Long Term Investing & Retirement: The second best time is now

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Long Term Investing & Retirement: The second best time is now

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GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

I thought the line about "Why do wealthy people own stocks, while poor people are less likely to own stocks?" was going to be a joke and not a sincere question by the Yale Economist

# ? Oct 18, 2022 02:18

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# ? May 27, 2024 11:43

totalnewbie: Nov 13, 2005; I was born and raised in China, lived in Japan, and now hold a US passport.

I am wrong in every way, all the damn time.

Ask me about my tattoos.

GoGoGadgetChris posted:

I thought the line about "Why do wealthy people own stocks, while poor people are less likely to own stocks?" was going to be a joke and not a sincere question by the Yale Economist

On one hand, I do appreciate the need to challenge our assumptions about what appear to be obvious things by studying them empirically.

For example, you might think it's better to charge EVs overnight when power demand is low, but that's not necessarily the case: https://www.latimes.com/california/story/2022-09-24/california-electric-vehicles-daytime-charging-power-grid-study

That said.. lol takes a Yale economist to figure out why people with no money can't buy things with the money they don't have huh?

# ? Oct 19, 2022 21:43

pseudanonymous: Aug 30, 2008; When you make the second entry and the debits and credits balance, and you blow them to hell.

totalnewbie posted:

That said.. lol takes a Yale economist to figure out why people with no money can't buy things with the money they don't have huh?

Economics has a huge divide between macro and micro economists and you frequently get galaxy brain takes about micro economic issues from macro economists, especially when it seems like a macro question.

# ? Oct 19, 2022 22:02

pmchem: Jan 22, 2010

edit: wrong thread

to make up for mispost, here's some long-term content

very pretty chart

https://twitter.com/bespokeinvest/status/1582814648507633664

# ? Oct 19, 2022 23:00

totalnewbie: Nov 13, 2005; I was born and raised in China, lived in Japan, and now hold a US passport.

I am wrong in every way, all the damn time.

Ask me about my tattoos.

This is the kind of poo poo that people love to soak up but is so completely meaningless.

# ? Oct 20, 2022 05:49

pokeyman: Nov 26, 2006; That elephant ate my entire platoon.

It might help convince someone not to sell on a down day? Maybe?

# ? Oct 20, 2022 07:17

Mr. Glass: May 1, 2009

good news for next year: the IRS is increasing the 401k contribution limit to $22500 and the overall limit to $66000 (mainly due to inflation).

https://www.irs.gov/pub/irs-drop/n-22-55.pdf

# ? Oct 21, 2022 18:27

KYOON GRIFFEY JR: Apr 12, 2010; Runner-up, TRP Sack Race 2021/22

Hey how about the IRA which everyone has equal access to and fully controls, how about that one?

oh

# ? Oct 21, 2022 18:39

Mr. Glass: May 1, 2009

i mean that's getting a $500 bump too but yeah it's never made sense to me that it's a separate limit

# ? Oct 21, 2022 18:43

KYOON GRIFFEY JR: Apr 12, 2010; Runner-up, TRP Sack Race 2021/22

one individual retirement account that you control that your employer can contribute to would be too simple and favorable to the employee so of course it cannot be done

# ? Oct 21, 2022 18:47

GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

Owns that my employer is tasked with providing up to $43,500 of my annual retirement savings and they're like "nah how about $3k"

# ? Oct 21, 2022 18:58

Mr. Glass: May 1, 2009

GoGoGadgetChris posted:

Owns that my employer is tasked with providing up to $43,500 of my annual retirement savings and they're like "nah how about $3k"

i currently have the best 401k plan i've ever heard of and there's still a $30000 gap that can only be filled by using an insane tax rules loophole (mega backdoor)

# ? Oct 21, 2022 19:06

SpartanIvy: May 18, 2007; Hair Elf

Mr. Glass posted:

i currently have the best 401k plan i've ever heard of and there's still a $30000 gap that can only be filled by using an insane tax rules loophole (mega backdoor)

Same, except my company's plan doesn't offer the mega backdoor so I'm just SoL.

I don't even understand the logic behind it. Do C-level's get 200% match on the 401K or something? What is the point of having such a high total contribution limit when someone can only contribute up to a third of it, and I've never seen a company offer more than 6% match (or 100% match for the first 6% as they prefer to phrase it)

# ? Oct 21, 2022 19:15

pseudanonymous: Aug 30, 2008; When you make the second entry and the debits and credits balance, and you blow them to hell.

SpartanIvy posted:

Same, except my company's plan doesn't offer the mega backdoor so I'm just SoL.

I don't even understand the logic behind it. Do C-level's get 200% match on the 401K or something? What is the point of having such a high total contribution limit when someone can only contribute up to a third of it, and I've never seen a company offer more than 6% match.

Uh yes. They often get things like unfunded contributions.

# ? Oct 21, 2022 19:16

Leperflesh: May 17, 2007

SpartanIvy posted:

Same, except my company's plan doesn't offer the mega backdoor so I'm just SoL.

