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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: kilogulf on August 19, 2017, 04:35:20 PM

Title: Help-Stupid idea to pump money into a Traditional IRA?
Post by: kilogulf on August 19, 2017, 04:35:20 PM

I just did a rollover of 3 previous 401k’s into a Vanguard Traditional IRA.  My asset allocation is 100% VTSAX.  Now what do I do?  It’s all tax deferred funds in there now and it’s just sitting there.  If I set up monthly contributions from my post-tax dollars, then it’s a Roth.  Can you mix pre-tax and post-tax dollars into a Traditional?

 I currently do not have an employee sponsored 401k because it’s a new employer and I have to wait until the first of the year to enroll.  I am told my new employer will match 3% on a SIMPLE IRA at that time.  I’m not sure I will be able to dovetail that account into my Vanguard, so I will have yet another 401k with worth peanuts…at least for a while.

It's driving me nuts just watching my 880.611 shares of VTSAX bounce up and down every day.  I want to buy more shares but I don't want to pay taxes on post-tax contributions.

Thanks for any guidance....

Ken in Dallas, Tx

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: JLee on August 19, 2017, 05:24:14 PM

You can contribute your post-tax dollars to a Traditional IRA and then take a tax deduction when you file taxes.

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: kilogulf on August 19, 2017, 06:41:04 PM

Thanks JLee.  I would imagine that Vanguard will provide a statement at the end of the year showing pre and post tax contributions?  This is my first time with Vanguard as well as being in this situation.

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: walkwalkwalk on August 19, 2017, 08:11:57 PM

To my knowledge, noone tracks your pre and post tax contributions but yourself and maybe your tax advisor if you give him the information. I would keep track of this myself if I were you and then if you get some kind of statement, then you could compare it for accuracy.

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: kilogulf on August 20, 2017, 10:39:36 AM

Thanks MMbergmann.  Ya I'm not the type to trust all that to a statement from Vanguard.  I will be able to capture that information for my tax guy without much issue.  Thanks for chiming in...

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: Dicey on August 20, 2017, 12:33:16 PM

1. Stop watching your accounts every day.
2. Next time you change jobs, negotiate on this point. No reason to make you sit out a year.

Title: Re: Help-Stupid idea to pump money into a Traditional IRA?
Post by: kilogulf on August 20, 2017, 03:27:17 PM

Quote

1. Stop watching your accounts every day.

LOL Dicey....I'm busted!  :-)