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Ganon posted:My plan is just to assume we'll all be dead by then from peak oil/climate change or President Bachmann starts WW3 or something. That's my plan as well!
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Nov 17, 2011 18:22
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KarmaCandy posted:if you don't plan on staying with your employer for the rest of your life, you'll be able to roll that over at some point into an IRA and choose to invest it in anything at some point. This is my first job with a 401k match and I've never had great choices, but unless they're really, really bad, there's usually one low rate boring fund you can put all your money into and then roll it over. An interesting point that I hadn't though much about, thanks for giving me something to consider. Though the 401k plan through my employer is still pretty bad, especially since there's no employer match. Yeah, yeah, the tax advantages etc., but eh. Maybe I'll enroll before the tax year is out and throw a bunch of money into it. I've really been more concerned with paying off all my student debt and my car loan the past 2 years, since that ~$35k in debt would be growing a lot faster than the crummy returns in some half-rate 401k funds. Since pretty much all of my large debts will be paid off at the end of this year, I'll be reworking my saving and investment strategy significantly next year since I'll have something like an extra $1000-$1500/mo that won't be going toward loan (over)payments. Getting out of debt ASAP and establishing a good cash cushion has been priority #1 since graduating 2 years ago, and now that that goal is almost accomplished I've got a lot of replanning to do. Guinness fucked around with this message at 20:47 on Nov 17, 2011 |
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Nov 17, 2011 20:43
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One thing to remember, Guinness, is that 401(k) contributions must be made from payroll deductions (You can not give a check to your employer to make a cash deposit.) This means that you have maybe 3/26ths of your income as an upper limit that you can contribute for this year (and possilby any bonuses that will be paid before Dec 31.) Just a quick example of how bad a bad 401k plan has to be to overwhelm the advantage of tax preference. Assume that you have maxed your ROTH and are now deciding purely between investing 10,000 after tax dollars. If you were Single with no kids, and making $75k with 0 other applicable deductions, you'd save $2,500 on your Fed taxes and likely about $500 on your state (if you had one). If your asset allocation yielded 6% but after a 2% expense ratio was 4%, your $13,000 investment is now at $13,520 - which can stay 100% put with 0 immediate tax liability. You then pay the taxes at the effective rate, rahter than the margina rate and can likely achieve a ~15% tax liability. On the other hand, even if you put that $10,000 in an amazing, subsidized .0001% expense ratio fund, you'll need to find 11.5% growth to get what your BAD 401k gave you. Then, after the fact, you have to pay tax on that $1,492! Even if everything was long term, and at the preferential 15% rate, you'd need to find $2,131.43! Finding reliable 6% returns is a whole lot easier/more likely than consistant 21% returns in any market! Also, don't forget the fact that the second you leave your current job, that money is yours - to put with any custodian you choose. It's been said a million times 401K to the match, ROTH to the limit, then 401k to the limit, then taxible as a vehicle of last resort. The above example should make it pretty clear why taxible funds are not a good idea when you have a 401k (even a lovely one) available. KennyG fucked around with this message at 20:24 on Nov 18, 2011 |
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Nov 18, 2011 20:18
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If I have the 401k with match and the SDRP, do I also need to try to do the ROTH? Vanguard also allows us to do Roth or standard 401k, but the matching would all go to standard. Should we (my wife and I work at the same company) split our contributions or 1 of us do Roth and 1 do standard or something? I am terrified of retiring poor and destitute.
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Nov 18, 2011 20:37
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Is there an easy way to determine what the taxable portion or percentage on a 401k to Roth IRA transfer would be? I've got like 3k sitting in an old old employer 401k that I'd like to throw in to a new Vanguard account to get the ball rolling. I just want to make sure I get the tax thing straight.
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Nov 19, 2011 15:26
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Untagged posted:Is there an easy way to determine what the taxable portion or percentage on a 401k to Roth IRA transfer would be? I've got like 3k sitting in an old old employer 401k that I'd like to throw in to a new Vanguard account to get the ball rolling. I just want to make sure I get the tax thing straight. It will be taxed as income at your personal rate, plus another 10% penalty. So I believe they'll withhold 20% plus the 10% penalty. On 3000, you're looking at 900 in withholding off the bat, and probably only getting a fraction of it back. Any reason you want to convert it to a Roth instead of a traditional rollover IRA?
