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nwin posted:Setting up my stay-at-home wife with an IRA. If her current tax rate is zero why would you prefer to pay taxes later instead of now?
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Sep 17, 2021 18:08
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That's only if they are filing separately.
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Sep 17, 2021 18:14
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nwin posted:Setting up my stay-at-home wife with an IRA. An IRA requires earned income, but I think a working spouse can contribute to a non-working spouses IRA (I'm not married and not a tax person, make sure you understand this before you do anything). Traditional vs Roth is mostly a matter of your current income and taxes. I have a Roth since my work based retirement account is a non-Roth, so tax savings would be minimal by adding another "traditional" retirement account. If you are very high income / high tax, your decision might be different.
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Sep 17, 2021 18:15
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drk posted:If you are very high income / high tax, your decision might be different. As respects IRAs, you don't really get much of a decision. Traditional is not an option at all if you are high income, and the vast majority of earners that qualify for Traditional IRA deduction will want to go Roth anyway.
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Sep 17, 2021 18:36
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drk posted:The easiest way is to put it all into LifeStrategy Moderate Growth Fund, which is a 60/40 fund, and is also split between domestic and international. If you want more, less, or no international exposure, you'll have to do the math yourself to determine how to split your funds. However, if you buy individual funds, you will need to rebalance them yourself (easy enough to do with a spreadsheet, but its more than zero work). OK - last question - it was a bit tricky but I moved all 6k to: LifeStrategy Moderate Growth - New fund $6,000.0 is it OK to just set it and forget it for now - nothing else I need to be doing to it?
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Sep 17, 2021 18:52
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Got a friend who has just retired and I wanted to send him some resources on budgeting and investing for retirees. As all of my reading on this subject has been for someone who is still working and saving, I haven't read much in the way of how a recent retiree should manage their assets. Any have any good links I could share with him?
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Sep 17, 2021 19:03
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everdave posted:OK - last question - it was a bit tricky but I moved all 6k to: LifeStrategy Moderate Growth - New fund $6,000.0 You're good! The greatest thing about those all-in-one funds is that they are self rebalancing. Asset allocations are ideally meant to be set and forget, or only slowly adjusted over time. A 60/40 split is a fairly classic balance between growth (from the stocks) and stability (from the bonds). If 5 or 10 years from now you decide you would like a little more, or a little less risk, you can shift into something with a different allocation.
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Sep 18, 2021 00:10
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Awesome thanks!
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Sep 18, 2021 00:13
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Banana Canada posted:Got a friend who has just retired and I wanted to send him some resources on budgeting and investing for retirees. As all of my reading on this subject has been for someone who is still working and saving, I haven't read much in the way of how a recent retiree should manage their assets. That's really going to depend on how old he is, how much money he has and how much money he needs to withdraw from investments each year. A very basic rule of thumb is that one should be able to spend 4% of their assets per year for a 30 year retirement with little risk of running out of money. Asset allocation is its own question. Ideally retirees wont be in a very risky portfolio, but again - the numbers matter (if you have substantial assets, its easier to justify taking risk in retirement than if you dont).
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Sep 18, 2021 00:23
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Note that the 4% rule (popularized by Bill Bengen) is to take 4% just the first year, and then that same amount adjusted for inflation every year thereafter. Probably a good idea to go lower than that if you're gonna be retired longer than 30 years though. And/or to go with the approach to add guardrails, so that yearly amount can't go over a certain % of your portfolio if the market tanks.
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Sep 18, 2021 04:20
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nwin posted:Setting up my stay-at-home wife with an IRA. I read this at first as you were setting up your IRA to be your wife, and I was just like, I donno if you need to be that obsessed with long term retirement.
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Sep 18, 2021 05:11
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I know about the 3-4% rule and could advise him on asset allocation to an extent but only if I pried into the details of his finances which I'd rather not do if I can instead send him some online resources he can read that would cover a variety of financial situations. That's what I'm hoping someone here could point me to if anyone has seen anything good. I'm fairly certain that he's in a comfortable position financially given his long-time position and years of service. I think his only major ongoing expense is his medical insurance. And while I'm on this topic, any opinions about retirees who have no intention of spending down their assets and are instead focused on growing a legacy? My thoughts have long been that if drawable assets vs expected annual drawdown is much greater than 34:1 (i.e. you are well below annually drawing even 3% of your assets) then I see no reason to switch away from near 100% equities assuming one does not panic sell during market crashes. If a bear market period hits, then there's still enough to draw upon without the danger of running out of funds in retirement. If markets continue to tread upwards, then one has engaged all their assets towards capturing that growth.
