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I'll repost: "I recently came into some money I was NOT expecting to come into. Having just recently paid off my student loans and car, this is a huge blessing. I received about 88,000 dollars from a step-relative who I had no idea would will me this money. My question to you guys is how I should proceed. I have a pretty low paying job all things considered, but I want to start putting this money into a retirement account. I guess my basic questions are how I should get started. Should I open up a lazy portfolio and Roth IRA? If so, who is currently the best to go with, Vanguard, Fidelity, Schwab? I think I only have a Schwab in my town out of these options, but these accounts can be opened through the internet, correct? Any advice is appreciated."
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Sep 4, 2014 23:51
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Unless I'm maxing both my Roth and 401k ($23k/year), then I shouldn't bother setting up a taxable investment account, correct?
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Sep 5, 2014 00:12
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Redkist posted:I'll repost: Don't really know what you're looking for, I guess. Droo had a couple good suggestions for getting the money into retirement accounts, now maybe you're not sure you actually want to do that? Provider is a matter of preference but Vanguard is a good default choice.
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Sep 5, 2014 00:16
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Redkist posted:I'll repost: Open an IRA in vanguard, dump 5500 there in a target date fund. Pay off credit card debt Put the rest in a 12 month CD Spend the next 12 months reading/researching until you feel like you have a better idea of what to do next If I were in your shoes, I'd gradually start moving all of it (that I didn't need for a downpayment on a house) into retirement funds by maxing out 401k (roth if you are in the 15% tax bracket) and IRA contributions and tapping the savings slowly as necessary. But the main thing is to protect it and not spend it while you figure out your plan. A lot of people inherit money, increase spending habits until it is gone, then go back to their old spending habits and have nothing to show for the money they inherited.
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Sep 5, 2014 00:38
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Redkist posted:Also, if I inherited that money, can't I NOT put it toward a Roth IRA?? You have to have at least $5500 of "earned income" from employment to max a Roth, and the inheritance doesn't count toward that measure of earned income. If the inheritance is your only income for the year, then you cannot fund a Roth. But I don't think you are prevented from actually using that money to fund the IRA as long as you meet the earned income requirements.
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Sep 5, 2014 00:44
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Redkist posted:Also, if I inherited that money, can't I NOT put it toward a Roth IRA?? You are allowed to put money in a Roth IRA if you don't exceed the income restriction and you have an income the year you make the deposit(s). Correct me if I'm wrong. e;fb
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Sep 5, 2014 01:16
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My wife is a teacher and has access to a 403b or 457b. We are planning for early retirement and I like the portability of the 403b... But all the 403b vendors seem to suck. Tons of fees for "financial advice" and other bullshit. Vanguard isn't an option. Any thoughts on choosing a 403b vendor? Why are they all life insurance companies - seriously, what the hell?
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Sep 5, 2014 02:39
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But 457's are portable aren't they? At least most are. Always thought 457s were actually the best for early retirement because they don't have a retirement age associated for your withdrawals.
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Sep 5, 2014 08:33
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403b's and 457's are among the most predatory plans in terms of high expense ratios. My wife is a local government employee and she had her choice of three brokers for her 457 options. It wasn't readily apparent after looking at the broker websites, but two out of the three had horrible wraps (1% per year just for having the account) and nothing but high (>1%) expense ratio funds for a total of 2% ER/year. The third broker is average with no wrap fees, and reasonable (~.3% ER). Guess which one I went with? Study your potential plans documentation carefully. I spent an entire day going over fine print and talking to reps from the various companies. You will find that most of her cohorts just go with the first rep to contact them and are unaware of the fees. Things to look for: -No/minimal wrap fee. 1% on TOP OF mutual fund fees will kill your returns. -Reasonable index funds to invest in with low expense ratios. The lower the better. -A "Brokerage Window". This can be your golden ticket and is ultimately what I wound up using. A proper brokerage window allows access to the entire market of ETFs/mutual funds. This means you can buy Vanguard ETFs (for ~$5-10 fee per trade). The math is not as straightforward as comparing expense ratios, but once you reach a dollar threshold it makes sense to pay a flat fee per trade to lock in lower expenses for life. 403b and 457 are virtually identical, so go with the one that has the lower fees/better funds. That said, a 403b is identical to a 401k in terms of early withdraw rules (59.5 or later unless you pay a penalty). A 457 has [b]no early withdrawal rules[b]. You could cash out at 45 and pay no penalties. If you plan to retire before 60 this could be a big deal for you. I hope to retire before 60 and we will use a combination of taxable investments and my wife's 457 to float us until 59.5 when my 401k/IRAs kick in. You can roll over a 457 into an IRA (and enjoy better/cheaper funds) when your wife leaves her job. Unfortunately this permanently destroys the early withdrawal feature of the 457. It's a tough choice to choose paying high fees for early withdrawal option vs rolling into IRA.
