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Virginia Slams posted:So I spoke with my HR today and turns out my companies "25% match up to $400" is not per pay period or month it is per year they just worded it in a very poor way. Am I right in assuming that's a well below average match? They also did not know the expense ratios and told me to call Vanguard directly to find out. I was originally going to go with the plan in the quote but would it be more advisable to change that now that I know I'm barely getting a match at all? You want to sock away as much money as you comfortably can. With such low expenses you should be trying to max your 401k and your ROTH IRA regardless of the match. Make sure you have a nice emergency fund first though.
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Jan 5, 2021 03:49
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E: wrong thread
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Jan 5, 2021 03:54
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zaurg posted:Why VTSAX + VTIAX mix instead of just VTWAX? If you want exactly 60% U.S. and 40% world, that'd work well. If you don't, it wouldn't.
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Jan 5, 2021 03:54
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TeMpLaR posted:How rare is it for a job to offer the mega backdoor roth option? I just found out the other day that my employer's plan offers it in a form that's even easier than usual. They allow in-plan Roth conversions of after-tax money up to six times per year. No need to roll it over to an IRA first.
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Jan 5, 2021 04:24
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My company offers an automatic conversion for you per paycheck or an unlimited number of times if you want to do it yourself. It’s through Vanguard. They added it last year. I don’t think a ton of people know it’s offered or even legal, however.
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Jan 5, 2021 04:40
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Fully automated luxury backdoor Roth conversions
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Jan 5, 2021 04:58
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SamDabbers posted:Fully automated luxury backdoor Roth conversions Excuse me sir, I had to opt in and check a box for the luxury conversion option.
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Jan 5, 2021 05:19
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I hear that there are some changes that might happen in 2022 to traditional 401ks? Can anyone elaborate on this? Instead of giving a tax deferral on the 401k, you get a 26% credit based on whatever you invested; so a maximum of $5,070?
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Jan 5, 2021 05:21
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obi_ant posted:I hear that there are some changes that might happen in 2022 to traditional 401ks? Can anyone elaborate on this? Instead of giving a tax deferral on the 401k, you get a 26% credit based on whatever you invested; so a maximum of $5,070? Biden's campaign proposed it as a change that would make 401(k) benefits less skewed towards high earners. Right now, it's an above-the-line deduction that basically shaves income that would have been taxed at your top marginal rate, so it's a "make more, save more" situation. Moving to a tax credit based on a percentage of contributions, kind of like the current saver's credit, means that people get the same dollar benefit for 401(k) contributions, whether they make a little or a lot. If you make less than $163k as a single filer or $326k as a married couple filing jointly, it would be a net benefit for you. But - it's just a proposal. If the Republicans win in Georgia tomorrow, it's definitely not going anywhere. If the Democrats end up with full control over Congress and the Presidency, maybe, but it's still the kind of thing that is likely to fall by the wayside (just like Trump's idea to eliminate 401(k) deductions entirely).
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Jan 5, 2021 05:39
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Virginia Slams posted:So I spoke with my HR today and turns out my companies "25% match up to $400" is not per pay period or month it is per year they just worded it in a very poor way. You also need to find out the vesting schedule.it could be vested over 5 years, to further compound how bad it is. It's still free money and you should still take advantage of it. But not knowing the vesting schedule leads to eggs being counted as chickens.
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Jan 5, 2021 05:45
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zaurg posted:Why VTSAX + VTIAX mix instead of just VTWAX?
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Jan 5, 2021 06:11
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moana posted:Apart from better control of your allocation, we were talking about this in the context of slicing and dicing for tax loss harvesting purposes. When one investment declines, the other might not, making it easier to reap tax loss harvesting benefits. To put it another way, rather than tasing your whole ball sack willy nilly, you take a rusty bread knife and slice that scrote right down the middle. That way if one of your balls ever descends, you can shove your taser right in the open wound and just tase that one single ball. I did not find this analogy helpful. 
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Jan 5, 2021 07:20
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VTWAX is also more expensive than if you bought VTIAX and VTSAX together at the same ratio. Not much, but convenience has a price.
