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What ever happened to the lawsuits filed against Vanguard, trying to make them be more expensive because they "were anti-competitive" by not needing an added profit margin beyond that of their fund owners? We talked about them for like a week and then never again.
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Jan 11, 2023 00:18
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Vanguard hosed over a bunch of people recently through a fund change so it's not like you're magically immune from them doing bad things to you. If Fidelity gets worse you can leave. Changes have to be announced so it's not like you will have no warning. To be fair to Vanguard, holding TDFs in taxable brokerage has always been a bad idea. It still wasn't well managed.
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Jan 11, 2023 00:39
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Unsinkabear posted:But they're still a publicly traded company, so imo you need to keep one eye on them if you are going to leave large sums of money there. Fidelity is actually privately owned by the Johnson family and employees.
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Jan 11, 2023 00:40
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Vanguard as a company might not have an incentive to screw investors over, but do the Vanguard executives who make the decisions that determine how much they're compensated? (I'm not being snarky, it's something I've wondered.)
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Jan 11, 2023 00:49
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Fidelity surprised investors with a similar tax bill in 2019 https://www.bogleheads.org/forum/viewtopic.php?t=299021#p4923776 Fortunately Vanguard announced the tax bill about 2 months ahead of time in its preliminary year-end distribution estimates https://advisors.vanguard.com//iwe/pdf/taxcenter/FAFYEEST_122021.pdf But unfortunately, the type of people to hold TDF in taxable are the type of people who don't read their emails. They'll hopefully do better in the future.
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Jan 11, 2023 01:16
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raminasi posted:Vanguard as a company might not have an incentive to screw investors over, but do the Vanguard executives who make the decisions that determine how much they're compensated? (I'm not being snarky, it's something I've wondered.) and you’re gonna keep wondering because Vanguard is only gonna give you this corporate speak word salad: https://corporate.vanguard.com/cont...trics_final.pdf they definitely aren’t gonna detail pay or pay schemes for high execs https://www.bloomberg.com/news/articles/2017-01-19/how-well-does-running-vanguard-pay https://archive.ph/siXdV quote:
but they’re happy to try and cut retiree benefits if they think they can get away with it https://www.inquirer.com/business/vanguard-board-of-directors-retiree-medical-accounts-20211018.html quote:
I love what Bogle and VG did, say, 20-40 years ago but they’ve been coasting on reputation and I’m really looking forward to transferring more accounts out of there after tax season. For a services company, their services and service trail competitors. I can hold their ETFs anywhere.
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Jan 11, 2023 01:19
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KYOON GRIFFEY JR posted:If Fidelity gets worse you can leave. Changes have to be announced so it's not like you will have no warning. To someone who does this as a hobby and is keyed into the news, I'm sure that's valid. To someone who sticks their monthly auto-draft in their target date fund and immediately stops paying attention to it, it is very possible to have no warning. I'm talking about the latter group. poo poo like that bites people all the time. ChineseBuffet posted:Fidelity is actually privately owned by the Johnson family and employees. Whooops. I looked up share prices and found FNF, but that's a different Fidelity National Financial. I don't think ownership includes the employees anymore, though. I got excited and tried to find out if they're transparent about executive comp after you posted this and pmchem posted Vanguard's disappointing lovely stance on the subject, and instead found this article about their new CEO killing the profit-sharing program for upper-level employees two years ago, and a lot of the commissions for lower-level employees shortly before that. pmchem posted:I love what Bogle and VG did, say, 20-40 years ago but they’ve been coasting on reputation and I’m really looking forward to transferring more accounts out of there after tax season. For a services company, their services and service trail competitors. I can hold their ETFs anywhere. I guess I'm just not doing anything complicated enough to run into those issues. They've been fine for me. I don't need shiny new services, I need a place for my money to sit whose interests roughly align with mine. They're not perfect but they're still the closest thing I can see to that right now.
