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I've got some free time coming up in the near future and my goal is to actually learn how to invest for the long term. Are the books in the OP still the best ones to read?
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Sep 24, 2011 03:44
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So I just set up a fidelity investment account for their credit card and just got access to a 401k that an old internship had set up for me a few years back. There's only $200 in it, but hey, money's money. Would there be any disadvantage to rolling it in to a Roth IRA just for the hell of it? I'm in my last year of med school so I don't have a retirement account set up yet and I won't be in residency until next June. Is there a limit to the number of Roth IRAs you can have? Should I just not worry about it?
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Oct 7, 2011 18:06
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Posting here since it seems like a better fit. Are Schwab's maintenance fees and such as cheap as Vanguard's? IE: is there any advantage to using Vanguard over Schwab for the long term? Bogleheads is big on vanguard but can I put together a similar portfolio based on index-funds/bond funds with fees as low as Vanguard's on Schwab?
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Nov 19, 2011 22:36
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Thanks for the help guys. I'll know what my financial situation's going to be like a lot better after March 16th. I'll post some hilarious loan balances then too.
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Nov 22, 2011 04:56
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Question on behalf of a friend of mine. He and his wife are both starting 3 year military residency programs. The pay in the military programs is much better than in the civilian equivalents, and there's a chance that they'll be bumping up against the cap for Roth IRAs in the next 1-2 years, and definitely after they finish in 3. Is there much point in him opening up a Roth IRA in the first place, or should he stick to a traditional IRA?
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Jan 16, 2012 17:53
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80k posted:Does he have access to the Thrift Savings Plan? If so, that is a great option and you would not need to worry about contribution limits on Roth or deductibility of Traditional. And the TSP is just as good if not better than a Vanguard IRA account. The expense ratios are the lowest available and the G fund is a good bond fund replacement. Yup, he says he has access to a TSP. When he mentioned it I asked him if there was some sort of matching along with it and he said he'd find out. I'm not familiar with TSPs: are they the equivalent of a military 401k?
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Jan 16, 2012 19:41
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80k posted:Yea, it is. And even with no matching, the TSP is a great way to go because it has the lowest expense ratios available. For my own knowledge, wouldn't a Roth IRA still make sense in that a physician is almost guaranteed to be in a higher income bracket in the future, and the money earned during residency put into the Roth would be taxed at a lower tax rate? (Assuming TSP is pretax)
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Jan 16, 2012 19:46
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80k posted:Sure but I thought he was hitting the limit for Roths. Sorry, should have been clearer. He's going to hit the limit very quickly, so the Roth will only be an option for the first year or two. Still, it sounds like they should go Roth then TSP until they can, and after just TSP?
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Jan 16, 2012 20:06
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We had a Financial Advisor come in to talk to my med school about long term financial planning. I was actually extremely impressed by the guy. Although my knowledge is pretty much limited to The Boglehead Guide and The Four Pillars, the basics of everything he said seemed to gel with what I've read as far as portfolio allocation being the most important thing, not to buy individual stocks, not to buy a house too early, staying away from exotic vehicles, and that debt comes before everything. He could have spent some more time talking about active/passive funds and making sure fees are low, but he did put a plug in for Vanguard/Fidelity and "The Millionaire Next Door" so he seemed like an ok guy. A question: he mentioned that he only dealt with accounts that had $1M+ in assets and charged 1%/year, but that he did do fee-only advising for some clients and said this usually ran about $1k-1.5k. That seems high, but is that unreasonable?
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Feb 29, 2012 04:37
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Harry posted:Depends what he does. Keep in mind, that a lot of these financial planners/wealth management guys don't only deal with investments, but also tax/estate planning. It's great that you're earning that 10%, but if you're paying 35% in taxes there goes a a decent amount of your gains. I understand this, but isn't 1%/year going to be huge over 30 years+? Definitely more so than just hiring a CPA?
