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SlightlyMadman posted:I've been using Personal Capital to track my retirement investments, and while its suggestions seem pretty much in line with what I'm doing, I'm always way under in Alternatives (they say I should be around 8%). I checked my Fidelity and Vanguard fund choices and don't see any alternatives; for most investors that would be gold and other metals, right? Should I be worried that I own almost no alternatives, or is this just a symptom Personal Capital being for rich people (for whom 8% of their portfolio is probably in a Picasso on the wall) in ways that don't apply to me? In theory you want something with very little correlation to the equity/bond markets you are in. I wouldn't be concerned about that so much, if you are on task with everything else, real alternatives tend not to have a convenient low cost index fund option.
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Nov 8, 2013 20:30
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Thanks! I'm not sure how I missed it at first, but I just found this fund: https://personal.vanguard.com/us/funds/snapshot?FundId=0053&FundIntExt=INT The expense ratio is a bit high, but not bad. I'll just drop the $3k minimum into it and leave it alone. That should hopefully bring me up to PC at least not nagging me about it and ease my mind a bit.
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Nov 8, 2013 20:40
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Minty Swagger posted:I have this card and while the rewards rule, the support really blows. Not that you need to call your CC company much but just an FYI that fidelity outsources the card to FIA card services, which, well: http://www.consumeraffairs.com/credit_cards/fia.html I've never heard of this. Do the reward contributions count against your own personal contribution limits? i.e. is it just like they are giving you the 2% as cash and then you're putting it into your account as a contribution?
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Nov 8, 2013 20:55
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flowinprose posted:I've never heard of this. Do the reward contributions count against your own personal contribution limits? i.e. is it just like they are giving you the 2% as cash and then you're putting it into your account as a contribution? Its just a cashback card, but in this case you have to drop it into a fidelity account. I handle my IRA myself and dont want it messing with it so I just get the money deposited into my taxable brokerage account. Neat since it happens automatically when you it a certain $. 50 bucks maybe? You could put it into an IRA fund if you wanted but then once you hit the max you're in risky territory and I wouldnt be suprised if you lost the money considering the supporting company's track record. The rewards are great, and its brainless once you set up autopay on the bill though.
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Nov 8, 2013 21:09
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I had a look around and didn't see anything particularly about managing savings in the UK so I'll ask here. If I have somehow completely skipped over a thread somewhere I apologize. I am 24 years old and within the next year I am 99.9% guaranteed to be walking into a career where I can expect to start out on roughly £28000 a year, potentially free of income tax depending on what company I end up signing on with due to being a seafarer. My parents while responsible with money never really did the investment thing and I am fairly sure their money just sits in a regular bank account. This means that I never got any advice when it comes savings and investments. Being away from home and pretty much fully catered for in my job for around half the year and not having any debts to settle aside from a student loan from saas means that I have a bunch of money coming up that I really don't know what to do with as I have only ever used a standard bank account up until now. Really what I am asking is what on earth should I be doing about saving for retirement and investing in the UK in general? Should I be cramming as much money as I can into a cash ISA every year? What about stocks and shares ISAs? Should I be sticking money in some sort of pension fund (obviously yes but I mean beyond what I may or may not get with my employer)? I am researching my options but I feel somewhat overwhelmed at the moment. If someone could give me a basic rundown of what I should be doing that would be a great help.
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Nov 9, 2013 17:39
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Find out if there is some tax sheltered method of investing where you can have a portfolio and pay less tax than just having it in a savings account and it getting counted in your taxable income. If there isn't.. like I've found for Australia.. go back and you can read about how I'm considering opening a trading account in Switzerland. Buy property, right? That's what the Australian old school will tell you, and apparently that's the same in the UK. Get on the ladder! Get in now and benefit from the next rally! Well your interest rates on the floor like ours.. debt can only get more expensive from here and if you go and read the thread about rental properties if it's an investment vehicle it becomes all about managing cash flow. I'm working out how to make returns to equal or beat the property market without the property market bullshit.
