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I'm an idiot when it comes to anything financially other than a savings account. I currently contribute 6% pretax to a company matched (max match is 6%, so I'm maxed out) Principal 401(k). When I signed up for it, I picked my retirement year, and the funds "are automatically moved around for maximum return". I'm sure later I'll get into what I'm actually investing in, but not right now. What I'm interested in now is supplementing that retirement account with a Roth IRA. If I'm reading correctly, I can take a max of $5k a year and contribute that to a Roth IRA, and then much like my 401(k), choose where to invest it. Is that correct? Is there anything else that I should be doing? Are there caps to how much you can contribute overall (I make $50k a year, so 6% pretax and if I put in $5k in a Roth, that would be a total of 16% yearly)?
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Jul 9, 2008 17:25
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| # ¿ Apr 28, 2024 18:19 |
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This thread is borderline overwhelming with how much info is in here. I'm only up to page 40 or so, but drat, there is so much to read and learn. I'm also reading through the four pillars of investing and the bogelheads guide to investing as well. I could use some immediate advice though. Here is my situation: I have a 401(k) through work right now with Wells Fargo. Employer matches first 6%, I dump in 10% and it all goes to a target 2045 fund (WFQPX). Expense ratio is at .52% according to what I can find on Wells Fargo. I just rolled over my old 403(b) from an old employer to a Vanguard rollover IRA. There is about $4k in there right now, all allocated to VTSMX at the moment. I have $20k saved up in an emergency "oh poo poo I lost my job" fund earning 1% in a high-yield savings account. Got another $5k in a house emergency fund earning about the same in a no-penalty CD. Various other amounts not worth mentioning in my normal savings and checking accounts for day to day poo poo. After paying all my expenses for the month, and setting aside some play money to save for vacation or whatever else I want, I have about $1500 a month left over. Previously that money has been going into the emergency fund and house fund. Now that those are where I want them, I'm not sure what to do with that money, and not sure what to do with my current savings. My initial plan was to take $5k from the $20k and put it into an IRA at Vanguard since I have until April to do that for 2011, right? I already filed my taxes if that matters, would I have to file an amendment? I was going to take another $415 a month and start automatically moving that into the same IRA since I can contribute another $5k for 2012, correct? My problem right now is Roth vs traditional IRA. I'm not far from jumping up to the next tax bracket, so my personal thought is that since I'm already paying a decent amount of taxes and will be paying more soon, that the Roth would be less advantageous for me and I should go with a traditional. Even then though, contributing only $415 a month leaves me with another $1100 roughly to do whatever with. Do I max out my iffy Wells Fargo 401(k) or do I start investing that on my own somewhere else?
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Feb 21, 2012 16:06
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Harry posted:Unless he lives really cheaply, he might not be able to contribute the full amount to a Roth. What are your monthly expense like? You might want to invest some of that 20,000 into something. I do live pretty cheaply, and I make decent money. The $1500 figure in my original post was money left over every month for investing, after paying all the essential bills (mortgage, utilities, car insurance, food, etc) and setting aside some extra spending money for whatever (vacations, entertainment).
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Feb 21, 2012 19:52
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Harry posted:I forgot to ask this, but where did you get a savings account with that high of a rate? Did it have a minimum amount to get that? Harry posted:How easy is it to transfer between those and your checking account? I have a penfed savings account sitting around which gets like .2%, and my main problem with it is they send a check.
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Feb 22, 2012 19:52
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C-Euro posted:What's the process of transferring a 401k between employers? I'm about to accept a new job after leaving my last one a month ago (under amicable terms), and I've never had a 401k to transfer. I was hoping I could use "make it easy for me to move my 401k over here" and one last little bargaining chip for this new position, but I guess I don't know how difficult it is by default. When I left my old position: I called Vanguard, which is where I wanted to roll my old IRA over to They called ING for me ING asked me "Are you sure you want to do this?" and then sent me a form I had to sign and fax/email back 3 days later my money was out of ING and into a Vanguard account. Between the phone call and the document, it may have taken 5 minutes of my time.
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Jun 18, 2015 16:40
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I'm thinking about getting a little riskier with my retirement savings. I'm in my late 30s still so I think I don't need to be as risk averse as I am now. Here is what I have now: Currently maxing out my employer provided 401(k) at $19k annually, plus the employer match. This is in a Vanguard target 2045 mutual fund with Wells Fargo because thats the terrible bank my employer chose. Currently maxing out my Roth IRA at $5.5k annually. This is also in a Vanguard target 2045 mutual fund, invested directly with Vanguard. I also have a rollover IRA from a previous employer currently valued around $10k with Vanguard in a total stock market fund VTSAX. No additional money is being added to this right now. I'm thinking about leaving my 401(k) alone with the target 2045 fund, but changing my Roth IRA over to the same total stock market fund VTSAX that my rollover IRA currently has. Thoughts?
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Apr 18, 2019 15:18
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Hoodwinker posted:That's perfectly fine. Additionally, the IRA limit is $6k this year (in addition to the 401k being bumped up to 19k which you knew about). Yup I mistyped that. I had to go back and double check my bi-weekly contribution and I'm on track for $6k this year. Thanks!
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Apr 18, 2019 15:20
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MockingQuantum posted:Is it common for savings accounts to cap APY once you hit a certain balance? It feels like ages since I've seen something say "4.00% APY up to a balance of $3000" Thats a checking account, and yes for checking accounts since they aren't usually places to horde cash.
