BFC Newbies Thread: 33% of the interest paid is tax delectable

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KS: Jun 10, 2003; Outrageous Lumpwad

vas0line posted:

Should I open a 401k with them right now?
Will my current employer's 401k transfer to my next employer's 401k?
If my next employer does not offer a 401k, what happens to the money in the account?

Check how much your employer matches your contributions and the vesting period on the match. Vesting equates to how long you have to work there to keep the money they match. It will determine how good a deal it will be for you.

When you switch employers or leave your current job, you have 4 options:
1) Leave it where it is;
2) Roll it to the new employer's 401k plan;
3) Roll it to an Individual Retirement Account.
4) Cash it out and pay large penalties (don't do this).

In no circumstances will you lose it.

# ? Jan 23, 2011 22:14

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# ? May 12, 2024 02:29

Vin BioEthanol: Jan 18, 2002; by Ralp

Wondering what to do with some 5-9 year old series I US savings bonds.

My grandmother passed away in december and according to my dad "left all the grandkids US savings bonds" I don't know if this was stated in the will or not. He said my grandmother wished I could put this money into my house. I do have plenty of projects that need starting. Like in a matter of months.

I got them today.

First of all tax stuff. Most of these bonds are in her name with the last line reading payable on death to me. 1 or 2 are in my name. Do I need to do anything on my 2010 taxes for this? If not, I'm sure I will the year that I cash them, I'll at least have to claim the interest but do I have to do inheritance stuff too? (face value of all the bonds is $2000)

Now finance stuff, the bonds are are mostly Series I purchased between 2001-2005 with one series EE.
Like I said I have some projects coming up, I have a cap-one money market savings that pays 1.35% with a nice chunk of cash in there that is kind of my transmission/furnace/roof-took-a-poo poo or lost job, emergency savings. I will have a nice tax return coming that will be going to carpet and paint and other house stuff. Series I bonds I've heard are quite nice esp older ones with the 3 or 4% fixed apr + the variable infaltion rate apr. So...

I'm using the tax return on the house, the bonds have an actual value of about $3100 now so I feel like putting an extra $3100 into the house. Should I get that $3100 out of my own savings and hang on to these bonds as long as possible? Any of these I should cash out and put money into something else? I know nothing of investing btw.

heres what the us treasury site says about mine:

code:


serial        series   denom    issued        next accru       final mature   issue price int paid       rate    value
l6037-xxxxx 	EE 	$50 	03/2005 	02/2011 	03/2035 	$25.00 	  $5.14         2.16% 	$30.14 	  	
l0445xxxxxx   	I 	$50 	04/2002 	02/2011 	04/2032 	$50.00 	  $24.56  	3.56% 	$74.56 	  	
d0021xxxxx 	I 	$500 	04/2002 	02/2011 	04/2032 	$500.00   $245.60 	3.56% 	$745.60 	  	
r0015xxxxx 	I 	$200 	10/2001 	02/2011 	10/2031 	$200.00   $133.28 	4.56% 	$333.28 	  	
r001xxxxx 	I 	$200 	04/2002 	02/2011 	04/2032 	$200.00   $98.24  	3.56% 	$298.24 	  	
m0019xxxxx 	I 	$1,000  09/2001	        02/2011 	09/2031 	$1,000.00 $672.40 	4.56% 	$1,672.4

Also, physical security. If the worst happens, flood/fire/burglar and the paper is gone I'm screwed right? They don't pay you for just knowing you have some bonds payable on death to you right? I don't have any kind of safe and as I understand most are poo poo anyway. Are these earning/will be earning anything close per month to what a safe deposit box costs? I do have some other things thqat a safe deposit box would be good for. But I tend to think think mostly that if I'm worried enough about their physical security to get a SD box, I'd be better off just cashing them and putting them into my 1.35% savings.

edit: and what's some kind of calculator that could give me an estimate of what some of these would be worth in 2030-whatever?

edit again: My grandma grew up during the depression, lost her husband to cancer with 4 kids teenaged down to toddler-aged, always shopped at thrift stores and garage sales, saved like mad. I haven't heard any actual numbers but probably died a millionaire at 86. I want to do her proud with the small part of her money that I have by making it earn for me in the most max but also most conservative way possible. If keeping it in savings bonds is it then that's good because taking money from the government has a certain appeal to it. I'm completely debt free except my 1.5 year old 105k mortgage that I only put 5% down on. PMI! :argh:

Vin BioEthanol fucked around with this message at 05:58 on Jan 24, 2011

# ? Jan 24, 2011 04:33

zelah: Dec 1, 2004; Diabetes, you are not invited to my pizza party.

I know what the title of this thread is, but creditkarma just told me that my (estimated) score went from 719 to 622 and lists the reason as my credit card utilization going from 2% to 0%. I'm not trying to buy a house tomorrow or anything, but is that just how credit scores work?

# ? Jan 24, 2011 05:42

modig: Aug 20, 2002

vas0line posted:

My current employer offers a 401k plan. I do not expect to be working with this employer in 2 more years.

Should I open a 401k with them right now?
Will my current employer's 401k transfer to my next employer's 401k?
If my next employer does not offer a 401k, what happens to the money in the account?

edit: I am single and my income is around $30k. I don't plan to completely retire until I'm 60-something.

You can move it over, or probably better, transfer it into a personal IRA when you leave. If they have matching funds you should enroll, if not I have no idea.

