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That's actually my exact problem. I can do a pretty good job mimicking the Total US Stock Market with the Spartan S&P 500 and Extended Market funds, but the only international stock option is ridiculous. Have to keep my entire international allocation in my IRAs (which grow at a much slower rate than my 401k, obviously). I asked the benefits center for the Spartan international fund months ago and got a form letter along the lines of "We'll pass this onto the appropriate party, thanks for your interest."
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Mar 1, 2015 06:42
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I've always wondered how they even pick funds for a 401k, more often than not it ends up being a horrible menagerie of overpriced funds. hell especially for non-US investments you could easy find low ER investments in a brokerage account, even though the size of institutional investments is supposed to make the options much cheaper like in the US TIPS program. I've noticed lots of the funds in my plan also have sky high turn over rates too since they tend to be active management type funds: 
etalian fucked around with this message at 19:45 on Mar 1, 2015 |
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Mar 1, 2015 08:12
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Sale people who work for the company that gets a cut of the fee tell the employer what funds to include and it doesn't matter to the employer because the employee is paying the fees, not them.
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Mar 1, 2015 18:56
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Zero One posted:Sale people who work for the company that gets a cut of the fee tell the employer what funds to include and it doesn't matter to the employer because the employee is paying the fees, not them. It's still somewhat hilarious, the company I work for is midcap category but for some reason the institutional class investments for foreign stock are all in the 0.8% to 1.0% ER range.
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Mar 1, 2015 20:32
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etalian posted:I've always wondered how they even pick funds for a 401k, more often than not it ends up being a horrible menagerie of overpriced funds. Many HR people are clueless when it comes to investing, just like the average American. They get sold a bundle of high-expense funds by the likes of Fidelity or whoever when they inquire about setting up a 401k plan, and since they don't know any better they just take what they get offered. It may be possible to lobby your HR department to improve their 401k plan, especially if you can get several people to care about it. We did that at my company and got several Spartan funds added to our available fund selection from Fidelity, which are almost as good as Vanguard funds. I'm now on the 401k committee at my office and the Fidelity representatives are absolutely salesmen and they lay on the bullshit thick.
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Mar 1, 2015 20:51
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Guinness posted:Many HR people are clueless when it comes to investing, just like the average American. They get sold a bundle of high-expense funds by the likes of Fidelity or whoever when they inquire about setting up a 401k plan, and since they don't know any better they just take what they get offered. Even ihares would be a big improvement over investments like lovely Oakmark. The only thing their funds discover is high expense ratios.
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Mar 1, 2015 22:57
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I've got $11k in Wells Fargo CDs. They've been open since last May and have, to date, matured a grand total of $2.61. There is, presumably, a more prudent and higher yield type of account I could move some (or all) of this money to when the terms of the CDs expire. Any suggestions? It seems like most savings/money market/CD type accounts just aren't worth it with interest rates being so low right now (and for the foreseeable future).
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Mar 2, 2015 03:21
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MeatwadIsGod posted:I've got $11k in Wells Fargo CDs. They've been open since last May and have, to date, matured a grand total of $2.61. There is, presumably, a more prudent and higher yield type of account I could move some (or all) of this money to when the terms of the CDs expire. Any suggestions? It seems like most savings/money market/CD type accounts just aren't worth it with interest rates being so low right now (and for the foreseeable future). What is your goal for this money and when do you plan on needing to access it?
