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Also from my limited understanding, the point of going Roth IRA over maxing 401k is that most people who care about saving for retirement will be able to retire early, and that's what you'd be drawing from to avoid penalties.
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Feb 12, 2019 21:14
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The Big Jesus posted:Also from my limited understanding, the point of going Roth IRA over maxing 401k is that most people who care about saving for retirement will be able to retire early, and that's what you'd be drawing from to avoid penalties. If by "early" you mean "hope to be able to retire at all" sure.
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Feb 12, 2019 21:18
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It'd be really nice if the whole system could get overhauled and simplified down to just IRAs. Combine all the limits and account types. Like just imagine how simple it'd be: - Combined contribution limit of $25k/yr (individual, same as 401k+IRA limit) - Employer can still match or make discretionary contributions into an employee's IRA of choice, potentially above the limit (like 401ks now) - Can split between traditional and Roth accounts however you like, up to the limit - You actually own the accounts and where they are at and what they are invested in But this stuff is so drat entrenched, and plus if you get rid of employer's nannying their employees' retirement account it could potentially reduce the national savings rate because people are bad at saving.
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Feb 12, 2019 21:25
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My new job's 401k allows after tax contributions that then convert to roth. I've never seen this before, but it seems like you can put another 27.5k into roth every year above the 19k limit. Is there some gotcha they're not telling me?
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Feb 12, 2019 23:05
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Nope. We had a discussion about this a few pages ago, check my earlier posts for links to IRS docs about it.
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Feb 12, 2019 23:30
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Solumin posted:Nope. We had a discussion about this a few pages ago, check my earlier posts for links to IRS docs about it. Thanks, I went through your thread post history and it was helpful.
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Feb 12, 2019 23:44
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But Roth 401ks have to be offered by your employer, correct? No other way to access them?
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Feb 13, 2019 00:33
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A 401(k) of any sort has to be offered by an employer. But, if you are self-employed, you can set up your one-person company to offer its one employee a 401(k), and then shovel a (capped) percentage of company profits into employer contributions.
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Feb 13, 2019 00:39
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Anals of History posted:Has anyone here set up an SEP-IRA for their small companies or sole proprietorships? If so, are there are any good resources to read through if you're completely new to the concept?
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Feb 13, 2019 00:41
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Pardot posted:My new job's 401k allows after tax contributions that then convert to roth. I've never seen this before, but it seems like you can put another 27.5k into roth every year above the 19k limit. Is there some gotcha they're not telling me? Seems Fidelity added this to everyone. Note that this is the limit between $19k and $56k where everything that isn't your base deferral goes, including employer matching, employer profit sharing, etc. So when all of your withholdings/matching/etc hit $56k deposits simply stop. For example, you make $100k and your employer matches 10% and you put in $19k that is: $56k - $19k - ($100k*10%=$10k) = $27k worth of after-tax Roth. Rollovers don't count for anything so ignore them.
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Feb 13, 2019 00:48
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H110Hawk posted:Seems Fidelity added this to everyone. I'm still waiting. The employer has to choose to allow this.
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Feb 13, 2019 00:58
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Note that a Roth 401k with employer contributions means that when you roll over you have to either split the money between a Roth IRA and Traditional IRA or convert that money to Roth. It’s kinda a pain and between that and wanting to diversify my tax liabilities is why I’m doing a Trad 401k.
