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Harveygod posted:I'm going to disagree here. At least for me, the customer experience has been suprisingly awful. I've been trying to transfer an IRA since mid-November and they still haven't done it. I've called 3 times and sent a "secure message" through their website a week ago with no response. I literally just need them to drop the paperwork in the mail but they won't do it. Each time I call they say it's been cleared up...but then nothing happens. I was going to call again today but their website says their lines are going to be especially busy today. Maybe tomorrow. I can attest to this. I think part of this is Vanguard likes hiring brokerage associates straight out of college that might not have a lot of experience and they can pay them low-ish salaries. I believe their low fees mean their call centers aren't particularly well staffed and a wait time of 30+ minutes is not uncommon. They also tend to mess things up with a regularity that is worrisome, however thankfully you don't need to engage with them that often to do what you need to do. And in general, once you get through, they are reasonably helpful. Despite the support hiccups, the stark difference in expense ratios between VG and its competitors means I would go with them every time. OH also, I ran into the exact same issue with the stupid medallion stamps. I had to speak with an associate at the outgoing and incoming (VG) bank, and explain to VG that the outgoing bank did not require a medallion. After that, it went through fine. Michael Scott fucked around with this message at 00:19 on Jan 4, 2017 |
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Jan 4, 2017 00:15
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My girlfriend had a heck of a time trying to get her 403b set up with Vanguard. They hosed something up in the set up process and opened her account with someone else's name (same as hers) and SSN that was already in their system. Once they finally got the identification and login poo poo sorted out, she could see statements for the other person in her account, but couldn't actually see or interact with their accounts. It took her like 8 phone calls and a few emails over the course of 3 weeks for it all to finally (hopefully) get sorted. I felt kind of bad recommending them after that clusterfuck since I've never had any issues, but I've also never really had to deal with their support line.
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Jan 4, 2017 00:26
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Seems like it's hit or miss. It took me over a month to finally open an account with them, they had to keep deleting it and re-opening and I had to send a bunch of paperwork. Once they finally did it correctly its been smooth sailing and they were extremely helpful and friendly helping me roll over an old 401k to IRA and then on to a Roth IRA. One thing, they explained that in order to roll to a Roth you have to roll it to a regular IRA first and then convert to Roth, otherwise they won't be able to provide you with tax paperwork for the IRS. So beware, because if you ask to open a Roth and roll it to Roth and the operator is not aware of this, you will be screwed when you do your taxes.
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Jan 4, 2017 00:34
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Animal posted:Seems like it's hit or miss. It took me over a month to finally open an account with them, they had to keep deleting it and re-opening and I had to send a bunch of paperwork. Once they finally did it correctly its been smooth sailing and they were extremely helpful and friendly helping me roll over an old 401k to IRA and then on to a Roth IRA. I just opened and deposited $5.5k into a traditional IRA through them. The steps are now... what exactly? I can or cannot have them directly transfer it into a Roth IRA? I have an existing Roth IRA already that I've deposited directly into in the past (but can no longer due to income limit)
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Jan 4, 2017 01:34
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Blinky2099 posted:wait can you explain further? i asked a question about this but didn't get a great answer AFAIK, as long as you transfer from a Vanguard IRA to a Vanguard Roth IRA, they will get you the tax paperwork at the end of the fiscal year. The problem is if you deposit the money from a pre-tax account from a different financial institution straight into a Vanguard Roth IRA - you don't get the paperwork then.
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Jan 4, 2017 03:07
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Animal posted:AFAIK, as long as you transfer from a Vanguard IRA to a Vanguard Roth IRA, they will get you the tax paperwork at the end of the fiscal year. The problem is if you deposit the money from a pre-tax account from a different financial institution straight into a Vanguard Roth IRA - you don't get the paperwork then.
