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H110Hawk posted:FINE thread I bought some ibonds today. (Well, initiated yesterday.) No Medallion needed. YOU WIN. If you delete autocomplete="off" and readonly="readonly", my password manager will just autofill it. Just right click the password field and say "Inspect" in Firefox to make this change. This is especially nice if you have a long, complex password. MJP posted:Oh yikes, 7% until April '22? That's not a bad "what do I do with this for a year" idea. ~7.1% for the first 6 months on anything bought through the end of April. If you bought today it would be Jan-Jun.
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Jan 6, 2022 03:28
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I have about $12k more than we (me + wife) need in liquid cash/savings. Most of it is in the form of "truck replacement fund" but that's going to be 2023 or later. All of this I-Bond talk had me sold on that, but then I thought I could take that $12k and max our 2022 Roth contributions now, in January, versus contributing $1000/mo throughout the year. I'd effectively be at "rule 4" on my Roth contributions, for all you old-school YNABers. Am I a chump if I'm not maxing our Roths at the beginning of the year? Or is that I-Bond rate just too good to pass up (understanding that it's variable)?
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Jan 6, 2022 03:38
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Easychair Bootson posted:I have about $12k more than we (me + wife) need in liquid cash/savings. Most of it is in the form of "truck replacement fund" but that's going to be 2023 or later. All of this I-Bond talk had me sold on that, but then I thought I could take that $12k and max our 2022 Roth contributions now, in January, versus contributing $1000/mo throughout the year. I'd effectively be at "rule 4" on my Roth contributions, for all you old-school YNABers. Am I a chump if I'm not maxing our Roths at the beginning of the year? Or is that I-Bond rate just too good to pass up (understanding that it's variable)? In general "time in the market beats timing the market", so maxing out your IRA contributions as early as possible is good. But, if you have a known expense coming up at least a year out, setting aside the money for it into I Bonds certainly seems like a reasonable idea to me.
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Jan 6, 2022 04:34
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KYOON GRIFFEY JR posted:And if kyoon griffey iii doesn't go to college, we can still get the money out of the 529 without too much penalty - contributions are returned untaxed and you pay (income) taxes on any capital gains. Isn't it income tax + 10% penalty? I know there are some penalty exceptions (scholarship/grant, I think a military one) and the possibility to change beneficiary, but I thought for the most part gains not used for qualified education expenses gained a 10% penalty. We're still looking into this ourselves, so I'm happy to hear if I'm wrong.
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Jan 6, 2022 04:42
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H110Hawk posted:Would this be simplified by using say Fidelity's charitable account at a small premium? You can dump money into it for the immediate deduction then it's just check writing at your leisure. Note that the DAFs don't support donating to all charities, so make sure your preferred charities are possible to donate to before you put the money in.
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Jan 6, 2022 06:09
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moana posted:Note that the DAFs don't support donating to all charities, so make sure your preferred charities are possible to donate to before you put the money in. That's surprising, I would have presumed all IRS 501(c)3's would be listed. Amazon Smile seems to use a comprehensive list of charities, I would assume Fidelity (et al) would use the same data source.
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Jan 6, 2022 06:32
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Maybe, I just checked and on fidelity's site theres: "Please note that all grant recommendations must comply with Fidelity Charitable's Program Guidelines. Public charity status alone does not guarantee that a grant recommendation will be approved." So I imagine it's most charities are supported but just in case it's a good idea to check.
