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MJP posted:Should be doing my monthly $300 investment in my brokerage account in my Roth instead? I could have sworn I asked this before and if I did please forgive the double-ask. Are you earmarking that money for anything in particular? If you plan on buying a house in 7+ years, you could justify putting your down payment in a brokerage account regardless of what is going on with your Roth and your overall retirement picture. If it's not for anything in particular, then you need to look at how much you are investing in retirement, and where you're going to end up at your current trajectory. Have you heard of the 4 percent rule? Using that, you can backfigure and decide the final lump sum amount you will need to retire comfortably. Once you know that, you can figure exactly how much you should be contributing to retirement each month until you retire. You may find you need that $300 in your Roth if you have the space and you aren't on track to reach your goals. If your $300 per month is surplus to your needs, you could put it in a brokerage if you want. If you're 30 years out from retirement, you could use the brokerage money to make your 40's and 50's more comfortable, or you could retire early and live off the brokerage account money for a few years before you're 59 1/2 and can withdraw from your retirement assets without penalty.
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Apr 3, 2020 22:06
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I would strongly urge putting the money in your Roth IRA, even if you think you’re on track for retirement already. Note you can always remove the contributions (principal) without penalty if you really need it.
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Apr 4, 2020 12:10
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acidx posted:Are you earmarking that money for anything in particular? If you plan on buying a house in 7+ years, you could justify putting your down payment in a brokerage account regardless of what is going on with your Roth and your overall retirement picture. If it's not for anything in particular, then you need to look at how much you are investing in retirement, and where you're going to end up at your current trajectory. Have you heard of the 4 percent rule? Using that, you can backfigure and decide the final lump sum amount you will need to retire comfortably. Once you know that, you can figure exactly how much you should be contributing to retirement each month until you retire. You may find you need that $300 in your Roth if you have the space and you aren't on track to reach your goals. If your $300 per month is surplus to your needs, you could put it in a brokerage if you want. If you're 30 years out from retirement, you could use the brokerage money to make your 40's and 50's more comfortable, or you could retire early and live off the brokerage account money for a few years before you're 59 1/2 and can withdraw from your retirement assets without penalty. We own a house and have roughly $180-$200k thanks to COVID-19 that we aren't touching in the brokerage account. Both sets of parents have their own retirement accounts and long-term care plans well spelled out. Both our cars are in fine shape and have tons of life left on them. Kitchen remodel is paid for already with a cash-out refi. I figure if I just leave the brokerage account alone (or should I do something to move the vast majority of it into the Roth, if it rolls over like that?) and contribute to the Roths, that would be a better bet since it's retirement $ from here on out. I do like the idea of getting out of the workforce early if that's feasible but I do want to make sure both our retirements are comfortable and well-funded.
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Apr 5, 2020 14:21
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MJP posted:We own a house and have roughly $180-$200k thanks to COVID-19 that we aren't touching in the brokerage account. Both sets of parents have their own retirement accounts and long-term care plans well spelled out. Both our cars are in fine shape and have tons of life left on them. Kitchen remodel is paid for already with a cash-out refi. If you have that kind of money sitting around and you're eligible to make Roth contributions, I'd max out your 2019 and 2020 IRA's before the end of April. You would have to withdraw the money from the brokerage account and contribute it to your IRA. Roth IRA's are also useful for early retirement, since you can withdraw your principal at any age with no penalty. If your overall picture for early retirement is good, then you can live off the principal for some time to bridge the gap before you turn 59 1/2.
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Apr 5, 2020 15:25
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https://twitter.com/StockCats/status/1245781002657685508?s=20
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Apr 5, 2020 16:01
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I'm sure they'll go back up eventually.
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Apr 5, 2020 17:01
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Some of them won't
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Apr 5, 2020 18:11
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I just thought it was funny. I felt that way a month and a half ago but I'm less certain about buying stocks now, so no particular recommendation being made in the post.
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Apr 5, 2020 18:59
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There is no process for moving an arbitrary amount of money from a taxable account to a Roth IRA. You cannot contribute belatedly against past year under-contributions, for example. Sorry. That’s why it is important to be aware of your IRA contribution eligibility and prioritize it in your retirement savings. (See Pub 590A for eligibility.) If you want to maximize your 2019 and 2020 Roth contributions, I would suggest using the investment budget first, then selling assets from the taxable accounts. IRA contributions for 2019 may be made until the postponed 2019 filing date.
