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I just got an e-mail from HR this week that they're changing our Fidelity 401(k) funds from somewhat decent 0.5% ER index funds to the Spartan class (0.1-0.2% ER) funds. Running the numbers, that will result in a 10% increase in my total retirement account in 30 years. I'm pretty happy about this, obviously.
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May 29, 2015 22:59
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Deadulus posted:Is there a big difference between investing via ETFs instead of straight into a mutual fund? It has some small difference, mutual fund trades settle faster and more importantly ETFs can be more tax efficient.
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May 29, 2015 23:22
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Bellagio Sampler posted:It's super easy. We just mailed in about 20 pages of paperwork and they contacted us to set us up with an online account similar to a Vanguard personal account. drat it, that's just as easy as I thought. Thanks!
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May 29, 2015 23:32
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So I just found out that my former employer's HSA broker (HealthEquity) waives maintenance fees on accounts with $2,500+, including invested funds. I guess I'll be sticking with them!
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May 29, 2015 23:37
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Steampunk Hitler posted:I switched jobs this month and I'm now working for HP. This means I have to futz around with my 401k again. Here's some basic information: To answer my own question (somewhat?): It looks like the HP Target Date funds have a ER of 0.48. I signed up for the BrokerageLink and there does not seem to any fees except ones on the funds themselves. I found in BrokerageLink that there is Fidelity Freedom® Index 2055 Fund (FDEWX) which has no transaction fees and an ER of 0.16 and Vanguard Target Retirement 2055 Fund Investor Shares (VFFVX) with an ER of .18 and a transaction fee of $75. Looking at those it seems like FDEWX is a no brainer, however the page on Fidelity gives FDEWX a 2 star rating with the returns at a 2 out 5 and VFFVX has a 4 star rating with returns at a 4 out 5. I think I should just ignore those and go with FDWEX because past returns are not future returns and FDEWX has a smaller ER and no transaction fee. If I went with VFFVX I would only pay the transaction fee once a year when I moved the money from the HP funds to the Vanguard fund each year. Is going with FDEWX probably the best option?
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May 30, 2015 00:27
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Yeah, star ratings and historical returns are not really useful for choosing retirement funds. FDEWX is fine if you like the allocation. However, why not just roll your old 401k into a traditional IRA and have whatever you want?
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May 30, 2015 00:43
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slap me silly posted:Yeah, star ratings and historical returns are not really useful for choosing retirement funds. FDEWX is fine if you like the allocation. However, why not just roll your old 401k into a traditional IRA and have whatever you want? I'm not well versed enough to really know much about allocations yet (still figuring things out) and had just been choosing target date fund previously. If FDEWX is a decent fund then I'll just use that until I know more anyways. I can stick the old 401k in a Traditional IRA, but my new company has a 401k so I'd need to select a fund going forward either way. Looking into it more, I realized that rolling over into a Traditional IRA may not be the best option for me because I make well over the limit for a deduction for a Traditional IRA (118k being the limit if I understand correctly), which is why I have the Roth IRA. I'm concerned that I'm getting somewhat close to the limit on a Roth IRA contribution (I am actually over the limit before deductions from my 401k and such take place) and I'm going to need to start doing a backdoor Roth IRA and it's my understanding that having a Traditional IRA account with ~25k in it would mean I'd have to roll over the entire amount into the Roth to do a backdoor Roth.
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May 30, 2015 00:53
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slap me silly posted:Yeah, star ratings and historical returns are not really useful for choosing retirement funds. FDEWX is fine if you like the allocation. However, why not just roll your old 401k into a traditional IRA and have whatever you want? It's also the passive index version of Fidelity's target retirement fund so it has a low expense ratio.
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May 30, 2015 03:15
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Dik Hz posted:I just got an e-mail from HR this week that they're changing our Fidelity 401(k) funds from somewhat decent 0.5% ER index funds to the Spartan class (0.1-0.2% ER) funds. Running the numbers, that will result in a 10% increase in my total retirement account in 30 years. I'm pretty happy about this, obviously. Yep, this is why they are usually recommended right after Vanguard. Can anyone give me a good reason not to leave my SIMPLE IRA money where it is when I leave my current job? I like my Spartan funds.
