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Hopefully this is the right place to ask this. I'm trying to consolidate my retirement and investment funds, and I'm not entirely sure what the ramifications are for moving things around. I realize most of this is probably stuff I should talk to a real adviser about, but I prefer to get the advice of strangers on the internet first. What I have: - A collection of stocks and some cash in a brokerage account with Wells Fargo - A Roth IRA with Fidelity - My 401(k) with J.P. Morgan (can't move this). - A mortgage, but no other debt Though the cost ratios on my Fidelity IRA funds aren't atrocious, both returns and expense ratios there are worse than their equivalents at Vanguard. My Wells Fargo account doesn't charge an annual management fee, but the costs to have them buy/sell a stock or even send me a check for my dividends is ridiculous, so I'd like to move those assets to a more reasonable place as well. I haven't made 2012 contributions to the IRA yet. 1) What is Vanguard like for individual stock management? I'm mainly just holding these stocks and don't have plans to purchase more, but I do get dividends that I'd like to be able to reinvest more wisely. Do IRA and brokerage accounts both count towards their "assets invested" number that determines whether I'm standard or Voyager? 2) Are there tax implications if I'm moving my Roth IRA from Fidelity to Vanguard? Is my only option for moving assets from Fidelity funds to Vanguard funds to sell the former and buy the latter? How do taxes and such work for that? 3) I'm going to try to refinance my mortgage soonish. Will moving assets like this affect anything that could affect my credit? 4) Would it be better to just ditch the movement stuff and start a new IRA account with Vanguard with my 2012 contribution and leave the Fidelity stuff where it is?
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Jan 13, 2013 10:38
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IT BURNS posted:So, MY WIFE and I are debt free - no student loans, car payments, or unsecured debt. Our combined income is 100k, and we have 11k in savings (we had 25k until we recently decided to use a big chunk to pay off a loan). What are some good short-term investment options? We are possibly facing a move/relocation in the next year. Should we focus on rebuilding our savings? We were also considering maxing out our 410k. Generally the advice is: 1. Emergency fund. Build up 4-6 months of expenses and keep it liquid (i.e., savings account). 2. Roth IRA(s). 3. 401(k). With your upcoming possible move, that changes things a little with regards to 3... do you own your home? Are you considering buying a home post-move? How much will it cost to move? I'd throw as much as possible in to a normal savings account past your emergency fund to handle that potential. If it turns out you don't need it, you can crank up your 401(k) contributions and make up the difference with that extra money and you'll only be out a few months of growth. The difference between 1% (bank) and 5% (market) is huge over the long term, but over the short term you'll come out way ahead if you have the savings when you need them rather than having to pull out retirement contributions or going in to debt. Just make sure not to leave the retirement contributions paused for very long.
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May 14, 2014 07:33
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So my employer's recently changed providers. The new place has access to Vanguard funds at good expense ratios, so I can approximate a whole-market fund pretty easily, but the bond funds (.51% ER) and international funds (.64% ER) aren't that great. I'm considering keeping what I have in the old 401k (which can be rolled into this, but doesn't have to) for their lower ER bond and international funds, and buy mainly US stock in the new one. Is .3% difference in about 30% of my portfolio really worth the hassle of keeping two 401ks, and having to buy more bonds than I would like in my Roth to keep my allocations right?