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Nov 9, 2013 18:13
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Mr Teatime posted:I had a look around and didn't see anything particularly about managing savings in the UK so I'll ask here. If I have somehow completely skipped over a thread somewhere I apologize. Here's the last post I made on the subject: This thread isn't great for UK advice as it's centered around US tax schemes, however: First off, how much money a year can you save? There are two cases: 1) you can save less than £11,520 (after tax). This number is the ISA limit - ISA provides a tax-free wrapper that means you don't pay any tax on interest or capital gains on anything inside the wrapper. I would put all the money into an ISA account. If you choose to go fully stocks and shares (this includes funds), or split 50-50 between stocks&shares and a cash account, that's up to you and your risk profile. Obviously cash just gives you the interest that is stated on the account, and an investment account can go up or down. If you're going for funds, then do some research into sectors that you're interested in, risk profiles etc. You may want to just buy into a ftse tracker fund. The main thing this thread will tell you is to be aware of management fees. 2) you have more than £11,520 - in this case max out your ISA allocations, and be a bit more creative with the rest. Look up some investment funds if any take your eye. Think about SEIS/EIS investments. Or just find a high interest savings account. I recommend Hargreaves Lansdowne as a broker to get a stocks/shares ISA through, it's very easy to set up and get going, and they provide access to a wide range of funds. If you're more risk averse and want a cash ISA, then shop around for the best rates, check out moneysavingexpert.com as a starting point, they do a lot of the work for you! Try to keep 3-6 months worth of costs in a fast access savings account as an emergency fund. Obviously we don't have healthcare issues like the US, but who knows, you may lose your job or have unexpected expenses. If there's anything in this post that you would like clarification or more detail about (or disagree with), just ask!
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Nov 9, 2013 19:14
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Is the ISA like the Canadian TFSA? Basically a tax free account that has a yearly contribution limit.. but you can have equities in it and the returns can come back into it on top of the contribution limit?
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Nov 9, 2013 19:40
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Thanks for the information. I'm glad someone could clarify that sticking money in an ISA of some sort was something basic that I should be doing if I can afford to. I shall have to go and research investing money beyond just that though.
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Nov 9, 2013 20:35
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Mr Teatime posted:Thanks for the information. I'm glad someone could clarify that sticking money in an ISA of some sort was something basic that I should be doing if I can afford to. I shall have to go and research investing money beyond just that though. Yeah, this thread is pretty U.S.-centric. You can extract some general principles from it though:
If you do find any good info on UK investment fund/account providers out there, please share it. Kilty Monroe fucked around with this message at 07:19 on Nov 10, 2013 |
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Nov 10, 2013 07:14
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necrobobsledder posted:There's only a few cases I can think of where keeping your money with them instead of rolling over would be a good idea. Those few cases start with Thrift Savings Plan. What if you're not fully vested and there's a chance you could end up working there again down the line?
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Nov 10, 2013 18:36
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Tony Montana posted:Is the ISA like the Canadian TFSA? Basically a tax free account that has a yearly contribution limit.. but you can have equities in it and the returns can come back into it on top of the contribution limit? Just answering my own question on this one: An Individual Savings Account is a financial product available to residents of the United Kingdom. It is designed for the purpose of investment and savings with a favourable tax status. Money is contributed from after tax income and not subjected to income tax or capital gains tax within a holding or upon withdrawal. Cash and a broad range of investments can be held and there is no restriction on when or how much money can be withdrawn So, that makes Australia the only country that doesn't have some form of this. Goddamn it.
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Nov 10, 2013 19:05
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tentish klown posted:Here's the last post I made on the subject: What's your opinion on the relative merits of S&S ISAs versus SIPPs as tax-privileged retirement savings vehicles?
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Nov 10, 2013 22:37
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LemonDrizzle posted:What's your opinion on the relative merits of S&S ISAs versus SIPPs as tax-privileged retirement savings vehicles? So the practical pros and cons of each, as I understand them: ISA: taxed as income at source, and then any capital gains/profits are tax free. Limited to 11.5k/year contribution. You can take it out at any time, but you can't replace funds that you take out for the purposes of the contribution limit. SIPP: tax free at source (i.e. pre-income tax). Possible company contributions here. You have to hold it until you're 55 to withdraw money without a penalty. At 55+ you can take a 25% lump sum and then purchase an annuity with the remainder. If this is money you'll need before you're 55, then an ISA is clearly better. If you max out your ISA contributions, then it starts getting a bit more interesting. With the assumption that you max your ISA contributions, you're probably earning above the 40% tax bracket level so the fact that SIPPs are free of income tax becomes a lot more valuable. My issue with SIPPs is that the private pension system is a bit hosed. You currently need to save 15k (approximately, I think) for every 1k/year you want you pension to give you. So for a minimum wage level pension you're talking £200k or so. And your options are very limited with regards to the money in your pension pot as you can't take the whole lot out if you want to. Personally, my current strategy is to max out an ISA account before adding to my pension pot, with a view to possibly taking the ISA money and buying a property with it for rental income. However, this also depends on company contributions - I was working in a job where the company matched my contribution up to 5% of salary, so I also took full advantage of this. However, I'm not anymore so I've decreased my pension allocation accordingly.
