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Rolo posted:Employer match does not count towards my max allowable 401k contribution, correct? Congrats! One thing to understand is how the match works if you max employee contributions early in the year. "Is there a true-up?" is something like the common question.
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Sep 16, 2022 19:40
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My plan was initially to do max divided by 12 to keep the match for all 12 months and to have a more steady budget. I guess it’s a better idea to invest more early in the year so it’s compounding earlier? Also I need to google True Up.
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Sep 16, 2022 19:45
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Rolo posted:My plan was initially to do max divided by 12 to keep the match for all 12 months and to have a more steady budget. Check with your HR or retirement plan manager. I was worried about this but it turned out my employer's retirement plan does in fact keep paying the full match every paycheck even if I hit the limit before the end of the year.
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Sep 16, 2022 19:59
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yeah we don't get a true up anymore
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Sep 16, 2022 20:29
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Even if your employer does true ups, if you max out the limit early and then change jobs before year end you are going to miss out on some matching.
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Sep 16, 2022 22:29
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KYOON GRIFFEY JR posted:yeah we don't get a true up anymore I get my match in February for the previous year. Fun times.
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Sep 16, 2022 23:20
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spwrozek posted:I get my match in February for the previous year. Fun times. Same. Rolo posted:My plan was initially to do max divided by 12 to keep the match for all 12 months and to have a more steady budget. If you prefer to keep it steady that's completely fine. Finishing contributions early is solidly in min-max territory.
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Sep 17, 2022 01:39
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spwrozek posted:I get my match in February for the previous year. Fun times. My company pays it's match in February every year for the previous year. If you leave the company prior to 12/31 of the previous year, you don't get any match for that year.
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Sep 17, 2022 15:21
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runawayturtles posted:Same. Ok, cause I’d rather just set the budget, keep it constant and forget it.
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Sep 17, 2022 15:22
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My employer matches my contributions per paycheck with no true-up, so I won't get the match for the rest of the year if I max out early.
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Sep 17, 2022 15:41
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SamDabbers posted:My employer matches my contributions per paycheck with no true-up, so I won't get the match for the rest of the year if I max out early. Same, and I only get whole percentage point granularity on my withholding, making hitting the right amount rather challenging.
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Sep 18, 2022 06:56
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Jows posted:Same, and I only get whole percentage point granularity on my withholding, making hitting the right amount rather challenging. That's how my plan works too, but they also allow the mega backdoor and give the option to either stop at the IRS limit or spill over to after tax contributions, which also count for the match. If they didn't do this and I wanted to max out to the cent, I'd probably shoot for a small overage in the last check of the year and then ask them to refund the difference. It'd be nice to specify the amount to contribute in dollars, either annually or per check. I'm not sure why they insist on this integer percentage scheme.
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Sep 18, 2022 12:38
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SamDabbers posted:That's how my plan works too, but they also allow the mega backdoor and give the option to either stop at the IRS limit or spill over to after tax contributions, which also count for the match. If they didn't do this and I wanted to max out to the cent, I'd probably shoot for a small overage in the last check of the year and then ask them to refund the difference. At a guess it’s because of the payroll software.
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Sep 18, 2022 16:57
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My family owns several properties in Upper Michigan left from when my grandpa bought them in the 50s and 60s. Most are heavily-wooded in tiny towns (none in cities), and are immensely treasured by myself and my extended family as a place to gather and enjoy life. We all want these properties to stay in the family for future generations, and I’m trying to ensure the costs of taxes and upkeep don’t become an undue burden for them. What would be a virtually zero-risk way to slowly grow the money set aside for taxes and upkeep (A bit over $20,000 at the moment)? As I’m planning based on a timeline of decades and generations, the real return can be pretty small. I considered I Bonds, but those don’t earn a real return and aren’t meant for the very long term right? The money has just been sitting in a checking account, and this horrified me when I found out. I’ve been assuming a larger role in the financial planning side of things, and I’m trying to course-correct for the future. The two current generations are contributing enough to cover annual property taxes at the moment, but I also realize an individual’s circumstances can change and it’s impossible to predict those things.
