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Gaius Marius posted:So he's in the military now but he wants to take his retirement when he gets out, transfer it to 401k, then use that as collateral to "jump start his economic engine" So he wants to cannibalize his retirement to go gamble with it when he knows he won't have a job? If he can't see the problem with that, I'm not sure there's anything you could reasonably say to him to convince him otherwise. Edit: I guess what you could say is a 401k is already an investment instrument and because of its tax-advantaged status, taking it out to invest the money is just going to cause him to have more taxes on whatever he makes. A 401k is already pretty flexible - he can invest it in tons of high-risk poo poo if he really wants to (but shouldn't). If that doesn't work, IDK man. KillHour fucked around with this message at 05:36 on Apr 6, 2022 |
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Apr 6, 2022 05:31
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You could try telling him a 401k is a big part of what prevents him from living out his days in a refrigerator box under a viaduct.
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Apr 6, 2022 05:47
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Cassius Belli posted:You now have "until tax day of the following year", and can get a little extra grace by filing for an extension, if it comes to that. Thanks. Still probably not a great situation to be in depending on the amount taken out. $10k over 18 months is almost $560 a month. If you're paying $250 and it jumps up to $560, that's probably going to be a tight squeeze for a person in a financial state where they are taking out 401k loans. More likely they would just ignore it and end up eating the tax bill, the early withdrawal penalties, and getting their retirement set back substantially.
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Apr 6, 2022 05:54
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TITTIEKISSER69 posted:You could try telling him a 401k is a big part of what prevents him from living out his days in a refrigerator box under a viaduct. why would he be living in a refrigerator box if he's a billionaire 
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Apr 6, 2022 06:00
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KillHour posted:why would he be living in a refrigerator box if he's a billionaire Billionaires got kinks
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Apr 6, 2022 06:47
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acidx posted:Thanks. Still probably not a great situation to be in depending on the amount taken out. Yeah, it's not a great situation, though it is definitely a "less bad" situation than having only 60 days. For example, using your $10k example, you can safely quit in favor of a new job that pays you $10k/year more, because you've got the time to pay it back out of your increased salary and still come out ahead. Having to pay it back lump-sum in 60 days could be a much heavier millstone around your neck and keep you from taking that opportunity.
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Apr 6, 2022 07:40
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I used to say there's no way to make a 401k loan worthwhile. I now say that there's one possible use: Using it to bridge the gap between buying a new house and selling the old one (assuming you have enough equity in the old one to cover it). In that case alone all you're losing is time in the market. Might be cheaper than a bridge loan. Also I'm willing to bet that "jump-starting his economic engine" involves crypto.
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Apr 6, 2022 08:47
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He could be right, though. Many people made a lot of money using crypto, for example through stealing NFTs or setting up successful scams
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Apr 6, 2022 08:49
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Tricky Ed posted:I used to say there's no way to make a 401k loan worthwhile. I now say that there's one possible use: Using it to bridge the gap between buying a new house and selling the old one (assuming you have enough equity in the old one to cover it). In that case alone all you're losing is time in the market. Might be cheaper than a bridge loan. "Strategic liquidity" in general is probably worthwhile, depending on your exact risk appetite. I know one guy who, very similarly, funded his house's down payment with a 401k loan, and the idea was to manage/minimize taxes by deferring some stock sales for a few months. He claims he wound up saving a few thousand dollars on the deal, but that has to be a corner case among corner cases.
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Apr 6, 2022 11:11
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Gaius Marius posted:So he's in the military now but he wants to take his retirement when he gets out, transfer it to 401k, then use that as collateral to "jump start his economic engine" This isn’t the bad with money thread, you’re posting in the wrong thread.
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Apr 6, 2022 14:30
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The TSP will have access to thousands of new mutual funds soon, so he may be able to leave it in there and gamble it away without paying any penalties!
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Apr 6, 2022 16:38
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Gaius Marius posted:So he's in the military now but he wants to take his retirement when he gets out, transfer it to 401k, then use that as collateral to "jump start his economic engine" Tell me you're not paying back the loan without telling me you're not paying back the loan. Residency Evil fucked around with this message at 18:18 on Apr 6, 2022 |
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Apr 6, 2022 18:14
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Yeah, I once took out a 401k loan to cover the difference on a down payment for my house, and then paid it back within six months. That and unexpected medical debt are pretty much the only circumstances in which I'd consider doing it.
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Apr 6, 2022 18:22
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Military kid with lots of income, upcoming discharge, being taken advantage of by scammers/getting excited about get rich quick schemes, all extremely common. There's a reason why every US military base is surrounded by payday loan companies, auto dealerships, etc. Young people often coming from poor families with windfall cash and no life experiences to help them gauge what is or isn't wise. Financial advisers are often a horrible idea but this is one case where I think I'd push that guy strongly to talk to a (ideally fee-only, definitely fiduciary) financial advisor. They need a personal relationship with someone they can build trust in, who will steer them to not blow all their money on a lifted F150, NFTs, and jet skis.
