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Subvisual Haze posted:It wouldn't be a backdoor. Backdoor refers specifically to converting non-deductible IRA contributions into Roth (at zero or near zero taxes). Your situation would be a standard Roth conversion. That's what I get for half reading the question, it would just be a standard Roth conversion and additional taxable income at the top rate. Thanks.
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Jun 10, 2024 23:18
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Thank you thread I’ve moved some cash into a brokerage account and SGOV provides such nicer returns than my old savings account!
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Jun 12, 2024 15:08
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Twlight posted:Thank you thread I’ve moved some cash into a brokerage account and SGOV provides such nicer returns than my old savings account! SGOV is fantastic, and thanks to the new T+1 settlement law it's even more liquid
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Jun 12, 2024 16:04
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So after years of planning to buy a house "soon" I've come to the realization that it's not going to happen for a while. I've been letting my down payment fund sit in a HYSA but it's at the FDIC limit of $250K which I'm taking as a sign that it's time to do something with it. I've maxed out my tax advantaged investment opportunities, my rainy day fund is at ~18 months of current expenses, and I don't have any children or foreseeable expenses for the next 3-5 years minimum. Is it time for me to start looking into taxable investments? My plan was to take $200K or so and split it evenly between a money market account (SGOV?) and some sort of low cost S&P index fund. Would there be any reason to open a second HYSA instead of SGOV? The combined value of my formerly down payment money and rainy day fund exceeds $250K which means I need to either open a second HYSA or find somewhere better to store it as a decent sized chunk is now sitting in my checking account earning effectively nothing. Also is there a goon consensus on Fidelity vs other brokerages? My 401K and HSA are with them so I was planning on using them just for simplicity's sake.
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Jun 13, 2024 12:17
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KodiakRS posted:So after years of planning to buy a house "soon" I've come to the realization that it's not going to happen for a while. I've been letting my down payment fund sit in a HYSA but it's at the FDIC limit of $250K which I'm taking as a sign that it's time to do something with it. I've maxed out my tax advantaged investment opportunities, my rainy day fund is at ~18 months of current expenses, and I don't have any children or foreseeable expenses for the next 3-5 years minimum. Is it time for me to start looking into taxable investments? re: bolded part. see flowcharts in OP. re: SGOV. while you've got the gist of it right for its common usage, it's not a "money market account", rather it is a treasury bill exchange-traded fund. it will generally protect capital and provide returns very slightly greater than a HYSA. sounds like you should be figuring out how to invest some excess cash in stock or bonds funds, yeah. some discussion of that in OP or I'm sure many people will chime in with their favorite strategies, almost all of which will include some amount of a low-cost S&P 500 or US total market fund.
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Jun 13, 2024 13:14
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Fidelity is a perfectly fine brokerage and it's nice to have consolidation if possible, so I would go with them. Schwab probably has a better UI and people like Vanguard's mission more but Fidelity is good. I think you should consider what you want to do with the money. If you are still on the prowl for a house eventually (ideally taking advantage of a market downturn and lower interest rates...) I would move the whole chunk over to SGOV, which has slightly higher nominal yields than HYSA, and if you live in a state with state income tax, has slight additional real yields due to the fact that income from US Treasury instruments is not taxed by states. Why? The events that will lead to you buying a house will likely be part of a broader economic downturn, which means that the value of any equities positions you were holding will be lower. That means less buying power, so investing in something with modest returns and no risk to principal makes sense. Beyond SGOV, treasury ladders are a ultra low risk option (basically mimicking SGOV) and you could get a few more basis points of yield, but that is slightly more complex to manage. If you have vaguely given up on a house, figure out what you want to do with the money instead. Money's just a tool - you need to attach goals to it in order to figure out how to manage it. If you don't anticipate needing this money for a decade or more, I would put most or all of it in the equities market in a taxable brokerage account.
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Jun 13, 2024 13:59
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KYOON GRIFFEY JR posted:Fidelity is a perfectly fine brokerage and it's nice to have consolidation if possible, so I would go with them. Schwab probably has a better UI and people like Vanguard's mission more but Fidelity is good. I took my somewhat smaller house fund and put it into a treasury bond ladder. It takes a little bit of overhead, but honestly not much. If you’re monitoring your accounts regularly it’s pretty easy to catch when the rungs are maturing and reinvest them in a shorter bond to match the ultimate expiration date of the ladder. If you’re the type of person who reads this thread you’ll be able to manage it easily.
