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Alright, I'm hoping to get into the retirement savings boat soon enough. Here's my situation: -23 years old -Can currently contribute ~$1500 USD per month -Have an additional $40K from last year that I haven't paid taxes on yet. Currently sitting in a ING Direct account. -Employer doesn't offer 401k -- we have our own retirement plan where they contribute 1 month of my salary for my first year of service, 2 months for my second year, and so on. But apparently the government doesn't like this one so the plan is scheduled to be phased out within the next 2-3 years. I guess I'll just get whatever amount deposited into my account at that point. -I live in Japan, where everyone is required to pay into a national pension system. My contributions to this are about $280 US per month (it's a percentage of my salary, but after my rent is taken off the top). Unfortunately the Japanese pension system isn't very friendly: basically I have to live in Japan for 25 years to collect on it. Otherwise the most I can get out of it is 3 years worth of contributions. Given the political situation here I'd say this pension system is just a black hole of money anyway... I basically expect to never see it again. -I really don't have any plans of owning a home here soon, because they're absurdly expensive and even less of a "good investment" than they are in the US. I'm going to have to check up what kind of restrictions I have from work too. I work at a securities company and we're straight-up not allowed to do futures/options transactions. All stock transactions have to be approved through compliance too. All of our securities accounts are supposed to be transferred to (domestic) approved vendors too, but I'm not sure if this is applicable for retirement accounts as well. But I'd still appreciate any suggestions. For the time being, all I earn is the 3% or whatever from the ING Direct account.
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Aug 11, 2008 13:23
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Does anyone know about how IRA/Roth IRA contributions work if you have income earned overseas? Just been doing a bit of reading and it seems like you can only contribute using "qualified income," e.g. income you get taxed on in the US. Earning overseas, I think (for 2009) I have a US tax exemption of $91K, which I did not exceed, so there's no doubt that I am ineligible to contribute. For 2010 I'm at $82K base, so still under the limit, but perhaps one day I'll be over the exclusion limit for foreign-earned income. In this case I'm able to contribute to an IRA based on however much I am over the limit, correct? If the exclusion limit is $92K and I make $95K, I'm able to contribute $3K, correct? Assuming the exclusion limit is $92K, I theoretically won't have to pay US taxes until I exceed $98K, since I'll be contributing the entirety of the $5K maximum to the IRA, correct? At this point I'm assuming Roth IRA is not an option since I'll make (hopefully) over $95K/year within the next few years. Obviously there are some fees associated with repatriating the money and interest rate risks involved, but I was just looking for as straight an answer as possible. Thanks for any advice. For the time being I have a pile of cash in Japan, a pile of cash in the US, a Vanguard Retirement Target 2050 account (regular mutual fund account, not IRA or anything), and money wrapped up in stock options.
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Apr 2, 2010 11:36
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shrike82 posted:I'm moving out of the country permanently to relocate to Bermuda for work; My firm has a pension/investment plan which I intend to invest in but that's for later. Should be NAV, so yeah, EOD. Derail but what do you do for work? I've never heard of relocation to Bermuda, that's pretty intense.
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Sep 22, 2010 23:45
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You can probably get it cheaper/for free through work anyway, once you get a job. If they want to give you money, taking out a life insurance policy on you is ridiculous because you won't be alive to see the money.
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Jul 28, 2011 00:48
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That assumes long-term there will be economic growth. What if global output declines for the rest of our lives? What if everything is "great" now, because it's only going to get worse? I'm fully invested in the market now, just sometimes wonder if that's the right choice. People look at for example 1950-2000 and say "oh well yeah there were ups and downs but long-term you're OK." But I really do wonder how well that will hold true for 2010-2060. Technology/science may be the only way out. Or BRICs. edit: which is to say, maybe I shouldn't be saving for retirement at all, instead taking advantage of what the world has to offer today zmcnulty fucked around with this message at 02:57 on Aug 8, 2011 |
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Aug 8, 2011 02:46
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Saint Fu posted:This is true. You have to have at least as much taxable income as you contribute to an IRA. Not exactly. If you make enough money overseas then you're over the Foreign Earned Income Exclusion (FEIE). Think it's $95K or so for 2011. Thus subject to both US taxes and taxes where you live. Anything you make over the FEIE is considered "taxable income" by the US so you are eligible to contribute to an IRA (maybe). A few problems: -With the Roth there's an extremely small window: if you make enough that you can contribute to a Roth IRA from overseas after FEIE, chances are you make too much to contribute to a Roth IRA (since it starts phasing out at like $105K) -With the traditional, if your employer provides a retirement plan, you are not eligible to make tax-deductible contributions if your income exceeds $66K. So here too you're probably hosed -- if you're making enough to be over FEIE, and you're not self-employed, your company probably provides a retirement plan. http://taxes.about.com/od/retirementtaxes/qt/Individual-Retirement-Accounts-For-Americans-Working-Abroad.htm zmcnulty fucked around with this message at 06:39 on Aug 11, 2011 |
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Aug 11, 2011 06:30
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Yes, that's correct.