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Apr 22, 2015 07:26
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When we're talking about the place where you, the investor, will live, home ownership is about one question: "Do I want to own my home?" You're going to be spending an amount of your money on housing wherever you are, and ownership vs. renting is a question of where that money goes. In some cases, a portion of the money you spend on housing if you mortgage a home will come back to you eventually. In the US, the mortgage interest deduction from your income tax is often a significant savings. But realistically you can't call "buying my single-family home" an investment, even here in the long-term thread. If, however, you're able to buy a multi-unit home, that's an investment worth looking in to. If the rent you are paid from one or more tenants can offset your mortgage payments and ownership costs significantly, that is indeed an investment you are making, and you are getting returns from it. It's the sort of thing that can slingshot your personal finances and help you out in the long run. It's also a gigantic pain in the tuckus since you're now responsible for multiple homes containing multiple things that can break, and you're at significant financial risk if you are unable to rent the additional unit(s) consistently, or if a tenant causes severe damage. But that's a different thread. Speaking very generally, if you're able to buy a house that is affordable (TCO is roughly equal to rent), and you're able to live in it for a long time, and the market doesn't crash on you, owning probably comes out ahead of renting because you can recover some of your expenses. Because there are so many events which can change that, and most of those events are out of your control, you're better off assuming that what you paid for housing will never come back, and budget/save so that you aren't depending on any of that money in the future. In other words, treat the money you spend on your house the same way you treat the money you spend on transportation. You might get lucky and buy a car that's worth more when you're ready to get rid of it, but you probably won't. Either way, as long as you're budgeting for reasonable transportation costs, you're going to be okay.
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Sep 9, 2016 23:01
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The only reason I was able to buy in 2009 was because I had my savings for my down payment in cash in 2008. All that "lost income" from the low interest rate hurt a lot less when it could have lost 40% of my savings.
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Oct 16, 2016 01:37
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Leon Trotsky 2012 posted:If you had it in the market before 2008 and didn't sell during the downtown, you still would have more than doubled your money in about 4 years and potentially more than tripled it if you invested in a DOW index fund at its lowest and just held for 4-5 years. Well, let's see. I started saving specifically for this in mid 2006. The DJIA was, when I started, hanging around 13,000. The peak before the recession was 14,100ish in October of 2007. That would have been 9% growth! At that time, I didn't have enough saved up to buy a house in the area I wanted. Then, the stock market crashed, but I kept saving. I put in my offer on the house I bought in May 2009, when the DJIA was only 8300. It wouldn't be back over 13,000 for another three years. In the long term, the stock market would eventually have had higher returns. This is why I also was buying stock in my retirement accounts during that period. In the short term, my savings would have been worth about 75% of what I had put in, and I could not have used it to buy when I did, which was at the end of the housing price dip (about $110k less than at the stock market peak, in my case), and when I was able to make use of the first time homebuyer's tax credit. In retrospect, it could only have worked out better if I'd literally found money in the attic. Yes, this is a very specific set of circumstances. In other very specific circumstances it would have been better to keep my savings in the market. The point is that stock prices are volatile and sometimes go down, there is a transaction cost when you sell, and when you are saving for a short-term goal in the next 2-3 years, you often can't afford the risk that you'll have lost value when you need to spend the money.
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Oct 19, 2016 10:05
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Throwing another anecdote on the pile here. I switched careers in 2006 and was just getting back to "normal" IRA contribution levels in the crash. I lost a lot of value, but my contributions in 2008-09 are now worth 2-3 times what I put in and I'm ahead of where I would have been overall. I also bought a house in the double-dip and now those prices have recovered, so all in all it was a pretty good time to throw money at things. If I had been set to retire in 2010 I would have been a lot worse off, but on the other hand if I had been getting close to retirement I wouldn't have had 95% of my retirement funds in stocks....
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Mar 25, 2017 22:10
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brugroffil posted:I wasn't sure about IRA/401(k) since I don't get any deductions from contributing to a traditional IRA anymore, but I'm still under the Roth IRA cap so I'm not sure which option is really "best." Probably going to follow that post a little bit ago saying "if you're paying attention this closely, you'll probably be fine anyway" post and go with my gut of dropping down my 401k contribution to 6% and putting the difference into a Roth IRA. Once you've maxed out your Roth space, I'd continue putting more money in your 401(k) if at all possible. As long as you keep to the low ER funds you'll still come out ahead of investing post-tax dollars in taxable investments, or spending it on an ever-grander series of hats. Basically, having investments in both types of vehicle is yet another form of diversification and maxing out both is the dream.
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Apr 21, 2017 19:11
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A share in an REIT will not run an illegal motorcycle repair shop in your portfolio and cut a hole in the floor to dump oil in, thereby halting your income until you remove the toxic soil underneath. But I know someone who had a tenant do that.