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Jan 5, 2021 11:07
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Is there a better way of funding a backdoor Roth than transferring the money over from my bank account? I funded the IRAs on 1/1 and it looks like the funds won't actually be available for Roth converting until 1/11, which I'll surely forget. Should next year should I just transfer the cash to my brokerage account ahead of 1/1? I feel I'm annoyed by this every year and then forget about it. Residency Evil fucked around with this message at 16:26 on Jan 5, 2021 |
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Jan 5, 2021 16:20
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Residency Evil posted:Is there a better way of funding a backdoor Roth than transferring the money over from my bank account? I funded the IRAs on 1/1 and it looks like the funds won't actually be available for Roth converting until 1/11, which I'll surely forget. Should next year should I just transfer the cash to my brokerage account ahead of 1/1? Set an alarm.
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Jan 5, 2021 16:33
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I inherited a non-spousal IRA in 2020 and the decedent was over 70 1/2. My understanding from the tax changes is that I have to distribute the entire account balance in the next 10 years however the CARES act waived RMDs for 2020. Does that mean I have to do it in the next 9 years or does the initial year not count towards the 10 giving me until 2031?
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Jan 5, 2021 16:45
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Residency Evil posted:Is there a better way of funding a backdoor Roth than transferring the money over from my bank account? I funded the IRAs on 1/1 and it looks like the funds won't actually be available for Roth converting until 1/11, which I'll surely forget. Should next year should I just transfer the cash to my brokerage account ahead of 1/1? I transfer from cash in taxable brokerage (Vanguard to Vanguard) so it just happens.......
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Jan 5, 2021 17:08
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withak posted:Set an alarm. This is what I usually do. Motronic posted:I transfer from cash in taxable brokerage (Vanguard to Vanguard) so it just happens....... I just never keep uninvested cash in the brokerage account. Unless I should? Am I living life wrong? Should I be depositing everything in to the brokerage account and then transferring money out to a checking account?
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Jan 5, 2021 17:26
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Residency Evil posted:This is what I usually do. It's just part of my asset allocation percentages to account for dividends - which I don't automatically reinvest for purposes of needing to rebalance. I wouldn't say that's something that must be done, it's a choice, and largely a choice I made when I was vesting mad equity every quarter so I was regularly interacting with brokerage. Now that I'm a filthy unemployed slob I may put things further on autopilot so I can sit around in my underwear drinking beer more effectively. But anyway, back to you. Even if you don't want to keep cash in brokerage, just toss you annual contribution in there in early december so you can do the instant transfer/invest on Jan 1.
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Jan 5, 2021 17:31
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Motronic posted:It's just part of my asset allocation percentages to account for dividends - which I don't automatically reinvest for purposes of needing to rebalance. I wouldn't say that's something that must be done, it's a choice, and largely a choice I made when I was vesting mad equity every quarter so I was regularly interacting with brokerage. Now that I'm a filthy unemployed slob I may put things further on autopilot so I can sit around in my underwear drinking beer more effectively. Gotcha, thanks. I keep dividends reinvesting automatically and have a rotating automatic investment of Total Stock/S&P/International at the end of the month, which allows me some flexibility for TLH purposes, and yet allows me to sit around drinking beer in my underwear.
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Jan 5, 2021 17:35
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Comedy option: Wire transfer. But yes at some point you have to eat the ach transfer delay, and if you automatically invest it on deposit then you further have to eat the settlement delay. How you choose to slice that pie is up to you. Keeping $6k in cash inside the same institution you hold your IRA at is how you can move the delay away from the conversion timing. You also just shouldn't worry about it you have all year. If you owe taxes it just means you made a profit in excess of your savings account rate and  more money in the end.
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Jan 5, 2021 17:55
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I usually building up $6k of savings in my savings account near the end of the year so I can do the Roth IRA contribution on 1/1. But you have me thinking - I guess in December I could transfer that to my Vanguard brokerage so that on 1/1 vanguard already has the uninvested money right away? 🤔
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Jan 5, 2021 18:19
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Guinness posted:If you have Vanguard funds at cost, you have a very good 401k and should be putting as much as you can afford into it. worth noting too that your 401k might have institutional or trust versions of the vanguard funds, which have an even lower ER than normal investor shares also having a 401k match of any kind is a luxury, as is having a 401k at all - definitely it would be great to have a good match but something like 60% of the population has no access to any of this at all
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Jan 5, 2021 18:27
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moana posted:To put it another way, rather than tasing your whole ball sack willy nilly, you take a rusty bread knife and slice that scrote right down the middle. That way if one of your balls ever descends, you can shove your taser right in the open wound and just tase that one single ball. i can only assume this is part of the cfp curriculum? 
