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Even HDHPs can get a little creative in their interpretation of preventative benefits. For example the ACA mandates a very narrow list of preventative medications that covered 100% pre-deductible, but my insurance has their own add-on list of certain additional medication categories (asthma, diabetes, heart meds, some antidepressants) that also are fully covered pre-deductible.
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Jul 1, 2023 18:04
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Atahualpa posted:I received an email about Multi-Year Guaranteed Annuities from a company that sometimes sends out retirement/investment stuff to members of my union. From a bit of research it sounds like these are very similar to CDs: a fixed-rate asset with specific duration where you know the exact rate at time of purchase, but with slightly different tax implications, issued by insurance companies rather than banks, and not FDIC-insured. Are there any other downsides I'm overlooking? The rates I'm seeing medium-to-long-term MYGAs are on par to moderately better than what I've been seeing for callable CDs and way better than anything I've seen for call-protected ones. Personally I am very skeptical of annuities. Not because there is anything inherently wrong with them as a concept but because they make sense for so few people and because they tend to be so expensive. Principal protection probably refers to your "investment" not being able to go down in value the way stocks or bonds can. Anything that offers downside protection does so at the expense of upside. For example something that tracks the S&P500 but literally can't go down probably caps the gains at 5% a year or something. It sounds nice but its actually terrible as the S&P500 tends to go up by a lot more than 5% in most up years. In the end you have far less money than a simple index fund due to that upside cap blocking most of the gains. Then add fees on top of that. I would make sure to get a very clear understanding of the fee structure and exit process/fees. They aren't actively trying to sell this thing because they are being charitable. The other thing I would do is take all of the info about this insurance product (because that's what it is, an insurance product, not an investment) and talk to a fee only fiduciary financial advisor about it to see if its a good fit for your situation. Insurance companies often make these things very complex because they don't want you to understand how they work. Because if you did you probably wouldn't buy it because you would be able to tell it wasn't a good fit for you. They know these things aren't a good fit for most people so they have to make that hard to figure out. Edit: Here are my thoughts on when an annuity might make sense. Specifically a single premium fixed income annuity. These are pretty simple. You pay the insurance company some large amount of money, X, once. They then pay you some smaller amount of money, Y, each month/year/whatever for the rest of your life. The math here is pretty simple. The insurance company is betting you will die before their payments to you exceed X plus whatever they got by investing that money over the time period. Lifespans are a thing you can do actuarial tables on so they set Y to a value that they feel is unlikely to loose them money. You on the other hand are betting that you will live long enough to get all your money back and then some. In that sense an annuity like this is insurance against outliving your money. Its not perfect. There is nothing for your next of kin to inherit and the payments, Y, aren't going to be adjusted for inflation. Odds are the insurance company wins here but some people like knowing they can't outlive their income. Antillie fucked around with this message at 15:44 on Jul 7, 2023 |
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Jul 1, 2023 21:16
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Absurd Alhazred posted:And I'm going to be honest, I'm not comfortable with using weird loopholes (some of which should have been closed by Build Back Better, apparently!) to get more tax benefits. Up to you, and it's true that the backdoor Roth was originally going to be closed and then wasn't, but it's a very commonly known thing and is endorsed by the IRS. IMO, the super-rich have so many benefits over the rest of us that I'm happy to take what little I can get.
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Jul 1, 2023 23:22
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The only weird thing about the Roth IRA is that they haven't just removed the income contribution requirement entirely.
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Jul 1, 2023 23:30
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runawayturtles posted:Up to you, and it's true that the backdoor Roth was originally going to be closed and then wasn't, but it's a very commonly known thing and is endorsed by the IRS.
