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KYOON GRIFFEY JR posted:Why? Treasuries are highly liquid, you can sell them whenever for a fair market price based on current yields. You have some interest rate risk, but rates are very unlikely to be going up in the near term. Hrm I mean I want to wind them down so I can use them as part of my downpayment. I'm only doing the 3-month T-Bills, or whatever is higher within that timeframe. Or are you referring to something else? Awkward Davies posted:Doesn’t mixing tax advantaged/non tax advantaged money make things more complicated in some cases? For example for a back door Roth. this is the same issue i ran up against last time i asked about backdooring a roth ira. i ended up not wanting to do it because i didn't want to keep track of what was already taxed. and i think i still had some money in a rollover ira that i still haven't gotten to (lol) :|
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Apr 10, 2024 18:43
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You don't need to "wind them down." Just keep rolling T-Bills and when it comes time to cough up the money for the downpayment, you can literally click "sell" and get a fair market price in cash in your brokerage account in less than 24 hours.
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Apr 10, 2024 18:55
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I am a high earner and I have no idea if it's a good idea for me to backdoor a Roth IRA, should I? I'm a software engineer, my income blows past the regular Roth IRA limits. I have a 401k with employer matching (which I'm opting in for hard), along with a significant amount of my income coming as an annual bonus and even more as an RSU. I have no idea if I'm going to have higher taxes when I retire? I'm hoping to not work much when I'm retired, would be much nicer chilling on a beach, but how do I determine what my taxes would likely be? An additional wrinkle is that I'm currently working on TN status, so I'm not a citizen of America (yet?), I also have no idea what country I will retire in (although likely either Canada or America [if those are still around in 30 years]) -- which reminds me I have an HSA that I could also contribute more to, but how does that work if I retire in Canada? etc. Is a backdoor Roth still a good option for me? So far I've been putting my RSU money in to a brokerage holding index ETFs, but I get the feeling I'd want to move as much of that to a tax-free situation like a Roth instead?
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Apr 10, 2024 19:16
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KYOON GRIFFEY JR posted:There's nothing particularly special about Vanguard funds per se, so there's no need to restrict yourself to those. OP should post all of the available funds and ERs in the portfolio. I find it hard to believe that a decent-ish 401(k) (based on inclusion of the funds the OP did post) doesn't have a S&P 500 tracker. Sure, here is the full list (some ERs are not exactly clear, posted both potential values in those cases) TIAA-CREF International Equity Index Fund - Institutional Class (TCIEX), ER 0.05% Baird Aggregate Bond Fund - Institutional Class (BAGIX), ER 0.30% Baird Short-Term Bond Fund - Institutional Class (BSBIX), ER 0.30% Federated Hermes Kaufmann Small Cap Fund - Class R6 Share (FKALX), ER is either 0.89% or 0.93% based on reporting but it's not clear Invesco Small Cap Value Fund - Class R6 (SMVSX), ER 0.71% Northern Funds Mid Cap Index Fund (NOMIX), ER is either 0.10% or 0.16%, not clear TIAA-CREF Equity Index Fund - Institutional Class (TIEIX), ER 0.05% American Funds Capital World Growth and Income Fund - Class R-6 (RWIGX), ER 0.42% DFA Emerging Markets Portfolio - Institutional Class (DFEMX), ER is either 0.36% or 0.46%, not clear Goldman Sachs Short Duration Government Fund - Class R6 Shares (GSTGX), ER 0.47% or 0.56%, not clear Principal MidCap Fund - Institutional Class (PCBIX), ER 0.67% T. Rowe Price Target Date Funds 2005-2065 options (TR**X), ER range from 0.34% - 0.46% TIAA-CREF Large-Cap Growth Index Fund - Institutional Class (TILIX), ER 0.05% Vanguard High-Yield Corporate Fund Admiral Shares (VWEAX), ER 0.13% Vanguard Inflation-Protected Securities Fund Admiral Shares (VAIPX), ER 0.10% Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX), ER 0.07% Vanguard Small-Cap Index Fund Admiral Shares (VSMAX), ER 0.05% Vanguard Value Index Fund Admiral Shares (VVIAX), ER 0.05%
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Apr 10, 2024 19:26
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piratepilates posted:I am a high earner and I have no idea if it's a good idea for me to backdoor a Roth IRA, should I? there is no reason to NOT contribute to a Roth IRA if you can afford to do so at high incomes. Your alternatives are all taxed in some way, and Roth IRA distributions are not taxed.
