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man, thinking about a 1.35% expense ratio on a us government securities fund of all things makes my stomach hurt
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Aug 16, 2021 22:17
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Flowers for QAnon posted:This is exactly what I’m doing, she does have actual fiduciary/conservator. Just double checking nothing fishy is going on & nothing exceedingly stupid. Besides the high expense ratios, nothing is drastically out of wack, is it? Besides taking an extra ~$4000 a year.... If they are doing that probably a lot of other bad stuff going on.
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Aug 16, 2021 22:49
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Are you sure they're fiduciary? Because those funds do not seem to be in her best interest.
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Aug 17, 2021 00:22
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If I work a partial year in private industry and contribute to a 401k, then go work for the federal government and contribute to a TSP, are they both under the same $19,500 contribution limit or are they separate limit? I think it's all under the one limit, if I'm reading this correctly, but would really rather not gently caress this up.
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Aug 17, 2021 00:55
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As a non-American, the OP was very useful but a lot of stuff doesn't exist where I am. I'm hopefully starting a job on September 1st, with a salary of $92,000. I'm working in a Middle Eastern country, so zero tax. There's a pension scheme here, I'm not sure how much gets deducted each month for the pension fund, and I don't know what my employer contribution is until I sign the work contract (in the next week or so). I was planning on investing $1600 each month, but I've got no idea how or where or what. I tried finding hedge funds or investment firms - or whatever the correct term is - in this country, but I haven't had much luck. I also don't much like the thought of being swindled on commission. Is there a way I can invest in stocks myself without any middlemen? I was planning on just dumping most of my money into the S&P500, cause that seems a great way to increase my investment since I'm basically betting against the economy, and there'd have to be some sort of apocalyptic event for it to drop to 0. What else can I do? I just want to make it so my 50s and 60s or whenever I retire has me sitting on a golden nest egg. I'm 28 right now and feel like I have an awful lot of catching up to do, since my life before now has been effectively useless and I wasted a lot of opportunities. Any advice or tips would be greatly appreciated. I feel like I should diversify my investments instead of whacking it all into one index fund but I've got no clue when it comes to this stuff. Edit: I also read somewhere that investing in the US stock market means I am required to pay taxes on said stocks when I withdraw it. Is this true? I'm not a US citizen. Qubee fucked around with this message at 14:44 on Aug 17, 2021 |
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Aug 17, 2021 14:29
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You're young and making a staggering amount of money so don't worry about catching up. If you stick to investing that much every month you'll be fine. No one can give you any specific answers without knowing what country you're from, but basically you want to look for a brokerage from your country that you can buy index funds through, and doesn't care that you're living abroad. It's just a lot easier to invest where you're a citizen. E: And if index funds don't exist where you are, you should be able to buy ETFs. More or less the same thing.
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Aug 17, 2021 17:49
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i'm in my mid-late 30s and i have tons of cash and didn't start parking my IRA funds until 2 years ago. it is good you're starting when you are. there's always a feeling of not wanting to start because you feel you're way too behind and that just completely sets you back even more. having said that. i've been really lax about putting in more money and i should probably do that more.. i already maxed all my stuff so right now i'm just looking into non tax-advantaged stuff.
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Aug 17, 2021 18:12
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Grand Fromage posted:You're young and making a staggering amount of money so don't worry about catching up. If you stick to investing that much every month you'll be fine. I'm extremely grateful, especially since I've been next to broke and penny pinching these past two years. Is there some kind of online resource I can go to to educate myself on these sorts of things, or other general 'how to be smart with your money' material that isn't purely catered towards the American market? Whilst I'm living with family and don't have many expenses, I want to pour it into stuff that I'll be thankful for later. I'm planning on setting aside 10% of my monthly income on a car, the lowest I can manage on accommodation is about 20% because real estate prices are hosed here. Then other stuff isn't an issue cause my work / life balance is work, come home and spend all my time vegging out in front of Netflix or on the PC, I'm a total homebody. Strong Sauce posted:i'm in my mid-late 30s and i have tons of cash and didn't start parking my IRA funds until 2 years ago. it is good you're starting when you are. there's always a feeling of not wanting to start because you feel you're way too behind and that just completely sets you back even more. Yeah, I'm glad I've had it rough til now, because it's really made me realise it's stupid not being smart with your finances. When I think of compound interest and how I invested / saved nothing from my early 20's, I kick myself over how stupid I was. I feel like I'm way behind in career aspects too, I pissed about during uni instead of finishing my studies on time, so I saw all my friends move on with their lives and work their way up the career ladder. Meanwhile, I finally graduate after 6 years (when it should have taken 4) and spend another 2 years wasting time in the UK for silly reasons instead of getting started on my career. Qubee fucked around with this message at 18:49 on Aug 17, 2021 |
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Aug 17, 2021 18:43
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Are you still effectively in the UK as far as access to financial markets and taxes? If so, you might want to take a look here: https://www.bogleheads.org/wiki/Investing_from_the_UK The site is mostly geared towards US folks, but that article is geared towards UK investors.
