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I have around 3k in a 401k from my last employer, currently managed by Fidelity. What should I do with this? I feel like I should roll it into a personal IRA instead of letting my old employer continue to manage it. How big of a conversion fee am I likely to get hit with? I'm 24 so I obviously won't be using this money for a long time. I'm also self-employed and poor (although on track to make a better salary this year), if that helps to clarify things 
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Mar 19, 2012 12:38
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So I need some advice, folks. I need to start working on a retirement fund and want to make sure I do it intelligently. Background: I'm 24 and just graduated from college, debt free thanks to scholarships and family. I just started a temp/student job that will last me for the next year and a half, through at least summer 2013. After that I may be starting a graduate program or looking for another job, possibly both. If I'm lucky I'll make $15k this year. My job does not contribute anything towards any retirement plans. I live with my boyfriend and together we have almost $10k in savings ($3k in his credit union, $2k in mine, and a shared ING emergency fund of $4.5k). The main push for getting this retirement fund going is that I will be inheriting $10k from my grandma's estate and want to put a good chunk of it away. Since it's below the $13k IRS gift tax I'm pretty sure I won't owe any taxes on this money. I was thinking of putting $5k into an IRA, another $3k into the ING emergency fund, $500 into my savings, and $1.5k for a new mattress and paying rent while I'm away for a month-long trip (already paid for, graduation present). From my research I'm leaning towards a Roth IRA since I now have an income, but that is capped at $5k a year, right? Do I have enough time to open an account for the 2011 tax season so that I can continue to contribute to it this year rather than instantly maxing it out? How will that affect me if I've already filed my taxes for the year? And most importantly, what would you recommend I invest in/what kind of split should I have when I do open an account? Every time I try to research this my brain just glosses over and I'm having a hard time keeping it all straight. Also, I want to help my boyfriend start a retirement account as well so that at least he has something to look forward to when he gets older. He's currently 27 and makes between $25 and $30k/year. His employer does not offer any retirement plans. What would be a good, low minimum account to get him started with? I can probably talk him into putting in $1k right now, so would a Vangaurd target retirement fund be best here? Thanks in advance for your help, goons!
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Mar 20, 2012 02:27
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PerfectTommy posted:So I need some advice, folks. I need to start working on a retirement fund and want to make sure I do it intelligently. Background: I'm 24 and just graduated from college, debt free thanks to scholarships and family. I just started a temp/student job that will last me for the next year and a half, through at least summer 2013. After that I may be starting a graduate program or looking for another job, possibly both. If I'm lucky I'll make $15k this year. My job does not contribute anything towards any retirement plans. I live with my boyfriend and together we have almost $10k in savings ($3k in his credit union, $2k in mine, and a shared ING emergency fund of $4.5k). The main push for getting this retirement fund going is that I will be inheriting $10k from my grandma's estate and want to put a good chunk of it away. Since it's below the $13k IRS gift tax I'm pretty sure I won't owe any taxes on this money. I was thinking of putting $5k into an IRA, another $3k into the ING emergency fund, $500 into my savings, and $1.5k for a new mattress and paying rent while I'm away for a month-long trip (already paid for, graduation present). It looks like you're on the right track on all of that... but $1500 for a MATTRESS??
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Mar 20, 2012 02:55
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PerfectTommy posted:So I need some advice, folks. I need to start working on a retirement fund and want to make sure I do it intelligently. Background: I'm 24 and just graduated from college, debt free thanks to scholarships and family. I just started a temp/student job that will last me for the next year and a half, through at least summer 2013. After that I may be starting a graduate program or looking for another job, possibly both. If I'm lucky I'll make $15k this year. My job does not contribute anything towards any retirement plans. I live with my boyfriend and together we have almost $10k in savings ($3k in his credit union, $2k in mine, and a shared ING emergency fund of $4.5k). The main push for getting this retirement fund going is that I will be inheriting $10k from my grandma's estate and want to put a good chunk of it away. Since it's below the $13k IRS gift tax I'm pretty sure I won't owe any taxes on this money. I was thinking of putting $5k into an IRA, another $3k into the ING emergency fund, $500 into my savings, and $1.5k for a new mattress and paying rent while I'm away for a month-long trip (already paid for, graduation present). No taxes will be owed on the grandma's inheritance due her estate being less than 5 million dollars. You can put all $10,000 in now if you so choose to. You have until April 15th (or whenever the tax deadline) to contribute for 2011. One thing I have to say though is, don't help your boyfriend with starting a retirement account until you're married. I know this is going to seem coldhearted, but look out for #1. $1,000 isn't exactly a hit you should willingly take, especially since a large chunk of your "savings" is in a joint account he can withdraw right before he breaks up with you and you have no recourse. Edit: Not sure if you're female or not, kind of just assumed in my original post. Either way, my point still stands. Harry fucked around with this message at 03:23 on Mar 20, 2012 |
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Mar 20, 2012 03:20
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flowinprose posted:It looks like you're on the right track on all of that... but $1500 for a MATTRESS?? Good mattresses are expensive and fit perfectly in this thread - after all, if you're getting a good night's sleep you do that much better for the interview for that nice high paying job with benefits, right? 