# ? Jan 24, 2011 06:53

FCKGW: May 21, 2006

Is there any point in contributing to a 401k if the company doesn't match? My old employer did this and I never contributed.

# ? Jan 24, 2011 07:42

Chin Strap: Nov 24, 2002; I failed my TFLC Toxx, but I no longer need a double chin strap; Pillbug

BorderPatrol posted:

Is there any point in contributing to a 401k if the company doesn't match? My old employer did this and I never contributed.

Sure.

A) You reduce your marginal income tax paid, as you can think of the 401k money otherwise being taxed at your highest marginal rate.

B) The money in the 401k grows tax deferred, i.e. you don't pay taxes on the earnings every year until you start withdrawing at retirement. The difference in final balance between taxation every year vs. at retirement is huge.

As long as your plan isn't completely crappy in terms of expense ratios or loads, it is still worth it. And if you leave the company, you can roll that 401k into an IRA, and get to pick any funds you want, which will get rid of crappy expense ratios.

# ? Jan 24, 2011 14:58

Zeta Taskforce: Jun 27, 2002

zelah posted:

I know what the title of this thread is, but creditkarma just told me that my (estimated) score went from 719 to 622 and lists the reason as my credit card utilization going from 2% to 0%. I'm not trying to buy a house tomorrow or anything, but is that just how credit scores work?

Its normal for scores to fluctuate for no apparent reason, but that is a huge drop.

I look at credit reports every day, and they still baffle me. Sometimes you look at a score, and you can�t believe how puffed up and inflated it seems based on the report it came from. Other times you don�t know why the guy got jipped and you think they deserve a way higher score. The only thing I can think of is if an account has a zero balance and zero activity for 6 months, it doesn�t get counted the same way, or perhaps not at all. I hate to tell people to alter their behavior to manipulate the score, but if you think that�s the reason, you might want to set up some reoccurring things to go to the account, like you gym membership or a phone bill, or whatever. If you have 6 accounts, you don�t need to do this for all of them, but maybe you do it on your oldest one or the one with the largest limit.

# ? Jan 24, 2011 15:31

P.D.B. Fishsticks: Jun 19, 2010

I travel two or three weeks a month for work, and while I'm usually flying to my destinations, there's a good deal of driving my personal vehicle as well � trips under a few hundred miles where flying wouldn't make sense, driving to further-away airports to get better flights, and so on.

Obviously, this puts miles on my car (which is, by the way, fully paid off) faster than I would otherwise accrue them, but to counter that, I'm reimbursed $0.51/mile to cover gas and vehicle wear and tear. Since this travel will mean I'll need to replace my car sooner than I otherwise would, I've been putting the entire mileage reimbursement for each trip, minus what I spent on gas, into my savings account to act something like a car replacement fund.

However, I'd like to keep the car savings separate from my normal savings account since I use it for a few other savings as well (emergency fund, etc.) While I can track how much I've put in for car fund purposes easily enough, it'd still be nice to keep them separate, and obviously I don't need the money quite as liquid for car savings.

So what would be a good place to keep a car savings account? My current car has just passed 90,000 miles, so I'm hoping I won't need to withdraw from this money for another three to five years, depending on my future travels. I'd generally be putting in a few hundred a month, but it varies wildly month to month depending on where I get sent. Obviously, I'd like this money to be relatively safe and am willing to accept a lower return for that.

# ? Jan 24, 2011 15:32

Nocheez: Sep 5, 2000; Can you spare a little cheddar?; Nap Ghost

Zeta Taskforce posted:

Its normal for scores to fluctuate for no apparent reason, but that is a huge drop.

I look at credit reports every day, and they still baffle me. Sometimes you look at a score, and you can�t believe how puffed up and inflated it seems based on the report it came from. Other times you don�t know why the guy got jipped and you think they deserve a way higher score. The only thing I can think of is if an account has a zero balance and zero activity for 6 months, it doesn�t get counted the same way, or perhaps not at all. I hate to tell people to alter their behavior to manipulate the score, but if you think that�s the reason, you might want to set up some reoccurring things to go to the account, like you gym membership or a phone bill, or whatever. If you have 6 accounts, you don�t need to do this for all of them, but maybe you do it on your oldest one or the one with the largest limit.

Thank you for this post. My credit score is crappy compared to what I think it should be (only debt is a mortgage with a reasonable payment, positive cash flow, nearly a year's worth of net pay in the bank, never missed a payment) and I had no clue why. I think I need to use my credit card once in a while and probably should think about a second card of some sort that I can use and pay off monthly.

# ? Jan 24, 2011 15:48

digitalhifi: Jun 5, 2004; In life I have encountered much, but nothing as profound as the statement "all we ever do is do stuff."

P.D.B. Fishsticks posted:

I travel two or three weeks a month for work, and while I'm usually flying to my destinations, there's a good deal of driving my personal vehicle as well � trips under a few hundred miles where flying wouldn't make sense, driving to further-away airports to get better flights, and so on.

Obviously, this puts miles on my car (which is, by the way, fully paid off) faster than I would otherwise accrue them, but to counter that, I'm reimbursed $0.51/mile to cover gas and vehicle wear and tear. Since this travel will mean I'll need to replace my car sooner than I otherwise would, I've been putting the entire mileage reimbursement for each trip, minus what I spent on gas, into my savings account to act something like a car replacement fund.