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Jul 1, 2023 23:32
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Can you fully fund a Fidelity trad ira, convert it to roth the next day, and everything is good to go or is there some kind of time window? ie. Can you fund Jan 2nd, convert Jan 3rd, and handle it at tax time the next year? BlackMK4 fucked around with this message at 00:50 on Jul 2, 2023 |
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Jul 2, 2023 00:45
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BlackMK4 posted:Can you fully fund a Fidelity trad ira, convert it to roth the next day, and everything is good to go or is there some kind of time window? Are you suggesting you create a trad ira with fidelity, fund it to your max Roth contribution, and rollover the following day? If so, yes, iirc that should be fine and is how I set up my back door Roth
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Jul 2, 2023 00:48
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BlackMK4 posted:Can you fully fund a Fidelity trad ira, convert it to roth the next day, and everything is good to go or is there some kind of time window? Fidelity might have like a 2-3 day lag but basically yeah.
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Jul 2, 2023 00:48
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Mykroft posted:Are you suggesting you create a trad ira with fidelity, fund it to your max Roth contribution, and rollover the following day? If so, yes, iirc that should be fine and is how I set up my back door Roth Yup. CubicalSucrose posted:Fidelity might have like a 2-3 day lag but basically yeah. Perfect, thank you both. Good to go
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Jul 2, 2023 00:50
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BlackMK4 posted:Yup. Keep in mind in subsequent years you may notice you have a couple cents in the trad ira account and that’s fine, just keep putting your once a year contribution in there and rolling over (uh… unless other goons tell me that is actually weird, afaik it’d get rounded down in your taxes and be a non thing every year)
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Jul 2, 2023 00:55
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Tax calculations round to the nearest dollar. If it is less than 50 cents then it is zero.
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Jul 2, 2023 00:56
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Pretty much every us congressman and senator does the backdoor ira. It's cool.
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Jul 2, 2023 01:42
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smackfu posted:Sounds like a good idea to just mail them in and see what happens. Only downside is that it may take a looooong time. Whenever I’ve sent them bonds, it’s 6-8 weeks minimum before they show up in my account one day with no notice. It’s not a huge deal, just something to be aware of.
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Jul 2, 2023 02:59
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Me and partner have a big mortgage at 4.83 apr which is a 30 year we're one year into. We managed to fully fund our tax advantaged accounts this year for the first time. After e fund and other medium term goals we have about 1k left over per month to invest somewhere. Does it make more sense to go brokerage, or put it into the mortgage principle? Or hedge and do both?
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Jul 2, 2023 06:25
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Spikes32 posted:Me and partner have a big mortgage at 4.83 apr which is a 30 year we're one year into. We managed to fully fund our tax advantaged accounts this year for the first time. After e fund and other medium term goals we have about 1k left over per month to invest somewhere. Does it make more sense to go brokerage, or put it into the mortgage principle? Or hedge and do both? Do you pay for PMI?
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Jul 2, 2023 06:32
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Absurd Alhazred posted:And I'm going to be honest, I'm not comfortable with using weird loopholes (some of which should have been closed by Build Back Better, apparently!) to get more tax benefits. Honestly, and we can bitch about tax law all day, but a lot of this was caused by a loophole abused by the ultra-rich that the final versions of Build Back Better didn't actually close. ...But then again, seems like claiming to close tax loopholes while actually making sure the ultra-rich are unaffected seems to be the MO for a lot of Democrats these days.* * this statement is not intended as an endorsement of any opposing political party.
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Jul 2, 2023 08:07
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CubicalSucrose posted:Do you pay for PMI? We do not.
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Jul 2, 2023 14:37
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withak posted:Tax calculations round to the nearest dollar. If it is less than 50 cents then it is zero. Just to clarify this because it’s something that I recently dug into: It is the tax filers choice to ignore cents when reporting. If the tax filer chooses to report cents on any line, they must report it on all lines. https://www.irs.gov/instructions/i1040gi#idm140064131360464  Practically, your tax software is 99.999% rounding those numbers because it’s the correct thing to do. However, one of my friends recently got audited by the IRS because his employer’s W2 had cents but his 1040 didn’t. He’s in the perfect sweet spot for getting audited (phd student being claimed as a dependent).
