Max It Out Tomorrow [your IRA]

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guitarguy
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Re: Max It Out Tomorrow [your IRA]

Post by guitarguy » Wed Jan 04, 2017 7:57 am

Interesting.

Over the past couple of years we've finally made it to the point where we can max out both Roth IRA's. Now all that's left is to tick up 401k contributions 1%...or more if we can swing it...per year until those are maxed as well. Right now we're at a savings rate of 23% of gross income. No taxable accounts as of yet. We are saving for car fund and so forth in cash.

Thinking we're doing pretty good. :D

Now I get on here and have to read about lump sum vs DCA?? :oops: :greedy

We'll stick with $458/m for now!

*3!4!/5!
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Re: Max It Out Tomorrow [your IRA]

Post by *3!4!/5! » Wed Jan 04, 2017 8:03 am

guitarguy wrote:Now I get on here and have to read about lump sum vs DCA?? :oops: :greedy
"lump sum vs DCA" is easy.

"lump sum investing" is when you invest exactly once in your entire life.

"DCA" is when you invest more than once in your entire life.

"not investing at all" is when you invest less than once in your entire life.

guitarguy
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Re: Max It Out Tomorrow [your IRA]

Post by guitarguy » Wed Jan 04, 2017 8:26 am

*3!4!/5! wrote:
guitarguy wrote:Now I get on here and have to read about lump sum vs DCA?? :oops: :greedy
"lump sum vs DCA" is easy.

"lump sum investing" is when you invest exactly once in your entire life.

"DCA" is when you invest more than once in your entire life.

"not investing at all" is when you invest less than once in your entire life.
I understand the concept. I was more tongue in cheek joking about the fact that just maxing out the Roth contributions isn't enough.

BH's are even maximizing HOW they maximize. :wink:

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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Wed Jan 04, 2017 12:27 pm

As you may have noticed, there's a lot of opinions on how best to invest, but at this point it's getting into the hair-splitting and investment theory of this all. You've done the most important part: focus on maximizing your savings and tax-advantages.

:sharebeer

As for your above questions, lump-sum vs DCA is usually a topic reserved for things like large windfalls or inheritances aka: inherited $120k, should you put $120k into your mutual funds right now or split it into $12k/month. That, IMO, is the traditional understanding of DCA: as a strategy to move a lump-sum of cash into the market gradually. I guess the Investopedia folks simplify it down to "regular purchasing of fixed dollar amounts of securities" which fits this mentality as well.

Personally, I think it's a bit of a stretch to say that putting our $5,500 IRA limit into your IRA on Jan 1 is DCA'ing your overall lifetime IRA contributions. It's certainly DCA to say you have $5,500 in cash and are contributing it to your IRA in 12 monthly installments. It is, IMHO, not DCA if you have $458/mo. that becomes newly available and is immediately invested regularly in your IRA.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

JD2775
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Re: Max It Out Tomorrow [your IRA]

Post by JD2775 » Wed Jan 04, 2017 1:41 pm

guitarguy wrote:Interesting.

Now I get on here and have to read about lump sum vs DCA?? :oops: :greedy

We'll stick with $458/m for now!
No problems with that, it's the same thing I do. Sure, I could take $5500 out of my savings and invest it upfront and then pay back my savings account but I don't see the need. So $458/month it is.

barnaclebob
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Re: Max It Out Tomorrow

Post by barnaclebob » Wed Jan 04, 2017 2:08 pm

aorin wrote:
red5 wrote:
aorin wrote:I will never max out on the first day again, last year sucked! I will be using a plan similar to Livesoft.
At first I did not know what you were referring to as "last year sucked!". I looked at prices and saw that Total US Stock dropped about 10% over the first month. Is that what you are referring to?

What happens if the stock market goes up 10% in the first month? Will you then say that this year sucked because you did not max out on the first day?

Hindsight is 20/20.
Yep if you bought say the S&P 500 Index on January 4th 2016, you were in the hole until march. My Roth has VTI(Total US),VBR(Small Cap Value US),VXUS(Total International), and VSS(Small International). I am betting that at least one of those will be cheaper than today at some point, but you are right I could totally lose out on crazy gains! I will be rooting for an early RBD.
I dont know what you are talking about, the beginning of last year was awesome. My wife and I had 20k out of the market while our Mega backdoor roth checks were in the mail...

