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Just want to double-check... I have a 401(k) through Disney -- they match 75% of contributions for the first 4% of my pay, and I make sure to get the full match. This is where I am right now: code:mod saas fucked around with this message at 08:04 on Aug 9, 2011 |
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Aug 9, 2011 04:38
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That seems fine - Spartan International is very highly weighted compared to international weightings of most target retirement funds (Vanguard's is only 27% international). I personally like a high international percentage, but you have to decide whether you want to be more domestically weighted or not.
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Aug 9, 2011 06:06
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Pro-tip: Bonds do not have leprosy. In fact, over certain periods (back around stagflation, basically) they've had better returns than equities! I just thought I'd mention that seeing as everyone seems to be trending toward very tiny bond allocations despite there being advantages to diversity even for long time horizons. Also, consider the risk that your life might change and you might suddenly decide to change your time horizon.
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Aug 9, 2011 06:18
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Adix posted:
I don't like any investments in the same company I work for. You already have such massive exposure to how well Disney is doing by the fact that they provide your salary. You shouldn't have more of you investment tied to them.
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Aug 9, 2011 11:46
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I'm guessing that he/she is required to hold his company's match in company stock until they are fully vested. The same applies for me. Of course my company stock decided to poo poo the bed to the tune of -10% below the S&P 500 (total -25.6%) in the last month before I am vested.
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Aug 9, 2011 11:55
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Chin Strap posted:I don't like any investments in the same company I work for. You already have such massive exposure to how well Disney is doing by the fact that they provide your salary. You shouldn't have more of you investment tied to them. I have a question related to this. My wife just accepted a job with Gentiva (GTIV). Their stock took a pounding recently due to changes in Medicare home health reimbursements. They offer an ESOP where you can allocate 1-15% of your salary to purchase stocks at 15% reduced price, fully vested, you sell at 100% price. Would it be worth allocating a small percentage of her salary to this to take advantage of the discount, or are we already exposed too much just by being employed through them? Or should we just continue doing what we were and putting into retirement, paying down student loans and saving for our house?
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Aug 9, 2011 13:19
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Are you fully vested immediately? If so, it seems like a no-brainer to max out the stock purchase option, turn around and sell it or re-allocate immediately and pocket the 15%.
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Aug 9, 2011 14:00
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Der Penguingott posted:
These sorts of things are the only way I feel that company stock makes sense. But the main question is as Saint Fu asks, how long until vesting?
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Aug 9, 2011 14:15
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If you're not immediately vested, you have to consider the odds that the stock will lose >15% in the time it takes you to become vested. It looks like the stock has been pretty volatile over the last 5 years including several drops well in excess of 15%. If it were only a month or so I'd consider it, but it's more likely that it is 3 months minimum, I would have to think long and hard about taking the risk.
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Aug 9, 2011 14:28
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I had been assuming that it would be 100% vested immediately. If it's not, it would change things. I made this assumption because there was no mention of vesting in the information provided for the stock plan but there was mention for the 401k. For the 401k they state it goes 40, 60, 80, 100% vesting for the employer match each year of employment after the second year when the match begins. The stock plan is administrated by Computershare. The way it works is there are 3 month "buy-in" periods. You sign up at the beginning of the period and the allocated percentage of your salary accumulates in payroll (?!?!? I'm assuming it just adds up in a tally on your pay stub and doesn't collect interest or anything) and at the end of the 3 month period shares are purchased for 85% of fair market value (value on the final day of the 3 month period) in your name and allocated in an account at Computershare. I assume there is some sort of protection to keep you from immediately selling after the purchase. Otherwise, it's guaranteed 15% return on whatever you allocate every 3 months.
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Aug 9, 2011 14:36
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If 100% fully invested immediately, then yea go for it and dump it first chance you get. I've been in a situation where we were required to hold for 6 months. At a 15% discount, I still think it is worth it. With high correlation to your human capital, asset pricing models would require a higher risk premium to compensate for the added correlation risk. At 15% discount, you can still optimize the risk/return of your portfolio with perhaps a slight reduction in total equity allocation, as long as your total exposure to your company stock does not represent too large a portion of your portfolio.
