|
Recently opened taxable custodial accounts for my kids (8 and 2). Going 100% VTI. I don't see much point in international or bonds given their huge time horizons or am I missing something? The goal is to give them down payments for homes when the time comes as I will be covering their college expenses myself. As for me I am running a 100% equity portfolio with 20+ years to go before retirement saving 22.6% of my income between the Roth IRA and Roth 401k. The IRA is 80% VTI, 10% SCHD, and 10% VIG. My 401k is in VOO as it was the only reasonable option I had. I'm not nuts right? I know everyone says its good to have bonds but volatility just doesn't bother me. I also have a taxable account that generates qualified dividends (50% SCHD, 25% VIG, 25% HDV) which help to fund the IRA. This this a sound strategy? Using dividends from a taxable brokerage account to help fund a Roth IRA?
|
#
¿
Aug 23, 2022 20:34
|
|
|
|
| # ¿ May 4, 2024 01:36 |
|
|
CubicalSucrose posted:Doesn't seem crazy, but kinda confusing. Money is fungible. If you need dividend yield to fund the Roth IRA and don't have to backdoor and you're either not capping your limits or just are barely, then sure I guess? But then why have a taxable account at all? So the IRA is maxed out each year, with roughly half of that coming from dividends from the taxable account, and the 401k is maxed out or nearly maxed out each year as well depending on how my company's bonus payout is for the year. The taxable account gets a bit of money added in when possible once the IRA is capped for the year although these contributions are now almost entirely going to the custodial accounts. As for why have a taxable account, well, I wanted to invest more than the IRA limit before I had access to a 401k (was working for a tiny company at the time) and it just sorta became a habit that I kept at even as my 401k contributions increased as I got pay raises over the years. It is now the college fund for the kids and doesn't need any more contributions to achieve that goal. And now that I am bumping up near the retirement account contribution limits the taxable account seems like the only real option aside from the custodial accounts. I am in the 22% marginal federal tax bracket (married, filing jointly) and live in a state with no state income tax so the IRA and 401k are both Roth so I can lock this in now. Sure tax rates might not go up but they probably won't go down either. I also don't want to have to deal with RMDs when I am old. I also want to be able to play Roth conversion tax bracket games with my traditional IRA (the result of rolling over an old Roth 401k, the employer match portion was pre tax so it split into two IRAs, one traditional, one Roth) when I am retired and living off the Roth IRA. Antillie fucked around with this message at 22:02 on Aug 23, 2022 |
|
#
¿
Aug 23, 2022 21:59
|
|
|
mekyabetsu posted:I accidentally contributed $500 over the yearly limit to my Roth IRA. Do I just have to eat the fine/penalty on this, or is there a better way of handling it? There doesn’t seem to be an obvious “oops, I hosed up” option on Vanguard’s site. I will obviously call them if needed, but I’d like to know what I’m talking about when I do. Are there forms I need to fill out? Am I going to jail? Call Vanguard and explain what happened. There is a process for pulling the money out. The sooner you get it out the less the penalties will be. No, not jail time. Just fines. 6% of the overage amount per year to be specific. Since we are far from tax time you'll probably be able to shift the $500 over to a taxable brokerage account without penalty. Either way you will need to deal with it by calling Vanguard. The sooner you correct the issue the easier it will be to deal with. Edit: Vanguard as a page about this here. Antillie fucked around with this message at 00:50 on Aug 24, 2022 |
|
#
¿
Aug 24, 2022 00:33
|
|
|
A lot of Vanguard mutual funds have ETF versions. Like VTSAX and VTI or VFIAX and VOO. I like buying the Vanguard ETFs on Fidelity's platform as Fidelity does fractional shares and there are no investment minimums. Fidelity also doesn't charge any fees or commissions for ETFs either. And of course you still get the benefit of Vanguard's low expense ratios. Which are actually 1 basis point lower on the ETF versions for some reason. Fidelity also has plenty of low cost mutual funds of their own as well. Like FSKAX and FXAIX, which actually beat the Vanguard funds on cost. If you are looking for a target date fund Fidelity has two sets of offerings, Freedom <year> Funds which are actively managed at 75 basis points, and Freedom Index <year> funds which are passive at 12 basis points. Of course finding the index versions is a bit more work on Google or Fidelity's own site. Personally I prefer ETFs over mutual funds as they have a more tax efficient structure (which doesn't matter in a retirement account) and they are always portable to other brokers. For example Fidelity's zero fee funds (like FXZROX) cannot be ported in kind to any other broker (100% intentional on Fidelity's part) but ETFs like VTI can be. Antillie fucked around with this message at 00:20 on Aug 30, 2022 |
|
#
¿
Aug 30, 2022 00:04
|
|
|
pmchem posted:leper I think you are doing a great service in breaking that down via spreadsheet, good post I see your catastrophic use of Open Office and raise you one cataclysmic use of Excel:     VOO is the Roth 401k. I recently changed jobs and rolled the old one into the Roth IRA so the new one is still small. The LIN is, well, first world problems.
