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I am eligible for a 403(b) at my current employer (without matching funds), though all the fund options are limited to various TIAA-CREF options. Does anyone have experience with them? The expense ratios are much higher than I would pay at Vanguard, for example 0.42% for a fund that tracks the total market, or 0.74-0.92% (Im unsure what, or how a "fee waiver" would work) for a lifecycle fund. There are also other options such as guaranteed annuities or bonds, but I feel I'm young enough (30) to take on the risk/reward of equity based investments. I'm assuming the tax advantages to putting money in a 403(b) outweigh the lower expense ratios I would pay by investing somewhere better in a taxable account. My IRA contribution is maxed for this year (at Vanguard), and I already have plenty of money saved for an emergency fund. Thoughts?
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Sep 5, 2013 01:01
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DACK FAYDEN posted:I'm young, I'm aggressive, and I want to open a Roth IRA. Obviously just going to walk over to Vanguard, but does anyone have a specific recommendation for a mix of funds? I could just shove it into Target Retirement 2060 and sit on an actual decision until later, but wondering if there's any particular reason to micromanage myself. Target retirement is an easy set it and forget it thing, but if you have a large amount of money, you can get lower fees with Vanguard's admiral-class shares (with minimum investments starting at $10k and up). You can mimic the Target Retirement fund mix with overall lower fees if you have enough money, and are willing to rebalance every year or two yourself. Here's a few links for other ideas: http://www.bogleheads.org/wiki/Three-fund_portfolio http://www.bogleheads.org/wiki/Lazy_portfolios http://www.bogleheads.org/wiki/Asset_allocation
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Sep 10, 2013 05:24
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The Big Jesus posted:So I got a job offer this week and need some help here. I can join as either w2 or 1099. With the w2, I'd have to do a Simple IRA. This means I can only sock away 13.5 in that. Do I also lose the ability to do regular IRA contribution of 6k with this? Since no one answered last page: yes, you can contribute to a SIMPLE and an individual IRA (traditional or Roth) both at their maximum limits (13.5k and 6k, respectively). There are limits to the tax deductions you can take via a traditional IRA if you are higher income, though (see: https://www.irs.gov/retirement-plan...nt-plan-at-work).
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Jul 5, 2021 07:22
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Yes, Vanguard is good because their funds have some of the lowest costs in the industry, and the company is owned by its funds (so, you, as an investor, own the company, not some external shareholders who'd be incentivized to squeeze you for every penny and % they could get away with). Its also boring, which is a good thing for an investment company.
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Jul 7, 2021 03:06
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Yeah, you can do perfectly fine with Fidelity or Schwab funds or whatever, they just mix in good low fee options, with less good, higher fee options. Here's a guide for creating a three-fund portfolio at numerous brokerages: https://www.bogleheads.org/wiki/Three-fund_portfolio#Choosing_three_funds
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Jul 7, 2021 03:55
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Are you still effectively in the UK as far as access to financial markets and taxes? If so, you might want to take a look here: https://www.bogleheads.org/wiki/Investing_from_the_UK The site is mostly geared towards US folks, but that article is geared towards UK investors.
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Aug 18, 2021 03:42
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I bonds "on track" to go to 6.5% Nov 1? https://tipswatch.com/2021/09/14/august-inflation-what-it-means-for-social-security-cola-i-bonds-and-tips/ I cant comment on this source, but if its true - this is worth many if not most people attempting to maximize this year and next (within limits of available income and/or ability to move other assets, of course).
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Sep 16, 2021 04:15
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If you buy them now, I believe they get the current interest for the first 6 months, then adjust to the current rate at the time for the next 6 months, etc. If you buy them Nov 1 up to the end of April they get the new rate for the first 6 months, then the same type of adjustment each 6 months. https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm#infl Depending on how long you think you'll hold them, you may want to wait until November. But, everyone gets every current and new rate for 6 months, so long term it doesnt matter much. The current rate is about 3.5% which is already good for a fixed income investment with no credit or interest rate risk. edit: The only reason I can think you'd want to wait until November is if you only plan to hold them the minimum one year period and you think the interest rate adjustment next May 1 will be higher than the current 3.5%. drk fucked around with this message at 06:08 on Sep 16, 2021 |
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Sep 16, 2021 05:55
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thechosenone posted:Thank you for the reminder. Will return to normal behavior of barely paying attention to my accounts. C fund has higher average returns in the past 10 years than the other equity funds (S, I), but that doesn't necessarily mean anything going forward. There is a reasonable argument that large US stocks are overvalued and international has higher expected returns over the next 5 or 10 years, but again, its impossible to know what will actually happen.
