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IRA lump sum? USA (mander.xyz)

submitted 9 months ago by 32sqft@mander.xyz to c/personalfinance@lemmy.ml

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I’ve read that if you have the money up front, investing it as a lump sum on January 1st will produce higher returns more often that investing on a monthly/weekly basis. Is there more to consider in 2024 with our current high interest rates?

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[–] I_am_10_squirrels@beehaw.org 1 points 8 months ago

Typical long term gains for an Ira mutual fund is 10%. Current high yield interest accounts are around 5%. If you put everything in at the beginning of the year, it has the whole year to earn double what it would in a high yield savings account. If you put it in each month, then only 1/12 of it is earning extra returns for the whole year.