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Toons
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Re: Max It Out Tomorrow

Post by Toons » Wed Jan 04, 2017 6:26 pm

orca91 wrote:I maxed mine out today.... $5500 into the balanced index fund.

People, we're talking about $5500 or $6500 (maybe double for a couple), not $5 million. Putting a fairly small amount ASAP in January or spreading it out over months or the year is going to make little difference in the long run. Keep things in perspective. Let's argue about things that actually make a difference, huh? :happy
:sharebeer
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

bantam222
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Re: Max It Out Tomorrow [your IRA]

Post by bantam222 » Thu Jan 05, 2017 5:03 pm

I just completed my back door roth contribution of $5500 today.

Fidelity seems to have a weird bug where I cannot convert traditional to roth the next trading day. I had to wait an additional day to perform the conversion.

Next up for 2017: Max traditional 401k and mega back door roth

Cheers :sharebeer

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Toons
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Re: Max It Out Tomorrow [your IRA]

Post by Toons » Thu Jan 05, 2017 6:17 pm

bantam222 wrote:I just completed my back door roth contribution of $5500 today.

Fidelity seems to have a weird bug where I cannot convert traditional to roth the next trading day. I had to wait an additional day to perform the conversion.

Next up for 2017: Max traditional 401k and mega back door roth

Cheers :sharebeer

:sharebeer
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Thu Jan 05, 2017 11:21 pm

Well after having to maneuver around my banks $5000/day transfer limits between my mortgage transfer and two Roth IRAs I'm all done getting my IRAs fully funded.

:sharebeer
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

island
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Re: Max It Out Tomorrow [your IRA]

Post by island » Sat Jan 07, 2017 12:47 pm

Spouse and I both all in $6500 yesterday, ready for backdoor conversion soon as the funds clear next week.

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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Sat Jan 07, 2017 1:32 pm

For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

*3!4!/5!
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Re: Max It Out Tomorrow [your IRA]

Post by *3!4!/5! » Sat Jan 07, 2017 1:35 pm

blaugranamd wrote:For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/convert to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
I'm maxing out stuff all year, then towards the end of the year I'm done maxing and can save next years IRA from the last few paychecks. So yes I'm guilty of leaving cash uninvested for a month or two before putting it in on Jan 1.

lazydavid
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Re: Max It Out Tomorrow [your IRA]

Post by lazydavid » Sat Jan 07, 2017 2:29 pm

Since I'll be effectively funding my Backdoor Roth from a Taxable account with a similar investment mix*, I don't think it matters much when I actually do it. There may be some slight difference in the amount of gain on the sale, but that should be eaten up by TLH throughout the year--unless the market ONLY goes up, but that's ok with me too. :) Taxable is funded 5 times per year (4xESPP, 1xRSU vestment), the moment the shares become available.

*I can't actually fund the Roth directly from the taxable, since they require deposits in cash. So instead I'll be initiating a contribution from my EF account to the IRA, and at the same time a sale/withdrawal of the same amount from taxable to the EF account. Small risk I'll miss a RGD or RBD in the 1-2 days it takes everything to settle, but more or less continuously invested.

island
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Re: Max It Out Tomorrow [your IRA]

Post by island » Sat Jan 07, 2017 2:38 pm

blaugranamd wrote:For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
I don't invest every cent. Have some cash in bank money market, money left over from paychecks not needed for expenses or invested yet, etc. So I guess you could call it my large emergency fund.