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May 30, 2015 05:03
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My new company gives me access to Vanguard's Institutional Plus shares in my 401k and HSA  My old company didn't even do 401k matching but I'm rolling over the tiny amount from the default contributions I made there. Hell I can even rollover my old HSA. MickeyFinn posted:Yep, this is why they are usually recommended right after Vanguard. No real reason unless you want to consolidate them so you can manage your old and new funds from the same place. Depends on your situation. Steampunk Hitler posted:I'm not well versed enough to really know much about allocations yet (still figuring things out) and had just been choosing target date fund previously. If FDEWX is a decent fund then I'll just use that until I know more anyways. A rollover from a 401k is separate from your contribution limit. There are no limits (though there are other restrictions, like it being a once a year thing) for a 401k -> traditional IRA rollover. If you do a backdoor Roth with that money you will pay income tax based on the proportions present in your IRA. So if you have 3/4 pre-tax and 1/4 after tax you'll pay income tax on 3/4 of the rollover, no matter what amount the rollover is (7.5k pre-tax, 2.5k post-tax, and you rollover $4? $3 of that is additional income for that year). That might sound bad but it's not really much worse than normal. Unless you're right on the cusp of another tax bracket, where adding that 3/4 pre-tax money as "income" pushes you over, you'll be paying the same marginal tax on that pre-tax amount as you did on the post-tax amount you contributed. In that situation you'd want to roll everything you could into the Roth until you hit the next tax bracket, and continue doing that each year until you cleared out the traditional IRA. However it does sound like your new 401k plan has better options than the old one, in which case I'd recommend just rolling it over if your new plan allows for that.
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May 30, 2015 05:55
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Yeah do the 401k direct rollover if the new plan has much better investment options.
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May 30, 2015 18:29
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Quick question about index funds: My understanding is that virtually all or at least most index funds do not hold shares of all the stocks listed in a given index but limit themselves to investing into a sample of shares that usually behave like the index as a whole. I imagine that they occassionally have to change which shares they use as a sample. Does this happen often and would they disclose that to the people investing into the fund? (Background is that I'm required to disclose into which companies I invest, even if it's through an index fund, to my employer.)
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May 30, 2015 18:57
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I think it's just active funds that track an index don't hold all the funds of the index, which makes it actively managed by definition. If it's a passive fund I think they do hold all and in the same proportions which is what makes it passive. E: don't take my word for it though. You need to be certain. It should be I the funds prospectus what exactly they are doing.
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May 30, 2015 19:41
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Not exactly. For instance, the S&P500 index has 502 stocks, whereas VINIX currently holds 504 stocks plus some bonds and cash: https://personal.vanguard.com/us/FundsAllHoldings?FundId=0094&FundIntExt=INT&tableName=Equity&tableIndex=0&sort=marketValue&sortOrder=desc So yeah, get the prospectus.
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May 30, 2015 20:16
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Randler posted:Quick question about index funds: My understanding is that virtually all or at least most index funds do not hold shares of all the stocks listed in a given index but limit themselves to investing into a sample of shares that usually behave like the index as a whole. I imagine that they occassionally have to change which shares they use as a sample. Does this happen often and would they disclose that to the people investing into the fund? (Background is that I'm required to disclose into which companies I invest, even if it's through an index fund, to my employer.) Not really things like a index fund do include a massive number of stocks such that the investment closely tracks the desired index e.g SP500 or Russel 2000. Indexes are not constant over time such as changing out countries or companies, which is why for a index fund there's always adjustments to make sure the fund follow the target index. For example the current SP500 includes 502 total companies, while vanguard's trackers include 504.
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May 31, 2015 02:14
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Steampunk Hitler posted:[list]
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May 31, 2015 03:21
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gvibes posted:Roll over to Vanguard. Disagree unless he's willing to pay the tax and rollover to a Roth as being over the IRA income limits and partially losing the ability to back door a Roth IRA is giving up a lot of tax advantaged space.
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May 31, 2015 06:45
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A rollover to traditional Ira does not count towards Ira contributions, and no one is forcing him into to backdoor Roth it. A simple rollover to vanguard emulates the exact same benefits as a 401k while providing better selection options with less expense ratios.
