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Just be aware that GSB requires another bank to transfer in and out of. They have no check, ATM, or mobile payment options. You park your money there and when/if you need it you initiate a transfer to your regular checking account/etc. Not a deal breaker - keeping rainy day funds at arms-length isn't a bad idea even if you are disciplined about spending - but something to consider nonetheless.
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Jun 19, 2017 22:17
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Ixian posted:Yes. Option B will also be better in years you hit the deductible, of course. Is that the only difference between plans though?
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Jun 19, 2017 22:48
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Everyone's favorite savings account bank, Ally, just bumped their no-penalty 11 month CD to 1.50%, fyi. 25k minimum and being a CD makes it a true hands-off/use only in emergency type fund instead of a higher-touch savings account, but if you have a large emergency stash it's one of the better safe returns available. Or you could just set up a regular Ally savings account at 1.15. For the same 25k the difference over 11 months is a whopping $90 and you get a more flexible account (that also doesn't have a minimum balance).
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Jun 20, 2017 15:16
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Ixian posted:Everyone's favorite savings account bank, Ally, just bumped their no-penalty 11 month CD to 1.50%, fyi.
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Jun 20, 2017 15:18
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Isn't the penalty for breaking a 5-year CD just paying back some of the interest? Wouldn't it be smarter to just throw it all in a 5-year CD at 2.25% and risk having to pay back the interest in an emergency?
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Jun 20, 2017 15:32
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Speaking of bank accounts, is there a better checking account than the 0.76% APY at Bank5 with only $100 minimum?
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Jun 20, 2017 15:42
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EugeneJ posted:Isn't the penalty for breaking a 5-year CD just paying back some of the interest? Look up CD early W/D penalties. They are typically a percentage of interest that WOULD HAVE been earned, even if it has not been earned yet. Therefore if you w/d early in the term, you may lose some principal.
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Jun 20, 2017 15:56
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Michael Scott posted:Look up CD early W/D penalties. They are typically a percentage of interest that WOULD HAVE been earned, even if it has not been earned yet. Therefore if you w/d early in the term, you may lose some principal. Oh wow - that's good to know
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Jun 20, 2017 16:00
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CD early withdrawal penalties are usually pretty anemic. As long as you don't withdraw in the first year you'll usually come you ahead vs savings accounts, and even if you don't, the difference is pretty small. The real danger is that in a crisis the bank has no obligation to let you withdraw early.
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Jun 20, 2017 16:07
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Eyes Only posted:CD early withdrawal penalties are usually pretty anemic. As long as you don't withdraw in the first year you'll usually come you ahead vs savings accounts, and even if you don't, the difference is pretty small. The latter is the real problem I agree. Though it's not a problem most of the time, it is an additional risk factor particularly if you may need the money in an emergency, and if you are taking on risk it pays to weigh other options. A 5 year at 2.25 is only going to net you another $150/y on a 25k balance compared to 1.5, and if you withdraw early you pay the interest carried forward as well. Granted on 25k it still wouldn't be much of a penalty but since the entire point of these things is to eek out as many pennies on the dollar as you can... Also these days a 5y CD isn't really even keeping up with inflation. Neither are other types of savings but at least you are free from penalties. The 11 month NP CD is good for "only access in case of emergency" funds simply because there really isn't any risk, other than if you withdraw early you have to withdraw it all and lose the remaining interest, which doesn't really count as "losing" anyway. You'd still come out slightly ahead.
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Jun 20, 2017 16:20
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Let me just throw this out there: if you are worried about the rate of return on your emergency fund, you are doing it wrong unless your "emergency" fund is simply your short-term asset allocation. If your assets are not at the level where you can coast for at least 10 years in a bad market downturn, you need to focus on the long-term in terms of both salary/job prospects and overall portfolio return before quibbling about short-term returns.
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Jun 20, 2017 17:30
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baquerd posted:Let me just throw this out there: if you are worried about the rate of return on your emergency fund, you are doing it wrong unless your "emergency" fund is simply your short-term asset allocation. If your assets are not at the level where you can coast for at least 10 years in a bad market downturn, you need to focus on the long-term in terms of both salary/job prospects and overall portfolio return before quibbling about short-term returns. That said I hope Ally ups their savings account interest rate because it feels bad to be on the low end of the high end.
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Jun 20, 2017 17:45
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There's nothing bad about using a short term, low return savings vehicle to park expenses. I agree that said returns being what they are it usually isn't worth a lot of fuss. Even with a $25+ balance you are talking a few hundred bucks a year at most difference over, say, a Chase savings account that pays .006% (and you can usually get cash bonuses for those). A few hundred bucks a year is nothing to sneeze at but worrying over 1.05% or 1.50% is probably a waste of time. Just something to consider if you are setting up new savings.
