Do you lump sum full amount into IRA at beginning of the year?

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dropdx
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Do you lump sum full amount into IRA at beginning of the year?

Post by dropdx »

Obviously you'd need to have the means to do so but for those that do, do you lump sum the full amount at the beginning of the year into your IRA?
Soon2BXProgrammer
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Soon2BXProgrammer »

Yes, only because it lets me just cross it off my list and not have to think about it.
seymore92
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by seymore92 »

Lump sum. Already submitted on TDA.

Time in market. Like you said, if one has the means and cash flow to.
stoptothink
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by stoptothink »

Lump summed both Roth IRAs and pair of 529s (to state deductible max) first thing this morning. My transfer of $20k from Ally to pay for it all hadn't come yet, despite being scheduled a week ago to arrive today. I've had this issue before (Ally transfers not showing up when scheduled); I will be just a tad bit angry if funds aren't there tomorrow.
mesaverde
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by mesaverde »

This has already been discussed in a recent thread:
viewtopic.php?p=5663291

Personally I contributed my full $6k today. If you have the money set aside already, why not? The sooner you're invested the better (regardless of market up or down).
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runner3081
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by runner3081 »

$500 monthly.
JD2775
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by JD2775 »

Yes, first time ever doing lump sum on Jan 1st.

I don't know why but I was really nervous doing it. I am a good 15-20k under the MAGI income limit but I needed to double/triple check :)
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TierArtz
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by TierArtz »

Yes; put $7K x 2 (half of our cash savings) into empty tIRAs as the fireworks exploded last night.

Vanguard's website worked perfectly. Hopefully Roth conversions after settlement go as well.
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FrankTheViking
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by FrankTheViking »

No. At our level of savings this would require not investing in taxable during Nov/Dec.
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F150HD
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by F150HD »

what would life be like without a good ol' fashioned "lump sum" Roth IRA thread on New Years Day. :beer
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changingtimes
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by changingtimes »

F150HD wrote: Fri Jan 01, 2021 12:14 pm what would life be like without a good ol' fashioned "lump sum" Roth IRA thread on New Years Day. :beer
How about getting a bit of a curve ball by asking, "Do you lump sum your full amount of expected Roth conversions at the beginning of the year?" :)
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F150HD
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by F150HD »

stoptothink wrote: Fri Jan 01, 2021 11:42 am Lump summed both Roth IRAs and pair of 529s (to state deductible max) first thing this morning. My transfer of $20k from Ally to pay for it all hadn't come yet, despite being scheduled a week ago to arrive today. I've had this issue before (Ally transfers not showing up when scheduled); I will be just a tad bit angry if funds aren't there tomorrow.
frustrating. Have had this happen w/ VG before where I transfer $$ in and then wait over a week to actually invest it (it needs to settle). IRT annual Roth contribution, I now move the funds to VG during early December so they 'settle' and it avoids this hassle.
Church Lady
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Church Lady »

If you have cash today, it's better to contribute right away. Not much interest on cash these days, but wouldn't you rather have the interest your cash earns in 2021 accumulate tax deferred or tax free?

Reasons not to lump sum in first week of January:
- You are uncertain you will earn enough income to contribute the full amount. Furlough, layoff, wage cut on the horizon?
- You want to contribute to a Roth IRA, believe you might earn too much to contribute to a Roth IRA, and prefer to wait until you know your annual income to contribute. https://www.irs.gov/retirement-plans/am ... e-for-2021

In the last decade of work, I never knew my income because we were paid a bonus in Q2, and got our raise (if any) in Q2 also. Of course, I never knew my investment income until the last minute. You might call your IRA custodian and ask if it possible to 'undo' the contribution if you accidentally contribute too much.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Dottie57 »

When I was employed I did.
livesoft
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by livesoft »

Nope. We may not have enough earned income to do so even by the end of 2021.
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F150HD
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by F150HD »

changingtimes wrote: Fri Jan 01, 2021 12:15 pm
F150HD wrote: Fri Jan 01, 2021 12:14 pm what would life be like without a good ol' fashioned "lump sum" Roth IRA thread on New Years Day. :beer
How about getting a bit of a curve ball by asking, "Do you lump sum your full amount of expected Roth conversions at the beginning of the year?" :)
yes, guessing many/most here (with earned income) do it in January at some point and be done w/ it. It is the strategy here. :beer
AlienGrrrl
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by AlienGrrrl »

I'm also trying to figure out what's best to do, in a situation where I might possibly be just over the limit to contribute to a Roth IRA, and won't know until later in the year due to some possible capital gains. All of my IRAs are Roth'd and I've typically dollar-cost averaged throughout the year. (In 2019 I had an unexpected capital gains that put me over the limit so I did the recharacterization/backdoor Roth thing but prefer to avoid it this time around).

