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"[panic posted:"] Can we get into some detail on this? Right now, I think I am sitting pretty so far as my financials go for a 24-year-old. I'm running roughly a $700/mo budget surplus, and am currently investing 20% of my pretax income into Roth IRA/Roth 401(k) which is more than enough to get my company's maximum matching. Specifically, I am looking for some insight as how to balance saving for retirement against saving for some intermediate goal such as going back for a masters/MBA or saving for a house. At the moment, I am not sold on doing either of these, but I can see myself making a decision on them in about five years or so.
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# ¿ Sep 15, 2008 20:57 |
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# ¿ May 4, 2024 20:39 |
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Right now I'm putting about 20% of my gross income into a Roth IRA and Roth 401k. 5% goes towards short-term saving for non-retirement goals, but I'm trying to increase that by cutting down on expenses: eating out right now is about 15% of my spending.
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# ¿ Mar 9, 2011 14:18 |
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The only other metric that would make sense would be a straight $ amount. Something like, "I plan to save $16000 this year." I know a couple of people who plan to have a specific dollar amount of investments, so for them it might make sense to look at it this way. Personally though, I tend to pre-budget savings. I can look at my salary and not even consider 50% due to federal taxes, state taxes, social security, and savings. It keeps me honest with saving as well since what I contribute increases along with my salary.
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# ¿ Mar 10, 2011 14:26 |
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Harry posted:24% in bonds? Really? Come on people, the OP is 24. He has 40+ years here, take some loving risk. When did the age-in-bonds rule become overly conservative? What would be a more appropriate percentage?
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# ¿ Mar 3, 2012 23:53 |
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At what point does that actually happen though? My understanding was that the tax-free status generally outweighed some exceptionally awful expense ratios, not to mention that you can just roll the balance of your 401k into your IRA when you move on to a new company.
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# ¿ Jun 6, 2012 13:31 |
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If your tax rate is exactly the same as it is right now, then it will work out to the same amount of money. Most likely though, it will change in some respect even if you ignore changes to the tax code from congress (which I personally think are impossible to realistically anticipate). Maybe you expect your earnings to really take off, and plan to travel the world on your hard-earned savings - so you'll need to withdraw more money sooner, and you'll see a higher tax than you do today. Maybe instead you have more modest plans, a paid-off house, and no other retirement income other than your IRA. If so, that would drastically reduce the amount of money you need - which means that you can withdraw less, and have a correspondingly lower tax rate.
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# ¿ Jun 19, 2012 15:36 |
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Most brokers won't charge a fee to buy their own funds. I can confirm that this is true for Schwabs index funds as that's what I use. (http://www.schwab.com/public/schwab...asp%3Fsymbol%3D).
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# ¿ Oct 12, 2012 17:17 |
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Mutual funds definitely can complement each other, giving you a broader exposure to the market. For example if the only thing I owned was VTSMX (tracks all US stocks), I could complement the fund with VFWIX (tracks non-US stocks). That said in order for the funds to be complementary they should be tracking fundamentally different things. if you already own something that tracks the S&P500 (US Stocks in large companies) and on top of that you add the USAA Nasdaq-100 Index (more US stocks in large companies), you are not diversifying at all. In this case you would be increasing your exposure in that single asset class.
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# ¿ Oct 16, 2012 16:57 |
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Or if you are using fidelity specifically, look at the features and fees tab. It's literally the first number there. Link to a random example: http://fundresearch.fidelity.com/mutual-funds/fees-and-features/315910299
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# ¿ Oct 30, 2012 00:49 |
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sapmagic posted:What's a reasonable percentage of your total assets that should be allocated to tax advantaged retirement accounts vs regular brokerage accounts vs checking/savings accounts? Do you have any specific goals? If so, how much money do you need? What is your timeline? From there its a matter of figuring out what is feasible. Let's say I wanted to retire in 35+ years and buy a $100k house next year. If I make $50K/year, and have $10/K left over after expenses/taxes, I obviously can't afford a 20% down payment on a house in a year. Even two years would be out of the question as I wouldn't be saving anything towards my retirement. So I'd need to either re prioritize my goals or take some action. In my case it would be either increasing my income by looking for a new job, or spending less money, or rethinking my goals - maybe I don't really need a house for another few years which would give me enough time to save.
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# ¿ Nov 9, 2012 16:14 |
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I keep enough cash to handle any sort of emergencies that might feasibly come up, about 3-4 months worth of expenses. Right now 85% of my assets are in my tax-advantaged retirement account. I don't see much point to keeping additional cash just because it is slightly more accessible. If I'm saving for something specific, I'll temporarily build up more cash to cover it. From what I can see there isn't a ton of benefit to having lots of cash on hand. Even in some sort of doomsday scenario where I'm driving my fiancee and her parents, and I crash into Jesus Christ's aston martin outside my house which then subsequently explodes into a fiery blaze burning down my apartment and all of my possessions.. that's where auto insurance, medical insurance, disability insurance, and renters insurance all come into play. And if after that I need to declare bankruptcy, I can rest easy knowing my 401k/IRA assets will be protected.
