Long Term Investing & Retirement: The second best time is now

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Long Term Investing & Retirement: The second best time is now

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Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

There isn't a lot of difference, tax-wise, from exporting your dividends versus a controlled sell-off / rebalancing on non-dividend stocks if the account is non-tax-advantaged. Maybe it's less paperwork? I'm not really understanding why it'd matter unless there are specific tax advantages to dividends that I'm unaware of.

Bhodi fucked around with this message at 02:09 on Dec 18, 2014

# ¿ Dec 18, 2014 02:06

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# ¿ May 12, 2024 20:10

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

It's likely you fill out a form and they will mail you a check that you then re-mail to your new HSA with a form of their own.

You may need to get it notarized / medallion sealed (such a loving scam).

# ¿ Dec 31, 2014 16:38

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I thought fidelity was OK until I switched companies and now have a 401k with them. My 401k options are pretty mediocre except for a single stock fund and bond fund.
0.75%? Really fidelity? I thought you were better than that

I particularly like the .06% fee for simply holding my money because the "Stock fund" is just literally the single NYSE company stock.

code:

JPMC TARGET 20XX                Blended Fund      N/A           0.29%	
STOCK FUND           03/27/2009 Stock Investments Company Stock	0.0646%
S&P 500 INDEX        09/26/2005 Stock Investments Large Cap	0.05%
SMALL CAP BLEND      09/26/2005 Stock Investments Mid-Cap	0.7468%
TMPL INTL EQUITY     03/31/2011 Stock Investments International 0.7266%
CAPITAL PRESERVATION 12/30/1988 Bond/Managed      Income Stable 0.3566%
BOND INDEX           09/26/2005 Bond/Managed Income Income	0.06%

If all those big investing words confuse the client, fear not because they also have something called a "Portfolio Advisory Service" which I assume is simply a novel way to funnel money out of people's retirement accounts and into fidelity's:

code:

This is a managed account that puts Fidelity's investment professionals in charge of managing your workplace savings.
While you are enrolled in the service, we will make all decisions regarding the investment selections for your account,
using our experience and in-depth research methods. This service provides discretionary money management for a fee.

For the first $100,000 or portion thereof               0.45%
For the next  $100,000 to $250,000, or portion thereof  0.35%
All additional assets over $250,000                     0.20%

Yeah... needless to say I went 80% S&P, 10% bond and 10% stock. (This also isn't my only investment, I'm diversified more elsewhere including a IRA and traditional investments)

Bhodi fucked around with this message at 01:25 on Jan 4, 2015

# ¿ Jan 4, 2015 01:19

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

The only difference for you is likely your 401k investment options. If they are low fee and you like the variety in your 401k, it's perfectly fine.

You're also conflating a Roth IRA (Post-tax in, untaxed out) with a Traditional IRA (Pre-tax in, taxed out). The traditional is similar to the 401k (Pre-tax in, taxed out) in that they both use pre-tax income and have withdrawal restrictions.

If you actually mean Roth, it's not so much 401k versus IRA, it's "Do I want to pay taxes now rather than pay them when I withdrawal from the account". The answer is generally "No, no you don't" if you are in your "earning" years.

Edit: It's also normal (if not recommended) that you roll over your 401k into a personal Traditional IRA once you leave your job. It's unlikely you'll be working at the same place until you're 60

so you'll probably end up with one anyway.

Bhodi fucked around with this message at 17:09 on Jan 12, 2015

# ¿ Jan 12, 2015 17:05

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

You're fine, assuming expense ratios aren't more than 0.50% on any of the 401k investment options you selected (though, the lower the better). It's not worth worrying about, revisit when you leave the company.

# ¿ Jan 12, 2015 18:11

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Well, there's a IRA-sized hole between gross income and claimed taxable income that shows up. You can do your taxes now, you'll just have to file an amendment.

# ¿ Jan 14, 2015 20:55

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I must be doing my taxes wrong. I had to declare it all, though there was no "proof", I just plugged in the number even though I hadn't actually contributed yet. This is why I'm getting an accountant this year!

# ¿ Jan 14, 2015 21:19

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Yep, turbotax

# ¿ Jan 14, 2015 21:34

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Honestly I feel like if you're savvy and wealthy enough to do roth backdooring, you probably should just pay a little extra for a real live tax preparer.

# ¿ Jan 15, 2015 00:34

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Fidelity costs a flat $70 to do a transfer, as does Sharebuilder (Now Capital One something something). I would assume most companies have similar fees.