For 2021, I see these as my options but would like to know what's the best recommendation:

(1) dollar cost average (or lump sum now) into the Roth and if I'm over the limit, do the recharacterization/backdoor and just deal with the annoying paperwork;
(2) dollar cost average (or lump sum now) into a nondeductible tIRA, and later on convert to a Roth (but then I'll have to pay tax on any gains);
(3) forgo the time value of contributing early and just wait until early 2022 when I have all the definite dollar numbers, and at that point contribute directly to the 2021 Roth, or if I can't contribute to a 2021 tIRA and backdoor the next day.

I've been following the boglehead principles since the 1990s but am very new to this site, and already have learned so much! Happy New Year to all!
Hyperchicken
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Hyperchicken »

I did last year (2020).

This year I'll probably wait until 2022 when my 2021 income is final.

In the meantime the money is invested in a similar ETF in taxable account, so no time in the market lost.
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ResearchMed
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by ResearchMed »

We aren't eligible to contribute to TIRA accounts anymore (no complaints).

Howver, we still have the Employee-contributed portion of the 403b, which allows significantly more money to be tax-deferred than in an IRA. We've got that set for an amount to be withheld each month until the max (including catch up amount due to age) is reached, so it will be completed in the first half of the year. The software automatically stops the withholding at that point each year.

Then that clock starts again automatically each January, unless we change it.

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dharrythomas
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by dharrythomas »

I put the checks in the mail yesterday.
JD2775
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by JD2775 »

Church Lady wrote: Fri Jan 01, 2021 12:18 pm If you have cash today, it's better to contribute right away. Not much interest on cash these days, but wouldn't you rather have the interest your cash earns in 2021 accumulate tax deferred or tax free?

Reasons not to lump sum in first week of January:
- You are uncertain you will earn enough income to contribute the full amount. Furlough, layoff, wage cut on the horizon?
- You want to contribute to a Roth IRA, believe you might earn too much to contribute to a Roth IRA, and prefer to wait until you know your annual income to contribute. https://www.irs.gov/retirement-plans/am ... e-for-2021

In the last decade of work, I never knew my income because we were paid a bonus in Q2, and got our raise (if any) in Q2 also. Of course, I never knew my investment income until the last minute. You might call your IRA custodian and ask if it possible to 'undo' the contribution if you accidentally contribute too much.
Regarding the part in bold...Is there an actual minimum you need to earn in order to contribute the full amount? I thought you just had to have "earned income" sometime during the year. I didn't realize there was a $$ threshold that needed to be met. I know there is a upper limit on income though obviously
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Hyperchicken »

JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
seymore92
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by seymore92 »

Hyperchicken wrote: Fri Jan 01, 2021 1:31 pm
JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
Or $12,000 combined for you & a spouse, just to be explicit, to contribute $6000 to each of yours.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by JD2775 »

Hyperchicken wrote: Fri Jan 01, 2021 1:31 pm
JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
Ah, got it. So if I go into work next week and get laid off and can't find a job the remainder of the year I may regret my lump sum. Hopefully won't be the case :sharebeer
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GerryL
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by GerryL »

I never did. Retired now, but I DCA'd all the way. I set up auto-invest for 1/12 of the limit per month into my Roth at Vanguard, shortly after my second paycheck each month.

