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Ok, I have a question about ESPP. From what I understand, when you sell them off, there are 3 scenarios: 1. Hold under 1 year, pay short-term capital gains tax. 2. Hold over 1 year, but 2 years have not elapsed since the offering period began. Taxed at long-term capital gains rate, but employer reports your SPP discount on your W2 as income. 3. Hold over 1 year, hold over 2 years after offering period began. Taxed as long-term. I gathered this info from here: https://turbotax.intuit.com/tax-tools/tax-tips/Investments-and-Taxes/Employee-Stock-Purchase-Plans/INF12047.html I have a set of SPP shares in category #2, but are about 2 months out of being in category 3. Is there a calculator anywhere that I can plug my numbers in to see which one would result in more profit? I'm not too optimistic on the stock staying where it is for 2 months, so I'm leaning toward just dumping it today.
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Jun 6, 2014 17:03
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So I'm trying to figure out what I should do here. I'm 26 years old and I currently make 140k/year in salary and ~21k a year in bonus (More or less based on company performance). I have a 401(k) through work and they offer matching up to 6%, so I'm currently doing that. Looking at the thread it appears the normal advice is to max a Roth IRA after that, and then go back to maxing the 401(k). My questions are: I'm not sure how to actually tell what the ER is for my 401(k). When I look at the options in Wells Fargo I see tables that look like this:  Which of those ERs should I be looking at? Or should I be looking at all of them? Additionally Wells Fargo has the option of "Before Tax Contributions" and "Roth Contributions" I'm assuming this is the Roth 401(k) that I've seen mentioned before? If so do I want to use the Roth 401(k) or the Before Tax?
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Jun 6, 2014 17:31
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Prospectus net expense ratio is what you want. In your situation, you should definitely do traditional/pre-tax 401k. There is almost no chance you won't be in a lower tax bracket in retirement. Also, you shouldn't just do the 6% to get the match, you should max it out, and max out a backdoor Roth IRA. You make a fuckton of money, you won't miss 23k(which, since 17.5k is pretax, you would only be losing about 18k in post-tax income anyway). I would say you should actually try to then throw another 10-20k a year in taxable investments and give yourself the option of retiring at 40 to a life of luxury if you feel like it, but maxing 401k and IRA would be a nice first step.
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Jun 6, 2014 17:47
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quote:Prospectus net expense ratio is what you want. Ok, so just ignore the Annual Report Gross/Net even for those that have a value in that spot? quote:In your situation, you should definitely do traditional/pre-tax 401k. There is almost no chance you won't be in a lower tax bracket in retirement. Ok, that's what I thought but I wasn't sure since the advice seemed to favor Roth stuff quote:Also, you shouldn't just do the 6% to get the match, you should max it out, and max out a backdoor Roth IRA. You make a fuckton of money, you won't miss 23k(which, since 17.5k is pretax, you would only be losing about 18k in post-tax income anyway). Yea I forgot to mention that I was planning on throwing money at this, maxing things out or what not. I had the 6% currently just because it's what the match percent was while I tried to figure out what to do. I also forgot to mention I have a HSA and I am currently maxing that out, although that's not likely to be much of an savings for me since there is chronic medical crap for my family (I have a wife and step daughter). What is a backdoor Roth IRA? quote:I would say you should actually try to then throw another 10-20k a year in taxable investments and give yourself the option of retiring at 40 to a life of luxury if you feel like it, but maxing 401k and IRA would be a nice first step. Are these like stocks? I'm really bad with money but trying to get unbad. Debt it almost gone and I'm also working on a budget so I don't blow money on stupid poo poo anymore! I'm not really sure what the options are in this category.
