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Plan fees are another potential drain in addition to tax and penalty. The 401k I just joined charges a fat fee for each distribution. Willfully placing yourself in a liquidity situation where are so eager to pay through the nose for a few hundred dollars of your own money is nothing to gloat to the benefits admin about. What you have going sounds like a business with some success, so far, but not a retirement plan.
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Apr 28, 2020 09:41
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When people invest for the long term, why is the standard advice stocks/bonds? I get the general idea of bonds. You are hiring them to give yourself protection through less volatility. But they aren't very good at this job. Bonds tend to drop when stocks drop, just less. And you are getting a reliably suboptimal return over the long term. You lose returns over your more aggressive index investor.  But if instead of Stock/Bonds you'd gone Stocks/Long Term Treasuries, you get a graph that looks like this.  Treasuries are a little bit counter-cyclical. They tend to got up when were is a crash. So you are getting lower volatility (which is what you hired the bonds to do) but you are getting overall returns that are rivaling the index investor (and sometimes winning!). What am I missing? These are graphs of investing $10,000 every year and rebalancing once per year. They are using the data from 1990-2020 which includes three major stock market crashes. If you want to play with the tool, you can find it at https://www.portfoliovisualizer.com/backtest-asset-class-allocation
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Apr 28, 2020 21:59
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Excellent question doingitwrong, I hope someone knows what's up  I wonder how that changes if you're 90/10 or 80/20 on a traditional glidepath.
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Apr 28, 2020 22:21
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Maybe I'm an idiot, but I feel like something is hosed up with the value of long-term treasuries on that. Portfolio 1 is 80/20 stocks/treasury Portfolio 2 is 100 treasury Portfolio 3 is 80/20 stocks/bonds Did long-term treasuries really have a 30% up year? Do they really have 10% volatility? Something seems fucky about this. For 2011, VUSTX was actually up 24%, and if you add in 2% for yield that does bring it up there. It's just wild to me if these values are accurate.
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Apr 28, 2020 22:22
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doingitwrong posted:When people invest for the long term, why is the standard advice stocks/bonds? I get the general idea of bonds. You are hiring them to give yourself protection through less volatility. You're not really wrong. If I recall correctly, there is plenty of evidence out there that a 100% or near 100% equities investment is best for long term investing. Certainly beyond a fairly limited allocation, bonds start to heavily drag down your likelihood of making it. E.g. this research: https://earlyretirementnow.com/2016/12/14/the-ultimate-guide-to-safe-withdrawal-rates-part-2-capital-preservation-vs-capital-depletion/ Bonds essentially allow you to sleep at night knowing that you probably aren't going to lose 50% of your net worth a few years before retirement. They help mitigate sequence of return risk before retirement.
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Apr 28, 2020 22:33
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Treasuries were wild in 1982 https://www.nytimes.com/1982/02/05/business/record-set-on-30-year-us-bonds.html
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Apr 28, 2020 22:38
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Yeah there's at least in theory a point at which you are no longer interested in long-term growth and want to reallocate to something that provides a more reliable income stream. You can't take it with you, you know.
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Apr 28, 2020 23:03
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So regarding treasuries - under what condition can you get more hosed with them than another asset class?
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Apr 29, 2020 00:33
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Alchenar posted:Yeah there's at least in theory a point at which you are no longer interested in long-term growth and want to reallocate to something that provides a more reliable income stream. You can't take it with you, you know. What I’m seeing in the chart is that treasuries don’t just preserve value. They outperform bonds and they allow a lower volatility result with smaller drawdowns but matching performance to the pure S&P 500 index. In the case the 60/40 Stocks Treasuries currently has a higher outcome than the index. And it was beating the index from 2008-2016.
