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feelix posted:This is clearly untrue though, the long term target date funds crashed just as badly as the s&p in 2020. I understand that this will not necessarily happen when the US stock market inevitably crashes again, but one of the big strikes against the managed funds is that the idea that they safeguard against a crash has been repeatedly demonstrably false The point of the target date funds is to focus on growth while you are young and increasingly hedge as you get close to retirement. So when you're 20++ years away from retiring (i.e. today) it's going to be roughly 80-90% the same as just putting your money in a total market fund, which is itself quite similar to an S&P 500 fund since those large caps are an increasingly massive portion of the total market. When you're close to retirement it will provide substantially more protection from a crash by allocating more into bonds, because that's when you need protection (since you won't necessarily have time to recover from the losses before you have to start withdrawing money to buy prune juice and adult diapers). Also, if you want to put a bunch of money in an S&P 500 fund to maximize growth and minimize your expense ratio while you're young that's totally fine, it's just a matter of preference and risk tolerance. Vox Nihili fucked around with this message at 23:48 on Dec 15, 2021 |
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Dec 15, 2021 23:46
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Trick is not to forget to transition out of that S&P500 fund at some point or else you might find yourself partaking of the proud tradition of buying high and selling low when it comes time to pick up your prune juice and adult diapers.
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Dec 16, 2021 03:07
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feelix posted:I didn't know about the total market indices, thanks. And I've thought about adding a Euro index too even though they compare pretty poorly. It seems like a lot of the reason they compare unfavorably is because they haven't bounced back from COVID as rapidly? ex-us funds have been underperforming the sp500 for the last ~30 years. some attribute this to america having some secret capitalism sauce that makes markets do better forever, others suggest us stocks are massively overvalued and ex us is going to see a massive breakout in the future that turns the trend on its head i have no idea which, if any, of these arguments are true, so i hold ex-us and us equities at about a market cap weighted percentage to split the difference
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Dec 16, 2021 05:15
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Ropes4u posted:Does anyone have any pro index fund podcasts to recommend? I shared the recommended reading with a coworker who was asking but she would prefer a podcast. Rational Reminder is very good.
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Dec 16, 2021 06:50
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New 401k policies at my employer: - Separate contribution election for bonus pay (used to be only one choice for bonus pay and regular pay). - After tax contribution limit increased from 2% to 6% of total pay. Retaining the automatic conversion to Roth 401k (as long as it is still legal). - Discontinuing the true-up for company match if you max out before the end of the year. Justification is that since the company matches up to 6%, if you hit the annual limit on trad/roth 401k contributions you can now continue contributing 6% as after-tax and the company will continue to match that. - New $7.25/quarter admin fee.
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Dec 16, 2021 14:07
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spf3million posted:New 401k policies at my employer: Wow, just gently caress you on that $29/yr on top of removing some paperwork on their side (true up). Otherwise seems to be encouraging people to keep doing after tax, but big gently caress you if it becomes illegal.
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Dec 16, 2021 16:15
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Work offers me the choice of Charles Schwab or Morgan Stanley for an RSUs broker. I can’t think of any reason why one would be worse than the other (they’re both kinda  ), does anyone here know of an obvious reason?
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Dec 16, 2021 16:21
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Pollyanna posted:Work offers me the choice of Charles Schwab or Morgan Stanley for an RSUs broker. I can’t think of any reason why one would be worse than the other (they’re both kinda Use Schwab. Unless their rsus platform is materially worse than their main one it should be great. All the boutique brokers suuuuuuuuuucccckkkkkk. We were on BAML and holy christ it was bad. A whole separate half thought out website that was designed under duress or something.
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Dec 16, 2021 16:31
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Pollyanna posted:Work offers me the choice of Charles Schwab or Morgan Stanley for an RSUs broker. I can’t think of any reason why one would be worse than the other (they’re both kinda Work uses Schwab for our ESPP, RSU and ISO management and their site is really good and customer service is excellent as well.
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Dec 16, 2021 16:46
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Schwab it is, thanks guys!
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Dec 16, 2021 18:12
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Pollyanna posted:Work offers me the choice of Charles Schwab or Morgan Stanley for an RSUs broker. I can’t think of any reason why one would be worse than the other (they’re both kinda Just to double cement this decision. Morgan Stanley deeply hosed up access as part of a recent liquidity event I was party to and have continually been a nightmare to deal with throughout the aftermath.
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Dec 16, 2021 18:22
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withak posted:Trick is not to forget to transition out of that S&P500 fund at some point or else you might find yourself partaking of the proud tradition of buying high and selling low when it comes time to pick up your prune juice and adult diapers. This is one of a couple of reasons why passive target date funds are pretty helpful. They usually have a pretty diverse range of holdings and they do bond/equity reallocation for you as you age without a ridiculous expense ratio. GhostofJohnMuir posted:ex-us funds have been underperforming the sp500 for the last ~30 years. I've been investing in VXUS for a while and the results have been underwhelming. I'm not sure whether to keep putting money into it when maybe there's something about foreign equity markets that I haven't caught on to that are preventing them from following the predictions of conventional wisdom.