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Nov 19, 2011 16:29
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I apologize in advance if this isn't the right thread for this question. Let's say you have a credit card with a balance just slightly below the credit limit before the end of your billing cycle. When your new statement is generated and the month's worth of interest is added onto your balance, that causes the balance to increase above the limit. Will you immediately be charged an over the limit fee and bumped to the penalty interest rate? Will that happen the next time you charge any actual purchase to the card (assuming you don't pay it down below the limit first)? Or is there some mechanism that automatically raises your limit to account for interest and fees charged by the card company itself?
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Nov 19, 2011 17:29
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Smilin Joe Fission posted:I apologize in advance if this isn't the right thread for this question. I don't know, but something tells me that they'll find a way to ding you if you give them even the slightest chance. And honestly, you have bigger issues if you're worried about a penalty interest rate if you go over your limit.
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Nov 19, 2011 17:33
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Mobius posted:It will be taxed as income at your personal rate, plus another 10% penalty. So I believe they'll withhold 20% plus the 10% penalty. On 3000, you're looking at 900 in withholding off the bat, and probably only getting a fraction of it back. Any reason you want to convert it to a Roth instead of a traditional rollover IRA? Almost right. You are not charged the 10% penalty. As to why you would do it, it makes sense to pay $750 (assuming the 25% tax bracket) in taxes today and have it grow tax free forever.
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Nov 19, 2011 17:37
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Fraternite posted:I don't know, but something tells me that they'll find a way to ding you if you give them even the slightest chance. Yeah, I've been working under the assumption that they'll probably count it against me even if I didn't actually make the transaction that put the balance over the limit. I called the customer service number and nobody I talked with even knew the answer to that.
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Nov 19, 2011 17:48
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Zeta Taskforce posted:Almost right. You are not charged the 10% penalty. As to why you would do it, it makes sense to pay $750 (assuming the 25% tax bracket) in taxes today and have it grow tax free forever. So are the rules just completely different for converting to a Roth than withdrawing? Why no penalty?
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Nov 19, 2011 18:27
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Mobius posted:So are the rules just completely different for converting to a Roth than withdrawing? Why no penalty? There are a handful of exceptions to the penalty always applying when you take money out of a traditional. Such as first time house purchase. Or if you are out of work you can use it to buy health insurance. Transferring to another retirement vehicle is one of the exceptions.
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Nov 19, 2011 18:41
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Mobius posted:Any reason you want to convert it to a Roth instead of a traditional rollover IRA? Zeta Taskforce posted:Almost right. You are not charged the 10% penalty. As to why you would do it, it makes sense to pay $750 (assuming the 25% tax bracket) in taxes today and have it grow tax free forever. That is pretty much why. I know it's not much, but because of the other thread I'm realizing now that the 457 I have with my new employer and it's high expense ratio, etc. should be secondary to a Roth IRA. So at this time I'm going through the process of combining what I have at various places and rolling it all over. Depending upon the taxes/fees would make the difference. Of course the main benefit of the 457 is early withdrawal compared to the other programs.
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Nov 19, 2011 19:05
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Smilin Joe Fission posted:I apologize in advance if this isn't the right thread for this question. No, interest isn't capitalized (added to the balance). It only appears that way...it's actually removed from your payment.
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Nov 20, 2011 00:57
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LorneReams posted:No, interest isn't capitalized (added to the balance). It only appears that way...it's actually removed from your payment. So you mean that if I had a balance of $9,990 and credit limit of $10,000 at the end of the month, the interest I'm being charged would not be added to my balance, thereby putting me over the limit? I'd always thought that's how it worked, but it's the kind of thing the companies aren't exactly forthcoming about.