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Apr 10, 2024 19:37
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Serious_Cyclone posted:Sure, here is the full list (some ERs are not exactly clear, posted both potential values in those cases) Some funny stuff (the largest cap index fund is a Russell 1000 Growth tracker? there are a bunch of small and mid index trackers for no reason?), and some decent choices overall (the TIAA-CREF funds are nice). I'd probably roll some combo of TCIEX for international, TIEIX (basically a Russel 3000 tracker) for domestic equities, and VAIPX for fixed income. That would get you an aggregate expense ratio at something like 6-7 bps depending on actual allocations. Certainly worth doing.
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Apr 10, 2024 19:45
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KYOON GRIFFEY JR posted:Some funny stuff (the largest cap index fund is a Russell 1000 Growth tracker? there are a bunch of small and mid index trackers for no reason?), and some decent choices overall (the TIAA-CREF funds are nice). I'd probably roll some combo of TCIEX for international, TIEIX (basically a Russel 3000 tracker) for domestic equities, and VAIPX for fixed income. That would get you an aggregate expense ratio at something like 6-7 bps depending on actual allocations. Certainly worth doing. I appreciate the guidance, thanks! The mish-mash of options gave me the vibe that this might be a collection that has mutated over time based on what the squeakiest wheel has said they want included. If there is one or two things I could bring to HR as requests to add to this portfolio, do any specific ones come to mind? You mention an S&P500 tracker of some kind would be helpful?
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Apr 10, 2024 19:48
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yeah you have both Vanguard and TIAA-CREF funds with cheap ERs so I bet your company could add either Vanguard's VFIAX or TIAA-CREF's TISPX easily and cheaply.
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Apr 10, 2024 20:00
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KYOON GRIFFEY JR posted:yeah you have both Vanguard and TIAA-CREF funds with cheap ERs so I bet your company could add either Vanguard's VFIAX or TIAA-CREF's TISPX easily and cheaply. Thanks! I think I'll take this to them to see if they can add either of these.
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Apr 10, 2024 20:05
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I will not be a high earner this year so I’m leaning trad IRA as I’ll most likely be able to get the full deductible, but I’m wondering if I should just beef up my Roth? It’s my smallest account by far at under 50k. The 401k is the leader followed by my taxable, both are in the 6 figgies.
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Apr 12, 2024 08:48
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You should never contribute to a trad IRA if you ever expect to be over the deductibility limit at any point in your life. That balance will make future back door Roth IRA contributions impossible without a significant tax payment.
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Apr 12, 2024 09:50
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Every year the Black & Tans sweat when I “up the IRA.”
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Apr 12, 2024 13:48
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KYOON GRIFFEY JR posted:You should never contribute to a trad IRA if you ever expect to be over the deductibility limit at any point in your life. That balance will make future back door Roth IRA contributions impossible without a significant tax payment. Unless you're able to roll the traditional IRA into a 401k at some point.
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Apr 12, 2024 13:53
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caluki posted:Unless you're able to roll the traditional IRA into a 401k at some point. True but not every 401k plan allows that and you never know where you might be working in 10 years or whatever and what sort of (maybe great, maybe crappy) 401k they might offer.
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Apr 12, 2024 14:19
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caluki posted:Unless you're able to roll the traditional IRA into a 401k at some point. This is what I did last time. Probably lucked out.
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Apr 12, 2024 17:14
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KYOON GRIFFEY JR posted:Some funny stuff (the largest cap index fund is a Russell 1000 Growth tracker? there are a bunch of small and mid index trackers for no reason?), and some decent choices overall (the TIAA-CREF funds are nice). I'd probably roll some combo of TCIEX for international, TIEIX (basically a Russel 3000 tracker) for domestic equities, and VAIPX for fixed income. That would get you an aggregate expense ratio at something like 6-7 bps depending on actual allocations. Certainly worth doing. So I managed to contact HR about adding VFIAX or TISPX and I am being bounced to the 401k provider for a phone call about it. No idea if that's going to go anywhere, but I'd like to be able to make a decent case for adding one of these funds. Is the overall argument here that TIEIX, being equivalent to a Russel 3000 tracker, is not diversified enough to function as the most efficient low-ER domestic equities fund, and VFIAX or TISPX would be a more attractive choice because it is a more comprehensive domestic market tracker?
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Apr 12, 2024 19:36
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TIEIX / Russell 3000 is a perfectly fine choice to use as the single US Equity fund you hold. Its *more* diversified than the SP500 funds you mentioned, not less.
