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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: bulblight on November 25, 2013, 11:18:24 AM

Title: Which to deposit into: Savings Accounts vs IRA Contributions?
Post by: bulblight on November 25, 2013, 11:18:24 AM
Hello Mustachians and thank you in advance for your insight!

As a MMM reader for almost a year now I have come to a point where I am starting to see the light at the end of the tunnel that will allow me to say ' F You' to my current employer!  It's an exciting point and through much luck and a general sense for being frugal for a large portion of my early career, I feel like I am in a pretty good position.  Since I was able to max out my 401k for a couple of years I feel as though I have enough in my retirement accounts that they will continue to grow to meet my needs and still be within the 4% withdraw rate. 

I know I still have more savings to do before I can actually retire, but I feeling positive about the prospects. 

My question for all of you is how much should I contribute to my IRAs (both Roth and Trad) vs my Savings accounts?

I am not worried about emergencies as I have enough to cover those. I mean, with retirement just a couple of years out, should I start to shift my savings into a savings account and let the IRA ride the growth train over the next several years?

Extra info in case it's helpful: At the age of 28 I have $150k in my retirement accounts, the majority in a Traditional Rollover IRA. I also have assets outside of these retirement accounts.
Title: Re: Which to deposit into: Savings Accounts vs IRA Contributions?
Post by: Bruised_Pepper on November 25, 2013, 11:31:37 AM
I am not worried about emergencies as I have enough to cover those. I mean, with retirement just a couple of years out, should I start to shift my savings into a savings account and let the IRA ride the growth train over the next several years?

I don't think you should have any more money in a traditional savings account than you need for emergencies, etc.  That money generally loses value due the effect of inflation.  If you're definitely going to hold it in a bank, at least put it in CDs.
Title: Re: Which to deposit into: Savings Accounts vs IRA Contributions?
Post by: bulblight on November 25, 2013, 01:26:34 PM
I should've been more specific. I don't necessarily mean a bank savings account. It could be a brokerage account that I use for savings. Hope that helps clarify the question!