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Mu Zeta posted:I have zero bonds. I also don't rebalance ever and only buy more. I plan to start adding bonds when I'm 50. The case for phasing one's emergency fund into I bonds is too compelling for me to skip, especially as significant increases to US inflation are taking place with more looming on the horizon. It's also locked away insurance for my dumbass decisions. On the topic of rebalancing, I recently read this from a 2007 Q&A on Jack Bogle's blog: Jack Bogle posted:
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Dec 5, 2021 17:04
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pretty short horizon though
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Dec 5, 2021 23:27
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skipdogg posted:My company is enabling a self directed brokerage option in our Fidelity 401K's next year. I definitely understand people wanting the choice to choose their own investments, but I think it's a terrible idea. I can't wait for stories about people blowing up 20 to 30 years of savings in the market because they think they're smarter than everyone else and can beat the market. It can vary based on rules set by the employer. I have access to BrokerageLink and for whatever reason my employer doesn't allow me to buy ETFs or stocks. I can only buy mutual funds, but it does open it up beyond what the 401k offers. I really only use it to get Fidelity Zero mutual funds and a low cost Fidelity Small Cap Value fund. But I guess you could just buy some really terrible funds if you wanted.
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Dec 7, 2021 04:58
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My new job has a stock plan in which I can purchase up to a certain % of salary in stock and which they will match up to 3.9% on the first 6%. There’s no discount, but this is a no brainer, right?
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Dec 7, 2021 18:40
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Is there a lookback or are you buying at today's market price with up to a (3.9% * 6%) match in shares? Are you required to hold it for any period of time? If not, you get (.039 * .06 * salary) in free money I think. If you make $100k that is the large sum of $234.
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Dec 7, 2021 19:31
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I'm reading it as if he puts in 6% towards the stock plan, the company will kick in 3.9% for a total of 9.9% of salary in stock. I don't know if I'd deal with the hassle or not. I guess it's a free 3 grand a year in your pocket at 100K a year salary I've never understood these ESPP plans. A former company just stopped offering it because no one ever held their shares, and it was just another way for highly compensated employees that could afford it to make a little more money from the company. We had a decent one too. 15% discount on the lower price of the start or end of the period. Max of 25K though.
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Dec 7, 2021 19:52
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The language around percent matching of percents is frustrating. 401k accounts, I'm looking at you 
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Dec 7, 2021 19:57
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Happiness Commando posted:The language around percent matching of percents is frustrating. 401k accounts, I'm looking at you A former employer had a match of "100% of the first 3% and 50% of the next 3%" (if you kicked in 6%, they'd kick in 4.5%). Very frustrating indeed.
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Dec 7, 2021 20:04
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Been putting off rolling over my 401ks from previous jobs (two, at voya and empower) until i was sure i'd be at my current position for a long time and i think i'm finally ready to start the process (on fidelity now). any tips on the process? i figure it shouldn't be too bad since they're all fairly major companies and they should have the process hammered out but i've still got anxiety about it lmao. don't want a 30k penalty or some poo poo to pop up on my taxes
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Dec 7, 2021 20:14
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Spokes posted:Been putting off rolling over my 401ks from previous jobs (two, at voya and empower) until i was sure i'd be at my current position for a long time and i think i'm finally ready to start the process (on fidelity now). any tips on the process? i figure it shouldn't be too bad since they're all fairly major companies and they should have the process hammered out but i've still got anxiety about it lmao. don't want a 30k penalty or some poo poo to pop up on my taxes Fidelity's website walks you through the process. I had zero issues when I did my rollover back in Feb. I went from Vanguard to Fidelity, so Vanguard had to mail a check which was a little nerve wracking, but Fidelity lets you mobile deposit it so I was only out of the market like 14 days or so.
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Dec 7, 2021 20:31
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skipdogg posted:I'm reading it as if he puts in 6% towards the stock plan, the company will kick in 3.9% for a total of 9.9% of salary in stock. I don't know if I'd deal with the hassle or not. I guess it's a free 3 grand a year in your pocket at 100K a year salary This is how I read it too. It’d be a little over $5k free (plus my 6% contribution) and the stock is considered a dividend aristocrat, so even though it may ebb and flow, it has a good >3% annual dividend return. I would assume I’d sell it as soon as I could though, so dividends may not matter. I didn’t see anything about a look back period which I had at a previous employer, nor did I see anything about a lockout period. I’ll have to look more into it!
