RothIRA rant

[BMEPhDinCO]

Hi all,

I just want to put this in the public forum but really it's just a rant for myself. In 2011, we were able to max both our RothIRAs. In 2012, we were able to max both our RothIRAs. This year though, we are $2,800 short (of course, they also raised the contribution levels by $1k so there's that...).

We were both grad students until May 2013, when DH graduated - he's been working several (fairly low paying) jobs since August (in his field, it's just not a lucrative one). I'm still in school.

We did put in just OVER 18% of our income into the Roths - last year it was just UNDER 18% so percentagewise, we did better this year on less income (around $9k less made this year). But I feel frustrated since the streak is broken.

I do have one option - take it out of our (admittedly large) emergency fund - we have 10 months in there right now, if I took it out we'd go down to just over 8. But I don't know if I'd be able to refill it to 10 months, probably just 9 AND do the other savings buckets AND do the 2014 Roth. Plus, we really don't know DH's employment situation after May and I have another 1.5 years in school.

So I am just ranting - I realize it's one of those "oh boo-hoo to you with full sarcasm intended here" situations but for US it is a big deal - I just turned 30 and Roths are the only way we have to save for retirement right now - no employer matching, no SE retirement accounts, no pension, etc. So if we don't do these as much as possible, we lose a lot of money in 37 or so years when we retire, assuming we can.

Rant over, thanks if you got this far.

[klarose]

I'd take it out of the EF.

[Like2Plan]

Hi all,

I just want to put this in the public forum but really it's just a rant for myself. In 2011, we were able to max both our RothIRAs. In 2012, we were able to max both our RothIRAs. This year though, we are $2,800 short (of course, they also raised the contribution levels by $1k so there's that...).

I don't know if this will help, but you can still contribute until tax time in 2014, so you still have an opportunity to fully fund your 2013 contribution year....

[Petunia 100]

If you pull money out of your EF for your Roth, you can always pull it right back out if you need it. (Contributions are available at any time for any reason, no tax or penalty).

But you do have almost 4 months until the deadline, so perhaps you can scrape up some more Roth money in the meantime.

[hadoty]

I would definitely take the money out of your emergency fund and put into your Roth. The reason: Contributions to your Roth are withdrawable at any time without penalty. You only incur penalty for early withdrawal of earnings. So, if you face an emergency, you can get the money back out of your Roth. But if you do not contribute the full amount by April 15, you lose the opportunity forever.