Chris S

Correct - a couple of years ago I funded my Roth before I did my taxes, only to learn I'd exceeded my allowable max contribution. It was a PITA to get ETrade to re-characterize my contribution! Lesson learned, now I don't make a Roth contribution until taxes are pretty well done.

mxt_77

^ I wondered how that worked. I'm getting close to that borderline, so now I know who to go to for advice if I hit it!

Your strategy might be a good one, though. Take advantage of the fact that you can make prior-year contributions up until April 15th of the subsequent tax year, and use that time to determine exactly how much you can contribute to your Roth without exceeding the limit. The downside is that you don't get to take advantage of the dollar-cost averaging of depositing more frequently throughout the year. Also, you have to find a place to stash that money until you get ready to move it into your Roth.

Penforhire

Don't mention Roths! I'm pissed because we're just a little over the income limit to take advantage of those. Grrrr.

mxt_77

^ Are you maxing your 401k? Since the money that you put into your 401k basically comes out of your AGI, then maybe you could invest more into your 401k to put you below the limit for Roth investment. That's my plan, anyway.

wills2k106

I thought IRAs, traditional and Roth, had flat dollar amount ceilings. For 2008 it is $5,000 and $4000 for 2007, or at least that is what I thought. Is there something I am missing?

Nevermind, I just found the earnings limits. $95k for single filers, $150k for married/joint. I don't have a problem with either limit yet.

mxt_77

^ Actually, single filers went up to 99K this year. I suspect the married/joint might've gone up too, but I don't have that problem yet.

QUIKAG

That is a problem most people would like to have. I'm not eligible either, but I realized the alternative is not making as much money! I rode the Roth wave as long as I could, but I'm on my own now.

Diablo99V

In life there are things that can waitand are not important but also there are things you can't live without. Life is all about being Happy (since we really don't know its meaning). The way I look at life is that I prioritize what makes me happy. I'm currently in a similar situation, I chose to get another S2000 and instead of waiting for some $$$ I will get in the near future, Im going to finance it as soon as I get the chance because tomorrow might be my last day. Just make rational desicions, while not putting yourself in a bad situation if you can swing it now and thats what is gign to make you happier than go for it. If you can't swing it just don't do it because tomorrow might also not be your last day. Sorry for the rant. Everyone has different priorities in life and some value some things more than others, the key is to take full control. Good Luck!

rai

Super OT but what the heck

[QUOTE]On May 17, 2006, President Bush signed the Tax Increase Prevention and Reconciliation Act of 2005 into law.

QUIKAG

Depends on what you think future tax rates are going to be and how long you have until retirement.

Back on topic (a little), but it really is a personal decision. I don't like car payments and I don't like giving the banks any more money than it already costs to buy a car nowadays. I ran the numbers on my Vette and it would cost me an extra $5-6k to finance over 60 months. Screw that. I'd rather pay cash and take what I would have spent on a monthly payment and pay myself by investing every month in a nice mutual fund.

When the crap hits the fan in the U.S., those that have minimum debt loads are going to be sitting much prettier than those who are strapped to the hilt with loans.