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bhaltair posted:The general opinion is that very little of your retirement plan savings should be put into company stock. The reason is diversification as job security, salary increases, benefit levels, and advancement opportunities are all tied to your company's success. Therefore you shouldn't need to add long-term retirement savings to that list. I was able to go in and cancel the election change. That is a common sense point I overlooked. Back to the drawing board.
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Mar 31, 2010 14:46
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grumpy posted:100% in equities Personally, I'm 33, my portfolio looks like this: 77% US stocks 10% non-US stocks 5% bonds 8% cash (long story) My goal over the next 5 years is something like 35% US stocks 35% non-US stocks 30% bonds Not to be "safe", but because I want more money in asset classes that are somewhat uncorrelated with US stocks.
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Mar 31, 2010 18:52
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Favorabilis Solitud posted:I was able to go in and cancel the election change. That is a common sense point I overlooked. Back to the drawing board. How does the matching vest? If it's immediate you might be able to beat transaction fees by selling the stock as soon as you get it and transferring the proceeds into another fund. Free money is free money, after all.
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Mar 31, 2010 19:10
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var1ety posted:How does the matching vest? If it's immediate you might be able to beat transaction fees by selling the stock as soon as you get it and transferring the proceeds into another fund. Free money is free money, after all. Good thinking. I just called. I get to transfer their match as well. It didn't add up to very much so far so I switched it back into the VG retirement 2050 plan which is already aggressive with 90% stocks 9% bonds and 1% currency. I think my best bet is to just dump most of what I can into the Vanguard Retirement 2050 for awhile so I can get some nice interest rolling. I am also considering opening an account with an online broker (whatever is best suited for someone who can't contribute much). What I will invest while in there I do not know.
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Mar 31, 2010 21:11
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I haven't read this whole thread yet, so sorry if this has already been answered. I currently work for an employer that does not offer a 401(k) (which also means no matching). I just recently started a roth IRA which I deposited the maximum yearly amount into. Is there really anything else I should be doing? Should I set up my own 401(k) or what?
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Apr 1, 2010 06:54
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Troglepus posted:I haven't read this whole thread yet, so sorry if this has already been answered. I currently work for an employer that does not offer a 401(k) (which also means no matching). I just recently started a roth IRA which I deposited the maximum yearly amount into. Is there really anything else I should be doing? Should I set up my own 401(k) or what? I believe the rule of thumb is. Deposit Money in the order of: Max Matching Max out Roth IRA Max out IRA Contributions. Invest in Yacht Fleet.
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Apr 1, 2010 07:04
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Dr. Jackal posted:I believe the rule of thumb is. I understand this. My company does not offer any matching or an employee IRA. Hence I don't know really what I should do in the "Max out IRA Contributions" step. I guess I am just confused what to contribute to if I don't have one provided by my work.
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Apr 1, 2010 07:15
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Troglepus posted:I understand this. My company does not offer any matching or an employee IRA. Hence I don't know really what I should do in the "Max out IRA Contributions" step. I guess I am just confused what to contribute to if I don't have one provided by my work. I think you can just open a traditional IRA with who ever you like?
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Apr 1, 2010 07:37
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Dr. Jackal posted:I think you can just open a traditional IRA with who ever you like? Again you can't do a Roth IRA and traditional IRA at the same time, so sorry dude put your money into a Interest Savings Account until you find better employment.
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Apr 1, 2010 12:36
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Koirhor posted:Again you can't do a Roth IRA and traditional IRA at the same time, so sorry dude put your money into a Interest Savings Account until you find better employment. Actually, more specifically you can do that, but the total of both your Roth IRA and traditional IRA contribution must not be more than $5000 in a given year. For example, you can contribute $3000 to a Roth and $2000 to traditional. This may be beneficial if you need your gross income to be under a certain amount to prevent a phase out of some other income based benefit.
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Apr 1, 2010 13:46
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More to the point, the max IRA contribution is too small if you make more than $40k or so. If you want another tax-deferred investment, you are probably limited to some sort of annuity, which is a little depressing...