|
|
#
¿
Aug 30, 2022 02:07
|
|
|
pseudanonymous posted:I’d say first world problems are on the rise so definitely increase your allocation there. I'm trying to get out of the business of owning individual stocks. LIN is the last one left due to the stupid amount of US capital gains and Irish Stamp Duty taxes I would have to pay if I sold it. Having 45% of my overall investments in a single company makes me super nervous but I just don't feel there is anything I can really do about it without taxes eating me alive. So I reinvest the dividends from it into index funds in the Roth IRAs. (One for me, one for my wife.)
|
|
#
¿
Aug 30, 2022 02:46
|
|
|
Leperflesh posted:You will have to sell it eventually, unless you plan to put 100% of that stock into your will for your inheritors. Assuming you eventually want to spend that money, you'll need to sell, right? Meanwhile you're exposed to a concentration risk. I've actually considered doing that and letting them benefit from the stepped up cost basis. In hindsight I could have sold it all in 2018 with essentially no additional capital gains tax after the merger. But on the other hand its done quite well since then beating the US index by ~6.6% CAGR and I will be able to retire just fine on my retirement accounts alone anyway. I could sell it over the course of a couple years and stay in the 15% capital gains tax bracket. But doing that would push me past the income limit for Roth IRA contributions. If I want to remain able to contribute to my Roth IRA it will take me 56 years to devest assuming the stock stays flat the entire time. So in the end I will probably just wait until I retire in 25 years and then devest over the course of a few years when I'm no longer adding to my Roth IRA anyway. I'll just have to juggle the devestments with Roth conversions from my traditional IRA and whatever dividends I am getting from the rest of my taxable account so I don't shoot myself into too high of a tax bracket. I won't be able to realistically capture the 0% long term capital gains tax bracket anyway as devesting at 80k a year would take over 60 years at the current share price. Edit: Maybe devesting over the course of two or three years and eating the 15% capital gains now would be worth getting to a more diversified position in something like VXUS since I can't meaningfully capture the 0% long term capital gains tax bracket anyway. Antillie fucked around with this message at 14:52 on Aug 30, 2022 |
|
#
¿
Aug 30, 2022 14:32
|
|
|
KYOON GRIFFEY JR posted:I feel like you're complicating this to high heaven for reasons I don't understand. Being over the Roth IRA limit just means you should be backdooring. That is a very straightforward process. I think you are right. I will just need to spend two or three years devesting and stick 6k into a traditional IRA in each of those years and then Roth convert it once the devesting is done. I'll need to read up on the details of the process but I'm sure google can teach me all about it.
|
|
#
¿
Aug 30, 2022 14:50
|
|
|
fourwood posted:The theoretical ideal amount of time to leave non-deductible contributions in a TradIRA before backdooring to a Roth is 0, and the max practical limit is basically the number of days between the day you deposit the money and Dec. 31 of that same tax year (so, not at the end of a multi-year process). The short version is you should probably contribute $6k in one lump some once per year and backdoor it as soon as your brokerage portal will let you (~2-3 days) and then forget about the Roth IRA income limits entirely. Good point about pushing the money through the back door asap. Yeah I have some in a traditional IRA so that would complicate things. The result of rolling over an old Roth 401k where the employer match was pre tax and got split off during the rollover. I didn't know the employer match wasn't Roth before I rolled it over. My Roth IRA is so much larger that I don't really pay any attention to the traditional one. I was planning to Roth convert it after I retire but I could always do that now I guess using some of the proceeds from devesting from LIN to cover the taxes.