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Jun 20, 2017 17:53
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Ixian posted:A few hundred bucks a year is nothing to sneeze at but worrying over 1.05% or 1.50% is probably a waste of time. Just something to consider if you are setting up new savings. For sure. Worrying and going to the trouble of transferring funds and chasing returns trying to eke out that last 0.1% on what should be a tiny portion of your portfolio is just silly until you get to the serious business levels of money. loving donate blood or give a handy if you're that hard up for cash.
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Jun 20, 2017 21:35
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baquerd posted:For sure. Worrying and going to the trouble of transferring funds and chasing returns trying to eke out that last 0.1% on what should be a tiny portion of your portfolio is just silly until you get to the serious business levels of money. loving donate blood or give a handy if you're that hard up for cash.
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Jun 20, 2017 21:59
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Hoodwinker posted:At the same time? That costs extra. For them.
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Jun 20, 2017 22:03
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What data do I need to get in order to weigh rolling over my former employer's 401k to my new employer vs leaving it?
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Jun 20, 2017 22:10
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dexter6 posted:What data do I need to get in order to weigh rolling over my former employer's 401k to my new employer vs leaving it?
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Jun 20, 2017 22:26
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List of available investments basically? Then you'd look at expense ratios and performance. Also, any fees charged by the 401k on top of the fund's expense. You might also want to compare old, new and rolling over into your own IRA from say vanguard or Fidelity. Usually, that offers the best cost and flexibility.
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Jun 20, 2017 22:27
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My FA has recommended rolling over one of my old 401k's into a REIT held in an IRA. My current allocation for all my retirement assets is roughly 75% domestic stocks, 15% international, 10% bonds. That old 401k has about 20% of my retirement assets sitting in it, so that move would make my overall allocation roughly 20% REIT, 65% domestic stocks, 10% international, 5% bonds. In theory, I like the idea of adding another asset class to help diversify my retirement portfolio. However, I am concerned about the fees associated with the REITs. One fund has a sales load (upfront fee) of 5.75% and 1.91% yearly, the other has a sales load of 3.75% and 1.95% yearly. Those fees seem astronomical to me, compared to my current Vanguard funds with expense ratios of under 0.1%. My question is, are those fees normal and expected for a REIT? Or is there another option I should be looking at?
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Jun 20, 2017 22:43
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FPS_Sage posted:My FA has recommended rolling over one of my old 401k's into a REIT held in an IRA. My current allocation for all my retirement assets is roughly 75% domestic stocks, 15% international, 10% bonds. That old 401k has about 20% of my retirement assets sitting in it, so that move would make my overall allocation roughly 20% REIT, 65% domestic stocks, 10% international, 5% bonds. By the way, why do you have an FA? Is your investment situation that complex?
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Jun 20, 2017 22:53
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FPS_Sage posted:My FA has recommended rolling over one of my old 401k's into a REIT held in an IRA. My current allocation for all my retirement assets is roughly 75% domestic stocks, 15% international, 10% bonds. That old 401k has about 20% of my retirement assets sitting in it, so that move would make my overall allocation roughly 20% REIT, 65% domestic stocks, 10% international, 5% bonds. https://personal.vanguard.com/us/funds/snapshot?FundId=0123&FundIntExt=INT Those fees are totally exorbitant. Your FA is trying to gently caress you and will almost certainly be collecting commission on those funds. If your situation is really so complex that you need an adviser than find a fee-only one and ditch this guy, but I doubt it is if you are asking on here. Rolling over a 401k and investing in REIT are independent decisions. You can roll that over to a Vanguard IRA, and choose to include some exposure to real estate or not.
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Jun 20, 2017 23:12
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Pretty new to a lot of this so I would like to confirm I understand some of this and see if there is anywhere I could improve on what I'm doing. I am 26 years old and just last year got a job with any retirement options. I have a Roth 403b through work that looks like it's accompanied by a 401a account where my employer puts their matched funds. The rate of matching is 75% of up to a 4% contribution. For the past year I was only putting in the 4% so I could receive the full 3% matching. I recently upped my contribution to 10% because I figured why not. I also have a Roth IRA that I am able to max every year with a max of $5,500 a year. At this point should I put my focus and efforts on maxing my Roth 403b which I believe has a yearly max of $18,000? Or would my money be better served being put somewhere else? Thanks ahead of time.