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Jan 11, 2023 15:39
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Unsinkabear posted:To someone who does this as a hobby and is keyed into the news, I'm sure that's valid. To someone who sticks their monthly auto-draft in their target date fund and immediately stops paying attention to it, it is very possible to have no warning. I'm talking about the latter group. poo poo like that bites people all the time. anyone who gives enough of a poo poo to come in to the most lame part of a dead gay forums is engaged enough to read emails from their brokerage
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Jan 11, 2023 15:54
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KYOON GRIFFEY JR posted:anyone who gives enough of a poo poo to come in to the most lame part of a dead gay forums is engaged enough to read emails from their brokerage Haha, I guess that's fair. I was thinking of an issue I had with Alliant a while back where they tried to slash the value of existing rewards points, and despite paying attention to that stuff I never saw an advance email or bit of news on the subject. I (and many others, by the sound of it) found out from the final email that the change had just been applied. I don't know if it was an issue with phrasing triggering people's spam filters or what, but it wasn't a good look when combined with that action. Given that they're a credit union, though, I'm not sure that example is a good argument for collective ownership being the safer bet. 
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Jan 11, 2023 16:08
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Yep, the ownership model is no guarantee. I like the principle behind Vanguard's ownership model and I think their presence in the market has caused other competitors to perform better, which is great, and so I support them. But I don't think that the result for an individual investor is inherently better, and when you're investing, even broad market long term stuff, there's responsibility to pay attention and look after things. None of the major custodians are going to actively rug pull or gently caress you up in secret.
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Jan 11, 2023 16:43
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Fidelity is privately owned by the Johnson family. Not publicly traded. Need details on your pension plan. Is it a cash balance plan?
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Jan 11, 2023 17:58
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daslog posted:Fidelity is privately owned by the Johnson family. Not publicly traded. That mistake was already pointed out and acknowledged. And tbh, I can't say it being owned and run by a billionaire who is increasing her own profit by slashing their long-standing and unique employee benefits to reshape it in a more trad US corporate image is... a particularly great answer to my concerns.
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Jan 11, 2023 18:11
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Unsinkabear posted:That mistake was already pointed out and acknowledged. I missed the part about benefits being cut. Got a link?
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Jan 11, 2023 18:52
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daslog posted:I missed the part about benefits being cut. Got a link? Ah, my bad, it was a very short link in that post. Here you go: https://riabiz.com/a/2020/1/13/head...y-and-execution While I was looking for a higher quality article I also found this other bit of news: https://www.reuters.com/investigates/special-report/usa-fidelity-family/ In conclusion, everyone is bad, currency was a mistake, and we should never have come down from the trees.
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Jan 11, 2023 19:10
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Did I screw up my backdoor Roth? I deposited $6500 for 2021 and $6500 for 2022 into a traditional IRA, both in 2022. I then rolled it over into a Roth IRA. Now I've got a 1099R that shows a taxable distribution for $12000, code 2 - early distribution, exception applies. Am I hosed?
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Jan 11, 2023 19:59
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MJP posted:Did I screw up my backdoor Roth? The limit for 2021 and 2022 was $6000 edit: unless you were over 50
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Jan 11, 2023 20:10
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MJP posted:Did I screw up my backdoor Roth? No, that's how it's supposed to look on the 1099R, it should have box 2b checked, which means "we don't know the tax implications, have your tax software figure it out". The tax software should walk you through form 8606 to document the non-deductibility of the original contribution which will eliminate the tax liability on the conversion.
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Jan 11, 2023 20:26
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drk posted:The limit for 2021 and 2022 was $6000 The way Vanguard does it, you put in how much you want to contribute for a year in separate boxes - I put $6000, I don't know where I got $6500. The 1099R lists $12000. I think the panic blew out my math skills. I'm under 50. SlapActionJackson posted:No, that's how it's supposed to look on the 1099R, it should have box 2b checked, which means "we don't know the tax implications, have your tax software figure it out". The tax software should walk you through form 8606 to document the non-deductibility of the original contribution which will eliminate the tax liability on the conversion. Does this count as checked? 