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Sep 18, 2021 18:13
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Duckman2008 posted:I read this at first as you were setting up your IRA to be your wife, and I was just like, I donno if you need to be that obsessed with long term retirement. Apparently you aren’t committed enough to your plan!
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Sep 18, 2021 18:53
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Banana Canada posted:I know about the 3-4% rule and could advise him on asset allocation to an extent but only if I pried into the details of his finances which I'd rather not do if I can instead send him some online resources he can read that would cover a variety of financial situations. That's what I'm hoping someone here could point me to if anyone has seen anything good. I wonder if this episode would be a good starting point. It’s a discussion of the 4% rule and gives an entry point to some other good episodes which in turn would lead to books and the like. https://rationalreminder.ca/podcast/164 The boglehead wiki might be a better dry entry point. https://www.bogleheads.org/wiki/Withdrawal_methods
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Sep 18, 2021 19:51
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Banana Canada posted:Got a friend who has just retired and I wanted to send him some resources on budgeting and investing for retirees. As all of my reading on this subject has been for someone who is still working and saving, I haven't read much in the way of how a recent retiree should manage their assets. The most comprehensive info on withdrawal strategies I'm aware of is here - https://earlyretirementnow.com/safe-withdrawal-rate-series/ - though if this person hates math this could be counterproductive.
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Sep 18, 2021 22:41
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Duckman2008 posted:I read this at first as you were setting up your IRA to be your wife, and I was just like, I donno if you need to be that obsessed with long term retirement. You just can't be too emotionally affected if you wake up one year and she decides to take half your assets. That's why it's good to have a bonds mistress on the side. Edit: speelingk SpelledBackwards fucked around with this message at 19:19 on Sep 19, 2021 |
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Sep 18, 2021 23:06
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SpelledBackwards posted:You just can't be too emotionally affected if you wanted up one year and she decides to take half your assets. That's why it's good to have a bonds mistress on the side 
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Sep 19, 2021 13:08
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So my mother has asked my help with her retirement savings since my father passed away at the beginning of this year and he handled pretty much everything. It appears he handled it poorly though because they had pretty much everything in cash for the last 15 years and she knew that was bad so she opened up a Merrill Lynch account and transferred all her retirement funds there. They charge her a 1% fee and provide flashy powerpoint decks with graphs about how certain they are she won't die before she runs out of money, but as far as I can tell that's about all the value they have. I'm a retirement fund novice myself who has been throwing money into his 401K and my IRA on Vanguard with index retirement funds, but I'm trying to make sure my mom doesn't get screwed. She's already retired and has no income besides Social Security. A low-risk portfolio is what she wants and needs. She'll need normal withdrawals and probably will need to take a little extra out in the near future to pay for a small house project. With that said, I've been getting some information from her the last few days and doing some initial research on the holdings seems to read to me that they are not performing as well as Vanguard retirement index funds that are coming up and they cost more in expenses like Management Fee's and Administrative Fees. Can I get someone who knows this stuff better than me to verify that that is the case and I should be trying to get her to  with ML and transfer all her stuff to Vanguard and throw it all into index funds? The holdings with the highest shares, in order: IIAXX (This is basically cash because my mom is still leery of investing everything) TGLMX PBDPX PFBPX BHYIX Also, since she's already retired, what index funds would those be? For myself I selected the target retirement fund for when I'll retire, but I don't know which funds I would buy for someone already retired.
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Sep 19, 2021 18:01
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Get her to Vanguard. There exists a 2020 retirement fund.
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Sep 19, 2021 19:30
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My biggest regret is not placing my money into the market when I was younger. Growing up poor and not being financially secure, I always had the mindset that I needed cash on hand incase of an emergency. I always felt that I was on the brink of losing my income or becoming homeless. It wasn't until years into my job that I realized that the job is pretty secure and I amassed a small nest egg. I didn't start placing money into the market until I was in my early 30s. I shudder at the thought of how I missed so many years compounding and growing it into something for my kids.
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Sep 19, 2021 19:41
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obi_ant posted:My biggest regret is not placing my money into the market when I was younger. Growing up poor and not being financially secure, I always had the mindset that I needed cash on hand incase of an emergency. I always felt that I was on the brink of losing my income or becoming homeless. It wasn't until years into my job that I realized that the job is pretty secure and I amassed a small nest egg. I didn't start placing money into the market until I was in my early 30s. I shudder at the thought of how I missed so many years compounding and growing it into something for my kids. Same. I had some pretty well paid computer toucher internships in college and wasted money on stuff like a Roomba for my dorm room. I didn't start investing until well after college/grad school. 