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Jun 20, 2017 23:44
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dexter6 posted:What data do I need to get in order to weigh rolling over my former employer's 401k to my new employer vs leaving it? Never leave it in the old plan. Look in to the fees and available funds in the new plan. Then: Roll in to new plan if it is half decent, and contribute to a Roth if you are under the income cap. If you are over the income cap look in to whether a backdoor Roth makes sense/is something you want to do. Pay tax now vs. later. If you can contribute to a Roth the regular way you can also set up a traditional IRA but the max contribution per year is combined so this generally doesn't make sense. If you do a backdoor Roth you also don't want regular IRA (outside of the one you set up the backdoor for) due to Pro Rata rules which will gently caress you on taxes. Easiest way is just to roll old 401k in to a low-cost traditional IRA somewhere like Vanguard, invest it in a target retirement fund, and leave it. You can and should take advantage of your new employer 401k no matter if you roll in to it or not, especially if they offer a match. Ixian fucked around with this message at 23:47 on Jun 20, 2017 |
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Jun 20, 2017 23:45
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FunkyBean posted:Pretty new to a lot of this so I would like to confirm I understand some of this and see if there is anywhere I could improve on what I'm doing. What are your tax liabilities today? 403b Roth is like a Roth IRA in that you pay taxes now and avoid paying them later. If you don't have a lot of taxable income to reduce today a Roth, generally speaking, makes sense. Tax-deferred make sense if your tax liability today is high and you want to knock it down. There's usually no yes/no answer as it is highly dependant on your situation, now and in the future. Generally speaking though if you are in the lower brackets now and are 26 focus on the Roth, pay the taxes now and avoid paying any on the growth or your contributions later. That is what I would do in your situation anyway.
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Jun 20, 2017 23:51
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Ixian posted:What are your tax liabilities today? 403b Roth is like a Roth IRA in that you pay taxes now and avoid paying them later. If you don't have a lot of taxable income to reduce today a Roth, generally speaking, makes sense. Tax-deferred make sense if your tax liability today is high and you want to knock it down. There's usually no yes/no answer as it is highly dependant on your situation, now and in the future. Thanks. I work in a field with very good job security and am new in it so I expect my salary to only increase with time. I am for sure maxing my Roth IRA every year. Once that is covered though would the next best decision to be to max out my 403b Roth? Thanks again.
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Jun 21, 2017 00:06
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Hoodwinker posted:There's really no benefit to leaving it. Roll your Traditional 401k money into your Traditional IRA. Your IRA provider should be able to take care of the rollover if you just give them the company that holds your 401k and your account number. There is a very important benefit to leaving money in your 401k as long as you aren't being charged excessive fees, namely that qualified 401k assets have virtually bulletproof immunity against creditors under federal law (ERISA) whereas assets in rolled over IRAs have varying degrees of protection that depend upon state law (and even in several states depend upon whether it is a Roth or traditional IRA!). Be wary of rolling funds out of qualified plans if there is not an important fee or fund choice advantage to do so.
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Jun 21, 2017 00:22
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FunkyBean posted:Thanks. I work in a field with very good job security and am new in it so I expect my salary to only increase with time. I am for sure maxing my Roth IRA every year. Once that is covered though would the next best decision to be to max out my 403b Roth? If your Roth 403b plan is decent you can contribute to both, and I'd at least make sure to max the 403b to get the match then max the regular Roth ($5500/year this tax year). Ideally max them both to the limit if you can. Even if you get out of Roths later due to switching jobs/rising income/etc. you'll still like having a growing retirement pool that won't affect RMD or taxes when you retire. If your employer offers an HDHP/HSA plan look in to that too. HSAs are truly tax free, going in *and* coming out, as long as you use the money for qualified health expenses (and odds are, you will). Even if you don't they are just treated like a regular IRA at age 65 for non-qualified withdrawals.
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Jun 21, 2017 00:35
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BEHOLD: MY CAPE posted:There is a very important benefit to leaving money in your 401k as long as you aren't being charged excessive fees, namely that qualified 401k assets have virtually bulletproof immunity against creditors under federal law (ERISA) whereas assets in rolled over IRAs have varying degrees of protection that depend upon state law (and even in several states depend upon whether it is a Roth or traditional IRA!). Be wary of rolling funds out of qualified plans if there is not an important fee or fund choice advantage to do so.
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Jun 21, 2017 00:56
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BEHOLD: MY CAPE posted:There is a very important benefit to leaving money in your 401k as long as you aren't being charged excessive fees, namely that qualified 401k assets have virtually bulletproof immunity against creditors under federal law (ERISA) whereas assets in rolled over IRAs have varying degrees of protection that depend upon state law (and even in several states depend upon whether it is a Roth or traditional IRA!). Be wary of rolling funds out of qualified plans if there is not an important fee or fund choice advantage to do so. i googled around about this and apparently the sc ruled iras are protected now? https://www.trustetc.com/trustetc/media/TrustETC/documents/ruling.pdf i dunno ianal
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Jun 21, 2017 01:26
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FPS_Sage posted:My FA has recommended rolling over one of my old 401k's into a REIT held in an IRA. My current allocation for all my retirement assets is roughly 75% domestic stocks, 15% international, 10% bonds. That old 401k has about 20% of my retirement assets sitting in it, so that move would make my overall allocation roughly 20% REIT, 65% domestic stocks, 10% international, 5% bonds. Practically speaking. your FA is at the same level as a mugger to you in terms of financial outcomes.