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Jan 5, 2021 18:33
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Been on hold with vanguard for an hour and a half ugh E: as soon as I posted this they answered, hell yea The Big Jesus fucked around with this message at 20:15 on Jan 5, 2021 |
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Jan 5, 2021 20:06
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Higher than expected December bonuses are looking to put my wife and me over the income threshold that makes the Roth IRA contribution limit below the $6k we each contributed for 2020. It’s definitely a worlds smallest violin moment, but now I have to go touch stuff in my set-it-and-forget-it account 
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Jan 5, 2021 20:15
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Democratic Pirate posted:Higher than expected December bonuses are looking to put my wife and me over the income threshold that makes the Roth IRA contribution limit below the $6k we each contributed for 2020. It’s definitely a worlds smallest violin moment, but now I have to go touch stuff in my set-it-and-forget-it account That's what I just did and it only took about five minutes on the phone.
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Jan 5, 2021 20:26
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Not sure where else to ask this. So I have a Roth IRA that I max out and a SEP IRA from my employer that they contribute to each year. However, I also make side gig 1099 income that I pay taxes on. If I understand this correctly.... I could make a new SEP IRA for my 1099 income in 2020. It would definitely be below the combined $57,000 cap on SEP IRAs, but I would only be limited to putting in 25% of my 1099 income into it? And then I would basically not have to pay the taxes on 25% of the high rear end 1099 taxes on that money I made in 2020. Basically I am finally to a place where I have zero debt (house paid off!). Maxing out me and my wife's Roth IRA, maxing out my kid's 529 Savings account, and still have extra money beyond above our emergency fund at the end of the year. I was thinking to just put the post-tax money that's above our emergency fund into a taxable brokerage account, but then I was made aware that this second SEP IRA account would be a better way to reduce the taxes that I owe on all this 1099 income I have. The only disadvantage of the SEP is that I couldn't touch it before I was 59 1/2, and that if I did I'd be subject to a 10% tax penalty in addition to paying the 33% taxes (or whatever ungodly number it is) on that income I would have paid. And the taxable brokerage account means I'd pay more taxes on it now, but could basically take that money out whenever I want down the road, though it would also be subjected to capital gains taxes. But it's money well above our substantial emergency fund, so I am not worried about that. Thoughts?
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Jan 5, 2021 21:16
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moana posted:0% capital gains bracket is the dumbest IRS rule ever, apart from the Masters exception that the Georgia wealthies pushed through so they could rent their houses out tax free for two weeks during their stupid golf tournament. In Austin, we call this the SXSW, ACL, and F1 Racing rule.
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Jan 7, 2021 13:56
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Maybe you guys were right about not being able to time the market. Why does SP500 keep going up? Hot drat.
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Jan 7, 2021 16:53
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I'm in the process of executing a reverse rollover of a traditional IRA (Vanguard) into my employer sponsored 401K, because as I understand it, I'm not able to conduct a backdoor roth IRA conversion if I hold any funds in traditional IRAs. My employer 401K is also with Vanguard and they said they allow it but I'm still confused on a few things. - It sounds like I'm only able to reverse rollover pretax money in the traditional IRA, but shouldn't this be 100% of the funds? Which cases would this ever be post tax that would prevent me from rolling into the 401K? The IRA was originally created from a 401K rollover at an old job and just had a few contributions to it since (see below). - I contributed to this traditional IRA in 2020 before I found out about this ($600) - does that have any implications on the rollover? It looks like I may have actually made a small contribution in 2019 as well. Thanks in advance for any advice!
