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nitsuga posted:Thanks! Skipping right past all the way-more-money-than-I-make talk, I'm set up with Vanguard on the recommendation of this forum years ago. Vanguard target-date funds are exactly the right choice for you, just pick the date you think is suitable and don't put any more thought into it, you will do just fine.
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Nov 5, 2019 16:45
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Jows posted:You should be able to call them and have them apply it to 2018. Fidelity did that for me once a while back (over a year later!), I would think this company would also be able to. If it's a traditional IRA I think you can also file an amended return to get whatever extra refund you should get from that extra IRA deduction as well. It was only $50, so I just let it ride and made a note to stop my automatic contributions in late September.
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Nov 5, 2019 17:22
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Kylaer posted:Vanguard target-date funds are exactly the right choice for you, just pick the date you think is suitable and don't put any more thought into it, you will do just fine. Honestly, there's not much reason to do Vanguard target-date funds, if you have even a modicum of patience. Because you can literally see what percentage of the three main funds comprise the Vanguard target-date funds at any given time, and just invest the same percentages in those three funds, except those three funds have lower costs than the target-date fund does. So if you want, just pick the three funds that are in the target-date fund, and update them once per year. Voila, you have the target-date fund, with a lower cost.
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Nov 5, 2019 18:34
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SlyFrog posted:Honestly, there's not much reason to do Vanguard target-date funds, if you have even a modicum of patience. Because you can literally see what percentage of the three main funds comprise the Vanguard target-date funds at any given time, and just invest the same percentages in those three funds, except those three funds have lower costs than the target-date fund does.
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Nov 5, 2019 18:42
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I don't do target date funds only because I don't want international bonds.
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Nov 5, 2019 18:45
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SlyFrog posted:Honestly, there's not much reason to do Vanguard target-date funds, if you have even a modicum of patience. But the person I was replying to doesn't have the patience or the interest to do that. They want to spend absolutely zero mental effort on managing their investments. They're the exact market that target-date funds are designed for and there's nothing wrong with that - at most, they'll miss out on <0.1% gains due to the differences in expense ratios, and that's not worth caring about.
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Nov 5, 2019 19:07
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SlyFrog posted:Honestly, there's not much reason to do Vanguard target-date funds, if you have even a modicum of patience. Because you can literally see what percentage of the three main funds comprise the Vanguard target-date funds at any given time, and just invest the same percentages in those three funds, except those three funds have lower costs than the target-date fund does. I did the math before (should be in this thread but search isn't working on my phone) and I thought the target date fund was exactly the same expense ratio as the weighted sum of the four individual funds. Replacing any of the funds with admiral funds brings the total expense ratio down, but not by much and only if you have enough money to meet the minimum requirements for admiral shares of each fund. When I did the math, the effective savings over a few decades was very minor for moving from Target fund to all admiral. I would argue there is not much reason to avoid the target fund unless it doesn't match your risk profile.
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Nov 5, 2019 19:47
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We're looking at a kitchen remodel, upgraded from just a kitchen refresh. We went from around a $12k-$14k budget to probably around $24k-$26k thanks to NY metro area costs of labor. No, we aren't planning to DIY it, because my wife and I both work and my wife has medical issues, I value my free time too much to spend it failing to cut tiles. My question here: how should I look at balancing out selling post-tax brokerage funds and a HELOC or home equity loan? I've invested in a four-fund portfolio and have some gifted stock to the tune of around $250k in our investment account, solely invested for unspecified long-term/retirement. Part of me likes the idea of just selling stocks to pay for the renovation. We don't plan on leaving the house anytime soon nor having kids, so why take out debt? On the other hand, we can afford taking on a HELOC or loan and paying it down over time plus a little towards the principal per payment. Or I could take the HELOC, use it for the kitchen, work out with my accountant how best to sell stuff to minimize capital gains hits, and pay down a percentage of it to shorten the life of the loan. Our cars are in good shape, so no need to buy one anytime soon. Our emergency fund is well stocked in case Bad poo poo Happens. Any broad logic for how I should approach this?