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Jun 21, 2017 01:33
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Mad Wack posted:i googled around about this and apparently the sc ruled iras are protected now? That applies strictly to bankruptcy
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Jun 21, 2017 02:19
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IMO if your financial planning includes "keep old company 401k(s) in place as hedge against future trouble with creditors" you have bigger problems looming. Not that it isn't important to know, but on the overall scale I'd rate creditor protection as a very low factor in whether or not to roll a prior company-sponsored retirement plan.
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Jun 21, 2017 02:22
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FPS_Sage posted:My FA has recommended rolling over one of my old 401k's into a REIT Don't invest in a REIT unless you have built up a considerable balance in stocks, bonds, and savings. REITs used to be attractive from a diversification standpoint but the performance, a few exceptions notwithstanding, hasn't really lived up to the promise. And as others have pointed out your FA may not be providing the best value for your money (fees) and you should perhaps look in to that. Not to say they are a crook - not nearly enough info to determine that - but if you are paying an FA it is worth your time to research the current state of the Fiduciary Rule for 2017-2018 because it pays to understand what motivates people in any industry/endeavor.
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Jun 21, 2017 02:29
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Ixian posted:IMO if your financial planning includes "keep old company 401k(s) in place as hedge against future trouble with creditors" you have bigger problems looming. Not that it isn't important to know, but on the overall scale I'd rate creditor protection as a very low factor in whether or not to roll a prior company-sponsored retirement plan. I guess I think differently than you as a physician and landlord who could have my pants sued off me at any time. If you did something like quit your job to start a small business and borrowed money to do so you'd also be wise to preserve maximum legal protection of your retirement assets. If you have large student loans or other debts outstanding it is also very beneficial to hold assets immune to legal collection if you became unemployed or disabled.
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Jun 21, 2017 02:34
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BEHOLD: MY CAPE posted:I guess I think differently than you as a physician and landlord who could have my pants sued off me at any time. If you did something like quit your job to start a small business and borrowed money to do so you'd also be wise to preserve maximum legal protection of your retirement assets. If you have large student loans or other debts outstanding it is also very beneficial to hold assets immune to legal collection if you became unemployed or disabled. That is a fair point, I agree. If you are taking on more risk either due to your profession or real estate, etc. then putting a higher weight on creditor protection makes sense. No argument there. If that isn't the case though generally speaking rolling to an outside IRA at a low-fee institution like Vanguard is the right answer for most. No stock answer, really.
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Jun 21, 2017 02:37
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BEHOLD: MY CAPE posted:I guess I think differently than you as a physician and landlord who could have my pants sued off me at any time. If you did something like quit your job to start a small business and borrowed money to do so you'd also be wise to preserve maximum legal protection of your retirement assets. If you have large student loans or other debts outstanding it is also very beneficial to hold assets immune to legal collection if you became unemployed or disabled. Have you looked into liability insurance instead?
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Jun 21, 2017 03:10
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Evil SpongeBob posted:Have you looked into liability insurance instead? If he/she is a physician they already have it - and it is ridiculously expensive, my younger brother is a doctor - and it doesn't cover everything that can hit you, depending on circumstances - said circumstances having less to do with whether you are a "good" doctor/don't maim or kill patients and more with shitheads and their lawyers. I am also sympathetic to this approach as I used to own a small retail business, years ago, and getting sued over slip&falls, insurance or not, is no joke. Didn't happen to me but I absolutely worried about it. If I had known this back then I might have hedged investments with it in mind too.
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Jun 21, 2017 03:21
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I have both professional and personal liability insurance. Costs me about $650 a year total. One of those things we should carry that protects assets. At least the personal liability.
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Jun 21, 2017 03:42
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Evil SpongeBob posted:I have both professional and personal liability insurance. Costs me about $650 a year total. I don't know your situation obviously but medical malpractice, liability, and umbrella insurances costs family and other people in the field I know personally far more than $650/year. Whether this makes 401k rollovers a factor, for the average person not in a situation where shielding assets to the maximum level possible, they should consider is an entirely different question that depends 100% on the person.
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Jun 21, 2017 03:55
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