Comments on: Fund Your Roth IRA Early This Year http://www.silverbeach.com/Money/archives/32 Thoughts by an Engineer on How Money Works and How to Make the Most of What You Have Fri, 21 Nov 2008 08:07:18 +0000 http://wordpress.org/?v=2.0.4 by: ryle http://www.silverbeach.com/Money/archives/32#comment-1574 Mon, 14 May 2007 21:00:21 +0000 http://www.silverbeach.com/Money/archives/32#comment-1574 Just to clarify, you actually can start taking distributions from your Roth IRA at age 59 1/2, not 65. (http://en.wikipedia.org/wiki/Roth_IRA). Also, fully funding your Roth IRA all at once is definitely one option, but if you invest it all at once and the market goes down, then you're out a bunch of money at once. What I prefer is known as dollar cost averaging (http://en.wikipedia.org/wiki/Dollar-cost_averaging), which essentially recommends putting a fixed amount into your investment each month. This way, if you put in $333 a month for 12 months (which adds up to $4,000), when the market is down you get more shares per dollar, when the market is up you get fewer shares per dollar. Over the long run you'll end up with more shares than if you invested it all at once. Just a thought! Just to clarify, you actually can start taking distributions from your Roth IRA at age 59 1/2, not 65. (http://en.wikipedia.org/wiki/Roth_IRA).

Also, fully funding your Roth IRA all at once is definitely one option, but if you invest it all at once and the market goes down, then you’re out a bunch of money at once. What I prefer is known as dollar cost averaging (http://en.wikipedia.org/wiki/Dollar-cost_averaging), which essentially recommends putting a fixed amount into your investment each month. This way, if you put in $333 a month for 12 months (which adds up to $4,000), when the market is down you get more shares per dollar, when the market is up you get fewer shares per dollar. Over the long run you’ll end up with more shares than if you invested it all at once.

Just a thought!

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