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Suntory BOSS posted:29 this month and belatedly realizing I should get serious about saving for retirement Well being debt free is an awesome start. From your plan above you are taking the $20k CD and putting $10.8 into roth and $9.2 into something else. It is good that you want to put a bunch away but you should keep some back as an emergency fund, 6 months of expense just in case. As mentioned above Vanguard has lower fees and equivalent performance so a good idea to go there. Also it is a good idea to go with monthly contributions instead of big chunks of money at the end of the year. Dollar cost averaging can help performance over time.
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Oct 2, 2013 14:05
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Anybody bored enough to advise me? 
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e: This is a dumb question I can answer myself.
the littlest prince fucked around with this message at 15:04 on Oct 2, 2013 |
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Oct 2, 2013 14:53
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Yesterday I opened an IRA.  Question: Can I contribute more than $5500 per year into this account, and have only $5500 (or whatever the maximum annual contribution is) be tax exempt? Or do I have to open a different account for any additional savings? Are there any recommendations on how to transfer money into my IRA (a single transfer in January vs. single transfer in Dec. vs. monthly transfers vs. ...)? Apologies if these questions are stupid.
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Oct 3, 2013 03:08
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theHUNGERian posted:Yesterday I opened an IRA. 5500 only; you wouldn't want to pay taxes now and taxes later anyway. Set up regular investments for dollar cost averaging. The easiest way is direct deposit with each check. Don't try to time the market.
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Oct 3, 2013 03:19
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SmuglyDismissed posted:5500 only; you wouldn't want to pay taxes now and taxes later anyway. Set up regular investments for dollar cost averaging. The easiest way is direct deposit with each check. Don't try to time the market. Thanks. I wasn't trying to time the market. I just wanted to know what the most straightforward/hassle-free option was.
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Oct 3, 2013 04:33
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FYI you have until 4/15/2014 to make your $5500 contribution for 2013.
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Oct 3, 2013 04:39
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Does anybody have any data on dollar cost averaging and the benefits of that versus dropping all my money in at once?
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Oct 3, 2013 05:11
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DCA works better when the market is very volatile and has significant dips and rises - thus letting you but at temporary low prices. Most people don't have the luxury of lump summing their investments since we tend to invest a portion of every paycheck. So most people DCA by necessity. But if the market takes a mostly linear trend upwards, then lump summing it at the beginning is the best as it means you got your money in at the cheapest price.
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Oct 3, 2013 06:11
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Thanks 94Gently and ntan1 for the feedback!
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Oct 3, 2013 06:22
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Here's an article on it: http://business.time.com/2012/11/15/is-dollar-cost-averaging-dumb/ DCA is mainly a psychological trick to get you to automatically shovel money away, rather than thinking about it too much. If you earn enough dough to comfortably make your yearly contribution on January 1st, you may as well just do it. You're basically still doing DCA, just at 1/12th the frequency.
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Oct 3, 2013 06:27
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If you're doing DCA in an attempt to time the market, you've already lost because rule #1 is to never try to time the market.
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Oct 3, 2013 13:31
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I have a dumb question: I've been putting a little of my discretionary income into Lending Club just to see what happens, and so far, so good I guess. I read somewhere that its ideal to have the funds of Lending Club under an IRA because the gains on the loans are inherently tax inefficient, but how do I make the distinction to the IRS which funds are "under an IRA?" I have my Roth with Vanguard maxed for this year already in one of their target retirement funds. Is switching some of my Lending Club investment to my IRA a worthwhile thing? If so, how do I go about doing that?
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Oct 3, 2013 14:01
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You have to open an IRA account with LendingClub. https://www.lendingclub.com/public/individual-retirement-accounts.action You could deposit your existing account into an IRA account, but it would count towards your yearly IRA max of $5500. I don't think you can do anything about the income you've already had through Lending Club, unless you weren't maxing your IRA already. (If you weren't maxing your IRA then just increase your contribution by an amount equal the income you got from Lending Club.)