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Apr 29, 2020 00:38
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Hoodwinker posted:So regarding treasuries - under what condition can you get more hosed with them than another asset class? A) you underperform your goals that you would have hit with some asset class that performed better, or B) the government of the united states of america defaults on its debt, but if that's happening, good loving luck with your other US-homed asset classes, lol There's a reason the US treasury bond is considered the default place to park money for most every world government, and the "Risk-free rate of return" is considered the current 3-month Treasury rate. It's "the safest investment in the world."
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Apr 29, 2020 01:05
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Leperflesh posted:A) you underperform your goals that you would have hit with some asset class that performed better, or I'm thinking about it from the perspective of each asset class functioning as a tool that benefits you most under a certain set or range of conditions. Maybe that's not accurate.
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Apr 29, 2020 01:06
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Hoodwinker posted:I get that. What I'm asking is what economic conditions can transpire to make treasuries less valuable than other asset classes. Or is that not even necessarily a valid question to ask? AH I get you. Well it immediately gets complicated. Like, are you holding actual bonds, or are you holding a treasuries ETF or something? Are you holding, or are you buying? What's your goal? Sometimes when money flees stocks, it seeks safe harbors like treasuries, which means that prices of treasury bonds rise, and therefore, yields fall. If you are already holding treasuries, that's good for you: you could sell your treasuries immediately, at a profit! If you're trying to buy treasuries, that's bad for you: the yield has fallen! If you're holding a treasuries fund, it's... well, it depends, is the fund buying, or selling, or just holding? Also sometimes when stocks fall, treasury prices fall too, because the money isn't seeking a safe harbor in treasuries. Maybe it's seeking better returns. Maybe it's buying gold. Different economic shocks have different characteristics. If you're just a long-term holder, treasuries are less volatile than stocks, but historically have underperformed them. Which of these matter more to you? It depends! So what I'm getting at is "valuable" is kind of a wishy-washy term; what's valuable to me might not be the same as what's valuable to you, if we have different goals, time horizons, risk tolerances, etc. etc. e. there's also stuff like the inflation-proof treasury (TIPS), which is a bit of a specialty tool; it just guarantees that no matter what happens broadly to treasury yields, you never lose your money to inflation. But you also might not make any more than that (here's an explanation). I might recommend these as an excellent option for someone with basically zero risk tolerance, but who isn't OK with (say) rolling three-month T-bills that might not even yield as much as the inflation rate. Leperflesh fucked around with this message at 01:20 on Apr 29, 2020 |
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Apr 29, 2020 01:16
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doingitwrong posted:What I'm seeing in the chart is that treasuries don't just preserve value. They outperform bonds and they allow a lower volatility result with smaller drawdowns but matching performance to the pure S&P 500 index. In the case the 60/40 Stocks Treasuries currently has a higher outcome than the index. And it was beating the index from 2008-2016. Can you preserve value also by hedging two inversely correlated assets? Maybe, but it may require more attention and produce more anxiety in retirement than you'd like.
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Apr 29, 2020 01:43
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The recent posts’ discussion would benefit from enumeration of different types of bonds and ways to invest in bonds, which leperflesh started above. Treasury (EE bond vs. Bill vs. regular T-Bond vs. inflation protected, and more!) vs. Corporate vs. foreign sovereign vs. Municipal Short, medium, and long-term (say, 2, 10, or 20+ years) Grades (AAA all the way down; generally junk vs. investment grade) Buying and holding an individual bond at par (like an EE) vs buying at/below par as a bond trader. Mutual fund vs ETF (which may dislocate from NAV), including mixed funds that hold both treasury and corporate bonds. In general the high returns of bonds experienced by most investors during downturns came from treasury bond mutual funds or ETFs which go up in value due to people bidding up to buy them for 2 reasons: flight to safety, or expected/realized lowering of interest rates (and the funds hold the older bonds at higher rates). There are very, very long (one might say cherry picked) periods where treasury funds outperform a total stock index. Corp bonds are generally less volatile than stocks with predictable yield and did better than stocks short term coming out the bottom of the GFC. Munis are used for tax advantages. Treasury funds can perform poorly, or have negative total return, if investors flood to stocks or interest rates rise. We have had an anomalously long 30+ year period of interest rates going down. Nobody knows if that will continue, or how long.