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Sep 17, 2021 00:29
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Personally I just pick a fixed amount of my assets that will be international and stick with it. I dont have access to those funds myself, but I think if you wanted to get the sort of portfolio that is often recommended, it might be something like this for the Equity portion: 55% C fund (Large US equity, basically SP500) 15% S fund (Small and Mid cap US equity) 30% I fund (International equity) This is split 70/30 Domestic/International. The split between C and S roughly approximates market weight of SP500 vs everything else in the US market.
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Sep 17, 2021 00:54
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moana posted:There's a reason every single fund prospectus includes the words "Past performance does not guarantee future results." This can be hard to intuitively understand, but I like this chart for understanding what that looks like: https://www.bogleheads.org/wiki/Callan_periodic_table_of_investment_returns
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Sep 17, 2021 03:54
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XSOE seems like a weird gimmick. If you really want to tilt emerging markets, why not just go with VWO? 0.10% ER, and quite similar holdings. I cant personally justify tilts to myself, and I'm certainly not recommending you do unless its just play money.
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Sep 17, 2021 04:18
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everdave posted:I now have access to the $6k i deposited into Vanguard (Roth IRA). I took the asset quiz and it told me 60% stocks, 40% bonds. But it does not allocate that for me. How do I do that in the best way? It is not immediately clear to me. The easiest way is to put it all into LifeStrategy Moderate Growth Fund, which is a 60/40 fund, and is also split between domestic and international. If you want more, less, or no international exposure, you'll have to do the math yourself to determine how to split your funds. However, if you buy individual funds, you will need to rebalance them yourself (easy enough to do with a spreadsheet, but its more than zero work). IRAs limits are based on calendar years, so Jan 1. The only small exception to that is that I believe you can contribute to a previous year's IRA up until tax day.
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Sep 17, 2021 18:07
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nwin posted:Setting up my stay-at-home wife with an IRA. An IRA requires earned income, but I think a working spouse can contribute to a non-working spouses IRA (I'm not married and not a tax person, make sure you understand this before you do anything). Traditional vs Roth is mostly a matter of your current income and taxes. I have a Roth since my work based retirement account is a non-Roth, so tax savings would be minimal by adding another "traditional" retirement account. If you are very high income / high tax, your decision might be different.
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Sep 17, 2021 18:15
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everdave posted:OK - last question - it was a bit tricky but I moved all 6k to: LifeStrategy Moderate Growth - New fund $6,000.0 You're good! The greatest thing about those all-in-one funds is that they are self rebalancing. Asset allocations are ideally meant to be set and forget, or only slowly adjusted over time. A 60/40 split is a fairly classic balance between growth (from the stocks) and stability (from the bonds). If 5 or 10 years from now you decide you would like a little more, or a little less risk, you can shift into something with a different allocation.
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Sep 18, 2021 00:10
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Banana Canada posted:Got a friend who has just retired and I wanted to send him some resources on budgeting and investing for retirees. As all of my reading on this subject has been for someone who is still working and saving, I haven't read much in the way of how a recent retiree should manage their assets. That's really going to depend on how old he is, how much money he has and how much money he needs to withdraw from investments each year. A very basic rule of thumb is that one should be able to spend 4% of their assets per year for a 30 year retirement with little risk of running out of money. Asset allocation is its own question. Ideally retirees wont be in a very risky portfolio, but again - the numbers matter (if you have substantial assets, its easier to justify taking risk in retirement than if you dont).
