The other market got me thinking and I thought I’d ask because some of you know way more about investment than I do.

I am 19 and opened a Roth IRA a year ago. I planned on investing $2000 a year in it, and did for the 2019 tax year. I have not put anything in it yet for the 2020 tax year. I am now prepared to do the $2000 I had planned on, but I am wondering if it is a good choice. I’m sure the stock market is difficult to time and judge, especially now, but do you think now is a good time to be investing? Should I be investing as much as I can? Should I wait and do more at the end of 2021? Is there any way to know? Any opinions are appriciated!

Slow and steady. By the time you are ready to retire the market will have gone up and down a hundred times.

Put in you $2000 this year. Just do it in 12 installments. Dollar cost averaging.

Invest it! You are on the right path. I started at 20 years old in a post tax setup and opened a Roth 10 years later. I regret not doing the Roth the whole time. You always want to buy low, the way I look at it is that stock will be on sale for the next 4 years. If you continue what your are planning for the next 10 years you will be in the drivers seat with retirement. Time is money in the stock market.

Always pay your self first. If you can do a percentage though work that is the easiest way. Roth you pay taxes now and taxes never go down. Only you can decide how much but if you put raises or do it when you get a new job before you see that first check you will never miss it because you never had it to spend.

great call!

Max it out as soon as you can, 6k limit annually now

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits#:~:text=For%202021%2C%202020%20and%202019,taxable%20compensation%20for%20the%20year

I doubt you will ever regret investing in your Roth. I advise you to contribute early in each year. By investing in January rather than December every year, your money will compound to yield an impressive amount vs a late year investment, especially over 50+ years. I retired from Prudential. We had software to show what a delayed contribution could cost over a lifetime. It was a substantial amount. Time in the market is your friend at age 19. Shielding your investment from taxation is also your friend.

I assume your are working now. You must have $2000 of income to invest that amount.

My best financial advice is to marry someone who is already wealthy.

the benefit of the roth is you pay the taxes now but you don't pay them later.

it is a good way to put some added insurance on the account.

if you can , it depends how you get paid , let the money pay out as it hits your account 75-100 dollars a pay check starts putting it away , and you are young if you have an employer 401K putting away in it pre tax lowers your taxable income for the year while setting it aside.


5 pieces of advice for young folks

1 do as little on credit as you possibly can , basically home mortgage and pay that down as quickly as reasonable.

2 put away a steady toward your retirement.

3 be frugal in your spending , but sometimes spending on good quality is worth the extra you need a vehicle but a new vehicle is usually a loan and a huge payment .
something used that was a good model can save you thousands.
maintenance is not frivolous keep up on it , learn to do much of it yourself , a little grease now can save you thousands later
an example my 2001 E350 van had places for zert fittings in the steering linkage and ball joints , I replaced the plugs with zert fittings you can purchase them for a dollar fifty each , then kept good grease in it that was around 2003-2004 I kept that van till 2019 and it still had all the original front end parts.
I tell my kids when you can save money faster than you can earn it , that is something to invest your time in for me that is cutting and heating with wood. doing my own brakes , some of my own truck repair
a washer and drier I went through a couple front loaders before I went back to a commercial top loader it was the most expensive washing machine I have ever purchased but if it lasts longer than the previous 2 it is well worth it to cost a couple hundred more.

4 live below your means we hear often about people living above their means every dollar and then some is spent before it is earned.
living below your means will afford you greater flexibility , always having savings , savings and cash available turns into the ability to purchase when you need or when there is a deal. a friend really likes Toyota Prius cars for a daily commuter they have one that has some issues but is also over 300K miles , they already have the replacement purchased found a very good deal on one and it is purchased and being run some waiting for the old one to give up or need something replaced.say what you will about the car they have their cost per mile way down and won't be in a bind when the car they have is done.
living in a 1200 or 1500 square foot house rather than a 2300sqft house if you have 8 kids you might need a bigger house but 2 people don't need 3000sqft hardly ever yet so many people have just that
that kind of cash on hand , get good deals , research purchase well , spend on the things that matter .cook most of your own food , it all leads to greater flexibility and savings never paying a charge or a fee or a late charge , the system punishes people who don't have the money to buy in fees and interest.
everyone markets their worst attribute "We don't sell no fat yeller chicken" comes to mind raise your own chickens on good feed with lots of garden extras and you will find they are both fat reasonably so and yellow that add portrays fat and yellow as bad , however beta carotene makes the color in chicken tissue and milk. think about the color cream it is off white , cows grazed on grass will produce cream colored milk beta carotene the better product has flavor and color.