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May 31, 2015 08:47
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Dead Pressed posted:A rollover to traditional Ira does not count towards Ira contributions, and no one is forcing him into to backdoor Roth it. A simple rollover to vanguard emulates the exact same benefits as a 401k while providing better selection options with less expense ratios. Right, but having a large traditional IRA (even via rollover) seriously limits your ability to backdoor Roth contributions in the future. I think it's not an absolute dealbreaker, but it's definitely on the radar under these circumstances: Steampunk Hitler posted:Looking into it more, I realized that rolling over into a Traditional IRA may not be the best option for me because I make well over the limit for a deduction for a Traditional IRA (118k being the limit if I understand correctly), which is why I have the Roth IRA. I'm concerned that I'm getting somewhat close to the limit on a Roth IRA contribution (I am actually over the limit before deductions from my 401k and such take place) and I'm going to need to start doing a backdoor Roth IRA and it's my understanding that having a Traditional IRA account with ~25k in it would mean I'd have to roll over the entire amount into the Roth to do a backdoor Roth. Alternate suggestion, as an afterthought: Roll over to IRA, then do a Roth conversion. The taxes should be ~5K, or about the regular contribution for one year. Contribute what you can for the year, then keep doing your thing exactly as normal. Try to optimize your deductions for this year. Cassius Belli fucked around with this message at 15:00 on May 31, 2015 |
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May 31, 2015 14:53
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I'm working full time for a smaller company that does not (yet) have a 401k. I make too much to contribute to a Roth IRA. Do I have any other tax advantaged options besides a traditional IRA? I looked at the SEP IRA and Solo 401k, but at first glance I do not think I qualify because I am not self-employed or freelancing.
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May 31, 2015 15:34
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Dead Pressed posted:A rollover to traditional Ira does not count towards Ira contributions, and no one is forcing him into to backdoor Roth it. A simple rollover to vanguard emulates the exact same benefits as a 401k while providing better selection options with less expense ratios. If you have pre-tax funds in a Traditional IRA, you are limiting your ability to back door a Roth IRA contribution as you cannot select which funds are converted and instead the money converted must be representative of all the money in your Trad, SEP and Simple IRA accounts. You can read more on http://www.bogleheads.org/wiki/Backdoor_Roth_IRA if this isn't clear, but the outcome is that having a Trad IRA with any significant amount of money in it, that you do not want to convert to a Roth. removes the backdoor Roth IRA option.
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May 31, 2015 16:08
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asur posted:If you have pre-tax funds in a Traditional IRA, you are limiting your ability to back door a Roth IRA contribution as you cannot select which funds are converted and instead the money converted must be representative of all the money in your Trad, SEP and Simple IRA accounts. You can read more on http://www.bogleheads.org/wiki/Backdoor_Roth_IRA if this isn't clear, but the outcome is that having a Trad IRA with any significant amount of money in it, that you do not want to convert to a Roth. removes the backdoor Roth IRA option. drat, I'm no where near needing to do a backdoor but I'd always sorta planned to keep it as an option. But, I had no idea SIMPLE IRAs counted toward the taxed/not ratio. I guess that is out now, as a big part of my savings is in my SIMPLE.
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May 31, 2015 16:25
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MickeyFinn posted:drat, I'm no where near needing to do a backdoor but I'd always sorta planned to keep it as an option. But, I had no idea SIMPLE IRAs counted toward the taxed/not ratio. I guess that is out now, as a big part of my savings is in my SIMPLE. Yeah in terms of the IRA back door tax all your IRA accounts are used, only other plans like 401k are separate. Another tax thing to note since your workplace doesn't offer a place, all of your IRA contributions would be deductible. 
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May 31, 2015 18:09
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etalian posted:Yeah in terms of the IRA back door tax all your IRA accounts are used, only other plans like 401k are separate. Where is that screen shot from? I have been maxing my SIMPLE and my Roth and deducting the full amount of the maxed SIMPLE. So I think I'm covered there, but I'm always interested in further reading.
