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See you down in Arizona bay
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Jan 3, 2020 23:01
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obi_ant posted:Overall I'm hoping for the market to beat 1.6% (the APR for my savings account) in the next five years. Any thoughts? Do you bank with Ally? I just opened an 1.6% savings account with them and couldn't find much better than that. PNC Bank offers 1.9% (which might be worth considering) and Vio offers a 2.05% (which would definitely be worth considering), but both also had lots of red flags when I was researching them. In term of FDIC coverage, Wealthfront seems to have the best offer at 1.82, though bonds, CDs, or a money market account might beat that with some added risk. There are also some high yield savings accounts that offer 4-5%, but you're limited to $1-2k per account. I've found you can get about 5% on $9k, but those rates aren't guaranteed and the $9k limit might be an insignificant portion of your savings. Another "safe" place I've been considering storing my spare (non-emergency) cash is Vanguard's Target Retirement Income fund. 70% bonds / 30% stock. Seems like a good way to both preserve and grow value over time, and it's lower $1k minimum is good for me. But I'd need to research it a bit more before taking the leap.
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Jan 3, 2020 23:21
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doingitwrong posted:If you just wanna beat 1.6%, there are CDs and bonds that will beat that. So the question is: by how much do you want to beat it and at how much risk? I'm willing to take risks in the market, but most of my investing experience comes from investing in the long term (20+ years); since 5 years is my current window, I'm not too confident with my choices. I'm taking a glance at VSPGX and the fund seems like it's up my alley. Vanguard classifies this as a level 4, I think I'm looking for something within the 3-4 range. Maybe I'll look into getting a mix of 3 and 4. literally this big posted:Do you bank with Ally? I just opened an 1.6% savings account with them and couldn't find much better than that. PNC Bank offers 1.9% (which might be worth considering) and Vio offers a 2.05% (which would definitely be worth considering), but both also had lots of red flags when I was researching them. In term of FDIC coverage, Wealthfront seems to have the best offer at 1.82, though bonds, CDs, or a money market account might beat that with some added risk. I do bank with Ally. I stated the 1.60% because that is what they dropped to over the course of a few months and have been thinking I can do better than that. I've considered opening a bunch of CDs as well, but came to the conclusion that I'm okay with the risk and getting something better than a 1.6%-2% in the market is okay with me. I currently have my Roth in a Vanguard Target Retirement Fund and it's a considerable chunk compared to my 401k. I guess I could just add more money into the target fund since it's considered a well diversified fund, but it also feels like I'm adding all my eggs into one basket.
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Jan 4, 2020 00:17
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Vanguard offers tax free bonds in some states like California and New York. Could be worth looking into those.
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Jan 4, 2020 01:34
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obi_ant posted:
I don't consider myself qualified to tell you how to invest with a discrete 5-year time horizon, but I can say that your gut feeling here is completely wrong. You cannot get any more diversified than a Vanguard target retirement fund, since it holds every available asset class (except muni bonds, but nobody would ever hold muni bonds in a tax advantaged account). You can decide to stray from Vanguard's chosen asset mix, and I do, but they are the very definition of diversified.
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Jan 4, 2020 01:47
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eh, I don't think vanguard target funds are holding e.g. commodities, forex, or real estate, although they're indirectly exposed to those things via the assets they do hold.
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Jan 4, 2020 04:49
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Kylaer posted:I don't consider myself qualified to tell you how to invest with a discrete 5-year time horizon, but I can say that your gut feeling here is completely wrong. You cannot get any more diversified than a Vanguard target retirement fund, since it holds every available asset class (except muni bonds, but nobody would ever hold muni bonds in a tax advantaged account). You can decide to stray from Vanguard's chosen asset mix, and I do, but they are the very definition of diversified. That makes sense. I suppose if I'm happy with my current return in my 401k I can look at other Target Funds.
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Jan 4, 2020 06:27
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I've got ~$12.00 in my IRA from some interest I got when I was doing my first Backdoor Roth last year for 2018 and 2019. If I drop in $6,000 today and move the whole thing over ($6012.xx)to my roth I just owe taxes on that $12.00 still right? Just want to keep that 6K safe. Thanks!
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Jan 4, 2020 17:11
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Minty Swagger posted:I've got ~$12.00 in my IRA from some interest I got when I was doing my first Backdoor Roth last year for 2018 and 2019. If I drop in $6,000 today and move the whole thing over ($6012.xx)to my roth I just owe taxes on that $12.00 still right? Just want to keep that 6K safe.
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Jan 4, 2020 17:13
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So just do 2 separate rollovers? One to clear it, and then one to handle the 6K? Does that make the form 8606 a pain in the rear end? I'm new to this as in that I havent actually filed for the work I did (correctly I hope) last year, so I havent touched the forms yet. I use fidelity so I'm hoping it just pipes into turbotax or whatever natively. Thanks again! EDIT: VVVVV you're right and I understand, just used the wrong terminology. Thanks! Minty Swagger fucked around with this message at 18:31 on Jan 4, 2020 |
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Jan 4, 2020 17:16
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Minty Swagger posted:So just do 2 separate rollovers? One to clear it, and then one to handle the 6K?