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Jul 2, 2023 19:26
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Spikes32 posted:We do not. Then it's basically "What makes you sleep better at night?" territory. You expect to make more over the long term by dumping it into VTI or whatever, but you seem to be in a good enough position that the peace of mind of early mortgage payoff might overrule it.
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Jul 2, 2023 20:34
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DNK posted:Just to clarify this because it’s something that I recently dug into: Another case of Free Tax USA looking out for the little filers by being so consistent about auto-rounding. (I would hope all tax filing sites do the same... right?)
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Jul 2, 2023 20:53
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That seems like a waste of an audit?
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Jul 2, 2023 21:24
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So I'm trying to convert a rollover IRA into my Roth IRA but for whatever reason, it says I owe $70 to Vanguard on it and won't let me convert it until I fix that. I haven't touched this account in like a decade so I'm not sure where the -$70 is from, but I've already contributed the full limit to my IRA this year, so it doesn't seem like there's any way to get that -$70 removed? Does anyone know of a way I can fix this or do I have to wait until next year to contribute $70 to it to make it right, and then I can convert it?
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Jul 2, 2023 21:27
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CubicalSucrose posted:Then it's basically "What makes you sleep better at night?" territory. You expect to make more over the long term by dumping it into VTI or whatever, but you seem to be in a good enough position that the peace of mind of early mortgage payoff might overrule it. OK that's about what I was thinking. Thanks for confirming
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Jul 2, 2023 21:59
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smackfu posted:That seems like a waste of an audit? It is profoundly unlikely that was the actual or only basis for the audit, unless it was an automated mail one.
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Jul 2, 2023 22:43
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Discendo Vox posted:It is profoundly unlikely that was the actual or only basis for the audit, unless it was an automated mail one. It was an auto mail audit and that was the only reason for the audit. I, too, am taken aback by how utterly ridiculous it is ...which is why I went through the effort of digging through IRS 1040 filing guidance.
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Jul 3, 2023 00:08
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DNK posted:It was an auto mail audit and that was the only reason for the audit. I, too, am taken aback by how utterly ridiculous it is ...which is why I went through the effort of digging through IRS 1040 filing guidance. Ah, well- just remember that IRS tech is so limited that the advanced software intended to make office audit documentation easier was built for windows 95 and will irretrievably crash if you use the clipboard functions.
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Jul 3, 2023 01:05
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What's the short version of how best to store more than the FDIC-insured $250k in an essentially non-volatile state for a retiree who is fully shifting into spend mode, as someone with very limited financial background? Separate bank accounts with multiple institutions? My mom's in her mid-70's but already looking at memory issues and will need assisted care in some form sooner than later, so I've been working to take over her finances, selling her house to get her close to us, and working on making sure we have everything we need in a liquid state. With all the other logistics I haven't had time yet for a deep dive on the links in the OP, have very limited background except for a target date retirement Roth IRA of my own. By the time her house sells I'll need to store about $400k before I even start looking at her inherited investments or farm rental property. I was planning to use a Capital One 360 (formerly ING) account to store a chunk like I do with my own paltry savings, but these are bigger numbers than I've dealt with by an order of magnitude.
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Jul 3, 2023 01:20
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Sofi has a program for up to 2 million of fdic coverage https://www.sofi.com/banking/fdic/ if you decide to keep it in cash and not cds or anything else
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Jul 3, 2023 01:27
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Remy Marathe posted:What's the short version of how best to store more than the FDIC-insured $250k in an essentially non-volatile state for a retiree who is fully shifting into spend mode, as someone with very limited financial background? Separate bank accounts with multiple institutions? Consider an annuity, perhaps? immediateannuities.com SPIAs are what I've heard from what I consider to be relatively reputable sources, but this has not ever been something I've seriously looked into. Also, multiple bank accounts each with 200k or whatever should work, but that could be a lot of management.
