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Leperflesh posted:"right to buy" Be careful with these - my term policy comes with a right to buy, as does my wife's, at the end of the 30 year term we bought, but the rate hike is HUGE. The price literally goes up more than 9X if I wanted to extend it for the 31st year. The point is, just because they guarantee that they'll sell you a policy doesn't mean that the premium will be anything approaching reasonable. One of the benefits of locking in the 20 or 30 year term policy now is that if and when your health does go to poo poo, your premiums stay flat and locked in a the healthy rates.
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Jul 30, 2011 01:13
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ashgromnies posted:I am 100% vested at this point. You're in it. Not to disparage what TraderStav said but the conventional wisdom here is Vanguard. It's a bit of a different company in that it's entirely geared toward long term, index/value/low cost investing. It is not a great place to get your Wall Street on  , It's not for Jim Cramer but if you like your investments boring and productive it's the place to be.Leperflesh, the thing to remember is that right now you basically have a auto-renewal 2 week term life insurance policy. It could change at any time. Have you looked around your office and seen the 350lb 5'1, 60-something woman with diabetes who talks about how much she likes fried Twinkies and double stuffed oreos? She is getting the same life insurance rate you are. ~25 a month for ~500k in coverage is pretty good for a 20 or 30 year term, but your term is only 2 weeks. The thing is, on a term policy, they are pricing the risk of you kicking it at year 19 or 29 into the policy as well as next week. Your group policy doesn't have that price stability. The nice thing about a term policy is that you can layer a few of them as your needs change over time. Get married, have kids, take out a mortgage. These are all things that should also include a term policy evaluation.
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Jul 30, 2011 03:21
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Mkay well I'm locked into this until the next open period which is in February (or until I have a qualifying life-change event, which I do not anticipate before then) so I have plenty of time to look at the alternatives. Thanks for the help guys.
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Jul 30, 2011 03:30
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Leperflesh posted:Mkay well I'm locked into this until the next open period which is in February (or until I have a qualifying life-change event, which I do not anticipate before then) so I have plenty of time to look at the alternatives. Thanks for the help guys. Just realize that getting insurance will take a month or so to get all the stuff done. Once you get the quotes and decide which company/policy you want to apply for, you'll need to fill out the application and mail it in, and then get a medical exam scheduled and taken and wait for the lab work to come back. I guess if you did everything as fast as possible you could turn it around in a couple weeks, but more realistically it'll take considerably longer. Also, these timings assume that you don't run into a snag along the way, both in terms of stuff getting lost in the mail and also policy limits that you didn't know would be an issue. Some carriers have different thresholds for their rate limits. One may say a cholesterol level of below 200 is fine for best, and another may want 180. Once you get the initial medical test done you can play around to get the best rate as you wish, but if you end up changing companies you'll have to reapply and may need to get a second medical test if they won't take results from the first one's lab. Point is, don't wait until Feb to start, and probably don't wait until Jan to start. You'll want to make sure you get your new coverage before you let the work policy lapse.
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Jul 30, 2011 03:39
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KennyG posted:You're in it. Not disparaging me in the least bit. Vanguard is absolutely one of the best options. I invest in lots of Vanguard funds in my Schwab account.  Only have the Schwab so I can add in other ETFs that fit my AA that Vanguard doesn't have a product for.
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Jul 30, 2011 04:45
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Speaking of insurance, I've been thinking that long-term disability insurance might be a good idea since I don't necessarily want to be on welfare for the rest of my life if I became too disabled to work somehow. However, all of pricing seems way too high, to the point of being something like 5% of gross income. Now since I rather doubt there's a 1 in 20 chance of me becoming a quadriplegic or something during my prime working years, where is the crazy cost coming from? Is there a high risk of fraud/adverse selection with these policies?