|
|
#
¿
Aug 30, 2022 17:30
|
|
|
KYOON GRIFFEY JR posted:How much money is in the Trad IRA? If it's not a ton, take that hit at a relatively low tax bracket today before you start selling LIN and pushing up your MAGI. Then start selling LIN and doing the backdoor IRA deal. About $60k. So if I Roth convert it I will need to do so over the course of a couple of years so I don't knock myself into a higher tax bracket. Not this year though. I already have lots of tax crap going on from reorganizing my accounts away from individual stocks and active mutual funds and into index funds. So going this route the plan would be: Year 1: Roth convert about half of the tIRA and sell some LIN to cover the taxes. Contribute to the rIRA as normal. Year 2: Roth convert the rest of the tIRA and sell some LIN to cover the taxes. Contribute to the rIRA as normal. Year 3: Sell the about half of LIN and use the proceeds to build a properly diversified international position with index funds (probably just VXUS). Backdoor 6k into the rIRA. Year 4: Sell the rest of LIN and reinvest into index funds. Backdoor 6k into the rIRA. Year 5: Resume normal rIRA contributions. SamDabbers posted:Does your current employer have a 401k that will allow you to roll this trad IRA into it? That would empty your trad balance with no tax hit and you'd be able to backdoor without paying taxes on it now. I had no idea you could do that. I will ask HR. If they allow it I will totally do this. That would allow me to skip steps 1 and 2 in the above plan. Antillie fucked around with this message at 18:30 on Aug 30, 2022 |
|
#
¿
Aug 30, 2022 18:27
|
|
|
SamDabbers posted:It may help to refer to it as a Rollover IRA when talking with HR. That's a trad IRA account established when you roll out of a previous employer's 401k and it only has that rollover balance in it with no non-401k contributions. Rollover IRAs can generally be rolled back into a new employer's 401k if the plan allows it, while an individual trad IRA account would not be allowed from what I read. Crap. Its got a single year's worth of normal contributions in it. Back when the LIN merger happened I was pushed out of the eligible income range for rIRA contributions for that one year. So I did my usual contribution to a traditional IRA that year. And then the pre tax portion of the old Roth 401k got rolled into that earlier this year. Probably easier to just spend a couple of years Roth converting it and be done with it. Antillie fucked around with this message at 18:52 on Aug 30, 2022 |
|
#
¿
Aug 30, 2022 18:44
|
|
|
raminasi posted:Some plans allow roll-ins from non-rollover IRAs! SamDabbers posted:Worth asking the question though, right? Indeed. I will ask. Antillie fucked around with this message at 19:04 on Aug 30, 2022 |
|
#
¿
Aug 30, 2022 18:51
|
|
|
Someone mentioned "goon approved Fidelity ETFs". What would these be? At the moment I am using ETFs from Vanguard, Schwab, and iShares. Always looking to expand my ETF vocabulary even if I don't end up actually investing in them.
|
|
#
¿
Aug 30, 2022 19:12
|
|
|
obi_ant posted:I went to look into my roll-over Roth from a few years ago and noticed a button I do not recall seeing. It could merge with your existing rIRA or it could become its own new rIRA. Both are valid options and there isn't really a meaningful difference between the two. But yes, you will have to pay taxes. All of the money in the tIRA will be counted as ordinary income for the year and all of it will be taxed at your highest marginal tax rate. So say you made $80k from your job or whatever this year. That puts you in the 22% marginal bracket for single filers. If you then Roth converted $9k this would give you an income of $89k, you would stay in the 22% bracket, and you would owe 22% of that 9k in taxes. But if you converted $10k that would give you an income of 90k which would bump you up into the 24% marginal bracket and you would owe 24% of the entire 10k in taxes, even though ~9k of it was still technically in the 22% marginal bracket. So if you want to do a Roth conversion you will need to look at what tax bracket you are currently in and how far you are from the next bracket and then only convert however much will keep you from jumping into the next bracket. Nerd Wallet has the brackets here. This is why many people often Roth convert a tIRA in small parts over several years. Also if you are close to retirement be aware of the 5 year rule for rIRAs. Basically you need to have had a rIRA for at least 5 years before you can pull money out of any of them without penalty (in addition to the age restrictions). Any rIRA counts for this. So if you opened one 5 years ago today you're all set for any future rIRAs you might open. The old one satisfies the rule for all future ones, even if you roll the old one into the new one. A better way to think of the 5 year rule is "has it been at least five years since the IRS was told that I contributed to literally any rIRA anywhere" even if the rIRA in question no longer exists for whatever reason. Since you already have a rIRA you may already satisfy this rule or at the very least you are already on your way to doing so. Note: I am a not a tax professional. I have no idea how your state taxes will impact this. I don't know your personal tax and financial situation. I recommend speaking to a tax professional about this before doing things involving money and taxes. I am probably an idiot who's advice may cost you all you money and cause you to live under a bridge or something. Antillie fucked around with this message at 14:42 on Sep 2, 2022 |
|
#
¿
Sep 2, 2022 14:23
|
|
|
