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Is it better to contribute as much as possible, as soon as possible, to your IRA in order to let it earn over a longer amount of time--or, should you spread out the contributions over 12 months to take advantage of dollar cost averaging??

I contribute the whole amount at once, near the beginning of the year because:

1. It is simplier for me to do so. I don't have to worry about over-contributing by either me or my custodian forgetting to stop DCA in time. Instead, I do it, and it is done for another year.

2. It is dollar cost averaging, just with contributions made annually instead of the more usual monthly.

3. Since the long-term trend of the market is upward, it is more likely to make more money being invested early in the year instead of late in the year. (The year 2000 is an example of where this strategy didn't work, but more often than not it will work. Oh well, I suspect January's contribution will buy more shares at discount prices.)

I don't earn enough that I can commit $2K from current income, so my Roth IRA contributions usually come from my credit union's money market account, which I build up by using payroll deduction. (In fact, last summer the balance in that MMA was great enough that I felt comfortable locking $2K in a 6-month CD with the plan that that $2K would be used as my Year 2001 Roth IRA contribution.)
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