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Easychair Bootson posted:I just changed jobs and am looking for some basic advice. My retirement savings are in a 401k and Roth IRA at about a 2:1 ratio. My new employer (state gov't) has a defined benefit pension plan with a mandatory 9% employee contribution. My understanding is that on top of that 9% my first priority should be to max out my Roth. You can't contribute to the 401k anymore since you don't have that job now. You probably want to roll it over to a traditional IRA. The IRA you can just transfer. I did an IRA transfer a while back myself, all online - the Vanguard web site makes it so easy a kindergartener could do it. I expect the rollover would be easy too. Have you figured out what funds you're going to put it all in?
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Feb 1, 2015 17:21
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Ugh, my new HSA has access to great Vanguard funds, but they tack on 0.33% administrative fees to all of them since they're "select" funds. Still, it's overall better than normal no fee funss, which have ERs that start around 1%. At least their investment interface is more intuitive than most I've seen. I guess that's worth ~$15 a year. 
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Feb 1, 2015 17:31
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I've seen it posted in this thread before that you can choose whichever HSA provider you want. Maybe your work recommended one, but shop around, I guess?
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Feb 1, 2015 17:38
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DNK posted:I've seen it posted in this thread before that you can choose whichever HSA provider you want. Maybe your work recommended one, but shop around, I guess? Can anyone recommend a good or preferred HSA provider?
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Feb 1, 2015 17:41
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slap me silly posted:You can't contribute to the 401k anymore since you don't have that job now. You probably want to roll it over to a traditional IRA. The IRA you can just transfer. I did an IRA transfer a while back myself, all online - the Vanguard web site makes it so easy a kindergartener could do it. I expect the rollover would be easy too.
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Feb 1, 2015 17:42
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I don't think there are anymore fee-free HSA banks with investment options, so this might be the least of all evils until I reach a higher account balance. ELF CU had a great deal for a while, but recently added a hefty wire fee for transferring money for investment. I think it will be several years before my investment account size will make that wire fee look attractive.
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Feb 1, 2015 17:44
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Easychair Bootson posted:Thanks, sounds simple enough. I haven't looked at any specific funds. Based on the little bit of reading I've done it looks like I want to select a few index funds to cover US stocks, global stocks, and US bonds in equal proportions. Yeah, that's a good plan. You're looking for VTSMX, VGTSX, and VBMFX. Or the Admiral class equivalents if you have more than $10k in any of them.
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Feb 1, 2015 17:47
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Easychair Bootson posted:Thanks, sounds simple enough. I haven't looked at any specific funds. Based on the little bit of reading I've done it looks like I want to select a few index funds to cover US stocks, global stocks, and US bonds in equal proportions. You can also try vanguard target retirement funds, it's one of the better options for lazy investment. The other option is to make your own simple and stupid 3 fund portfolio: http://www.bogleheads.org/wiki/Three-fund_portfolio Using Vanguard ETFs: 30% VXUS 10% BND 60% VTI Of course nice thing about the target retirement fund is it already has similar allocation to the above and you don't need to worry about headaches like fund rebalancing over time.
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Feb 1, 2015 17:52
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Cheers, thanks to both of you for the advice.
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Feb 1, 2015 18:09
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Easychair Bootson posted:Cheers, thanks to both of you for the advice. For the target retirement fund option you just need $1000 to start investing. I would pretty much recommend it for new investors since it simplifies things such as rebalancing and also risk adjustment over time.
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Feb 1, 2015 18:14
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My job doesn't offer a 401k or any other retirement plan (It's been coming soon for a while). I'm set to max out my IRA, but will still have money set aside for retirement that needs to go somewhere. Is my best bet a taxable account? Or is there another option I'm not aware of? If I do put money into my taxable account, what investment types should I pick to optimize taxes? (e.g. Stock Funds vs Bond Funds, Foreign vs Domestic) Further, lets say in a year or two my company starts offering a 401k. If I start contributing to that instead of my IRA, does it make sense to move money from my taxable account into my IRA? (Assuming the 401k is any good, and I have room in my IRA cap.)
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Feb 1, 2015 18:20
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This is a good read: http://www.bogleheads.org/wiki/Principles_of_tax-efficient_fund_placement Whether you want to move money back out of e.g. a stock market index fund will depend on the situation at that time, whether you would have a gain or a loss, etc.
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Feb 1, 2015 18:26
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Guy Axlerod posted:My job doesn't offer a 401k or any other retirement plan (It's been coming soon for a while). I'm set to max out my IRA, but will still have money set aside for retirement that needs to go somewhere. Is my best bet a taxable account? Or is there another option I'm not aware of?
