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GamingHyena posted:What worries me is that the rate of return for stocks has been so poor over the last decade. Combine that with our current economic troubles and poor demographic trends (baby boomers) and it's easy to forecast potentially decades of sluggish returns. At the very least though you are saving. It seems the Baby Boomers never thought of the concept until 401ks became common place.
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Aug 12, 2010 18:12
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I've got ~$20k from a previous employer in a 401k at Fidelity. I'm interested in opening a Roth IRA at Vanguard though, and had a question about rollovers. Is it possible to rollover part of a 401k, or do you have to rollover the entire thing? If I move $20k from a tax-deferred 401k to an IRA, I take it I would owe something like $6-8k in taxes. Do you just have to have cash on hand to pay that tax bill?
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Aug 12, 2010 18:39
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It's a prime example of why I think finding a reliable market timing system and applying that to at least some of your portfolio is a good idea, as discussed a few pages back.
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Aug 12, 2010 18:54
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gp2k posted:I've got ~$20k from a previous employer in a 401k at Fidelity. I'm interested in opening a Roth IRA at Vanguard though, and had a question about rollovers. You don't have to pay taxes IF you roll it over into another IRA. I think you have like 30 days or 60 days to put that money back. If you don't then you have to pay taxes on it. As for a partial roll over, I am not sure. You can check on Vanguard's site or call them. They are pretty helpful.
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Aug 12, 2010 20:38
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Strict 9 posted:It's a prime example of why I think finding a reliable market timing system and applying that to at least some of your portfolio is a good idea, as discussed a few pages back. The only problem is now that bonds look like they are a bubble I don't really have options other than equities (no thx) or money market. Oh well.
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Aug 12, 2010 22:48
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abagofcheetos posted:I went like 80% bonds in my 401k in February and am sitting at 3.5% up. The good news is that with inflation essentially at a standstill for the moment, your 3.5% is effectively a 3.5% real return. Of course, don't expect that to hold true for the long-term.
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Aug 12, 2010 23:00
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abagofcheetos posted:The only problem is now that bonds look like they are a bubble I don't really have options other than equities (no thx) or money market. Oh well. It's interesting, and also gives a historical perspective from different times when rates rose steeply and what happened to bond investments in subsequent years.
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Aug 12, 2010 23:25
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I have a relatively minor question but I'm a bit baffled by my options. There's just too many of them! I have an employer matched Roth 401(k) with a relatively paltry amount in it. It's ~$400. I had only paid into it from about 4 or 5 paychecks before I chose to leave them. Now, I know that I can roll it over into a personal IRA but I don't even know where I should open one. What should I look for in a personal IRA? I'd like to have an individual one that I can fund, since I don't know what the future holds in terms of employer offered ones. I am also very lucky in that I have access to NavyFederal Credit Union as well as USAA, who I've always found offer far better rates than your traditional banks and investment places. In short, what would be a good choice of a personal IRA to open and roll into? Relevant information: I am 22, newly unemployed, and therefore have no personal income at the moment. I also have only about $1000 in savings. (Sounds sketchy, but my boyfriend and I discussed my options and have a financial plan until I start a new career).
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Aug 13, 2010 21:47
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Is there anything that can be done if your employer for whatever reason doesn't withhold your 401k contribution from a paycheck? My office kind of has problems with this kind of thing. e: The best part is that's not even the thing I'm most concerned about, they also haven't submitted any of the 401k contributions they did withhold from my pay last month yet.  The Rokstar fucked around with this message at 23:55 on Aug 13, 2010 |
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Aug 13, 2010 23:51
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The Rokstar posted:Is there anything that can be done if your employer for whatever reason doesn't withhold your 401k contribution from a paycheck? My office kind of has problems with this kind of thing. DOL requires employers to deposit ASAP. There is an outer limit of 15 days after the end of the month of which the money was withheld. However, that is not a deadline, but an outer limit meaning that it can't purposely be held until that limit. Oftentimes, the DOL will determine the actual "deadline" to be merely a few days after the deduction was made. Your employer needs to get their act together. That's the rule... what you should do about it is another matter. I hope you asked someone at your accounting dept before asking the Internet. 80k fucked around with this message at 00:12 on Aug 14, 2010 |
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Aug 14, 2010 00:10
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80k posted:DOL requires employers to deposit ASAP. There is an outer limit of 15 days after the end of the month of which the money was withheld. However, that is not a deadline, but an outer limit meaning that it can't purposely be held until that limit. Oftentimes, the DOL will determine the actual "deadline" to be merely a few days after the deduction was made. 