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Apr 1, 2010 16:30
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When contributing to a 401k, is the maximum $16.5k counting employer's contribution or just yours? What should I do if I max out my Roth IRA, 401k / IRA, and do not care about a yacht fleet (but may want a house in Silicon Valley, which costs roughly the same)? I'd like to try contributing to retirement plans under my wife's name (she has $0 in retirement) but don't know if that would start counting under "gift" tax or not. Should I be contributing to a Roth in her name rather than trying to max out my personal retirement accounts? Or is this one of those sneaky things that rich people take advantage of that would get little me in trouble?
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Apr 1, 2010 18:57
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I am 25 and I am putting 5k to IRA and 15-16k to my 401k this year. I make 55k and have about 23k in my IRA already, nothing in 401k. Am I trying to save too much or will this all be worth it one day? I have a feeling I'll be making a lot later in my life but on the other hand all this tax deferred savings is tempting.
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Apr 1, 2010 19:02
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There is no gift tax for gifts to spouses, but California is a community property state so, good news, half the money is hers already. I believe that if you're married and file jointly, each spouse can deposit the maximum contribution in his or her own IRA as long as you jointly have the earned income to cover it.
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Apr 1, 2010 19:08
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necrobobsledder posted:When contributing to a 401k, is the maximum $16.5k counting employer's contribution or just yours? What should I do if I max out my Roth IRA, 401k / IRA, and do not care about a yacht fleet (but may want a house in Silicon Valley, which costs roughly the same)? Employer contributions are not considered in the 16.5k max. That max only includes your contributions. Transfer of money/property inbetween spouses is not in any way taxable as far as I know. I'm not certain if that holds true if you are filing separately. In any case, the limit for the gift tax is around $13,000 per year, which is more than enough to contribute $5,000 to a Roth without any concern.
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Apr 1, 2010 19:14
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5436 posted:I am 25 and I am putting 5k to IRA and 15-16k to my 401k this year. I make 55k and have about 23k in my IRA already, nothing in 401k. Am I trying to save too much or will this all be worth it one day? I have a feeling I'll be making a lot later in my life but on the other hand all this tax deferred savings is tempting. Assuming you're saving around $20,000 total, you're saving around 36% of your salary for retirement. Given your age that seems pretty high to me, but it may or may not be appropriate depending on your larger financial picture and long term goals. Do you have an emergency fund? Do you have any credit card or other high interest debts? Do you plan on making any large financial commitments (house, car, baby) in the foreseeable future? Are you happy with your current take home pay? When do you want to retire? What sort of lifestyle do you want to lead in retirement? Do you want to leave any money to your beneficiaries when you die? What are you invested in? Personally, I think the sort of issues raised in the above questions will give you more guidance than broadly stating that your must save at least $X or sock away X% for retirement.
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Apr 1, 2010 19:14
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BTW, looks like they have a provision for IRAs to keep housewives from getting extra tax-deferred retirement for their rich husbands:quote:To be eligible, you must meet the earned income minimum requirement. In order to make a contribution, you must have taxable compensation (not taxable income from investments). Unfortunately for a couple making good money, Roth IRA contributions start phasing out at $150k AGI and you're not eligible at $160k AGI anymore. Most retirement advice is done with the assumption you'll steadily go up, not wildly up and down or hit the lottery or something. 5436 posted:I am 25 and I am putting 5k to IRA and 15-16k to my 401k this year. I make 55k and have about 23k in my IRA already, nothing in 401k. Am I trying to save too much or will this all be worth it one day? I have a feeling I'll be making a lot later in my life but on the other hand all this tax deferred savings is tempting. Frankly, I'd burn some money set aside for a "go loving nuts" period when you're young and make decent money making sure to keep an emergency fund. Travel, scuba dive, sky dive, bang high-end hookers (get them now while they're on discount!), do luxury drugs, and maybe even lease a nice car for a while (pretend it's a long-term rental car that is). None of this requires more than $15k over several years really if you do it sensibly (yes, you can be frugal and live a pretty luxurious life, that's what I've done pretty well), and your life will be a lot richer for it whereas $15k isn't that much in the end for retirement decades down the line. At the very least, you'd have cooler stories to tell at dinner parties later on than "yeah man, I totally got wasted at this one office Christmas party and relived an episode of the Office." If you're the type to be putting a bunch of money away on retirement at a young age, you probably could use some excitement in your life.
