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etalian posted:Not sure what you would gain by switching since the Vanguard Target retirement fund has a very close strategy to your desired allocation. I enjoy setting it up and being involved in the allocation, even if I pick a boring, generic strategy. The mix I put above has an overall expense ratio that is half of the target retirement funds. The TR fund ratios are already really low, but why not keep more of the money if it's available to me?
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Jun 4, 2015 00:18
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turevidar posted:I enjoy setting it up and being involved in the allocation, even if I pick a boring, generic strategy. The mix I put above has an overall expense ratio that is half of the target retirement funds. The TR fund ratios are already really low, but why not keep more of the money if it's available to me? Mainly because the target retirement includes automatic rebalacing and with a DIY allocation you have be pretty rigorous to rebalance especially when one asset is in a bear market. Also saving 0.05-.07% ER does not lead to a massive change in the final investment, most of the ER advantage makes a big difference going from a ripoff ER like 1% down to Vanguard's more reasonable range.
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Jun 4, 2015 00:30
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Tigntink posted:Thanks for the reassurance. turevidar posted:I enjoy setting it up and being involved in the allocation, even if I pick a boring, generic strategy. The mix I put above has an overall expense ratio that is half of the target retirement funds. The TR fund ratios are already really low, but why not keep more of the money if it's available to me?
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Jun 4, 2015 00:34
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etalian posted:Mainly because the target retirement includes automatic rebalacing and with a DIY allocation you have be pretty rigorous to rebalance especially when one asset is in a bear market. There's some evidence that its beneficial to only rebalance once a year and not have too happy of a trigger finger.
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Jun 4, 2015 00:41
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So I've opened a brokerage account with the best cost to variety of funds ratio I could find. Now I've got some more questions. What do people use for portfolio rebalancing? How often do people usually add to their accounts? Is there a gadget that will calculate how to split your additions between assets? I'd like to add to the account on a monthly basis, is that a bad idea?
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Jun 4, 2015 04:46
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Stringent posted:So I've opened a brokerage account with the best cost to variety of funds ratio I could find. Now I've got some more questions. If it's a tax-deferred or tax-free account rebalance by selling and buying once a year or so. If it's a taxable account "rebalance" by changing what you buy going forward to avoid paying unnecessary tax on capital gains. I've got a simple spreadsheet to keep it tidy but you don't need too much, it's not complicated to do by hand. Just something to tell you what to buy with the next paycheck. Unless you have really high transaction costs (you probably don't, not with any of the major companies like vanguard, fidelity, or schwab) you want to put money in as you get it. There's no benefit to holding onto cash beyond your emergency fund.
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Jun 4, 2015 05:28
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Desuwa posted:If it's a tax-deferred or tax-free account rebalance by selling and buying once a year or so. If it's a taxable account "rebalance" by changing what you buy going forward to avoid paying unnecessary tax on capital gains. Thanks, that's very helpful.
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Jun 4, 2015 05:36
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Looking for some guidance on my roth ira. I kind of jumped into it without fully understanding the market/investing. Jumped into this without doing enough research and as you can see I am not very diversified with 3k in energy.. Below are my current investments. fund purchase current VGENX $3000 $2905 VGT $2450 $2443 VTSMX $3000 $3084 I still need to allocate ~$2560. Unfortunately its not enough to get into some of the mutual funds which require $3000.
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Jun 4, 2015 16:20
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I would recommend either a three-fund portfolio or one of Vanguard's Target Retirement Date funds. There's no real reason to pick specific sectors like energy unless you have a strong reason to think they have a low or negative correlation with other sectors. Since you yourself say that you don't "fully understand the market/investing" I think a three-fund portfolio or a TR fund would be perfect for you. Personally, I have a lot of experience working in the finance industry and I still use a three-fund portfolio, so don't let anyone tell you that they are just for uninformed investors or something.
