I just started contributing to a Roth IRA, and found it was a convenient way to do some financial spring cleaning, and was wondering if any one else used it this way as well.
I'm pretty close to maxing out my 401k contributions. I'm a little unsure about if they can ever be truly 'maxed' without losing some company match. There are a few variable parameters to annual pay (bonuses, PTO sellback, shift differentials) so it's not quite a simple as taking an annual salary and dividing by 24 to determine what percentage to contribute to hit $18,000, but I digress. Lets basically assume I'm maxing 401k.
I believe I am making to much to get a tax benefit from a tIRA, so the next item on the investment order is a Roth IRA.
I just opened one and originally intended to hit my $5500 limit for 2017 before April 2018, then spread out my contributions over the rest to 2018 to hit the $5500 limit for 2018 by the end of the year, and continue with periodic payments in subsequent years.
However, it has provided a rather useful incentive to scout around for money that isn't really doing anything useful, and throw it in the Roth. Rather than make periodic contributions (which I would probably budget for by reducing my contributions to a taxable account), I think I will leave the Roth as a place for the cash that inevitably seems to accumulate from sources that I don't tend to budget. Such as, PTO sellback, side gigs, hell, even Christmas money! I seem to have reached the age where more and more people just give me cash.
Also, I don't keep a particularly large emergency fund, so I do sometimes worry about tying up money in retirement accounts and then wishing I had a bit more cash.
I assume the main argument against waiting to the end of the year is that the best investment strategy is to get into the market as early as possible.
I'm not sure there is too much logic behind my idea. I just quite like the idea of having 3-4 months to 'find' $5500. Maybe it's just a way of adding a bit of fun to the otherwise boring task of wealth accumulation.
