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H110Hawk posted:Match is a % of compensation, not amount deferred. So if you make $100k and the match is 20% that's $20k. I guess I'm confused/not sure how to interpret this then: quote:for instance, Google matches 50 cents on every dollar of non-backdoor contribution, no cap Since employee contributions are capped at 19.5, while employee + employer contributions are capped at 59k.
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Apr 25, 2021 19:24
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Link: https://finance.zacks.com/can-spouses-contribute-maximum-roth-ira-5511.htmlquote:Provided they meet the specific federal requirements for being allowed to contribute to a Roth, each spouse in a marriage may contribute money toward a Roth IRA in his or her own name. Couples may not both contribute to a single IRA listed with both their names, but rather must maintain their own Roth IRA accounts. So, my wife, who has no interest in doing her own investments, said I might as well set up a Roth IRA for her. I have one already that's maxed out for '20 and '21. However, she wants me to pay into it using our checking account I've used to fund mine - is there any issue with doing so?
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Apr 25, 2021 19:41
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There is not. My wife and I both contribute to our IRAs using the same checking account.
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Apr 25, 2021 19:42
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Residency Evil posted:I guess I'm confused/not sure how to interpret this then: Googlers who've talked about their compensation with me have a match of 50 cents on every dollar they put in up to the IRS limit, so in 2021 they'd get a max match of $9,750. This is pretty generous for the software industry, where a middle-of-the-road offer is "dollar-for-dollar matching up to a 3-5% cap." I think their plan also allows unmatched and unlimited (up to the IRS cap) backdoor Roth shenanigans, but at this point we're talking about half-remembered conversations over drinks from several years ago, so I might be wrong about that. H110Hawk posted:Match is a % of compensation, not amount deferred. So if you make $100k and the match is 20% that's $20k. It can be either in casual conversation. In general if someone gives me a sub-10% number for "401(k) match" I'd interpret it as a percentage-of-salary cap on employer contributions, and anything over that as the percent matched out of my own contributions, although that's just a rule of thumb. So, if a recruiter says "we have a 401(k) with a 5% match," I'd expect that to be a dollar-for-dollar match of my contributions up to 5% of total salary, while "we have a 401(k) with a 33% match" would mean that for every dollar I put in I'd get 33 cents in matching money.
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Apr 25, 2021 19:46
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I forgot 401ks can infinitely different. Ugh.
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Apr 25, 2021 19:54
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KYOON GRIFFEY JR posted:There is not. My wife and I both contribute to our IRAs using the same checking account. Even if we file jointly, and plan to use the same broker? I think my plan is to set her up with a Vanguard targeted retirement fund, while mine is mostly VOO.
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Apr 25, 2021 20:08
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Red posted:Even if we file jointly, and plan to use the same broker? I think my plan is to set her up with a Vanguard targeted retirement fund, while mine is mostly VOO. it's a separate account that you're contributing to, there's no problem
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Apr 25, 2021 20:09
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Money is all fungible, the only difference is how to classify portions of it at tax time. Especially because you are MFJ no one cares which account it comes from. You will both have IRAs in your respective names, hence the "Individual" part.
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Apr 25, 2021 20:25
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Thank you!
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Apr 26, 2021 00:10
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Space Gopher posted:Googlers who've talked about their compensation with me have a match of 50 cents on every dollar they put in up to the IRS limit, so in 2021 they'd get a max match of $9,750. This is pretty generous for the software industry, where a middle-of-the-road offer is "dollar-for-dollar matching up to a 3-5% cap." I think their plan also allows unmatched and unlimited (up to the IRS cap) backdoor Roth shenanigans, but at this point we're talking about half-remembered conversations over drinks from several years ago, so I might be wrong about that. Yup, this is correct. They are also the reason Vanguard implemented automatic mega-backdoor conversions a few years ago.
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Apr 26, 2021 00:57
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Space Gopher posted:I've talked to my mom and convinced her to move her money from a financial advisor (who thankfully stuck to bad but liquid mutual funds and stock-picking instead of whole-life or wacky annuity garbage) into Vanguard. Ah ok that led to my next question: “what’s average?” Still a pretty loving good deal, but I’m not going to complain about getting $50k a year pre-tax for my pension when I start claiming it in five years.