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Aug 9, 2011 19:29
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I just started looking at 401k options to start contributing to. I've been doing a little reading up (mostly via this thread), but to be honest I have a pretty loose grasp about how all of this works. I'm 22, no real debts to worry about. My employer matches 5% of my base salary, and they use Principal for their 401k plans. After reading around a bit it seems that Principal is pretty costly and doesn't have many options for investing.  Is there a way that I can use Vanguard (which seems to be a much better option from what I've read) and still receive my employer contribution match? Like, could I keep the Principal IRA open to collect my employer match each paycheck, and then immediately roll that over into my Vanguard 401k (is this even possible)? If so, would I have to rollover the money each paycheck? Sorry if this has been asked before, I looked around a bit but I couldn't find anything that looked like this question.
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Aug 9, 2011 19:34
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Turd Eater fucked around with this message at 19:34 on Aug 11, 2011 |
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Aug 9, 2011 20:34
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I'm coming to the end of a contract at work where I was being force-fed large quantities of dollar bills. I'm 25, no debt, and I have a few tens of thousands...sitting in a 0% interest checking account. My 401k is on pace to max out, and I do not qualify for an IRA this year. Once the contract ends I'll be making less than half of what I have for the past two years, and I'm trying to decide what to do with the money. I do not really enjoy money management at all, so I'm mostly looking for a place to park my savings and ignore it for a decade (or many decades). Since I will be making a lot less, something that I can access easily if a need arises (ugh, houses are still expensive). I was considering just opening a Vanguard account and putting ~50% of my savings into one or two of their funds, and the rest (barring what the checking account needs to cover expenses) into a savings account. Is that stupid?
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Aug 9, 2011 23:51
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I'm 21 and am thinking about starting to do some long term investing, namely investing in a Roth IRA. I was wondering if I could get some advice on what to do. -I still have a year of college left. I know everyone says to start saving up for retirement early but is it too early for me? Should I wait until I'm out of school before I start jumping into this? -I don't know much about investing (though I plan during the school year to buy a book or two of the ones recommended in this thread so I can at least have a foundation) so I was thinking of starting to invest in a Vanguard Target Retirement 2055 Fund since it seems like most of the work would be done for me. Later on though if I get more comfortable with investing could I move the funds from the targeted fund to something I have more control over? If I can move these funds is there anything I should know? (like penalties?) -I know I can at any time remove the principle amount from the Roth IRA. I was thinking rather than letting some of my money sit in my bank account I should rather throw it into a Roth IRA and treat it like an emergency bank account. Are there any cons to this plan? (besides the con of my investment potentially losing value depending on how the investments are doing)
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Aug 9, 2011 23:53
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Dazzo posted:I'm 21 and am thinking about starting to do some long term investing, namely investing in a Roth IRA. I was wondering if I could get some advice on what to do. 1. Never too early. 2. Yes, you can sell your shares of the target fund & invest in other stuff instead. A Roth is a Roth, whatever you buy to fill it. 3. Principal  (and you're not the only one here loving that up  ) I would say it's a poor choice to use an investment account as an emergency fund for two main reasons: first, it's risky and if you end up needing money when it's low, you've only hurt yourself; second, it's just not liquid enough-- it takes a couple of days to get your money out, maybe longer.
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Aug 10, 2011 00:02
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You could open a Roth IRA and fill it with the Vanguard Money Market Account for now. You'll still have to wait a few days to get it out if you need it (but isn't that what credit cards are for?) and you aren't at risk of losing it. When you max out your $5k for the year and start building up your emergency fund, you can transition the Roth from the money market to a different fund. This method allows you to definitely make the $5k in contributions this year (an opportunity you will not get back if you miss it) and still allows you to maintain a safe, albeit illiquid, emergency fund. You also have to consider your ability to have fun while still in college. Your income right now is probably much lower than it will be once you graduate and (hopefully) get a job. If you are sacrificing fun times with your friends to fill your IRA, when you'll be making much more next year, I personally do not think it is worth it. You can't get that year back. Just something to think about.
