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ntan1 posted:So... There is no point in a conversion, just put money into both individually. Go with the standard order of preference of: 1) 401k until your match stops 2) IRA till full (5.5k) 3) 401k till full (17.5k) An aside about traditional vs Roth: I you're making enough to max out both a 401k and an IRA, consider having them both be Roth. In the case of same tax rate now vs at retirement, even a few percent higher, Roth wins out because you can invest more in it since it's already taxed.
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Dec 21, 2012 16:24
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Can someone explain to me why the DJIA is down 150 and the S&P is down 17 but most of the stock index funds on Vanguard (like the 500 index for example) are still up? Does it take time for an index fund to adjust to the market? edit: Ah I see that the price is as of 12/20 and not 12/21... Does it usually take a day for index funds to adjust? Sephiroth_IRA fucked around with this message at 17:33 on Dec 21, 2012 |
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Dec 21, 2012 17:25
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Orange_Lazarus posted:Can someone explain to me why the DJIA is down 150 and the S&P is down 17 but most of the stock index funds on Vanguard (like the 500 index for example) are still up? Does it take time for an index fund to adjust to the market? It is usually updated a couple hours after market close. If you want to get updated pricing, just check out the equivalent ETFs. Just about every Vanguard Index fund has a corresponding ETF.
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Dec 21, 2012 18:12
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Xenoborg posted:There is no point in a conversion, just put money into both individually. Oh, by Roth Limit, I meant that I exceed the AGI Roth Limit. ntan1 fucked around with this message at 19:19 on Dec 21, 2012 |
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Dec 21, 2012 18:57
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Orange_Lazarus posted:Can someone explain to me why the DJIA is down 150 and the S&P is down 17 but most of the stock index funds on Vanguard (like the 500 index for example) are still up? Does it take time for an index fund to adjust to the market? Mutual fund NAV (Net Asset Values) are priced 1-2 hours after market close. Mutual funds are not traded assets, rather a collection of such. Therefore they do not have a traded market price during the day. ETFs however ARE traded, and therefore have intra-day market prices.
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Dec 21, 2012 19:10
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UncleGuito posted:So I have my picks for rebalancing my Fidelity Roth (I'm sticking to their no commission ETFs for now): Anyone?
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Dec 21, 2012 21:57
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UncleGuito posted:Anyone? Looks fine. Go with ACWX. It is a better index than EFA and ACWI is global and contains half US stocks.
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Dec 21, 2012 22:09
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80k posted:Looks fine. Go with ACWX. It is a better index than EFA and ACWI is global and contains half US stocks. Will do, thanks!
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Dec 21, 2012 22:34
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Howdy y'all, I'd greatly appreciate any advice and direction y'all care to offer. I'm 28, working my first Job out of college, I have zero debt. I live very frugally, my job pays me less then $9k a year, and I can live off of just that money alone. A member of my immediate family is the beneficiary of a trust, each month she writes me a personal check for a few thousand dollars. I'm rapidly accumulating cash and I'm both concerned about my tax situation, and finding optimal investments for this cash. I did a bit of research in my spare time, but didn't really think too closely about how I've been investing: back of the hand calculations put me invested: 16% cash, 16% Mutual Funds, 16%Treasury I Bonds, 52% stocks. I'm watching this pile of money quickly approach six digits and it's kinda scary, I don't know how taxes work when I'm getting most of the money as a gift either. Anyone able to help me out?
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Dec 23, 2012 08:46
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Runoir posted:A member of my immediate family is the beneficiary of a trust, each month she writes me a personal check for a few thousand dollars. I'm rapidly accumulating cash and I'm both concerned about my tax situation You don't have a tax situation, it's entirely up to her to determine her tax liabilities for gifts. You owe no income tax on the money gifted, only gains on the money you invest. That said, have your family (or just that immediate family member if she prefers) sit down with a lawyer that specializes in trusts to make sure everything is structured as advantageously as possible. The trust may already have a lawyer administering it, that's probably not a bad resource to start with. Runoir posted:I did a bit of research in my spare time, but didn't really think too closely about how I've been investing: back of the hand calculations put me invested: 16% cash, 16% Mutual Funds, 16%Treasury I Bonds, 52% stocks. Mutual funds are not an asset class, they can hold whatever investments - stocks, corporate bonds, treasury bonds, etc. But that's not even the immediate question. The first thing you need to do is figure out what you want to do with the money. Will it be coming in forever, or is this a temporary windfall? Are you socking it away for retirement, or do you plan to make purchases in the next few years (house, business, wedding, children, whatever)? Where do you realistically see your career going, and are you going to be using this money to supplement that income, replace it entirely at some point, or what? If you feel comfortable answering some of the above answers in a public forum, go ahead and this thread can give you some general advice. But given the amount of money, it would be in your interests to spend a few hours with a (fee based) financial adviser (who will ask you all those above questions and then some, so think over them anyway). Or maybe just bring it up with the lawyers and accountants who will be taking a look at the trust structure when your family does that (or the ones already in place) - at the least, they can probably point you towards someone who can help you.