However, I'd like to keep the car savings separate from my normal savings account since I use it for a few other savings as well (emergency fund, etc.) While I can track how much I've put in for car fund purposes easily enough, it'd still be nice to keep them separate, and obviously I don't need the money quite as liquid for car savings.

So what would be a good place to keep a car savings account? My current car has just passed 90,000 miles, so I'm hoping I won't need to withdraw from this money for another three to five years, depending on my future travels. I'd generally be putting in a few hundred a month, but it varies wildly month to month depending on where I get sent. Obviously, I'd like this money to be relatively safe and am willing to accept a lower return for that.

If you sign up for a Smartypig savings account, you can have as many mini-accounts as you want attached to your account. I, for example have a car account, an emergency fund account, and an insurance premium account. I contribute monthly to each of these, and can cash them out separately. Smartypig also has a pretty good interest rate (1.35% now). Its also pretty easy to get your money out, even if you haven't reached your savings "goal" yet. It takes about 3-5 days regardless.

# ? Jan 24, 2011 16:12

Zeta Taskforce: Jun 27, 2002

digitalhifi posted:

If you sign up for a Smartypig savings account, you can have as many mini-accounts as you want attached to your account. I, for example have a car account, an emergency fund account, and an insurance premium account. I contribute monthly to each of these, and can cash them out separately. Smartypig also has a pretty good interest rate (1.35% now). Its also pretty easy to get your money out, even if you haven't reached your savings "goal" yet. It takes about 3-5 days regardless.

Does anyone know if its possible to do the same thing with ING? I know smarty pig pays a bit more, but its not like I have that much money, I already have Perk street, and I just don�t feel like opening up yet another account, linking everything all over again, and getting another whole series of emails for an extra 15 cents a month. But having subaccounts and being able to save for discrete things sweetens the deal more. I know its more mental and less math, but you can�t discount mental.

# ? Jan 24, 2011 16:28

digitalhifi: Jun 5, 2004; In life I have encountered much, but nothing as profound as the statement "all we ever do is do stuff."

Zeta Taskforce posted:

Does anyone know if its possible to do the same thing with ING? I know smarty pig pays a bit more, but its not like I have that much money, I already have Perk street, and I just don�t feel like opening up yet another account, linking everything all over again, and getting another whole series of emails for an extra 15 cents a month. But having subaccounts and being able to save for discrete things sweetens the deal more. I know its more mental and less math, but you can�t discount mental.

When I was shopping around for savings accounts, I remember seeing a sub account option for some other company besides Smartypig. I think it was either ING or Ally. Not sure though. It was pretty well featured though on the application website.

# ? Jan 24, 2011 16:48

Inept: Jul 8, 2003

Zeta Taskforce posted:

Does anyone know if its possible to do the same thing with ING? I know smarty pig pays a bit more, but its not like I have that much money, I already have Perk street, and I just don�t feel like opening up yet another account, linking everything all over again, and getting another whole series of emails for an extra 15 cents a month. But having subaccounts and being able to save for discrete things sweetens the deal more. I know its more mental and less math, but you can�t discount mental.

Just apply for new savings accounts on their website. They all show up on your accounts page, and they only take a minute to create. I think I have my checking account and 4 savings accounts listed.

# ? Jan 24, 2011 21:44

Zeta Taskforce: Jun 27, 2002

Inept posted:

Just apply for new savings accounts on their website. They all show up on your accounts page, and they only take a minute to create. I think I have my checking account and 4 savings accounts listed.

Thanks. That�s pretty easy. It�s not as pretty as smartypig and they don�t advertise it as much, but it should still work.

# ? Jan 25, 2011 14:35

Pieces: Jan 25, 2011

Long time lurker of SA, registered just to be able to post in this extremely informative thread.

I'm a recent college graduate (23 y/o) with a somewhat unique situation:

10k RRSP (401k Canadian Equivalent) - invested in Mutual Funds
2k - GIC / CD (RRSP)
11k TFSA (Roth IRA Canadian Equivalent)- speculating in Dividend Paying Stock (room for 5k contribution for 2011 as well)
78k - invested in Mutual Funds
20k - savings (2k in USD)
14k - loan to parent(s) being repaid to me at 500/month over the next 28 months

No debt, 1 CC with good credit (15k limit - paid off monthly). No car.

I'm not currently working in my field of study (engineering) - been on the job hunt for the past 4 months and really hoping to get something before the next wave of graduates. I am doing some part time work in nightclubs, with a monthly earnings of $2000 after tax. If I can find a job in my field, I'd estimate a take home earnings of between $3200-3500 (not including any nightclub work).

Monthly expenses are less than 1k (paying $400 rent but living at home).

My money is primarily dumped into mutual funds because I have a financial adviser that is a family friend - these funds are all back-end, and have been performing reasonably (~10-12% / year). Based on my own financial spreadsheets, I have about a 65/35 split for stocks / bonds across ~100k in investments.

After reading through several threads in BFC, it seems like self-directed investing in ETFs are preferable versus mutual funds (out with the old, in with the new!). Have setup an account with mint.com, and have put together an estimated budget for moving out in excel. One thing I currently am NOT doing is keeping my savings money in an online account - will probably move that over to smartypig given the overwhelming recommendations here. I feel like I can be doing more / being more aggressive with my money given that finding a job will put me in a financial secure position. Also, I have alot of free time - I work nights a couple of times a week, so my days are free until I get a 'real job'. Any advice to help me on the road to a successful mid-life?