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Sep 5, 2014 15:14
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I received a gift of few thousand bucks that I'd like to put towards retirement. My IRA is about maxed out for the year, would it be crazy to set my 403b paycheck contribution to like, 30% for a few months and then change it back? I think my employer lets me change my plan elections every month if I want.
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Sep 5, 2014 16:00
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Evil SpongeBob posted:Your dad should get an annual letter detailing all of his retirement and pay benefits. Mine shows exactly what my pension and TSP annuity (if taken) would be worth if I retire at various ages. There is a wealth of information about what to do with TSP money, but very, very few (1% IIRC) take the TSP annuity. Bisty Q. posted:A cool thing about the TSP is the G fund, which is protected from losses by the entire federal government. So even if the stock market explodes, your investment is still safe, which is something that basically nothing else can match. Thanks for this. I was able to assuage his worries a bit after I read over everything. He's a pretty healthy guy and I wouldn't be surprised if he lived to 95+. As far as his TSP goes the monthly payments based on life expectancy seem like a pretty sweet deal for someone in his position.
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Sep 5, 2014 16:05
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Thufir posted:I received a gift of few thousand bucks that I'd like to put towards retirement. My IRA is about maxed out for the year, would it be crazy to set my 403b paycheck contribution to like, 30% for a few months and then change it back? I think my employer lets me change my plan elections every month if I want. As long as it isn't a huge hassle to change your contributions, and you aren't needing that cash for something else, I see no reason not to do it to get more money into tax advantaged accounts. I do this if I come in under budget for a couple months. For me, my employer lets me change the % contribution at will via a webpage, so I don't even have to fill out paper forms or talk to anyone to change it.
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Sep 5, 2014 16:39
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Thufir posted:I received a gift of few thousand bucks that I'd like to put towards retirement. My IRA is about maxed out for the year, would it be crazy to set my 403b paycheck contribution to like, 30% for a few months and then change it back? I think my employer lets me change my plan elections every month if I want. Sounds perfectly reasonable to me. I've done that in the past as well.
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Sep 5, 2014 16:46
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What are some trustworthy resources on what to do with/when to exercise NQSOs, what I really got myself into by deferring 15% of my paycheck into what seems to be a potentially very lucrative ESPP, etc? The company I work for recently went public, the IPO went really well, and now my head is spinning. Besides that, I think I'm in pretty decent financial shape. Emergency fund is all set-up, maxed out IRA contributions, <10k in student loans that will be gone by this time next year, no other debt. Is this something I can still reasonably manage on my own? I'm a cheap bastard but would consider paying a NAPFA advisor. Any good books or online resources that focus specifically on the stock options piece (and any relevant tax implications)?
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Sep 5, 2014 16:49
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Hi guys! I just got my first real job and am totally lost when it comes to retirement, investing and all the options within. I would really like to learn more about it and dive deep into the investment rabbit hole. I'm trying to decide on if I should go TIAA-CREF or Fidelity and what options I should choose. I would like to get this ball rolling quickly since I'm nearly 30 and don't really have anything put back yet.  Thanks!
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Sep 5, 2014 19:02
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Put money into your 401k to get the maximum match - use a single Fidelity target retirement type fund for now, if they offer that. Then go read books from the OP. That would be a good start.
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Sep 5, 2014 19:05
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slap me silly posted:Don't really know what you're looking for, I guess. Droo had a couple good suggestions for getting the money into retirement accounts, now maybe you're not sure you actually want to do that? Provider is a matter of preference but Vanguard is a good default choice. Thanks for confirming that at least one person on this forum can see my posts
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Sep 5, 2014 20:35
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Okay, so I finished up Four Pillars a few weeks ago and sort of let things sit for a while. I felt the book was lacking in detail on the specific science of asset allocation, and I feel like that's what I need to figure out before moving forward. Bernstein just offers 3 example portfolios, but obviously nobody's situation matches those exactly (and he says as much). There are 2 books mentioned in the OP that seem to cover asset allocation (based on the titles obviously). The Intelligent Asset Allocator All About Asset Allocation Which of these have you guys found the most helpful? If I'm to read one, which should it be. Alternatively, did I just not put enough attention into the asset allocation chapters of Four Pillars? Should I have got everything I need just from there? Sidenote - the links in the OP all point to A Random Walk instead of where they are supposed to point.