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Jun 13, 2024 14:22
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I ended up shaving off the top of my HYSA-limited savings and putting them into my long-term taxable brokerage account, with my 90-10 bond split, not to be touched until I’m old and ready to retire. Buying a house just to tie up your finances in something is a pretty bad idea, and I’ve already got enough for a down payment + closing costs + maintenance buffer if I ever do decide to buy.
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Jun 13, 2024 14:43
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Awkward Davies posted:I took my somewhat smaller house fund and put it into a treasury bond ladder. It takes a little bit of overhead, but honestly not much. If you’re monitoring your accounts regularly it’s pretty easy to catch when the rungs are maturing and reinvest them in a shorter bond to match the ultimate expiration date of the ladder. If you’re the type of person who reads this thread you’ll be able to manage it easily. I don't disagree, but I don't think that treasury ladders are a first recommendation for someone looking to park money. If someone came in and said "I want ultralow risk yield maximization and I am not happy with the yield of SGOV (et al) and i like to gently caress around with securities a little bit" sure, I'll recommend a treasury ladder.
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Jun 13, 2024 14:58
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KYOON GRIFFEY JR posted:I don't disagree, but I don't think that treasury ladders are a first recommendation for someone looking to park money. If someone came in and said "I want ultralow risk yield maximization and I am not happy with the yield of SGOV (et al) and i like to gently caress around with securities a little bit" sure, I'll recommend a treasury ladder. Do you actually get a meaningfully higher yield by holding t-bills directly? I think the ER on SGOV is only 0.05% or so.
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Jun 13, 2024 15:11
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This is kind of a footnote but if you want to own something like SGOV for more than a year—like with a potential house down payment—you might also want to take a look at BOXX, which through the magic of loopholes can transmute interest income into capital gains (which may save you on taxes in excess of that fund’s higher expense ratio).
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Jun 13, 2024 15:22
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Jabarto posted:Do you actually get a meaningfully higher yield by holding t-bills directly? I think the ER on SGOV is only 0.05% or so. five basis points is five basis points but in addition to that SGOV is also holding a bit of cash and so if you were to only ladder 13 week bills with an automatic rebuy you would get a slightly higher yield
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Jun 13, 2024 16:23
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I've posted in here before about getting inheritance processing advice and had a solid experience with a fiduciary advisor. So far, so good, made some decisions on it yesterday. As roughly 95% of my lifetime retirement assets were inherited this year it took a bit of work to get me set up. The next step is trickier: how do I go about helping my sister, who gets half, as she is a dual citizen that only comes back to America from her home in Sydney every few years. We don't know who to reach out to or in which country. She's going to have taxable income from the annuity we inherited, whether it's taken all at once or yearly over the next few decades. I did a quick amount of googling about claiming both the standard deduction for income in America + the foreign income tax deduction and said 'she needs a professional, I'm not doing this for free ' Is there a specific phrase I can use to look into to find someone who specializes in this? Edit: and of course when I made my decision to cash out the annuity, the fiduciary advisor for my mom who's holding the money insists im doing the math wrong and I should stretch the annuity out. Argh I hate this. It should just be a simple formula and I can't figure out who's missing what. trevorreznik fucked around with this message at 23:32 on Jun 13, 2024 |
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Jun 13, 2024 18:57
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KodiakRS posted:So after years of planning to buy a house "soon" I've come to the realization that it's not going to happen for a while. I've been letting my down payment fund sit in a HYSA but it's at the FDIC limit of $250K Didn't see I bonds mentioned which are a very good alternative to a HYSA, assuming you don't need the money for at least a year. As housing costs are a very large part of inflation indexes, I bonds are particularly well suited for house savings IMO
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Jun 13, 2024 20:00
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You can only buy $10k of I bonds per year per person, so it's really not an option for $250k.
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Jun 13, 2024 20:02
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Leperflesh posted:You can only buy $10k of I bonds per year per person, so it's really not an option for $250k. My understanding was OP was looking for a place to put new funds. Yes, the contribution limit is annoying, but less so if you are married and have 5+ year investment time frame. It sounds like OP is cash heavy in general, so I think an I bond allocation, even if only $10k this year, is worth considering.