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Aug 14, 2010 00:28
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BFC newbie here, trying to get on the right track in terms of finance/savings/retirement. I started working full time about 10 months ago after graduating, and after a few months of goofing off/living paycheck to paycheck, I've built up some savings, started budgeting, and am beginning to set up my investments and retirement strategy. So far I think I'm doing alright, but I don't really know enough about this stuff to tell if that assessment is correct or not. Basic stats follow -23 years old, zero debt, zero credit -$~55k/yr income -$2k emergency fund (I'm working on getting this up to $5k by the end of the year) -$2,750 in a Roth IRA set up by my parents when I was a kid -Various stocks, bonds, and mutual funds bought by my parents. I've let them manage my finances most of my life, and it seems to me like they've done a good job. I'm planning on going over my current holdings with my dad when I go home for the holidays so I have a more accurate idea of my net worth. My employer doesn't offer 401k matching (engineering contract work: great pay, terrible benefits), so my current plan is to set up bi-weekly $175 transfers to my Roth IRA, which should get me close enough to the yearly contribution limit that I can top it off as necessary. 100% of my current Roth IRA is in a multi-cap growth mutual fund (NICSX), but as I've recently switched a large portion of my banking to USAA (dad was Army, and enrolled me when I was a kid), I'm considering adding USAA as a Roth IRA trustee and investing in their 2050 Target Retirement Fund (URFFX). I've been comparing the two in Google Finance, and while most of the numbers are gibberish to me, they seem to have relatively similar performance. Am I on the right track? Is there a difference between my current mutual fund and the USAA fund? Should I split my Roth IRA contributions between mutual funds and a brokerage account and try and manage some of this myself? I have some other questions about building credit, but those probably belong in a different thread.
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Aug 14, 2010 02:51
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Gonktastic posted:What should I look for in a personal IRA? I'd like to have an individual one that I can fund, since I don't know what the future holds in terms of employer offered ones. I am also very lucky in that I have access to NavyFederal Credit Union as well as USAA, who I've always found offer far better rates than your traditional banks and investment places. plustwobonus: I wouldn't try to actively manage any of your retirement savings until you have enough time and energy to dedicate to doing research. If you really want to, be sure it's a small percent of your portfolio. What are the expense ratios on the two funds? The target retirement funds will also often have bonds included and will probably get you a bit of international exposure as well (I don't know USAA's funds very well so you'll need to check this out). I'd be hesitant about being all growth though.
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Aug 14, 2010 04:54
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Several years ago I signed up for some "Make a trade and get a $XX gift card" in some deal with Costco and Sharebuilder, and over the years when I had disposable income and thought I knew what I was doing I built up a tiny portfolio (about $600 worth now) of stocks. I set up an IRA with Vanguard recently and am liking the company so far. Would it be worth it (or be a huge hassle) to try and move the stocks over to Vanguard's brokerage service somehow? I'm not really planning to buy or sell any individual stocks in the near future, but I figured it might be simpler to keep everything with one company I like and I think I'll use Vanguard's services a lot more then I would Sharebuilder.