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Sep 6, 2014 19:36
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Dammit. Fixed, I think.
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Sep 6, 2014 20:34
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I read all about asset allocation by Ferri, and it examined some nice things, but I didn't leave with much more than your age in bonds diversified risk to an appropriate amount. I recommend it, but it wouldn't be my first choice.
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Sep 6, 2014 20:53
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Hog Obituary posted:Okay, so I finished up Four Pillars a few weeks ago and sort of let things sit for a while. I felt the book was lacking in detail on the specific science of asset allocation, and I feel like that's what I need to figure out before moving forward. Bernstein just offers 3 example portfolios, but obviously nobody's situation matches those exactly (and he says as much). I honestly don't think you need either book. Neither one tells you "go with this allocation, because it has been determined by academics to be as close to optimal as we can reasonably get". They give the standard 100-age in bonds, and then determine your tolerance for risk and for complex portfolios. I don't really see the purpose of adding the "100 minus age in bonds". You lose like a half percent in expected return per 10% bonds you allocate. For a 25 year old, you probably want that extra expected 1.25%. Going over 40% bonds in retirement seems pretty conservative too. Not sure why you should give a poo poo about the complexity of your portfolio either. If having two funds has a .1% better expected return than having 1 fund, then please sell me 2 funds. Celot fucked around with this message at 22:11 on Sep 6, 2014 |
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Sep 6, 2014 22:05
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Yeah, I didn't fully understand that part where he gives an example of some young number-nerd having a complex portfolio and somebody who doesn't want to worry about it having a simpler portfolio. It seems like once you establish your allocation it should be all mechanical from there on out -- value average, put away every quarter, and rebalance every 2 years or whatever. The thing is, my situation is kind of complex: 1. I don't know what my future holds since I'm single and don't own property. 2. I have more liquid cash than I have in my 401k right now -- that money can be invested in a taxable account, so I'll be like 50/50 tax-advantaged vs taxable. 3. I own illiquid private company stock. I also have company stock options that are worth something (FMV is significantly above strike). 4. The cash that I do have *could* be used as a down payment on property, but I don't know if I want to do that. I would need to decide if I want the cash to go into my retirement fund (e.g. riskier assets since it's a long term investment), or if I should put it into something more stable because I *am* going to use it in the next 5 years. I don't know yet. Maybe I have to hedge between the two possibilities (a compromise that might handle neither situation well). 5. Maybe I want to make some luxury purchases -- I'll need to figure out what the right balance between pleasure now and money later is. So perhaps the right thing to do is take all this to a fee-only adviser after all.
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Sep 6, 2014 23:40
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Hog Obituary posted:I don't know what my future holds
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Sep 7, 2014 00:25
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slap me silly posted:maintain maximal flexibility without giving up a lot of potential return. slap me silly posted:What do you think about taking the money you don't need for current expenses and categorizing it in percentages of luxuries now; stuff in 5 years; stuff in 15 years; retirement? You don't have to commit too hard to anything, it would just be one way to try to get a mental handle on it.
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Sep 7, 2014 02:26
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I set up an employer sponsored SIMPLE IRA through Vangaurd a few months back, and the last three paychecks have had line item deductions that should be going into this account but the Vangaurd account balance has stayed at zero. I set up the IRA to fund a target requirement account that had a $1000 minimum, what happens to my money before I accumulate the $1000? Where is my money?
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Sep 7, 2014 08:13
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It appears to me that Vanguard doesn't enforce minimums in SIMPLE IRAs except for funds with $10k plus minimums (Admiral Shares etc). And that when there is a minimum, they put the contributions in the money market fund instead. Your company has 30-60 days to get the money to Vanguard so it's possibly still just in process. If you call Vanguard and ask, they'll probably be informative. Dunno what will happen if you ask your boss 
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Sep 7, 2014 17:14
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Saw something interesting on Bloomberg today:Bloomberg posted:Sometimes it takes a second trip to see a place in a new light. If my city or state had an ETF that just held local stuff I would totally chuck a thousand bucks into it just to see what happened.