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Jun 13, 2024 20:18
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KodiakRS posted:My plan was to take $200K or so and split it evenly between a money market account (SGOV?) and some sort of low cost S&P index fund. So like $100k to invest immediately in something safe like SGOV, and $100k into an index fund.
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Jun 13, 2024 22:44
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Leperflesh posted:So like $100k to invest immediately in something safe like SGOV, and $100k into an index fund. Correct, I currently have a bit over $300K of savings outside of my retirement accounts. Right now $250K of that is in a HYSA with the remainder spread across a few checking and low yield savings accounts that I use for daily banking and spending. I'm planning on taking that 300K and leaving 100K in the HYSA as my emergency fund. Putting 100K into some sort of low risk relatively easy to liquidate investment, probably SGOV based on what I've been reading. The last 100K will go into some sort of low cost index fund as a long term investment. I can directly contribute an additional 4-5K per month which will likely end up in the HYSA until it gets close to full again. For what it's worth my financial goals are basically "Be ready to buy a house when my life, the housing market, and interest rates make that a smart choice." who the hell knows when any of those 3 things are going to happen though. I like the idea of "set it and forget it," style investing. At the moment I spend about 15 minutes once a month doing a financial self checkup and don't really want to deal with much more than that. Hence the interest in SGOV instead of something I need to actively manage.
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Jun 14, 2024 00:18
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SGOV will do it for ya then. I'd not bother contributing to the HYSA. Put that extra 4-5 straight in to SGOV. $100K is an awfully beefy e-fund which you might want to pare down. SGOV is liquid and works as a store of value. If it loses value the most probable situation is that the US has defaulted on its debt.
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Jun 14, 2024 01:57
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Did Fidelity ever specify when SPAXX was going live as a core option for the CMA account? Last I heard it was going to happen on or around today
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Jun 14, 2024 18:21
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it's supposed to be an option starting today or tomorrow
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Jun 14, 2024 21:39
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Not today for me: "There are no new core positions to select." And tomorrow is a Saturday which would be an unusual day for financial anything to happen
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Jun 14, 2024 23:14
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Fidelity has me in a weird position regarding cash positions, or maybe I just need to call customer service: I originally had one Fidelity "Individual" account that I used for checking and investing, as well as a Roth IRA. Later on, I added another brokerage account, bringing the total to three. The IRA and newer brokerage account both have a position called "Cash - HELD IN MONEY MARKET" that uses SPAXX. I can change that core position to either an FDIC sweep or FDRXX at will. However, my original checking account still defaults to an FDIC sweep account, and I have to manually order it to purchase SPAXX whenever money moves into that account. There is no visible option (yet) to change the default cash position in the checking account, even though the other two already have that ability. Really weird inconsistency!
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Jun 15, 2024 04:45
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Sounds like your "checking account" is a cash management account. There has never been an option to change the core position on those accounts. It looks like and almost entirely functions like a standard fidelity brokerage account otherwise.
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Jun 15, 2024 20:33
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Based on VT ETF data, USA market is ~ 62% and ex-USA is ~ 38%. For VTI ETF: I couldn’t find where the S&P 500 and remaining market was split. My 401k only has S&P 500 and another “completion” fund for the USA stock market. I know I’ve heard 80/20 split but I wanted to see actual breakdowns as they can shift over time - similar to how 60/40 world market is not 62/38. Where can I find that info? Queer Grenadier fucked around with this message at 03:58 on Jun 17, 2024 |
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Jun 17, 2024 03:15
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What is your end goal here? Replicate VT across your entire retirement portfolio?
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Jun 17, 2024 14:03
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Queer Grenadier posted:Based on VT ETF data, USA market is ~ 62% and ex-USA is ~ 38%. https://www.etfrc.com/funds/overlap.php This shows roughly 87% overlap between VOO and VTI. The website doesn't appear to be without errors, but that's pretty close to what I get by hand looking at the relative weights on Microsoft.
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Jun 17, 2024 14:35
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KYOON GRIFFEY JR posted:What is your end goal here? Replicate VT across your entire retirement portfolio? Precisely. I can’t buy the USA portion with VTI, so I need to know how much S&P (C Fund) and completion funds (S Fund) in the Thrift Savings Plan equates to VTI.
