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Demented Guy posted:If you have already maxed out the Roth, you can't open a traditional IRA. The 5,500 limit covers BOTH traditional IRA and Roth IRA. So if you want to have another tax-advantaged account, I suggest you utilize the 403b (17,500 is the limit I think so you can set aside more money) Oh jeez I'm dumb, didn't realize that for some reason. ntan1 posted:Yes, 403b is your next bet (I assume your place doesn't offer a 401k?) It's a school district, so they only offer 403/7b. Of those five companies (NG, Lincoln, Met Life, VALIC, and Security Benefits) could anyone recommend my best option?
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May 24, 2013 19:12
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Pirate Ken posted:Of those five companies (NG, Lincoln, Met Life, VALIC, and Security Benefits) could anyone recommend my best option? Figure out what they have available for you to invest in (probably a lot of annuities), and check the expense ratios and fees. 403b accounts are notorious for having awful expenses to the point where it is sometimes better to invest your money in a taxable account, but there are sometimes reasonable funds available.
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May 24, 2013 22:42
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These might be dumb questions, but I am just beginning my adult life and I want to get started on the right foot. Firstly: I am interested in starting up a Roth IRA that I can dump a bit into each month, but I'm not entirely sure how to go about doing that. Who are the providers for these IRAs? Is it like a credit card where I should be shopping around looking for the best deals, or is basically the same thing everywhere? I guess what I mean is, where do I actually go to set one up? Second: I want to create a second savings account as well, ideally something with a higher interest rate than the bog-standard Bank of America account I have right now. Since I'm a broke college student right now I don't expect to be putting too much into it (aiming for like $50 a month), and I'm trying to avoid some kind of account where the money isn't "liquid", as in unavailable in case of a serious emergency. Are there any savings plans that fit that bill, or is my standard checking account as good as it gets in my position?
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May 25, 2013 04:55
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1. Go to the thread OP, find the vanguard investor education page to start your education. Vanguard also offers target date retirement funds, essentially the most hands off way to get your feet wet while you learn more. Save up $3000, open the Roth IRA by buying the right target date fund, and invest to the maximum each year. 2. It's hard to give a good answer here. What is your savings goal? Is it short term (<5 years)? How big is it? If its short term and something like a house down payment where you cannot stand much risk, CDs are probably the best of some pretty crappy options.
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May 25, 2013 05:49
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El_Elegante posted:1. Go to the thread OP, find the vanguard investor education page to start your education. Vanguard also offers target date retirement funds, essentially the most hands off way to get your feet wet while you learn more. Save up $3000, open the Roth IRA by buying the right target date fund, and invest to the maximum each year. Ideally it would be a long-term savings plan, but since I'm a broke student right now I'm afraid to lock my money up and not be able to access it in case of a major emergency. CDs sound like a decent option, are there any recommended providers for that if I'm not going to be putting an assload of money into it? I assume I'm just looking for whoever has the highest interest rate over the fixed time period I'm looking for, as well as whoever has the least painful penalties for early withdrawal, though hopefully that isn't an issue. And thanks for the info on the IRA and Vanguard, not sure how I missed that in the OP. Will be reading that shortly.
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May 25, 2013 15:25
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Honey Badger posted:Ideally it would be a long-term savings plan, but since I'm a broke student right now I'm afraid to lock my money up and not be able to access it in case of a major emergency. CDs sound like a decent option, are there any recommended providers for that if I'm not going to be putting an assload of money into it? I assume I'm just looking for whoever has the highest interest rate over the fixed time period I'm looking for, as well as whoever has the least painful penalties for early withdrawal, though hopefully that isn't an issue. Do you have an emergency fund worth at least six months of living expenses? You should have that in a savings account before you invest any money.
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May 25, 2013 18:17
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ntan1 posted:Do you have an emergency fund worth at least six months of living expenses? You should have that in a savings account before you invest any money. Nope. I guess I should probably start working towards that, but it would be a very long time before I had that kind of a fund stocked up. $50-100 bucks a month is basically all I can spare right now because I can't find a job that doesn't pay like poo poo, which means I'm living paycheck to paycheck, so trying to save up 6 months of rent would take me like...12 years at my current rate. Obviously I'm actively looking for better work right now, but there aren't a hell of a lot of options around here. And rent is basically $600-700 anywhere that isn't a crack den if you want to be in driving distance of anything.
