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slap me silly posted:Guesswork... Giving up $5500 of tax-advantaged space that disappears forever in April is also a certainty. I'd take the hit of a few more bucks in interest in exchange for the tax benefit.
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Jan 22, 2016 16:45
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Delta-Wye posted:The Very Serious People who write articles about the market suggest to antiga posted:I don't know if you're right or wrong, but hindsight bias makes it pretty impossible to be objective for something like this. If I pulled up the 10K for a few dozen companies around the same time that didn't pull an Enron you'd surely find some things to be worried about.
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Jan 22, 2016 17:03
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buy buy buy
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I have an old 401k that I would like to get over to vanguard. Vanguard us asking if I want to roll it into a traditional IRA or a Roth IRA. I have about $12,500 in this old 401k. My MAGI in 2015 was $101,000. I expect similar this year. When I do my taxes it will be at the very top end of the 25% basket. If I roll the old 401k over to a Roth I have to pay the taxes on that conversion which will basically be completely in the 28% bracket. My expenses last year (not counting the debt I paid, student loans...) Was about $35k. It is obviously hard to determine future tax rates and how much money I will need. If I do the roll over to a Roth now I am looking at $3,500 in taxes which is not conducive to my get out of debt plan. I don't know if I plan to work to 60..I hope not but right now my plan is debt reduction and then retirement. So should I but the bullet and make it a Roth or keep it a traditional? Any advice would be great. I need to get my retirement house in order.
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Jan 22, 2016 22:17
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spwrozek posted:I have an old 401k that I would like to get over to vanguard. Vanguard us asking if I want to roll it into a traditional IRA or a Roth IRA. I have about $12,500 in this old 401k. My MAGI in 2015 was $101,000. I expect similar this year. When I do my taxes it will be at the very top end of the 25% basket. If I roll the old 401k over to a Roth I have to pay the taxes on that conversion which will basically be completely in the 28% bracket. My expenses last year (not counting the debt I paid, student loans...) Was about $35k. Probably doesn't matter so much that you should gripe too hard about it. Easy answer: Keep it as a traditional and put future money into Roth (401k or IRA) to hedge.
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Jan 22, 2016 23:00
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spwrozek posted:So should I but the bullet and make it a Roth or keep it a traditional? Any advice would be great. I need to get my retirement house in order. Whenever you are undecided, just roll it over to a Traditional. You can still convert any amount (the entire amount or just a portion) from the Traditional to Roth whenever you want before year end. I have been converting small amounts most years over the past decade. It can be done with a simple form or even done online in a matter of seconds.
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Jan 22, 2016 23:11
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80k posted:Whenever you are undecided, just roll it over to a Traditional. You can still convert any amount (the entire amount or just a portion) from the Traditional to Roth whenever you want before year end. I have been converting small amounts most years over the past decade. It can be done with a simple form or even done online in a matter of seconds. Thanks. Sounds like a good plan.
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Jan 22, 2016 23:18
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80k posted:Whenever you are undecided, just roll it over to a Traditional. You can still convert any amount (the entire amount or just a portion) from the Traditional to Roth whenever you want before year end. I have been converting small amounts most years over the past decade. It can be done with a simple form or even done online in a matter of seconds.
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Jan 23, 2016 02:49
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SiGmA_X posted:I agree here. Spwrozek, you may want to roll the amount that 'fits' in the 25% bracket, perhaps. If you feel like paying taxes on it this year, that is. Seems like a good plan. I am going to throw it all traditional just so I can lower the expense ratios from the crappy 401k for now. Then depending on my raise and bonus I can figure out things later this year. Thanks guys.