5 eat real food , if it says low cal, fat free, reduced fat , stay way from it they have to do something too it to take the fat out. a good example is fat free cream , cream is fat so how do you make it fat free they add thickeners , corn syrup and other junk to skim milk , why would that be better , it isn't but it is cheaper than real dairy fat it lasts longer on the shelf and they can sell it for the same or slightly lower price people will buy it and they make a larger profit margin on it.

listen to Dave Ramsey's info he has a lot of good financial info

live content enjoy life it goes very fast

For 2020 make the investment. For 2021 do what claypool said, make monthly investments. I don't know if I'd bet on congress not changing the rules before you can pull out the money. In fact I stopped contributing to my Roth and just fund a deductible 401k now.

not sure who told you to put in at yrs end, but you are hurting yourself.

Make monthly pymts. Auto-pay out of your acct is easy.

Your better off than 98% of those your age! My guess is your going to be very happy in the coming years. Put it in a broad index fund and just let it ride don't look at it daily and get worried it goes up and down but on a 10 year period you will be making money. Best thing about a Roth is the money is all yours when you pull it out and in your younger years you don't need a tax break. I always had traditional IRAs before the Roths and did well but when your older and in a higher tax bracket and pull it out you cry when you see how much you give back. I got into Roths when they first came out and continued and when I pull money out its all mine way better situation.

Take all the advice given here, I don't need to add any. I remember a Vikings quarterback said after retirement he did not worry about tax on his earnings, he was concentrating on making money, but if he had Roth IRA available at that time I can pretty much guarantee it would have been fully funded every year.

My target is 15% of my income each year into savings.

If someone only maxed a roth and 401k annually from age 20 to 60 in good funds indexed to the SP500, based on historic stock market growth, you'll be a multi millionaire at retirement

You can continue contributing to the prior year until April 15th as well. (Tax day) so you can add more or play catch up if you didn't make your yearly goal.

Also. I stopped my 401k. Only Roth for me. Taxes up front. Tax rate may be higher to pay for these stimulus checks. 401k could take a beating when the tax man come.

One thing about a 401K is, if there is a company match. Then it is a good idea to at least put in enough to get the match. That is 100% interest the first year. After that go into the ROTH. But like ebsurveyor said tax laws are always changing.

You can still get a company match and have it in a Roth in most cases I know of.

You have a 40 plus year window before usage unless needed. Investing early is always the best option and don't worry about 2-6 months of stock issues when you are looking at 500 months of growth opportunity with no taxes due no matter how this all plays out.

Bryce

As other mentioned...don’t follow it, lol!! I don’t have a Roth just my 401K and I have to make myself not look. Been tempted to delete my app. You could make $5K one day and lose 10K the next. Just ride it out. Also make sure you save some cash (savings) as well. For those, “Well Crap,” moments in life...appliances, vehicle repairs, just anything unexpected.

Good for you! I wish I started at 19. Assuming you invest in something that matches the growth of the overall stock market, you should double your money every 6 or 7 years. Money invested at 19 is worth TWICE what the same money would be if invested at 25 or 26. Invest all that you can now. Every dollar invested now will be worth around $50 at retirement. That's not true 10, 20, or 30 years from now because your money won't have as much time to grow.

You can probably still invest in your IRA for 2020. There is a grace period after the year ends but I don't know when the grace period ends.

You asked if you should invest now because you're not sure what the market is going to do. The answer is yes. You will never be able to accurately time the market. The market is unpredictable. I always think that this political event, that weather event, or this other pandemic is going to cause A or B to happen and I'm wrong more often than I'm right.

The only thing that I know has happened for the last 100 years is an average growth of around 12%. Some years the growth is much higher. Some years it loses money. But, the average growth over any 20 year period is 12%. You're young enough that you don't need to worry about years that lose money. You have plenty of investing years left. Losses in one year will be offset by gains in another. As you get closer to retirement, that risk matters because you'll eventually run out of time to recover from a loss. That doesn't matter now.

And I agree with what others have said, instead of trying to come up with money to invest a the end of the year, it's much easier to just invest with every paycheck. If you can set up direct deposit through your employer with part of your paycheck automatically going into your IRA, that's the best. You never see it and won't miss it. A minimum goal should be 10%. Real winners invest 15%.

If you already have $4,000 invested ($2K last year and this year), you invest only $50 per month in your IRA from today forward, and you invest in an index fund that averages 12% return, you will retire at 65 with $1.9 million in that account. You only put in $27,000 and you get out almost $2 million. And, the more you can invest, and the earlier you do it, the more you make.