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Feb 29, 2012 22:03
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Ravarek posted:Yes, a 1%/year asset management fee can really zap the value of your portfolio over a long period of time. Unfortunately, most (probably 90%) of financial planners and asset management companies will charge similar rates. Of course, if you are wealthy (say, a net worth of 20 million) then you could expect a far lower asset management rate since everybody will be fighting over you and your sweet-rear end money. I see this mentioned a bunch, but what's the level of "wealthy" where it makes sense to get an advisor for that charges 1%? $5M? $20M? If an account does get to that level why stop doing what's working? Is it just to get access to investment vehicles that are only available at that level? How likely are those to outperform the global 1% upfront loss you're taking?
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Mar 1, 2012 02:02
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Not sure where the best place to put this is but it might as well be here. I have approximately 150k in federal student loans at approximately 6.8%. I'm currently in my first year of residency and earning 53k/year. Residency will be 5 years, although it's possible but unlikely I'll do an extra year or two. I applied for and got approved for IBR using my 53k/year income that I started earning at the end of June, however I've heard that I can appeal and provide documentation that I'm only earning half of that for the 2012 tax year (since I only began working in June) which would decrease/eliminate my payments for a year. Would it be a silly idea to do that and use the extra ~500/month to repay the other ~50k or so of debt I have, between 1%-5%? The other bright side of this would be to delay my debt repayment for another year under IBR, potentially allowing more debt to be forgiven if I end up doing PSLF.
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Aug 16, 2012 22:31
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Residency Evil posted:Not sure where the best place to put this is but it might as well be here. I have approximately 150k in federal student loans at approximately 6.8%. I'm currently in my first year of residency and earning 53k/year. Residency will be 5 years, although it's possible but unlikely I'll do an extra year or two. I applied for and got approved for IBR using my 53k/year income that I started earning at the end of June, however I've heard that I can appeal and provide documentation that I'm only earning half of that for the 2012 tax year (since I only began working in June) which would decrease/eliminate my payments for a year. Would it be a silly idea to do that and use the extra ~500/month to repay the other ~50k or so of debt I have, between 1%-5%? The other bright side of this would be to delay my debt repayment for another year under IBR, potentially allowing more debt to be forgiven if I end up doing PSLF. Wrong place to ask this?
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Aug 18, 2012 17:45
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Here's my current loan situation: Federal loans: $170k at 6.8%, currently in income based repayment at paying $80/month. Alumni foundation loan: 11k left at 5%, paying $300/month on this Medical foundation loan: 14k, in forbearance for the next 3.5 years, at 3% Foundation loan: 17.5k left, currently paying a minimal amount on the principal each month plus the 5% interest each year as required. Car loan: 8k left at 2%, car is a 2010 VW GTI with 44k miles, worth about 15-16k, paying $280/month. I currently earn 56k/year, will go up to 58k/year in July. I have 7k in savings, and save a $400 each month for my rainy day/emergency fund. I'm 27, single, unmarried (dating, but not going to get married soon), and have no kids. I have 3.5 years until my income will go up significantly to at least 200k/year and then up from there. My emergency fund is now at a point where it would cover me for 3 months at a minimum, although in the worst case I could get my parents to help out if I really needed to, and I do have some disability insurance through my hospital. My question is what I should do with extra money if I have it. I could put it in to my loan payments, or I could put it towards a Roth while I'm able to. I wasn't planning on any investing until I finished residency because I figured it wasn't worth the trouble over the guaranteed percentage on my loans, but was wondering if anyone had any advice. Also, if I were to make extra loan payments, what's the thought on putting them towards my highest "normal" loans at 5% versus putting them towards my car at 2%? Residency Evil fucked around with this message at 22:37 on Jan 11, 2014 |
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Jan 11, 2014 21:27
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No worries on the savings. With regards to now though, with the 401k off as my hospital doesn't have any sort of match for residents, is there any thinking about paying off the 5% loan off faster versus paying off the car at 2%? It's only at 2%, but am I wrong in thinking it can be a better to pay an auto loan off first?
