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Residency Evil posted:70% seems pretty high for someone in retirement tbqh. i don't think its a particularly wild benchmark depending on your level of assets. while most of my clients typically settle in the 5050 realm, those that are on the higher net worth side tend to have higher equity concentrations if only because the time horizon for the money is necessarily longer (and arguably should really be beyond their lives in the first place, entirely)
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Sep 7, 2020 04:29
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just to give an idea my clientele is broadly split up like so: public sector folks: ~500k-1m in assets, usually little to no financial literacy whatsoever private sector folks lower tier: ~800k-2m in assets, much stronger financial acumen typically, ironically the firm i work for most often that i have in mind here has quite a strong pension so while i'm thinking solely DC plans in the assets tallying you can think these ppl are MUCH stronger in retiremeny than the public sector ppl typically private sector folks higher tier: typically at or exceeding the estate exclusion amount (~23m for a married couple) so the scale of planning changes insanely between the first two buckets of ppl and the third
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Sep 7, 2020 04:32
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At what point do rich people just start buying property? Once they're past FDIC?
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Sep 7, 2020 05:28
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Most brokerages can automatically get you 5-10x FDIC just through having multiple member banks. Add in joint accounts, trusts, retirement accounts, etc, you're looking at a few million in cash before you even break a sweat pushing the FDIC limits.
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Sep 7, 2020 07:07
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Also FDIC protection is for scrubs, the truly rich people have their money in institutions that are too big to fail. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/banklist.html These are almost all lovely little local banks that went under.
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Sep 7, 2020 07:13
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tbp posted:just to give an idea my clientele is broadly split up like so: That’s fair, and I imagine most of your clients hopefully don’t have a 70% equity allocation in retirement, since the first two buckets outnumber the third?
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Sep 7, 2020 11:10
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Are bonds even better than a HYSA at this point since interest rates are bottomed out and aren't going up again any time soon?
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Sep 7, 2020 12:40
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Residency Evil posted:That’s fair, and I imagine most of your clients hopefully don’t have a 70% equity allocation in retirement, since the first two buckets outnumber the third? honestly i shouldn't generalize so much in posts w/ percentages and the like because the more i think about the individuals involved the more it really does change based on the person, personality and goal involved. truncating my speech only leads to misunderstandings, my mistake
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Sep 7, 2020 14:57
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Yep. I think it is a far bigger risk that you fall to inflation with an overly conservative bond allocation. That's also what all the historical data seems to suggest. Honestly, even if you had to withdraw a little equity in a down market it would be fine, as long as you adjust your expenses for a few years to minimize the impact (and you had a large enough principal balance in the first place).
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Sep 7, 2020 18:06
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Also remember that people with $2mm in assets 30% bonds represents a larger absolute number of dollars compared to someone with $500k-$1mm. The baseline amount required to live is roughly similar across the board ignoring things like property taxes. This means 30% for a high net worth person is probably a longer runway than 50/50 or 70% bonds person. They can simply go longer to weather a storm topping up to 30% annually if the market isn't in a crater.
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Sep 7, 2020 19:12
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SlyFrog posted:(and you had a large enough principal balance in the first place). And that, of course, is the (undetermined-number-of-millions) question 
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Sep 7, 2020 19:13
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H110Hawk posted:Also remember that people with $2mm in assets 30% bonds represents a larger absolute number of dollars compared to someone with $500k-$1mm. The baseline amount required to live is roughly similar across the board ignoring things like property taxes. This means 30% for a high net worth person is probably a longer runway than 50/50 or 70% bonds person. They can simply go longer to weather a storm topping up to 30% annually if the market isn't in a crater. This, exactly. I hear people talk about this, and I'm like "If you have a couple million, 20% in bonds/cash is $400,000. If you run out of that before the stock market rebounds at least to some semblance of itself (such that you're having to draw equity), we are in Mad Max world and your asset allocation probably doesn't matter and wouldn't really have mattered." That's the thing that frightens me. The American retirement system more and more is literally depending on the stock market doing well over an extended period of time. We don't have pensions anymore here. If the market doesn't perform, we are pretty much all hosed.
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Sep 7, 2020 21:28
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SlyFrog posted:This, exactly. I hear people talk about this, and I'm like "If you have a couple million, 20% in bonds/cash is $400,000. If you run out of that before the stock market rebounds at least to some semblance of itself (such that you're having to draw equity), we are in Mad Max world and your asset allocation probably doesn't matter and wouldn't really have mattered." I'm not an expert but pensions are pretty dependent on market growth too right?
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Sep 7, 2020 21:30
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SlyFrog posted:This, exactly. I hear people talk about this, and I'm like "If you have a couple million, 20% in bonds/cash is $400,000. If you run out of that before the stock market rebounds at least to some semblance of itself (such that you're having to draw equity), we are in Mad Max world and your asset allocation probably doesn't matter and wouldn't really have mattered." Instead of changing allocations, I like to phrase it as keep 5-10 years of living expenses in bond/cash and the rest keep the same growth based allocation you want, 80/10 bond/stock or whatever.
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Sep 7, 2020 22:08
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Xguard86 posted:I'm not an expert but pensions are pretty dependent on market growth too right? Defined benefit pension plans depend on the market performing to not end up needing to get bailed out or end up a pyramid scheme. Or just go bust.
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Sep 7, 2020 22:32
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Motronic posted:Defined benefit pension plans depend on the market performing to not end up needing to get bailed out or end up a pyramid scheme. Or just go bust. Yeah, that's the difference. It's still an obligation. With federal guarantees and insurance programs in place (as well as duties to top up the funds if the asset value drops below certain levels). As opposed to personal 401ks, as to which the employers response to a bad stock market or you not saving enough is "lol - guess you're hosed".