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Dec 23, 2012 15:01
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AreWeDrunkYet posted:You don't have a tax situation, Awesome, my big concern was that I was supposed to be paying someone that I wasn't. AreWeDrunkYet posted:Mutual funds are not an asset class, they can hold whatever investments - stocks, corporate bonds, treasury bonds, etc. But that's not even the immediate question. ack! my bad, it was late when I wrote that, I meant index funds AreWeDrunkYet posted:The first thing you need to do is figure out what you want to do with the money. Will it be coming in forever, or is this a temporary windfall? Are you socking it away for retirement, or do you plan to make purchases in the next few years (house, business, wedding, children, whatever)? Where do you realistically see your career going, and are you going to be using this money to supplement that income, replace it entirely at some point, or what? The money will be coming in for the near term, but the trust will dry out in the next 1-3 years. I'm not 'actively' looking for ways to spend this money. I wouldn't say I'm saving it for retirement, because if a really great opportunity for me to go into business for myself comes along, I would prefer to use the money for that. But, I can't see myself wanting to use any of this money in the next 5 years.
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Dec 24, 2012 01:15
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Hi, there. First time posting in this thread, and I'm learning about investing as I go along. I've read about a third of the Four Pillars so far. I have $49 in a Fidelity 401(a) plan because I was working full-time as a student over the summer at my university (so contributions were automatically taken out of my pay check.) But now that I've graduated, I've transitioned to a full-time staff job and I can't add any more contributions to the 401(a) and it's kinda just sitting there... What kind of (risky) investment should I move this into to get the most out of my $50 pocket money? Sorry if this question is too generic; I figure I should just get advice as to what kind of investment to throw my money into before figuring out what specific investment to choose and then move from there. I've been looking at a lot of these investments' performance graphs, and most of the investment options seem to be at a high return. From what I've gathered so far, it would be a bad idea to put money into these investments, no? (If so, that sucks 'cause it sure does limit my investment options..) Lastly, I want to start contributing to my 403(b) (or would 457(b) be better?) but I only want to put about $100 a month until I finish paying off my student loans. Would it be wiser to spread out my investments now with my small contribution amount? Or should I just invest in one option and diversify once I finish off my loans and start putting more money into my plan?
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Dec 25, 2012 03:44
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Runoir posted:The money will be coming in for the near term, but the trust will dry out in the next 1-3 years. I'm not 'actively' looking for ways to spend this money. I wouldn't say I'm saving it for retirement, because if a really great opportunity for me to go into business for myself comes along, I would prefer to use the money for that. But, I can't see myself wanting to use any of this money in the next 5 years. Well, you can probably safely max out your Roth for last year and this year, especially since you contribute after tax income. You don't have a huge amount of options to shelter the rest, so that will probably go into taxable accounts, but taxes on gains are nearly non existent at your level of income. As far as allocation, yours sounds somewhat aggressive. Go for about a third bonds (blend of corporate and treasuries) and two thirds broad index stock funds. Don't worry about individual stocks or any other securities. Given your circumstances, I wouldn't even be averse to sacrificing some gains and putting 10-15% of it in money market funds or short term treasuries so that you can have some cash available if you need it without selling at a loss since you don't have much other income to speak of. You can skip that step if you have another source of cash - if the market was down, could you comfortably borrow a few thousand dollars from your family until your investments recover some if you wanted to start a business or had other need for a bunch of cash? But you mentioned that you were talking about a nearly six figure windfall, and you're earning less than the poverty level on your own. Sit down for an hour or two with a financial adviser, work out a strategy, then make and maintain the investments yourself with someone like Vanguard. It'll be worth the couple hundred dollars it costs you.
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Dec 25, 2012 04:44
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krnhotwings posted:Hi, there. First time posting in this thread, and I'm learning about investing as I go along. I've read about a third of the Four Pillars so far.
