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Great, thank you for the reply.
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Apr 15, 2014 21:09
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antiga posted:That is a highly diversified fund, and it would be a great choice. If you are with vanguard double check that you get Admiral shares for a lower expense ratio. There's no Admiral version of their TR funds. That's because the TR funds are just a pile shares of non-Admiral funds. I ended up using the TR funds for the first couple years then shifted to individual funds once I had enough saved to reach 10k in my largest class.
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Apr 15, 2014 21:11
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I've got a Roth IRA and a taxable account at Vanguard. Come January 1st, can I move money from the taxable into the Roth? Does this cause anything unusual to happen?
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Apr 15, 2014 21:21
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I posted this in the budgeting thread but it'd probably be better here:100 HOGS AGREE posted:Ok, I've been listening to a lot of talk in here and I'm trying to figure out if I should keep overpaying my student loans or start contributing to a Roth IRA or something instead. Could I get some advice on this I've kinda put myself in panic mode cause today's the cutoff for 2013 Roth contributions and I've been putting off making a decision on this cause big numbers and poo poo.
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Apr 15, 2014 22:54
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It's very important to have 3-6 months of expenses in the form of an emergency fund. It's higher on the list of priorities than maxing out your Roth, so in my opinion, don't use your emergency fund for anything other than emergencies.
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Apr 15, 2014 23:03
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Well that's two months of earnings in there right now. Probably 3 months of expenses if I had to tighten my belt and cut everything but the necessities, which I can do and have done before. What about moving forward though? For the last couple years I've been in full on "GOTTA REDUCE DEBT OMG" mode since I figured that since my interest rates were 10%ish no investment would really be worthwhile considering all the interest I was paying. But now I'm not really sure if I should keep overpaying on the student loans or take that money and invest it instead.
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Apr 15, 2014 23:12
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100 HOGS AGREE posted:I posted this in the budgeting thread but it'd probably be better here: Not adjusting for inflation here because I'm being sloppy. With the overpayment you pay off your loans in 3 years and 8 months (vs 14 years and 1 month) and save 4636.39 in interest. The trade off is, you lose $12, 584 in your Roth IRA account you'll never be able to put in again. Or in other words, a tax shelter for the gains on that amount of money. Now, as GoGoGadgetChris said, you need an emergency fund, and since you can't fund both at all, let's assume you put the money in a Roth IRA account but keeping it as cash for the first 8 years (between making more money and having at least one loan paid off, you hopefully will be be able to start funding an emergency fund and a Roth IRA at this point). Further, let's assume a retirement age of 65 (or as an end date), a 5% return after these first 8 years and a 15% long term capital gains tax. Then putting that money in would be a savings of: (12584*(1.05^29) - 12584)*0.15 = 5,882.02 So, in the end it's close to a wash, and this isn't even inflation adjusted. I still recommend getting an emergency fund of 6 months, and putting it into a Roth account since you can take it out penalty free.
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Apr 15, 2014 23:20
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Rurutia posted:I still recommend getting an emergency fund of 6 months, and putting it into a Roth account since you can take it out penalty free.
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Apr 15, 2014 23:28
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100 HOGS AGREE posted:Oh you can do that? I thought once you threw it in there you pretty much can't touch it. You can remove contributions penalty free but not investment gains. Also you cannot replace anything you withdraw, so it's not something to do lightly
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Apr 15, 2014 23:32
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Yeah but supposing my choice is funding an IRA and maybe having to remove some of the money I put into it if an emergency hits, or not funding it at all and losing out on those years... I dunno, I'm gonna call Vanguard tonight and ask some questions I guess.
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Apr 15, 2014 23:35
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100 HOGS AGREE posted:Yeah but supposing my choice is funding an IRA and maybe having to remove some of the money I put into it if an emergency hits, or not funding it at all and losing out on those years... Keep in mind your investments can lose value.