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Sep 20, 2022 00:52
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A high yield savings account is the only really risk free way to get returns here. You could throw it in a 40/60 index fund which is low risk but would provide some real return; its unlikely to lose money over a 10 year period but obviously there are no guarantees.
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Sep 20, 2022 01:31
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Was told my new job's plan allowed investment in Vanguard Index funds. Turns out it's Vanguard Index fund, singular. Specifically VSMAX, the Vanguard small cap index. Folks, I am irked.
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Sep 20, 2022 01:37
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The Puppy Bowl posted:Was told my new job's plan allowed investment in Vanguard Index funds. Turns out it's Vanguard Index fund, singular. Specifically VSMAX, the Vanguard small cap index. At least it’s the index fund ? I have it and would recommend as a part of a portfolio. But yeah, just one fund is bullshit.
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Sep 20, 2022 03:32
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Valicious posted:As I’m planning based on a timeline of decades and generations, the real return can be pretty small. I considered I Bonds, but those don’t earn a real return and aren’t meant for the very long term right?
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Sep 20, 2022 03:40
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I think conceptualizing in terms of real returns is a trap that can immolate your account through excessive risk. The best way to think of inflation is merely as an extra universal stealth tax. It sucks, but there's not much you can realistically do about it. Just keep trying to pursue long term gains. Chasing ever higher potential returns to counter the inflation loss is likely to just blow up in your face.
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Sep 20, 2022 04:48
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WithoutTheFezOn posted:Whether they’re worth it or not is up to you, but for info series I bonds continue earning interest for 30 years. I Bonds only track the rate of inflation, so that means they won't earn anything over inflation right? Is there another type of bond that would? I'm not "chasing" ever higher returns, just looking for an extremely-low risk option.
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Sep 20, 2022 05:20
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Subvisual Haze posted:I think conceptualizing in terms of real returns is a trap that can immolate your account through excessive risk. The best way to think of inflation is merely as an extra universal stealth tax. It sucks, but there's not much you can realistically do about it. Just keep trying to pursue long term gains. Chasing ever higher potential returns to counter the inflation loss is likely to just blow up in your face. i get where you're coming from, but at the end of the day it's necessary to plan for future expenses in real terms, not nominal (unless it's a fixed rate nominal loan or similar). i think the key is saving at a high enough rate that you don't need very high long term real returns that push you too far on the risk spectrum, but you need to consider real returns or you might end up like the folks who only invest in savings accounts or cd's and eating a nominal gain but real loss
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Sep 20, 2022 05:44
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Valicious posted:I Bonds only track the rate of inflation, so that means they won't earn anything over inflation right? Is there another type of bond that would? I'm not "chasing" ever higher returns, just looking for an extremely-low risk option.
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Sep 20, 2022 05:44
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Subvisual Haze posted:I think conceptualizing in terms of real returns is a trap that can immolate your account through excessive risk. The best way to think of inflation is merely as an extra universal stealth tax. It sucks, but there's not much you can realistically do about it. Just keep trying to pursue long term gains. Chasing ever higher potential returns to counter the inflation loss is likely to just blow up in your face. Hedge funds are essentially cancer, the cool part is there are so many hedge funds now that their returns are just cratering as a group. The space is so crowded the actual returns net of fee are like less than solid index fund averages which is just kind of hilarious to me. Yet "Wall Street" is such a dishonest incestuous hydra-like entity that people are still hot to chase those big returns and ignore the 2 and 20.