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Mar 2, 2015 03:24
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pig slut lisa posted:What is your goal for this money and when do you plan on needing to access it? My primary goal right now (no kids, wife, etc.) is saving for retirement. I have about $12k in a Roth and about $6k in a 401k. Thus far I've been able to max my contributions every year on the IRA and I put about 15% of every paycheck toward the 401k. I was considering taking maybe $5k that's currently in the CDs and try to diversify my retirement savings a bit like putting that money into various mutual funds. The remainder I was thinking about putting into a more traditional savings account since I have about 4 months' expenses (roughly $5k) in a checking account for emergency purposes. So about $5,500 of what's currently wrapped up in the CDs could be very long term with the other half bolstering my emergency fund, just in a savings account instead of checking. That at least was what I was considering. MeatwadIsGod fucked around with this message at 03:34 on Mar 2, 2015 |
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Mar 2, 2015 03:32
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I'm still a little confused. Tell me if this is a correct accounting of your financial assets: -Roth IRA: $12,000 [Query: How is this money allocated? Mutual funds? Individual stocks? Something else?] -401k: $6,000 [Query: Same as above?] -Non-retirement: $11,000 in CDs Congrats on your IRA maxing so far, that's great. It's good to see you're contributing to your 401k as well. Does your company offer a match, and if so are you receiving the full value of it?
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Mar 2, 2015 04:19
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I apologize to the thread if I misled anyone about how rental real estate taxes work. I am apparently guilty of having been told something, believing it, and then when quickly googling before posting, finding articles that confirmed what I thought I knew. That said, I don't think anyone has contradicted the most important part of my original response about a goon's plan to buy a second residence and rent out his first, which was: be aware that this could affect your taxes and do your research/talk to an accountant beforehand so you don't get a nasty surprise. I didn't know there was a rental property thread. I'll refer people there in the future. Thanks everyone for correcting me: I'd hate to be giving out bad information here.
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Mar 2, 2015 04:38
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pig slut lisa posted:I'm still a little confused. Tell me if this is a correct accounting of your financial assets: I probably didn't provide enough context. - IRA (Vanguard Target Fund): ~$12,000, comprised mostly of index funds and international stocks - 401k: ~$6,000 (Vanguard Target Fund), comprised of the same. My employer does full matches at 3% and half matches at 5% - CDs: $11,000 - Checking: ~$5,000 - Vanguard Growth Fund: ~$3,000, also comprised mostly of index funds, international stocks, and bonds
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Mar 2, 2015 06:24
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MeatwadIsGod posted:I probably didn't provide enough context. I don't see an explicit emergency fund listed. I stick my efund in an Ally savings earning 0.99%. I keep a couple grand extra in my checking which should cover 1mo of bills - but not all expenses - as a buffer for paying bills and accruing for semiannual bills. If I were you, I'd set up an Ally/other high yield (~1% these days, pitiful!) savings account and stick 3-6mo of expenses in there. Beyond that, 12mo CD's pay around 1.05% (Ally) to maybe 1.3% (http://www.bankrate.com/cd.aspx). For longer term savings (over 5yrs) you can also use a taxable Vang target date fund. It depends on the goal of your savings, really.
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Mar 2, 2015 07:00
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Does anyone in the UK have recommendations regarding platforms? I'm looking at investing up to £30k over the next year using my ISA allowances, heading for index trusts, maybe a couple of EFTs - I have to do a bit more research. I've been consulting Monevator and their excellent comparison chart of online brokers, and it seems at the £30k level that going for the cheapest fixed charge option (iweb) would definitely be worth it, but I wanted to know if anyone has any other recommendations? e: iweb's charges page for info. On the face of it they seem ridiculously cheap, which is why I'm a little wary despite my research not having turned up any terrible reports. El Grillo fucked around with this message at 15:55 on Mar 2, 2015 |
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Mar 2, 2015 15:51
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El Grillo posted:Does anyone in the UK have recommendations regarding platforms? I'm looking at investing up to £30k over the next year using my ISA allowances, heading for index trusts, maybe a couple of EFTs - I have to do a bit more research. What you want to look for, at least State side, is the asset management fees and expense ratios of the individual funds. I also couldn't find a list of mutual funds on their website. Maybe it's just not very mobile friendly. Hopefully. SiGmA_X fucked around with this message at 16:09 on Mar 2, 2015 |
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Mar 2, 2015 16:05
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The only issue with iweb is they don't have many Vanguard funds (though you can fill the gaps with other managers, or just go the relevant LifeStrategy if you're set on using Vanguard. Aside from that they're pretty good. £25 up front isn't amazing; but assuming you only do a few trades a year, it's still cheaper than all the other UK providers. Here's some simpler comparison tables for ISAs and SIPPs that you also might like.
