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Most of my invested savings so far are post-tax and not in a tax-advantaged account, since they’re lottery winnings from a startup IPO.  It’s the best thing I can do with them right now, but I do worry that I’ll get hosed on taxes by the end of it all and end up with way less than I think. I can’t prove that it’s a reasonable thing to worry about, but still!
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Jun 15, 2021 14:21
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EmmaDilemma posted:Can I contribute $7,200 to the HSA? Yes.
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Jun 15, 2021 14:40
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Pollyanna posted:Most of my invested savings so far are post-tax and not in a tax-advantaged account, since they’re lottery winnings from a startup IPO. i mean there's always a vanishingly small chance that the government seizes assets but if that happens here in the US of A a whole lot of other poo poo will be going down and the world will be pretty unrecognizable. you can't effectively or meaningfully plan for things you can't forecast. but short of that the three major paths are as follows: 1) US tax policy continues to be slanted in favor of capital and wealth. You benefit, cash in hand. 2) US tax policy ceases to favor capital and wealth. You pay a bit more in taxes, ideally the US is slightly more functional as a result. 3) US tax policy slants against capital and wealth. You pay a lot more in taxes, but if this happens it will be part of the Fabian Democratic Socialist evolution or part of the Glorious Worker's and Peasants Republic of the USA, in which case you'll almost certainly benefit from a stronger social safety net.
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Jun 15, 2021 14:47
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Pollyanna posted:Most of my invested savings so far are post-tax and not in a tax-advantaged account, since they’re lottery winnings from a startup IPO. I'm still learning so this is a sincere question. Does it make sense for you to max out all of your tax advantaged options at work and personal Roth IRA , and slowly withdraw this invested money for living expenses? Then it's more like regular income? Perhaps you already are and that's not an option. Or is it fine and you're just losing 15% of your gains as you withdraw per year, in retirement, which isn't much worse than a 401k from pretax investment? StormDrain fucked around with this message at 15:39 on Jun 15, 2021 |
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Jun 15, 2021 15:34
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StormDrain posted:I'm still learning so this is a sincere question. Yes. It's all one big chunk of money, and drawing from savings (lottery winnings) is a smart way to fund 401k/ira if you need to. Though it is likely that they have the base salary to do that already.
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Jun 15, 2021 15:39
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Has anyone here used Fidelity BrokerageLink? My 401k fund options are not great and I'm considering it.
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Jun 15, 2021 15:57
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raminasi posted:Has anyone here used Fidelity BrokerageLink? My 401k fund options are not great and I'm considering it. List your funds and expense ratios. Brokerage link comes with a per transaction fee if I recall correctly?
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Jun 15, 2021 16:08
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H110Hawk posted:List your funds and expense ratios. Brokerage link comes with a per transaction fee if I recall correctly? At least for me BrokerageLink has the same fees as a normal brokerage account, i.e. $0 for stocks and ETFs. There are some things with fees (some mutual funds by other companies, $0.65 per contract for options, yes you can do options in your 401k apparently) but its a good deal if you have lovely 401k options.
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Jun 15, 2021 16:18
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KYOON GRIFFEY JR posted:The people that 2008 bit really hard were people who had compounding factors, mainly mortgages with little equity on inflated asset prices, limited liquidity, who lost jobs and made bad decisions at the height of the crisis with their 401(k). Also a lot of the stories you hear about people losing everything weren't "I parked all my money in Vanguard index funds" but people doing weird get rich quick schemes with skeezy brokers.
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Jun 15, 2021 16:33
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Grand Fromage posted:Also a lot of the stories you hear about people losing everything weren't "I parked all my money in Vanguard index funds" but people doing weird get rich quick schemes with skeezy brokers. True. Keeping my money in the index funds allowed me to buy them low every two weeks. From 70 in 2008 to 390 today.
