|
pig slut lisa posted:Hey there no matching buddy Are you sure the vesting period just isn't the minimum amount of time you have to work for the IMRF employer before you can take a retirement package at whatever age they choose is an appropriate retirement age? Do you get to pull the cash, employer contributions and interest if you make 10 years? Is the interest comparable to what the market can get you? My pension plan has a vesting period of a similar # of years but what that means is I have to be at least 50y/o and have worked those years to take a pension at severely reduced benefits. In my case taking the money out just nullifies my chance of getting a pension and I'd be free to do whatever I wanted with the money. I love my job, and if I got the opportunity to round out my years for full benefits that would be great, but it would really not be fun if I felt chained to a job just to round out the years for benefits. Is whatever interest you might have made worth being chained to something for an extra 2, 4, or however many years? On a different note... If I have access to a 401k, Roth 401k, 457, and Roth 457 with about 10-15 funds (couple of indexes like S&P500, small/mid, and international with fairly low ER and some standard funds with about 0.80% ER) what should I contribute to? I max out a Roth IRA and have around a hundred left over for others. Also, if given the chance to have a 457(b) why would anyone not take it over a 401k?
|
#
¿
Jan 14, 2015 01:58
|
|
). Both I and my employer contribute to this every pay period.
|
|
| # ¿ May 12, 2024 20:23 |
|
|
pig slut lisa posted:Yeah, that's how mine works. Sorry if it wasn't clear. If I hit 10 years and quit my job I still can't start drawing pension checks for another few decades. Sounds like yours is set up similarly to mine, except I don't get to see what my employer contributions are and the interest they give on the account (that I can see and/or potentially take out) is less than what their investments make. An example on my pension plan: if I had 10 years of service with my entity @ age 35 I might have $40k in the account that I could pull. If I left, that money would have to sit in the account for 15 years until I reached age 50, at which point I could take a reduced benefit pension... like maybe... $5,000 a year. If I waited until the age of unreduced benefits - another 10 years to age 60 - I might get $10,000 a year. The decision becomes very different if I have 10 years of service at age 49 instead of age 35 because all of the $ values would be the same, but instead of waiting 15 years I'm only waiting 1 for reduced benefits. From the sounds of it you're going to want that money available at age 40-ish so keeping it in that system doesn't do you any good until like... age 50 or 55 or whatever your pension plan says. If you're capable of rolling that balance into your 457 you might be able to make use of it at that age, but you'd be forfeiting the pension. The question would be, can you outperform the plan if you cash out? A benefit to cashing out is that when you die, the money is still there... if you haven't spent it all.
|
|
#
¿
Jan 15, 2015 01:10
|
|
|
Speaking of diversification, If someone is just starting to save - and avoiding fees is the name of the game - and they were starting to open accounts with Vanguard should they: Try and avoid the $20/yr per fund under $10k fee like the plague by: Opening an account at the minimum $3k and build it until it gets to $20k then transfer $10k into another fund. Each subsequent purchase into a new fund would be with 10k from any of the other funds, thus bypassing the $20/yr per fund under $10k fee. Or say the $20/yr per fund under $10k is acceptable and: Open an account with the minimum $3k and then work towards purchasing into a second fund when total assets reach $6k making the split $3k and $3k each. Continue purchasing into new funds at the minimum until you have all proper diversification. Then and only then do you continue to build at your preferred allocations accepting that you may pay $60 to $100 per year as you build these 3-5 or whatever accounts past the $10k mark each.
|
|
#
¿
Jan 29, 2015 01:16
|
|
|
That was a simple answer to what now appears to be a needlessly complicated question. So umm... what kinds of fees would one typically be looking at to switch money from one Roth IRA to another from two different fund companies? It seems that I got excited about starting investing before reading any of the books in the OP and now that I've read Four Pillars and Winning The Loser's Game, things seem to make more sense. At least I managed to get into funds without any loads...
|
|
#
¿
Jan 29, 2015 02:24
|
|
|
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?
|
|
#
¿
Feb 3, 2015 13:36
|
|
|
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 |
|
#
¿
Feb 4, 2015 00:17
|
|
|
Say for example you are in retirement and you've decided to start withdrawing from your accounts. You have a traditional 401k and a taxable account. Your spending is larger than the distributions from your bonds, hence you also have to either sell equities or bonds in order to maintain your desired spending levels. Would it make a difference as to whether your bonds were held in the 401k or the taxable account given that you're spending more than they are distributing?
|
|
#
¿
Apr 14, 2015 22:38
|
|
|
Zool posted:For corporate bonds, in either account the yields end up taxed as income. If you sell the bonds, that ends up taxed as income for the withdrawal from the 401k, while its capital gains in the taxable account. Kinda sounds like it makes more sense to keep corporate bonds in a taxable account - if you're drawing down on them faster than the yields come in.
|
|
#
¿
Apr 15, 2015 12:29
|
|
|
It kind of sounds like non-governmental 457 plans can be quite cumbersome with the number of rules they can have. Do those rules change from agency to agency? What are some examples of rules that a 457 can have that's implemented by the employer? It sounds like they can force you to take the money in a short period of time after separation? If that's the case, is there a benefit of having that as your primary savings vehicle over the 401k? I thought the idea was to have some untold millions in the retirement account and draw off it forever, so having to take it all in 5 years would immediately preclude it from that. Or should a non-governmental 457 just be treated as the stop-gap between an early retirement, of like let's say 52, until you hit that magical age of 59.5 or when Social security kicks in?