Bacchus01
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Re: Max It Out Tomorrow

Post by Bacchus01 » Sat Jan 14, 2017 3:40 pm

sat24 wrote:
Bacchus01 wrote:Each year I max out on Jan 1 or as soon after:

- two IRAs for backdoor
- 5 X 529s (emphasis mine, not from OP)
- Hsa
re: this

What does maxing out 529 mean? I have never been able to figure out what the cap is. Some say 14K per parent per 529 beneficiary, but then some say the limit is much higher than that. (not counting the "5yr mega"-529)
In our state, Wisconsin, there is a tax deduction for $3,100 of contribution. Thus, we contribute $3,100 to each of them each year. One each for three kids and one each for my wife and I.

pasadena
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Re: Max It Out Tomorrow [your IRA]

Post by pasadena » Sat Jan 14, 2017 3:54 pm

blaugranamd wrote:For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
The first year I did 1 (FY2014 on 01/2015) then used my bonus in 04/2015 for FY2015.

Now I do 2. I maxed out FY2017 early January and I just started building up for FY2018 in my savings account.

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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Tue Jan 02, 2018 8:55 am

Any one else maxing out the IRA contributions all in one go in 2018? :sharebeer
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

RRAAYY3
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Re: Max It Out Tomorrow [your IRA]

Post by RRAAYY3 » Tue Jan 02, 2018 9:01 am

Roth = maxed

See ya in 2019

coupleofcents
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Re: Max It Out Tomorrow [your IRA]

Post by coupleofcents » Tue Jan 02, 2018 9:10 am

Initiated 11,000 to my wife and my brokerage yesterday. Once that posts I still haven't decided how much to Roth vs. Traditional IRA, and which funds in which amounts.

stoptothink
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Re: Max It Out Tomorrow [your IRA]

Post by stoptothink » Tue Jan 02, 2018 9:19 am

blaugranamd wrote:
Tue Jan 02, 2018 8:55 am
Any one else maxing out the IRA contributions all in one go in 2018? :sharebeer
Yep, took care of that yesterday. I am also going to try to significantly front-load my 401k this year, to the point where I'll just get the match about halfway through the year to hit the max. Will continue just DCA'ing the wife's 401k, at least for this year.

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TierArtz
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Re: Max It Out Tomorrow [your IRA]

Post by TierArtz » Tue Jan 02, 2018 9:25 am

My tIRA and that of DW will be maxed at market close today. I used most of our cash to do it. So far today, stocks appear to be on sale!

Edit: My M* app was stuck on the stock market declines for 29 December. So now, it looks like my Roth conversion will be more than the $6500 "stolen" from my emergency funds :happy
Last edited by TierArtz on Tue Jan 02, 2018 2:54 pm, edited 1 time in total.

Jags4186
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Re: Max It Out Tomorrow [your IRA]

Post by Jags4186 » Tue Jan 02, 2018 9:30 am

*3!4!/5! wrote:
Wed Jan 04, 2017 8:03 am
guitarguy wrote:Now I get on here and have to read about lump sum vs DCA?? :oops: :greedy
"lump sum vs DCA" is easy.

"lump sum investing" is when you invest exactly once in your entire life.

"DCA" is when you invest more than once in your entire life.

"not investing at all" is when you invest less than once in your entire life.
I would suggest that DCA is not investing more than once in your life. DCA only occurs when you have a lump sum that you choose to invest over a period of time--I.E. you inherit $100,000 and decide to invest $10,000/mo for 10 months instead of the entire $100,000 immediately. If you invest every week from your paycheck you are by definition "lump sum investing" -- because it after all new money available to you that you are investing immediately.

lostdog
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Re: Max It Out Tomorrow [your IRA]

Post by lostdog » Tue Jan 02, 2018 9:47 am

We have money in vtsax in taxable. We're piling in monthly to our Roth IRA's. Would it be better to sell vtsax shares in taxable to max our 2018 Roth contributions instead of using monthly income cash to fill the roth accounts?

We're in a low tax bracket currently.
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Jags4186
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Re: Max It Out Tomorrow [your IRA]

Post by Jags4186 » Tue Jan 02, 2018 9:50 am

lostdog wrote:
Tue Jan 02, 2018 9:47 am
We have money in vtsax in taxable. We're piling in monthly to our Roth IRA's. Would it be better to sell vtsax shares in taxable to max our 2018 Roth contributions instead of using monthly income cash to fill the roth accounts?