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Jan 11, 2023 20:55
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truavatar posted:
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Jan 11, 2023 20:56
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When I opened/transferred all my accounts following advice from this thread and other places a number of years ago, I chose Vanguard. This was based on reputation, the fact that I wanted to auto-invest (which requires mutual funds), and the fact that I wanted to freely use the same mutual funds most people provide in examples (i.e. Vanguard ones). Knowing what I know now, it doesn't really matter that much, but I probably would have chosen Fidelity. Fidelity just offers a better user experience and more fully-developed features, while it feels like Vanguard has been spinning its wheels for a long time, not really able to make progress on any improvements. MJP posted:Does this count as checked? Yes.
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Jan 11, 2023 21:01
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raminasi posted:... Thanks for the responses all - very helpful! I decided to go with Fidelity since I already have my HSA there. I'll move the small handful of day-trade stocks I've got over to a Fidelity brokerage account from TD Ameritrade as well. Nice to have everything in one place for simplicity. Next step will be to do some research on investment options beyond simple target date funds. Looks like fidelity has some zero expense ratio index funds that could be good. daslog posted:Need details on your pension plan. Is it a cash balance plan? Just called the pension office. I can rollover to a trad IRA without any penalty or to a Roth IRA with usual tax implications (but no extra penalty).
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Jan 11, 2023 21:12
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MJP posted:Did I screw up my backdoor Roth? Nothing wrong, but that might be a bit more complicated than usual. Were the $6k you put in for 2021 included in last year's tax filings? e: should be fine either way. https://thefinancebuff.com/backdoor-roth-tax-return-made-easy.html has good templates of Form 8606 in both situations. Subvisual Haze fucked around with this message at 22:04 on Jan 11, 2023 |
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Jan 11, 2023 22:01
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I have used and have accounts at both Vanguard and Fidelity. At this point, I think you could go either way, but Fidelity lost my trust in 2007-2008 in a way that still puts Vanguard ahead, for me at least. Leading up to the GFC in 2008/2009, Fidelity bond funds had a lot of exposure to subprime loans. This wasn't just in their junk bond funds, but also their ultra-short and short bond fund that was supposed to be of the investment grade credit quality, as well as their Treasury inflation-protected securities fund, which was supposed to be all treasuries. You know how in the prospectuses, they always cover their asses with verbage that says "At least 80% of the funds will be invested in such-and-such way"? Well, Fidelity took that literally and actually had subprime exposure in funds that were supposed/implied to be 100% investment grade or even treasury funds. None of Vanguard's funds had this problem. This led me to believe that although the prospectuses are written similarly, Vanguard's (IMO) superior culture and reputation still matters. Fast forward to now, Fidelity's selection of stock and bond index funds are actually fantastic. They have even lower fees than Vanguard, and they also track their respective indices very well. In short, there isn't a lot of evidence that you have to worry about the scenario I described above. That said, Fidelity still has some evidence that they are trying to cater to the millennial/FOMO/YOLO crowd. This is evidenced by their reps participating in the Fidelity subreddit and answering stupid questions about shorts and loaning of shares for the GME "How do I know you are not part of a hedge fund conspiracy" crowd. Their beta interface looks like Robinhood. And they launched Fidelity Crypto recently. I'm not impressed with their direction. Honestly, I'm not convinced Vanguard's supposed decline in customer service and their inferior website/app makes Fidelity a superior choice.
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Jan 11, 2023 22:19
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I have my HSA at Fidelity and buy Fidelity index funds with it. It's fine. I have my Roth IRA at Vanguard and buy Vanguard index funds with it. It's also fine. If I wanted to do more complicated trading stuff I'd probably go with Fidelity if I had to choose between the two, but for a lazy index fund buyer like me I think they're both fine.
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Jan 11, 2023 22:30
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I have Vanguard and Schwab. They’ve both been fine for everything I’ve tried to do so far.