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Apr 29, 2020 01:50
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This is true. The graphs I posted above were looking at long term treasuries vs total US bond market index (which I take to be the normal advice when people say “buy an index fund, buy a bond fund”).
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Apr 29, 2020 03:33
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It seems to me the problem isn’t bonds so much as bond funds. With bonds you can choose to ignore the daily value and hold until maturity. Bond funds can fluctuate daily and you have no “hold to maturity” option.
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Apr 29, 2020 03:40
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Except see: Defined Maturity Funds, offered by legit outfits like Fidelity: https://www.fidelity.com/mutual-funds/mutual-fund-spotlights/defined-maturity-funds quote:How DMFs work So you can buy the distribution of assets you get with a fund, plus the hold-to-maturity advantages of holding individual bonds to maturity. But you pay for it; FOCFX has an ER. of .40%. And the performance of that particular fund is... not exciting.
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Apr 29, 2020 04:19
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This may be the prelude to some questions about long term investing, but I have a new account in one of my banks that is titled after my late grandmother’s trust. I just noticed it yesterday and I haven’t heard from the executor of the will yet; she passed in Dec last year. Is it common that I would see the whole trust like this, or just what was bequeathed? I know I don’t have a lot of details, I just want to know if this is part of the normal process
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May 1, 2020 17:35
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Gazpacho posted:You said that private bonds drop with the market but less, but I don't see that in your chart. The drops appear to be just the stock component of the portfolio dropping. Private bonds by themselves responded very weakly to market swings over the period and were effective at preserving value. You're right about the correlation. The bonds show a tiny positive correlation (0.06). The treasuries have a small negative correlation(-0.15). Here is a chart just comparing these two assets.  I'm not sure why you think that Stock/Bonds is less stressful than Stock/Treasuries, given that Stocks/Treasuries see smaller drawdowns in the charts I posted at the top of the page? Aren't Treasuries understood to be the "riskless asset"?
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May 1, 2020 18:17
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LawfulWaffle posted:This may be the prelude to some questions about long term investing, but I have a new account in one of my banks that is titled after my late grandmother’s trust. I just noticed it yesterday and I haven’t heard from the executor of the will yet; she passed in Dec last year. Is it common that I would see the whole trust like this, or just what was bequeathed? I know I don’t have a lot of details, I just want to know if this is part of the normal process You should get specific instructions, including a full accounting of her estate, if you are one of the beneficiaries. The executor should be in contact from you. If they aren't contact them and just verify they know how to get ahold of you.
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May 1, 2020 19:15
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nelson posted:It seems to me the problem isn’t bonds so much as bond funds. With bonds you can choose to ignore the daily value and hold until maturity. Bond funds can fluctuate daily and you have no “hold to maturity” option. Bond funds are also holding most securities to maturity, but have to report a liquid NAV each day. That makes them appear more volatile that if you held the underlying securities yourself. However be aware that if you tried to liquidate fund during a level of low liquidity, you would be exposed to the same fluctuation in prices. The big problem with bonds is liquidity. It is fundamentally the same problem with stocks (fewer buyers equal lower prices), but with bonds you simply have less volume to begin with. When you own most large-cap stocks, there will always be someone to buy it. With bonds, that is not the case. This makes price discovery very difficult, especially with corporate issues which are thinly traded to begin with. Usually those bonds sit in an account somewhere and nobody thinks twice about them. However when the market is distressed, people all want to sell it at the same time and there is little interest to buy a 13-year, 4-month maturity bond for JNJ (or whoever). This results in a bit of a fire sale, and bond prices take a big hit; at least temporarily. After the distress has ended, whoever bought that bond resells it at normal prices, realizes a quasi-arbitrage, and it rebounds quickly. This is why you see those periodic spikes in corporate bond funds around the same time there is a market crash. Treasuries are less susceptible to it because they are extremely liquid. quote:So regarding treasuries - under what condition can you get more hosed with them than another asset class? Treasuries can still be very risky at higher duration. The 10-year is at like 0.65% right now. Let's you bought one note worth with a par value of $1,000. If the 