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Mar 2, 2015 17:45
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^^thanks for that man. Yeah, their (well, Halifax's) funds browser is a bit of a poo poo. Checking out the LifeStrategy funds, they look pretty perfect for me as a beginner, but I'll do some reading (Tim Hale's 'Smarter Investing' book is on its way from Amazon) before making any final decisions. I may go half in on a LifeStrategy, equity-heavy, and with the other half do a bit of my own fund choosing, see how that goes. SiGmA_X posted:As an American who uses Vanguard, 25GBP to open an account seems steep! They don't charge an annual platform fee, and levy very small fees on each trade, so I think it's looking pretty good? I've been struggling to find info on any rules that govern UK providers changing fees - what's to stop iWeb just deciding to hike their fees, and hike their transfer fees at the same time to try and prevent people leaving?
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Mar 2, 2015 20:07
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El Grillo posted:^^thanks for that man. Yeah, their (well, Halifax's) funds browser is a bit of a poo poo. Lifestrategy funds are pretty decent since they already provide a diversified mutual fund with three types of investments. So you can easily use it as core holding and then buy a few more investments to add strategy such as a value stock tilt. etalian fucked around with this message at 02:36 on Mar 3, 2015 |
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Mar 3, 2015 00:10
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SiGmA_X posted:Vang Target Date funds are great, leave it be until you have more assets or a desire to manually allocate. I'm pretty new at this also and is there a good reason to keep money in a target fund (target 5050: mostly stocks with some bonds) rather than just be heavily an S&P index and S&P completion index? (VIIIX and VEMPX) I'm like 80% target fund and 10% each of the index funds, but am thinking of going like 70% VIIIX and 30% VEMPX. The target fund is like 90% stock anyways, so it's not any less risky to make up for the lesser returns. I'm not planning on withdrawing for like 40 years fwiw.
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Mar 3, 2015 04:02
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tesilential posted:I'm pretty new at this also and is there a good reason to keep money in a target fund (target 5050: mostly stocks with some bonds) rather than just be heavily an S&P index and S&P completion index? (VIIIX and VEMPX) Mainly because the target retirement fund does things like rebalancing automatically and also basically does the simple stupid 3 fund portfolio. Plus your strategy would overlook the Ex US side of the stock market by just stick to US stocks and bonds. Savings for retirement is mainly about making regular contributions and also maintaining a consistent investment strategy which the target retirement fund does very well. Vanguard also has LifeStrategy funds if you if you want to do simple always fixed 80-20 stock bond allocation with no risk adjustment over time. I use the target fund as a core holding, then add in a small US stock value tilt (VBR,VOE,VYM), some REIT(RWO) and a small emerging market bond allocation(EMB) etalian fucked around with this message at 08:02 on Mar 3, 2015 |
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Mar 3, 2015 07:54
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I have a 401(k) through work and have been contributing well beyond my employer match of 5%. I currently do not have IRA accounts that I contribute to. My wife has neither 401(k) or IRA accounts, so all retirement investment has been through my 401(k). To confirm, is the general thinking that we should follow these steps? 1. Continue contributions into my 401(k) up to the employer match. 2. My wife and I should both open (Roth) IRA accounts and max those out. 3. Make additional contributions into my 401(k) (after IRA accounts are maxed). For end of year tax bracket issues, if we need to decrease our AGI, will we benefit more from maxing out my 401(k) and/or Traditional IRA, rather than going for the Roth IRAs?