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Sep 8, 2014 19:08
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Isn't it probably not great risk management to invest in a fund based on your local economy?quote:HCA came to Nashville in 2012 thanks to a $66 million tax incentive deal offered by the metro council. This is misleading. HCA has always been in Nashville but for a while they had their main headquarters across the county line in Williamson County. e: quote:Why are all of these hospitals based in Nashville? Because HCA is based here and they are all HCA spinoffs.
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Sep 8, 2014 19:47
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Thufir posted:Isn't it probably not great risk management to invest in a fund based on your local economy? Not to mention not being well diversified and also how targeted ETFs tend to be volatile especially if things go south for things like energy/biotech.
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Sep 9, 2014 02:22
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Thufir posted:Isn't it probably not great risk management to invest in a fund based on your local economy? Absolutely. That's why I said I'd chuck a thousand bucks in, not ditch all my index funds. There's also a civic pride aspect to it that would be worth it to me. At least at a sub 0.8% expense ratio. I love my city but I wouldn't buy in at 1.5%+.
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Sep 9, 2014 02:34
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I got a job that isn't garbage in March, and I have the opportunity to open a 401k through Great-West Financial. I honestly have zero idea what I'm doing other than "put my money into this magical account that will multiply my money". I can't even carve through the application process. I'm so lost. Right now it's asking me if I want to do a managed account or not. As far as I've been able to discern, it's basically just some third party that makes investments for you and takes a percentage of your returns. Is it better if I forgo this option entirely? I feel like I just got airdropped into a country halfway across the world with no survival skills or knowledge of the culture. If it helps, I'm 24, single, no debt, living with my dad. Credit score is decent, but not very established. Only a few minutes in and I want to just say gently caress it. I'm way over my head.
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Sep 9, 2014 02:46
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ScurvyKip posted:I want to just say gently caress it. I'm way over my head. Have you started by reading the first post of the thread?
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Sep 9, 2014 02:49
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SpelledBackwards posted:Have you started by reading the first post of the thread? Yes. I read a bit of the thread but it's pretty much all gibberish to me outside of some basic terms. I know the basic differences between things like IRA and 401k, stuff like that. I understand a bit about how compounded interest works, stuff like that. I understand these concepts but the details completely go over my head.
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Sep 9, 2014 03:05
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Do you get matching in the 401k?
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Sep 9, 2014 03:27
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Echo 3 posted:Do you get matching in the 401k? Up to 4%. I guess my biggest hangup is just if I want to open a managed account or not.
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Sep 9, 2014 03:31
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Matching instantly doubles your money and no management fees will completely counteract that benefit. Invest to get the full match, but only that much. Anything above that put into a Roth IRA.
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Sep 9, 2014 03:37
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I think by managed account he means something with a high expense ratio, vs. an index fund. Can you list in detail your 401k options?
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Sep 9, 2014 03:40
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Yeah, "managed account" smells like bullshit, but you can post details if you want.
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Sep 9, 2014 03:43
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slap me silly posted:I think by managed account he means something with a high expense ratio, vs. an index fund. Can you list in detail your 401k options? No. I'm pretty sure it isn't. ScurvyKip posted:Right now it's asking me if I want to do a managed account or not. As far as I've been able to discern, it's basically just some third party that makes investments for you and takes a percentage of your returns. It sounds like a managed account available via financial engines, which great west does business with, where they basically have a computer generated model shove you into different allocations based on your risk analysis and they wanted to charge me around $5 per 10k invested /month. That's basically a target retirement date fund but allocated outside of any one specific mutual fund. Dead Pressed fucked around with this message at 03:49 on Sep 9, 2014 |
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Sep 9, 2014 03:47
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Dead Pressed posted:It sounds like a managed account available via financial engines, which great west does business with, where they basically have a computer generated model shove you into different allocations based on your risk analysis and they wanted to charge me around $5 per 10k invested /month. That's basically a target retirement date fund but allocated outside of any one specific mutual fund. Yeah this is basically what it is. It makes a lot more sense when presented to me this way. I also learned I have the option to put into a Roth as part of this company plan, or am I better off using another company for opening one up?
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Sep 9, 2014 04:05
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