|
|
#
¿
May 27, 2017 13:49
|
|
|
Was looking at the Vanguard Prime Money Market fund VMMXX and the SEC yield is 1.12% at the moment with an ER of 0.16%. Is that the yield after expenses? I can't ever remember. I was wondering where to park my emergency fund cash to eek out some extra bucks, but don't want to go through the hassle of opening an account with a new bank or institution. I've got a checking account that pays nearly 0%, a savings account that pays 1%, and if VMMXX is paying 1.12% after expenses it seems like I should be loading my emergency fund into VMMXX. The savings account has paid exactly 1% since I opened the account in 2009 - which makes me think that the interest paid isn't tied to what the market rate is. Generally speaking the loan and deposit rates that this credit union has are pretty crappy. The savings account has really been the only thing redeeming about it, but my expectation is that the 1% interest rate will continue to be parked in that spot for a while regardless of whether market interest rates rise. If the Fed does what they have said they will do and continue to slowly increase rates, then the gap between my savings account and the MM account will likely widen. Is there any appreciable difference in keeping the cash in the savings account vs in Vanguard's MM account? I don't see where VMMXX has FDIC insurance, so that's probably the big difference? I may even wait until the gap between the savings account and MM widens a bit more.
|
|
#
¿
Sep 16, 2017 12:34
|
|
|
Hoodwinker posted:Why wouldn't you put it into an Ally savings account, which is definitely FDIC insured, gives 1.2% interest, and is probably easier to withdraw than dealing with a MM account? I would, but for just a few bucks a month, I don't want the hassle of another bank and the associated 1099-int to keep up with. Moving it to the MM account would keep all of the existing banking relationships the same with the potential bonus of those extra few bucks. balancedbias posted:Yield is yield. Any listed ER is subtracted from yield. So 1.12-0.16=0.96 in your pocket. Which apparently wouldn't actually be an extra few bucks. Mu Zeta posted:I put my money in the Ally 11-month no penalty CD. You can withdraw at any time. Do you have to keep renewing that product every 11 months, or does it renew automatically at that competitive of a rate? I ask because my parents have recently started taking care of my 90 year old grandmother's finances and found that she had some CDs that auto renewed, but the rates were garbage compared to what other institutions such as Ally were offering. Thanks for the responses folks!
|
|
#
¿
Sep 17, 2017 01:07
|
|
|
Hoodwinker posted:This is reasonable, but wouldn't you be getting a 1099-DIV for a money market account anyway True! But I already get a 1099-DIV from them, so no additional paperwork. cumshitter posted:I like Able Bank for my savings account. I just checked and their Money Market is 1.3%. It's a risk thing, and my wife and I have already agreed to keeping some cash for emergencies because it makes us feel good. True VBLTX doesn't have a whole lot of drama to it, but it *can* go down and that wouldn't feel good in an emergency. The argument of why waste time on min/maxing what routinely is the smallest, least risky, and lowest reward portion of anyone's portfolio is valid. Time is better spent getting the big stuff right, like asset allocation, costs, minimizing taxes, etc.
|
|
#
¿
Sep 17, 2017 18:44
|
|
|
|
| # ¿ May 12, 2024 20:23 |
|
|
Ok, so there was some talk about how to go about withdrawals and asset allocation in retirement. I'd like to run my concept past you folks to see what you have to say. Take the concept with a grain of salt and know that I'm waaaaay way off from that point in time. Asset Allocation: So I hear a lot and a lot of talk about a 4% model of safe withdrawals. What that would mean is that every year of spending = 4% of my starting portfolio. My concept is that I'd like to have 5 years worth of expenses in bonds and cash, and the remainder in stocks. The reason for this 5 year time period is that I've heard that if your investing for less than five years, you should be in bonds or depending on if it's shorter, cash, however if you're investing for longer than 5 years, you can take more risk and be in equities. All of this leads to a portfolio that is only 20% bonds and cash in/at retirement. With I don't know, 2 years of cash and 3 years of bonds? Withdrawal strategy: On an annual basis, if the stock portion of the portfolio shows no gain or is up then sell stocks and replenish cash used that year. If stock portion of the portfolio is down by at least $1, then sell bonds to replenish cash. If after selling bonds the stock portion of the portfolio is up at least $1 on the previous year, sell enough stock to replenish two years' worth of cash/bonds. Continue selling stock at two years' worth of living expenses every year that the market is either even or goes up until desired 20% cash/bonds position is reached. What this does is makes the bonds/cash portion of the portfolio vary between 0% and 20%. This withdrawal method is in a way, trying to help keep from selling equities when markets are down by attributing defined timeframes on the cash/bond section of the portfolio. The hope is that with "5 years of reserves" one could weather some of the worst things the market could throw at us, but also give time to adjust lifestyle if need be. I understand there's no getting around bad markets, and so to say the least, this methodology would be considered optimistic. This method is also a method that has a varied income element to it.
|
|
#
¿
Apr 6, 2018 23:53
|
|