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Nov 20, 2011 01:46
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I'm a total newbie to pretty much all things finance, and I have a couple questions. I hope they're not totally stupid, but they weren't exactly answered by the OP either. I just got a new job about a month and a half ago after being unemployed for a while. I've got this "to buy" list compiled, and it totals out to about $1500 worth of stuff. For the past few paychecks, I've been buying one thing per paycheck. But some of the items on there cost more than I'll allow myself to spend in one paycheck. Also, I still live with my parents. I'm 21, and I'd love to move out, but I've just never had the adequate funds, and honestly, I still don't think I do. I'll wait until I get a promotion or something to do that. But when I do move out, I'll likely look for an apartment in a complex, and I've been told that pretty much all complexes (in my area, at least) run your credit when you apply to rent there. I've never had anything but a debit card, so my credit is nonexistent then? Or do I just have some base credit number that everyone has before they start paying their debt off / going into debt and not being able to pay it off? Now, for all those things I want to buy and based on the information I've given so far, should I sign up for a credit card? I'd want something with no monthly fees, but don't all of them have that? I see that on a lot of credit card commercials. Assuming I get a credit card and buy $1000 worth of stuff on it now, I'd be able to put forth probably $200 from each paycheck to go towards paying that off. And I get paid biweekly. So is there one that lets you pay like that? Or are they all set up to let you do that? If I'm able to make payments on time and pay it off within a few paychecks, then my credit rating will go up, right? And apartment complexes...are they likely to approve you if you're over a certain credit score or do you have to have really above-average credit, usually? Apologies for the long post but I'm just interested to know if I should get something going soon, and I didn't want to skimp on the information. Any explanation/advice you guys can give me is much appreciated.
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Nov 20, 2011 03:42
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Rageaholic Monkey posted:I'm a total newbie to pretty much all things finance, and I have a couple questions. I hope they're not totally stupid, but they weren't exactly answered by the OP either. Landlords can/will most likely run your credit. You can still rent with no credit, depending on the landlords and how they feel about it, though it may be easier to apply with a guarantor. Basically, someone will have to share your liability to pay so that if you can't make the payments, they'll be held responsible and the landlord will still receive their money. It's plenty easy to find a credit card without a monthly fee. Typically, if a card comes with a hard fee you have to pay regardless of usage it'll be an annual fee. These can vary, but $150 or so is pretty common. As for 'monthly fees', I actually don't know that I've heard of anything along those lines unless you carry a balance (don't pay the card off IN FULL every pay period). At that point, you're subject to your interest rate. The published interest rate, varying from say...12.99% to 29.99% or so, is where this comes into place. If you leave $100 on the card to pay off every month, you'll be charged whatever your interest rate is. If your interest rate is 20%, then you'll pay $120 the next month to pay off the $100 retained from the month previous. In short, DO NOT CARRY A BALANCE. PAY IT OFF IN FULL EVERY MONTH!!!. This is a money pit that gets a lot of people in a lot of trouble. If you can't afford to pay the balance monthly, don't buy it! Take a few months to save up. Dead Pressed fucked around with this message at 03:57 on Nov 20, 2011 |
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Nov 20, 2011 03:55
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Ah, okay. So if I bought $1000 worth of stuff on it and was only able to pay, say, $400 a month on it, the remaining $600 would turn into $720 if my card had an interest rate of 20%? And then if I was only able to pay the same amount the next month ($400) on that remaining $720, the remaining $320 would turn into $384 and so on and so forth? I mean, there wouldn't be a so on and so forth since I'd be able to pay that $384 off in a month, but I just want to clarify for future months in case I spent more than $1000 and couldn't pay it off in 3 months. Do you think getting a credit card would even be worth it since I'd pretty much have to carry a balance with the situation I'm referring to? Or should I just stick to buying with my debit card now and wait to get a credit card later when it's viable for me to pay in full every month?
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Nov 20, 2011 04:05
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Never get a credit card with an intent to buy more things than you can afford at the moment. They're not a tool to get more money than you have, they're a tool to save you from having to carry around $400 in cash in your wallet when you want to go to the grocery store. If some things you want are more expensive than you can buy with a single paycheck, then take a portion of that paycheck and set it aside each pay period until you have enough money to be able to buy them, then pay for it in cash or use your credit card knowing you can pay it off immediately. The absolute biggest financial mistake anyone can make in their younger years is getting used to the idea of spending more money than they have in the bank. It's such a bad way of thinking and will often turn into a lifelong habit. Please avoid it at all costs! Since you're living with your parents you're likely not about to be living on the street or starving to death, and everything else can wait until you've saved up. If you really don't think you can handle having a credit card that you don't overspend with, then get a really tiny limit one (like, $500) to build credit history and stick with just that one.