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Mar 20, 2012 04:36
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flowinprose posted:It looks like you're on the right track on all of that... but $1500 for a MATTRESS?? I assumed when he said "$1.5k for a new mattress and paying rent while I'm away for a month-long trip", he meant $1.5k for (a new mattress AND paying rent while I'm away for a month-long trip), not ($1.5k for a new mattress) and ($mystery for paying rent while I'm away for a month-long trip).
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Mar 20, 2012 09:37
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flowinprose posted:It looks like you're on the right track on all of that... but $1500 for a MATTRESS?? You spend almost a third of your life sleeping. Invest in a good one, and it is indeed a long term investment.
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Mar 20, 2012 11:59
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A good mattress provides a lot of benefits: http://www.sleeplikethedead.com/mattress-sex.html
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Mar 20, 2012 17:03
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I opened up a Roth IRA with Vanguard last summer (May of 2011) and contributed the maximum $5,000. Am I eligible to invest $5,000 for 2012 yet or do I need to wait for the 2011 tax deadline last month? Sorry for the basic question, I am having a hard time getting an answer. I know that if I hadn't contributed the max last year I have until the tax deadline to contribute for 2011, but I don't know about options if I DID max out last year. Thanks
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Mar 20, 2012 17:52
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You can contribute to 2012 on Jan. 1, 2012 no matter how much you contributed to 2011.
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Mar 20, 2012 17:54
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Saint Fu posted:You can contribute to 2012 on Jan. 1, 2012 no matter how much you contributed to 2011. Fantastic, thank you. While I am at it, I may as well ask the much more important question: Like I said, last May, I invested $5,000, all into Vanguard Total Stock Market Index. Ultimately, I want to make my account look (approximately) like this: 50% Total Stock Market Index Fund 30% Total International Stock Market Index Fund (VGTSX) 20% Total Bond Market Index Fund (VBMFX) So, ideally, this year, I would put $3,000 into VGTSX and $2,000 into VBMFX, but both have $3,000 minimums. Should I just up my stock market percentages for the current year and buy into the bond market index fund next year or should I look into one of Vanguard's Retirement Fund's instead that is composed of a balance already? (I'm 24 years old, FYI, using age 60 as my retirement planning benchmark) STAT1C_X fucked around with this message at 18:24 on Mar 20, 2012 |
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Mar 20, 2012 18:03
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STAT1C_X posted:Fantastic, thank you. You can buy the equivalent ETFs and there shouldn't be minimums. For the target date funds, VTHRX is the closest to what you want, but it's going to reallocate to bonds much more rapidly than what I imagine someone 35 years from retirement would prefer. The VFIFX is probably more your speed, but if you consider having only 10% in bonds at age 24 to be too aggressive, then I think you'll have to manage your portfolio yourself accordingly.
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Mar 20, 2012 18:38
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There's no way to invest pre-tax other than through my employer's payroll 401k, if I'm already fully funding a Roth IRA, right?
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Mar 20, 2012 19:16
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Well Roth IRAs are post-tax right? I believe you can contribute up to something like $16,500 per year to a pretax IRA or 401(k) whether you contribute to a Roth IRA or not. So you should be able to contribute up to that limit in an IRA through Vanguard or the like without contributing anything to your company 401(k). Someone correct me if I'm wrong.
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Mar 20, 2012 20:43
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Roth IRA is post tax, but there is a combined limit between Roth and Traditional tax-deductible IRA contributions. If you already maxed a Roth, your only option for pre-tax contributions would be a 401k/403b (i.e. employer sponsored retirement account).