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Jun 6, 2014 18:01
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Google backdoor Roth IRA but basically: -At a certain point, you can no longer directly contribute to a Roth IRA (you are over this amount) -At a certain point, Traditional IRA contributions are no longer tax-deductible (you are over this amount) -You can always roll a traditional IRA to a Roth IRA -Doing so means that you'll never pay capital gains tax on growth in the IRA As for taxable investments, it's just like an IRA except that it's an account that you have to pay capital gains taxes on. They make tax-managed mutual funds that try not to sell stocks often to minimize the amount you have to pay on this year to year. It's not nearly as good as a 401k or an IRA, but it's better than the money sitting in savings and making less than 1% interest. Go to vanguard.com to see about opening either an IRA or a taxable investment account. They make it very straightforward. With the taxable account especially though, you really want to make sure you know what funds you want. Check out some of the books from the OP, particularly The Four Pillars of Investing and A Random Walk Down Wall Street.
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Jun 6, 2014 18:07
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Cicero posted:Was reading an article about financial knowledge and investment performance in the Economist and this troubled me: There are a lot of equal weighted funds and ETF's and a lot has been written on how the following outperform cap weighted index funds: - dividend weighting - equal weighting - fundamental weighting (based on metrics like price/book) People like Rob Arnott and Jeremy Siegel amongst others have hyped these for several years now and a lot of research has been done in subsequent years. So far, the conclusion is that these are just different ways of accessing the value and small factor loadings that Fama and French have been discussing for decades. Basically, the three factor return model has just been reaffirmed using gimmicky products with higher turnover and trading costs as well as higher licensing fees for the indices. If you want the same long-term results in a more efficient way, simply load more towards small-cap, and value funds, and use cap weighted indexes among each respective categories. Basically what William Bernstein and Larry Swedroe have been proposing for quite a while now. A portfolio of stocks heavily weighted towards small-cap and value funds will be riskier, so it is likely you would want to adjust the stock/bond ratio.
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Jun 6, 2014 18:11
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Nail Rat posted:Prospectus net expense ratio is what you want. What if he's married and she doesn't make much/is a stay at home mom? We're in a similar situation (I'm the student), and we currently do Roth because I figure once we are a two income family, we will make twice as much. However, recently I've been rethinking this because the deduction from the 401k is off of your highest tax bracket, but when you withdraw from the 401k in retirement, you're taxed based on the normal tiered system. It seems to me that it may be optimal to put enough in 401k to deduct up to your expected top income bracket, then put the rest in Roth. But then, I personally think there's a lot of additional benefit to putting in Roth for retiring early since you can withdraw on your contributions and because if they hike up taxes in the future, it most likely won't income Roth's.
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Jun 6, 2014 18:11
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Well he said he is married which changes it somewhat, but he's still in the 25% bracket for sure with no way to deduct out of it. In retirement he'll likely be in a lower bracket, even if each bracket gets raised 5%. I personally think the thing to do if you're in the 25% is traditional 401k and backdoor Roth + taxable investments for tax diversification...but there's no right answer, it's all just opinions and priorities 
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Jun 6, 2014 18:14
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Nail Rat posted:Well he said he is married which changes it somewhat, but he's still in the 25% bracket for sure with no way to deduct out of it. In retirement he'll likely be in a lower bracket, even if each bracket gets raised 5%. It's just something I've been thinking about a lot more recently. I never really questioned the advice of 'will you be making more in the future? Y? Go with Roth' until I actually thought about it and realized a) your peak income is probably not going to be the same rate you will withdraw at in retirement and b) you deduct off your highest marginal, but when you withdraw a good chunk will be taxed at a lower rate. We do put an extra 20k in taxable investments on top of taxable accounts though.
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Jun 6, 2014 18:18
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Nail Rat posted:Google backdoor Roth IRA but basically: I'll order those books now then. Here's to hoping I won't die poor with no money. Thanks a lot!
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Jun 6, 2014 19:07
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So assuming you have retirement savings in a 401k and/or IRA, what happens if you want to retire early? I know you can start taking it out at 59 1/2, but what kind of tax liabilities would you have if you retired before then? If you plan on retiring early, is it recommended to save up a good chunk in a taxable account to carry you to that point?