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Jul 30, 2011 22:13
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TraderStav posted:Assuming you are 100% vested, you will take it with you and likely roll it over into an IRA at another custodian. Otherwise, you'll take your vested portion. It's your money. There is little benefit to keep the 401k after your company stops contributing to it. You will have limited fund choices and potentially other fees and restrictions. At the same time, if your 401k is good you don't have to transfer out of it. My 401k was with Fidelity and had fine choices, so I haven't bothered to roll it over. However, if you have a crappy run 401k through some small brokerage only offering funds with expense ratios > 2% then yes, get that money out of there ASAP. Sometimes your 401k will have funds and fund classes you could not otherwise have access to.
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Jul 30, 2011 22:54
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DuckConference posted:Speaking of insurance, I've been thinking that long-term disability insurance might be a good idea since I don't necessarily want to be on welfare for the rest of my life if I became too disabled to work somehow. ***most lame introductory statement ever*** It depends. Long-term disability can have different lengths of time to describe "long term." If you're out of work for 2 years or twenty, the company knows that it has to have enough assests to foot that bill (  ) or it drastically makes cuts in payments after a certain amount of time (very common).Then there's the definition of "disability." Will you be able to be a paper pusher in the same company that you've been operating manual labor for? Are they replacing a percentage of the average salary for someone in your position, or your personal salary itself? (again,  ) It's not just about the doomsday quadriplegic scenario for these companies; it's the "drat my back doesn't feel right but I just had my sixth injection so my health insurance won't cover any more so I can't quite do what I used to but there are no other positions available and I'd lose my benefits if I had to look for another job" etc. scenarios that they have to add up.So the people who get the most bang for their buck with LTD insurance are those who find themselves in a completely irreplaceable position (a surgeon who has no other training but loses the ability to do surgery as the hardcore example). It's not a coincidence that they're the ones most likely able to afford the premiums in the first place.
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Jul 31, 2011 05:28
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Are there any others that are out there that are regarded as good besides Aflac? *Short or long term*
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Jul 31, 2011 23:17
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ashgromnies posted:How would I roll it into an IRA and how do I pick an IRA custodian? Is there a thread with resources on that? I recently did this, it's pretty simple. You just open an empty rollover IRA account at vanguard (all online), they give you an account number, you send a form to your current 401(k) provider, and they transfer the money to that account.
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Aug 1, 2011 23:37
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I'm 27 and I currently contribute 11% of my pre-tax pay to my 401(k) with an additional 6% match from my employer. I currently put about $1,200 a month into a savings account as well. As of next week I will be 100% debt free. Would it make sense to max out my contribution to the $16,500 limit? I figure I would still have about $800 a month to put into savings plus my yearly bonus and restricted stock vesting.
ch3cooh fucked around with this message at 02:47 on Aug 4, 2011 |
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Aug 4, 2011 02:41
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ch3cooh posted:I'm 27 and I currently contribute 11% of my pre-tax pay to my 401(k) with an additional 6% match from my employer. I currently put about $1,200 a month into a savings account as well. As of next week I will be 100% debt free. Would it make sense to max out my contribution to the $16,500 limit? I figure I would still have about $800 a month to put into savings plus my yearly bonus and restricted stock vesting. Are you maxing out the available $5k for a Roth before putting more into your 401(k)? It sounds like you're saving enough money that you'd want distributions rather than contributions to be tax-free. If there's more match available from your employer though, that takes precedence.
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Aug 4, 2011 03:33
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AreWeDrunkYet posted:Are you maxing out the available $5k for a Roth before putting more into your 401(k)? It sounds like you're saving enough money that you'd want distributions rather than contributions to be tax-free. Roth isn't very appealing, because of my AGI I can't make the max contribution and I'm probably only a couple years from being disqualified completely. What is the general opinion on BlackRock? I have an uncle who works there and my dad thought it might be a good idea to give him a call.
