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Bremen posted:I plan to use the money for retirement, but I still have to take some of it out from the IRA each year, so it will probably slowly transition from the IRA to a post-tax brokerage account (which will quite likely be mostly a target date fund). And yeah, 1% did seem pretty high to me. Just to be clear: .75% to 1.5%+ is customary for the financial advisor marketplace. It's just that the entire profession is 90% grift. There are fixed-fee advisors out there, and if you ultimately decide that you absolutely need one, that's the way to go. Especially since what you probably would need is one-time advice and then you can self-manage, vs. someone who is going to scrape a quarter of your average earnings annually in order to spend 1 hour a year fiddling with your account. quote:This, on the other hand, makes me kind of wonder if I do need an advisor, since I had to puzzle over it awhile to figure out what you mean. Like, I have no idea how bonds would lower my RMDs, though I can (now) see why I'd want the tax inefficient stuff in the IRA while still maintaining a balanced portfolio overall. OK so, you probably get that RMDs are calculated by taking your life expectency and multiplying it by the account value, yeah? Well, if you put the "worst performing" asset class of your asset distribution into this account, then you can expect the amount in the account to grow more slowly; which means less money in there, and therefore, smaller RMD amounts. This might sound insane at first: why would you intentionally choose to invest in an asset class with poor performance? But, the assumption here is that you've already decided that you agree with and accept the philosophy of reducing portfolio volatility risk via asset allocation that includes e.g. bonds as well as stocks, while accepting that doing so also marginally reduces long-term gains. That's also referred to as the 3- or 4-fund portfolio. If you've decided to do that - and if you're considering a target retirement fund, that's effectively what you've decided to do - you can consider your asset allocation across your entire portfolio, put the assets you expect to perform the worst into the IRA you have to take distros from, and over time, as that account is your worst-performing one, you'll be taking smaller distributions. THAT SAID, you'll also have to rebalance, because those distributions will be reducing your allocation in bonds or whatever; and, over time as you approach retirement, typically you want to be increasing not decreasing, your allocation to those lower-volatility, "safer" investments. You'll have to compensate for that, most likely by adding bonds (possibly selling stocks to buy bonds, possibly just using new contributions to buy bonds) to your 401(k) or other IRAs etc. quote:My first impression was to avoid target retirement funds for the IRA since I have to take a little out each year, but I guess in hindsight just because it has a target date doesn't mean I can't sell it in bits and pieces before then.
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May 6, 2020 23:59
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MetaJew posted:I spoke to HR and to Charlse Schwab. Both told me that they can't do it, and I'll have to self manage it. Since the contribution is only from base-pay and not including any bonuses, I think I can calculate approximately to max it out-- and I may miss out on putting in a few tens of dollars, but the employer i think matches 3-6%. Somewhere in there, so I'll get the match, for sure. That’s extremely weird - if you overcontribute, CS is required to give you the excess back and the process is a pain in the rear end for everyone so I’m surprised that they don’t have a way to prevent it in the first place.
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May 7, 2020 00:01
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MetaJew posted:As for putting the money into a roth 401k vs a traditional 401k, I honestly have never known what the right thing to do is. The idea of not paying any taxes on withdrawals somewhere in the future is appealing, but I understand that I am very likely in a higher tax bracket now than when I would be pulling that money out. Of course, I'm not one of the WSB guy sthat is gutsy enough to go gamble my Roth IRA on options, so it's not like I'm making insane gains where the Roth component really pays off. Many of us like to hedge our bets by splitting our retirement savings between traditional and Roth vehicles. Ideally, the ratio of that split would represent my confidence in the question of whether my top marginal tax rate is higher today, or will be higher when I retire. Personally I suspect that I'll live on less money when I retire than I take home now (which favors traditional to save on taxes now), but also I suspect that income taxes are too low and government debt rising too fast, and future governments will be forced to raise income taxes, and therefore there's a good chance that despite having a lower taxable income when I retire, my top marginal rate could be as high or higher. So most of my retirement money is in traditional 401(k)s, but my wife and I are putting our $12k a year of IRA money into Roth, so we'll at least have some tax-free money to pull on in 20+ years if our taxes have gone up. In the end, you can't be certain of the future, so don't beat yourself up too much about the decision. There is one more important factor, though: if you think you'll ever want to take advantage of a back-door Roth (because your income will be too high to contribute to a Roth IRA normally), you'll want to have zero money in a traditional IRA account. Any money you have in that trad IRA will have to be converted to Roth, and you'll have to pay tax on the earnings the money made, all at once, and you want to avoid that tax bill. So if you see your future income exceeding the Trad IRA limits, go ahead and stick to Roth IRA now. I believe this does not affect your decision about trad vs. roth 401(k) now: I just wanted to be clear about IRAs in case you were also doing those.