D-Tron posted:I have a 401k from a previous employer that has a portion of contributions made via automatic in-plan conversions from after tax to roth (i.e. the mega backdoor). I also have a separate roth IRA in a different account. Would it be advisable to roll the roth portion of the 401k into the IRA? Seems like a no brainer per this page since according to that roth IRAs don't have a required minimum distribution while roth 401ks do but if anyone knows if I'm missing something please lmk! A 401k can be subject to the rule of 55, allowing you to pull out the money at 55 without penalty in some cases. The other thing is that a 401k is just about untouchable in bankruptcy proceedings. IRAs are generally somewhat less protected in such matters but this varies from state to state. Additionally r401ks have their own 5 year rule that is separate for each r401k you have. Unlike rIRAs where one old rIRA account can meet the five year rule for all of your rIRA accounts. So its possible to get around the 5 year rule on a r401k by rolling it over to a rIRA if you have already met the rIRA 5 year rule. But doing this removes the possibility of using the rule of 55. Personally I rolled my old r401k over to my rIRA to avoid RMDs when I get old and to consolidate accounts so I didn't have things spread out all over the place. Antillie fucked around with this message at 00:21 on Sep 9, 2022 |
|
#
¿
Sep 9, 2022 00:00
|
|
|
I am also zero bonds. Buying as much VTI and SCHD as I can while things are down. Riding that 100% equity roller coaster. Woooo! But realistically I'm at the point where in 20-25 years when I plan to retire a 50% market drop with a 15 year recovery wouldn't really matter. And I just don't think that's going to happen anyway. Antillie fucked around with this message at 14:40 on Sep 15, 2022 |
|
#
¿
Sep 15, 2022 14:28
|
|
|
incogneato posted:What is the general advice for a grandparent that wants to invest money for a grandkid? My mom wants to start setting aside money for our daughter (who is under 1yo at the moment). My mom said she'd prefer it not be restricted to educational use, to maybe allow my daughter to travel or something after turning 18. That's pretty much it. Technically EE bonds are an option but they have terrible returns. A big UTMA account will disqualify them from need based financial aid for college while a 529 held by you won't count against them quite as much. However anything held by a grandparent is invisible to the college aid evaluation process. Personally I am doing UTMA accounts for my kids as they are already disqualified from need based financial aid on the basis of my income and net worth alone and I want them to be able to use the money for a down payment on a house or whatever if they end up not going to college and/or I just straight up pay for their college for them out of my investments. (The latter is what is almost certainly going to happen.) Most people don't seem to know this but the first $1100 of earnings each year in a UTMA account isn't taxed and the next $1100 is only taxed at 10% in most cases. Its only after that point that the tax rate jumps up (a lot). So if your just buying and holding a broad market index fund like VTI you would need to get over $73k in there before you would have to pay any taxes at all while they are under 18. And then when they turn 18 and sell some shares to pay for college or whatever they get to enjoy no capital gains tax at all if their income is under ~$40k. More than enough to cover college costs each year. They may need more money for rent or whatever but there is nothing stopping you or grandma from covering that. The other thing you can do to give your kid a head start is to fund their Roth IRA for them each year once they start working. So to sum up the steps to make your kid rich: 1. Setup a UTMA account for them and stuff as much in there as you reasonably can. 2. Pay for their college for them. 529's are cool, but not strictly necessary. 3. Once they get their first job fully fund their Roth IRA for them each year until their income is such that they can take over and do it themselves. Antillie fucked around with this message at 21:12 on Sep 21, 2022 |
|
#
¿
Sep 21, 2022 20:42
|
|
|
Animal posted:why tho Because of how electricity works. Off topic for this thread (and *very* simplified) but what the hell. Electrical current has a frequency just like any other signal. That's why you sometimes see 120v at 60hz in the states. The current is oscillating at 60hz. (We're talking AC current here.) Now that oscillation has a "shape" if you will. Essentially a sine wave. It bounces between the same peak and valley over and over at regular timed intervals. The timing being that 60hz rate. Now when you have more that one source of power on a circuit (like a power grid) it is super duper important that all of the power sources have their sine waves in sync. If things aren't in sync it will cause serious damage to everything on the grid, including the generators. Its also very important to keep everything running at whatever oscillation rate all of the equipment is designed for at all times. Too much generation and the oscillation frequency will jump up, too little generation and the oscillation frequency will drop (this nearly sunk the TX grid during the '21 freeze). Letting either of those happen would be..... bad. So when a solar system (which makes DC) wants to put AC power onto the grid it needs to know what to sync its output to. So it needs to get a bit of input from the grid to tell it how to form and time the oscillation of the current coming out of the DC to AC inverter. So... if the grid connection goes down for whatever reason the inverter shuts off to prevent damage to the grid and the stuff in your house. This is why the vast majority of solar installs do not provide power without a grid connection, it wouldn't be safe to do so. Doing solar that works without a grid connection at home isn't hard from an engineering perspective. You just can't ever hook into the grid for those pesky times when the sun isn't shining. So you had better buy some batteries. Now somewhat back on topic, in my experience the value of a solar system isn't generally well reflected in the appraised value of a home. Meaning either the buyer needs to have a hefty down payment to cover the appraisal gap or the seller has to be willing to accept what the lender is willing to lend based on the appraised value. I had solar on my old home and when I sold it the appraisal was more about local comparables, that didn't have solar, than it was about the house itself. Now I did get more for my home than all of the comparables, and the solar system probably helped with that, but this was in late '21 when everything was sky high and going higher. Antillie fucked around with this message at 21:01 on Oct 4, 2022 |