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Dec 16, 2021 20:04
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So with HMBradley pulling the plug, what's the next best thing for short- to mid-term savings (~1 year) if I'm already maxed out on I-bonds?
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Dec 16, 2021 20:06
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fatman1683 posted:So with HMBradley pulling the plug, what's the next best thing for short- to mid-term savings (~1 year) if I'm already maxed out on I-bonds? Personally, just a HYSA at 0.5% and just call It a day.
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Dec 16, 2021 21:26
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Edit: app hosed up, sorry for the double post.
Duckman2008 fucked around with this message at 21:37 on Dec 16, 2021 |
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Dec 16, 2021 21:29
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GhostofJohnMuir posted:ex-us funds have been underperforming the sp500 for the last ~30 years. I'd say this is a function of tech having done really well, but who knows which industry will be the big driver in the next 30 years. Lol at Europe if it's another industry that needs lots of white collar professionals though.
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Dec 16, 2021 22:21
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fatman1683 posted:So with HMBradley pulling the plug, what's the next best thing for short- to mid-term savings (~1 year) if I'm already maxed out on I-bonds? Still seems worth it though for the 3%. If you have $50,000 in emergency funds that's $1500 in interest, minus the $60 fee, no?
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Dec 16, 2021 22:38
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GhostofJohnMuir posted:ex-us funds have been underperforming the sp500 for the last ~30 years. International massively outperformed the S&P from 2000 to 2010. That wasn't even that long ago.
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Dec 17, 2021 03:31
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acidx posted:The money guy show is my favorite by a good margin and it's very newbie friendly. Thank you!
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Dec 17, 2021 03:36
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Baxate posted:Rational Reminder is very good. Thank you
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Dec 17, 2021 03:37
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Looking for advice on where to make contributions next year. My emergency savings are good and I have no debt or mortgage. 37 years old and make $90k/year. 401k = $400k Roth IRA = $191k Brokerage = $113k HSA = $26K After getting employer match and maxing out Roth, should I max out 401k or put the rest into Brokerage? I’m thinking I want to retire early or at least remain FI, so I’m wondering if having more money not in my 401k that is more liquid while I’m younger would be better. Thoughts?
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Dec 17, 2021 05:33
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dexter6 posted:Looking for advice on where to make contributions next year. What are your annual expenses? If you're going to do a Roth conversion ladder post-retirement, you'll need about 5 years combined from taxable brokerage + standard Roth IRA contributions to plug the gap. If you can swing that, then getting the tax break by maxing out your 401k seems good. Your marginal tax rate isn't super high though, so it's a decision that won't make or break you.
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Dec 17, 2021 06:23
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401k, you can always do a SEPP to drain the money out pre-65. Even if not, the tax drag is so high that it can make sense to take the 10% penalty if you need to withdraw. There was an article on this not too long ago, not sure where I saw it but the result was that it almost always makes sense to do the 401k rather than taxable.
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Dec 17, 2021 07:15
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Recently got a new job, thinking about next year and was wondering: what's the basic calculus for deciding on investing in an ESPP? All my basics (trad 401k, HSA, backdoor Roth IRA if still around) will be maxed out. My job lets me put in up to 15% for a 10% discount on quarterly purchase and I can sell immediately. I also have the option of after tax contributions with in plan roth conversion that I have not yet exercised. I'm inclined to max the ESPP first and then put into after tax as comfortable (and converting if I still can). Is this decent? Sleng Teng fucked around with this message at 21:10 on Dec 17, 2021 |
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Dec 17, 2021 20:54
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I just went through this myself, granted with less favorable terms. The consensus seems to be that if you can afford to do so you should max out contributions to the ESPP and sell as soon as you can. Even after taxes in my case it came out to roughly a 2% gain in wages each year.
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Dec 17, 2021 21:06
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My company will start matching our (Fidelity) 401k plan in January ( ), so I'm enrolling.The Fidelity Freedom target date fund had an expense ratio of 0.75%. That felt a bit high, but I'm used to Vanguard. So instead, I was planning to do 60/30/10 of FSKAX/FOSFX/FTBFX (Total Market Index Fund / Overseas Fund / Total Bond Fund). Their ERs are 0.015/1.040/0.450 (so together would effectively be 0.366). Does this sound not very stupid? I've only ever invested in Target Date funds before.
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Dec 17, 2021 21:19
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Harveygod posted:My company will start matching our (Fidelity) 401k plan in January ( If you think about your overall portfolio across all your accounts, I imagine you can get a much better deal on international (if that's something you care about). Same on bond funds probably but those are all very, very different so it's a lot less clear. To be clear, I'd say something like "just do all FSKAX in this account, then use your other accounts like an IRA or something more flexible to buy VXUS or whatever in the right aggregate proportions."