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Apr 5, 2020 19:03
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Gazpacho posted:There is no process for moving an arbitrary amount of money from a taxable account to a Roth IRA. You cannot contribute belatedly against past year under-contributions, for example. Sorry. That’s why it is important to be aware of your IRA contribution eligibility and prioritize it in your retirement savings. (See Pub 590A for eligibility.) For moving stuff from brokerage: should I just sell in the brokerage account, contribute from brokerage to Roth, then buy the same quantities in the Roth of holdings I sold? Or is there a process to roll from brokerage to Roth?
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Apr 6, 2020 15:01
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You can sell assets for cash in the taxable account and contribute the cash to the IRA up to your contribution limit. This is not a rollover. A rollover is a cash transfer between two similarly tax-advantaged accounts.
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Apr 6, 2020 15:47
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Gazpacho posted:You can sell assets for cash in the taxable account and contribute the cash to the IRA up to your contribution limit. This is not a rollover. A rollover is a cash transfer between two similarly tax-advantaged accounts. Gotcha. Should I be making proportionate sales from my brokerage account based on how much is in each fund (VBTLX, VXUS, VTSAX, and VFORX) to the Roth (VFIFX) or just from VFORX to VFIFX?
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Apr 6, 2020 16:16
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My previous company did the thing where they contribute to your HSA if you have a high deductible plan and I kind of ignored it because I didn't really have any medical expenses. Well, I used pretty much all of it over the last 6 months for dental work, and I think there's like $16 left or whatever. I'd just leave it be, but it's through hsabank, which apparently charges $2.50/mo account maintenance fees (WTF?). I have another HSA through my current company that I could transfer the account to, but it looks like that is just a massive pain in the rear end (I have to call real people and then physically mail documents). If I just ignore it, will the account just close when it hits $0, or will it go negative and start accruing debt? I really don't want to put in a shitload of time to figure out what to do about a $16 account...
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Apr 6, 2020 16:44
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MJP posted:Gotcha. Should I be making proportionate sales from my brokerage account based on how much is in each fund (VBTLX, VXUS, VTSAX, and VFORX) to the Roth (VFIFX) or just from VFORX to VFIFX?
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Apr 6, 2020 16:47
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Just "reimburse" yourself $16 and have them mail you a check. Then close the account. You will never get audited over the $16.
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Apr 6, 2020 16:48
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KillHour posted:My previous company did the thing where they contribute to your HSA if you have a high deductible plan and I kind of ignored it because I didn't really have any medical expenses. Well, I used pretty much all of it over the last 6 months for dental work, and I think there's like $16 left or whatever. I'd just leave it be, but it's through hsabank, which apparently charges $2.50/mo account maintenance fees (WTF?). I have another HSA through my current company that I could transfer the account to, but it looks like that is just a massive pain in the rear end (I have to call real people and then physically mail documents). If I just ignore it, will the account just close when it hits $0, or will it go negative and start accruing debt? I really don't want to put in a shitload of time to figure out what to do about a $16 account... You are going to have to call
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Apr 6, 2020 16:50
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spwrozek posted:Just "reimburse" yourself $16 and have them mail you a check. Then close the account. You will never get audited over the $16. Would the account still remain open and incurring fees, though? I'm not worried about the $16, I'm worried about getting a bill in the mail in a year for overdraft fees or whatever. You can't close the account without calling and mailing their stupid paperwork. pixaal posted:You are going to have to call God damnit.
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Apr 6, 2020 16:50
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MJP posted:Gotcha. Should I be making proportionate sales from my brokerage account based on how much is in each fund (VBTLX, VXUS, VTSAX, and VFORX) to the Roth (VFIFX) or just from VFORX to VFIFX?
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Apr 6, 2020 16:53
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KillHour posted:Would the account still remain open and incurring fees, though? I'm not worried about the $16, I'm worried about getting a bill in the mail in a year for overdraft fees or whatever. You can't close the account without calling and mailing their stupid paperwork. Well that sucks.
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Apr 6, 2020 16:57
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I called and had them close the account. Not sure what's going to happen with that leftover money - will they just send me a check in the mail? Does that have tax implications? This is too much effort spent thinking about $14.67. Also: Don't use HSA Bank. Those fees are insane.