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Apr 26, 2021 02:29
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Space Gopher posted:Googlers who've talked about their compensation with me have a match of 50 cents on every dollar they put in up to the IRS limit, so in 2021 they'd get a max match of $9,750. This is pretty generous for the software industry, where a middle-of-the-road offer is "dollar-for-dollar matching up to a 3-5% cap." I think their plan also allows unmatched and unlimited (up to the IRS cap) backdoor Roth shenanigans, but at this point we're talking about half-remembered conversations over drinks from several years ago, so I might be wrong about that. For a high average salary company like google or another tech, it might be cheaper to match contributions than salary. In the case of 50% contribution match, 9.75k is the most google is out. Compare that to a "normal" 6% salary match and for people making over 162k google puts in less under contribution matching. No clue what the average salary on those on that plan is, but glassdoor says salaries of 300k and up happen.
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Apr 26, 2021 02:57
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nwin posted:Ah ok that led to my next question: “what’s average?” Not sure about average, but my Fortune 500 civil engineering employer matches half of the first 6% you contribute. Anecdotally I understand that this ranges from typical to slightly below typical for our industry.
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Apr 26, 2021 03:09
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withak posted:Not sure about average, but my Fortune 500 civil engineering employer matches half of the first 6% you contribute. Anecdotally I understand that this ranges from typical to slightly below typical for our industry. Seems pretty normal, we are 1/2 on 8%. Also Fortune 500.
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Apr 26, 2021 04:00
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Xenoborg posted:For a high average salary company like google or another tech, it might be cheaper to match contributions than salary. In the case of 50% contribution match, 9.75k is the most google is out. Compare that to a "normal" 6% salary match and for people making over 162k google puts in less under contribution matching. No clue what the average salary on those on that plan is, but glassdoor says salaries of 300k and up happen. https://www.levels.fyi/company/Google/benefits/ quote:50% match on employee's contribution up to $19000. Google will match up to the greater of (a) 100% of your contributions up to $3,000 or (b) 50% of your contributions up to the maximum of $9,500 per calendar year. Every dollar of the match is fully vested. Take it with the same grain of salt as all the salaries you see on that site, but it sounds close enough. (And note that they tend to be very stock heavy.)
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Apr 26, 2021 04:17
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Does Google also have a separate 401(k) bonus top-up at the end of the year? If they're really just matching 50% up to the max employee contribution, that's pretty low for bay area tech companies.
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Apr 26, 2021 04:55
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Looking for subjective (or objective) context here on long term money accounts. After emergency savings, we dump all our extra money into the vanguard life strategy fund. We don't do any me detailed managing or adjusting than that. I know that the different accounts' risk is based on how much is in stocks and how much of in bonds, but those percentages mean nothing to be. The growth one is 80% stocks and 20% bonds. Is this considered realistically a very aggressive and risky allocation? Or just 'more' risky comparatively? We have no target retirement date, nothing we're saving for, just want money to grow and to set and forget, and aren't super risk averse nor so interested in making as much money as possible that we'd swing all the way to the riskiest options. I know this is might be very hard to answer (if not impossible), but figured I'd get a feeling for how dangerous we really are living. Edit: is there a prized vanguard or similar account for emergency savings besides my banks savings account? PageMaster fucked around with this message at 06:29 on Apr 26, 2021 |
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Apr 26, 2021 06:21
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How old are you? Or like how long do you think you can park it there before you expect to need that money?