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Apr 1, 2010 21:18
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necrobobsledder posted:BTW, looks like they have a provision for IRAs to keep housewives from getting extra tax-deferred retirement for their rich husbands: No, if married filing jointly, husband's compensation can count as earned income for the wife's IRA.
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Apr 1, 2010 21:30
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GamingHyena posted:Assuming you're saving around $20,000 total, you're saving around 36% of your salary for retirement. Given your age that seems pretty high to me, but it may or may not be appropriate depending on your larger financial picture and long term goals. Emergency fund, not much (2k?). I can always take a 0% loan from bank of parents. I have no high interest debt, a student loan which is pretty low, and an interest free car loan. I do wish to live a more baller lifestyle though, through my entire life. Right now I went from buying lunch out everyday to bringing my lunch because I looked at what I want to save and what I make. I sorta feel pinched cause I go to a lotta concerts, and I want to maybe go to a festival, Japan, and Florida this year. I do not plan on leaving money behind, and I want to retire as early as possible or move into teaching when I'm older at obviously a way lower pay grade. My current finances are like $400 - Car loan $150 - Student Loan $70 - Cell phone $100 - Car Insurance/maintenance $35 - Health Insurance Leaving the rest for happy fun time. I want to move to NYC in a year or two, so my savings rate will go down.
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Apr 1, 2010 21:41
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So you're living with your parents? Save up for your move to NYC, build up an emergency fund for when you get there, and you should be set.
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Apr 1, 2010 22:46
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5436 posted:I can always take a 0% loan from bank of parents. I have no high interest debt, a student loan which is pretty low, and an interest free car loan. I do wish to live a more baller lifestyle though, through my entire life. Is the car loan & student loan suppose to stay low/no interest until the end of time? Look into when you have to start paying the rates and compare that against your employer's matching rate/your retirement account's rates. If you haven't already, I'd recommend you start doing what the fellow from the multiple accounts was doing, making a separate savings account (or a high yield MMA) and dumping (a set amount of) money in there for crazy trip with (expensive) hookers. I wish my parents were the 0% loan type, I'm getting 5 years 100% interest rate.
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Apr 1, 2010 23:46
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Does anyone know about how IRA/Roth IRA contributions work if you have income earned overseas? Just been doing a bit of reading and it seems like you can only contribute using "qualified income," e.g. income you get taxed on in the US. Earning overseas, I think (for 2009) I have a US tax exemption of $91K, which I did not exceed, so there's no doubt that I am ineligible to contribute. For 2010 I'm at $82K base, so still under the limit, but perhaps one day I'll be over the exclusion limit for foreign-earned income. In this case I'm able to contribute to an IRA based on however much I am over the limit, correct? If the exclusion limit is $92K and I make $95K, I'm able to contribute $3K, correct? Assuming the exclusion limit is $92K, I theoretically won't have to pay US taxes until I exceed $98K, since I'll be contributing the entirety of the $5K maximum to the IRA, correct? At this point I'm assuming Roth IRA is not an option since I'll make (hopefully) over $95K/year within the next few years. Obviously there are some fees associated with repatriating the money and interest rate risks involved, but I was just looking for as straight an answer as possible. Thanks for any advice. For the time being I have a pile of cash in Japan, a pile of cash in the US, a Vanguard Retirement Target 2050 account (regular mutual fund account, not IRA or anything), and money wrapped up in stock options.
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Apr 2, 2010 11:36
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zmcnulty, you are pretty much right on. but check the MAGI requirements for Roth when you finally have taxable income over the foreign exclusion. You may qualify.