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May 7, 2020 00:05
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I thought inherited IRAs now had to be withdrawn within 10 years unless from a spouse? You can't drag out the RMDs forever anymore.
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May 7, 2020 00:27
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Bremen posted:I plan to use the money for retirement, but I still have to take some of it out from the IRA each year, so it will probably slowly transition from the IRA to a post-tax brokerage account (which will quite likely be mostly a target date fund). And yeah, 1% did seem pretty high to me. If you want an advisor, look at napfa.org for fee only or Garrett network for hourly planners. I would say just wait and hire me but the goddamned CFP exam just got postponed so who knows when the gently caress I'm ever going to get licensed, THANKS CORONAVIRUS
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May 7, 2020 00:28
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MrLogan posted:I thought inherited IRAs now had to be withdrawn within 10 years unless from a spouse? You can't drag out the RMDs forever anymore. This is true, but it's based on when the person died, so I'm grandfathered in even though the inheritance didn't get worked out until a few weeks ago as my uncle passed away at the end of last year.
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May 7, 2020 00:37
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MrLogan posted:I thought inherited IRAs now had to be withdrawn within 10 years unless from a spouse? You can't drag out the RMDs forever anymore. Ah, yeah, I didn't think about it but this is usually right. The uncle passed away prior to this year so the old rule applies and you'll have to RMD the whole thing over 10 years, although my googling is saying you don't have to take it in exactly 10% chunks, you just have to be sure to clean out the account in 10 years. On that basis, I'd treat the money in the IRA as "retirement money" only if all of those distros are going into a brokerage account to purchase retirement assets: while in the account, you can treat them as tax-advantaged, but once out, you can't, so... you'll be shifting between two asset classes as you make this transfer, and you'll need to compensate in the rest of your portfolio in order to account for that shift. This further cements that you probably shouldn't just use a target retirement fund, if you care about maintaining a consistent asset allocation. Unless you're really young and just mostly in stocks anyway, which simplifies everything: you could just use a total market stock fund for both in- and out-of the IRA? edit: Bremen posted:This is true, but it's based on when the person died, so I'm grandfathered in even though the inheritance didn't get worked out until a few weeks ago as my uncle passed away at the end of last year.
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May 7, 2020 00:40
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Leperflesh posted:Many of us like to hedge our bets by splitting our retirement savings between traditional and Roth vehicles. Ideally, the ratio of that split would represent my confidence in the question of whether my top marginal tax rate is higher today, or will be higher when I retire. Personally I suspect that I'll live on less money when I retire than I take home now (which favors traditional to save on taxes now), but also I suspect that income taxes are too low and government debt rising too fast, and future governments will be forced to raise income taxes, and therefore there's a good chance that despite having a lower taxable income when I retire, my top marginal rate could be as high or higher. One thing to be aware of is that your income taxes in retirement will not purely be based on the amount you plan to need for living expenses. After age 70.5/72, you'll have to take RMDs and if your traditional IRA & 401k balances are large enough (from being a good saver), your RMDs could take your taxable income into higher marginal tax brackets than if you were only pulling out money needed for expenses. So that's something to keep in mind when deciding your Traditional and Roth split.