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May 31, 2015 21:22
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Hello moneygoons, I am hoping I can get some advice on what to do with a 401(k). I got a grownup job and now I need to pick funds for this 401(k) and I have no idea where to even begin. What information I have managed to gather so far indicates these options are not good, as there are no index funds and all the expense ratios are very high. For the record I am contributing 4% to get a match of 4%. I also have a Roth IRA with Vanguard that I started maxing last year that is all in the target retirement 2050 fund (VFIFX), but I can change that if it would help. These are my options: quote:RGABX American Funds Growth Fund of America R2 - ER 1.38% So: 1) What should I do with this 401(k)? 2) Is this 401(k) bad enough that I should try to talk to my boss about it? My company is 6 people and I don't want to rock the boat too much as a new employee who is grateful to be getting a 4% match.
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May 31, 2015 21:54
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Thermos H Christ posted:Hello moneygoons, I am hoping I can get some advice on what to do with a 401(k). I got a grownup job and now I need to pick funds for this 401(k) and I have no idea where to even begin. What information I have managed to gather so far indicates these options are not good, as there are no index funds and all the expense ratios are very high. For the record I am contributing 4% to get a match of 4%. I also have a Roth IRA with Vanguard that I started maxing last year that is all in the target retirement 2050 fund (VFIFX), but I can change that if it would help. It is a bad 401k, but one I would call typical for a small company. American Funds typically charge a 5% fee right off the top with every purchase, which is obscene. However, they often waive the fee (also called a "sales load") in 401k plans. Ask your plan director if the sales load is waived.
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May 31, 2015 22:03
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I'm pretty sure there is no sales load.
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May 31, 2015 22:06
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You definitely want to be contributing to get your full 4% match, but those funds are bad enough that I'd be running numbers myself to determine whether it's worth it or not past that point. Depending on your tax situation you might consider putting your bonds in your 401k despite the poor expense ratios and your stocks outside of it. One other thing to consider is how long you'll be with this company. I don't know what your job is but you might not be there in five years and your next job might allow rollovers into your new, presumably better, 401k.
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May 31, 2015 22:46
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As soon as they leave they can roll it over into a good IRA and keep it there until retirement.
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May 31, 2015 23:04
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MickeyFinn posted:Where is that screen shot from? I have been maxing my SIMPLE and my Roth and deducting the full amount of the maxed SIMPLE. So I think I'm covered there, but I'm always interested in further reading. Just the IRS website guide for IRA tax deductions.
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Jun 1, 2015 00:43
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Dead Pressed posted:A rollover to traditional Ira does not count towards Ira contributions, and no one is forcing him into to backdoor Roth it. A simple rollover to vanguard emulates the exact same benefits as a 401k while providing better selection options with less expense ratios. Yond Cassius posted:Right, but having a large traditional IRA (even via rollover) seriously limits your ability to backdoor Roth contributions in the future. I think it's not an absolute dealbreaker, but it's definitely on the radar under these circumstances: I'm going to just roll over to the new 401k which (via BrokerageLink) has access to FDEWX with an ER of 0.16 (which is 0.02 lower than Vanguard's VFFVX at 0.18 anyways). If I really want to do Vanguard in the future I can just transfer out of FDEWX into VFFVX every few years or so for $75 a trade (but I think it's more likely I'll start managing my own asset allocations before then anyways using Spartan Funds, assuming I'm still at HP at that point). I'm basically right on the border of starting to get a reduced ability to contribute before deductions (160k Salary, ~15k in yearly bonuses) while my wife is a stay at home mother who is starting to make money on the side freelancing via graphic design again (which she earned ~50k a year or so before). Given that it's very likely we'll need to backdoor in the next couple of years and given the availablity of FDEWX, I think it makes the most sense to just roll over. Also: Thanks folks for helping me sort out the right options!
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Jun 1, 2015 17:22
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Hoping to get some advice about my first 401k. I'm 23 and just left a position at Wells Fargo with $11,457.80 in a fully vested 401k. My new employer is grant-funded so I don't have any new plan to roll it into other than starting my own IRA. My plan was to just open a Traditional IRA with my bank and keep it all there. However, $5,720.05 of my account is in Wells Fargo ESOP stocks. So, my main beef is that I don't know if it would be more prudent to just liquidate the stock and continue as I had planned originally, or to open a brokerage account in order to keep the stock and then invest the cash into mutual funds or something. I don't know enough about stocks right now to know if its even a good stock to keep, or if that's even a decent amount of it, but this is my only real retirement fund at this point so I'd rather not do something stupid with it. As I understand, a brokerage account will give me more options with my money, but I'd lose the tax-advantage of an IRA. Any help?