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Feb 13, 2019 03:27
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Gazpacho posted:You’re right. If the IRS provides specific guidance on withdrawing Roth IRA contributions I don’t know where it is. I just went through withdrawing Roth IRA contributions. You get a 1099-R from your financial institution showing the disbursement of funds coded ‘J’ — distribution without a known exemption. File that exactly as it is given to you by your brokerage. You then need to file form 8606 which is where you declare your Roth IRA basis (...and where everyone should be declaring their basis on every tax year, regardless of withdrawals. Note I haven’t done this in the past and it is not required; in the event of an audit it would be nice to have a long trail showing steady contributions). This is also where you show how much was disbursed without exemption. I purchased and discussed the nuances of this with my tax software provider, and they claimed this was sufficient for filing your taxes and being square with the IRS. Notably, I was not told to file form 5329 / input any information about the non-exempt withdrawal. The entire show, as it is, is described in 8606 showing your basis and a withdrawal of less than that basis. Now, if you withdraw MORE than your contributions, then you will need to file form 5329 and describe that. Additionally, if you withdraw more than your contributions but DO have a exemption (I.e. first time homebuyer but <$10k in principal), you will need to file 5329. hth DNK fucked around with this message at 03:39 on Feb 13, 2019 |
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Feb 13, 2019 03:36
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I recently moved to the US and got a job that offers a retirement account separate from a 401(k). The plan document I got explains that this account is funded with between 6 and 15% of my base salary each year. It vests 25% each year, fully vests at year 4, and the percentage of base salary matched increases by 1.5% each year thereafter until year 10, when it tops out at 15%. The 401(k) contributions I make are not matched, but can be divided between roth and traditional. The fund selection for both is identical (a pile of Fidelity Freedom target date funds with an ER of 0.75%, and FXAIX, FSMAX, FSPSX and VSMAX for passive/index funds with expense ratios between 0.015% to 0.05%). This leaves me with a few questions: Does the presence of a "pension fund" such as it is impact my ability to mega backdoor roth? Is this pension fund tax advantaged from an IRS perspective? I'm working under the assumption that this money will be taxed upon distribution. Do the contributions of my employer to this pension fund (to which I am not able to contribute) count against the contribution limits for the 401k? If no to question 3, does that make my total tax advantaged space 6% of base salary (pension fund) plus the $56.000 for a mega backdoor roth annually?
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Feb 15, 2019 00:13
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Don't know if its the right thread, but what are the best alternatives to Mint? I use it to keep track of my spending budget and investments. But recently they started only updating your accounts maybe once a day, yet deceitfully tell you that the accounts have been refreshed when you manually updating them. Presumably to save on bandwidth.
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Feb 15, 2019 20:21
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Animal posted:Don't know if its the right thread, but what are the best alternatives to Mint? I use it to keep track of my spending budget and investments. But recently they started only updating your accounts maybe once a day, yet deceitfully tell you that the accounts have been refreshed when you manually updating them. Presumably to save on bandwidth. Hmm I have not experienced the same with all my account types on Mint. Are you clicking the gear on the overview page, then 'refresh'? That does the trick for me. Your account provider may be restricting Mint's API calls to a period of time, but Mint is definitely capable of real-time refreshes each time I click that button with my specific accounts. 'Personal Capital' is the one competitor usually mentioned, your question is easily Googleable, but IMHO I haven't found something with the same or better mix of features as Mint.
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Feb 15, 2019 20:34
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Animal posted:Don't know if its the right thread, but what are the best alternatives to Mint? I use it to keep track of my spending budget and investments. But recently they started only updating your accounts maybe once a day, yet deceitfully tell you that the accounts have been refreshed when you manually updating them. Presumably to save on bandwidth. Why do you care more than once a day? Stop caring so much. If you're living that close to the wire you should work on other aspects of your life. I use Fidelity Full View which refreshes seemingly daily, but wouldn't surprise me if it went a few days between or did it on-demand-ish on login. Hambilderberglar posted:I recently moved to the US and got a job that offers a retirement account separate from a 401(k). The plan document I got explains that this account is funded with between 6 and 15% of my base salary each year. Mandatory contributions tend to not impact anything. Do you know what kind of pension account it is? Does your employer actually offer the After Tax In Plan Conversion magic? In theory your max space is indeed the pension + 401k higher limit. If you can hit that, goon speed.