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Jan 4, 2017 03:14
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Droo posted:He's saying that it is unfair that certain people can put $18,000 into a retirement plan because they have a good job with benefits, but people with crappy jobs can't put that money into a retirement plan on their own. NOTE: both can contribute to an IRA so I ignored it. It has nothing to do with employers getting away with stuff, it is an issue of federal tax law fairness.
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Jan 4, 2017 05:25
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I ended up getting MSCI world ETF and an MSCI emerging markets ETF, with TER of 0.2 and 0.25% with a 90/10% split, figuring out diversifications otherwise seemed like a pain and I would have needed a bunch of different ETFs. As far as I can see that should be pretty good geographical diversification and the main thing missing is small-cap stocks, but there doesn't seem to be any convenient instrument (=available for me without transaction costs) available for those so maybe I'll buy some in a larger lot at some time.
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Jan 4, 2017 07:15
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ShadowHawk posted:Oh it's far worse than that. Those of us who can mega-backdoor-roth can contribute about 53,000 dollars into the 401k, plus another 6k or so into an HSA, meaning we have more than 10 times the tax-protected retirement space of a normal American with just an IRA. Even if you save half of your after tax money you need to make about 3 times the median household income to max out that space. The only real difference between people who have access to the mega-backdoor-roth and those who don't is that some can put it in a Roth (where they can withdraw it tax-free) and the rest have to use taxable accounts. That can suck a bit when you are accumulating and end up with $10K+ in dividends, all taxable, but at that level of money you're going to be set for retirement assuming you are saving instead of being candidates for the Bad With Money thread.
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Jan 4, 2017 07:44
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Today I learned the Canadian equivalent of the Roth IRA, the TFSA is just hilarious. Basically all the same benefits regarding tax-free growth and withdrawals, same $5500 a year max contribution, same investment flexibility (I think? I need to look into this), but you can just take out money whenever the heck you want, there seem to be zero age requirements or income limits. Don't appear to be any methods for backdooring funds into it though. Unfortunately I figured this out because the USA of course doesn't give a poo poo and will claim taxes on any returns in that account, so it looks like my wife and I have to be super vigilant about never mingling any of our assets or it'll end up completely screwing her on the tax-efficiency. Great!
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Jan 4, 2017 19:03
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pr0zac posted:Today I learned the Canadian equivalent of the Roth IRA, the TFSA is just hilarious. Basically all the same benefits regarding tax-free growth and withdrawals, same $5500 a year max contribution, same investment flexibility (I think? I need to look into this), but you can just take out money whenever the heck you want, there seem to be zero age requirements or income limits. Don't appear to be any methods for backdooring funds into it though. You can take money out of a Roth IRA whenever you want as well. Just not investment gains. If I deposit 50k in a Roth IRA and it is now worth 60k, then I can withdraw 50k whenever I want with no tax penalties.
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Jan 4, 2017 19:35
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Leon Trotsky 2012 posted:You can take money out of a Roth IRA whenever you want as well. Just not investment gains. I thought I read somewhere that it'd force you to count the $50k withdrawal as $25k from contributions and $25k from gains (thus you'd be taxed on the gains half), but maybe that was roth 401k or maybe I'm making that up
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Jan 4, 2017 20:15
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Blinky2099 posted:To confirm, if I deposit $50k, it grows to $100k, I can withdraw $50k without a penny of tax? Yes, any contributions you make to a Roth IRA can be withdrawn with no penalty as long as the account itself is over 5 years old. If you contribute 50k, then you can remove 50k with no penalty, no matter what the total value of the account is. If you are over 59 1/2 and the account is more than 5 years old, then you can remove gains with no tax penalty as well.
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Jan 4, 2017 20:21
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Not Roth IRA, but I believe that's correct about how early withdrawals from a Roth 401k work; the distribution is split pro-rata into contributions vs growth, with the growth portion taxed and potentially subject to the early withdrawal penalty.
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Jan 4, 2017 20:40
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I have my year's contribution in cash but don't really want to buy in yet due to the end of the year run-up in the markets. Anyone in a similar boat?