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Jun 15, 2021 16:44
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H110Hawk posted:List your funds and expense ratios. Brokerage link comes with a per transaction fee if I recall correctly? It's three each of large cap domestic, mid cap domestic, small cap domestic, international, and bonds. There's a cheap/passive fund in each of the categories, but I don't care to or know how to do my own small/mid/large cap weighting. I'd rather just use a total domestic. There are also some BlackRock target date funds I was using but I noticed was getting popped with quarterly recordkeeping fees and after some Googling I found that BlackRock got sued a few years back for hiding fees through fund layering, so I don't really trust them.
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Jun 15, 2021 16:48
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Thank you thread for reminding me that Vanguard should already have the physical check that Fidelity had to sent to me to then send to Vanguard to roll out of my previous employer's 401(k). What a stupid way of doing things. In any case they've credit my account and I just YOLO'd on VTSAX. (it was in FXAIX before). I am an incredibly boring investor.
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Jun 15, 2021 17:41
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raminasi posted:It's three each of large cap domestic, mid cap domestic, small cap domestic, international, and bonds. There's a cheap/passive fund in each of the categories, but I don't care to or know how to do my own small/mid/large cap weighting. I'd rather just use a total domestic. There are also some BlackRock target date funds I was using but I noticed was getting popped with quarterly recordkeeping fees and after some Googling I found that BlackRock got sued a few years back for hiding fees through fund layering, so I don't really trust them. Motronic posted:(it was in FXAIX before). I am an incredibly boring investor. No FXAIX available?
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Jun 15, 2021 18:32
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KYOON GRIFFEY JR posted:i mean there's always a vanishingly small chance that the government seizes assets but if that happens here in the US of A a whole lot of other poo poo will be going down and the world will be pretty unrecognizable. you can't effectively or meaningfully plan for things you can't forecast. I used to work with a guy that refused to participate in the 401(k) because he thought it was just a way for the government to get easy access to your money. Why yes, I do work in a red-state
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Jun 15, 2021 18:35
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H110Hawk posted:No FXAIX available? FXAIX is available, but is that considered broad enough? "Just the S&P 500" seems narrow to me - I also have FSMDX and FSSNX available and so I figured I'd want to allocate between the three, and that's what felt like work I wasn't interested in learning how to properly do. But maybe I'm overthinking this.
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Jun 15, 2021 18:56
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raminasi posted:FXAIX is available, but is that considered broad enough? "Just the S&P 500" seems narrow to me - I also have FSMDX and FSSNX available and so I figured I'd want to allocate between the three, and that's what felt like work I wasn't interested in learning how to properly do. But maybe I'm overthinking this. 100% FXAIX is what I do for broad market coverage in my 401k. I buy FSKAX in my IRA and Taxable Brokerage. Close enough for me.
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Jun 15, 2021 19:19
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Grand Fromage posted:Also a lot of the stories you hear about people losing everything weren't "I parked all my money in Vanguard index funds" but people doing weird get rich quick schemes with skeezy brokers. such intense pathos (for real) when reading about these people who invested their 401(k) in some high fee bullshit, worked a good job for decades, ended up with like $50K in it, thought they were gonna retire on it, and then when the market tanked they cashed it out at like $20K. just end-to-end tragedy.
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Jun 15, 2021 19:19
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raminasi posted:FXAIX is available, but is that considered broad enough? "Just the S&P 500" seems narrow to me - I also have FSMDX and FSSNX available and so I figured I'd want to allocate between the three, and that's what felt like work I wasn't interested in learning how to properly do. But maybe I'm overthinking this. Look up the correlation between S&P500 and total market over the past (however long) and it's going to be "damned close." Also doesn't BrokerageLink have like a $100/quarter or something fee?