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Sep 7, 2020 23:54
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Motronic posted:Defined benefit pension plans depend on the market performing to not end up needing to get bailed out or end up a pyramid scheme. Or just go bust. The federal government has already demonstrated that they're willing to bail out failed pensions, I wouldn't worry too much about it.
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Sep 8, 2020 00:50
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Twerk from Home posted:The federal government has already demonstrated that they're willing to bail out failed pensions, I wouldn't worry too much about it. Not just willing. It is an obligation, and there are even government entities set up for it, like the Pension Benefit Guaranty Corporation.
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Sep 8, 2020 00:55
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Just rolled over an old 401k to Vanguard. Currently in my 30s, is Vanguard TD 2055 a good fund to toss it all into or should I split it into a few different funds?
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Sep 8, 2020 19:53
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The Slack Lagoon posted:Just rolled over an old 401k to Vanguard. Currently in my 30s, is Vanguard TD 2055 a good fund to toss it all into or should I split it into a few different funds? Dump it in and forget about it 
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Sep 8, 2020 20:11
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Apparently I have a pension from Hertz that's worth about 24k. Can I cash this out early? I have zero trust in Hertz to do anything correctly, much less manage my money for 20 years. I'm already maxing out 401k and Roth for actual retirement..
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Sep 8, 2020 22:29
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FateFree posted:Apparently I have a pension from Hertz that's worth about 24k. Can I cash this out early? I have zero trust in Hertz to do anything correctly, much less manage my money for 20 years. I'm already maxing out 401k and Roth for actual retirement.. SlyFrog posted:Not just willing. It is an obligation, and there are even government entities set up for it, like the Pension Benefit Guaranty Corporation.
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Sep 8, 2020 23:03
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FateFree posted:Apparently I have a pension from Hertz that's worth about 24k. Can I cash this out early? I have zero trust in Hertz to do anything correctly, much less manage my money for 20 years. I'm already maxing out 401k and Roth for actual retirement.. what you can do with that money administratively is entirely up to hertz really, we wouldn't be able to know assuming by cash out you mean "put this in my bank account" - i wouldn't recommend it unless you have some need for the funds. if you can, it's probably best to roll it over to some other tax deferred acct and just invest it there if you dont want it w/ the former employer
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Sep 9, 2020 17:47
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My Marcus savings is down to 0.6%
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Sep 9, 2020 20:55
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Mu Zeta posted:My Marcus savings is down to 0.6% 0.80% at ally still 
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Sep 9, 2020 21:10
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H110Hawk posted:0.80% at ally still For now. I twitch every time Ally sends me an email right now. Lol.
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Sep 10, 2020 01:00
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Duckman2008 posted:For now. I twitch every time Ally sends me an email right now. Lol. how much cash do you have in that account where you are even going to notice a 0.2% drop
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Sep 10, 2020 04:05
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you'd have to have 6 figgies in cash savings before that becomes barely more than just beer money. chill out man.
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Sep 10, 2020 04:14
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H110Hawk posted:0.80% at ally still drat, I miss when HSBC Online-only accounts were like 7% back in 2006 or so. 
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Sep 10, 2020 04:22
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Is Varo any good? They have by far the highest APY of any savings account, even if you go past their $10,000 maximum. Would it be best to go with them or something more "mainstream" like Ally or even American Express?
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Sep 10, 2020 08:35
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I just have my emergency fund split between Ally and Marcus so not really concerned about the APY. Just don't want to get the chump change from Bank of America or Chase.
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Sep 10, 2020 11:06
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fart simpson posted:how much cash do you have in that account where you are even going to notice a 0.2% drop
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Sep 10, 2020 13:22
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fart simpson posted:how much cash do you have in that account where you are even going to notice a 0.2% drop Lol I was mostly joking. I dont actually get upset when it drops beyond a small “oh drat, it dropped again.”
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Sep 10, 2020 14:35
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I'm annoyed but realistically GS can get free money from the Fed so why do they want to pay me anything for small amounts of money?
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Sep 10, 2020 14:58
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WithoutTheFezOn posted:You don’t notice one sting, but you notice ten. 12 months ago they were paying 2.1%. True but also...meh. it is my emergency fund. Cash ready and on hand is more important than the rate. (sure I will take a higher rate, but if it was 0% (before online only banks) I wouldn't change my approach)
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Sep 10, 2020 16:52
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My local regional bank has dropped from 5.01% to 3.01% since the rona started.
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Sep 11, 2020 13:05
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A bank was offering 5% interest in 2020? 
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Sep 11, 2020 13:10
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Darkrenown posted:A bank was offering 5% interest in 2020? Quite a few were, although there's terms and conditions. Usually a required amount of debit purchases per month and a limit to the balance that gets the higher interest rate. Worked great for my emergency fund but I have really low expenses. Still quite a few in the 2-4% range. I'd imagine with the fed not planning on raising interest rates any time soon, they're going to continue to drop though. https://www.doctorofcredit.com/high-interest-savings-to-get/
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Sep 11, 2020 13:58
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Anyone have advice on where to start finding an IRA servicer? I have 2 401Ks from old jobs that I'd like to roll over in an IRA instead of into my current 401k [fund selection isn't great at current employer]. I have accounts at ETRADE, Fidelity and Wells now but I'm open to somewhere new if there's a clearly better option. I guess my main question is what should I look for as far as fund selection, features like auto-rebalancing, etc.? Of course all the big places refuse to publish numbers or comprehensive lists of funds on their websites because they want to get me on the phone instead. I already have non-retirement investments that I manually manage, my goal with this is to be able to stay pretty hands-off and not have to worry about it.
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Sep 12, 2020 01:34
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Vanguard is the de facto answer.
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Sep 12, 2020 01:47
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