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Nov 5, 2019 20:41
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MJP posted:We're looking at a kitchen remodel, upgraded from just a kitchen refresh. We went from around a $12k-$14k budget to probably around $24k-$26k thanks to NY metro area costs of labor. No, we aren't planning to DIY it, because my wife and I both work and my wife has medical issues, I value my free time too much to spend it failing to cut tiles. I would look at HELOC rates, but honestly if you have long term capital gains available to you I would sell those lots to pay for it. HELOC rates are unlikely to beat the market performance "on average."
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Nov 5, 2019 20:57
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you need rate info to make an informed decision on this one
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Nov 5, 2019 21:04
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jjack229 posted:I did the math before (should be in this thread but search isn't working on my phone) and I thought the target date fund was exactly the same expense ratio as the weighted sum of the four individual funds. That was not my finding at all, but then I also do not recall mixing in an international bond fund. Let me do it again and see why I thought it was lower. Let's see. VTTHX (2035 Target Date Fund) has a .14% fees and expenses. Its component parts: VTSAX - .04% with Admiral Shares VTIAX - .11% with Admiral Shares VTBNX - .02% with Admiral Shares VTABX - .11% with Admiral Shares Everyone of these is lower than the .14% fees for the Target Fund (which I do not believe you can get in Admiral Shares - I don't see an option to do Target Funds in Admiral Shares for lower fees), so there's really no point in doing any kind of weighted average or anything. It's just cheaper to buy each individually across the board (and obviously cheaper as a whole). If you cannot afford Admiral Shares, then it really doesn't matter. But then, if you cannot afford Admiral Shares, it definitely doesn't matter, because the difference as a savings for ROI purposes is kind of pointless just due to the low amount invested. Hoodwinker posted:The reason is that you don't have the $100k to do the exact breakdown because each of the funds involved has a $3k minimum and the international bond allocation of VFFVX is 3%. You could do ETFs, but those are not as frictionless as mutual funds. If you just have $1k you can dump it all in a TDR and forget about it. $100,000? Why would you need that? You don't literally have to match the percentage allocations to the hundredth percentile. Why would you need $100,000 for $3k minimum funds? SlyFrog fucked around with this message at 23:23 on Nov 5, 2019 |
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Nov 5, 2019 23:13
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SlyFrog posted:$100,000? Why would you need that? You don't literally have to match the percentage allocations to the hundredth percentile. Why would you need $100,000 for $3k minimum funds? Okay, so you do 60/40 and skip the bonds, you still need $7.5k to afford the minimum $3k you need for the international portion. Okay, so you just do 100 US equity, you still need $3k to... My point is, whatever level of granularity you need, you need a minimum amount and the TDRs have a $1k minimum, which for some people is all they can afford at the moment.
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Nov 5, 2019 23:55
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So a while back (circa September) I posted... 401k-on track to max for the year Roth IRA - on tracker for the year HSA - this is new, for 2020, set up and ready to go. Taxable Brokerage - Not sure what this is, but will set it up with Vanguard... Currently due to family shenanigans, I am purchasing my first house... Anyway, I was talking to one of the people in charge of my 401k plan today, they mentioned something interesting... So if I go over the IRS limits it rolls into... pre-tax? (Or is it pre-tax rolling over into Post-Tax) Either way, they made it sound like theres a way to put more money in your 401k, past the the IRS limit of 18.5k, but it rolls into a different account or something... Maybe I just misunderstood. So not being a savy person (besides working a poo poo ton of over time) where can I put my money so that it doesn't lose value from inflation? For example if I set up a 529 plan, is it possible to use that for graduate school? (Looking around it does not look like hte 529 plans allow me to roll it over to my nieces or nephews in the event something happens to me.... just sayin.) Also what the heck are these Vanguard Admiral shares I keep hearing about? I wish I would have been taught more on how to invest... Is there anything I can read that explains things relatively simply? SA-Anon fucked around with this message at 06:45 on Nov 6, 2019 |
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Nov 6, 2019 06:37
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Cacafuego posted:How do REITs pay out? I may have asked here in the past, but we were looking for some future passive income and as someone new to finance and investing, I’m not sure what to look into. I think someone suggested commercial property as well. I inherited a rental house and I hate dealing with it so much. SO much. And this is with having actual tenants who have been great. If you get poo poo tenants then things can potentially really loving suck. Obviously you can hire someone to manage the property for you if you want though.