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Oct 3, 2013 14:06
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filthy regex posted:Here's an article on it: http://business.time.com/2012/11/15/is-dollar-cost-averaging-dumb/ The particular situation above was DCA at the end of the year, if we assume over the long term the market will generally rise then doing DCA over a year instead of holding onto that money until the end will be beneficial. There is a better argument for lump sum investing at the beginning of the year (some companies allow you to delay taking your year end bonus until the start of the next year so you can fund the 401k max day one).
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Oct 3, 2013 14:17
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So I've posted in the past that my company's 401k funds are a pile of steaming dog poo poo lumped on top of a company that's a big pile of donkey poo poo with the management fees on top of the fund ER's. I assume that's because my company is cheap as gently caress and wants to pass as much of the cost of offering one onto us employees just so they can say to prospective employees "hey look at the benefits we offer!!!!11!1". I want to seriously talk to the company controller about moving us to something less craptacular. Obviously Vanguard would be the best choice because they're just so damned awesome. But I'm hunting around and I don't really see anything that says they manage 401k's; just IRA's and regular brokerage accounts. Am I wrong? Do they do 401k's? Anyone got a link? Failing that, what are some other good companies that manage 401k's? I hear Fidelity thrown around a bit. Any others? Links would be very appreciated so I can do some research and walk into his office with a well reasoned argument.
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Oct 3, 2013 14:18
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SeaWolf posted:So I've posted in the past that my company's 401k funds are a pile of steaming dog poo poo lumped on top of a company that's a big pile of donkey poo poo with the management fees on top of the fund ER's. I assume that's because my company is cheap as gently caress and wants to pass as much of the cost of offering one onto us employees just so they can say to prospective employees "hey look at the benefits we offer!!!!11!1". How large is the company? Fees can be a problem for very small firms if they don't have the size to spread out costs. Most of the big 401k players have low cost option index funds, just need to make sure those are offered, it might be an easy first step to see if your existing provider has a low cost index fund option and have that added to the mix.
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Oct 3, 2013 14:25
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SeaWolf posted:I want to seriously talk to the company controller about moving us to something less craptacular. Obviously Vanguard would be the best choice because they're just so damned awesome. But I'm hunting around and I don't really see anything that says they manage 401k's; just IRA's and regular brokerage accounts. Am I wrong? Do they do 401k's? Anyone got a link? My company retirement is a KSOP through Vanguard. All my contribution is a 401k that I have in Vanguard funds. All my company's contributions are company stock/ESOP (it is an employee owned company). When I log into Vanguard I see my Roth IRA, my 401k, and my ESOP. Based on my HR document, it looks like we work with Vanguard Fiduciary Trust Company, a subsidiary of The Vanguard Group. Hope that helps somewhat.
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Oct 3, 2013 14:52
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J4Gently posted:How large is the company? Fees can be a problem for very small firms if they don't have the size to spread out costs. We're hospitality, so not small. I'd say between 130-170 people. But there's higher than average turnover for anyone not in management, and one of the four hotels is a union shop so I think they operate a little differently, though I did see their accountant on the plan website. And we're in the luxury segment so we're making literally piles and piles and piles of money. Our plan right now is with PAi. Where would I look to see what low cost funds there are with them? Rooting around on the website is just a whole bunch of fluff and why PAi is teh bestest. Who should I talk to, my company's controller?
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Oct 3, 2013 15:05
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Go into Vanguard's Institutional Investors site. Thats where they have information for companies who want to set up a Vanguard 401k plan. You can try looking up your current 401k plan's filings here: https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1 It should give you a name to talk to.