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Sep 18, 2021 00:23
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SpartanIvy posted:Thank you. These insights are what I was thinking and I appreciate you giving me some important areas to look at closer to build my case for Vanguard funds. You could also consider VTINX (Vanguard's Target Retirement Income fund), if capital preservation is a big concern. Its about 30% stocks and 70% fixed income (including a portion that is "inflation-protected"). Expense ratios really are a big thing, and it should be simple to calculate how much is being lost to fees for different types of investments. At $1M, 1% is $10k per year, every year (money which additionally does not have the opportunity to compound its returns each year).
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Sep 19, 2021 22:51
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Residency Evil posted:On another topic, our current asset allocation is as follows: I've never been convinced of the case for tilts. That being said, I'd sooner tilt small or value than REIT (at least in a taxable account). REIT dividend distributions are taxed at your normal marginal tax rate, unlike other equity dividends (which are taxed at long term cap gains rates after being held for a year or longer).
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Sep 21, 2021 18:13
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Residency Evil posted:Yeah, as much as it pains me to say it, savings account at Ally is where our downpayment money is sitting right now. I-bonds are fine but not very useful as you're limited to 10k/year. $20k/year if you're married, and we're only a few months from 2022, so $40k total in a short period of time. At the current rate of 3.5%, that's $300 more a year for each $10k invested compared to a 0.5% savings account. That's not insignificant with a potential $40k investment. Interest adjusts every 6 months, but signs are pointing to it going up for the next 6 month period, not down.
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Sep 22, 2021 00:12
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Sure, savings is fine. But I dont know that 2.5-3 years is "extreme short term". We're talking about a difference of at least $1000 in interest based on current rates. The only risk would be that inflation goes to 0 (or negative) at the same time that savings rates go through the roof. Even then, you can withdraw I bonds at 12 months with a small penalty.
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Sep 22, 2021 00:41
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SSDQX looks good if you want a 2055 target date (suggesting you intend to work another ~35 years). 0.09% would be inclusive of all the fees in the underlying funds. There are probably other options if 2055 sounds like the wrong year.
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Sep 22, 2021 05:28
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Pham Nuwen posted:I'm in a good position right now where both my wife and I have pretty good jobs and few expenses, so we're saving a big chunk of our income. Does your employer have any retirement account options? If not, can you convince them to add one? I work for a very small company that had no retirement options when I joined, but I convinced them to give us a Simple IRA. They are easy to set up and dont have fees (though your employer may be required to give a small matching contribution). If not, I'd say investing in a taxable investment account is the right move. I Bonds are also quite nice right now, but thats only because inflation happens to be high (the fixed portion is 0%).
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Sep 23, 2021 22:03
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Pham Nuwen posted:I'll ask about a SIMPLE IRA, I wasn't aware of that. It's a startup and we're juuuust getting to the point where we probably ought to get some retirement options in place. Can you contribute to both a SIMPLE and a traditional IRA? Limits are here: https://www.irs.gov/retirement-plan...nt-plan-at-work Your wife's 401k may already preclude you from taking deductions on a traditional IRA. You should definitely make sure you understand your current tax situation. The way I read it your best plan would be to max out your wifes 401k and some type of retirement plan through your work if you have a high AGI that precludes you from taking advantage of individual traditional or Roth IRAs. After that, it would be taxable investments.
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Sep 23, 2021 22:49
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cheese eats mouse posted:Can someone add to the OP Vanguard customer service has gone in the shitter and to reconsider opening with them. I have been trying to reach a CS rep for 1hr and this is not the first time I have gone through this experience. Their form they want you fill out to transfer/rollover money out does not work. I've never understood why someone would want to roll money into an employer based retirement account. Its obviously too late now, but I dont know why you wouldnt just manage the money as an IRA.
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Oct 27, 2021 01:24
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Anyone who hasn't maxed I Bonds this year would be advised to do so ASAP if they have money in anything lower yielding over the next year (such as savings accounts or bond funds in a taxable account, etc). Current rate is ~7.1%. Worst case scenario inflation goes to 0% or less during your second 6 month period and you withdraw with a 1 year return of ~3.5%. If inflation remains above average, this will almost certainly outperform almost any nominal bond fund for at least a year, and is 100% treasury. Must hold for at least a year, though.