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Jun 15, 2021 20:25
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I'm still figuring out how to get some bonds into my taxable investments, and I think I've settled on a mix of Series I and a bond fund (through Vanguard). I have it in my head that bonds are generally less tax-efficient than stocks, assuming you're including corporate bonds. Is that true? And is it true of bond funds as well? Basically I'm trying to understand the difference between VTEAX (tax-exempt bond fund) and VBTLX (total bond market fund) and which I should go with. I'm not great at reading performance graphs but they don't seem to have wildly different performance, though the tax-exempt is more expensive (ER .09 vs .05). Any advice?
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Jun 15, 2021 20:37
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H110Hawk posted:100% FXAIX is what I do for broad market coverage in my 401k. I buy FSKAX in my IRA and Taxable Brokerage. Close enough for me. what's the diff between FSKAX and FZROX ?
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Jun 15, 2021 20:50
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When the federal government taxes dividends from bond funds, it taxes them at the ordinary rate and not the qualified dividend/capital gain rate. Distributed and realized long-term gains from bond funds are eligible for the QDCG rate. VTEAX's dividends are exempt from federal tax. Its dividends may also be partially exempted from state income tax to the extent that they come from bonds of that state. VBTLX has significant federal bond holdings and its interest from those bonds may also may also qualify for a state tax exemption. The exemption rules vary by state; some states do not allow an exemption unless the fund is concentrated in the exempt assets. Vanguard breaks down the holdings and income by state in supplements at the end of the year. This means that a historical performance comparison between the two funds is complicated, and would require calculating the after-tax return for your jurisdiction using more historical data than Vanguard normally provides on its web site. VTEAX gets you exemptions while VBTLX gets you broader income opportunities, including corporate earnings.
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Jun 15, 2021 21:33
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MockingQuantum posted:I'm still figuring out how to get some bonds into my taxable investments, and I think I've settled on a mix of Series I and a bond fund (through Vanguard). I have it in my head that bonds are generally less tax-efficient than stocks, assuming you're including corporate bonds. Is that true? And is it true of bond funds as well? I probably didn't do the math correctly, but when I looked into this a few months ago for my own allocations, it appeared to me that the higher ER of VTEAX outweighed the tax savings, so I went with VBTLX. But yeah, it's complicated and changes over time depending on a bunch of factors.
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Jun 15, 2021 21:54
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Unless you are at the highest tax bracket, a tax-exempt bond fund generally doesn't make sense. If you are, then you should probably be looking at muni bonds funds for your state specifically.
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Jun 15, 2021 21:58
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Strong Sauce posted:what's the diff between FSKAX and FZROX ? FSKAX has ~900 more holdings than FZROX, but considering they still have 2,500 holdings in common, their performance is drat near identical. They have the same allocations to large/mid/small cap (72/20/8, last I checked). FSKAX has a miniscule expense ratio that won't be felt until you're too rich to care; FZROX has no fee.
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Jun 16, 2021 04:51
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I wouldn’t hold FZROX in a a taxable account unless you plan to be on Fidelity till the day you die because you can’t exchange it out to another brokerage without triggering a taxable event by selling it first. It’s exclusive to Fidelity brokerage accounts
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Jun 16, 2021 06:18
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I'm setting up my 401K at my new employer and while the expenses are a bit higher than my previous employer, they still have Fidelity Index Funds that I'd go with. For a sanity check here are the options I'm looking at (ignoring all the specialty funds/actively managed funds/bond funds): Fidelity 500 Index Fund FXAIX ER: 0.02% For US Large Cap coverage Fidelity Extended Market Index Fund FXMAX ER: 0.05% For US Mid-Small Cap Coverage Fidelity Total International Index Fund FTIHX ER: 0.06% For World Ex-US Developed and Emerging These would be the three to give me broad equity index coverage, right? I'm not rolling over my 401k at my former employer because there are no maintenance fees and I'm in all index funds there at lower ERs, and I'll start this 401k over in as close to the same ratio as before ( 90/10 US/Int'l, 70/15/5 Large/Med/Small). What am I looking at for something like that with these three? 70/20/10 FXAIX/FXMAX/FTIHX?
