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If you pay the $10 bucks for SigFig can you cancel after just the first month or do they force you to stay with them a year? I'm not sure if I'm interested in having my account regularly rebalanced but I would like to see everything diversified. edit Is TD Ameritrade a company that has their own funds like Vanguard or is it just a place that sells funds from different brokerages? Sephiroth_IRA fucked around with this message at 00:41 on Jan 24, 2014 |
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Jan 24, 2014 00:35
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USSMICHELLEBACHMAN posted:Yeah, but there are a lot of really high yield mutual funds that I don't have access to until I have 100k, for instance: Oh, I see. Yes, if you want something like that then just get the ETF. Now I am going to ask you to justify it though  Calling it "high yield" suggests you're chasing returns instead of thinking about portfolio allocation. This particular fund also probably overlaps quite a bit with the S&P500, if you are using that.
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Jan 24, 2014 00:41
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slap me silly posted:Now I am going to ask you to justify it though What's a good primary fund if I'm mostly looking at long term growth and fine with short term fluctuations? The S&P 500 covers a lot of different sectors, and a nice yield, but I don't understand what a 2-for-1 reverse stock split is. I looked it up and it didn't make me feel more informed. Plus I'm weary of the funds that are < 10 years old.
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Jan 24, 2014 00:52
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I use a mix of Vanguard's Total Stock Market, Total Bond Market, and International Stock Market. But they also have some nice all-in-one types with $1000-3000 minimums: the Target Retirement funds and the Life Strategy funds. You could get a really good portfolio with just one of those, depending on what you want. Not sure how much of your investments are in taxable accounts but the taxable/non-taxable allocation is also something to think about if you're not just throwing everything into 401k and IRA. E: The Life Strategy funds are young, but it doesn't matter because they are just collecting other index funds together. Not a situation where you need to think about the track record of the fund; only of the company and the market. slap me silly fucked around with this message at 01:00 on Jan 24, 2014 |
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Jan 24, 2014 00:56
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slap me silly posted:Not sure how much of your investments are in taxable accounts but the taxable/non-taxable allocation is also something to think about if you're not just throwing everything into 401k and IRA. Yeah I haven't decided yet. I've done the math on a Roth IRA (to the best of my abilities) and there's no reason not to do that. But honestly, I'm really not that interested in my retirement. I'm much too skeptical about the/my future to want to lock my money away until I'm old. Still, it looks like if you eat the penalty on withdrawing early from a Roth IRA, you're still better off than if you just invested through a normal mutual fund, because it wont experience drag from capital gains tax. But I could be totally wrong about this, I'm still very new.
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Jan 24, 2014 01:06
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Anyone use Sallie Mae for cash savings? They're paying .9% with no minimums.
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Jan 24, 2014 05:17
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I'm actually about to open an account to move my emergency fund from my checking to a savings account, to reap that ~1% return  Would love to hear what people use! or should I just invest in a money market in fidelity? 
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Jan 24, 2014 06:08
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I've been putting 8% (4% matched) into a company 401k for the last 6 years. I want to start putting another ~$500/mo as something to possibly retire early on. I don't currently have a Roth. I'm 30 now, so $500 for 20 years at 6% is $250K, or 25@8% is $500K. I'd like to have the option to gently caress off to Southeast Asia and lie on the beach for 10 years until I start drawing on my primary retirement funds. Not to say this is what myself or my wife will want in 20-25 years, but having the option would be nice. I guess my question is whether I should put this into a RothIRA so I have access to the principal, and possibly have the tax advantage if I leave the rest for 59.5? The risk of possibly withdrawing some at a penalty seems better to me than leaving everything in a non-tax advantaged account. Am I missing something that might be better?