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Jun 6, 2014 21:16
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Bob Mundon posted:So assuming you have retirement savings in a 401k and/or IRA, what happens if you want to retire early? I know you can start taking it out at 59 1/2, but what kind of tax liabilities would you have if you retired before then? If you plan on retiring early, is it recommended to save up a good chunk in a taxable account to carry you to that point? You set up a SEPP plan for one or more of your retirement accounts. http://www.investopedia.com/terms/s/sepp.asp If you deviate before age 59 1/2 or five years(whichever is last), you immediately owe the 10% penalty on anything you withdrew to that point. So you should only do it if you're very sure. I would say if you just want to take a few years off but think you might go back to work, living off taxable investments would be the way to go.
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Jun 6, 2014 21:20
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Nail Rat posted:You set up a SEPP plan for one or more of your retirement accounts. http://www.investopedia.com/terms/s/sepp.asp This is more about just planning on retiring before I reach the 59 1/2, sounds like the way to go. If you plan on retiring completely after that, is there really any limit to the amount of time you can do that for, other than your IRA balance being high enough to sustain you for that long? Bob Mundon fucked around with this message at 03:19 on Jun 7, 2014 |
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Jun 7, 2014 03:17
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Catching up on the thread, so forgive me if this was already posted. I see a lot of you are asking about the appropriate balances and funds for your retirement accounts. About once or twice a year, I use the Financial Engines link through my Vanguard account homepage to check my overall portfolio. It will even grab balances from your non-Vanguard accounts (like my Federal Govt Thrift Savings 401k). It took me about 15 minutes or so to enter in my age, retirement age, income, desired retirement income, other account info, etc. It then uses that data with a fancy quantitative (Monte Carlo) analysis to see if your portfolio matches your goals and risk tolerance. It will even re-balance your Vanguard portfolio for you if you agree with its recommendations. For the sperg crowd, it will give you a detailed report of the exact analysis.
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Jun 7, 2014 04:08
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The hell? Where exactly is that through vanguard? I get that service through my JPMorgan 401k w/ current employer, but would like to see how its set up with Vanguard (and I can't find it---maybe its just through your employer?)
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Jun 7, 2014 13:01
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Dead Pressed posted:The hell? Where exactly is that through vanguard? I get that service through my JPMorgan 401k w/ current employer, but would like to see how its set up with Vanguard (and I can't find it---maybe its just through your employer?) I found it using the Vanguard search bar on the top right (entering in Financial Engines). Thanks for the head's up, Evil SpongeBob, it's a neat little tool.
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Jun 7, 2014 13:58
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Yeah, I learned about that last year, I believe elsewhere in this thread, and I love it. I have it set up to load in my Fidelity account, which is hampered by lovely fund choices, and then lock those to the least lovely and balance my Vanguard accounts to match.
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Jun 7, 2014 14:08
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 Literally always forget about search. Looks like its only for folks with $50k+. My wife and my roths are split, and my 401k is through JPMorgan, so I'm not quite at that threshold yet.... oh well. I do get it from JPMorgan (though they charge $5/month per $10k invested for the service, I think).
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Jun 7, 2014 14:28
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So it's like Sig Fig but already provided with Vanguard (if you have enough funds) and will take care of balancing the Vanguard side of things to compensate? I never ended up paying for Sig Fig's premium features, and now maybe I don't have to. Thanks!
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Jun 7, 2014 15:17
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Sorry, didn't realize it might only be for Voyager/Flagship clients. Another incentive to save I guess. Edit: IIRC, you can get Voyager status with total household assets of $50k. So if you & your spouse meet that threshold together, you qualify. Evil SpongeBob fucked around with this message at 15:33 on Jun 7, 2014 |
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Jun 7, 2014 15:20
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SpelledBackwards posted:So it's like Sig Fig but already provided with Vanguard (if you have enough funds) and will take care of balancing the Vanguard side of things to compensate? I never ended up paying for Sig Fig's premium features, and now maybe I don't have to. Thanks! It's way better than SigFig, because it actually gives you objective advice instead of telling you to transfer all your funds into whatever ridiculously high expense ratio fund paid them off.