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Aug 18, 2021 03:42
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Qubee posted:I'm extremely grateful... This is good and please keep doing it. Qubee posted:I kick myself over how stupid I was... I feel like I'm way behind in career aspects too... I saw all my friends move on with their lives and work their way up the career ladder. This thinking won't help you, but it's an easy trap to find yourself in (and most media encourages it). It's okay if you haven't optimized your life for monetary success, and it will be okay when you choose fulfillment over more money in the future. You are still starting earlier than most people and you're saving a lot! Totally continue with your plan to invest as much money as you are comfortable allocating, and also remember that money isn't serving you unless it is helping you live a better life.
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Aug 18, 2021 09:36
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My wife and I (early/mid 30s) are finally no longer living hand-to-mouth, and in a position to start saving for retirement for the first time. We're US citizens, but permanent residents in Switzerland. We plan on opening private tax-deductible retirement accounts asap. They're called Pillar 3a accounts, and you can contribute up to 6'883 CHF per person per year, so about 14k/year total. I'm leaning towards either of 2 relatively new app-based asset managers, finpension or VIAC, which let you chose between a variety of different strategies. We'll each only have about 30-years before we hit retirement age, which is obligatory. It's been recommended to me to have more exposure to equity the younger you are, and vice-versa. So right now I'm considering either a "Global 100" or "Global 80" portfolio, and then shifting to lower risk options in a couple decades. Traditional Pillar 3a accounts are managed by banks, and offer very modest interest rates, the main benefit being the tax-deductible status. You're also able to pledge a portion of a Pillar 3a fund towards the down payment of a mortgage, but we're not sure if being property owners makes sense, since we're starting fairly late with little principal, and properties in our area start at 1.2 million with a 20% down payment. Any advice about the kind of timeline for shifting away from equity exposure as you approach retirement age? And if we're able to save more thank 14k a year, should that should go in a non-retirement portfolio?
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Aug 19, 2021 13:33
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Yes, global 80-100 would be the way to go at your age. Those fees are not cheap 0.45%, so you should shop around to see if you can find something a little better. They're not high enough to make it not worth doing it if they're the only option, however. As for timeline, you can consult a Vanguard 2050 target date fund (https://investor.vanguard.com/mutual-funds/profile/VFIFX) to see what their equity allocation is every few years and adjust yours to match. As their equity weight will be continuous and not a multiple of 20, you'll have to either accept up to 10% tracking error or (if possible) mix some combination of different weights to achieve the same effective weight. Excess money should go in a taxable account where you can buy the ETFs that make up the underlying assets of the retirement funds.
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Aug 19, 2021 13:59
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webcams for christ posted:We're US citizens, but permanent residents in Switzerland. We plan on opening private tax-deductible retirement accounts asap. Hello from Lausanne* The answer to this depends a lot on when you want to retire. Note that in Switzerland you do not have capital gains tax. So money you invest now and is already taxed is a good bet to put in a regular investment account. However I don't know how the US might tax you on the gains. What is your Pillar 2 looking like? The pillar 2 interest is fairly lovely but the annuity conversion rate is pretty good. Especially if you plan to retire before 58 I think it makes sense to max out any employer match into your Pillar 2, then invest the anything else into a regular post-tax investment account. While you can spend pillar 2 on things like a house deposit, you have to pay it back, and can't really draw on it until 58. In a post tax account you're obviously free to do what you want with it, retire early if you can or want, and if it's been in the market for 20+ years the lack of CGT makes a big difference. I have an interactive brokers account I set up recently, the native Swiss ones are subject to extra charges so it pays to have one based abroad. * actually London right this minute but that's where I live
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Aug 19, 2021 18:47
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knox_harrington posted:Hello from Lausanne* Salüü! This is great to consider, and I'll have to dig my Pillar 2 paperwork up this afternoon to get the details. Our plan is definitely to retire at 65/64. We lucked out into fairly chill union jobs where what is lacking in salary is more than made up for in job security, work-life-balance, and vacation days. So we're not in a rush to get out. Good to know I shouldn't limit myself to Swiss brokers accounts either. drainpipe posted:As for timeline, you can consult a Vanguard 2050 target date fund (https://investor.vanguard.com/mutual-funds/profile/VFIFX) to see what their equity allocation is every few years and adjust yours to match. As their equity weight will be continuous and not a multiple of 20, you'll have to either accept up to 10% tracking error or (if possible) mix some combination of different weights to achieve the same effective weight. This is a great reference point, thank you webcams for christ fucked around with this message at 15:54 on Aug 10, 2023 |
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Aug 20, 2021 08:45
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What happens when you hit the maximum on yearly 401k contributions? A coworker thought there’s penalties for over contributing but I’m pretty sure I’d either forget to stop contributing or have to have it stop a couple paychecks early to make sure it happens in time.