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Aug 10, 2011 03:27
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Hi. A few weeks ago, i left my job. My existing 401k choices sucked, fund wise. If I roll it over to etrade, does that mean I can invest it in real, individual stocks like I already have with them? Also, this would mean I wouldn't incur any penalties if I initiate it within 60 days right (I'm under 59)? Last question: is there a way to get to any of that money if I so choose? Muchos gracias!
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Aug 10, 2011 03:28
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I have a few questions and I think this is the right place for it. If not call me a dumbass and point me to the right place, please. My father recently passed and my mother asked me to go to Scottrade with her and help her move over their joint stock account. Long story short while there I find out that she has her retirement accounts here, too, and my father has been managing them. She had no clue what was in them. When I see them I almost faint. My mother gave me control of the accounts and I told the guy that I need a couple of days for research before making decisions on these. I figure with the market tanking this is a great time to make changes to hopefully greatly help her profile. For background, the Rollover is from my mom's 401k from a job that left CA 17 years ago and she took it all and rolled into an IRA at Scottrade with about 50k. No extra money has been added to it since then. She also has a Roth IRA with a little more in it but these are way way way too low for a 61 year-old to have in her retirement. Like dangerously low. She says she doesn't need the money and its for my brother and I when she dies. She gets enough from my dad's social security and her part-time job to comfortably pay the bills and in a couple of years she gets the full amount from social, too. My thing is that is all fine and dandy but if something happens where that money disappears for whatever reason you need to know you have back-up. Rollover IRA (MSFT) 1425 Shares (YHOO) 100 Shares Total Market Value: $36, 207.07 Total Cash Balance: $5,898.49 Total Brokerage Account Value: $42,105.56 Roth IRA (MSFT) 600 Shares (SYY) 500 Shares (WMT) 100 Shares Total Market Value: $34,080.50 Total Cash Balance: $10,225.84 Total Brokerage Account Value: $44,306.34 Old Joint Account (SYY) 309 Shares (WNWN) 1 Share (Worth 1/3 Cent!) Total Market Value: $8,868.30 Total Cash Balance: $4,180.88 Total Brokerage Account Value: $13,049.18 So yeah, my mom has less than $90k in retirement. First thing is, what is the cash value balance? Is that just money sitting in the account? I was thinking of getting rid of the Sysco stock, it was my dad's employer and he kept it for whatever reason but it is a wholesale food company which I don't think is a safe investment right now. I was thinking of taking that and moving it to an energy company like BP or Chevron, or maybe McDonalds. Also, is Microsoft good for long range? Should I move the Yahoo into Microsoft or sell it along with the Microsoft and buy other companies? Tell me I'm dumb and leave poo poo alone or WTF is this poo poo, you're better off doing this and this. As you can tell I am pretty new to this and am going to read the books suggested here and in the stock thread and after memorizing them after 6-12 months maybe play around with the Old Joint Account for more higher risk stuff but basically leave the retirememt accounts alone for 10+ years unless something happens that would require me not to. Help me, Goons, you're my only hope.
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Aug 10, 2011 07:19
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pipebomb posted:Hi. A few weeks ago, i left my job. My existing 401k choices sucked, fund wise. If I roll it over to etrade, does that mean I can invest it in real, individual stocks like I already have with them? Yes, you need to do your own research on this but if you were to roll your 401k into a ROTH account you would pay taxes on the money today and when it comes time to retirement you get all that money free of charge. pipebomb posted:Also, this would mean I wouldn't incur any penalties if I initiate it within 60 days right (I'm under 59)? Correct. pipebomb posted:Last question: is there a way to get to any of that money if I so choose?
