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I have an old 401k that I would like to get over to vanguard. Vanguard us asking if I want to roll it into a traditional IRA or a Roth IRA. I have about $12,500 in this old 401k. My MAGI in 2015 was $101,000. I expect similar this year. When I do my taxes it will be at the very top end of the 25% basket. If I roll the old 401k over to a Roth I have to pay the taxes on that conversion which will basically be completely in the 28% bracket. My expenses last year (not counting the debt I paid, student loans...) Was about $35k. It is obviously hard to determine future tax rates and how much money I will need. If I do the roll over to a Roth now I am looking at $3,500 in taxes which is not conducive to my get out of debt plan. I don't know if I plan to work to 60..I hope not but right now my plan is debt reduction and then retirement. So should I but the bullet and make it a Roth or keep it a traditional? Any advice would be great. I need to get my retirement house in order.
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Jan 22, 2016 22:17
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80k posted:Whenever you are undecided, just roll it over to a Traditional. You can still convert any amount (the entire amount or just a portion) from the Traditional to Roth whenever you want before year end. I have been converting small amounts most years over the past decade. It can be done with a simple form or even done online in a matter of seconds. Thanks. Sounds like a good plan.
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Jan 22, 2016 23:18
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SiGmA_X posted:I agree here. Spwrozek, you may want to roll the amount that 'fits' in the 25% bracket, perhaps. If you feel like paying taxes on it this year, that is. Seems like a good plan. I am going to throw it all traditional just so I can lower the expense ratios from the crappy 401k for now. Then depending on my raise and bonus I can figure out things later this year. Thanks guys.
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Jan 23, 2016 03:28
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I would just put it in a vanguard target retirement fund.
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Jan 26, 2016 20:46
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1% is a very high fee. Not recommended.
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Jan 27, 2016 23:12
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Cheesemaster200 posted:What if there are multiple contributions? For example, if I have a direct deposit each paycheck? Are all those contributions available for withdrawal at any time? Vanguard or whoever you use tracks it. It is pretty simple.
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Feb 1, 2016 18:24
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He mentioned a 9% match so it is probably with getting the match at least. That is a sweet match.
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Feb 11, 2016 16:52
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^yup that is a good plan too. You should end up in the phase out (between 184-194k). So you could contribute something. Unless you expect a bonus or something that pushes you up higher. spwrozek fucked around with this message at 17:06 on Feb 24, 2016 |
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Feb 24, 2016 17:00
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Celador posted:To add to this: the U.S. Tax Code is so outdated that filing "Married" treats your income as coming from one earner to support your family. So when you have both spouses earning a lot of money, or have incomes close to the same amount (like you said), then there is a "penalty" because you are taxed at a higher rate than a single person of the same income. That doesn't mean that you should file separately, because you can take advantage of more breaks/credits filing jointly. You just have to be prepared that you might owe more at the end of the year unless you update your withholding properly. One thing I noticed about the IRS calculator is that, at least for me paid 2 times a month, it always was off by one payment. I checked it last year and took my tax per paycheck multiplied it out by remaining pay periods and added tax I already paid. I did it three times in different months at different times in the month and it always says my taxes paid was going to be one payment less than it was. So I always had to add that in to see how I was doing.
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Feb 26, 2016 02:10
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I keep my max out of pocket in cash in my HSA and then invest above that. I prefer to have the $3500 laying around if poo poo hits the fan medically.
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Mar 13, 2016 15:42
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baquerd posted:Maybe include spouse too, even if you're a DINK. Agree with this.
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Mar 14, 2016 21:12
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anne frank fanfic posted:Lol, yeah my spouse whos working need life insurance I used to carry it when I was married. She would have got a paid off house and had a bunch of money left to offset my lack of income. I don't think it is at all crazy. Especially for people who budget for both salaries.
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Mar 15, 2016 00:04
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I wouldn't be too worried about the vanguard situation.
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Mar 18, 2016 20:05
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Never mind
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Mar 21, 2016 20:14
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I max out my HSA. If you want to use it as an investment vehicle and have it for health things it is probably the best approach. I keep $3500 in cash (my yearly max OOP) and invest the rest. You may not spend much right now but you probably will spend a bit each year and one accident and your spend it all. I used $3300 to pay for LASIK a couple years ago.
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Mar 23, 2016 18:53
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Use the HSA for the medical expense.