Pieces fucked around with this message at 19:13 on Jan 25, 2011

# ? Jan 25, 2011 18:53

bam thwok: Sep 20, 2005; I sure hope I don't get banned

Pieces posted:

After reading through several threads in BFC, it seems like self-directed investing in ETFs are preferable versus mutual funds (out with the old, in with the new!). Have setup an account with mint.com, and have put together an estimated budget for moving out in excel. One thing I currently am NOT doing is keeping my savings money in an online account - will probably move that over to smartypig given the overwhelming recommendations here. I feel like I can be doing more / being more aggressive with my money given that finding a job will put me in a financial secure position. Also, I have alot of free time - I work nights a couple of times a week, so my days are free until I get a 'real job'. Any advice to help me on the road to a successful mid-life?

Considering your shaky employment and difficulty finding a job, I'd say your cash savings should stay where they are, especially if you intend to move out soon. Additionally, if your mutual fund investments are consistently returning in the 10-12% range even with a fairly conservative equity/bond split, I don't really see any compelling reason to incur fees by fiddling around with it. But let's see what other goons think.

# ? Jan 25, 2011 20:37

Chin Strap: Nov 24, 2002; I failed my TFLC Toxx, but I no longer need a double chin strap; Pillbug

bam thwok posted:

Considering your shaky employment and difficulty finding a job, I'd say your cash savings should stay where they are, especially if you intend to move out soon. Additionally, if your mutual fund investments are consistently returning in the 10-12% range even with a fairly conservative equity/bond split, I don't really see any compelling reason to incur fees by fiddling around with it. But let's see what other goons think.

Yeah but you've got to subtract out the back-end load from that to get a true return, which will probably be much lower.

Pieces: Can you explain why ETFs are better than mutual funds (hint: they aren't) (double hint: new almost never equals better).

# ? Jan 25, 2011 20:42

Zeta Taskforce: Jun 27, 2002

Chin Strap posted:

Yeah but you've got to subtract out the back-end load from that to get a true return, which will probably be much lower.

Pieces: Can you explain why ETFs are better than mutual funds (hint: they aren't) (double hint: new almost never equals better).

The explanation I�ve heard is that because they trade like a stock, they can be traded near instantly instead of like a mutual fund, which can only be bought and sold at the end of the day. Also, their expense ratios are tiny, less than a mutual funds, even less than Vanguard index funds, so for someone who wants exposure to something, and will never trade, they will pay less in fees. The downside is you have to pay a broker every time you want to trade, so they would be horrible for someone who wants to regularly invest a couple hundred bucks a month automatically.

# ? Jan 25, 2011 20:54

Inept: Jul 8, 2003

Chin Strap posted:

Pieces: Can you explain why ETFs are better than mutual funds (hint: they aren't) (double hint: new almost never equals better).

Using Vanguard as an example, their S&P 500 index ETF has a 0.06% expense ratio, and their investor shares 500 index fund has a 0.18% expense ratio. Purchasing ETFs through Vanguard has no purchase fee, and the only additional expense I'm aware of is the bid/ask spread. In this example, an ETF may be better if you don't have the 10K to get admiral shares of the fund, or if the fund you are looking to contribute to doesn't have admiral shares. I'm not saying ETFs are always better, but in some cases they are.

# ? Jan 25, 2011 20:57

Chin Strap: Nov 24, 2002; I failed my TFLC Toxx, but I no longer need a double chin strap; Pillbug

Zeta Taskforce posted:

The explanation I�ve heard is that because they trade like a stock, they can be traded near instantly instead of like a mutual fund, which can only be bought and sold at the end of the day. Also, their expense ratios are tiny, less than a mutual funds, even less than Vanguard index funds, so for someone who wants exposure to something, and will never trade, they will pay less in fees. The downside is you have to pay a broker every time you want to trade, so they would be horrible for someone who wants to regularly invest a couple hundred bucks a month automatically.

Admiral level funds at Vanguard carry the same ER as the ETF. Yes ETFs are different, but not "better" as some general rule, and the ER difference can get wiped out by broker comission and bid/ask spread. He was treating ETFs as some magical new class of thing when they are just another way to buy mutual funds.

# ? Jan 25, 2011 20:58

80k: Jul 3, 2004; careful!

Chin Strap posted:

Yeah but you've got to subtract out the back-end load from that to get a true return, which will probably be much lower.

Pieces: Can you explain why ETFs are better than mutual funds (hint: they aren't) (double hint: new almost never equals better).

Choosing between index funds and ETF's is about the least important decision you need to make. However, ETF's have several advantages over index funds:
- Often lower expense ratios (not as much the case now that Vanguard lowered minimums for Admiral shares. However note that many Vanguard index funds do not have admiral share class. International Small, FTSE ex-US, and Dividend Appreciation index come to mind).
- No trading restrictions, early redemption fees. This is significant as Vanguard imposes 60-day trading restrictions from buying back a fund after selling shares. They also have purchase and redemption fees on some of their international funds.

The negatives of ETF's are very insignificant: plenty of commission-free options out there. Also bid-ask spreads are tiny for highly liquid ETF's, which are the only ETF's you should be considering anyway.