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Jan 23, 2016 03:28
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Oh man, CNN Money is even better than Marketwatch at  Rodatose posted:http://money.cnn.com/2016/01/20/investing/stocks-markets-dow-oil-china/
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Jan 23, 2016 04:20
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looks like it was a good day to have maxed out my 401k for the year 
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Jan 23, 2016 04:35
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Thank you all for this thread. I'm 32 and finally thinking hard about my retirement. Up until the last couple of years my strategy was pretty much "spend what little money you have". Thankfully, I started a new job that has already increased my income significantly, and has good retirement benefits. I am reading the IfYouCan.pdf books (just finished Bogle's Common Sense), and trying to wrap my head around all this... I currently have about $5500 in my previous employer's 401K that I'm rolling over to max out 2015's Roth IRA (Vanguard). I am contributing 6% of my pre-tax income PLUS 9% employer contribution/max match to my 401k. My own contributions are eligible to go to a Roth 401K, employer contributions are restricted to pre-tax 401k. The Vanguard funds (with share type and expense ratios) available in my 401k plan are: 500 Index Fund (Adm, .05%) Energy Index Fund(Adm, .12%) Mid-Cap Growth Fund (Inv, .46%) Mid-Cap Index Fund (Adm, .09%) REIT Index Fund (Adm, .12%) Selected Value Fund (Inv, .44%) Small-Cap Growth Index Fund (Adm, .09%) Small-Cap Index Fund (Adm, .09%) All of the bond funds available in my 401k are expensive compared to Vanguard's offerings, and none of the Vanguard stock funds are international, so I'm currently planning on maxing out my Vanguard Roth IRA every year, splitting it in some ratio of bonds/international. 2015 Income was roughly $60,000, and I live comfortably. I have a 6 month emergency fund saved up. With no plans to increase my spending, I expect my income to steadily climb to exceed $100,000 within 5 years and then plateau, leaving a lot of dough to sock away. I am also enrolled in a defined benefit pension that, as far as I can tell, should be worth approximately 25% of my salary at retirement annually. Debt: $170,000 @ 3.5% (mortgage, payment split with partner, 29 years left on a 30 year mortgage.) $13,000 @ 0.9% (auto loan) I have a vague notion that I should probably take advantage of Roth stuff now, since my income will be rising, but beyond that I don't know. Should I be putting all of my 6% contribution to Roth 401k until my income plateau's? Or leave it in traditional, and put additional take home pay towards the mortgage? Is there a reasonable way to approximate a Total Stock Market index with the funds available in my 401k? Some good ratio of 500 Index, mid-cap, and small cap? Would it be dumb to consider my pension as a sort of risk insurance and perhaps increase my stock/bonds ratio? Apologies for so many words. My head spins when I think about it, so it helps to get it all written down. tl;dr: I'm probably overthinking it, but I want someone to tell me how to be a good Boglehead with my particular 401k/debt and rising income situation.
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Jan 23, 2016 11:00
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identity49 posted:
For reproducing the TSM with what you have, see: https://www.bogleheads.org/wiki/Approximating_total_stock_market As for managing the rising income situation, I'd personally just make the minimum payments while maxing out all your tax advantaged locations: 401k, Roth IRA, HSA (if possible), etc. Once those are maxed out, then you can debate paying off debt or investing in taxable. With payments that low and the market doing a bit of a dip at the moment, I'd personally dump everything into taxable. The rates you are paying on that debt are very low. Build up an emergency fund if you don't have any buffer as well.
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Jan 23, 2016 17:08
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identity49 posted:
Rollovers don't count against your contribution limits for the year, So you can still contribute to 2015 until April 15 (if you have the funds).
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Jan 23, 2016 17:51
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I did a share class upgrade in Vanguard since my 2016 IRA contribution bumped the total over $10,000. However, the Investor Share version of the fund has been showing up on my balances page with a total of $0 ever since. Will it ever go away?
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Jan 23, 2016 21:51
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GoGoGadgetChris posted:I did a share class upgrade in Vanguard since my 2016 IRA contribution bumped the total over $10,000. Yes, sometimes it takes a year or so. You can customize your view with a link on the top of the page to uncheck the $0 funds if you want.
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Jan 23, 2016 22:11
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I recently got laid off. Yay. Normally, I have an IRA auto-contribution set up every two weeks to match my paychecks. Since I no longer have a paycheck (well, at least one more), I was thinking about liquidating some of the investments in my taxable account and using the proceeds to max out my IRA for the year. I have enough earned income to make that happen. Then, when / if I get a new job this year, I can make future contributions to my taxable account to fill it back up. The only downside I see is paying capital gains, but I have to pay them eventually and I don't think it will be that much.
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Jan 25, 2016 14:51
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Good plan. If you plan on selling anything at a loss, double check the wash sale requirements. I'm not sure if it applies to selling from a taxable account and re-buying in an IRA but I think it does. You'd have to wait 30 days to repurchase.