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Mar 30, 2016 15:46
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I don't understand your guys advice. Using your post tax income at say 25% or using pre tax money. You would be saving quite a bit. Maybe on the theory that if your HSA has an investment option you could make more long term. I guess someone would have to do the numbers. Personally I invest my HSA but also use it to pay for medical expenses.
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Mar 30, 2016 16:04
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Saint Fu posted:The idea is that if you pay cash now instead of using the HSA, you can let that money (presumably invested) grow for decades, then use the receipt you saved to withdraw the money once you retire. I never looked into it but it is surprising there is not a limit on the time frame for the withdrawal.
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Mar 30, 2016 16:38
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I am in the process of trying to get my mom's whole retirement picture (relying on my sister for this) but I have a question about what I should do for her. I opened a savings account with Ally and put $1K in it and am putting $300 a month into it. My mom is 58 right now. I don't think her retirement situation is great (she has part of a 401K from a divorce with my dad and then who knows...) She is working now but I don't really know how that is going (seems OK). So my question is should I just roll with the savings (she may need help 10 years from now or 20 or...?) or look at some sort of investment? Obviously the whole picture will help and my sister is working on it but any advice would be helpful. Thanks.
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Aug 17, 2016 00:47
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KYOON GRIFFEY JR posted:are you saving the $300/mo in ally for your mom? I would put it in some kind of equity/bond mix (Vanguard Target 2025?) if you have a 10 year horizon Yeah that is what I am thinking I will do once I know the whole picture but at this point I have no idea when I may need to help her so savings seemed the way to go for the next few months. Once I know more I can probably make a better decision.
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Aug 19, 2016 00:00
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Looking for advice on how to best invest retirement money after maxing out my 401K and Roth IRA. Specifically for now I am saving money for my mom's retirement if she needs it (not really sure, my sister is supposed to figure that out but....crickets over the last 6 months). Right now I have about $2500 in a Ally savings account. My mom is 60 and I am thinking I have about 10 years until she may need my help. I am saving $300 a month into that account right now (I opened it maybe 4 months ago). I am pretty sure 10 years is long enough to invest in the market instead of getting that sweet sweet 1% interest. All my other retirement investments are with Vanguard. I figure stick with Vanguard. So I guess two questions: Do I just open a taxable investment account (really have no idea here)? Do I just dump it in a 2025 or 2030 target fun and call it a day? What am I missing?
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Dec 1, 2016 01:54
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fenixwb posted:Also, I current have all my 401k contribution going into a Fidelity 2050 Target Fund as there wasn't a decent mutual fund or international index fund to make my own mix. This is fine, but should I be doing anything different with my Roth money? I'm willing to spend a little time managing allocations in domestic, MF, and international indexes. But is there anything different with money in a Roth that would take advantage of its specific nature? I also would like to know about this as I basically do the same thing with my Roth.
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Dec 1, 2016 01:56
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Thanks guys, sounds pretty straight forward. With Vanguard my roll of IRA and Roth are ER of .16 (both with about $12,000 in 2060 target funds). My 401k with Vanguard is .06 ER with a mix of Bond/US stock/Int Stock. It seems to be doing about about the same as the target fund. For my moms stuff I kind of just want to set it and forget it so I think I have a good plan.
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Dec 1, 2016 06:25
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I am pretty sure everything is good but if I could get a check here: Mom is 60 Mom gets $33.5K in Alimony Alimony counts as income for IRA I can "gift" money to my mom/just put it in her IRA I should open a Trad IRA since it will be tax deductible for her and it will lower her into the savers credit bracket (if I put in $6500 for her). Anything I am missing?
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Feb 11, 2017 05:12
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monster on a stick posted:She'll have to start taking withdrawals from the IRA in ten years, and not only will it be taxable but it will also impact how much of her social security is taxed. Right now she hasn't worked enough to get SS in the eyes of the government. She was self employed for most her life and my dad always made it so she made $0 in her business. She wants to get a job but she is 60 and has been out of the workforce for 7 years since she had a grand mal seizure. She thinks that she should get part of my dad's SS but I am not exactly sure how true it is. She got 8 years of alimony which will stop when she is 65. At that point she has $90K in a 401K and ... me? She watches my sisters kids 2 times a week and they give her a couple hundred in cash but other than that. My sister and I were finally able to sit down and talk abut this stuff with her and have her take it to heart, so making progress. I will look into the IRA impact on SS if she gets any. Harveygod posted:Is that her only income? In which case, her income (and therefore tax bracket) is low, so why not Roth? (She wouldn't have to worry about RMDs that way, either.) Keep in mind that the savers credit is only good for $2000 worth of contribution, so it'll only be worth $200 to her, not $650. Right now yes (see above). Thanks for the clarification on the credit. I am basically trying to save her all the money I can any way possible. If all she has is the $90K I am not sure that is going to last very long. She lives with my grandpa and he and my grandma, before she passed, said they were going to help her in their will but I haven't been able to find out what exactly that means. Maybe Roth is the way to go. I will just need to do some more reading. Still have 2 months to figure it out.