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Jan 6, 2022 06:41
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incogneato posted:Isn't it income tax + 10% penalty? I know there are some penalty exceptions (scholarship/grant, I think a military one) and the possibility to change beneficiary, but I thought for the most part gains not used for qualified education expenses gained a 10% penalty. you are right, there's a 10% penalty on earnings plus income tax but that's generally a risk I'm willing to run, and you can always switch beneficiaries if necessary
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Jan 6, 2022 13:12
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KYOON GRIFFEY JR posted:One question I have is around contributions - I doubt we contribute more than $15K a year total across grandparents etc but is the $15K limit per individual contributing (eg I can contribute $15K and my parents can also separately contribute $15K) or what? I suspect it's in total but I can't quite figure it out. There are no annual limits on 529 contributions. The plans themselves may set an aggregate limit - currently $500K for MA. Federal tax law considers 529 contributions to be a taxable gift from the contributor to the beneficiary in the year of the contribution, so the usual gift tax rules apply, including lifetime estate/gift tax exclusion. State tax benefits may be (and pretty much always are) limited to a smaller amount per year. Residency Evil posted:If I want to save the cost of attendance to a four-year private college in 18 years, what's the best way to think about saving? Would it make more sense to front load that money now? Does it make more sense to save money slowly over the years, to hedge against college costs changing? If your goal is to max out tax-advantaged money for education, then absolutely front load the poo poo out of it. If the goal is to match 529 plan balance to actual college expenditures, you'll want a more save-as-you-go approach so you can tweak along the way. The problem is that you won't know until very late in the game what those actual expenditures will be. Baseline "cost of college" will continue to rise, but does your kid choose a twee private school, or major public + ROTC ? You probably won't know that till late high school at best and then there's no time to make adjustments in the 529. My plan is regular monthly savings in the 529 like the kids will choose the expensive private school, and just accept the risk of cost overshoot as a good problem to have.
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Jan 6, 2022 14:46
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drk posted:In general "time in the market beats timing the market", so maxing out your IRA contributions as early as possible is good. But, if you have a known expense coming up at least a year out, setting aside the money for it into I Bonds certainly seems like a reasonable idea to me. That makes sense. Putting aside the eventual truck purchase and assuming I have emergency funds covered, what should I do with the $1000/mo I'm saving throughout 2022 for the tax year 2023 Roth contribution that I'll make one year from now? Is it worthwhile to be putting that money into I Bonds as I go, with the understanding that I need to get a year ahead in that savings in order to get them to at least 12 months of maturity? For that matter, should I be doing the same thing with the money I set aside monthly for homeowner's insurance and property taxes? e: by my simple math it looks like I'd earn somewhere between $100 and $700 a year, if the Series I composite rate is between 1% and 7% e2: forgot to subtract the last 3 months of interest from the bonds but I'm too lazy so it's a little less Easychair Bootson fucked around with this message at 16:08 on Jan 6, 2022 |
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Jan 6, 2022 15:51
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Need some advice on Roth IRA portfolio. I’ve been doing a ton of reading on different funds, but I’d like other opinions. Right now: 20% VTI 20% VXUS 20% AVUV 20% ADVD 20% AVES I really like Advantis’s value and profitability screener. I’m considering switching out VXUS as it weights me toward EM a bit more than I’d prefer as I already have AVES. AVLV makes more sense to me because it’s essentially applying Advantis’s screener to US Large cap. Potential new portfolio: 20% AVLV 20% AVIV 20% AVUV 20% AVDV 20% AVES Valicious fucked around with this message at 15:59 on Jan 6, 2022 |
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Jan 6, 2022 15:52
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SlapActionJackson posted:There are no annual limits on 529 contributions. thank you, this is a very helpful post!
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Jan 6, 2022 16:09
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SlapActionJackson posted:If your goal is to max out tax-advantaged money for education, then absolutely front load the poo poo out of it. If the goal is to match 529 plan balance to actual college expenditures, you'll want a more save-as-you-go approach so you can tweak along the way. The problem is that you won't know until very late in the game what those actual expenditures will be. Baseline "cost of college" will continue to rise, but does your kid choose a twee private school, or major public + ROTC ? You probably won't know that till late high school at best and then there's no time to make adjustments in the 529. Yeah, I'm just having a tough time trying to figure out how much to put in now versus later. Ideally I'd love to have at least the cost of college saved (whatever that ends up being), but would also want to pay for post-grad education if he's interested (however much that ends up being). All of it just seems like a totally random moving target.
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Jan 6, 2022 17:19
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Residency Evil posted:Yeah, I'm just having a tough time trying to figure out how much to put in now versus later. Ideally I'd love to have at least the cost of college saved (whatever that ends up being), but would also want to pay for post-grad education if he's interested (however much that ends up being). All of it just seems like a totally random moving target. It is. I would front load like $100k into there and then another for each kid you have, each in their own accounts. Then if school becomes magically cheaper you aren't super over 529'd. If it's more expensive then you'll just need to pay for it out of long term cap gains or current income. If one kid becomes a no-college insufferable tech person you can just change it to the dumb kid who decides to follow in their parents footsteps.