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Mar 20, 2012 20:48
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onefish posted:There's no way to invest pre-tax other than through my employer's payroll 401k, if I'm already fully funding a Roth IRA, right? Well there are HSAs, but other than that the next best thing would be tax-deferred or tax-advantaged investments like municipal bonds or annuities. But what's so bad about taxes? bam thwok fucked around with this message at 21:13 on Mar 20, 2012 |
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Mar 20, 2012 21:11
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Is there a recommendation for a vanilla Dow/S&P500 index fund? Would it even be a smart investment if I'm already holding a Dow/Midcap ETF? PRADA SLUT fucked around with this message at 22:52 on Mar 20, 2012 |
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Mar 20, 2012 22:17
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bam thwok posted:Well there are HSAs, but other than that the next best thing would be tax-deferred or tax-advantaged investments like municipal bonds or annuities. But what's so bad about taxes? Thanks. No, nothing's so bad about taxes. The issue is that I don't *currently* max my 401k. I work at a small company, and cannot change my 401k contribution automatically, but have to go through the company accountant. I make a relatively low salary, but live beneath my means anyway and am still saving. But I make little enough as it is--I'd prefer not to let them know that I can afford to save more, since I think that would make them less likely to increase my pay! Which it shouldn't, but I think that might be the psychology. I mean, I have enough of a savings cushion that it would even make sense to max the 401k even if net income went below zero by a bit, since non-retirement savings could cover the difference for a long while. It probably makes sense to bit the bullet and ask to increase or max my 401k after my next raise, though. onefish fucked around with this message at 21:41 on Mar 23, 2012 |
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Mar 20, 2012 22:22
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Maybe it's just me, but if you're denied a raise because you've maxed out your 401K contributions under the pretense that you've got "extra" money, it sound like bullshit company management.
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Mar 20, 2012 22:50
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Harry posted:No taxes will be owed on the grandma's inheritance due her estate being less than 5 million dollars. You can put all $10,000 in now if you so choose to. You have until April 15th (or whenever the tax deadline) to contribute for 2011. I'm not going to be putting my own money into his retirement account, but I would like to help him start an account with his money. He knows less about this stuff than I do and since I'll be starting up my own account anyway, might as well do one for him at the same time. I control most of the finances in our relationship, I don't think he even knows how to log into ING so him taking all of our money before a break up is not likely to happen. Also, I thought Roth IRAs maxed out at $5,000, how could I put all $10,000 in? flowinprose posted:It looks like you're on the right track on all of that... but $1500 for a MATTRESS?? It's not $1500 for a mattress, it's $1500 for both a mattress and rent for a month. But like others have said, good mattresses are expensive.
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Mar 21, 2012 01:05
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PerfectTommy posted:Also, I thought Roth IRAs maxed out at $5,000, how could I put all $10,000 in?
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Mar 21, 2012 03:02
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polyfractal posted:I have around 3k in a 401k from my last employer, currently managed by Fidelity. What should I do with this? I feel like I should roll it into a personal IRA instead of letting my old employer continue to manage it. How big of a conversion fee am I likely to get hit with? Quoting myself...anyone?
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Mar 25, 2012 03:34
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polyfractal posted:I have around 3k in a 401k from my last employer, currently managed by Fidelity. What should I do with this? I feel like I should roll it into a personal IRA instead of letting my old employer continue to manage it. How big of a conversion fee am I likely to get hit with? In my experience, you shouldn't get hit with a fee for the rollover. You'll get hit with taxes if you then convert it to Roth, but that's it.
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Mar 25, 2012 03:40
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I'm trying to get my fiancee to switch from Thrivent to Vanguard. Thrivent has an up front 4-5% fee and about a 1% expense ratio. All of her money is currently in one fund, I think it's a conservative allocation. I'm not sure how much she is making off that fund. I need to find some good points against Thrivent and probably 3 funds for Vanguard. I'm thinking right now, Total Bond, Total Stock and REIT, which is what I guess I'd do if i had as much money as she does. Maybe more % in bonds. She could do admiralty on all of those too. She likes pulling money out every month or so though, monthly dividends are a plus.
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Mar 26, 2012 08:20
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Vanguard has a tool that shows you what the difference in expense fees mean on an annual basis. It's pretty convincing. https://personal.vanguard.com/us/funds/tools/costcompare
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Mar 26, 2012 15:02
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The company I work for got bought out a few months ago. Now they are going to combine the 401(k) plans into one new plan. I thought my money in my account was my money. Can they move my money around and change the investments on me like that? Of course, the investment choices could end up being better, and in the worst case I can roll it into my own IRA and do what I want.