10-year rate rose to 1.5%, it would now be worth $921. If rates rose to 2.5%, it would be worth $837. If it rose to 3.184% (recent high in 11/2018), it would be $784. That's a 21.5% loss. Now, interest rates of course fluctuate so the loss isn't permanent. You can also ride the bond to maturity for 10-years; though whats the point if you are presumably investing in bonds over stocks for capital preservation and liquidity? Also note that as the bond gets closer to maturity, its duration declines. This means that it will naturally rise in value until it hits its par value the day of its maturity. Higher duration bonds (e.g. 30-years) are much more sensitive to interest rates. A 30-year bond in the example above would be worth $512 if you bought it at 0.65% and it went up to 3.184%. Cheesemaster200 fucked around with this message at 17:36 on May 2, 2020 |
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May 2, 2020 17:18
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Anyone here have a securities license? If so, how difficult was the exam and how much prep did you do?
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May 2, 2020 18:31
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Can anyone give me some quick advice as far as setting up my 401k contribution amount after being laid off from a previous employer? To date, I've contributed a little under $4,400 while at my previous employer, through March 31. I now need to set up my 401k at my new employer, and of course, the only option I have is to choose a percentage of my pay to be contributed to the 401k until I hit the $19,500 limit. I believe I can comfortably max out the contribution this year, having gotten a raise going to the new employer, but I have no idea how to set up the contribution appropriately such that I don't accidentally over contribute. My previous employer used Fidelity for our retirement accounts, and the new employer uses Charles Schwab. Is it possible to contact them directly after creating my account and make them aware of the amount of my YTD retirement contribution, or is there some way to set this in my account so that contributions are stopped once I reach a cumulative $19,500? Lastly, I'm sure this has been answered elsewhere, but is there a best practice as far as what to do with my previous retirement account and holdings? Specifically, I have contributed to a Roth 401k. I've read that I can either roll it into the new employer provided brokerage or I could transfer it into my Roth IRA which I am holding at Vanguard. Is there any one correct choice?
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May 6, 2020 07:27
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MetaJew posted:I believe I can comfortably max out the contribution this year, having gotten a raise going to the new employer, but I have no idea how to set up the contribution appropriately such that I don't accidentally over contribute. My previous employer used Fidelity for our retirement accounts, and the new employer uses Charles Schwab. Is it possible to contact them directly after creating my account and make them aware of the amount of my YTD retirement contribution, or is there some way to set this in my account so that contributions are stopped once I reach a cumulative $19,500? I screwed this up when I switched jobs, but after the fact I was told that there was a form I could have filled out to tell my new company that I had already made $X of 401k contributions that year at my old job. MetaJew posted:Lastly, I'm sure this has been answered elsewhere, but is there a best practice as far as what to do with my previous retirement account and holdings? Specifically, I have contributed to a Roth 401k. I've read that I can either roll it into the new employer provided brokerage or I could transfer it into my Roth IRA which I am holding at Vanguard. Is there any one correct choice? There might be other factors, but I think the decision to leave the holdings in your old 401k account, rollover into your new Roth 401k, or rollover into a Roth IRA largely depends on the funds you have available for all three kinds of accounts and the expense ratios. Some people are fortunate to work at companies where in their 401k accounts they get access to funds with lower expense ratios than funds purchased in a Vanguard Roth IRA account. Some people who work at other companies are not so fortunate and the funds available in their 401k accounts have higher expense ratios. It depends on how large and how cheap the company is when it comes to paying for 401k account administration. The cheap companies don't pay a lot and force their employees to pay for the service through higher fund expense ratios. I've never looked into Charles Schwab's fund options and expense ratios, but they get slammed a lot here for pushing a lot of actively managed funds and for charging a lot of fees. Maybe it is best to rollover into a Roth IRA in your case? But you should compare the Charles Schwab fund options and your old work's 401k fund options with the options in your Roth IRA account. silence_kit fucked around with this message at 12:24 on May 6, 2020 |
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May 6, 2020 12:11
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Schwab's fund options mostly suck, but they provide no-fee, no-load to a lot of non-Schwab mutual funds. And, more importantly, no-commission trades on a wide variety of ETFs, including Vanguard and Blackrock ones. So just buy ETFs.
