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Discendo Vox posted:Without getting into specifics, my employer's matched policy is insufficient (though I've got it maxed) and I've currently just got checking and debit with BofA (and have generally had poor experiences with them) plus a Capital One credit card flowing from my BofA checking. I'd like to effectively bolster my longer-term savings while taking a minimal involvement, low risk approach (I don't have the time or holdings to make being more active worthwhile). I'm looking into changing up what bank I use and want to consider what my added options are. any recommendations? I was considering moving my checking to Ally and also getting some of their CDs. I've got some long-term "cash" in a couple places, and I'd recommend either or both to you: Vanguard brokerage account -- the "cash" here is automatically held as one of their money market funds, which has a current yield over 5%. Sometimes I buy multi-month treasuries at auction and hold them for their entire period. I was pretty stunned at how easy the Vanguard account was to set up and use...it just worked for me Merrill cash management account -- I believe everything I have in this account is in SGOV? I prefer the Vanguard account, but the thing to keep in mind is how great BofA's CC premium rewards program can be. If you can hold $100k in your accounts across BofA/Merrill, including things like IRAs, then you can get 2.5% back on every purchase (or more if you use the points to buy whatever gift cards are on special). That's as much CC complexity as I want, so that works for me. Even if you're not near $100k (yet!), you might check if the earlier tiers are worth it to you...I think there are some other perks, too, like no ATM fees.
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Feb 1, 2024 19:54
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adnam posted:I was wondering if this is a good place to ask this but I've got parents who want to contribute to little adnam's education fund. I was reading somewhere that grandparent held 529 have minimal effect on FAFSA applications, something about a 'grandparent loophole'. Is it worthwhile for me to help them set up a 529 account under their names or is this not worth the effort? If I remember correctly, the owner of a 529 needs to have the social security number of the beneficiary? For me, that puts a big pause, because the potential savings just isn't worth the risk. Also, most people have no idea how numbers work and will put the whole thing in an investment earning 1.5% with 1.1% fees or something similarly ridiculous. My vote would be to set up the 529 yourself, then give anyone else the "uGift" code or whatever it is, so they can put money directly into the account. The other thing to keep in mind is the new rule that lets $35k of 529 funds be used as Roth IRA contributions. I believe that rule requires the account to be 15 years old, which means you'll want to plan ahead and have an account created NOW that has you as owner and child as beneficiary. Even though you're supposed to be able to change the beneficiary, it seems like (at least with Vanguard/Nevada) changing the beneficiary actually means you're creating a new account, which seems like it would mess up the account age requirement to use the new Roth IRA feature.
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Feb 4, 2024 09:55
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Pipistrelle posted:I had a weird interaction with the Fidelity customer chat last week that also has me second guessing doing too much with them. I have a couple of 401(k) accounts that I recently rolled the balances over to another 401(k), so they were sitting empty. I reached out to Fidelity over their customer chat on their website to close them, and was told they couldn’t be closed, only hidden in the UI. When I asked why, I was told “for record keeping and security purposes”, the accounts cannot be closed. I tried to ask follow up questions and the chat person just copy and pasted the same “for record keeping and security purposes” line over and over again until I finally gave up and ended the chat. It was super weird, and kind of weirds me out that the accounts will just sit open, even though I can’t use them anymore. Maybe I’m overthinking it, but it was a really weird interaction I personally wouldn't worry about it, but I definitely understand it being weird. My guess is that there are enough edge cases -- people calling up a year later and demanding records, etc -- that it's cheaper for them to just leave the account open. Sometimes I see people post about "I desperately need to know the cost basis for this investment I bought 20 years and 5 account transfers ago", but I don't know enough about 401ks to know if that kind of thing would be relevant to a 401k. Now, the thing with entering a password on a phone has me genuinely mad. Like, are they storing the "phone keypad version" of your password in plaintext, or a hash of it, or is your actual password in plaintext somewhere...no way of doing this seem acceptable? It's like when I realized a random door-to-door ATT salesperson could see my security questions and answers, along with all my account info. It's a miracle that we aren't all having our accounts drained on a daily basis.
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Feb 17, 2024 17:15
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Is there any sort of an ETA on when more specific info about 529-to-Roth IRA rollover may be written? Or is everyone pretty sure at this point that details will just emerge over time as 529 providers just start doing things, and occasionally the IRS will say no to some things? Like, the $35k lifetime limit has to increase over time, right? Probably will increase to stay in line with 5 years of the contribution limit? So what is going to inevitably happen is people with extra 529 money are going to trickle that money into a Roth as that lifetime limit goes up, right? And, I'm curious how the 15 year account age requirement works with transfers between 529s with different beneficiaries(or owners?). Right now, it feels like I should just set up accounts ASAP for everyone in my immediate family, then in 15 years we can transfer any extra 529 money around and put it in Roth IRAs. Even if there's a 5-year wait on rolling new transfers/contributions into Roths...I should at least start all those 15 year clocks now, right? Or do the rules cover these kinds of things already and I just need to go read the right IRS doc/law/whatever?