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Jul 3, 2023 01:30
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Brain Curry posted:Sofi has a program for up to 2 million of fdic coverage https://www.sofi.com/banking/fdic/ if you decide to keep it in cash and not cds or anything else Most banks have something similar to this. Talk to your FI.
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Jul 3, 2023 01:34
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If you're clicking the buttons or whatever, and not your mom, brokered CDs are another option. You get $250k insurance per bank, and can deposit money into hundreds of different banks in $1000 increments for terms from 1 month up to 2 or 5 years. The rates are usually higher than almost all HYSAs and it's all managed from a single account at Vanguard or Fidelity or whatever. The downside is it's a little bit more complicated than just a regular bank account so whoever is actually managing the money has to be comfortable with that.
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Jul 3, 2023 03:38
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Remy Marathe posted:What's the short version of how best to store more than the FDIC-insured $250k in an essentially non-volatile state for a retiree who is fully shifting into spend mode, as someone with very limited financial background? Separate bank accounts with multiple institutions? I'm not sure if you're already planning on it or not, but you really need to talk to an estate planning attorney, especially if she's going to need assisted care. There's no polite way to really bring this up, but assisted living/nursing home care is incredibly expensive and can deplete someone's entire savings in a matter of years. There are things that can be done, if you want to, to try to preserve some of those assets now.
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Jul 3, 2023 05:42
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Remy Marathe posted:What's the short version of how best to store more than the FDIC-insured $250k in an essentially non-volatile state for a retiree who is fully shifting into spend mode, as someone with very limited financial background? Separate bank accounts with multiple institutions? Fidelity Cash Management Accounts will give FDIC insurance for up to $1.25 million by automatically splitting the money into separate non-fidelity bank accounts to stay under the limit for each one. It all happens behind the scenes and it just appears like a normal checking account to you. The only thing to watch out for is if you have external funds at one of those banks it might push the total deposits over the FDIC limit for that particular bank.
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Jul 3, 2023 17:37
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Thanks for the leads all, they help a lot. And thanks for the prompt on an estate planning attorney, I've never gotten paid legal or financial advice in any context before and it's definitely time.
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Jul 3, 2023 23:05
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I am re-allocating into VTSAX, VTIAX, and VBTLX, distributing between a taxable brokerage and an inherited trad IRA. I have about 6 years left before I have to drain what remains of the balance of the inherited trad IRA. Of those three funds, is there one I should prioritize putting into the inherited IRA, as it is essentially a time-limited tax sheltered IRA space? I have read it is best to have bond funds in tax-sheltered accounts, so maybe I should put at least put the entirety of the bond fund in there? Appreciate any thoughts.
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Jul 6, 2023 16:48
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It's pretty ballsy of the federal government to charge you taxes on the interest income they give you for borrowing your money.
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Jul 6, 2023 19:08
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hobbez posted:I am re-allocating into VTSAX, VTIAX, and VBTLX, distributing between a taxable brokerage and an inherited trad IRA. I have about 6 years left before I have to drain what remains of the balance of the inherited trad IRA. The bond fund, at the moment, is going to throw off more income. Putting that into the inherited IRA will delay some of those taxes. Additionally, capital gains get a much more favorable tax treatment in taxable accounts than IRAs where everything is treated as normal income (I think). So, keeping the stock funds in your taxable makes more sense.
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Jul 6, 2023 23:40
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neurobasalmedium posted:It's pretty ballsy of the federal government to charge you taxes on the interest income they give you for borrowing your money. Why? If you work for the federal government you still pay federal income taxes.
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Jul 7, 2023 03:04
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drk posted:The bond fund, at the moment, is going to throw off more income. Putting that into the inherited IRA will delay some of those taxes. Thank you!
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Jul 7, 2023 03:38
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neurobasalmedium posted:It's pretty ballsy of the federal government to charge you taxes on the interest income they give you for borrowing your money.
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Jul 7, 2023 19:56
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