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Aug 10, 2011 11:34
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Tsuchang posted:Yes, you need to do your own research on this but if you were to roll your 401k into a ROTH account you would pay taxes on the money today and when it comes time to retirement you get all that money free of charge. Thanks, financial panther. http://www.youtube.com/watch?v=LAeZgTDh3nM
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Aug 10, 2011 14:20
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jabro posted:Help me, Goons, you're my only hope. First of all I am not sure you added it up correctly. In total I counted: MSFT - 2025 shares @ 24.72 = ~$50,058 YHOO - 100 shares @ 11.89 = ~$1189 SYY - 809 shares @ 28.33 = ~$22,918 WMT - 100 shares @ $49.08 = ~$4,908 Cash - $20,303 Total ~$100,000 dollars While the current values of her retirement accounts are low, based on what you said she doesn't seem to be in too bad of a spot. Right now she is getting by on your dad social security and her part time job. Presumably this is only going get better when she also begins to collect SS. Do you know what her income/expenses are like? Is this money going to be used only in case of an emergency? As for what her money is in you absolutely need to diversify. Half of all the money is in a single stock! Three quarters of the funds are in two stocks. Just imagine what would happen if news came out tomorrow that the jet carrying the MSFT board went down or that there were substantial 'irregularities' with accounting. Your mother's portfolio needs to be diversified. Although people could argue how many stocks you truly need to be diversified, most would agree that the minimum should be more than 8-10. Another thing to consider is you want to be diversified across stocks and other investments. Rather than get hit by a bunch of trading fees purchasing lots of small lots which would be very expensive, you will want to buy a mutual fund. All mutual funds have fees, so you should look to minimize those. One of the perennial favorites of this forum is http://www.vanguard.com due to their extremely low cost. You will want to buy a fund split with a split, maybe 50% stocks vs 50% bonds/cash. Here are Vanguard's Managed Payout Funds. I would take a look at Vanguard Managed Payout Distribution Focus Fund Investor Shares (VPDFX) in particular as it is a less risky form that focuses on perserving principal and paying out a distribution. Vanguard estimates that a $100,000 investment would yield $567/month. Another option that would not give large distributions and would instead slowly grow be a fund like Vanguard Target Retirement 2010 Fund (VTENX). The last issue is timing. First I would work on transferring all the assets to Vanguard. You'll have to call the current custodian and Vanguard to arrange to get everything transferred. Once you get it all in Vanguard you don't want to sell all her current holdings at once especially with the market down 10% in the past few days. Each week I would sell 20% of her stock and buy your chosen Vanguard fund with the proceeds. This way you are dollar cost averaging and won't take as big of a hit as if you had switched it all on one day and the market the day before you sold. alreadybeen fucked around with this message at 18:39 on Aug 10, 2011 |
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Aug 10, 2011 17:59
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Question: Is there any advantage to setting up a Vanguard account to buy into their funds as opposed to using something like Scottrade to do so? I already have a Roth IRA set up with Scottrade (mainly because they have no yearly maintenance fee) and another Scottrade account for general investing outside of that. Also are there benefits to sticking money into my Roth IRA account rather than my general investing account if it doesn't save me anything on taxes? Also, I don't live or work in the US right now, so I don't pay US taxes. Mercury_Storm fucked around with this message at 18:37 on Aug 10, 2011 |
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Aug 10, 2011 18:21
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Mercury_Storm posted:Question: Is there any advantage to setting up a Vanguard account to buy into their funds as opposed to using something like Scottrade to do so? I already have a Roth IRA set up with Scottrade (mainly because they have no yearly maintenance fee) and another Scottrade account for general investing outside of that. Mercury_Storm posted:Also are there benefits to sticking money into my Roth IRA account rather than my general investing account if it doesn't save me anything on taxes? Also, I don't live or work in the US right now. And yes there is a good reason - tax-free appreciation.
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Aug 10, 2011 18:28
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Mercury_Storm posted:Question: Is there any advantage to setting up a Vanguard account to buy into their funds as opposed to using something like Scottrade to do so? I already have a Roth IRA set up with Scottrade (mainly because they have no yearly maintenance fee) and another Scottrade account for general investing outside of that. Your Roth IRA is not taxed on any money it accrues, so if you're not taking that into account there you go.
