Comments on: Getting Ready For 2010

By: Sallie's Niece

Sallie's Niece — Tue, 15 Dec 2009 17:10:29 +0000

Good for you. This posts makes me a little sad though as your 403(b) contributions are more than my biweekly income.

By: NCN

NCN — Tue, 15 Dec 2009 04:11:22 +0000

@Boyan I suppose you are correct. Keep in mind, I’m still making contributions to my 2009 IRAs, and will do so for the next 5 months. (Dec – April)

@Matt I’m 99% sure that I won’t make too much to make maximum contributions. If I WERE to get close, I’d just hold back on the contributions from say January to April…

@mbhunter It’s good to be back! I keep a 12 month emergency fund in my savings account…

By: mbhunter

mbhunter — Tue, 15 Dec 2009 03:53:41 +0000

Welcome back! Missed you!

That’s a lot of money into tax-advantaged accounts. Do you keep enough outside as well?

By: Matt

Matt — Mon, 14 Dec 2009 22:32:14 +0000

What happens if you contribute monthly to a ROTH IRA but than find out during tax time of the next year that you made to much to contribute, what happens?

By: Boyan

Boyan — Mon, 14 Dec 2009 22:28:03 +0000

Hello,

I see you’re contributing $312.50 monthly to your Roth. However, $5000/12 = $416 per month.

What you may be doing (and what warrants further discussion), is making 2010 Roth contributions before April 15, 2011; thus giving yourself 16 months to get in $5000. Indeed 16*$312.50 = $5000.

However, I’ve thought about this, and I’m not sure it’s the best idea. In your case, you’re depositing $625 per Roth (half for 2010 and half for 2011) in the first four months of the year, and $325.50 in the other eight. Thus, you’re systematically oversampling the market in the first four months, and biasing your dollar-cost-averaging towards Jan-April.

Is this intentional (part of your strategy) or a minor oversight?

Thanks!