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# ¿ Nov 9, 2012 18:01 |
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Well, assuming that you're looking at $10k making 8% for the next 35 years, you just made yourself an extra $177 which is pretty good for just moving some money around vv Unfortunately you cannot rollover your 401k while you a still employed. Initio fucked around with this message at 17:42 on Nov 27, 2012 |
# ¿ Nov 27, 2012 17:10 |
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Guinness posted:Yes, that is why expense fees are so killer (and why ETFs are an appealing alternative to mutual funds) Don't ETFs have expense fees as well?
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# ¿ Nov 29, 2012 19:01 |
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My boss told me the other day that he's selling off $30k of investments due to the fiscal cliff. I'd tell him that he sounds crazy, but I'd rather not get him too agitated right before I take a holiday. Plus the whole 'fiscal cliff' thing is far too politicized for me to even consider discussing it at work.
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# ¿ Dec 18, 2012 15:22 |
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If you wanted to avoid the issue with minimums, wouldn't an ETF like BND (which is also run by vanguard) be a viable alternative?
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# ¿ Jan 10, 2013 18:33 |
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I'd still give a 401k due consideration even the fund choices are terrible *and* the company doesn't match. When you leave that job, you'll be able to roll everything into an IRA regardless, and in the interim the benefits of the tax-advantaged status can still outweigh the higher fees of many funds.
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# ¿ Jan 31, 2013 17:50 |
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The phaseout ranges for roth IRA contributions begin at $178k if you're filing jointly or $112k if you're single. Even if you're beyond the caps, you can just do the backdoor roth contribution anyways - so there really is no effective limit.
Initio fucked around with this message at 16:15 on Feb 5, 2013 |
# ¿ Feb 5, 2013 16:13 |
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Harry posted:You should pretty much always get your money out of an old 401k. If I'm happy with the funds in my 401k is there still a good reason to roll it over to an IRA?
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# ¿ Apr 24, 2013 20:53 |
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The company won't contribute any more after 4%. Another way to put it, is that for every $1.00 that you contribute the company will also put in $0.50 for the first 4% of your salary. If you put in more than 4% in to your 401k, the company won't put in anything extra.
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# ¿ May 7, 2013 14:03 |
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Orange_Lazarus posted:Please tell me you're not joking. I seriously want to be resurrected in the 24th century. It's totally a thing! Cryonics Institute FAQ posted:Q: What about the cost? I heard cryonics is incredibly expensive.
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# ¿ Aug 27, 2013 14:23 |
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My 401k offers a vanguard S&P 500, mid-cap, and small-cap funds (VIIIX, VMCPX, and VSCPX). Any idea what percentages I'd need to approximate a total market type fund?
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# ¿ Sep 26, 2016 23:35 |
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That's pretty awesome. I guess I need to check out boggleheads
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# ¿ Sep 27, 2016 13:57 |
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# ¿ May 4, 2024 20:39 |
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I honestly think I'm pretty lucky with how the timing of the crash worked out. I started my first post-college job and my 401k in 2007. So even as everything was crashing, I didn't really see the effects on my balance. I remember a bunch of quarterly statements though where I saw that the only reason my balance was going up was because of the continued contributions I was making - the funds themselves all lost value. For a while, I was very much into reading about investments, how to plan, and listening to the financial news. But after figuring out an allocation, the plan is pretty much just "invest more". The crash taught me to be pretty cynical of financial news too. All of the financial news for specific companies is pretty much just noise - partially since there's no way to act on it before anyone else, and partly because even with the data you'd need to know what everyone else is expecting. Right now I only ever pay attention to how my own company is doing. But there never seems like there's a correlation between quarterly results and what happens to the stock price. We had an amazing quarter, earnings above our guided range we provided, and our stock drops because analysts expected more. Or we'd get a so-so quarter, and our stock jumps 10% over the next couple weeks. And none of it, despite my managers assurances, has affected our raises/bonuses in a predictable way either. The broader market affecting news tends to have a lot more impact regardless. Stuff like Brexit and Trumps 2016 election tend to shake things up more than they should. In both events people had next to no idea what would happen. Brexit was a non-binding resolution, and Trump had hardly given any details about his economic agenda. So everyone jumps in and speculates, driving up volatility. Eventually though, everything calms down and the market continues gradually moving upward. Hopefully I can remind myself of that during the next crash.
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# ¿ May 18, 2017 22:04 |