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I'm sitting on about $150k in cash that is doing nothing. I want to buy another house somewhere between 3 and 24 months from now. What should I do with this pile of money until then?
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Nov 10, 2015 06:47
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Savings account.
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Nov 10, 2015 12:27
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Dead Pressed posted:Savings account. I'd agree with this for the portion of the money you're looking to spend on new housing expenses (down payment + any new furniture, renovations, etc. you want to make). But if there's some money in that $150K that you aren't planning on spending in the next few years, consider investing it in an index fund that matches your risk tolerance.
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Nov 10, 2015 14:08
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Star War Sex Parrot posted:My suspicion is that you have cliff vesting, where your employer's contributions all become yours after a specified period. Check your employee benefits guide or ask an HR rep. You should be able to see the total balance, and the split, in cliff vesting though. My company uses Fidelity, if I log into Mint it actually only shows me my combined amount, but when I log into Fidelity itself I can easily see Vested vs not Vested.
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Nov 10, 2015 20:01
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Need some advice if anyone could be kind enough. I have a government loan (Australia, approximately ~23k), that is indexed to inflation (currently at ~1.5 if I am reading it correctly). My Interest account is about 4%, of course this means that it's more advantageous to earn interest on the money instead of paying it outright. But the government does have a voluntary repayment bonus of 5%. This means that I would get a bonus of $1150 if I pay off my loan. Indexation is about $400 per year. I will not be working for the next 3 years (PhD). This is relevant because repayments are enforced through increased taxation (more than $53k per year). In other words the amount will increase over the next 3 years. I can either a) pay off the debit (leaving plenty of savings left for an emergency) b) earn interest at 4% then use it to pay off the loan (no tax on interest as I will be claiming the tax free threshold) c) not pay off the loan and let it index d) continue to pay as if I was being employed (approximately $5k/year) e) wild card! any other options?
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Nov 11, 2015 08:07
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Suspicious Lump posted:Need some advice if anyone could be kind enough. I have a government loan (Australia, approximately ~23k), that is indexed to inflation (currently at ~1.5 if I am reading it correctly). My Interest account is about 4%, of course this means that it's more advantageous to earn interest on the money instead of paying it outright. Does the government not eventually garnish wages/report the debt to credit rating agencies if you straight up don't pay it?
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Nov 11, 2015 12:50
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I would just pay it off. The bonus money they give you for paying it off makes the interest spread game not very worth it. Plus one less thing to worry about which has intangible benefits.
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Nov 11, 2015 13:27
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Ur Getting Fatter posted:Does the government not eventually garnish wages/report the debt to credit rating agencies if you straight up don't pay it? nelson posted:I would just pay it off. The bonus money they give you for paying it off makes the interest spread game not very worth it. Plus one less thing to worry about which has intangible benefits. Suspicious Lump fucked around with this message at 03:34 on Nov 12, 2015 |
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Nov 12, 2015 03:24
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Invest or put it in savings. Let your future income pay it off, given that it's inflation indexed only you are better off making more interest or capital gains now as the value of the loan doesn't change with time (in terms of present value). It's the same way people deal with student loans in NZ except there's a 0% interest rate so slowest repayment lets inflation diminish the principal of the loan.
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Nov 12, 2015 04:40
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Hypnolobster posted:Does anybody have some links for trying to figure out if a HSA/high deductable health plan is worth it over traditional? It's open enrollment time on Monday, and I barely understand how the hell a HSA/hdhp works anyway and I'm trying to educate myself before I make a dumb choice. I'm in this boat as well, but I went straight for the HDHP plan a few years ago so I currently have $2k in my HSA right now from employer contribution. Some plans I'm looking at right now: BCBS PPO: $148.38/mo, $5.5k OOP limit, $0 deductible, flat copay rate GEHA PPO: $112.21/mo, $6k OOP limit, $350 deductible, 85/15 coinsurance GEHA HDHP: $117/mo, $6k OOP limit, $1.5k deductible, 90/10 coinsurance (what I have right now) Recommended I just stick with the HDHP plan if I'm in my 20s, healthy, and not planning to marry or have kids anytime soon?
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Nov 15, 2015 20:33
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halokiller posted:I'm in this boat as well, but I went straight for the HDHP plan a few years ago so I currently have $2k in my HSA right now from employer contribution. Some plans I'm looking at right now: 
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Nov 15, 2015 22:50
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I am close enough to paying off my student loans that I'm planning what my financial life will look like afterwards (hooray!)... Most of the money formerly earmarked for loans will go into the roth IRA, but I'd like to stick some of it in a savings place that is less long term. The question is, where should I put it? I don't have a big lump sum, I'd probably be kicking in 200-500/mo. There's got to be a better place for it than a savings account, interest wise, right? I don't know what I"d be saving it for (fabulous vacation? Future Mini-micona college fund?) which complicates things a bit. I'd like it to be somewhat liquid, but having immediate access to it isn't super important. My financial literacy level is basically "pay yer debts don't spend money have a budget" but I'm willing to learn more.