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Jan 6, 2022 17:27
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Residency Evil posted:Yeah, I'm just having a tough time trying to figure out how much to put in now versus later. Ideally I'd love to have at least the cost of college saved (whatever that ends up being), but would also want to pay for post-grad education if he's interested (however much that ends up being). All of it just seems like a totally random moving target. My goal is for my son to be able to attend whatever college(s) he chooses and still be able to start his career debt free. Seems like aiming for $250k by age 18 should do the trick for undergrad but with costs continuing to spiral out of control, who knows? Factoring in grad or professional school (which I'll encourage if that's the direction he wants to take his life), I'm thinking my target needs to double.
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Jan 6, 2022 17:32
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my kid is fuckin on their own for grad school I'll probably try to front load in the first years to avoid gift tax issues and then contribute $2k/year to get my $100/year from the taxpayers of Our Fair Commonwealth. The big question mark in all this is what the family does. there's a scarcity of children on my side so it's likely that various old people pump money in to this. i guess if KG3 ends up with too much money they can do whatever.
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Jan 6, 2022 17:43
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I'm biting my tongue on the e/n aspects of all that stuff, I'll just say from a BFC standpoint, seriously do not cut your retirement savings for 529, or that kid might be making career sacrifices to support you in your old age anyway. You could wind up needing to hire one or two full-time in-home carepeople for a decade. If you can possibly sock away an extra million for your old age, do so. That's only ten years of OK living at an OK full-care nursing home for one person. You know how the costs of college are spiraling? So are the costs of elder care, and the number of healthy young people available and willing to do that work 20 years from now may be smaller than the already inadequate number today. Set your retirement goals generously, see that they're fully funded, and then consider the gift of helping your kids with college. If you can't give them a dime, they'll survive anyway. If you can't afford health care, you might not.
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Jan 6, 2022 18:24
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For 529 I am just going up to the state tax reduction limit ($3500 in my case) and putting the rest in brokerage.
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Jan 6, 2022 18:25
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Leperflesh posted:I'm biting my tongue on the e/n aspects of all that stuff, I'll just say from a BFC standpoint, seriously do not cut your retirement savings for 529, or that kid might be making career sacrifices to support you in your old age anyway. You could wind up needing to hire one or two full-time in-home carepeople for a decade. If you can possibly sock away an extra million for your old age, do so. That's only ten years of OK living at an OK full-care nursing home for one person. You know how the costs of college are spiraling? So are the costs of elder care, and the number of healthy young people available and willing to do that work 20 years from now may be smaller than the already inadequate number today.
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Jan 6, 2022 18:32
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Leperflesh posted:I'm biting my tongue on the e/n aspects of all that stuff, I'll just say from a BFC standpoint, seriously do not cut your retirement savings for 529, or that kid might be making career sacrifices to support you in your old age anyway. You could wind up needing to hire one or two full-time in-home carepeople for a decade. If you can possibly sock away an extra million for your old age, do so. That's only ten years of OK living at an OK full-care nursing home for one person. You know how the costs of college are spiraling? So are the costs of elder care, and the number of healthy young people available and willing to do that work 20 years from now may be smaller than the already inadequate number today. where are people talking about cutting their retirement savings to contribute to a 529? i agree with you in general but you seem to be tilting at windmills here
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Jan 6, 2022 18:34
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KYOON GRIFFEY JR posted:where are people talking about cutting their retirement savings to contribute to a 529? i agree with you in general but you seem to be tilting at windmills here It's a general advice thread, I assume a lot of people read along and see/use other people's comments as guidance. But also I didn't see Residency Evil posting all his numbers, just his desire to fund college, so I felt it was worth pointing out.