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Apr 15, 2014 23:59
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Don't put money you anticipate possibly needing within a few years into a tax-sheltered account! What if the market loses 40% of its value and as part of the economic downturn, you lose your job? You've lost your emergency fund at the same time you now need it. Just my opinion though 
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Apr 16, 2014 00:00
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Cranbe posted:Keep in mind your investments can lose value. That's why I assume keeping the money as cash in the account until he can fund an external account along with a Roth. I feel like this gets brought up so much and I just don't get it. You don't have to actually immediately invest money you put into a Roth IRA. It's like any other investment account.
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Apr 16, 2014 00:12
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It's pretty late but if I were you I would open a Roth IRA with Vanguard and stick your emergency fund in their money market fund!
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Apr 16, 2014 02:34
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Nail Rat posted:Don't put money you anticipate possibly needing within a few years into a tax-sheltered account! It's why the OP recommends having a raining day fund in safe liquid accounts. antiga posted:You can remove contributions penalty free but not investment gains. Also you cannot replace anything you withdraw, so it's not something to do lightly I believe withdrawals from a "vested" Roth IRA also count against the yearly contribution so pretty much avoid raiding your retirement accounts unless you are in a really bad finance situation. etalian fucked around with this message at 03:47 on Apr 16, 2014 |
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Apr 16, 2014 03:45
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So I opened up IRA accounts for the first time last month and right now I have $4,500 each in a Roth and a traditional IRA($9k total, $2k left to contribute before I hit the 2014 cap). So like, what do I actually do with the money I have in them? The last couple posts seem to say I should leave the Roth money alone for now, what about the money in my Traditional one? I've set them up with Merrill Lynch because I bank with BoA so my accounts are linked, if that matters at all.
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Apr 16, 2014 16:55
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Epi Lepi posted:So I opened up IRA accounts for the first time last month and right now I have $4,500 each in a Roth and a traditional IRA($9k total, $2k left to contribute before I hit the 2014 cap). So like, what do I actually do with the money I have in them? The last couple posts seem to say I should leave the Roth money alone for now, what about the money in my Traditional one? I've set them up with Merrill Lynch because I bank with BoA so my accounts are linked, if that matters at all. Leave it as cash until you have read the suggested literature in the OP. E: Hadn't seen that it's with ML—not Vanguard. Once you've read some of the recommended books, consider switching to Vanguard. The reasons will become very apparent in the reading. Cranbe fucked around with this message at 17:08 on Apr 16, 2014 |
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Apr 16, 2014 17:06
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Im looking to drop 1-2k in one or two companies stocks to experiment and learn the basics of ivestment. What would be a good online broker (not Etrade?) to use, as my bank does not want to broker such piddly amounts. In their words the filing fees would make any single purchase under 5k worhthless.
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Apr 16, 2014 18:52
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Gaj posted:Im looking to drop 1-2k in one or two companies stocks to experiment and learn the basics of ivestment. What would be a good online broker (not Etrade?) to use, as my bank does not want to broker such piddly amounts. In their words the filing fees would make any single purchase under 5k worhthless. This thread might be better suited to your goal: http://forums.somethingawful.com/showthread.php?threadid=3259986
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Apr 16, 2014 18:57
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Gaj posted:Im looking to drop 1-2k in one or two companies stocks to experiment and learn the basics of ivestment. What would be a good online broker (not Etrade?) to use, as my bank does not want to broker such piddly amounts. In their words the filing fees would make any single purchase under 5k worhthless. Not sure how long it takes to work your way through the waiting list, but https://www.robinhood.com/ seems like a good way to get into low volume stock trades. Supposedly free trades, but I haven't used it myself.
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Apr 16, 2014 18:59
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GoGoGadgetChris posted:I've got a Roth IRA and a taxable account at Vanguard. Come January 1st, can I move money from the taxable into the Roth? Does this cause anything unusual to happen? Anyone? Can I just fund my Roth IRA contribution my transferring from a taxable account?
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Apr 16, 2014 19:12
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GoGoGadgetChris posted:Anyone? Can I just fund my Roth IRA contribution my transferring from a taxable account? I've only ever done that from a money market fund. I assume that you would have capital gains taxes if you were selling something to fund the Roth.