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Jan 24, 2014 16:13
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I think you need to be saving/investing a lot more money before you can entertain the notion of retiring before 60 unless you live extremely frugally(in which case I would expect you should be able to save a much higher percentage of income so I doubt this is the case). You will probably need around 2.5 million dollars at age 60 to be able to take currently-recommended "safe" withdrawals of 2.5% and have 40k in today's purchasing power per year. Of course this becomes about 1.8 million or 1.4 million if you're willing to withdraw 4% or 5% per year, but with lower returns expected in the future this increases the chance significantly of running out of money before you die. Nail Rat fucked around with this message at 16:36 on Jan 24, 2014 |
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Jan 24, 2014 16:30
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Keeping contributions to my 401K until I'm 55 and assuming 7% growth would keep me at 1.5m at 60 so I guess I should shore that up a little. The next place to do that would be a Roth, so there is my answer. 50-60 or 55-60 would be very frugal, because if I did I would be in a low cost of living country. Its only something we would entertain if we were happy with where our retirement account was at 50-55 and would not have any issues missing the contributions we would miss not working out that last 5-10 years.
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Jan 24, 2014 16:52
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Given all that, I'd say if you can max a Roth(460 a month) and find a way to contribute 2-300 a month to a taxable account(saving a little more than you were setting out to do) would give you a comfortable retirement after 60 and possibly give you a few hundred k in the taxable account by 50-55 to go live cheap in paradise until 59.5.
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Jan 24, 2014 17:03
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Nail Rat posted:Given all that, I'd say if you can max a Roth(460 a month) and find a way to contribute 2-300 a month to a taxable account(saving a little more than you were setting out to do) would give you a comfortable retirement after 60 and possibly give you a few hundred k in the taxable account by 50-55 to go live cheap in paradise until 59.5. I'm married, so I could set up two Roth IRAs and risk the penalty (on what will likely be the lowest tax brackets) for a few years.
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Jan 24, 2014 17:08
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Arzakon posted:I'm married, so I could set up two Roth IRAs and risk the penalty (on what will likely be the lowest tax brackets) for a few years. If you are going to do this and you expect to be in that much of a lower tax bracket, it would make much more sense to withdraw from traditional contributions (401k, etc). The penalty is the same either way. The tax benefit would be that you are deferring income now to be taxed later at a lower rate. Because of this, if you really think you will be at a much lower tax bracket later, it would make much more sense to maximize your 401k contributions now prior to even contributing to a Roth. Save your Roth IRA earnings for later when it won't be taxed at all. Go ahead and withdraw any Roth contributions first, though. flowinprose fucked around with this message at 17:21 on Jan 24, 2014 |
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Jan 24, 2014 17:18
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Nail Rat posted:I think you need to be saving/investing a lot more money before you can entertain the notion of retiring before 60 unless you live extremely frugally(in which case I would expect you should be able to save a much higher percentage of income so I doubt this is the case). You will probably need around 2.5 million dollars at age 60 to be able to take currently-recommended "safe" withdrawals of 2.5% and have 40k in today's purchasing power per year. Man that's pretty depressing. Thank god I plan to be cheap when I'm old. There's also the possibility I'll semi retire early and work part time until I can afford to quit completely. Sephiroth_IRA fucked around with this message at 17:56 on Jan 24, 2014 |
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Jan 24, 2014 17:51
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On the one hand it's depressing, on the other hand it's good to put some concrete numbers on something a lot of people treat as an abstract concept. It's also worth keeping in mind that that 2.5% "safe" withdrawal is designed so you have a very high chance of still having money for many decades past when you will probably die. Meaning, you can have less than that and still have plenty enough to last you your lifetime, but unless you know when you're going to die, you're better off having more than you think you need. If you retire at 60 and are alive at age 88 and run out of money, there's probably not much demand for you in the workforce.
