Author Topic: Is this a good time to put money in ROTH IRA?  (Read 4302 times)

Nikii

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Is this a good time to put money in ROTH IRA?
« on: January 13, 2016, 07:29:10 AM »
Hi,
I followed this forum a few months ago and because of our move/ job changes lost a track of it. Just to give you some background, i am 30 years old and have no idea about investments/ retirement. i know i have wasted a lot of time but i moved to the US from another country about 7 years ago and was not sure how long i wanted to stay here, so was not keen on investing a lot of money that i could not touch before the retirement age.
Last year was the first time I contributed to ROTH IRA after i followed this board for a bit, and this year too i decided to fully contribute to ROTH IRA but when i checked my account yesterday, we have lost 1600 between my husband and I for the last year in Target Retirement 2050 funds.. i was in a state of shock since i never really tracked my Vanguard account on a regular basis.
Now my question is- is this the right time to contribute for this year or should i wait some time? I have heard some not so pleasant stories about the market this year and not sure of my next move.. thanks very much for your input and please pardon my ignorance on this topic

rubybeth

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Re: Is this a good time to put money in ROTH IRA?
« Reply #1 on: January 13, 2016, 07:38:53 AM »
Well, I'm no expert and no financial adviser, but in my mind, right now stocks are cheap, the market is on sale, and it's a great time to buy (ever hear the phrase "buy low, sell high"? right now, it's low... in the future, it'll likely be higher, so you'll make money). Also, keep in mind that you own exactly the same number of shares now as you did before, they are just valued lower. It's kind of like owning a house with no mortgage. Sometimes, it will be valued at $100,000, and the next year, it might be valued at $99,000, but you still own it and it belongs to you, and you can decide to wait until it's valued at $110,000 before you sell it.

boarder42

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Re: Is this a good time to put money in ROTH IRA?
« Reply #2 on: January 13, 2016, 07:43:02 AM »
dont worry about trying to time the market.  also get out of those god awful target date funds.  invest early and often and dont worry about it.

MrMoogle

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Re: Is this a good time to put money in ROTH IRA?
« Reply #3 on: January 13, 2016, 07:53:20 AM »
You're question seems about timing the market.  Time in the market is way more important. 
Unless you have some insider trader information, the best time to get in the market is as soon as you get the money. 

I can't tell you the market will be this year.  I can be pretty confident in saying in 30 years, the market will be higher than it is today, and you'll make lots of money in dividends along the way.

The other thing, is if you qualify for the tax advantages, a traditional IRA is usually better for someone just starting out.

dandarc

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Re: Is this a good time to put money in ROTH IRA?
« Reply #4 on: January 13, 2016, 07:55:32 AM »
Suggested reading:

http://jlcollinsnh.com/stock-series/

particularly

http://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/


I'm personally continuing to execute the plan my wife and I have in place - so I bought $3800 worth of shares in my soloK when my check came in as planned - managed to get in on the 2nd lowest day of 2016!.  Hurrah!  I can only hope this slide lasts at least into February so that my wife can get some discounted shares in her 457.

Nikii

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Re: Is this a good time to put money in ROTH IRA?
« Reply #5 on: January 13, 2016, 08:05:16 AM »
boarder42- i thought target date funds were the best for beginners like me.. i just followed the vanguard website and selected what was suitable for me.. what are the other funds that can be easily managed?

And frankly speaking, i have no idea about the market whatsoever.. i was just basing my opinions on some of the reports i read on WSJ and CNN on the market being bad this year and then i ended up seeing that i actually lost money, so was a little overwhelmed.. I have some money to fully fund my ROTH this year and hence this post about should i buy now or wait until it gets better. From what i am seeing in the responses so far, i should go ahead and fund my account for this year

windypig

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Re: Is this a good time to put money in ROTH IRA?
« Reply #6 on: January 13, 2016, 08:09:38 AM »
Target date funds are fine, especially vanguards, though you are trusting someone else to control your allocation. You could instead construct a three or four fund portfolio based upon your own desired allocation of domestic, international stocks and bonds by owning three funds directly, specifically:

Vanguard Total Stock Market Index Fund (VTSMX)
Vanguard Total International Stock Index Fund (VGTSX)
Vanguard Total Bond Market Fund (VBMFX)

The target date funds are mostly just comprised of the above funds in specific ratios.

onlykelsey

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Re: Is this a good time to put money in ROTH IRA?
« Reply #7 on: January 13, 2016, 08:11:35 AM »
Quote
buy now or wait until it gets better

I think you're confused about what "better" means here.  When you're buying, this is great.  You WANT the market to be low.  If you were 70 and needed to sell to pay for rent this month, it would be worse. 

boarder42

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Re: Is this a good time to put money in ROTH IRA?
« Reply #8 on: January 13, 2016, 08:24:25 AM »
you really need to educate yourself go read jlcollins stock series.

FLBiker

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Re: Is this a good time to put money in ROTH IRA?
« Reply #9 on: January 13, 2016, 09:11:45 AM »
Yes

(and consider this answer evergreen)

ooeei

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Re: Is this a good time to put money in ROTH IRA?
« Reply #10 on: January 13, 2016, 09:18:19 AM »
you really need to educate yourself go read jlcollins stock series.

I agree with this advice.

http://jlcollinsnh.com/stock-series/


rubybeth

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Re: Is this a good time to put money in ROTH IRA?
« Reply #11 on: January 13, 2016, 09:54:26 AM »
Quote
buy now or wait until it gets better

I think you're confused about what "better" means here.  When you're buying, this is great.  You WANT the market to be low.  If you were 70 and needed to sell to pay for rent this month, it would be worse.

Right. Buy low, sell high. Low = good. "A bad time for stocks" in the media just means they are cheap.

Nikii

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Re: Is this a good time to put money in ROTH IRA?
« Reply #12 on: January 13, 2016, 10:07:50 AM »
Thanks everyone!
i will really go and educate myself more on this.. for now, i did go ahead and partially funded my account

boarder42

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Re: Is this a good time to put money in ROTH IRA?
« Reply #13 on: January 13, 2016, 10:16:11 AM »
with everything said here you came to the conclusion to partial fund.  thats interesting. 

Nikii

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Re: Is this a good time to put money in ROTH IRA?
« Reply #14 on: January 13, 2016, 10:19:56 AM »
boarder42- well i receive my next paycheck tomorrow, so yes partially funded for now (until tomorrow :))

And thanks to the posters who provided jcollin links, thats really helpful!

boarder42

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Re: Is this a good time to put money in ROTH IRA?
« Reply #15 on: January 13, 2016, 10:24:56 AM »
quick question.  based on your OP ... did you not fully fund your Roth from 2015?  if so thats where you should be putting your money now.  you can put money in til tax day in april for the previous year's contributions.

Nikii

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Re: Is this a good time to put money in ROTH IRA?
« Reply #16 on: January 13, 2016, 11:31:58 AM »
quick question.  based on your OP ... did you not fully fund your Roth from 2015?  if so thats where you should be putting your money now.  you can put money in til tax day in april for the previous year's contributions.

i already fully funded for 2015 sometime in April-May last year.. i am currently funding the 2016 ROTH IRAs, i think in the next 2 months i should be able to fully fund mine and husband's IRA for 2016