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Jun 7, 2014 17:13
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I'm looking for some advice. A friend of mine has been a public school teacher for about 2 years. She makes about 33K. We've been discussing retirement savings for a few weeks and she agreed to let me look at her finances. Here's what I found. During her first month as a teacher she got a phone call from a guy who wanted to help her start retirement savings. She agreed to meet with him at school. One thing that concerns me is she felt like this was a mandatory part of her training among dozens of various meetings. She started contributing $20 per month. Into what exactly? She had no idea. A fellow teacher told her "Do it, it's retirement savings". This was all two years ago. She never really looked into what she bought and has been making these contributions pre-tax ever since. She let me look at her account with this company and it turns out she has been contributing to a Variable Interest Annuity. This was a new thing to me so I had to do some research. The way I understand it, with the guaranteed interest option she has selected, they take her money and invest it in a large variety of funds. Based on the performance of these funds they give her an interest rate. The interest rate is capped at both ends, so no matter what she gets a minimum amount but can never make more than the company wants her to make. I'm guessing at some point she can begin withdrawing this money much like an IRA. Except the withdrawals will be taxed as income rather than capital gains. I tried reading all the brochures and legal documents but they only succeeded in confusing me further. I've tried locating a contract or something specific to her account but failed. We have emailed the company asking for details on the account. I'm no expert on annuities or 403(b) or public school teacher investment strategies. The whole thing just stinks of rip-off and I'm worried she might have been suckered into something. I have no doubt he earned a nice commission off the sale. The good news is she only has about $1000 in the account. Otherwise she is pretty financial sound (no debts, good budgeting skills). What should I advise her to do?
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Jun 7, 2014 17:30
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As Warren Buffet said, "Never invest in a business that you can't understand". Annuities in general are bizarrely complex products that can be very effective at hiding fees.
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Jun 7, 2014 23:09
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etalian posted:Traditional IRA is tax deductible but on the flip side the distribution is taxed. Roth IRA on the other hand lets you grow your money and make all tax free on distribution. Traditional IRA contributions are not tax deductible if your income is over 69k, are they?
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Jun 8, 2014 16:48
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So I did some fun with math as to how much fees I'd pay with my John Hancock 401k if I invested for 30 years. The monthly account fee is $2/month, and we'll assume I put all my money into the 500 Index Fund, which has a fee of $7.00 annually per $1,000 invested. If I put in 3% of my salary ($750) and got the employer match ($750) and the full profit-sharing contribution ($1500), I would be earning $3000/year in the account, not counting any return. So here's how the fees would break down as my account increased: Year 01 - 045 fee, 3000 Year 02 - 090 fee, 6000 Year 03 - 135 fee, 9000 Year 04 - 180 fee, 12000 Year 05 - 225 fee, 15000 Year 06 - 270 fee, 18000 Year 07 - 315 fee, 21000 Year 08 - 360 fee, 24000 Year 09 - 405 fee, 27000 Year 10 - 450 fee, 30000 Fees paid after 10 years: $2475 on an account balance of $30,000 (8% of total) Year 11 - 495 fee, 33000 Year 12 - 540 fee, 36000 Year 13 - 585 fee, 39000 Year 14 - 630 fee, 42000 Year 15 - 675 fee, 45000 Year 16 - 720 fee, 48000 Year 17 - 765 fee, 51000 Year 18 - 810 fee, 54000 Year 19 - 855 fee, 57000 Year 20 - 900 fee, 60000 Fees paid after 20 years: $9450 on an account balance of $60,000 (16% of total) Year 21 - 0945 fee, 63000 Year 22 - 0990 fee, 66000 Year 23 - 1035 fee, 69000 Year 24 - 1080 fee, 72000 Year 25 - 1125 fee, 75000 Year 26 - 1170 fee, 78000 Year 27 - 1215 fee, 81000 Year 28 - 1260 fee, 84000 Year 29 - 1305 fee, 87000 Year 30 - 1350 fee, 90000 Fees paid after 30 years: $20,925 on an account balance of $90,000 (23% of total)  I think I'll stick to the fixed-return option instead. At least at 0.05% I'd only have to pay the $2.00 monthly account fee ($720 over 30 years) and I'd actually make 0.05% of the $90,000 in profit ($4500). Even if the 500 Index Fund performed at 2% annually, I'd still end up $20,000 in the hole with fees and the 2% return would only be like $2,000.