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Nov 20, 2011 04:16
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Rageaholic Monkey posted:Ah, okay. So if I bought $1000 worth of stuff on it and was only able to pay, say, $400 a month on it, the remaining $600 would turn into $720 if my card had an interest rate of 20%? And then if I was only able to pay the same amount the next month ($400) on that remaining $720, the remaining $320 would turn into $384 and so on and so forth? No, the interest is an annual percentage, not monthly. You should definitely get a credit card now if you can find a place that will give you one. A big part of your credit score is how long you've had an active credit account in good standing. You'll still help your credit if you get the card, only put a little on it, and then pay it off each month.
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Nov 20, 2011 04:23
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Rageaholic Monkey posted:Ah, okay. So if I bought $1000 worth of stuff on it and was only able to pay, say, $400 a month on it, the remaining $600 would turn into $720 if my card had an interest rate of 20%? And then if I was only able to pay the same amount the next month ($400) on that remaining $720, the remaining $320 would turn into $384 and so on and so forth? Yes. The scenario you've typed up is how it would work (note the above comment about it being an annual percentage rate, or APR. You'd actually take that rate and divide it by 12 to get your monthly charges. I inadvertently oversimplified it). That's still a lot of money you'd be spending to borrow it for such a short time, eh? That's where they get you! Having a credit card is a nice luxury. There's nothing wrong with cards if you can use them wisely. The trick is to use them like a debit card. You physically can not spend more than you have with a debit card. Use a credit card with that same mentality. If there's something you want, save up for the couple of months until you can. If you're successfully using a debit card without overdrafting, there's no reason you can't do the same with a credit card. Dead Pressed fucked around with this message at 04:28 on Nov 20, 2011 |
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Nov 20, 2011 04:25
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Besides building your credit score, you can also get some small rewards for using a credit card for those purchases. Why not take advantage of a percent or two of cash back? Just don't carry a balance.
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Nov 20, 2011 04:27
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Okay, cool. So basically keep doing what I'm doing now (buying only one thing per paycheck that I can afford), but do it on a credit card in order to build up my credit standing?
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Nov 20, 2011 04:30
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Rageaholic Monkey posted:Okay, cool. So basically keep doing what I'm doing now (buying only one thing per paycheck that I can afford), but do it on a credit card in order to build up my credit standing? Yep. Worst case buy a candy bar and pay it off each month. I personally would recommend 2-3 credit cards (dont need to get both immediately) long term to get a good score. Like the above person said, get a rewards card and you'll gain a slight amount of money for your efforts. Just always always pay it off.
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Nov 20, 2011 06:31
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Rageaholic Monkey posted:Okay, cool. So basically keep doing what I'm doing now (buying only one thing per paycheck that I can afford), but do it on a credit card in order to build up my credit standing? Still, I cannot emphasize enough that you should NEVER CARRY A BALANCE. Do not ever ever get into credit card debt. It's easy to trick yourself into thinking you'll be the exception, but once you start charging more than you have in the bank, you're pretty much gambling with your financial security.
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Nov 20, 2011 06:47
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Smilin Joe Fission posted:So you mean that if I had a balance of $9,990 and credit limit of $10,000 at the end of the month, the interest I'm being charged would not be added to my balance, thereby putting me over the limit? This has happened to me a couple of times on my Wells Fargo card, and they just put a note when I login to the account and it says "Pay this immediately!" and I always do and nothing bad has happened.
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Nov 20, 2011 07:21
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Alright, that clears things up  So I'll go on the lookout for a rewards card and maybe even get my parents to sign off on it with me. I'm not planning on buying up real estate or anything, just smaller, hobby-related things like camera gear and computer upgrades and poo poo, so hopefully they'll be okay with it. I'm not planning on getting myself into debt. Just wondering how everything worked in regards to that. And now that I have a basic idea, I think I'll do okay with it. Thanks for the explanation!
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Nov 20, 2011 10:08
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Is it better to put as much as your money as you can into your 401k as you can to avoid taxes? I recently started a new job where I make more money than previously. My new employer matches 5% with their stock I believe. So right now I just have 5% going in. However now with the new job, I pay a lot more taxes. So is it better to try to max out your 401k to avoid taxes as much as possible?
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Nov 20, 2011 17:38
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TLG James posted:Is it better to put as much as your money as you can into your 401k as you can to avoid taxes? Rule of thumb is put in what your employer matches then start a Roth IRA for the rest. You're not avoiding taxes because when you retire you're going to pay taxes on it. A Roth IRA is post-tax so you've already paid.