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Nov 6, 2019 08:05
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SA-Anon posted:Anyway, I was talking to one of the people in charge of my 401k plan today, they mentioned something interesting... So if I go over the IRS limits it rolls into... pre-tax? (Or is it pre-tax rolling over into Post-Tax) Either way, they made it sound like theres a way to put more money in your 401k, past the the IRS limit of 18.5k, but it rolls into a different account or something...
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Nov 6, 2019 08:59
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SA-Anon posted:Anyway, I was talking to one of the people in charge of my 401k plan today, they mentioned something interesting... So if I go over the IRS limits it rolls into... pre-tax? (Or is it pre-tax rolling over into Post-Tax) Either way, they made it sound like theres a way to put more money in your 401k, past the the IRS limit of 18.5k, but it rolls into a different account or something... I recently found this out as well. You can contribute after tax, up to a total of 56k (19k trad + employer match + after tax = 56k). You can then rollover the after-tax into a Roth IRA. If you look back a few pages I asked about this, and there were some good replies.
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Nov 6, 2019 12:55
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For people talking about rentals, for 1-4 family properties management fees run from 5-10% of gross rents.
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Nov 6, 2019 13:22
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SA-Anon posted:So not being a savy person (besides working a poo poo ton of over time) where can I put my money so that it doesn't lose value from inflation? quote:For example if I set up a 529 plan, is it possible to use that for graduate school? quote:Also what the heck are these Vanguard Admiral shares I keep hearing about? quote:I wish I would have been taught more on how to invest... Is there anything I can read that explains things relatively simply?
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Nov 6, 2019 14:38
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SA-Anon posted:I wish I would have been taught more on how to invest... Is there anything I can read that explains things relatively simply? The PDF previously linked is a good place to start, it's even included on the reading list here: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit
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Nov 6, 2019 14:44
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H110Hawk posted:I would look at HELOC rates, but honestly if you have long term capital gains available to you I would sell those lots to pay for it. HELOC rates are unlikely to beat the market performance "on average." KYOON GRIFFEY JR posted:you need rate info to make an informed decision on this one HELOC rates at a bank near me are running 4.25% intro, 5% after the first 12 months for my credit score/ZIP/home value/total equity. The same bank is 4.5% for a home equity loan. These are just from Bankrate, so it's not set in stone, and we don't start buying stuff for the remodel until at least next March so things could change. I have gifted PRU stock that I don't have cost basis info from; my father-in-law worked there and got stock from them over time, and he gifted some to all the kids and their spouses. He doesn't recall when he got the stocks, and I've sold a little in the past, specifying the acquisition date as 2005. I also have my four-fund portfolio, and I could do specific shares to sell in order to minimize capital gains for purposes of calculating tax. Do those seem like the saner options? Or should I be looking at some other factor to determine whether to sell or whether to HELOC/loan?
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Nov 6, 2019 15:08
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I would sell the PRU stock because i would be looking to ditch it anyway, what the hell
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Nov 6, 2019 15:12
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DeadFatDuckFat posted:I inherited a rental house and I hate dealing with it so much. SO much. And this is with having actual tenants who have been great. If you get poo poo tenants then things can potentially really loving suck. Obviously you can hire someone to manage the property for you if you want though. tumblr hype man posted:For people talking about rentals, for 1-4 family properties management fees run from 5-10% of gross rents. We have no interest in managing it ourselves, we’d be hiring someone else to manage it. Do management companies exist for commercial property as well? With the understanding that it may not be fully rented out at all times and we’d be responsible for maintenance costs, and that we’ll pay them off quickly (3-5 years), monthly rent-(5-10%) sounds fine for future passive income and were prepared to pay that.
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Nov 6, 2019 15:12
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MJP posted:I have gifted PRU stock that I don't have cost basis info from You're too concentrated in this 1 stock. You should sell it regardless. 4.5% I would use your cash unless when you actually pull the trigger we're in a deep (2009, or that 1 day Christmas 2018ish) dip.
