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Looks like my new job won't allow me to contribute to a 401k (even a personal one) until 1 year of service. I start the new job this July. I should probably max out my current 403b to reach the max of 19.5k by the end of June 2021, and then contribute to the new 401k July - December 2022, right?
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Mar 8, 2021 23:34
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Residency Evil posted:Looks like my new job won't allow me to contribute to a 401k (even a personal one) until 1 year of service. I start the new job this July. I should probably max out my current 403b to reach the max of 19.5k by the end of June 2021, and then contribute to the new 401k July - December 2022, right? Yup. Man is that some garbage.
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Mar 9, 2021 00:12
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spwrozek posted:Yup. Man is that some garbage. Yeah it's kind of a bummer, but after a year I get a very very nice contribution as long as I stay, so  .
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Mar 9, 2021 00:54
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Residency Evil posted:Yeah it's kind of a bummer, but after a year I get a very very nice contribution as long as I stay, so And thankfully there is time at both jobs to max out the years limit because it's mid year. Kinda dumb, but
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Mar 9, 2021 01:02
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i should have my rollover funds in my new vanguard account in the next couple of days, and i had a question about the minimum investing amounts for vanguard admiral funds. i have enough funds to have all of my initial investments at over $3,000 for even the smallest fund holding, but the smallest will be just barely over. what are the consequences if a fund drops below the minimum investment level? should i overweight my initial allocation to the smaller funds to avoid dipping below the limit, and return to my target allocation by weighting my future contributions?
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Mar 9, 2021 21:32
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GhostofJohnMuir posted:i should have my rollover funds in my new vanguard account in the next couple of days, and i had a question about the minimum investing amounts for vanguard admiral funds. i have enough funds to have all of my initial investments at over $3,000 for even the smallest fund holding, but the smallest will be just barely over. what are the consequences if a fund drops below the minimum investment level? should i overweight my initial allocation to the smaller funds to avoid dipping below the limit, and return to my target allocation by weighting my future contributions? Just put the minimum if that's all you want to do. It will take years below the minimum before Vanguard will even care enough to notify you, after which you can decide what to do.
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Mar 10, 2021 00:01
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Used to be much easier when Admiral funds were all $50k or more. A bit silly to even have the concept when the limit is $3k.
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Mar 10, 2021 00:04
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GhostofJohnMuir posted:i should have my rollover funds in my new vanguard account in the next couple of days, and i had a question about the minimum investing amounts for vanguard admiral funds. i have enough funds to have all of my initial investments at over $3,000 for even the smallest fund holding, but the smallest will be just barely over. what are the consequences if a fund drops below the minimum investment level? should i overweight my initial allocation to the smaller funds to avoid dipping below the limit, and return to my target allocation by weighting my future contributions? I had one of my funds drop under by like, $500 when the market crashed in March 2020. I think they just leave it be if you started at $3k. They just don’t allow you to start it without an initial deposit of $3k or more. I could be wrong for the record, just my experience. The market went back up over the next few months, so it didn’t stay under for a long time.
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Mar 10, 2021 00:13
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If you're going to be actively contributing to that fund after you put in $3k I wouldn't worry about it at all. Pretty sure with Vanguard once you're in, you're in anyways. It's that way with their funds that are closed to new investors.
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Mar 10, 2021 10:57
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I think with this most recent quarter I’ve put a solid 80~85% of my company stock proceeds into retirement. At least I figured out something good to do with them.
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Mar 10, 2021 14:43
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EmmaDilemma posted:For those that participate in an employer 401k, how much is the plan administration fee? KYOON GRIFFEY JR posted:Your plan administrator is obligated to provide you with a full annual report which will help you understand the fees and what is being paid for. Administrative expenses are either on a flat basis or variable based on total plan administrative fees incurred, or in some cases a combination of both. In general there isn't anything you can do with your allocation to reduce fees, unless you have some setup where you are paying for trades or things of that nature. Again, that'll be in your annual report and administrative documents. Thanks, just posting a follow-up, after a few emails learned that the admin expenses are probably about 30 bps and 40 bps so 0.7% charged by the two companies involved w/ the 401k plan, which may come down in future as the plan assets grow. It was also suggested to me during the back and forth with advisor, that, fees are meaningless for long-term planning and investing in the S&P500 has been ok recently but during 2000-2013 would have earned me zero so it may not be a great choice. Overall a bit of a frustrating process to dig into this but at least a learning experience. In the end I'm not changing anything, 401k is still the best deal for me given the employer match and tax savings and I'm fine with sticking with the plan's lowest fee index funds... despite the interesting advice from the advisor.