We're in a low tax bracket currently.
If you can sell your proceeds in your taxable account at a 0% capital gains tax than I would do it. If you have to pay the tax and can put the $5500/$11000 into your Roth IRA during the course of the year, I would simply contribute from your income.

Keepcalm
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Re: Max It Out Tomorrow [your IRA]

Post by Keepcalm » Tue Jan 02, 2018 10:06 am

Cheers to all who are maxing out today. I wanted to but last minute backed out. It will deplete just too much of my $7,200.00 EF and does not seem wise as much as I would love to do so.

458/MO is a lot better than not investing at all though! In addition I also contribute ~$425.00/MO towards my governmental 457(b) so annually I usually am able to get between $10,500-$11,000 invested.

All VINIX (through 457 to avoid 5MM minimum), VOO, and BIV in portfolio 90/10.
Last edited by Keepcalm on Tue Jan 02, 2018 10:10 am, edited 4 times in total.

coupleofcents
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Re: Max It Out Tomorrow [your IRA]

Post by coupleofcents » Tue Jan 02, 2018 10:06 am

blaugranamd wrote:
Sat Jan 07, 2017 1:32 pm
For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
Lucky enough to get a Christmas bonus. Sits in Ally Online Savings account for about 2 weeks before getting deployed to IRAs.

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Re: Max It Out Tomorrow [your IRA]

Post by jhfenton » Tue Jan 02, 2018 10:26 am

I added $495 to my Roth this morning. In two weeks, I'll add the same to my wife's Roth. The rest of the year I'll add $455 per month to each Roth.

We would have to raid our emergency funds and/or sell taxable investments to fully fund them both immediately.

Bacchus01
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Re: Max It Out Tomorrow

Post by Bacchus01 » Tue Jan 02, 2018 10:32 am

JD2775 wrote:
Mon Jan 02, 2017 6:24 pm
Can someone explain this to me?

The market is fairly "high" right now....why would dumping $5500 into it today be better than breaking it up into 12-monthly installments for example? (which I have to do, no choice)

Just curious. Thanks.
Because I don't need it for 10+ years, maybe 20. I'm betting that lump summing it now is better than, or at least minimally different than, dollar cost averaging over the next 12 months for a withdrawal in 10+ years.

ny_knicks
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Re: Max It Out Tomorrow [your IRA]

Post by ny_knicks » Tue Jan 02, 2018 10:43 am

Both GF and I contribute $105 a week and then will backdoor at the end of the year.

I don't consider this DCA as we don't have the extra cash to max both on Jan 1. We pay ourselves every time new money comes in the door. If we decided to front-load it we'd have $$$ just sitting in a savings account or some other short-term vehicle for 6 months waiting for next year. Prefer to smooth it out in our budget so I really know what is excess every month.

Believe Vanguard did a piece on DCA and it lags lump sum by like 2% historically.

livesoft
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Re: Max It Out Tomorrow [your IRA]

Post by livesoft » Tue Jan 02, 2018 10:52 am

TierArtz wrote:
Tue Jan 02, 2018 9:25 am
My tIRA and that of DW will be maxed at market close today. I used most of our cash to do it. So far today, stocks appear to be on sale!
???
Bond funds are on sale. Stock funds are selling, but are not on sale.

As I type this US Total Stock Market ETF is up about 0.5%. If this holds to close of market today, then anybody buying Vanguard Total Stock Market Index fund VTSMX or VTSAX today will trail the return of these funds by 0.5% with that money for 2018.

OTOH, Total Bond Index ETF was down about 0.3% earlier today, so anybody who bought it will outperform VBTLX / VBMFX for 2018 by about 10% of the return for 2017.
Last edited by livesoft on Tue Jan 02, 2018 10:58 am, edited 1 time in total.
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Crisium
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Re: Max It Out Tomorrow [your IRA]

Post by Crisium » Tue Jan 02, 2018 10:54 am

Moved cash into the account (from Emergency funds, but still have a good amount there and it will be replenished), will place buy orders so my mutual funds can get bought tonight (one day out of the market!).