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Jun 4, 2017 19:43
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MockingQuantum posted:Sounds good. I was concerned that there was something better I could do with the money than leave it in an account with a not-great (1.15%, I think) interest rate but I suppose there's no point in doing anything with it until I know what I want. It'll probably all end up going towards a house and a car within the next 5 years anyway. 1.15% is fine for short term savings. You're not losing much to inflation and you won't lose any of it when the next bear cycle kicks in, like you could if it were in the stock market or some other investment. Having your savings in cash for a house when the market turns downward is like having superpowers.
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Jul 28, 2017 21:19
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Riders of Brohan posted:
I wouldn't be surprised. They've tried changing regulations and that didn't work, so I imagine misinformation is cheaper than competing.
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Oct 1, 2017 02:53
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I think the remaining argument is 10% bonds vs. 0% bonds at a point where retirement is 20+ years in the future. The 10% bonds argument is that you lower volatility by lots and lower potential profit by not-much. The 0% bonds argument is volatility doesn't matter and potential profit is the only true goal of retirement savings until you get closer to needing the money. At that point it's just a difference in personalities, really, and the risk tolerance you think you have, which is usually way higher than the risk tolerance you actually have.
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Oct 8, 2017 06:31
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Frankly, high employer contributions to your 401(k) plan are a really difficult draw to begin with. Most people are going to go for $2k more raw salary than 1% more in matching funds that they can't use until their sixties, even if that 1% translates to thousands more contributed per year. It just flat-out seems like you're getting less money. Sure, in a theoretical place where you're already contributing to the cap and the two jobs offer equal salaries and benefits otherwise, you'd go for the larger match, because that's free money that can't be put in your retirement fund in any other manner. And it almost certainly makes sense to take the higher match in the scenario above, too. We're just really, really, really bad at weighing future benefits against our current desires in a logical manner. Thinking about this now, though, maybe that would be an interesting way to select for employees that are good about thinking in the long term? You'd have to be running a really stable profit, of course, but I kind of like it...
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Oct 21, 2017 19:49
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Mr.Fuzzywig posted:I max out my employer match every year and this year i should be able to max out my IRA as well but if i dont want to think about it too much is 100 % Vanguard Target Retirement 2060 VTTSX a good place to put it? i really like vanguard but i am wondering if i should do 80 or 90% and put the rest in bonds. Im 25 and dont mind the risk too much i just dont want to have to rejigger all this stuff every couple years. Assuming you will be hitting retirement age at or around 2060, that is exactly where you want to put it if you don't want to think about it for another 42 years. It already contains an amount of bonds appropriate to that retirement time and will automatically shift towards more as that year approaches. There are more efficient ways to handle your funds if you wanted to do it yourself, but for hands-off no-worries management that's literally what these funds are made for. Set them and forget them.
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Jan 11, 2018 09:52
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Ropes4u posted:What is a sane home price to investments / income ratio? Conventional wisdom is that you shouldn't spend more than 40% of your gross income on all debts combined (housing, student loans, auto loans). You shouldn't spend more than 32% of your gross income on total housing expenses (mortgage, insurance, taxes), and no more than 28% of your gross income should be going to the payment itself. Note that lots of people exceed these numbers, especially in High Cost of Living areas, but these percentages are pretty much the standard for what's "safe" in the US. Going just by your income it wouldn't be unreasonable to go as high as $500k, and since that would be a $100k down payment you're looking very good in your low-$400k range. A $450k house with 20% down at 4.5% would still be a mortgage payment under $1900/mo, and you make more than 5 times that. You could pay an extra $1300/mo in principle and still be "fine" going by those numbers (and you'd pay off your house in ~12 years) (don't actually do that). You're in a great position financially.
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Apr 20, 2018 06:09
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The time to move money from stocks to bonds is during your annual rebalance, and only as much as it takes to meet your planned allocation goals for that year (if you're increasing your bond percentage over time). The whole point of diversifying your portfolio is so you don't have to freak out about rapid changes like this, and so you don't do like my boss and move all your bonds into stocks on Monday because he was tired of them "underperforming."