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Mar 10, 2021 14:44
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smackfu posted:I unexpectedly got a “retention” stock bonus this year, vested over four years. I assume this falls under the same theory of ESPP and I should sell as soon as I am able? Stupid question about the ESPP theory - is it always "sell the second you acquire the stock" even with the whole favorable tax treatment after 2 years?
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Mar 10, 2021 15:51
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MJP posted:Stupid question about the ESPP theory - is it always "sell the second you acquire the stock" even with the whole favorable tax treatment after 2 years? You should be able to calculate the favorable tax treatment and see how much holding would save you. Then decide if that percentage is worth the risk. I think the favourable tax treatment only applies if the ESPP has a look back as well.
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Mar 10, 2021 15:57
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What are the benefits of ESPPs? My employer offers one, but I haven't enrolled in it. As far as I can tell theres no tax benefit, and I don't see a price discount based on my benefits documents. It says the stock purchase price is the average price of all shares purchased during the period. I guess that means the purchase price could be above or below the current price when I receive the shares which seems kind of bad. It seems like the only benefit is not paying brokerage fees/commission, which is pretty much phased out of the retail brokerage industry at this point. I own some company stock through just a regular brokerage account, but I'm wondering if I'm missing out on anything not being in the ESPP. Baxate fucked around with this message at 18:25 on Mar 10, 2021 |
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Mar 10, 2021 18:23
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Baxate posted:What are the benefits of ESPPs? My employer offers one, but I haven't enrolled in it. As far as I can tell theres no tax benefit, and I don't see a price discount based on my benefits documents. It says the stock purchase price is the average price of all shares purchased during the period. I guess that means the purchase price could be above or below the current price when I receive the shares which seems kind of bad. A good ESPP locks in a 15% discount on the lowest price at the beginning/end of the purchase period for 2.5 years. If you choose to hold for 1-2 years until your purchase is qualified then you get the whole sum as LTCG. If your stock rockets up this is a HUGE benefit. Even if it is perfectly flat you still make 15%. If it's truly an average I would ask for an example, or just ask a person who was enrolled in it before, or enroll and put a thousand bucks in and see what happens.
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Mar 10, 2021 18:51
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H110Hawk posted:A good ESPP locks in a 15% discount on the lowest price at the beginning/end of the purchase period for 2.5 years. If you choose to hold for 1-2 years until your purchase is qualified then you get the whole sum as LTCG. If your stock rockets up this is a HUGE benefit. Even if it is perfectly flat you still make 15%. It's my understanding that the discount is income immediately when you receive the shares. And then that day's stock price is your new cost basis. That's how it's always been handed on my taxes, as well as how it's always been withheld by the employer.
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Mar 10, 2021 18:54
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Motronic posted:It's my understanding that the discount is income immediately when you receive the shares. And then that day's stock price is your new cost basis. I think it depends on the lockup period and the terms around it. My last company had a one-year lockup where they clawed back the discount if you sold prematurely, but if you sold afterwards it was all long-term. Overall though I remember it being a pretty terrible ESPP - 5% discount on the transaction day, no lookback window at all. I think I wound up losing a hundred bucks or so over my time there.
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Mar 10, 2021 19:03
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MJP posted:is it always "sell the second you acquire the stock" even with the whole favorable tax treatment after 2 years? Are you referring to Long Term Capital Gains? That’s 1 year. If you’re referring to something else: what’s that. And to add my opinion: IF you have a guaranteed baked in gain (lookback or discount provision) AND the company is big, stable, and liquid (any of the S&P500) then probably hold until LTCG. You’ll boost your own return by 2-3%* just due to the taxation difference. *say you get a 15% discount on the stock at purchase. If you immediately sold, you’d recognize that 15% as a capital gain and pay (let’s say) 32% taxes on it. So a $1000 ESPP purchase turns into $1000/.85 = $1176 of stock which (if immediately sold) is $176 of gains minus $56 taxes. If you wait a year, your $176 gains will be taxed at 15% — $26! That’s a savings of... $30 — your reward for locking $1000 away for an entire year. That’s why the “stable” part matters. That $30 difference gets completely swamped by tiny fluctuations in price. All it would take is a ~3% decline in the stock price to wipe out the taxation benefit. Or, to phrase it another way, if your company underperforms index funds by 3%, you would have been better off just selling immediately and buying VTI / VOO.