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Apr 16, 2014 19:15
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Yeah, there should be some taxes associated with the sale. Plus you have to observe the maximum contribution limit for the IRA of course.
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Apr 16, 2014 19:22
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drat. I wasn't sure if it was a sale or a transfer, since taxable and Roth contributions are made with post-tax dollars, and I was just going VTSAX->VTSAX. Seems strange that it need be a "Sale" rather than a transfer, but there you go.
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Apr 16, 2014 19:24
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GoGoGadgetChris posted:drat. I wasn't sure if it was a sale or a transfer, since taxable and Roth contributions are made with post-tax dollars, and I was just going VTSAX->VTSAX. Seems strange that it need be a "Sale" rather than a transfer, but there you go. Well your taxable account shares aren't 'post-tax' since they have unrealized gains/losses.
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Apr 16, 2014 19:27
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GoGoGadgetChris posted:VTSAX->VTSAX. That's called an in-kind transfer and as far as I know you can't do it from a taxable account to a Roth IRA. Presumably because you'd be cheating the rest of us out of the taxes on your gains 
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Apr 16, 2014 19:42
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So I am in the process of losing my job due to down sizing and would like to move my 401(k) from my employer(I work at a bank) to another institution in the form of a Roth IRA. Now, my balance is currently only $838 in the 401(k), so Vanguard is out, with their $3k/minimums. I was just wondering if anyone had any other recommendations for someone just really starting out who doesn't necessarily have the funds most people do?
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Apr 17, 2014 03:40
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Captain Melo posted:So I am in the process of losing my job due to down sizing and would like to move my 401(k) from my employer(I work at a bank) to another institution in the form of a Roth IRA. Now, my balance is currently only $838 in the 401(k), so Vanguard is out, with their $3k/minimums. I was just wondering if anyone had any other recommendations for someone just really starting out who doesn't necessarily have the funds most people do? Have you looked into ETFs? No minimum investment (other than having to buy non-fractional shares) when you go with those. Vanguard offers commission-free trades on its own ETFs, and Fidelity offers the same on a comparable range of iShares ETFs. Kilty Monroe fucked around with this message at 05:34 on Apr 17, 2014 |
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Apr 17, 2014 05:27
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Kilty Monroe posted:Have you looked into ETFs? No minimum investment (other than having to buy non-fractional shares) when you go with those. Vanguard offers commission-free trades on its own ETFs, and Fidelity offers the same on a comparable range of iShares ETFs. If I was looking to do that, would I still be looking at rolling over my 401(k) into a Roth IRA or is it a different investment vehicle?
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Apr 17, 2014 05:31
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Captain Melo posted:If I was looking to do that, would I still be looking at rolling over my 401(k) into a Roth IRA or is it a different investment vehicle? It'd still be a Roth IRA. Roth IRA only designates the tax treatment it gets, not what kind of assets it holds. Though, at Vanguard, I believe you have to specifically open a Roth IRA brokerage account to do ETFs. Fidelity lets you do both ETFs and ordinary mutual funds in the same account. Also, do you still work at that bank? Generally, you can only rollover a 401k when you separate from the company.
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Apr 17, 2014 05:32
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Kilty Monroe posted:It'd still be a Roth IRA. Roth IRA only designates the tax treatment it gets, not what kind of assets it holds. Though, at Vanguard, I believe you have to specifically open a Roth IRA brokerage account to do ETFs. Fidelity lets you do both ETFs and ordinary mutual funds in the same account. My last day will be April 25th at the bank, so after that I will be able to roll over the 401k. I guess right now I'm just doing some research to see what my best options would be. e: So it looks like with Vanguard ETF's, you need a Prime Money Market Fund account, which has a minimum of $3k, so that option is out. Any other options or am I better off just building up savings and starting an account with a 401k roll over + regular savings? Captain Melo fucked around with this message at 06:05 on Apr 17, 2014 |
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Apr 17, 2014 05:59
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Captain Melo posted:My last day will be April 25th at the bank, so after that I will be able to roll over the 401k. I guess right now I'm just doing some research to see what my best options would be. Right, failure of reading comprehension on my part, my eyes skimmed right over the "in the process of losing my job" bit. My bad. Anyways, if you go Vanguard, I'd do: 5 shares VTI 4 shares VXUS 1 share VT (easiest way to make the domestic/international split even at this point, you can dump this later on) 1 share BND edit: Welp, didn't know that about Vanguard. Sorry about that. I know Fidelity has no such requirement, though.