LS > DCA 2/3 of the time. I don't have a crystal ball so I'll do what is statistically in my favour. I buy into my 401k twice a month anyway, so that's my mental insurance if DCA is better: I can tell myself my 401k did it right (similar allocations in both accounts). Regular 401k contributions, if technically LS as Jags says, have the same effect as DCA. It's impossible for me to max anyway, so no choice on my part.

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Re: Max It Out Tomorrow

Post by blaugranamd » Tue Jan 02, 2018 11:34 am

Bacchus01 wrote:
Tue Jan 02, 2018 10:32 am
JD2775 wrote:
Mon Jan 02, 2017 6:24 pm
Can someone explain this to me?

The market is fairly "high" right now....why would dumping $5500 into it today be better than breaking it up into 12-monthly installments for example? (which I have to do, no choice)

Just curious. Thanks.
Because I don't need it for 10+ years, maybe 20. I'm betting that lump summing it now is better than, or at least minimally different than, dollar cost averaging over the next 12 months for a withdrawal in 10+ years.
Keep an eye on the timestamps in this thread. This is PRECISELY why I bumped this thread from last year. For 2017 at least, lump summing in January > DCA given the market went up virtually all year despite being at an all time high at the time. While it's just one year, it's a great illustration of the point that has been born out in a number of referenced statistics on the topic. I'd be interested in seeing the math of real final outcomes for 2017 of lump sum vs equal lot DCA and the difference in ROI for both strategies if someone better at math than me can produce it.

For those who can't lump sum, better to invest as you can than not at all. This is, admittedly, a topic for folks who are blessed enough to split hairs on how to invest moderate sums of money at once.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Tue Jan 02, 2018 11:36 am

coupleofcents wrote:
Tue Jan 02, 2018 10:06 am
blaugranamd wrote:
Sat Jan 07, 2017 1:32 pm
For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
Lucky enough to get a Christmas bonus. Sits in Ally Online Savings account for about 2 weeks before getting deployed to IRAs.
To answer my own question, my TSP maxed out in mid Nov, so I got a "bonus" in the sense of the extra take home pay from TSP not being funded for 6 weeks. Plus I haven't allocated a lot of my monthly income explicitly yet so what ended up being taxable investments was just held until now for IRA contributions. Should do a better job of watching my TSP % with BRS starting this year.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

JD2775
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Re: Max It Out Tomorrow [your IRA]

Post by JD2775 » Tue Jan 02, 2018 11:40 am

ny_knicks wrote:
Tue Jan 02, 2018 10:43 am
Both GF and I contribute $105 a week and then will backdoor at the end of the year.

I don't consider this DCA as we don't have the extra cash to max both on Jan 1.
Bingo. I don't consider it DCA either as it's just not feasible for me to do a lump sum all at once, so I spread it out. It's not for any other reason other than that

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samsoes
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Re: Max It Out Tomorrow [your IRA]

Post by samsoes » Tue Jan 02, 2018 11:54 am

blaugranamd wrote:
Tue Jan 02, 2018 8:55 am
Any one else maxing out the IRA contributions all in one go in 2018? :sharebeer
Nope. Not sure I'll have the necessary MAGI. I may pull the ripcord at Megacorp very soon. Interstate commute is killing me. In the meantime, I'll be front-loading 401(k) to maximize what I can defer (which in turn lowers MAGI) while I'm still employed.

(I originally planned to give notice on 12/8, but I have major dental work next week and will likely need to use the whole dental allotment.)
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blaugranamd
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Re: Max It Out Tomorrow [your IRA]

Post by blaugranamd » Tue Jan 02, 2018 12:17 pm

samsoes wrote:
Tue Jan 02, 2018 11:54 am
blaugranamd wrote:
Tue Jan 02, 2018 8:55 am
Any one else maxing out the IRA contributions all in one go in 2018? :sharebeer
Nope. Not sure I'll have the necessary MAGI. I may pull the ripcord at Megacorp very soon. Interstate commute is killing me. In the meantime, I'll be front-loading 401(k) to maximize what I can defer (which in turn lowers MAGI) while I'm still employed.