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Mar 10, 2021 19:05
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DNK posted:Are you referring to Long Term Capital Gains? That’s 1 year. ESPP's it's 2 years from initial purchase period AND 1 year since purchase. So "it depends." Motronic posted:It's my understanding that the discount is income immediately when you receive the shares. And then that day's stock price is your new cost basis. Honestly the Qualified distribution stuff I always forget the subtly of it because it's always been short term / disqualified disposition for me. 
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Mar 10, 2021 19:08
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H110Hawk posted:Honestly the Qualified distribution stuff I always forget the subtly of it because it's always been short term / disqualified disposition for me. You may be thinking of this: Yond Cassius posted:I think it depends on the lockup period and the terms around it. My last company had a one-year lockup where they clawed back the discount if you sold prematurely, but if you sold afterwards it was all long-term. Because, yeah.....in this case you don't actually control/own the shares so I think they can be treated differently. I've not been in an ESPP like that. Mine was that you 100% own the shares on the last day of the period, which triggered the taxable event.
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Mar 10, 2021 19:13
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There is no standard ESPP, if you have questions about the technicalities then you need to talk who whoever is in charge of it at your company. Every company is different as to how they do the length of the period, the purchase price, the discount, and stuff relating to how it is qualified. Mine is just a 12% discount on the price of the shares at the end of the two-month period. I sell immediately and pocket the 12% (less taxes and +/- random swings in the price before the shares show up in my account after the end of the period) on the max they let me put in every two months.
withak fucked around with this message at 19:18 on Mar 10, 2021 |
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Mar 10, 2021 19:14
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Hi thread! I'm moving to a good 401(k) from a terrible one for the first time, so I have some questions about mega backdoor Roths and true up contributions that I've never had to think about before. I max my 401k and a Roth IRA. I currently have money in a (pretax) Vanguard rollover IRA. The expense ratios at my 401k are basically equal with the IRA, and they have an equivalent fund to the one I'm invested in, so I see no reason not to roll the IRA into the 401k. Am I missing anything? I can't come close to maxing the $58k total limit, but I do contribute a couple of thousand dollars a year to a brokerage account. Assuming this is retirement money, is there any reason not to redirect the brokerage funds to a mega backdoor Roth? What if I can only do 2 in-service rollovers a year, would it still be worth it? If I understand right, I'd have to pay taxes on the gains from between when I put the money in and made the conversion. Is that short term capital gains, or income tax? Lastly, I asked about true up matching contributions, and they replied saying that they "true up for the company match. And we actually do it every pay period." What does that even mean? My only guess is that for the pay periods after I max the 401k, they'd still make the same matching contribution? I dunno, this isn't important, that answer just threw me for a loop. Grumpwagon fucked around with this message at 23:04 on Mar 10, 2021 |
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Mar 10, 2021 23:00
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I was able to successfully migrate/roll my Simple IRA from Charles Schwab to Fidelity. The Fidelity IRA-rolling wizard was great, and the process was super simple. I never really bothered to much with an IRA before, so now I have 11K in one from at least one of my jobs that I worked at over the last 20 years. Nice. I threw the 11K into 60% VTI / 20% VXUS / 20% undecided (maybe VTV?), instead of spreading it around a bunch of other ETFs like I see others do on Reddit and such. It seems like the less is better for more dividends?