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May 26, 2013 03:53
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Age: 33 Currently I've got the following investments, all Vanguard funds: Roth IRA (maxed out every year): VFORX (Target Retirement 2040) - 34k Rollover IRA from a previous job's 401(k) (No active contributions): VDMIX (Developed Markets) - 5k VWIGX (International Growth) - 8k VASGX (LifeStrategy Growth) - 6k VTIVX (Target Retirement 2045) - 13k Current job's 401(k) (~13k/yr including matching): VTIVX (Target Retirement 2045) - 10k Other (Contribute whenever I have some extra cash lying around) VFINX (S&P 500 Index) - 5k VGHCX (Health Care) - 4k VWELX (Wellington) - 15k Total investments: ~100k Overall I'm about 88% stocks, 12% bonds. Stocks are 65% US, 35% international. Any suggestions on what to throw my next $5-10k of spare cash at? A bond fund (maybe VBIIX?) to balance my portfolio a little more? A growth stock index fund (maybe VISGX or VMGIX, since I'm currently really heavy on large-cap value/blend funds)? Maybe put some into something more diverse like an REIT index fund? Or just add it to the Wellington fund (or maybe buy into another balanced fund)?
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May 26, 2013 04:31
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dennyk posted:Age: 33 The first main question that's for you to answer is: Is the current bond/stock split one that you would like to go with? To give you a little bit of insight, the 2040 target retirement fund has a 90%/10% stock to bond split. That will determine whether you should be putting more money into stocks or bonds. Beyond this, the people who usually give advice in this thread (including me) will likely look into your investment portfolio and ask why you are explicitly targeting the Health Care sector. Other ideas: from the perspective of IRAs, since you've rolled over, it may be time to simplify as you might have more choice of where to put your money. Why not simply do the standard Total International Stock/Total Stock/Total Bond fund split (which the Target 2045 retirement fund does) in your IRA? It ensures diversity between large-cap and small stocks, and has the benefit of keeping your fund composition incredibly simple. Finally, I'd say that you should stick away from Wellington because it's likely not going to be the stock/bond composition that you'd like. It might make sense for someone who is 55, but not for you.
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May 26, 2013 19:29
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El_Elegante posted:1. Go to the thread OP, find the vanguard investor education page to start your education. Vanguard also offers target date retirement funds, essentially the most hands off way to get your feet wet while you learn more. Save up $3000, open the Roth IRA by buying the right target date fund, and invest to the maximum each year. Just to clarify, the minimum investment amount for Vanguard Target Retirement funds is only $1000. The majority of their other options have a $3000 minimum.
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May 27, 2013 02:46
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I'm leaving my career in the glamorous fashion industry to work in real estate to make 200% more so I can start saving and investing again. I have been funding my ROTH IRA successfully since 18 years old but have not been able to do it ever since I got into fashion. Looking forward to hopefully retiring early 
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May 27, 2013 05:04
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Marble posted:Just to clarify, the minimum investment amount for Vanguard Target Retirement funds is only $1000. The majority of their other options have a $3000 minimum. To be fair, this sounds somewhat reasonable from an investment standpoint. If you have less than 1000, there is a huge likelihood that you lack an emergency fund too, which is what you should absolutely focus on first.
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May 27, 2013 06:22
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I have my retirement accounts in funds such as FFFGX and FSTVX, both mutual or index funds. What (aside from expense rations) benefits does a mutual or index fund like these have over an ETF like SPY? Seems like SPY is a better deal (with .09exp) because you could set a stop loss in case things really hit the fan if the whole "correction" gloom and doom happens. TLDR why a index fund vs an ETF.
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May 28, 2013 14:42
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BotchedLobotomy posted:I have my retirement accounts in funds such as FFFGX and FSTVX, both mutual or index funds. ETF's and index funds are pretty much the same... ER's are similar so it is mostly personal preference. Index funds are probably better for most people, because they are just a tad simpler to deal with. Get ETFs if you are really anal about knowing exactly what price you are getting at the time you place an order. If you want to start setting stop losses on your long-term investments, I suggest you use index funds so you don't do that poo poo.