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Aug 20, 2021 11:32
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My company automatically stops deposits once you hit the limit. I contribute a lot and max out in October every year. I only discovered this when I was trying to figure out why my paychecks at the end of the year were so much larger.
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Aug 20, 2021 11:38
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deedee megadoodoo posted:My company automatically stops deposits once you hit the limit. I contribute a lot and max out in October every year. I only discovered this when I was trying to figure out why my paychecks at the end of the year were so much larger. Ok cool, I hope my jobs are as good about it. I work freelance and the payroll people aren’t always on their game.
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Aug 20, 2021 11:40
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Snowy posted:Ok cool, I hope my jobs are as good about it. I work freelance and the payroll people aren’t always on their game. It's worth staying on top of at your end; many companies don't true up their contribution.
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Aug 20, 2021 12:14
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Snowy posted:Ok cool, I hope my jobs are as good about it. I work freelance and the payroll people aren’t always on their game. Couple things here, first is that companies will not talk to each other on this. I changed jobs and it’s on me this year to ensure Job 1 Contributions + Job 2 Contributions <= $19.5k or I’m paying penalties. Next year Job 2 will stop me before over contributing but that’s because they know all my contributions. Secondly, are you a 1099 contractor or W-2 employee? I don’t often see 401(k) plans open to contractors so the freelance part is a bit of an orange flag to me.
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Aug 20, 2021 12:38
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Snowy posted:What happens when you hit the maximum on yearly 401k contributions? A coworker thought there’s penalties for over contributing but I’m pretty sure I’d either forget to stop contributing or have to have it stop a couple paychecks early to make sure it happens in time. If you do overcontribute, either because you switched jobs or somebody who should have checked dropped the ball, you will pay additional penalties until you get the excess money back, so you should do it asap. You'll have to contact the plan manager of the most recent plan you contributed to (i.e. the one the overcontribution was made to) and find out their steps for requesting a return of the money. They'll have a process, but it will probably be convoluted and slow (e.g. "fax a signed letter with this specific format and information to our compliance department and wait six weeks"), so jump on it as soon as you know so it doesn't mess up your taxes for the next year.
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Aug 20, 2021 15:06
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Started a new job, so I figured it's a good time to think about my various retirement accounts. Old 401k #1: Vanguard target date retirement 2045 Old 401k #2: Fidelity AF TRGT DATE 2045 R6 New 401k: Some plan from Guideline I'm over the income limit for a Roth IRA, so my option there is to do a backdoor conversion. From what I understand, I can't do that if I have funds in a traditional IRA. Are my options: a) Leave everything separate, open a traditional IRA with Vanguard to do the Roth conversion b) Move the two old 401ks to Guideline, open a traditional IRA with Vanguard to do the Roth conversion My preference would be to move the Fidelity 401k to the Vanguard 401k, but since they're both old I don't think I can do that, right?
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Aug 20, 2021 16:29
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Omne posted:Started a new job, so I figured it's a good time to think about my various retirement accounts. You will not be able to move money into the old 401K (at least I have never seen that). Guideline has basically the same target date funds you are used to at a 0.15ER. If it costs you nothing to keep your old 401ks where they are I probably would leave them alone. That allows you to backdoor.
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Aug 20, 2021 16:51
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Omne posted:Started a new job, so I figured it's a good time to think about my various retirement accounts. List fees and expense ratios for all three options, but either leave alone or move everything to the newest plan.
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Aug 20, 2021 17:11
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Fidelity AF TRGT DATE 2045 R6 looks like it has an ER of .39% (if that's the same fund) which is probably beatable by Guideline. If you have a lot of money in that one rolling into the new 401k might be a good idea.