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Apr 6, 2022 18:39
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lwoodio posted:The TSP will have access to thousands of new mutual funds soon, so he may be able to leave it in there and gamble it away without paying any penalties! I just saw this. Buying into the new outside funds also incurs new fees and transaction costs. And I bet the ERs are a bunch higher than the TSP's 0.04%. It feels like a trap. Or, more accurately, it feels like a bunch of outside investment companies finally convinced Congress to let them prey on the government crowd they had been cut off from. But I honestly haven't looked at it beyond seeing all the new annual and per transaction fees.
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Apr 6, 2022 23:17
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incogneato posted:I just saw this. Buying into the new outside funds also incurs new fees and transaction costs. And I bet the ERs are a bunch higher than the TSP's 0.04%. Yeah, it's... yeah.  That doesn't feel like "trap" so much as it does "scam designed to get the smart people to select out before ever interacting with it".
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Apr 7, 2022 19:35
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The biggest, and nearly only, complaint I’ve heard about the TSP over the years is the limited investment options you have. Sounds like this is just a response to that, with a generous serving of monkey's paw.
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Apr 7, 2022 20:16
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See, Edward Jones isn't so bad after all.
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Apr 7, 2022 21:10
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Anyone familiar with Computershare? At some point my dad's Metlife account got split into Metlife and Brighthouse/Computershare and some of his money went to this computershare place. I'm logged in and can't figure out if it's a taxable brokerage account or an IRA. He thinks it's an IRA but I don't see anywhere that says it and the only tax document is a 1099div from 2021 saying he received $22 in dividends. I found out he's received monthly checks for like $4 since 2018?
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Apr 8, 2022 04:25
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Mu Zeta posted:Anyone familiar with Computershare? At some point my dad's Metlife account got split into Metlife and Brighthouse/Computershare and some of his money went to this computershare place. I'm logged in and can't figure out if it's a taxable brokerage account or an IRA. He thinks it's an IRA but I don't see anywhere that says it and the only tax document is a 1099div from 2021 saying he received $22 in dividends. I found out he's received monthly checks for like $4 since 2018? In my dealings with them it's neither of those things but closer to taxable brokerage: it's just a stock transfer company. So the shares you have at Computershare are directly held stock, which should be treated in the same way as if you bought stock in a taxable brokerage account. Big caveat on "in my dealings with them". I dont' know if they offer other types of services.
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Apr 8, 2022 04:34
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Thanks that's what I was suspecting. It's weird because the site doesn't even let me see the full account#. And my dad swears he's only ever put money into his Metlife IRA so he's confused why he would have a taxable account. Maybe during the Metlife/Brighthouse split they forced it on their customers.
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Apr 8, 2022 04:50
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Some companies issue shares to employees through Computershare. Like “We can’t afford to give you cash bonuses, but here’s 10 shares of our stock. Log into ComputerShare to see it.” That’s my experience with them anyway.
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Apr 8, 2022 05:07
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Mu Zeta posted:Thanks that's what I was suspecting. It's weird because the site doesn't even let me see the full account#. And my dad swears he's only ever put money into his Metlife IRA so he's confused why he would have a taxable account. Maybe during the Metlife/Brighthouse split they forced it on their customers. So it sounds like he doesn't have a taxable brokerage account - in earlier terminology this would be the equivalent of him holding physical stock certificates and getting dividend checks directly from the company he held them with. nelson posted:Some companies issue shares to employees through Computershare. Like “We can’t afford to give you cash bonuses, but here’s 10 shares of our stock. Log into ComputerShare to see it.” That’s my experience with them anyway. This too. But the bay area one (for "pre-IPO" companies) is now Carta. I have a lot of worthless "paper" in there from several advisory arrangements. Computershare is real deal companies for the most part.
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Apr 8, 2022 05:13
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So if he wants to just sell the 12 shares or whatever in there that's fine right? For tax purposes it's just like selling stocks from a taxable account?
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Apr 8, 2022 05:20
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Computershare tracks stock ownership for company DRIP programs among other purposes, and the other purpose in this case is that they are Brighthouse's stock agent. Ultimately Brighthouse, not Computershare, is in a position to say what the account's tax status is. It would be highly irregular (i.e. asking for lawsuits) for Metlife to involuntarily distribute customers' IRAs as part of a business spinoff.
Gazpacho fucked around with this message at 05:25 on Apr 8, 2022 |
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Apr 8, 2022 05:21
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I found an FAQ on the Metlife site but I'm too dumb to understand. It looks like it's what happened to my dad though. https://investor.metlife.com/shareholder-services/faqs/default.aspx#all How did I acquire MetLife, Inc. common stock? When MetLife demutualized and converted to a stock insurance company on April 7, 2000, eligible policyholders were allocated shares of MetLife, Inc. common stock. Where and how is the MetLife, Inc. common stock held? Shares that were allocated to eligible policyholders as a result of the demutualization are held in the MetLife Policyholder Trust (the “Trust”) in book entry form. These shares are held electronically with Computershare as custodian of the Trust. How may I contact Computershare?
