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obi_ant posted:What do people typically do if they do not have money saved up for retirement? Assuming they've worked all their lives, they just live off of their Social Security checks? Other options include working much later in life, reverse mortgaging or selling assets, and turning to a life of crime.
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Oct 27, 2015 13:46
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baquerd posted:Other options include working much later in life, reverse mortgaging or selling assets, and turning to a life of crime. There's also relying on kids and, eventually, going on Medicaid post asset-depletion.
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Oct 27, 2015 13:53
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Doghouse posted:Can someone tell me how transferring a 401k when switching jobs works? What exactly should I be doing? My wife and I are relocating and taking new jobs, and we have an employee 401k with her company. I am pretty much a dunce in these matters, forgive me. The other option is to call up Vanguard and ask them to help you open an IRA and rollover your old 401k to that IRA. If you do nothing, the old 401k will continue to sit under management by the old company. This is also fine, especially if they had good funds available. You'll be able to roll it over anytime in the future.
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Oct 27, 2015 14:24
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Droo posted:So if I have 100k of pension income and I take another 50k out of my IRA, exactly how is that 50k taxed "from the lowest"? Every additional dollar put into Traditional takes taxable income from the top of the Adjusted Gross Income stack. Your taxable stack is large because you have incumbent income. Every additional dollar taken out of Traditional puts taxable income on top of the AGI stack. Your taxable stack in retirement is small because you do not have considerable income (social security is the main factor). "From the lowest", I admit, is a confusing piece of terminology. The stack example is much more apt. It takes $1M+ traditional balances to start hitting more than 15% tax brackets with reasonable distribution strategies (4% disbursement with 4% expected growth). Starting at age 28 (because that's how old I am), assuming you put 18500 every year into a traditional 401k and saw consistent 7% annual returns your ending balance at age 55 would be $1.59M gross. Assuming moderate inflation (2%), that amount would be valued at $903k today-dollars. That amount isn't enough to break out of today's 15% bracket assuming a reasonable distribution strategy. There are assumptions all over this but the gist of it is solid. In short, Traditional is more now and more later. Roth is financial flexibility. e:slight number tweak for better precision DNK fucked around with this message at 18:08 on Oct 27, 2015 |
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Oct 27, 2015 14:54
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Zauper posted:There's also relying on kids and, eventually, going on Medicaid post asset-depletion. Don't forget suicide!  Now I've made myself sad.
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Oct 27, 2015 15:39
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I am not at all joking when i say my primary driving force to be frugal in my life is so i don't end up homeless and alone in a gutter when i get old.
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Oct 27, 2015 15:46
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Dum Cumpster posted:Since when is 7% a year exponential? Year 2: 1.07 * 1.07 = 1.145 Year 3: 1.145 * 1.07 = 1.225 Year 4: 1.225 * 1.07 = 1.312 Year 5: 1.312 * 1.07 = 1.403 This becomes exponential as the function is executed.
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Oct 28, 2015 00:07
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Cheesemaster200 posted:Year 1: 1 * 1.07 = 1.07 Coincidentally, you dug this up from so long ago and today I ran across a response to this: Parallel Paraplegic posted:Anyway I don't think technological advancement can continue infinitely into the future either, we're already running into fundamental physical limits for things like how small you can make a transistor before its atoms fall apart. http://qz.com/532580/scientists-have-found-a-way-to-make-light-waves-travel-infinitely-fast/ At no time are we necessarily at the "bottom" of what sorts of things are possible in this universe, only what our current understanding of those possibilities allows us. We are always on the brink of discovering something else which breaks those understood rules. The "fundamental physical limits" are only what we know today. Tomorrow they may be vastly different.
