The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: SmileAllDay on February 20, 2019, 08:40:11 AM
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Hey all. I'll try to keep this brief, but feel free to ask any questions if I've left out something salient.
My accountant has informed me I can contribute $8,000 into a SEP IRA for the 2018 tax year.
I transferred a large lump sum into index funds in January before hearing this. I try to create an artificial feeling of scarcity to keep myself Mustachian. A little too much so— in hindsight— given that rustling up $8,000 in 2 months will be a stretch taking living expenses into account, too.
I will be using Betterment for the SEP, to keep things in one place. My goal was to open a 0% APR card like Chase Freedom (15 months @ 0%) to fund the SEP then repay it.
Unfortunately (if understandably) Betterment does not accept funding using credit/debit card.
Which leads me back to where I am today. I am determined to max it out. Perhaps the best approach is to open that same card and put living expenses on it instead, temporarily. Business is steady and paying it back won't be an issue.
Is there another (smarter) approach I'm overlooking?
THANK YOU ALL SO MUCH.
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Why complicate things? I would just sell from taxable. Pick the investments with the least gains. Ideally long term, unless you have anything with a loss, then ideally short term.
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Should you proceed with the 0% CC for your two months of expenses to then free up the 8K for the SEP, how long would it take you to pay it off? 4 months? 6 months?
If it were me, and it would only take 4-6 months and I was confident that I could do it, then I would do exactly what you laid out.
Plus you always could sell the taxable funds in case of an emergency as if this all never happened.