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Apr 26, 2021 13:20
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80% stocks / 20% bonds is a fairly aggressive allocation. Some people do 90/10, or even 100% stocks and disregard bonds, but 80/20 is definitely on the aggressive side. Based on what you're describing, I think it's an appropriate choice for you, it is an excellent set-and-forget option for someone with good risk tolerance. Is it in a tax-advantaged account (401k or IRA) or is it in a taxable brokerage? In terms of parking your cash for your emergency fund, I would recommend an FDIC-insured online savings account rather than parking that money in Vanguard - they do have money-market funds which perform similarly to a high yield savings account, but they are not FDIC insured. (Also note that "high yield" is a questionable term these days, interest rates are very low across the board, any money you park in a savings account will almost certainly be losing value to inflation). Kylaer fucked around with this message at 13:41 on Apr 26, 2021 |
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Apr 26, 2021 13:38
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Sundae posted:Does Google also have a separate 401(k) bonus top-up at the end of the year? If they're really just matching 50% up to the max employee contribution, that's pretty low for bay area tech companies. Comparing on levels.fyi Facebook has 50% on 7% salary, Amazon has 50% on 4%, Apple's is complicated "100% match on the first 6% of base salary. 3-6% of base salary depending on seniority; 50% match for <2yrs, 75% for 2-5 yrs, 100% for 5+ yrs", Microsoft is the same as Google, Netflix is 50% on 4% I'm not sure how Facebook's match works if 7% of your salary is >$19500, I'm guessing it just ends up being equivalent to Google at that point since they match contributions and you wouldn't be able to contribute more than $19500. In terms of FAANG the Google 401k match is the best. Edit: On second thought, I guess Apple is better once you get some seniority and a high enough base salary Jose Valasquez fucked around with this message at 15:54 on Apr 26, 2021 |
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Apr 26, 2021 15:50
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Jose Valasquez posted:I'm not sure how Facebook's match works if 7% of your salary is >$19500, I'm guessing it just ends up being equivalent to Google at that point since they match contributions and you wouldn't be able to contribute more than $19500. Presumably it's subject to the IRS rule that limits your matching to the first $290k of salary, so you get a maximum match of 7% of $290k. Honestly I'm kind of surprised. I would have thought that all of these cash-flush tech companies would have super generous, 100% match plans. I guess everyone just gets options instead?
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Apr 26, 2021 15:58
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Residency Evil posted:Presumably it's subject to the IRS rule that limits your matching to the first $290k of salary, so you get a maximum match of 7% of $290k. Pretty much, although actual options are kind of rare these days compared to RSUs (just straight up “here’s some stock” rather than “you have the right to buy today’s stock at an old, hopefully lower price”). Amazon in particular has a terrible match, especially since they have a soft salary cap at $150-175k for almost everybody in the company, but the total comp is insane because they throw massive amounts of stock at their employees. Of course, the delayed vesting on that stock means walking away from their toxic work environment means throwing away six figures. That’s not an accident.
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Apr 26, 2021 16:07
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We're 40, and would need the money if there was something we decided we wanted to spend the cash on one day, so no date to plan around.. We're relatively safe I think since we have military retirement income and VA disability that covers our basic living expenses (mortgage and food/utilities) so short of those going away I can't think of an emergency where we would HAVE to pull the money (medical is covered); so it's mostly just extra money for whenever we want, but I'm still not comfortable with something where we could potentially lose all of it. Edit: not an IRA, just a taxable mutual fund PageMaster fucked around with this message at 16:31 on Apr 26, 2021 |
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Apr 26, 2021 16:12
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Space Gopher posted:Pretty much, although actual options are kind of rare these days compared to RSUs (just straight up “here’s some stock” rather than “you have the right to buy today’s stock at an old, hopefully lower price”). Options are rare these days in public companies, sure. But options are still the best way to deal with companies that are not public because accepting an RSU grant ties you into taxable events as the shares vest. Shares of a company that probably doesn't have a defined and for-sure liquidity event that you've now paid income tax for. ISO/NSOs (options) get around this and are heavily used in lots of those pre-IPO bay area startups (at least, I don't know specifically about other places).
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Apr 26, 2021 16:13
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Space Gopher posted:Amazon in particular has a terrible match, especially since they have a soft salary cap at $150-175k for almost everybody in the company, but the total comp is insane because they throw massive amounts of stock at their employees. Of course, the delayed vesting on that stock means walking away from their toxic work environment means throwing away six figures. That’s not an accident. This is less of a thing now with a good recruiter / manager. Not the toxic work environment thing mind you. But you should be able to negotiate your missing rsu's as a 2 year sign-on bonus, paid monthly, no take backs. They won't call it salary because god forbid but it's functionally the same. (At least based on recent trip reports from friends at aws and Amazon.)
