|
Roth is after tax, so the Roth portion would not be taxed again as it rolled into a Roth IRA. However, employer contritions into 401k with a Roth component must be of a traditional contrition [eg, before tax] so any matching contributions would have to be taxed if you were to roll it over into a Roth IRA.
|
#
?
Aug 1, 2015 10:14
|
|
|
|
| # ? May 26, 2024 19:15 |
|
|
Dead Pressed posted:Roth is after tax, so the Roth portion would not be taxed again as it rolled into a Roth IRA. My old employer didn't do any matching at all so I don't have to worry about that... uh... luckily? 
|
|
#
?
Aug 1, 2015 11:17
|
|
|
Leperflesh posted:Between a traditional IRA and a roth IRA, you have both pre-tax and post-tax savings covered. 401(k) offers two advantages: match (if any), and the ability to go beyond your maximum IRA contribution. Occasionally you may have access to a higher class of vanguard funds, but that's only going to save you at most 0.10% over an investor-class fund directly purchased in a vanguard IRA, so it's a pretty nominal third possible benefit. The catch with traditional IRAs is they don't provide any tax deduction benefit if you are above a certain income level. 401k without a match is worth it since it allows you sock away $17500 each year tax free. Also the whole automatic deduction from each paycheck solves the whole forced savings problem.
|
|
#
?
Aug 1, 2015 17:18
|
|
|
etalian posted:The catch with traditional IRAs is they don't provide any tax deduction benefit if you are above a certain income level. Moreover, putting money into a traditional 401(k) reduces your income for the purposes of determining whether you can make deductible contributions to a traditional IRA.
|
|
#
?
Aug 1, 2015 17:36
|
|
|
Anyone else having issues logging into Vanguard.com? It goes to the homepage fine, but when I try to login to the personal investor site, it gives me a "too many redirects" error. Getting this on two OSX browsers & iPhone Safari.
|
|
#
?
Aug 1, 2015 20:42
|
|
|
bloodysabbath posted:Anyone else having issues logging into Vanguard.com? It goes to the homepage fine, but when I try to login to the personal investor site, it gives me a "too many redirects" error. Getting this on two OSX browsers & iPhone Safari. Fine over here.
|
|
#
?
Aug 1, 2015 21:01
|
|
|
Fine here, but Mint seems to be choking on it (though it does that by itself plenty of times too).
|
|
#
?
Aug 2, 2015 01:40
|
|
|
Looking for some guidance on choosing a 529 plan. I've been doing some of my own research but am struggling to find meaningful distinctions between all the state plans. Some information that may be more or less relevant: -We are Illinois residents and will likely remain so long term -We prefer a savings plan to a prepaid tuition plan -We prefer a plan that allows third-party contributions so our parents can pitch in if they want -We do not have a child yet; we' plan to name one of us as the beneficiary and then switch when we do have a child Any help would be appreciated. Let me know if I'm missing important info about our situation or preferences.
|
|
#
?
Aug 2, 2015 16:52
|
|
|
pig slut lisa posted:Looking for some guidance on choosing a 529 plan. I've been doing some of my own research but am struggling to find meaningful distinctions between all the state plans. Some information that may be more or less relevant: Kiplinger has a good guide here: http://www.kiplinger.com/article/college/T002-C000-S003-the-best-529-college-savings-plans-2014.html The main catch is the Illinois plan called Brightstar that does offer a tax deduction break up to 20k a year for joint filing so in your case it's the best one to use. So in you case you could open up the account for yourself or your spouse, then switch it at a later date once you have kids. I checked the investments and the plan does offer Vanguard funds which is good(Low cost is best) 
etalian fucked around with this message at 17:22 on Aug 2, 2015 |
|
#
?
Aug 2, 2015 17:18
|
|
|
Something to understand on 529s: They are run at the state level, but you can participate in any state's plan. The main difference between the various state plans are fees/investment options and tax deductability. In some states you get to deduct your personal income by the amount you contribute, in other states you do not. The Nevada state 529 and in typical vanguard style offers some of the best funds at the lowest cost. If your state does not allow for deductions I'd strongly recommend the Nevada 529 (I am in NJ which has no state deduction so I participate in the Nevada plan). However since you live in IL and the IL 529 offers tax deduction on state income taxes, I'd go with that.
|
|
#
?
