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Just made an effortpost about commodity funds over in the stocks thread. I thought about posting it here but didn’t want people to claim I was recommending people buy commodity futures right now (the post does not say that). But it may be of wide interest to people here, too.
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May 1, 2021 17:04
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I've got what may be a basic math question.. Looking at my 1099s for 2020, I've got a decent amount of capital gains from a Vanguard Target Retirement fund. This makes sense, since it would be effectively "cashing out" stocks as I get older and the asset allocation changes, and also have to "cash out" more during years when the stock market does well. But won't I have to pay capital gains on this again once / if I sell the fund, albeit as a portion of a much larger overall gain? For example, the Target Retirement 2020 fund shows a current 1-year return (from May 2020) of 27%, but an estimated after-tax return of 17%. Asset allocation questions aside, does it even make sense to hold this type of fund in a non-retirement account? (I was specifically investing to purchase a home this year, so maybe it's OK for my case even if it is a bad idea in general)
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May 2, 2021 01:03
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Baby Proof posted:I've got what may be a basic math question.. I think the cost basis of the underlying fund will adjust when it does these rebalances, so that ultimately your tax burden equals out, but I am not completely sure of that, it's esoteric beyond my knowledge. Holding a target-date fund in a non-retirement account is not optimal. It's not horrible, and it can be reasonable for someone who truly wants a set-and-forget option and is willing to pay for a bit of tax drag, but holding the underlying index funds is definitely better if you're not working in a tax-advantaged account.
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May 2, 2021 01:12
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That's kind of what I thought - I'll have to look into "realized" vs. "unrealized" gains in the fund. So you would say that it's strictly worse from a tax basis simply because you don't have control over when the taxable gains are taken out? Or is it strictly better to use the tax-efficient funds even if you would be re-balancing by hand? Baby Proof fucked around with this message at 01:35 on May 2, 2021 |
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May 2, 2021 01:30
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I've been offered a pretty good job at a Ohio university, and have the option of enrolling either in the State Teachers Retirement System or an alternative retirement plan, which seems to let you pick among four providers (AXA-Equitable, Fidelity Investments, TIAA or VOYA). Is there an obviously better option here? I'm an EU citizen & US green card holder (eligible for dual citizenship in a year or two), so I'm intuitively disinclined to tie myself to an Ohio-specific system, but would appreciate a more informed opinion.
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May 2, 2021 17:04
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The State Teachers Retirement System is a defined benefits pension. It looks like it's decently funded (about 77% based on their numbers https://www.strsoh.org/publications...ear%20actuarial), but I think the more important concern is that you'd definitely be tying yourself to Ohio. The alternate retirement plan is probably a defined contribution 401k style where the university puts some money into a tax-advantaged account for you manage your own investments. It's more flexible since this would be your money, but you're responsible for investing in a way to get the needed growth to fund your retirement. If portability is very important to you, and you are willing to mange your own investments (and this thread is a good resource for learning how to do that) I'd go for option 2. If you think it's likely you'll be staying in Ohio for long term and don't want to think about managing investments, option 1 is better. For reference, I also work for a public university (in a different state) and I chose the second option over the first. drainpipe fucked around with this message at 17:16 on May 2, 2021 |
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May 2, 2021 17:13
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drainpipe posted:For reference, I also work for a public university (in a different state) and I chose the second option over the first. Thank you! Yes, I've been at a different public university for ~6 years with TIAA, and I don't super want to commit to Ohio, so I'll go with #2.  Any particular reason to stay with TIAA or would it be better to move to Fidelity or one of the others?
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May 2, 2021 17:40
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drainpipe posted:For reference, I also work for a public university (in a different state) and I chose the second option over the first. Same here. Although I am required to pay into the state teachers retirement pension. Starting year 4 soon of a 10 year vesting period on the pension. Thankfully if I leave before then I can roll that over into an IRA with Vanguard or something. Also contributing to my 457/403 and a ROTH. We had the option between TIAA and Lincoln, and I chose TIAA. Vesna, it looks like OhioU has AIG, AXA, VOYA, and TIAA as options. I'm only familiar with TIAA. Their target retirement date funds don't have the greatest ERs, but they're not awful. And fund availability through TIAA will depend entirely on what OhioU has chosen. Where I am, we -only- have the option for TIAA funds, even though TIAA offers Vanguard funds at other places.
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May 2, 2021 17:52
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You can post your fund options in this thread and we can evaluate, but without prior knowledge I'd say that Fidelity would probably be better. They are one of the biggest brokerages, so they'll have access to cheaper fund options.