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Apr 23, 2019 17:02
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Anyone here dealing with an inherited IRA? My dad recently passed and named my sister and I as beneficiaries on his IRA with Primerica. I'm already in the process of moving that out of Primerica and in to inherited IRAs at Vanguard for both my sister and I. From what I can tell, since my dad was younger than 70.5 and not at a point where he had to take RMDs yet, I can either take out the money now in lump sum (not an option I'm pursuing), take it out over a period of 5 years (also no pursuing this option), or start taking RMDs next year based on my life expectancy. Since I'm not anywhere close to retirement age yet, the RMDs start out pretty small for the first 10 years or so. My initial thought was to start taking these RMDs sometime early in the year, set aside the 32% I will need for federal income tax, and use the left over amount to jump start my Roth IRA contributions for the year. Eventually when the RMDs exceed my Roth contributions, then put the rest into a taxable brokerage account. I plan on meeting with a financial advisor of my own to go over some other options because I'm almost to the point where I can't contribute to a Roth, so I'll have to either look into backdoor conversions, or just leave it all in taxable accounts.
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Jul 16, 2019 13:29
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Hoodwinker posted:Some employers let you do in-service rollovers but my understanding is that many don't. I wish mine did. Our provider is Wells Fargo and after they hosed up my first mortgage, and the duplicate account scandal, I don't want them holding any of my money. The only good thing is the extremely low ER. Through Wells Fargo, the 2045 target retirement fund I'm invested in has an ER of .08%. The same fund at Vanguard VTIVX has an ER of .15%
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Jul 31, 2019 13:10
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ranbo das posted:Be careful with out of pocket max vs deductible. That's where people get screwed i.e. my deductible is like $3k but my oop max is like $10k.
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Aug 5, 2019 17:40
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El Mero Mero posted:Jeeze, rolling over my partner's 403(b) from Nationwide (who I have always hated) and they charge $190 just to move out. What a rip. Is that normal for a provider to charge you to leave? I would expect some fee, but $190 seems high. I just paid TD Ameritrade $75 to transfer funds to another brokerage.
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Aug 13, 2019 15:50
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Solumin posted:0.5% would be bad but it's not the worst we've seen in this thread and I'm pretty sure it's still better than not being in a tax advantaged account would be. They said its .05% not .5%, and .05% for an S&P index fund is pretty good.
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Aug 15, 2019 14:09
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SlapActionJackson posted:If you make more than $137k*, you can't contribute to a Roth IRA directly. Under current tax law, this limit is trivially avoided by contributing to a non-deductible traditional IRA, then immediately converting that to a Roth. The catch is if you have deductible IRA assets, the conversion becomes not so trivial and may trigger some taxes.
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Sep 6, 2019 15:40
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KYOON GRIFFEY JR posted:If your trad IRA is with Vanguard, you can convert it to Roth by like clicking two buttons.
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Sep 6, 2019 15:53
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SlapActionJackson posted:And he will owe tax on the gains in the account. But if the gains are relatively small and he can come up with the money for the taxes from elsewhere, then it's a good plan B.
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Sep 6, 2019 15:58
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Anyone use Vanguard Personal Advisor service? Had an initial phone call with them and it all sounds pretty good, from asset balancing, to tax planning on what assets to invest where, and when to withdraw from each. I know that will be a challenge for me going between a workplace 401(k), a Roth IRA, an inherited IRA, an HSA account, a brokerage account, and a rollover IRA. Fees didn't seem too pricey either at .3%.
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Sep 10, 2019 16:51
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Residency Evil posted:No, but I'm curious. I think the meetings are "free" above some threshold invested too, right?
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Sep 10, 2019 17:33
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Does anyone here have any advice on dealing with a 409(a) plan at work? Apparently I can't contribute much to my 401(k) anymore, but will be eligible to use a 409(a) plan next year. I've done some research already, and it seems overly complicated.
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Oct 8, 2019 13:31
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SnatchRabbit posted:Looking for some general advise/confirmation on my retirement situation. I'm 37, make 130k a year, I have 60-65k in my fidelity 401k from previous jobs which I realize is not great at all, so I'm trying to do some catch up. My new job offers 4% 410k matching, so right now I'm contributing 6%, probably will bump that to at least 8 maybe 10 or more. They also offer a Roth 401k which I'm not super familiar with so could use some guidance on that. I've asked HR for information on the exact details on the Roth 401k.
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Jan 27, 2020 18:20
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This year I have to take a RMD from a beneficiary IRA by 12/31/2020, and the amount is close to $7k. My plan is to take 30% off that amount for taxes, but then take the remaining amount and put it into my Roth IRA. Since I'll have only a day or two of lag time between the RMD and the Roth deposit, and since both are invested in the same Vanguard funds, does it really matter when I take the RMD? Since I'm going to take a tax hit no matter at some point this year, I might as well get the money back into a Roth to grow as long as it can tax-free, right?
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Feb 5, 2020 13:57
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H110Hawk posted:Nope. Just do it. Today is great.
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Feb 5, 2020 14:53
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33% Target 2045 67% VFIAX
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Feb 21, 2020 19:37
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KillHour posted:My plan is to live out of a cardboard box to save on property taxes. Just make sure it's not corrugated cardboard. That will put you in a higher tax bracket.
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May 7, 2020 13:30
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| # ¿ Apr 28, 2024 18:19 |
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Are any of you on non-qualified deferred compensation plans? If so, how did you determine the benefits of NQDC plans vs. just dumping money into a brokerage or backdoor Roth IRA conversions? I know the deferred compensation plan lowers your AGI, and lowering that obviously defers taxes for now, and with a lower AGI keeps me an my wife both eligible for normal Roth IRA contributions. What if I were to just take all the income I would have deferred, plus the money we would have put in a Roth and just dump it all into VFIAX or VTSAX in a brokerage account for the next 20+ years?
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Feb 25, 2021 15:12
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