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Jun 16, 2021 14:19
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Fhqwhgads posted:What am I looking at for something like that with these three? 70/20/10 FXAIX/FXMAX/FTIHX? Pretty much. drat, what a wholesome allocation, I wish you great long-term returns!
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Jun 16, 2021 14:41
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i just noticed that my garbage 401k provider (Voya) recently added a new statement to their fund info sheets. "*Effective 03/22/2021 the Plan will assess an additional levelized fee of 0.27% to cover general administrative expenses as part of the Fund’s daily unit value calculation, for a total net expenseof0.33% annually. This additional fee is not reflected in the performance results shown in this fact sheet. Please see the quarterly Plan Fee Disclosure for performance inclusive of the additional fee." very cool! i have zero options with a <0.27% expense ratio.
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Jun 16, 2021 15:04
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So my mom has an fairly comfortable investment account for retirement, managed by an investment company. Recently I realized that they change $1,600 per year to prepare the 1099 that they send her. They're not preparing her taxes or anything, that's just to prepare the 1099. Is that... a gigantic rip off? I know they probably have to figure out the cost basis and so forth for any investments that were sold, as well as compute dividends and whatnot, but a lot of that seems like it should be almost automatic since the numbers are in their system? Like when I had investments at a brokerage firm I got a 1099 and was charge a $15 balance for maintaining the account, which was then refunded due to keeping funds above a certain balance. There was no "preparer" fee listed on the 1099.
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Jun 16, 2021 15:22
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a.p. dent posted:i just noticed that my garbage 401k provider (Voya) recently added a new statement to their fund info sheets. This is pretty normal, from what I understand. Most providers just don't even tell you about the fee, so it's nice that yours does.
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Jun 16, 2021 15:26
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Ccs posted:So my mom has an fairly comfortable investment account for retirement, managed by an investment company. Recently I realized that they change $1,600 per year to prepare the 1099 that they send her. They're not preparing her taxes or anything, that's just to prepare the 1099. Is that... a gigantic rip off? I know they probably have to figure out the cost basis and so forth for any investments that were sold, as well as compute dividends and whatnot, but a lot of that seems like it should be almost automatic since the numbers are in their system? That seems like a gigantic rip-off, technically without seeing the rest of the fee schedule we can't know to what magnitude. (We all know this is on top of 1%+ funds and 1% aum fees.)
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Jun 16, 2021 15:34
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Baxate posted:I wouldn’t hold FZROX in a a taxable account unless you plan to be on Fidelity till the day you die because you can’t exchange it out to another brokerage without triggering a taxable event by selling it first. It’s exclusive to Fidelity brokerage accounts you mean a normal individual account and not like a traditional ira right?
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Jun 16, 2021 15:48
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EmmaDilemma posted:This is pretty normal, from what I understand. Most providers just don't even tell you about the fee, so it's nice that yours does. hmm, alright, thanks. annoying but i guess it’s fine
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Jun 16, 2021 17:10
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a.p. dent posted:hmm, alright, thanks. annoying but i guess it’s fine It's cheap by your employer, but you're still well within the bounds of a great 401k assuming you have a passive index fund to invest in, 0.27% is nothing to lose sleep over.
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Jun 16, 2021 17:12
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Two questions: 1. My meager 401K (just started 2.5 years ago, contributing 10% of my $50K salary) is through Principal.com. Are they pretty solid? Have it set with their Target Date 2050 Fund and just rolling with it for now. 2. My broker account is through Schwab, is there any reason not to pick SCHB over VTI if I wanted to throw some money into a broad or total market ETF? SCHB has the benefit of being able to buy fractional shares but I see VTI mentioned a lot everywhere.
