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cheese eats mouse posted:How long does a Traditional IRA to 401k rollover take? The money was taken Sept 8 and it feels like it's been ages.
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Sep 29, 2021 02:31
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Vanguard lowering their target date fund ER to 0.08% next year  https://pressroom.vanguard.com/news...RFs-092821.htmlThat's low enough that, if you are comfortable with their asset allocation and glide path, it probably no longer makes sense to slice and dice. I'm not so comfortable with their glidepath, so I'm hoping that they do the same with their LifeStrategy funds.
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Sep 29, 2021 13:00
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Ulf posted:Less time than that. Was it a check sent in the mail? Was it to you or to the other party? It was Vanguard to Lincoln. I haven't had anything sent to me since I was away on vacation and didn't want the check to sit in the mail.
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Sep 29, 2021 14:21
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drainpipe posted:I'm not so comfortable with their glidepath, so I'm hoping that they do the same with their LifeStrategy funds. Why is that?
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Sep 29, 2021 14:27
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Pollyanna posted:My new job offers an HSA via a gHIP plan. Is it worth passing over the predictability of a PPO in favor of socking money away in an HSA? And in the non-financial sense, what's the downside of a gHIP compared to a PPO? gHIP is a Google-specific thing, so you probably want to try to find people within the company to give you better guidance. That being said, based on the FAQ, it looks like it's an EPO plus a ~~health care concierge~~ (which sounds like the Googliest loving thing imaginable). EPOs' defining characteristic is absolutely no out of network coverage, which - especially given the gHIP's small network - I'd personally consider a dealbreaker, but the extra ~5K in tax-free retirement savings a year might be worth it to you. As with all health insurance choices, you'll want to consider each plan's deductible and out-of-pocket maximum as well as your expected personal health care needs. raminasi fucked around with this message at 15:02 on Sep 29, 2021 |
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Sep 29, 2021 14:58
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Unsinkabear posted:Why is that? Vanguard's glide path has you eventually reach a 40% equity allocation in mid-late retirement. That is far too conservative in my estimation. I'm aiming for something more like 70%.
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Sep 29, 2021 15:18
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*speculation on upcoming US tax law changes regarding backdoor and Megabackdoor roth* If this stuff happens as they would like, if I’m currently maxing both, and they go away…. Would I just be left with maxing 401K pre tax and then brokerage? Should I consider the Roth 401k option I have at work?
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Sep 29, 2021 17:44
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dexter6 posted:*speculation on upcoming US tax law changes regarding backdoor and Megabackdoor roth* You only have 19.5k of 401k space. Whether you choose to pay taxes on it now/put it in post-tax (Roth) or pre-tax/down the road (non-Roth) is up to you.
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Sep 29, 2021 17:47
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If the Roth IRA backdoor is closed, that will not prevent you from contributing to a traditional IRA, so long as you or your spouse have enough earned income.
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Sep 29, 2021 18:42
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Is there any real difference between pre-tax and Roth 401k besides the taxes? When my company started offering Roth 401k, I kept the contributions up to my company match as pre-tax and the rest as Roth. So now I have both, but mostly pre-tax funds.
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Sep 29, 2021 18:44
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dexter6 posted:*speculation on upcoming US tax law changes regarding backdoor and Megabackdoor roth* Don't forget HSA, it's not much space but very worth maxing out.
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Sep 29, 2021 18:51
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HSA is good because you can reimburse yourself at any time, so if you can pay medical expenses out of pocket but keep the receipts then you can take out that much tax free money if you need it in the future. Or at 65 you can treat it like any other IRA and spend it on whatever you want after paying the taxes.
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Sep 29, 2021 18:55
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Sorry I forgot to mention, I’m above the income limit for traditional IRA and I’m maxing HSA.
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Sep 29, 2021 19:04
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dexter6 posted:Sorry I forgot to mention, I’m above the income limit for traditional IRA and I’m maxing HSA. You can still contribute to the trad IRA, you just can't deduct it from your taxes. Better than nothing even if the backdoor Roth option goes away.