# ? Jan 25, 2011 21:02

Pieces: Jan 25, 2011

Chin Strap posted:

Pieces: Can you explain why ETFs are better than mutual funds (hint: they aren't) (double hint: new almost never equals better).

To be completely honest, I haven't done a whole lot of research into ETFs yet, but there are a few points that I think are beneficial for me: They allow for more flexibility and can be bought / sold instantaneously, and they are (sometimes?) more cost effective in terms of fees and commissions.

Also, I made a mistake in labeling my current mutual funds as back-end, they are actually no-load funds (with MER of ~2.2%). Given that change, its probably just in my best interest to keep those investments for the long haul?

# ? Jan 25, 2011 21:04

Chin Strap: Nov 24, 2002; I failed my TFLC Toxx, but I no longer need a double chin strap; Pillbug

80k posted:

Choosing between index funds and ETF's is about the least important decision you need to make. However, ETF's have several advantages over index funds:
- Often lower expense ratios (not as much the case now that Vanguard lowered minimums for Admiral shares. However note that many Vanguard index funds do not have admiral share class. International Small, FTSE ex-US, and Dividend Appreciation index come to mind).
- No trading restrictions, early redemption fees. This is significant as Vanguard imposes 60-day trading restrictions from buying back a fund after selling shares. They also have purchase and redemption fees on some of their international funds.

The negatives of ETF's are very insignificant: plenty of commission-free options out there. Also bid-ask spreads are tiny for highly liquid ETF's, which are the only ETF's you should be considering anyway.

I agree with all this and maybe "they aren't" is too strong of a word. I really should have said "the difference between them and the corresponding fund isn't going to be any where near as large as the difference of getting out of a loaded mutual fund into something lower cost". He could still be going out and buying high ER ETF's, it isn't like they absolve you from understanding what you are buying. Just another way to buy mutual funds.

# ? Jan 25, 2011 21:06

80k: Jul 3, 2004; careful!

Pieces posted:

Also, I made a mistake in labeling my current mutual funds as back-end, they are actually no-load funds (with MER of ~2.2%). Given that change, its probably just in my best interest to keep those investments for the long haul?

With no back-end, there is even greater reason to get out of them and into lower cost funds ASAP.

# ? Jan 25, 2011 21:06

alreadybeen: Nov 24, 2009

80k posted:

Choosing between index funds and ETF's is about the least important decision you need to make. However, ETF's have several advantages over index funds:
- Often lower expense ratios (not as much the case now that Vanguard lowered minimums for Admiral shares. However note that many Vanguard index funds do not have admiral share class. International Small, FTSE ex-US, and Dividend Appreciation index come to mind).
- No trading restrictions, early redemption fees. This is significant as Vanguard imposes 60-day trading restrictions from buying back a fund after selling shares. They also have purchase and redemption fees on some of their international funds.

The negatives of ETF's are very insignificant: plenty of commission-free options out there. Also bid-ask spreads are tiny for highly liquid ETF's, which are the only ETF's you should be considering anyway.

So if I am "buy and hold for 30 years type investor" does it make sense to convert my mutual fund to ETFs? I have enough for most of my funds to be admiral shares, but ETFs even beat admiral shares on expense ratio.

# ? Jan 25, 2011 22:24

80k: Jul 3, 2004; careful!

alreadybeen posted:

So if I am "buy and hold for 30 years type investor" does it make sense to convert my mutual fund to ETFs? I have enough for most of my funds to be admiral shares, but ETFs even beat admiral shares on expense ratio.

Admiral ER's and ETF ER's are virtually identical. There might be one or two Vanguard ETF's that have a slightly better ER but it is minuscule.

It is not worth converting from Admiral shares unless you actually prefer holding ETF's (like buying shares instantly on an exchange, not having trading restrictions, etc).

If I were starting out with a small portfolio, I'd do an exclusively ETF portfolio so that I can diversify into a low cost portfolio without worrying about fund minimums or trading restrictions. IMO, ETF's are a marginally superior investment vehicle over open ended funds and I feel it is worth it for beginning investors to get used to the mechanics of trading ETF's. But if you already have admirals, the benefits are marginal enough that it really does not matter. Just personal preference at that point.

# ? Jan 25, 2011 22:38

big shtick energy: May 27, 2004

It's also pretty dependent on what kind of mutual funds are available. In Canada, the cheapest index mutual funds you'll find are a bit over 0.5%, and most are around 1% or over. This makes ETFs a better option, since canadian bond/equity ETFs are much more reasonable (like XIC at .25%) and you can just buy the vanguard ETFs for the international component.

# ? Jan 26, 2011 02:42

minato: Jun 7, 2004; cutty cain't hang, say 7-up.; Taco Defender

I'm trying to figure out how much I should contribute to my 401(k) in order to max it out, but not go over the annual limit. Here's my math and working - does it sound right?

Annual Gross Salary = $Salary
Employer matches up to match%
Annual salary deferral contributions limit for 2010 is $16,500 (according to my HR department).
Amount I should ideally be contributing from my salary is x% (the unknown).
Amount contributed to the 401(k) all year is: Salary * (x + match)/100

So to max it out at $16,500:
Salary * (x + match)/100 = $16,500
Solve for x:
x = (100 * $16,500 / Salary) - match

Am I doing this right? The figure I get for someone with a gross salary of $70,000 and a 4% employer match is about 19%.