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Dec 28, 2021 04:26
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Residency Evil posted:Yearly rebalancing: complete. The cool way to do it is to pay someone 1.5% a year to do it in a spreadsheet for you. On a more serious note, I also just use a spreadsheet but am only really balancing a single taxable account - both of my retirement accounts are just in a single target date fund. The way my spreadsheet is setup automatically pulls prices from google finance, so the only thing to do is make sure the share counts are updated and it can calculate things like where to allocate new money or how to rebalance.
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Dec 28, 2021 17:36
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runawayturtles posted:Yeah, too late. And you've probably seen this mentioned before, but don't get it notarized, that's not sufficient. It needs a medallion or signature guarantee. My credit union did this for me earlier this year at no charge and with very little hassle (took 5-10 minutes, no appointment needed). I have heard that some banks or branches wont do this even for their own customers, or wont know what you're asking for so you might want to call ahead.
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Dec 29, 2021 00:42
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Atahualpa posted:Some more questions about I bonds: The answer to both of these questions is that the interest accrues with a 3 month delay for the first 5 years (so for example, at year 1 you'd see 9 months of interest credited to the bond). The value you see on treasury direct is always the value you'd get to withdraw immediately for this reason.
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Dec 30, 2021 06:28
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As someone who recently went through an estate plan with all sort of ridiculous provisions, I'd suggest: Estate Planning: Sorry, the mineral rights to my condo are per stirpes
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Jan 1, 2022 02:18
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The Puppy Bowl posted:New year, new contributions. Last year, two weeks ago, I put all 6,000 in VTSAX. We're up $40! Now I'm thinking about how best to expose myself to the international and bond markets. As a new investor I was attracted to the idea of broadly following Berstein's recommendations in "If You Can" and dumping 3,000 (the minimum investment) in Vanguard's total bond and international market funds. Thing is, I'm already 10k into I-bonds, and since I'd get another 4 months of the 7.12% at a minimum I was thinking of buying up more of that instead. That doesn't put me in the bond market as much as in I-bonds but that feels okay with that kind of guaranteed return. I can always pull out after a year and invest elsewhere if the rate drops substantially and only at the cost of 3 month's interest at the lower rate. Then the question becomes what to do with that additional 3,000 of space in my IRA. The pull against balance is very hard to resist. You can buy ETFs in an IRA if the $3000 minimum on the mutual funds is a problem. At least, I can in mine.
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Jan 1, 2022 21:57
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The Puppy Bowl posted:33. So yeah, I know the typical retirement date fund would have me fully out of the bonds market. I've got time to make up as well since my retirement investment has been sporadic thus far. Only amounts to like 30 k at the moment, minus my newly created IRA. I'm just so drat risk averse. Were we could revive the good old days of defined benefit. If you've got a ton of bonds already, I wouldn't personally put more in an IRA. I think at 33, somewhere between 10-30% bonds is appropriate. If you are really risk averse 40 or 50% bonds might be more appropriate, but keep in mind bond funds right now dont yield much. That being said, you're relatively young - a major drop in the market is virtually guaranteed in your investing lifetime, probably many times. It could be next week or it could be 10 years from now. Over the long term, having a diversified equity allocation is a good idea. My opinion is something like 70-90% equity for someone your age, with 10-50% of the equity being international. Asset allocation is personal though - find something that works for you and stick to it.
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Jan 1, 2022 23:43
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Ramrod Hotshot posted:Time to plunk down another $6k on my Roth IRA. My Roth is currently entirely invested in a target date fund, but I won't be putting any more into those. In fact I'm considering selling it for more index funds. But as for the 6k in cash I'm adding to my Roth - all of my current index funds in retirement savings are large cap domestic and international funds. Should I bother with diversifying them with small/mid cap funds? Small and midcap is 10 and 20% of the overall market, respectively. Unless you are intentionally tilting to large, it makes sense to hold them at market weight. If you are currently holding an SP500 fund, there are "extended market" funds that pair well as they are essentially everything but SP500. Probably easier to just buy a total market fund though if you want to hold everything at market weight.