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Apr 6, 2020 16:58
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Fidelity's HSA is really nice. Separately, going forward if you can float medical expenses through liquidity, keep receipts, and reimburse yourself "whenever" in the future. That way you can leave money invested and growing in the HSA account, where the tax treatment is better (vs. the equivalent amount of money growing in a taxable account).
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Apr 6, 2020 17:04
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Hoodwinker posted:Nobody's brought this up and somebody can correct me if I'm wrong but you should be mindful not to declare capital losses from the sale from your brokerage account because the immediate rebuying might trigger a wash sale. Though I don't know if this applies for taxable -> tax-advantaged since there's no cost basis in the latter. Even if it's selling from VFORX in Brokerage Account A, contributing to Roth IRA B, and buying VFIFX?
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Apr 6, 2020 17:04
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MJP posted:Gotcha. Should I be making proportionate sales from my brokerage account based on how much is in each fund (VBTLX, VXUS, VTSAX, and VFORX) to the Roth (VFIFX) or just from VFORX to VFIFX? OK so, your portfolio across all accounts should have the asset allocation that you have settled on; you treat it all like one big portfolio. But, if you have a large amount of money in a taxable account even after putting as much of it as you can into your IRA (for 2019 and 2020), then it may be to your advantage to concentrate the taxable account(s) on more tax-efficient assets and concentrate the tax-inefficient asset types in your tax-advantaged IRA. It's difficult to give you specific advice about this without knowing your balance, and the numbers, and some details about your tax status. If the amounts are in the tens of thousands, the tax you're generating in the taxable account from dividends etc. probably isn't large, so you don't need to worry about it. If you have hundreds of thousands in the taxable account, then it may be enough of a difference to be worth doing. Furthermore, you can avoid wash sale rules (e.g., actually realize the losses when you make sales in your taxable brokerage account for a tax credit) by not buying exactly the same funds in your IRA. For example, moving from the underlying index funds to the target retirement funds you mentioned in your post would not trigger the wash sale rule. You only need to hold the "alternative" fund for a month and then you could move that money into whatever funds you had in the first place in your taxable account. This only matters for you if you are trying to tax loss harvest when you're selling shares in your brokerage account.
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Apr 6, 2020 17:05
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MJP posted:Even if it's selling from VFORX in Brokerage Account A, contributing to Roth IRA B, and buying VFIFX?
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Apr 6, 2020 17:16
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Transactions inside an IRA are not taxed, so you can park your contribution in something plainly different from what you sold (such as a money fund) for 30 days, then exchange it for something else.
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Apr 6, 2020 17:54
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Leperflesh posted:OK so, your portfolio across all accounts should have the asset allocation that you have settled on; you treat it all like one big portfolio. But, if you have a large amount of money in a taxable account even after putting as much of it as you can into your IRA (for 2019 and 2020), then it may be to your advantage to concentrate the taxable account(s) on more tax-efficient assets and concentrate the tax-inefficient asset types in your tax-advantaged IRA. It's difficult to give you specific advice about this without knowing your balance, and the numbers, and some details about your tax status. If the amounts are in the tens of thousands, the tax you're generating in the taxable account from dividends etc. probably isn't large, so you don't need to worry about it. If you have hundreds of thousands in the taxable account, then it may be enough of a difference to be worth doing. I'm good for wash sale rules, my IRA only has VFIFX in it right now. I suppose what I'll do is when I do my proportionate selling in the brokerage account I'll just proportionate buy VFIFX with the VFORFX funds in the brokerage account. Should I be looking at converting VXUS, VTSAX, and VBTLX to something more tax-efficient once we get back to pre-COVID levels?