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Dec 25, 2012 06:25
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put it all on 36 or alternatively, bet $1 on black. If you lose, bet $2 on black. If you lose, bet $4 on black. If you lose, bet $8 on black. If you lose, bet $16 on black. This way you're almost guaranteed to make $1.
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Dec 27, 2012 04:29
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Celot posted:put it all on 36 I know you're joking and I hope everyone reading knows you're joking. But just in case this seems like a revelation to anyone: it's just Martenngale.
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Dec 27, 2012 09:46
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Given the options, I think I'll place my bet on scratchers  Perhaps I should rephrase my question:By default, the university placed my $49 contributions into a short-term bond investment (half treasury, half agencies.) Ultimately, I'd like to roll this over to a Roth IRA once I leave the university in about a year, but in the interim would it be unwise to move the investment elsewhere since I plan to rollover the 401(a) in a short amount of time?
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Dec 27, 2012 21:11
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krnhotwings posted:Given the options, I think I'll place my bet on scratchers I'm almost positive that you're not going to get any returns or losses on $49 that mean anything. Do whatever the heck you like with it. If you want to start a good example for future retirement, buy an index fund ETF or something with it but know that the transaction fees will eat up a good chunk of your $49. Just leave it, when you roll it over your IRA will have $49 more. Yipee.
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Dec 27, 2012 23:34
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I'm in the military, and the TSP has just begun offering a Roth option for our retirement options. So here's my question: I'm about to deploy, and my bossman says I should put all my special combat pay into the Roth account because combat pay isn't taxed - so in theory I would never pay taxes on this money because in a Roth it is only taxed going in. Is this understanding correct? Would I be a fool not to do this?
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Dec 28, 2012 02:41
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Apparently the military get an exemption to the taxed income rule. http://themilitarywallet.com/heroes-earned-retirement-opportunities-hero-act/
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Dec 28, 2012 02:47
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The company I am starting with on Wednesday has a SIMPLE-IRA with Fidelity that I am going to max out (Roth with Vanguard too) but I can't decide which funds to put the money in to. Does anyone have any info on Fidelity funds? I like the Spartan funds because they have low expense ratios, at least compared to other funds I have seen.
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Dec 29, 2012 17:19
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Tamgerine posted:I'm in the military, and the TSP has just begun offering a Roth option for our retirement options. So here's my question: How long are you going to be deployed for? As I understand it, the HERO Act only applies if you're in a combat zone for all 12 months in a calendar year. Most of us shy away from the Roth TSP options, but if you want something simple and hands off, it's a great plan.
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Dec 30, 2012 00:16
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MickeyFinn posted:The company I am starting with on Wednesday has a SIMPLE-IRA with Fidelity that I am going to max out (Roth with Vanguard too) but I can't decide which funds to put the money in to. Does anyone have any info on Fidelity funds? I like the Spartan funds because they have low expense ratios, at least compared to other funds I have seen. Wait, can you put money into an IRA and a Roth and max out both on a given year? I thought it was 5K in any sort of IRA regardless of roth or not?
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Dec 30, 2012 02:49
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BotchedLobotomy posted:Wait, can you put money into an IRA and a Roth and max out both on a given year? I thought it was 5K in any sort of IRA regardless of roth or not? In his case, it is a SIMPLE IRA, so it is fine. And the Spartan funds are a good choice.
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Dec 30, 2012 03:57
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I'm not sure if it is true or not, but I was told that when you get out of the military, the tax free stuff becomes a bit annoying if you try to transfer your account. I had a previous military member tell me he had to leave the 3k or whatever of tax free in his TSP and he was able to transfer the rest into his new 401k. I chose to just leave it all in TSP.
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Dec 30, 2012 19:31
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80k posted:In his case, it is a SIMPLE IRA, so it is fine. And the Spartan funds are a good choice. Yeah sorry, should have spent 3 seconds googling SIMPLE IRA, I just assumed he meant a regular IRA vs a roth.  Thanks!
