Author Topic: Monthly Retirement Contributions  (Read 1313 times)

HoratianOde

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Monthly Retirement Contributions
« on: December 03, 2016, 12:05:44 PM »
If you are still working and have a plan to contribute a certain amount of monthly income to index funds, is better to (A.) simply add that portion of your income at the beginning of the month, or (B.) set aside money in a savings account and buy on dips in the market?

Interest Compound

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Re: Monthly Retirement Contributions
« Reply #1 on: December 03, 2016, 12:16:35 PM »
If you are still working and have a plan to contribute a certain amount of monthly income to index funds, is better to (A.) simply add that portion of your income at the beginning of the month, or (B.) set aside money in a savings account and buy on dips in the market?

Buy it immediately. You can't predict the future. Statistically speaking, people who try to time the market fail. Read all the similar threads on this forum and bogleheads.org and you'll find the same answer.

Time IN the market almost always beats Timing the market.

Rubyvroom

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Re: Monthly Retirement Contributions
« Reply #2 on: December 04, 2016, 07:04:15 AM »
Time IN the market almost always beats Timing the market.

+1

Set up a recurring monthly transfer as early in the month as you can afford to and forget about it. Or set up weekly/bi-weekly transfers that correspond to your paycheck dates - whatever process works best for you in terms of cash management.

Metric Mouse

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Re: Monthly Retirement Contributions
« Reply #3 on: December 04, 2016, 07:07:56 AM »
It's probably even better to max out those contributions early in the year, if possible.

If one has to do it on a monthly basis, getting in at the beginning of the month is probably negligibly different than the end - its really only a few days, so I wouldn't worry about it if I had to average in each pay period.