Among other retirement accounts I put max out my Roth IRA account 1 lump sum at the beginning of the year. At least that is how i have been doing it for years. Each month i set aside whatever the new max contribution limit is (pending any changes through the year) divided by 12. So that by December i have the amount needed for my next lump sum contribution in January.
1st question: Is this okay? Should I be doing this differently? Like just stop doing the lump sum once a year and DCA each month into the IRA instead?
2nd question: If it is okay, what should i do with that cash just sitting there each month waiting to be invested for the following year? Should i invest it in a taxable account and then sell it when time comes at the end of 12 months to then reinvest it again in the ira? Hoping that we would be in a bull market to make some money and have more than i started with and not a bear where i would have less than the max and have to contribute more obviously short term investing? Or do i just keep it in cash and wait for it to be contributed and then invest it in the ira like normal
3rd question: Anything else i should be thinking about?
Leave a Reply