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Mar 11, 2021 00:29
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Grumpwagon posted:Hi thread! I'm moving to a good 401(k) from a terrible one for the first time, so I have some questions about mega backdoor Roths and true up contributions that I've never had to think about before. Roth IRA already at vanguard: I would probably leave this alone. You are not in control of what your 401k plan administrator does, so there are only downsides here. (Outside of stronger legal protections for 401ks apparently?) They could decide to go nuts and change you out to 2% frontloaded mutual funds. It's unlikely since it sounds like a good plan in general, but the risk is there. Extra money you're saving for retirement: Yes. Because you're going to pay those taxes regardless in the brokerage account, why not stop the tax bills? Just set yourself reminders to do it. Remember, it's the overall limit minus matching minus $19,500 limit = available "mega backdoor". So if you make $1500 in matching and it's a $58k limit, that's $58 - 19.5 - 1.5 = $37k. Sounds like you're far from worrying about it, but now you know how to do the math in a spreadsheet. Trueup: Sounds like if you're owed $1500 in match and you max your 401k in 1 paycheck in january (pretend...) they would give you the rest of your match in equal installments over the rest of the year per-paycheck. This is ideal and great.
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Mar 11, 2021 00:52
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jeeves posted:I was able to successfully migrate/roll my Simple IRA from Charles Schwab to Fidelity. The Fidelity IRA-rolling wizard was great, and the process was super simple. I don't understand your last sentence/question, could you clarify? Big ETF fan here. I've posted about these ETFs elsewhere, but, if you are seeking a value tilt, you may want to investigate: VTV, FVAL, and/or FNDF to complement your core broad indexes of VTI/VXUS. I agree that keeping the total number of ETFs employed small is preferable. FNDF is a "fundamentally weighted" international index that will get you more exposure to developed companies with low price ratios (its methodology is a bit more complicated than that, but that's the simple explanation). So you get more weight in things like oil, car companies, banks, etc. VTV you know of; CRSP divides large caps (mid+mega) into "growth" or "value" and those are the "value" and neutral ones according to their factor calculation (which I personally prefer over S&P, Schwab, or Russell's). FVAL is Fidelity's value factor index and, as opposed to many other value factor ETFs, considers free cash flow yield. In practice it ends up looking a lot like a cross between the S&P 500 and VTV but with a P/E screen to omit things like TSLA. Smaller ETF AUM-wise.
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Mar 11, 2021 01:01
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I’ve seen people on Reddit’s Rate My ETF portfolio threads post stuff like this: Total Market Index / Blue Chips (30%): VTI - 10% VXUS - 10% QQQM - 10% Innovative Tech (20%) ARKK - 10% QQQJ - 10% Clean Energy (10%) PBW - 10% Cannabis (10%) MSOS - 10% Semiconductor Market (10%) SMH - 10% Blockchain (10%) BLOK - 10% Cryptocurrency (10%) Ethereum - 10% And it’s like— wouldn’t it make more sense to just throw it into one or three ETFs instead of a huge spread like that? I guess my thought on dividends don’t really matter there, I was thinking like the more money you had in one thing like VTI the more dividends you’d get. But ideally you’d get it all the same.
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Mar 11, 2021 01:20
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Reddit is full of loving idiots. Throw it into a few funds and stop thinking about it. Trying to actively invest your retirement is incredibly stupid.
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Mar 11, 2021 01:31
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jeeves posted:I’ve seen people on Reddit’s Rate My ETF portfolio threads post stuff like this: reddit portfolios are meme garbage, pay them no attention for serious investing if you want to evaluate a portfolio, this tool is useful: https://www.tdameritrade.com/education/tools-and-calculators/morningstar-instant-xray.page you can get a rough idea of the expected dividend yield of your portfolio by looking at the weighted average of 30-day SEC or TTM yields of each component of it. but, in my opinion, optimizing for dividends rarely makes sense unless you really need it to cover some monthly expenses or some other special case. For example, Berkshire Hathaway is about the most famously conservative value investment of the past few decades and it doesn't provide dividends.
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Mar 11, 2021 01:32
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jeeves posted:I’ve seen people on Reddit’s Rate My ETF portfolio threads post stuff like this: I'm SMH, all right. Just VTI (which isn't blue chips??) and chill.
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Mar 11, 2021 01:40
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Putting almost half your money in Crypto and Weed, at least reddit knows it's audience
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Mar 11, 2021 01:43
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Gaius Marius posted:Putting almost half your money in Crypto and Weed, at least reddit knows it's audience Yeah, when I saw that I knew it was some major loving red flags. Hence me asking here than continuing to read anything on there.