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Sep 20, 2022 05:49
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Valicious posted:I Bonds only track the rate of inflation, so that means they won't earn anything over inflation right? Is there another type of bond that would? I'm not "chasing" ever higher returns, just looking for an extremely-low risk option. i bonds have a base rate which the inflation adjustment is added onto. so theoretically i bonds could beat inflation if the base rate was raised, it's just that the base rate has been zero basis points for a very long time, so in effect you won't earn more than inflation (slightly less than inflation once taxes are factored in) tips (treasury inflation protected securities) also protect against inflation and have the possibility of real returns (generally worse tax treatment though). the quick and dirty (you should probably look up some additional articles), tips are priced such that the yield is less than an identical nominal bond (think of it as an insurance premium against inflation) based on the markets expectation. if inflation over the bond's term is equal to or less than market expectations at the time of the bond's issue, you would have been better off holding a nominal bond. if inflation is worse than market expectations you benefit by holding tips. the same interest rate risk for nominal bonds holds for tips if you want to sell before the bond matures, or if you hold a tips fund (this came as a shock to some this year, you do alright on the inflation end, but then the fed raises rates and the price on your tips goes down). they're not something i hold now, but i'm very interested in using them to duration match expected expenses in retirement edit: i hadn't seen your original post, so i'll expand. a tips ladder sounds like it could possibly meet your goals (it's really dependent on your expected costs and current yields) in that it will provide essentially a guaranteed real future income on a fixed day. the problems that come to mind are that these things can be tedious to administer (not too many hours a year, but generally not 'set it and forget it'), and since this expense seems like it may be in perpetuity, you still run the risk of eventually running out depending on costs and current/future yields https://retirementresearcher.com/how-do-i-build-a-tips-bond-ladder-for-retirement-income/ here's an article on the concept from a retirement perspective if this is really supposed to be covering upkeep in perpetuity, in a perfect world i'd personally try to get enough principal so you'd only have to withdraw 1%-2% annually and then invest that in something very conservative like 70% fixed income (mostly tips) and 30% in some mix of domestic and international equity. i'd also consult a lawyer about some kind trust, if that's not already in place GhostofJohnMuir fucked around with this message at 06:17 on Sep 20, 2022 |
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Sep 20, 2022 05:56
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pseudanonymous posted:Hedge funds are essentially cancer, the cool part is there are so many hedge funds now that their returns are just cratering as a group. The space is so crowded the actual returns net of fee are like less than solid index fund averages which is just kind of hilarious to me. Yet "Wall Street" is such a dishonest incestuous hydra-like entity that people are still hot to chase those big returns and ignore the 2 and 20. Haven't hedge funds, and actively managed funds as a whole, lost a ton of AUM to vanguard and friends over the last 10 years?
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Sep 20, 2022 06:02
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GhostofJohnMuir posted:
The would be a buffer of the ~$20k that wouldn’t be invested. (Perhaps 80% invested). I like the idea of a TIPS ladder. I know I’m willing to put in the few hours of work/year, but I can’t speak to future generations with 100% certainty. Switching to a complete set-it-and-forget-it approach can always be reevaluated in the future if need be. I like the idea of a trust. It’s something I’ve been thinking of, but unsure if the costs of setting one up are worth it. Everything has just been sitting in a personal bank account, so you can imagine my reaction at learning all this.
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Sep 21, 2022 00:28
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Oh boy is this thread overwhelming.  But thank you smart goons for posting all of your smart words.
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Sep 21, 2022 04:54
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The r/personalfinance flowchart gets you more than 90% of the way there. After that its agonizing over tiny rear end changes that may or may not actually have any relevance or meaningful impact to your situation
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Sep 21, 2022 04:56
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The most significant factors in long-term investing are 1) Starting 2) Staying Most people start late and can't stay put! Regular contributions into broad indexes outperform even the best market timers. Horrible market timers still come out several times ahead of mattress-stuffers.
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Sep 21, 2022 05:02
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Happiness Commando posted:The r/personalfinance flowchart gets you more than 90% of the way there. After that its agonizing over tiny rear end changes that may or may not actually have any relevance or meaningful impact to your situation Thanks for this. That flow chart is handy and a lot easier to understand. I'm fortunately quite a ways down that flow chart. Space Fish posted:The most significant factors in long-term investing are Yeah, I am all for index funds and I at least know that much. Having had a lot of my money tied up in a house during the 2007/2008 recession, I am always very wary of not having access to money. I think I've started doing taxable index funds before maxing out 401ks, IRAs, HSAs, etc. I suppose I need to back up a bit once I'm comfortable with where my "accessible money" is. I'm sure you all get that type of question/comment all of the time, so no need to go over it for the 100th time on my behalf. Thanks for the recommendations. 
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Sep 21, 2022 05:10
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Internet Explorer posted:Thanks for this. That flow chart is handy and a lot easier to understand. I'm fortunately quite a ways down that flow chart. If you have any question just ask. We all kind of love discussing this stuff.
