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Insane Totoro posted:Okay here's the deal. She is currently a long-term substitute. However if she was not asked to come back, she would just return to substitute teaching. I am not sure, but if you can't, you could roll that balance over into an IRA. There is little benefit to remain in a 403b or 401k plan once you leave a 'company' as you are only able to buy their funds and may be subject to other fees. Sounds like a call needs to be put into the schools 403b administrator or HR (do schools have HR?) to clarify that point.
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# ¿ Oct 26, 2011 18:09 |
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# ¿ May 15, 2024 18:52 |
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KennyG posted:American's as a population have no savings. You forget how retarded the unwashed masses really are. This fact has not gotten by me in the least. I'm speaking of the minority that actually do pay any attention to their finances, there is a very small section that actually do it intelligently and pragmatically.
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# ¿ Oct 26, 2011 19:45 |
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Tai-Pan posted:I think KennyG, are in agreement. You think people don't use calculators, I think more people than you guess actually do and they are getting confusing information from them. People look and are stupid anyway. I'm arguing that the point is more or less moot. Those who do take a serious look at their finances will not solely rely on such a calculator, and will engage a professional or educate themselves more completely while the others plug in some numbers and never do anything to better their financial plan regardless of the outcome of the calculator.
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# ¿ Oct 26, 2011 20:20 |
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bam thwok posted:Isn't math awesome? The rule of thumb for most people with steady income is 3-6 months, regardless of home ownership status. If you have volatile income (contract worker/etc) I would recommend 12 months.
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# ¿ Oct 27, 2011 15:54 |
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bam thwok posted:Isn't that just the straight up rule for an emergency fund, rather than cash savings? I treat cash savings, outside of an emergency fund, as a situational thing. So you would be saving for specific items, with predetermined amounts. This could be a down payment on a house, a vacation fund, auto maintenance, or even just a pot of cash that makes you feel comfortable having. In my view, anything beyond the emergency fund is making accommodations for your risk tolerance. If you want to make sure that you have the 3-6 months ready, in-tact, and never touched (not willing to accept the risk of floating value due to irregular large payments, etc) then you would want to set up separate savings for those irregular events. tl;dr: depends on your risk tolerance.
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# ¿ Oct 27, 2011 16:45 |
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Saint Fu posted:I go with automatic monthly contributions. Dollar cost averaging and all that. I've heard the argument that you should invest it all as soon as possible because if you expect the market to go up over the long run, your money will have more time in the market to generate returns. I personally don't think the risk is worth the potential rewards but that's just me. I would agree with you, the average investor is best served by automating their retirement fund process and distancing themselves from such things as beating the market and getting swept up in all of that. I would recommend a monthly contribution into a portfolio of Index funds (if you don't have much money (<$70k), I would fund a stock index fund and a bond one until you hit that point, where your returns start overtaking the impact of your savings rate) with annual rebalancing. Simplify and automate, you're not Warren Buffet, who consequently said that index funds are the best investment choice...
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# ¿ Oct 28, 2011 17:43 |
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sanchez posted:I can't see one, if there was wouldn't it be better to invest every day? Transaction costs would likely eat away at any gains you would have. If you were doing this in a transaction free fund though, it may be better mathematically. I know that statistically if I bill my clients monthly, rather than quarterly, they end up with a higher balance at the end of the year and my fees are higher. The 'magic' is due to the higher number of compounding periods.
