If you're like me and are on the edge of being able to max Roth IRA contributions, this may be interesting to you.
This year I've got a healthy emergency fund, but am not able to max my Roth IRA contributions for 2025. I had the idea of using money from my emergency savings to max my Roth IRA contribution for 2025. I would park it in SGOV and covert to my standard portfolio as I refill my emergency cash fund.
Since Roth IRA contributions are withdrawable tax-free and SGOV is considered cash-equivalent, I am taking on virtually zero additional risk (other than losing access to instant liquidity during market close).
The clear advantage of this approach is that I have the opportunity to utilize my full 2025 Roth IRA contribution beyond the deadline unless an emergency arises.
If I continue to have years like this one, then my Roth IRA eventually just becomes my emergency fund as the cash is converted each year to the Roth IRA... But the liquidity is the same and I have the advantage of hitting Roth IRA contributions each year that I wouldn't otherwise.
When I have better years in the future, then the previous "cash" contributions I already advanced in the Roth IRA simply start earning more interest as it's converted to my standard portfolio.
Is this a solid strategy for not falling behind on Roth IRA contributions? Or am I totally missing something that makes this a bad idea?