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Jan 4, 2017 20:52
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No. Just put it in. Edit: It's 5500. The amount of market watching and thinking and remembering is not worth it even if you are trying to time the market. potatoducks fucked around with this message at 20:58 on Jan 4, 2017 |
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Jan 4, 2017 20:55
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cowofwar posted:I have my year's contribution in cash but don't really want to buy in yet due to the end of the year run-up in the markets. Anyone in a similar boat? Same. It seems likely that there will be a dip at some point in the next 16 months, but who knows? I got about 50% of my contribution in the day after Brexit and 50% in during the huge downturn at the beginning of the year last year and it was great. Only a couple hundred extra dollars, but free money and future dividends none-the-less. I'm holding on for a little bit. But there is a good chance that it could be a dumb move. You can never really time the markets.
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Jan 4, 2017 20:55
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eviltastic posted:Not Roth IRA, but I believe that's correct about how early withdrawals from a Roth 401k work; the distribution is split pro-rata into contributions vs growth, with the growth portion taxed and potentially subject to the early withdrawal penalty. OK that little piece of knowledge gives me the chance to get my money out of my crappy R401k with minimal penalties. This is absolutely fantastic. Corroborated here: http://www.investopedia.com/ask/answers/101314/what-are-roth-401k-withdrawal-rules.asp
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Jan 4, 2017 21:47
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Leon Trotsky 2012 posted:Same. NEVER try to time the market. Just invest now.
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Jan 4, 2017 22:18
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SeaWolf posted:OK that little piece of knowledge gives me the chance to get my money out of my crappy R401k with minimal penalties. This is absolutely fantastic. eviltastic posted:Not Roth IRA, but I believe that's correct about how early withdrawals from a Roth 401k work; the distribution is split pro-rata into contributions vs growth, with the growth portion taxed and potentially subject to the early withdrawal penalty.
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Jan 5, 2017 00:27
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Blinky2099 posted:How, exactly? I'm a bit confused by what you mean. Can you just roll it over to a Roth IRA while totally ignoring Roth IRA annual contribution limits or something? I had the same thought. Guessing he either A. Still works at that employer, or B. Wants to get his grubby paws on that money to spend it!
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Jan 5, 2017 00:37
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GoGoGadgetChris posted:I had the same thought. Guessing he either A. Still works at that employer, or B. Wants to get his grubby paws on that money to spend it! The former. I only started reading here and learning personal finance in depth when I first got access to my 401k and discovered fees are important and 3%fees are outright robbery. So I still work there and until this point was resigned to the fact that I had 10k that I put in that I could never ever touch as long as I was employed there and would never grow due to those fees.
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Jan 5, 2017 00:58
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Leon Trotsky 2012 posted:You can take money out of a Roth IRA whenever you want as well. Just not investment gains. Yeah in a TFSA you can take out earnings as well tax free with no penalty at any time.
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Jan 5, 2017 04:08
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So I've been contributing $5500 to a Roth IRA for the past two years. This year I ended up with a fair bit of extra income coming from the acquisition of the company I work for, so I hit the phase-out level and will have to recharacterize part of that contribution. My question is, I think there's a decent chance that this year will also put me over that limit. Am I best served by putting my yearly contribution into the Roth again, knowing I'll likely have to recharacterize part of it, or should I put it in a traditional IRA? Some option C? This whole situation has been pretty unexpected so I'm still sorting out the implications (obviously there are worse problems to have)
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Jan 5, 2017 15:04
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Lamont Cranston posted:So I've been contributing $5500 to a Roth IRA for the past two years. This year I ended up with a fair bit of extra income coming from the acquisition of the company I work for, so I hit the phase-out level and will have to recharacterize part of that contribution. My question is, I think there's a decent chance that this year will also put me over that limit. Am I best served by putting my yearly contribution into the Roth again, knowing I'll likely have to recharacterize part of it, or should I put it in a traditional IRA? Some option C? This whole situation has been pretty unexpected so I'm still sorting out the implications (obviously there are worse problems to have) First, for this year's taxes, make sure that after your 401k and any other deductions that make it into your MAGI, that you still have a problem. For next year, one option would be to simply wait and contribute to the Roth towards the end of this year when you will have a better idea of how much you'll be able to contribute, and then make a final top-off payment in early 2018 for your 2017 Roth when you know your 2017 MAGI. Another thing to consider is to just head straight to the backdoor Roth. This means you'll need to roll any current deductible traditional IRA contributions into your 401k to avoid getting taxed on them, contribute non-deductible to the traditional IRA, then rollover into Roth.