Ran into trouble the year my income went over the limit for a full Roth contribution. I didn't discover the problem until I was doing taxes. At that point I turned off auto-invest and waited until I knew my exact income figure, usually into the new year. Good news / bad news: In the last few years of my work life I made too much to contribute to a Roth.
Bayliss
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Bayliss »

I just finished putting in the final amount to reach the 6k for 2020. I have enough to to put another 6k for 2021. But I think I'm going to spread it out throughout the year. I know: time in the market, etc. But I want to wait just a bit to see the Biden impact on the markets. And it's weird but it is "painful" for me to see all 6k immediately drop out of my savings account. DCA for me sets my mind at ease.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by powermega »

Yes. Investing the IRA contributions is just part of a larger overall portfolio re-balancing event. HSA and taxable accounts treated the same way.
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runner9
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by runner9 »

Yes, market historically is likely to go up not down in a given year and it's one less think to deal with during the year. Of course, I'll do it on January 3 this year, it makes no different midnight Jan 1 to 3:59pm on Jan 4 because of the weekend.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by pasadena »

Yes. I save up the money at the end of the year, and lump sum it immediately after the new year. Done and done, no need to think about it until next year. I do the backdoor, so this is also much simpler, since it cannot be automated.

I already submitted the first step this morning. I expect to be able to do the second one on Tuesday or Wednesday. Then I can forget about it :)
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by jfn111 »

I max out our Roth IRAs only after I have earned income that covers the amount. I work part time as a 1099 worker (real estate sales) and one of these days I might say screw it and quit working.
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AllMostThere
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by AllMostThere »

Absolutely! Every year. Today, I just initated $7K for myself and DW as part of our annual Backdoor ROTH process. I am firm believer that time in market is key to success. :beer
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by yangtui »

yep, clicked the buttons when I got up first thing this morning.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by count damoney »

seymore92 wrote: Fri Jan 01, 2021 1:33 pm
Hyperchicken wrote: Fri Jan 01, 2021 1:31 pm
JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
Or $12,000 combined for you & a spouse, just to be explicit, to contribute $6000 to each of yours.
To piggy back on this comment:
My wife will make about $15k this year and she is contributing 92% of her paycheck to her 401k so her paycheck is about $1/week.
We are above the income limit to make a Roth contribution directly.
Can I still do a back door Roth for her (neither of us have a tIRA)?

If I can’t, I’m guessing she should contribute nothing to her 401k until she reaches $7000 (we are over 50) of earned income, then do the back door, then switch to 92% contribution, correct?
Last edited by count damoney on Fri Jan 01, 2021 4:32 pm, edited 1 time in total.
grettman
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by grettman »

Thanks for the reminder.
02nz
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by 02nz »

We have this same discussion every year. It's not really "lump sum" since presumably you intend to contribute to the IRA again in the future. So it's a matter of DCA annually or DCA monthly (or whatever). And it just doesn't matter (unless earned income is so low that you are unsure about being able to contribute the full amount, or so high as to be phased out of direct Roth IRA contributions).
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by 02nz »

count damoney wrote: Fri Jan 01, 2021 4:25 pm
seymore92 wrote: Fri Jan 01, 2021 1:33 pm
Hyperchicken wrote: Fri Jan 01, 2021 1:31 pm
JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
Or $12,000 combined for you & a spouse, just to be explicit, to contribute $6000 to each of yours.
To piggy back on this comment:
My wife will make about $15k this year and she is contributing 92% of her paycheck to her 401k so her paycheck is about $1/week.
We are above the income limit to make a Roth contribution directly.
Can I still do a back door Roth for her (neither of us have a tIRA)?

If I can’t, I’m guessing she should contribute nothing to her 401k until she reaches $7000 (we are over 50) of earned income, then do the back door, then switch to 92% contribution, correct?
There's no need to make it that complicated. As long as you have at least $14K of earned income (W-2 box 1) between the two of you, you can do the backdoor for both of you. And since you stated your total income is above the limit for direct Roth contributions, I'm certain you have enough income (even if you both max traditional 401k's). You can start the backdoor process today if you'd like - there's no requirement about having the earned income before making the contribution.
count damoney
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by count damoney »

02nz wrote: Fri Jan 01, 2021 5:01 pm
count damoney wrote: Fri Jan 01, 2021 4:25 pm
seymore92 wrote: Fri Jan 01, 2021 1:33 pm
Hyperchicken wrote: Fri Jan 01, 2021 1:31 pm
JD2775 wrote: Fri Jan 01, 2021 1:26 pm ...Is there an actual minimum you need to earn in order to contribute the full amount? ...
The minimum income to contribute $6000 is $6000.