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Sep 29, 2021 19:09
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On the topic of HSAs, are they also a good option if you do expect significant health expenses? My wife and I decided to go with her Kaiser HMO plan for this year, but I'm curious if we should consider going back to an HSA for next year, even though we have a baby coming. Presumably delivery/etc will max out a HDHP, and we might save money on health expenses versus an HMO?
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Sep 29, 2021 19:11
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It'd entirely depend on the math of the different deductible/coinsurance/OOP max numbers between plans, but it would be conceivable that an HDHP could come out ahead even with significant expenses.
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Sep 29, 2021 19:16
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Guinness posted:It'd entirely depend on the math of the different deductible/coinsurance/OOP max numbers between plans, but it would be conceivable that an HDHP could come out ahead even with significant expenses. Yeah, it's confusing because I honestly have no idea how much a routine hospital delivery/etc would 1. cost 2. be reimbursed 3. be OOP Not to mention if there are any complications, NICU stays, etc. Why do hospitals make this so hard?  I guess this is one part of life that's going to be hard to min/max right now.
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Sep 29, 2021 19:19
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withak posted:You can still contribute to the trad IRA, you just can't deduct it from your taxes. Better than nothing even if the backdoor Roth option goes away. I have a question about this, actually. If you contribute post-tax money to a tIRA, you pay nothing while it accumulates and then income taxes on the gains once you retire. If you instead put it in a taxable brokerage account, you're going to pay the various taxes that apply while it accumulates (e.g. on dividends), and then LTCG when you retire on it. Is the latter number necessarily (or at least commonly) greater than the former? Do I have some other part of this wrong?
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Sep 29, 2021 19:37
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Residency Evil posted:On the topic of HSAs, are they also a good option if you do expect significant health expenses? My wife and I decided to go with her Kaiser HMO plan for this year, but I'm curious if we should consider going back to an HSA for next year, even though we have a baby coming. Presumably delivery/etc will max out a HDHP, and we might save money on health expenses versus an HMO? Depends on the plan and how its setup, and what the coverage premiums are, plan deductibles are and co-insurance, etc. I'm having a hard time thinking of a scenario where a HDHP is going to come out ahead over an HMO for a childbirth without complications. My wife is on a HDHP with a 3K deductible. She pays every penny to 3K and then it kicks in and covers 100%. My last job was a HDHP where after the deductible it kicked in 80/20 until the max out of pocket was hit. Don't forget when running your numbers that the second the child is born, that's another deductible to hit. My first kid (Mar 2010) was about 1300 dollars out of pocket. This was with excellent PPO insurance. 90/10 coverage with 500 dollar deductibles. Standard caesarean delivery without complications. My second kid (Dec 2011) was about 1900 dollars out of pocket. Same insurance, but he spent 2 days in NICU for observation as he took some fluid in during delivery. 500 dollar deductible (x2) and then the rest was about 9,000 dollars, which my insurance covered 90% of. The NICU ain't cheap. Having a kid these days would cost probably triple that right now. I was able to load up my FSA at the time, so that allowed me to cover both of those bills with tax advantaged money, not that I made much back then. So yeah, you have to weigh the health insurance premiums, then estimate how much you'll pay OOP, then figure out the tax implications of everything, and yep, it sucks. It's just money though, it's cliche but all you really care about his having a healthy kid and mom at the end.
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Sep 29, 2021 19:45
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drainpipe posted:Vanguard's glide path has you eventually reach a 40% equity allocation in mid-late retirement. That is far too conservative in my estimation. I'm aiming for something more like 70%. I guess it depends on how much you have, but isn't 70% pretty risky for being more than halfway through your retirement? End of life ain't cheap, and I would definitely not want 70% of what I have to eat a market drop when I may not live long enough to see the recovery.