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Jun 8, 2014 17:27
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EugeneJ posted:So I did some fun with math as to how much fees I'd pay with my John Hancock 401k if I invested for 30 years.......................... Yea, they definitely add up. I can't recall if this is in the OP or not, but reminds me of the PBS documentary from last year when the reporter sat down and realized just how much money was being taken from him, haha. If you haven't watched it, it's a VERY good deal, (as are most Frontline reports imo). http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/
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Jun 8, 2014 17:37
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Madbullogna posted:Yea, they definitely add up. I can't recall if this is in the OP or not, but reminds me of the PBS documentary from last year when the reporter sat down and realized just how much money was being taken from him, haha. If you haven't watched it, it's a VERY good deal, (as are most Frontline reports imo). I mean, if my contribution to the plan was $750/year, that would work out to $22,500 I'm actually putting in myself over 30 years. And then almost the exact same amount ($20,925) is being harvested away from me through fees. Insanity.
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Jun 8, 2014 17:41
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SlightlyMadman posted:It's way better than SigFig, because it actually gives you objective advice instead of telling you to transfer all your funds into whatever ridiculously high expense ratio fund paid them off. Drat, it's saying my ESPP is taxable retirement account instead of a taxable non-retirement account, although I don't think it affects calculations. More importantly, it's not properly detecting that those shared (through E*Trade) are part of my company's stock, so it doesn't know how to analyze them. And it isn't giving me advice on taxable account at Vanguard right now either, even though it's about the same size as my 401(k) -- because for years I only matched my company's contribution and maxed ESPP. I held on to way too much company stock for a long time until last year when I read The Millionaire Teacher, read BFC, and finally sold all but a 1 year buffer of it and put it into taxable accounts at Vanguard. Now in my enlightment I max my 401(k) and my Roth IRA (the latter mostly through ESPP sales) before contributing any excess to the taxable account. I think I've partially worked around it by saying whatever contributions normally go into my ESPP (minus sales for Roth IRA contributions), I put down as the contribution rate instead in my taxable Vanguard account. That's where it eventually ends up anyway.
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Jun 8, 2014 18:03
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Alright I'm back. Just to make sure this is correct, I get paid every other week on Friday. So that's 26 pay periods in a year. The max contribution to a 401k is 17500, 17500/26 is roughly 673. So I've set my 401k contribution to $673 per pay period, so I'll be contributing $17498 a year. I may adjust this for a few pay periods to "catch up" for this year to make up what I missed by not having it be that all along. Now I'm not sure what fund I want all of this in. Currently I have it in "T. Rowe Price Retire 2050" because I figured that was the right thing to do since I'll be 62 in 2050. However I'm not sure. Here is what is available to me: pre:======================================== ===== ===== ===== ==== Fund PT% ARGER ARNER PNER ======================================== ===== ===== ===== ==== Wells Fargo Stable Return Fund N ? ? ? ? Harbor Bond Fund/Inst 446 0.56 0.53 0.53 T. Rowe Price Retire 2010 16.5 0 0 0.6 T. Rowe Price Retire 2020 14.2 0 0 0.69 T. Rowe Price Retire 2030 13 0 0 0.75 T. Rowe Price Retire 2040 12.8 0 0 0.78 T. Rowe Price Retire 2050 14.1 0 0 0.78 Keeley Small Cap Value Fund 51.12 1.36 1.36 1.37 T. Rowe Price Real Estate 3.5 0.79 0.79 0.79 Dodge & Cox Intl Stock 13 0.64 0.64 0.64 Royce Premier 11 1.09 1.09 1.09 Hartford Capital Appr R5 91 0.8 0.8 0.8 Vanguard Interm Term Bond Index (Signal) 70 0.1 0.1 0.1 Vanguard Mid-Cap Idx/Signal 32 0.09 0.09 0.09 Vanguard Reit Index Signal 11 0.01 0.01 0.01 Vanguard Small Cap Idx/Signal 29 0.09 0.09 0.09 Vanguard Totl Stk Mkt Indx Signal 4 0.05 0.05 0.05 Vanguard Total Intl Stock Index Signal 5 0.14 0.14 0.14 PT% - Portfolio Turnover % ARGER - Annual Report Gross Expense Ratio ARNER - Annual Report Net Expense Ratio PNER - Prospectus Net Expense Ratio Is the T. Rowe Price Retire 2050 a bad option (Alternatively is 0.78 PNER bad?). Is a different one a better option?