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May 2, 2021 18:02
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Thank you for the advice, everyone! I'll tell the university that I want to go for the alternative retirement plan, and ask for further advice once I've actually got there and have the fund options.
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May 2, 2021 20:59
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Vesna posted:I've been offered a pretty good job at a Ohio university, and have the option of enrolling either in the State Teachers Retirement System or an alternative retirement plan, which seems to let you pick among four providers (AXA-Equitable, Fidelity Investments, TIAA or VOYA). Is there an obviously better option here? I'm an EU citizen & US green card holder (eligible for dual citizenship in a year or two), so I'm intuitively disinclined to tie myself to an Ohio-specific system, but would appreciate a more informed opinion. Just for another perspective, your alternative retirement plan probably also has a vesting schedule that will take 5+ years, and it is likely less generous. The Ohio State's website for example: https://hr.osu.edu/benefits/retirement/ says that they match 14% for the pension, and for the alternative plan: quote:9.53% goes to your individual STRS account Also, if you do leave before you vest, you still get your contributions back.
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May 3, 2021 02:39
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Hey, I wanted to give a shout out to this thread for the good advice and reinforcing my retirement investing mindset. I got all the fun having out of my system for the most part and hold 100% stock Vanguard index funds across my taxable, ROTH IRA, and Trad 401(k) accounts. I don't see that changing until... maybe 4-8 years from retirement (very high risk tolerance, I remember increasing my weekly contributions by 10% when the stock market was crashing due to COVID-19). I keep it real simple and my highest fee is .05% and my lowest is .02%. Managing to save money for the IRA has been my most difficult task, but I'm too weak to give up Starbucks right now to make it easier. Ok, I'm still holding some MSFT too, but whatever. Live a little.
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May 3, 2021 07:29
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Vesna posted:Thank you for the advice, everyone! I'll tell the university that I want to go for the alternative retirement plan, and ask for further advice once I've actually got there and have the fund options. Let me make a counterargument. If you choose option 1, that is as close to guaranteed reliable retirement income as you can get, and that plan is also as close to hands-off as you can get. In other words, it's hard to screw up a pension. At my current state job, option 2 sounded fine until you got a look at the fees tied to those 401k accounts. The salesmen meeting with HR folks choosing your plans brought the HR folks donuts to distract them from the 2% or 3% yearly fees, and the HR folks don't read this thread. Plus after your contributions to the pension system, with any extra income you can still save in tax advantage space using all of the good advice of this thread. I recently started a job where I had the same options - it's different state, but right now I plan to stay for the next 25 years. After looking at the choices I thought option #1 was a clearly superior choice for me. BigHead fucked around with this message at 17:54 on May 3, 2021 |
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May 3, 2021 17:27
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Residency Evil posted:Want to post another reminder May 1st? 3.54% seems pretty good. Reminder that the I-Bond rate went up today, as requested.
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May 4, 2021 01:02
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Unsinkabear posted:Reminder that the I-Bond rate went up today, as requested. 
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May 4, 2021 01:19
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Unsinkabear posted:Reminder that the I-Bond rate went up today, as requested. I am a huge fan of these things. Glad to see others using them, even though you need that TreasuryDirect account...
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May 4, 2021 01:36
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Unsinkabear posted:Reminder that the I-Bond rate went up today, as requested. Please put in a request for it to go up again next month.
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May 4, 2021 02:07
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withak posted:Please put in a request for it to go up again next month. 
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May 4, 2021 03:35
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I clicked some clickbait and wanted to share this part. I don't see how it would change my long-term savings strategy, but found the difference pretty interesting. Do any of you change your investing strategy based on the this trend? https://www.marketwatch.com/story/a...ist-11620041385  "The table shows that the S&P 500 May 1 to Oct-31 each year starting with an initial $10,000 investment in 1950 (no further contributions) resulted in $78k by 2021 versus $2.99 million if invested only from Nov-1 to the following year Apr-30, but it is critical to note that investing in all 12 months of the year (i.e., never exiting the S&P5 500) would now be worth $23,525,500. The purpose is not to highlight a tool for market timing but rather to show when returns are more likely to occur."
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May 4, 2021 14:12
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EmmaDilemma posted:I clicked some clickbait and wanted to share this part. I don't see how it would change my long-term savings strategy, but found the difference pretty interesting. Do any of you change your investing strategy based on the this trend? That chart looks like it came straight from the 1990s. Also, past returns does not indicate future performance. You cannot time the market. Repeat after me. You cannot time the market.
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May 4, 2021 15:10
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My eyes glazed over looking at that so there’s your answer.