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Jan 6, 2022 18:39
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I refuse to support my children following my footsteps into grad school. They can pay for that awful decision themselves. We're funding their 529s to 200k by the time they're 5 or 6 and then stopping all contributions. Given that tuition + room and board + fees at my alma mater is $78k/yr now, I doubt that will be sufficient but I'd like to keep my options a bit more open by potentially funding the rest via taxable brokerage. The income tax (as opposed to long term cap gains) + 10% penalty is no joke. And strongly agree about funding retirement first, but I'm not super worried about Residency Evil there.
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Jan 6, 2022 18:49
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Leperflesh posted:It's a general advice thread, I assume a lot of people read along and see/use other people's comments as guidance. But also I didn't see Residency Evil posting all his numbers, just his desire to fund college, so I felt it was worth pointing out. Double doctors who just bought a $2M house... he will be ok. Good general advice though, completely agree.
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Jan 6, 2022 19:24
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KYOON GRIFFEY JR posted:where are people talking about cutting their retirement savings to contribute to a 529? i agree with you in general but you seem to be tilting at windmills here Leperflesh posted:It's a general advice thread, I assume a lot of people read along and see/use other people's comments as guidance. But also I didn't see Residency Evil posting all his numbers, just his desire to fund college, so I felt it was worth pointing out. It is critically important and I glossed over it to give direct advice to that poster knowing their current situation. Two doctors, two Porsches, one child (+N>=0 more). Slapping $100k per kid in to frontload it isn't going to materially impact their ability to retire. To be clear, for 529's they are literally last - Fund your own life and retirement first. The best gift you can give your kids is to not be a burden upon them in retirement. You can always pay for their school out of your own savings, but you cannot borrow for retirement. You should be well into "hookers and blow" money before you're putting significant money into a 529, it is a rich persons vessel to dodge yet more taxes by using it to pay for their little psychopaths elite education, including the rent on the condo they bought out of their personal funds next to the school. I put $50/child/month into their 529 and have frontloaded it with $1000 each. I backdated some of it for child number 2 because it took us until nearly his second birthday to get a SSN due to covid and congress. I put thousands away into personal savings per month. I am a awful tech person to put it in context.
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Jan 6, 2022 19:30
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Valicious posted:Need some advice on Roth IRA portfolio. I’ve been doing a ton of reading on different funds, but I’d like other opinions. If I understand correctly, you want to shift out of your US/International total market holdings (VTI/VXUS) completely into value funds (AVLV/AVIV)? Granted, Avantis has a rather non conventional definition of value that includes large growth tech companies like Apple/Meta/Microsoft. I like value too, but as a tilt, not 100% of my whole portfolio. Also these Avantis funds are all very new (the oldest is from 2019), so I wouldnt read into their recent outperformance too much.
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Jan 6, 2022 20:26
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Valicious posted:Need some advice on Roth IRA portfolio. I’ve been doing a ton of reading on different funds, but I’d like other opinions. AVUS is a more like-for-like comparison to VTI than AVLV. Total US Stock market with their factor screening. Also I just noticed AVLV only has 212 holdings. AVUS has 2043. And it's arguable that you don't need AVUV at all with AVUS since it already has a small value tilt.
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Jan 6, 2022 21:23
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Leperflesh posted:I'm biting my tongue on the e/n aspects of all that stuff, I'll just say from a BFC standpoint, seriously do not cut your retirement savings for 529, or that kid might be making career sacrifices to support you in your old age anyway. You could wind up needing to hire one or two full-time in-home carepeople for a decade. If you can possibly sock away an extra million for your old age, do so. That's only ten years of OK living at an OK full-care nursing home for one person. You know how the costs of college are spiraling? So are the costs of elder care, and the number of healthy young people available and willing to do that work 20 years from now may be smaller than the already inadequate number today. Where do I sign up for the take me out back and shoot me retirement plan?
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Jan 6, 2022 22:43
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Epitope posted:Where do I sign up for the take me out back and shoot me retirement plan? The doctor signed it for you on the "Certificate of Domestic Birth"
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Jan 6, 2022 22:49
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Epitope posted:Where do I sign up for the take me out back and shoot me retirement plan? Sadly, this is the actual plan for some people in the US, a country with more firearms than people
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Jan 7, 2022 03:34
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Excuse me, you mean our education system.  Actually, why not both.