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Mar 3, 2015 12:20
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Tortilla Maker posted:I have a 401(k) through work and have been contributing well beyond my employer match of 5%. I currently do not have IRA accounts that I contribute to. My wife has neither 401(k) or IRA accounts, so all retirement investment has been through my 401(k). You might want to consider contributing to an HSA if available to you. This could be either before or after priority #2. Otherwise, yeah you got it. You are correct that contributing to the traditional 401(k) or traditional IRA would reduce your taxable income this year.
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Mar 3, 2015 12:39
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etalian posted:Mainly because the target retirement fund does things like rebalancing automatically and also basically does the simple stupid 3 fund portfolio. Plus your strategy would overlook the Ex US side of the stock market by just stick to US stocks and bonds. I think I see what you are getting at here, but I wouldn't call it stupid.
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Mar 3, 2015 17:07
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Saint Fu posted:You might want to consider contributing to an HSA if available to you. This could be either before or after priority #2. Otherwise, yeah you got it. You are correct that contributing to the traditional 401(k) or traditional IRA would reduce your taxable income this year. Why would you contribute to an HSA before a Roth IRA? They're less flexible about contributions, withdrawals, distributions, and fund selections. They're still great though, but I wouldn't contribute to one until I've maxed the 401k Match, Roth IRA, and 401k.
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Mar 3, 2015 19:19
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GoGoGadgetChris posted:Why would you contribute to an HSA before a Roth IRA? They're less flexible about contributions, withdrawals, distributions, and fund selections. HSAs are triple tax-advantaged. They're tax-free going in, tax-free growth, and tax-free going out. Everyone is guaranteed to have increasing medical expenses as they age. Getting the money out is not going to be difficult, especially considering the balance probably isn't going to grow to enormous amounts with a $3350/yr contribution cap. Even if you don't want to save your medical/dental/vision receipts to reimburse yourself down the line, withdrawing from your HSA immediately to pay medical/dental/vision costs is still completely tax-free money and not a bad idea. I don't understand how you think they're less flexible about contributions - they're MORE flexible than 401ks as you can contribute via payroll deduction OR as an ad hoc post-tax contribution that you can then claim as an above-the-line federal tax deduction. There's a small benefit to contributing via payroll deduction as that way you also don't pay FICA on the money, but the bulk of the benefit is the income tax deduction which you get either way. At the 25% marginal rate, maxing your HSA lowers your federal income tax liability by over $800 and that money will never get taxed again. I think they're also much more flexible about withdrawals than 401ks and IRAs as you can just pay for medical expenses directly with your HSA debit card or you can just go online and reimburse yourself if you have receipts to back up the claim. No paperwork, no loans, no RMDs. It's true that fund selections are generally not as good as something like a Vanguard IRA or a top-notch 401k, but the massive tax advantage and easy access are hard to ignore. quote:They're still great though, but I wouldn't contribute to one until I've maxed the 401k Match, Roth IRA, and 401k. IMO, max your HSA after your 401k match and IRA. Max out the rest of your 401k after the HSA. Guinness fucked around with this message at 19:48 on Mar 3, 2015 |
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Mar 3, 2015 19:37
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Guinness posted:Everyone is guaranteed to have increasing medical expenses as they age. HSAs are an interesting and useful tool, but I think you're over-promoting them, or at least not recognizing that the above isn't always the case. In my case, for example, I have an excellent medical insurance plan through my work. I have zero deductible and my copayments for most services are $5 to $20. Switching to a high-deductible plan in order to qualify for an HSA would wind up costing me far more in medical expenses than access to the HSA's tax advantages would make up for. Especially since I have an ongoing condition that requires daily medication, which currently costs me ten cents a day (my $5 copay for 50 day's worth) but would instead cost me $2 a day if I had to cover the whole cost of the medication myself. A lot of people have no insurance or lovely insurance options, and for them, an HSA may make a lot of sense. But it's not a completely universal situation. It is also possible that this country could eventually institute universal health care. I know it seems remote, now, but a lot can change in ten or twenty or thirty years. Assuming you will have spiraling medical expenses is probably a reasonable guess, but it's not, as you put it, a "guarantee."