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Oct 12, 2018 05:36
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Plug that lump sum into a mortgage calculator and figure out how much it saves you in interest, plus how many months of PMI it cuts off. It's still probably less of a long-term benefit than maxing your tax-advantaged retirement accounts, but it's also going to be a substantial and guaranteed savings. I don't think it'll be a bad decision either way.
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Dec 25, 2018 18:04
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punk rebel ecks posted:This is so loving stupid. Why would my credit score take a hit if I cancel my credit card after completely paying it off!? There are two things that happen when you get a new credit card. First, you get a hit because you've just applied for and gotten a new line of credit. This will go away in a few months. Second, you get a hit because the average age of your accounts has gone down. This takes longer to go away. You will eventually get a benefit to having that amount of additional credit (as long as you pay it off every month) because that means you have a larger total amount of credit and you are utilizing a lower percentage of it. If you close your old card, you take a hit on two fronts: first, your average account age drops even more, because you're losing an older line in addition to adding a new one. Second, you are lowering your total amount of available credit and thus your utilization percentage won't go down. If you don't have an annual fee with your Chase card you're better off to keep it and not use it. Chase will be able to accept electronic payment from your new bank or you can use eBills to pay it off from your bank directly, and you get the benefits of unused, old credit. All that said, if you're not applying for a loan in the next year or so this is mainly academic. The vast majority of your credit score just comes from paying everything off and not paying late. We're just cautioning you because there will be a hit caused by this and that can mess with loans.
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Jun 14, 2019 17:20
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I repeat this story a lot, but: I had my downpayment savings in cash in 2008, and therefore when both the housing market and stock market crashed I was able to buy a much better house than I could have normally because I didn't lose 40% of my savings. If I'd had to wait for the stock market to recover I could not have afforded the house I bought with 25% down. It was a huge net worth springboard and has changed my financial future. Sure, we're currently in the longest sustained period of growth in 50 years or whatever, but that doesn't mean it's guaranteed to go on for another 5 years.
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Dec 4, 2019 18:08
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MF_James posted:So, you're advocating for putting cash in your mattress (or a savings account/CD) and predicting a recession? Yes, if you need the money in a relatively short time frame (<5 years), putting it in a HYSA will reduce your earnings but eliminate risk. if there is a recession during that period, you will be able to take advantage of it with all of the money you saved. If there is not, you will still have all the money you saved. Long term investments benefit from risk and can ride out downturns. Those statements are less true the shorter your time frame is.
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Dec 4, 2019 23:52
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Abongination posted:I’ve been waiting for a market crash to dump a decent chunk of cash into index funds, I feel like a ghoul but this Corona virus crash seems to be the best time to dive in. Don't try to time the market in the short term. You're putting money in that you don't expect to touch for 5+ years. If you put it in last week or this week or two weeks from now it won't really make a difference on that timescale. If you need the money in less than 5 years, it shouldn't go in the market.
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Feb 29, 2020 11:02
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This past January, as part of my overall retirement plan, I shifted some of my stock funds to bond funds. I did it with the intent to lower volatility and "lock in" my stock gains over the past decade. I'm very happy with how it has worked this year. My retirement accounts didn't get the huge bailout bump they might have, but they also didn't crash nearly as much as they would have with my former allocation. I'll see what the balance looks like next January and decide if I need to alter my mix again then.
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Jun 23, 2020 02:40
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StarkingBarfish posted:I'm glad it worked for you but be aware that this is timing the market which is hard. How sure are you that January is the right time to shift back from bonds to stocks? January is when I make my Roth IRA contribution for the year, so that's when I rebalance my other investments as well. January is also my "evaluate long term goals" period since I usually have a decent vacation and am in the best state of mind to do so. I have no intention to move that percentage back into stocks as a slow conversion from stocks to bonds is my plan for what is hopefully my last decade of full time work. I don't think I'll ever get to the point where "my age in bonds" is the answer, but I can see getting to about 45% eventually. When next January comes around I'll see what needs to be done then. And yeah, it happened to work out this year, perhaps better than it would in other years, but I used this year's craziness as an example of why I'm slowly moving into less volatile investments as I approach retirement. That dip would've been really stressful if I were a few years further along and had a higher percentage invested in equities, which is the point of having your assets balanced to suit your risk tolerance. We're all good. Don't pick winners, don't time the market, do rebalance based on your risk tolerance on a set schedule.