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May 7, 2020 01:27
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Leperflesh posted:Ah, so you're a primary non-spouse beneficiary under the pre-2020 rule, so it's back to what I said earlier? You can take small RMDs based on your age but mostly this is still long term (10+ years) retirement money. Yep. I'll have to take out a bit each year, increasing as I age, though it won't ever completely disappear.
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May 7, 2020 02:10
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Ancillary Character posted:One thing to be aware of is that your income taxes in retirement will not purely be based on the amount you plan to need for living expenses. After age 70.5/72, you'll have to take RMDs and if your traditional IRA & 401k balances are large enough (from being a good saver), your RMDs could take your taxable income into higher marginal tax brackets than if you were only pulling out money needed for expenses. So that's something to keep in mind when deciding your Traditional and Roth split. Yeah that's one of those "problems I'd love to have" really, but it's good to keep it in mind.
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May 7, 2020 02:18
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My plan is to have minimal retirement savings to save on income taxes.
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May 7, 2020 02:54
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My plan is to live out of a cardboard box to save on property taxes.
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May 7, 2020 05:08
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Inner Light posted:Keep in mind a good mutual fund could have a yearly fee of around .1%, so 1% would be ten times higher. ACTUALLY, 1% would only be nine times higher. By relative comparison, a doubling is 1x higher, tripling is 2x higher... and 1% is 10x of 0.1%, but only nine times higher. 
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May 7, 2020 05:47
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KillHour posted:My plan is to live out of a cardboard box to save on property taxes. Just make sure it's not corrugated cardboard. That will put you in a higher tax bracket.
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May 7, 2020 13:30
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I'm about to change jobs for the first time in a long time. Should I roll my 401k into my vanguard IRA or my new 401k? I don't know the fund options at the new gig yet, so without that, maybe there isn't an answer. I'm also going to be jumping from "able to use a Roth" to completely "makes too much to use a Roth", but I've contributed this year. How do I handle that?
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May 9, 2020 00:27
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Gerdalti posted:I'm about to change jobs for the first time in a long time. New 401k unless it's completely Roth dollars. You don't want any non-Roth IRA funds if possible if you want to backdoor moving forward. Do you have any ability to get your AGI below the limit? HSA, commuter benefit, switching mostly to traditional 401k?
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May 9, 2020 00:32
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Gerdalti posted:I'm also going to be jumping from "able to use a Roth" to completely "makes too much to use a Roth", but I've contributed this year. If you want to backdoor Roth this money the magic word here is “recharacterization”. I did it this year with Vanguard and it was one phone call. If you don’t already have a Trad IRA already you should create it and leave it with a $0 balance before you call. They’ll recharacterize your Roth contributions into that account and then you can “convert” them back to Roth as soon as they clear. In Jan you’ll get a 1099-R that says you did this in a way so you’re not penalized. I think the only wrinkle is you will owe some tax IF you already have a Trad IRA with pre-tax dollars in it. Sobriquet fucked around with this message at 02:57 on May 10, 2020 |
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May 9, 2020 03:44
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I’m genuinely torn between saving up for a house, or just biting the bullet and using that money to rent better properties instead. I’ve been budgeting for a while and from what I can tell I have enough inflow to work towards the former, but then there’s all the downsides to home ownership...either way, what I do know is that I for sure don’t want to live in a crappy place. Maybe I’ll rent a better place, then see if I can still save up for a house from there.
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May 11, 2020 15:21
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For starters, how long are you planning on staying where you are? If you had to find another job, would you have to relocate? What are the property taxes like where you are at and how much do they increase every year?
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May 11, 2020 15:28
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Pollyanna posted:I’m genuinely torn between saving up for a house, or just biting the bullet and using that money to rent better properties instead. I’ve been budgeting for a while and from what I can tell I have enough inflow to work towards the former, but then there’s all the downsides to home ownership...either way, what I do know is that I for sure don’t want to live in a crappy place. Don't spend your savings on rent. Don't live somewhere you can't afford while also saving (if possible).