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Jan 24, 2014 18:50
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Nail Rat posted:It's also worth keeping in mind that that 2.5% "safe" withdrawal is designed so you have a very high chance of still having money for many decades past when you will probably die. Meaning, you can have less than that and still have plenty enough to last you your lifetime, but unless you know when you're going to die, you're better off having more than you think you need. If you retire at 60 and are alive at age 88 and run out of money, there's probably not much demand for you in the workforce. For all 50 year periods in US history from 1871 onwards, a 2.5% withdrawal rate would be safe. So would a 3.4% withdrawal rate. A 4% withdrawal rate would be safe in 83.9% of these cases. Now assume you actually only have a 30 year retirement (e.g. 65-95). Then your 4% withdrawal has a success rate of 95%, and you have only one failure case with anything below 3.7%. All of this assume you never do anything to earn or otherwise receive another dollar from any other source, never cut back your spending, and have 75% equities/25% bonds. http://www.firecalc.com/
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Jan 24, 2014 19:59
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baquerd posted:For all 50 year periods in US history from 1871 onwards, a 2.5% withdrawal rate would be safe. So would a 3.4% withdrawal rate. A 4% withdrawal rate would be safe in 83.9% of these cases. This is great historically but as has been noted several times in this thread future stock returns may not be as high as they were in the 20th century. From Forbes: quote:The 4% target is certainly a good starting point. But this simple, one-size-fits-all plan may be off the mark for many retirees these days. Nail Rat fucked around with this message at 20:09 on Jan 24, 2014 |
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Jan 24, 2014 20:07
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It also assumes there will be no social security. Which is probably at least a possibility, but I don't think it's a certainty. I prefer to plan on SS existing, but then discount it by the percentage chance I think it's at risk of being reduced or eliminated. I realize that leaves me in a more risky place, but everything about investing is about risk management, right?
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Jan 24, 2014 21:00
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Nail Rat posted:This is great historically but as has been noted several times in this thread future stock returns may not be as high as they were in the 20th century. From Forbes: Yeah, but the thing is that firecalc uses all possible periods since 1870, including what happened if you entered in to the market with your portfolio and started pulling out your X% during the shittiest of poo poo periods, such as right before the stock market crash of 1929 where they didn't really recover for 15 years. Withdrawing an inflation-adjusted 3.4% of your *original starting* portfolio balance a year leaves you safe in every single scenario for a full 50-year retirement, even though you're just too stubborn to cut back or find a side hustle, and social security loses the record of your existence and/or collapses, and you don't have any actual assets to sell. 2.5% is just ludicrously safe. Really, if you're still working part-time a la early retirement or have any money-making hobbies, or any room in the budget to cut back, then even if we're in a doom scenario worse than the great depression you'll be fine at a 4% withdrawal rate.
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Jan 24, 2014 21:35
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If you're in a financial situation where you're better off than 98% of people your age in a first world country (and you have healthcare) you're probably going to be OK. Unless you expect Mad Max to happen in which case you'd be better of "diversifying" into canned goods.
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Jan 24, 2014 21:39
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I just finished the Four Pillars today, and it was a great read. I do have a couple of questions though: (minor) Is there a reason Bernstein uses "worst single-year loss" as a measure of volatility instead of the more typical "standard deviation of return" that I've seen elsewhere? (major) Are there arguments against having a small exposure to REITs and Precious Metal Equities? He made a good case for them being additional non-correlated assets, but I don't normally see them as a part of the typical "lazy" portfolios on Bogleheads and the like. (major) I borrowed the 2002 edition from my local library. Are there any major changes to the book in more recent editions, aside from some well-deserved told-you-so's after 2008?
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Jan 24, 2014 22:48
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Nolanar posted:(major) Are there arguments against having a small exposure to REITs and Precious Metal Equities? He made a good case for them being additional non-correlated assets, but I don't normally see them as a part of the typical "lazy" portfolios on Bogleheads and the like. The way I argue it is that REITs and Precious Metal Equities are just equities (there are plenty of both in the S&P 500, for example), so treating them as a separate asset class is essentially overweighting a particular sector of equity, which is something that I don't want to do. Would love to hear other opinions on that. quote:(minor) Is there a reason Bernstein uses "worst single-year loss" as a measure of volatility instead of the more typical "standard deviation of return" that I've seen elsewhere? I haven't read the book but I suspect he is basing this on the way people think about risk: Standard deviation is sort of a poor measure from a human being's perspective, because it counts upside and downside risk equally, and in reality, nobody is crying about risk when their stocks go up a lot quickly. On the other hand, "worst single-year loss" is very important from a human perspective because psychologically you need to be able to handle the worst loss without losing your poo poo and selling everything. As much as we are all buy-and-hold index investors here, even we will probably have SOME level of drop in portfolio that would cause us to freak out.