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Jun 24, 2020 23:44
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Okay, so my partner has an annuity that was sold to him years ago by a man who's now in jail, and the annual fee is about to come out of it again so we want to move on this quickly. It's got a current valuation of about $19k and he doesn't have an immediate use for the money. I know that if he cashes out the entire amount will be counted as income for 2020, but he's got enough deductions to cover it. At minimum we're going to stick it in a high yield savings account where it will make money for him and not the annuity people, but would it make any sense at all to backdoor it into a Roth IRA and put it all in VTSAX or something? He has no IRAs and no investments in the stock market due to residual pain from the dotcom bust. He's already retired and his current investments are providing more than enough income. Ultimately this just boils down to: What to do with a windfall of $19k?
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Jul 7, 2020 23:15
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KYOON GRIFFEY JR posted:The major HYSAs which off the top of my head are Ally, Amex, Capital One, and Marcus (GS), basically move together since the underlying macroeconomic conditions and benchmark rates are the same. I personally think Marcus' web interface is better than Ally's. I haven't used the others so cannot speak to that. Capital One has physical branches (Cafes loool) and the other three are entirely online. I ditched Capital One for Amex a few years ago because Capital One had a consistently lower rate than the others and I have an Amex card. There really isn't an advantage there, unfortunately. They have the same login (now, finally) but they are run by separate entities so there's no real integration. When I opened that account it earned 5%. What a marvel.
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Aug 20, 2020 09:53
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You pick your asset allocation to match your ideal risk profile. If you don't rebalance you're then in a different risk profile than you planned. Rebalancing in good years means you're talking your unexpected profit from over performing assets and putting those profits into (generally) less volatile assets, where the money will be safer. Rebalancing in bad years means you're using your savings from one asset to "buy the dip" in an underperforming asset, and (generally) repaying yourself when that sector recovers and you rebalance again. In both cases you're aiming for a consistent risk profile, which is the second most important part of long term investing (The most important part is saving as much as you can for as long as you can).
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Jan 14, 2021 09:43
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Heroic Yoshimitsu posted:I now have a Roth IRA with Vanguard. I have a couple questions: Yes and no. Most mutual funds have minimums for investments and I think $1000 is the lowest I can remember one having, but you can also invest in stocks or ETFs (Exchange Traded Funds), where the only effective minimum is the price of one share. Many ETFs represent portfolios like broad market index funds and are a good way to get started investing before you meet the minimums for those funds. For example, VTI is the ETF version of VTSAX, Vanguard's Total Stock Market Fund. You need to have $3000 to invest in VTSAX, but you can buy shares of VTI for $200ish. Heroic Yoshimitsu posted:- At this point, I can invest money in either 2020 or 2021. Now I definitely don't intend on maxing either of this by late April this year. But let's assume it is possible I could invest more than $6000 this year... Is there anything wrong with the idea of investing in 2020 until its no longer possible, so that I have room to max out 2021 if I can later? That is a great strategy. Invest in 2020 as long as you've got the cap space and the spare money.