Aug 2, 2015 17:54
|
|
|
app posted:Something to understand on 529s: They are run at the state level, but you can participate in any state's plan. The main difference between the various state plans are fees/investment options and tax deductability. In some states you get to deduct your personal income by the amount you contribute, in other states you do not. The Nevada state 529 and in typical vanguard style offers some of the best funds at the lowest cost. If your state does not allow for deductions I'd strongly recommend the Nevada 529 (I am in NJ which has no state deduction so I participate in the Nevada plan). However since you live in IL and the IL 529 offers tax deduction on state income taxes, I'd go with that. Yeah the Tax deduction up to 20k for joint filling means the IL plan is best and it also offers low cost Vanguard funds. Edit: It's also important to note 529 plan allows direct Rollovers similar to IRAs, so you could easily rollover the full amount if you moved states. Just remember it's only one rollover per year http://www.savingforcollege.com/articles/when-should-you-switch-529-plans etalian fucked around with this message at 19:37 on Aug 2, 2015 |
|
#
?
Aug 2, 2015 18:19
|
|
|
I am no wizard, but I am an Illinois resident and decided that the Illinois Bright Start 529 was the best option. There are two types of funds offered, one run by Vanguard with low expenses, and one not, so just be sure to pick the Vanguard ones.
|
|
#
?
Aug 2, 2015 19:18
|
|
|
I saw this article today, and I thought it would be a great response to anybody who thinks it is possible to successfully time the market: http://finance.yahoo.com/news/theres-literally-nothing-past-stock-133129375.html
|
|
#
?
Aug 4, 2015 01:10
|
|
|
JohnnyPalace posted:I saw this article today, and I thought it would be a great response to anybody who thinks it is possible to successfully time the market: "It's impossible to predict the stock market over the next 12 months, here's a ton of reasons why!" -> "Subramanian has a 2,200 year-end target for the S&P 500, and she sees it returning at least another 10% in the next 12 months."
|
|
#
?
Aug 4, 2015 03:21
|
|
|
the grade my portfolio articles are pretty interesting: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2014/12/04/portfolio-analysis-a-high-risk-14-million-retirement-plan Seems like lots of people saving for retirement make the mistake of sticking with high expense funds and also having a hodge podge of investments instead of simple stupid strategy like the three fund portfolio. A really dishonest advisor will do the above and also charge you big management fees on top of everything.
|
|
#
?
Aug 4, 2015 04:19
|
|
|
etalian posted:the grade my portfolio articles are pretty interesting: Well it's a lot of work to randomly allocate money to so many different funds that you're getting kickbacks for offering. Every time one of them stops offering you as much you have to rebalance all of your clients.
|
|
#
?
Aug 4, 2015 04:40
|
|
|
Desuwa posted:Well it's a lot of work to randomly allocate money to so many different funds that you're getting kickbacks for offering. Every time one of them stops offering you as much you have to rebalance all of your clients. A lot of the bad portfolios also tend to make the mistake of sinking piles of money in single stocks like Apple or GE instead of focusing on broad market ETFs.
|
|
#
?
Aug 4, 2015 05:08
|
|
|
Parallel Paraplegic posted:"It's impossible to predict the stock market over the next 12 months, here's a ton of reasons why!" -> "Subramanian has a 2,200 year-end target for the S&P 500, and she sees it returning at least another 10% in the next 12 months." (I totally agree, but...) I think the article is talking more about "past performance =/= indication of future performance". There's all sorts of reasons why someone might think the market will go up or down in the next year not at all related to the previous 5 years performance of the market. For example, if you were a financial wizard and could see the writing on the wall for the subprime market back in 2007/2008, then you would have made out like a bandit, even though the market was amazingly bullish the previous 5 years. And that's a totally legitimate reason to make some sort of prediction like you would have at the time. So you know, you could easily say that okay, the market is going to be great in the next 12 months because of low energy prices, low interest rates, blah blah blah and it can be legitimate. But I wouldn't call that "timing the market".
|
|
#
?
Aug 4, 2015 17:18
|
|
|
Predicting the time of when things will happen in the market... hmm, would I call that "timing the market"? Yes I would. Everybody knows prices are going to go up or down. They might even know a lot about why. But knowing the time frame? Good luck with that, even if you are a financial wizard.Parallel Paraplegic posted:"It's impossible to predict the stock market over the next 12 months, here's a ton of reasons why!" -> "Subramanian has a 2,200 year-end target for the S&P 500, and she sees it returning at least another 10% in the next 12 months."
|
|
#
?
Aug 4, 2015 18:24
|
|
|
I have a big newbie question about how to buy something. I read the first post and it doesn't seem to say anything about how to buy things. I've maxed out my IRA and 401k and I still have a fair amount in my bank account just sitting there not doing anything. I don't want to do anything tricky. If I could just invest in the market, like buy shares of S&P500 or Dow or something, I'd prefer to do that. So how could I go about doing that? I currently have a bank account with BOA and my 401k and IRA are between Vanguard and TIAA-CREF. Can I do this through one of them or should I open up an account with Etrade or Charles Schwab or something like that? Is there any difference between these and Vanguard/TIAA? Also, who would I buy shares of S&P500 or Dow from? Are they just stocks that I can buy (if so, what are their abbreviations)? drainpipe fucked around with this message at 19:51 on Aug 4, 2015 |
|
#
?