|
#
¿
Oct 4, 2022 20:44
|
|
|
As much as I love Vanguard's funds I keep hearing that their website, and tech ability in general, is kinda crap. Fidelity has a reasonable website that is easy to use and they are quite happy to let you buy Vanguard ETFs (VTI, VOO, VXUS, BND, ect...) with support for fractional shares and automatic dividend reinvesting with no fees or commissions. They even have a few zero fee funds like FZROX that Vanguard doesn't really have an answer for. They also do no fee UTMA/UGMA accounts if that ever becomes a thing she wants to set up. So sorta a vote for Fidelity over Vanguard from a platform perspective. From a fund perspective Vanguard is great, I just prefer to buy into their funds through someone else. Then again I've never actually had an account at Vanguard so I don't really have the full picture from experience. On the earlier topic of solar, yes you can get disconnect switches and inverters that do the work needed to maintain their own 60hz output when the grid goes down but they cost more and the install process is by necessity more complex, and thus more expensive. And odds are you will still need a hefty battery as the inverter should shut down if it can't put out enough juice to keep things above 58hz or so without a battery to provide the additional power needed to push things up to 60hz if its sorta cloudy or you're just using a lot of power. Antillie fucked around with this message at 00:41 on Oct 5, 2022 |
|
#
¿
Oct 5, 2022 00:12
|
|
|
I can second the bit about good phone support. They were great in helping me out when I moved my IRAs over to them and they were quite knowledgeable and responsive in fixing a mistake they made in the transfer process. Their total finances dashboard is pretty nice but the free one at Personal Capital blows it away. However using the one at Personal Capital does mean that Personal Capital calls you once a quarter to see if you are interested in their asset management services. Mildly annoying I suppose but easy enough to ignore. I just tell them that I don't believe in active management and they wish me a nice day and leave me alone for another few months.
|
|
#
¿
Oct 5, 2022 00:34
|
|
|
Hadlock posted:Maybe they're only introducing ESPP for employees because executive band got a B or A tier look back Yeah if enough people participate it puts a small but constant amount of upward pressure on the stock price. Maybe just enough to squeak an extra 0.2% onto the value of the oodles of shares owned by the c-suite guys. Antillie fucked around with this message at 15:50 on Oct 5, 2022 |
|
#
¿
Oct 5, 2022 15:48
|
|
|
Vice President posted:Vanguard's website is... fine. I log in once a month to check my statements and I've never had any real issues. Over the last year or so there's been a big redesign to make it somewhat more mobile friendly (the old site definitely was not) but it's functional if no-frills. Many people on the Bogleheads forum hate the change and complain about it constantly. Fidelity imho has a nicer website with more features though the counter argument is Vanguard's whole thing is the Bogle "just set up automated regular investing and never touch it" philosophy so who cares if the site isn't flashy as long as you stick with investing. There is also the argument that Vanguard's ownership structure lets them generally charge lower fees vs. Fidelity and other brokerages but that's also debatable. These are all good points. However I would point out that VTI is 1 basis point cheaper than VTSAX and Vanguard doesn't do fractional shares of ETFs on their platform which makes using ETFs instead of the mutual fund equivalents super clunky. The same is true for VOO vs VFIAX (1 point), BND vs VBTLX (2 points), and VXUS vs VTIAX (4 points). So if you want to chase expense ratio but don't want to get locked into Fidelity's zero fee funds Fidelity still wins as a platform for owning Vanguard funds. Of course I am a wierdo who chases low expense ratios with a probably irrational fervor and refuses to invest in anything that costs more than 8 basis points. Antillie fucked around with this message at 16:03 on Oct 5, 2022 |
|
#
¿
Oct 5, 2022 16:00
|
|
|
Dangerous Mind posted:I turn 29 next month. You are going to be just fine.
|
|
#
¿
Oct 17, 2022 22:26
|
|
|
So I recently moved my efund from a savings account at Chase where it was earning functionally nothing to SPAXX at Fidelity. However by reading this thread I have been made aware of SGOV and it seems like moving my efund there to drop 30 basis points would be a good move. The slightly higher rate of return is nice but I assume that will drop to be equal to or slightly less than SPAXX at some point. This this a good idea? Or am I worrying about numbers so small it literally doesn't matter? Or is SGOV not a good place to keep my cash for some reason I am not aware of? Antillie fucked around with this message at 17:48 on Jun 19, 2023 |
|
#
¿
Jun 19, 2023 17:39
|
|
|
drk posted:Fidelity is one of the brokerages that will auto-roll treasuries for you. I think thats probably a better option than SPAXX or SGOV. I happen to live in a no income tax state so no worries there. I will look into auto-rolling short term treasuries and see how easy it is as I am incredibly lazy when it comes to actually managing my investments. That is to say, I don't, I just let them sit year after year. Other than the expense ratio is there any difference between holding SGOV and auto-rolling short term treasuries?