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Feb 4, 2021 03:47
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This is Vanguard's explanation of ETF vs. Mutual Funds. The biggest difference is how they're traded. ETFs are traded like stocks, so the transaction happens during the day (if you place it while the market is open) and the price can fluctuate as the day goes on. Mutual Fund transactions all happen at once, after the market has closed, so everyone who buys a mutual fund on a specific day pays the same price. This can be good or bad depending on the day. It's possible to buy fractional shares of a mutual fund, but not an ETF, e.g., I can buy exactly $3500 of VTSAX, but only a whole number of shares of VTI, which would be around $3400 as of today. Vanguard won't do automated buys/sells of ETFs but will do that for mutual funds. Expense ratios can differ. Often an ETF of a mutual fund will mimic the "admiral" version of a fund that has a high minimum investment, so you can get lower expense ratios for a smaller investment. This differs from fund to fund so read the fine print. As an example, Vanguard says they may charge a $20 annual fee for VTSAX if you have less than $10,000 in it. I don't know the details of it but that probably changes the math for which is cheaper based on how much you're investing. There aren't always direct correlations between an ETF and a fund. Sometimes an ETF will hit a sector you like that isn't served by a fund, or vice versa. I personally do most of my retirement investing in funds because they're easier to manage, but ETFs were a novelty when I started out. 
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Feb 4, 2021 05:34
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Another important distinction between keeping your spare cash in a bank (checking/savings) vs. a brokerage, even in money market accounts, is that your bank account is FDIC insured. If the next big speculation bubble falls and your bank fails as an entity, the government guarantees that up to $250,000 of your money held by them will be returned to you. If your brokerage fails (as an entity) and they're an SIPC member, up to $250,000 in cash can be returned to you and up to $500,000 in total value. If whatever you're invested in (this includes money markets) crashes, you're out of luck and there's no insurance for that. If you're not banking with an FDIC bank or investing with an SIPC firm, what are you doing. Stop that. I always recommend keeping your e-fund and cash you're planning to use in the next five years in a savings account (or CDs if you know your timeline). To me the potential best-case gains over that timeframe are not worth the risk of suddenly losing 30% of your savings, especially since you're most likely to need that money more if the stock market loses 30% of its value.
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Feb 6, 2021 02:29
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L0cke17 posted:Ok, so after doing more reading it looks like we want a traditional IRA. Fidelity and Vanguard are both good choices for this. Vanguard basically invented the idea of low cost index funds and is owned by the participants in those funds, so it's less likely to change it's business model later. Fidelity has the better website. Places like Edward Jones are built on charging management fees and selling high cost investment products. Don't go with any place like that.
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May 7, 2021 18:38
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There are two major ways to look at a refinance. The first is "how will this affect my month-to-month finances?" In this case you're probably wanting to go with the lowest initial costs on any loan that also lowers your APR. You're taking the now-smaller loan amount and stretching it back out to 30 years, AND paying a little less interest on that loan amount. Depending on your existing loan terms, it could even end up costing you more money in the long run due to extending the loan by some years, but it will save you money every month as soon as the lowered payments pay back the closing costs. If that saved money goes into investments you will likely come out ahead. The second is "how much money will this cost me in total?" In this case you'll look at buying points and getting the APR as low as you can go. You will trade some money now for saving in the very long term. The higher upfront costs mean the payoff will take longer but once you cross that point you're both paying less per month AND less total. Where those payoff points are depends a lot on your current rate and how long you have left on your current loan. There's a pretty good Google Sheets amortization template that I used to plot out my current mortgage and all my options. I ended up taking the lower upfront cost option because I need reduced expenses now more than I need to save $100 a month in 2040, but I also realize that this option will cost me if I'm not putting those extra funds into something that earns me more than 3% in real returns.
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May 20, 2021 19:27
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Stepping back a little, the whole purpose of an asset allocation is to provide the balance of risk and growth that you want. If you never rebalance, your allocation changes based on recent market results, slowly changing your risk profile. Annual rebalancing keeps you balanced where you want to be just fine. Like most things having to do with long term investment, getting more involved makes it less effective.
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May 29, 2021 09:24
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Upgrade posted:I just plowed my money into a target date fund and set up an auto transfer and auto invest to hit the cap for 2022 and future years. Will max out 2021 with additional deposits too, and just... not think about it. This is a good thing!
