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Roth IRA Question
Posted on 4/1/14 at 8:25 am
Posted on 4/1/14 at 8:25 am
Finally opening one today with Vanguard and selecting the Target Retirement 2050 Fund and it is giving me an option to contribute to 2013 Tax year or just start in 2014. I can't fully fund for 2013 so what should I do?
This post was edited on 4/1/14 at 8:26 am
2
Posted on 4/1/14 at 8:28 am to corndawg85
fund as much as you can for 2013. and then set up for auto withdraw on a monthly or bi-monthly base.
Posted on 4/1/14 at 8:33 am to corndawg85
As stated, always contribute to the back year when it's an option. I'm guessing you won't be able to contribute to 2013 after 4/15. Just get as much in 2013 as you can then start on 14. Remember, you can do this ever year until you begin maxing out. 15 months to contribute for each calender year.
Posted on 4/1/14 at 3:20 pm to Oenophile Brah
So contribute to the back year even if your taxes are done for 2013? Does this effect anything?
Posted on 4/1/14 at 3:21 pm to AintBigButItsPretty
Don't do the target date fund
Posted on 4/1/14 at 3:27 pm to AintBigButItsPretty
quote:
So contribute to the back year even if your taxes are done for 2013? Does this effect anything?
Yes, contribute to the back year even if your taxes are done.
ROTH contributions are from money that has already been taxed, so it wouldn't affect your taxes since you've already paid them on that money.
This post was edited on 4/1/14 at 3:28 pm
Posted on 4/1/14 at 3:35 pm to roguetiger15
quote:
Don't do the target date fund
So which one should I do?
Posted on 4/1/14 at 3:35 pm to Teddy Ruxpin
quote:
Yes, contribute to the back year even if your taxes are done.
ROTH contributions are from money that has already been taxed, so it wouldn't affect your taxes since you've already paid them on that money.
Awesome thanks. So I've been doing some beginner research and it looks like everything is slightly down. Should I wait to see what is up or just put down my $3000 and get started before April 15th? Was looking at Star and a few Vanguard Target Funds with a 0% expense ratio and min $3000 investment.
Posted on 4/1/14 at 3:41 pm to AintBigButItsPretty
First thing you need to do is go ahead and just fund the account. The money will go into a money market account for 2013 so at least you got your contribution in.
From there you can research a bit more before you make a decision, but "waiting" or "timing" the market when you obviously know very little isn't going to do one iota of good for you.
You should just find the best investment vehicle for you, and then put money into it monthly or whatever reasonably even schedule you desire.
From there you can research a bit more before you make a decision, but "waiting" or "timing" the market when you obviously know very little isn't going to do one iota of good for you.
You should just find the best investment vehicle for you, and then put money into it monthly or whatever reasonably even schedule you desire.
Posted on 4/1/14 at 3:42 pm to AintBigButItsPretty
With my experience target date funds get too conservative too quickly in general. i say "don't do it", but let me take that back. Do it if it makes you more comfortable but there's better options out there IMHO. What's that exactly for you ? I don't know. Index funds are pretty great, maybe not this year but in the long run they are
Posted on 4/1/14 at 3:45 pm to roguetiger15
quote:
With my experience target date funds get too conservative too quickly in general.
The way around this is to pick a Retirement Fund whose date is 10 or so years later than the actual date you're aiming for.
Vanguard's Target funds IIRC, are just made up of underlying index funds they offer anyways, so its not like you're missing out on much. There could be some expense ratio costs or portfolio balance issues that individual investors may have a problem with but I haven't looked into them enough to discuss it.
Note: I do index ETFs in percentages that I like, so I have no comment on TR funds one way or the other.
This post was edited on 4/1/14 at 3:47 pm
Posted on 4/1/14 at 3:47 pm to Teddy Ruxpin
quote:correct. for instance a 2050 or 2060 target date is just a 90/10 mix of total stock and bonds. which is what I would have probably selected anyway. and they have lower minimum initials
Vanguard's Target funds IIRC, are just made up of underlying index funds they offer anyways, so its not like you're missing out on much
Posted on 4/1/14 at 4:01 pm to Teddy Ruxpin
quote:
The way around this is to pick a Retirement Fund whose date is 10 or so years later than the actual date you're aiming for
This.
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