# ¿ Jan 29, 2015 02:49

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

moana posted:

And hey, here's a no-cost option for you: tell us your age and what you're investing the money for (house, retirement, what?) and we'll tell you exactly what to do for free. Please don't waste your money on "a money guy."

Cautiously amending this; periodic consultations with flat-fee "money guys" aren't a terrible deal for a sanity check for more complex investment calculations or if you have a life event and need help doing planning. If you invest enough in vanguard (4-500k?) they provide this service for free a few times a year. I think fidelity charges you $50-$75 per 30m session.

For example: What's the best balance for my taxed and non-taxed investments, considering I plan on retiring early within 10 years and will need to live off the income for ~20 years until I can start withdrawing from my IRA and become eligible for SS? How does the balance shift if I want to spend $200 more a month? Can I even afford to retire, will I "make" it to the point where I can start using the IRA funds? What if I planned on buying a house and pulling some/all of the value out of an IRA? What percentage is sensible given all the above?

There aren't any perfect answers and it's a pretty complicated question with a lot of moving parts. And I can't be the only one playing around with questions like this - it's good to ask someone else (other than an internet comedy forum) for perspective.

Bhodi fucked around with this message at 03:45 on Feb 10, 2015

# ¿ Feb 10, 2015 03:42

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I wasn't slighting you personally! There's a lot of smart people here. But as was said, sometimes it's hard to get accurate advice without showing your finances to a public forum.

The balance question referred to stock/bond/other for risk management, obviously you max out all tax advantaged options before overflowing, but semi / early retirement is not the same as traditional retirement so it throws the traditional advice of shifting allocation to bonds out of wack.

For me, it's about calculating if I really can retire when I want, and if I need to squeeze some to get my monthly spend down or let the date slip a bit. Plus family planning, incidentals, but it all requires exact figures. 30m probably isn't enough, but it's also not "lol worthless"

# ¿ Feb 10, 2015 06:22

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Oh personally my fallback plan is to just scrape all the money I can into a giant bin and at some point starting around 40-45ish I'll drop a few days a week of work and go from there. I'm way off track but I was trying to suggest there is a moderate ground between someone who can be told to just go with whatever has the lowest fee and to max out your 401k and someone like me who needs to spend a dozen hours with some books or a two hours and a grand, or of course posting here.

# ¿ Feb 10, 2015 06:42

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

You know I just realized my entire problem; we all compare things to what we know and as a tech guy if someone picked up tech for dummies and put a few dozen hours into learning something, I'd be incredibly wary of lending any credence to their self-taught knowledge. I thus sort of conclude internally that it's the same for finance, even if it isn't really true, and there probably is a reason they get paid multi-hundred dollars an hour.

# ¿ Feb 10, 2015 06:51

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Is there a convenient tool I'm missing in vanguard that helps when you want to rebalance? It can tell me percentages and throw up a handy pie chart, but when it comes to doing actual math I end up having to copy-paste my dollars/shares out and play around with them in a separate spreadsheet until I figure how many shares I need to exchange.

# ¿ Apr 1, 2015 19:24

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

you need to slow down and do some research and future planning. You just casually threw out the fact that owning property "saves on rent" when it might hurt you financially in the long run, especially when you're young due to opportunity costs of being tied to one place. It's not a slam-dunk.

# ¿ Apr 30, 2015 15:39

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

But if you're in that situation and >65 you can just convert your normal into a Roth slowly?

# ¿ May 7, 2015 14:00

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

ASIC v Danny Bro posted:

Hit me, guys - what should I be doing?

Go with vanguard, Stick what you can in an IRA (trad/roth as you choose) @5.5k/yr, buy vanguard retirement 20XX funds with the balance of both accounts until you decide what, if anything, you want to change

# ¿ May 10, 2015 13:43

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

If you're the type of person who gets really excited because they just got back from that coinstar machine at the grocery store with two hundred bucks in a gift card and it's basically free money, I can just get that box set because hey I have a gift card I need to spend, than acorns is probably for you.

If on the other hand you get angry that coinstar takes a ridiculous fee and won't even give you cash, I mean not that you'd ever use the dumb machine anyway, it takes an hour tops to roll your coins and you can get a bag of rolls for two bucks, acorn is probably not for you.

# ¿ May 12, 2015 06:15

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

your profits go into their yachts rather than back into your own pockets, basically. The fees are so high you won't get the compounding you should and with the same amount of money in, it might take you twice or even three times as long to get to a number that you'd get with a lower cost vanguard fund.

# ¿ May 15, 2015 17:13

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

etalian posted:

Still any many you can sock in your 20s makes a big difference for the future, even if it's a small amount.