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Jan 7, 2021 17:40
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I want to drop a huge thanks to investment goons in general as well as whomever I took seriously some years ago when I started a roth and stumbled across their suggestion of VASGX. That led me down the path of researching Vanguard and their funds, and my retirement savings have benefited as a result. Okay now real talk: are the zero-fee Fidelity funds a trap or what? The price is right, and their performance against similar funds from rival brokerages tends to be comparable, but I can't help but worry their management is too passive or they're quietly siphoning profits elsewhere.
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Jan 9, 2021 19:56
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Space Fish posted:I want to drop a huge thanks to investment goons in general as well as whomever I took seriously some years ago when I started a roth and stumbled across their suggestion of VASGX. That led me down the path of researching Vanguard and their funds, and my retirement savings have benefited as a result. They're an odd gimmick. I am staying clear of them for now. The spread between 0.015% and 0.000% is so small. https://fundresearch.fidelity.com/f...s=FZROX%2CFSKAX
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Jan 9, 2021 20:05
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I have had all my Fidelity HSA invested in FZROX for a couple years. No funny business yet.
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Jan 9, 2021 20:20
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I taking them at face value, but I imagine Fidelity is using them as loss leaders to get people into their system. They are being subsidized by the higher ER on other funds. If your money is already going into Fidelity, then I'd definitely use them, but I don't think it'd be worth transferring money over for if you're already getting something like 0.04%. For example, if you miss a 0.5% market increase while the transfer is occurring (a totally normal amount of fluctuation), it'd take 10 years to make it up.
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Jan 9, 2021 20:36
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when in doubt, we can also check total return: https://stockcharts.com/freecharts/perf.php?VTSAX,FZROX&n=252&O=011000 including fees, VTSAX is +22.51% over the past trading year. FZROX is +22.10%. their zero fee fund doesn't seem to provide any particular advantage to the investor.
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Jan 9, 2021 21:00
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Space Fish posted:Okay now real talk: are the zero-fee Fidelity funds a trap or what? The price is right, and their performance against similar funds from rival brokerages tends to be comparable, but I can't help but worry their management is too passive or they're quietly siphoning profits elsewhere.
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Jan 9, 2021 22:03
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literally this big posted:It's probably a loss-leader for them. Get you in to FZROX for free and then get you to 'diversify'/over-weight certain sectors a bit with some of their other funds. Fidelity reps won’t bother you if you want to be left alone. When you set up your account just check the option for experienced investor that manages own investments. The only time I’ve received a call from a rep is when a local rep left me a voicemail to say that they had just opened a new local branch near me. He also said that it was a one-time call and not to worry about future calls from him. Haven’t heard from them since. The people that like the zero or low fee fee funds will eventually transfer over their other accounts. My partner and I now have our iras,hsas, checking accounts, and even the fidelity credit card. So they aren’t making big fees off us but with enough people like us they get a lot of volume.
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Jan 9, 2021 22:35
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I've asked this very same question, and for now, I choose to leave my funds with Vanguard, as some measure of loyalty for providing low cost funds originally, rather than grudgingly at metaphorical gunpoint as later providers like Fidelity have done. I'll only take this so far, but I am willing to go a little out of my way for rewarding companies for doing the right thing up front, and not as an after-adopter.
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Jan 9, 2021 22:47
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SlyFrog posted:I've asked this very same question, and for now, I choose to leave my funds with Vanguard, as some measure of loyalty for providing low cost funds originally, rather than grudgingly at metaphorical gunpoint as later providers like Fidelity have done. There are a lot of good threads on the Bogleheads forums about best brokerages. The consensus is generally that Vanguard isn't the only game in town anymore for low-fee brokerages and that Vanguard really lacks in customer service and IT capability. Some say that Vanguard is mostly focused on their institutional accounts and have scaled back service for individual investors. But if you're in the accumulation phase then Vanguard is totally fine. It's retirees that have to do complex things with their accounts where Vanguard seems to give issues. Bogleheads tend to favor Schwab and Fidelity but some like Merrill Edge as well. I switched from Merrill Edge to Fidelity about 4 years ago and have been very happy. My Dad uses Fidelity and he likes having the local reps that he can bother about stuff. The Fidelity reps do seem to push him towards actively managed funds so he's the kind of person that they make their money on.
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Jan 9, 2021 23:34
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