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Aug 4, 2011 03:38
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ch3cooh posted:Roth isn't very appealing, because of my AGI I can't make the max contribution and I'm probably only a couple years from being disqualified completely. Comes down to personal preference and your 401(k) options then. You have to sit down and assess how accessible you want your savings to be - do you have plans to make any large purchases or put a down payment on any sort of visible horizon? Do you have any plans, or even any chance of, starting a business? Are there any possible contingencies that could require access to your money - how secure is your job, do you possibly see yourself wanting out of your job, is there any chance you'd want to relocate, etc, etc, etc. Once you've decided how much money you're absolutely secure about not wanting to access without penalty, the question is whether your 401(k) has solid, low-cost options that match all of your investment objectives? If so, and if you've gotten through all those conditionals, go ahead and increase your contributions.
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Aug 4, 2011 04:07
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AreWeDrunkYet posted:Are you maxing out the available $5k for a Roth before putting more into your 401(k)?  I think I picked the worlds worst ETF's to invest in.
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Aug 4, 2011 06:11
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syphon posted:Bleh, I opened a Roth about a month ago. I know its a long term investment and I shouldn't be checking it every day, but that poo poo's gone down almost 10% since I opened it. Markets have been sliding since then, as a long-term investment, you shouldn't be overly concerned with the returns in a single month. Every one of my equity ETFs are taking it in the pooper right now, but I'm looking to rebalance out of bonds into more equities.
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Aug 4, 2011 13:02
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syphon posted:Bleh, I opened a Roth about a month ago. I know its a long term investment and I shouldn't be checking it every day, but that poo poo's gone down almost 10% since I opened it. No, you picked the month where there has been a fair amount of panic about the ~debt ceiling~ and there's been a little bit of  going around (plus our economy IS still in the shitter woooooooo yes I know the debt ceiling is only a tiny part of a huge rear end sandwich). By the time you're 65, no one will remember this dip.Unless you picked an ETF on Congressional Efficiency I think you shouldn't worry. eta: Oh drat, mine's been going down steadily since May too. THANKS FOR MAKING ME CHECK, JERK
Eggplant Wizard fucked around with this message at 14:22 on Aug 4, 2011 |
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Aug 4, 2011 14:20
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Same here - started my roth for the first time in April, with $5k, and all it's done is lose $300. I know not to worry, but it's still always a bit disappointing when I check it.
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Aug 4, 2011 14:46
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ch3cooh posted:Roth isn't very appealing, because of my AGI I can't make the max contribution and I'm probably only a couple years from being disqualified completely. Can you make any contribution? If you are single and not all the way at the upper limit you could do both. A 401K can reduce your MAGI and be used to get you under the IRA contribution max limit. It depends entirely on your situation and available funds, but if you were able to get it down, the ROTH is a very attractive savings vehicle. It gives you some liquidity before retirement, a lot of flexibility after retirement and frankly, your nuts if you think Tax rates are going anywhere but up after the last 30 years and current fiscal situation. Roth contributions have much lower annual contribution limits and a lower ratio of catchup bonus over 55. This means that missing a single year can be more detrimental
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Aug 4, 2011 14:50
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ch3cooh posted:Roth isn't very appealing, because of my AGI I can't make the max contribution and I'm probably only a couple years from being disqualified completely. If you're restricted on the Roth, I'd still consider opening a regular IRA account and maxing it out before maxing out your 401k since you have more control over the funds in an IRA. That is unless your 401k is loaded with low cost fund choices, but that's not often the case. I have no opinion on BlackRock, but I wouldn't choose a company just because a family member works there. It's not a good basis for choosing a company that works well for you, and there can be animosity or difficulty if down the road you wanted to change companies and your uncle was your account manager.
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Aug 4, 2011 14:53
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Inept posted:If you're restricted on the Roth, I'd still consider opening a regular IRA account and maxing it out before maxing out your 401k since you have more control over the funds in an IRA. That is unless your 401k is loaded with low cost fund choices, but that's not often the case. Unless the expenses of the funds available in the 401k are greater than the 6% match he's getting by contributing to them, I don't think that's very good advice.