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Jan 4, 2020 17:40
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I've been back and forth this weekend on whether to continue with my backdoor Roth or start making deductible Traditional IRA contributions. This will be the first year that I won't have any 1099 income, so I will no longer be able to contribute to my Solo 401k, which removes the income limit on deducting IRA contributions. I also do not get any sort of retirement benefits through work and it's unlikely I'd ever get them with different employers in the future unless I start my own business with one. I'm projecting to have more than $6k in the 32% federal tax bracket, so it makes sense to do Traditional, right? I guess the risk is that I do end up getting an unexpected workplace retirement plan and have to convert all those contributions later (potentially paying greater than 32% if the tax cut have expired) in order to do more backdoor Roth contributions in the future. There's also the minor hassle of juggling ETFs between two separate accounts to try to minimize the amount of money I have left over in a cash position.
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Jan 5, 2020 06:10
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Ancillary Character posted:I've been back and forth this weekend on whether to continue with my backdoor Roth or start making deductible Traditional IRA contributions. This will be the first year that I won't have any 1099 income, so I will no longer be able to contribute to my Solo 401k, which removes the income limit on deducting IRA contributions. I also do not get any sort of retirement benefits through work and it's unlikely I'd ever get them with different employers in the future unless I start my own business with one. I'm projecting to have more than $6k in the 32% federal tax bracket, so it makes sense to do Traditional, right? You make the taxable election of the IRA on your tax return. So you can contribute to the IRA now, and wait until the end of the year to do the backdoor if you end up having a 401k option. You'll pay taxes on any gains, but even if the market skyrockets 15% that's still going to be like $360 taxes owed.
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Jan 5, 2020 17:33
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Not sure if this is the right thread, but I have a question about rebalancing ahead of big purchases. Right now, my spouse and I are maxing our Roth IRAs and hitting employer match on 401k/403b accounts, and we've been throwing everything beyond that and our emergency fund into VASGX because  . We've paid off all our debt. Now that we've found real jobs in our 30s and all of a sudden that taxable account is growing, we're thinking about buying property in the next couple years. I'm feeling like this current strategy is risky if we want money available for a down payment, but I'm also still waffling on whether we should take on that risk because we're not really dying to be homeowners. We live in Boston and our commute is a top of the top priority so we're not going to be able to buy anything under about $500K. We currently have $50K invested in the taxable account, and we'll be able to swing saving something in the ballpark of $35K/year. We have no intention of touching the money in the retirement accounts for this. What would you do? Move everything to a high-yield savings account? Move part of it? Hold steady and hope very hard? BRAKE FOR MOOSE fucked around with this message at 02:26 on Jan 6, 2020 |
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Jan 6, 2020 02:22
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BRAKE FOR MOOSE posted:Not sure if this is the right thread, but I have a question about rebalancing ahead of big purchases. I'm in the same situation as you, look about 15 posts back.
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Jan 6, 2020 03:31
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BRAKE FOR MOOSE posted:Right now, my spouse and I are maxing our Roth IRAs and hitting employer match on 401k/403b accounts, and we've been throwing everything beyond that and our emergency fund into VASGX because Is there a reason you are putting money in a taxable account while leaving tax advantaged space on the table? spwrozek fucked around with this message at 17:21 on Jan 6, 2020 |
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Jan 6, 2020 17:19
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Phone issues...
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Jan 6, 2020 17:21
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spwrozek posted:Is there a reason you are putting money in a taxable account while leaving tax advantaged space on the table? My understanding is that the early withdrawal penalties from a 401k would be greater than the tax hit in the brokerage account...
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Jan 6, 2020 18:05
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BRAKE FOR MOOSE posted:My understanding is that the early withdrawal penalties from a 401k would be greater than the tax hit in the brokerage account... There are ways around that: https://www.madfientist.com/how-to-access-retirement-funds-early/. Take a look at the Roth conversion ladder specifically.
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Jan 6, 2020 18:18
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BRAKE FOR MOOSE posted:My understanding is that the early withdrawal penalties from a 401k would be greater than the tax hit in the brokerage account... Yeah, you wouldn't want to do this. The question would make sense if your taxable account were being considered a retirement fund, in which case you're a giant idiot. On the other hand, if your taxable account is for a down payment then it makes sense. If we're to say that you're targeting 100k for a down payment then you can hit that in under two years at your current savings rate. Given that you're reluctant to buy a house/tiny room in a run down building for half a million bucks, you're not under any time pressure. To me, it sounds like you two should first max out your tax advantaged space (I don't think your current RETIREMENT saving rate, i.e. Roth IRA + 401k/403b is high enough for your income level, do you?) and then think about what you want to do with the rest, whether that's VASGX, a bond fund, or even just high yield checking/CD ladders/otherwise safe spaces.