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Apr 2, 2010 16:27
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Looking to drop an grand extra into my wife's 403(b) to reduce taxes a bit and I can't seem to figure out how to go about it...it's handled by Principal (2045 R1 fund). Any ideas? Bother her company HR? Alternatively, any advice on a solid, low fee/no load targeted retirement fund I could throw that money into by opening a new traditional IRA? Investment minimum would have to be ~$1000 and I know the Vanguard funds are $3000. My retirement stuff is all RothIRA so it doesn't help us any for this tax purpose, though next (this) year I'll have a SEP-IRA. mcsuede fucked around with this message at 19:11 on Apr 3, 2010 |
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Apr 3, 2010 18:54
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necrobobsledder posted:So you're living with your parents? Yea at home. I'm having issues of whether I should have any liquid savings. Its like I can save 20-25k this year, but that will almost all go into 401k/ira (16+5=21k). So the question is, long term, should I just have no liquid savings at all and put it all towards retirement and if anything comes up or I need some liquidity, I can always just get interest free loans from my parents. The other option is I balance my savings more but I do not max my 401k. What financially is the smartest thing to do?
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Apr 5, 2010 00:52
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Financially the smartest thing to do is not depend on your parents for interest-free loans.
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Apr 5, 2010 01:51
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slap me silly posted:Financially the smartest thing to do is not depend on your parents for interest-free loans. I see it differently. I am getting my parents money anyways when they pass, might as well use it as wisely as possible.
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Apr 5, 2010 03:01
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Keeping enough cash to handle your own emergencies and down payments is more responsible towards your family. Lending you money interest-free is a raw deal for them. Even if they offered unprompted, their position may have changed by the time you need it. They're also under no obligation to leave you anything when they die. It's kind of presumptuous of you to take that stuff for granted. There are also risks in depending on them. They may need to spend a lot on health care, or they might get conned. Those are both common unpredictable expenditures among the elderly. In short, having enough liquid cash available is the wisest way to use your money. The meaning of "enough" depends on your expenses and plans, but doesn't have to depend on your parents maintaining their financial status quo.
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Apr 5, 2010 03:33
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5436 posted:I see it differently. I am getting my parents money anyways when they pass, might as well use it as wisely as possible. being exposed to dumbass kids' risks affects drawdown of parents' assets (with positive correlation to stock market risk.. i.e. Dow crashes, expect a call from kids), and hence affects their ability and willingness to take risk with their money which affects your inheritance.
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Apr 5, 2010 04:36
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80k posted:being exposed to dumbass kids' risks affects drawdown of parents' assets (with positive correlation to stock market risk.. i.e. Dow crashes, expect a call from kids), and hence affects their ability and willingness to take risk with their money which affects your inheritance. Surely that assumes that the parental support market is efficient.
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Apr 5, 2010 05:08
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5436 posted:I see it differently. I am getting my parents money anyways when they pass, might as well use it as wisely as possible. I was all like "it's good to see a young, financially-savvy investor like myself in this thread" and now I'm a little  .You should definitely keep a decent amount of money liquid for emergencies that pop up. Treating your parents as a very generous bank carries its own risks (and comes off a bit disrespectful). I would recommend keeping at least 5k in an easy to access account (money market, savings, callable GIC) for emergencies and maybe another 2k that you keep in your chequeing as a float that you use for random expenses. I'm pretty conservative in general, though. I'm also of the school that you're way more likely to regret not saving enough than the reverse. Getting a good stockpile in place when you're in your twenties can mean your retirement is in a good position before you have to worry about mortgages and kids. Also: 5436 posted:I see it differently. I am getting my parents money anyways when they pass, might as well use it as wisely as possible. 5436 posted:I do not plan on leaving money behind. Heh.
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Apr 5, 2010 05:32
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I just finished reading four pillars and am starting to adjust what I called my retirement savings plan. I'm starting a new job making 100-120k. My job does not match 401k. Should I participate in the 401k? It seems I should just max out IRA and then go into the index/passive configuration recommended in four pillars. My current savings are about 10k in a 401k about 10k in equities. I'd like to retire in 25 years but I have kids and a house coming up too. And about 18k student loan. The book doesn't really leave you with much planning help but my plan now is to do about 75/25 split between saving and paying off my loan out of 20% of my salary. Then leave my 401k where it's at, max out a roth IRA and then split the rest into index funds with vanguard or can i keep it with ING where it's at now?