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Apr 12, 2024 19:47
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no, the argument is that "I want to invest in a S&P500 index fund and you should offer it" or if you really want to get picky it's "S&P 500 index tracking funds are very standard building blocks of a retirement portfolio and we should have one because I want to invest in it" - you're the customer, they're the service provider, you don't have to "make a case" for anything and you absolutely should not because your argument is not true. a russell 3000 tracker is more diversified than a S&P 500 tracker so if I were the 401(k) provider I'd just kind of say that and let you dangle in the air for a bit and then tell you to invest in that since you want diversity. You actually don't care about WHICH S&P500 index fund tracker you get, you just want one with low ERs and if they hem and haw you can suggest either of the two tickers I provided.
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Apr 12, 2024 19:49
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KYOON GRIFFEY JR posted:no, the argument is that "I want to invest in a S&P500 index fund and you should offer it" or if you really want to get picky it's "S&P 500 index tracking funds are very standard building blocks of a retirement portfolio and we should have one because I want to invest in it" - you're the customer, they're the service provider, you don't have to "make a case" for anything and you absolutely should not because your argument is not true. a russell 3000 tracker is more diversified than a S&P 500 tracker so if I were the 401(k) provider I'd just kind of say that and let you dangle in the air for a bit and then tell you to invest in that since you want diversity. Alright, I appreciate the clarification. I got turned around a bit on the conversation from earlier, my impression was that the Russell 3000 tracker was lacking in some respect and there was an S&P500-shaped hole in the currently offered portfolio.
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Apr 12, 2024 19:53
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There is a S&P 500 exclusive -ly shaped hole in your offerings. What if you don't want the the other 2500 companies in the Russel 3000? It's fine if you want universal exposure to a bunch of midcaps. Up to you if you want that or not.
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Apr 12, 2024 20:04
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KYOON GRIFFEY JR posted:There is a S&P 500 exclusive -ly shaped hole in your offerings. What if you don't want the the other 2500 companies in the Russel 3000? Gotcha, thanks again. I'll make sure to phrase it this way.
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Apr 12, 2024 20:10
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caluki posted:Unless you're able to roll the traditional IRA into a 401k at some point. I have a rollover IRA that I’ve considering doing this with because I think it’s considered a traditional IRA. But I’m also considering leaving my current job, so maybe I won’t.
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Apr 13, 2024 13:57
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Pollyanna posted:I have a rollover IRA that I’ve considering doing this with because I think it’s considered a traditional IRA. But I’m also considering leaving my current job, so maybe I won’t. If your current 401(k) offers in service rollovers you should absolutely do that with a trad IRA balance. Your next employer may not offer in service rollovers and then you’re hanging on to that trad IRA which is going to constantly prevent you from doing back door Roth conversions. If you leave your job so what? You either keep your 401(k) at old job or transfer it to a 401(k) at new job. Both are very normal.
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Apr 13, 2024 18:31
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I still have a 401(k) from a job I had that ended in 2004. It's at Vanguard and has good choices in it so there's no reason to change.
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Apr 14, 2024 01:18
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KYOON GRIFFEY JR posted:If your current 401(k) offers in service rollovers you should absolutely do that with a trad IRA balance. Your next employer may not offer in service rollovers and then you’re hanging on to that trad IRA which is going to constantly prevent you from doing back door Roth conversions. The only exception might be if you are getting dirt low ER in the IRA and the new 401k has super bad ERs.
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Apr 14, 2024 01:25
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Since we are talking roths / IRAs I did my annual contribution then found out since I filed jointly with my wife, I'm probably over the income limit for contributing to my roth. I use fidelity - I'll probably call them and get it sorted out, but it sounds like an alternative is I can put it in a traditional IRA then... backdoor it into my roth?
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Apr 14, 2024 03:52
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Yes.
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Apr 14, 2024 03:59
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During my semi annual call with my vanguard advisor this week, he told me that it's ok to stop saving for retirement. Apparently, I've made it. 2 mil in retirement savings and about $180k (90k now plus another 90k-ish when my wife and I are done at 63) in pension payments with federal retiree health insurance. I don't own a home, no debt other than about $6k on a 2% auto loan which is covered and then some by VA payment. So now I guess I can start saving for my old man home. (But I didn't enjoy being a home owner previously). Edit: Please start as young as you can. I started my IRA at 21 with $25 a month. He also told me that it's ok to spend money now. I'm 50 if that gives a reference point. Evil SpongeBob fucked around with this message at 07:29 on Apr 14, 2024 |
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Apr 14, 2024 07:21
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Luxury watch collecting is a cool hobby to get into. Maybe absurdly expensive home espresso and stereo equipment as well. Congrats man.
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Apr 14, 2024 07:51
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Evil SpongeBob posted:During my semi annual call with my vanguard advisor this week, he told me that it's ok to stop saving for retirement. Apparently, I've made it. 2 mil in retirement savings and about $180k (90k now plus another 90k-ish when my wife and I are done at 63) in pension payments with federal retiree health insurance. what is the combination of pensions to produce that 90k now and +90k at 63? I understand you were a fed for what, 20-30 years, but a single fed pension alone wouldn't be 90k right now, correct?
