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SiGmA_X posted:Most 401k's won't allow you to make post tax deposits, and require payroll deductions. But you can only change your contribution at certain times a year, right?
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Oct 28, 2014 20:00
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totalnewbie posted:But you can only change your contribution at certain times a year, right? It varies from plan to plan. I can change my 457 whenever I want and as many times per year as I want.
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Oct 28, 2014 20:06
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I can change my Fidelity 401k contribution amount whenever I want right on their website as often as I like.
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Oct 28, 2014 20:16
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At my company, the max match ($0.50 per dollar withheld up to 6% of paycheck)is on a per-paycheck-withheld basis, so if I said withhold $3000/month from my check thinking my 401k would get filled to $17.5k in ~6 months, then actually I'd be missing out on half the corporate matching on the year because each paycheck (24 in a year) hits a cap of matching equivalent to [(0.5*%6) / 24 paychecks per year]). I'm better off setting $17,500 / 24 paychecks = $729 per paycheck and ensuring that I hit the max only in my last paycheck of the year. Luckily our plan through Schwab does in fact let us set a flat $ amount on the withholding and I don't have to set it as a percentage basis of my check and adjust it whenever I get a raise. So if my salary were $100k/yr, then setting a 401k withholding of $729 per paycheck would give me $125 in matching per check, and $3k max at the end of the year. If I contributed let's say $1500 per paycheck, each contribution would still cap at $125 per paycheck, but my contributions would cap out and stop after about 6 months, and therefore my corporate matching funds would stop as well. Then I'd only have about $1500 in matching for the year.
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Oct 28, 2014 20:28
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totalnewbie posted:But you can only change your contribution at certain times a year, right? That's typically things like health insurance which have an open season or other restrictions. 401k contributions are usually adjustable as often as you like, although some companies with really antiquated processes might have restrictions to try to reduce their overhead cost from lots of adjustments.
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Oct 28, 2014 23:35
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totalnewbie posted:But you can only change your contribution at certain times a year, right? Only on crappy plans. With Vanguard and can do whatever.
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Oct 29, 2014 05:54
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totalnewbie posted:But you can only change your contribution at certain times a year, right? SiGmA_X fucked around with this message at 07:00 on Oct 29, 2014 |
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Oct 29, 2014 06:46
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SpelledBackwards posted:At my company, the max match ($0.50 per dollar withheld up to 6% of paycheck)is on a per-paycheck-withheld basis, so if I said withhold $3000/month from my check thinking my 401k would get filled to $17.5k in ~6 months, then actually I'd be missing out on half the corporate matching on the year because each paycheck (24 in a year) hits a cap of matching equivalent to [(0.5*%6) / 24 paychecks per year]). FYI Most employers make a true up contribution if you miss out on match because of this.
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Oct 29, 2014 07:22
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Remulak posted:Hi All, Mint does this passively and I don't mind it personally. Try Level, I've started using that in addition (since Mint is not great at enforcing your budget, just kind of tracking) and its pretty cool.
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Oct 29, 2014 12:51
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My US employer has a health care plan that allows an HSA, but there is no HSA administrator associated with the plan, so I have to set that up on my own. Any recommendations on HSA administrators? I have a weak preference towards anyone that offers Vanguard funds, as I'm already familiar with them.
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Oct 29, 2014 15:50
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Our company's HSA is setup through PNC if you have any of those nearby. It's been fine for me, and they do offer Vanguard funds as an option.
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Oct 29, 2014 16:45
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PersonalCapital users - has anyone found a way to show home equity? I've added my mortgage and it shows the balance, but not the total paid. I like how Mint gives you at least a rough idea of your home equity and adds that to your net worth. I would love if I could just put in the price paid for the house and have it base equity calculations off that when figuring up net worth.
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Oct 29, 2014 20:43
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Obsolete posted:PersonalCapital users - has anyone found a way to show home equity? I've added my mortgage and it shows the balance, but not the total paid. I like how Mint gives you at least a rough idea of your home equity and adds that to your net worth. I would love if I could just put in the price paid for the house and have it base equity calculations off that when figuring up net worth. You can actually put in your address and it will hook up with zillow to add the house's current value to your net worth. Of course, the usefulness of that is entirely dependent on how close to reality your zillow estimate is. Alternatively, just manually add what you think it's worth, or your purchase price, or whatever.
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Oct 29, 2014 21:26
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SlightlyMadman posted:Alternatively, just manually add what you think it's worth, or your purchase price, or whatever.
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Oct 29, 2014 23:30
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SlightlyMadman posted:You can actually put in your address and it will hook up with zillow to add the house's current value to your net worth. Of course, the usefulness of that is entirely dependent on how close to reality your zillow estimate is. Found it, thank you! Sometimes all it takes is asking a dumb question on the internet to find the right box to click.