Something else to note is that chances are, if you're in your 20s and just starting your career, income is fairly low. That qualifies you (assuming USA) for the saver's credit which also helps.

I know it's a bit crazy to suggest even saving more when you're not making much, but at least you might get some of it "back". And it's in a lump sum at tax time so you can finally splurge on that new tv you wanted! don't do this

# ¿ Jun 6, 2015 15:33

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

so quick question, I've only got ~20% of my overall investments in tax-advantaged accounts (90%/10% trad IRA/401k) due to a recent large lump sum (house sale) and a high savings rate. Current place of work does not allow outside 401k contributions and so transferring my IRA into the 401k and doing a giant roth backdoor isn't an option right now.

I'm 36 and my horizon is 10-15 years, I plan on starting to work part-time and starting drawdown then, baring any financial catastrophe (like children, ha!)

Two questions.

Are there any other ways to get that investment into a tax-advantaged status of some sort?

Are there enough potential savings doing the backdoor that I should be shopping specifically for an employer that WILL let me do 401k transfers when I decide it's time to move on?

Bhodi fucked around with this message at 15:53 on Jun 6, 2015

# ¿ Jun 6, 2015 15:49

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

yeah, i was looking at the mega backdoor roth as a way to get that lump sum into tax advantaged status.

my understanding is that some companies let you transfer existing IRAs into the 401k, so then I would then be able to take my current traditional IRA, transfer it into the 401k, and be able to backdoor roth without the tax burden of the current existing trad ira.

I'm also not sure I'm a great candidate for the roth right now in general, as my tax burden is very high at the moment due to income and no deductions, it will almost certainly be lower in the future, especially when I move to part-time. I could be wrong on this, however.

# ¿ Jun 6, 2015 15:59

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

yeah, that's what I figured, but I thought I'd check anyway. Thanks!

# ¿ Jun 7, 2015 04:29

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

anything greater than zero dollars and less than the yearly maximum contribution (~$3500)?

# ¿ Jun 21, 2015 03:24

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Parallel Paraplegic posted:

So to roll over my 401k into a Vanguard IRA I apparently need to get the HR person at my previous company to approve it, if I'm understanding these forms correctly.

She's incredibly vindictive and took my quitting very personally, this will be fun.

You shouldn't. you might need to get a medallion cert which is basically a super-notary and involves going to the one dude at your bank who can do it, showing your ID to them and having them stamp the form and mail it off. It's to prove you are who you say you are which can't be done over the phone.

It might also require your previous company to flag your 401k as inactive/left the company, but that doesn't have anything to do with the form.

Bhodi fucked around with this message at 04:59 on Aug 23, 2015

# ¿ Aug 23, 2015 04:56

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Peanut3141 posted:

Listen to the guy above me. Don't be the guy who pulled everything out in March 2009 and missed the 200% rise in the past 6 years.

I did this in 2011 at the dip. It was a bad move. I lost a lot of potential earnings.

# ¿ Aug 23, 2015 22:20

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

GoGoGadgetChris posted:

I'm curious if we have any retired goons, or soon-to-be-retired goons, who follow the principles of this thread?

I'm a decade out from semi-retire / part time. I'd be closer if I had found the thread sooner.

# ¿ Aug 27, 2015 03:26

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I am not at all joking when i say my primary driving force to be frugal in my life is so i don't end up homeless and alone in a gutter when i get old.

# ¿ Oct 27, 2015 15:46

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Rurutia posted:

Backdoor is a huge pain in the rear end to set up if you have actual trad ira savings.

Seriously, if anyone has a way around this without job hopping to a place that allows post tax 401k i'd really like to hear it!

So annoying this issue isn't brought up in the forefront of issues when comparing trad vs ira, and i didn't read deep enough until it was too late.

# ¿ Aug 12, 2016 13:30

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

So does anyone have recommendations for one-off sessions for financial planning? I thought the vanguard advisers offered (used to offer?) this service but it seems to actually be a managed fund allocation service which takes 0.30% off the top and I'm not interested in that at all.

Specifically, I'm heading into possibly going part-time and then to retirement in the next few years and need a second pair of eyes to confirm everything looks good and to walk me through doing tax-smart distribution plan and working out on paper the pros and cons of funneling my traditional ira through a mega-backdoor roth over a period of years versus a slow yearly conversion, and to possibly re-allocate my funds to minimize the taxes, and to crunch all the numbers and confirm that yes, I in fact am at the stage that I think I am and I (probably) won't run out of money before I can reach into my IRA/401k.