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Jan 11, 2023 23:27
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e: wrong thread
nelson fucked around with this message at 23:47 on Jan 11, 2023 |
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Jan 11, 2023 23:32
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truavatar posted:Just called the pension office. I can rollover to a trad IRA without any penalty or to a Roth IRA with usual tax implications (but no extra penalty). I think you need to investigate and understand all the implications of pulling out of the pension. There's a lot of different flavors of pension! Some have a fixed annual payout, others pay out an amount that goes up with CPI. Some have a cap, others keep paying till you die. Some are historically well-managed, some are managed terribly and run millions or even billions short. You need to understand what the expected value of your pension payouts are, and compare them to what you can likely generate on your own with your own investment strategy, keeping in mind your needs to maintain a proportion of cash, sequence-of-returns risk, etc. This thread has a lot of great advice about investing etc. but few of us really know a lot about pensions and given their variety, my feeling is that you should not pull out of that pension based solely on this thread's advice. You need to read the plan documents carefully and maybe consult experts to figure out if you have a dynamite, top notch pension, a run of the mill one, or something dogshit that you'd be happy to bail on.
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Jan 11, 2023 23:36
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I absolutely agree with your post, and will also note that while IRA/401(k)/403(b)/457/TSP rules are both common and universal, that is absolutely not the case with pensions. They are all fun special snowflakes.
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Jan 12, 2023 00:26
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truavatar posted:Thanks for the responses all - very helpful! I decided to go with Fidelity since I already have my HSA there. I'll move the small handful of day-trade stocks I've got over to a Fidelity brokerage account from TD Ameritrade as well. Nice to have everything in one place for simplicity. Even at Fidelity it might make more sense to use VTI over FZROX. VTI is portable, so you can bring it with you to Vanguard or Schwab or IBKR if Fidelity shits the bed later. And FZROX is a mutual fund which has a little extra baggage over ETFs. But either one is great!
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Jan 12, 2023 00:40
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Leperflesh posted:I think you need to investigate and understand all the implications of pulling out of the pension. It’s an excellent pension, but I’m not really pulling out of it - I didn’t work for the city long enough to vest. So I’m required to take my contributions back if I don’t return to service with the city within 5 years. I just want to make sure however I get my money back is done in the most advantageous way. That said, I learned today that Gov. Hochul signed a law last year allowing my tier of pension to vest in 5 years instead of 10, which I’m actually quite close to. So now I’m inclined to let it sit in the bucket and make the flat 5% in case something big changes in my life over the next few years and I actually go back to work for the city or state. If I don’t, I can just roll it over to an IRA at the end of the 5 year limit. CubicalSucrose posted:Even at Fidelity it might make more sense to use VTI over FZROX. VTI is portable, so you can bring it with you to Vanguard or Schwab or IBKR if Fidelity shits the bed later. And FZROX is a mutual fund which has a little extra baggage over ETFs. But either one is great! This is a good point, thank you.
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Jan 12, 2023 01:16
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What is the use case for storing money in a C.D. as opposed to a HYSA? I've never used a C.D. but I'm curious.
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Jan 12, 2023 03:21
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Dangerous Mind posted:What is the use case for storing money in a C.D. as opposed to a HYSA? I've never used a C.D. but I'm curious. Generally speaking a CD will have a higher interest rate with a lock. If you locked in a 18 month CD with my HYSA bank it pays 4.4%, 110bps higher than their current HYSA rate of 3.3%. However, you lock that rate for 18 months, unlike a HYSA which has a floating rate. If interest rates go down, your HYSA might only pay 2.25, but that CD will pay 4.4 through the term of the CD. To mitigate interest rate risk most people who are loving about with CDs and T-bills use ladders, which is just a fancy way of saying that they time purchases at set intervals or pick multiple durations so that not all of those instruments reach maturity at the same time.
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Jan 12, 2023 03:42
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You could think of the HYSA as you just paying the bank a little bit to add you to a huge CD ladder.