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Oct 28, 2015 04:57
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Dessert Rose posted:Coincidentally, you dug this up from so long ago and today I ran across a response to this: No, the fundamental physical limits are fundamental physical limits. Regardless of whether or not our theoretical framework accounts for all of them or predicts their nature accurately there are most definitely fundamental rules to how the universe operates, and the limits we have now definitely seem to be the "right" ones (or at least really close to the "right" ones) since they've survived a few generations of physicists intact so far. As for the link you posted, "superluminal" phase velocities have been known for a while (x-rays do it in some cases) and don't violate any physical constants - you can't actually use them to transmit information faster than light. Creating a material with a limitless one certainly is useful and probably a prerequisite for building useful optical computers but it's not "breaking any understood rules." Anyway I get the point you're making, I've just had to deal with several other people who thought things like for instance the randomness inherent in quantum processes wasn't because they're actually random but because we didn't know ~the real theory~ underlying them so we just guessed that they "seem" random, and one day that theory will come along and we'll just throw out all of quantum mechanics and start over altogether. I don't mean to imply you believe that or anything though 
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Oct 28, 2015 08:15
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Regardless there are economic models that show you can have positive real interest rates even without perpetual productivity growth from technology. That's all you need for your savings to grow eventually. Thought experiment: If the only valuable things in the world were sandwiches, sandwich-making machines, and labor, and you were the only one buying sandwich making machines with your labor while everyone else occasionally sold them or let them break down (you are "saving"), you'd eventually own everything in the world.
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Oct 28, 2015 09:20
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My company has discontinued its 401k plan, so I'm opening an IRA. 30yo, no dependents or anything. I gather that a Roth from Vanguard is the recommendation. The question is what to do with my 401k, with $17k in it: do I keep it there and start the IRA fresh, or do I want to roll it over?
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Oct 28, 2015 14:37
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It depends on whether your 401k has/had funds that are better than you'd get in an IRA. Regardless, assuming it's a traditional 401k, you wouldn't want to roll it over to a Roth IRA if you do roll it over. You'd want to establish a traditional IRA and roll the money into there, then open up a Roth to contribute to going forward. That's pretty bogus that they've discontinued the 401k, and unless you're extremely happy there, that'd be enough to get me to start looking elsewhere. When social security runs through the surplus, I think it'd be pretty hard to live off just the distributions from an IRA in a lengthy retirement.
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Oct 28, 2015 14:48
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Nail Rat posted:That's pretty bogus that they've discontinued the 401k, and unless you're extremely happy there, that'd be enough to get me to start looking elsewhere. When social security runs through the surplus, I think it'd be pretty hard to live off just the distributions from an IRA in a lengthy retirement. Trying. Can you make contributions to a 401k not directly through a payroll deduction? It's through ADP and there's no option on the site for it, but could it be arraigned to send them a month check or something? My concern with not rolling it over was that the plan fees wouldn't make it worthwhile without continuing contributions, but if that's not a big problem, then I'll gladly keep it around.
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Oct 28, 2015 14:54
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If they're discontinuing it, you won't be able to make contributions anymore. Rolling it over into a new traditional IRA is 99% probably the right choice, but there are a few 401k plans so good it makes sense to leave it.
Nail Rat fucked around with this message at 15:06 on Oct 28, 2015 |
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Oct 28, 2015 14:57
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Nail Rat posted:If they're discontinuing it, you won't be able to make contributions anymore. Rolling it over into a new traditional e: if you roll it to a Roth IRA, you'll have to pay taxes on the $17k as if it were income this year. This might be worthwhile if you ever plan to make more than the Roth IRA income limits so you can do back-door Roths in the future. If you're nowhere near this, then don't worry about it and roll it to a traditional IRA. spf3million fucked around with this message at 15:08 on Oct 28, 2015 |
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Oct 28, 2015 15:05
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Yeah, that. Oops.
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Oct 28, 2015 15:06
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Talk about roth 401ks has me looking into it and my plan has both. Are you all saying I can max out both a roth and a traditional 401k both with maxes of 18000 or is it a shared pool? If I could put away cash into a roth 401k instead of a taxable account (since 401k is maxed) that would be killer. Thanks!