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Jan 2, 2022 07:08
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smackfu posted:It's not a scam per se but most of them are not "invest in good companies" but rather "do not invest in bad companies." And there are very few bad companies. Yeah, I think a lot of ESG funds are "total market index minus tobacco, firearms, gambling and nuclear power", or some variation on that theme. Its not exactly a scam, but it is misleading.
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Jan 2, 2022 22:27
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PopZeus posted:VIGAX growth index funds 53% That VSEQX mid-small blend is a weird tilt too. If you cant sell all of what you have without paying a hefty tax bill, at least turn off any reinvestment into that stuff. pmchem posted:If you want ETFs instead of mutual funds and no bonds, something like 65% VTI (or VOO for S&P 500) and 35% VEA (or VXUS if you also want emerging markets) gets you broad, worldwide, market weight index exposure to equities. This is good advice.
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Jan 4, 2022 00:23
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Mr.Fuzzywig posted:I'm just now in a position where i can think about starting to really sock away some cash. 31 and i can max out my 401k, is the advice in the OP still sound? In that you should open a Roth IRA and max that as well? If you have other tax advantaged accounts you want to contribute to like a HSA, or 529 plan you could contribute to those. Otherwise, open a taxable investment account.
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Jan 4, 2022 06:25
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moana posted:Retirement before 529 always and forever Mr.Fuzzywig posted:after a maxing out a 401k and IRA
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Jan 4, 2022 06:40
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Space Fish posted:Yeah, bonds go down due to rates flattening, and they also go down when rates go up. So right now, with rates at 0... they can still only go down. The federal funds rate is near zero, but that doesnt make bond yields zero. If you are holding bonds with an appropriate duration, yields going up is a good thing. Yes, prices go down in the short term, but over time the increased interest payments more than make up for it. There's a good bogleheads thread with graphs about this, Just watch out for duration mismatch. If you are saving money for a purchase in 1-2 years by holding a bond fund with a 10 year average duration, you are exposing yourself to interest rate risk. If you're holding the same fund in a retirement account you wont touch for 30 years, just ignore the short term noise, you'll be fine. edit: here's the thread with the graphs: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=360575 drk fucked around with this message at 21:18 on Jan 4, 2022 |
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Jan 4, 2022 20:51
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H110Hawk posted:FINE thread I bought some ibonds today. (Well, initiated yesterday.) No Medallion needed. YOU WIN. If you delete autocomplete="off" and readonly="readonly", my password manager will just autofill it. Just right click the password field and say "Inspect" in Firefox to make this change. This is especially nice if you have a long, complex password. MJP posted:Oh yikes, 7% until April '22? That's not a bad "what do I do with this for a year" idea. ~7.1% for the first 6 months on anything bought through the end of April. If you bought today it would be Jan-Jun.
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Jan 6, 2022 03:28
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Easychair Bootson posted:I have about $12k more than we (me + wife) need in liquid cash/savings. Most of it is in the form of "truck replacement fund" but that's going to be 2023 or later. All of this I-Bond talk had me sold on that, but then I thought I could take that $12k and max our 2022 Roth contributions now, in January, versus contributing $1000/mo throughout the year. I'd effectively be at "rule 4" on my Roth contributions, for all you old-school YNABers. Am I a chump if I'm not maxing our Roths at the beginning of the year? Or is that I-Bond rate just too good to pass up (understanding that it's variable)? In general "time in the market beats timing the market", so maxing out your IRA contributions as early as possible is good. But, if you have a known expense coming up at least a year out, setting aside the money for it into I Bonds certainly seems like a reasonable idea to me.
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Jan 6, 2022 04:34
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Valicious posted:Need some advice on Roth IRA portfolio. I’ve been doing a ton of reading on different funds, but I’d like other opinions. If I understand correctly, you want to shift out of your US/International total market holdings (VTI/VXUS) completely into value funds (AVLV/AVIV)? Granted, Avantis has a rather non conventional definition of value that includes large growth tech companies like Apple/Meta/Microsoft. I like value too, but as a tilt, not 100% of my whole portfolio. Also these Avantis funds are all very new (the oldest is from 2019), so I wouldnt read into their recent outperformance too much.
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Jan 6, 2022 20:26
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