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Apr 26, 2021 16:18
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So I have about slightly more than 5 years left on my student loans at 4.57% and 16,288 remaining and I will be able to pay it off EOY. It feels like to me investing it at this point would be better over the 5 years? I do have an emergency fund and no other debts. Still feels like a gamble vs a 5 year time horizon which is a long time when it comes to personal changes. But also being debt free this year sounds loving fantastic.
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Apr 26, 2021 16:22
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Stock options are rarely worth giving a gently caress about. You should calculate the value of a stock option (in whatever form) by determining what the IRS is going to charge you on. Other than that, it's just the company being cheap. Here's a brief primer of Employee Stock Options (ESOs). They're all considered equity compensation which is to say just a different form of compensation than cash. RS(x): Restricted Stock <mumble>. These have many names, like RSO (restricted stock options), RSU (restricted stock units), RSG (restricted stock grants), etc. They're all just a situation where you're given equity compensation but you do not actually get to call it yours until certain criteria are met, usually time worked. Once the criteria are met these stocks "vest" meaning you have now-unrestricted ownership of them. If they're not public or don't have some established fair market value, you'll pay tax on some other metric, usually par value, which is pennies and then at some point (when you sell) you have to pay a fuckload of taxes on them because the par value was considered their basis. Employee Stock Purchase Plans (ESPPs): Employees are granted the opportunity to purchase stocks at a discount. Work for Amazon, you can buy a certain amount of Amazon stock at a 20% discount as compensation for working there. A long time ago this was a big issue of people not being taxed, but they patched it very quickly by making you be taxed on the discount. Stock Appreciation Rights (SARs): Hoping to circumvent situations of ownership/taxes while also incentivizing employees to give a poo poo about their company, these grant the employees the rights to any gains in the stock during some pre-determined term, payable in cash or stock without actually owning any stocks. You pay taxes on the cash or stock you receive. Phantom Stock: Some stupid nonsense that is usually reserved for executive compensation because it's complicated and stupid and is often a method of having the company try to gently caress around to benefit phantom stockholders. Basically it's (usually) non-convertible rights to the cash value increase of a specified amount of shares that you do not receive legal ownership of. At the end of the day, you don't really want to receive shares in a company in lieu of cash because you can invest cash in diversified good investments but shares in a company are "locked up". Generally the best approach to ESOs is to receive whatever form they take, and the minute they are able to be turned into cash (like when a RS(x) vests) you do so and properly invest that cash. If someone is trying to impress you and list "stock options" as a benefit for working at some company, know that it's stupid nonsense-- you are not in a better position for receiving stock rather than cash, because receiving stock is the same mathematical outcome as having been given cash and then buying a bunch of company stock for that cash. Some stocks are not easily bought or sold, such as a private start-up. Their stocks are also usually terrible financial propositions. jokes fucked around with this message at 16:38 on Apr 26, 2021 |
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Apr 26, 2021 16:29
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i just got the third installment of this year's maintenance loan, which i will pretty much never have to pay back because of how that poo poo works in the UK im gonna stick some of it in a long-term investment fund or something, a friend recommended i check out morningstar and research some funds on my own from there
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Apr 26, 2021 16:33
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jokes posted:Stock options are rarely worth giving a gently caress about. You should calculate the value of a stock option (in whatever form) by determining what the IRS is going to charge you on. Other than that, it's just the company being cheap. I don't see ISOs anywhere on this list, and that's all I get. What's up with ISOs?
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Apr 26, 2021 16:35
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A pain in the rear end, that’s what.
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Apr 26, 2021 16:36
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Twerk from Home posted:I don't see ISOs anywhere on this list, and that's all I get. What's up with ISOs? ISOs are ESPPs but they might be getting taxed as capital gains instead of as income. As such they're a hassle, and are usually reserved for "specials", because the company has to do a lot of Really Cool And Sometimes Expensive Things to get this tax treatment and then your own taxes get more complicated as a result. The only people who would really care about this are usually really rich at a very high tax bracket who have fancy accountants and junk. For a reason! e: Also, if I recall correctly, ISOs have a mandatory vesting and holding period. This is probably why only rich folks get them-- you won't see that money for 3+ years but when you do, it's highly tax-advantaged. e2: Yeah, 2 years vesting, 1 year holding. jokes fucked around with this message at 16:43 on Apr 26, 2021 |
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Apr 26, 2021 16:37
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ESPPs are great as long as you can sell right away. The discount is free money and the only risk is that the company stock tanks by more than the amount of the discount before you can sell it. Just have to be careful how it goes on your taxes since the discount may get counted as income twice if your employer includes the discount on your W-2 income and the 1099-B shows the discounted price.