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Sep 19, 2021 19:48
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SpartanIvy posted:So my mother has asked my help with her retirement savings since my father passed away at the beginning of this year and he handled pretty much everything... she opened up a Merrill Lynch account and transferred all her retirement funds there. Let's look at your mom's situation is in ML's hands by comparing similar funds between ML's and Vanguard's. I'll compare in the order of the ML funds you listed: IIAXX (This is basically cash because my mom is still leery of investing everything) - N/A, no comment TGLMX - TCW Total Return Bond Fund Class I - 0.55%/0.49% Gross/Net Expense Ratio PBDPX - Investment Grade Credit Bond I-2 - 0.62% Expense Ratio PFBPX - PIMCO Intl Bond Fund (US Dollar-Hedged) I-2 - 0.60% Expense Ratio BHYIX - BlackRock High Yield Bond Portfolio - 0.58% Expense Ratio Now compare these to: BND - Vanguard Total Bond Market Index Fund - 0.04% Expense Ratio On all the timescales Fidelity offers (1-month, 3-month, 6-month, 1-year, 2-year, 5-year, 10-year), the only fund that doesn't show strong correlation to the others, and significantly outperforms beyond the difference in expense ratio, is BHYIX. However, if you start before the 2008 crash, BHYIX actually trails everyone else hard and never returns to previous highs.  You know who whups everyone's rear end? BND, and for less than a tenth of the annual fee of anything ML used. Don't forget ML's 1% fee on top of that! OGDanDogg posted:Get her to Vanguard. There exists a 2020 retirement fund. OGDanDogg is steering you better than ML ever did. Vanguard Target Retirement 2020 Fund Investor Shares, or VTWNX, has a 0.13% Expense Ratio. Its composition is roughly: 38% Domestic bonds 14% Foreign bonds 28% Domestic stocks 19% Foreign stocks Or, 47% stocks, 53% bonds, which is generally a fine allocation for retirement. I'm not so versed in using bonds for passive income, so someone else might want to comment on that, but yeah, VTWNX seems like a great alternative to what your mom's currently got. Escape those higher fees ASAP. 
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Sep 19, 2021 20:53
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This is probably the wrong thread to bring up this topic, but I'm posting in the hopes that someone can point me towards the right thread(s). I have put a significant amount of money into number, and although number is real, and good, and my friend who surely will never betray me, I'm also thinking to do a little "investing" in accordance with Sam Vimes' Boots Theory. Basically I want to buy durable goods for daily use that are of sufficient quality that I should never need or want to replace them. As an example, I've got a couple of All-Clad stainless skillets and, other than the fact that their handle design is bullshit, they're great pans and unless I grossly abuse them they ought to last me forever. I'm looking for more similar things for other housewares, or anything else that you can think of - basically anything that lets me pay once, even for a high price, so that I don't have to think about paying that price again.
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Sep 19, 2021 21:03
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Space Fish posted:Let's look at your mom's situation is in ML's hands by comparing similar funds between ML's and Vanguard's. I'll compare in the order of the ML funds you listed:
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Sep 19, 2021 21:12
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Kylaer posted:This is probably the wrong thread to bring up this topic, but I'm posting in the hopes that someone can point me towards the right thread(s). I have put a significant amount of money into number, and although number is real, and good, and my friend who surely will never betray me, I'm also thinking to do a little "investing" in accordance with Sam Vimes' Boots Theory. Basically I want to buy durable goods for daily use that are of sufficient quality that I should never need or want to replace them. As an example, I've got a couple of All-Clad stainless skillets and, other than the fact that their handle design is bullshit, they're great pans and unless I grossly abuse them they ought to last me forever. I'm looking for more similar things for other housewares, or anything else that you can think of - basically anything that lets me pay once, even for a high price, so that I don't have to think about paying that price again. I don't think there is really a thread for that. The most appropriate might be just in the general BFC chat thread. There is a Buy it for Life subreddit that is what you're looking for: https://www.reddit.com/r/BuyItForLife/ edit: There is this PYF thread https://forums.somethingawful.com/showthread.php?threadid=3684302 drainpipe fucked around with this message at 21:38 on Sep 19, 2021 |
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Sep 19, 2021 21:15
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Note that it is customary to hand over 0.3% of your assets to the thread when you receive help.
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Sep 19, 2021 21:38
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PM me for 0.2% advice
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Sep 19, 2021 22:19
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SpartanIvy posted:Thank you. These insights are what I was thinking and I appreciate you giving me some important areas to look at closer to build my case for Vanguard funds. You could also consider VTINX (Vanguard's Target Retirement Income fund), if capital preservation is a big concern. Its about 30% stocks and 70% fixed income (including a portion that is "inflation-protected"). Expense ratios really are a big thing, and it should be simple to calculate how much is being lost to fees for different types of investments. At $1M, 1% is $10k per year, every year (money which additionally does not have the opportunity to compound its returns each year).
