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GhostofJohnMuir posted:god, the day i figured out an after tax/non-deductible ira contribution was something completely different from a roth ira contribution blew my loving mind. when you step back from it, the layers of different tax advantaged rules really are just a crock of poo poo. i get a perverse pleasure from learning about this stuff, and after years of reading about it, listening to podcasts about it, and talking on forums about it, i'm still finding new nuances i didn't know. i can't imagine how your average joe is supposed to parse all of this poo poo They're literally not, the whole point is to make it confusing and also scary so you pay someone who coincidentally isn't even a fiduciary, i.e. works for one of the firms that lobby's to keep adding new layers of confusing regulations and opportunities that are mostly only available to people who make a lot of money (relative to the average American) but don't have wealth in the sense that they just live off their investments.
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Dec 23, 2022 06:54
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Good-Natured Filth posted:I have been given a Long-Term Incentive bonus at my company this year for the first time. I can choose between RSUs or Options or a mix between the two. From what I gather, it's usually a 6:1 difference in how many Options vs RSUs you'd get. Both are awarded on a 3-year graded vesting schedule. The Options must be exercised within 10 years of grant date, and the grant date is the lookback point when exercising. Check to see if the options expire when (or shortly after) you quit. If they do, then quitting when the stock is down will be harder than it otherwise would be. As for valuation, the former employer I worked at that granted option-like compensation priced them such that the expected value was equivalent to the RSUs they granted, just with higher volatility. Your company might be doing the same thing. (This fact was buried in the documentation but we eventually found it.) runawayturtles posted:And yeah, Vanguard added support for fractional ETF shares recently. They still don't support auto-investing in them, and I doubt they will any time soon considering AFAIK Fidelity still doesn't support that either. Fidelity offers the ability to automatically reinvest dividends into fractional ETFs for some ETFs. I don’t know exactly what the criteria are but SGOV is supported at least.
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Dec 23, 2022 06:57
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pseudanonymous posted:They're literally not, the whole point is to make it confusing and also scary so you pay someone who coincidentally isn't even a fiduciary, i.e. works for one of the firms that lobby's to keep adding new layers of confusing regulations and opportunities that are mostly only available to people who make a lot of money (relative to the average American) but don't have wealth in the sense that they just live off their investments. Part of it is also that a whole lot of this poo poo wasn't even planned, just happened to allow for non-rich people to do things with weird loopholes that have become enshrined as the norm, right?
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Dec 23, 2022 12:33
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GhostofJohnMuir posted:god, the day i figured out an after tax/non-deductible ira contribution was something completely different from a roth ira contribution blew my loving mind. when you step back from it, the layers of different tax advantaged rules really are just a crock of poo poo. i get a perverse pleasure from learning about this stuff, and after years of reading about it, listening to podcasts about it, and talking on forums about it, i'm still finding new nuances i didn't know. i can't imagine how your average joe is supposed to parse all of this poo poo It's not meant to be decipherable, it's an amalgam of all the fun little tax advantages that the wealthy have lobbied into our tax code. That's why tax professional is a job that exists. Any benefit to the common man is a bug or a compromise that they needed to get it through, not a feature
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Dec 23, 2022 15:24
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Ben Felix has discussed this before but he put out a new video on the 4% rule. It ultimately comes do to your withdraw rate considering the timeline and your risk. A good video though suggesting a lower rate but really don't blindly follow that number. https://www.youtube.com/watch?v=1FwgCRIS0Wg
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Dec 23, 2022 18:02
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spwrozek posted:I pulled the trigger on my GF loss harvest and need to do the reinvest. Question about the reinvestment, Sold VTSAX and VFIAX and I basically see these options: How about VLCAX / VV? It functions very similar to VFIAX / VOO, but includes a couple dozen more companies. That'd make you a bit more diversified than VFIAX, without having to balance around VEXAX. edit: I see you already made your choice, but the point still stands. I think VLCAX is a really underappreciated fund. literally this big fucked around with this message at 21:10 on Dec 23, 2022 |
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Dec 23, 2022 21:02
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literally this big posted:How about VLCAX / VV? It functions very similar to VFIAX / VOO, but includes a couple dozen more companies. That'd make you a bit more diversified than VFIAX, without having to balance around VEXAX. Still appreciated. I will add it to my list of funds for the future.