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Apr 10, 2010 00:01
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Since your employer doesn't match, doing a separate IRA first makes sense because you have the most control over it. Once that is maxed, though, the 401(k) is at least tax-advantaged; so if it has relatively good investment options, it might make a better second-place than just putting money directly into a brokerage account and investing in funds or whatever. It depends on whether the 401(k)'s tax advantage is in the "right" direction for you (that is, which side of the investment you'd pay less tax on, your earnings today, vs. the withdrawals when you retire). If your student loan is quite low interest (federally subsidised?) then I think your plan makes sense. If it is higher interest (private loan?) then I think paying off the debt faster is the smart move, because dollars invested won't make as much in earnings+tax savings as you'll be paying in interest in the interim. (Of course, this assumes that after you pay off your loan, you'll increase your dollars invested so that the total going to investments+debt is the same.)
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Apr 10, 2010 00:57
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My student loan is $17,958.06 @ 7% and the 401k offer is pre-tax savings. I expect my tax rate to go up in the future, however. So is there another tax sheltered retirement fund that I could use? And should I still plan 75/25 between saving/student loan repayment? I really liked four pillars and now I'm trying to create models of retirement plans in excel that model various outcomes like the trinity exercise in the last section of the book. Does anyone else do stuff like that?
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Apr 10, 2010 20:31
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As far as I know, for Americans, your tax-advantaged retirement plans are: IRAs (traditional and/or Roth), and employer retirement plans (401(k)s and their cousins). There's more complicated stuff like trusts and things I think? But mostly that's what there is. 7% isn't great. Not awful, but not great. And I assume it's a variable rate that will rise with interest rates (which are currently as low as they can go, more or less, so the only thing they can do in the future is go up). So I'd say, certainly max your IRA/Roth contribution each year (because you can't 'go back' and fill in that money later, so it's an opportunity cost to not contribute) and then put every dollar beyond that into the loan to pay it off as fast as you can. You might manage 7% on a retirement plan, but you might not, and either way it's uncertain, whereas you'll definitely get 7% (on not paying interest) for every dollar you put into the loan.
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Apr 10, 2010 21:03
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Yup, with a 7% loan and no 401k match that's probably what I would do, too.
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Apr 11, 2010 20:30
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noooo
Evil Robot fucked around with this message at 03:23 on Feb 7, 2013 |
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Apr 12, 2010 03:12
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Enjoy your youth! Congratulations, you are going to retire a wealthy man. Go have fun. (Sorry, that's not terribly helpful! But I think you've got the right idea, more or less. One could argue about the exact ratios to put in stock funds vs. other investments, but in the long run you've got no debt, plenty of money, maxxing out your tax advantaged retirement options, and in great position to buy a house whenever you want. You could easily spend ten grand on a backpacking trip across Europe or something and be in good shape afterward. You're in your 20s, young and strong and full of vigor and (I imagine, you didn't say) not tied down by kids and family yet... it's time to sow some wild oats and enjoy yourself.)
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Apr 12, 2010 04:49
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I have an option between a 401k, a Roth 401k or managing my retirement savings myself with passive index funds. It seems to come down to two things: my tax bracket and the fund. I'm already in a pretty high tax bracket (25%), and it will go up in the future as my wife's career grows (we file together) but I don't know if my bracket will be higher or lower in retirement. It doesn't seem like it can go up much further. The funds are with California Investment Trust and appear to be okay (with options for index funds). My company has no matching. Is it worth this tax sheltering and if so, which one should I use?
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Apr 14, 2010 22:55
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I recently started a Roth IRA. I'm heavily invested in Bonds as I plan to use some of it for downpayment on a house in the next 10 years. A great deal of my funds are invested in VFSTX https://personal.vanguard.com/us/funds/snapshot?FundId=0039&FundIntExt=INT#hist=tab%3A5 Recently this article appeared: https://personal.vanguard.com/us/insights/article/bear-flattening-bond-surprise-04012010 Am I correct that this article is talking mainly about TIPS and that it shouldn't have that much of an impact on this fund?
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Apr 15, 2010 02:12
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