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Nov 6, 2019 17:09
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moana posted:Online high yield savings account. I use Alliant Credit Union, others here use Ally But also note that Vanguard eliminated admiral shares for a lot of their funds, so now there's only a single tier that costs $3k to buy into and has the lower admiral share ER.
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Nov 6, 2019 17:20
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KYOON GRIFFEY JR posted:I would sell the PRU stock because i would be looking to ditch it anyway, what the hell I've hung onto it mostly because it gives decent dividends. I never really counted it as a Serious Core Portfolio Holding - my FIL, the saint that he is, was divesting for tax purposes in retirement, so we all got a few hundred shares. I held off on selling it to buy funds in my portfolio because I didn't want to face 10+ years of long-term capital gains, which some back-of-the-envelope calculation shows would be a $2,120 tax bill. I've had $2800 worth of dividends alone reinvested in Pru since it was gifted to us. I like the thought of a no-debt kitchen but blowing away a source of literal free money seems like overkill IMO, even if Pru isn't exactly a market-beater. (Big ups to how apparently a decent quarter's growth pisses off enough people to cause a 3% drop, what in the actual hecking heck is that)
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Nov 6, 2019 17:20
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H110Hawk posted:You're too concentrated in this 1 stock. You should sell it regardless. H110Hawk posted:You're too concentrated in this 1 stock. You should sell it regardless. If it helps or makes a difference, I've got $240,000 in my post-tax brokerage with zero Pru, in a basic Bogleized four-fund portfolio. $14k in savings, currently replenishing it up to around $25k over the course of six months, $85k in a trad IRA, $2.5k in a Roth IRA (converting a little a year to keep taxes down), $72k in my 401k and contributing at 13% which is a bit below the $19k/year max. I always viewed Pru as a nice part of the portfolio but never really a core reliant part of it.
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Nov 6, 2019 17:25
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MJP posted:If it helps or makes a difference, I've got $240,000 in my post-tax brokerage with zero Pru, in a basic Bogleized four-fund portfolio. $14k in savings, currently replenishing it up to around $25k over the course of six months, $85k in a trad IRA, $2.5k in a Roth IRA (converting a little a year to keep taxes down), $72k in my 401k and contributing at 13% which is a bit below the $19k/year max.
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Nov 6, 2019 17:33
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Hoodwinker posted:Conceivably the earnings you'll get on an equivalent amount of four-fund investments would eclipse the dividend payments on PRU. If this were the case, then despite how tantalizing the dividends seem, selling that stock is a better choice than selling any other part of your investments. So sell, invest, and HELOC/loan for the kitchen? Makes sense, we have no other debts. We use our credit card for miles and pay it down to zero monthly, and we have the mortgage, that's about it.
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Nov 6, 2019 17:38
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MJP posted:So sell, invest, and HELOC/loan for the kitchen? Makes sense, we have no other debts. We use our credit card for miles and pay it down to zero monthly, and we have the mortgage, that's about it.
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Nov 6, 2019 17:58
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MJP posted:So sell, invest, and HELOC/loan for the kitchen? Makes sense, we have no other debts. We use our credit card for miles and pay it down to zero monthly, and we have the mortgage, that's about it. Sell it, do either, I lean towards not taking the heloc as ugh paperwork and interest. You're in a sweet spot where you are splitting hairs in returns. The past few years the heloc is the clear choice, next year might be flat and then the heloc was a "bad" idea.
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Nov 6, 2019 18:02
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My parents are retiring in 3 or so years, and have trusted a financial advisor who is not a fiduciary. So now that I’ve learned a good bit from BFC and the Bogleheads, I want to convince them the plans they are being offered are worse than just doing it themselves via index funds. They are particularly hoping for stable income, though I’ve no idea yet how much they’ve got to work with. I want to confirm that my explanation to them makes sense: “Using your preferred mix of a total stock market index and a total bond index, you will invest your money in buying those funds. The bond funds will give you monthly distributions and the stock fund will give you a yearly distribution. Beyond those occasions, you will sell some of the shares you have in order to re-access/make availability that ‘income.’ “ Do i have that right, goons? Anything else they should know/understand?