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Feb 15, 2019 20:35
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Something Offal posted:Hmm I have not experienced the same with all my account types on Mint. Are you clicking the gear on the overview page, then 'refresh'? That does the trick for me. Your account provider may be restricting Mint's API calls to a period of time, but Mint is definitely capable of real-time refreshes each time I click that button with my specific accounts. Yes. And I have gone so far as to delete the account and then re-add it, and when I add it back again it shows the balances as they were before I deleted it. Also when I make changes to the budget, and log back in, the changes didn't stick. Regardless of whether I log back in with the iOS app or the website.
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Feb 15, 2019 20:38
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H110Hawk posted:Why do you care more than once a day? Stop caring so much. If you're living that close to the wire you should work on other aspects of your life. I use Fidelity Full View which refreshes seemingly daily, but wouldn't surprise me if it went a few days between or did it on-demand-ish on login. Thanks for the unsolicited advice! I need to refresh it more than once a day because I share a very complicated budget with my spouse that involves a lot of traveling expenses so we need to keep track of it during the day. The only way to "work on other aspects of my life" would be to abandon my career, such as it is.
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Feb 15, 2019 20:40
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Animal posted:Thanks for the unsolicited advice! You're welcome! Animal posted:I need to refresh it more than once a day because I share a very complicated budget with my spouse that involves a lot of traveling expenses so we need to keep track of it during the day. I have a hard time envisioning a system where you are working that close to the line where even twice a day budget updates are anything more than min/maxing something a little to close to the wire. 
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Feb 15, 2019 20:43
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Personal Capital updates as soon as every 6-12 hours I suppose. It's not a good site for tracking your investments though. It gives me an accurate balance as of this moment, but it doesn't remember what my numbers were over previous days, so it gives me out of whack return percentages and such. I've logged in daily for a few weeks now, and I'm up between 6-10% on all my investments since the start of the year, but Personal Capital has always said I'm getting negative returns. 
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Feb 15, 2019 20:46
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If you want exact up to date stuff, then log transactions on a shared google sheet, don't rely on mint, I guess.
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Feb 15, 2019 20:47
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H110Hawk posted:You're welcome! Twice a day would be fine. Mint hasn't updated my bank information in almost 48 hours, yet it tells me it did which has led to make mistakes about certain transactions. Manually having to open my bank account to compare the data with other apps to make sure certain payments and charges went through, got refunded, etc takes too much of my time and if I don't do it right I start getting calls from people and I'm now in a different time zone so I wanna simplify things so I can get some rest. Until I find an alternative I'm just gonna have to use a notepad the old fashioned way. silvergoose posted:If you want exact up to date stuff, then log transactions on a shared google sheet, don't rely on mint, I guess. Probably gonna do this as soon as I get some time to sit down with a laptop. Animal fucked around with this message at 20:55 on Feb 15, 2019 |
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Feb 15, 2019 20:51
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If its Capital One, the API that they provide for third party tools like Mint (or any other) limits its refreshes to once per 24 hours, and also doesn't show pending transactions. You'll face the same problem with any other aggregation tool. It's really good that Capital One has implemented a secure, read-only, separately-authenticated API, but it's kind of annoying how slow it is to refresh. All my other accounts in Mint can be force-refreshed, but Capital One has a limitation on their API itself. Nothing Mint can do about it.
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Feb 15, 2019 20:53
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Guinness posted:If its Capital One, the API that they provide for third party tools like Mint (or any other) limits its refreshes to once per 24 hours, and also doesn't show pending transactions. You'll face the same problem with any other aggregation tool. That makes sense. It's Alliant. I'll just create a spreadsheed when I have some time. Thanks!
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Feb 15, 2019 20:56
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Animal posted:Twice a day would be fine. Mint hasn't updated my bank information in almost 48 hours, yet it tells me it did which has led to make mistakes about certain transactions. Manually having to open my bank account to compare the data with other apps to make sure certain payments and charges went through, got refunded, etc takes too much of my time and if I don't do it right I start getting calls from people and I'm now in a different time zone so I wanna simplify things so I can get some rest. Without knowing anything about what you're trying to accomplish here it really sounds like you need something a step up from luck (Mint) like Expensify or Quickbooks, that sort of thing. None of the free-ish services are intended to run a business off of, which it sounds like you're trying to do here. I made the (not insane) assumption that you were doing this for your personal bank accounts, and in the "long term investing" thread that screamed crazytown.