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Mar 13, 2024 21:10
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runawayturtles posted:You know that transferring from a 529 to a Roth counts towards your yearly IRA contribution limit, right? So for any immediate family who would contribute anyway, I'm not sure there's much benefit, except potentially a state tax deduction. I do know these things y'all are pointing out. I guess my actual underlying question is "since it's almost impossible to predict the postsecondary education costs a current-day infant will face, what's every possible way I can sneak any 'extra' dollars out of 529s -- without the 10% penalty --, so I can make an informed decision about how much is too much in a 529?" The Boglehead answers seem to be 1) aim for $35k in the 529 and cashflow all education expenses because you're high income 2) transfer any extra in 529s back to your own 529 and spend it on a 'study abroad' that's actually a vacation 3) transfer it forward to the next generation. Pretty sure at this point that my frustrations with finding detailed info on 529 edge cases mean I'm barking up the wrong tree, and I should focus on squeezing benefits from other tax-advantaged accounts first.
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Mar 14, 2024 20:45
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Agree with everything here. At this moment in time, 5% should be a rough baseline for basically all cash/savings, whose "job" is principal-preservation/no-risk/ultra low-risk/etc. It feels like that 5% baseline could start to decrease later this year -- I think people anticipate the Fed rate decreasing. 5% is possible in several ways, and you may have to find the one that makes the most sense for your situation or accounts -- things like money market funds, treasury bills, SGOV, maybe CDs or some high-yield savings accounts, etc. There can be reasons for some cash to not be earning 5%, but I'd say you should have a reason and make sure it's worth the lost opportunity. For example, if you want to keep $1000 in a more convenient checking account with no real interest paid, that's pretty normal, but be aware it's costing you $50/year. If you're getting 4.5%, that's probably fine for a few thousand, but you want to think hard about it if it's tens of thousands. If you've got thousands in "cash" sitting in random accounts --a few thousand sitting in an HSA, a few thousand in a savings account you never touch, a few thousand sitting uninvested in an old retirement account -- now is the time to look at each situation and make changes, transfers, or investment purchases to get those extra percentage points! I just want to yell that at everyone I know, and it's so frustrating that most people's eyes just glaze over, no matter how much I simplify the idea.
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Mar 19, 2024 19:04
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feelix posted:My HSA automatically sweeps into a Schwab HSBA, but it looks like I actually have to give Schwab an exact dollar amount and frequency to automatically buy investments? That seems super annoying and even if I figure out the correct timing and dollar amounts, it would all get messed up if I ever spend any money in my HSA. I suppose it's another reason to not touch the HSA even for healthcare expenses If I understand what you're saying, I'm a little jealous of your situation, because the investment fees/options in my employer HSA are terrible. So, I manually initiate a transfer out a couple times a year and wait multiple weeks for it to go through, then manually initiate the investment purchase once the transfer settles. My transfers seem to be free at both ends, at least, but I figure I'm probably losing a hundred dollars a year in missed gains because of the time it takes for the transfers. But yeah, there are lots of little annoyances with using HSAs for investment space. I try to remember this is not really the primary use case and just appreciate it for what it is. Hopefully it works out great when we retire!
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Mar 25, 2024 18:46
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Pollyanna posted:... I’m not sure how to value my brokerage account. How should I treat it in comparison? With the assumption that I’m not touching it for like another three decades. ... Wouldn't it just be subtracting 15% (or whatever LTCG rate you anticipate) from the gain, and adding that to the basis? My approach is so simple and some of these responses so long that I'm probably wrong in some major way. My retirement savings in taxable/brokerage are all in a total stock market fund. The money I've transferred in is basically the same as the basis, and any change from that total is the gain/loss. So, I just multiply the investment gain/loss by 85% (to estimate 15% LTCG tax) and add to the basis. Then I use that estimate for things like monitoring net worth or estimating overall progress of retirement investments.
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Apr 22, 2024 01:47
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Bone Crimes posted:This post is from forever ago, but I'm having the same questions, and the replies to it weren't really helpful. I haven't read the entire thread so if there is a keyword or post that would point me in the right direction that would be appreciated. I think the answer you need is probably the one you hinted at: if the general rules and estimates aren't accurate enough, you'll probably need to add more information and detail on your own. The situation after retirement is a lot like the situation before retirement, in that you start by estimating your income and your expenses. If you aren't tracking your expenses at a category level now -- groceries, utilities, entertainment, transportation, housing, insurance, etc -- I'd start there. Having that as a baseline means you can look at/in estimate each category and more accurately plan for retirement expenses relative to what you're spending now. On the income side, you'll probably have to plan it out yourself -- estimate your social security, any pensions, any retirement accounts, etc. Read about "safe" withdrawal rates and variable rates and see what you think. If it's overwhelming, use the estimates for each number, and just pick a possible retirement age/year. Run those numbers, see if you feel like it's accurate, and get more precise if not. Or, if you pick a retirement year and have way more cushion than you need, try moving it a few years earlier. Not sure if that's the answer you're looking for, but it sounds like you're about at the edge of what the general rules and estimates can do for you, so you may just have to start dialing in more precise numbers on your own. Or maybe I'm misunderstanding what you're asking?
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May 1, 2024 00:49
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