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Dec 31, 2012 05:23
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My company 401k is with Schwab and has limted fund options. I currently have my allocation at 5% in a bonds fund and 95% in their agressive portfolio. The agressive portfolio has an expense ratio of 0.71%. They have an S&P500 index fund that only has a .1% expense ratio. They have two international stock funds, REREX and LZEMX and only one option for bonds, PTTRX. I'm trying to match my 401K allocation to that of my roth, which is Vanguard's VFIFX . Would I be better off matching the percentages from these individual funds, S&P500 for US stock, REREX or LZEMX for international stock, and PTTRX for bond to be that of Vanguard's VFIFX rather than keeping most of it in the current Aggressive portfolio? This would make a large portion of my allocation have the lower .1% expense ratio of the S&P500 fund, but the expense ratio on the individual foreign stock funds seem rather high or 0.85% or 1.12%. To match VFIFX I think it would be something like 63% Schwab S&P500 index fund, 27% a combination of the two foreign stock funds, and 10% in the Schwab bond fund.
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Jan 1, 2013 02:45
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I just have a general question regarding what people here think about the naysayers who say the past 50 years where you could just invest your money for the long term in the market and come out the better for it are over. Investing is dead and you have to be a trader to compete in today's market. Edit: For the record this sounds stupid to me as well. I have I feeling the markets in emerging nations are going to follow the exponential growth of the S&P500 and I'd feel safer riding the market as a whole then spending hours of my time researching what stock to hold onto for this month or quarter. Oh and you guys probably get this one a lot but how likely am I to get a 5 percent yearly return on average if I follow an index or choose a specific mutual fund, and which is likely to pull this off? A mutual fund or an index fund? Kneel Before Zog fucked around with this message at 18:58 on Jan 1, 2013 |
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Jan 1, 2013 18:53
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Binary posted:My company 401k is with Schwab and has limted fund options. I currently have my allocation at 5% in a bonds fund and 95% in their agressive portfolio. The agressive portfolio has an expense ratio of 0.71%. I don't know all of Vanguards options, but I think you would have a much lower overall expense ratio if you put your entire 401k in the S&P500 index and then balanced that by putting your IRA in funds that overall make your allocation close to VFIFX.
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Jan 1, 2013 21:24
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Kneel Before Zog posted:I just have a general question regarding what people here think about the naysayers who say the past 50 years where you could just invest your money for the long term in the market and come out the better for it are over. Investing is dead and you have to be a trader to compete in today's market. The next 50 years could be better, the same, or worse than the last 50 years. Nobody knows. However, there is a good case in the idea that today's risk premiums, and hence returns, are lower going forward. But the idea that investing is dead, and that you have to be a trader is total BS. Your chances are going to be better with low-cost, passive, index investing versus trading or active mutual funds. This fact will not change.
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Jan 1, 2013 23:00
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I'm 21 and just started paying into a Roth 401k last year. The company my company outsources this sort of stuff to wound up ripping us off in other areas (mainly health insurance) so now we're going to switch to a different company (that I don't actually have any information on at the moment) for 2013 and beyond. I have a few questions though: 1) My employer doesn't do any sort of matching at all, should I stop using the 401k, open an IRA and pay into that (up to the max) instead? 2) If I do keep using the 401k, should I pay the extra like, six bucks a month and have them manage it for me (I believe they just reshuffle them every few months to match "changing markets"), or do you guys have a pretty good idea on what would be good to sprinkle my money around into? I read that index funds were invented because statistically investors, even experienced ones, did no better on average than a large averaging index like the S&P 500. If this is true, are my 6 bux even worth it? Sorry I don't really have more info on specific investment options, I'm supposed to get them later this week or next week depending on when our HR lady gets around to it. If you can't do anything with the information I have for 2 I could come back later once I have it, but I'd like to know about 1 so I can set that stuff up. Also this is unrelated, but thanks BFC - the infamous Cornholio thread kicked me into gear financially earlier this year and I now have a pretty good savings mounting, no credit card debt, and
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Jan 2, 2013 08:03
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I'm about to start on my job's 401(a) plan. It's tax deferred, and my employer contributes automatically (they give 9.3% of my salary, nothing taken out of my pay). It's through Fidelity, and I can choose the fund. The default fund (for me) is the FID FREEDOM 2050 which has an expense ratio of 0.77% and currently has an allocation of 62.94% Domestic Equity Funds, 23.55% International Equity Funds, 13.46% Bond Funds, and 0.05% Short-Term/Other Assets. I was looking at the Spartan 500 index fund they have (SPTN 500 INDEX ADV), and it has an expense ratio of 0.07%. I am already maxing out a Roth IRA with Vanguard using their Target Retirement Fund for 2050 (or 2045, should be the same at the moment). I'm wondering if it would be better idea to go with the (maybe riskier?) Spartan fund with the much lower expense ratio, or if I should stick with the more diversified freedom fund? Or maybe some other option? I'll be 30 in a few months so I'm not retiring any time soon. Thanks!