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Aug 10, 2011 18:29
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alreadybeen posted:First of all I am not sure you added it up correctly. This is awesome infomation. Thank you very much. The pricing was going off close of Monday which was the last time I printed everything out. She says she doesn't need the money but I want it available for emergencies. I am looking over everything at Vanguard regarding the Mutual Funds, VPDFX, and VTENX. I knew having everything in stocks was bad and it needed diversification. Her expenses are very minimal except for the credit line my dad took out on the house about a dozen years ago. She makes enough to cover the bills, have some disposable money, and also put some in savings. I thought about her making at least an extra payment on the house every year but realistically it wont be paid off by the time she dies so make the minimum and when I sell the house pay it off then. Again, thanks for this info.
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Aug 10, 2011 19:49
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jabro posted:Her expenses are very minimal except for the credit line my dad took out on the house about a dozen years ago. She makes enough to cover the bills, have some disposable money, and also put some in savings. I thought about her making at least an extra payment on the house every year but realistically it wont be paid off by the time she dies so make the minimum and when I sell the house pay it off then. Again, thanks for this info. Since you confirmed she doesn't need the income from the investment, I would not focus on the first group of funds I posted as those are more dedicated to paying income out. I'd stick with the target retirement 2010/2015 one or take a look at only slightly more aggressive funds like these: Vanguard LifeStrategy Moderate Growth Fund (VSMGX) Vanguard Wellesley Income Fund Investor Shares (VWINX)
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Aug 10, 2011 21:38
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alreadybeen posted:Since you confirmed she doesn't need the income from the investment, I would not focus on the first group of funds I posted as those are more dedicated to paying income out. I'd stick with the target retirement 2010/2015 one or take a look at only slightly more aggressive funds like these: The two you listed here, is it better to split between the two or just go for one? I like VWINX but will split it between the two if it will be better in the long run.
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Aug 11, 2011 02:30
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jabro posted:The two you listed here, is it better to split between the two or just go for one? I like VWINX but will split it between the two if it will be better in the long run. Now comes the possible bad news, she may lose quite a bit of money switching over. Check the average buy price of the shares she has vs. the current price and you may be unpleasantly surprised to find that some are probably lower than the original price, and it looks like they will keep dropping for a little while. If you're lucky, your dad bought Microsoft shares back when they first started and it won't matter, although he may have been one of "those" investors that sell when the price crashes and then buys when it goes back up. She'll have to decide if she's willing to wait for the prices to go back up, or if she'll switch over right now and take a hit.
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Aug 11, 2011 03:31
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gvibes posted:I think that you have to have income here to invest in an IRA here. Not 100% sure on that either.
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Aug 11, 2011 04:20
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Saint Fu posted:This is true. You have to have at least as much taxable income as you contribute to an IRA. Not exactly. If you make enough money overseas then you're over the Foreign Earned Income Exclusion (FEIE). Think it's $95K or so for 2011. Thus subject to both US taxes and taxes where you live. Anything you make over the FEIE is considered "taxable income" by the US so you are eligible to contribute to an IRA (maybe). A few problems: -With the Roth there's an extremely small window: if you make enough that you can contribute to a Roth IRA from overseas after FEIE, chances are you make too much to contribute to a Roth IRA (since it starts phasing out at like $105K) -With the traditional, if your employer provides a retirement plan, you are not eligible to make tax-deductible contributions if your income exceeds $66K. So here too you're probably hosed -- if you're making enough to be over FEIE, and you're not self-employed, your company probably provides a retirement plan. http://taxes.about.com/od/retirementtaxes/qt/Individual-Retirement-Accounts-For-Americans-Working-Abroad.htm zmcnulty fucked around with this message at 06:39 on Aug 11, 2011 |
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Aug 11, 2011 06:30
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zmcnulty posted:Not exactly. If you make enough money overseas then you're over the Foreign Earned Income Exclusion (FEIE). Think it's $95K or so for 2011. Thus subject to both US taxes and taxes where you live. Anything you make over the FEIE is considered "taxable income" by the US so you are eligible to contribute to an IRA (maybe).