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Dec 24, 2022 02:22
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spwrozek posted:Still appreciated. I will add it to my list of funds for the future. IMO hold VTSAX in your tax-advantaged accounts. Use VLCAX as your primary holding in your taxable account, with VFIAX as a secondary fund for when you need a second fund of similar performance to avoid wash sales, etc. That's what I do, and I like to pretend that I'm special and that I've got this super secret underappreciated idea that only I realized. But really that's the best fund selection and placement IMO. Simpler than having to constantly rebalance 80/20, slightly more tax efficient, avoids the consequence of selling in your taxable limiting your ability to purchase in your tax-advantages account, etc. literally this big fucked around with this message at 03:06 on Dec 24, 2022 |
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Dec 24, 2022 03:01
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if you're hunting for tax-loss harvesting pairs, Vanguard provides a tool very useful for that: https://advisors.vanguard.com/investments/portfolio-construction-tools/compare-products/ you can find correlated products (just don't pick something with an identical underlying fund or index) e.g. for VV (VLCAX's ETF version), highest correlations among Vanguard ETFs are VONE, VTI, VTHR and MGC at 0.99. No surprises there. The tool can also search among non-Vanguard products.
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Dec 24, 2022 03:51
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Salami Surgeon posted:Yes. That's what the OP recommends: Hmm I made some elections but I'm seeing more in this PDF than the ADP UI was showing me, so I'll take a look again once I can change my elections in a few days. https://imgur.com/a/sq6nu3v Both State Street S&P 500 Index Securities and State Street S&P Midcap Index look good to me? Are any of the other options better?
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Dec 25, 2022 07:21
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Ubiquitus posted:Hmm I made some elections but I'm seeing more in this PDF than the ADP UI was showing me, so I'll take a look again once I can change my elections in a few days. https://imgur.com/a/sq6nu3v  But yeah, that 500 fund is your best bet.
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Dec 25, 2022 07:34
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So, do the plan advisors get some sort of kickback by picking high ER funds? I get not every plan will have access to the lowest cost options, but a lot of those funds have literally 10x or more the fees of best in class funds.
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Dec 25, 2022 17:59
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I assume that the cost to the employer is reduced by having high fee funds. And then they have a single S&P 500 fund that is reasonable so they can point the complainers to it. Edit: Checked my wife’s plan and the fees for her BlackRock S&P 500 Index is 0.14 and all the target retirement ones are around 0.90 and a few other ones get down to 0.65. So we are all in on the cheap one and diversify elsewhere. smackfu fucked around with this message at 18:29 on Dec 25, 2022 |
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Dec 25, 2022 18:16
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smackfu posted:I assume that the cost to the employer is reduced by having high fee funds This is exactly what it is. In these sorts of high fee plans, the company is passing on the plan admin fees to the participants via high ERs. In all likelihood it’d actually be total cost cheaper to pay plan admin fees separately and get cheaper funds but that’d come out of the company’s pocket instead of the employees’. The company either knows and doesn’t care, or is incompetent and getting swindled by 401k plan salesmen. Or both.
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Dec 25, 2022 18:29
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Guinness posted:
It’s more apathy probably, it’s a problem nobody is complaining about and will be a big hassle to switch plans or providers but if it goes wrong the manager or director in charge will get blamed. Also if the CFO or whatever doesn’t care about it or likes some aspect of the current fund, you risk their wrath if you try to do something about it.
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Dec 25, 2022 18:41
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Yeah I guess it could be apathy, we just lost a HR person AND doubled in headcount over the past 6 months. It would be hilarious if it was incompetence, considering it’s indirectly fintech
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Dec 26, 2022 04:24
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I complained a lot about my 401k in the recent employee survey at my job, and I know other people did too, so maybe there's a little momentum behind fixing it. It's also through ADP and similar to the one posted, but we don't have anything with expense ratios that low or even an S&P500 index.
