2019 Roth IRA Contributions

[FPS_dapdap]

How many people are making their 2019 Roth IRA contribution on 1/1/19? What are the pros and cons?

[infotrader]

Always do it at 12am for every eligible member in family, then go sleep.
Don't see any downsides.

[Jordan4FI]

I would like to be able to, but atm I do not the the $ in the bank.. I will continue to invest on a weekly schedule.. $115 every Monday.

[magicrat]

I am. Upside: Expected returns from stocks are positive, invest early to capture. Downside: None

[FPS_dapdap]

Thanks everyone for the replies. Looks like i'll be dumping $6K on 1/1/19 as well.

[Edie]

Am not. Will still be doing 2018 contributions, as we are perpetually behind. I save 30+% in workplace contributions, but haven't caught up to being able to get IRA contributions completed in the calendar year to which they apply. Someday!

[nolesrule]

Since we must do a backdoor Roth and conversions are not reversible anymore, we wait until we've had payroll hit. It takes 2 paychecks each to have enough income to hit the contribution amount. So for my wife it'll be Jan 18 and for me January 31st to make the non-deductible contributions and when they settle we'll do the conversions.

[deltaneutral83]

Since we must do a backdoor Roth and conversions are not reversible anymore, we wait until we've had payroll hit. It takes 2 paychecks each to have enough income to hit the contribution amount. So for my wife it'll be Jan 18 and for me January 31st to make the non-deductible contributions and when they settle we'll do the conversions.

If you're in backdoor territory, I'm curious why it takes two checks to get to $12,000. Unless you front load your 401k or have other non standard deductions????

[jhfenton]

I would like to be able to, but atm I do not the the $ in the bank.. I will continue to invest on a weekly schedule.. $115 every Monday.

+1 We never have an extra $12,000 just sitting around not invested. I don't do weekly, but I do monthly or biweekly. This year math is easy, $1,000 per month across two accounts. I will do at least $1,000 on January 1 or 2.

[nolesrule]

Since we must do a backdoor Roth and conversions are not reversible anymore, we wait until we've had payroll hit. It takes 2 paychecks each to have enough income to hit the contribution amount. So for my wife it'll be Jan 18 and for me January 31st to make the non-deductible contributions and when they settle we'll do the conversions.

If you're in backdoor territory, I'm curious why it takes two checks to get to $12,000. Unless you front load your 401k or have other non standard deductions????

It's not a full two paychecks. But one does not receive fractions of paychecks.

Every pre-tax deduction reduces income available. I'm paid 24 times a year and the wife is paid 26 times a year. Our income is similar, but all the non-401k pretax deductions come out of my wife's pay. It takes me about 1.1 paychecks to get enough Box 1 wages. it takes my wife about 1.6 paychecks.

My 401k is not front-loaded since there's no true up on the match, but I get variable quarterly bonuses and my variable raise comes at the start of Q4, so I defer to my 401k based on zero bonuses or raise and then back off the contributions as necessary throughout the year so that I still can get a full match on the final paycheck.

[RickBoglehead]

How many people are making their 2019 Roth IRA contribution on 1/1/19? What are the pros and cons?

The answer is - no one.

1/1/19 is not a date the markets are open, nor the banks. A purchase on 1/1/19 actually happens on 1/2/19

I will be, only because I can remove contributions made if the earnings don't happen, in case one of us loses employment by surprise.

[bgf]

my plan is to tax loss harvest at the end of the year. transfer $12k from those sales into our Roths as soon as it clears and go on my merry way!

[samsoes]

Am not. Waiting until $7k earned income is realized, and only then once I'm convinced I won't need to contribute instead to a deductible TIRA for ACA MAGI manipulation purposes if I suspect to find myself unexpectedly unemployed.

[MathWizard]

I'm always contributing for the previous year when I do my taxes.

We are still barely in the 22% bracket with max 403b contributions, so
we keep maxing that to save on taxes.

We just got two kids out of college, and the house paid off. To do so without
debt, we deferred both maintenance on the house and car replacement.
We are now catching up on that, which requires quite a bit of our cash flow.
Thus, we do not yet have funds built up to be able to do 2 year's contributions in 1.
I plan to do that in about 3 years from now as I approach retirement.

[Earl Lemongrab]

For the first time in quite a while, I will be ineligible for IRA contributions, what with no earned income and all.

[nolesrule]

Since we must do a backdoor Roth and conversions are not reversible anymore, we wait until we've had payroll hit. It takes 2 paychecks each to have enough income to hit the contribution amount. So for my wife it'll be Jan 18 and for me January 31st to make the non-deductible contributions and when they settle we'll do the conversions.

If you're in backdoor territory, I'm curious why it takes two checks to get to $12,000. Unless you front load your 401k or have other non standard deductions????

Just to throw a little math at this question. For 2 earners getting 2 checks per month, your W-2 Box 1 wages combined would be at least $288k to be able to do it in 1 check each. That's almost $100k above the bottom of the direct Roth contribution phaseout range.