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Jun 18, 2024 00:21
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https://www.tsp.gov/publications/tsplf14.pdf Pg. 10 indicates that 85% C Fund and 15% S Fund would appreciate the US Stock Market. So, VT (62% US/38% ex-USA) would be.. 53% C Fund 9% S Fund 38% I Fund (closest to ex-USA) Queer Grenadier fucked around with this message at 00:39 on Jun 18, 2024 |
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Jun 18, 2024 00:35
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Jabarto posted:Did Fidelity ever specify when SPAXX was going live as a core option for the CMA account? Last I heard it was going to happen on or around today came here wondering this too, i swore they had a whole thread about it on reddit
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Jun 18, 2024 01:26
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Mad Wack posted:came here wondering this too, i swore they had a whole thread about it on reddit It's still there on the Fidelity subreddit, which is moderated by actual Fidelity employees/contractors. https://old.reddit.com/r/fidelityinvestments/comments/1dghhdr/announcing_a_new_core_position_option_for_your/ quote:By the end of next week, we’ll have rolled out the option to choose the Fidelity® Government Money Market Fund (SPAXX) as your core position. With that position, your cash is still available to use but with a current 7-day yield of 4.95%1 as of 6/12/24. SPAXX also pays its dividends on the last business day of each month. Sounds like it'll roll out by this Friday the 21st. e: They forced the new Fidelity app on me ughhhhh Boris Galerkin fucked around with this message at 01:38 on Jun 18, 2024 |
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Jun 18, 2024 01:34
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Boris Galerkin posted:It's still there on the Fidelity subreddit, which is moderated by actual Fidelity employees/contractors. I already was able to select this.
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Jun 18, 2024 09:11
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can confirm as well that i was able to switch to SPAXX for core position in cash mgmt.
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Jun 19, 2024 01:44
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I've heard others say it's live too. For some bafflingly stupid reason, however, you can't change your core position unless you have shares of the fund you want to switch to. Which in my case means selling $1 of SPAXX so the sweep account will show up on my account and setting SPAXX as the core after everything clears on Thursday.
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Jun 19, 2024 01:49
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Where is the button to change? I'm blind or something.
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Jun 19, 2024 03:39
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I'm now reading about SGOV, and is there any reason not to move a chunk of my savings (about $20-30k) from my HYSA at Synchrony to SGOV via Schwab?
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Jun 19, 2024 03:57
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Deviant posted:I'm now reading about SGOV, and is there any reason not to move a chunk of my savings (about $20-30k) from my HYSA at Synchrony to SGOV via Schwab? Well SGOV and a HYSA fill the same basic role. So it really comes down the yield, how much you value FDIC insurance, and the fact that selling SGOV and withdrawing the resulting money might take a day or two longer than just withdrawing from a HYSA. Personally I have my efund in SPAXX, my (Iarger) new car fund in SGOV, and don't bother with FDIC insurance at all (aside from a few thousand in a checking account at Chase). I also really like having everything in one place as much as possible, Fidelity in my case, and this setup allows me to do that while still earning reasonable interest on my cash.
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Jun 19, 2024 05:51
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Boris Galerkin posted:Where is the button to change? I'm blind or something. its... the only button?  that is the desktop site, cant help you if you are toilet telephone trading, i am an old
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Jun 19, 2024 06:40
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drk posted:its... the only button? 
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Jun 19, 2024 06:43
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Cugel the Clever posted:Doesn't exist on mine. Possibly because I've currently got everything in SPAXX manually? If the cash balance is empty, maybe there is nothing to change? Clicking change for me initiates an order to buy the new fund from the existing balance. You can go to https://digital.fidelity.com/ftgw/digital/core-change/select/X12345678 to change this on your account, replace X12345678 with your CMA account number. You could also just sell $1 of SPAXX into cash if it wont let you change it. edit: to be clear, that button has been there since I opened the account last year, its just only as of today that it actually let me change to SPAXX (which I am not intending to do until later this month due to pending transactions) drk fucked around with this message at 07:11 on Jun 19, 2024 |
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Jun 19, 2024 07:05
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