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Mar 29, 2012 01:08
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Guy Axlerod posted:The company I work for got bought out a few months ago. Now they are going to combine the 401(k) plans into one new plan. Yes, they can. If the new 401k provider doesn't offer the same funds as the old one, they can reallocate pretty much as they please. Usually they'll map prior investments to equivalents available in the new provider. If you don't want that, they will give you the option to say so, in which case your money will be temporarily dumped into a money market fund until you manually choose a new allocation. Whether the funds are actually equivalent(or better/worse) is a toss-up, and has more to do with the sales pitch that the 401k provider made to your HR folks.
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Mar 29, 2012 02:23
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Guy Axlerod posted:The company I work for got bought out a few months ago. Now they are going to combine the 401(k) plans into one new plan. My company was purchased a few years ago (along with a few other big companies) and they're finally integrating all of the financials/benefits/etc into the parent companies, as of last month. My wife's and my 401k was moved from PNC to Vanguard. The funds mapped over pretty well and it was very painless and smooth. They definitely can and will move your investments around, but you -should- have ample time to decide what allocations you want and get things figured out.
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Mar 29, 2012 14:12
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Another quick question. I just accepted a full-time position with a small startup. I have health benefits, but I'm not sure about a 401k (which I'll check on, and possibly try to persuade). I know the usual priority is to contribute 401k up to match, IRA, then up to 401k max. What should I do if there is no 401k to max out? I'll be making pretty good money, so I definitely want to put it somewhere other than the couch. Are the only options left to invest in traditional, non-tax-advantaged investment vehicles?
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Mar 31, 2012 21:12
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polyfractal posted:Another quick question. I just accepted a full-time position with a small startup. I have health benefits, but I'm not sure about a 401k (which I'll check on, and possibly try to persuade). I know the usual priority is to contribute 401k up to match, IRA, then up to 401k max. You can invest it in pretty much anything you'd put 401k/IRA money into, it just won't be tax advantaged. Remember to change your risk/reward balancing if you're looking to do something besides retire with the money. I personally would get a nice (1 year of expenses) emergency fund and pay down any debt that had interest rates above inflation first, but it's your money so do whatever makes you happy. EDIT: I hosed up and didn't read your post correctly. Paying down any long term debt you have (auto/house etc) is a great place to put surplus funds - you won't have to pay capital gains on it and you'll get a guaranteed rate of return (your interest rate). A GIANT PARSNIP fucked around with this message at 01:13 on Apr 1, 2012 |
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Apr 1, 2012 01:03
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I have a quick question: I started a vanguard account a month or so ago (just $1000 into the target 2050). At the end of the month, the account ended up at ~1036. From what I understand, any gains are automatically reinvested for me. When does that reinvestment actually happen with any net gains? Monthly? Annually? I don't quite get it.
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Apr 3, 2012 12:51
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You are probably confusing a rise in the fund value due to a rise in stock prices, or dividend payments on those stocks being used to buy more units of the TR2050 fund. I think what you've seen so far is the former.
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Apr 3, 2012 13:25
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Hawkeye posted:I have a quick question: sanchez is right about the increase. The shares get priced at the end of every day, and the value of your portfolio will be (# of shares you own) * ($ current price) at all times. That said, dividend reinvestment and capital gains (realized profits in underlying investments) do occur, but looking at my Vanguard statements they only seem to happen on the last business day of the year (the last two were 12/30/2010 and 12/29/2011).
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Apr 3, 2012 15:18
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A GIANT PARSNIP posted:You can invest it in pretty much anything you'd put 401k/IRA money into, it just won't be tax advantaged. Remember to change your risk/reward balancing if you're looking to do something besides retire with the money. Ok, thanks. I have a 6-month emergency fund and no debt, so I'll see about padding my emergency fund and then just start investing in non-tax-advantaged things I guess.