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May 6, 2020 12:47
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If you have a high enough income to sock away $19.5k per year in after-tax dollars then you might want to be maxing out your non-Roth 401k first with those sweet pre-tax dollars. Either way, first priority should probably be maxing out your employer matching contributions. An instant 100% return is the best investment you'll ever see and every payroll not utilizing it could be leaving free money on the table, depending on the true-up clauses.
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May 6, 2020 13:33
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I’m on year two of maxing my 401k. Go me But I changed jobs this year. I asked them to rollover my last 401k into the new one. Was this a good idea? I’m worried about stupid poo poo like the check getting lost or them not knowing what to do with it when it arrives. The money was already withdrawn from the old account. So right now my retirement savings reads $0. I’m probably overthinking this
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May 6, 2020 13:38
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I'm assuming you did an indirect transfer because you are talking about a physical check. Should do a direct transfer if possible. You'll get the check in an indirect transfer. It does not go to your new 401(k) provider directly. You have 60 days to get the money to the provider. The new provider wants your money, why would they "not know what to do with it when it arrives" they're a financial institution mate.
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May 6, 2020 13:53
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MetaJew posted:Can anyone give me some quick advice as far as setting up my 401k contribution amount after being laid off from a previous employer? To date, I've contributed a little under $4,400 while at my previous employer, through March 31. I now need to set up my 401k at my new employer, and of course, the only option I have is to choose a percentage of my pay to be contributed to the 401k until I hit the $19,500 limit. Talk to your new company’s payroll department. This is a common problem and they should have a solution for it. They may require documentation of your existing YTD contribution. If they don’t, call Charles Schwab and ask.
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May 6, 2020 14:15
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MetaJew posted:Can anyone give me some quick advice as far as setting up my 401k contribution amount after being laid off from a previous employer? To date, I've contributed a little under $4,400 while at my previous employer, through March 31. I now need to set up my 401k at my new employer, and of course, the only option I have is to choose a percentage of my pay to be contributed to the 401k until I hit the $19,500 limit.
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May 6, 2020 14:27
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wide stance posted:If you have a high enough income to sock away $19.5k per year in after-tax dollars then you might want to be maxing out your non-Roth 401k first with those sweet pre-tax dollars. I've wondered about the general accepted advice for making Roth vs Traditional 401k contributions. Two years ago I used the Vanguard RMD calculator (aside: I can't find the link to it anymore!), took my current traditional 401k retirement account savings, assumed max 401k contribution each year & 4% annual return on investments, and it told me that my RMDs would be higher than my current salary. Assuming that the tax rates wouldn't change 30 years from now, this would mean that it makes sense for me to make Roth 401k contributions, at least unless my salary went up, right? I switched to only making Roth 401k contributions after that calculation. I do get a salary match in a pre-tax 401k account for which the RMDs taken from the account at retirement age would be income that would be taxed at a lower tax bracket than the one I am currently sitting in. silence_kit fucked around with this message at 14:51 on May 6, 2020 |
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May 6, 2020 14:48