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Oct 3, 2013 15:16
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J4Gently posted:Lay it all out in a letter, and email. Create a clear and concise timeline of when you took the money, when you stopped paying, when you went into default (the balance when you went into default). And the 1099 that says you took a non-qualified distribution, and the evidence of the payments you have made to the IRS. Clear out the pre-post default 401k situation and do the math to figure out what your situation should be with the new 401k company. I haven't heard back from them yet, but I did do a bit of Googling and find this: http://www.irs.gov/pub/irs-tege/epche12a03.pdf quote:Q-19: If there is a deemed distribution under section 72(p), is the interest that accrues Looks like I'm basically hosed as far as getting rid of the loan and have to figure out a way to either outpace it's rate of growth or pay it back, as I'm reading elsewhere that Fidelity should have handled it at a plan offset within 60 days of my initial default (and at this point I'm stuck with it). There is a very slight chance of getting to do a "plan offset" (basically having my loan absorbed by my remaining account balance and the remaining balance being my new balance) if my employer happens to roll over to a different 401k company, but it's kind of a hazy gray area for me and I'm not counting on it at this point. EDIT: For clarity, if you default for financial hardship reasons that aren't a result of military deployment, you're given a 1099-R coded as a "Deemed Distribution" and the loan continues to show as outstanding and continues accruing interest until you pay it back (as a placeholder to basically prevent people from taking loans, paying back a little and saying "gently caress it" and defaulting and taking another loan out later, presumably off of profit-sharing contributions, etc., though what esoteric finances would have to be in place for this to be viable to begin with is beyond me). Some Pinko Commie fucked around with this message at 16:28 on Oct 3, 2013 |
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Oct 3, 2013 16:15
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How long ago was this and what is your interest rate? The rates on 401k loans should be really, really low because of the low risk to the loan provider. Edit/quote: Guy Axlerod posted:You can try looking up your current 401k plan's filings here: https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1 It should give you a name to talk to. At my company, only about 30% of eligible participants actually have an account balance. 
Folly fucked around with this message at 18:00 on Oct 3, 2013 |
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Oct 3, 2013 17:31
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Folly posted:How long ago was this and what is your interest rate? The rates on 401k loans should be really, really low because of the low risk to the loan provider. Interest rate is 6%, the loan was originally done in 2008.
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Oct 3, 2013 18:25
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SeaWolf posted:We're hospitality, so not small. I'd say between 130-170 people. But there's higher than average turnover for anyone not in management, and one of the four hotels is a union shop so I think they operate a little differently, though I did see their accountant on the plan website. And we're in the luxury segment so we're making literally piles and piles and piles of money. Our plan right now is with PAi. Where would I look to see what low cost funds there are with them? Rooting around on the website is just a whole bunch of fluff and why PAi is teh bestest. Who should I talk to, my company's controller? The company also gets a kickback from the expenses their employees pay. It's in their interest to select funds with high fees for their 401k plans. It's the dirty nasty secret behind 401k that no one wants to admit.
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Oct 3, 2013 18:38
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Thanks for your help guys! I spoke to the controller and he laughed because even he doesn't invest in it he knows it sucks that much. But we can have funds added as long as they're on the "approved list" which just means any of the oppenheimer funds. Which still suck. BUT, even though it looks like they don't offer any single fund that tracks any major index, I think I could put together a list of funds that we could add that could replicate something coming close to tracking what looks like an index. So without consideration for ratios because that comes down to personal need... what sort of funds do I need to be adding to look like a major index? Should I be adding a small, mid, and large cap fund? Growth and/or value? International should be easier; there's just a few funds. And bonds there's just 2 or 3 which I think we already have. Edit: I also got to see the allocation across the board for the whole company and there's about 20 people in the whole company using it. And my contributions alone come to almost 5%. The GM of my hotel has about 20% of companywide contributions. I already spoke to him about opening an IRA and not burning money into this sinkhole
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Oct 3, 2013 22:41
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Remember, no matter how bad the funds are, you only have to invest in them for as long as you work there, so don't let that dissuade you from putting money into it. If you leave that job (and you should, because if their 401k is poo poo then they clearly don't care about their employees), you can roll all that money over into a Vanguard IRA. edit: Oh I just re-read your post and it sounds like you're not maxing an IRA either. If the funds are poo poo, you should definitely max out an IRA or Roth IRA first (unless there's a 401k match, in which case contribute up to the match before that, since free money in lovely funds is still free money). SlightlyMadman fucked around with this message at 22:50 on Oct 3, 2013 |
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Oct 3, 2013 22:47
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SeaWolf posted:Thanks for your help guys! I spoke to the controller and he laughed because even he doesn't invest in it he knows it sucks that much. But we can have funds added as long as they're on the "approved list" which just means any of the oppenheimer funds. Which still suck. BUT, even though it looks like they don't offer any single fund that tracks any major index, I think I could put together a list of funds that we could add that could replicate something coming close to tracking what looks like an index. Wow kind of shocking but you are right, nothing even close to low cost index funds with Oppenheimer. MSIGX OEQAX 1 and 2 star funds with fees almost 1% Next step try and get them to switch providers, or perhaps you can get a self directed option.