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Jan 2, 2013 21:35
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Briantist posted:I'm about to start on my job's 401(a) plan. It's tax deferred, and my employer contributes automatically (they give 9.3% of my salary, nothing taken out of my pay). It's through Fidelity, and I can choose the fund. The default fund (for me) is the FID FREEDOM 2050 which has an expense ratio of 0.77% and currently has an allocation of 62.94% Domestic Equity Funds, 23.55% International Equity Funds, 13.46% Bond Funds, and 0.05% Short-Term/Other Assets.
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Jan 2, 2013 22:09
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I'm looking to build a Schwab ETF based portfolio and was wondering what you guys thought of this allocation. (Age 27, moderate risk tolerance, long term outlook.) 35% U.S. Stock Market - 35% SCHB, Schwab U.S. Broad Equity ETF (Large Blend), .04% expense ratio 30% International Stock Market - 18% SCHF, Schwab International Equity ETF (Foreign Large Blend), .09% expense ratio - 6% SCHE, Schwab U.S. Emerging Markets Equity ETF (Diversified Emerging Markets), .15% expense ratio - 6% SCHC, Schwab International Small-Cap Equity ETF (Foreign Small/Mid Blend), .20% expense ratio 30% Fixed Income - 20% SCHZ, Schwab U.S. Aggregate Bond ETF (Intermediate-Term Bond), .05% expense ratio - 10% SCHP, Schwab U.S. TIPS ETF (Inflation-Protected Bond), .07% expense ratio 5% Real Estate - 5% SCHH, Schwab U.S. REIT ETF (Real Estate), .07% expense ratio Does this look reasonable? Should I split domestic into more specific categories?
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Jan 2, 2013 22:35
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Apparently the contribution limit for Roth IRAs is going up to $5500 this year. The IRS published this a few months ago, but I didn't see it earlier in the thread, and I only noticed while looking at my IRA account online. Now for a question: I have a small amount of money (~$280) that was contributed to a pretax 457 plan while I was working part time. Now that I'm no longer a part-time employee, I'll be able to access this money later this year. What do I do with it though? I contribute to a pension plan pre-tax, and I have a Roth for post-tax so I'm not sure what exactly I could roll the money over to. Could I roll it into a regular IRA and do a "back door" Roth with that to avoid the tax hit, or is the amount of money so low that I might as well take the tax hit and just put whatever I get out of it into my Roth myself?
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Jan 2, 2013 23:30
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Kneel Before Zog posted:I just have a general question regarding what people here think about the naysayers who say the past 50 years where you could just invest your money for the long term in the market and come out the better for it are over. Investing is dead and you have to be a trader to compete in today's market. I'm not an investing expert or anything, but I've made a decent amount in my IRA and 401K since I started in 2008.
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Jan 4, 2013 01:31
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ZeroAX posted:I'm not an investing expert or anything, but I've made a decent amount in my IRA and 401K since I started in 2008.
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Jan 4, 2013 18:08
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cowofwar posted:And a lot of people have lost. It depends on timing. The markets are no longer anything like classical markets of the '20s-'70s. Everything from the '80s onwards has been retarded. My overall strategy is to treat developed market funds as "new" bonds (and diversify out of classical bonds given they're bubbles) and to just take retirement from a different perspective expecting to work until I'm dead or incapacitated (because unless you're a 1%er and will stay a 1%er, you'll have to work). So basically, full-on high risk and volatility tolerance.
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Jan 4, 2013 19:04
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cowofwar posted:And a lot of people have lost. It depends on timing. The markets are no longer anything like classical markets of the '20s-'70s. Everything from the '80s onwards has been retarded. You're neither accounting for dollar cost averaging nor dividend yield as a source of growth in portfolio value over time. It's not accurate to assume that because someone was invested in an indexed mutual fund which lost, say, 10% in one year, that their portfolio lost 10% of its value, or that the drop represented an impediment rather than an opportunity.
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Jan 4, 2013 19:12
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cowofwar posted:And a lot of people have lost. It depends on timing. The markets are no longer anything like classical markets of the '20s-'70s. Everything from the '80s onwards has been retarded. You need to look at index (and stock) returns on a logarithmic scale. Under a normal scale, if you assume something will increase ~5-10% a year, of course you are going to see an exponential growth in the most recent time period. Here is the S&P over the last 62 years:
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Jan 4, 2013 19:15
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