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I changed jobs last year and dragged my feet on rolling over my 401k from the old job. My old job's 401k is at Fidelity split between 3 funds with ~80% in a S+P 500 fund (the lowest ER available). My current employer uses MassMutual and I have my allocation split between 3 Vanguard funds. I previously worked at my current job and had rolled over the previous MassMutual 401k from there to Fidelity. When I did this, they sold everything and sent me a check, which I sent to Fidelity, then allocated it within. If I rollover from Fidelity back to MassMutual, will they sell everything and send me a check again? Or will they keep the $ in the funds that it's already in? To me, this sounds like timing the market, and I know that's dumb, but I'm happy enough to let it sit in Fidelity until I retire. I don't want to lock in losses now. Or, is this just stupidly trying to time the market and I should just pull the trigger? E: Or - should I roll the Fidelity 401k over into a Vanguard rollover IRA? I already have an IRA at Vanguard. When my wife did a rollover of her previous job's 401k to Vanguard, they kept the $ in the funds that she had. Would that be a better idea? Cacafuego fucked around with this message at 15:37 on May 6, 2020 |
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May 6, 2020 14:49
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If you sell at $3 and buy back at $3, it's the same as selling at 30 cents and buying back at 30 cents - you end up with the same number of shares. The only differences are if 1: the price changes significantly between when you sell and when you buy or 2: there's some sort of arbitrage between the two funds. Note: there may or may not be tax consequences to all of this that change the answer.
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May 6, 2020 16:04
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Cacafuego posted:I changed jobs last year and dragged my feet on rolling over my 401k from the old job. My old job's 401k is at Fidelity split between 3 funds with ~80% in a S+P 500 fund (the lowest ER available). My current employer uses MassMutual and I have my allocation split between 3 Vanguard funds. I previously worked at my current job and had rolled over the previous MassMutual 401k from there to Fidelity. When I did this, they sold everything and sent me a check, which I sent to Fidelity, then allocated it within. If you roll from Fidelity back to Mass Mutual, they will send you a check, again. You won't lock in losses other than changes in market value over the time period that your money is "floating" in cash out of the market if you're re-buying essentially the same securities. Eg: if you currently have 100 shares of S&P 500 index fund in fidelity, that you bought for $20, and are now worth $10, and you roll them to Mass Mutual, and buy 100 shares of S&P 500 index for $10 each, you haven't locked in any losses. You still have 100 shares of S&P 500 index fund. The only disadvantage is because you're moving between tax advantaged retirement accounts, you can't harvest those losses. Be careful rolling over to IRA depending on your Roth eligibility and use of backdoors.
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May 6, 2020 16:24
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Oh drat it, I’m dumb. Thanks for explaining it.
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May 6, 2020 16:45
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I've got a question for the thread. My uncle passed away last year and left me part of his IRA (divided up among several friends and relatives, though, so I'm not going to run out and buy a yacht). I arranged to roll it over into an IRA for me with the same company (Fidelity), and doing so apparently required converting it all into cash. They said they'd schedule an appointment with a financial advisor to reinvest it, and I talked to one who said he'd have a plan mailed to me. So far so good. The plan they sent was a few pages of what appears to be a very standard investment plan (all of the stock in one large blend fund, for example), then a large form for me to sign to agree to Fidelity advisory services with an estimated yearly fee of nearly 1%. Is this a good idea? I'm the first to admit I'm no financial genius, I do a bit of reading here and on r/personalfinance and know the basics of how funds work and how taxes work with an IRA, but that's about it. And since it's an inherited IRA I have to take some out every year, so it's not as simple as "just put everything in a target date fund" like I frequently see. And it occurred to me that maybe the actual personalized advice comes after I agree to the fee, instead of them mailing it to me and then asking if I'll pay for it. But on the other hand 1% seems pretty high - what does the advisory fee actually get me that I wouldn't get by, say, reading a few investment advice articles and putting my uncle's money in a few basic funds? I'm supposed to talk to the advisor again Friday, so I can ask my questions then, but I felt like I should ask for advice from people without a financial stake in it (fiduciary duty or not) before I agree to anything.