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# ¿ Oct 28, 2011 18:43 |
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Insane Totoro posted:Okay here's what my wife told me from her HR department at the school district. It probably does work like that, but not for the reason you're thinking. The pension program bears the risk of providing the benefit to the employee. The 7.5% target return, on a 7.5% of salary savings rate will not provide for more than 9 years of $45,000/yr in retirement. The employer must be contributing a portion to fund the difference to account for the remaining years of life. I just did a back of the napkin calculation in Excel and at the end of 40 years, with a base salary of $50k, annual raises of 3%, annual contribution of 7.5% and a market return of 7.5% for 40 years, the value of the investment is $303.6k. With a 45k annual withdrawal, and 7.5% return on the balance continuing into retirement, that leaves a negative balance in the 10th year of $10k. Upping the contribution amount to 15% (let's assume the employer kicks in 7.5% also), now we get some interesting results. At year 40, the portfolio is worth 607k, guess what 45k represents of that size? 7.5% So that means for every year in retirement, assuming they hit their 7.5% target, the portfolio value is constant, providing the $45k/yr in benefits. After 35 years in retirement, the portfolio is worth $692k, your wife has received 45k/yr (which in future terms, is not going to be a lot of money, so need information on any inflation adjustments to the benefit) and the pension fund keeps the 692. As I said, there has to be an inflation adjustment in that value, which would just reduce the final amount the pension balance gets. tl;dr: The math works out, it's not insane. It's likely a good solid retirement program, but definitely would want to have other retirement savings as it would not likely fund your standard of living in retirement. Is th
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# ¿ Oct 28, 2011 18:56 |
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Insane Totoro posted:Okay, I think I understand how that math works out. It's funded by both employee and employer and if the investments hold out, it's pretty self-sufficient. The Roth does not have an 8% interest rate, nor is that necessarily to be assumed. The 7.5% rate, as I believe it's worded, in the PSERS is guaranteed. If the returns are lower, the employer would have to make up the difference. If it's greater, I don't believe you would see that. At least this is how most pension programs work. The Roth is a different retirement vehicle. You cannot contribute to it after you make a certain amount of income, and you fund it with after-tax dollars today. In retirement, those dollars are withdrawn tax free (on both gains, dividends, and interest) whereas the pension would be taxable income, but tax-free today. The amount you need at retirement depends on a lot of factors. Your standard of living, your expected lifespan, etc. It sounds like you guys are fairly young, and it's good that you're thinking about this stuff. The more you save now, the WAY more you will have at retirement as well as building solid wealth-building behaviors that will continue throughout your careers. If you can continue to live beneath your means, save 15% of your income, it will be mostly irrelevant what kind of returns you get on your portfolio, at least in the near term. With an assumed 1:1 match on the PSERS, I'd recommend maximizing that for your wife, then begin funding your Roths. After you maximize your Roths, you'd want to take advantage of any non-employer-matching retirement program your company has for you. After those are maximized, you are out of retirement account options, but can then turn to taxable investment portfolios, which should not be overlooked.
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# ¿ Oct 28, 2011 19:57 |
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Insane Totoro posted:So you actually recommend two individual Roth accounts? Absolutely, Roths are amazing. You should only fund your employer retirement account FIRST if they match your contribution. Otherwise, do your Roth first, then when that is maximized do your employer plan.
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# ¿ Oct 28, 2011 20:36 |
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Insane Totoro posted:Forgive my endless questions. Pension plan is receiving a benefit for contribution, the employer match, which is free money. It also may have a higher contribution maximum. You'd want to maximize the free money, then the Roths, then turn to your employer plan to be able to fund more tax-deferred retirement savings. After you've exhausted those, you're stuck with taxable investment accounts, which will not perform as well over time due to the lack of a tax benefit.
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# ¿ Oct 28, 2011 21:03 |
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DuckConference posted:A bit of commodity exposure can be a fine way to reduce volatility, but this thread is all about reducing costs, and having to deal with physical items can be pretty costly in terms of dealer spreads, shipping, security (safety deposit box and/or insurance coverage), and so forth. So investing in one of a fund that is tied to the commodity might be a better option. Not to mention that over the long-run, commodities have failed to produce excess return in a diversified portfolio, nor have they reduced portfolio risk. With neither of those two factors being there, I have no reason to have it in my portfolio.