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Jan 11, 2014 22:44
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INTJ Mastermind posted:So I'm a PGY-1 with about $140k of federal loans at 6.8% so similar to your position except without the private loans. Income is about $3300 monthly post tax. I'm contributing $500 monthly to my ROTH IRA and making the minimum IBR payments of about $300 a month. The rest goes into my savings / emergency fund. Yeah, I've considered this as well. My rationale is that the money we contribute to a Roth right now ($5500/year max) is a pittance compared to 50k/year+, so I might as well save myself the hassle and take the guaranteed return of paying off the loan. I don't think there's a right or wrong here, as in the end the difference in returns is going to be minimal.
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Jan 13, 2014 15:31
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Yearly check to make sure I'm not crazy: I'm 28 and currently earning about 60k/year. I just paid off my car fully but still have a hilarious amount of student loan debt (200k or so) and no savings beyond an emergency fund. Most of it is via federal loans at 6.8%, but I also have some loan debt that was at 0% for a few years before going up to 5%. Here are my non-federal loans that remain: 10k at 5% 13k at 5% 17k at 5% I'm paying all of these down while also paying down my federal loans. I'm going to have the opportunity to do some sporadic contract-type work for $1500/day in the next few months that will become more regular next year and my income should go up significantly in 2017. Until then, should I: 1. Continue to pay off my non-federal loans at 5% 2. Open a Roth IRA and invest while I'm still eligible (No retirement/match through my current job) 3. ??? Residency Evil fucked around with this message at 06:02 on Dec 12, 2014 |
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Dec 12, 2014 06:00
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Yet there are still people talking about pulling their 401ks completely out of the market. 
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Aug 24, 2015 01:18
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This downturn is finally the kick that's making me open a Roth while I can. I have a feeling the vanguard rep is going to hate me for doing it today.
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Aug 24, 2015 14:56
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Posting this for my sister, who's 26 years old. Income: 70k/year Debt: 20k student loans @ 4-7%, although my dad has offered to pay it off for her and pay him back. Cash: 20k in savings 18k in checking Retirement: Fully maxing out her 100%, 6% match 17k in a TRRNX, a T. Rowe Price Target retirement plan for 2055, 90% stocks/10% bonds, if anyone's familiar with it. 0.76% ER The right thing to do for her would be to max out a Roth IRA as the next step, right? I was thinking of making things as painless as possible for her and: 1. Having her invest in the corresponding Vanguard 2055 retirement fund with the Roth money 2. Putting extra cash in the 401k. Is that the best way forward for her? She does have access to a few funds in her 401k, including a vanguard institutional index fund, which tracks the S&P and has an ER of 0.04% Don't see too many other options, as most everything else has a fee of over 1%. Residency Evil fucked around with this message at 02:47 on Aug 31, 2015 |
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Aug 31, 2015 02:43
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There's no reason she has 38k sitting around other than me not telling her what to do with it. Regarding the student loan, looks like my dad is offering to pay it off/loan her money at 1%, so either way that'll get taken care of. Her only low cost 401k option is VINIX, which seems like a pretty solid option @ 0.04%. If we push her 401k in to that fund, we'd need to find something on vanguard for some additional stocks (maybe international) and bonds, right? I'm trying to keep things fairly simple for her so she only has to worry about a couple times per year for rebalancing.
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Aug 31, 2015 03:32
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How reasonable does this sound for her? 90% stock(80% domestic, 20% international)/10% bond Roth IRA: 10% VBMFX (Total Bonds) 18% VGTSX (International) 14% VEXMX (Extended Market) 401k: 58% VINIX (S&P 500) The one thing I'm confused about is how to factor in the 401k in the rebalancing, as she can't transfer funds from the 401k to her Roth.