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May 11, 2020 15:28
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You have to own a house for something like 8 years to break even with rent, depending on stuff like taxes. There's a pretty big opportunity cost of owning unless you know you're not going to move. I love my house but every time I consider moving I remember how much of a pain in the rear end it would be. It's also a lot more work than you'd think and you have to be one of those broken people who enjoy maintaining poo poo or you'll be miserable.
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May 11, 2020 15:39
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The first house I bought was basically a wash compared to renting. It was also not a great location. I was glad to sell it. The one I’m now is actually in a good location (and the right size) for turning into a rental house if I have to move. I feel a lot better about owning this one.
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May 11, 2020 15:58
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We're saving so much money by paying for landscaping for our house.
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May 11, 2020 16:17
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I bought my place not too long ago and between closing costs and real estate transfer fees I paid more than a year's rent at my last place. Also, the whole "rEnT iS jUsT tHrOwInG mOnEy AwAy!" thing never considers all of the money you're going to shovel into your house-pit that you'll never get back. The interest on your mortgage, the PMI, your homeowner's insurance, property taxes, etc. And if you want to be super depressed, the vast majority of your mortgage payment every month is going to interest, not principle. I paid way below market on my place and I still have to stay put for at least 5 years before it will make any financial sense at all. And if the market blows up due to everything that is going on, welp... FreelanceSocialist fucked around with this message at 16:23 on May 11, 2020 |
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May 11, 2020 16:21
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do not buy a house in 2020
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May 11, 2020 16:49
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What I'm facing is that we need more space for the baby (possibly 2nd) but rent vs buy seems to really diverge when I look at bigger apts vs houses. (And for whatever reason people don't seem to rent homes in this area...)
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May 11, 2020 16:50
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I know this is heresy in some circles, but would it make sense not to have more babies until poo poo starts to head in the direction of returning to normal? Things are really messed up right now and most people aren't seeing it.
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May 11, 2020 16:53
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Maybe gently caress houses then.
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May 11, 2020 16:58
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FreelanceSocialist posted:I know this is heresy in some circles, but would it make sense not to have more babies until poo poo starts to head in the direction of returning to normal? Things are really messed up right now and most people aren't seeing it. Maybe. For some folks, the doom-and-gloom outlook never ends. Are you just talking, wait till the covid-19 thing is over? Or, are you gonna wait out a full recession, or another Trump term, or ? I think if you were deciding to have a baby and you decided to put it off, it's a good idea to reach an agreement on when, exactly, you'll go ahead and do it. Something like "we'll wait a year and then even if things aren't better, lets go ahead" or similar. But ultimately the decision of when to have a child is extremely personal and there's no definitely right answer. IMO you should try to make sure you're in the right place in your relationship, and try to prepare financially; but even poor people can and should have children, so like, don't take that as meaning they shouldn't.
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May 11, 2020 17:03
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Putting it off until the COVID situation (and the market/government response to it) begins to stabilize. It's very likely that we're headed into a drop in the value of the dollar and some market turmoil (including real estate) in the next 8-12 months and it has been made very clear that the current administration is not equipped to handle it properly. We're not even through the real workforce shock and unemployment phases, yet. This might seem ridiculous but you have to remember we're in uncharted territory with all of this and our captain and crew have no clue how to sail...
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May 11, 2020 17:11
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FreelanceSocialist posted:I know this is heresy in some circles, but would it make sense not to have more babies until poo poo starts to head in the direction of returning to normal? Things are really messed up right now and most people aren't seeing it. But rawdog loving is the only pleasure in life we have left. What are you going to do - go out and face the apocalypse for birth control? Hell no.
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May 11, 2020 17:13
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If you want a baby then have a baby. There never is, has, or will be the "perfect time" to have a baby for the general masses. People figure it out in the best and worst of times, from dirt poor to upper middle class.
