[calm]

I'm trying to figure out whether it's +EV to maximize my IRA contributions. So we basically need to look at the marginal return of a dollar in my sports betting roll vs. in a IRA.

Someone double-check my math please, but for the IRA here's how I see it... we put a dollar in and since we're doing a traditional IRA it's tax free upfront, so we still have the full dollar. Assuming an expected annual return of 8%, we're looking at $1.08 after one year, $2.16 after 10 years, and a whopping $18.63 when I hit retirement age in 38 years. Then of course we pay taxes on withdrawal, but we would pay the same taxes on our sports betting profits so we can just ignore those for now.

For the sports betting roll it's tougher to determine my marginal ROI on a dollar. Even if my average ROI per bet is X% and annual ROI is Y%, I need a lot more info to figure out my marginal annual ROI. What we can do though is figure out the breakeven marginal ROI needed to make it worth forgoing the IRA. Here's that math...

We start with the same dollar, but since we're not putting it in the IRA we have to subtract 28 cents for Uncle Sam, leaving us with $0.72. To get that $0.72 up to the same $18.63 we would achieve in our IRA, we need an annual ROI of 8.93% over the same 38 years. Now I don't want to offend any OldManTed's lurking around these parts, but no sane man would want to bet sports for a living for 38 years straight. Let's optimistically give myself five more years of grinding before I go insane or move to Estonia (or both). After those five years let's say I eke out the same piddling 8% while sipping Swongas as the hypothetical IRA above. That raises the stakes a little bit, as the breakeven marginal sports ROI bumps up to 15.3%. And if I decide to grind just one more year, it goes all the way to 50%.

Of course none of this accounts for any details like the monetary value of my time, joy felt pwning noobs at sports vs. finance, etc.

[Vesuvius]

No need for solid investments, go ALL IN!!!

[NicksPicks]

Sports betting is the best investment ever.

[goucla]

just put it in the ira, unless u are short on sports money. You can hit a losing streak either way but in sports you lose all your investment but with the ira your losses if they occur are almost never 100%

[gomiamigo]

IRA contribution is like, what, one big bet for you? ezpz imo.

[username474]

You get 8% on an IRA ?

[Boner_18]

Are funds deposited offshore FDIC or SIPC insured? Are you eligible for the Federal Savers Credit? The short answer is that there is no short answer, or most likely both.

[Insoluble]

Your questions still depends on two things.

1) The amount of your bankroll your thinking of depositing. If you deposit your bankroll at the right book, you might get an initial bonus match of 100% (if you're only looking at a $500 bankroll) or maybe just a 10-30% deposit bonus for a larger deposit. So right there you either have a great return on investment or you've at least regained your 28% you gave to taxes ( this is all provided you reach your rollover successfully which if you are +EV I assume you will)

2) I wouldn't discount the tax calculations, even for the IRA on the back end...you never know what the tax rate might be on that side, plus you can't always take you IRA out in a lump sum, there can be rules on withdrawing and getting taxed on the distributions.

Without a better read on those factors the answer might still be ambiguous

[OnlyMayo]

My 2 cents would be to convert to a ROTH IRA....

If you plan on being more successful in the future, it will benefit you. As you probably know, a Roth you pay taxes now on your contributions. But, if you enter into a higher tax bracket between now and the time you withdrawal your IRA you will have saved a lot of money. Traditional, you would be paying taxes on whichever tax bracket you are in at the time....so if you plan on getting poorer, then that may be the route for you..but if you make more money then you pay more taxes when you withdrawal...

GL in whichever you do though..

[Data]

put a dollar in ... a whopping $18.63 when I hit retirement age in 38 years.

Likely, worth 18.63c of today's 1$

we have to subtract 28 cents for Uncle Sam, leaving us with $0.72.

That M'F'er is broke. Take your 72c while you can and run.

[cjwatsonfan32]

Take everything out of your ira and put it on a 4 team parlay of the ml on all the 16 seeds

[mr.inpak]

depends on how you bet if your a middler and a scalper keep it in sports its the only way to win if you just bet games you have no chance in the long run put it in the IRA

[That Foreign Guy]

Another thing to consider is putting it in your IRA and keeping it in your sportsbetting roll. Your bankroll is not merely all the money immediately available to you to bet. It is all the money you are willing to bet with. Poker players don't keep their bankroll all on the Internet and often tie up some of their theoretical bankroll in long term assets.

Maybe an IRA is too restrictive given that you can't access the money (I assume), but if you have other assets you can use as part of sportsbetting liquidity then max out your IRA.