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# ¿ Oct 31, 2011 12:50 |
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Supermercado posted:I'm not aware of any discount program or anything. Today I set my 401k contributions to go 100% into the Fidelity 2045 lifecycle fund and put in the orders to move my existing 401k assets into the same 2045 fund. What good timing! I'm actually about to launch a service on SA-Mart for something just like this. I'm planning to give away five packages when I do, and if you are interested you can claim one right now. I don't have the whole write-up ready at this moment, but it'll be a modified version of this service I offer to my brick-and-mortar clients (http://www.ewafinancialplanning.com/financial-checkup/). I'll check back in and let you know when it's all ready, I am anticipating in the next week or so, but it's being delayed as my Wife who is pregnant with twins may be hospitalized tomorrow until they're born (they're only 26 weeks) so needless to say I'm a bit distracted!
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# ¿ Nov 2, 2011 01:32 |
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Chin Strap posted:It is amazing that this seems to be so pervasive in people's head. Even if you read and claim to believe the benefits of low cost passive indexing, it still creeps in that maybe you can do better. It is hard to get that part of your ego to shut the hell up. It took me reading about 20 books, all telling the same information, for me to really really believe it, really. It took years of my active portion of my portfolio severely underperforming my passive to convince me. Only when I compared performance did I believe it.
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# ¿ Dec 6, 2011 13:54 |
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totalnewbie posted:Aren't these "passive" indexed funds still managed by someone? In that case, it seems that by actively managing your own investments, you're trying to do better, in your spare time, than someone whose job it is to make money. That rarely works out well in any field. Yes they are, but it doesn't require a whole lot of work. They are tracking an index, and there can be deviations from it, but all in all they pretty much have it down. It's when you get into these fancy-dancy index ETFs (that are passing themselves off as passive funds) that attempt to do 2x, or some obscure international region that it really becomes a real problem. Building a fund to match the S&P 500 is fairly trivial work for a portfolio manager. Buy 500 stocks proportionate to the makeup of the S&P, take new dollars and buy more, sell the proportion of those that are redeemed. You are dead on though, I always encounter people who try to become stock wizards when their excellent at what they normally do. I tell them to go out and do MORE of what they're great at, and just leave their investments to a nice solid asset allocation of index funds. (poker players are notorious for this for some reason)
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# ¿ Dec 6, 2011 15:03 |
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Astro7x posted:How so? The money goes in after taxes, comes out untaxed. So do Roths Whole life insurance policies are a rip off. You pay very high fees for an unremarkable investment account. The worst part of it, the 'savings' component of whole life does not pass to your beneficiary, just the face value. Buy term insurance, invest the difference you would pay between the whole policy and the term, and you will be MUCH better off. Check this out: http://www.daveramsey.com/article/the-truth-about-life-insurance/
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# ¿ Dec 6, 2011 23:14 |
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gvibes posted:1) Never ever ever buy anything from Northwestern Mutual. They are utter cock smokers. More specifically, their fees are ridiculous. Even leaving aside the fact that if you die unexpectedly your cash value disappears, NWM funds have crap returns. Find an insurance broker you can trust and have them price policies if you are dumb and insist on doing this. Don't buy from scam artists. I'm sure those guys at NWM didn't MEAN to put that Variable Annuity in an IRA....
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# ¿ Dec 7, 2011 01:01 |
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Choicecut posted:I briefly skimmed through this thread to try and find answers to my questions, but did not see anything directly relative so please excuse me if this has already been answered. Without an employee match you definitely should contribute to your Roth IRAs first. With a 403b you can rollover the balance into a traditional IRA (and subsequently do the backdoor Roth that has been described here in the past few pages) at any time, and I believe as often as you like. I always recommend getting out of the employee sponsored plans if possible due to the limited funds and potentially higher fees. They are valuable, however, when you contribute your max to your IRAs and still wish to do more.
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# ¿ Dec 14, 2011 17:11 |
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gvibes posted:My understanding is that you can't roll over the 403(b) until you leave the company. You can, 401ks you cannot.
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# ¿ Dec 14, 2011 17:14 |
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xaarman posted:1) You can move the total amount to anything you want, with a few stipulations. A: If you take it out of the Roth IRA, you will pay penalties. B: If you want to use another companys funds (IE your Roth IRA is with Vanguard and in Vanguard funds and you want to move it to a Fidelity fund) you will have to pay additional fees or roll over the account. We use 5% bands and a minimum of $3000 in transaction size for rebalancing. Anything smaller in $ is too expensive in commissions and the 5% let's the positions run a little.