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Feb 15, 2019 21:02
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It’s all good man. I work for a kind of unconventional airline and have to handle and get reimbursed for certain expenses on the road traveling across many time zones, all which can change immediately or in a few hours. Combined with helping my spouse start a business, combined with some expensive things that I’m currently selling online, combined with our normal boring budgets. Throw in the fact that around the 15th and 30th if I don’t watch my job’s compensation like a hawk I can be, and have been, short changed on stuff like my HSA contributions and hours paid and if I don’t catch it quickly enough I have to wait a month for it to get fixed. Anyways that’s it. I do need to simplify. Mint really helped me keep things under control until this issue started. I knew this was probably not the right thread to ask without raising eyebrows but it’s the finance thread I lurk most on in and I haven’t slept in over 25 hours. Animal fucked around with this message at 21:19 on Feb 15, 2019 |
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Feb 15, 2019 21:14
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My wife and I are 30, and I want to take a look at how our retirement looks to see if we should increase anything and/or see how we're doing with current contributions. Wife has a 403(b) I have a defined benefit pension (if I stay with my employer for about 30 years, unless the pension is abolished...) I also have a 457 What is the best way to go about looking at total projected retirement assets when it includes a defined benefit pension? The payout will change based on what job title and pay rate I'm in, and how many years I work/retire.
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Feb 15, 2019 21:34
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H110Hawk posted:Mandatory contributions tend to not impact anything. Do you know what kind of pension account it is? I don’t have documents that expressly confirm that they offer the after tax in plan conversion magic, but I’m told by the guy who referred me that they do. Once I actually get somebody from HR in front of me I will confirm.
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Feb 15, 2019 23:19
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The Slack Lagoon posted:What is the best way to go about looking at total projected retirement assets when it includes a defined benefit pension? The payout will change based on what job title and pay rate I'm in, and how many years I work/retire. You can value your 401k / IRA using Excel’s “future value” (=fv) function where you can plug in your data / assumptions to calculate a lump sum. Rate = annual % return nper = years (“number of periods”) pmt = how much you’re contributing annually pv = present value / how much you have right now. You can value your pension payment / annuity using a simple calculation: Value = annual payment / rate. I.e. 50k annual payout @ 7% annual growth = $715k lump sum 75k @ 4% = $1,875k These two methods in combination will allow you to compare your two retirement plans apples to apples (with your own assumptions about rates — a hugely important factor).
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Feb 15, 2019 23:35
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Any thoughts on allocation if I can max out my 403b, Roth IRA, but not both? Say I can put in 20K, and the limits are 18.5K and 5.5K. I would like to retire early (50), so I'd be able to get my 403b right then, and then the Roth I could get 9.5-10 years later.
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Feb 16, 2019 00:52
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This is a bit of a niche scenario but I was wondering if anyone had any input on my situation. I was an employee of a startup and I had in-the-money ISOs that I exercised before leaving, for tax purposes. In part, this (and the resulting ~$70k tax burden that I'll be getting back slowly over time as AMT carryover) was funded by a loan from my parents. The loan has the following terms, simplified: - $150,000 principal - 5.5% annual interest - No payments necessary until May 2020 - Only interest-only payments necessary until May 2022, then the rest paid over the following 6 years - At any time I can pay down whatever I want. After filing my taxes this year I will have an extra $60,000 in an Ally savings account and $36,000 in a Vanguard taxable target retirement fund (this is in addition to an emergency fund, 401k, IRA, etc). Given that paying back the loan is a guaranteed 5.5% return, would it make sense to throw the full $60k at the loan, while also liquidating the $36k taxable account and putting that toward the loan as well? I'd owe some long-term capital gains on the taxable account but given that I'll have AMT carryover it won't really matter anyway. I don't anticipate having any difficulty paying down this loan no matter what; I guess I'm just asking if a guaranteed 5.5% return is worth paying the cash + liquidating a taxable investment account.