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Mar 11, 2021 01:57
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Speaking of red flags, Alliant just slashed the value of people's existing rewards card points without notifying anyone, and only rewound it a month later when people noticed and got mad. So much for credit unions being inherently more trustworthy. Does anyone have a replacement suggestion to use as my main hub for stuff like checking, HYSA, and short-term savings buckets? The first consideration is ACH transfer speed, with the ability to have supplemental savings accounts for free and a lack of this kind of corporate shittiness a close second and third. Credit union would be nice but is apparently not worth making a requirement.
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Mar 11, 2021 04:03
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Unsinkabear posted:Speaking of red flags, Alliant just slashed the value of people's existing rewards card points without notifying anyone, and only rewound it a month later when people noticed and got mad. So much for credit unions being inherently more trustworthy. Ally.
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Mar 11, 2021 04:31
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spwrozek posted:Ally. Unsinkabear posted:Speaking of red flags, Alliant just slashed the value of people's existing rewards card points without notifying anyone, and only rewound it a month later when people noticed and got mad. So much for credit unions being inherently more trustworthy. I use Ally for my checking and use HMBradley for my HYSA. HMBradley does require some finagling, but if your work allows you to split your paycheck between two accounts put something like 50 dollars into HMBradley each paycheck from direct deposit and literally never pull the money out except as an emergency. You’ll get 3% interest up to 100k in savings.
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Mar 11, 2021 04:43
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Nitrousoxide posted:I use Ally for my checking and use HMBradley for my HYSA. HMBradley does require some finagling, but if your work allows you to split your paycheck between two accounts put something like 50 dollars into HMBradley each paycheck from direct deposit and literally never pull the money out except as an emergency. You’ll get 3% interest up to 100k in savings. 3%? How is that possible? Does that 3% savings tier only apply to money you've direct deposited? Or can we just setup a $50/paycheck direct deposit, and also transfer over $50k savings from another savings account, then start earning 3%? EmmaDilemma fucked around with this message at 05:21 on Mar 11, 2021 |
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Mar 11, 2021 04:56
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Nitrousoxide posted:I use Ally for my checking and use HMBradley for my HYSA. HMBradley does require some finagling, but if your work allows you to split your paycheck between two accounts put something like 50 dollars into HMBradley each paycheck from direct deposit and literally never pull the money out except as an emergency. You’ll get 3% interest up to 100k in savings. I’ll be surprised if they keep that up. I bet that they slash that APR down sometime relatively soon.
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Mar 11, 2021 05:26
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EmmaDilemma posted:3%? How is that possible? Yup, up to 100K. It will go down eventually but you have to have DD and more than 20% of the DD saved per quarter. I have like $10,500 over there.
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Mar 11, 2021 05:27
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Well, awesome. I'm seeing no reason to not open HMBradley account, setup small direct deposit, transfer over a chunk of savings from Marcus (getting 0.50%) wait a quarter and start earning 3% at HMB. With my luck the rates will come down by then but seems at least worth a try.
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Mar 11, 2021 05:49
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Nathan Winklepeck is giving me plenty to chew on with his dividend ETF analysis: https://youtu.be/TPSw7On2gUo Any downsides to holding SCHD in a tax-advantaged account? I would of course set dividends to automatically reinvest. Edit: as a counterpoint, I'm not asking about chasing dividends or valuing the percentage payout for its own sake, just as a useful tool for passively increasing a stake in a set of screened companies. I understand the case against chasing dividends as explained here: https://www.optimizedportfolio.com/dividends/ Space Fish fucked around with this message at 07:23 on Mar 11, 2021 |
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Mar 11, 2021 07:16
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Space Fish posted:Nathan Winklepeck is giving me plenty to chew on with his dividend ETF analysis: https://youtu.be/TPSw7On2gUo if you’re looking at dividends as a measure of sustainable and profitable business then I think you could get better exposure to what you’re looking for here with an index fund that tracks quality (profitability) like Baxate fucked around with this message at 15:48 on Mar 11, 2021 |
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Mar 11, 2021 07:42
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