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WithoutTheFezOn posted:So there’s no confusion, pensions (that I know of) don’t pay your highest salary, they pay a percentage of your highest salary. If the pension in question is in fact the one mentioned above, it looks like that percentage is very roughly 1.5-2% times your number of years of service. And technically it’s not based on your highest salary, but the average of your highest three years' salaries. So if you work there for 20 years and make $50k, you'll get $20k/year in pension? Good luck surviving on that.
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Apr 6, 2020 22:56
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KYOON GRIFFEY JR posted:You have an aversion to HYSAs? Yes, I don't want to open accounts with an another bank.
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Apr 6, 2020 23:02
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Leperflesh posted:e2. To answer someone else: california's public pensions like CALPERs are huge and well managed, but I can't speak to this one.
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Apr 6, 2020 23:18
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hey all, just checking in, is this a good time to time the market? April 7th seems like a good time.
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Apr 7, 2020 00:37
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moana posted:The UC pension system is fantastic for those taking pensions right now. They recently introduced the new 401k option which some say is severely reducing the payin from younger workers. I personally would choose the pension plan if I was going to work there 10 years and then retire. Any longer and I think you're putting your eggs in one basket. They'll pay, but not as nicely as now imo. If you already have a decent IRA from other jobs and will be retiring soonish, then pension all the way. I have an IRA in Vanguard from my last two employers. I’m 30. That’s what I’m worried about, I’ll pay into this thing and for whatever reason not reap the benefits
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Apr 7, 2020 00:47
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KillHour posted:So if you work there for 20 years and make $50k, you'll get $20k/year in pension? Good luck surviving on that. I'd hope that's in addition to Social Security, at least.
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Apr 7, 2020 01:15
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zaurg posted:hey all, just checking in, is this a good time to time the market? April 7th seems like a good time. It's always a good time to time the market, friend.
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Apr 7, 2020 01:21
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zaurg posted:hey all, just checking in, is this a good time to time the market? April 7th seems like a good time. Get out.
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Apr 7, 2020 02:02
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Successfully sold low last week, now is the time to buy high!
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Apr 7, 2020 03:14
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Cheesemaster200 posted:Yes, I don't want to open accounts with an another bank. Vanguard Prime Money Market Fund will be the best you can do. But similar to post-GFC (2009), HYSA will be the only game in town for cash for the foreseeable future.
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Apr 7, 2020 03:52
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withak posted:Successfully sold low last week, now is the time to buy high! Sounds like you are thinking of buying, most be time to sell.
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Apr 7, 2020 05:17
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Cheesemaster200 posted:Yes, I don't want to open accounts with an another bank. It'll cost you money not to do so.
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Apr 7, 2020 12:02
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My girlfriend has a big chunk of money sitting in savings, like $85k she's doing nothing with. She's wanted to put it into investments so I told her to signup for a Vanguard account and put it into Index Funds. She's asking me to help her pick which funds and how much she should put in. Any suggestions on how to handle this? I don't wanna tell her to just dump all of it in there (although that's probably what I would do). Obviously I'm gonna advise she keep at least $10k for an emergency fund but is it wise to just take the remainder and put all into index funds? Or should I point her to an actual financial adviser?
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Apr 7, 2020 23:16
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Popete posted:My girlfriend has a big chunk of money sitting in savings, like $85k she's doing nothing with. She's wanted to put it into investments so I told her to signup for a Vanguard account and put it into Index Funds. Yeah, def be cautious on making sure she has a liquid cash savings fund. $10-20k with how the times are right now. Worst case, put some in now , some later? That said, not saying she tried to time the market, but she ended up being lucky, better to invest now than say, January 2020. Anyway, it’s probably either a % of US Total stock market, international, and bonds, or you can take the lazy route and do a Vanguard target retirement fund (I assume something like 2050-2060) which basically does it for you. Only real downside for most for the retirement fund is the fee is 0.15% instead of “only” 0.04%. For the record, it for sure is a difference, but it isn’t the biggest cost difference in the world for the sake of simplicity. Target fund definitely better than financial advisor.
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Apr 7, 2020 23:38
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She works for the state so is paying in for a pension on top of contributing to a 401k. Her mom also maintains a fund for her so liquidity isn't really an issue for her. I was thinking of telling her to take 45k to start and split it up between funds and bonds and then maybe max out her 401k or IRA contributions for the year. Also yeah the timing is perfect, that's why I've been really pushing her to do it right now. Her money could go a long way. Popete fucked around with this message at 23:59 on Apr 7, 2020 |
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Apr 7, 2020 23:52
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Popete posted:She works for the state so is paying in for a pension on top of contributing to a 401k. Her mom also maintains a fund for her so liquidity isn't really an issue for her. I was thinking of telling her to take 45k to start and split it up between funds and bonds and then maybe max out her 401k or IRA contributions for the year. So you would have it in a taxable account and then max out the 401k/IRA? IIRC IRA contributions are limited at 6K a year. You might as well just max it out for the year before you move on to taxable accounts.