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Feb 11, 2017 15:51
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I have a question about the best way to go about investing in my taxable account. Currently in retirement accounts I have (all with Vanguard): 401K 11.3% Vanguard Developed Markets Index Fund Institutional Plus Shares (VDIPX) - .06 ER 40.4% Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) - .02 ER 28.8% Vanguard Mid-Cap Index Fund Institutional Plus Shares (VMCPX) - .05 ER 8.6% Vanguard Small-Cap Index Fund Institutional Plus Shares (VSCPX) - .05 ER 10.9% Vanguard Total Bond Market Index Fund Institutional Plus Shares (VBMPX) - .04 ER Rollover IRA (from a poo poo 401K with 1+ER's...) 100% Vanguard Target Retirement 2060 Fund Investor Shares (VTTSX) - .16 ER Roth IRA 100% Vanguard Target Retirement 2060 Fund Investor Shares (VTTSX) - .16 ER Taxable account (about $1500 in it) 100% Vanguard Target Retirement 2060 Fund Investor Shares (VTTSX) - .16 ER I have been reading that it is pretty tax inefficient to have bonds in my taxable account (which the 2060 target date fund has). I am figuring that I can cover my bond needs in my tax-advantaged accounts. So I think I should look into investing into something different in the taxable account. My basic thought is that I should be invested in total US and total international stock. Can/Should I just make a 2 fund portfolio in the taxable account of: 80% Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) - .16 ER (.05 ER admiral status) 20% Vanguard Total International Stock Index Fund Investor Shares (VGTSX) - .18 ER (.11 ER admiral status) I was looking to just put $500 a month in the taxable but I can use the bonus I am getting this month to just bump it up and get to the $3000 min in VTSMX. Once I get that up to 10K I can purchase VGTSX (again with a $3K min). I also don't have a problem transferring the existing ~1500 out of VTTSX as the $55 of gains are not a big concern. I just finished reading https://www.bogleheads.org/wiki/Tax-efficient_fund_placement which was helpful but I want to make sure I am on the right track here. Any and all advice welcome, thanks. About me: 30 year old, single, rent, engineer, max 401k, HSA, and RothIRA, $20K emergency account with Ally, for some reason ~13K in my checking. E: My taxable is just my early retirement account at this point.
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Mar 5, 2017 01:57
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Yeah that is true. I am hoping to have a lot of money in there at some point though. Eventually it will start re-balancing though towards more bonds.
spwrozek fucked around with this message at 02:11 on Mar 6, 2017 |
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Mar 6, 2017 02:09
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poe meater posted:Hi, I'm trying to invest for the first time ever just before tax day and could use some much needed guidance. I'm 27 with a large emergency fund/savings doing nothing at the moment. My company doesn't offer a 401k/retirement stuff so it's all up to me. I been reading on and off for the past couple of months and looks like the traditional IRA from Vanguard is the one for me. Correct me if I'm wrong. I want to max out $5,500 for 2016 and 2017. Is there anything else I should do? Most studies show Roth is better tan Trad in the long run. How did you come to the Trad conclusion?
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Apr 4, 2017 04:56
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Anything over a 3% match is good seeing as the average is only 2.7% if you even get a 401k/403b/etc.
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Apr 13, 2017 00:45
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toadoftoadhall posted:Hello friends Probably not the perfect thread but what I would do is this: 1) figure out your budget for all the money that you make each month 2) If you want to save (get an emergency fund, save towards retirement, a house, whatever) you need to pay yourself first 3) based on your budget try to get 3-6 month equivalent in the savings account 4) Move onto your next savings goal (perhaps a car or house or what this thread is about long term investing and retirement) Say you make $4000 after taxes a month. Say your budget is $3000 with $1000 for saving. I would take my pay check and (assuming direct deposit) send $3000 to my current (I assume this is like checking in the US) and $1000 to your savings. Then your savings happens automatically and your budgeted money is already in your current. Once your money in your current is gone or close to gone for the month you will have to think long and hard (or at the very least log in and make the transfer) before dipping into your savings.