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Sep 29, 2021 20:35
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raminasi posted:I have a question about this, actually. If you contribute post-tax money to a tIRA, you pay nothing while it accumulates and then income taxes on the gains once you retire. If you instead put it in a taxable brokerage account, you're going to pay the various taxes that apply while it accumulates (e.g. on dividends), and then LTCG when you retire on it. Is the latter number necessarily (or at least commonly) greater than the former? Do I have some other part of this wrong? The value at retirement should be greater in the former case, assuming that the investments have generally positive performance, because it retains capital that is taxed away in the latter case. The difference upon retirement would be not just the total amount of tax paid, but the amount it would be worth if it had remained invested. Gazpacho fucked around with this message at 21:13 on Sep 29, 2021 |
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Sep 29, 2021 21:10
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skipdogg posted:Depends on the plan and how its setup, and what the coverage premiums are, plan deductibles are and co-insurance, etc. I'm having a hard time thinking of a scenario where a HDHP is going to come out ahead over an HMO for a childbirth without complications. Thanks, this is helpful. Sounds like I'll probably stick with the HMO for now, at least until we're done having kids.
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Sep 29, 2021 21:19
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Residency Evil posted:Thanks, this is helpful. Sounds like I'll probably stick with the HMO for now, at least until we're done having kids. I've never been a part of an HMO system, but I understand they can be pretty limiting when it comes to provider access and making sure the paperwork and approvals are in line, or else they don't pay. I'm guessing it's the same system your wife works in so it might not be that bad, but just to throw another wrench in things, you'll want to make sure your providers of choice are available. If not, you may find it worth it to go with the PPO so you can see the doctors you want.
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Sep 29, 2021 21:28
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Unsinkabear posted:I guess it depends on how much you have, but isn't 70% pretty risky for being more than halfway through your retirement? End of life ain't cheap, and I would definitely not want 70% of what I have to eat a market drop when I may not live long enough to see the recovery. Having too low equity allocation is not without its own risks as you then run into the danger of out-living your capital. It's a trade-off between the two risks. How I viewed it is that the gold standard portfolio has been 60% equity, which has worked well for the past few decades. Given today's low bond yields, I think it's necessary to tilt more towards equities. edit: I'm also planning to save way more than necessary so the 30% bond should be more than enough to ride out rough markets. drainpipe fucked around with this message at 21:40 on Sep 29, 2021 |
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Sep 29, 2021 21:33
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Unsinkabear posted:I guess it depends on how much you have, but isn't 70% pretty risky for being more than halfway through your retirement? End of life ain't cheap, and I would definitely not want 70% of what I have to eat a market drop when I may not live long enough to see the recovery. There are a lot of factors here, portfolio size and risk profile are definitely important, and two other big ones are yearly drawdown percentage and end of life plans (some people would consider dying broke a complete success, while others want to maintain a sizeable portfolio for inheritance or charity). But as far as I've read, there are lots of people who never plan to go higher than 40% or 50% bonds.
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Sep 29, 2021 21:39
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skipdogg posted:I've never been a part of an HMO system, but I understand they can be pretty limiting when it comes to provider access and making sure the paperwork and approvals are in line, or else they don't pay. I'm guessing it's the same system your wife works in so it might not be that bad, but just to throw another wrench in things, you'll want to make sure your providers of choice are available. If not, you may find it worth it to go with the PPO so you can see the doctors you want. Yup, that can be true. We have the benefit of being able to better navigate that system in the event that we need to, and thankfully, we don't have very complicated health needs (*knock on wood*) at the moment. Hopefully they can handle basic things for now.
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Sep 29, 2021 21:39
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Gazpacho posted:This has two aspects: the value at retirement, and the tax rate. IRA distributions are taxed at the ordinary income rate, regardless of how the IRA derives them. So you'd have to compare the ordinary rate and the capital gain rate on whatever amount of income you project for retirement. This is unknowable, since it's in the future. Isn't the LTCG rate less than the ordinary income rate at every income level, though? Obviously this might change in the future, but I don't recall ever reading post-tax contributions to a tIRA as being a bet on a change to that particular tax policy. Do I have the wrong idea about these relative tax rates? quote:The value at retirement should be greater in the former case, assuming that the investments have generally positive performance, because it retains capital that is taxed away in the latter case. The difference upon retirement would be not just the total amount of tax paid, but the amount it would be worth if it had remained invested. And this I get, but is it safe to say that this difference will probably dominate the difference from tax treatment? (That's a genuine question, I'm not being rhetorical.) That's always how I've interpreted the advice to contribute post-tax to a tIRA, anyway.