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Aug 11, 2011 07:00
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Yes, that's correct.
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Aug 11, 2011 08:32
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Yaos posted:If you get the income account as regular investment account she will have to pay taxes on the dividends, but in an IRA they won't be taxed. If she has to pay taxes and she does not have the cash on hand she may be forced to sell shares. If she takes the dividends out, she won't be able to increase the number of shares as quickly as she would if she left them in, reducing the future value of the fund for her. With the LifeStrategy account the dividend payout is lower, reducing her yearly tax cost. Thanks for this. I will definitely look at how much she loses in each of the options we have.
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Aug 12, 2011 02:15
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alreadybeen posted:One key advantage not mentioned in this article is that a Roth account allows you to put in more after tax dollars than a traditional. If you are able to max it out you can get tax free growth on ~25% more money. This has a powerful effect on the ultimate balance. However if you can't afford to max it out, the point about marginal tax dollars is critical and something you should consider. I'd rather be putting $16.5k of post-tax dollars in a tax advantaged account than pre-tax.
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Aug 12, 2011 05:11
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Just wanted to open up this post by thanking all the frequent posters in here - this has been an extremely informative thread. My question is this: My wife and I are both 25 and we both have Roth IRAs that we have nearly maxed out for the last 2-3 years, mine has around 15k and hers has about 10k. Right now I have both Roth IRAs set to the Target Retirement 2050 fund with Vanguard. Is this a good plan, or would it make more sense to have one of the IRAs set to something more aggressive and another one to something less aggressive, for example.
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Aug 12, 2011 11:00
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zmcnulty posted:Yes, that's correct. Given that I have basically zero AGI on account of living abroad, is there any special thing that I should be looking at instead? What other gotchas might I be missing on account of being abroad?
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Aug 12, 2011 11:28
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Camelmaster posted:Just wanted to open up this post by thanking all the frequent posters in here - this has been an extremely informative thread. If you don't feel like managing it yourself, you're ok. Money is fungible. The water company doesn't care where the money comes from or how it was made (sometimes the Gov't cares how) as long as you pay. Short of a prenup that states otherwise, your two IRAs are each 50% the other's property (subject to a few state quirks). You can continue treating them identically, or if it gives you a strategic advantage, you can treat them as a big fund that allows you to do more. It won't make a bit of difference if you're in TargetDate funds, as both of you could split your funds and still have above the minimum with Vanguard. If on the otherhand you wanted to get into say 7 different funds to get your allocation balance the way you wanted, you'd need to use your two funds as a single logical fund.
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Aug 12, 2011 13:13
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Camelmaster posted:Just wanted to open up this post by thanking all the frequent posters in here - this has been an extremely informative thread.
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Aug 13, 2011 06:12
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Saint Fu posted:I personally feel that the target retirement funds do not allocate enough to bonds. The 2050 fund is something like 90% stocks and I'm not comfortable putting that much in equities. Everyone has their own opinions of course. I have all of my Roth IRA in 2050 and use my work's Roth 401(k) to add some bonds along with their equivalent 2050 fund. I tend to agree with this. I do think that they should allocate a little more toward bonds. A potential solution to this is to simply choose a retirement fund with a closer target date. So if you plan to retire in 2050 but don't want as much in stocks, you can buy a 2035 or 2040 fund which has less. One other thing to add is that you want your riskiest stuff in your Roth. Simply because you won't be taxed on the profits. For instance, if you have $20k in a Roth and $50k in other investments (traditional or just a brokerage account), you're better off putting your Roth almost entirely into equities and sticking the others with the bonds. Seems like you are already doing that by keeping the bonds in the 401K that doesn't have the long term tax benefit. Niwrad fucked around with this message at 08:46 on Aug 13, 2011 |
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Aug 13, 2011 08:44
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