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Aug 20, 2021 17:12
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raminasi posted:Fidelity AF TRGT DATE 2045 R6 looks like it has an ER of .39% (if that's the same fund) which is probably beatable by Guideline. If you have a lot of money in that one rolling into the new 401k might be a good idea. It is indeed that one, and the balance is ~$95k. I'll move that one to Guideline, keep the Vanguard one as is, and then start the backdoor accounts. Thanks all, that's what I thought but wanted confirmation
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Aug 20, 2021 18:45
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Looking for some advice on how to optimize my retirement savings. My wife and I have very similar incomes and so all of this is going to be duplicated, essentially. My employer contributes 10% of my base pay into a 403(b). The investment company has a decent selection of funds - I have it allocated 40/30/30 in the Vanguard US stocks index fund, international index fund, and a medium-term bond fund. There is no contribution matching available. We are over the income limit for contributing to Roth-IRAs - we have some from when we were younger and they are held in our brokerage account and invested in a similar split of Vanguard index funds. Other than that I have the rest in a taxable savings account that I again split into a lazy portfolio of Vanguard funds. Now I'm recently learning that I could instead be contributing to a tax-deferred annuity plan, up to $19,500 for each of my wife and I. As far as I can tell this very, very similar in structure to my 403(b) except that it's voluntarily coming from my paycheck instead of from my employer. Does that sound correct? Is this where I should be putting my money? Is there any reason to instead have it in this taxable account?
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Aug 24, 2021 02:49
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Turds in magma posted:Looking for some advice on how to optimize my retirement savings. My wife and I have very similar incomes and so all of this is going to be duplicated, essentially. So is your 403(b) actually in an annuity or is it just referred to as an annuity because it's a 403(b) plan (which used to only be available in the form of an annuity plan)? I'm also trying to get my head around what tax-deferred option you're talking about, but from what I've read, most of the traditional annuity plans tend to have high fees (and really complex fee structures) that are supposedly justified because you're getting a pension-like annual distribution. Liquidity in the case of an emergency where you need to draw more money than usual can get tricky and it can also be really complex for surviving spouses or heirs to get their hands on the funds without the annuity provider taking a big cut. Then again, the option you're talking about may not be what I think of when someone mentions "annuity."
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Aug 24, 2021 05:47
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Eric Cantonese posted:So is your 403(b) actually in an annuity or is it just referred to as an annuity because it's a 403(b) plan (which used to only be available in the form of an annuity plan)? I'm glad it isn't just me - I found this very confusing. I'll try to contact someone to figure this out - believe it or not the 104 page document they provide didn't help... As far as I can tell this just has the name "annuity" because, as you say, it's a 403(b). It looks like otherwise investments and withdrawals are handled the same as the employer-sponsored account. Another confusing question: I can apparently open a traditional IRA through my bank (Schwab) but the contribution limit is $6,000? And because we jointly make over 60,000, none of it is tax deductible?
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Aug 24, 2021 13:23
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Correct, an IRA is separate from any other retirement funds, and each individual can contribute $6,000 annually (more if you're old). You are also correct that if you make too much money you are not able to deduct this contribution from your taxes, but you are able to contribute to a Roth IRA. If your MAGI as a couple is less than $198,000 for 2021, you can contribute to Roth IRAs directly. If it is over that number, you can contribute to traditional IRAs and then convert them to Roth (by pressing a couple buttons). IRAs are Individual Retirement Accounts so you and your spouse will each have a separate one.
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Aug 24, 2021 13:46
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Beyond "track it all in excel, idiot," does anyone have some good guides or tools for tips/pitfalls of moving money out of taxable accounts into cash? The use case would be pulling some money out of regular taxable investment accounts over time for the purpose of a house purchase without doing it all in one year and slamming head first into a higher tax bracket. There's the tricky part of time outside of the market vs tax brackets, but when I am looking at my next house purchase (probably 7-10 years from now), having the funds guaranteed in cash or extremely low risk bonds is preferable to running the risk of a market crash right when I was about to need cash to buy a house. I have no intent to play with SEP 72(t) or the like as of now. Unless plans change a lot, I would expect household income to grow for the next 6-8 years and then drop rapidly, as the plan is early retirement with the option to keep working or work reduced hours if it makes things more comfortable. I expect that my federal taxes should drop from a top marginal 22-24% down to as low as maybe 12%, but also to go from a state with zero income tax to one with very high income taxes.
