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MickeyFinn posted:If the company you work for has a match, shouldn't you take it even if you are planning to withdraw the money early? The penalty is only 10% compared to the 100% gain from the match. Ah see, I knew I was overlooking something. The match must get taxed as income if I pull it early, right? Still seems like a no-brainer though, unless I leave the job after only a few years and the match doesn't vest. Edit: I'm reading an example: quote:Your company plan vests 20% of the employer match each year, until you reach 100% in five years. If you change jobs after three years, you only take 60% (3 years x 20% vesting each year) of the employer match with you. You contribute $4,000 a year to your 401(k), and your employer matches 50% of your contributions, for a total of $6,000 ($2,000 x 3 years). However, you're only 60% vested. So, when you leave, you take 60% of that $6,000 with you, or $3,600. In that example, does that mean that each year, the amount I contribute for that year vests 20%? Or does it mean that once I hit 5 years of service, all five years worth of contributions are completely vested? Zero VGS fucked around with this message at 21:37 on Sep 18, 2014 |
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Sep 18, 2014 21:34
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Zero VGS posted:once I hit 5 years of service, all five years worth of contributions are completely vested? Keep in mind though, that these contributions will be to a tax-sheltered account meaning that if the company contributions are withdrawn before the minimum age you will be penalized 10% in addition to normal taxation as income. It's still a net positive since losing 10% of your free money still leaves you with free money.
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Sep 18, 2014 21:58
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If you retire at 40, your life expectancy is still like 80 so half your life would be in the penalty free withdrawal part... plus you talked about having kids, and presumably a wife, so even if you walk in front of a bus at 60 what about them? Am I missing something? Why would you not be willing to leave any money in a 401k?
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Sep 18, 2014 22:41
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Vanguard 2025 2035 now have all my monies. The big exception is a sizable chuck of company stock (35% of my total plan) which is where all our matching funds are directed.
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Sep 18, 2014 22:55
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Zero VGS posted:My emergency funds are my HELOCs, they're zeroed out right now but I can write checks off them so that's something nice. Your emergency fund exists, partially, to keep you solvent in the event of some sort of financial crisis. If there's another 2007-2008 clusterfuck, your bank may not keep HELOCs open. Your emergency fund should be in extremely liquid cash.
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Sep 19, 2014 00:09
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Zero VGS posted:Ah see, I knew I was overlooking something. The match must get taxed as income if I pull it early, right? Still seems like a no-brainer though, unless I leave the job after only a few years and the match doesn't vest. What I was thinking was more like the benefit of taking the money. I don't know a thing about vesting, so I'll leave that out for the time being. Let us assume that your company will match up to 3% of your gross pay ($2400 if you make $80k/year). At $80k/year your highest marginal federal tax rate is 25%. So, you can take that $2400 (before tax!) out and invest the $1800 you get after taxes. Or you can invest the $2400 in the company plan and get the match to make a total of $4800. When you pull it out early and eat the 10% penalty (35% total tax rate) you end up with $3120, nearly 75% more than you would have gotten by taking your pay directly. Vesting is a complication, and so is maybe short term capital gains? I dunno. I should be clear that this is not advice to take any particular action. I simply mean that I haven't come up with a reason not to take the match, even if you intend to pull the money out early.
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Sep 19, 2014 00:10
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Droo posted:If you retire at 40, your life expectancy is still like 80 so half your life would be in the penalty free withdrawal part... plus you talked about having kids, and presumably a wife, so even if you walk in front of a bus at 60 what about them? Further saving for retirement (or the later years of retirement) sounds like a good idea to me. The balance is in having the investment now or later, if it's going to stay invested why not have it in the retirement account? Probably budgeting how much you would be able to retire on when you're 40 would be a good start. Of course rent income would factor into that.
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Sep 19, 2014 00:47
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Droo posted:If you retire at 40, your life expectancy is still like 80 so half your life would be in the penalty free withdrawal part... plus you talked about having kids, and presumably a wife, so even if you walk in front of a bus at 60 what about them? I dunno, males in my family die around 70 and isn't the government free to vote to keep pushing up the retirement age? In 40 years the retirement age might be way more than 70. For walking in front of a bus I could get life insurance and that's only if my partner's income and the stuff I leave behind wouldn't be enough to cover them. For now I guess I'll put in the employer's 401k match and call it a day, that's a sure bet and I'd rather have the rest freed up. Thanks everyone for the help!
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Sep 19, 2014 01:25
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Zero VGS posted:I've got a weird one, I'm in my early 30's and have no debt, and I own two paid-off apartments worth $100k each. I live in one and rent the other. As long as you keep your spending pretty reasonable, retiring by 40 should be fairly easy. You'll want to check out other threads though or possibly the mr. money mustache blog and forums. For investing: It still makes sense to cap out your Roth IRA investments every year since you can still withdraw principal. I hope to be FI by 43 and potentially retire and I'm still maxing out every tax advantaged account I can. There are lots of strategies for getting it out including Roth conversion ladders and just withdrawing principal from your IRA.