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Nov 16, 2015 01:13
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It is okay to keep some of it in a savings account, especially for an emergency fund or if you are saving up for something, such as a car. Other than that there is no reason not to max out the Roth before looking at other options.
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Nov 16, 2015 02:06
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SiGmA_X posted:What's your employer kick in for the HDHP? Personally I would go with the HDHP unless you have a lot of medical expenses (over the difference between annual premium [$57.48] + HSA contribution [eg $750] = $692.52/yr). I also contribute to my HSA but not that much because I am a poor $62/mo. I haven't contributed a single cent yet which I should start doing but between contributing to my 401k, my Roth, and student loans, don't have much left to give up D:
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Nov 16, 2015 06:21
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Micomicona posted:I am close enough to paying off my student loans that I'm planning what my financial life will look like afterwards (hooray!)... Most of the money formerly earmarked for loans will go into the roth IRA, but I'd like to stick some of it in a savings place that is less long term. The question is, where should I put it? I don't have a big lump sum, I'd probably be kicking in 200-500/mo. There's got to be a better place for it than a savings account, interest wise, right? I don't know what I"d be saving it for (fabulous vacation? Future Mini-micona college fund?) which complicates things a bit. I'd like it to be somewhat liquid, but having immediate access to it isn't super important. My financial literacy level is basically "pay yer debts don't spend money have a budget" but I'm willing to learn more. That sounds like the exact case for a savings account. I used to wonder about opening a CD or something more "sophisticated" with my non-retirement savings, but any differences in gains you'd see from short-term investments of small sums aren't even worth worrying about. I'm not sure why savings accounts got a reputation for being inferior, it's not like CDs or money markets are that much better right now. I think of savings accounts as being for money that you don't want to keep in your checking account, but you may want to spend sometime in the next few years. I once had a financial advisor who convinced me to park short-term savings (1-3 years) in a conservative mutual fund instead of a savings account. Don't do that.
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Nov 16, 2015 06:39
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Zanthia posted:I once had a financial advisor who convinced me to park short-term savings (1-3 years) in a conservative mutual fund instead of a savings account. Don't do that. Did you get burned, or did you wise up before anything too terrible happened? And dare I ask what the fees were on that? In any event I 100% agree with what you said.
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Nov 16, 2015 07:18
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Hi BFC goons, I've got 10 grand currently sitting in my checking account that I've earmarked for starting a college fund for our daughter who is now 8 months old. This was some of the net proceeds from selling property a few months ago. What can you all tell me about 529s? My parents have started one already that they plan to contribute to on an ongoing basis. I was under the impression that we would need to start our own plan to avoid getting taxed but recent searches seem to suggest that the gift tax exclusion is just based on single-vs-joint and calendar year. I'm not opposed to opening up our own fund such that we can control it, and our daughter is the beneficiary either way. Just wondering what people's experiences are For those of you who have set up a 529, it looks like Vanguard does one which I assume would be the goon approved choice. They do target age accounts much like their target retirement funds which adjust automatically as the beneficiary approaches college age, with three different risk tolerance profiles (conservative, moderate, aggressive).
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Nov 16, 2015 07:36
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Micomicona posted:I am close enough to paying off my student loans that I'm planning what my financial life will look like afterwards (hooray!)... Most of the money formerly earmarked for loans will go into the roth IRA, but I'd like to stick some of it in a savings place that is less long term. The question is, where should I put it? I don't have a big lump sum, I'd probably be kicking in 200-500/mo. There's got to be a better place for it than a savings account, interest wise, right? I don't know what I"d be saving it for (fabulous vacation? Future Mini-micona college fund?) which complicates things a bit. I'd like it to be somewhat liquid, but having immediate access to it isn't super important. My financial literacy level is basically "pay yer debts don't spend money have a budget" but I'm willing to learn more. If the choice is between Roth being funded and not being funded by tax day you should pick Roth every time - at worst you just withdraw the contributions, which has no penalty, and at best you find the money elsewhere and have more in your Roth
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Nov 16, 2015 13:04
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Zanthia posted:I think of savings accounts as being for money that you don't want to keep in your checking account, but you may want to spend sometime in the next few years. I once had a financial advisor who convinced me to park short-term savings (1-3 years) in a conservative mutual fund instead of a savings account. Don't do that. That might be perfectly reasonable depending on the purpose of the money and the mutual fund in question
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Nov 16, 2015 13:07
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vanilla slimfast posted:For those of you who have set up a 529, it looks like Vanguard does one which I assume would be the goon approved choice. This is actually one area where "Always Vanguard" is not the applicable rule, depending on what state you're in. Many states offer tax benefits for 529 contributions but only if you are (1) a resident of the state who (2) contributes to your state's plan. For example, in Illinois the plan is administered by Bright Start and something like the first $10,000 ($20,000 for married joint filers) in contributions is exempted from the income number used to calculate state income tax liability. Bright Start's funds aren't Vanguard cheap but they aren't far off (the index funds have ERs of 0.17-0.21 or so). It's possible that your state plan does not offer tax benefits, or that the tax benefits are offset by insanely high ERs. But your first line of exploration should be with your state plan. Of course if you live in Nevada then ignore what I just said because Vanguard administers their plan.