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Oct 29, 2014 23:46
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Completely new to this forum, so forgive me if this is asked a lot. But what savings account would you recommend? Obviously I'm looking for a high interest rate. Check-writing would be highly desirable, or at least near-instant transfers to my Schwab checking. Don't care if it's online-only. I'd just be starting so I'd initially deposit like $500 or so. Synchrony seems solid. Anyone save with them? Thanks.
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Oct 31, 2014 14:43
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You won't be able to transfer quickly with any account besides one with Charles Schwab to your checking account, but their savings account isn't very good. An Ally money market account might be good. .85% interest but it lets you write checks and is still FDIC insured. I have a Synchrony account and it's fine, it doesn't sync with Mint if that matters to you. Transfers from either bank will probably take 3-5 business days depending on what bank you initiate the transfer from by the way.
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Oct 31, 2014 15:22
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Actually went with the Sallie Mae MMA. All of those features at .9%.
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Oct 31, 2014 15:45
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I have a little under 6k in fed student loans (like 4000 @4.x%, and 2000@6.5%), and I have a little more than that in the bank. Is there any reason I should not pay them off lump sum once I have a little more of a cushion? Alternatively, I can pay as low as $60 per month until it's gone. It's not like there's something better I can do with the money by putting it somewhere, is there? I'm pretty sure there isn't, but I thought I'd ask.
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Nov 1, 2014 18:02
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Consider paying just half now and keeping a cash cushion for emergencies in your account. Then maybe do 4-10x minimum payments on the remainder as you see fit until it's gone.
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Nov 1, 2014 21:23
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SpelledBackwards posted:Consider paying just half now and keeping a cash cushion for emergencies in your account. Then maybe do 4-10x minimum payments on the remainder as you see fit until it's gone. Yeah, that seems sensible. After my next paycheck in a week, I'll have nearly 2k more than my loan amount in the bank. I'm considering just getting them over with. They really bother me psychologically. Emergency fund is somewhat moot in my situation. If I lose my job, I'm not really qualified/socially adept enough for anything else that stops me from moving back into my parents' apartment anyway. It would only help me sustain something ultimately unsustainable.
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Nov 1, 2014 23:03
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My employer does matching funds for 401k, should I take advantage of this even if I think there is a good chance that I will withdraw early? It seems like a no-brainer, since the penalty is only 10%, and the only drawback is sacrificing liquidity of that 10% because I have to wait for the matching funds. Anything I'm missing?
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Nov 1, 2014 23:48
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jarjarbinksfan621 posted:My employer does matching funds for 401k, should I take advantage of this even if I think there is a good chance that I will withdraw early? It seems like a no-brainer, since the penalty is only 10%, and the only drawback is sacrificing liquidity of that 10% because I have to wait for the matching funds. Anything I'm missing? Why do you think you will need to withdraw early?
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Nov 1, 2014 23:56
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Always contribute enough to get your employer's match, it's free money. Withdrawing early is not a good idea.
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Nov 2, 2014 00:14
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Looks like there was something big I missed, for my company, you only truly own your matching funds after you've worked there X amount of years (percentage per year). It sounds like "free money" is a bit of an oversell. I don't know if I'll even be working there in 2 months, forget 5 years when you get full ownership. I'm gonna pass for now.
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Nov 2, 2014 00:45
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jarjarbinksfan621 posted:Looks like there was something big I missed, for my company, you only truly own your matching funds after you've worked there X amount of years (percentage per year). It sounds like "free money" is a bit of an oversell. I don't know if I'll even be working there in 2 months, forget 5 years when you get full ownership. I'm gonna pass for now. Contributing to a 401k is a good thing to be doing anyway, it's why the government structures things in such a way as to encourage employers to provide a matching fund and thus encourage people to contribute. Do you have some credit card debt you could be paying off instead?
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Nov 2, 2014 01:17
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jarjarbinksfan621 posted:My employer does matching funds for 401k, should I take advantage of this even if I think there is a good chance that I will withdraw early? It seems like a no-brainer, since the penalty is only 10%, and the only drawback is sacrificing liquidity of that 10% because I have to wait for the matching funds. Anything I'm missing? 10% + usual taxes (assuming this isn't a Roth 401k); so if you're doing a non-qualified early withdrawal, you'll probably only see 55-65% of the money you take out, based on your tax bracket. jarjarbinksfan621 posted:Looks like there was something big I missed, for my company, you only truly own your matching funds after you've worked there X amount of years (percentage per year). It sounds like "free money" is a bit of an oversell. I don't know if I'll even be working there in 2 months, forget 5 years when you get full ownership. I'm gonna pass for now. That's pretty typical. It's still free money, you just may only get 20% or 40% if you leave that job in the next few years. Not contributing because you're uncertain about your future career is like not saving for retirement because you could be hit by a bus tomorrow. It sounds like you wanted to contribute some amount, get an employer match and the tax benefits of a 401k, and then be able to withdraw that money. That's not how a 401k is intended to be used.