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Apr 3, 2012 15:38
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Sorry for the wall of text... I used to have a bit of a debt problem, but after cutting expenses, budgeting, and getting a better paying job, I'm now out of all debt beyond a low interest rate mortgage. I'm now faced with the much better "problem" of having a good amount of surplus money coming in but having absolutely no idea what I should be doing with it. Here is where I stand right now: 35 years old, married (wife has separate finances, but we pool money for household expenses), no kids planned My primary goal is to do what I can to be sure I *can* retire, preferably a bit early if at all possible. Current work retirement account through TIAA-CREF is around $57k with 10% of my pre-tax salary going into it. Current take-home pay is roughly $4000/month Current monthly expenditures average $2200/month Since clearing the debt, not knowing what to do I've been paying my monthly bills then putting $500 into an account intended to start investing with. Then anything extra (usually between $900-1300 is split evenly into the investment savings account and saving up to buy a new car when my truck dies (all nonessential purchases come out of this account as well). I primarily bank with ING and have the following in my savings accounts right now: Savings (target is $1000) $1000 Car/Funny money $3300 money marked "to invest" $8600 I’m clearly overlooking a true emergency fund, partially because our pooled household accounts have served this need and partially because my job is extremely stable, in any case I plan to remedy this – likely by bumping the savings target up by $500/month until it hits 6 months of expenses. My immediate plans: Open a Roth IRA with $5k (to fully fund me for 2011 before the deadline). Plans for later this year: Increase emergency fund savings I’ll probably hold the rest of the “to invest” account back for a couple months in case I need an emergency fund before I beef up my regular savings. When I feel comfortable, I’ll put the $5k into the Roth IRA for 2012. After funding the 2012 Roth IRA, I guess I should look at a non-retirement investment account to start building wealth? Perhaps find a better place than a savings account to park the emergency fund? After actually laying this out and reading it, it seems pretty solid to me, but I’m really new to the whole investing thing. Does this all sound like a good plan? The one thing I’m not sure about, is where to open the Roth IRA? I had been researching on my own until I found this thread and read the last 5 pages or so. I was looking at T. Rowe Price, but it is hard to ignore the Fidelity/Vanguard love. I don’t expect to be very “hands on” with this so I’ll probably just dump a chunk of it into a few mutual funds that sound interesting and the majority into the target retirement date funds (much like how I do my existing retirement account). Any reason to prefer one of the other in my case? Knowing me, I’m going to stick with whatever company I start in on  Thanks for any help!
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Apr 3, 2012 19:15
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I'm 27 now, finally finished with school, working my first real job and I want to start saving for retirement. I work for a German company in Germany (as an American) and so 10% of my salary is put into the public pension scheme (and matched by my employer). I won't be able to pull a pension unless I contribute for 5 years (and I am not sure if I can get the money back if I don't). At the moment, I have $4,000 in a stock portfolio from when I was a kid. It's making a little bit of money, but not much, and the cost of paying a guy to manage it pretty much eats any potential profit. I'm thinking of moving the $4,000 in stocks to a Roth IRA. Would that be a better use of that money? As for 401(k) retirement saving, is there a way to start a 401(k) not attached to an employer? I could budget about €50 a month to go into a 401(k), though I would have to deposit it all in one sum on my yearly trip home (I assume that is OK?). I have no debt and $3,000 in an HSBC savings account. I'm working on building up a "high" interest (2.6%) savings account here in Germany. It has €1,000 in it right now, and I try to put €300-400 a month in it. I'm not making that much money (€25,000/yr) so I don't think I would be able to max out a Roth IRA every year, but I feel like I need to start somewhere with regards to retirement, but as an American abroad who will eventually return home, I'm not sure how to get started. Total Confusion fucked around with this message at 19:45 on Apr 3, 2012 |
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Apr 3, 2012 19:40
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Well first off, read up on the foreign earned income exclusion for a $92.5k or some such tax deduction for not being in the US. If you make the tax break (330 days outside the US out of a rolling 365) you won't pay US taxes for the portion of the year your were outside the US. The drawback is that you wont't be able to contribute to a Roth IRA that year.
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Apr 3, 2012 21:38
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Are Fidelity and Vanguard essentially interchangeable for someone looking to park their money for a while? You can click my post history in the thread for details, but I'm essentially looking to put my fiancees money into a low risk mid-term bond fund to beat inflation(if possible) for a few years, and she already has a retirement account through Fidelity.
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Apr 3, 2012 22:29
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Saint Fu posted:Well first off, read up on the foreign earned income exclusion for a $92.5k or some such tax deduction for not being in the US. If you make the tax break (330 days outside the US out of a rolling 365) you won't pay US taxes for the portion of the year your were outside the US. The drawback is that you wont't be able to contribute to a Roth IRA that year. Looks like I can't have a 401(k) or a Roth IRA as long as I live in Germany/make less than $92,900. I guess I'll have to find a financial advisor to help me figure this out 
Total Confusion fucked around with this message at 22:37 on Apr 3, 2012 |
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Apr 3, 2012 22:34
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Zeitgueist posted:Are Fidelity and Vanguard essentially interchangeable for someone looking to park their money for a while? You can click my post history in the thread for details, but I'm essentially looking to put my fiancees money into a low risk mid-term bond fund to beat inflation(if possible) for a few years, and she already has a retirement account through Fidelity.
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Apr 3, 2012 22:40
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