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Nov 16, 2015 14:09
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The nice thing is Vanguard actually has a section of their site dedicated to helping you choose whether to use your state's 529 or theirs.
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Nov 16, 2015 14:11
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Nail Rat posted:The nice thing is Vanguard actually has a section of their site dedicated to helping you choose whether to use your state's 529 or theirs. Good point. When I searched 529 Colorado the first hit is at college invest, which actually uses vanguard under the covers. Just wasn't sure if there was any benefit to going directly with them And CO definitely has a tax benefit; contributions can be deducted from income and you only pay tax on non qualified expenses
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Nov 16, 2015 16:20
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halokiller posted:$62/mo. I haven't contributed a single cent yet which I should start doing but between contributing to my 401k, my Roth, and student loans, don't have much left to give up D:
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Nov 16, 2015 17:50
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Zanthia posted:That sounds like the exact case for a savings account. I used to wonder about opening a CD or something more "sophisticated" with my non-retirement savings, but any differences in gains you'd see from short-term investments of small sums aren't even worth worrying about. I'm not sure why savings accounts got a reputation for being inferior, it's not like CDs or money markets are that much better right now. Oh huh! I will definitely start by tucking it in savings then. Also, for sure priority number one is fully funding the Roth, this money would just be the extra left over. For future reference/curiosity's sake, at what point does it become "worth it" to find something beyond a savings account (in terms of how long I'd be saving for), and what might that something be?
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Nov 17, 2015 04:04
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I'm relocating from Dallas to San Francisco in December. My new company has given me a $5000 "relocation bonus" as I guess the accounting is easier to just give me a cash bonus and let me use it however, rather than having to make me keep track of reciepts etc. That's how they sold it anyways. And the papers are signed so whatever it's a done deal. I'm gussing post-tax I will only see about $2950 of the bonus. So California has a state income tax. Texas does not. I've taken this in to account when doing salary negotiatons, but never really made enough money to need to look at tax exemptions, etc. From what I understand, at the federal level, I can write off all of my moving expenses, can I write this off for my state taxes as well? The california website is murky at best and the one useful link is a dead link. Second, I am going to literally double my dollar amount income with this move. Roughly $50k to $100k Which means I am paying about $31,000 in combined income taxes, between Federal, State, SS, Medicare in California, compared to about $5500 in Texas (combined). If my total moving costs are in the $6-7000 range, can I write those off for January, to take advantage of the tax situation in 2016? How much is the $6000 tax write off worth? Would it be worth sleeping on a cot in my new place until Dec 31st, and then drive the stuff out Jan 1, or is the difference pretty small and I should just apply it to my 2015 taxes. Can I move now and claim the relocation for January if the last of my stuff comes through in the first week of January? Moving the cats cross country probably would be the last step.
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Nov 17, 2015 07:54
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Hadlock posted:I'm relocating from Dallas to San Francisco in December. First of all, your $5500 estimate was off for what you were paying. You would have paid $5700 in federal tax plus another $3825 in FICA tax on 50k, for a total of $9525. In California, you will owe about $32250 on 100k of income (fed + state + fica). The moving expenses are an "above the line" adjustment and they are valid in federal and california taxes, so a $6000 moving expense would be worth: 2015 on $50k of income in Texas: $1125 2016 on $100k of income in CA: $1500 (federal) + $558 (CA) = $2058. (using 2015 tax rates). So you'd save an extra $933 by shifting the expenses to 2016.
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Nov 17, 2015 16:19
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Hadlock posted:Second, I am going to literally double my dollar amount income with this move.