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Nov 2, 2014 02:58
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jarjarbinksfan621 posted:Looks like there was something big I missed, for my company, you only truly own your matching funds after you've worked there X amount of years (percentage per year). It sounds like "free money" is a bit of an oversell. I don't know if I'll even be working there in 2 months, forget 5 years when you get full ownership. I'm gonna pass for now. How are you planning on investing or spending the money that you would otherwise contribute to your 401k at the full match level?
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Nov 2, 2014 04:00
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RogueLemming posted:That's pretty typical. It's still free money, you just may only get 20% or 40% if you leave that job in the next few years. Not contributing because you're uncertain about your future career is like not saving for retirement because you could be hit by a bus tomorrow. I just wanted to dip my toes in the 401k water without risking a loss should I not like the temperature. The match bonus sounded like a good way to do it, that I would be foolish to not take advantage of. The tax benefits mean nothing to me (would never contribute enough to drop a bracket), in fact, I was leaning somewhat towards the Roth 401k anyway. I have a very uncertain life situation in the present, otherwise I would have no problem socking money away with the risk of a fee should I need it.
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Nov 2, 2014 13:36
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jarjarbinksfan621 posted:The tax benefits mean nothing to me (would never contribute enough to drop a bracket) Um... it doesn't really matter whether you "drop a bracket" or not. In fact the tax benefits are greater when you are in a higher bracket.
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Nov 2, 2014 14:10
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I don't think you understand how taxes and tax brackets work. The money you contribute to a 401k is deducted from your income for tax purposes, so you don't pay taxes on that money. For demonstration purposes, let's say you made 20k a year and are taxed at 10%. That means your yearly income tax is 2000. If you contributed 10k to your 401k, you would only pay 1000 in income tax (until such time that you withdraw). Even if you "dropped a bracket", you are still being taxed at the same rates for income above and below that point. So, again, for demonstration purposes: Taxes from 0-10k is 10% and 10-20k is 20%, you still make 20k. Now, you pay 3000 in income tax per year (10k * 10% + 10k * 20% = 3k). Now, if you contribute 5000, you save (5k * 20% = ) 1000 in income tax. That's what Echo 3 means by the fact that the tax benefits are greater when you're in a higher bracket. The tax system is not set up in a way that if you get a 2 dollar raise to put you up in the next bracket that you actually take a pay cut because of the "extra taxes". That sounds stupid because it is stupid and that's why it's not that way. Warren Buffet pays the same taxes you do (not counting deductions) on his ordinary income. That means from his first to however many dollars, he doesn't pay any taxes on it because it's part of his standard deduction, just like you and me. Now, if you feel you're not able to contribute due to a lack of a rainy day fund and unstable income then that is a much better reason not to contribute. But, if your employer has matching and you can afford to contribute up to the matching, you should absolutely do that, at the very least, while adding to your rainy day fund, until such point that you feel it is sufficient.
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Nov 2, 2014 16:19
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totalnewbie posted:I don't think you understand how taxes and tax brackets work. I understood that, but if it's tax-deferred, I am still going to end up paying those taxes (more or less) anyway. That's why I don't really see it as a discount. totalnewbie posted:Even if you "dropped a bracket", you are still being taxed at the same rates for income above and below that point. So, again, for demonstration purposes: Oh, I did not know that. The way people are so passionately against progressive taxation made me think otherwise.
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Nov 2, 2014 19:10
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I'm currently saving for a house deposit, and have about £15k saved with the intention of buying a house around this time next year. I'm currently getting 3% interest in a savings account on this, but it seems that there must be something i can do with a chunk of this to try and get better returns? I obviously don't want to expose myself to too much risk and end up losing money so I cant put the deposit down on a house next year. I was thinking of taking 1-3k of this and doing something with it, but i'm not sure what. Am i just better off sitting on this until i put it down, especially given the relatively short time frame? For the record, i'm 23, no debts apart from student loan (UK student loan, not US if that makes a difference), have a credit card i pay off every month. No experience with doing anything with my money apart from putting it into a savings account. I wasn't sure if this was the right place for this, any advice appreciated though!
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Nov 2, 2014 19:38
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Marco YOLO posted:I'm currently saving for a house deposit, and have about £15k saved with the intention of buying a house around this time next year. I'm currently getting 3% interest in a savings account on this, but it seems that there must be something i can do with a chunk of this to try and get better returns? I obviously don't want to expose myself to too much risk and end up losing money so I cant put the deposit down on a house next year. I was thinking of taking 1-3k of this and doing something with it, but i'm not sure what. Am i just better off sitting on this until i put it down, especially given the relatively short time frame? The general rule of thumb is for any time horizons less than 3-5 years, leave it in a savings account. If it makes you feel any better, your 3% interest beats the crap out of what savings accounts are offering in the US.
