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Tetraptous posted:Beyond that, it's just a balance between whether you think you will earn more later / be taxed more versus earn less / be taxed less. If you're early in your career, hopefully you will earn more later. But beyond that, if you really don't know, diversification is a good strategy. This is what I’m having trouble with. I expect to make more but probably not tons and tons more (it’s the government we’re talking about). But isn’t it about how much I’m actually withdrawing after I retire, not how much I make beforehand? I’m supposed to have an idea of this 30 years early? Just not sure how people get a good estimation of that. I forgot that the matching is trad only - I think your strategy probably makes sense for me too. (I know it’s not going to make or break my retirement but what’s this forum good for if not sweating the details of these things?) AndrewP fucked around with this message at 20:10 on Aug 9, 2018 |
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Aug 9, 2018 20:06
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I have a regular 401(k) and a Roth IRA. I figure I'm splitting the difference which is a kind of hedge against the uncertainty of whether I'll make more now than then, and the uncertainty of what taxes will be look like (I think higher) then vs. now. You are right though that you can't really tell. Worst case scenario is you pay a bit more tax. Just make sure you save enough money to survive even if you have to pay a bit more tax and you'll be OK, though, the really important thing is to be saving. Exactly which tax advantaged approach you take is much, much less important.
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Aug 9, 2018 20:25
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AndrewP posted:This is what I’m having trouble with. I expect to make more but probably not tons and tons more (it’s the government we’re talking about). But isn’t it about how much I’m actually withdrawing after I retire, not how much I make beforehand? I’m supposed to have an idea of this 30 years early? Just not sure how people get a good estimation of that. Are both you and your spouse going to be pulling down FERS pensions? In that case having more Roth TSP funds would be nice, since you could dip into it as needed without raising your taxable income.
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Aug 9, 2018 20:27
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I just wanted to update the thread. I initiated transfers to Vanguard for everything (except the “emergency fund”, which hilariously I apparently can’t even transfer funds from myself, but need to do via him). Then I fired my financial advisor via email and then a follow up phone call. I was pleasant but explicit about being disinterested in additional advice. At the end he said he would have liked to have a chance to discuss the other ways we could still have a financial relationship (flat fee, etc) which I politely declined. I’m from Minnesota, I’m unfailingly polite. I’ve ordered four pillars of investing and will be reading through that while all the transfers go through. I am going to do some calculations on how much cash to keep on hand, how much to have in an emergency fund (I chronically keep too much in checking, I think), and how much to invest versus allocate to student loan repayment. For now the plan is to put the emergency funds into VMMFF (or VMRFF, I’m not sure if the admiral shares have more restrictions beyond the minimum balance), think about putting the Roth into a target date fund (it’s from residency and not actively doing anything) and do nothing hasty. I also am going to look into the 529s, because it wouldn’t shock me if they’ve earned virtually nothing. It might make financial sense to sell them (the tax penalty applied to no returns should be nothing), use the money to pay down more of the 6.5% loans, and just stick with a normal investment account once the loans are gone.
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Aug 9, 2018 21:33
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Velius posted:I just wanted to update the thread. I initiated transfers to Vanguard for everything (except the “emergency fund”, which hilariously I apparently can’t even transfer funds from myself, but need to do via him). Then I fired my financial advisor via email and then a follow up phone call. I was pleasant but explicit about being disinterested in additional advice. At the end he said he would have liked to have a chance to discuss the other ways we could still have a financial relationship (flat fee, etc) which I politely declined. I’m from Minnesota, I’m unfailingly polite.  Now take 4.5% of your amount transferred and buy forums upgrades.
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Aug 9, 2018 21:44
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H110Hawk posted:
Isn’t that poster a doctor? Couldn’t the docs on SA have worked together to voluntarily replace Lowtax’s busted spine? Maybe for a tax write off to be GWM?
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Aug 9, 2018 21:52
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GoGoGadgetChris posted:Real question on the 529 though. What if college changes? Or your kid can't or won't go? Are there provisions to get that money back? That said, worst cases scenario, you pull it out with a 10% penalty.
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Aug 9, 2018 23:12
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gvibes posted:I have many kids, so the odds ... that I ... pull it out ... 10% ...
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Aug 9, 2018 23:17
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Velius posted:I just wanted to update the thread. I initiated transfers to Vanguard for everything (except the “emergency fund”, which hilariously I apparently can’t even transfer funds from myself, but need to do via him). Then I fired my financial advisor via email and then a follow up phone call. nicely done! Now that you’re not getting ripped off on every transaction you can spend some time figuring out what you wanna do. No rush.Now I can’t un-see it.