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Sep 29, 2021 21:41
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Yeah I also really don't understand why it would be worthwhile to contribute post-tax to a traditional IRA if the backdoor is gone (which, to be clear, is only being proposed for single/married filers earning over 400k/450k). Even beyond the higher tax rates, you have to deal with age restrictions, required minimum distributions, more recordkeeping to track your basis so you don't get double taxed, no step-up in basis if it gets inherited... with the current tax code why deal with all that?
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Sep 29, 2021 22:04
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drainpipe posted:Having too low equity allocation is not without its own risks as you then run into the danger of out-living your capital. It's a trade-off between the two risks. How I viewed it is that the gold standard portfolio has been 60% equity, which has worked well for the past few decades. Given today's low bond yields, I think it's necessary to tilt more towards equities. runawayturtles posted:There are a lot of factors here, portfolio size and risk profile are definitely important, and two other big ones are yearly drawdown percentage and end of life plans (some people would consider dying broke a complete success, while others want to maintain a sizeable portfolio for inheritance or charity). But as far as I've read, there are lots of people who never plan to go higher than 40% or 50% bonds. Interesting. My portfolio size is small and I'd prefer to not play the "try to die broke" game, so idk where that leaves me. I wonder if I also should look at shifting out of the retirement date fund I'm in now and into a LifeStrategy fund that's a little less conservative
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Sep 29, 2021 22:04
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runawayturtles posted:Yeah I also really don't understand why it would be worthwhile to contribute post-tax to a traditional IRA if the backdoor is gone (which, to be clear, is only being proposed for single/married filers earning over 400k/450k). Even beyond the higher tax rates, you have to deal with age restrictions, required minimum distributions, more recordkeeping to track your basis so you don't get double taxed, no step-up in basis if it gets inherited... with the current tax code why deal with all that? Yup, no reason to contribute to a traditional IRA if the tax break on the front-end is gone.
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Sep 29, 2021 22:11
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Unsinkabear posted:Interesting. My portfolio size is small and I'd prefer to not play the "try to die broke" game, so idk where that leaves me. I wonder if I also should look at shifting out of the retirement date fund I'm in now and into a LifeStrategy fund that's a little less conservative Well, for retirement accounts it's fine as long as you like your current target retirement fund's allocations. If you don't like where it's headed many years down the line, you can change to something else whenever you want. I currently have target retirement funds but don't plan to hold them forever because eventually they'll be too conservative. But they're fine for now. For taxable it's more important to plan out farther in advance, since you can't as easily move things around without triggering a bunch of taxes. But obviously there's a limit to how far you can look into the future... I personally have no idea what allocation I'm gonna aim for half-way through retirement.
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Sep 29, 2021 22:25
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runawayturtles posted:Yeah I also really don't understand why it would be worthwhile to contribute post-tax to a traditional IRA if the backdoor is gone (which, to be clear, is only being proposed for single/married filers earning over 400k/450k). Even beyond the higher tax rates, you have to deal with age restrictions, required minimum distributions, more recordkeeping to track your basis so you don't get double taxed, no step-up in basis if it gets inherited... with the current tax code why deal with all that? The proposal, as I interpret it, eliminates all after-tax contributions to all types of retirement plan, at all income levels. This would kill off the backdoor Roth IRA as well, since that technically involves an after-tax contribution. It also makes this whole discussion of after-tax vs taxable moot because after-tax would no longer be possible anyway. To answer the original question anyway, LTCG rates are universally lower than income taxes rates, so in the "short" term, taxable is better. That difference in tax rates is levied once (at the end when you sell/distribute). The nuance here that hasn't been mentioned is that taxable accounts also must pay taxes yearly on dividends. That tax drag builds up over time, as a result, an after-tax IRA will eventually overtake a taxable account on a long enough timeline. Under current dividend yields that timeline is probably longer than your lifespan, which is why this strategy is not commonly recommended.
