When to contribute to a 2008 Roth IRA?

Question

I was wondering if i should open my 2008 Roth IRA now, or should i wait until the april 2009 deadline for it? Is there any advantage to opening it sooner in the year or closer to the deadline?

And also: I don't know how much i can contribute to my Roth; my income is close to the limit set for the 2008 year. So should i make just a partial contribution for now?

thanks for your time!

Answer 1

The sooner you make it, the sooner it starts growing.  I'd make it now.  Remember that if you are over the limit you can recharacterize it into a traditional IRA up to the 4/15 deadline.  

Remember that you can make your 2009 contribution as early as Jan. 1, 2009.

Answer 2

Your first choice should be based on how you chosse to invest your money and whether now or later is a better time to invest.

Since you have till 4/15/09  to contribute for 2008, do not invest more than you are sure you will earn in 2008. If you earn more, you can add to it. Contributing too much creates a problem that you will do well to avoid.

Any funds contributed between 1/1/09 and 4/15/09 should be clearly designateed as a"prior year contribution."