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Nov 2, 2014 20:09
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jarjarbinksfan621 posted:I understood that, but if it's tax-deferred, I am still going to end up paying those taxes (more or less) anyway. That's why I don't really see it as a discount. The big advantage of a tax-deferred account is that you get to put more money into it (everything that would have gone to taxes) at the beginning of the compounding process. That has a huge effect, especially towards the beginning of a long-term investment that will likely last a couple of decades. There's another wrinkle, too. Money in a 401(k) can grow tax-free, too. With a normal taxable account, if you need to shift assets around, you have to pay capital gains tax when you rebalance (after all, you're selling stuff off, even if you plan to go invest it somewhere else later). If you own shares in a mutual fund in a taxable account, and the fund rebalances, then you're on the hook for your share of taxes, as well. With a taxable account, sometimes you need to make decisions which aren't strictly optimal because they're more tax-efficient (such as investing in lower-return funds that are managed with tax efficiency in mind). But, with a 401(k) or IRA, you don't have to worry about that. Your before-tax and after-tax returns are the same, and you don't have to worry about tax efficiency at all, because the only taxable event is when you get a check. Again, this is a small difference that adds up to a big difference over time. If you can, always put money into tax-advantaged accounts. Marco YOLO posted:I'm currently saving for a house deposit, and have about £15k saved with the intention of buying a house around this time next year. I'm currently getting 3% interest in a savings account on this, but it seems that there must be something i can do with a chunk of this to try and get better returns? I obviously don't want to expose myself to too much risk and end up losing money so I cant put the deposit down on a house next year. I was thinking of taking 1-3k of this and doing something with it, but i'm not sure what. Am i just better off sitting on this until i put it down, especially given the relatively short time frame? If you want to put away money for a year with low risk, you'll be hard pressed to beat any savings account. Normally, you might consider buying a CD (certificate of deposit), where you can get a better rate in exchange for not touching the money for a set term, but even there it'll be very, very hard to beat 3%. Plenty of folks in the US would kill for that kind of rate in a federally insured savings account. Also, take a good long look at whether a house is something you want to buy at 23. You're young, you've got an education (I'm assuming, from those student loans), and you have a citizenship that gives you the right to work anywhere in the EU or an easy road to a work visa in lots of Commonwealth countries. In short, you can chase good jobs and figure out where you want to put down roots. If you have a bunch of your life savings tied up in real estate, that's where you're going to live, no matter what happens to the local economy.
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Nov 2, 2014 20:24
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jarjarbinksfan621 posted:I understood that, but if it's tax-deferred, I am still going to end up paying those taxes (more or less) anyway. That's why I don't really see it as a discount. It's a huge discount for 2 reasons: 1) The tax deduction is at the highest marginal tax rate, but when you take it out it will be taxed at your effective rate. For me, the difference between these two rates is 10% which translates to a shitton of money. 2) Your don't pay capital gains on any returns. It allows you to take advantage of investments with a better mix of growth and risk such as REIT's, index funds, dividend stocks (mostly index funds) without experiencing their downside which is their tax inefficiency. Rurutia fucked around with this message at 00:43 on Nov 3, 2014 |
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Nov 2, 2014 21:31
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Edited Also if possible please don't quote this post so I can edit out my money stuff later. Thanks I'm 21 if it matters. What should I do? I LIKE COOKIE fucked around with this message at 02:40 on Nov 4, 2014 |
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Nov 2, 2014 23:08
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Rurutia posted:2) Your earnings are tax free - you only pay tax on what you put in. While this by itself is a great benefit, it also allows you to take advantage of investments with a better mix of growth and risk such as REIT's, index funds, dividend stocks (mostly index funds) without experiencing their downside which is their tax inefficiency. I'm pretty sure this is not true, and that all your withdrawals are taxed as ordinary income.
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Nov 3, 2014 00:33
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pig slut lisa posted:I'm pretty sure this is not true, and that all your withdrawals are taxed as ordinary income. Whoops, sorry I don't know why I wrote it like that. I meant that you don't pay capital gains on dividends etc. edit Fixed.
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Nov 3, 2014 00:39
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I like cookie, If you're planning on liquidating in the next few years, it's too short a time horizon for any securities. So look for a high interest rate savings account. 1% is your goal here. Bankrate lists savings account rates, but Ally has 1% iirc. If rates start going up, look into laddering CDs Bloody Queef fucked around with this message at 01:40 on Nov 3, 2014 |
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Nov 3, 2014 01:37
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