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Dec 7, 2021 20:53
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Cacafuego posted:My new job has a stock plan in which I can purchase up to a certain % of salary in stock and which they will match up to 3.9% on the first 6%. There’s no discount, but this is a no brainer, right? It is usually a no-brainer. The amount of the match (plus anything else from any kind of lookback period) is free money. You will be betting that the stock price won't tank by more than that amount between the time the purchase is made and the time you can sell it (which should be ASAP). Tricky part is how the free money gets reported on your taxes, it may show up both on your W-2 and on the 1099-B from whoever handles the stock purchase. If that is the case then you need to adjust it in your tax paperwork so it doesn't get double-counted.
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Dec 7, 2021 21:02
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Cacafuego posted:and the stock is considered a dividend aristocrat, so even though it may ebb and flow, it has a good >3% annual dividend return. These things don't mean anything. I see you mentioned selling immediately, which is good, but don't get the impression that "astrologers call company X an (any name)" should have any bearing on your strategy.
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Dec 8, 2021 06:00
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CubicalSucrose posted:These things don't mean anything. I see you mentioned selling immediately, which is good, but don't get the impression that "astrologers call company X an (any name)" should have any bearing on your strategy. Fair, but it allows me to (attempt to) assess the potential risk of having the stock drop over that period of time. Because if I can’t sell them back immediately and have to hold for a length of time, at least there’s a >3% dividend that has a 25+ year history of 1) being paid and 2) increasing. Looking back, it’s on an increasing trend since 2009. Basically, I would like to get >$5k in free stock (in addition to my contribution) per year that I can sell as soon as I get the match. If I can look back >10 years and see an increasing trend and a >25 year history of paying an increasing dividend, it makes me feel safer about holding it through whatever lockout period I have to, if there is one.
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Dec 8, 2021 13:03
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Cacafuego posted:Looking back, it’s on an increasing trend since 2009. You don't say....
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Dec 8, 2021 18:50
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I don't know anything about it really but "dividend aristocrat" may be the most dire and cringeworthy financial term I've ever heard
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Dec 8, 2021 19:59
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MockingQuantum posted:I don't know anything about it really but "dividend aristocrat" may be the most dire and cringeworthy financial term I've ever heard it's an old term and very commonly used. prior to a 1982 SEC rule change ( https://www.investopedia.com/terms/r/rule10b18.asp ), buybacks were rather uncommon. thus, companies largely returned profits to shareholders via dividends. it's why you see old school investing books discuss dividends so heavily. a strong, stable company that was a good investment often paid, and even increased, its dividend annually for decades without missing a beat. eventually people formalized this as an investment style, running funds or publishing indexes based on dividend "aristocrats" or "kings". here is a current-day example: S&P 500 DIVIDEND ARISTOCRATS ETF https://www.proshares.com/funds/nobl.html as a strategy, dividend aristocrat investing has dwindled in popularity as more and more companies do buybacks instead of dividends because of the advantages that offers to extremely wealthy, very large shareholders. but some retired people still adopt something like this to generate regular income.
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Dec 8, 2021 20:20
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Hello fellow BFC goons, I'm looking for some input on utilizing a backdoor Roth IRA conversion. I have a couple old IRA accounts on Vanguard, one pre-tax traditional and one Roth, both with about $10k in them. I also have a Current Company 401(k) with Schwab and an Old Company 401(k) with Fidelity (yes, it is annoying to have accounts across so many providers, but whatever). I understand that in order to do the backdoor roth conversion without paying taxes I need to have my traditional IRA accounts completely empty of pre-tax dollars as of year-end. The problem is that my current 401(k) plan does not permit rollovers from IRA accounts and my old 401(k) plan certainly doesn't permit rollovers into the account since I am no longer with Old Company. I also don't want to pay the pro-rata taxes on a backdoor Roth conversion since I have a substantial sum in the trad account already and I would strongly prefer not to pay taxes on the full amount. Am I stuck? I contributed to the stupid trad IRA just once ~5 years ago and now it's apparently a huge blocker for my backdoor Roth options.
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Dec 9, 2021 00:11
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Sounds like you might be boned. But taxable brokerage accounts aren't that bad, especially when you have income high enough to force the backdoor option.
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Dec 9, 2021 04:07
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Vox Nihili posted:Hello fellow BFC goons, I'm looking for some input on utilizing a backdoor Roth IRA conversion. you could just pay the ~$2500 in taxes. you are going to pay it eventually. Might not be an option in 2022 with the BBBB.
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Dec 9, 2021 04:12
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You've got $10k in a trad ira and enough income to need to backdoor. Just convert it now and pay the tax. With upcoming tax law changes, this may be your last chance to get funds in the Roth at all. E:f,b
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Dec 9, 2021 04:15
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Does the BBBB stuff affect long term capital gains? I've got $210k in unrealized gains and I really do want to liquidate those positions. I was going to split it into thirds for this December, then January, and then January 2023, but if the Libs are about to blow it all up...