Edit: According to this post, "$15,500 is the max that you yourself can contribute -- whatever employer match you get is separate from that amount.", which means my equation is wrong and all I need to do is simply:

x% = 100 * $16,500 / Salary

minato fucked around with this message at 06:05 on Jan 26, 2011

# ? Jan 26, 2011 04:55

|Ziggy|: Oct 2, 2004

Employer match doesn't count towards the $16,500 limit. This limit changes from year to year. So I think what you're looking for is 16.5k/12 = $1375 per month. 1375/monthly salary = % contribution. Modify to account for pay period(weekly, biweekly, monthly, whatever).

At $70k annual getting paid biweekly it comes out to about $687.5 contribution with salary of ~$2916.67 making % contribution ~23.57. I think my math is correct here, but double check it yourself.

edit - your equation gives the same percentage so I think we're good.

|Ziggy| fucked around with this message at 16:38 on Jan 26, 2011

# ? Jan 26, 2011 16:35

HFX: Nov 29, 2004

Wagonburner posted:

Wondering what to do with some 5-9 year old series I US savings bonds.

My grandmother passed away in december and according to my dad "left all the grandkids US savings bonds" I don't know if this was stated in the will or not. He said my grandmother wished I could put this money into my house. I do have plenty of projects that need starting. Like in a matter of months.

I got them today.

First of all tax stuff. Most of these bonds are in her name with the last line reading payable on death to me. 1 or 2 are in my name. Do I need to do anything on my 2010 taxes for this? If not, I'm sure I will the year that I cash them, I'll at least have to claim the interest but do I have to do inheritance stuff too? (face value of all the bonds is $2000)

Now finance stuff, the bonds are are mostly Series I purchased between 2001-2005 with one series EE.
Like I said I have some projects coming up, I have a cap-one money market savings that pays 1.35% with a nice chunk of cash in there that is kind of my transmission/furnace/roof-took-a-poo poo or lost job, emergency savings. I will have a nice tax return coming that will be going to carpet and paint and other house stuff. Series I bonds I've heard are quite nice esp older ones with the 3 or 4% fixed apr + the variable infaltion rate apr. So...

I'm using the tax return on the house, the bonds have an actual value of about $3100 now so I feel like putting an extra $3100 into the house. Should I get that $3100 out of my own savings and hang on to these bonds as long as possible? Any of these I should cash out and put money into something else? I know nothing of investing btw.

heres what the us treasury site says about mine:
code:
serial        series   denom    issued        next accru       final mature   issue price int paid       rate    value
l6037-xxxxx 	EE 	$50 	03/2005 	02/2011 	03/2035 	$25.00 	  $5.14         2.16% 	$30.14 	  	
l0445xxxxxx   	I 	$50 	04/2002 	02/2011 	04/2032 	$50.00 	  $24.56  	3.56% 	$74.56 	  	
d0021xxxxx 	I 	$500 	04/2002 	02/2011 	04/2032 	$500.00   $245.60 	3.56% 	$745.60 	  	
r0015xxxxx 	I 	$200 	10/2001 	02/2011 	10/2031 	$200.00   $133.28 	4.56% 	$333.28 	  	
r001xxxxx 	I 	$200 	04/2002 	02/2011 	04/2032 	$200.00   $98.24  	3.56% 	$298.24 	  	
m0019xxxxx 	I 	$1,000  09/2001	        02/2011 	09/2031 	$1,000.00 $672.40 	4.56% 	$1,672.4
Also, physical security. If the worst happens, flood/fire/burglar and the paper is gone I'm screwed right? They don't pay you for just knowing you have some bonds payable on death to you right? I don't have any kind of safe and as I understand most are poo poo anyway. Are these earning/will be earning anything close per month to what a safe deposit box costs? I do have some other things thqat a safe deposit box would be good for. But I tend to think think mostly that if I'm worried enough about their physical security to get a SD box, I'd be better off just cashing them and putting them into my 1.35% savings.

edit: and what's some kind of calculator that could give me an estimate of what some of these would be worth in 2030-whatever?

edit again: My grandma grew up during the depression, lost her husband to cancer with 4 kids teenaged down to toddler-aged, always shopped at thrift stores and garage sales, saved like mad. I haven't heard any actual numbers but probably died a millionaire at 86. I want to do her proud with the small part of her money that I have by making it earn for me in the most max but also most conservative way possible. If keeping it in savings bonds is it then that's good because taking money from the government has a certain appeal to it. I'm completely debt free except my 1.5 year old 105k mortgage that I only put 5% down on. PMI!

You may want to see a good lawyer.

There should be a form to update the ownership of the bonds to yourself although if they were printed with you named on it, you already have ownership by her death. If it was added after, you may have to get the form to update them.

Taxes: If they were already assigned to you, they fall under joint ownership and until you redeem them, you are not liable for any taxes. There should be no estate tax at the federal level on them as the total value was less then $5M even if this did apply. However, state laws may do whatever, and I have no idea. At this point, I would ask a tax attorney or a good CPA.

# ? Jan 26, 2011 19:07

renzor: Jul 28, 2004; ...I still get the ham, right? Good.

How did you choose your bank?