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Jan 25, 2016 17:09
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Saint Fu posted:Good plan.
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Jan 26, 2016 09:00
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So I'm rolling over a government pre-tax retirement account to a Vanguard Roth IRA (income is low so I figured I'd take the tax hit now because it might be minuscule) and I'm wondering how this works. Do I pick a fund to invest into? I'm really dumb. 
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Jan 26, 2016 20:38
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I would just put it in a vanguard target retirement fund.
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Jan 26, 2016 20:46
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spwrozek posted:I would just put it in a vanguard target retirement fund. I like these quite a bit, but what I did is try to replicate them using other Vanguard funds. Generally Vanguard's index ETFs have expense ratios around 5-10 basis points and the target date funds have expense ratios around 18 basis points. If you're willing to rebalance it yourself from time to time you can just look at the composition of the target retirement date fund and replicate it using the component funds.
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Jan 27, 2016 07:39
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Sorry if I'm in the wrong thread, but where would be the best place to get long-term financial advice for the UK? I started reading the If You Can books, but a lot of it seems US-centric and I was wondering if anyone could point me at some UK-specific stuff.
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Jan 27, 2016 12:29
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Cat Machine posted:Sorry if I'm in the wrong thread, but where would be the best place to get long-term financial advice for the UK? I started reading the If You Can books, but a lot of it seems US-centric and I was wondering if anyone could point me at some UK-specific stuff. monevator.com is the best UK centric website I've found; Smarter Investing by Tim Hale is the best UK centric book I've found.
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Jan 27, 2016 18:26
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Oh boy. My company's retirement contributions website has a big notice on the front page linking to a document discussing "Market Volatility and Your Retirement." Key points are Don't Count Paper Losses, Look at the Long-term Record, and Stay Focused on Your Goals. I wonder if a lot people are drastically shifting their contributions / allocations due to the recent down-turn. In other news, my friend asked me today if I was going to jump on the Chipotle train. He was very proud of himself for buying a single stock of Chipotle while it was at 415 and predicting a comeback. He's made 35 bucks so far - what an investor. 
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Jan 27, 2016 19:12
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Good-Natured Filth posted:In other news, my friend asked me today if I was going to jump on the Chipotle train. He was very proud of himself for buying a single stock of Chipotle while it was at 415 and predicting a comeback. He's made 35 bucks so far - what an investor. A 7.7% return is pretty good for three weeks.
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Jan 27, 2016 19:57
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Don't forget the $19.95 buy/sell commission
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Jan 27, 2016 20:29
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Super Dan posted:A 7.7% return is pretty good for three weeks. You mean 7.7% winnings.
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Jan 27, 2016 20:34
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Cat Machine posted:Sorry if I'm in the wrong thread, but where would be the best place to get long-term financial advice for the UK? I started reading the If You Can books, but a lot of it seems US-centric and I was wondering if anyone could point me at some UK-specific stuff. Briefly: you'll need to use a fund platform unless you do it through your work. cheapest isa platform for small portfolios is Cavendish online, for larger ones its probably one of the fixed price ones like iweb. Cavendish online is also the cheapest sipp as they charge no annual fee. Also consider fidelity if you'd prefer a bit better customer service. ISA is post tax, tax sheltered account with £15500(?) annual limit. SIPP is a pre tax pension account, which appears to have been designed by the administrators as they are kinda complex and loaded with fees everywhere. If you are young and don't get any pension matching from work I'd stay with an isa for now as the government loves loving around with sipps. Also if you are planning on buying a first house soon there's a help to buy isa which is terrible policy but might get you some free cash. No idea how it interacts with a normal isa.
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Jan 27, 2016 21:20
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If you're willing to pay the 'ugh someone else do it' tax, there's also services like Nutmeg; where you set up a monthly direct debit of ≥£50, choose your risk scale from 1-10, and accept a single 1% automatically-calculated annual fee for the convenience. They'll then invest your money, either in an ISA or in a SIPP.
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Jan 27, 2016 22:19
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so I could say that I finally figured out what this god damned cube is doing. Get well Lowtax.
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1% is a very high fee. Not recommended.