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Jun 8, 2014 18:20
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Steampunk Hitler posted:Alright I'm back........ Others much more knowledgeable than myself will surely chime in, but to get you started.... I would avoid the TRP TD fund, simply due to the high ER that it has. I am lazy and thus love TD funds, (hence why I have my IRA monies going into one at Vanguard), but 0.78 is bad. I actually had the same TRP TD options, with the same ERs you do, in my 457b through GreatWest, which is what prompted me to start looking at other funds. Once you figure out an asset allocation that you're comfortable with, I think you'd be better off building your portfolio from the other choices in there. You've got a decent selection of Vanguard funds in there with low ERs, so you should be able to assemble one that meets your AA needs. The only difference is that you'll need to re-balance from time to time to meet your needs, but that's not something you would do every month either.
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Jun 8, 2014 18:53
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Steampunk Hitler posted:Alright I'm back. I would use the Vanguard funds to diversify yourself vs using the T Rowe 2050 fund. Something like this maybe: 27% Vanguard Total Intl 64% Vanguard Total Stk Mkt 9% Vanguard Interm Term Bond Index This is the allocation I came up with for myself (I'm 2yrs older than you, so similar risk tolerance and allocation - and a fraction of your income :p) with the input from the folks here: 44.10% Large cap domestic 18.90% Mid & small cap domestic 27.00% Large cap intl 8.00% Domestic bond 2.00% Intl bond Folks in here can give more info than I can. Also your 401k admin probably will let you do a quarterly or biannual auto rebalance which will make it quite hands off.
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Jun 8, 2014 18:56
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manic mike posted:I'm no expert on annuities or 403(b) or public school teacher investment strategies. The whole thing just stinks of rip-off and I'm worried she might have been suckered into something. I have no doubt he earned a nice commission off the sale. Teachers are one of the most preyed upon people in the entire retirement industry. They do not have a 401k committee looking out for them like real companies, they are seen as "low value" by the big boys so there is limited competition, and the options they do have tend to be godawful. Yes variable interest annuities are terrible, as are almost all of the annuity options. Hopefully her school district will let her open an account with fidelity or vanguard and start making contributions there. It will be more work than having a salesman sell her something but it might actually have some long term value.
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Jun 8, 2014 18:56
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manic mike posted:I'm looking for some advice. A friend of mine has been a public school teacher for about 2 years. She makes about 33K. We've been discussing retirement savings for a few weeks and she agreed to let me look at her finances. Here's what I found. It's funny you just mentioned this, because a teacher in the documentary posted on this page fell for the same scam: http://www.pbs.org/wgbh/pages/frontline/retirement-gamble/ Apparently you start out at a high interest rate, but then the interest rate drops dramatically every year and there's a large penalty to withdraw the money.
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Jun 8, 2014 19:27
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SiGmA_X posted:Its a fine option, its just really expensive. Are you funding investment accounts outside of the 401k? Thanks! Right this minute I am not funding anything outside of this account, however I am looking at IRA's next and then after that I'm going to take whatever is left in my take home and figure out a budget and try to throw a good chunk at a taxable investment account thing too (at recommendation of this thread). I can use that allocation, but I'm wondering how I'd come up with that? Is that something that either the "The Four Pillars of Investing", or "A Random Walk Down Wall Street" will teach me? I have those two books on my stack to read (going to start later today!). If not is there some other resource that I should look at for figuring out what allocation I want (especially going into the future)? It appears that Wells Fargo offers Annual, Semi Annual, Quarterly or Monthly Automatic Rebalancing so that should be covered.