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Apr 8, 2020 00:02
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Popete posted:My girlfriend has a big chunk of money sitting in savings, like $85k she's doing nothing with. She's wanted to put it into investments so I told her to signup for a Vanguard account and put it into Index Funds. 1. Max out her 2019 Roth IRA if she hasn't already. 2. Max out her 2020 Roth IRA if she hasn't already. 3. Put the rest of the money minus emergency fund in to a Vanguard Target Date fund.
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Apr 8, 2020 00:08
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Popete posted:My girlfriend has a big chunk of money sitting in savings, like $85k she's doing nothing with. She's wanted to put it into investments so I told her to signup for a Vanguard account and put it into Index Funds. With that big a sum you are going to get a bonus for opening an account. Shop around, if it's just going to sit there and you can buy the same index fund you don't really care about the portfolio management UI get the bonus $300-600 from whoever is going to give you the most. It might be Vanguard. I'd buy Vanguard ETFs in whatever broker you end up going with but you don't need to use Vanguard.
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Apr 8, 2020 00:12
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I'm gonna put the brakes on for a second. Putting money into the market is what we advise for long term savings. Make sure that that $85k is not "money I might want to spend on, say, a house down payment in under 10 years" because that should not be in index funds or a target retirement fund. Also she needs to really internalize that the point here is to use decades in the market to smooth out volatility: and that means not selling when she thinks the market is high at some point. You didn't specifically use the magic words "long term" or "retirement" so I think it's critical to discuss with her what her goals are for this money, and not just assume that anyone who has $85k they "wanted to put into investments" must be doing one or both.
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Apr 8, 2020 00:15
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You're right, I should sit down with her and clarify how she wants to use this money in the future. My view is she already is doing quite well contributing to her retirement and she also has an investment account her parents put money into and they manage it to the tune of $300k. So this $85k is just money she's saved up over the years, she just never really spends money. We just recently bought a home (or I did and she rents from me) so I don't think she is looking to buy property anytime soon. Although we have discussed her potentially buying a rental property, but nothing too serious. I'd say her overall picture is financially quite secure, she wants to keep at least $25k in savings as an emergency fund the rest she wants to invest. I think she likely would want to have access to that investment money in the future so it's probably more of a long term investment than contributing it all to retirement.
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Apr 8, 2020 01:05
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Popete posted:she also has an investment account her parents put money into and they manage it to the tune of $300k I'd say so also!  I should save the snark, that's quite generous. Inner Light fucked around with this message at 02:01 on Apr 8, 2020 |
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Apr 8, 2020 01:59
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Yeah her Mom is like an investing whizz I guess. She just slowly saved money up and managed it well.
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Apr 8, 2020 02:39
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Popete posted:Yeah her Mom is like an investing whizz I guess. She just slowly saved money up and managed it well. Maybe she should be asking her mom what to do with this money. Also  @ your girlfriend renting from you.
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Apr 8, 2020 02:58
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withak posted:Also As a medium sized derail how do you suggest handling the situation, if not that? I don't own a home yet but I'm wondering how one would handle a prospective SO moving in before getting married.
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Apr 8, 2020 03:08
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There's nothing wrong with splitting the costs of living together so I would ignore that.
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Apr 8, 2020 03:27
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Inner Light posted:As a medium sized derail how do you suggest handling the situation, if not that? I don't own a home yet but I'm wondering how one would handle a prospective SO moving in before getting married. Split every community expense in half or don't live together. Do not come up with a clever system like "I pay water you do electricity" with household expenses. Groceries too. If you own a home outright or are mortgaging, you charge them rent because if they pay part of your mortgage they might be able to claim they own a part of the house.
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Apr 8, 2020 03:28
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Inner Light posted:As a medium sized derail how do you suggest handling the situation, if not that? I don't own a home yet but I'm wondering how one would handle a prospective SO moving in before getting married. Do what you think is right. When my now wife moved in with me I could afford to let her do so for free. It also sounds like she can afford to pay rent so...
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Apr 8, 2020 03:49
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When my (now) wife moved in with me I just charged her an insanely low for the market amount of rent. I was otherwise already happily living there alone and could afford the mortgage. Having the extra few $hundreds/month was nice and we split groceries and utils 50/50 on top of that I think. Basically the money we saved as a couple went a long way towards improving our lifestyle at the time and helped us put some money in our Roth IRAs. Obviously the most important thing in a relationship is to just communicate and be on the same page. I don’t necessarily think you need a contract or whatever but you should should talk about what the plan would be if things turn bad.
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Apr 8, 2020 03:57
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Not to derail too much but yeah we've been together a long time now and we like to keep our finances separate. When I decided I wanted to buy a place I did so not counting on her paying rent but we discussed it and agreed on a sum. I'm not really sure why that would be an issue.
