Author Topic: Skip 2017 Roth IRA Contributions?  (Read 1120 times)


  • Pencil Stache
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  • Location: Midwest
Skip 2017 Roth IRA Contributions?
« on: February 07, 2018, 08:53:42 AM »

Life Situation:
Family of 5 (soon to be 6)
15% Tax Bracket (for 2017)

Avg Net Monthly Salary:
Her: $5,600 (will be on unpaid maternity leave April, May, June)
Him: $2,400 (after Self-Employment tax is set aside)
Non-taxable income: $950

Avg Monthly Expenses:
Right Now: ~$5,900
During maternity leave: ~$5,200
2 in Daycare: ~$6,300
2 in Daycare with 2018 Roth IRA & 529 contributions: ~$ 7,400

401k: $95k-$102k (depending on the market)
Roth IRA: $1,200
Savings: $9,500 (Expected to be in savings by the time maternity leave happens).
2017 Self-Employment Tax Savings Account:  $3,000
2017 Tax Refund: ~$2,000-2,500 (We received a tax incentive in 2017 that should remove all tax liabilities for 2017 and this is what I paid in before changing my withholdings)

Student Loan: $7,700 @ 7.5% interest (Plan to pay this off before end of 2018, after maternity leave)
Other Debt: All below 4.125% interest and no current plans to accelerate payoff.

Specific Questions:
First thing, my salary just increased to that amount (as in 1st check isnt until next week) and DHs business has only really gotten to that level in the last month or two.  His business is one that picks up in the spring/summer/fall so we anticipate his income to continue at that level or grow even more.

We originally planned to hold all extra money (savings, SE Tax savings, Tax Refund) until I got back to work from maternity leave BUT after I did some forward budgeting estimates the other day I am not sure that is necessary.  If we just sit on that money until I get back from maternity leave that will give us approximately $14-15k and I only anticipate needing around $5k of that to cover my leave.  I plan to use a good portion of the remaining dollars after leave and any monthly surplus to payoff the SL before the end of the year.  That goal appears to be well within reach, without counting the 2017 SE Tax Savings.

Question:  Should I use the $3,000 in the SE Tax Savings to add to the IRA for 2017 or hold the money as per our original plan and miss out on the 2017 IRA space?  We do plan to max the IRA for 2018 after I get back from maternity leave.


  • Handlebar Stache
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Re: Skip 2017 Roth IRA Contributions?
« Reply #1 on: February 07, 2018, 10:52:36 AM »
Use it for the 2017 Roth IRA.  If something dire and unexpected happens you can always take it out again with no penalty or taxes.


  • Pencil Stache
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  • Posts: 514
  • Location: Midwest
Re: Skip 2017 Roth IRA Contributions?
« Reply #2 on: February 12, 2018, 07:47:46 AM »
Put in our purchase order with Vanguard on Friday for $3,000, directed as a 2017 contribution!

I am really excited to see how the rest of the year plays out.  If my calculations/future budgeting are correct we should be able to max the IRA for 2018, payoff the SL debt, and put around $6k into my 401k.  That is an increase in NW of around $22k for 2018, not counting any other debt pay down, employer contribution to 401k or whatever the market is going to end up doing the rest of the year. 

Cheers to 2018 being a major turning point in our financial life!