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Oct 28, 2015 17:38
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Minty Swagger posted:Talk about roth 401ks has me looking into it and my plan has both. It's a shared pool. Some companies have an in-plan conversion option which makes the 20k after tax contribution you can make worth it, though, and in that case the conversion turns into a Roth. So you can max out your traditional 401k contribution and also get a similar amount in Roth that way.
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Oct 28, 2015 17:42
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As there are some new job opportunities on the horizon, do I maybe want to keep the 401k where it is and roll it over to the new employer, or is Roth + traditional + new 401k the way to go?
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Oct 28, 2015 17:51
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Dessert Rose posted:It's a shared pool biiiiiiiiiiiiiitch. Yeah, it sounded too good to be true haha. On the positive end my 401k finally got it's head out of its rear end expense ratio-wise and stopped charging .45% for vanguard target retirement funds and .27 for a total market index fund and dropped them to .10 and .7 respectively.  At the .10 rate for a target fund I feel like just dropping it all in there and not having to worry about rebalancing in that account anymore for a small .03% loss.
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Oct 28, 2015 18:10
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dupersaurus posted:As there are some new job opportunities on the horizon, do I maybe want to keep the 401k where it is and roll it over to the new employer, or is Roth + traditional + new 401k the way to go?
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Oct 28, 2015 18:15
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Saint Fu posted:Yeah I'd probably wait until I had the 401k info for a potential new job. Keeping it in a 401k is kind of more convenient due to the backdoor-roth thing. But again, if you don't anticipate needing to do a backdoor-roth in the future, then a traditional IRA is usually just as good if not better than a traditional 401k. Simply because fund availability is great and the expense ratios are pretty good if you choose a good custodian for the traditional IRA. You might have slightly better expense ratios in a 401k, just depends on the employer's system/agreement they have with the 401k custodian. 401ks also have other fringe benefits such as better bankruptcy protection. I'll stick with my 401k since it has something called brokerage link which lets you buy all the investments available to a standard brokerage account.
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Oct 29, 2015 02:31
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(cross-posted from the Newbie Personal Finance Thread. Hope that's not a problem) Unfortunately, at 29 years old, I'm still a real noob to retirement savings and investment, but I'm working hard on turning that around, and I'm saving monthly and contributing to a Roth IRA (I'm a professional classical musician, so I exclusively work as an independent contractor, and that's been the suggestion of every financial advisor I've spoken to so far.)A financial advisor suggested Fidelity as a good place to set up accounts, and since he told me I could also use their Cash Management accounts as de facto checking accounts and keep all my $$ under one roof, I set up my IRA and other accounts there. After getting my savings blasted by some wonderful, but quickly and emotionally planned life events (engagement ring, opulent dinner at which I proposed, etc.), I've finally contributed about $1400 to my IRA and a few hundred more to my savings/investment account in the last few months. I've been pretty excited to start investing that, but from what I've been able to ascertain within my research on Fidelity's site, they have a $2,500 minimum to invest in ANY mutual funds there. Not just Fidelity funds, but anything. From outside research, it seems like there are funds out there with lower minimums than that (maybe even some good ones?), but I can't find anything with <$2,500 minimum to invest on Fidelity. Goons - what should I do? I'd love to start investing/growing my savings ASAP, but it would definitely take me a few months to contribute another ~$1,100 to my Roth. A diversified portfolio of mutual funds seems like a good beginner strategy, from what I can tell, but that seems a long way off, ESPECIALLY with $2,500 minimum on every fund. - I know Target Date funds are a Thing these days, especially the Vanguard ones - are Fidelity's any good? Do I just contribute up to $2,500 ASAP, invest in one of those, and keep going from there? - Should I start by just investing in a diverse portfolio of stocks/bonds, then move into funds when I have the capital? TL;DR: Is it worthwhile to stay with Fidelity/how do I START investing my very meager nestegg?
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Nov 1, 2015 00:19
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firebad57 posted:(cross-posted from the Newbie Personal Finance Thread. Hope that's not a problem) quote:After getting my savings blasted by some wonderful, but quickly and emotionally planned life events (engagement ring, opulent dinner at which I proposed, etc.), I've finally contributed about $1400 to my IRA and a few hundred more to my savings/investment account in the last few months. One of the reasons Vanguard is preferred here is that they're a nonprofit owned by the investors: the investment bank equivalent of a credit union.