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Jun 4, 2015 16:30
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If you don't have a good grasp on the market/investing, just throw it all into VTIVX (target retirement 2045) or another appropriate target retirement fund. It will auto-rebalance for you as you get closer to retirement.
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Jun 4, 2015 16:31
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So is it worth it to pull out of vanguard energy at a loss?
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Jun 4, 2015 16:39
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DholmbladRU posted:So is it worth it to pull out of vanguard energy at a loss? You're not going to pull it out, you're going to rebalance your portfolio to align with your goals. Now is the time. Share prices go up and down, that's what they do, and that's why you ignore them and keep your portfolio where you want it instead.
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Jun 4, 2015 16:43
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DholmbladRU posted:So is it worth it to pull out of vanguard energy at a loss? Its an IRA so there's no tax issues with the transaction to consider. Just ask yourself this: If you had an extra $3k in cash to invest today, would you buy that energy fund with it?
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Jun 4, 2015 16:55
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Or, equivalently but from a different angle, do you expect that money to grow faster in the energy fund or out of it? If you keep it there until it grows back to whatever value you invested to avoid "selling at a loss" you're giving up whatever it could have earned in another fund during that same time period.
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Jun 4, 2015 17:00
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Desuwa posted:Or, equivalently but from a different angle, do you expect that money to grow faster in the energy fund or out of it? That makes a lot of sense. Does this look better? fund purchase current VGT $2450 $2443 VTSMX $3000 $3084 VGTSX $3105 VTIVX $2368
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Jun 4, 2015 17:16
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Pretty sure VTIVX contains VTSMX. Honestly just throw it ALL into VTIVX if you really don't know what you're doing. Then read the books in the OP. e: VTIVX is 59% VTSMX: https://personal.vanguard.com/us/funds/snapshot?FundId=0306&FundIntExt=INT Henrik Zetterberg fucked around with this message at 20:49 on Jun 4, 2015 |
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Jun 4, 2015 20:45
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Also keep in mind with those dollar amounts, it barely matters. You're talking $3k. If you crush the market by 20% you're still only looking at $600 more. That same gain could be found by cutting $50 a month from your budget and investing it.
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Jun 4, 2015 23:46
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With a vanguard ira and roth ira account(s), if you sell your fund into your ira account settlement fund is that a taxable event (or penalizing event) or does it not matter since it is still in your ira account? VWINX and VWELX have been getting murdered for the better part of a year and it hurts  VGENX probably has long term upside due to the oil price being crushed by opec. Not that I am going to invest in vgenx. Torpor fucked around with this message at 15:32 on Jun 5, 2015 |
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Jun 5, 2015 15:29
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Anything that happens inside your IRA is completely tax free. Buy and sell at your pleasure.
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Jun 5, 2015 15:33
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Torpor posted:VWINX and VWELX have been getting murdered for the better part of a year and it hurts They've both had positive returns, ~4% and ~6% respectively. That's hardly getting killed.
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Jun 5, 2015 16:18
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District Selectman posted:Also keep in mind with those dollar amounts, it barely matters. You're talking $3k. If you crush the market by 20% you're still only looking at $600 more. That same gain could be found by cutting $50 a month from your budget and investing it. Well, it is the maximum I can get in with my roth at the moment.
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Jun 5, 2015 20:44
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DholmbladRU posted:Well, it is the maximum I can get in with my roth at the moment. Yeah, but, this is your retirement money, right? You're probably planning on retiring with at least a few hundred thousand dollars in your retirement accounts. A couple hundred dollars one way or another right now isn't that important; the important thing is contributing enough every year to run up the numbers while you're young. Allocation will matter a lot more when you're in your 40s and you have a significant balance.