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Jun 1, 2015 23:33
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Opentarget posted:Hoping to get some advice about my first 401k. I'm 23 and just left a position at Wells Fargo with $11,457.80 in a fully vested 401k. My new employer is grant-funded so I don't have any new plan to roll it into other than starting my own IRA. My plan was to just open a Traditional IRA with my bank and keep it all there. However, $5,720.05 of my account is in Wells Fargo ESOP stocks. So, my main beef is that I don't know if it would be more prudent to just liquidate the stock and continue as I had planned originally, or to open a brokerage account in order to keep the stock and then invest the cash into mutual funds or something. I don't know enough about stocks right now to know if its even a good stock to keep, or if that's even a decent amount of it, but this is my only real retirement fund at this point so I'd rather not do something stupid with it. You can always roll it over to any IRA provider of your choice and not lose the tax advantage, it's your right when you decide to end your current employment. Vanguard is the preferred brokeage pick around since it's a honest company that offers the best value for things like expense ratios. People also tend to like Vanguard's target retirement date fund since it has all the good features people itt recommend such as low yearly cost and also excellent diversification. Also make sure you avoiding socking too much money away in employee stock purchase, you want to focus on broad market investments. Right now you have over half of your money in a single stock which is never a good thing. So for your plan of action I would do a 401k to IRA rollover to Vanguard, then invest the whole lump sum in Vanguard Target Retirement 2055 Fund (VFFVX). etalian fucked around with this message at 00:48 on Jun 2, 2015 |
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Jun 2, 2015 00:46
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Right now I have 100% of my 401k and Roth IRA in a target retirement 2050 fund. I have access to these funds through my 401k: vanguard total bond market index institutional @ 0.06 vanguard wellington admiral @ 0.18 vanguard institutional index plus @ 0.02 vanguard extended market index institutional @ 0.08 vanguard total international stock index @ 0.12 vanguard target retirement 20xx trust plus @ 0.07 I want to lower my effective expense ratio and give myself control over asset allocation in my 401k. am planning to switch from the target retirement fund to this: 60% institutional index plus 30% total international stock index 10% total bond market index Is there anything else I should include from what I have available? ploots fucked around with this message at 13:54 on Jun 3, 2015 |
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Jun 3, 2015 13:51
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turevidar posted:Right now I have 100% of my 401k and Roth IRA in a target retirement 2050 fund. I have access to these funds through my 401k: That's a pretty reasonable allocation (and an awesome fund selection, I'm so jealous!). You can look at what Vanguard themselves allocate in their target retirement funds in the fund prospectus itself if you generally want to follow that lead. You might also want to throw in an international bond fund; if you don't have one available in your 401k make up for it in your IRA.
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Jun 3, 2015 14:27
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So I worked for a gov agency for a while and I have a decent amount of money in a 401A. Basically I didn't contribute to social security and instead paid in 10% + they matched me 12% for the time I worked there. Anyway... Now i'm working for a non profit which uses a 403B. I was doing some reading that says I can roll my 401A over into my 403B which is in a far better account - vanguard 2050 fund with a .18 expense ratio. Does this eat up my yearly contribution or have no effect on my contributions for this year? I would personally think that it wouldn't affect this years contributions but i'm in weird waters here with these non profit/gov accounts.
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Jun 3, 2015 21:24
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Rollovers never affect your annual contribution limit.
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Jun 3, 2015 21:43
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You also may consider just rolling it to a Vanguard IRA. If you backdoor Roth, you won't want to do that, however. I recall you saying your household income is very high so you probably do backdoor.
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Jun 3, 2015 21:59
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turevidar posted:Is there anything else I should include from what I have available? Not sure what you would gain by switching since the Vanguard Target retirement fund has a very close strategy to your desired allocation.
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Jun 3, 2015 23:42
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Leperflesh posted:Rollovers never affect your annual contribution limit. Thanks for the reassurance. Sigma - We were talking about the roth possibility for sure.
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Jun 3, 2015 23:57
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