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# ¿ Dec 29, 2011 00:19 |
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What's the current goon-approved broker for doing automatic investments with no/minimal cost into index funds either through etfs or funds? I see Schwab waives the minimum if you set up a $100/mo transfer in, but I'd like to also not get hit with a monthly commission also. At $240/mo that I intend to start with, the $8.95 would be significant enough to give me pause on the automatic investment. Thanks!
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# ¿ Oct 12, 2012 16:35 |
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It's for a taxable account, sorry for not specifying. I think I'll check out the vanguard offerings since ill be buying vanguard funds mostly anyway. Thanks!
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# ¿ Oct 12, 2012 18:08 |
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Accretionist posted:Well, I don't think we'll see another like it* but maybe I should account for that more Think more about interest rates. Preferred Stocks act more similarly to bonds than common stocks. We are at absurdly low interest rates right now. If rates increase in the near future, which they do not have much room to go lower, than the price of preferred stocks are likely to decline as their fixed dividend will be less valuable.
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# ¿ Aug 24, 2017 11:46 |
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Accretionist posted:Are you saying it would drop and stay there as opposed to a bond fund dropping but creeping back up? I'm saying that a major part of the pricing of a preferred stock is going to be dependent on interest rates, the rest mostly has to do with the underlying company. If the risk free rate is 2% (roughly 10-year treasury), and the preferred stock pays out at 7% it may be priced at the $60 you see based on all of its other factors. If interest rates rise, the dividend above the risk free rate will be smaller (7% against the 2%), which means it has less value. Investors will only be receiving 4% over the risk free versus 5%. That will put pressure on the price.
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# ¿ Aug 24, 2017 15:45 |
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Giant Metal Robot posted:Because the tax free interest is nullified in a tax free IRA and you still take whatever trade-offs (increasing your exposure to the financial well-being of your home state)? I'm still learning, and it's not completely obvious to me yet. Right. More specifically you're getting a lower return for no reason in an IRA. In a taxable account, if you have a high tax bracket that 2.5% has the same value as ~4% on taxable bonds. Throw all your crazy taxable bonds and REITs in your tax deferred or Roth account.
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# ¿ Oct 15, 2017 15:16 |
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Rebalance out of your company stock quarterly. You have your human capital tied up in the company, don't take a double whammy unless there's a discount to be had.
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# ¿ Oct 18, 2017 21:20 |
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Fhqwhgads posted:Currently only 5% of my contribution is going to the stock. I'd like to think the company isn't going anywhere for a while, but I was around for the last crash. To dive a tiny bit deeper. The reason we're mentioning a discount here is that many stock purchase plans offer a discount, meaning free money. So if they let you purchase it for 15% lower than market, you can turn around and sell it immediately for guaranteed gain. That may be worth the risk mentioned above for the reward. However, if it's not offered at a discount, there's no shortage of opportunities to deploy capital and get a reasonable return.
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# ¿ Oct 18, 2017 21:30 |
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Charles Mansion posted:If people contribute far less to their 401k, won't that also have major consequences for the stock market? How much in total is invested on a monthly or annual basis through 401k accounts? Yes, there are many who believe that a large part of the growth in the stock market in the past thirty years has a lot to do with the boomers funding their 401ks like crazy.
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# ¿ Oct 20, 2017 22:36 |
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Mons Hubris posted:If I’m wrong then that’s fine. I am not an expert by any means. Happy to be wrong about that! Would be awesome if you're right. My savings rate is increasing each month, could really use a fire sale right now.
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# ¿ Oct 27, 2017 11:56 |
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Motronic posted:My most recent purchase was a Land Cruiser for the wife. They are like $82k new, which is nauseating. CPO 2 years old with 80k miles for like $43k. That is an INSANE amount of savings for essentially the same thing. Was gonna pay cash, but they gave me something like 1.8% 0 cash down from a local credit union so I told them to throw $30k on there because, not that it matters because I have emergency funds, I will be at NO point anywhere even close to upside down. Holy cow, 40k miles a year? That is a huge savings but also a gigantic amount of the cars usable life eating up.