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Jun 8, 2014 19:31
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Nail Rat posted:Well he said he is married which changes it somewhat, but he's still in the 25% bracket for sure with no way to deduct out of it. In retirement he'll likely be in a lower bracket, even if each bracket gets raised 5%. Coming back to this, I'm looking at a Roth IRA now, according to http://www.rothira.com/roth-ira-limits the limits for married filed jointly is $181,000. Since I make 140k + A profit sharing bonus based on how well the company does (If we hit our targets exactly I'll get 21k, if we miss I'll get less, if we go over I'll get more) and I am married where my wife makes not much, mostly a side business that brought in ~9k gross in 2013. That'll be like ~170k if we hit our profit targets exactly. If I understand correctly contributing to a 401k reduces your MAGI, so if I'm ~maxing mine at 17498/year that'll drop that ~170k back down to ~152k giving us ~28k cushion before we start bumping into the Roth IRA limits and need to do something like a backdoor Roth IRA. Is that correct? Can I have an additional Roth IRA in my wife's name? Or Is there some method for getting her a 401k? I'm assuming I can't contribute more to those than she makes in a year, but can I contribute 100% of what she makes?
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Jun 8, 2014 19:42
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Steampunk Hitler posted:Can I have an additional Roth IRA in my wife's name? Or Is there some method for getting her a 401k? I'm assuming I can't contribute more to those than she makes in a year, but can I contribute 100% of what she makes? This is a good question and I would also like to know the answer. I hadn't even considered that this might be an option.
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Jun 8, 2014 20:00
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Steampunk Hitler posted:I can use that allocation, but I'm wondering how I'd come up with that? Is that something that either the "The Four Pillars of Investing", or "A Random Walk Down Wall Street" will teach me? I have those two books on my stack to read (going to start later today!). If not is there some other resource that I should look at for figuring out what allocation I want (especially going into the future)? I would go with Four Pillars as the first one to dive into, just imo anyway. For me it helped to set the foundation in my continued learning. There are a few different ways to determine your risk tolerance, and thus your asset allocation. One of the common ones is "100 - Your Age = Percentage of Stocks, the remainder being in Bonds". Another way to look at it is your age = bond percentage. Lately though, a lot of folks believe you should up it to "110 or 120 - Your Age", since it allows for more time in stocks since folks live longer these days.
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Jun 8, 2014 20:24
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Steampunk Hitler posted:Can I have an additional Roth IRA in my wife's name? Or Is there some method for getting her a 401k? I'm assuming I can't contribute more to those than she makes in a year, but can I contribute 100% of what she makes? Your wife can have a Roth IRA, it would be in her name, but the contribution limits in terms of minimum earned income are shared between the couple. So as long as you make a combined $11,000 in earned income both you and your wife can contribute $5,500 to a Roth IRA (as long as your MAGI is underneath the income limit).
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Jun 8, 2014 20:50
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flowinprose posted:Your wife can have a Roth IRA, it would be in her name, but the contribution limits in terms of minimum earned income are shared between the couple. So as long as you make a combined $11,000 in earned income both you and your wife can contribute $5,500 to a Roth IRA (as long as your MAGI is underneath the income limit). Oh, so it doesn't matter *who* made that money, as long as combined we've made more than $11,000?
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Jun 8, 2014 20:55
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| # ? May 26, 2024 12:06 |
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I wasn't aware that the Saver's Credit was a tax benefit for those contributing to a retirement plan who earn under $30,000/year: http://www.irs.gov/Retirement-Plans...%80%99s-Credit) I'll be sure to take advantage of that!
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Jun 8, 2014 21:02
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