Aug 4, 2015 19:49
|
|
|
drainpipe posted:I have a big newbie question about how to buy something. I read the first post and it doesn't seem to say anything about how to buy things. You can do it with Vanguard, it'll be very similar to your IRA, but with a regular brokerage account. You can buy shares of the Vanguard S&P500 index fund (VFINX).
|
|
#
?
Aug 4, 2015 20:19
|
|
|
Yeah just do it with Vanguard. Since you already have a 401k with Vanguard should be easy to set up a brokerage account with them. Although you may want to consider the total stock market index fund (VTSMX) instead of the S&P 500 index fund (VFINX), that way you get exposure to smaller companies as well.
|
|
#
?
Aug 4, 2015 21:55
|
|
|
Cicero posted:Yeah just do it with Vanguard. Since you already have a 401k with Vanguard should be easy to set up a brokerage account with them. You could also just go with the VT ETF (Total World)
|
|
#
?
Aug 4, 2015 22:04
|
|
|
I have a question that seems obvious by standard BFC advice but the numbers don't seem to line up with it and I'm wondering what I'm missing. When I joined my company I wasn't very literate with finances and just picked a target year fund for my 401k. I picked the Vanguard 2050 fund (VFIFX) which has an expense ration of 0.18, so in retrospect it turned out to be an ok decision. A few years later I decided I should start a Roth IRA and opened a fund at TD Ameritrade (due to it having the lowest bar to entry at the time IIRC) and picked the lowest ER target fund they had, the T. Rowe Price 2050 fund (TRRMX) at an ER of 0.76. Lately I've been trying to get a little more financially aware and going by standard BFC advice I should drop the TRRMX and switch my Roth over to Vanguard as well for the lower expense ratio, but looking at performance over time the TRRMX seems to outperform the VFIFX by more than the difference between the expense ratios despite both being 2050 funds. I'm sure the difference in holdings makes for the differing outcome, but in terms of the results from each does it make sense to transfer my Roth over to Vanguard?
|
|
#
?
Aug 5, 2015 14:27
|
|
|
I think the simple answer is the standard "past returns don't guarantee future performance" spiel. The future performance of each fund is unknown, but the expense ratio each is going to charge you is a certainty.
|
|
#
?
Aug 5, 2015 14:55
|
|
|
Ok, so I'm 24, debt free, opened a Vanguard roth ira 2050 retirement fund and maxed it for the year. I then went with some financial advice my stepdad gave me and put a large amount ($20000 plus) into VTSMX. Should I diversify or stick to just the two and dump money into VTSMX like I'm being advised to?
|
|
#
?
Aug 5, 2015 18:16
|
|
|
at more than 20k, you'll probably want to diversify into the Total International and some sort of short term bond fund, but I'm not a taxable investment guru. He gave you pretty drat solid advice though! If you get a chance, read The Four Pillars of Investing, or I think there's a cliffnotes version floating around for free on the internet that gives you all the core principles pretty quickly. edit: found it, in the OP: http://www.etf.com/docs/IfYouCan.pdf
|
|
#
?
Aug 5, 2015 18:42
|
|
|
Super Dan posted:You can do it with Vanguard, it'll be very similar to your IRA, but with a regular brokerage account. You can buy shares of the Vanguard S&P500 index fund (VFINX). I'm looking to do the same thing as drainpipe and also a newbie regarding taxable investments. What are the yearly tax implications of buying something like VFINX? I understand tax on capital gains for the most part. If vanguard replaces a stock in VFINX, how do they pass on the capital gains? Is it a single tax form?
|
|
#
?
Aug 5, 2015 19:56
|
|
|
Ranidas posted:I have a question that seems obvious by standard BFC advice but the numbers don't seem to line up with it and I'm wondering what I'm missing. The short answer to your question is absolutely yes switch over to Vanguard as a 0.76% expense ratio on an index fund is highway robbery and that those past performance numbers have absolutely nothing to do with what the future return will be for the same reason that knowing a roulette wheel has come up red 20 times in a row doesn't improve the odds that it will come up black next time.
|
|
#
?
Aug 5, 2015 20:46
|
|
|
Thanks for the advice. I want a set it and forget it (except tax time of course) option, so I guess total stock market and total international are some good options for me to look at.
|
|
#
?