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Nov 1, 2015 00:28
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ShadowHawk posted:Careful! The majority of "financial advisors" are actually "salesmen" and have no fiduciary duty to you. The result is that you may have ended up buying into high fee managed funds or marginally valuable services, which he in turn gets a kickback from. Luckily, I didn't buy anything other than an hour of time and advice for myself and my fiancée, most of which was very practically oriented around taxes and such - complex subjects when you work in our field (she's another dumb professional classical musician). He's more of a "tax guy", and maybe less of a "financial advisor" - I'm no expert when it comes to these terms.
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Nov 1, 2015 00:37
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firebad57 posted:Luckily, I didn't buy anything other than an hour of time and advice for myself and my fiancée, most of which was very practically oriented around taxes and such - complex subjects when you work in our field (she's another dumb professional classical musician). He's more of a "tax guy", and maybe less of a "financial advisor" - I'm no expert when it comes to these terms. Congrats on the successful proposal and good for you for getting your retirement savings started!
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Nov 1, 2015 01:26
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firebad57 posted:- I know Target Date funds are a Thing these days, especially the Vanguard ones - are Fidelity's any good? Do I just contribute up to $2,500 ASAP, invest in one of those, and keep going from there? Fidelity's funds are more expensive than Vanguards in terms of a yearly cost and I don't like Fidelity's allocation since it includes riskier investments such as commodities. For investing just follow this strategy -The money you put in now can grow more since you are still very young. AKA if you delay investing now you will have make bigger contributions in the future just to get the same amount of retirement money. Get time on your side. -Save and invest on regular basis even it's a small amount. -Wise investment with simple strategy, this thread recommends Vanguards target funds since it's the lowest cost properly diverse way to invest for greenhorn investors.
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Nov 1, 2015 08:03
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Just finished reading the four pillars of investment, any other books you guys could recommend? I did make screen shots of Bernsteins further reading but lost them when I changed phones.
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Nov 2, 2015 23:51
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Godline posted:Just finished reading the four pillars of investment, any other books you guys could recommend? I did make screen shots of Bernsteins further reading but lost them when I changed phones. I like If you Can by Bernstein, it's a quick rundown of many of strategies discussed in this thread such the importance of saving and also picking low cost simple investments. https://www.etf.com/docs/IfYouCan.pdf
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Nov 3, 2015 01:15
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So I'm finally done with school and I have a full time job and I'm at the point where I've been employed long enough to set aside some money into a 401k. I already have a 401k account from my previous employer that I'll have to rollover into this one once it's set up. At my first job they just had one plan, at this job I have to choose from a mound of different options and I don't know what the hell I'm doing. I'm thinking of going with the moderately aggressive plan as I'm only 25 which google tells me is the right thing. Goons is this a good idea and why or why not? 
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Nov 3, 2015 15:56
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I would go with the Aggressive model, at 25 you can afford the risk of going 90% stocks in exchange for the greater returns over time.