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Jan 5, 2017 15:29
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Right now I have my various savings and retirement accounts spread across a few different institutions and it would be nice to get them consolidated. I have a friend who works at Edward Jones, but from what I gather they tend to rip you off with fees? Other options are Vanguard and Charles Schwab. I'm not looking for active investing, but it would be nice to have someone to advise me on the mechanics/tax of retirement accounts.
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Jan 5, 2017 20:19
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Lump Shaker posted:Right now I have my various savings and retirement accounts spread across a few different institutions and it would be nice to get them consolidated. I have a friend who works at Edward Jones, but from what I gather they tend to rip you off with fees? Other options are Vanguard and Charles Schwab. I'm not looking for active investing, but it would be nice to have someone to advise me on the mechanics/tax of retirement accounts. What accounts and institutions? Some of them may not be able to be moved. IRAs and 401ks from an employer you no longer work for will be the easiest to move. Edward Jones is a ripoff. They are notorious for high fees, commission-based sales, and transaction fees. Vanguard will be your best bet.
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Jan 5, 2017 20:25
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Lump Shaker posted:Right now I have my various savings and retirement accounts spread across a few different institutions and it would be nice to get them consolidated. I have a friend who works at Edward Jones, but from what I gather they tend to rip you off with fees? Other options are Vanguard and Charles Schwab. I'm not looking for active investing, but it would be nice to have someone to advise me on the mechanics/tax of retirement accounts. Unless your friend is throwing in free blowjobs (and you're into that sort of thing), skip right over Edward Jones. Vanguard is the only fund company out there not trying to serve two masters (fund holders and fund company shareholders). It's not always the absolute best in expense ratios, but you'll find that the companies that are occasionally beating them are typically running the funds as loss leaders or on a temporary basis, and the difference is never that big once you're into the Admiral shares at Vanguard.
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Jan 5, 2017 20:48
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I finally got around to looking at my wife's 401(k) which I've mainly ignored since she has a pension as well and her 401(k) isn't that big. I've always worked for large companies with decent 401(k)s. In comparison, her plan with MassMutual is pretty shocking. Every fund has a 0.85% fee. The additional fund expenses range from 0.8-1.3%. I don't even know what to put her existing money into. All the large cap funds are over 2%. Maybe a target retirement at 1.7% total fees? I'm going to have to really do the research on this. Argh.
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Jan 6, 2017 02:45
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smackfu posted:I finally got around to looking at my wife's 401(k) which I've mainly ignored since she has a pension as well and her 401(k) isn't that big. Three words: In Service Rollover. With such a lovely plan, it's unlikely; but it can't hurt to ask.
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Jan 6, 2017 04:32
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Quick question on HSAs, I currently have one that's matched by my employer at Health Equity. It seems like they're not great because they have a monthly fee of up to $3.95 and all their regular investment options don't seem very good. They do have an investors choice option which opens up a significant amount of mutual funds with low expense ratios but Health Equity would charge a 0.033% monthly fee on the average value of those investments. I'm pretty new at this but this doesn't seem great. I was thinking about switching over to HSA bank which has a monthly account fee of $2.50 and monthly investment fee of $3 and can trade via TD Ameritrade with no additional fees. However my employer currently contributes to my Health Equity account. Would the best choice be to open an HSA bank account, transfer most of the money over from Health Equity to HSA bank and continue to let my employer contribute to my Health Equity account until I switch employers and completely close that one out? Does anyone have any other recommendations on best HSAs to choose?