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Oct 3, 2013 22:52
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Instead of worrying about picking funds to approximate a given index, I would be picking funds that have low expense ratios. Index funds typically have low expense ratios, but it sounds like they don't have any available.
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Oct 3, 2013 22:52
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The key concept behind an Index fund is that it doesn't need to be managed as much precisely because it follows the exact individual components that represent a sector or the entirety of the stock market. Hence, you see low ratios. By definition, the Oppenheimer funds are actively managed, meaning that a manager chooses the funds based on his personal belief that a certain stock or set of stocks are better than others. You're paying to the manager saying that you believe he is smart. In the case of Oppneheimer, a poo poo ton of money. So basically, a fund that looks like a major index will always be an index fund or a combination of index funds 
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Oct 3, 2013 22:54
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SlightlyMadman posted:Remember, no matter how bad the funds are, you only have to invest in them for as long as you work there, so don't let that dissuade you from putting money into it. If you leave that job (and you should, because if their 401k is poo poo then they clearly don't care about their employees), you can roll all that money over into a Vanguard IRA. Oh no, I am DEFINITELY maxing my IRA. It's with Vanguard and I love the poo poo out of it. Since there's no company match, my IRA is first, then I put a little extra into the 401k (because I am DEFINITELY NOT going to work here forever) so I can have a sweet haul to dump into the Vanguard target fund in my IRA when I leave. The rest that I have to play with I started putting into my taxable accounts using iShare funds to replicate the Vanguard TR fund since I don't pay commission to trade on those. I just want to maximize my tax advantaged options (even if they suck) so I can get as much money into my IRA as possible, even if I have to wait until I leave this company. It might be an uphill battle to try to get them to switch, but I'll see what I can do. Just need to do my research. I'll start with the Vanguard institutional site. ntan1 posted:The key concept behind an Index fund is that it doesn't need to be managed as much precisely because it follows the exact individual components that represent a sector or the entirety of the stock market. Hence, you see low ratios. So basically, I can't win if we stay with these funds. They really really suck.
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Oct 3, 2013 23:00
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You would think Opp, like Fidelity who has managed funds, would offer a low cost index option to keep people in their family of funds. Kind of crazy that is this day and age they are able to survive. Next you will be telling me people still buy funds with loads!!
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Oct 3, 2013 23:04
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SeaWolf posted:
Yah they suck, but they are better than not saving at all. Max out that Vanguard IRA, then sock away what you can and hope the 401k options change in the future.
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Oct 3, 2013 23:07
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J4Gently posted:You would think Opp, like Fidelity who has managed funds, would offer a low cost index option to keep people in their family of funds. Kind of crazy that is this day and age they are able to survive. Next you will be telling me people still buy funds with loads!! Funds with loads aren't *always* bad, just almost all funds that only consist of regular market instruments. 99% of people probably have no business investing in any fund with a load, but with sufficient assets esoteric funds that do things like direct venture capital or direct student loans can have some desirable characteristics for a portfolio.