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May 28, 2013 14:51
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Haha fair enough. I just remember doing the same in 2008 and one day checking to see my account had cut in half. At least with the stop loss I could set the thing to sell if it ends up dropping past 15% of what I sold it at and then set a trigger for it to buy when its way lower. Though then again I guess I should just leave it alone.  EDIT: Looks like VOO is a good one, its the vanguard ETF, has a lower stock price and similar dividend period. I might go with that vs SPY unless you all see an issue? Seems like all ETF/indexfunds that follow the S&P 500 are the same more or less. Minty Swagger fucked around with this message at 15:26 on May 28, 2013 |
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May 28, 2013 14:57
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I know that market timing is usually suicidal, but for the past year or two I've been making my max Roth IRA contribution as one lump somewhere in the year when I think the market is low. Usually I try and get it in sometime before June, but this year as we've all seen equities are magical things that only go up so I'm putting in 2013's contribution sometime later this year, possibly even next. Is it likely that I'm hurting myself by this behavior and would be better off making equal contributions each month, or is my instinct to do a single lump sum contribution acceptable? Also, this is the first I'm seeing of stop-losses in retirement accounts. Is that something that makes more sense when you're close to retirement? Where I am in my 20s I'm personally hoping for a big correction so that I can get more into the market. With my 401k and IRA funds I don't think I would want to lock in any losses at all, and just fire and forget the whole thing until I'm old.
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May 28, 2013 15:49
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Statistically, I believe the earlier you get your money in the better off you'll be.
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May 28, 2013 15:54
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Harry posted:Statistically, I believe the earlier you get your money in the better off you'll be. Thanks, so I'm best off tossing in the whole contribution as a lump sometime every January and forgetting about it. This current market is confusing the hell out of me, I don't understand it at all and I'm glad that preparing for a house down payment had me pull my non-retirement stuff out of equities about a month ago so I don't have to worry about it. Twerk from Home fucked around with this message at 16:15 on May 28, 2013 |
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May 28, 2013 15:56
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For every time you try to push it in when it is low, you are missing out on times like now where it is growing. If you really believe that over the long term you will get some positive percentage return per year, you want to be in as long as possible. Dumping it in ASAP in January is the right move. Unless you know something special about the market (you don't).
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May 28, 2013 16:13
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Weinertron posted:I know that market timing is usually suicidal, but for the past year or two I've been making my max Roth IRA contribution as one lump somewhere in the year when I think the market is low. Usually I try and get it in sometime before June, but this year as we've all seen equities are magical things that only go up so I'm putting in 2013's contribution sometime later this year, possibly even next. It's not such a big deal if you're trying to time the market on a yearly basis, as long as you put the same amount of money in per year. That said, remember that you still have to put the money in even if you don't think the market is every good for that entire year. Evidence suggests that timing isn't a good strategy, but people have concerns over finances/other small factors that affect how much they can put in immediately. Once you start to deal with waiting an year to put money in, then you're really trying to time the market and that's a bad idea.
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May 28, 2013 18:15
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So are there any sectors or other types of investments that historically do well when say the S&P/DJIA have crashed? Basically any advice on how I could balance a portfolio to reduce risk would be appreciated.
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May 29, 2013 16:52
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This seems like a pretty obvious question but I want to get it cleared up anyway--my employer does full 401k matching up to 3% and 50% matching up to 5%. I definitely know to do at least 3%, but contributing 5% to get 4% matched is optimal, yes?
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May 29, 2013 18:42
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Yes.
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May 29, 2013 18:43
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walrusonthehill posted:This seems like a pretty obvious question but I want to get it cleared up anyway--my employer does full 401k matching up to 3% and 50% matching up to 5%. I definitely know to do at least 3%, but contributing 5% to get 4% matched is optimal, yes? I'd never heard of that method of tiered matches, but yes, as long as there is a positive match amount, it's basically a no-brainer for free money.
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May 29, 2013 18:46
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Okay, thanks to both of you!
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May 29, 2013 18:48
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Orange_Lazarus posted:So are there any sectors or other types of investments that historically do well when say the S&P/DJIA have crashed? Nope on sectors. Bonds and stocks to tend to be the inverse of each other, which is one of the reasons that people tend to recommend an asset mix of both. However, to create a good portfolio with less risk, the critical thing to do is capture the entire market. Hence, balancing a portfolio is actually quote simple and involves in investing in funds that actually do capture the market, like the Total Stock fund, Total International Stock fund, and the Total Bond fund. Unfortunately, after this, you must take risk to have very high returns. The way you decrease risk is to put more money into bonds, and then to put money into money markets after that. Of course, the consequence of this is that your returns will likely be lower.