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Nov 10, 2013 23:51
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Hey, I'm 27 (about to be 28) and finally starting my retirement savings. I work at a non-profit, and I'm investing through Vanguard with a 403b plan. My employer will 100% match any contribution up to $500, so I'm looking to get fairly close to that number (probably $300, ideally). I was doing really good at the part where I had to put in my name and address but then it hit me with a giant list of "investments" to choose from. I know nothing at all. I'm going back and reading the thread now, but if anyone has advice or has picked from the Vanguard list of choices already, help would be appreciated. My biggest question is about the different "categories" of investments, I can choose from these fund categories: Balanced Fund Bonds Fund Money Market Fund Stocks Fund or the "safe option", the "Prime Money Market Account" I don't plan on touching this money outside of my first house purchase in the next ten years, which I can apparently draw from from my contributions to the account (but not my employer's match). Thanks for any response.
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Nov 11, 2013 15:05
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Not to be rude, but have you read the thread at all? Like the OP? General rules of thumb: choose broad index funds (OP has help with this), never ever ever withdraw from retirement accounts if you can at all avoid it (don't buy a house if you can't afford it without retirement money) and if you can, get to the full match, 100% is fantastic (though make sure you have an emergency fund as well).
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Nov 11, 2013 15:11
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ntan1 posted:Yup, Open a Roth account with Vanguard, and put 30% of your total stock portfolio (including 401k) into the Total International Stock Fund, and about 15-20% into the Vanguard Extended Market Fund. If you invest in bonds, those will also need to be in your Roth. You eventually should, but you seem to be just starting your career (aka, less than 30 years of age). This looks like pretty good advice pertaining to my situation. Apologies for making the oldest mistake on the SA boards. Elephunk fucked around with this message at 16:01 on Nov 11, 2013 |
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Nov 11, 2013 15:57
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Elephunk posted:Hey, They should almost certainly have the Target Retirement fund series available, pick a year that's close to when you expect to retire and run with that until you know a little more about what you are doing. Buy or borrow a used copy of The Four Pillars of Investing per the OP, it's pretty cheap and not a very long read. If you want more help than that, you'll need to post a list of the fund options they've given you and their expense ratios. When they say they'll match contributions up to $500, is that per check? I've never seen a maximum match defined by a flat amount before. Absolutely try to get your maximum match, that's straight-up free money that if you don't take now, you will never see again. You also shouldn't draw from your retirement money to pay for a house, because anything you pull out now can't be made up past the contribution limits later. I also don't believe you can get out of the early withdrawal penalty on a 401k/403b even as a first-time homebuyer either.
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Nov 11, 2013 15:59
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Thanks for the great responses. Looks like I'm going with the two above (International Stock, Extended Market), and the 500 index option, and a "target retirement fund". Did I pick enough?
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Nov 11, 2013 16:02
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Elephunk posted:Thanks for the great responses. A Vanguard Target Retirement fund is actually a "fund of funds" that includes their domestic and international stock and bond index funds already. The only real disadvantage with them is that their expense ratio is based on Investor class shares, while you probably already have access to better share classes of the same funds. Put it all in the TR fund until you know what you're doing, then stop using it entirely. You'll also want some percentage of bonds. 10-15% is pretty standard at your age.
