End of Year Bonus - Dump into Roth?

I maxed out my 401(k) ($19,500) and family HSA ($7,300) this year. Up until about February of this year, I was also maxing out mine and my wife’s Roth ($500 per month apiece). So I still have about $11K that I can dump into the Roth prior to April 15 of next year for 2022, right? I am going to get back on track in January with bi-monthly contributions.

I will be getting a very nice annual bonus for 2022 sometime around March. I’m torn between buying $11K all at once, especially considering the roller coaster ride we’ve been on this year. I’m equally concerned about missing the compounding of this $11K over the next 20-25 years before retirement if I miss the window. My question is: should I dump all $11K into the Roths in March or should I put the money into my after-tax brokerage account that is heavily tilted towards cash equivalents (I use it for saving money for big purchases: vehicles, home improvements, etc.).

My fear is that I am used to dollar-cost averaging. I’d really hate dumping $11K in all at once and seeing several thousand of it disappear overnight in the event of a short-term selloff.


Put it all in a money market or buy individual issue T-bills. Very safe compared to stocks.

Roth vs. after-tax is a question of when you need the money, and has little to do with what you invest in.

If you’re worried about a big loss in whatever you invest in in your Roth, you can put it in a money market fund inside your Roth IRA and then invest monthly. I personally wouldn’t worry too much about short-term losses in something I’ll need in 20+ years, and would just buy the investment as soon as you have the money. Yearly is still DCA, after all.

If you’re planning to need the money for big purchases, then put it into the after-tax account.

By the way, 401k limits were $20,500 in 2022.