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Sep 19, 2021 22:51
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My favorite part of this thread is when it helps the parents not eat cat food.
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Sep 19, 2021 23:03
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drk posted:You could also consider VTINX (Vanguard's Target Retirement Income fund), if capital preservation is a big concern. Its about 30% stocks and 70% fixed income (including a portion that is "inflation-protected"). cheese eats mouse posted:My favorite part of this thread is when it helps the parents not eat cat food. withak posted:Note that it is customary to hand over 0.3% of your assets to the thread when you receive help. I'm wiring the money to Jeffrey as we speak
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Sep 20, 2021 00:26
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Residency Evil posted:Same. I had some pretty well paid computer toucher internships in college and wasted money on stuff like a Roomba for my dorm room. I didn't start investing until well after college/grad school. My roomba sends me a tweet whenever it starts a cleaning job, money well spent imo
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Sep 20, 2021 01:17
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I'm just now learning about backdoor roth iras, my understanding is that if you're over the income limit for a roth ira then you can just contribute to a traditional ira instead and immediately roll over the contributions to the roth ira. Is that really all there is to it? Why does this exist?
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Sep 20, 2021 05:53
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QuarkJets posted:I'm just now learning about backdoor roth iras, my understanding is that if you're over the income limit for a roth ira then you can just contribute to a traditional ira instead and immediately roll over the contributions to the roth ira. Is that really all there is to it? Why does this exist? It's called a conversion instead of a rollover, but yeah. It wasn't originally intended to be a thing, but once it was found out... politicians like rich people. That said, some loopholes could be closing next year if the recent proposals become law.SpartanIvy posted:This looks like what she is looking for. According to Vanguards website all the target funds should have the same allocation as this fund within 7 years, so it's perfect for someone already retired. That's a quick and simple solution, and it may very well work for your mom, but I think some would disagree with such a bond-heavy portfolio even for someone who's already retired (especially since bonds aren't in the best place right now). But really, a lot of it depends on how long her investments are expected to last given how much she needs to draw down yearly to live comfortably, and how that compares to how long she needs/wants them to last.
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Sep 20, 2021 08:01
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QuarkJets posted:I'm just now learning about backdoor roth iras, my understanding is that if you're over the income limit for a roth ira then you can just contribute to a traditional ira instead and immediately roll over the contributions to the roth ira. Is that really all there is to it? Why does this exist?
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Sep 21, 2021 01:42
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Gazpacho posted:That can be fixed, though, if you're able to zero the IRA's balance by transferring it carefully to other tax-advantaged accounts. Ooh, I wish to subscribe to this newsletter. How would you do that?
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Sep 21, 2021 03:59
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At a high level, traditional IRAs may contain amounts on which tax has been paid (a current non-deductible contribution or a prior basis) and amounts on which tax is deferred (a current deductible contribution and anything else). The amounts already taxed can be converted to a Roth IRA, and the rest can be transferred to a 401(k) or other qualified plan. When done correctly by Dec. 31, this results in "1" on Form 8606 Line 10 and no tax on the conversion. You might not want to do this if the qualified plan has unfavorable fees or investment options, and you should consult a CPA for further details.
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Sep 21, 2021 05:04
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So now that I'm starting to pay attention can someone tell me if I'm doing this wrong. My irá currently holds Pff 30% Qqqm 30% Nobl 30% The ten percent is scattered between Alaska airlines stock USA Qtum Clou For no reason other than I wanted to remember those funds and usually had left over money from investing in the other three. Am I missing a type of fund? Or am I risking too much with those three? I also wanted some exposure to China, but I don't know if that's something I add in the irá or in a seperate non taxable account.
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Sep 21, 2021 12:20
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There’s good reason to be leery of preferred shares. This video gets into why https://youtu.be/rRlkvFVTqvM
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Sep 21, 2021 12:33
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doingitwrong posted:There’s good reason to be leery of preferred shares. This video gets into why https://youtu.be/rRlkvFVTqvM Oh wow I didn't realize that. Does that apply to an etf as well?
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Sep 21, 2021 13:45
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Basic dummy question here, I’ve been meaning to put some money in an s&p index fund so when it dropped yesterday I finally took a look at my vanguard 401k and IRA to see if I could move some money into VOO or VFINX but neither account had them as an option. What’s the best way to buy into VOO?
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Sep 21, 2021 14:20
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