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Nov 11, 2013 16:07
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Kilty Monroe posted:A Vanguard Target Retirement fund is actually a "fund of funds" that includes their domestic and international stock and bond index funds already. The only real disadvantage with them is that their expense ratio is based on Investor class shares, while you probably already have access to better share classes of the same funds. Put it all in the TR fund until you know what you're doing, then stop using it entirely. Well, let me put in the "admiral" share class and see what options I get... Edit: Didn't get much. 403b plans can't access tax-exempt plans. I'm either going to 100% the TR fund, although I can see the "package" of deals it is. It will be better if I manually choose the funds from the TR package one-by-one, and it looks like I can add a fifth option in Bonds. Hope I'm not messing this up - I think it's pretty easy to reallocate funds once I do more reading? Elephunk fucked around with this message at 16:46 on Nov 11, 2013 |
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Nov 11, 2013 16:17
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Looking at expenses, it's 0.18% for the TR 2040 package. Individually, the accounts have (.20 + .22 + .23 + .17) / 4 = average of .205% expense. So it's actually a better deal for me to do the package, yeah?
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Nov 11, 2013 17:18
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Elephunk posted:Looking at expenses, it's 0.18% for the TR 2040 package. Only if the funds are equally split (25% each) in the TR2040 package.
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Nov 11, 2013 17:26
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Elephunk posted:Looking at expenses, it's 0.18% for the TR 2040 package. You should be calculating it as a weighted average, but it's almost certainly still going to be the case that the target fund has lower expenses.
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Nov 11, 2013 17:27
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They're not equally invested though; I believe Vanguard's TR funds are exactly the same expense ratio as distributing it yourself. The only difference, as has been said, is that if you split it up manually you may have access to Admiral funds.
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Nov 11, 2013 17:29
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The difference between 0.18% and 0.21% is nothing compared to getting a reasonable allocation and you are wasting your energy even thinking about it. Forest/trees/all that. Do the easy thing, put 100% in the Target Retirement fund until you've learned enough to have your own preference for the stock/bond ratio. Admiral shares are worth it if you can actually get them in your 403b (unlikely) but that is also something you can save for later. slap me silly fucked around with this message at 17:36 on Nov 11, 2013 |
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Nov 11, 2013 17:33
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slap me silly posted:The difference between 0.18% and 0.21% is nothing compared to getting a reasonable allocation and you are wasting your energy even thinking about it. Forest/trees/all that. Do the easy thing, put 100% in the Target Retirement fund until you've learned enough to have your own preference for the stock/bond ratio. This and if you're just getting started, you probably don't have enough capital to do a reasonable allocation using individual funds because of minimum balance per fund unless 401k/403b works differently than individual accounts. I'm still pretty much 100% into TR funds because I simply don't have enough in my accounts to get the distribution I want and hit 10k on any individual fund.
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Nov 11, 2013 17:44
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Thanks for the help and the good reads in pages gone by. Here's what I'm about to pull the trigger on: (Contribution - Name - Expense - Symbol) (8% Contribution) 500 Index Fund Inv 0.17% VFINX (32%) Total Stock Mkt Idx Inv 0.17% VTSMX (40%) Total Intl Stock Ix Inv 0.22% VGTSX (10%) Total Intl Bond Ix Investor 0.23% VTIBX (10%) Total Bond Mkt Index Inv 0.20% VBMFX I did my allocations based on some advice from a page or two back. This look like a disaster? I really don't think so. It's their TR package with my own allocations + the addition of the 500 index fund into my Domestic Stocks. OH THIS IS SO FUN
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Nov 11, 2013 18:00
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You're about my age, so you can be a bit more aggressive and 5-10% put less toward bonds.
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Nov 11, 2013 18:14
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When saying 'buy bonds' are we talking actually buying bonds or buying bond indexed funds?
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Nov 11, 2013 18:17
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ETB posted:You're about my age, so you can be a bit more aggressive and 5-10% put less toward bonds. Does this mean increase my bonds to 15% contribution, or lower them to 5%?
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Nov 11, 2013 18:23
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Elephunk posted:Does this mean increase my bonds to 15% contribution, or lower them to 5%? He's saying to decrease your bond allocation to 5-10%. Bonds aren't great right now anyways because interest rates can really only go up
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Nov 11, 2013 18:36
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Here we go. Gonna read the Four Pillars and some other stuff, but this is a good place to start I think: (9% Contribution) 500 Index Fund Inv 0.17% VFINX (36%) Total Stock Mkt Idx Inv 0.17% VTSMX (45%) Total Intl Stock Ix Inv 0.22% VGTSX (5%) Total Intl Bond Ix Investor 0.23% VTIBX (5%) Total Bond Mkt Index Inv 0.20% VBMFX
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Nov 11, 2013 19:05
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Sorry, slightly dyslexic today. That's what I meant, yes. You could just round that 9 to 10% if you like nice-looking numbers, but it probably doesn't matter too much in the end. 