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Nov 20, 2011 17:44
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Moniker posted:Rule of thumb is put in what your employer matches then start a Roth IRA for the rest. You're not avoiding taxes because when you retire you're going to pay taxes on it. A Roth IRA is post-tax so you've already paid. K, thanks. My previous employer didn't have any matching funds so I already had a Roth going, I'll just increase my contributions to it.
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Nov 20, 2011 17:56
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So, in the past couple of months I got my first credit card, which I've been using to build a positive credit history. This was the sort of general idea that was communicated to me by people I know, and the guy at the BoA branch that I spoke with. Reading the OP though, it seems like this doesn't actually do much? Also, I'm very careful to always pay what I spend on it, if not immediately, within the next three days. I don't buy what I can't afford out of pocket. But I just did some reading, and because I've been doing that, I always have 0.00 statements. From what I've read, that makes it seem to credit companies like I don't use the card at all? Am I wasting my time with this?
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Nov 20, 2011 18:37
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They definitely know if you are using your card or not because they made money off of the transactions you make. Also, if you don't use your card at all, you may start getting hit by inactivity fees. I'm pretty sure the general consensus is that as long as you don't carry a balance, having a credit card for a long time is neutral at worst. In other words, keep doing what you're doing because it doesn't hurt.
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Nov 20, 2011 18:42
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Anonymous Robot posted:Reading the OP though, it seems like this doesn't actually do much? Also, I'm very careful to always pay what I spend on it, if not immediately, within the next three days. I don't buy what I can't afford out of pocket. Shine fucked around with this message at 18:49 on Nov 20, 2011 |
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Nov 20, 2011 18:46
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Length of time that each line of credit has been extended to you is also a factor in credit score. As long as you're not getting nailed by fees, keep the card open.
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Nov 20, 2011 18:47
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Anonymous Robot posted:So, in the past couple of months I got my first credit card, which I've been using to build a positive credit history. This was the sort of general idea that was communicated to me by people I know, and the guy at the BoA branch that I spoke with. Make smart financial decisions and your credit will look after itself. I've never tried to improve my credit score on purpose, I make my payments on time for loans/bills. I pay off my credit card the day it shows up on my account usually, and i've got excellent credit. Really, credit isn't something that you can rush, you just build it up over time, don't worry about it as long as you keep your finances in good standing.
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Nov 21, 2011 21:15
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Is there a good resource available that compiles various balance transfer promotions offered by credit card companies?
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Nov 22, 2011 19:28
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William Lee posted:Is there a good resource available that compiles various balance transfer promotions offered by credit card companies? As much as I feel dirty about going there, fatwallet is a pretty spergy source for this sort of data.
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Nov 22, 2011 19:36
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Does anyone have experience with dealing with fraudulent charges with American Express? I noticed someone spent $300 on my card at a yoga clothing store in Los Angeles (I'm in Texas) on Sunday. I opened a dispute with American Express and the CSR told me that my card was physically swiped at the store (how is that even possible  ). Now to wait. I hope they don't turn down my dispute just because it was somehow "swiped".
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Nov 22, 2011 21:20
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Amex is usually pretty good with stuff like this. They will probably ask you to sign a statement that you didn't make this purchase and will give you a credit. Most likely someone skimmed your credit card number and wrote it to a dummy card. It's easy to do and if the merchant is lazy and doesn't check easy to get away with.
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Nov 22, 2011 21:27
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Stupid question: My wife unfortunately got scammed by a crying, apparently pregnant woman. The classic "my car broke down and I need to get home" thing, wouldn't take the $20 she had and walked her to an ATM to pull out $160 with a promise to pay her back and probably some fake information. Sigh. She's really embarrassed by the whole thing, and called me immediately afterwards. I tried calling the mall in the area where this happened to report an aggressive panhandler (it is illegal to solicit that close to an ATM for exactly this reason), and got transferred around to a few departments but the long and short is no one cares - not surprising. My question is, there is almost certainly no way to recover this money, correct? It was an ATM transaction made under a type of emotional duress, but the card was never taken or used by anyone else. For the amount of money, it's big enough that it bugs me but not big enough for anyone else to care.
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Nov 23, 2011 00:24
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