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Nov 6, 2019 18:17
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Elvis Enwright posted:My parents are retiring in 3 or so years, and have trusted a financial advisor who is not a fiduciary. So now that I’ve learned a good bit from BFC and the Bogleheads, I want to convince them the plans they are being offered are worse than just doing it themselves via index funds. They are particularly hoping for stable income, though I’ve no idea yet how much they’ve got to work with. I want to confirm that my explanation to them makes sense: Do not make those recommendations to them unless you truly know their financial situation, goals for retirement, and monthly cash needs. Odds are, even if the FA is not a fiduciary, they have worked through a plan with them that works and functions for their needs. Rather than bringing an idea to change their current plans - let them know that you have been following and researching financial matters and want to discuss their plan just as an extra set of eyes. That way you can get a full picture of the situation before saying - hey, I know you fed/clothed/housed me, raised me into a responsible adult, but you're doing everything wrong let me show you how.
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Nov 6, 2019 19:20
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Sab0921 posted:Do not make those recommendations to them unless you truly know their financial situation, goals for retirement, and monthly cash needs. Odds are, even if the FA is not a fiduciary, they have worked through a plan with them that works and functions for their needs.
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Nov 6, 2019 19:22
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Sab0921 posted:Do not make those recommendations to them unless you truly know their financial situation, goals for retirement, and monthly cash needs. Odds are, even if the FA is not a fiduciary, they have worked through a plan with them that works and functions for their needs. This is spot on. You should figure out what they're doing first. My inlaws are getting charged 1 or something percent for their advisor, but it's all in Vanguard admiral mutual funds and it just doesn't matter. I just grind my teeth to myself about the money they're throwing away on the advisor. "Hey I've recently really gotten my retirement stuff in order and think I am on a good path, I would really love to see what you guys are doing?" Don't rock the boat until you know it's taking on water at an unsustainable rate. A single premium immediate annuity may be just what they need to feel secure in retirement.
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Nov 6, 2019 19:30
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Cacafuego posted:We have no interest in managing it ourselves, we’d be hiring someone else to manage it. Do management companies exist for commercial property as well? Commercial property management is a bit more professionalized than the single-family residential side, but it definitely exists.
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Nov 6, 2019 19:56
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Maybe more of a home ownership question, but if I'm already paying extra towards my mortgage principal and have done so for about 7 years, and I'm at a decent rate - 4% - should I recast my mortgage? We don't intend to move or have kids, and my objective would be to get more of the payment to go towards the principal. There are recasting calculators but none that would involve recasts after all the extra payments, just with a lump sum.
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Nov 6, 2019 21:11
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The 401k contribution limit is going up by $500 next year: https://www.forbes.com/sites/ashleaebeling/2019/11/06/irs-announces-higher-2020-retirement-plan-contribution-limits-for-401ks-and-more/ That's $19,500 per year, or $57,000 total.
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Nov 6, 2019 21:28
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Solumin posted:The 401k contribution limit is going up by $500 next year: https://www.forbes.com/sites/ashleaebeling/2019/11/06/irs-announces-higher-2020-retirement-plan-contribution-limits-for-401ks-and-more/ Awesome, super excited that IRAs aren't budging in the least, that definitely won't suck for me
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Nov 6, 2019 21:34
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Solumin posted:The 401k contribution limit is going up by $500 next year: https://www.forbes.com/sites/ashleaebeling/2019/11/06/irs-announces-higher-2020-retirement-plan-contribution-limits-for-401ks-and-more/
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Nov 6, 2019 21:35
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Solumin posted:The 401k contribution limit is going up by $500 next year: https://www.forbes.com/sites/ashleaebeling/2019/11/06/irs-announces-higher-2020-retirement-plan-contribution-limits-for-401ks-and-more/ Has anyone successfully lobbied their employers to allow for aftertax contributions? Is there a higher plan cost associated with that?
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Nov 6, 2019 21:36
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