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Jan 6, 2017 05:09
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Quick question on backdoor roths: to do this I open a traditional ira, fund it, then convert it to a Roth IRA, correct? Is there a waiting period in between any of these steps? Is this something I can do over Vanguard's website or do I need to do it over the phone?
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Jan 6, 2017 12:15
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Residency Evil posted:Quick question on backdoor roths: to do this I open a traditional ira, fund it, then convert it to a Roth IRA, correct? Is there a waiting period in between any of these steps? Is this something I can do over Vanguard's website or do I need to do it over the phone? Yes. There's a literal "convert to Roth" button on Vanguard's site. Make sure to convert all of it, no tax withholding. And remember first that you can't have any non-Roth IRA balances unless you want to pay taxes because of rules.
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Jan 6, 2017 12:18
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monster on a stick posted:Yes. There's a literal "convert to Roth" button on Vanguard's site. Make sure to convert all of it, no tax withholding. And remember first that you can't have any non-Roth IRA balances unless you want to pay taxes because of rules. Does the money have to sit in a money market fund (like VMMXX) for a few days? Will I have to fill out form 8606 come tax time? edit: How much of a pain in the dick is it going to be to figure out what to do with my Roth IRA contributions for 2016 once I figure out exactly how much past the income limit I am for the year?
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Jan 6, 2017 12:33
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Residency Evil posted:Does the money have to sit in a money market fund (like VMMXX) for a few days? Will I have to fill out form 8606 come tax time? You can convert it as soon as the transaction hits and your Traditional IRA reports a $5500 balance in your settlement fund. There's no benefit to waiting, in fact you want to do it ASAP. Yes you'll need to fill out 8606. And to read your edit right - did you contribute to your 2016 Roth (I assume a regular Roth transaction, not a backdoor) before knowing how much you could contribute?
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Jan 6, 2017 12:53
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monster on a stick posted:You can convert it as soon as the transaction hits and your Traditional IRA reports a $5500 balance in your settlement fund. There's no benefit to waiting, in fact you want to do it ASAP. Yes you'll need to fill out 8606. Gotcha. And yeah, I nudged up against the phase out in 2015 and didn't know exactly how much I'd make in 2016, so I just contributed the max, figuring I'd figure it out at tax time. I know I won't be close in 2017 so I'm doing it now.
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Jan 6, 2017 13:14
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Residency Evil posted:Gotcha. Ugh. Yeah, don't do that  You'll have to either withdraw the excess (and pay tax + 10% on any earnings that your excess made), or maybe recharacterize to a (non-deductible) traditional IRA (and then pay tax + 10% on any earnings when you roll it over to a Roth.) I guess you could keep it in non-deductible traditional IRA but not sure why you would, I'd just take the tax hit because non-deductible traditional IRAs are a bit of a pain to manage.
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Jan 6, 2017 13:33
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Theoretically if someone were to retire in 3 years at the age of 55, could they access their 401k funds without penalty?
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Jan 6, 2017 14:17
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monster on a stick posted:Yes. There's a literal "convert to Roth" button on Vanguard's site. Make sure to convert all of it, no tax withholding. And remember first that you can't have any non-Roth IRA balances unless you want to pay taxes because of rules. Could you elaborate on the last part? I know that separate accounts is important if you're doing the roth conversion horse race relations recharacterization madness, but that doesn't seem to be what you're talking about.
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Jan 6, 2017 14:31
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Follow-up backdoor Roth IRA question. If I expect my net income to drop significantly from 2016->2017->2018 I should wait to do the conversion from IRA->Roth IRA after my income has dropped because I am taxed on the conversion amount correct? Theres no benefit to doing it immediately that I'm missing?
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Jan 6, 2017 14:36
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