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Aug 4, 2011 15:16
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bam thwok posted:Unless the expenses of the funds available in the 401k are greater than the 6% match he's getting by contributing to them, I don't think that's very good advice. I would imagine he's discussing what to do with the funds over the match amount.
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Aug 4, 2011 15:46
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TraderStav posted:I would imagine he's discussing what to do with the funds over the match amount. This... makes sense.
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Aug 4, 2011 16:04
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Blackrock runs the TSP which is about the best 401k type option out there, expense ratio wise. All that said, the actual administration of the fund is a joke considering the number of participants and what they could do with minimal effort. The website and tracking tools are poor at best, but I will suffer through all of that for a <.03% ER International Fund.
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Aug 4, 2011 17:13
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So how much cash should I be saving vs retirement accounts? I don't really have a good understanding of this. Right now I put $5k/year of my savings into a Roth that is at around $15k. I just became eligible for my company's 401k plan which goes into "JPMorgan SmartRetirement 2050 R2", but don't know how much to contribute. Unfortunately, it does not look like my company matches (they let me enter the full $16.5k). I currently save about $3000/mo which I'm comfortable with. If I were to max out my 401k it would cut my cash savings rate down to below $2k which feels tight. Things I would need cash for are: my emergency fund, downpayment on a house in the next 5 or so years, traveling, and it would like to be able to replace my car sometime in the next few years.
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Aug 4, 2011 18:03
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ynotony posted:So how much cash should I be saving vs retirement accounts? I don't really have a good understanding of this. The 16.5k is non-inclusive of your match. For example, if your company has a 10% match, and you made 165,000, you could contribute 16.5 and your company could do the same, giving you 33k annually. (There is a 40k total contribution limit, but very few employers give more than 1:1 matches) Also, with almost no exceptions there are options for you to change your plan from that fund. Ask your HR and see what other options are available for you as well as any possible match details. To your question. Savings is a target number that you just get to and stop (until you get below). Something equal to 6-8 months living expenses. Retirement however, is more of a percentage of gross because the number is so large. If you are saving $3k a month and able to contribute to a Roth IRA, my money is on the fact that you already have your savings number for at least your emergency fund. Saving $3000 a month in cash (for someone able to contribute to a Roth IRA) without a definite goal may not be so wise given the poor savings interest rates available. If you posted some numbers, more information specific information could be given. KennyG fucked around with this message at 18:41 on Aug 4, 2011 |
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Aug 4, 2011 18:37
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ynotony posted:So how much cash should I be saving vs retirement accounts? I don't really have a good understanding of this.
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Aug 4, 2011 18:47
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gvibes posted:I would generally say that it's a good idea to max out your 401(k) if you can, even if it means you have to wait a little while longer to save for a downpayment (worst case scenario, you can borrow from your IRA, I think, to fund a downpayment - double check me on that though). You can buy a home any time, but you never get that opportunity back to make that $16.5k tax-advantaged investment. Borrowing from a 401k is BAD as getting fired (or in any way no longer being employed with that company) will make that money due very quickly and could mean you have to pay major taxes if it gets treated as ordinary income. Withdrawing from your Roth IRA is a less bad option as you can take out up to the principle without paying a penalty. Unfortunatly though, you can't put it back in. I am pretty sure that you can't take an IRA loan in the way that you can take a 401k loan source. That does talk about using your IRA as a 60 day bridge loan but that's not what you want to do, pretty much ever. If nothing else, given the really poor interest rates, you'd be better off just sinking more money into your retirement for as long as you don't think you will buy a home and getting in front of the curve, and then focus on saving for a house if and when you decide to do that, even if it means cutting back (not stopping) temporarily on your retirement savings.