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Aug 9, 2018 23:24
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Velius posted:I just wanted to update the thread. I solved my "too much money in checking " problem with an online bank where the money transfers instantly between savings and checking. You can easily get 1.5%+ on your emergency fund in an online bank savings account.
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Aug 10, 2018 00:00
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moana posted:Hurray to all of this! Funny story, that’s the argument used to put my money in that account I can’t access. “It’ll get better returns and you can easily transfer it out!”
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Aug 10, 2018 00:14
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So on the Fidelity page for my work 403(b) it says "The Internal Revenue Service (IRS) limit for elective deferrals (Pre-tax and Roth) is $18,500.00 in 2018." Is 18.5K the limit on the TOTAL amount I can contribute between the two? i.e. I put 5500 into the Roth before tax day 2019 for the 2018 year, am I limited to 13K for the 403b for 2018?
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Aug 10, 2018 00:49
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actionjackson posted:So on the Fidelity page for my work 403(b) it says The 18.5k limit is only on the 403(b). You can have your IRA on the side on top of that.
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Aug 10, 2018 00:58
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Quick dumb question: Can you purchase partial shares of Vanguard ETFs? I know to start you have to buy a full share, but if a share goes for $147, and I plan to do like $100/month, would I have to wait for two months to buy a share or can I buy a partial?
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Aug 10, 2018 01:38
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actionjackson posted:So on the Fidelity page for my work 403(b) it says If you make $5,500 of Roth contributions to your 403b, you can still make $5,500 of Roth contributions to an IRA, but you can only make $13,000 in either Roth/Traditional contributions to your 403b, because that is the limit on the total amount of money (regardless of contribution type) you can make to a 403b. Omne posted:Quick dumb question: Can you purchase partial shares of Vanguard ETFs? I know to start you have to buy a full share, but if a share goes for $147, and I plan to do like $100/month, would I have to wait for two months to buy a share or can I buy a partial?
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Aug 10, 2018 01:38
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Okay thanks. So I am doing a traditional 403b and a Roth IRA? With traditional meaning I pay taxes now, and Roth meaning I pay taxes later (or maybe I have that backwards), 403b referring to a type of work account that the employer may also contribute to, and IRA being my own account.
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Aug 10, 2018 02:29
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Velius posted:I just wanted to update the thread. I initiated transfers to Vanguard for everything (except the “emergency fund”, which hilariously I apparently can’t even transfer funds from myself, but need to do via him). Then I fired my financial advisor via email and then a follow up phone call. I was pleasant but explicit about being disinterested in additional advice. At the end he said he would have liked to have a chance to discuss the other ways we could still have a financial relationship (flat fee, etc) which I politely declined. I’m from Minnesota, I’m unfailingly polite. nice work, and definitely take a look at the 529s and get that e-fund in your own hands
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Aug 10, 2018 03:27
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actionjackson posted:Okay thanks. So I am doing a traditional 403b and a Roth IRA? With traditional meaning I pay taxes now, and Roth meaning I pay taxes later (or maybe I have that backwards), 403b referring to a type of work account that the employer may also contribute to, and IRA being my own account.
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Aug 10, 2018 04:31
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actionjackson posted:Okay thanks. So I am doing a traditional 403b and a Roth IRA? With traditional meaning I pay taxes now, and Roth meaning I pay taxes later (or maybe I have that backwards), 403b referring to a type of work account that the employer may also contribute to, and IRA being my own account. Did you used to play Call of Duty with the goons as J 2 the Ackson?
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Aug 10, 2018 13:07
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Hoodwinker posted:
Well crap. So every time I want to buy shares I have to transfer the actual price into my settlement account and then purchase a share? Any way I can set up an automatic transfer to my settlement account and have it set to purchase shares whenever there's enough? Would a mutual fund have the same issue?
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Aug 10, 2018 13:20
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Omne posted:Well crap. So every time I want to buy shares I have to transfer the actual price into my settlement account and then purchase a share? Any way I can set up an automatic transfer to my settlement account and have it set to purchase shares whenever there's enough?
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Aug 10, 2018 13:25
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Omne posted:Well crap. So every time I want to buy shares I have to transfer the actual price into my settlement account and then purchase a share? Any way I can set up an automatic transfer to my settlement account and have it set to purchase shares whenever there's enough? You can buy partial shares of any security on M1 Finance. Zero fees, no commission online broker, similar to Robinhood but they execute all their trades at the same time every day (so no intraday trades). You get the same expense ratio as the Vanguard Admiral shares as well, so it's a no brainer if you are going to set it and forget it.