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Sep 19, 2014 02:26
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Huh, that Mr. Money Mustache guy has the same philosophies, lifestyle, and budget as me down to a T. Thanks for pointing me to that one. I'm looking at the Roth IRA now, and I see what you mean, if there's no penalty to withdrawing principal I can basically keep that as my emergency fund account. Now I'm looking at this thing: http://www.madfientist.com/retire-even-earlier/ It's a lot to absorb but I guess with some crazy tax ninjitsu I can have my cake and eat it too. I have the Saul Goodman of tax preparers so I'll see what he thinks.
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Sep 19, 2014 03:42
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Zero VGS posted:Huh, that Mr. Money Mustache guy has the same philosophies, lifestyle, and budget as me down to a T. Thanks for pointing me to that one. The roth IRA isn't exactly that simple, you can take money out for things like a home down payment but can't put the money back in.
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Sep 19, 2014 04:26
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Zero VGS posted:Huh, that Mr. Money Mustache guy has the same philosophies, lifestyle, and budget as me down to a T. Thanks for pointing me to that one. If you really believe what you're saying here, you've got a lot of reading to do. It's a commendable attitude, but your lack of financial knowledge and failures of implementation are going to add literal years to your working life.
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Sep 19, 2014 04:54
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Zero VGS posted:Huh, that Mr. Money Mustache guy has the same philosophies, lifestyle, and budget as me down to a T. Thanks for pointing me to that one. Read this book: http://www.amazon.com/The-Four-Pill...rs+of+investing
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Sep 19, 2014 16:05
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Doesn't the standard IRA have AGI limits meaning the deduction is only useful if you meet the criteria?
etalian fucked around with this message at 20:47 on Sep 20, 2014 |
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Sep 20, 2014 17:35
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For deductible contributions yes, but the limit is something "low" like in the 70k-ish range.
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Sep 20, 2014 17:51
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Does it matter where I open up a Roth IRA? I already have a trading account with Tradeking (discount stock broker), so is it fine if I just open one up there or will I be missing out on something?
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Sep 20, 2014 18:31
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Depends on what you want to invest in. Some brokers offer fee free trades when purchasing their own brand of ETF/mutual fund. Vanguard for example offers free trades in their mutual funds which I believe would cost you $4.95 with TK.
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Sep 20, 2014 18:37
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Gotcha. I don't really have any idea what I want to invest in. If I went with Tradeking, I'd probably just invest in some more large-cap dividend stocks. My 401k is with Vanguard, so maybe it would be better to add the Roth IRA to one of their targeted retirement funds.
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Sep 20, 2014 18:55
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Ron Don Volante posted:If I went with Tradeking, I'd probably just invest in some more large-cap dividend stocks. My 401k is with Vanguard, so maybe it would be better to add the Roth IRA to one of their targeted retirement funds. Those are very different things, so spend some time figuring out what you want (hint, read books from the OP). Or just use the Vanguard target retirement fund, if you are too busy to think about it right now.
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Sep 20, 2014 20:12
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Henrik Zetterberg posted:For deductible contributions yes, but the limit is something "low" like in the 70k-ish range. Makes me think the guide for going IRA instead of Roth IRA during the working years is somewhat inaccurate since most people have workplace retirement plan and would also tend to be in the income range to not make the IRA contributions tax deductible. From the IRS:  I guess the IRA deduction would still be useful if you had married tax filing, with only one worker in the household. etalian fucked around with this message at 20:57 on Sep 20, 2014 |
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Sep 20, 2014 20:52
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I would opt to not deduct my IRA contributions anyway. Tax now on a smaller amount or tax later on a larger amount.
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Sep 20, 2014 21:11
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SiGmA_X posted:I would opt to not deduct my IRA contributions anyway. Tax now on a smaller amount or tax later on a larger amount. The calculus of whether to go Roth or traditional IRA is contingent on several factors that all boil down to predicting your personal financial future and the future of tax policy in the United States. To call it complicated is an understatement.
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Sep 21, 2014 01:28
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BEHOLD: MY CAPE posted:The calculus of whether to go Roth or traditional IRA is contingent on several factors that all boil down to predicting your personal financial future and the future of tax policy in the United States. To call it complicated is an understatement. Well the game plan on madfientist was based around going the IRA route during working years and then doing the clever Roth backdoor conversion trick right before the retirement finish line. Of course the whole avoid taxes now plan overlooks how you need a certain AGI and also not having a workplace retirement plan to deduct the complete 5500 from your yearly taxes. According to the IRS website if you have a AGI greater than 69,000 there's no tax advantage/deduction for going the vanilla IRA route. etalian fucked around with this message at 06:59 on Sep 21, 2014 |
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Sep 21, 2014 06:56
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SiGmA_X posted:I would opt to not deduct my IRA contributions anyway. Tax now on a smaller amount or tax later on a larger amount. This advice may be fine provided that you are doing this in a Roth IRA rather than having nondeductible contributions in a traditional IRA.