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Dec 17, 2021 21:26
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Harveygod posted:My company will start matching our (Fidelity) 401k plan in January ( Like Cubical Sucrose said, FSKAX is a great fund, the other two aren't great. If there aren't any other options for international and bonds, I'd second going 100% into FSKAX, and putting your international and bond allocations in your IRA.
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Dec 17, 2021 23:28
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Kylaer posted:Like Cubical Sucrose said, FSKAX is a great fund, the other two aren't great. If there aren't any other options for international and bonds, I'd second going 100% into FSKAX, and putting your international and bond allocations in your IRA. Wouldn't that complicate rebalancing since I couldn't move money between the accounts? e: Actually I think I figured it out. I really like spreadsheets anyway, so I can do it. Harveygod fucked around with this message at 00:07 on Dec 18, 2021 |
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Dec 17, 2021 23:58
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Harveygod posted:Wouldn't that complicate rebalancing since I couldn't move money between the accounts? Depends. If your other accounts are worth $10M total, then this new account is trivial. If your other accounts don't exist, then this is not possible to do. In addition to your other account sizes (and expected future contributions for each), your overall portfolio asset allocation target matters. And your specific plan for rebalancing. And how you want to handle pre-tax vs post-tax money. We can discuss situations about as complicated as you want to make it. But since we don't know any of that for your situation, went with an approach that should probably work out just fine given a pretty wide range of actual true values.
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Dec 18, 2021 00:08
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Harveygod posted:Wouldn't that complicate rebalancing since I couldn't move money between the accounts? A little, but since they're both tax-advantaged there is no tax consequence of selling a U.S. stock fund in your IRA (assuming that you have one) and using that money to immediately purchase an international stock fund or bond fund. I would say dodging a 1% expense ratio would be worth the small bit of extra math.
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Dec 18, 2021 00:09
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Harveygod posted:Wouldn't that complicate rebalancing since I couldn't move money between the accounts? It depends on how disproportionately large your 401k is compared to your IRA. If it's most of your savings it will complicate things, but start with making your IRA 100% of whatever to minimize exposure to the higher rates.
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Dec 18, 2021 00:11
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My IRA has about $50,000 (all Roth), all in a Target Date fund. My 401k has nothing right now, but I'll be contributing about $300 per month (again, all Roth except for employer contributions). I can put all the 401k into FSKAX and balance it on the IRA side by putting some portion of future contributions into better bond/international funds.. If it comes to it, I can even exchange some of the IRA's target date funds within the IRA itself. That way I don't have to move funds between Fidelity and Vanguard. Thanks for the sanity checks. Now I'm eating Mexican food.
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Dec 18, 2021 00:27
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I think you're in a perfect position to split your holdings, with that additional information in mind.
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Dec 18, 2021 00:40
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Me pulling off my Roth conversion before year end despite unexpected delays:
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Dec 18, 2021 06:54
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Harveygod posted:Wouldn't that complicate rebalancing since I couldn't move money between the accounts? my thought process on this is: gently caress rebalancing mostly (does it really matter if you're 8/92 or 12/88 vs 10/90?) but do it through allocation of contributions rather than buying and selling assets
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Dec 18, 2021 16:45
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Do 25 year old EE bonds count as long term investing? Man, that has to be the worst way to turn $50 into $100. Earning 0.75% interest.
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Dec 18, 2021 17:57
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smackfu posted:Do 25 year old EE bonds count as long term investing? Man, that has to be the worst way to turn $50 into $100. Earning 0.75% interest. EE bonds double in 20 years... after that you should redeem them, though you could (but shouldn't) hold for another 10 years at a 0.1% rate thereafter. That makes it an effective nominal yield of 3.5% if held for 20 years. The 10 year treasury is around 1.4% and the 30 year treasury is about 1.8%. So the EE bond is a great deal in this environment, as long as you have a place for a very long term treasury that you shouldn't redeem before 20 years. Maybe a small forever portion of your bond allocation that you know you can't rebalance out of. I have purchased the max I-Bond and EE-Bond allowance for the past few years. edit: typo... after 20 years, you can hold for another 10 years not 30, though you really shouldn't anyway unless you must delay the taxes. 80k fucked around with this message at 19:03 on Dec 18, 2021 |
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Dec 18, 2021 18:20
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Aha, I did not realize that they were guaranteed to double so yes that isn’t bad.
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Dec 18, 2021 18:28
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smackfu posted:Do 25 year old EE bonds count as long term investing? Man, that has to be the worst way to turn $50 into $100. Earning 0.75% interest. If I remember right they were way better before 2008. My parents took a bunch out for me over the years (very fortunate) and the interest rates were 3-4% until around 2007 ish when they cratered to like, 0.5%.
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Dec 19, 2021 00:20
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