Author Topic: Invest now or wait  (Read 396 times)

FoundPeace

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Invest now or wait
« on: November 07, 2019, 01:52:46 PM »
Last year was the first year I was able to max my 401(k) and IRAs (1 for me and one spousal IRA). That was due to a raise and downsizing a house. At the end of the year I ended up with a lot more cash than I usually have. So, I decided to hold onto it for 2 months so that I could fill my IRA immediately and put all of my pay check into my 401k for a few months. Now I'm in a similar situation and I'm not sure if I should do something similar or go ahead and invest my excess as I get it and then withdraw some of it if I need to next year? Right now I'm thinking that I'll invest the excess and just fill my 401k and our IRAs slowly throughout the year.

Some financial details:
We like to have $8k as an emergency fund
We have $14k in checking right now and will have around $22k by the end of December if I don't do anything with it.
I make $72k and my partner makes around $10k
Invested NW is $285k
Savings rate is around 50%



dandarc

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Re: Invest now or wait
« Reply #1 on: November 07, 2019, 02:01:39 PM »
Not really a wrong answer here. Math says invest immediately, but you're only talking about waiting 2 months for 3-4% of your 'stache.

Personally, we just did a cash-out refinance on the house. I immediately funded the 2019 soloK and our IRAs, but I'm waiting until January for further investments and then I'll make the big deposit for 2020 soloK and IRAs. We've been getting closer to the funding deadlines for these accounts than I'd like for a lot of reasons the last couple of years, so this move will buy me a few years of being "caught up" in that regard - even if we fall behind again on the contributions, it will take a while to eat up all the extra time we bought with this transaction. Basically, making a move that is slightly sub-optimal financially in order to save some of my sanity.

BECABECA

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Re: Invest now or wait
« Reply #2 on: November 07, 2019, 03:29:46 PM »
One thing to keep in mind is if your employer matches your 401k contributions up to a certain percentage, then you could be forfeiting the opportunity to get the employer match on each paycheck after you hit the 401k max for the year.