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Jan 27, 2016 23:12
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I'm maxing HSA/IRA/401k fairly early this year and will be looking into taxable long-term investment accounts for the first time. I'm young, and thus looking to keep somewhere around an 80/20 to 100/0 stock-to-bond ratio. Does it make the most sense for me to balance accounts by having a higher weight in stocks/higher risk investments in my tax sheltered 401k/IRA, and then keep all bonds/lower risk investments in taxable accounts? 1) Theoretically higher gains on the tax-sheltered stocks, thus tax-sheltering a higher % of growth for min-maxing goodness 2) If I do want to pull some money out of the taxable accounts in the 5-15 year horizon span, it makes more sense to keep the lower volatility assets here Am I missing something? Any advice for how you guys currently do this? edit: vvv thanks! Blinky2099 fucked around with this message at 01:53 on Jan 28, 2016 |
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Jan 28, 2016 00:45
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Some info: https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement
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Jan 28, 2016 01:18
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slap me silly posted:Some info: https://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement Interesting. It spells out both advantages and disadvantages of bonds vs. stocks in taxable investment accounts, but then suggests to place the least tax efficient funds (e.g. bonds) in tax-deferred accounts (401k, IRA), and the most efficient funds (e.g. Total US stock market index fund) into taxable accounts. Sounds like the correct choice is (usually, for most people) opposite of what I originally thought.
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Jan 28, 2016 02:06
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Yeah, you don't want to add taxable income via bonds, you want those to grow tax free. I wish I had a taxable account at this point, so I could keep my international stock there, but it doesn't make sense to do that until I pay off all my debt and max out tax advantaged space.
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Jan 28, 2016 03:10
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They actually recommend filling your tax free accounts (Roth) with your high growth stocks, if you are able.
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Jan 28, 2016 03:19
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Blinky2099 posted:Interesting. It spells out both advantages and disadvantages of bonds vs. stocks in taxable investment accounts, but then suggests to place the least tax efficient funds (e.g. bonds) in tax-deferred accounts (401k, IRA), and the most efficient funds (e.g. Total US stock market index fund) into taxable accounts. With current bond yields, I'm not so sure. This is mentioned in the "Criticisms of this tax placement strategy" section, but this explains it better: http://thefinancebuff.com/tax-efficiency-relative-or-absolute.html.
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Jan 28, 2016 03:55
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Oh, that's super interesting, and makes tons of sense. Guess I'm going to start pushing my bonds into my taxable space. e: I have a pretty substantial loss right now on the Spartan total market fund in my taxable account. If I sell that and buy a bunch of an s&p 500 fund in my IRA, does that trigger a wash sale? No, right, because they're different enough? Then a month or so from now I can dump the S&P 500 for the original total market fund - I figure the two are correlated closely enough to not let me miss out on a potential market rebound in the meantime. The other side of that transfer is of course buying a bunch of a bond fund on the taxable side, which is actually realizing a small (tax-free) gain. Dessert Rose fucked around with this message at 06:29 on Jan 28, 2016 |
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Jan 28, 2016 04:41
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Dessert Rose posted:Oh, that's super interesting, and makes tons of sense. Guess I'm going to start pushing my bonds into my taxable space. It probably doesn't trigger the wash sale rule. If you're talking about FSTMX, it tracks the Dow Jones US Total Market Index, which is substantially different from the S&P 500, and thus definitely doesn't trigger the wash sale rule. If your Spartan fund is an S&P 500 index fund (e.g. FUSEX), then it might, since it'd be substantially the same.
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Jan 28, 2016 08:01
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Yeah it'd be FSTVX for FUSVX. Cool, just wanted to be sure I wasn't misunderstanding the rule 
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Jan 28, 2016 08:12
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I got confused about which years I could contribute to a Roth IRA/Traditional IRA (got married, can now only contribute to a Roth via backdooring it due to income limits and filing status) and now I need to take out the money I contributed in 2015 and re-contribute/characterize it to/as a Traditional IRA and then back-door it again to my Roth. With Vanguard, should that be easy enough or have I caused myself a bit of a headache? And since I'm doing the recharacterization in 2016, does that mean I have to wait until 2017 to change it back to a Roth IRA? Also, I guess with the market as it is and the fact that my IRA has gone down in value, am I kind of screwed and will lose out on some money by doing the recharacterization now? Total Confusion fucked around with this message at 11:17 on Jan 28, 2016 |
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Jan 28, 2016 10:44
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