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May 29, 2013 20:31
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I have 24k in nine stocks, mostly picked when I was still in college. One of them, that I purchased about $2k worth of shares in 2008-2011, would yield 15k of profit if I were to sell it now. I feel like I need to distribute some of this around, but I also feel like I should hold onto it and let it ride. I know it really depends on volatility and what not, but thoughts? I was planing on just letting my stocks sit forever, but having so much in one stock scares me. I also have 6 month emergency fund in a Wells Fargo MMA 18k in Savings/Checking Accts 12k in a USAA Mutual Fund 14k in a Roth IRA 8k in two different Roth 401ks that I still need to combine.
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May 30, 2013 09:39
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What are some of the good arguments for investing in a taxable long-term account alongside a tax-advantaged account? For me having access to funds when an investment opportunity seems reasonable enough. What kind of funds would make sense for a taxable account? I read in the four pillars that I should expect economic down-turns to happen several times during my life, and with the last down-turn people who were lucky enough to keep their jobs found that they had significantly greater income utility. If someone invested (alongside their tax advantaged accounts) in funds that historically did well/sustained themselves in recessions and then simply waited for the next one to happen would that greater utility be worth taking the tax hit? After typing all that out I'm so glad I have you guys. edit: A few things: I understand that I would probably get greater long-term returns by going in completely with tax advantaged accounts and just buying/holding in a diversified portfolio. However, getting the highest long-term return when I'm in my sixties isn't everything to me, (I might not even make it that far, the economy might be in the dumps by then as well) I want to enjoy the time I have in the next 30 years too. So taking advantage of greater utility in down-turns if one or more occurs in the next 30 years seems advantageous to me. Sephiroth_IRA fucked around with this message at 16:13 on May 30, 2013 |
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May 30, 2013 15:30
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Fish Shalami posted:I have 24k in nine stocks, mostly picked when I was still in college. One of them, that I purchased about $2k worth of shares in 2008-2011, would yield 15k of profit if I were to sell it now. I feel like I need to distribute some of this around, but I also feel like I should hold onto it and let it ride. I know it really depends on volatility and what not, but thoughts? I was planing on just letting my stocks sit forever, but having so much in one stock scares me. Take that 15k, call the capital gains, and then put it into a diversified fund. If you let that money stay in one stock forever, there is a huge chance that you could just lose it all in a few years. Orange_Lazarus posted:What are some of the good arguments for investing in a taxable long-term account alongside a tax-advantaged account? For me having access to funds when an investment opportunity seems reasonable enough. What kind of funds would make sense for a taxable account? Taxable savings accounts are for when you want to invest but either can't contribute anymore to a tax free account, or want large diversity in investment options. Here's the thing: I'd personally rather put the money into roth accounts or tax free investment accounts if at all possible. I'd simply take the 10% penalty if I wanted to pull the money out in 15 years instead of 30, as this is less than the 15%-18% that comes with capital gains taxes. That being said, if you're looking for a shorter term investment, then a taxable account definitely makes sense. Orange_Lazarus posted:I read in the four pillars that I should expect economic down-turns to happen several times during my life, and with the last down-turn people who were lucky enough to keep their jobs found that they had significantly greater income utility. If someone invested (alongside their tax advantaged accounts) in funds that historically did well/sustained themselves in recessions and then simply waited for the next one to happen would that greater utility be worth taking the tax hit? Two things: do you have confidence that you can accurately predict what they are? There's also a good chance that they would do poorly in the interim while you're waiting and you'd lose money. Second, in terms of income utility, keeping money carefully invested, and having an emergency savings account would do bigger wonders here  .
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May 30, 2013 18:16
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ntan1 posted:Nope on sectors. Gold/silver were high in 08/09. I think people were using that to counter falling stocks. Might be something to look further into. I'm not a trading professional.
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May 30, 2013 18:31
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ntan1 posted:
I'm not 100% on this, but about 90% sure that any earnings you withdraw from your Roth IRA that aren't a qualified distribution get *both* the 10% penalty as well as are taxed like regular income... Any contributions could be pulled out, though, w/o penalty or tax. Edit: seems I am correct http://www.irs.gov/publications/p590/ch02.html#en_US_2012_publink1000231057 Fancy_Lad fucked around with this message at 19:15 on May 30, 2013 |
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May 30, 2013 19:06
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Fancy_Lad posted:I'm not 100% on this, but about 90% sure that any earnings you withdraw from your Roth IRA that aren't a qualified distribution get *both* the 10% penalty as well as are taxed like regular income... Any contributions could be pulled out, though, w/o penalty or tax. I'm 100% sure that this is true.