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Feb 1, 2015 19:21
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Guy Axlerod posted:If I do put money into my taxable account, what investment types should I pick to optimize taxes? (e.g. Stock Funds vs Bond Funds, Foreign vs Domestic)) For taxable accounts muni bonds and stocks which pay qualified dividends are the most tax efficient. On the flip side things like high yield bonds and REITs make more sense to use in non-taxable accounts, mainly because the dividends/interest get taxed at ordinary income rates.
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Feb 1, 2015 19:22
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DNK posted:I've seen it posted in this thread before that you can choose whichever HSA provider you want. Maybe your work recommended one, but shop around, I guess? Generally you don't pay FICA on HSA contributions through your employer so dependent on how long you plan on being there it may worth a small increase in fees.
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Feb 1, 2015 21:22
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Ropes4u posted:Can anyone recommend a good or preferred HSA provider? Look into ELF CU and HSA Bank, they seem to have the best investment options, but require about a year's worth of contributions (~$2500) to avoid fees.
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Feb 1, 2015 21:39
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DNK posted:I've seen it posted in this thread before that you can choose whichever HSA provider you want. Maybe your work recommended one, but shop around, I guess?
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Feb 1, 2015 23:55
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ETB posted:Look into ELF CU and HSA Bank, they seem to have the best investment options, but require about a year's worth of contributions (~$2500) to avoid fees. Perfect I am well past that, now I need to hope we aren't taking kickbacks. AKA I'm locked in until I leave the company, which I hope won't happen until retirement. Ropes4u fucked around with this message at 04:31 on Feb 2, 2015 |
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Feb 2, 2015 04:17
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SiGmA_X posted:Last I checked 7.65% was more expensive than 0.33%. I'd go with the employer HSA and the added management fee over paying SS/FICA. Unless you know a way to get money into a non-work HSA? My HSA (Payflex) does not allow rollover while employed. Mine doesn't either, so the fund selection and expense ratios for Chase are all I've got. But I did get the good news from HR a few weeks ago though that we'll be moving to HSA Bank and our investment options will open up greatly (including possibly self-directed, it sounds like from their site.) http://www.hsabank.com/hsabank/education/product-overview quote:HSA Overview
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Feb 2, 2015 07:39
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Well I found the funds i am allowed to access through JP Morgan's HSA account. Many are loaded at 4-5% with expense ratios bouncing between 0.51% and 1.5% But the JP Morgan Equity Index Fund - HLEIX - offers a waiver so total expenses are 0.2% with no load fees. I could post all the funds if anyone was super interested. But I would like your input on the HLEIX fund.
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Feb 2, 2015 19:08
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Ropes4u posted:But I would like your input on the HLEIX fund. It's a perfectly suitable S&P 500 index fund for an HSA. No reason to touch it if you have access to Vanguard or Spartan funds, but since you don't in the HSA...
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Feb 2, 2015 20:04
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I'm new to this, but I'm having trouble figuring out how to set up a three-fund portfolio for my 401k given what options I have under my employer. My 401k is managed by T. Rowe Price. Allocation options:
My boss recommended I throw everything into the S&P 500 index fund since it's the cheapest option (I'm only 24 so risk is OK), but I really have no idea what I'm doing. Should I just take the easy option and put everything into the 2055 target date active trust instead? I'd like to learn how to do portfolio management myself rather than taking a hands-off approach and putting 100% in the active trust, but I don't think my options are too great since there isn't a low-cost international stock option.
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Feb 2, 2015 23:21
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dead lettuce posted:I'm new to this, but I'm having trouble figuring out how to set up a three-fund portfolio for my 401k given what options I have under my employer. DODFX is a fine enough international fund, and not that expensive. If you want international, use that, or you can open a Roth/Traditional IRA and invest in Vanguard's International index fund instead. DODFX, S&P500 and either PTTRX or Stable Value would be the 3 funds that cover the 3 most important asset classes. If the Stable Value fund offers higher than, say, 1.5% yield, I think it is worth choosing that as a bond equivalent. Otherwise, PTTRX.
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Feb 2, 2015 23:34
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dead lettuce posted:I'd like to learn how to do portfolio management myself rather than taking a hands-off approach Yeah, the three that 80k mentioned are fine. None of those ERs are worth crying over, especially if you're getting any kind of match.
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Feb 2, 2015 23:55
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80k posted:DODFX, S&P500 and either PTTRX or Stable Value would be the 3 funds that cover the 3 most important asset classes. If the Stable Value fund offers higher than, say, 1.5% yield, I think it is worth choosing that as a bond equivalent. Otherwise, PTTRX. slap me silly posted:Yeah, the three that 80k mentioned are fine. None of those ERs are worth crying over, especially if you're getting any kind of match. Thank you both, that makes sense. I'm getting a full match on a 6% contribution, but I had no benchmark for the ERs and my co-workers made it sound like anything above 0.06 was bad. Now to figure out what splits to use... 