withak fucked around with this message at 16:50 on Apr 26, 2021 |
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Apr 26, 2021 16:43
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withak posted:ESPPs are great as long as you can sell right away. The discount is free money and the only risk is that the company stock tanks by more than the amount of the discount before you can sell it. Just have to be careful how it goes on your taxes since the discount may get counted as income twice if your employer includes the discount on your W-2 income and the 1099-B shows the non-discounted price. Yeah but if you can get a $10k discount on stock via an ESPP every year, that's the same as $10k cash and the only person this benefits is the company who now doesn't have to pay you cash. Overall it's a wash, but people (usually olds) think stock options are awesome and cool but they're not. Just normal compensation with a bit of extra work for dubious benefit. ISOs, though, for an established rich person who doesn't need money? Now those are very cool.
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Apr 26, 2021 16:45
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Yeah, don't pick an ESPP over salary. I was talking about the optional kind that is offered as a benefit.
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Apr 26, 2021 16:48
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withak posted:ESPPs are great as long as you can sell right away. The discount is free money and the only risk is that the company stock tanks by more than the amount of the discount before you can sell it. Just have to be careful how it goes on your taxes since the discount may get counted as income twice if your employer includes the discount on your W-2 income and the 1099-B shows the non-discounted price. Yup, or if they gently caress up the W-2s a bunch 
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Apr 26, 2021 16:48
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withak posted:Yeah, don't pick an ESPP over salary. I was talking about the optional kind that is offered as a benefit. Oh hell yeah free money baby I always feel like companies that offer them are probably also factoring in that benefit when determining salary and are probably shortchanging employees. I don't know though, I've never worked for a public company.
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Apr 26, 2021 16:49
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jokes posted:Oh hell yeah free money baby Oh they do, for sure. Companies will try to cheap out on you as much as possible.
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Apr 26, 2021 16:51
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jokes posted:RS(x): Restricted Stock <mumble>. These have many names, like RSO (restricted stock options), RSU (restricted stock units), RSG (restricted stock grants), etc. They're all just a situation where you're given equity compensation but you do not actually get to call it yours until certain criteria are met, usually time worked. Once the criteria are met these stocks "vest" meaning you have now-unrestricted ownership of them. If they're not public or don't have some established fair market value, you'll pay tax on some other metric, usually par value, which is pennies and then at some point (when you sell) you have to pay a fuckload of taxes on them because the par value was considered their basis. If you're being taxes on pennies of RSU's then the upside sale you mention will be Capital Gains - likely Long Term. If you're being charged "a fuckload' of taxes then you've made "several fuckloads" of capital gains. The drawback to RSU's is the forced taxable event when they're vested while there is some readily attainable value such as it's a publicly traded company. Then you either need to have cash on hand to cover until a trading window, or your employer has to withhold shares to cover a portion of the taxes and you true up quarterly. ESPP's can be amazing if your company is generous in the plan. Otherwise they're kind OK at best. Right now I'm buying into an ESPP from a price 2 years old, which for my company is $10,000's in upside right out of the gate. It's closer to $100k than $50k based on todays price.
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Apr 26, 2021 16:52
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Stock options/rsu's are seldom going to be worth anything at non-public companies, you shouldn't weight them very heavily in your comp considerations. Stock options/rsu's at big tech companies are absolutely a critical part of your comp and your attitude/approach needs a 180° change if/when you make that jump. Grab every share you can. Often recruiters/hiring managers have more leeway on shares than anything else, get all you can from base salary and cash signing bonus, then go after the shares signing bonus.
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Apr 26, 2021 16:57
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jokes posted:ISOs are ESPPs Just no. These are not the same at all. Maybe you've been somewhere that treated them this way, but that's not at all how it HAS to work.
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Apr 26, 2021 16:58
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