I don't even understand the logic behind it. Do C-level's get 200% match on the 401K or something? What is the point of having such a high total contribution limit when someone can only contribute up to a third of it, and I've never seen a company offer more than 6% match (or 100% match for the first 6% as they prefer to phrase it)

politicians are often self-employed in their side hustle

that's really the entire reason

# ? Oct 21, 2022 19:19

ROJO: Jan 14, 2006; Oven Wrangler

Speaking of mega-back doors, what will I have to do if I accidentally squeak over the $61k limit? I am trying to avoid meticulously charting everything out, and have reduced my contribution now to just the point where I max my employer contribution. I think I am going to be safely below the limit by about a pay period, but curious how much I should be really making sure.

# ? Oct 21, 2022 19:34

Residency Evil: Jul 28, 2003; 4/5 godo... Schumi

SpartanIvy posted:

Same, except my company's plan doesn't offer the mega backdoor so I'm just SoL.

I don't even understand the logic behind it. Do C-level's get 200% match on the 401K or something? What is the point of having such a high total contribution limit when someone can only contribute up to a third of it, and I've never seen a company offer more than 6% match (or 100% match for the first 6% as they prefer to phrase it)

The IRS also places limits on the amount of compensation that can be matched (300kish), so if you get an 8% match on 300k, you're still missing out on the full amount even after your own 20k.

# ? Oct 21, 2022 19:36

withak: Jan 15, 2003; Fun Shoe

ROJO posted:

Speaking of mega-back doors, what will I have to do if I accidentally squeak over the $61k limit? I am trying to avoid meticulously charting everything out, and have reduced my contribution now to just the point where I max my employer contribution. I think I am going to be safely below the limit by about a pay period, but curious how much I should be really making sure.

Your company doesn't cut off automatically at contribution limits? I would think most do.

# ? Oct 21, 2022 19:37

KYOON GRIFFEY JR: Apr 12, 2010; Runner-up, TRP Sack Race 2021/22

SpartanIvy posted:

Same, except my company's plan doesn't offer the mega backdoor so I'm just SoL.

I don't even understand the logic behind it. Do C-level's get 200% match on the 401K or something? What is the point of having such a high total contribution limit when someone can only contribute up to a third of it, and I've never seen a company offer more than 6% match (or 100% match for the first 6% as they prefer to phrase it)

there are various fairness tests to try to avoid having this type of stuff happen

# ? Oct 21, 2022 19:41

spwrozek: Sep 4, 2006; Sail when it's windy

Mr. Glass posted:

i mean that's getting a $500 bump too but yeah it's never made sense to me that it's a separate limit

Shockingly it actually went up to $7500.

# ? Oct 21, 2022 19:44

Mr. Glass: May 1, 2009

ROJO posted:

Speaking of mega-back doors, what will I have to do if I accidentally squeak over the $61k limit? I am trying to avoid meticulously charting everything out, and have reduced my contribution now to just the point where I max my employer contribution. I think I am going to be safely below the limit by about a pay period, but curious how much I should be really making sure.

usually the only way for this to happen is if you changed jobs this year and your new 401k administrator doesn't know how much you put in on your old plan. every plan i've heard of will stop taking contributions once you hit the limit (since it's almost certainly even more annoying for them to straighten out than it is for you).

# ? Oct 21, 2022 19:46

Fezziwig: Jun 7, 2011

spwrozek posted:

Shockingly it actually went up to $7500.

I'm reading that's the catch-up limit if you're over 50.

# ? Oct 21, 2022 19:48

Mu Zeta: Oct 17, 2002; Me crush ass to dust

It's $6500 if you're under 50

# ? Oct 21, 2022 19:48

spwrozek: Sep 4, 2006; Sail when it's windy

Fezziwig posted:

I'm reading that's the catch-up limit if you're over 50.

The first result on google has all the wrong info. great. lol.

# ? Oct 21, 2022 19:53

ROJO: Jan 14, 2006; Oven Wrangler

withak posted:

Your company doesn't cut off automatically at contribution limits? I would think most do.

I was assuming the worst and wasn't trusting my employer to be that smart, but maybe fidelity is? I guess I will call. Thanks!

# ? Oct 21, 2022 20:08

Super Dan: Jan 26, 2006

spwrozek posted:

The first result on google has all the wrong info. great. lol.

Seems to work fine for me

# ? Oct 21, 2022 20:19

80k: Jul 3, 2004; careful!

withak posted:

Your company doesn't cut off automatically at contribution limits? I would think most do.

It's not that simple, since $61K includes your pretax, your match, your profit sharing contributions, everything. It'd be bad to be cut-off prematurely, since you still want to squeeze in your non-mega-backdoor contributions/matches. In short, you should plan carefully ahead of time.

# ? Oct 21, 2022 20:23

spwrozek: Sep 4, 2006; Sail when it's windy

Super Dan posted:

Seems to work fine for me

had I guess? The article has been edited that it took me to. doesn't really matter. $6500, it is dumb, keep maxing it out.