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Feb 3, 2015 00:26
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Very possibly your employer could do better if enough people hassled them about it. But what you've got now is fine for getting on with. The 6% match is a much bigger deal, that's great.
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Feb 3, 2015 00:29
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dead lettuce posted:Thank you both, that makes sense. I'm getting a full match on a 6% contribution, but I had no benchmark for the ERs and my co-workers made it sound like anything above 0.06 was bad. Now to figure out what splits to use... I consider 0.5% and below to be a decent ER. For ripoff plans they tend to have things like 1% and above ER, plus other devious like the ol' load fund trap. Basically a mutual fund load is like a extra sales cost and many less honest companies use it separate money from the investor since it's often assessed at the total purchase value.
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Feb 3, 2015 00:48
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One of the most interesting things that I read in Four Pillars was a small chart that showed the annualized returns of four sections of the market - large growth, large value, small growth, and small value - over a timeframe of something like 80 years. It was interesting to see how large value has a slight edge on large growth, but that small value has a huge edge over small growth. In that chart small value had an edge over all categories and small growth had a large disadvantage compared to all. My questions are: Why would I try and match the market with heavy investments in large companies and smaller investments in small companies with the information above? Why would I even bother investing in small growth when it lags behind everything else? Should I build a portfolio that has more emphasis on sections of the market that have a tendency to perform better - small value followed by large value? Why or why not?
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Feb 3, 2015 13:36
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SweetSassyMolassy posted:One of the most interesting things that I read in Four Pillars was a small chart that showed the annualized returns of four sections of the market - large growth, large value, small growth, and small value - over a timeframe of something like 80 years. It was interesting to see how large value has a slight edge on large growth, but that small value has a huge edge over small growth. In that chart small value had an edge over all categories and small growth had a large disadvantage compared to all. A point that Four Pillars keeps bringing up is that you have no idea what stocks will perform the best in the time between now and when you will need to start using your investments. It may be that for the next 30 years small growth may beat all other investment types by 5% or more. You have no idea, and no one else does either. It is why we diversify into several types of index funds. More than likely at some point in the future, small growth will beat the market for a 10 year stretch, and thanks to diligent re-balancing, you will move some of those gains back into say... large value, while it is somewhat discounted compared to small growth, then it might beat the market for the following 10 years. The point is that you don't know what the market will do between now and retirement, so you want to invest intelligently. At the same time, if you are uncomfortable with a type of investment, then you do not have to invest in it. Just know it may effect (maybe for the better for all you know) your long term returns and ability to weather downturns in the market. Asset allocation is a bit beyond my level expertise at this point, but from what I understand, you do not invest 25% of money in each asset. It is a little more complicated than that. Four Pillars has a few different sections where it discusses the percentage of each type you might want to invest in. Obviously many in this thread also have their own preferences.
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Feb 3, 2015 15:18
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What's the best vehicle to store your emergency fund in? I don't think I need to have the money "liquid" since anything urgent that happens I can easily throw on a credit card(some of my CC's have 30k limits!) while I wait for the money to come from *wherever*. I figure I'd like to invest this relatively sanely, but not at money market rates. I'm willing to take some risk here. The only requirement is that I'd like to be able to withdraw the principle at any time without paying taxes(on the principle) and also be able to go from withdrawal to "cash in hand" within 15 days?
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Feb 3, 2015 16:55
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DogsCantBudget posted:What's the best vehicle to store your emergency fund in? I don't think I need to have the money "liquid" since anything urgent that happens I can easily throw on a credit card(some of my CC's have 30k limits!) while I wait for the money to come from *wherever*. I figure I'd like to invest this relatively sanely, but not at money market rates. I'm willing to take some risk here. The only requirement is that I'd like to be able to withdraw the principle at any time without paying taxes(on the principle) and also be able to go from withdrawal to "cash in hand" within 15 days?
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Feb 3, 2015 17:02
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We've had that discussion a dozen times in this thread or the newbie thread, including about the additional dumb risks you are taking by relying on credit cards in emergencies, if you feel like flipping through pages - but in short: keep your emergency fund in an insured cash account, that's the whole point of having it. Set up a CD ladder if the extra percent or so return is worth the extra hassle to you. Gonna change all the thread titles in BFC to "Don't chase returns with your emergency fund"
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Feb 3, 2015 17:14
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slap me silly posted:We've had that discussion a dozen times in this thread or the newbie thread, including about the additional dumb risks you are taking by relying on credit cards in emergencies, if you feel like flipping through pages - but in short: keep your emergency fund in an insured cash account, that's the whole point of having it. Set up a CD ladder if the extra percent or so return is worth the extra hassle to you. The real question is: where would Robert Boggle keep his emergency fund?
