Invest all at once after maxing out Roth IRA - or each time I contribute?
This depends on the terms and conditions of your IRA account, and those of the investments you have chosen. In general, you are better off investing as quickly as is feasible given those terms.  Money in your cash account doesn't earn much of a return, so the quicker you get money into something earning a return, the better. However, pay attention to the fees and costs associated with investing.  If there is a per-transaction fee, you may want to consolidate, as it may be more efficient to do so - after all, if you contribute $500 at a shot, and it costs you $5 to make a trade, you're paying 1% off the top to make that trade if you make 11 of them, versus 0.1% to make 1, so the question is do you earn that 1% back over the course of the six months?  That will depend on what you are investing in.   More than likely you're going to earn more than 1% over the course of the six months, so it's probably worth investing it in pieces still in that situation, but if the transaction cost is higher, or the time differential lower, you may have a less clear-cut answer.  I invest at Vanguard in their funds and have no transaction fees, so I have a more obvious answer (invest as soon as possible). You also need to consider whether you have minimums to pay attention to - maybe your investment is something you can only buy whole shares of, for example, or you might have a much higher fee if you make small transactions.  In that case, you should wait until you have the minimum to make that transaction if the fee is more than the return you'll get. So the answer is - make the transactions as early as you can, subject to considering the fees you will pay for making them. "If you are like most people, your timing is kind of awful.  What I mean by most, is all.  Psychologically we have strong tendencies to buy when the market is high and avoid buying when it is low.  One of the easiest to implement strategies to avoid this is Dollar Cost Averaging.  In most cases you are far better off making small investments regularly. Having said that, you may need to ""save"" a bit in order to make subsequent investments because of minimums.   For me there is also a positive psychological effect of putting money to work sooner and more often.  I find it enjoyable to purchase shares of a mutual fund or stock and the days that I do so are a bit better than the others.   An added benefit to doing regular investing is to have them be automated.  Many wealthy people describe this as a key to success as they can focused on the business of earning money in their chosen profession as opposed to investing money they have already earned.  Additionally the author of I will Teach You to be Rich cites this as a easy, free, and key step in building wealth."
"You could put in in a Money Market Fund. These are designed to always be $1 per share, and not lose money. Of course, it still, very rarely, happens and is called ""breaking the buck"" when they do.  Sounds like the high yield savings is the way to go. The rates will be the same as what you can get from a Money Market Fund, but you also have the added advantage that the account is FDIC insured. BTW, using a Roth as an emergency fund is a terrible idea. It is true that, since you already paid taxes on your contributions, you can withdraw those contributions without incurring penalties. However, you have to file paperwork to do it, and since it's not common, the IRA custodian is likely to screw it up. Plus, you have to keep track of what were contributions, and what was investment returns, to not run afoul of the penalties. And it will take time to do it, which you may not have in an emergency. Considering you're only looking at getting 1% interest anyway, there's no reason to use a Roth account as an emergency fund. You can set those same automatic deposits into a savings account." "If you have maxed out your IRA contribution for 2017 already (and it all went into your Roth IRA), then, until the 2017 Tax Day in April 2018, you can remove any part of this contribution (and the earnings therefrom) from your Roth IRA without any tax consequences or penalties. If you discover in early 2018 that you are not eligible (or only partially eligible) to contribute to a Roth IRA, then of course you must remove all (or part) of your 2017 contributions (and the earnings therefrom) from your Roth IRA by the 2017 Tax Day in April 2018. Indeed, if you have filed for an extension of time to submit your 2017 tax return, then you have until the extended due date to make the withdrawal. As NathanL's answer points out, for 2017, you and withdraw and re-contribute ""as many times as you like"" though if you push this idea to excess with the same IRA custodian, the custodian may start charging fees.  Note that IRS Publication 590b says in the Roth IRA section, Withdrawals of contributions by due date.   If you withdraw contributions (including any net earnings on the contributions) by the due date of your return for the year in which you made the contribution, the contributions are treated as if you never made them. If you have an extension of time to file your return, you can withdraw the contributions and earnings by the extended due date. The withdrawal of contributions is tax free, but you must include the earnings on the contributions in income for the year in which you made the contributions. Now, if in the middle of all these transactions, you need to take a distribution from your Roth IRA during 2017 (say because you have a cash flow problem), then it makes a lot of sense to first withdraw all your 2017 contributions and the earnings therefrom. If more money is needed, than you can take a distribution from your Roth IRA. What the distribution consists of is described in great detail in Publication 590b and you might have to pay a tax penalty for a  premature distribution depending on how much the distribution is. (The first dollars coming are assumed to be previous contributions in the order in which you made them and these are tax-free and penalty-free; after that the rollover and conversion amounts start to come out and are penalized if they have not spent 5 years in the IRA etc) But you can put the money back into your Roth IRA within 60 days and avoid penalties.  