Once Roth is Maxed out...
 

I just got a job and will have more money to put away in 2008.

There is no 401k offered at my job.

After I put 5k into my Roth, I will have about $10k to invest in 2008.



Are there other tax-free/deferred options for mutual funds?

Thanks.

Re: Once Roth is Maxed out...
 

So there's no job benefits whatsoever towards retirement? If you do have something, I'd take a look at investing in that.

Otherwise, just start up a taxable account. You can still invest in funds that are very tax efficient like a TSM.

Re: Once Roth is Maxed out...
 

I assume you've already put money in for 2007?

Re: Once Roth is Maxed out...
 

It's a small company and no retirement benefits are offered.

I was thinking about opening a Vanguard targeted retirement date fund with the extra money.

It automatically adjusts the portfolio based on how many years left until retirement.


Is this a good option, even if I'm taxed on it?

Thanks.

Re: Once Roth is Maxed out...
 

[ QUOTE ]
I assume you've already put money in for 2007?

[/ QUOTE ]

I will have 4k in my Roth by the end of this year.

Got the job a little while ago so don't have much more money to play with this year.

Re: Once Roth is Maxed out...
 

you can also max out a traditional IRA

Re: Once Roth is Maxed out...
 

[ QUOTE ]
you can also max out a traditional IRA

[/ QUOTE ]

Are you saying I can squirrel away 5k in a Roth and then another 5k in a traditional IRA next year?

Thanks.

Re: Once Roth is Maxed out...
 

[ QUOTE ]
[ QUOTE ]
you can also max out a traditional IRA

[/ QUOTE ]

Are you saying I can squirrel away 5k in a Roth and then another 5k in a traditional IRA next year?

Thanks.

[/ QUOTE ]

I'm 98% sure you cannot

Re: Once Roth is Maxed out...
 

Have you considered a Health Savings Account? Withdraws are tax free at any time if used for medical expenses, and tax-deferred if withdrawn after age 65 for non-medical expenses.

Re: Once Roth is Maxed out...
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
you can also max out a traditional IRA

[/ QUOTE ]

Are you saying I can squirrel away 5k in a Roth and then another 5k in a traditional IRA next year?

Thanks.

[/ QUOTE ]

I'm 100% sure you cannot

[/ QUOTE ]

FYP

Jimbo

Re: Once Roth is Maxed out...
 

I'll look into the HSA.

Thanks for the tip.

Re: Once Roth is Maxed out...
 

[ QUOTE ]

I was thinking about opening a Vanguard targeted retirement date fund with the extra money.

Is this a good option, even if I'm taxed on it?


[/ QUOTE ]

Yeah. This is the fund I own in my Roth anyway.

Also, to re-iterate what other posters have said, I don't believe you can max out a traditional as well as a Roth in the same year. If it has the "IRA" tag on it, it's $4k max. ($5K next year). I believe you could do any combination though. Such as 2 in a traditional, and 2 in a Roth but it can only add up to 4.

Re: Once Roth is Maxed out...
 

OT: Those of you who max out your Roth...do you lump sum it in there on Jan. 1, or DCA it?

I'm planning on throwing all of mine in there on Jan. 1. Just wanted to know what others' strategy was.

Re: Once Roth is Maxed out...
 

[ QUOTE ]
OT: Those of you who max out your Roth...do you lump sum it in there on Jan. 1, or DCA it?

I'm planning on throwing all of mine in there on Jan. 1. Just wanted to know what others' strategy was.

[/ QUOTE ]

Ya I have pondered this before too. Lump Sump or dollar cost averaging. Which is more ideal?

Re: Once Roth is Maxed out...
 

[ QUOTE ]
[ QUOTE ]
OT: Those of you who max out your Roth...do you lump sum it in there on Jan. 1, or DCA it?

I'm planning on throwing all of mine in there on Jan. 1. Just wanted to know what others' strategy was.

[/ QUOTE ]

Ya I have pondered this before too. Lump Sump or dollar cost averaging. Which is more ideal?

[/ QUOTE ]

Lumping it will increase your returns but also increase your variance (volatility or whatever they call risk).

Re: Once Roth is Maxed out...
 

Lump summing is ideal.

While it's true that DCA has lower variance, it also has lower returns. If you want lower variance, lump sum into a more conservative portfolio instead of DCAing.

DCA is an inefficient method that makes no mathematical or logical sense. The only reason people use it is for psychological reasons.

Re: Once Roth is Maxed out...
 

DCA makes great sense for people who make a set salary and want to save an amount at the end of a time frame. Obv keeping 100k in a amoney market to DCA 1k a month is stupid.

Re: Once Roth is Maxed out...
 

[ QUOTE ]
While it's true that DCA has lower variance, it also has lower returns.

[/ QUOTE ]

Care to take a shot at proving this theroy?

Jimbo