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Jan 7, 2022 04:23
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Baxate posted:AVUS is a more like-for-like comparison to VTI than AVLV. Total US Stock market with their factor screening. Between the large cap value and small cap value, I feel I’m pretty well-covered with a heavier factor tilt. Doesnt AVUS actually have only a slight tilt?
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Jan 7, 2022 04:53
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Valicious posted:Doesn't AVUS actually have only a slight tilt? Time for a Morningstar X-Ray comparison: VTI 72% Large-cap (16% value, 27% blend, 29% growth, ) 19% Mid-cap (6% value, 8% blend, 5% growth) 9% Small-cap (3% value, 4% blend, 2% growth) AVUS 58% Large-cap (17% value, 20% blend, 21% growth, ) 26% Mid-cap (10% value, 11% blend, 5% growth) 16% Small-cap (7% value, 7% blend, 2% growth)
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Jan 7, 2022 05:09
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So there's been I Bonds talk here recently, but what about EE Savings Bonds. I have some old savings bonds from my dear departed grandmother, generally 3 or 4 of them a year between 1992 through 2002. I pretty much just stuck them in my safe deposit box and forgot about them for 20 years. I ran them through the savings bond calculator on Treasury Direct.. and I was pretty surprised to see the interest rate on almost all of them is either 0.52%, 0.74% or 0.77%. If I cashed them all out now it'd only be about $2000. Even if I did nothing more than put the cash in my emergency fund I'd be getting almost the same interest rate (0.50%) so I should just.. cash them all out right? Looking at the interest rate history it doesn't seem worth keeping them around another 10 years hoping the savings bond interest rate goes up higher than inflation.
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Jan 7, 2022 08:31
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Vice President posted:So there's been I Bonds talk here recently, but what about EE Savings Bonds. EE bonds are guaranteed to double in value after twenty years regardless of the associated rate. The old paper bonds had a face value equal to half of what was actually paid for them (i.e. you would pay $25 for a "$50 bond"), so they should be worth at least their face value now (or soon, for the 2002 bonds). I would probably wait to get the double value on all of them then cash those puppies in.
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Jan 7, 2022 09:21
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Vox Nihili posted:EE bonds are guaranteed to double in value after twenty years regardless of the associated rate. The old paper bonds had a face value equal to half of what was actually paid for them (i.e. you would pay $25 for a "$50 bond"), so they should be worth at least their face value now (or soon, for the 2002 bonds). Wish I had known that in my early 20s when I was in the same situation as Vice President! I looked at the terrible interest rates and cashed them all out. They were probably about 5 years from hitting the 20...
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Jan 7, 2022 11:20
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Math nerds, what effective annual interest rate is (principal doubled after 20 years) equal to?
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Jan 7, 2022 15:58
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Inner Light posted:Math nerds, what effective annual interest rate is (principal doubled after 20 years) equal to? Solve 1*(1+x)^20 = 2 --> x = 2^(1/20) - 1 ~= 3.5% Effective annual interest rate is about 3.5%.
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Jan 7, 2022 16:03
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Thanks for the advice everyone. I kind of calculated that front loading with 80k or so would let us "finish" college savings, but I wasn't sure if people had different thoughts about whether that was a good idea or not.bergeoisie posted:I refuse to support my children following my footsteps into grad school. They can pay for that awful decision themselves. I had the same thought about grad school, but then I looked at all of my classmates that were lucky enough to have parents that paid for it (and the ones that even bought them apartments!), and realized that their lives were better and they could focus on more important things than worrying about student loans. I'm not sure that I ended up a better person because I was/am forced to pay back student loans. I'm sure my opinion on this will change over the years. 
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Jan 7, 2022 16:18
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Debt is terrible. One of the best life lessons you can teach your kids, starting from a young age, is how to save and avoid debt. They're bombarded with messaging to consume more and live the life they deserve just like the rest of us, and will need education to recognize and reject that. It's a shame that personal finance isn't a required part of getting a high school diploma.
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Jan 7, 2022 16:25
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debt is also a very useful and powerful tool that allows you to do such things as buy cars and houses. if used properly it can save you money.
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Jan 7, 2022 16:30
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