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Aug 31, 2015 03:57
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Fancy_Lad posted:How bad are the bonds, international, and extended us options in her 401k? Are we talking like .3% APR, >1% with front load, nonexistent options, or what? Bond options: Metropolitan West Total Return Bond Fund (Class I) MWTIX: 0.44% International: Fidelity Diversified International: 0.91% annual, 1% redemption fee Extended US: Voya Small cap: 1.18% Wells Fargo Advantage Enterprise Fund (Admin): 1.16% AB Discovery Value Fund: 0.81%
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Aug 31, 2015 04:26
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Residency Evil posted:How reasonable does this sound for her? Residency Evil posted:Kind of lovely, it looks like. The lowest options: Just so we're clear, this seems reasonable, right? Transitioning her 401k funds in to the S&P fund and using the Roth IRA to balance out with an extended market, international, and bond funds?
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Aug 31, 2015 17:25
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GoGoGadgetChris posted:How are you managing to get 42% in the IRA? That would require her to max out the $5,500 in the IRA but only contribute $7,500 to the 401k. Ah drat, you're right. How about one of these options: 1. Continue matching in to the 401k using the target date fund that's diversified (0.76 ER) and use the Roth to build a separate portfolio. 2. Just funnel all of the 401k in to the Vanguard S&P 500 fund, use the Roth to buy some bonds and additional stock market funds and just call it a day since she's 26. Honestly it all kind of seems kind of academic either way. She's been working for 3 years in LA after starting at 50k and has almost 60k saved. She's doing better than I am at 29.
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Aug 31, 2015 19:18
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Ronald McReagan posted:How long does she plan on staying with her current employer? Once she leaves, she can just roll all of her 401(k) money into her IRA and then actually invest it in whatever she wants. Unless she's looking to stay there for 20-30 years, the higher expense ratios aren't going to bite too hard. The bond fund in there isn't *too* bad, if I were her (and if I were at all likely to switch jobs within 5-7 years) I would probably use that for my bond allocation, plow as much as I could afford into the S&P 500 fund, and max out the IRA with VGTSX and not bother with VEXMX for now. With the contribution limit to an IRA being what it is, that money is going to be put to better use diversifying across the world market rather than just across the US market. Once she leaves her job, roll everything into the IRA and then take another look. That actually sounds pretty reasonable/simple for her. 90% in to stocks, split between the S&P 500 fund in the 401k and VGTSX in the Roth, then 10% in bonds in the 401k fund. She's been there for 3 years and not planning on staying on beyond an additional 2-3.
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Aug 31, 2015 20:00
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Is there anything special I have to do to have my extra 2016 Roth contribution count towards 2015?
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Feb 28, 2016 22:29
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Residency Evil posted:Is there anything special I have to do to have my extra 2016 Roth contribution count towards 2015? Is it just 5500-2015 contributions?
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Feb 29, 2016 14:05
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Trying to make sure I do my yearly sanity check. Current situation: 29, single, no kids. Still finishing up my training, but will start my first "real" job in 2017. 2015 Income: $101k 2015/early 2016 debt Status: Paid off $7k left on Car Paid off $12k student loan at 5% Paid off $15k student loan at 5% Savings: Fully funded 2015 Roth IRA Partially funded 2016 Roth IRA $15k in Capital One 360 Emergency Fund Debt: 160k student loan debt at 6.8% (in repayment on IBR, hoping for public service loan forgiveness) 17k student loan debt at 3% fixed (not eligible for IBR) 12k student loan debt at 2% fixed (not eligible for IBR) What should I focus on for 2016? My 2016 income should be similar/a bit higher as compared to my 2015 income, but it's tough to predict. I successfully paid off $27k in "high" interest student loans at 5% in 2015/early this year. Obviously I'll fully fund my Roth this year, but what should I do after that? I'm going to sit on my 2%/3% loan debt and pay the minimums on those. Depending on my job situation in 2017, there's a good chance my 160k @ 6.8% may qualify for loan forgiveness. My income will significantly rise starting in 2017 and I'll have to backdoor the Roth. Should I just pour my extra money in to a 403b even though I'm not eligible for matching? Finally buy disability insurance? Put it in my fun fund? Residency Evil fucked around with this message at 19:07 on Mar 23, 2016 |
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Mar 23, 2016 19:01
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EugeneJ posted:Where the hell is your salary going - do you live in a $3000/month condo or something? Well, the 101k was only for 2015: before that I was earning 50k/year. I also get minimal breaks as far as taxes go since this is from multiple jobs, I'm paying over $1k/month in student loans, $1.5k for my apartment, and trying to save/put away $1k/month. That plus paying off 35k in loans in a bit over a year seemed ok to me?