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Dec 9, 2021 04:30
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The proposed increase in the long term capital gains to 25% is currently out. It was also planned to be retroactive back to September 2021.
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Dec 9, 2021 16:12
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smackfu posted:The proposed increase in the long term capital gains to 25% is currently out. It was also planned to be retroactive back to September 2021. Christ! Out as in "scrapped", right? Not out as in "now in effect"? My combined state and federal gains tax would be about 40%!
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Dec 9, 2021 17:01
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GoGoGadgetChris posted:Christ! Out as in "scrapped", right? Not out as in "now in effect"? My combined state and federal gains tax would be about 40%! As you've indicated, 25% on top of state taxes basically starts to look like earned income tax rates in most of the U.S.
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Dec 9, 2021 17:11
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GoGoGadgetChris posted:Christ! Out as in "scrapped", right? Not out as in "now in effect"? My combined state and federal gains tax would be about 40%! Just don't sell until you fall out of that tax bracket. You're welcome in advance.
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Dec 9, 2021 17:13
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Pretty sure it’s “out” as in “scrapped”, especially because congress hasn’t actually passed anything.
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Dec 9, 2021 17:20
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Residency Evil posted:Just don't sell until you fall out of that tax bracket. You're welcome in advance. Currently structuring my retirement plan around minimizing taxes owed in this and other ways. Good times.
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Dec 9, 2021 17:32
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Residency Evil posted:Just don't sell until you fall out of that tax bracket. You're welcome in advance. But now I live in fear of retroactive tax rates! Also these are inherited shares of single company stocks like Procter & Gamble and JnJ and IBM that I don't want to hold on to
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Dec 9, 2021 17:33
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GoGoGadgetChris posted:But now I live in fear of retroactive tax rates!
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Dec 9, 2021 17:34
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Ersatz posted:If you inherited them not long ago, there shouldn't be a lot gains to worry about. Might consider offloading them soon in that case, and then putting the proceeds into index funds. I inherited them in 1991 but the estate they are from was pilfered and they only recently found their way to me. The account is about 80% unrealized gains
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Dec 9, 2021 17:36
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GoGoGadgetChris posted:I inherited them in 1991 but the estate they are from was pilfered and they only recently found their way to me. The account is about 80% unrealized gains good problem to have, i guess?
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Dec 9, 2021 17:37
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KYOON GRIFFEY JR posted:good problem to have, i guess? For sure :-) I did no labor to receive this money, but I do feel a strong ethical obligation to minimize how much money I give to the united states governments
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Dec 9, 2021 18:13
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Give it all away to charity and take the tax write off. Everybody wins.
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Dec 9, 2021 19:41
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Ersatz posted:If you inherited them not long ago, there shouldn't be a lot gains to worry about. Might consider offloading them soon in that case, and then putting the proceeds into index funds. FAANG, Microsoft, and Tesla support this strategy.
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Dec 9, 2021 19:42
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Which brokers support MFA/2FA using an app (not SMS)? I use Fidelity and Vanguard and but neither seem to support app code generation which is more secure IMO than SMS, email or phone call.
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Dec 10, 2021 02:57
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dexter6 posted:Which brokers support MFA/2FA using an app (not SMS)? If your email account is protected by a 2FA you like, I'd consider that just as safe as a direct 2FA token.
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Dec 10, 2021 03:07
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dexter6 posted:Which brokers support MFA/2FA using an app (not SMS)? Fidelity can do Symantec VIP. It does seem that these guys don't take account security as seriously as they could.
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Dec 10, 2021 15:47
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I made the maximum Roth IRA contribution for 2021 in January and didn't think much about it, but just realized that I might be in the reduced contribution range this year due to unexpectedly getting a new better-paid job in September and cashing out a lot of unused vacation/sick leave time from my last job. What's the best way to proceed? Wait until I get my W-2s to determine my MAGI? How hard is it to reverse that contribution at this point? My Roth IRA is with Vanguard, if that matters.
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Dec 10, 2021 16:02
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Reach out to Vanguard, they're fairly accustomed to dealing with this kinda thing. For others, it's a good cautionary tale - if you ever think you're gonna be close to the limit or have a chance of getting to it, you should split up your contributions or delay til you get your final MAGI. time in market is good, but not creating a whole pain in the rear end for you is even better than marginal time in market.
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Dec 10, 2021 16:11
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