Important Notes regarding rollover transactions:" For a young person with good income, 50k sitting in a savings account earning nothing is really bad. You're losing money because of inflation, and losing on the growth potential of investing. Please rethink your aversion to retirement accounts. You will make more money in the long run through lower taxes by taking advantage of these accounts. At a minimum, make a Roth IRA contribution every year and max it out ($5500/yr right now). Time is of the essence! You have until April 15th to make your 2014 contribution! Equities (stocks) do very well in the long run. If you don't want to actively manage your portfolio, there is nothing wrong (and you could do a lot worse) than simply investing in a low-fee S&P 500 index fund. Let's say I have $10,000, and I invest said monies in mutual fund   XXXXX at $100/share, effectively giving me 100 shares. Now, let's   assume at the end of the year I have a 5% return. My $10,000 is now   $10,500. At what point does my investment benefit from compounded interest?   Monthly? Quarter? Yearly? Does it even benefit? Daily would be my answer as your investment, unless you are selling shares or not re-investing distributions is getting the following day's change that impacts the overall return. Consider how if your fund went up 2% one day and then 2% another day from that $10,000 initial investment. The first gain brings it up to $10,200 and then the second makes it $10,402 where the extra $2 is from the compounding. The key though is that these are generally small movements that have to be multiplied together. Note also that if your fund goes up and down, you may end up down overall given how the returns compound. Consider that your $10,000 goes up 10% to $11,000 and then down 10% to result in $9,900 as the return for up x% and down x% is (1+x)(1-x)=1-x^2 which in this case is 1% as 10% of 10% is 1%. The key is how long do you keep all the money in there so that the next day is applied to that amount rather than resetting back to the initial investment. This is a great idea and I can't think of any downside. The best part about it is in the future when you have built up your emergency fund beyond the maximum contributions to the Roth IRA, you can then move your Roth funds into a higher yielding investment. I might take it a step further. In addition to this, try to get a line of credit from your bank (with no annual fee). In case of emergency, you can decide if you want to take the money from your Roth or borrow from the line and pay some interest temporarily. Depending on the situation it may actually make sense to pay a little bit of interest and leave the money in the Roth, since over the long run the future earnings of that money could easily make you more than the interest you'll pay for (let's hope) a short amount of time. To really hit home why your idea is fantastic: My thoughts are your retirement investing priorities should be as follows: So in your case I would not put any money into your 401k until you have maxed out your Roth IRA. I'm staring at this chart and asking myself, How long a period is enough to have an average I'd be happy with regardless of the direction the market goes?  3 years? 4 years? Clearly, a lump sum investment risks a 2000 buy at 1500. Not good. Honestly, I love the question, and find it interesting, but there's likely no exact answer, just some back and forth analysis. You're investing about $40K/yr anyway. I'd suggest a 4 year timeframe is a good time to invest the new money as well. Other folk want to offer opinions? Edit - with the OP's additional info, he expects these bonuses to continue, my updated advice is to DCA quarterly if going into assets with a transaction fee or monthly if into a no-fee fund, over just a one year period. "I have a similar situation -- five different accounts between me and my wife. Just as you and @Alex B describe, I maintain my asset allocation across the combination of all accounts. I also maintain a spreadsheet to track the targets, deviations from the targets, amounts required to get back in balance, and overall performance. I (mostly) don't use mutual funds. I have selected, for each category, 1 or 2 ETFs. Choosing index ETFs with low expense ratios and a brokerage with cheap or free trades keeps expenses low. (My broker offers free ETF trades if you buy off their list as long as you aren't short-term trading; this is great for rebalancing for free 2 or 3 times a year.) Using ETFs also solves the minimum balance problem -- but watch out for commissions. If you pay $10 to buy $500 worth of an ETF, that's an immediate 2% loss; trade a couple of times a year and that ETF has to gain 5% just to break even. One issue that comes up is managing cash and avoiding transaction fees. Say your IRA has all the growth stock funds and your Roth has the bonds. Stocks do well and bonds do poorly, so you sell off some stocks, which creates a bunch of cash in your IRA. Now you want to buy some bonds but you don't have enough cash in your Roth, so you buy the bonds in your IRA. Not a problem at first but if you don't manage it you can end up with small amounts of various funds spread across all of your accounts. If you're not careful you can end up paying two commissions (in two different accounts) to sell off / purchase enough of a category to get back to your targets. Another problem I had is that only one account (401k) is receiving deposits on a regular basis, and that's all going into an S&P 500 index fund. This makes it so that my allocation is off by a fair amount every quarter or so -- too much in large cap equities, not enough of everything else. My solution to this going forward is to ""over-rebalance"" a couple of times a year: sell enough SPY from my other accounts so that I'm under-allocated in large caps by the amount I expect to add to my 401k over the next 3 months. (So that in six months at my next rebalancing I'm only 3 months over-allocated to large caps -- plus or minus whatever gains/losses there are.)" "The money you invested in your Roth was taxed as income when you filed your income tax.   A Roth contribution is ""post-tax"" as opposed to a standard IRA or 401k contribution which are ""pre-tax"". Pre-tax contributions lower your taxable income for the year. In example, you had income of $100,000 and made a standard IRA contribution of $5000. Your taxable income would be $95,000. In the case of a Roth contribution, the same $5000 investment would not reduce your taxable income for the year." "You seem to be treating your Roth IRA as a sort of savings account for use in emergency situations.  