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Jul 17, 2021 22:56
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Qubee posted:I'm extremely grateful... This is good and please keep doing it. Qubee posted:I kick myself over how stupid I was... I feel like I'm way behind in career aspects too... I saw all my friends move on with their lives and work their way up the career ladder. This thinking won't help you, but it's an easy trap to find yourself in (and most media encourages it). It's okay if you haven't optimized your life for monetary success, and it will be okay when you choose fulfillment over more money in the future. You are still starting earlier than most people and you're saving a lot! Totally continue with your plan to invest as much money as you are comfortable allocating, and also remember that money isn't serving you unless it is helping you live a better life.
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Aug 18, 2021 09:36
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pokeyman posted:I think it stops being an emergency fund when you invest it. This. And it stops being an emergency fund when you can't access it in a time of need. Most bonds and all bond funds are capable of losing value. While I-bonds are as guaranteed as anything financial can be these days, losing access to that money for a year means it's not in your emergency fund for that year.
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Nov 11, 2021 10:36
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Magicaljesus posted:My employer is moving to Empower. Anyone have experience with them? I've had decent experiences with Empower. The website is fine. The fees and funds will depend on your employer's deal with them, but I've seen no fees at all and flat quarterly fees at various times. They push their automated advisor but it's easy to not use it. I've seen Vanguard index funds available and not-great custom ones, so if you don't have good options, push your employer to add them.
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Dec 2, 2021 19:43
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Someone else has said that they're viewing i-bonds more as an inflation hedge to replace liquid cash, and I'm inclined to agree with that method myself. Here's how I split my money: Cash (including i-bonds): Emergency fund and money I plan to use in the next 5 years (new car, new roof, home purchase down payment, major renovation, etc). This is money I would be seriously screwed if I were to lose a portion, so I'm okay with taking the hit from inflation to have the liquidity of keeping it in a HYSA. "Bonds:" Long-term investments that are lower volatility and don't necessarily track the stock market. This is money I can reasonably expect to be available to me in the next 10 years regardless of market volatility and reduce sequence of returns risk early in retirement. This stability is offset by lower returns, so it shouldn't be a big part of my portfolio until retirement is near. "Stocks:" Long-term investments that have higher risk but offer higher rewards. This is where money I don't expect to need for more than 10 years will go, so that I can get the most returns on my investment. So basically as my time horizon for retirement approaches, I'm allocating less money to the long term pool and more to the short and intermediate pools so that I can maximize availability when I need the money. I'm still putting money in the long term pool for use in like 2035 and later, but the money I expect to need sooner goes in less volatile investments.
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Feb 1, 2022 22:21
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There are two types of IRA: Traditional and Roth. Contributions to a traditional IRA are deducted from your income taxes, but you get taxed on the gains when you withdraw it. Contributions to a Roth IRA are post-tax dollars, but your gains are not taxed when you withdraw them. Generally the thread recommends Roth if you've already got a 401(k). You're under the combined income limit so you can open a Roth IRA for you and your spouse, and you can also contribute to last year's IRA for both you and your spouse as long as you do it before April 15th. This is a great opportunity for you to get some extra long term savings in place! You can open up your IRAs at Fidelity (or Vanguard), and you will need to open up separate ones for you and your spouse. Once open, you'll make contributions to both accounts, and when you make those contributions you can specify which years they're for. If you go whole hog you'll be able to make a $6000 contribution for you for2021 and 2022, and then a $6000 contribution for your spouse for 2021 and 2022. Once the money's all in there you can invest it in funds of your choosing. If you don't know what you want, pick a "Target retirement index fund 20XX" (where 20XX is the closest year to when you plan to retire) and forget about it until then. We can help you set up a three- or four-fund portfolio as well if you're into it. Long story short, you're in a good place. The most important factor in successful retirement is saving regularly and you're already doing that.
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Mar 8, 2022 08:38
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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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| # ¿ May 8, 2024 18:35 |
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Hawkperson posted:The vanguard 2050 target thing This is Good. It's a good thing to do. You may be able to grow the money faster by going 100% stock funds if that's a risk you are comfortable with, but you are definitely doing a good thing and it'll serve you well if you keep maxing out your IRA and leave it right there. If you have extra money beyond your emergency fund, your short to medium-term goals will determine the best place for that money to go.
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Apr 14, 2022 04:59
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