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Sep 29, 2021 22:55
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SNiPER_Magnum posted:Is there any real difference between pre-tax and Roth 401k besides the taxes? When my company started offering Roth 401k, I kept the contributions up to my company match as pre-tax and the rest as Roth. So now I have both, but mostly pre-tax funds. the one big difference that comes to mind is that roth 401k contributions (but not gains) can be withdrawn penalty free at any time without paying taxes or penalties since you've already paid taxes on it. any withdrawals are prorated between contributions and gains, so almost any withdrawal will have some portion hit with taxes and penalties, but the impact will normally less than a similar amount being withdrawn from a pre-tax 401k it's not something to do unless you absolutely have to, but i suppose the extra flexibility could be an upside for people worried about being retirement rich and life poor when a life changing emergency hits
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Sep 30, 2021 01:17
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Pollyanna posted:My new job offers an HSA via a gHIP plan. Is it worth passing over the predictability of a PPO in favor of socking money away in an HSA? And in the non-financial sense, what's the downside of a gHIP compared to a PPO? raminasi posted:gHIP is a Google-specific thing, so you probably want to try to find people within the company to give you better guidance. That being said, based on the FAQ, it looks like it's an EPO plus a ~~health care concierge~~ (which sounds like the Googliest loving thing imaginable). EPOs' defining characteristic is absolutely no out of network coverage, which - especially given the gHIP's small network - I'd personally consider a dealbreaker, but the extra ~5K in tax-free retirement savings a year might be worth it to you. As with all health insurance choices, you'll want to consider each plan's deductible and out-of-pocket maximum as well as your expected personal health care needs. FWIW this link is describing the "gHIP select" plan (which may not even be available to you unless you're in the bay area). the regular gHIP plan is just a regular high-deductible PPO with an HSA, and iirc the math works out in your favor over the regular PPO in basically every circumstance. even if your health care costs are high, the seed money covers like 2/3 of the deductible, so paying 100% out of pocket up to that limit works out to roughly the same amount as the whatever% coinsurance on the PPO plan.
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Sep 30, 2021 02:40
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Eyes Only posted:The proposal, as I interpret it, eliminates all after-tax contributions to all types of retirement plan, at all income levels. What about regular Roth IRAs for people legitimately below the current limit? Wouldn't that kill all Roths entirely?
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Sep 30, 2021 03:17
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So... am I the only one getting jitters with the upcoming debt ceiling battle in Congress?' Any other year I would like to think things will pass and life will move on... But... I feel like this will end up being a 50-50 vote at best. (Possibly maybe a few people say no which could result in a disaster.) What can I do to maximize my stability for the next 30-60 days for my Vanguard IRA and Brokerage and my 401k? Bonds bonds bonds? If nothing happens, I'm more than happy to bounce back into the market again?
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Sep 30, 2021 03:31
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SA-Anon posted:So... am I the only one getting jitters with the upcoming debt ceiling battle in Congress?'
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Sep 30, 2021 03:33
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GhostofJohnMuir posted:the one big difference that comes to mind is that roth 401k contributions (but not gains) can be withdrawn penalty free at any time without paying taxes or penalties since you've already paid taxes on it. any withdrawals are prorated between contributions and gains, so almost any withdrawal will have some portion hit with taxes and penalties, but the impact will normally less than a similar amount being withdrawn from a pre-tax 401k Thanks. That makes sense. It's probably pretty useless then since I already have a Roth IRA.
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Sep 30, 2021 03:38
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I don't really like a target % fixed income for retirement spending (its fine for volatility damping during growth). IMO we should really be talking about X years of spending. Someone retiring with 10 million in assets who spends 200k a year doesn't need to keep 50%, aka 5 million, aka 25 years of spending, in fixed. Somewhere in the 5-15 x yearly spending seems like it would be a better target.
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Sep 30, 2021 03:44
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dexter6 posted:Have you thought about timing the market? It might work Ok, I get your sarcasm. But here's why my strategy is guaranteed to pay off!
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Sep 30, 2021 03:53
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