I've been with the same bank since I was 12 so I haven't really explored any other options. Seeing as how I'm in my mid 20's and make 66k/yr at what I view as an incredibly stable job I'm preparing to buy a place this spring/summer as well as after a couple years of virtual stocks and burying myself in books I'd like to potentially opening a trading account, provided I enjoy it/see results in my virtual portfolio. Am I being ignorant trying to consolidate all of these to as few institutions possible? For instance, I have a couple quite wealthy relatives that bank through the local HSBC branch and assume that negotiating with people who deal with blood relatives that make them money can only be a good thing, where as I've heard their trading software/accounts pale in comparison to something like TD. I feel like a fool for neglecting this for so long and simply sitting on my savings in a generic account rather than doing something with it and now I'm semi-panicking and just overwhelming myself. If anyone can give me a few pointers on how to re-assess everything down to my choice of bank for day-to-day stuff that would be greatly appreciated.

I'm in Canada if it matters at all.

# ? Jan 26, 2011 21:38

modig: Aug 20, 2002

renzor posted:

How did you choose your bank?

I've been with the same bank since I was 12 so I haven't really explored any other options. Seeing as how I'm in my mid 20's and make 66k/yr at what I view as an incredibly stable job I'm preparing to buy a place this spring/summer as well as after a couple years of virtual stocks and burying myself in books I'd like to potentially opening a trading account, provided I enjoy it/see results in my virtual portfolio. Am I being ignorant trying to consolidate all of these to as few institutions possible? For instance, I have a couple quite wealthy relatives that bank through the local HSBC branch and assume that negotiating with people who deal with blood relatives that make them money can only be a good thing, where as I've heard their trading software/accounts pale in comparison to something like TD. I feel like a fool for neglecting this for so long and simply sitting on my savings in a generic account rather than doing something with it and now I'm semi-panicking and just overwhelming myself. If anyone can give me a few pointers on how to re-assess everything down to my choice of bank for day-to-day stuff that would be greatly appreciated.

I'm in Canada if it matters at all.

I think Canada does matter, but I'll tell you how I chose anyway. I started with Wells Fargo because it was local when I opened an account with like $50 at like 14 or something. I've continued using them because I haven't had any particular problems with them.

At around 22 or so I started using USAA as well, which is a bank started for military personel who move all the time, so it was way ahead on cross state services in the past. I can use USAA because my grandfather was in the Navy, which is a bit odd. But anyway both my parents and most of my brothers use USAA and all I hear about it are positive stories about how helpful their customer service was and how easy this or that was on the website. They also can provide car insurance, investment services, and lots of other stuff I will probably need in the future all from the same website. So I'm slowly moving everything to USAA to simplify.

# ? Jan 27, 2011 17:04

Tricky Ed: Aug 18, 2010; It is important to avoid confusion. This is the one that's okay to lick.

Credit score gurus:

I know the length of time you've had a bank account goes in to your score. I've had one particular bank account for over 15 years now, and it's been dormant for about 8 years since I moved away from their service area. It doesn't cost me anything, but the money in it isn't earning any interest either (plus I have no ATM card or checkbook to be able to get it quickly). I'm thinking of closing it.

My current bank account is coming up on 5 years old. Is this old enough to overcome the hit I'd take from closing the old dormant account, or should I just let the old account ride? How big of a factor is account age, anyway, and do credit cards count as part of it?

Also - I'm saving up for some roof work I'll probably have done in about a year and a possible car purchase or repair (timeframe unknown - depends on how mine holds up). I've been throwing my spare cash in my ING account, but I can't help feeling I could earn more than 1.15% on it. Anyone have a suggestion for a better place to save in the short term but keep things relatively liquid?

# ? Jan 29, 2011 10:00

KarmaCandy: Jan 14, 2006

Tricky Ed posted:

Credit score gurus:

I know the length of time you've had a bank account goes in to your score.

No it doesn't, the length of time you've had a bank account open doesn't matter at all. The length of time you've had a credit card open, on the other hand, does matter and is a factor in your credit score.

Tricky Ed posted:

Anyone have a suggestion for a better place to save in the short term but keep things relatively liquid?

You could look into smarty pig. They have slightly higher rates and it's still a liquid account.

# ? Jan 29, 2011 16:07

Overwined: Sep 22, 2008; Wine can of their wits the wise beguile,
Make the sage frolic, and the serious smile.

Hopefully this is the right place to ask this. I didn't see any good info in the OP.

In the last 5 years I've been doing a ton to repair damaged credit from...ummm...past youthful indescrepencies. I've been checking my report in the various free ways you can do each quarter, but I want a more detailed and up to date report because I'm about to knock my credit into "good" range and want to make sure there are no slip-ups. I must be doing alright as I now have about $5000 in available credit on only two credit cards (currently carrying less than 5% balance), but I don't want to rely on this as a metric.

I want to use one of the many services that allow you to keep tabs on your credit. Yes, I know most cost money and I'm okay with that. What do you guys recommend? I just checked out experian, but $15 a month seems steep to me.

# ? Jan 31, 2011 19:21

Zeta Taskforce: Jun 27, 2002

Overwined posted:

Hopefully this is the right place to ask this. I didn't see any good info in the OP.

In the last 5 years I've been doing a ton to repair damaged credit from...ummm...past youthful indescrepencies. I've been checking my report in the various free ways you can do each quarter, but I want a more detailed and up to date report because I'm about to knock my credit into "good" range and want to make sure there are no slip-ups. I must be doing alright as I now have about $5000 in available credit on only two credit cards (currently carrying less than 5% balance), but I don't want to rely on this as a metric.