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Jan 24, 2014 23:09
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Nolanar posted:(major) Are there arguments against having a small exposure to REITs and Precious Metal Equities? He made a good case for them being additional non-correlated assets, but I don't normally see them as a part of the typical "lazy" portfolios on Bogleheads and the like. You already know the arguments for exposure into REITs and Precious Metals. The argument against those is that they are smaller markets that contain a lot of fluctuation and risk. Another argument is that you are investing in the companies that make their money doing real estate and dealing with commodities by investing in the stock market. A third one is that your house already is an effective investment in real estate. A fourth one is that it's easier to manage and track a very small number (3 or so) funds than 5-6. The key idea is that you do not want to put the majority of your money into REITs/Metal Equities, which Bernstein does say. quote:(major) I borrowed the 2002 edition from my local library. Are there any major changes to the book in more recent editions, aside from some well-deserved told-you-so's after 2008?
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Jan 24, 2014 23:14
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Thanks to both of you for the answers! Treating home ownership as exposure to the real estate market didn't occur to me, but it makes perfect sense in the "don't own stock in your own company" line of thinking. I don't own a home, so I might end up putting a couple percent into each one as "play" money.Echo 3 posted:The way I argue it is that REITs and Precious Metal Equities are just equities (there are plenty of both in the S&P 500, for example), so treating them as a separate asset class is essentially overweighting a particular sector of equity, which is something that I don't want to do. My understanding of Bernstein's argument is that for historical reasons, people tend to think of gold and real estate as "safe" investments, so investors tend to flock to precious metal and real estate stocks when it looks like the sky is falling. They tend to be poorly correlated (or even slightly negatively correlated) with the stock market as a whole, so when your other stocks are in the toilet, those sectors are doing alright or even doing really well. Then you do your regular rebalance to your portfolio and dump those earnings back into the general market when stocks are generally cheap.
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Jan 25, 2014 02:07
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Probably a dumb question but my guess is it's safe to assume that if I were to transfer funds from my Vanguard ROTH IRA to a TD Ameritrade Roth and decided I didn't like TD Ameritrade I could always send my money back to Vanguard right?
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Jan 25, 2014 03:34
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Orange_Lazarus posted:Probably a dumb question but my guess is it's safe to assume that if I were to transfer funds from my Vanguard ROTH IRA to a TD Ameritrade Roth and decided I didn't like TD Ameritrade I could always send my money back to Vanguard right? TDA charges fees for transferring accounts. Not sure whether Vanguard does or not.
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Jan 25, 2014 04:18
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Echo 3 posted:The way I argue it is that REITs and Precious Metal Equities are just equities (there are plenty of both in the S&P 500, for example), so treating them as a separate asset class is essentially overweighting a particular sector of equity, which is something that I don't want to do. I agree with your assessment, except I decided I did want to do that. I just look at it as a "tilt". I get VGRSX in my 401k so I put 7% towards it and just took it out of my other domestic stock allocation. I think that's fine. Precious metals, on the other hand... if you're thinking of adding them based on what Bernstein says about rebalancing, you should also read what he writes in The Longest Discipline.
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Jan 25, 2014 10:37
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I'm not sure if the OP can be updated or not but this is a pretty good documentary. It goes along with the long term philosophy and it is definitely a good watch for people that are just starting out. http://video.pbs.org/video/2365000843/
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Jan 27, 2014 02:39
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So I found out about a new HSA provider that lets you invest everything in Vanguard ETFs for zero fees. Kinda the holy grail of HSAs if you plan on using it as a booster IRA and not actually as an HSA. http://www.elfcu.org/solutions/deposits/health-savings-account/ http://thefinancebuff.com/best-hsa-provider-for-investing-hsa-money.html
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Jan 27, 2014 03:09
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Orange_Lazarus posted:I'm not sure if the OP can be updated or not but this is a pretty good documentary. It goes along with the long term philosophy and it is definitely a good watch for people that are just starting out. I just watched this documentary and it's very alarming. Here in Australia every company has to put 9.25% of their employees wages into a nominated superannuation account for the employee. There are hefty penalties involved for not doing so, though idiots still try to avoid paying it with varying degrees of success. The more and more I read about America the less I want to go there. Also, a quick investing question - should I be worried about capital preservation funds that have had prices going down over the long term? The exchange-traded fund I was interested in only started up a few years ago, but it has consistently been going down in price. Is this something that really matters? I'm assuming it has something to do with the fact that the stock market here in Australia has done quite well over the past few years, but I don't know how to correctly analyse the situation, because this one has the lowest fees I can find.