Note: pre-tax 401(k) contributions are counted against that number. For example, if I had $20,000 of earned income, and contributed $15,000 to pre-tax 401(k), I can contribute $5,000 to Roth IRA.
Or $12,000 combined for you & a spouse, just to be explicit, to contribute $6000 to each of yours.
To piggy back on this comment:
My wife will make about $15k this year and she is contributing 92% of her paycheck to her 401k so her paycheck is about $1/week.
We are above the income limit to make a Roth contribution directly.
Can I still do a back door Roth for her (neither of us have a tIRA)?

If I can’t, I’m guessing she should contribute nothing to her 401k until she reaches $7000 (we are over 50) of earned income, then do the back door, then switch to 92% contribution, correct?
There's no need to make it that complicated. As long as you have at least $14K of earned income (W-2 box 1) between the two of you, you can do the backdoor for both of you. And since you stated your total income is above the limit for direct Roth contributions, I'm certain you have enough income (even if you both max traditional 401k's). You can start the backdoor process today if you'd like - there's no requirement about having the earned income before making the contribution.
Thanks. Time to move some money to Vanguard and Fidelity :sharebeer
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by cos »

dropdx wrote: Fri Jan 01, 2021 11:35 am Obviously you'd need to have the means to do so but for those that do, do you lump sum the full amount at the beginning of the year into your IRA?
Interestingly, I'm doing the opposite! I'm still tax gain harvesting at this point in my life so I have $6,000 waiting in taxable to be transferred to Roth no sooner than April 1st, earmarked for the 2020 tax year. I plan to wait til around December 30th for 2021, but assuming all goes well with my next big career move, I'll be contributing directly to Roth as the paychecks come in at the start of the year in 2022.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by manatee2005 »

dropdx wrote: Fri Jan 01, 2021 11:35 am Obviously you'd need to have the means to do so but for those that do, do you lump sum the full amount at the beginning of the year into your IRA?
Yes because I already have that amount in taxable and want to make the gains tax free as soon as possible
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Broken Man 1999 »

I usually fund my BIL's Roth early in the year from his taxable account. $7000 for him..

Every bit helps. I need to do that Monday. I set an Alexa reminder.

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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by spmysp1 »

yangtui wrote: Fri Jan 01, 2021 4:24 pm yep, clicked the buttons when I got up first thing this morning.
same here. a new years day tradition.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by ImUrHuckleberry »

2 $7k Roth (well IRA for backdoor) contributions and 2 $10k I-Bond contributions this morning. I know that I could have done the I-Bonds closer to the end of the month but the money wasn't earning anything anyway.
Last edited by ImUrHuckleberry on Fri Jan 01, 2021 5:14 pm, edited 1 time in total.
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Candor »

I transferred the $7k this morning. It's nice of Vanguard to instantly add the amount to my account total although with a little "pending" underneath. My company has been purchased by megacorp and it finalizes the first of the year so lets hope I don't get laid off before the end of the month. :D
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by cchrissyy »

yes, in the years i am sure that i qualify to contribute and i am sure about if it should be in roth or traditional
no, in all other years
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dropdx
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by dropdx »

02nz wrote: Fri Jan 01, 2021 4:31 pm We have this same discussion every year. It's not really "lump sum" since presumably you intend to contribute to the IRA again in the future. So it's a matter of DCA annually or DCA monthly (or whatever).
I'm going to have to disagree with you here, otherwise, EVERYTHING would just be DCA with your definition.
02nz
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by 02nz »

dropdx wrote: Fri Jan 01, 2021 8:14 pm
02nz wrote: Fri Jan 01, 2021 4:31 pm We have this same discussion every year. It's not really "lump sum" since presumably you intend to contribute to the IRA again in the future. So it's a matter of DCA annually or DCA monthly (or whatever).
I'm going to have to disagree with you here, otherwise, EVERYTHING would just be DCA with your definition.
No it would not. The lump sum vs DCA discussion is most applicable to one-time windfalls. Somebody who inherits say $100K and is trying to decide whether to lump sum or DCA isn't going to keep inheriting $100K year after year. By contrast, you do plan on contributing $6K next year and the year after that (or whatever the inflation-adjusted maximum is at that time).