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May 6, 2020 22:21
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Bremen posted:I've got a question for the thread. Nope! Don't do this. Financial advisors largely are salespeople who will try to get you to give them money for services you do not need. Determine how you're going to use the windfall. Are you using it for retirement? Find a Fidelity target year retirement mutual fund, stick it all in there, and forget about it. For other goals the answer is slightly more complicated, but shouldn't require the use of an advisor. Keep in mind a good mutual fund could have a yearly fee of around .1%, so 1% would be ten times higher.
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May 6, 2020 22:32
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A target retirement fund isn't bad for an inherited IRA. If you have other substantial assets in IRAs/401ks, you can probably improve a bit more with some tax efficient asset allocation taking into consideration your other accounts. The Fidelity rep will likely not give a gently caress about your other accounts and therefore will be worthless. I'd put bonds in an inherited IRA to lower RMDs and just up the stock portion in my 401k account. Lower yield in stuff you have to take out, higher yield in stuff you keep for longer. Bonds are also tax inefficient so it's good to have them in a tax advantaged account. If you aren't currently maxing your 401k, use the RMD to do that. You can also post your own thread here with all the deets and we can make sure it all looks good.
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May 6, 2020 22:51
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Inner Light posted:Nope! Don't do this. Financial advisors largely are salespeople who will try to get you to give them money for services you do not need. Determine how you're going to use the windfall. Are you using it for retirement? Find a Fidelity target year retirement mutual fund, stick it all in there, and forget about it. For other goals the answer is slightly more complicated, but shouldn't require the use of an advisor. I plan to use the money for retirement, but I still have to take some of it out from the IRA each year, so it will probably slowly transition from the IRA to a post-tax brokerage account (which will quite likely be mostly a target date fund). And yeah, 1% did seem pretty high to me. moana posted:A target retirement fund isn't bad for an inherited IRA. If you have other substantial assets in IRAs/401ks, you can probably improve a bit more with some tax efficient asset allocation taking into consideration your other accounts. The Fidelity rep will likely not give a gently caress about your other accounts and therefore will be worthless. This, on the other hand, makes me kind of wonder if I do need an advisor, since I had to puzzle over it awhile to figure out what you mean. Like, I have no idea how bonds would lower my RMDs, though I can (now) see why I'd want the tax inefficient stuff in the IRA while still maintaining a balanced portfolio overall. My first impression was to avoid target retirement funds for the IRA since I have to take a little out each year, but I guess in hindsight just because it has a target date doesn't mean I can't sell it in bits and pieces before then.
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May 6, 2020 23:19
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raminasi posted:Talk to your new company’s payroll department. This is a common problem and they should have a solution for it. They may require documentation of your existing YTD contribution. If they don’t, call Charles Schwab and ask. The Leck posted:Like others have said, talk to the new company, with the caveat that they may not be able to help. When I last switched jobs, the new 401k provider wouldn't do anything, so I just had to do some math and calculate my contributions to be as close as I could get without going over. If that $4 contribution I missed out on because I couldn't get it precise enough ends up screwing me over in retirement, they'll be hearing from me! I spoke to HR and to Charlse Schwab. Both told me that they can't do it, and I'll have to self manage it. Since the contribution is only from base-pay and not including any bonuses, I think I can calculate approximately to max it out-- and I may miss out on putting in a few tens of dollars, but the employer i think matches 3-6%. Somewhere in there, so I'll get the match, for sure. As for putting the money into a roth 401k vs a traditional 401k, I honestly have never known what the right thing to do is. The idea of not paying any taxes on withdrawals somewhere in the future is appealing, but I understand that I am very likely in a higher tax bracket now than when I would be pulling that money out. Of course, I'm not one of the WSB guy sthat is gutsy enough to go gamble my Roth IRA on options, so it's not like I'm making insane gains where the Roth component really pays off.
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May 6, 2020 23:25
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