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Aug 11, 2011 08:32
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waloo posted:Given that I have basically zero AGI on account of living abroad, is there any special thing that I should be looking at instead? What other gotchas might I be missing on account of being abroad? There's the "kick in the rear end tax," part of the HEART Act, if you ever try to expatriate and have significant assets ($2MM or average income of $139k/year for past 5 years). IRS basically assumes you expatriate for tax avoidance... and they're probably right.
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Aug 15, 2011 08:37
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waloo posted:Haha thanks for the reply and it seems I certainly don't have those to worry about, neither having that much money nor planning to expatriate. Sorry for the late reply. First you can look into domestic options if your employer isn't offering anything. Here in Japan, paying into the national pension system is required by law. Personally I don't consider that "retirement savings" since I'm 90% sure I will never see that money: the future of the Japanese economy isn't so bright. But hopefully where you live things are better. IRAs and Roth IRAs simply don't exist here, but I think there's something equivalent in the UK? And so I would assume a lot of the Commonwealth has similar options. The point is to reduce your taxation as much as possible. Apart from that, yes, my plan is to buy some indexes and hold indefinitely  On the (very) negative side, it's a regular investment account so taxed as a regular account. On the plus side, there are no penalties for early withdrawal so it's more liquid than a IRA/401k. zmcnulty fucked around with this message at 09:22 on Aug 23, 2011 |
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Aug 23, 2011 09:17
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Suppose you were considering going to get an MBA, estimated cost $200K. Your current retirement savings is $120K you contribute at least $25K per year (more depending on bonus, but zero employer matching). Would you: A) Continue saving then take everything out of retirement savings to fund the MBA, because it's a regular investment account (e.g. not IRA) and there are no penalties for early withdrawal B) Keep your retirement money and go into debt for the $200K, under the assumption that whatever job you get after the MBA will enable you to pay down the debt fairly quickly C) Do neither because why the hell get an MBA when you can already contribute +$25K/year to retirement I can get into more specifics about my situation if required but figured it's a fairly broad question anyway. Does this just boil down to what returns I can expect on my current savings vs. what rate I can get a student loan at? I feel like I'm missing something. zmcnulty fucked around with this message at 06:08 on Aug 21, 2012 |
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Aug 21, 2012 06:06
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I am 27. I just figured $200k would cover tuition, books, living expenses, etc. over the course of the 2 years. Depending on what school I goto, cost of living won't be cheap either. Columbia for example estimates $90K per year. Yes I am planning on shooting for a top 5 school. Not sure what my chances are (besides "low") but just applying won't hurt. My undergrad was also business. zmcnulty fucked around with this message at 23:50 on Aug 21, 2012 |
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Aug 21, 2012 23:47
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jayd42 posted:When do you start indexing a monkey? Let's say I start a new index, the Z-Monkey Index, tracking the market cap of 100 companies specializing in monkeys and monkey-related industries. Z-Monkey Asset Management decides to buy and hold every publicly available stock of these 100 companies, and will buy and hold 100% of new issuances of all these companies forever. Z-Monkey Asset Management then goes and decides to market the Z-Monkey Index Fund to investors, 100% invested in the Z-Monkey Index. This is your scenario. Which part is realistic and merits further discussion?
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Nov 2, 2012 04:11
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I'm interested in this as well since I already have $$$ in VFIFX in a taxable account, but really no understanding of the tax complications. I am maybe selling it all relatively soon to fund an MBA. Some links I've come up with: http://www.early-retirement.org/forums/f30/vanguard-funds-for-someone-in-late-20s-taxable-account-34615.html https://personal.vanguard.com/us/funds/snapshot?FundId=0127&FundIntExt=INT http://www.getrichslowly.org/forum/viewtopic.php?f=2&t=45522 https://personal.vanguard.com/us/insights/taxcenter/taxable-accounts Most people seem to be saying that 1) equities are better for taxable accounts, 2) fund-of-funds don't get foreign tax deductions like index funds, so it's better to use index funds and 3) depending on your age you may not want to be 100% equity, so if you have any tax-sheltered options use those to invest in bonds No idea which of those are correct, if any. Hopefully I'm not too screwed.
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Jan 9, 2013 05:51
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I took the YLLS approach to retirement savings ("do whatever"), and as a result I currently have most of it in Vanguard Target 2050. I do not qualify for any tax-advantaged accounts, my 401k setup is rather useless (the fund selection is pure poo poo) and I already maxed it out, and I never expect to see a single dime back from the government pension program I pay into right now. Then there are some stocks I have in my old company. So my situation is sorta non-standard. So given that I cannot take advantage of IRAs and the like, what would you suggest I get into? I heard that the Target funds are not good for non tax-advantaged usage. So what is better (preferably something through Vanguard)? Currently I contribute about $30k a year.
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Sep 17, 2014 02:32
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