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Aug 4, 2011 19:42
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KennyG posted:To your question. Savings is a target number that you just get to and stop (until you get below). Something equal to 6-8 months living expenses. Retirement however, is more of a percentage of gross because the number is so large. If you are saving $3k a month and able to contribute to a Roth IRA, my money is on the fact that you already have your savings number for at least your emergency fund. My employer does not match, so I guess I'm on my own. I'd rather not go into too much detail but yes, I have about 2 years in an "emergency fund" which really does not need to grow anymore. Given my personal goals, 2 years is what I've decided is comfortable for me (may want to take that time off from a paycheck to pursue some things, for instance). Given my take home and my budget, $3k is a very safe estimation for the amount of "I really don't need to touch for anything" money. Not even for the occasional one-time expenses like gifts, travel, moving/furnishing, car repairs, etc. In my head, that $3k/mo could potentially be used on a new car in a few years ($15k) if I wanted one. A downpayment for a house if I wanted one. Or some mystery thing I don't even know about. And that is the trouble. I don't know what I will want/need in a few years, which is why my savings number is a moving target.
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Aug 4, 2011 21:27
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ynotony posted:My employer does not match, so I guess I'm on my own. As you are in a very positive financial situation, I highly recommend you read The Millionaire Next Door and further extend it. You are in a prime position for financial greatness, which equates to a great lifestyle of your choosing.
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Aug 4, 2011 21:36
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In the next month or so, I'll be getting a little over $11,000 shortly from a savings account held for me till I turned 25. Accounts currently:
I pay off my credit cards every month and my only debt is $17,500 student loans, deferred for another 2-3 years while I'm in school. So my question is. Of $11k, I'm going to put $2500 in the Roth. I'll probably put another $2000 in the ING Savings just to bulk it back up. What about the other $6500? I'm open to dumping more of it into the ING Savings. If I want to put more in my brokerage account, what would be good funds? Right now I notice I only have US funds and I think it might be good to get some international exposure? I'm pretty hands-off and so I prefer to go with ETFs and mutual funds rather than individual stocks. Any thoughts?
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Aug 5, 2011 16:28
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Eggplant Wizard posted:In the next month or so, I'll be getting a little over $11,000 shortly from a savings account held for me till I turned 25. I'm of the position that your best position right now would be to get as debt-free as possible. You already have habits that are in that direction, but have $17.5k in student loans that will take some time to pay off and take a good chunk out of your cash flow later. I'd suggest dropping as much as possible on the student loan, so that you can make that debt go away before you leave college and start acquiring more debt. The best situation would be that you leave college and start paying for things in cash (car, house, etc), but that's unlikely so you want to bring your monthly fixed cost down to a bare minimum. Also, focus less on the location of your investments, but more on the size of them. At this age and account size, your performance is the smallest factor in the growth of the portfolio.
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Aug 5, 2011 16:39
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Oh, I should have said. I'm in grad school, not college. I live on my own & pay rent and all those good things. As a TA I make about $25k a year. If I start repaying my loan now, I'll have to keep doing it, and while I have the cash, I'm not sure it'd be that good of an idea to spend my entire cushion. I'm planning on dumping a bunch of cash into the loan as soon as I graduate though. That is sortakinda what the brokerage account is destined for ultimately. I do not have a car because I don't have the extra every month to make me feel comfortable paying insurance instead of savings. I don't really need one at the moment and walking/biking keeps me skinny!
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Aug 5, 2011 18:35
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Eggplant Wizard posted:Oh, I should have said. I'm in grad school, not college. I live on my own & pay rent and all those good things. As a TA I make about $25k a year. If I start repaying my loan now, I'll have to keep doing it, and while I have the cash, I'm not sure it'd be that good of an idea to spend my entire cushion. I'm planning on dumping a bunch of cash into the loan as soon as I graduate though. That is sortakinda what the brokerage account is destined for ultimately. In that case, don't do anything with it. Put it aside for a year or two (2% or 6% on that amount of money is quite insignificant) until your immediate term outlook is more stabilized. Then, if you don't NEED it then, pay down the debt. In any event, you will have it there if you need it in the short-term, and you'll have it later if you don't!
