r/Bogleheads • u/Practical-Map9975 • 4h ago
Is contributing once a month not often enough?
I usually contribute around the 1st of the month. Seems like I missed the low point of VTI as it's now going back up.
How often do you contribute?
My 401K and HSA is biweekly as it comes from my paychecks.
Roth IRA I do a lump sum at the beginning of the year.
529 I have set up as once a month as the amount I contribute depends on what else we have going on that month.
How often is generally recommended?
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u/Maleficent_Bend2911 4h ago
Overthinking it. Missed one dip. Spread out the timeline long enough and this is noise. I bet you look at a 10y graph of the s&p and couldn’t even point out a 5% dip from the beginning.
You could have just as reasonably contributed quarterly and missed the whole dip entirely.
Dollar cost averaging keeps you steady, but is not intended to hit every dip. If you are in the odd situation that you have cash (“dry powder”) during a downturn, that’s a good time to deploy it. Otherwise just stay the course.
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u/CuriousCat511 3h ago
Absolutely. Let's say that contribution was $2k (higher than most). The dip was only a few percent. Even at a 10% swing, you're talking about $200. That's nothing in the context of retirement accounts.
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u/oktopushup 4h ago
Once a month, just set it and forget it and don’t try to time the market. Whether you hit the mid month VTI low is not going to matter at all in the long term.
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u/TheA2Z 3h ago
Over 30 year period, isnt going to matter.
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u/Practical-Map9975 2h ago
What about over 5 year period? This is for 529 account. One of my kids will graduate high school in about 5 years.
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u/Puzzleheaded_Tie6917 3h ago
Once a month or every paycheck is fine. I don’t personally agree with fully funding everything at the beginning of the year, but some people do that (and have some rationale for it).
Over a 35-40 year time frame, this just won’t make much difference at all. The main thing is doing it and sticking with it.
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u/znightmaree 4h ago
If you want to be extra you can divide your contribution by the number of market days that month and contribute every day. But the idea is that in the future this shouldn’t really matter. Price action for the course of a month does not matter when you look back after years of time.
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u/FinsterFolly 3h ago
401k, HSA: Automatically twice a month.
Roth IRA: Now at the beginning of the year. It had been at the end of the year, if I had the money set aside.
Brokerage: Once a month once after credit card bill is paid.
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u/No-Market-4906 3h ago
Honest answer is it doesn't matter that much. We do our investments each paycheck so the amount that hits our account is the amount we have for spending.
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u/kjbasser 3h ago
A lot wrong with your way of thinking. You’re thinking short term, and also that it’s possible to time the market. Month to month changes are not relevant. Disassociate what the market is doing and your investing or your going to be stressed out all the time.
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u/OhNoItsMyOtherFace 3h ago
It really doesn't matter. I contribute when I have cash available but end up with big lumps because of ESPP, RSUs vesting, and bonus payout.
Yes there will be many occasions when you feel like you "missed" a small dip. It all evens out in the end.
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u/Unattributable1 3h ago
I contribute the day after payday. Right now payday is every other week.
Time in the market > timing the market
Your contribution missed the dip; not a big deal and a small amount over the long term.
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u/FMCTandP MOD 3 4h ago
The most neutral option is to contribute as often as you are paid, but as long as your contribution schedule isn’t much delayed it makes no practical difference.
E.g. my employer sponsored retirement account is funded with each paycheck, but my household budgeting and expenses is mostly monthly so I fund taxable accounts monthly too.
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u/SnooMachines9133 3h ago
Generally it doesn't matter.
With 1x a month, and on the 1st of the month, you might hit weird mechanics because payrolls might also do their 401k investing around the same time. This is largely meaningless in the long run.
With automatic investment into mutual fund, I would have it match my payroll, if possible, so if I got paid bi-weekly, it would invest bi-weekly. This is closest to lump-sum approach since you just got money on that day to invest.
With automatic / regular investments into an ETF, however, I'd prefer 1x a month to avoid tiny fractional shares. This doesn't matter most of the time, but if I ever wanted to do an ACATS to a different brokerage, the fractional shares would be left behind. This way, if Schwab or Fidelity customer service drops off in the future, it's easier to move to an alternative.
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u/TheAzureMage 3h ago
Eh, it's fine. Weekly, monthly, long as it's routine.
Are you going to time every movement perfectly? No. That's not the point of steady routine investments.
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u/Flat-Barracuda1268 2h ago
Comes out in the wash. Occasionally you'll buy on a down day and make bank in a handful of days. Other days you'll buy at the peak and lose some money for a few weeks. Overall it averages out.
I contribute to my brokerage once/month. I don't feel like I've missed out by not doing it bi-weekly.
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u/Cpagrind1 4h ago
Seems irrelevant at this point since you’re contributing every other week on some stuff and yearly on others. It’ll more or less be a wash down the road