Roths funded for 2013

[disneysteve]

I just sent in the final Roth contributions for 2013. It is way later than I usually accomplish that and it took some juggling of funds. The past year or so have been rather difficult in terms of cashflow. In the past 15 months, we've purchased 2 cars. The first is fully paid for and the other is well on it's way to being paid for. We took about a $4,000 hit at tax time that I wasn't expecting so money that normally would have gone to the Roths had to take care of that instead. And as I've shared before, my wife left her job in May so we lost her income. On top of all of that, the Roth limit went up this year from $5,000 to $5,500 and my wife turns 50 this year so she could put in an additional $1,000 meaning we needed a total of $12,000 instead of the $10,000 we needed last year.

Anyway, bottom line is the Roths are fully funded with $12,000.

[dczech09]

Anyway, bottom line is the Roths are fully funded with $12,000.

Congrats, DS!

Has anyone heard if the Roth IRA limit will increase in 2014? I currently contribute $458.33 per month ($5,499.96 for the year, so 4 cents off the max if we want to get technical ). I would be interested to know if the limit will jump in 2014 so that I can budget for it.

I just got a raise, so I need to change up my retirement contributions to hit 15% again!

[disneysteve]

Has anyone heard if the Roth IRA limit will increase in 2014?

I don't think it has been announced yet. I think last year they didn't say until November. It is indexed to inflation but can only rise in $500 increments so it isn't likely to go up every year as I understand it. I do wish they'd hike up the limit to match the 401k limit for the 50% of Americans who don't have a 401k.

[LivingAlmostLarge]

Awesome. Very cool. We do ours in january to see what the last years income was. I think we're on the bubble

[disneysteve]

Awesome. Very cool. We do ours in january to see what the last years income was. I think we're on the bubble

We're not close to the limit so I just aim to get it in as early as possible. This year just happened to be late for various reasons but that's okay. Next year I get another bump in contributions as I'll turn 50 so we can put away $13,000 assuming the limit doesn't change.

[cardtrick]

Small chance I might go over the income limits for Roth this year, so I'm holding off till the end of the year. I put $500 into my Roth so far. I might have to withdraw that and backdoor all $5500.

[BuckyBadger]

I just backdoor the whole Roth every January to avoid having to know how much I would otherwise be able to directly contribute to a Roth. It's easier and I like getting the money in as early as possible. I save the Roth contribution in a regular account throughout the previous year so that I can put it all in as soon as possible in January.

[humandraydel]

I do wish they'd hike up the limit to match the 401k limit for the 50% of Americans who don't have a 401k.

They probably should - especially now that the Roth 401k is becoming so common!

[KTP]

I just backdoor the whole Roth every January to avoid having to know how much I would otherwise be able to directly contribute to a Roth. It's easier and I like getting the money in as early as possible. I save the Roth contribution in a regular account throughout the previous year so that I can put it all in as soon as possible in January.

It is so stupid that we have to backdoor to get a Roth. I can understand not getting a tax deduction for a traditional IRA if you make too much money, but can't understand why there is an income limit on Roth contributions. With all of the trouble expected from social security funding in the future, you would think they would want everyone saving in a Roth. I know plenty of people making $200K a year who are not saving a dime, Roth or no Roth.

[disneysteve]

can't understand why there is an income limit on Roth contributions.

I agree. It kind of made sense when there were only 401k plans, but now that there are Roth 401k plans it really doesn't make sense anymore. Anyone with access to one can put $17,500 into a Roth 401k regardless of income but those of us without that access can only put $5,500 in a Roth and only if we make less than a certain amount. It is a very inconsistent set of rules that doesn't make any sense.

[cardtrick]

I just backdoor the whole Roth every January to avoid having to know how much I would otherwise be able to directly contribute to a Roth. It's easier and I like getting the money in as early as possible. I save the Roth contribution in a regular account throughout the previous year so that I can put it all in as soon as possible in January.

I plan on using the Roth to make big long-term bets on individual stocks. Basically go for a portfolio of no more than 4 stocks. I don't currently see anything I want to buy and hold, so the money will sit in cash anyway. That's why I'm holding off till the end of the year.

[feh]

I usually make our Roth contributions early in the year. Not this year, however, because I don't know if we'll be over the income limit.

In the end, I'm glad I didn't contribute. For the next 3 years (and this year), we're going to throw all of our savings at our taxable account, getting ready for early retirement. The only tax-advantaged savings we'll be making will be up to my company's 401K match.

[Blessed]

Awesome Disney Steve!!!

I didnt realize the limit went up. I better do another deposit in both.

[bjl584]

Congrats.

I still DCA mine over the course of the year. It's just easier for me from a budget standpoint than trying to come up with $5500 all at once.

[bjl584]

Has anyone heard if the Roth IRA limit will increase in 2014?

No info on this yet. I doubt that they will next year, but that's just a guess on my part.