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Nov 17, 2015 21:16
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If you have a checking account or similar at a big bank (or small bank/credit union) do they use any of that data to assess your risk for credit cards and loans? If I have thin credit history would a bank that sees I have a lot of regular deposits have more confidence in me? Or is all that stuff verified "out of band" and my checking account activity is private?
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Nov 17, 2015 21:19
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ShadowHawk posted:If you have a checking account or similar at a big bank (or small bank/credit union) do they use any of that data to assess your risk for credit cards and loans? Almost all of the time a computer algorithm looks at your credit report and makes a decision without checking your history at a particular bank or your balance/history in any active banking accounts. Sometimes though if you go in person to a branch and speak with someone they might be able to help you get approved based on those factos. Depending on the bank they may offer you a secured credit card that requires a deposit. A lot of these have tons of fees so just be aware of the cards your bank offers before you go. A lot of banks have a reconsideration line you can call if you don't get approved, if you explain you're looking to start building your credit they might be able to get you approved. Make sure the number you call is the actual bank though, don't trust some redditor that posts the number. For loans I'm not sure, I know for a mortgage they actually require you to prove you have a certain amount of money liquid and available but I don't think they do that for any other loans.
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Nov 17, 2015 22:50
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pig slut lisa posted:Did you get burned, or did you wise up before anything too terrible happened? And dare I ask what the fees were on that? Bit of both. I put $31k in, split up between two conservative funds- one with an expense ratio of 1.69% and one with an expense ratio of 1.58%. The idea was to leave it there for a year or two and keep contributing so I could put it toward buying a house. You can already see this is a brilliant plan. Long story short, both funds lost value right away and didn't recover their losses over the course of a year, so I changed my plans. That was far from his worst advice, so I ultimately ended up moving everything to Vanguard. I lost $1k of that $31k in the process. It was a good Bad With Money lesson. Micomicona posted:Oh huh! I will definitely start by tucking it in savings then. Also, for sure priority number one is fully funding the Roth, this money would just be the extra left over. For future reference/curiosity's sake, at what point does it become "worth it" to find something beyond a savings account (in terms of how long I'd be saving for), and what might that something be? If you decide you really want to save for a kid's college fund, there are better accounts for education-specific savings. Or if you've got a few extra grand that you wouldn't miss, you might look at something riskier like market investments. Basic Vanguard mutual funds require a minimum of $3k, but the better funds require a minimum of $10k. Don't do that with your emergency fund or money that you have short-term plans for, though, because it's only fun when you can ride out the occasional market meltdown.
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Nov 18, 2015 04:48
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A friend of mine recently had a medical bill that shouldn't have existed (a medical test that was supposed to be comped). She told the biller (let's call the biller XYZ) that the bill was wrong, and they said "okay we'll look into it." Looking into it took a while, and meanwhile it went to collections, and it was actually with a collections agency for a while - a couple of months I think, while XYZ "looked into it." XYZ finally got off their asses and figured out that the bill wasn't supposed to exist, and called it off. My question is, what, if anything, should she do in terms of checking on her credit? Since the bill never should have existed, in an ideal world her credit rating should go back to pre-incident levels, but I'm worried that it was reported to credit rating agencies and that its retraction wasn't. Am I right to worry? Do collections agencies typically report the retraction of a bill to rating agencies, or do they often not bother? My thinking is that she should wait a couple of months and then get her report from annualcreditreport.com, see if there are bad marks on it related to this incident, and if so, call the collections agency. But if anyone knows more about how these things work I'd love to know.
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Nov 18, 2015 16:03
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Wait a couple months and then get the free credit report from each of the three agencies. If the bill is on there and marked incorrectly then dispute it. I wouldn't even talk to the collections agency unless forced to. You have proof that the debt was not correct and thus should be able to resolve the issue.
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Nov 18, 2015 17:33
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Health care chat! I am currently scheduled to start enrollment in a 2016 HDHP/HSA plan through my employer. With my spouse on the plan and us paying $400/yr to the HSA to max my employer's matching contribution, I'm paying ~4700/year (pre-tax) for a policy that covers gently caress-all before the deductible is hit, and that deductible is $3500/person. That is not a comfortable number to have to pay, although I have emergency savings that would cover it and having to pay $$$$ for an emergency medical bill without the insurance could suck worse. But we are both reasonably healthy, don't smoke, short commutes, etc so I don't see us hitting that deductible in the next year... I don't know how I'm justifying that much money disappearing from my paycheck - literally 1/5 of my income because I am a poor - and not being used to pay for more than a few "preventive care" visits (if we even had a primary care provider). What I want to know is whether I should skip the HSA-added $400 bonus (basically free money from my employer to help me be healthy), go to the Marketplace, and pay $1700 less for a catastrophic plan that also covers gently caress-all, has a 2x higher deductible (which I can NOT afford to pay in one lump if one of us goes belly-up), and does not offer the HSA. Given that we have been gambling on good health without insurance for years now and have yet to hit a major expense, I am not sure whether I want to continue pushing our luck or whether I should pay the horrible price for having coverage that won't bankrupt me. TL;DR: $400 "free" HSA money + "peace of mind", or $1700 more in my pocket - taxes?