From reading it all seems to be a somewhat fluid process, depending on investment / distribution income and I just want to make sure I don't get hit with any unexpected taxes and as I still have a few years, do anything I need to do to prepare for the transition.

# ¿ Sep 3, 2016 15:04

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

You can also request to get your house re-appraised, sometimes you can get enough equity to remove PMI from that. It doesn't automatically drop off BTW - since it makes the company money there are often hoops you have to jump through to get it removed.

# ¿ Oct 7, 2016 02:01

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

Sorry in advance for politics, but Trump is aiming to heavily modify or get rid of the upcoming Fiduciary Standard law for employee benefits/pensions. So I guess that's going to continue to be a thing: https://webcache.googleusercontent....n&ct=clnk&gl=us

# ¿ Nov 11, 2016 03:15

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

is there any general advice to doing tax-loss harvesting when rebalancing/reallocating? I've been avoiding it for a while but it's really time to just cut out a bunch of legacy underperforming things before this year's taxes. I want to dump them all but I don't know if I need to do it in chunks for maximum tax advantage, is there a guide to walk you through figuring out that and the tax type vanguard asks you about when you sell?

# ¿ Jan 17, 2017 18:17

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

fartzilla posted:

I am not sure what you mean by "chunking," but managing individual lots during a sale is only advantageous if you are reducing, not closing, a position and want to maximize tax savings. Let's say today I sold some stock for a profit. Then, at the end of 2017, I do some routine portfolio rebalancing. During the rebalance, I could choose to sell some lots at a loss to offset the gains I earned earlier in the year.

If your goal is to sell all shares of a position, and that whole position has a loss, then just do it all at once.

I didn't know if there was some sort of cap or maximum on applying realized losses to other capital gains taxes and if I'd have to do it in parts over a period of years. It's entirely possible that I lack understanding in this as historically I have just put numbers in boxes in turbotax and write a check for what it tells me every year.

e: yes, they're all more than a year old. I'll just hit the sell button, thanks!

Bhodi fucked around with this message at 19:12 on Jan 17, 2017

# ¿ Jan 17, 2017 19:09

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

monster on a stick posted:

Using TLH, you can offset any capital gains for the year, plus an additional $3000 against ordinary income. You can carry losses forward to other years. There are people who took tax losses during 2008-9 and are still using up their carry-forward losses.

Excellent, that was exactly what I hoped for! Silver linings and all that.

# ¿ Jan 17, 2017 19:13

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I sure hope international markets start to pick up soon, my emerging markets and even vanguard retirement funds have been sandbagging for the past 4 or 5 years. I'm sticking it out, obv.

# ¿ Jan 24, 2017 17:43

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

brugroffil posted:

I've heard from a friend who has worked in financial compliance before that this was a well-intentioned rule but was poorly written such that it'd create a huge compliance headache especially for small and mid-level shops.

I have an old rollover IRA with Prudential that I want to move to someone better and with more options. Opinions on Vanguard or Fidelity? Or someone better?

Either are good and their rates and support lines are roughly similar. Use their demo sites and see which website look you prefer. Vanguard is also still not-for-profit with a different mentality so that could also swing your decision.

Bhodi fucked around with this message at 17:20 on Feb 3, 2017

# ¿ Feb 3, 2017 17:15

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

oliveoil posted:

I could build something like flappy bird in a weekend (and I bet art assets for it would cost less than $5k) and I've read a couple books on marketing and growth hacking and I've come up with a few novel marketing ideas that seem like they could work once or twice before anyone else notices them and starts using them too.

You should check-in with the making games megathread before you get carried away. Make sure you soberly read the various postmortems, especially ones that detail the financials for making small indie games. I can tell you right now that you won't like what you find. You likely won't listen but it's better to suggest real, concrete examples rather than going into this idea completely blind. Just do a search on "postmortem" in that thread and you'll get a dozen writeup links of various successful and unsuccessful goon games.

https://forums.somethingawful.com/showthread.php?threadid=3506853

Bhodi fucked around with this message at 22:25 on Mar 16, 2017

# ¿ Mar 16, 2017 22:22

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# ¿ May 12, 2024 20:10

Bhodi: Dec 9, 2007; Oh, it's just a cat.; Pillbug

I screwed myself by putting my first ~5 years of savings into traditional; now I can't do a backdoor roth and my current employer does not support post-tax 401k so I can't do a megabackdoor either. Going trad was a seriously bad move on my part.

# ¿ Apr 5, 2017 20:16

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Long Term Investing & Retirement: The second best time is now

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