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Jun 5, 2015 20:51
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I was playing around with the Vanguard Total Portfolio recommendation tool, and it seems that given a 15+ year time horizon and a stable income it basically always seems to advise me to go with 100% stocks (60% in VTSMX and 40% in VGTSX). The Boggleheads Wiki seems to be suggesting that something like 50% stock and 50% bond is better, and I've seen mention in here that 90/10 is pretty good (and 90/10 seems to be what the Target Date fund for my age group has in Vanguard's Target Date Funds). Why does the Bogglehead Wiki seem to suggest much more in bonds than Vanguard and this forum seems to suggest? If It's smart to have at least some Bonds why does Vanguard's total recommend tool keep trying to tell me that I should have 100% stocks?
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Jun 5, 2015 20:56
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I think the only explanation is that the founder of Vanguard, CEO of Vanguard, and Vanguard's actual tools often disagree with each other. Much like picking health insurance, you can never have a Sure Bet that you chose the correct asset allocation since you don't know how each sector will perform and in what years you'll need to draw from principal. At the end of your investment career you'll be able to say "wow I should've had a 12% international and 27% bond holding the whole time for optimal results", but today you just can't know. We all just find an AA that makes us comfortable and wait to compare results in 30 years, really.
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Jun 5, 2015 21:05
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Steampunk Hitler posted:I was playing around with the Vanguard Total Portfolio recommendation tool, and it seems that given a 15+ year time horizon and a stable income it basically always seems to advise me to go with 100% stocks (60% in VTSMX and 40% in VGTSX). The Boggleheads Wiki seems to be suggesting that something like 50% stock and 50% bond is better, and I've seen mention in here that 90/10 is pretty good (and 90/10 seems to be what the Target Date fund for my age group has in Vanguard's Target Date Funds).
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Jun 5, 2015 23:57
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Leperflesh posted:Yeah, but, this is your retirement money, right? You're probably planning on retiring with at least a few hundred thousand dollars in your retirement accounts. A couple hundred dollars one way or another right now isn't that important; the important thing is contributing enough every year to run up the numbers while you're young. consistent saving is probably the biggest trap for fresh outs in their 20s since they have so many other obligations like school loans. Still any many you can sock in your 20s makes a big difference for the future, even if it's a small amount.
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Jun 6, 2015 01:50
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Steampunk Hitler posted:I was playing around with the Vanguard Total Portfolio recommendation tool, and it seems that given a 15+ year time horizon and a stable income it basically always seems to advise me to go with 100% stocks (60% in VTSMX and 40% in VGTSX). The Boggleheads Wiki seems to be suggesting that something like 50% stock and 50% bond is better, and I've seen mention in here that 90/10 is pretty good (and 90/10 seems to be what the Target Date fund for my age group has in Vanguard's Target Date Funds).
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Jun 6, 2015 14:09
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etalian posted:Still any many you can sock in your 20s makes a big difference for the future, even if it's a small amount. I know it's a bit crazy to suggest even saving more when you're not making much, but at least you might get some of it "back". And it's in a lump sum at tax time so you can finally splurge on that new tv you wanted! don't do this
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Jun 6, 2015 15:33
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so quick question, I've only got ~20% of my overall investments in tax-advantaged accounts (90%/10% trad IRA/401k) due to a recent large lump sum (house sale) and a high savings rate. Current place of work does not allow outside 401k contributions and so transferring my IRA into the 401k and doing a giant roth backdoor isn't an option right now. I'm 36 and my horizon is 10-15 years, I plan on starting to work part-time and starting drawdown then, baring any financial catastrophe (like children, ha!) Two questions. Are there any other ways to get that investment into a tax-advantaged status of some sort? Are there enough potential savings doing the backdoor that I should be shopping specifically for an employer that WILL let me do 401k transfers when I decide it's time to move on? Bhodi fucked around with this message at 15:53 on Jun 6, 2015 |
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Jun 6, 2015 15:49
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Why not rollover the traditional IRA directly into a Roth? And you can't contribute more than 17.5k or so per year into a 401k so unless you aren't maxing that out the ability to make outside contributions wouldn't help.
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Jun 6, 2015 15:54
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He might be thinking of the mega backdoor Roth.