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Jan 12, 2023 03:49
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Leperflesh posted:I think you need to investigate and understand all the implications of pulling out of the pension. There's a lot of different flavors of pension! Some have a fixed annual payout, others pay out an amount that goes up with CPI. Some have a cap, others keep paying till you die. Some are historically well-managed, some are managed terribly and run millions or even billions short. You need to understand what the expected value of your pension payouts are, and compare them to what you can likely generate on your own with your own investment strategy, keeping in mind your needs to maintain a proportion of cash, sequence-of-returns risk, etc. Another topic on pensions, is inheritence. Depending on which plan you elect, your spouse or partner may get everything that was entitled to you, or half. Others, you may not be able to pass it on like you would an IRA. It may stay in the pension fund, or at least that has been the impression on some of the stuff I've been reading. In my area the local pipe fitters have a pretty good pension funding. Their take home pay is about $50/hr. Their pension contribution is about $18. However, as far as the health of the funds themselves. (They've got a national, state, and supplemental fund) I'll have to do a bit more digging around to find that.
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Jan 12, 2023 05:22
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I bought I-series bonds last year, $10k each for my wife and I. Is there a general guideline for how long to hold them? I like the idea of guaranteed interest pegged to inflation but it skews my bond percentage a bit. If I keep them, I'm at around 12.5% in bonds, if I sell them I get down to around 10%. I'm 40, looking to retire 55-62, so I feel like I should sell the bonds once they hit the 1-year mark. They'd let me do the backdoor IRAs for the year and pay off my property taxes, which then frees up more per month to invest as I normally do. Not trying to time the market, just making sure I don't lose $ in the I-series as inflation continues. Already maxing 401ks and HSA. Got a few months' worth of life in savings. MJP fucked around with this message at 16:59 on Jan 12, 2023 |
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Jan 12, 2023 16:41
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I bonds are pegged to inflation. So any money you would be losing are gains in the market that you can't predict, right?
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Jan 12, 2023 17:02
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Count them as part of your emergency fund and recalculate accordingly IMO.
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Jan 12, 2023 17:10
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MJP posted:I bought I-series bonds last year, $10k each for my wife and I. Is there a general guideline for how long to hold them? I like the idea of guaranteed interest pegged to inflation but it skews my bond percentage a bit. If I keep them, I'm at around 12.5% in bonds, if I sell them I get down to around 10%. I'm 40, looking to retire 55-62, so I feel like I should sell the bonds once they hit the 1-year mark. They'd let me do the backdoor IRAs for the year and pay off my property taxes, which then frees up more per month to invest as I normally do. Remember if you sell before 5 years you lose some of the interest.
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Jan 12, 2023 17:10
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withak posted:Count them as part of your emergency fund and recalculate accordingly IMO. MrLogan posted:Remember if you sell before 5 years you lose some of the interest. Solid logic. I'm happy to punt the decision and treat 'em as a fixed high-interest savings account until the inflation crisis abates, hopefully sooner than 5 years. CubicalSucrose posted:Why did you buy them? Used to be in my savings account until I recalculated how much we'd need in savings for real serious "I need this in three days to exist for three months of zero income even from disability or insurance" problems. I wasn't sure at the time if I should invest or do something else with it. Thus I bought the I-bonds in order to punt the decision and see what happened with the market. It wasn't part of a broader strategy, just part of the "we're gonna have serious-rear end inflation problems in 2022" crowd. Tangential question: my BIL has a new daughter. I want to contribute to her 529. If he's married filing jointly and the sole income earner, is it better for me to just give him a check for $5k so he can contribute to it for a tax break or should I use Ugift or whatever to gift directly to it? MJP fucked around with this message at 17:54 on Jan 12, 2023 |
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Jan 12, 2023 17:28
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MJP posted:I bought I-series bonds last year, $10k each for my wife and I. Is there a general guideline for how long to hold them? I like the idea of guaranteed interest pegged to inflation but it skews my bond percentage a bit. If I keep them, I'm at around 12.5% in bonds, if I sell them I get down to around 10%. I'm 40, looking to retire 55-62, so I feel like I should sell the bonds once they hit the 1-year mark. They'd let me do the backdoor IRAs for the year and pay off my property taxes, which then frees up more per month to invest as I normally do. Why did you buy them?
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Jan 12, 2023 17:50
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