Once Roth is Maxed out... - Page 2

ICMoney · #11 11-12-2007, 11:32 AM

I'll look into the HSA.

Thanks for the tip.

prohornblower · #12 11-12-2007, 04:40 PM

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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?

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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.

prohornblower · #13 11-12-2007, 04:48 PM

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.

ilikeaces86_ · #14 11-12-2007, 05:29 PM

[ 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.

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

mtgordon · #15 11-12-2007, 06:18 PM

[ 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?

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

gull · #16 11-12-2007, 07:49 PM

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.

Thremp · #17 11-12-2007, 08:06 PM

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.

Jimbo · #18 11-13-2007, 12:34 AM

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

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Care to take a shot at proving this theroy?

Jimbo