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Sep 21, 2014 16:56
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I suck at medium term savings, like for a down payment on a house. How do I make an account that has restrictions on withdrawal? Like can I make it so that money can only be taken out for a house? Or only taken out with a month's notice? Because depositing the money is easy, but treating it as untouchable is hard.
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Sep 21, 2014 16:59
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Celot posted:I suck at medium term savings, like for a down payment on a house. How do I make an account that has restrictions on withdrawal? Like can I make it so that money can only be taken out for a house? Or only taken out with a month's notice? Because depositing the money is easy, but treating it as untouchable is hard. What about CDs?
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Sep 21, 2014 17:00
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I had dismissed those because of low return but for a 2-3 year span it probably is worth it. E: eesh, .45% interest at my credit union Celot fucked around with this message at 17:11 on Sep 21, 2014 |
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Sep 21, 2014 17:04
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http://www.bankrate.com/cd.aspx Looks like you can do much better than your particular credit union on a CD.
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Sep 21, 2014 17:26
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Celot posted:I had dismissed those because of low return but for a 2-3 year span it probably is worth it. I think Ally's are better than that and they have one that changes rate half way through. It'll still be terrible, but if its crappy rates or spending your savings. ..
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Sep 21, 2014 18:00
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Celot posted:I suck at medium term savings, like for a down payment on a house. How do I make an account that has restrictions on withdrawal? Like can I make it so that money can only be taken out for a house? Or only taken out with a month's notice? Because depositing the money is easy, but treating it as untouchable is hard. It's kind of like being fat because you eat too much. You just stop taking the money out because you have the willpower of an adult.
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Sep 21, 2014 21:24
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Flip wrong thread - sorry
Ropes4u fucked around with this message at 23:31 on Sep 21, 2014 |
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Sep 21, 2014 22:59
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Don't anybody dare derail this thread into fattalk
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Sep 21, 2014 23:04
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Celot posted:I had dismissed those because of low return but for a 2-3 year span it probably is worth it. Synchrony Bank has 0.95% high-yield savings accounts. I opened up one online and that's what I use to stash my stockpile for a future down payment.
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Sep 21, 2014 23:50
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Henrik Zetterberg posted:Synchrony Bank has 0.95% high-yield savings accounts. I opened up one online and that's what I use to stash my stockpile for a future down payment. Yup around 1% is around the best rate you can get with high yield savings account.
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Sep 22, 2014 04:05
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EDIT: Oops. Wrong thread. melon cat fucked around with this message at 22:57 on Sep 22, 2014 |
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Sep 22, 2014 21:59
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melon cat posted:So what are the other TSLA stockholders in this thread up to? I'm still in the black for my TSLA stock (thank goodness), but it does, however, suck to see TSLA drop from $290 to $250 within a week. I believe you're looking for the
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Sep 22, 2014 22:37
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slap me silly posted:I believe you're looking for the And yes, gambling indeed.
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Sep 22, 2014 22:52
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Looking to rebalance my 401k, I'm late 20's and willing to take on a significant risk, but don't know a lot about most of these options. I'm familiar with Vanguard and like them for the low expense ratios, so I'l probably incorporate them into my portfolio. I think I'm looking for 90% stocks with 10% bonds per the recommendations but not entirely sure how much I should put in small caps vs big cap index funds. Any advice? these are the options that Transamerica gives me Transamerica Stable Value Advantage Account 0% % Interm./Long-Term Bonds Prudential Total Return Bond Ret Acct 0% % Amer Cent Inflation-Adj Bond Inv Acct 0% % Large-Cap Stocks American Funds Washington Mutual Investors Ret Acct 0% % MFS Massachusetts Investors Ret Acct 0% % Transamerica Partners Stock Index Ret Acct 0% % Vanguard Total Stock Market Index Ret Acct 0% % American Funds Growth Fund of America Inv Acct 0% % Morgan Stanley Growth Ret Acct 0% % Small/Mid-Cap Stocks Transamerica Partners Mid Value Ret Acct 0% % SSgA S&P Mid Cap Index Ret Acct 0% % Wells Fargo Advantage Discovery Ret Acct 0% % Vanguard Small-Cap Value Index Ret Acct 0% % SSgA Russell Small Cap Index Ret Acct 0% % SSgA Russell Small Cap Growth Index Ret Acct 0% % Nuveen Real Estate Securities Ret Acct 0% % International Stocks American Funds New Perspective Inv Acct 0% % MFS International Value Ret Acct 0% % Thornburg International Value Ret Acct 0% % Multi-Asset/Other Janus Balanced Inv Acct 100% % Manning & Napier Pro-Mix Conservative Term 0% % Manning & Napier Pro-Mix Moderate Term 0% % Manning & Napier Pro-Mix Extended Term 0% % Manning & Napier Pro-Mix Maximum Term 0% %
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Sep 23, 2014 05:03
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Please add in the expense ratios for each fund.
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Sep 23, 2014 05:07
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seniorservice posted:I'm looking for 90% stocks with 10% bonds
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Sep 23, 2014 05:13
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