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Apr 6, 2020 18:29
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Number go up
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Apr 6, 2020 19:11
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please knock Mom! posted:Number go up
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Apr 6, 2020 19:14
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it’s like the market is conspiring to go up every single time my deposits are about to go in
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Apr 6, 2020 19:19
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MJP posted:I'm good for wash sale rules, my IRA only has VFIFX in it right now. I suppose what I'll do is when I do my proportionate selling in the brokerage account I'll just proportionate buy VFIFX with the VFORFX funds in the brokerage account. If they're held in your taxable account, then you could, but how much money you'd save is a function of how much money is in there, and, your particular tax situation. For example, if you hold any international exposure in your taxable account, the dividends are typically taxed by the foreign country, and you should take the foreign tax credit (or deduction, and if you deduct, it only works if you itemize, so usually you'd take the credit). So it might be to your advantage to hold all of your international exposure in your taxable account, assuming you do nothing with that investment that would result in having to realize a capital gain (such as moving it to cash or selling some to rebalance into another asset class within your taxable account or something). On the other hand, if you hold a significant exposure to bonds, there are tax-free bond funds, although their performance compared to a total market bond fund may differ by enough that the tax savings are too miniscule to offset. I'll reiterate that it's probably not worth bothering with (you might only save a few dozens of dollars a year) if your total investment in the taxable brokerage account is relatively small.
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Apr 6, 2020 19:29
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So my work offers Pension or 403b To vest in the pension matching I would have to wait 5 years, otherwise it’s 1 year. The matching on the 403 is like 8% I’m of two minds. Should I take the pension or the 403b? I don’t think I’ll mind going the distance here, but that may not be my choice.
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Apr 6, 2020 19:51
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skooma512 posted:So my work offers Pension or 403b
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Apr 6, 2020 19:53
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The answer should be pension, but with how this country has been, the 401k match is way more guaranteed to be yours in 30 years , vs a pension that can go bust. That’s a hard decision either way.
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Apr 6, 2020 20:05
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Hoodwinker posted:drat, this is a really good question. My gut reaction would be that the pension could absolutely be worth it, given a long list of affirmatives about its characteristics and the characteristics of your company and industry, but that the 8% 403b match is pretty rock solid and would not be a terrible choice regardless. Can you give us more info about the pension? I’m in healthcare attached to a major university in California. Pension is a 7 percent contribution and I would get my highest pay over my career if i can work here for 5 years. edit: yeah I’m mostly worried about the pension being looted but it’s a state job.
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Apr 6, 2020 20:06
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I would do the math and if I could comfortably reach my retirement goals with the 403b I would go that route. I don't know about CA, but in my state I would be stunned if pensions don't get cut to the bone in the next decade or so.
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Apr 6, 2020 20:11
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State pensions can and most likely will get looted.
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Apr 6, 2020 20:57
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I'm sorry if you didn't intend to mention who your employer was, but given just the info you presented, I knew the answer. If you think this is too much info about you, please say so and I'll delete the content of this post. Here's the details on the two choices; https://ucnet.universityofcalifornia.edu/compensation-and-benefits/retirement-benefits/2016-retirement-choice/index.html As the page says, I would only go for the pension plan if you intend to work most or all of your career there. The benefit is based on the maximum income you earn over your career, it's probably not portable (e.g., if you work there seven years, you'll be vested, but you can't roll it over into some other retirement plan, so that portion of your retirement income will forever be tied to the pension plan's fortunes), but: having a defined benefit for the rest of your life after you retire is pretty sweet if you wind up living into very old age, compared to having to self-manage your retirement funds in a 401(k) and facing the prospect of possibly loving it up and running out of money prematurely. like, that's why pensions are awesome in the first place and this hellworld we live in where we all have to become loving financial experts just to ensure we don't wind up eating cat food when we're 80, is because having a guaranteed benefit for life means actual security. This is why so many old people buy (and get ripped off) annuities. e. it looks like in addition to your required contribution to one or the other, they're also offering you supplemental choices that, if you can afford it, you should totally take advantage of to bring your contributions up to the $19.5k, if they're not there with the primary choice. e2. To answer someone else: california's public pensions like CALPERs are huge and well managed, but I can't speak to this one. Leperflesh fucked around with this message at 21:14 on Apr 6, 2020 |
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Apr 6, 2020 21:09
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Hey, what is a good money market fund to park cash in without it actually being cash? I would preferably like something with a non-zero yield, but I am guessing wont be very common now that interest rates are at nothing.
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Apr 6, 2020 22:05
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You have an aversion to HYSAs?
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Apr 6, 2020 22:09
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skooma512 posted:Pension is a 7 percent contribution and I would get my highest pay over my career if i can work here for 5 years.
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Apr 6, 2020 22:20
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