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Aug 16, 2010 10:55
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Chin Strap posted:How about this for a decent balance? Vanguard is my 401k provider, and I figure I want to break out of the target retirement fund. Anyone? I'm just making sure I'm not being too conservative. I'm pretty risk tolerant. Here's a list of all the Vanguard funds in my plan (the others have too high an expense ratio). Vanguard Prime Money Mkt Fund VMMXX Vanguard Total Bond Mkt Index Inst VBTIX Vanguard Extended Mkt Index Inst VIEIX Vanguard Inst Index Fund Inst VINIX Vanguard Total Int'l Stock Index Vanguard Wellesley Income Fund Inv VWINX Vanguard REIT Index Fund Inst
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Aug 16, 2010 18:10
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Chin Strap posted:Anyone? I'm just making sure I'm not being too conservative. I'm pretty risk tolerant. Here's a list of all the Vanguard funds in my plan (the others have too high an expense ratio). A few thoughts (these are my opinions, but I am by no means an expert): 1) Regardless of risk tolerance/age, I am going to go with Ben Graham and say that there aren't any fundamental reasons anyone should hold more than 75% equities or less than 25% equities. 2) You're overweighting (if you go by marketcap) the extended market index. The completion index comes out to around 20-25% of total stock market capitalization. Historically, small caps have outpaced large caps, but if you've read the Four Pillars then you know past performance does not necessarily correlate to the future. 3) You're also underweighting the international markets (or overweighting U.S. if you want to look at it that way). World stock market cap has the U.S. with about 35-40% of the capitalization. Right now you have about 66% of your stocks in U.S. funds. This is pretty sketchy though, as more and more today U.S. companies (particularly larger ones) are heavily effected by international operations/growth. So I don't think this really matters much. 4) You've pretty heavily overweighted in the REIT index with a 10% allocation. You might consider scaling that back to around 5%. In summary, my recommendation would be something more like this: BONDS = 25% VBTIX (bonds) = 25% of total, 100% of bonds STOCKS = 75% VIEIX (mid/small cap) = 15% of total, 20% of stocks VGSNX (REIT - real estate) = 5% of total, ~7% of stocks VINIX (large cap) = 25% of total,~33% of stocks VGTSX (total int'l stock) = 30% of total, 40% of stocks
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Aug 16, 2010 19:49
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moana posted:plustwobonus: I wouldn't try to actively manage any of your retirement savings until you have enough time and energy to dedicate to doing research. If you really want to, be sure it's a small percent of your portfolio. What are the expense ratios on the two funds? The target retirement funds will also often have bonds included and will probably get you a bit of international exposure as well (I don't know USAA's funds very well so you'll need to check this out). I'd be hesitant about being all growth though. Expense ratios: NICSX: 0.78% URFFX: 0.79% I think I'll skip on trying to manage anything myself at the moment, at least until I do a fair bit more research on the subject. As far as the bonds/international bit goes, I assume I want more bonds/cash as I get older?
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Aug 16, 2010 23:50
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Yeah, but if you invest in a target retirement fund, it'll automatically rebalance to shift towards bonds as you get older. Those expense ratios are okay, probably better than average, but Vanguard's will be lower - their target retirement 2050 fund is at .20% (I don't think anybody can beat Vanguard in this regard). If you're going to open a new account anyway, I would just go with Vanguard as long as you're able to put in the minimum $3k.
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Aug 16, 2010 23:58
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Actually, moana, that really makes me wonder. We've all talked up Vanguard in this thread because of their excellent expense ratios (among other reasons). Why does Vanguard offer such low expense ratios? Are they simply paying their fund managers less? Do they manage based on a formula? Are they performing as well as other, more expensive funds? I'm interested in a discussion on this topic, because I may (finally) be ready to invest beyond my (matched) 401(k) this year, so a Vanguard Roth is the obvious next choice for me.
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Aug 18, 2010 19:41
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Vanguard is, as far as I know, the only mutual fund company that is owned entirely by its funds - the profits of the whole Vanguard group are redistributed back to the funds, so the expense ratios are significantly lower than they would be for a private company or a publicly traded company. From wikipedia: "Vanguard is unusual among mutual-fund companies since it is owned by the funds themselves. In this structure, each fund contributes a set amount of capital towards shared management, marketing, and distribution services. The company says that this structure better orients management towards shareholder interests.[2] Other mutual-fund sponsors are expected simultaneously to make a profit for their outside owners and provide the most cost-effective service to funds for their shareholders."
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Aug 18, 2010 19:55
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Leperflesh posted:Are they performing as well as other, more expensive funds? On average, they perform better because... the expenses are lower.