|
|
#
¿
Jun 19, 2023 18:13
|
|
|
drk posted:Not really. 3-12 mo treasuries currently yield a little more than SGOV, but not enough to be meaningful unless you have a huge amount to invest. I will probably go with SGOV then just because I am lazy. Thanks. I just wanted to make sure there wasn't some sort of gotcha thing I wasn't aware of.
|
|
#
¿
Jun 19, 2023 18:44
|
|
|
1. The ETFs are often cheaper by one basis point. Its a tiny difference but its there. The ETFs can also be moved to another broker fairly easily if you ever want/need to do that. Other than that, no. In the end it isn't going to really matter if you go with the ETF or the mutual fund. 2. Sounds reasonable to me. There is no hard and fast rule for how much someone should allocate to international or bonds but the general idea is to slowly move more into bonds as you get older. International allocation is harder to nail down but I've heard anywhere from 10% to 40% thrown around on different parts of the net. It really comes down to your personal situation and risk tolerance. A target date fund it a perfectly reasonable solution to these questions for most people. Edit: If you are on Vanguard's platform I think its easier to setup automatic reinvestment with the mutual funds than with the ETFs. I use Fidelity personally and automatic reinvesting with VTI is dead simple there. Antillie fucked around with this message at 20:17 on Jun 19, 2023 |
|
#
¿
Jun 19, 2023 20:10
|
|
|
jokes posted:Trading bonds is going to be so much more esoteric and beyond the ken of normal people, and involves a bit more paperwork. Trading stock is just so much easier to understand. Yeah if I am going to hold bonds its going to be through an ETF like SGOV or BND. I need the simplicity because I am lazy.
|
|
#
¿
Jun 23, 2023 18:44
|
|
|
My grandfather bought a number shares in Union Carbide through the ESPP and gave them to me when I was small. The paper stock certificate looked really cool but I had to send it in a number of years ago to get it turned into electronic shares due to a merger.
|
|
#
¿
Jun 27, 2023 01:08
|
|
|
Atahualpa posted:I received an email about Multi-Year Guaranteed Annuities from a company that sometimes sends out retirement/investment stuff to members of my union. From a bit of research it sounds like these are very similar to CDs: a fixed-rate asset with specific duration where you know the exact rate at time of purchase, but with slightly different tax implications, issued by insurance companies rather than banks, and not FDIC-insured. Are there any other downsides I'm overlooking? The rates I'm seeing medium-to-long-term MYGAs are on par to moderately better than what I've been seeing for callable CDs and way better than anything I've seen for call-protected ones. Personally I am very skeptical of annuities. Not because there is anything inherently wrong with them as a concept but because they make sense for so few people and because they tend to be so expensive. Principal protection probably refers to your "investment" not being able to go down in value the way stocks or bonds can. Anything that offers downside protection does so at the expense of upside. For example something that tracks the S&P500 but literally can't go down probably caps the gains at 5% a year or something. It sounds nice but its actually terrible as the S&P500 tends to go up by a lot more than 5% in most up years. In the end you have far less money than a simple index fund due to that upside cap blocking most of the gains. Then add fees on top of that. I would make sure to get a very clear understanding of the fee structure and exit process/fees. They aren't actively trying to sell this thing because they are being charitable. The other thing I would do is take all of the info about this insurance product (because that's what it is, an insurance product, not an investment) and talk to a fee only fiduciary financial advisor about it to see if its a good fit for your situation. Insurance companies often make these things very complex because they don't want you to understand how they work. Because if you did you probably wouldn't buy it because you would be able to tell it wasn't a good fit for you. They know these things aren't a good fit for most people so they have to make that hard to figure out. Edit: Here are my thoughts on when an annuity might make sense. Specifically a single premium fixed income annuity. These are pretty simple. You pay the insurance company some large amount of money, X, once. They then pay you some smaller amount of money, Y, each month/year/whatever for the rest of your life. The math here is pretty simple. The insurance company is betting you will die before their payments to you exceed X plus whatever they got by investing that money over the time period. Lifespans are a thing you can do actuarial tables on so they set Y to a value that they feel is unlikely to loose them money. You on the other hand are betting that you will live long enough to get all your money back and then some. In that sense an annuity like this is insurance against outliving your money. Its not perfect. There is nothing for your next of kin to inherit and the payments, Y, aren't going to be adjusted for inflation. Odds are the insurance company wins here but some people like knowing they can't outlive their income. Antillie fucked around with this message at 15:44 on Jul 7, 2023 |
|
#
¿
Jul 1, 2023 21:16
|
|
|
daslog posted:And you can get the Fidelity Visa card where 2% of every purchase automatically gets credited to your cash management account. Which I also dump into SPAXX because I'm lazy and it's like 4.6% 7 day yield or something I got this card recently to replace the 1% cash back card that I used to run my entire life through. I am kicking myself for not making the switch years ago. I am also kicking myself for keeping my savings at Chase where it earned zero point gently caress all for over ten years. But live and learn I guess.