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Apr 8, 2020 04:17
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Popete posted:You're right, I should sit down with her and clarify how she wants to use this money in the future. My view is she already is doing quite well contributing to her retirement and she also has an investment account her parents put money into and they manage it to the tune of $300k.
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Apr 8, 2020 04:42
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moana posted:Yeah, just let her parents manage it with her other investments if they are actually good managers. She may want to check that out, many parents are "good managers" if you ask them but actually suck. Her position is she wants to learn how to manager her money. I suggested holding $25k in savings and maxing out her Roth IRA for this year and then putting in up to $45k into index funds in the mean time.
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Apr 8, 2020 05:00
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Managing money can mean a lot of things. How to invest it for retirement can take like a weekend as you read an in-depth article/thread about retirement contributions to tax-advantaged accounts. If she’s thinking about picking good stocks or timing the market then caution and advise her that that’s not really how investment works (if you want to keep money, at least— gambling is fun sometimes).
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Apr 8, 2020 05:48
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Inner Light posted:As a medium sized derail how do you suggest handling the situation, if not that? I don't own a home yet but I'm wondering how one would handle a prospective SO moving in before getting married.
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Apr 8, 2020 07:27
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In like a month-plus of active stonks, in a hosed up market like this, I have made like $30 from an initial $1k, entirely by luck. Not worth it.
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Apr 8, 2020 15:08
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Dik Hz posted:I was the person moving into my SO's house that they owned. I paid rent equal to half the mortgage + upkeep. When we married, I got half the equity I had paid into. It's perfectly reasonable. And if you had broken up instead of getting married?
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Apr 8, 2020 15:14
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Pollyanna posted:In like a month-plus of active stonks, in a hosed up market like this, I have made like $30 from an initial $1k, entirely by luck. Not worth it. Yup. An often forgotten benefit to passive investing is that it's...passive. It's pretty liberating to not have to worry about what stocks you should buy/sell this month. But casinos and race tracks are closed so I keep on thinking I should be gambling with options to stay sane while working from home.
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Apr 8, 2020 15:16
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Then you move out of your rental
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Apr 8, 2020 15:16
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KillHour posted:And if you had broken up instead of getting married?
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Apr 8, 2020 16:12
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KillHour posted:And if you had broken up instead of getting married? He would have simply paid rent like other, normal people in other, normal situations.
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Apr 8, 2020 16:20
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I've paid the rent and some other bills and costs for myself and my then-girlfriend, now-wife for over 20 years now without a problem. Why? Because I make a good salary and she's an artist and arts administrator running a nonprofit and she's a woman and her pay sucks. It's worth it for both of us, we reached a simple agreement and have never had a fight about it, ever. This doesn't work for everyone, of course, but there's no one rule for exactly how couples choose to divvy up their expenses that works for everyone. The important thing is that you have an agreement you can both be OK with and that if you start to not be OK with it any more, you discuss it further. You can even come up with a formal legal document (google "living together agreement") if you like, not a bad idea if there's significant assets that might become disputed in a bad breakup. As for that $75k, I think since it's not exactly retirement money, but also not exactly targeted for anything, that you're in that difficult spot where you can invest it - say, in an index fund - but you need to understand and be aware of the risks involved, the taxes you'll pay since this isn't tax-advantaged, and how your decisions in the future about that money can put it at additional risk. The vague statement that the parents have really well managed that $300k aren't much to go on, either. I've seen many cases where supposedly "well managed" money was badly underperforming the market, but assumed to be well-managed because the number went up over time, or because someone could point out specific examples of good plays along the line (we made almost 50% profit on that one stock we bought that one time!). That doesn't mean it's not well-managed, though, and "well managed" doesn't necessarily mean "beats the market" either; you have to look at risk-adjusted returns and compare to a comparable reference index or whatever. If someone's only goal is capital preservation at as low risk as possible, putting the entire pile into inflation-proof treasuries could make sense, even though that would earn very little above the rate of inflation, just as an example. So I'm back to: if the discussion of goals is "no particular goals really" then the next step is discussion of risk, and that discussion only goes right if risks are understood. By which I do not mean vague statements like "I'm willing to take some risk" but more concrete discussions like "I understand inflation risk, concentration risk, currency risk, sequence-of-returns risk, liquidity risk, regulatory risk, horizon risk, credit risk, etc. and I've evaluated my personal tolerance for risk, and so therefore I think that X, Y, and Z investment vehicles, in a specific balance of allocations, adequately meets my desire for returns while adequately addressing my specific risk tolerance; and I have a written plan for how I'll change these investment choices over time, based on changing market conditions, my changing tolerance for risks, and any new goals for the money that may arise." Get the GF to read some of the stuff in the OP, before just shoving that money into an index fund.
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Apr 8, 2020 16:33
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