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Apr 20, 2017 13:39
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alnilam posted:If you are single and make less than like 180k, you can put $5,500 all at once into an IRA or roth IRA. 180K is waaaaaaay over the limit for a Roth without the backdoor for a single person. (the phase out starts at 117K and ends at 132K)
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Apr 28, 2017 04:55
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Cacafuego posted:Is there a good source of information - a wiki, or book, or something - explaining ETFs, mutual funds, stocks, etc and how everything works? I understand the very basics of investing and how it works, but I'd like a good source to reference, if there's one that exists. The OP has 4 links to what you are looking for.
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May 3, 2017 05:24
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Wicaeed posted:What is (generally) the correct place to store money set aside for an emergency? Just put your emergency fund in an Ally savings account and get the 1.05% interest.
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May 17, 2017 23:59
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CopperHound posted:I think listening to the freakonomics back catalog has broken my brain. I saw the headline "Almost half of Americans die nearly broke" and was amazed by the number of people who do a good job of coordinating their draw down rate with their life span. I had the same reaction and mentioned it to my cube mate....
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Jun 2, 2017 23:57
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You could leave it or roll it to vanguard or if you new place let's you roll it into that 401k. They all are insanely easy to do/people will walk you through step by step.
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Dec 19, 2018 05:40
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Is this what we are doing? For the year: My balance is up 7.2% My returns (gain/loss and dividends) are down 63% From the high in September down 13% overall So there is that 
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Dec 21, 2018 21:30
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80k posted:Have you never sold from that fund? If so, you can change the cost basis from Average Cost to Specific ID. SpecID lets you select lots to sell and you can see exactly what your gain/loss is going to be. You SHOULD be using SpecID because you should always be selecting the tax lot that gives you the best benefit or least tax hit. If you bought it before a certain date (I can't remember off hand..2011?) Vanguard doesn't have all the records so you either have to use average cost or figure it all out by hand.
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Dec 27, 2018 02:27
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Looking for some advice on my portfolio. I think i have some adjustments to make from the days when I didn't really know what i was doing. I currently max out my 401K, my RothIRA (via backdoor starting this year), and HSA. I put a minimum of $500 a month in a taxable account. Here is my current allocation with the mix being localized to the account: 410k VDIPX - ER:0.05% Mix:10.49% VMCPX - ER:0.03% Mix:28.30% VSCPX - ER:0.03% Mix:7.78% Vanguard Inst. 500 Index Trust - ER:0.015% Mix:41.55% (basically VTSAX) Vanguard Inst. Total Bond Trust - ER:0.028% Mix:11.89% (basically VBTLX) Roth IRA VTTSX - ER:0.15% (54% US stock, 35.4% Int Stock, 7% US bond, 3% INT Bond) Brokerage VTIAX - ER:0.11% VTSAX - ER:0.04% Here is the rolled up percentages. Total - 100% US Stock - 73.5% International Stock - 16.3% Bonds - 9.0% I see a few issues. First I am not really sure why I am in the mid and small cap funds (VMCPX and VSCPX) in my 401K instead of just the 500 index. Not sure it is worth the volatility. Second I am not exposed to enough international stock, maybe should be 20-25%. I am 32 so a ways to go before I retire. I feel good about my bond exposure. I have no problem with risk exposure. I probably have too much cash on hand but I am debating buying a place so that is OK for now. So I am thinking I should lose the VMCPX and VSCPX, pushing it to the 500 Index in my 401K. Change my input from my paycheck to 10% bond, 25% Int. Stock, 65% US Stock. In my roth I am OK with the target fund but i could get better ER by changing it to specific funds. In my taxable account I am feeling OK but as I contribute I could lean towards the Int. Stock. Any advice or thoughts?
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Dec 28, 2018 20:14
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EAT FASTER!!!!!! posted:Just a real coarse view, I tend to like the mid and small cap funds which you're otherwise not getting exposed to and have tended to outrun the S&P on a long timeline. The volatility doesn't matter if you're on a long, long timeline. Interesting thought. It seems like a lot of what I read is about 3 or 4 fund portfolios to keep things simple. Maybe I should just look at how much allocation I have in the SC and MC funds. I dont have very much experience out side of reading the four pillars a few years back.
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Dec 28, 2018 20:23
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Droo posted:Most of the 3 fund portfolios use a total stock market index instead of an S&P 500 index, so their single domestic fund already includes small and midcap stock representatives. Ah, I see. Hence the looking for advice.
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Dec 28, 2018 20:53
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