(I originally planned to give notice on 12/8, but I have major dental work next week and will likely need to use the whole dental allotment.)
We'll still be ok thanks to the larger MFJ standard deduction in 2018. The real debate is now that marginal income brackets are even lower than 2017, I was planning to shift some of my Roth to Traditional TSP. However, with the new tax law changes, we should be in 22% marginal rate next year instead of the 28% I was expecting. But that's a topic for another thread.
-- Don't mistake more funds for more diversity: Total Int'l + Total Market = 7k to 10k stocks -- | -- Market return does NOT = average nor 50th percentile, rather 80-90th percentile long term ---

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DaftInvestor
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Re: Max It Out Tomorrow [your IRA]

Post by DaftInvestor » Tue Jan 02, 2018 1:52 pm

The sooner I can move money that is generating taxable growth to non-taxable (or tax-deferred) the better.

Max'd into t-IRA today - will move that into Roth (backdoor) in a couple of days (as soon as it clears).
Also - put in my 529 to get my state deduction and will buy an iBond before month's end.
Regarding my company 401K plan - unfortunately I need to stretch that across the year to get my company match (as my company has a max-match per quarter) - otherwise I would try to get that space filled ASAP as well.

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Clever_Username
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Re: Max It Out Tomorrow [your IRA]

Post by Clever_Username » Tue Jan 02, 2018 2:18 pm

Sadly, I cannot backdoor and my income is at that level where I might or might not be able to contribute anything to a Roth IRA in 2018. Same problem in 2017, although I now have the information to calculate if I can finally make my 2017 contribution.
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FootballFan5548
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Re: Max It Out Tomorrow [your IRA]

Post by FootballFan5548 » Tue Jan 02, 2018 2:22 pm

I just dumped $5,500 each for my wife and I into our TIRA's. Will wait a few days and then backdoor Roth both of them.

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telemark
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Re: Max It Out Tomorrow

Post by telemark » Tue Jan 02, 2018 2:28 pm

blaugranamd wrote:
Tue Jan 02, 2018 11:34 am
Keep an eye on the timestamps in this thread.
I thought the arguments seemed familiar.

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Re: Max It Out Tomorrow [your IRA]

Post by a username for Mike » Tue Jan 02, 2018 2:46 pm

blaugranamd wrote:
Sat Jan 07, 2017 1:32 pm
For those of you who are "all-in January" people, where do you get your funds from or where do you hold your funds until next year?

1. Borrow from emergency fund in January and rebuild over the year
2. Build up separate cash reserves to invest next January
3. Invest in the same funds as your IRA in taxable and sell/"convert" to IRA equivalent shares, TLHing or paying ST/LT cap gains taxes in the process
4. Invest in different funds from your IRA in a taxable account, like a tax-exempt muni bond fund, and convert to cash to transfer into your IRA at your current AA
5. Other? :confused
Overall I try to max my tax advantaged space early.

I have a frontloaded contribution to my 401k so it maxes out 4 months in and leaves me with more income the rest of the year. I usually let the excess money from paychecks accumulate in an online savings account and then use that to contribute back to my AA balance quarterly, prioritizing tax advantaged space. The January quarter usually involves putting money into Roth IRA alongside this and the April one usually doesn't have much to do as most of the normal excess goes to my 401k.

It's not maximally efficient because the money isn't in the market the entire time, but I don't want to make lots of trades every time I get paid or buy something.

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FIREchief
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Re: Max It Out Tomorrow

Post by FIREchief » Tue Jan 02, 2018 3:29 pm

Great and timely thread bump!!
livesoft wrote:
Mon Jan 02, 2017 6:57 pm
I am not a fan of dumping in on the first day.

First, there are no distributions scheduled for another month, so there is no rush.

What is the past probabilty that the lowest point of the year occurred in the first 4 trading days of the year?