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Jan 6, 2020 18:19
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What's the right way to think of a taxable account, once you've built up an adequate emergency fund? My wife and I are maxing our 403bs/457s/Roths and we're putting "extra" money for retirement in to a taxable account. I currently see that money as untouchable. We have a decently sized emergency fund, but we'll need to buy a new car in the middle of 2021 or so. I've been saving money for the car in the same high yield savings account that we have our emergency fund in, but should I instead be putting the extra money in to the brokerage account, then selling investments/paying long term capital gains in order to buy a car? Residency Evil fucked around with this message at 18:38 on Jan 6, 2020 |
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Jan 6, 2020 18:35
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Residency Evil posted:What's the right way to think of a taxable account, once you've built up an adequate emergency fund? My wife and I are maxing our 403bs/457s/Roths and we're putting "extra" money for retirement in to a taxable account. I currently see that money as untouchable.
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Jan 6, 2020 19:09
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Residency Evil posted:What's the right way to think of a taxable account, once you've built up an adequate emergency fund? My wife and I are maxing our 403bs/457s/Roths and we're putting "extra" money for retirement in to a taxable account. I currently see that money as untouchable. For you, as someone who makes enough money in a week to put a down payment on a financed car? Yes sure.
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Jan 6, 2020 19:14
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Chu020 posted:You're missing mid cap, but that's like 4% of a total stock market index so meh. You could probably do 82% VFIAX and 18% VSMAX and call it a day. Awesome, thanks! I tweaked slightly to more VSGAX but upped the VFIAX contributions.
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Jan 6, 2020 19:14
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The best way to think of a taxable account is 
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Jan 6, 2020 19:21
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totalnewbie posted:Yeah, you wouldn't want to do this. The question would make sense if your taxable account were being considered a retirement fund, in which case you're a giant idiot. This was basically what I was getting at. So thanks for replying better than me.
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Jan 6, 2020 21:00
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Kylaer posted:The best way to think of a taxable account is We talking /r/wallstreetbets?
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Jan 6, 2020 21:40
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Not me, I'm almost pure index funds except for half a dozen shares of Costco that I bought essentially as a joke.
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Jan 6, 2020 22:17
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Kylaer posted:Not me, I'm almost pure index funds except for half a dozen shares of Costco that I bought essentially as a joke. Low prices and unbeatable value are no laughing matter, friend.
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Jan 6, 2020 22:27
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Kylaer posted:Not me, I'm almost pure index funds except for half a dozen shares of Costco that I bought essentially as a joke. Costco is definitely winning at playing the game of joke investments.
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Jan 6, 2020 22:30
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In the not-so-distant cyberpunk future, where large corporations rule the world, I want to be on Team Costco.
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Jan 7, 2020 02:42
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totalnewbie posted:Yeah, you wouldn't want to do this. The question would make sense if your taxable account were being considered a retirement fund, in which case you're a giant idiot. We're at around 17% of income invested into the retirement funds, which could be better, but with home savings as an additional goal I thought that was okay. I do think that investing $51K/yr is more than we would need invested to sustain our lifestyles in retirement (and we're unlikely to have any desire to retire early). BRAKE FOR MOOSE fucked around with this message at 06:19 on Jan 7, 2020 |
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Jan 7, 2020 06:13
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literally this big posted:In the not-so-distant cyberpunk future, where large corporations rule the world, I want to be on Team Costco. sorry the teams are all owned by the same british crisp company 
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Jan 7, 2020 13:25
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literally this big posted:In the not-so-distant cyberpunk future, where large corporations rule the world, I want to be on Team Costco. Welcome to Costco, I love you.
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Jan 7, 2020 15:41
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BRAKE FOR MOOSE posted:We're at around 17% of income invested into the retirement funds, which could be better, but with home savings as an additional goal I thought that was okay. I do think that investing $51K/yr is more than we would need invested to sustain our lifestyles in retirement (and we're unlikely to have any desire to retire early).
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Jan 7, 2020 15:43
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Kylaer posted:Not me, I'm almost pure index funds except for half a dozen shares of Costco that I bought essentially as a joke. This is me, everything in ETFs except for two dozen shares of some garbage corp nobody likes
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Jan 7, 2020 15:50
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The hate hedge.
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Jan 7, 2020 17:12
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Hoodwinker posted:The other benefit to saving more earlier is that you need to save less overall to hit your target. It lets you ease off the savings gas later in your life if you feel like it (or - also possible - because you have to). If you can afford to save more now, it's a good idea to. On top of this, when you're young is also when saving a lot is the least painful since you do not have many responsibilities in terms of feeding/clothing kids or maintaining property.
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Jan 7, 2020 17:19
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drainpipe posted:On top of this, when you're young is also when saving a lot is the least painful since you do not have many responsibilities in terms of feeding/clothing kids or maintaining property.
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Jan 7, 2020 17:22
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please knock Mom! posted:This is me, everything in ETFs except for two dozen shares of some garbage corp nobody likes Do you mean garbage as in they're a bad company, or are they literally a garbage company like Waste Management (whose logo I always think looks suspiciously like Weyland-Yutani's)?
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Jan 7, 2020 18:34
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