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Dec 26, 2022 16:57
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I've been shopping for a 401k, and let me tell you, it's easier to shop for health insurance
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Dec 26, 2022 17:50
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I have to say, I quite like the SIMPLE IRA I have through the (very) small business I work for. No fees for the employer or employees, and the list of available investments is... all of Vanguards mutual funds. The biggest downside is the lower contribution limit: 15.5k vs 22.5k for a 401k next year. I think the employer match is also much less flexible.
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Dec 26, 2022 18:21
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I got a dumb question. If I made no income this year and I want to get rid of some stocks I'm holding at a loss; is it better to do it now or wait till next year? (Assuming I have income next year).
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Dec 29, 2022 00:51
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Do you have any capital gains? If so, you might not want to take a loss this year since your gains wont be taxed anyways.
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Dec 29, 2022 02:17
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drk posted:Do you have any capital gains? If so, you might not want to take a loss this year since your gains wont be taxed anyways. Nah no gains. Thanks.
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Dec 29, 2022 03:13
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If you have no gains, then now might be exactly the time to take some of the losses since you can offset up to $3,000 of ordinary income with capital losses. Edit: disregard, glossed over the part where you had no income of any kind. But leaving this up in case the information is useful to someone else.
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Dec 29, 2022 14:41
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How do capital losses work with qualified dividends? Since they are different schedules it looks like they don't interact until the Qualified Dividends and Capitals Gains worksheet on 1099. I have 4k of dividends, so even if I have capital losses of the 3k max on Sche D, it looks like they will offset the qualified dividends (at 15%) first and there is no way to offset any regular income (at 22%)? Is there any argument for loss harvesting if you can't do it at a advantageous tax rate? Xenoborg fucked around with this message at 15:34 on Dec 29, 2022 |
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Dec 29, 2022 15:31
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Xenoborg posted:How do capital losses work with qualified dividends? Since they are different schedules it looks like they don't interact until the Qualified Dividends and Capitals Gains worksheet on 1099. Try the entire worksheet again... I am pretty sure it offsets ordinary income first.
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Dec 29, 2022 18:09
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You are right, the lower rates for Qualified dividends and Long Term Gains get counted last. Short term gain and short/long gains get applied directly to income on 1099 before your income goes into the worksheet.
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Dec 29, 2022 19:38
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I maxed out both mine and my wife’s RothIRA this year and just realized we’re over the max income. Oops! What do we do?? I’m assuming I’ll have to call Vanguard for help moving the deposited money from Roth IRA to trad IRA’s and then back to Roth? So annoying. Why do we have to play these games.
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Dec 30, 2022 23:29
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You need to do a recharacterization to get it back to traditional, there's an online form for it. Here's a page with info and the link to the form at the bottom but also you can call if you want to talk through it I'd imagine: https://investor.vanguard.com/investor-resources-education/iras/ira-recharacterization
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Dec 31, 2022 02:22
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Animal posted:I maxed out both mine and my wife’s RothIRA this year and just realized we’re over the max income. Oops! What do we do?? I’m assuming I’ll have to call Vanguard for help moving the deposited money from Roth IRA to trad IRA’s and then back to Roth? So annoying. Why do we have to play these games. I had to do this very recently and it was pretty easy just to call Vanguard. They were able to create a trad IRA account and do all the recharacterizations and forms all over the phone pretty quickly. Then when it processed a day later or so I just had to go in and click a button to convert it back to Roth
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Dec 31, 2022 16:51
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What are people’s opinions on Ibonds in 2023? Are they worth picking up again now that their interest rate is low(er)?
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Dec 31, 2022 21:33
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Still higher than a HYSA right?
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Dec 31, 2022 21:35
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withak posted:Still higher than a HYSA right? Looks like the composite rate is 6.9% (nice) until April, so it’s probably worth buying them at least until we see what the new rate ends up being. I know people here were also talking about laddering 6 month t-bills or something.
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Dec 31, 2022 21:43
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Residency Evil posted:What are people’s opinions on Ibonds in 2023? Are they worth picking up again now that their interest rate is low(er)? I buy the max every year, but the question is always... do I wait until May (or even November) or take a chance that the 0.4% real rate is the best rate we will get this year?