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Jan 27, 2014 04:59
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Yeah, I mean the 401k is a great tool but workers are never taught how to use it and even the small percentage of people that do learn about modern portfolio theory often kill their retirement by raiding it in bad times. My guess is things are going to start getting nasty once the boomers retire and run out of savings 5-10 years into retirement.
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Jan 27, 2014 14:59
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baquerd posted:So I found out about a new HSA provider that lets you invest everything in Vanguard ETFs for zero fees. Kinda the holy grail of HSAs if you plan on using it as a booster IRA and not actually as an HSA. The Vanguard site itself also recommends Health Savings Administrators as an HSA provider with Vanguard funds, for those that don't want to mess with ETFs.
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Jan 27, 2014 17:28
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Kilty Monroe posted:The Vanguard site itself also recommends Health Savings Administrators as an HSA provider with Vanguard funds, for those that don't want to mess with ETFs. Just keep in mind: https://hsaadministrators.info/hsa-fees
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Jan 27, 2014 17:51
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So I've got a chunk of my retirement savings that I've been wanting to move from stocks to bonds for a while, but have not done so due to the beating bonds have been taking over the last couple years? Now that the Fed is finally tapering, would this be a decent time to finally pull that trigger?
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Jan 27, 2014 17:59
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Acceptableloss posted:So I've got a chunk of my retirement savings that I've been wanting to move from stocks to bonds for a while, but have not done so due to the beating bonds have been taking over the last couple years? Now that the Fed is finally tapering, would this be a decent time to finally pull that trigger? Don't time the market! We don't really make macro forecasts in this thread. Edit: or any kind of forecast
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Jan 27, 2014 18:11
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Acceptableloss posted:So I've got a chunk of my retirement savings that I've been wanting to move from stocks to bonds for a while, but have not done so due to the beating bonds have been taking over the last couple years? Now that the Fed is finally tapering, would this be a decent time to finally pull that trigger? By the time people are starting to buy an asset class, it's a bad time to buy that asset class. Stop thinking in the short term.
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Jan 27, 2014 18:24
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Yes I know I am posting about this in the other thread but I am kinda confuses/a little freaked out. Basically what I want to know is this - If I take all the money I have out of a Vanguard Roth IRA, should I leave the empty account open, or should I close it? If I close it, can I open another one at a later time? Which is the smarter thing to do - keep an empty Roth IRA account open, or close it completely and the re-open another one when I need to? Mainly I'm wondering about fees that may be associated with an empty account with Vanguard - are there any? THANK YOU!
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Jan 27, 2014 21:42
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razz posted:Yes I know I am posting about this in the other thread but I am kinda confuses/a little freaked out. This page appears to describe the fee situation: https://personal.vanguard.com/us/content/Funds/FundsVanguardFundsLowBalanceDisclaimerJSP.jsp I think as long as you're signed up for "e-service" (getting stuff through email instead of on paper) you should not be charged any fees. You could always call them and ask.
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Jan 27, 2014 22:55
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Echo 3 posted:This page appears to describe the fee situation: https://personal.vanguard.com/us/content/Funds/FundsVanguardFundsLowBalanceDisclaimerJSP.jsp Thanks, I called them and got it worked out. No fee since the account had no earnings and I had signed up for the e-service. Apparently the account can just hang out being empty, but after 15 months of inactivity they will automatically close the account.
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Jan 28, 2014 02:58
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Fancy_Lad posted:Just keep in mind: https://hsaadministrators.info/hsa-fees Also their investment site is a streaming pile of sit that Mint can't plug in to. Don't go with HSA Administrators. Edit: however, their customer service is exceptional. I sent in a nastygram with my yearly fee payment and the president of the company called me. He let me know that they have updated their site and that they offer Vanguard admiral shares with no minimum. MrKatharsis fucked around with this message at 18:28 on Jan 30, 2014 |
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