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May 30, 2013 19:14
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Fancy_Lad posted:I'm not 100% on this, but about 90% sure that any earnings you withdraw from your Roth IRA that aren't a qualified distribution get *both* the 10% penalty as well as are taxed like regular income... Any contributions could be pulled out, though, w/o penalty or tax. Correct, contributions could be pulled out. With a standard 401k, it's just the 10% penalty applied. |Ziggy| posted:Gold/silver were high in 08/09. I think people were using that to counter falling stocks. Might be something to look further into. I'm not a trading professional. It isn't and is a terrible idea; past results do not predict future risk/gains. The below talk is by Malkiel who wrote A Random Walk Down Wall Street as recommended in the OP. I remember he explicitly addresses this. https://www.youtube.com/watch?v=wnCxlIQjT-s ntan1 fucked around with this message at 21:28 on May 30, 2013 |
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May 30, 2013 21:21
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ntan1 posted:Correct, contributions could be pulled out. With a standard 401k, it's just the 10% penalty applied. Huh? With a standard 401k you have to pay the 10% penalty and income tax on any unqualified distribution, including contributions. This is because you deducted those contributions from your income when you made them. I would also point out that these taxes would be paid on your full marginal tax rate, which is practically always going to be higher than what you would've paid for capital gains taxes if you had them in a taxable account to begin with. So long story short, it is not a good "plan" to invest in retirement accounts with the intention of pulling that money out early. flowinprose fucked around with this message at 21:45 on May 30, 2013 |
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May 30, 2013 21:33
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ntan1 posted:Correct, contributions could be pulled out. With a standard 401k, it's just the 10% penalty applied. So with a Roth IRA, is there a time limit to this, or does it mean you can keep pulling money out until you've pulled out an amount equal to all the contributions you've ever made? I take it you'd have to come up with documentation of contributions to match up the amount you withdrew?
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May 30, 2013 21:35
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SlightlyMadman posted:So with a Roth IRA, is there a time limit to this, or does it mean you can keep pulling money out until you've pulled out an amount equal to all the contributions you've ever made? I take it you'd have to come up with documentation of contributions to match up the amount you withdrew? No, there is no time limit. The order in which you take distributions from a Roth IRA is forced to be in the order of normal contributions first, then conversion/rollover contributions, then earnings. I believe the IRA fiduciary is required to send information to the IRS regarding what distributions you have taken and what category/portion of those distributions fell under. Of course this only really applies to non-qualified distributions, since once you reach the point that you are taking qualified distributions (59 & 1/2), none of this matters as none of it is taxable or has any penalties. So in that effect, there is a "time-limit" of sorts after which it doesn't make any difference.
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May 30, 2013 21:41
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Awesome, so if I lost my job or something, I could pull money out of my Roth IRA to pay my bills, and I wouldn't have to pay a dime in penalties or taxes as long as I didn't touch any of the interest that had accumulated?
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May 30, 2013 21:43
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flowinprose posted:Huh? With a standard 401k you have to pay the 10% penalty and income tax on any unqualified distribution, including contributions. This is because you deducted those contributions from your income when you made them. Yes, but with after tax investment accounts, you're still paying the taxes, just up front.
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May 30, 2013 21:47
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SlightlyMadman posted:Awesome, so if I lost my job or something, I could pull money out of my Roth IRA to pay my bills, and I wouldn't have to pay a dime in penalties or taxes as long as I didn't touch any of the interest that had accumulated? That is correct, however, that would still be a pretty bad idea as long as you had any other option... since you would not be able to recontribute those amounts, effectively negating some portion of your past contributions permanently.
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May 30, 2013 21:48
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SlightlyMadman posted:Awesome, so if I lost my job or something, I could pull money out of my Roth IRA to pay my bills, and I wouldn't have to pay a dime in penalties or taxes as long as I didn't touch any of the interest that had accumulated? This is true, but you also lose the ability to put that money back into your Roth IRA. It is dangerous to think of this as an extension of (or, ugh, a replacement for) a fully funded emergency fund because you are just robbing your future if you do have to pull it out.
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May 30, 2013 21:49
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