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Mar 23, 2016 20:22
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SiGmA_X posted:Taxes are the same from one or a dozen jobs. I think you're a contractor for some of them if I remember right, which does increase taxes. I think you're doing pretty good. All of us will know more next year when the first crop of PSLF applicants become eligible. Rumor has it is that the way the promissory note is written makes it pretty iron clad, but who knows. Eligible 501c3 jobs are a bit tricky to find, but non-eligible jobs generally pay (much) better, so PSLF on its own is not going to be a make-or-break it factor for me.
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Mar 23, 2016 21:02
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El_Elegante posted:RE do you moonlight like a motherfucker or what? Eh, here and there.
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Mar 24, 2016 01:02
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Quick question on backdoor roths: to do this I open a traditional ira, fund it, then convert it to a Roth IRA, correct? Is there a waiting period in between any of these steps? Is this something I can do over Vanguard's website or do I need to do it over the phone?
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Jan 6, 2017 12:15
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monster on a stick posted:Yes. There's a literal "convert to Roth" button on Vanguard's site. Make sure to convert all of it, no tax withholding. And remember first that you can't have any non-Roth IRA balances unless you want to pay taxes because of rules. Does the money have to sit in a money market fund (like VMMXX) for a few days? Will I have to fill out form 8606 come tax time? edit: How much of a pain in the dick is it going to be to figure out what to do with my Roth IRA contributions for 2016 once I figure out exactly how much past the income limit I am for the year?
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Jan 6, 2017 12:33
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monster on a stick posted:You can convert it as soon as the transaction hits and your Traditional IRA reports a $5500 balance in your settlement fund. There's no benefit to waiting, in fact you want to do it ASAP. Yes you'll need to fill out 8606. Gotcha. And yeah, I nudged up against the phase out in 2015 and didn't know exactly how much I'd make in 2016, so I just contributed the max, figuring I'd figure it out at tax time. I know I won't be close in 2017 so I'm doing it now.
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Jan 6, 2017 13:14
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Kind of a simple question, but if all of my income is going to be W-2 moving forward, as a single, unmarried person my maximum tax-advantaged retirement space is only 5.5k (IRA) + 18k (401k), correct? The rest has to go in regular accounts? When I married and my spouse works, it doubles, correct?
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Jan 7, 2017 20:33
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Star War Sex Parrot posted:I think you could start playing with backdoor Roth stuff to get more money into tax-advantaged vehicles, but I also don't understand those well enough to say for sure. Lots of discussion the last page or so though. I was counting the Backdoor Roth as part of the IRA. Can I open both a Roth IRA as well as an IRA for a total of 11k/year?
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Jan 7, 2017 20:46
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EAT FASTER!!!!!! posted:Find a high level job at a non-profit hospital where you're eligible for the bomb-rear end super-combo of the 403 (b) for up to $52,000 and a 457 for an additional $18,000 and then marry another physician at the same hospital for the patently absurd $140,000 of tax protected pre-tax and Roth money.  I need to figure out what my exact retirement plan is going to be, but hopefully it's this.
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Jan 7, 2017 21:10
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Chu020 posted:Awesome info. Thanks a ton dude, this is great.
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Jan 8, 2017 04:05
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Pie Colony posted:If you have access to a HSA I believe you can use it similarly w/ $3.4k/yr. I believe that only applies if you're enrolled in a High Deductible Plan?
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Jan 8, 2017 17:36
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