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Nov 3, 2015 16:36
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JibbaJabberwocky posted:So I'm finally done with school and I have a full time job and I'm at the point where I've been employed long enough to set aside some money into a 401k. I already have a 401k account from my previous employer that I'll have to rollover into this one once it's set up. At my first job they just had one plan, at this job I have to choose from a mound of different options and I don't know what the hell I'm doing. I'm thinking of going with the moderately aggressive plan as I'm only 25 which google tells me is the right thing. Goons is this a good idea and why or why not? First of all, read this PDF: https://www.etf.com/docs/IfYouCan.pdf You don't have to roll over your old 401(k) into a new one. Typically, the best thing to do with an old 401(k) is to roll it into an IRA, which keeps the tax shelter but lets you direct the investments yourself. The only downside is that having a significant traditional IRA balance will make it more expensive to do backdoor Roth IRA conversions in the future (which let you get around the income cap on Roth IRAs). At your age, you should definitely be pursuing an aggressive strategy. You've got a long time until retirement, so you can afford to put your money into riskier investments and let their expected better average over time pay out. At 26, I'd probably go with the "aggressive" model as a general asset allocation, although your best choice depends on your risk tolerance. Pulling your money out during a crash is typically a very bad idea, so if you think that's something you might do, err on the conservative side. Keep an eye on the specific funds in your 401(k). The plan will have limited choices. Some plans offer great stuff - ultra-low-expense-ratio institutional passive index funds you can't buy into as a private investor unless you have a spare ten million dollars. Most have a mix of OK funds (low-ish expense ratio index funds) and garbage (expensive actively managed stuff). And, there are some where a fly-by-night "advisor" gets to pillage everybody's retirement accounts because he's charming and spent $1,000 treating the 401(k) committee to a very nice lunch. Reading the "If You Can" PDF linked above will help you identify them. In general, look for the lowest possible expenses, and passive management that tries to match the market instead of beating it. Even if your fund choices are horrible, it's still worth taking any 401(k) match that's offered - it's not only free money, but tax-free* too! In general, the OP's recommendations are good unless your 401(k) is stellar: quote:1) Contribute to 401(k) up to employer match. Always get the free money! *well, deferred. Still a really good deal.
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Nov 3, 2015 16:46
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Space Gopher posted:Even if your fund choices are horrible, it's still worth taking any 401(k) match that's offered - it's not only free money, but tax-free* too! In general, the OP's recommendations are good unless your 401(k) is stellar:
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Nov 3, 2015 17:24
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Do you have the option to pick your investments directly? Most of the the time those prefab packages that are the default choices in 401k are full of questionable high expense ratio funds, and they try and hide the better options because it makes them less in kickbacks.
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Nov 3, 2015 17:38
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Xenoborg posted:Do you have the option to pick your investments directly? Most of the the time those prefab packages that are the default choices in 401k are full of questionable high expense ratio funds, and they try and hide the better options because it makes them less in kickbacks. Yes. But I'm still not super sure I should be giving them any money when my employer wont match it and it'll affect my ability to fill up a Roth IRA.
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Nov 3, 2015 17:59
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JibbaJabberwocky posted:Yes. But I'm still not super sure I should be giving them any money when my employer wont match it and it'll affect my ability to fill up a Roth IRA. I believe the conventional wisdom in this thread for prioritizing retirement saving is: 1) 401k to match limit 2) Roth IRA to max 3) 401k to max 4) other options (HSA etc) since step 1 is 0 for you, skip to step 2. Mr. Glass fucked around with this message at 18:28 on Nov 3, 2015 |
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Nov 3, 2015 18:17
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Mr. Glass posted:I believe the conventional wisdom in this thread for prioritizing retirement saving is: http://forums.somethingawful.com/showthread.php?threadid=2892928&pagenumber=280&perpage=40#post442260564
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Nov 3, 2015 18:29
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HSA is great if available to you but really most people don't have access to HSA eligible plans. If you do and you're a young person I'd be all over that.
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Nov 3, 2015 23:13
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I bought VHT in June as a place to park former 401k funds in hopes of diversifying a bit into healthcare. It's down to 131, I bought at 142, in the red for around $284 and it doesn't look like it'll recover, at least the way I'm reading healthcare these days. Am I better off putting it into VTSMX if I want a good option to hold for a year or two?
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Nov 6, 2015 17:12
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Buying a sector ETF is the opposite of diversifying. Unless you are a professional financial analyst with experience in healthcare economics I would probably discard your personal read of the healthcare sector. Where you put money to hold it for a year or two depends a lot upon how risk adverse you are with the principal, I'd just put it in cash if you absolutely must have $X in two years or in a broad index ETF just the same as your long term savings if you wouldn't mind being forced into a realized loss if the market happens to be down when you need the money.
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Nov 6, 2015 18:51
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