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Apr 8, 2022 05:31
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Wow, that's complex. I take back what I said about who would be the authority on the account's tax status. It's important to understand that these are three distinct companies though.
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Apr 8, 2022 05:53
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Mu Zeta posted:How may I contact Computershare? Toll +1 (201) 680 6578 Toll Free 800 649 3593 https://www-us.computershare.com/Investor/#Contact I had to deal with Computershare last year to close out shares for an estate. It took a little time but eventually got the shares sold.
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Apr 8, 2022 07:42
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nnnotime posted:I had to deal with Computershare last year to close out shares for an estate. It took a little time but eventually got the shares sold. I’m currently trying to do this. Hope it’s not as big of a pain as I expect
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Apr 8, 2022 17:01
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My partner worked a lovely retail job for a few years, but left it due to COVID and has just hung out unemployed since. My income more than covers expenses so it's not a problem for us, but: She had a 401k that got pushed into a rollover IRA with fidelity. She ignored it for a while so it hasn't been invested, but now I'm looking to do something with it. I use vanguard so I'm not familiar with Fidelity's offerings. What's a good fund to throw approximately $3600 into and then forget for a decade or two? Or is there something better to be doing with it? We're mid 30s and she currently doesn't have significant plans to go back to work but might if she can find something that pays worthwhile wages and interests her, so it's not likely to have additional money added to it in the near future. Also if someone can ELI5 using Fidelity's dashboard to actually buy the fund that'd be great, their dashboard is so much worse/different than vanguard's and I don't want to make some dumb mistake born of barely knowing what I'm doing. (I've only had enough income to be able to think about investing for a couple years so this is all pretty new to me.)
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Apr 8, 2022 18:27
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FFLDX is their 2055 passively invested target date fund. Basically fire and forget for mid 30s folks. If you're concerned about doing something wrong when making the trade they have 24/7 phone support with US based bankers.
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Apr 8, 2022 18:44
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Nighthand posted:My partner worked a lovely retail job for a few years, but left it due to COVID and has just hung out unemployed since. My income more than covers expenses so it's not a problem for us, but: Fyi if you like Vanguard (as I do as well ), she can just roll it over to Vanguard. I rolled my wife’s in the same way, if I remember you call vanguard , open account, then have fidelity close out account by mailing check to vanguard directly. Like, a week turn around, wasn’t too bad. My only gripe with vanguard is their internet interface could def be better. It’s functional , but yeah kind of blows. I also have fidelity via my work, and it’s either just as bad or worse.
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Apr 9, 2022 14:41
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quote:There’s no such thing as a free lunch in finance. Except maybe this: The interest rate on inflation-adjusted U.S. savings bonds will approach 10% beginning in May. https://www.wsj.com/articles/the-safe-investment-that-will-soon-yield-almost-10-11649769505?mod=rss_markets_main
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Apr 12, 2022 16:31
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So what happens with rates if you buy an i series bond today? The Treasury web site says the rate of 7.12 applies for six months. So does the rate only go up to 9.6 in the middle of October? And then change to whatever is announced as starting in November?
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Apr 12, 2022 16:43
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WithoutTheFezOn posted:So what happens with rates if you buy an i series bond today? The Treasury web site says the rate of 7.12 applies for six months. So does the rate only go up to 9.6 in the middle of October? And then change to whatever is announced as starting in November?
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Apr 12, 2022 17:01
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Getting a 10k series i bond in mid 2021 was a good decision. Was 3.54% rate when purchased, now 7.12%, and will be going up to 9.6% as noted above. Absolutely crushing a 0.50% savings account, which is where the 10k used to reside. Best thread on SA.
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Apr 13, 2022 07:50
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zaurg posted:Getting a 10k series i bond in mid 2021 was a good decision. Was 3.54% rate when purchased, now 7.12%, and will be going up to 9.6% as noted above. Absolutely crushing a 0.50% savings account, which is where the 10k used to reside. Best thread on SA. Strong agree.
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Apr 13, 2022 13:15
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zaurg posted:Getting a 10k series i bond in mid 2021 was a good decision. Was 3.54% rate when purchased, now 7.12%, and will be going up to 9.6% as noted above. Absolutely crushing a 0.50% savings account, which is where the 10k used to reside. Best thread on SA. You're not wrong! It is hard to stomach that what the I-Bond returns actually mean is that the bond is the only place I'm not losing money outside of my house, which is by it's nature a money pit.
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Apr 13, 2022 15:21
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The Puppy Bowl posted:You're not wrong! It is hard to stomach that what the I-Bond returns actually mean is that the bond is the only place I'm not losing money outside of my house, which is by it's nature a money pit. It's ok. Everyone else is losing money, too! Hope you're looking forward to your 2% raise this year!
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Apr 13, 2022 15:35
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This is probably a dumb question, but I got a $10,000 I-bond in December 2021, and on Treasury Direct it still shows up as $10,000. Does the value not update until the first 6 months has passed?
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Apr 13, 2022 15:57
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