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Started By
Message
Hold off on starting a Roth?
Posted on 1/22/16 at 5:29 am
Posted on 1/22/16 at 5:29 am
So I have been wanting to get a Roth started for some time now but just havent had the time and with the way the market has been lately I am glad I havent. Trying to decide if I should wait and see if things settle out or if the recession talk is is going to come to fruition. Not to mention that I am in oil and am nervous about dropping a large chunk of money with how the industry is right now. To top it off I am wanting to add some more to the energy stocks I have as well.
Not to mention I have around 20K in school loans I am still paying off with varying rates from 3-5%.
Not to mention I have around 20K in school loans I am still paying off with varying rates from 3-5%.
7
Posted on 1/22/16 at 5:32 am to GREENHEAD22
quote:
dropping a large chunk of money with how the industry is right now
The most you could drop in, unless you are old enough and making up, is 11k through April 18th.
I don't know why you wouldn't at least contribute something to your 2015 Roth while you still can, you can pull out your contributions at any point if you need them and its free of penalty.
Posted on 1/22/16 at 6:36 am to GREENHEAD22
No, you only get to contribute $5500 per tax year. (Until you're 50 - but hopefully you make way too much money by then) Also, don't ever take out even the principal. Chances are you wont pay it back in time. I mean, if shite hits the fan and there's no other option, sure, but don't use if for something you could otherwise do without or save for. Just my opinion.
Also, you can park it in a money market if you're nervous about investing, but frankly I'd just DCA.
Also, you can park it in a money market if you're nervous about investing, but frankly I'd just DCA.
Posted on 1/22/16 at 6:49 am to TigerDeBaiter
quote:
Also, don't ever take out even the principal. Chances are you wont pay it back in time.
In time for what?
Posted on 1/22/16 at 7:17 am to GREENHEAD22
I was thinking the opposite, although my situation is a bit different. I started a 401k last year to take advantage of company matching but I paid off all of my loans.
I usually get a decent amount back on tax return (should be higher now that 401k started) and I was debating dropping in the max for 2015 or starting off with regular deposits for 2016.
I will say, paying off student loans is an amazing feeling. It's great not throwing a thousand dollars a year away to interest.
I usually get a decent amount back on tax return (should be higher now that 401k started) and I was debating dropping in the max for 2015 or starting off with regular deposits for 2016.
I will say, paying off student loans is an amazing feeling. It's great not throwing a thousand dollars a year away to interest.
Posted on 1/22/16 at 7:46 am to TigerDeBaiter
quote:
No, you only get to contribute $5500 per tax year.
Yeah $5,500 for 2015 and $5,500 for 2016 is $11,000. That's what the poster above meant since you are still able to make contributions towards 2015 tax year till tax date.
I think you should make the contributions that you are comfortable with. Like another poster mentioned, you could always take it back out (contributions not earnings) since you've already paid tax on them. You also don't have to invest in anything to contribute. You can just have it in an account ready to go when you are.
Posted on 1/22/16 at 8:00 am to GREENHEAD22
You don't have to immediately invest the money. Just put the money in a Roth and either dollar cost average or wait for when you're comfortable.
Posted on 1/22/16 at 8:03 am to GREENHEAD22
Do it now. Stocks are on sale.
Posted on 1/22/16 at 8:08 am to GREENHEAD22
What's the point of waiting? Stocks are already cheap. Just jump in and let it ride
Posted on 1/22/16 at 8:17 am to castorinho
Thinking of waiting bc like I said earlier of a possible recession hitting again. I contribute around 16% right now to 401K and company stock purchase. I guess I will just split what I feel comfortable with between the energy stocks I want to add to and the Roth. Once I get my return I will throw that into the Roth.
Posted on 1/22/16 at 8:40 am to GREENHEAD22
You can invest in those stocks in your roth
Posted on 1/22/16 at 8:42 am to castorinho
Someone needs to define "cheap" for me.
Posted on 1/22/16 at 8:42 am to GREENHEAD22
quote:You'd be making a mistake, IMO. Even if you started your ROTH and invested half of it immediately then stocks drop further, you'd be reinvesting your dividends into more shares since their price fell.
Thinking of waiting bc like I said earlier of a possible recession hitting again.
Warren Buffet has a lesson for all of us: "It's not market timing that's important, it's TIME IN the market that builds wealth."
Get started with your time in the market sooner rather than later.....
Posted on 1/22/16 at 9:16 am to LSURussian
quote:
You'd be making a mistake, IMO. Even if you started your ROTH and invested half of it immediately then stocks drop further, you'd be reinvesting your dividends into more shares since their price fell.
This is currently what I've been doing with my roth for 2015 and moving in to 16. Just putting the funds in and letting the other half sit on the sidelines. Might be a mistake...might not. I feel like the time to throw the remaining cash in to the game is coming soon though.
If you plan on maxing out your roth, no reason not to at least make the deposit.
Posted on 1/22/16 at 9:21 am to GREENHEAD22
NO! Just stick it in money market in your Roth if you're worried
I'd dollar cost it thought
I'd dollar cost it thought
This post was edited on 1/22/16 at 9:40 am
Posted on 1/22/16 at 10:51 am to LSURussian
quote:
You'd be making a mistake, IMO. Even if you started your ROTH and invested half of it immediately then stocks drop further, you'd be reinvesting your dividends into more shares since their price fell.
Warren Buffet has a lesson for all of us: "It's not market timing that's important, it's TIME IN the market that builds wealth."
Get started with your time in the market sooner rather than later.....
well said
Posted on 1/22/16 at 10:57 am to LSURussian
quote:
You'd be making a mistake, IMO. Even if you started your ROTH and invested half of it immediately then stocks drop further, you'd be reinvesting your dividends into more shares since their price fell.
Warren Buffet has a lesson for all of us: "It's not market timing that's important, it's TIME IN the market that builds wealth."
Get started with your time in the market sooner rather than later.....
TRUST this advice. Back in 2009, I was 20 years old, in college, and had a lot of exposure to doomsday scenarios. I found myself agreeing with them in a lot of cases and even stated that the stock market could go all the way to 0, on this board! Looking back, I'm glad that happened when I had zero money to invest. Learn from my previous ignorance, and from others who cashed out at completely the wrong time, and dollar cost average into the market now, or as soon as you can afford to.
Posted on 1/22/16 at 11:15 am to TigerDeBaiter
quote:
I've never been a fan of people "banking" on using the Roth for an emergency fund.
I disagree.
If I have to stretch to hit my annual roth max, then I'm going to put it there, even if it sits on the sideline. After April 15th, I can't go back and max it out and sitting in my savings account provides me virtually zero future value. How you manage your money within the roth is obviously up for discussion when using it as an emergency fund, but saying it's a "waste", is short-sighted IMO.
Posted on 1/22/16 at 11:32 am to LSUtoOmaha
quote:
Back in 2009, I was 20 years old, in college, and had a lot of exposure to doomsday scenarios. I found myself agreeing with them in a lot of cases and even stated that the stock market could go all the way to 0, on this board!
Do you remember your post in the linked thread below? You were the first to reply to the thread I started when you posted:
quote:There were other posters who agreed with you, fwiw.
I'm thinking stocks may not even exist.
Feb. 14, 2009
For those who forgot, the low for the S&P500 index during the Great Recession occurred on March 6, 2009 when it dropped to an intra-day low of 666.79.
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