I would use a savings account for savings as withdrawing money from an IRA will have penalties under various circumstances (more than contributions, Roth IRA less than 5 years old, more than $10k for a down payment). Also, you mention folding your IRA into your 401k so that it will ""grow faster"".  However, this will not have that effect.  Imagine you have $30k in an IRA and $100k in a 401k and you are averaging a return of 8% / year on each.  This will be identical to having a single 401k with $130k and an 8% / year return. This is not one of your questions, but employer matches are not counted in the 401k contribution limit.  If your 22% calculation of your salary includes the match to reach the max contribution, you can still contribute more." I think what you're asking is,  Can I buy 1000 shares of the stock at $1.  For $1000.   it goes up to $2, then sell 500 shares of the stock with proceeds of $1000, now   having my original $1000 out of it, and still owning 500 shares.    And that not create a taxable event. Since all I   did was take my cost basis back out, and didn't collect any gains.   And then I want to repeat that over and over. Nope, not in the USA anyway.   Each sale is a separate taxable event. The first sale will have proceeds of $1000 and a cost basis of $500, with $500 of capital gains, and taxes owed at the time of that sale. The remaining stock will have a cost basis of $500 and proceeds of whatever you sell it for in the future. The next batch of stock will have a cost basis of whatever you pay for it.   The only thing that works anything like the way you're thinking, is a Roth IRA...   You can put your cost basis in, pull it back out, and put it back in again, all tax free.   But every time your cost basis cycles in, that counts towed your contribution limits unless you do it fast enough to call it a rollover. The first question is essentially asking for specific investment advice which is off-topic per the FAQ, but I'll take a stab at #2 and #3 (2) If my 401k doesn't change before I leave my job (not planned in the   near future), I should roll it over into my Roth IRA after I leave due   to these high expense ratios, correct? My advice is that you should roll over a 401K into an IRA the first chance you get (usually when you leave the job). 401K plans are NOTORIOUS for high expense ratios and why leave your money in a plan where you have a limited choice of investments anyway versus a self-directed IRA where you can invest in anything you want? (3) Should I still max contribute with these horrible expense ratios? If they are providing a match, yes. Even with the expense ratios it is hard to beat the immediate return of an employer match.  If they aren't matching, the answer is still probably yes for a few reasons: You already are maxing out your ability to contribute to sheltered accounts, so assuming you still want to sock away that money for retirement, the tax benefits are still valuable and probably offset the expense ratios. Although you seem to be an exception, it is hard for most people to be disciplined enough to put money in a retirement account after they have it in their hands (versus auto-deduction from paychecks). Lets assume you put the max of 5000 per year in a Roth IRA.  You have your home and all other debt paid off, and your investment earns 10%, a few points below the market average.  You will have $822,470 at 65, 1005K at 67 that you can draw on tax free.  It is a fairly tidy sum and should keep you from working as the greeter in WalMart. This kind of return should be expected from most mutual funds, and you could invest some time in reading about how to pick good returning funds.  An index fund, which shadows a market index, should have that kind of return.  And yes that is 10% per year.  In investing it is about momentum. I too write software for a living, and would suggest you should be able to contribute about double that amount and still be comfortable.  That would set you up for a pretty comfortable post-work life style. You understand the value of building passive income.  Traditionally that is accomplished through dividends of reliable companies, but are now accomplished a variety of ways.  Keep in mind the way you are asking this question opens you to many scams. Your max contribution to your Roth IRA and your traditional IRA share the same cap, so if you are maxing your Roth IRA you cannot have a traditional one as well. I would put the additional into your 401k or perhaps a 529 if you have any kids. "If you have wage income that is reported on a W2 form, you can contribute the maximum of your wages, what you can afford, or $5500 in a Roth IRA.   One advantage of this is that the nominal amounts you contribute can always be removed without tax consequences, so a Roth IRA can be a deep emergency fund (i.e., if the choice is $2000 in cash as emergency fund or $2000 in cash in a 2015 Roth IRA contribution, choice 2 gives you more flexibility and optimistic upside at the risk of not being able to draw on interest/gains until you retire or claim losses on your tax return).  If you let April 15 2016 pass by without making a Roth IRA contribution, you lose the 2015 limit forever.  If you are presently a student and partially employed, you are most likely in the lowest marginal tax rate you will be in for decades, which utilizes the Roth tax game effectively.   If you're estimating ""a few hundred"", then what you pick as an investment is going to be less important than making the contributions.  That is, you can pick any mutual fund that strikes your fancy and be prepared to gain or lose, call it $50/year (or pick a single stock and be prepared to lose it all).  At some point, you need to understand your emotions around volatility, and the only tuition for this school is taking a loss and having the presence of mind to examine any panic responses you may have.  No reason not to learn this on ""a few hundred"".  While it's not ideal to have losses in a Roth, ""a few hundred"" is not consequential in the long run.   If you're not prepared at this time in your life for the possibility of losing it all (or will need the money within a year or few, as your edit suggests), keep it in cash and try to reduce your expenses to contribute more.  Can you contribute another $100?  You will have more money at the end of the year than investment choice will likely return."