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Sep 21, 2022 05:33
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spwrozek posted:If you have any question just ask. We all kind of love discussing this stuff. I see that!  I've got a bunch of notes just from skimming the last 10-20 pages and the recommendations so far are great. I'm sure I'll be back with questions. Thank you! 
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Sep 21, 2022 05:35
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Valicious posted:We all want these properties to stay in the family for future generations, and I’m trying to ensure the costs of taxes and upkeep don’t become an undue burden for them. What you’re looking for is a perpetuity, which—as far as I can tell—don’t exist as specific products at present. In order for you to meet your goals, you are going to need to invest enough money that it can throw off enough gains to pay for a (somewhat inflation-linked) cost while itself growing so that it can continue to throw that off. This means you need a plan that significantly beats inflation, since compounding is working against you otherwise. Most of the rules of thumb for personal finance won’t quite work for you. They are designed to let people live well and have a decent retirement and maybe leave a little more behind. For example, things like the safe withdrawal rate of 4% succeeds if the money runs out in year 31. That’s a failure in the case of your generational goals. On the timelines you are planning for, “virtually-zero risk” involves a different set of trade-offs than it does for someone planning for a human lifetime. You should be looking towards the asset allocation of things like endowment funds which tend to manage that kind of risk with a mixture of safe and risky assets and *very* conservative withdrawal rates. You might also need to look at some kind of family structures that can manage some of the tax burdens and things associated with passing the property on. You could also think about what kind of contributions you could ask people to make which could lower the pressure on needed returns.
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Sep 21, 2022 12:27
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Internet Explorer posted:I think I've started doing taxable index funds before maxing out 401ks, IRAs, HSAs, etc. I suppose I need to back up a bit once I'm comfortable with where my "accessible money" is. Just so you know, your contributions (but not growth) into a Roth IRA are always accessible to you, although you shouldn't touch them unless it is absolutely necessary. There is almost no reason to contribute to a taxable fund before maxing that.
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Sep 21, 2022 12:51
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doingitwrong posted:What you’re looking for is a perpetuity, which—as far as I can tell—don’t exist as specific products at present. In addition to the endowment, there are various legal structures that could make it easier to retain the properties within the family and prevent a single inheritor who controls one from selling, but then it increases friction if you DO need to sell it, and there can be governance or administration issues with maintaining the entity. Petty family squabbles and all that, but now in legal form.
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Sep 21, 2022 14:59
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drainpipe posted:Just so you know, your contributions (but not growth) into a Roth IRA are always accessible to you, although you shouldn't touch them unless it is absolutely necessary. There is almost no reason to contribute to a taxable fund before maxing that.  Thank you.
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Sep 21, 2022 15:45
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I had Fidelity send me a check from my old 403b, so I could send it to Vanguard to roll into my current 401k. The payee was made out wrong (my fault), so I called them to get a new check properly made out. I logged into my account and noticed there was $19 in there - I thought issuing the check would close my account? I asked and they said no, to do that would be a different transaction (withdrawal). Is that correct?
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Sep 21, 2022 16:04
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What is the general advice for a grandparent that wants to invest money for a grandkid? My mom wants to start setting aside money for our daughter (who is under 1yo at the moment). My mom said she'd prefer it not be restricted to educational use, to maybe allow my daughter to travel or something after turning 18. We're in the United States. As far as I can tell in my very amateur research, the options generally are:
Am I missing anything? Does anyone have any experience or advice with this sort of thing?
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Sep 21, 2022 16:11
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incogneato posted:What is the general advice for a grandparent that wants to invest money for a grandkid? My mom wants to start setting aside money for our daughter (who is under 1yo at the moment). My mom said she'd prefer it not be restricted to educational use, to maybe allow my daughter to travel or something after turning 18. Apparently 529s held by a grandparent are counted against kids when it comes to tuition aid for college in a way that parents' 529 accounts are not. I am not sure about the details of this.
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Sep 21, 2022 16:22
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Smashing Link posted:Apparently 529s held by a grandparent are counted against kids when it comes to tuition aid for college in a way that parents' 529 accounts are not. I am not sure about the details of this. It’s the other way around.
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Sep 21, 2022 16:35
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