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Aug 24, 2021 15:51
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Turds in magma posted:I'm glad it isn't just me - I found this very confusing. I'll try to contact someone to figure this out - believe it or not the 104 page document they provide didn't help... Assuming it's not actually an annuity, your 403(b) sounds identical to my wife's. She was even in the same position as you until recently, where she had the 10% contribution from her employer accumulating for years without contributing anything herself (although in her case it was accidental). But yes, contributing to it yourself is generally a good idea before putting that money in a taxable account. It will show up in a separate account within the same 403(b), with the same investments and everything. The general advice of this thread would be to max out your contribution (and your wife's - $19,500 each) before dealing with a taxable account at all. Also, because you make over the limit to deduct a contribution to a traditional IRA, and you also make over the limit to contribute directly to a Roth IRA, you and your wife would likely benefit from doing yearly backdoor Roth conversions to make use of that $6,000 each of tax-advantaged space. This all adds up to $51,000 of contributions you could be making to tax-advantaged retirement accounts every year. It would certainly make sense to use it all before touching a taxable account, as long as you don't need that money before retirement. runawayturtles fucked around with this message at 16:37 on Aug 24, 2021 |
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Aug 24, 2021 16:34
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Anyone have any articles or rules of thumb they can share with me? I’m curious at what $ amount invested should one consider switching from a Target Date fund to a 3 or 4 fund portfolio to something more complex than that?
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Aug 24, 2021 17:14
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dexter6 posted:Anyone have any articles or rules of thumb they can share with me? There's nothing wrong with a target date fund well into the millions of dollars, if that is the allocation you are going for. If you don't want to think about it, a target date fund is entirely reasonable for the long haul especially in retirement accounts. If you feel personally inclined to spend more time managing/thinking about it, you can shave off a fraction of a percent in expenses with a 3-fund portfolio. Whether it's worth it is a personal choice of how involved you want to be.
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Aug 24, 2021 17:22
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I’ll throw out my opinion here: that’s a silly question to ask. Here’s a similarly silly question: anyone have an article handy that tells what age should someone buy a house? There’s a lot more to these decisions than your chosen criteria! Ok, that said — IF YOUR PERSONAL APPETITE INCLUDES MANUAL REBALANCING — when your total invested amount would cover the minimum fund requirements for your smallest allocation (probably bonds). Vanguard Total Bond Market requires $3000 minimum. Bonds are probably 10% of your portfolio. So you’d need at least $30k before breaking out into a three-fund portfolio. Why would you do this? Marginally lower expense ratios. You’d save, like, dozens of dollars per year that would compound to thousands over a 30-year timeframe. Do you need to do this? No. It’s the difference between 2,000,000 and 2,015,000.
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Aug 24, 2021 17:23
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Fair enough, thanks. I use a 4 fund portfolio so that I can have a bit of the tax-advantaged stuff (international in my taxable, bonds in my tax-deferred, etc.) but sounds like I shouldn’t ever really worry about getting more complicated than that.
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Aug 24, 2021 17:54
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DNK posted:I’ll throw out my opinion here: that’s a silly question to ask. Valid point. For a while I solved this by buying about $500 in the ETF version of the bond fund. I since rebalanced and just eliminated because in my Roth funds since I realized my risk tolerance level is fine with 0 bonds (I have 5% in my larger work 401k).
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Aug 24, 2021 17:58
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dexter6 posted:Fair enough, thanks. IMO if you try to make 3/4-fund portfolios too complicated then there is a good chance that you accidentally eat up any tiny gains from saving on the fees by forgetting to do something or making a minor mistake somewhere along the line.
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Aug 24, 2021 17:59
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dexter6 posted:Anyone have any articles or rules of thumb they can share with me? If you are wondering about the reduced expense ratio using admiral shares instead of the standard shares in a Target Date fund, I had run the numbers for myself a few years ago: https://forums.somethingawful.com/showthread.php?noseen=1&threadid=2892928&pagenumber=553&perpage=40#post486745861 https://forums.somethingawful.com/showthread.php?noseen=1&threadid=2892928&pagenumber=693&perpage=40#post499784876 I decided to just stick with the Target Date fund.
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Aug 25, 2021 00:18
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My options didn't tank (yet) and our lock-up is ending soon. I'm looking at enough for a very large taxable account. Before I go there I'm thinking to next year. Want to make sure I don't miss anything. In the order of priority -Pay tax man -Shore up emergency fund -Add to ESPP max pool savings (I'm supplementing with savings while I max our generous ESPP) -Pay off student loans -Backdoor Roth 2021 & 2022 -Savings for the cross country move next summer -Savings for a certification in UX management -Max 401k -Roth 401k max? -then Taxable account
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Aug 25, 2021 00:55
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| # ? May 28, 2024 23:37 |
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cheese eats mouse posted:-Max 401k These two share a limit. So you can max your 401k, or Roth 401k, or a mix of the two.
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Aug 25, 2021 02:44
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