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Aug 18, 2010 20:09
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moana posted:Vanguard is, as far as I know, the only mutual fund company that is owned entirely by its funds - the profits of the whole Vanguard group are redistributed back to the funds, so the expense ratios are significantly lower than they would be for a private company or a publicly traded company. I think of them like a investment CO-OP. They are telling you what they are investing in, and for a small fee they will let you add your money to the pot. It was started buy some Smart Dudes from Univ of Penn. They tend to be of the Value Investing school, and they believe that over a long time investing in Indexes will beat investing with specialists or 'managed' funds. They don't offer 'short' products. And they created some of the most heavily traded products on the market.
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Aug 18, 2010 20:45
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As far as discount brokers go, is there anything I'm missing about the ridiculously low fees of Interactive Brokers? I know they charge a $10 monthly minimum if you don't incur that much in fees. Aside from the $5k-10k account minimums, is that really the only downside?
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Aug 20, 2010 19:37
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For an emergency fund (~$25K) how crazy would it be to put 75% or so into VFSTX?
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Aug 23, 2010 15:28
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gp2k posted:For an emergency fund (~$25K) how crazy would it be to put 75% or so into VFSTX? Emergency funds aren't meant to make money. You need it something extremely liquid and safe. Just stick with a money market account.
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Aug 23, 2010 16:21
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gp2k posted:For an emergency fund (~$25K) how crazy would it be to put 75% or so into VFSTX? I personally split mine between VFSTX and VIPSX, and I don't see a great reason not to use some sort of short-term bond fund (VIPSX is medium term, but has a built in hedge against the risks of increased duration). You should put more money in the emergency fund than you would otherwise (or have some cash elsewhere in your portfolio) to deal with any price fluctuations, but with money market rates are about negligible now, you'll see more of a return overall. That said, these funds are not cash, and doing this does add some risk to your financial situation, so make sure you accept that.
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Aug 23, 2010 16:25
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Chin Strap posted:Emergency funds aren't meant to make money. You need it something extremely liquid and safe. Just stick with a money market account. Yeah, you're right. Related question though, since the Vanguard Prime Money Market fund is making 0.09%, and its expense ratio is 0.25%, why would anyone put money in it? Why not keep it in a savings account in a bank that has no fees or expense ratio?
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Aug 23, 2010 16:52
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gp2k posted:Yeah, you're right. Exactly. That's why mine is in a savings account earning ~1%. It's for emergencies, not investing. Safety and immediate liquidity is the goal here.
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Aug 23, 2010 17:02
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GOOCHY posted:Exactly. That's why mine is in a savings account earning ~1%. It's for emergencies, not investing. Safety and immediate liquidity is the goal here. Which bank if I might ask? My credit union's Money Market savings account for that balance range is only 0.4%
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Aug 23, 2010 17:17
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gp2k posted:Yeah, you're right. yield is after expense ratio. your bank has an expense ratio too but it is just not advertised. but anyway, the Vanguard Prime MM should not be considered in light of the far better rates available at FDIC insured banks right now.
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Aug 23, 2010 17:19
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gp2k posted:Which bank if I might ask? My credit union's Money Market savings account for that balance range is only 0.4%
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Aug 23, 2010 17:27
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gp2k posted:For an emergency fund (~$25K) how crazy would it be to put 75% or so into VFSTX? What are your monthly expenses like? Do you actually need a $25,000 emergency fund? I would calculate your monthly expenses and multiply by 6 or 12 (depending on how conservative you are and how comfortable you are about your job, your health insurance, etc.) and put that money in a checking account or high yield savings account. If there's anything left over, put that in VFSTX.
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Aug 23, 2010 17:29
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80k posted:yield is after expense ratio. your bank has an expense ratio too but it is just not advertised. Interesting. Thanks for clarifying that. I just finished the four pillars and (unless I somehow totally missed it) you would always subtract the expense ratio from the listed rate. 80k posted:but anyway, the Vanguard Prime MM should not be considered in light of the far better rates available at FDIC insured banks right now. Exactly--that makes a ton of sense. But the fund has $106B in it, so I guess that's not "regular" people's money that would be covered by FDIC (with their $250K limit)?