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Aug 10, 2018 13:31
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EAT FASTER!!!!!! posted:Did you used to play Call of Duty with the goons as J 2 the Ackson? Were you part of the Hush crew too? What was your GT?
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Aug 10, 2018 13:48
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TraderStav posted:Were you part of the Hush crew too? What was your GT? most recently: im a doc irl, most infamously: perl necklace. previously: ayn randy, smeg macaroni, howd ur dad die, black cops hack.
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Aug 10, 2018 14:14
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Stock picking thread talkin' poo poo!
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Aug 10, 2018 19:04
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Gonna go all in on some liras
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Aug 10, 2018 19:09
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EAT FASTER!!!!!! posted:most recently: im a doc irl, most infamously: perl necklace. previously: ayn randy, smeg macaroni, howd ur dad die, black cops hack. TraderStavros represent. Not sure if you were around when I figured out how to hook up my computer to the Xbox Live remote and was playing soundboards of How to Catch a Predator and other wacky stuff. I miss those days when I could spend hours and hours doing stupid stuff with goons online. Before responsibilities.
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Aug 10, 2018 19:57
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Aug 10, 2018 23:24
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Amazing.
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Aug 10, 2018 23:31
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Sounds about right.
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Aug 11, 2018 01:10
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Velius posted:I just wanted to update the thread. I initiated transfers to Vanguard for everything (except the “emergency fund”, which hilariously I apparently can’t even transfer funds from myself, but need to do via him). Then I fired my financial advisor via email and then a follow up phone call. I was pleasant but explicit about being disinterested in additional advice. At the end he said he would have liked to have a chance to discuss the other ways we could still have a financial relationship (flat fee, etc) which I politely declined. I’m from Minnesota, I’m unfailingly polite. Congrats my man. It was jarring to see how much you were getting ripped, but it makes you tackling it that much more sweet a victory! Keep up the good work.
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Aug 11, 2018 15:46
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The 403b contributions reduce my taxable income by that amount, correct? I just want to try to estimate what kind of refund I should expect next year ahead of time.
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Aug 12, 2018 17:42
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actionjackson posted:The 403b contributions reduce my taxable income by that amount, correct? I just want to try to estimate what kind of refund I should expect next year ahead of time.
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Aug 12, 2018 17:46
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actionjackson posted:The 403b contributions reduce my taxable income by that amount, correct? I just want to try to estimate what kind of refund I should expect next year ahead of time. Your employer does the math for you more or less, then withholds less tax from your paycheck. This is why saving 100 only reduces your take home by $75 (or whatever). Your refund should be about the same, just reduced by whatever % you saved.
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Aug 12, 2018 18:11
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Uuuuugggghhh
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Aug 13, 2018 18:33
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My workplace offers a choice between a Traditional 401(k) and a Roth 401(k). Regardless of what I choose, the company match will go to the Trad 401(k). From what I've read, it seems like I should go with the Roth, as I'm still starting out in my career making ~40k gross. Besides it being more of a hassle to have two accounts to keep track of, will having funds split between a trad and Roth matter in the long run? Would it be better to have all the money in one Traditional account?
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Aug 14, 2018 00:04
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It matters in that one will be taxed when you withdraw and the other won't. It's probably a good idea to have cash in both types of accounts anyway.
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Aug 14, 2018 00:07
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Residency Evil posted:Uuuuugggghhh It's sadly true though. I've been a practicing dentist for 1.5 years now and have met A LOT of dentists who are absolutely horrible with money. I've been keeping up with someone from my class who graduated with 400k< loans and is making minimum payments so he can buy more bitcoin. Fortunately for him, his wife sells lipsense so he should be fine in the long run (she is a dentist too)
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Aug 14, 2018 00:48
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Mu Zeta posted:It matters in that one will be taxed when you withdraw and the other won't. It's probably a good idea to have cash in both types of accounts anyway. Thanks. I'm already contributing to a Roth IRA, so I'll take a second look at the Trad 401(k).
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Aug 14, 2018 01:05
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Someone who understands finance better than I do may shoot down this comparison but I think of Roth money as concentrated money, because the taxes have already been removed. Traditional money is dilute money since it will be taxed in the future. You have a limited amount of tax-advantaged space so if you have the ability, it's better to fill that space with concentrated money rather than dilute. But you'll take the tax hit up front if you go Roth, so if that's not something you can absorb easily in your current salary, that's a point in favor of traditional.
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Aug 14, 2018 02:45
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