Best place to gradually save $6000 to max-out Roth IRA contribution in January

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Cranberry44
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Re: Best place to gradually save $6000 to max-out Roth IRA contribution in January

Post by Cranberry44 » Mon May 25, 2020 7:16 pm

RomeoMustDie wrote:
Mon May 25, 2020 7:09 pm
Put money into healthcare savings and education savings accounts until roth becomes available again. Maybe up your 401k contribution when you know your roth is full.
No HSA, 401(k), or education savings account (see my portfolio review request for more details, if you care). But for others, I'm sure that is great advice.

RomeoMustDie
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Re: Best place to gradually save $6000 to max-out Roth IRA contribution in January

Post by RomeoMustDie » Mon May 25, 2020 7:31 pm

Cranberry44 wrote:
Mon May 25, 2020 7:16 pm
RomeoMustDie wrote:
Mon May 25, 2020 7:09 pm
Put money into healthcare savings and education savings accounts until roth becomes available again. Maybe up your 401k contribution when you know your roth is full.
No HSA, 401(k), or education savings account (see my portfolio review request for more details, if you care). But for others, I'm sure that is great advice.
I'd just dump your extra money into the brokerage and fund the roth with new money. Would not short sell to fund roth.

Overall for $6 grand there isn't much difference either way.

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Cranberry44
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Re: Best place to gradually save $6000 to max-out Roth IRA contribution in January

Post by Cranberry44 » Tue May 26, 2020 9:01 am

RomeoMustDie wrote:
Mon May 25, 2020 7:31 pm
Cranberry44 wrote:
Mon May 25, 2020 7:16 pm
RomeoMustDie wrote:
Mon May 25, 2020 7:09 pm
Put money into healthcare savings and education savings accounts until roth becomes available again. Maybe up your 401k contribution when you know your roth is full.
No HSA, 401(k), or education savings account (see my portfolio review request for more details, if you care). But for others, I'm sure that is great advice.
I'd just dump your extra money into the brokerage and fund the roth with new money. Would not short sell to fund roth.

Overall for $6 grand there isn't much difference either way.
Thanks, RomeoMustDie -- this is how I'm leaning now -- I appreciate your insights!

retired@50
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Location: Living in the U.S.A.

Re: Best place to gradually save $6000 to max-out Roth IRA contribution in January

Post by retired@50 » Tue May 26, 2020 9:10 am

Cranberry44 wrote:
Sun May 17, 2020 2:05 pm
Hello!
...
**EDIT 2 (May 20):**
Based on advice received thus far in this thread, my current situation is:
1) I have maxed my 2020 IRA contribution (fully funding in January)
2) I am now purchasing VTI in a taxable, with possibility of selling them to fund my 2021 Roth in 01/2021 (see below).
3a) If by the end of the year I can TLH, I will, and repurchase VTI in Roth after 31 days.
3b) If by the end of the the year my VTI taxable position has a gain, I won't touch it, and will fund the Roth with new income.

Follow-up Question:
At step 2, should I be reinvesting dividends in this taxable account? Will that complicate 3a (or 3b) somehow?
Cranberry44,
I mean this in the nicest possible way, but, you've made buying a Roth IRA more complicated that anything I can imagine. You're completely forgetting about simplicity in investing. You're overthinking things, trying to worry about a "possible" tax-loss harvesting / wash sale problem in the future. My advice remains the same.

Stop funding your Roth IRA early, just fund it all year long. I believe that funding each account you contribute to (401k, Roth IRA, taxable) all year long is the simplest way to actually maintain your savings habit. Making this as routine as brushing your teeth will help you avoid errors.

Regards,
This is one person's opinion. Nothing more.

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Topic Author
Cranberry44
Posts: 87
Joined: Sun May 17, 2020 1:46 pm

Re: Best place to gradually save $6000 to max-out Roth IRA contribution in January

Post by Cranberry44 » Tue May 26, 2020 9:25 am

retired@50 wrote:
Tue May 26, 2020 9:10 am
Cranberry44 wrote:
Sun May 17, 2020 2:05 pm
Hello!
...
**EDIT 2 (May 20):**
Based on advice received thus far in this thread, my current situation is:
1) I have maxed my 2020 IRA contribution (fully funding in January)
2) I am now purchasing VTI in a taxable, with possibility of selling them to fund my 2021 Roth in 01/2021 (see below).
3a) If by the end of the year I can TLH, I will, and repurchase VTI in Roth after 31 days.
3b) If by the end of the the year my VTI taxable position has a gain, I won't touch it, and will fund the Roth with new income.

Follow-up Question:
At step 2, should I be reinvesting dividends in this taxable account? Will that complicate 3a (or 3b) somehow?
Cranberry44,
I mean this in the nicest possible way, but, you've made buying a Roth IRA more complicated that anything I can imagine. You're completely forgetting about simplicity in investing. You're overthinking things, trying to worry about a "possible" tax-loss harvesting / wash sale problem in the future. My advice remains the same.

Stop funding your Roth IRA early, just fund it all year long. I believe that funding each account you contribute to (401k, Roth IRA, taxable) all year long is the simplest way to actually maintain your savings habit. Making this as routine as brushing your teeth will help you avoid errors.

Regards,

Yes -- I'm in agreement! I was getting extremely overwhelmed and was just trying to compile all the advice I've received, as I'm trying to get my finances on the right track. I've been upset at all the missed opportunities in my financial life over the last decade, and I just don't want to screw up again. But I've decided to do what you and a few others have stated -- I'm going to stick with simplicity!

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