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Jun 16, 2021 19:03
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Fake James posted:Two questions: If you mean the Principal LifeTime 2050 Institutional fund (PPLIX), it has a 0.680% expense ratio. In comparison, the Vanguard Target Retirement 2050 fund (VFIFX) has an expense ratio of 0.150%. That's significantly better than principal. If you're actually in the Principal Lifetime 2050 A fund (PPEAX), then you're looking at 1.050% which is awful and you're being robbed.
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Jun 16, 2021 19:21
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Solumin posted:If you mean the Principal LifeTime 2050 Institutional fund (PPLIX), it has a 0.680% expense ratio. I just looked it up and its the Principal LifeTime Hybrid 2050 CIT, with a 0.29% expense ratio. Not amazing compared to the Vanguard fund, but definitely better than the Lifetime 2050 Institutional and 2050 A. Thank you for the info on the funds!
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Jun 16, 2021 19:32
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You’re being robbed at 1% but there are bigger robbers out there. 2-and-20 arrangements on index funds are more “highway robbery” than “fee structure” and a bunch of boomers ran with that for decades, blissfully unaware until their retirement shows they maybe outpaced inflation.
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Jun 16, 2021 20:06
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Fake James posted:Two questions: My 401k is also managed by Principal, as in I go to https://www.principal.com to log in, but they offer more than just Principal funds. Can you post your fund options here? I suspect you'll be able to recreate the principal target date fund with either Vanguard or Fidelity options are extremely low fees.
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Jun 16, 2021 20:14
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GoGoGadgetChris posted:My 401k is also managed by Principal, as in I go to https://www.principal.com to log in, but they offer more than just Principal funds. Can you post your fund options here? I suspect you'll be able to recreate the principal target date fund with either Vanguard or Fidelity options are extremely low fees. Looks like outside of prebuilt automatic funds (just the hybrid target dates), I have the following allocation options (ER in parenthesis): DFA Inflation Protected Securities I Fund (0.11) BrandywineGLOBAL Global Opportunities Bond IS Fund (0.59) Core Fixed Income Separate Account (0.27) TIAA-CREF High Yield Institutional Fund (0.36) Vanguard Intermediate-Term Bond Index Admiral Fund (0.07) Principal LifeTime Hybrid Income CIT (0.29) Principal LifeTime Hybrid 2010 CIT (0.29) Principal LifeTime Hybrid 2015 CIT (0.29) Principal LifeTime Hybrid 2020 CIT (0.29) Principal LifeTime Hybrid 2025 CIT (0.29) Principal LifeTime Hybrid 2030 CIT (0.29) Principal LifeTime Hybrid 2035 CIT (0.29) Principal LifeTime Hybrid 2040 CIT (0.29) Principal LifeTime Hybrid 2045 CIT (0.29) Principal LifeTime Hybrid 2050 CIT (0.29) Principal LifeTime Hybrid 2055 CIT (0.29) Principal LifeTime Hybrid 2060 CIT (0.29) Principal LifeTime Hybrid 2065 CIT (0.29) Vanguard Equity-Income Adm Fund (0.19) Vanguard 500 Index Admiral Fund (0.04) Wilmington Large Cap Growth R1 Fund (0.29) Fidelity Small Cap Index Fund (0.03) Janus Henderson Small Cap Value N Fund (0.86) Principal Global Investors MidCap S&P 400 Index Separate Account (0.05) Vanguard Explorer Admiral Fund (0.30) Vanguard Mid-Cap Growth Index Admiral Fund (0.07) Vanguard Mid-Cap Value Index Admiral Fund (0.07) Vanguard Real Estate Index Admiral Fund (0.12) American Funds New World R6 Fund (0.59) Principal Diversified International Separate Account (0.43) Vanguard Developed Markets Index Admiral Fund (0.07) Vanguard International Growth Admiral Fund (0.33) Dimensional Fund Advisors DFA Commodity Strategy I Fund (0.32) Fake James fucked around with this message at 21:22 on Jun 16, 2021 |
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Jun 16, 2021 21:03
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