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Apr 14, 2024 14:53
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pmchem posted:what is the combination of pensions to produce that 90k now and +90k at 63? I understand you were a fed for what, 20-30 years, but a single fed pension alone wouldn't be 90k right now, correct? It could be! E.g., someone making an average of $180k for their highest 3 years of salary who had 45 years at retirement would have an annuity of $89k. And IIRC from the federal jobs thread Evil SpongeBob started young and is pretty high up there on the GS scale, so something like that certainly seems plausible depending on the locality. For example, a GS 15 Step 4 position in Washington, DC, makes $180,359 under the 2024 pay table. Given their age it seems unlikely, but if they're somehow covered under CSRS rather than FERS for retirement, it's much easier. CSRS maxes out at 80% of the average of the highest three years of salary at 42 years of federal service, so at the higher end of the GS scale, that could hit $90k very easily. (There technically is no max under FERS I believe, but you'd have to work like 70+ years to hit 80%.)
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Apr 14, 2024 16:02
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pmchem posted:what is the combination of pensions to produce that 90k now and +90k at 63? I understand you were a fed for what, 20-30 years, but a single fed pension alone wouldn't be 90k right now, correct? Ahh, I started a new job with a city government in Feb which is a 2 percent of high 3 at 63. My wife has a small Maryland teacher pension plus her current CA pension. I retired from fed after 32 years under FERS special coverage. If you retire under age 57, there is a supplement of about 12k a year (for me) that assumes you can't get SSA benefit. I was topped out on the pay scale at a high COLA area. Edit: I guess the point of me posting was to say start young and hopefully a professional will one day tell you to stop. My boomer parents who didn't save for retirement really made me paranoid that I would never be financially secure enough to be comfortable in retirement. I wish the same peace for all of you who are stressing this like I did for decades. Evil SpongeBob fucked around with this message at 16:45 on Apr 14, 2024 |
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Apr 14, 2024 16:37
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Evil SpongeBob posted:During my semi annual call with my vanguard advisor this week, he told me that it's ok to stop saving for retirement. Apparently, I've made it. 2 mil in retirement savings and about $180k (90k now plus another 90k-ish when my wife and I are done at 63) in pension payments with federal retiree health insurance. If you've got 180k in pensions coming arguably you don't need any of that saved money for retirement, so I'd say y'all can put 100% of your excess cash flow into a house (if you want one). Or travel, new cars, etc Congrats, its quite an accomplishment, especially working for the gov.
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Apr 14, 2024 19:43
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Just saw this come up on the bogleheads forums, figured some self-employed people here might be affected: https://www.bogleheads.org/forum/viewtopic.php?t=429947 quote:DRESHER, Pa., April 16, 2024 /PRNewswire/ -- Ascensus announced today a definitive agreement to acquire Vanguard's Individual 401(k), Multiple Participant SEP (Multi-SEP), and SIMPLE IRA Plans business.
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Apr 17, 2024 22:58
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Motherfucker. Does this mean a new account/login?
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Apr 17, 2024 23:49
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Residency Evil posted:Motherfucker. Does this mean a new account/login? Yes, Ascensus has a separate site with separate credentials. I don't use it much, but I can say it does not play nicely with aggregators like Personal Capital or the now-dead Mint. You can still see the existence of the account and the balance on the main Vanguard site, but everything else has to be done through Ascensus.
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Apr 18, 2024 00:37
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Took me a second to re-read, and that's not the regular Vanguard 401(k)s, nor ordinary trad and Roth IRAs. It's just the weirdo redheaded stepchildren: individual 401ks, SEPs, and SIMPLEs (neither of which ought to be called IRAs but they are, gently caress you whoever named them that).
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Apr 18, 2024 00:42
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dang it I have a SEP through Vanguard, and they made it surprisingly easy to just deposit employer contributions through the app. Hopefully this isn't extremely annoying in the future.
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Apr 18, 2024 00:45
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Sorry if I wasn't clear. I was under the impression individual 401ks et al were primarily used by self-employed people with LLCs etc.
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Apr 18, 2024 00:47
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Boris Galerkin posted:Sorry if I wasn't clear. I was under the impression individual 401ks et al were primarily used by self-employed people with LLCs etc. that is correct. An Individual 401(k) is for when you're self-employed. SEP and SIMPLE "IRAs" are employer-sponsored and typically offered by relatively small employers, i.e. those with fewer than 50 or so employees.
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Apr 18, 2024 00:48
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