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May 11, 2020 17:14
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Leperflesh posted:Maybe. For some folks, the doom-and-gloom outlook never ends. Are you just talking, wait till the covid-19 thing is over? Or, are you gonna wait out a full recession, or another Trump term, or ? I think if you were deciding to have a baby and you decided to put it off, it's a good idea to reach an agreement on when, exactly, you'll go ahead and do it. Something like "we'll wait a year and then even if things aren't better, lets go ahead" or similar. It's really important to remember this, I think. There's a subset of people who always think this is going to be the end of things. The country during the Vietnam era. Watergate. Carter economic woes/inflation. Black Monday in 1987. AIDS crisis/how widely will this spread, and what the gently caress even is it? Lewinsky era dysfunctional government. Dotcom crash. 9/11. 2008 Mega-Recession. Trump being elected - oh god, the stock market will be destroyed. Covid 19. All of these things are real, but there can be a tendency for some people to always assume the apocalypse is around the corner. You have to be smart, but you also shouldn't spend life waiting on the sidelines for the end to come (or waiting for the perfect time to come). I'm getting closer to 50, and I'm not sure I've lived through an era where people *at that time* thought, "Man, this era is great, there are no major problems." I will say, this is something that I decidedly believe the internet echo chamber has made worse. Because when I was growing up, and up until about 10-20 years ago, people did not have the ability to kind of hole up and just bounce neurotic poo poo off of like minded individuals all day long. Internet forums, etc. have definitely created this magnifying effect for fear, in my opinion. Internet forums are basically that staircase outside the middle school where the goth kids hung out talking about how the world is poo poo, but times 10,000.
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May 11, 2020 17:19
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My particular case is ~12 to 18 months to get pregnant with round 2. It does make sense to look for the right time but there is a physical clock on all this. Even with modern (and expensive) medicine it's harder/riskier at 35+
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May 11, 2020 17:21
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FreelanceSocialist posted:I know this is heresy in some circles, but would it make sense not to have more babies until poo poo starts to head in the direction of returning to normal? Things are really messed up right now and most people aren't seeing it. Heh, my wife and I are thinking of whether or not we should have a Rona baby or not. We wanted to do one more “big trip” before, but that’s not going to happen now...
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May 11, 2020 17:32
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SlyFrog posted:
100% this, Twitter specifically
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May 11, 2020 17:36
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Residency Evil posted:Heh, my wife and I are thinking of whether or not we should have a Rona baby or not. We wanted to do one more “big trip” before, but that’s not going to happen now... Take a mental inventory of all the things you currently have and then figure out what the contingency plan looks like if they aren't around in 9 months. Stuff like maternity ward access, NICU for complications, your jobs or sources of income, etc. Also, keep an eye on the news about this Kawasaki-like stuff going on with COVID-positive kids. There's a lot of unknowns that could become very real problems. Like what if your wife gets COVID and has to be in an induced coma and on a vent during the pregnancy?
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May 11, 2020 17:44
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FreelanceSocialist posted:Take a mental inventory of all the things you currently have and then figure out what the contingency plan looks like if they aren't around in 9 months. Stuff like maternity ward access, NICU for complications, your jobs or sources of income, etc. Also, keep an eye on the news about this Kawasaki-like stuff going on with COVID-positive kids. There's a lot of unknowns that could become very real problems. Like what if your wife gets COVID and has to be in an induced coma and on a vent during the pregnancy? She went through an obgyn residency so I’m hoping she’s on it.
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May 11, 2020 17:49
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spwrozek posted:If you want a baby then have a baby. There never is, has, or will be the "perfect time" to have a baby for the general masses. People figure it out in the best and worst of times, from dirt poor to upper middle class. This. FreelanceSocialist posted:Take a mental inventory of all the things you currently have and then figure out what the contingency plan looks like if they aren't around in 9 months. Stuff like maternity ward access, NICU for complications, your jobs or sources of income, etc. Also, keep an eye on the news about this Kawasaki-like stuff going on with COVID-positive kids. There's a lot of unknowns that could become very real problems. Like what if your wife gets COVID and has to be in an induced coma and on a vent during the pregnancy? Yeah, and nuclear war can break out, or time traveling aliens come back and destroy the human race, or he could get hit by a bus driving to work and die. Good grief man.
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May 11, 2020 17:50
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Adoption is always an option.
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May 11, 2020 17:51
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