I want to use one of the many services that allow you to keep tabs on your credit. Yes, I know most cost money and I'm okay with that. What do you guys recommend? I just checked out experian, but $15 a month seems steep to me.

With Creditkarma, you can get a free Transunion report and actual FICO score, no strings attached. Most financial institutions report to all 3 bureaus so assuming the data is the same going into all 3, they shouldn�t be that far off. As you probably have been doing, you are entitled to free reports from https://www.annualcreditreport.com and there you can at least check up on the accuracy of the data. If you are needing to do a major purchase in the near future, you may want to buy your score from Equifax (don�t bother with buying the score from Experian, for some reason they don�t give FICO scores to consumers). But other than that, if the last blemish was years ago, you have not been opening new accounts, and your balances are low, your credit is probably at least workable, even if it isn�t excellent yet.

# ? Jan 31, 2011 19:33

Nocheez: Sep 5, 2000; Can you spare a little cheddar?; Nap Ghost

Overwined posted:

indescrepencies.

What word were you trying to use here? Indiscretions?

# ? Jan 31, 2011 20:06

Zeta Taskforce: Jun 27, 2002

Nocheez posted:

What word were you trying to use here? Indiscretions?

Remember back in 1998 when they impeached Clinton? All these Republicans who got caught having affairs talked about their youthful indiscretions. Except in their case, the youthful indiscretions usually happened in their 40�s. I think he meant that. Without the affair part. I think. What were we talking about again?

# ? Jan 31, 2011 20:11

asmallrabbit: Dec 15, 2005

renzor posted:

How did you choose your bank?

I've been with the same bank since I was 12 so I haven't really explored any other options. Seeing as how I'm in my mid 20's and make 66k/yr at what I view as an incredibly stable job I'm preparing to buy a place this spring/summer as well as after a couple years of virtual stocks and burying myself in books I'd like to potentially opening a trading account, provided I enjoy it/see results in my virtual portfolio. Am I being ignorant trying to consolidate all of these to as few institutions possible? For instance, I have a couple quite wealthy relatives that bank through the local HSBC branch and assume that negotiating with people who deal with blood relatives that make them money can only be a good thing, where as I've heard their trading software/accounts pale in comparison to something like TD. I feel like a fool for neglecting this for so long and simply sitting on my savings in a generic account rather than doing something with it and now I'm semi-panicking and just overwhelming myself. If anyone can give me a few pointers on how to re-assess everything down to my choice of bank for day-to-day stuff that would be greatly appreciated.

I'm in Canada if it matters at all.

I started with ScotiaBank as a kids/joint account with my mom. I later changed it to a student account but was displeased with the hours that i had access to a teller (before i did a lot of online banking) I opened up an account with TD and got them to transfer over everything from my old account and to close it off. Scotia ended up calling me months later about charges for the account that had never been closed on their end, trying to get me to pay a fee and saying i had to deposit money and withdraw it before i could close the account. Ended up actually talking to someone that knew what they were doing closed the account for good (there was still some money in it!) and said good riddance to scotia.

TD has been great for me so far, all of my accounts/cards/credit is with them and they have been very easy to deal with and very accomodating.

# ? Jan 31, 2011 21:03

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# ? May 12, 2024 02:29

Overwined: Sep 22, 2008; Wine can of their wits the wise beguile,
Make the sage frolic, and the serious smile.

Nocheez posted:

What word were you trying to use here? Indiscretions?

Yes, and I was purposely using the wrong word to highlight the extent of my indiscretions. That's the story I'm going with. Seriously, I was having a major league brain block on that and was getting pissed at the spell checker for not recognizing it. I blame it on not enough coffee and a stubborn belief that I'm always right even when I'm horribly wrong.

Thanks for the reply Zeta Taskforce. I have had years-old issues crop up on my report before. A few years ago I had collection activities on a debt that I had paid in full three or more years before that. The debt was for "legal fees" surrounding what was then almost 6 year old medical expenses that were in collection and paid in full about 4 years prior. At the time I hadn't any reason to believe that new blemishes would show up, so I was happy I was looking at least intermittently.

If you're wondering I owed a hospital about $600 which I paid in one lump, but a bit late (hadn't even gone to collections). I must have looked at an old bill that was missing about $40-50 in late fees. I moved shortly thereafter and apparently they were after me for the remainder, only I was unaware of it. They caught up to me years later and collected like $300 from that $40-$50 and I paid it and screamed for a receipt in triplicate stating the debt was settled. Shortly after that they apparently billed me for legal fees somehow and again I was unaware of it until it went to collections.

Interestingly, I called their collection department pretty hot under the collar and they didn't put up a fight at all, they just dropped it. Makes me think that hospital system just goes fishing for poo poo like that. Anyway, I also called them twice a month and screamed for the entire 5 months it took for them to get that blemish removed from my report.

Long story short, most any agency that you can owe money to has come to the realization that dead beats can make a lot of money. I've long ago cleaned up my deadbeat ways, but that doesn't stop some of these legal scams. In my defense, most of my credit blemishes are due to me not taking it seriously and just thinking small debts would simply vanish.

# ? Jan 31, 2011 23:02

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > BFC Newbies Thread: 33% of the interest paid is tax delectable

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