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Apr 17, 2014 06:16
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I would maybe open a Roth IRA with $1k (you don't need $3k for Target Retirement funds) and then roll the 401k into it. But that only helps if you have $1k around right now to contribute towards your IRA for 2014. I am not sure about the ETF option but I did just open a (non-retirement) brokerage account with $500...
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Apr 17, 2014 06:18
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Captain Melo posted:So I am in the process of losing my job due to down sizing and would like to move my 401(k) from my employer(I work at a bank) to another institution in the form of a Roth IRA. Now, my balance is currently only $838 in the 401(k), so Vanguard is out, with their $3k/minimums. I was just wondering if anyone had any other recommendations for someone just really starting out who doesn't necessarily have the funds most people do?
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Apr 17, 2014 07:11
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Epi Lepi posted:So I opened up IRA accounts for the first time last month and right now I have $4,500 each in a Roth and a traditional IRA($9k total, $2k left to contribute before I hit the 2014 cap). So like, what do I actually do with the money I have in them? The last couple posts seem to say I should leave the Roth money alone for now, what about the money in my Traditional one? I've set them up with Merrill Lynch because I bank with BoA so my accounts are linked, if that matters at all. Just to be clear. You contributed $9k total to IRAs in the last month? Can you confirm that you split the allocation across 2013 and 2014? Its entirely possible what you did is fine, but I just wanted to make sure you realize the yearly contribution limit is $5,500 total across both Roth and Traditional IRAs and not $5,500 per IRA type per year. edit: spelling.
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Apr 17, 2014 13:04
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jbetten posted:Just to be clear. You contributed $9k total to IRAs in the last month? Can you confirm that you split the allocation across 2013 and 2014? Yes I split it across 2013 and 2014. Tax stuff is easy, I do that for a living. Investments, I know nothing about.
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Apr 17, 2014 19:57
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Epi Lepi posted:Yes I split it across 2013 and 2014. Tax stuff is easy, I do that for a living. Investments, I know nothing about. The OP references some good books on investing, my favorite of which is "A Random Walk Down Wall Street" I also recommend the Boglehead's Wiki: http://www.bogleheads.org/wiki/Main_Page The trick to investing is accepting that in all likely hood you aren't going to beat the market. Which means you should try to match the market while minimizing your costs which are dominated by transaction costs, expense ratios, and taxes.
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Apr 17, 2014 20:09
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I'm a third of the way through A Random Walk Down Wall Street, and while it's not as dry as Four Pillars, I think I prefer Four Pillars. A Random Walk tends to meander and not be as well-organized/edited; during the chapter on bubbles from the 60s to 90s it was particularly disjointed in my opinion. I guess the overall point got across but not as well as Bernstein had put it.
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Apr 17, 2014 20:21
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Captain Melo, you realize that if you roll your traditional 401k into a ROTH IRA, you'll have to pay taxes as if it was income, right? You may know that and I'm just beating a dead horse, but it's worth pointing out that if your roll it into a traditional IRA it will be tax free until you start making withdrawals when you're old and gray (or young and financially independent).
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Apr 17, 2014 20:35
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Brian Fellows posted:Captain Melo, you realize that if you roll your traditional 401k into a ROTH IRA, you'll have to pay taxes as if it was income, right? My understanding of it was that I should do the Roth and pay taxes based on my extremely low tax rate now as opposed to when I'm older and in all likelihood have higher taxes. Is that correct or would I be better off going with the traditional?
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Apr 18, 2014 00:23
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