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Mar 3, 2015 19:48
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Guinness posted:
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Mar 3, 2015 19:48
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Leperflesh posted:HSAs are an interesting and useful tool, but I think you're over-promoting them, or at least not recognizing that the above isn't always the case. I'm not trying to sell them as the best plan for everyone. But if you already have access to one or don't have an affordable cadillac insurance plan through your employer you should absolutely be fully utilizing your HSA to offset your medical costs. quote:It is also possible that this country could eventually institute universal health care. I know it seems remote, now, but a lot can change in ten or twenty or thirty years. Assuming you will have spiraling medical expenses is probably a reasonable guess, but it's not, as you put it, a "guarantee." This is a problem I would be thrilled to have. But between receipts from between now and some UHC future, and all the additional things that HSAs cover in addition to medical insurance I'm really not too worried about "losing" that money. Absolute "worst case" the US adopts a comprehensive UHC plan with no copays, no deductibles, and complete dental and vision coverage as well... so I end up withdrawing from my HSA in retirement as if it were a traditional IRA. Because there are also provisions in HSAs for that as well.
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Mar 3, 2015 19:57
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the non-qualified withdrawal penalty goes away at age 65, so at that point your HSA is functionally equivalent to a traditional IRA.
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Mar 3, 2015 20:00
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Guinness posted:so I end up withdrawing from my HSA in retirement as if it were a traditional IRA. Because there are also provisions in HSAs for that as well. Edit: beaten 
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Mar 3, 2015 20:00
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also you may want to consider that even if you have a fantastic health plan available to you now, you may not have this option available to you when you retire. so it may be more worth your money to take the financial hit of enrolling in a HDHP now rather than taking the financial hit of paying for medical expenses out of pocket later. that's my current thinking, at least; i'm fairly young, and my medical expenses are fairly low, and even if I get hit by a car my out of pocket maximum is manageable at my current income level. ymmv though, obviously i don't claim to know the details of your individual situation.
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Mar 3, 2015 20:05
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Mr. Glass posted:i'm fairly young, and my medical expenses are fairly low, and even if I get hit by a car my out of pocket maximum is manageable at my current income level. ymmv though, obviously i don't claim to know the details of your individual situation. For sure, HDHPs and their accompanying HSAs are really targeted at relatively young and healthy people. If you are older or have ongoing/chronic medical concerns, the benefit starts to dwindle significantly. HDHPs are insurance in the traditional sense of the word and is why they're so much cheaper if you have minimal medical expenses. They cover you in the event of a disaster (broken limbs, cancer, etc.), and leave you on the hook for the minor stuff. It's kind of like auto insurance. If you total your car, insurance pays out but you still have to pay for your own oil changes and tires. If you've got minimal medical expenses, a big old cadillac insurance plan is kind of a waste if it isn't being provided to you at no/low cost. And now with the ACA even your HDHP has to cover preventative checkups and annual exams, which is going to be most of your recurring expenses when you're young/healthy.
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Mar 3, 2015 20:16
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I've been reading on bogleheads about asset allocation across multiple accounts, and one thing I don't see mentioned is consideration about the timing of withdrawals. I have a traditional IRA from a 401k rollover and I have a Roth IRA that I'm currently contributing to. Both are at Vanguard. I'm guessing that I'll want to tap the Roth first, at age 60 or older, and I may not be fully retired then, meaning I'm in a higher tax bracket. I'm in my 30s now. Should I be weighting the Roth slightly less aggressively than the traditional? Or is that such a minor consideration at this point that I can ignore it for now? I've considered simply using LifeStrategy funds but since the size of my portfolio gives me access to Admiral funds that makes me lean towards a lazy 3- or 4-fund strategy.
