First 2017 Roth contributions made

[disneysteve]

I just sent $1,000 to each of our Roths. That's the first money I've put in this year. We ran into some cash flow issues in December because I had miscalculated how much we'd owe for tuition so that messed things up a bit. Everything is back on track now so it was time to start feeding those accounts. Since we're both over 50, we get to put in a total of $13,000/year so $2,000 down, $11,000 to go.

[StormRichards]

Made our first contribution immediately following our January 15th paychecks. Made a second contribution after the 2/15 pay, and plan to max them out at month's end when DH's bonus comes in.

Then I will shift my focus to other savings initiatives.

[james.hendrickson]

Storm, do you have any credit card debt? That should be paid off immediately before doing anything else.

[StormRichards]

Storm, do you have any credit card debt? That should be paid off immediately before doing anything else.

$0

Our only debt is our mortgage.

[tripods68]

We got our tax refund and already fully funded our ROTH for 2017.

[disneysteve]

We got our tax refund and already fully funded our ROTH for 2017.

That's a great use of the refund, but that's also a huge refund. Have you adjusted your withholding so that doesn't happen again? Or was there some one-time event that bumped it up that high?

We are going to have our taxes done on Friday. I suspect there will be a refund but I never count on it until I actually see the numbers.

[feh]

Still waiting on some forms so I can finish our tax return so I know if I can make a 2016 Roth contribution...

[disneysteve]

Still waiting on some forms so I can finish our tax return so I know if I can make a 2016 Roth contribution...

That would drive me a bit crazy, not knowing. It's bad enough I don't know until we do our taxes how much I can contribute to my SEP-IRA and that's only a couple thousand dollars.

Do you set money aside during the year for your Roth contribution and just wait to find out if or how much of it you can actually put in?

[feh]

That would drive me a bit crazy, not knowing. It's bad enough I don't know until we do our taxes how much I can contribute to my SEP-IRA and that's only a couple thousand dollars.

Do you set money aside during the year for your Roth contribution and just wait to find out if or how much of it you can actually put in?

Yes, I simply increase our "occasional large expenses" fund (aka emergency fund) in the event we're allowed to contribute. If we aren't allowed, that money will just be invested in our taxable account.

[james.hendrickson]

One major downside to retirement accounts, (e.g. 401Ks, Roth IRAs) is once the money is invested in the accounts, it isn't portable or liquid. So you can't withdraw it to invest it in a business or real estate without paying a heavy penalty.

[StormRichards]

One major downside to retirement accounts, (e.g. 401Ks, Roth IRAs) is once the money is invested in the accounts, it isn't portable or liquid. So you can't withdraw it to invest it in a business or real estate without paying a heavy penalty.

Like in an Oil Well perhaps?

[corn18]

One major downside to retirement accounts, (e.g. 401Ks, Roth IRAs) is once the money is invested in the accounts, it isn't portable or liquid. So you can't withdraw it to invest it in a business or real estate without paying a heavy penalty.

Not true. I can withdraw my Roth contributions at any time without penalty or tax. I cannot withdraw any earnings before 59.5, but the contributions are readily available. A lot of people use a Roth as their EF for this very reason.

[james.hendrickson]

Not true. I can withdraw my Roth contributions at any time without penalty or tax. I cannot withdraw any earnings before 59.5, but the contributions are readily available. A lot of people use a Roth as their EF for this very reason.

Actually, I think thats correct. Good catch.

[james.hendrickson]

Like in an Oil Well perhaps?

Ummm...I am not sure if you can buy those assets in a Roth IRA. Thats a great question.

[tripods68]

That's a great use of the refund, but that's also a huge refund.

We got about $3600 of refund so it wasn't enough to fund the $5500. We use the rest of our cash savings to fully fund the remaining balance. Mostly we wanted to check off this list for 2017 to concentrate on other immediate financial goals.