Aug 5, 2015 21:47
|
|
|
Grumpo posted:Ok, so I'm 24, debt free, opened a Vanguard roth ira 2050 retirement fund and maxed it for the year. I then went with some financial advice my stepdad gave me and put a large amount ($20000 plus) into VTSMX. Should I diversify or stick to just the two and dump money into VTSMX like I'm being advised to? The fund you listed only covers US stocks. For long term fire and forget investing you can go with one of vanguards lifestrategy funds since they automatically cover US stock/non-US stock plus bonds.
|
|
#
?
Aug 5, 2015 22:04
|
|
|
In the process of signing up for a new 401k, with the below fund options. Would it be wise to dump it all into VINIX? It has the lowest expense rate (column C) by a significant margin. I also have my Roth IRA in a Vanguard Target Retirement 2055 Fund (currently 90/10 stocks/bonds). If I put the whole 401k into VINIX, should I worry about balance? Thanks so much for your help! 
Family Photo fucked around with this message at 22:25 on Aug 21, 2015 |
|
#
?
Aug 6, 2015 01:23
|
|
|
etalian posted:The fund you listed only covers US stocks. Is more exposure a good thing beyond the US market? I don't really know anything about foreign markets. I'm in a position to contribute at least $2000 a month in additon to the 15 percent already going to my job's thrift savings plan. I will also be deploying soon which will increase my contribution amount to at least $3000 a month due to no living expenses. My main question would then be figuring out if I should set up some sort of specific car or house fund for when the need arises.
|
|
#
?
Aug 6, 2015 01:47
|
|
|
Family Photo posted:Hi all, Not really and the SP500 fund is the only with a low expense ratio. I would go with 90% in the SP500 fund and 10% in the PIMCO total return fund.
|
|
#
?
Aug 6, 2015 01:48
|
|
|
mtr posted:I'm looking to do the same thing as drainpipe and also a newbie regarding taxable investments. If a fund incurs a capital gain, they pass it on to investors via a "capital gains distribution," which you receive as money like a dividend but you pay capital gains tax rates on it. This doesn't happen very often in index funds except, as you identified, in the case when a stock in the index is replaced. The other tax implication is dividends, which are passed on to investors via a quarterly (or semi-annual or whatever) dividend from the fund.
|
|
#
?
Aug 6, 2015 13:30
|
|
|
When I got my first job I knew nothing about what choices to make for 401k so my dad just had his financial advisor friend recommend how to split up my investment elections. I have never changed them and now 5 years later (currently 26 years old) I finally starting to research and learn more about it so would like to now make more educated decisions about it These are my choices, expense ratios and the % I'm currently contributing to each  What would be a recommended split among these choices? I'm guessing some mix of the two Vanguard funds and then some in one of the bonds?
|
|
#
?
Aug 6, 2015 14:57
|
|
|
I love how the allocations were set completely randomly with no rhyme or reason. You can tell the friend wanted to make himself look useful by making it look complicated. As for allocations, decide how much domestic stock, international stock, and bonds you want. Do you have an IRA or taxable account?
|
|
#
?
Aug 6, 2015 15:09
|
|
|
Desuwa posted:I love how the allocations were set completely randomly with no rhyme or reason. You can tell the friend wanted to make himself look useful by making it look complicated. This 401k is currently my only retirement account. I recently upped to contributing 10% (I was at 5% before which maximized the match) so wanted to straighten out these election percentages. Once I get this all set up I plan on figuring out how to open an IRA also.
|
|
#
?
Aug 6, 2015 15:36
|
|
|
First, thank you to everybody offering advice here. I've learned a lot and can see I've made some poor/uninformed decisions about my money. I have a lot more to learn and fix, but for now I want to figure out my 401k. I'm contributing 5% which maxes out the company match (4% of my salary). I'm 37, no debt, gross about $75k/year. I have a small Roth IRA and a small 401a from a previous job. I'll start maxing out the Roth this year and I'll have some other decisions to make later this year with some inheritance. I'll start a thread for that when the time comes as currently not everything has been finalized with the estate. Here are my (terrible) 401k options:  Should I just allocate everything to the HIMCO index and diversify in my Roth and other investments? Or would some diversification in the 401k itself be worth the high expense ratios? Thanks again.
|
|
#
?
Aug 6, 2015 17:17
|
|
|
|
| # ? May 26, 2024 19:15 |
|
|
Yeah that 401k is atrocious. Stick with the 0.6% HIMCO large-cap fund and fiddle with bonds and international in your IRA.
|
|
#
?
Aug 6, 2015 18:07
|
|