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Nov 11, 2013 19:13
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I also recommend reading The Intelligent Asset Allocator. The relationship between stocks / bonds and returns is not linear. Basically adding some bonds to a stock portfolio will decrease your risk without significantly reducing overall returns. For that reason I think anywhere between 10-30% bonds is fine for an aggressive stock-heavy portfolio.
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Nov 11, 2013 19:19
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INTJ Mastermind posted:I also recommend reading The Intelligent Asset Allocator. The relationship between stocks / bonds and returns is not linear. Basically adding some bonds to a stock portfolio will decrease your risk without significantly reducing overall returns. For that reason I think anywhere between 10-30% bonds is fine for an aggressive stock-heavy portfolio. Four Pillars first. The Intelligent Asset Allocator is a great book, but as Bernstein says, the reason he wrote Four Pillars was because The Intelligent Asset Allocator was too technical and not as easily accessible.
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Nov 11, 2013 20:51
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Elephunk posted:Here we go. Gonna read the Four Pillars and some other stuff, but this is a good place to start I think: The Total Stock Market Index fund already includes everything that's in the 500 index fund, so by adding the 500 index you're merely "tilting" your domestic stock allocation towards the 500 index, which I wouldn't advise (if anything you should tilt towards mid-/small-cap and/or value stock). It's strange that your 403b doesn't offer any better than Investor shares for such core funds. You could try talking to HR about it? I can tell you're really getting into this, unfortunately, as long as you're stuck with Investor shares it seems that the Target Retirement fund really is going to be the best option for you (it uses the somewhat cheaper Total Bond Market II fund, which you don't have access to otherwise). You can still add a small percentage of other funds to it for market tilt if you like. gwrtheyrn posted:This and if you're just getting started, you probably don't have enough capital to do a reasonable allocation using individual funds because of minimum balance per fund unless 401k/403b works differently than individual accounts. I'm still pretty much 100% into TR funds because I simply don't have enough in my accounts to get the distribution I want and hit 10k on any individual fund. Yeah, there's no individual minimum investment on funds in a 401k/403b plan, by virtue of everyone in the plan investing collectively. 401k plans are pretty much the only place anyone ever gets those $1 million minimum Institutional class shares. Kilty Monroe fucked around with this message at 07:21 on Nov 12, 2013 |
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Nov 12, 2013 07:07
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Moving money around in retirement accounts makes me so nervous...I just expect I'm going to gently caress something up and wind up with a huge tax bill. I believe the below is correct: I took a 403(b) (pre-tax) and rolled it over into my Vanguard Roth IRA account. This amount (~$11,000) does not count towards my contribution limit for this year, but will be taxed as income. I took a Traditional IRA that I opened in 2012 and converted it, in its entirety, into a Roth IRA. This was my only traditional IRA investment. I plan to do an indirect rollover (receive check, deposit check into Vanguard) within 60 days. This amount will be taxed as income because of the conversion, and will not count towards my contribution limit for this year because it was a conversion, not a re characterization. All good? Your marginal tax rate/bracket is determined by your income AFTER the personal exemption and standard deduction, right? I am doing some things that rely on the fact that even with the conversions above I will still be in the 15% bracket (so pay 0% capital gains)
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Nov 12, 2013 17:59
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kaishek posted:I am doing some things that rely on the fact that even with the conversions above I will still be in the 15% bracket (so pay 0% capital gains) This worries me. I think that any capital gains are effectively realized in the Traditional IRA/403(b) during rollover, meaning that all capital gains there will be taxed as income. If you're not relying on that, you're good.
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Nov 12, 2013 18:33
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baquerd posted:This worries me. I think that any capital gains are effectively realized in the Traditional IRA/403(b) during rollover, meaning that all capital gains there will be taxed as income. If you're not relying on that, you're good. That's expected - I was referring to about $6,000 in other stocks/mutual funds I had in taxable accounts that I am going to cash out to keep as an emergency fund (and possibly put back into a Roth if I am able to build up enough cash to cover emergencies otherwise). It will save me a huuuuuge headache in calculating my basis on these, because my granddad got them for me when I was little and I have none of the original paperwork. And thanks! Like I said, moving money around makes me nervous.
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Nov 12, 2013 21:29
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