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Mar 3, 2015 20:39
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Guinness posted:HDHPs are insurance in the traditional sense of the word and is why they're so much cheaper if you have minimal medical expenses. They cover you in the event of a disaster (broken limbs, cancer, etc.), and leave you on the hook for the minor stuff. It's kind of like auto insurance. If you total your car, insurance pays out but you still have to pay for your own oil changes and tires. I mean, not really? Depends on your plan outlay. Our company's HSA plan last year could fit that description but this year there were options at 2k/2500 deductible which you'll potentially hit with a colonoscopy if it's not covered, which isn't catastrophic coverage. It covers catastrophes too, but it also lowered my prescriptions from a combined 100-150/month to 10 dollars. You can also negotiate costs. Colonoscopies, as an example again, can range in cost by the thousands in a city, and just asking about pricing can considerably lower that. On a typical plan, sure you take the best doctor you can get every time, but you also pay enough to offset that variation in price regardless of your choice's cost. But all I'm getting at is that HDHPs range from significant to catastrophic and incredibly minor costs (checkups, twice/year dental, prevent care, cheap generic meds), so it's entirely possible to avoid most of the deductible if you're healthy enough to not need massive catastrophic care, and if you do, your % after deductible is considerably less to a comparable plan. I've got a HDHP but my wife's company offers a great cadillac plan and she's on that one and pays her expenses from my HSA, which is nice. The first rule should always be: Do some math to figure out which is better for you.
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Mar 3, 2015 22:50
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I get $1,000 in company-funded HRA dollars when I choose my CDHP. I get $0 when I choose a HDHP. An HSA would be nice, but I prefer the free money.
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Mar 3, 2015 22:56
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Radbot posted:I get $1,000 in company-funded HRA dollars when I choose my CDHP. I get $0 when I choose a HDHP. An HSA would be nice, but I prefer the free money. MJBuddy posted:The first rule should always be: Do some math to figure out which is better for you.
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Mar 3, 2015 23:02
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Really the bottom line is that in the US right now, healthcare is still coupled with your employer. Just like how there are awesome 401k benefit programs and there are terrible ones, healthcare options are in a similar boat. For my employer, the premiums and yearly out of pocket max for the HDHP could only be more than the out of pocket max for the traditional PPO plan premiums and deductible in a very narrow point. If I had a whole lot of expenses, HDHP wins solidly. If I didn't have much, HDHP wins by a huge margin. The middle depends a lot on what happens, but by my estimations in the band where the PPO would come out ahead, it wouldn't generally be by much. It all depends on what you are offered and your needs. Do the math and see how much your base premiums will cost, make an educated guess as to your expected costs under all options, review max out of pockets and determine your comfort level, choose what makes sense. I wouldn't pick an HDHP just to get access to an HSA if I expected it would end up costing me a bunch more . If it were close, I'd probably lean towards the HDHP. If you have access to an HSA, consider maxing it out - probably either between "401 to match" and "Roth IRA" or between "Roth IRA" and "401 to max" steps. Radbot posted:I get $1,000 in company-funded HRA dollars when I choose my CDHP. I get $0 when I choose a HDHP. An HSA would be nice, but I prefer the free money. I was under the impression that (at least some) CDHP plans were eligible for an HSA...
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Mar 3, 2015 23:40
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You guys and gals are insane if you think an HSA should come before a Roth IRA. Contributing to a Roth is as easy as depositing in a checking account, and I could withdraw every penny I've ever contributed right this second without any penalties or a fistful of Nasonex receipts. Not to mention that Roth IRAs have a gargantuan advantage in fund selection/fee avoidance... Plus, everybody will need *money* in the future. Medical expenses are harder to predict. I think HSAs are great if a list of criteria are met (you have low medical expenses now and expect them higher later, you have access to good investment options, you've run out of other tax-deferred saving options, etc.), but it's wacky to say a health savings account is a higher retirement priority than an individual retirement account.
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Mar 4, 2015 00:34
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GoGoGadgetChris posted:You guys and gals are insane if you think an HSA should come before a Roth IRA.
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Mar 4, 2015 00:44
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Saint Fu suggested possibly doing HSA before IRA.
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Mar 4, 2015 01:37
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