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Feb 16, 2019 02:23
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opposable thumbs.db posted:This is a bit of a niche scenario but I was wondering if anyone had any input on my situation. I was an employee of a startup and I had in-the-money ISOs that I exercised before leaving, for tax purposes. In part, this (and the resulting ~$70k tax burden that I'll be getting back slowly over time as AMT carryover) was funded by a loan from my parents. The loan has the following terms, simplified: When does interest start accruing? If not until May 2020 then don't pay anything until then. Regardless, it's a close call on the $60k, unlikely to be worth also liquidating the $36k. This changes if you expect to need cash for a large expense coming up in the next few ish years, like a house down payment.
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Feb 16, 2019 02:46
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CubicalSucrose posted:When does interest start accruing? If not until May 2020 then don't pay anything until then. Regardless, it's a close call on the $60k, unlikely to be worth also liquidating the $36k. This changes if you expect to need cash for a large expense coming up in the next few ish years, like a house down payment. To answer your questions, the interest is always accruing and I don't see any large expenses upcoming in the next couple years. 5.5% is kind of on the border when it comes to guaranteed returns versus higher risk/return, I think.
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Feb 16, 2019 03:17
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Hambilderberglar posted:It’s not a mandatory contribution per se, I am expressly not allowed/able to contribute to it, and the document I received specifically states it’s only employer money that funds this account. It also doesn’t name it anything besides “retirement savings and investment plan” so I do not know what type it is beyond that. Is there an IRS pub that lays out what possible types it could be? This sounds like one of these https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps but I’m just speculating.
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Feb 16, 2019 09:22
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I haven’t been making traditional IRA contributions for the last few years because of being over the income limits. I just found out that Roth IRA limits are substantially higher than trad. I always assumed they were the same but for married filling jointly its $203k this year. I’m kind of annoyed that it took me this long to figure it out, we could have contributed close to 70k over the last 6 years between us. Guess I’m opening some Roth IRA accounts.
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Feb 16, 2019 13:50
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opposable thumbs.db posted:To answer your questions, the interest is always accruing and I don't see any large expenses upcoming in the next couple years. 5.5% is kind of on the border when it comes to guaranteed returns versus higher risk/return, I think. Why not just sell some of the stock you bought with the $150k loan and pay them back? aka why didn't you just do a cashless exercise? If there's no liquidity (e.g. you can't just sell that stock), then the options aren't REALLY in the money and it's a big gamble.
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Feb 16, 2019 15:16
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Murgos posted:I haven’t been making traditional IRA contributions for the last few years because of being over the income limits. You mean over the limit where you get a tax deduction? As far as I know there is no limit to contributing to a TIRA. But you should for sure open and contribute to the Roth.
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Feb 16, 2019 15:34
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spwrozek posted:You mean over the limit where you get a tax deduction? As far as I know there is no limit to contributing to a TIRA. Yes for the tax deduction. Is there a good reason why I would put after tax money in an IRA? It’s just going to confuse things and I have a brokerage account.
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Feb 16, 2019 16:05
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spwrozek posted:You mean over the limit where you get a tax deduction? As far as I know there is no limit to contributing to a TIRA. Traditional IRA tax deductions phase out....if either you or your spouse is covered by a retirement plan at work. https://www.irs.gov/retirement-plan...nt-plan-at-work https://www.irs.gov/retirement-plan...nt-plan-at-work There's no phase out if you have no access to a workplace plan though. quote:Yes for the tax deduction. Is there a good reason why I would put after tax money in an IRA? It’s just going to confuse things and I have a brokerage account. Generally speaking, the reason you contribute to a traditional IRA with after tax money is so that you can convert that to a roth, which also has income limits Zauper fucked around with this message at 16:10 on Feb 16, 2019 |
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Feb 16, 2019 16:08
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