And I wonder if DCA did better in 2016 than LS on the first day of the year?
Not to pick on livesoft, but in 2017 Jan 2 was actually the lowest point of the year!! 8-)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Max It Out Tomorrow [your IRA]

Post by livesoft » Tue Jan 02, 2018 3:38 pm

^It has happened before. :)

But in 2017, one could have waited to 8/18/2017 in order to invest in VSIAX (Vanguard Small-cap Value Index fund) to get the lowest value of the year. :twisted:

That is, one can often find something later in the year that is lower than the first day. :sharebeer
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cfs
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Re: Max It Out Tomorrow [your IRA]

Post by cfs » Tue Jan 02, 2018 3:45 pm

Of course, challenging days will come, however, you just don't want to be out of this market for one day. Good luck, and thanks for reading ~cfs~
~ Member of the Active Retired Force ~

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FIREchief
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Re: Max It Out Tomorrow [your IRA]

Post by FIREchief » Tue Jan 02, 2018 3:52 pm

livesoft wrote:
Tue Jan 02, 2018 3:38 pm
^It has happened before. :)

But in 2017, one could have waited to 8/18/2017 in order to invest in VSIAX (Vanguard Small-cap Value Index fund) to get the lowest value of the year. :twisted:

That is, one can often find something later in the year that is lower than the first day. :sharebeer
touche' :sharebeer

I'm a US TMI investor, so Jan 2 worked great last year. It might work great this year or it might be good but not great. I do this every year, so it's more a matter of "stay the course." Any opportunity I miss this year will likely be more than offset by how great 2017 worked out.

disclosure: in my scenario, it is Roth conversions and not IRA contributions as I am FIRE. Same things apply, though.

Now, I need to go search the forum to see who posted on 8/18/2017 saying that "today is the day to buy VSIAX!" :twisted: (and, I AM going to check the posts for "last edited" time/date).
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

livesoft
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Re: Max It Out Tomorrow [your IRA]

Post by livesoft » Tue Jan 02, 2018 3:56 pm

^I think triceratop did. :)
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Re: Max It Out Tomorrow [your IRA]

Post by flamesabers » Tue Jan 02, 2018 4:02 pm

Jags4186 wrote:
Tue Jan 02, 2018 9:50 am
lostdog wrote:
Tue Jan 02, 2018 9:47 am
We have money in vtsax in taxable. We're piling in monthly to our Roth IRA's. Would it be better to sell vtsax shares in taxable to max our 2018 Roth contributions instead of using monthly income cash to fill the roth accounts?

We're in a low tax bracket currently.
If you can sell your proceeds in your taxable account at a 0% capital gains tax than I would do it.
I think I'll do that. Thank you for the advice Jags4186.

Engineer250
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Re: Max It Out Tomorrow [your IRA]

Post by Engineer250 » Tue Jan 02, 2018 6:55 pm

Keepcalm wrote:
Tue Jan 02, 2018 10:06 am
Cheers to all who are maxing out today. I wanted to but last minute backed out. It will deplete just too much of my $7,200.00 EF and does not seem wise as much as I would love to do so.

458/MO is a lot better than not investing at all though! In addition I also contribute ~$425.00/MO towards my governmental 457(b) so annually I usually am able to get between $10,500-$11,000 invested.

All VINIX (through 457 to avoid 5MM minimum), VOO, and BIV in portfolio 90/10.
I'm in the same boat. But did not quite max both Roths last year, neither my 401k. Should be able to max two Roths, a 401k, and mostly fund a second 401k this year. My emergency fund could still use some work. Hopefully in a few years we will be able to max the Roths on Jan 2, looking forward to it.
Where the tides of fortune take us, no man can know.

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Re: Max It Out Tomorrow [your IRA]

Post by Rainmaker41 » Tue Jan 02, 2018 9:30 pm

We just submitted the orders to contribute $11,000 to our Roth IRAs. :)

This was a momentous occasion, because we will probably never again have substantial taxable assets beyond cash reserves on hand. We just happened to have a large surplus due to 2017 expenses being lower than anticipated.

Going forward, we'll be investing money as it is earned each pay period into 401k-type plans and Roth IRAs evenly throughout every year.

I'll remember this fondly; the year I pretended to be a high earner with loads of surplus cash waiting for IRA-maxing season to roll around...

:sharebeer
My username is not about money, but is my old online gaming username. I can't say that I make a great deal of money; I just hate spending it. Married the most loving woman in the world October 2017.

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