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Jun 6, 2015 15:59
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yeah, i was looking at the mega backdoor roth as a way to get that lump sum into tax advantaged status. my understanding is that some companies let you transfer existing IRAs into the 401k, so then I would then be able to take my current traditional IRA, transfer it into the 401k, and be able to backdoor roth without the tax burden of the current existing trad ira. I'm also not sure I'm a great candidate for the roth right now in general, as my tax burden is very high at the moment due to income and no deductions, it will almost certainly be lower in the future, especially when I move to part-time. I could be wrong on this, however.
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Jun 6, 2015 15:59
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Bhodi posted:I'm also not sure I'm a great candidate for the roth right now in general, as my tax burden is very high at the moment due to income and no deductions, it will almost certainly be lower in the future, especially when I move to part-time. I could be wrong on this, however. Well for single filing it's up to $116k AGI to max the contribution, if you make up to $116k to $131k AGI then you can still do a partial contribution.
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Jun 7, 2015 02:47
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If you're above the roth contribution limit and can't do a mega backdoor you're best off just investing into taxable accounts and slowly using the regular roth backdoor as much as you're able to without your traditional IRA conversion pushing you into a higher tax bracket over the coming years. If you expect your tax bracket to go up in the coming years it's worth it to rollover your traditional IRA into the Roth anyway, and contributing after-tax to the IRA only helps. This year might not be a great year for it because of the lump sum, but next year might be. Not knowing everything about your situation, I'd do a mega backdoor if possible, contribute straight into the Roth IRA as much as allowed by your income, and contribute after-tax up to the IRA limit but not do a regular backdoor until next year.
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Jun 7, 2015 03:13
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yeah, that's what I figured, but I thought I'd check anyway. Thanks!
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Jun 7, 2015 04:29
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If you can figure out a way to be self-employed, I think that'd open up the option of the huge Solo 401(k) thing. Being self-employed could be as simple as working on a 1099 basis as a contractor instead of as a salaried employee; a lot of professional occupations have that as a possibility. http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans You can pour profits from your c-corp or whatever (e.g., your income) into your 401(k). Not all of them, there's a calculation to be made, but total contributions limits (not counting catch-ups if you're 50 or older) is $53k. Presumably by managing your own 401(k) you'd also be able to do the ira-to-401(k) rollover, but I don't know if typical solo 401(k)s offered by vanguard, fideltiy, etc. have that feature. I would assume so, but check.
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Jun 8, 2015 18:40
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So I just put two and two together and realized that my workplace does allow for the mega-backdoor Roth. They allow it into both the 401k and IRA but I'd do the IRA so that, if necessary, I can withdraw the conversions five years after they convert. I already have a healthy emergency fund and will be leaving myself more than enough income after the after-tax 401k to live and play with, and probably move any excess fun money into the same IRA with a regular backdoor. Are there any gotchas with the mega backdoor I'm missing? I've got no plans to buy a house or even a car in the next five years.
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Jun 9, 2015 01:28
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Looking for some guidance on my company 401k, age 27. Currently they do not match. And I am putting in 10% of my salary. Do people generally spread themselves in this many investment options, or should I rebalance http://i.imgur.com/ufOctO2.png DholmbladRU fucked around with this message at 03:26 on Jun 9, 2015 |
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Jun 9, 2015 03:19
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DholmbladRU posted:Looking for some guidance on my company 401k, age 27. Currently they do not match. And I am putting in 10% of my salary. Do people generally spread themselves in this many investment options, or should I rebalance Most time you are best off sticking to the lowest cost options possible. More is also not better since the main goal is to cover US stock, international stock and a bond fund. What sort of ER do you have for the funds?
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Jun 9, 2015 03:30
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etalian posted:Most time you are best off sticking to the lowest cost options possible. Im sorry, I am not familiar with that acronym.
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Jun 9, 2015 03:32
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