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Oct 3, 2013 23:11
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SeaWolf posted:So basically, I can't win if we stay with these funds. They really really suck. No, that's not the lesson to be taken here. MERs aren't the be-all end-all method of picking funds for investment, and is, in fact, a REALLY REALLY lovely way of doing so. Yes, they're important, but such things as historical performance, strength of management and alignment with time horizon and investment goals are more important. Funds that are actively managed don't have some dude in the back picking stocks by throwing poo poo at a dartboard (as some people here seem to think), they spend the money doing research, fundamental and financial analysis on the companies they're considering purchasing. That poo poo costs money, it's not done by a bunch of college interns as a summer job. Quite simply, the people who do active management for mutual funds know what they're doing or they wouldn't have jobs. ntan1 posted:By definition, the Oppenheimer funds are actively managed, meaning that a manager chooses the funds based on his personal belief that a certain stock or set of stocks are better than others. You're paying to the manager saying that you believe he is smart. In the case of Oppneheimer, a poo poo ton of money. You, in particular, don't have the barest clue what the gently caress you're talking about and need to stop spouting this crap. (USER WAS PUT ON PROBATION FOR THIS POST)
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Oct 4, 2013 05:49
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No, funds that are actively managed often seem equivalent to randomly throwing a dart at a board. The entire premise that both Bernstein and Malkiel suggest in their books is that the stock market is a representation of a random walk. Active managers truly believe that security analysis and charts and graphs accurately allow them to do better at the stock market. They can gain money by doing so, and there is certainly some degree of survival bias in the active fund market. However, almost no active funds beat index funds in the long term (20 years or more).
ntan1 fucked around with this message at 06:45 on Oct 4, 2013 |
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Oct 4, 2013 06:23
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grack posted:Quite simply, the people who do active management for mutual funds know what they're doing or they wouldn't have jobs. Yes, they are excellent salespeople and that's the only reason they keep their jobs. How else would you explain the fact that 2/3 of actively managed funds underperform their respective indices every year after fees are taken into account?
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Oct 4, 2013 07:16
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grack posted:No, that's not the lesson to be taken here. MERs aren't the be-all end-all method of picking funds for investment, and is, in fact, a REALLY REALLY lovely way of doing so. Yes, they're important, but such things as historical performance, strength of management and alignment with time horizon and investment goals are more important.  Historical Performance? Strength of Management? You don't happen to work for JP Morgan Asset Management, I suppose? grack posted:Hey, I'm a professional advisor! Oh wait.... 
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Oct 4, 2013 07:17
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Okay, fine. Do whatever the gently caress you want. Trust a bunch of internet experts who've read books and have no professional training or experience. Seems like a helluva good idea to me. I mean, you can learn how to do everything on the internet, amirite?
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Oct 4, 2013 07:25
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grack posted:Okay, fine. Do whatever the gently caress you want. Trust a bunch of internet experts who've read books and have no professional training or experience. Seems like a helluva good idea to me. Maybe if you were actually providing reasons and data to support the fact that MER is a sub-standard or poor way of picking funds instead of just spouting the same bullshit 'actively managed funds are great' that every 'financial expert' that's peddling his own fund says, people would actually listen to you. Also, nice that you assume that no-one else in here could possibly have any investing experience while insulting them at the same time. Good start.
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Oct 4, 2013 07:46
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DrewkroDleman posted:I guess I will just pose a question and hope a European goon (or someone else who has some experience or knowledge) will be able provide some insight. What up fellow American-in-Germany goon! I have been looking into how to best invest for retirement while living in Germany and it doesn't look so great. Vanguard exists in Germany, but the fund selection is greatly reduced and I think you then run into FACTA issues since it's a foreign account. On the other hand, if you continue to invest in some sort of retirement account in the US, the fund you use has to be a "transparent" fund, registered in Germany or it could be subject to punitive taxes. There is some more reading you can do about it here. I've been meaning to go to an accountant here and/or paying for 30 min consultation with a US accountancy firm specializing in expat taxes to see what my best options are, but I just haven't gotten around to it yet
Total Confusion fucked around with this message at 10:14 on Oct 4, 2013 |
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Oct 4, 2013 10:11
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grack posted:Okay, fine. Do whatever the gently caress you want. Trust a bunch of internet experts who've read books and have no professional training or experience. Seems like a helluva good idea to me. Actually, I'm glad you're here. Can you tell me the name of a good book that offers a counterpoint to what I've been reading? Something that posits some combination of 1) market timing is a verifiable skill, 2) the current mutual fund hiring systems adequately recruit people with this skill into fund management positions, 3) the use of this skill is profitable enough to overcome the fund fees. I am fairly convinced that actively managed funds are a bad idea. But I wouldn't mind hearing the other side, just for the sake of my own due diligence.
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Oct 4, 2013 14:15
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