5:56 pm

I'm new to all this. 6 months in. ETF stocks, bonds etc

I have a Roth IRA and a taxable account. I already have liquid saved so I use my taxable as 60/40 semi savings, and my Roth as my 90/10 retirement. I put a little in each in week.

Right now I have about 3000 in my taxable and 2400 in my Roth.

My question is, does it make sense for me to have it like this, or should I be pulling the money out of my taxable and basically maxing out my Roth right now for the year? Am I essentially losing out on gains by now having it all in my Roth? Should I take it out and then max it out, and just put money for the rest of the year into my taxable?

My concern with that is, my taxable account is for money that I might actually wanna take out in the next 5 years. My Roth is for money I don't wanna touch for another 30 years.

As you can see, deff new at this.

Thanks

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arcticpineapplecorp.
Posts: 3354
Joined: Tue Mar 06, 2012 9:22 pm

Re: Just a little help.

Post by arcticpineapplecorp. » Mon Jul 10, 2017 6:49 pm

I don't understand. Wasn't this question already answered in your previous post?:

viewtopic.php?f=1&t=212378&p=3259418#p3259418

Did you not get the answers to your question? There was lots of good information already given in that post. I think they were saying to focus on maxing out the Roth. One poster said that was the priority. So why would you sell taxable investments to fund the Roth? There's many months left in the year (and up to tax day next year to max the Roth). Can't you get that done with new contributions between now and then?

If you post in the following format, you might get better answers:

viewtopic.php?t=6212
Last edited by arcticpineapplecorp. on Mon Jul 10, 2017 7:07 pm, edited 1 time in total.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

Investment17
Posts: 20
Joined: Tue Feb 28, 2017 9:14 am

Re: Just a little help.

Post by Investment17 » Mon Jul 10, 2017 7:06 pm

Thanks for the response

Emergency funds: 17,000
Debt: Zero
Tax Filing Status: Single
Tax Rate: 25% Federal, 8.97% State
Age:30
Asset allocation: 90% stocks / 10% bonds ROTH 2,400

60/40 Taxable 3,000

Put around 200-250 a week towards those 2 accounts. Stopped putting into emergency fund.

No 401K or Employee match. Doing it on my own.

Investment17
Posts: 20
Joined: Tue Feb 28, 2017 9:14 am

Re: Just a little help.

Post by Investment17 » Mon Jul 10, 2017 7:08 pm

arcticpineapplecorp. wrote:I don't understand. Wasn't this question already answered in your previous post?:

viewtopic.php?f=1&t=212378&p=3259418#p3259418

Did you not get the answers to your question? There was lots of good information already given in that post. I think they were saying to focus on maxing out the Roth. One poster said that was the priority. So why would you sell taxable investments to fund the Roth? There's many months left in the year (and up to tax day next year to max the Roth). Can't you get that done with new contributions between now and then?

If you post in the following format, you might get better answers:

viewtopic.php?t=6212
Oh yes, that was a lot of help and got me off the ground with all this. This was more about if I should take out of the taxable and put into the Roth. I did much more research since then on here. I apologize for not putting it in that thread. Thanks for pointing that out. I am going to take a look at that again, been a while since I've looked at that thread

To answer your question, yes that is true. I would basically have to only fund the Roth now and leave the taxable alone. I guess sometimes I feel that when I fund the Roth IRA only, that I am not saving money that I might need within a few years, and am only saving money that I won't touch till retirement. ( Nothing wrong with that, hard to explain what I mean)

You are right though, and the advice in the other thread was great. Funding my IRA should be priority, and once that is maxed, add to my taxable. Adding money to both at the same time, might not get me to MAX Roth.

MPAndy222
Posts: 42
Joined: Thu Mar 31, 2016 6:26 pm

Re: Just a little help.

Post by MPAndy222 » Mon Jul 10, 2017 7:24 pm

At your income I would avoid taxable until you max out the IRA account especially since you don't have a work 401k. I would put the $5500 in the 2017 roth IRA. If you AA is 90/10 then you could use the vanguard target retirement 2050 fund. The ER is 0.16 compared to betterment's 0.25.

mortfree
Posts: 1299
Joined: Mon Sep 12, 2016 7:06 pm

Re: Just a little help.

Post by mortfree » Mon Jul 10, 2017 8:14 pm

I would leave taxable alone...

Tell yourself you have a two-tiered EF/Savings - the 17k cash and the 3k taxable funds.

Max the Roth.

Look at it this way, if you had a 401k you could contribute 18k/year... for a total of 23.5 between Roth and 401k.

You're not even hitting 5500 towards retirement savings...

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