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May 4, 2021 15:22
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I'm wondering if there's a way to simplify my financial life by having my emergency fund at Schwab in their brokerage account, instead of at Ally, allowing for movement between the two more easily. Is there something "fairly safe" that I can buy with my extra cash/emergency fund that will return something similar to Ally's 0.5%? I think Fidelity has something similar with their cash balance accounts, where any spare cash is put in to a money market account? Does anyone do something similar? We have a decent chunk just sitting at Ally, not really doing anything. Residency Evil fucked around with this message at 15:51 on May 4, 2021 |
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May 4, 2021 15:46
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Not familiar with Schwab's offerings but... Is the emergency fund really supposed to do much aside from sit there and wait for an emergency, and maybe earn a little %? Isn't that what it's doing at Ally? Might as well be content with 0.5% or just go crazy and throw it in something like: https://blockfi.com/rates/
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May 4, 2021 16:00
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EmmaDilemma posted:Not familiar with Schwab's offerings but... Is the emergency fund really supposed to do much aside from sit there and wait for an emergency, and maybe earn a little %? Isn't that what it's doing at Ally? I'm fine with 0.5%, but I'm looking for a way to keep it at Schwab. Currently, half of the money at ally is our emergency fund, half of it is a roof/short term savings/etc fund. Admittedly, we probably have too much in cash.
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May 4, 2021 16:06
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Residency Evil posted:I'm wondering if there's a way to simplify my financial life by having my emergency fund at Schwab in their brokerage account, instead of at Ally, allowing for movement between the two more easily. Yeah, there’s a lot of that discussion here, and I’m def guilty of wanting to maximize my emergency fund. For now, I’ve looked at the stuff like HM Bradley, but I’m personally holding off a bit. For better or worse emergency funds are meant to basically sit there. It just wasn’t appealing for me to put like, half my emergency fund into a new savings account that may get me 1-2% more, but then if poo poo hits the fan , it would add to my worry. March 2020 was such an oh poo poo moment, I try and remember that, and that with my emergency funds it was the one (financial) thing that made me feel better watching everything close , was “ok, I at least have I at least have immediate access to xx savings.” So I’m staying put a bit longer (my wife and I also both got new jobs, so waiting until the dust settles is good for us specifically). That said, I could see myself getting some I Bonds since you can withdraw it after a year, but I think it would be with “bonus/extra” emergency savings , I wouldn’t reduce my e fund for it. Edit: other question is how long does it take funds to transfer? My stuff goes from Ally to vanguard in one business day, which seems fine to me.
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May 4, 2021 16:08
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Annoyingly, a transfer request initiated from Schwab is taking 4 business days. I'm not really looking for another bank account, as I'm fine only earning 0.5%, but I'm curious if there's a way for me to do that at Schwab instead of Ally.
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May 4, 2021 16:11
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Residency Evil posted:Annoyingly, a transfer request initiated from Schwab is taking 4 business days. Oh, that’s weird since you would think both companies are established. Yeah, that would def annoy me.
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May 4, 2021 16:12
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Residency Evil posted:Annoyingly, a transfer request initiated from Schwab is taking 4 business days. I'm not really looking for another bank account, as I'm fine only earning 0.5%, but I'm curious if there's a way for me to do that at Schwab instead of Ally. Don't they have a cash management account? You probably have some dumb person you can call and talk to, maybe ask them?
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May 4, 2021 16:23
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EmmaDilemma posted:I clicked some clickbait and wanted to share this part. I don't see how it would change my long-term savings strategy, but found the difference pretty interesting. Do any of you change your investing strategy based on the this trend? Both halves of the year still grow, just one grows more on average. Even if it was perfectly predictive of the future (and not the result of a few single events that happened to happen in the bad half), it would still just lead to the same buy and hold forever mindset.
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May 4, 2021 16:29
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Residency Evil posted:Annoyingly, a transfer request initiated from Schwab is taking 4 business days. I'm not really looking for another bank account, as I'm fine only earning 0.5%, but I'm curious if there's a way for me to do that at Schwab instead of Ally. to my knowledge there is not. source: schwab/marcus household. however, our marcus/schwab transfers are a lot faster than that, i think. Xenoborg posted:Both halves of the year still grow, just one grows more on average. beware arbitrary end points, always
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May 4, 2021 16:30
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H110Hawk posted:Don't they have a cash management account? You probably have some dumb person you can call and talk to, maybe ask them? Schwab? Yup, we use their High Yield Checking account as our primary checking account. I can definitely call them, and I'm sure the Schwab people would be more than happy to take my cash. Ideally, what I'm trying to figure out is if there's a way for me to continue making 0.5% (or hey, maybe more!) on my emergency fund in a Schwab Brokerage account, and next time when my wife forgets to tell me about a check she wrote, money can simply get transferred from the brokerage account to the checking account.