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Aug 5, 2011 18:53
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Fair enough. Thanks
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Aug 5, 2011 21:38
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One suggestion, max out the Roth. Your contributions (not earnings) to the Roth IRA can be taken out at anytime penalty free. So if an emergency does strike, you have easy access to the cash. Since the Roth is an annual "use it or lose it" deal, you'd be missing out on a $2500 contribution this year. Also, the earlier you build that up, the more tax free earnings you'll make over the next 40 years. ING is sort of a waste with an interest rate of 1%. And anything you plan to do in the brokerage account can likely be done in the Roth. The only downside I see is if you planned to make a large purchase in the near future and needed to use returns on your investment right away. But if it's just paying off school loans when you get out, don't bother unless the interest rates are high. You'll likely earn more in your Roth than you would paying interest on your school loan. So make a few tax free percentage points off their money. You may even be able to deduct your student loan interest. And if something does come up where you need a large cash quickly, you can just pull the principle out of your Roth with no harm at all.
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Aug 6, 2011 12:54
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Niwrad posted:One suggestion, max out the Roth. Your contributions (not earnings) to the Roth IRA can be taken out at anytime penalty free. So if an emergency does strike, you have easy access to the cash. Since the Roth is an annual "use it or lose it" deal, you'd be missing out on a $2500 contribution this year. Also, the earlier you build that up, the more tax free earnings you'll make over the next 40 years. Totally forgot about the Roth this way. Do this! But don't daytrade or by risky stuff. You're goal is to not miss contribution years, not performance.
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Aug 6, 2011 14:17
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Niwrad posted:One suggestion, max out the Roth. Your contributions (not earnings) to the Roth IRA can be taken out at anytime penalty free. So if an emergency does strike, you have easy access to the cash. Since the Roth is an annual "use it or lose it" deal, you'd be missing out on a $2500 contribution this year. Also, the earlier you build that up, the more tax free earnings you'll make over the next 40 years. I am definitely planning to max the Roth and to continue doing so as long as I can (eta: Just did it ). My Roth is my only retirement account so I plan on leaving the money there, but I am aware that I can pull the principal out which is a nice for peace of mind. And thankfully the loan in question is a federal direct subsidized, so there's no interest till I start paying it. Daytrading is so, so not me. I was more wondering whether it'd be good to add money to those funds now since things have gone to poo poo again on Wall St. and chances are good that before I die it'll have recovered a bit. Another 50 years should be enough to get us out of it, right? 
Eggplant Wizard fucked around with this message at 15:39 on Aug 6, 2011 |
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Aug 6, 2011 15:32
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Eggplant Wizard posted:And thankfully the loan in question is a federal direct subsidized, so there's no interest till I start paying it. I'm conflicted about what to do with my student loans as well. I just started a federal job and as far as retirement goes, I get an employer match up to 5%, so I am putting aside 5% of my income for retirement to get the full 10% contribution. It's actually slightly less than 10% since I have employer match dollar for dollar on 3%, then 50 cents on the dollar for 2%. At the end of each month, I have an extra $1600. This is mostly because my student loans don't go into repayment until March 2012. Once student loans kick into repayment, I'll have a minimum payment of $690/month and my extra income will go down. My instinct is to throw all of my extra money toward my enormous student loan debt ($60k at 6.8%- all federal stafford loans) since there's no early repayment penalty and I stand to save around $14k in interest if I pay the loans off in 4 years instead of 10. However, I'm also wondering if I should put more toward retirement. I was thinking $400/month into a Roth IRA and $1200/month toward the student loans might be better, but the psychological burden of such a huge debt makes me want to just be done with the student loans. Any opinions?
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Aug 6, 2011 16:24
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amethystbliss posted:Are you sure about this? I've been making (very small) payments on my stafford loans for a few years now even though I'm a student, and they still don't officially go into repayment until my grace period is over in March 2012. The logical thing would be the Roth because when you don't contribute for a year you've lost that year. But I could see the argument for either way. Whatever you do, don't get used to having this extra 1600. Start paying it now even though it doesn't start until March. That way you won't miss it.
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Aug 6, 2011 16:58
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