Actually, by your definition EVERYTHING would be a lump sum, because if you DCA monthly, aren't your really choosing to "lump sum" instead of DCA weekly? And if you DCA weekly, why not daily? ... and so on.
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dropdx
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by dropdx »

02nz wrote: Fri Jan 01, 2021 10:03 pm
dropdx wrote: Fri Jan 01, 2021 8:14 pm
02nz wrote: Fri Jan 01, 2021 4:31 pm We have this same discussion every year. It's not really "lump sum" since presumably you intend to contribute to the IRA again in the future. So it's a matter of DCA annually or DCA monthly (or whatever).
I'm going to have to disagree with you here, otherwise, EVERYTHING would just be DCA with your definition.
No it would not. The lump sum vs DCA discussion is most applicable to one-time windfalls. Somebody who inherits say $100K and is trying to decide whether to lump sum or DCA isn't going to keep inheriting $100K year after year. By contrast, you do plan on contributing $6K next year and the year after that (or whatever the inflation-adjusted maximum is at that time).

Actually, by your definition EVERYTHING would be a lump sum, because if you DCA monthly, aren't your really choosing to "lump sum" instead of DCA weekly? And if you DCA weekly, why not daily? ... and so on.
No, YOU are!
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Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Church Lady »

JD2775 wrote: Fri Jan 01, 2021 1:26 pm
Church Lady wrote: Fri Jan 01, 2021 12:18 pm If you have cash today, it's better to contribute right away. Not much interest on cash these days, but wouldn't you rather have the interest your cash earns in 2021 accumulate tax deferred or tax free?

Reasons not to lump sum in first week of January:
- You are uncertain you will earn enough income to contribute the full amount. Furlough, layoff, wage cut on the horizon?
- You want to contribute to a Roth IRA, believe you might earn too much to contribute to a Roth IRA, and prefer to wait until you know your annual income to contribute. https://www.irs.gov/retirement-plans/am ... e-for-2021

In the last decade of work, I never knew my income because we were paid a bonus in Q2, and got our raise (if any) in Q2 also. Of course, I never knew my investment income until the last minute. You might call your IRA custodian and ask if it possible to 'undo' the contribution if you accidentally contribute too much.
Regarding the part in bold...Is there an actual minimum you need to earn in order to contribute the full amount? I thought you just had to have "earned income" sometime during the year. I didn't realize there was a $$ threshold that needed to be met. I know there is a upper limit on income though obviously
As others have said, you have to earn the amount you contribution in the year you contribute. I have a friend, retired, who intentionally works just enough to earn his Roth contribution.

Good luck!
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Charon
Posts: 212
Joined: Thu May 03, 2018 12:08 pm

Re: Do you lump sum full amount into IRA at beginning of the year?

Post by Charon »

02nz wrote: Fri Jan 01, 2021 10:03 pm
dropdx wrote: Fri Jan 01, 2021 8:14 pm
02nz wrote: Fri Jan 01, 2021 4:31 pm We have this same discussion every year. It's not really "lump sum" since presumably you intend to contribute to the IRA again in the future. So it's a matter of DCA annually or DCA monthly (or whatever).
I'm going to have to disagree with you here, otherwise, EVERYTHING would just be DCA with your definition.
No it would not. The lump sum vs DCA discussion is most applicable to one-time windfalls. Somebody who inherits say $100K and is trying to decide whether to lump sum or DCA isn't going to keep inheriting $100K year after year. By contrast, you do plan on contributing $6K next year and the year after that (or whatever the inflation-adjusted maximum is at that time).

Actually, by your definition EVERYTHING would be a lump sum, because if you DCA monthly, aren't your really choosing to "lump sum" instead of DCA weekly? And if you DCA weekly, why not daily? ... and so on.
This is silly. DCA v. lump sum is about what you choose to do. The restriction on how much can annually be put into an IRA is not a choice. So doing it once a year is being as lump sum as possible. And of course there are different strategies for DCA at various frequencies, but those all fall within the DCA umbrella.

FWIW I DCA my IRA monthly because it helps minimize regret and smooths out my expenses so that I don't even have to think about the investment. ~<$200 a year in opportunity cost is a small amount of pay for peace of mind and removal of active decision making (and its associated pitfalls).
dru808
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Location: mid pac

Re: Do you lump sum full amount into IRA at beginning of the year?

Post by dru808 »

No, I wait till tax season to decide whether to contribute the 6k to traditional or Roth.
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