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Dec 31, 2022 21:51
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Residency Evil posted:What are people’s opinions on Ibonds in 2023? Are they worth picking up again now that their interest rate is low(er)? I'm buying since my current I Bonds are almost all 0% real. Since I intend to hold I Bonds long term, dumping the 0% rate ones for 0.4% seems like a good idea. Will probably keep an eye on TIPS also though since they are currently yielding 1.6-1.7% real.
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Dec 31, 2022 22:44
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80k posted:I buy the max every year, but the question is always... do I wait until May (or even November) or take a chance that the 0.4% real rate is the best rate we will get this year? Looking through the history of I bonds the Treasury has never had a non-zero interest rate on new issues for less than a year. Obviously thats not a guarantee and I don't believe they publicly disclose their methodology for setting fixed rates. Chart here: http://www.eyebonds.info/ibonds/rates.html
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Dec 31, 2022 22:57
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Hey, we've got a feedback/rules discussion thread for the new year up here https://forums.somethingawful.com/showthread.php?threadid=4020879 Appreciate any and all of your thoughts.
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Dec 31, 2022 23:22
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Is there a specific windfall / large sum post / series of posts in this thread? Reading up on a few different articles (Bogleheads, etc.) but looking to answer a few key questions in the short-term at least (best parking-lot option, estimating tax, etc.).
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Dec 31, 2022 23:43
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drk posted:Looking through the history of I bonds the Treasury has never had a non-zero interest rate on new issues for less than a year. Obviously thats not a guarantee and I don't believe they publicly disclose their methodology for setting fixed rates. The I bond fixed rate and the federal reserve rate seem to have at least a minor correlation, so I strongly suspect not only will the fixed rate still be there in May but it will probably go up. Assuming inflation continues to fall the semi-annual rate may be considerably lower, though. This is all just me guessing based on a layman's grasp of financial policy, of course, so make your own judgements.
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Jan 1, 2023 00:34
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Bremen posted:The I bond fixed rate and the federal reserve rate seem to have at least a minor correlation, so I strongly suspect not only will the fixed rate still be there in May but it will probably go up. Assuming inflation continues to fall the semi-annual rate may be considerably lower, though. This guy's blog is really the best for everything I-Bonds/EE-Bonds and TIPS: https://tipswatch.com/ I've been reading it for years and based on his previous posts, I'd be expecting a blog post very soon with a recommendation of whether to buy in January or wait. His advice has always been great. Here was last year's early January post: https://tipswatch.com/2022/01/04/i-bonds-a-very-simple-buying-guide-for-2022/ His assessment of what it would take for real rates to rise above zero was spot on. Very unlikely unless an unprecedented surge in real rates occured... which is what happened, and to an extent no one predicted. Starting from -0.97% at the time of that post to +1.57% for the 10 year TIPS yield (just checked Bloomberg)... that is an insane rise. So depite getting a better deal on fixed rates, in November, it was still the right call back in January given the information he had, and he also explained the head start you get with the huge variable rate you get for the 11 months that you would wait until November 2022.
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Jan 1, 2023 01:06
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80k posted:This guy's blog is really the best for everything I-Bonds/EE-Bonds and TIPS: https://tipswatch.com/ To be fair, his prediction was spot on for May; he also noted November was much more open but dismissed it as a major concern since investors could still get the new rate with their new $10,000 cap in the new year (which I don't necessarily agree with since investors might prefer the higher rate on two years worth of capped bond purchases - though that might be a little bit of rationalization because I did indeed wait to make my I-bond purchase and I keep telling myself I don't regret missing that 9.62%, not at all). Anyways, he does have one obvious bit of advice: If you're worried about what the rate will do it makes sense just to wait to buy the I-bond until the last two weeks of April (or October). The new variable rate will be available then so you'll know what you'll be getting after 6 months, and you'll also have more info available to make a guess at what the fixed rate will do. And since you're locked into the variable rate for 6 months anyways you won't be giving up 6 months of potentially higher rates just by waiting (assuming you're not just keeping your money under your bed until then, anyways). Bremen fucked around with this message at 01:59 on Jan 1, 2023 |
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Jan 1, 2023 01:41
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