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May 4, 2021 16:35
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Residency Evil posted:Schwab? Yup, we use their High Yield Checking account as our primary checking account. I can definitely call them, and I'm sure the Schwab people would be more than happy to take my cash. Ideally, what I'm trying to figure out is if there's a way for me to continue making 0.5% (or hey, maybe more!) on my emergency fund in a Schwab Brokerage account, and next time when my wife forgets to tell me about a check she wrote, money can simply get transferred from the brokerage account to the checking account. I don't know what size checks you're writing, but if it's anything under say $5k just keep a larger buffer in your checking account. We have a pre-check-writing threshold where my wife checks in ahead of time at around $2500. I imagine schwab has some kind of interest bearing fdic insured sweep account they can put you in for a straight brokerage account.
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May 4, 2021 16:41
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Duckman2008 posted:For now, I’ve looked at the stuff like HM Bradley, but I’m personally holding off a bit. For better or worse emergency funds are meant to basically sit there. It just wasn’t appealing for me to put like, half my emergency fund into a new savings account that may get me 1-2% more, but then if poo poo hits the fan , it would add to my worry. Can I ask what would add to your worry? I just moved most of my savings to HMB from Ally and I don't see any big red flags, but I would certainly like to know if there's something I'm overlooking. HMB is FDIC insured too, so I felt good about that.
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May 4, 2021 16:41
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HM Bradley to me seems suspiciously like an upcoming lesson in "If it sounds too good to be true, it is." I have nothing to base this on except that they're offering way better savings-account interest than any other bank and no bank ever does anything altruistically.
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May 4, 2021 16:50
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H110Hawk posted:I don't know what size checks you're writing, but if it's anything under say $5k just keep a larger buffer in your checking account. We have a pre-check-writing threshold where my wife checks in ahead of time at around $2500. Yeah, this was a somewhat abnormal amount of spending, so we went beyond the usual buffer. I should have kept better track of our combined spending, but  , lesson learned I guess.But if you look at something like SWVXX, the 0.35% ER, and 1 year return of 0.11%, you begin to wonder if there are alternatives.
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May 4, 2021 16:52
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In more "normal" times, there are alternatives. I quite liked SHV to park cash in a brokerage account that otherwise paid 0.01% APY. But that was back when the rates on short term Treasury obligations were higher. SHV does basically nothing right now. I don't think you're going to beat your 0.50% on a demand deposit.
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May 4, 2021 16:58
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Kylaer posted:HM Bradley to me seems suspiciously like an upcoming lesson in "If it sounds too good to be true, it is." I have nothing to base this on except that they're offering way better savings-account interest than any other bank and no bank ever does anything altruistically. They are offering it with some hoops. These type of things are all over the place though (better rates if you jump through the hoops). It is backed by 1 specific bank and the accounts are actually with them, at some point they will drop the rate but the money isn't going to disappear.
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May 4, 2021 16:59
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Agronox posted:In more "normal" times, there are alternatives. I quite liked SHV to park cash in a brokerage account that otherwise paid 0.01% APY. But that was back when the rates on short term Treasury obligations were higher. SHV does basically nothing right now. yeah. the next closest thing to a high-yield savings or money market fund, but where principal can actually go down, would be an ultra-short term bond fund such as JPST, ICSH, or VUSB can't say I'd recommend it given the very low return, added portfolio effort, and possibility of loss
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May 4, 2021 17:36
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pmchem posted:yeah. the next closest thing to a high-yield savings or money market fund, but where principal can actually go down, would be an ultra-short term bond fund such as JPST, ICSH, or VUSB Yeah I was looking at something like SWSBX. I guess I could structure things so that I kept some money at Schwab in a brokerage account, invested in short term bonds.
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May 4, 2021 17:41
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spwrozek posted:They are offering it with some hoops. These type of things are all over the place though (better rates if you jump through the hoops). It is backed by 1 specific bank and the accounts are actually with them, at some point they will drop the rate but the money isn't going to disappear. Agreed. So to answer the question above, I don’t think I would be worried about losing my money in HM Bradley. But it’s not worth the hassle basically. Keeping one bank account, that everything deposits to, is super simple, and I use a credit card not connected to said bank account so it mitigates any risk of having all your funds in one account (as much as one can).
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May 4, 2021 17:42
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