I just opened my Roth IRA in 2021 and maxed it out at $6,000. I kept contributing to it monthly to max it out again for 2022. So far my contributions are $7900 total and my balance is at $7093. (I am invested in a target date retirement index fund).
I understand the general advice of its best to not time the market, time in the market is better than timing the market, and keep investing, but for the past several months, it’s like as soon as the contribution goes in, it’s gone within a few days so it feels pretty pointless.
My question is, do I set future contributions aside in savings for the time being and add them to my Roth to invest when the market is doing better?
We are also trying to buy a house within the next 1-2 years, and I only have about $8,500 in savings. I have a 403b with $4k in it that I plan to keep contributing to ( I do not have a match).
Buy low, sell high. Right now you are buying, so the market being down is a good thing. It means each dollar you contribute can buy more shares.
> it’s like as soon as the contribution goes in, it’s gone within a few days so it feels pretty pointless.
It’s not gone, it was converted into investments that you’re purchasing at a discount relative to their price just a few months ago.
> My question is, do I set future contributions aside in savings for the time being and add them to my Roth to invest when the market is doing better?
Why would you wait to buy things until their price was *higher*? That’s the opposite of what you should do.
If anything you should put more into it, not less.
> My question is, do I set future contributions aside in savings for the time being and add them to my Roth to invest when the market is doing better?
You want to wait to buy something until it’s more expensive? Why?
> We are also trying to buy a house within the next 1-2 years, and I only have about $8,500 in savings.
You gotta decide if you’re gonna buy a house or not. If so, that’s a legitimate reason to stop contributions and save more instead.
You already know the answer to your question.
Now is the time to invest more – Be greedy when others are fearful, and be fearful when others are greedy
You aren’t losing any shares. The shares are getting cheaper.
If you move money out now, you’re guaranteeing your losses.
Moving money out now is silly. Your investment horizon here is not a week, month, year, or even a decade. Want some perspective? Look at a 30 year history of any stock index.
Yes. I wish I hadn’t gone all in in January to the roth back door, but that’s done now. Take advantage and do it now while it’s low. And don’t worry if it keeps dropping, you are still gonna have massive gains when the turn around happens.
Always funny to me…post after post….understanding no one can time the market.
Then the next statement is you want to time the market.
Really, it can’t be done reliably by anyone that is on this forum.
Your comments show a pretty large misunderstanding of how investing works, highly recommend reading the wiki. For investment purposes you want to put in as much as possible right now.
no. keep adding them to the Roth, even if you choose to defer investing them into a fund that keeps dropping. You can put the money into a money market fund, or bonds, or pig futures. I have a neighbor who invested his IRA in rental homes. But he had the cash to do so.
Personally, I’m staying the course. I’ve not touched my investment choices for like 3 years now.
Now… house is a different matter. If you want to cut back on retirement investing to build up a down payment, that’s a reasonable choice.
By the way, why IRA + 403(b)? are the investment choices in the 403b lousy? No Roth? Personally, I do all my retirement investing into my employer’s 401k, and my contributions go in as Roth. I’m also investing into taxable accounts – I like the freedom those give.
Thank you everyone for the advice! I will keep my auto investments in my Roth as is for the time being