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# ¿ Oct 28, 2017 16:47 |
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You need a fee only planner, brother.
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# ¿ Aug 7, 2018 03:03 |
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Something Offal posted:I'm pretty sure financial advice is a fairly unregulated industry. Do you even need any certifications to do what you describe and help some people open up Vanguard stuff? Really hope this is tongue in cheek. If you're going to offer any financial advice, you need to file with your state as an RIA. If you're going to collect loads or commissions, you will need to take the appropriate Series exams and have a registered broker/dealer sponsor you. You can relatively simply set up an RIA. There are off-the-shelf solutions that will help you file the necessary paperwork and pay the appropriate fees to hang your shingle. It's very doable as a side business if you have a decent population of folks to serve as a customer base. The hard part will be differentiating yourself from other advisors and justifying your fee. For your services, I'd suggest something more conservative like .3-.5% AUM fee. Or just have the guy buy you lunch and lay some wisdom on him.
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# ¿ Aug 9, 2018 15:46 |
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EAT FASTER!!!!!! posted:Did you used to play Call of Duty with the goons as J 2 the Ackson? Were you part of the Hush crew too? What was your GT?
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# ¿ Aug 10, 2018 13:48 |
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EAT FASTER!!!!!! posted:most recently: im a doc irl, most infamously: perl necklace. previously: ayn randy, smeg macaroni, howd ur dad die, black cops hack. TraderStavros represent. Not sure if you were around when I figured out how to hook up my computer to the Xbox Live remote and was playing soundboards of How to Catch a Predator and other wacky stuff. I miss those days when I could spend hours and hours doing stupid stuff with goons online. Before responsibilities.
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# ¿ Aug 10, 2018 19:57 |
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My take: Only sell and payoff Mortgage if you'll sleep better at night. You'll be fine either way as you're very well set up on all fronts. One is slightly more efficient / productive than the other, but in your situation it won't make a significant impact if you choose one or the other. There is an impact for sure, but you'll be fine.
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# ¿ Aug 24, 2018 21:08 |
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GoGoGadgetChris posted:Where were you when a goon said Art and Amazon are the same type of investment Like bitcoin.
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# ¿ Aug 19, 2019 17:47 |
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Question about backdoor Roths and our IRAs: I’m at the point where my AGI is very close to not being able to make a standard Roth IRA contribution. I fully understand that if I want to avoid the pro-rata rule, I’ll need to roll my Traditional IRAs into my 401(k) and then follow the backdoor process. How are my wife’s traditional IRAs treated? Can I leave hers and still complete the backdoor process, or will the value of her IRA play into the pro-rata rule if it’s only for MY Roth IRA contribution. We are MFJ, but wasn’t sure if there was a distinction between who was making the contribution or if it was for the pair of us. She works part time and has access to a 403(b), but I’m not sure she can roll her Traditional IRA into it.
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# ¿ Jan 18, 2021 16:49 |
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80k posted:Her IRA doesn't affect your backdoor IRA. Only worry about hers if/when she is interested in doing backdoor's herself. Thanks for clarifying. I still have headroom in our budget to increase her 403(b) so may still continue down that path, but I'd like to have options at the end of the year. Since she's part time (actually on leave right now due to not willing to work in the schools during the pandemic) she's not contributing anything.
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# ¿ Jan 19, 2021 03:41 |
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fart simpson posted:sso launched in 2006 I went heavy into SSO in 09, it paid off but was stupid as hell.
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# ¿ Jan 23, 2021 15:41 |
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# ¿ May 15, 2024 18:52 |
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fart simpson posted:why do you think it was stupid? The position alone wasn't. It was way too much risk for me and too much of my account at the time in it. Mistakes were made.
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# ¿ Jan 24, 2021 07:12 |