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Feb 3, 2015 17:19
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even with a bond or CD ladder you're gonna get only marginally better returns than just dropping the cash in a discover savings account (their rate is currently 0.9%).
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Feb 3, 2015 17:20
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Risk cannot be separated from return, etc.
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Feb 3, 2015 17:23
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gvibes posted:I'm not sure how dumb this is, but I keep my emergency fund in the vanguard short term bond fund. I can write checks off of it, so it's pretty liquid. Not dumb, but there is no duration premium on short term bonds now. They are yielding 0.9%-ish (higher for investment grade), and many savings accounts are offering around 1%. Also everytime you write checks or sell shares, you create a taxable event... more work on your tax return.
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Feb 3, 2015 17:54
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SweetSassyMolassy posted:One of the most interesting things that I read in Four Pillars was a small chart that showed the annualized returns of four sections of the market - large growth, large value, small growth, and small value - over a timeframe of something like 80 years. It was interesting to see how large value has a slight edge on large growth, but that small value has a huge edge over small growth. In that chart small value had an edge over all categories and small growth had a large disadvantage compared to all. There is enough persistence in the size and value premium, that a heavily tilted portfolio towards small value is a legitimate strategy, though certainly not a slam dunk. Enough literature has been written on this subject for decades now, and the premiums haven't gone away. There is a good risk story that supports it, which is another important (and imo, necessary) aspect of a good strategy. The premise of factor investing, which is immensely popular right now, has its roots in small-value tilted portfolio but has expanded to other sources of return (momentum, quality/defensiveness, carry, etc). Getting a bit of this with a simple overweight in small and value stocks is generally accepted as being a good bet. Likely to pay off in the long run, not guaranteed, unlikely to go terribly wrong. It is only when you make extreme bets (i.e. ONLY concentrating on small and value stocks) that you need to have an iron stomach, extreme patience, and accept that you may get disappointing longterm returns. Full disclosure, I have a pretty tilted portfolio, but I offset the additional risk by having less stocks and more bonds. For instance, the bulk of my stocks is in emerging value stocks, micro cap stocks, international and small value stocks, but my overall stock allocation is very low for my age, so my overall risk exposure is acceptable. Read about the Larry Portfolio (Google it) to learn more about this strategy. 80k fucked around with this message at 18:04 on Feb 3, 2015 |
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Feb 3, 2015 18:01
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Consider I Savings Bonds. Current rate is 1.48%, interest earnings are federal tax deferred for 30 years and free from state and local taxes. There is a one year holding period, and if you redeem them before 5 years after purchase you forfeit 3 months interest. I got around holding period by doing a dollar for dollar swap every time I got paid, and since I have a >1 year emergency fund it works out alright.
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Feb 3, 2015 18:25
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SweetSassyMolassy posted:Should I build a portfolio that has more emphasis on sections of the market that have a tendency to perform better - small value followed by large value? Why or why not? Well to use a good example Betterment has a US value stock tilt in addition to using all the standard bread and butter broad funds like VTI. Studies have also shown that value type companies actually tend to preform better for a long investment window than growth companies everyone rushes out to buy. It's driven by for value stocks IMO you at least have things like price to book and other factors to use for comparison against other companies in the same sector. Growth stocks going up on the flip side is driven by the hope that the company will go big or just continue its current crazy market growth. Value stocks are not a sure bet since on the flip instead of bargin stock the market has actually recognized that it's a lemon. For pursuing a US stock value tilt Vanguard does have value stock ETFs to cover all the standard caps. (Of course remember that past performance is not a surefire indictor of future performance)
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Feb 4, 2015 00:17
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80k posted:There is enough persistence in the size and value premium, that a heavily tilted portfolio towards small value is a legitimate strategy, though certainly not a slam dunk. Enough literature has been written on this subject for decades now, and the premiums haven't gone away. There is a good risk story that supports it, which is another important (and imo, necessary) aspect of a good strategy. That was an interesting read. As I go on, I'll be confidently leaning more towards value. What determines that a company is part of the value class, the P/E ratio? What would cause a value company to migrate from value to growth, and would someone like Vangaurd ditch the company from their value fund in that case, or would they hold it for some length of time? SweetSassyMolassy fucked around with this message at 00:24 on Feb 4, 2015 |
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Feb 4, 2015 00:17
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