|
|
#
¿
Jul 25, 2023 03:52
|
|
|
Turbinosamente posted:Invest in whiskey is a new and exciting one. I wind up seeing a bunch of old people tv (Me TV) and some gold company has hired Chuck Woolery for an ad promoting the old "give us money and we'll give you a piece of paper that says you own a part of the gold in our vaults" Nothing makes me feel prepared for the coming collapse like a piece of paper saying I own some gold somewhere. What's really funny is that having a bunch of booze in your basement would probably be much more useful than a bunch of gold in some hypothetical mad max scenario. A quick run in portfolio visualizer shows that $12.8k in gold in 1976 would be worth $165k today. So they are strangely under selling themselves. But yeah, that same $12.8k in the total US stock market in 1976 would be worth $2.3 million today.
|
|
#
¿
Aug 29, 2023 15:02
|
|
|
Vesna posted:The recent question about HYSAs motivated me to look at my savings account as well and I clearly need to do something about it. The last couple of pages have made me uncertain about HYSAs vs. SGOV vs. whatever, so I'd appreciate a quick sanity check about my specific situation if anyone has time. I already had an account a Fidelity due to my 401k being there. I moved my savings over to them and put it into SGOV a couple of months ago. Mostly due to SGOV having a lower expense ratio than the default position. (SPAXX, a government money market fund) Both SPAXX and SGOV are highly liquid and super safe. My plan is to keep my efund in SGOV and my new car fund in SPAXX just so the totals are separate on the screen. The practical difference between the two is pretty small. Technically an FDIC insured HYSA is a bit safer I suppose but I don't want to bother opening an account at yet another place. I don't have a Vanguard account so I'm not familiar with their interface but Fidelity makes all this stuff really easy. I've sure Vanguard has an equivalent of SPAXX. (Edit: They do, VMFXX.) Traditional banks pay zero point fuckall interest because they know most people are lazy and won't bother to move their savings. That's it. There is no reason not to move other than the effort required to do so. Antillie fucked around with this message at 17:33 on Aug 29, 2023 |
|
#
¿
Aug 29, 2023 17:25
|
|
|
Vesna posted:Is there a clear better option here? Not really. We're talking about savings here so returns aren't really the goal. Nothing wrong with going with whatever takes the least effort. Any of them are going to pay over 100 times what your old bank account did. The only possible caveat would be state income taxes. Being 100% US government treasuries SGOV is exempt from state income taxes. That probably isn't the case for VUSXX and VMFXX. (Not tax advice, just a rando on the internet. Consult an actual tax pro for actual answers.) Personally I live in a state that doesn't have state income tax so it makes no difference to me but for people in places like NY or CA it might matter.
|
|
#
¿
Aug 29, 2023 18:14
|
|
|
SamDabbers posted:It's absurd that retirement savings vehicles are tied to employment. gently caress you if your employer doesn't offer a 401k I guess. Agreed. It amazing how many companies don't offer 401k plans. I am of the opinion that all employers with more than 10 or so employees should be required to offer a 401k/403b/ect. Once you get to the point of employing more than 10 or so people full time you should be a good corporate citizen and stop setting up your employees to be a burden on society when they are old. I am also amazed at how many people aren't aware that IRAs exist. Sure the contribution limits on IRAs make them severely limited in their usefulness but its better than nothing. The same goes for ordinary taxable brokerage accounts. Sure you pay taxes as you go but if you hold for long term capital gains rates, stick to low yielding index funds, municipal bonds, and/or stuff that pays qualified dividends you won't get destroyed by the IRS. But on the flip side you have to access to all of your money any time you need it and there are no contribution limits.
|
|
#
¿
Aug 31, 2023 16:47
|
|
|
KYOON GRIFFEY JR posted:i mean the normal/good way to do this is to get rid of 401(k) plans entirely, make the IRA contribution limit $29k/year or whatever, and allow employers to contribute to the IRA as they do with an employer-sponsored retirement plan. this would significantly reduce the number of open plans and the opportunity of plan providers to make money, and it would decrease employer power over employees, so it will obviously not happen any time. I really like this idea. Too bad it makes far to much sense to ever actually happen.
