Author Topic: Do you front load?  (Read 3725 times)

Murse

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Do you front load?
« on: December 13, 2015, 11:26:31 AM »
Do you front load your retirement accounts and why or why not?

I have read the post from the mad fientist and can see the merits of doing it if you plan to quit or unsure about job stability but what's the advantage if you still have 10+ years and your job is very stable?i mean let's say every month you have 3k you can invest, does it really make that big of a difference if you do 3k in 401k the first 6 months then switch to ira, then to taxable?
« Last Edit: December 13, 2015, 12:47:46 PM by Murse »

jac941

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Re: Do you front load?
« Reply #1 on: December 13, 2015, 12:14:36 PM »
I front load my accounts for a couple of reasons. Job flexibility -- after I've maxed my retirement account, I can job hunt & take a job with a waiting period for retirement benefits. Also in the years that I had babies, I made sure to max out my accounts before starting maternity leave. The other *real* reason why I front load is that I like to flex my frugality muscles early in the year just to see how it goes - it's like a New Year's resolution of sorts. My take-home pay for the first 3 months this year was $0, so we were living on my spouse's income and still saving on top of that. We find that this pushes our frugality boundaries and we create new money saving habits that stick around for the rest of the year. We've done this for the past 4 or so years now & learn something & get a little better at it each time. That said, I don't think there's any real "investment" or "financial" reason to do this.

Cornbread OMalley

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Re: Do you front load?
« Reply #2 on: December 13, 2015, 03:29:52 PM »
Do you front load your retirement accounts and why or why not?
I am going to front load my Roth for 2016 and also subsequent years.  The main reason I am doing this is to deploy more of my cash earlier to work in building wealth.  I am able to save the money the year prior and front load when the New Year rolls around.  I read this article that convinced me to front load:

http://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/

iamlindoro

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Re: Do you front load?
« Reply #3 on: December 13, 2015, 04:27:07 PM »
I'm a contractor, and don't hold on to much cash, so I just invest regular amounts as my invoices are paid.  I allow myself some flexibility when I have a planned real estate investment purchase coming up, so next year will involve a couple of months early in the year where I don't invest in the market, because I'm allowing the down payment on my next rental to accumulate.  So I guess the answer is "no, I don't front load."

For those who are W2 employees with 401k matching, the much more important question is whether you lose matching by front loading your 401k.  Many employers only allow you to maximize the match if your contributions are spread throughout the year.

use2betrix

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Re: Do you front load?
« Reply #4 on: December 13, 2015, 06:32:45 PM »
I'm a contractor, and don't hold on to much cash, so I just invest regular amounts as my invoices are paid.  I allow myself some flexibility when I have a planned real estate investment purchase coming up, so next year will involve a couple of months early in the year where I don't invest in the market, because I'm allowing the down payment on my next rental to accumulate.  So I guess the answer is "no, I don't front load."

For those who are W2 employees with 401k matching, the much more important question is whether you lose matching by front loading your 401k.  Many employers only allow you to maximize the match if your contributions are spread throughout the year.

This. I'll front load for the first 6 months and then reduce my contributions the last 6 months so I'm contributing enough to max my 401k and their match.

FLBiker

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Re: Do you front load?
« Reply #5 on: December 14, 2015, 01:15:23 PM »
I frontload my trad IRA (in that we do ours early in the year) but our 403bs / 457 we spread out.  No great reason.

BarkyardBQ

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Re: Do you front load?
« Reply #6 on: December 14, 2015, 01:24:38 PM »
Front load everything for my wife and I.

IRA's - January, first market day of the year.
Deferred Plans - get front loaded as much as our checks allow, all complete by October 1. (no matching)
Taxable - January, first market day of the year. Based on estimated savings for the year, if we over shoot we can invest less in taxable the year after. We also usually end up making some additional income, which allows us to make another contribution in December or adjust our reserves as needed.

We cannot control market returns, but we can control how many stocks we own per quarter, and compound those distributions/dividends over and over.

Guesl982374

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Re: Do you front load?
« Reply #7 on: December 14, 2015, 01:51:03 PM »
No front loading for us. The employer match is across all pay periods so if you front load and max out at the end of 6 months then you only receive 50% of the employer match.

frugaliknowit

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Re: Do you front load?
« Reply #8 on: December 14, 2015, 02:53:31 PM »
Load up the Roth IRA every Jan 1.  No 401K.

honeybbq

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Re: Do you front load?
« Reply #9 on: December 14, 2015, 03:30:54 PM »
No, I contribute the same to my 401 and taxable accounts each month through the year.