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Nov 20, 2015 01:57
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Faerunner posted:What I want to know is whether I should skip the HSA-added $400 bonus (basically free money from my employer to help me be healthy), go to the Marketplace, and pay $1700 less for a catastrophic plan that also covers gently caress-all, has a 2x higher deductible (which I can NOT afford to pay in one lump if one of us goes belly-up), and does not offer the HSA. Given that we have been gambling on good health without insurance for years now and have yet to hit a major expense, I am not sure whether I want to continue pushing our luck or whether I should pay the horrible price for having coverage that won't bankrupt me. You answered your own question. You can not afford the "cheaper" option. Keep going with the HSA.
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Nov 20, 2015 02:03
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Faerunner posted:Health care chat! Are there any other employer plans available - usually the Silver plans are only slightly more than Bronze plans and have a much lower deductible
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Nov 20, 2015 02:05
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There are, but the Silver plans are more than I can afford - the Bronze plan is stretching it as it is, and the Silver costs $1200/yr more for a $2k deductible. So yes, it would "save" me $1500 if poo poo actually happened, but the basic coverage doesn't change, since neither plan covers more than basic wellness visits until after maxing the deductible anyway. After deductible the silver plan's copays are a lower percentage but the Silver plan's annual cost would screw my ability to pay the rest of the bills. I have student loan payments to make and I was hoping to keep putting money into savings so I could retire before I'm 90.
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Nov 20, 2015 02:26
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Faerunner posted:There are, but the Silver plans are more than I can afford - the Bronze plan is stretching it as it is, and the Silver costs $1200/yr more for a $2k deductible. So yes, it would "save" me $1500 if poo poo actually happened, but the basic coverage doesn't change, since neither plan covers more than basic wellness visits until after maxing the deductible anyway. After deductible the silver plan's copays are a lower percentage but the Silver plan's annual cost would screw my ability to pay the rest of the bills. I have student loan payments to make and I was hoping to keep putting money into savings so I could retire before I'm 90. If the cheapest employer plan is more than like 9% of your income, that's not considered affordable and you should be able to get a plan on the exchange (and possibly with tax subsidies depending on your income). Fill out an application for the hell of it and see what exchange plans you'd qualify for. Your state might have an online premium calculator where you don't even have to register and can browse plans.
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Nov 20, 2015 03:22
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Already did; can't get a subsidy because my employer offers plans considered "minimally acceptable" or whatever bullshit language they're using to describe plans that fit Obamacare requirements. Making too much money for medicaid. Plans on the exchange cost as much or more than plans offered by my employer, for worse coverage options. Edit: This area is not great for plans because there are like, two major insurance carriers who want to deal with the marketplace, and there is no pressure at all for them to make their plans more affordable. Double Edit: I'll just stick with the plan I originally selected. It's the best balance of coverage and affordability right now. Faerunner fucked around with this message at 07:50 on Nov 20, 2015 |
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Nov 20, 2015 07:36
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Stop moving to San Francisco, were full. Also I hope you know that 100k will not get you very far as a new person here. Do you already have housing lined up because if not, hoooooo boy.
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Nov 21, 2015 20:17
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MAKE NO BABBYS posted:Stop moving to San Francisco, we're full. I remember reading in the 1990's the same phrase, and I'd agree with it both then and now. The housing market out there is white hot. That said, I was able to find a ~700 sq ft place within my price range. I did some price comparison (besides housing) and it looks like I'll be able to make a lateral move. My plan is to just eat poo poo on rent for the first year (moving with two cats is problematic when moving to a new city unless you go 1 bedroom) and then somewhere around the 9 month mark find a roommate(s) and increase my savings rate dramatically. Dallas already has $7-9 pints of beer and $20 mexican dinner plates at normal restaurants, so I'm pretty aware of what I'm getting in to. If not, I can pretend I'm 24 again and eat ramen. I went in to this knowing it was going to be an expensive move, and so far I haven't exceeded my relocation bonus  I have no idea what the SF rental market is going to look like in a year, but right now I saw rental prices drop by 10% in three days on all of the units I was looking at. With all the tech layoffs, hopefully prices will come down somewhat.
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Nov 21, 2015 21:17
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