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Aug 23, 2010 17:48
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KarmaCandy posted:What are your monthly expenses like? Do you actually need a $25,000 emergency fund? I would calculate your monthly expenses and multiply by 6 or 12 (depending on how conservative you are and how comfortable you are about your job, your health insurance, etc.) and put that money in a checking account or high yield savings account. That's about 6x my monthly take home pay. My expensive tastes could be curtailed to probably make that last 10-12 months without resorting to cat food, so I think I'll just leave it at the credit union and pray for one day, decent interest rates.
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Aug 23, 2010 17:51
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I don't see any reason why you couldn't have your emergency funds in a CD ladder or something similar. I mean you could keep around 1-2 months expenses directly in a checking/savings account, and then have the rest (6-8 months of expenses) in a CD ladder. It's not like something is going to come up where you need to have a one day turnaround to withdraw 6 months worth of expenses.
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Aug 23, 2010 18:56
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gp2k posted:Which bank if I might ask? My credit union's Money Market savings account for that balance range is only 0.4% A local bank to me, Modern Woodmen.
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Aug 23, 2010 19:07
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gp2k posted:That's about 6x my monthly take home pay. My expensive tastes could be curtailed to probably make that last 10-12 months without resorting to cat food, so I think I'll just leave it at the credit union and pray for one day, decent interest rates. CD rates kind of suck and tie up your money, but you could at least transfer some of that money to a high yield savings account. You can definitely do better than .4%. Fat Wallet always has a good updated list: http://www.fatwallet.com/forums/finance/783099/ And since you make a lot, you can just start putting all your new savings in a Vanguard fund now that you have a decent emergency fund built up.
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Aug 23, 2010 20:17
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Smartypig.com is also a reasonable option for storing your emergency fund. 2.15% and can be withdrawn at any time via ACH back to the original checking account.
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Aug 23, 2010 20:37
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So, I'm changing jobs and reevaluating my retirement savings because I could be contributing more. I'm hoping you guys can evaluate my strategy for when my 401(k) at my new job kicks in and point out any flaws in my thinking. Here's the stats: Age: 28 (29 soon!) Location: NYC Old Salary: $90,000 New Salary: $102,000 Debt: $0 Cash Savings: ~$8,000 Retirement: ~$15,000 (thanks, recession) Cash savings are split between ING Direct and CapitalOne Online Savings. About $10,000 of my retirement money is in a Roth 401(k) at my current employer, $1,700 in Traditional 401(k) funds at my current employer, and $3,300 in a Rollover IRA at Vanguard. Short-Term Plan: Rest of 2010 Roll the Traditional 401(k) funds into my existing IRA (I think that's allowed). Roll the Roth 401(k) funds into a new Roth IRA at Vanguard. I won't be able to contribute to my new employer's 401(k) for a couple months, so for that period I'll probably just shore up my cash savings and try to throw $416 every month into my Roth IRA. Longer-Term Plan: 2011 and On I plan to max out contributions to a Traditional 401(k) - so, $1,375/month - and hopefully max my new Roth IRA contributions as well. That way, I can sort of play both the Roth and Traditional fields. While $102,000 here isn't as much as it is in other parts of the country, the IRS doesn't seem to notice. Plus, I pay NYC income taxes in addition to NY State income taxes. I don't plan to live in the city forever and certainly not in retirement; so, reducing my taxable income as well as deferring paying taxes on a large part of my retirement funds makes sense to me.
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Aug 24, 2010 22:50
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Has anyone else taken a look at Plantly.com. They are advertising themselves as a planning utility, but they are suggesting the 'same returns with lower risk' which strikes me as a HUGE red flag. My wife is investment averse (as she just "doesn't care") so I'm trying to find the easiest/most colorful way for her to make decisions. Plantly looks promising, but it also strikes me as predatory somehow. Anyone? (Lifehacker.com has invites for Plantly if you are interested in getting into the beta. GOLIFEHACKER is the beta code.) Right now I'm just having her park her money in a targeted retirement fund at Vanguard, which seems much more trustworthy to me.
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Aug 26, 2010 00:49
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