Author Topic: Where to save until the New Year  (Read 2342 times)

mrtomk

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Where to save until the New Year
« on: November 03, 2013, 12:57:32 PM »
Hello All,

First post. Having discovered MMM only about 6 weeks ago, My wife and I (both 28) have had a great time slashing costs all over the place in our day-to-day lives. Now its time to figure out where to put some of this new stash...

My employer has a 403b plan with Vanguard, but they don't offer a match. My plan is to begin paying into that anyway, but I can only start at the beginning of each quarter. So I cant make use of this until 1/1/2014. At which point I intended to save a chunk both in this and a Roth IRA.

My question is what to do in the meantime. I'll be receiving another 4 pay checks before January, from those I'll have a total of about $4000 available to save before the end of the year, that I'd like to stash away for the future. My original plan was to put this into a Roth IRA, but do I have any other pre-tax options? Should I just wait until the NY, or is there a tax-deferred option I can use for the rest of this year? Does putting money in a traditional IRA now, mean I can't use a Roth later without converting, or can I just not save into both types at the same time?

I'm originally from the UK so I am still learning the rules around these retirement options, and our FI/ER plans are still pretty vague. I do know that putting off stashing my money somewhere is what has led me to having no real savings to speak of so far in my adult life, so I'm eager to get started.

I know this topic has more or less been covered in every other thread, and Ive read most of them. I was just wondering if there was any advice for this 'interim' situation...

Thanks for any advice you can provide.

iamlindoro

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Re: Where to save until the New Year
« Reply #1 on: November 03, 2013, 01:54:10 PM »
Since we're only talking about 60 days, it's too short for much of anything but a decent savings account, which will earn you next to nothing... but still *better* than nothing.

engineerjourney

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Re: Where to save until the New Year
« Reply #2 on: November 03, 2013, 01:58:20 PM »
Have you contributed to a IRA yet for 2013?  I would open one of those depending on which you qualify for.  Without knowing your whole income situation I think reading here http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-IRAs will help you!

mrtomk

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Re: Where to save until the New Year
« Reply #3 on: November 04, 2013, 01:53:55 AM »
Thank you for the link. I haven't contributed to an IRA yet this year. Sorry for not being clear. We qualify for both the traditional & roth ira. Income is roughly 70k for a married couple.

It seems to me, and correct me if I am wrong, that the best move would be to contribute to a traditional IRA now, and deduct those contributions from taxes for 2013, before considering opening a roth alongside a 403b from next year onwards.

Thanks again.

mrtomk

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Re: Where to save until the New Year
« Reply #4 on: November 04, 2013, 01:56:02 AM »
Since we're only talking about 60 days, it's too short for much of anything but a decent savings account, which will earn you next to nothing... but still *better* than nothing.

Thanks for the tip. Sorry, 'until the New Year' is a bit confusing. I don't need to access it at that point. As it happens, I do get 2.25% on my credit union checking account, so it is definitely better than nothing!

pom

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Re: Where to save until the New Year
« Reply #5 on: November 04, 2013, 04:57:51 AM »
It would seem to me that a regular IRA is the way to go. Open one with Vanguard or another investment house that offers very low fees.