# ? Oct 21, 2022 21:42

downout: Jul 6, 2009

This all sounds unnecessarily dumb and complicated.

# ? Oct 21, 2022 21:46

drk: Jan 16, 2005

fans of logging in to treasurydirect: I got around to making a tampermonkey script to allow logging in with a password manager

code:

// ==UserScript==
// @name         TD PW RW
// @namespace    http://tampermonkey.net/
// @version      0.1
// @description  remove readonly from td login
// @author       forums member drk
// @match        https://www.treasurydirect.gov/RS/PW-Display.do
// @icon         
// @grant        none
// ==/UserScript==

(function() {
    'use strict';
    document.querySelector(".pwordinput").removeAttribute("readonly");
})();

drk fucked around with this message at 01:36 on Oct 22, 2022

# ? Oct 22, 2022 00:02

Valicious: Aug 16, 2010

I�m catching up in the thread, and I�m a bit confused. What�s the $61k limit that�s being talked about?

# ? Oct 22, 2022 00:19

Residency Evil: Jul 28, 2003; 4/5 godo... Schumi

Valicious posted:

I�m catching up in the thread, and I�m a bit confused. What�s the $61k limit that�s being talked about?

Limit of 401k employEE AND employER contributions.

# ? Oct 22, 2022 00:43

Leperflesh: May 17, 2007

Which means it's effectively the maximum amount of dollars that rich self-employed people can stuff into the 401k space of their tax advantaged savings. If you're self-employed and your business makes like $400k a year you can pay yourself a salary, put your $22k out of your salary into the 401k, and then your business adds in another 39k in employee contributions. Do this every year for thirty years and you've stuffed 1.8M just in contributions into tax-advantaged space.

Note: it is a little more complicated than I'm making it sound, see
https://www.bankrate.com/retirement/401k-contributions/
but this is the gist.

Leperflesh fucked around with this message at 01:07 on Oct 22, 2022

# ? Oct 22, 2022 01:04

drk: Jan 16, 2005

helpful table for the not at all confusing US tax-advantaged retirement/savings accounts

# ? Oct 22, 2022 16:53

CmdrRiker: Apr 8, 2016; You dismally untalented little creep!

Which seems like a better thing to do, the ~9% for 6mo I Bonds for a year or so, or buying more risky stocks during the bear market?

# ? Oct 24, 2022 14:25

DNK: Sep 18, 2004

The only reason to not take a risk-free 9% is:
�locking money away for 1 year
�you forfeit 3mo of returns if you withdraw before 5yrs (turning the above into a risk free ~4.5%, which is still wildly good)

DNK fucked around with this message at 17:21 on Oct 24, 2022

# ? Oct 24, 2022 14:31

Motronic: Nov 6, 2009

CmdrRiker posted:

Which seems like a better thing to do, the ~9% for 6mo I Bonds for a year or so, or buying more risky stocks during the bear market?

The reason one would choose one vs the other are nearly opposite.

Ibonds are capital preservation that is appropriate for short term needs. "Buying risky stocks" is a gambling addiction. Buying broad market index funds is a long term investment.

So what matters is the intent of the money you're investing.

# ? Oct 24, 2022 14:32

CmdrRiker: Apr 8, 2016; You dismally untalented little creep!

DNK posted:

The only reason to not take a risk-free 9% is:
�locking money away for 1 year
�you forfeit 6mo of returns if you withdraw before 5yrs (turning the above into a risk free 4.5%, which is still wildly good)

Is that right? I read this:

quote:

You can cash in (redeem) your I bond after 12 months.

However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest. See Cash in (redeem) an EE or I savings bond.

# ? Oct 24, 2022 15:04

Mu Zeta: Oct 17, 2002; Me crush ass to dust

As long as the I Bonds are so high I'd max that out first. Even the 6.4% the next 6 months is a great guarantee. Then throw it in stocks after ~15 months so you lose the last 3 months of the presumably crappier I Bond rate.

# ? Oct 24, 2022 15:10

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# ? May 27, 2024 11:43

Harveygod: Jan 4, 2014; YEEAAH HEH HEH HEEEHH

YOU KNOW WHAT I'M SAYIN

THIS TRASH WAR AIN'T GONNA SOLVE ITSELF YA KNOW

While on the topic of I-bonds:

My semi-retired parents have a few hundred thousand dollars in cash that they want to do something low-risk with. My mom is probably going to put it in a 9-month CD for now, but I've suggested also buying two $10,000 I-bonds.

They also want to put something extra away for their 3 grandkids. I've read a little at TreasuryDirect and they should be able to buy bonds as gifts for them. It looks like any gifted bonds would stay in a "gift box" in my mom's account until the grandkids' parents set up accounts for each recipient.

Does anyone know how long the bonds can stay in the "gift box" before being delivered? Could they just stay in there (while earning interest) for like 10 - 15 years before transferring it to accounts controlled by the kids/parents? I know the rate will lower at the end of the week, so I'm planning to help them buy today/tomorrow.

# ? Oct 24, 2022 16:33

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Long Term Investing & Retirement: The second best time is now

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