|
|
#
¿
Aug 31, 2023 17:07
|
|
|
jokes posted:A common thing about boomers is that their retirement is their house because they did absolutely zero retirement savings, despite making very healthy livings, and their home is an asset they can't touch, so it's the only asset they still have at retirement. Though 'reverse mortgages' seem to be a way to loosen up that particular line item. My wife's aunt is in this situation. She got a reverse mortgage about a year ago and that's how she is funding her retirement. Her deadbeat former druggie daughter is expecting to inherit the house free and clear when her mom goes. Its literally her only hope of not ending up on the street when the day comes. She knows its her only hope and is expecting it because she has been able to leech off her mom her whole life (she is largely why her mom has no savings and needs the reverse mortgage). Boy is she going to get a shock when the bank takes the place at some point in the next ~15-20 years and refuses to sell it back to her due to her lovely credit and criminal record.
|
|
#
¿
Sep 1, 2023 03:36
|
|
|
esquilax posted:There's also no definition of "paycheck to paycheck" besides answering the survey question "Do you live paycheck to paycheck" as "Yes" or "Sometimes". Yeah I have always wondered about this. I keep just under a month's worth of money in my checking account and depend on those pay checks to pay my bills. I have to watch my spending and plan for major purchases. If I lost my job I would have to hit my efund pretty darn quick. Does this make me paycheck to paycheck? I've got just under three months worth of expenses in in my efund (working on building it up to 6 months) and several years worth of expenses in my brokerage account. Does that make me not paycheck to paycheck? Sure I *could* pull that money if I had to but I really don't want to. I contribute to my 401k each paycheck, does that make me not paycheck to paycheck? When I find I have a surplus at the end of the month I invest it in either the Roth IRA or the taxable account depending on if the IRA is already maxed out for the year. Does that make me not paycheck to paycheck? What does paycheck to paycheck even mean? Like I said if I suddenly lost my job I would need to massively cut expenses and scramble to find another one pretty quick if I didn't want to cannibalize my investments. I'm probably not paycheck to paycheck by most definitions of the term. But it sure feels like I am since I have to plan my spending and investing around my paychecks.
|
|
#
¿
Sep 1, 2023 03:51
|
|
|
Ccs posted:I work in post production for the film industry, and because of recent events a lot of people are hurting financially. I went onto linkedin to see someone talking about saving and investing. At first I thought "yeah, that's a good idea, people would be a lot less stressed if they actually saved a hefty emergency fund and knew what etfs were. Real estate is incredibly risky. Mostly because you are using leverage (debt) to buy the properties. Because of this risk it can also be incredibly lucrative. What most people seem to forget, or at the very least gloss over, is the the cost involved in repairs and maintenance, the closing costs of real estate transactions, the challenges involved in finding a good tenant, the cost of insurance, the risk of something happening that leaves you unable to sell/rent out the property for some period of time, and taxes. There is also the fact that real estate is very illiquid. If I suddenly needed money I could sell some stock in my brokerage account and have the money in my checking account in a couple of days. On the other end of the spectrum my in laws have been trying to sell their house and the ~19.2 acres its on for over a year. They are lucky to have social security and a small pension to let them get by while they try and get to the money locked up in their real estate. (The size of their plot and its location put them squarely in the commercial real estate market, nobody cares about the house.) Even in a white hot market it can still take a month or more to sell a house. I'm not saying real estate is bad or that you shouldn't get into it. You can very much retire on some rental properties. But you should understand the risks involved and the deep pockets needed to get into, and be able to stay in, the real estate game. Or, you could just invest in a REIT. So no, you are not wrong. Antillie fucked around with this message at 14:42 on Sep 1, 2023 |
|
#
¿
Sep 1, 2023 14:17
|
|
|
|
| # ¿ May 4, 2024 01:36 |
|
|
Boris Galerkin posted:I thought it was pretty well and widely understood by everyone that living paycheck to paycheck means “if I don’t get paid I can’t pay the bills without going into debt”. People with an emergency fund can still pay the bills, ergo they aren’t living paycheck to paycheck. People contributing to a retirement account that they can pull from (even if they don’t want to) can still pay the bills, ergo they aren’t living paycheck to paycheck. It’s pretty gross that some of you are going “hurr durr technically I’m paycheck to paycheck because I budget so that I have $0 unaccounted for (after Ive contributed to x y and z retirement funds)” when you know drat well what paycheck to paycheck means. I've seen this definition of paycheck to paycheck implied in a number of places but I have never seen it actually spelled out before. Hence my assumption that I was probably not paycheck to paycheck. But that's also why I was never really sure. I guess my socioeconomic status is showing. In any case thanks for hitting me upside the head with some simple logic and reality.
|
|
#
¿
Sep 1, 2023 14:26
|
|