I was thinking about whoever said "put everything in stock, not retiring for decades!", why not put everything in small caps then? It's not like the economy would still grow if small caps didn't.
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Retirement-Era |OT| How to Invest For Retirement
- Thread starter TheTrinity
- Start date
- OT
If you have good funds with low fees, then there's no reason to move it over to another 401k if your current company 401k is shit. You can move it to an IRA or Roth if you want. But it's not a huge deal.
That's what I figured but I didn't know if more money in a single one would be more growth. It's just annoying to have to request and mail a check for rollover.
I really wish I had some money to put away right now. All this market uncertainty moment would make for a great buy moment...
Also Ether: That was me. And I also realized why your "just buy 100% Vanguard target fund with 20% bonds" strategy doesn't work - if you need money in a market downturn, you can't just selectively sell the bonds-part of a target ETF. So either you don't trust yourself -> then fine, allocate something to bonds for a rainy day fund. Or you trust yourself -> go 100% stocks. But 100% into a target fund with 20% bonds is the worst of both worlds.
Also Ether: That was me. And I also realized why your "just buy 100% Vanguard target fund with 20% bonds" strategy doesn't work - if you need money in a market downturn, you can't just selectively sell the bonds-part of a target ETF. So either you don't trust yourself -> then fine, allocate something to bonds for a rainy day fund. Or you trust yourself -> go 100% stocks. But 100% into a target fund with 20% bonds is the worst of both worlds.
Sell $10K of your target fund, then turn around an reinvest $8K in stock-only funds. There, you've liquidated only the 20% bond component.
There is a difference in tax treatment, but if we are talking about a hypothetical situation where the market is down, that isn't necessarily a bad thing.
By the way, I don't understand what "trust yourself" has to do with it if we are talking about hypothetical events that are outside any individual's control.
OP
OP
Because it's not like small caps always outperform the rest of the market, even over longer time periods. So I don't see much benefit over the long term and at the cost of more volatility.
So I currently contribute to a Roth fund through my employer, and right now am thinking about putting money into a Traditional IRA before the tax deadline so I can get those tax breaks. From what I'm reading, there is a limit of $5,500 that can be deducted from my gross income via IRA. Is it a good idea to open one of those as well right now? I have the money available. It was supposed to be being saved for a home eventually but I have no real plan for when that is going to happen and I figured the 25% tax cut I'll get from the IRA deposit as well as the contribution to my retirement would be a better idea.
tfw when your tax refund comes just in time to max out your 2017 Roth contribution
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tfw when you should've had to not worry about this
Not a huge deal, but there are some small advantages to doing Roth IRA and Traditional 401K.
- If you need to make an early withdrawal, you can withdraw principal tax-free from a Roth IRA, whereas a Roth 401K may not allow withdrawals and a Traditional IRA would incur a tax penalty.
- If you are in a position to use the backdoor Roth IRA later in life it helps not to already have a large traditional IRA.
I am looking into switching everything up right now. I think I am going to rollover my Roth 401k into a Roth IRA (and then possibly move that money into a different bank/service). I also want to rollover my traditional IRA into a traditional 401k, but I assume I will need to first change my employee contributions to traditional before I can do that.
I'm looking at the index funds in the OP and think I will also change my options to that. I'm currently invested in the JP Morgan fund in the link below. Thinking it's better to change to the Vanguard TSM index..
https://www.marketwatch.com/tools/m...ckers=VTSMX+ONGAX+VGTSX+vbmfx&Compare=Returns
Is there a general investing thread? I'm considering putting some money into an IPO but I don't know if I'm stupid.
I've started looking at Target Funds for my IRA. My parents were previously handling the account and just buying stocks for me but I'm kind of over stressing and management.
Have an eTrade account because that's just what my family uses and we all share a single account. If I started my own Vanguard account would the only difference be that I wouldn't be charged that $20 transaction fee I'd pay anytime I make a purchase or is there something else I'm missing? The one I was looking at VTIVX.
Have an eTrade account because that's just what my family uses and we all share a single account. If I started my own Vanguard account would the only difference be that I wouldn't be charged that $20 transaction fee I'd pay anytime I make a purchase or is there something else I'm missing? The one I was looking at VTIVX.
There are no fees for buying Vanguard funds in a Vanguard account.
This is a good feeling. The original PieCake thread put me on the right track in 2015 when I doubled my current retirement savings. We all start somewhere and it feels good to have some peace of mind for the future.
Yeah, finally getting my shit together, too late in life.
But if I keep this up I should be good to semi-retire at 55. Cross those fingers.
OP
OP
Good news everyone, EA converted me from temporary to permanent role so now I get all the benefits.
50%-100% RRSP match on first 6% (depends on company performance). ESPP where I can get a 15% discount on stock purchase using up to 10% of salary.
15% bonus. $35,000 USD in RSU vesting over 3 years. And the usual pretty good extended medical benefits and $500 per year HSA.
Not AMAZING, but much better than anywhere else that I've worked. Will be a nice little boost to the retirement funds.
50%-100% RRSP match on first 6% (depends on company performance). ESPP where I can get a 15% discount on stock purchase using up to 10% of salary.
15% bonus. $35,000 USD in RSU vesting over 3 years. And the usual pretty good extended medical benefits and $500 per year HSA.
Not AMAZING, but much better than anywhere else that I've worked. Will be a nice little boost to the retirement funds.
So I tried opening a Roth IRA account at Vanguard and after typing in all of my info and submitting it I kept getting a message saying they couldn't verify my info and I'd have to download and fill out the whole application and mail it in. What? I googled it and apparently a lot of other people have had the same issue and there doesn't really seem to be an explanation.
Has anyone dealt with this? I'm thinking about just opening an account with Schwab instead. Vanguard's archaic looking website, no brick and mortar locations, and lack of any kind of online live chat are really making me wary of investing with them in the first place. I'm assuming the main advantage of Vanguard is lower fees?
Any suggestions?
Has anyone dealt with this? I'm thinking about just opening an account with Schwab instead. Vanguard's archaic looking website, no brick and mortar locations, and lack of any kind of online live chat are really making me wary of investing with them in the first place. I'm assuming the main advantage of Vanguard is lower fees?
Any suggestions?
I wouldn't be basing which broker I used based off of a few days of inconvenience. It isn't that uncommon to have to send in paper forms at the beginning. And online chat isn't that different from calling someone.
The inconvenience isn't what bothers me. It's the red flags of not having their shit together with a working website that bothers me. I get errors on everything. I tried just getting a generic login account on there to do more research -> error, it says it doesn't recognize my info even though I said I was registering new. So yeah, of course they wouldn't have my info. Then I tried opening an account and them telling me they can't verify my info with zero explanation at all as to why doesn't give me much confidence. And then of course there is no physical location to get these issues ironed out so, as you mentioned, I'm stuck contacting them by phone where I can sit on hold or spend time going through the sequence of prompts until I can hopefully get through to someone instead of just opening a chat window.
Is there a good reason I should still keep pursuing a Vanguard account specifically instead of another broker?
I had to mail in my Vanguard application, but I assumed it was because I froze my credit after the experian breach and have had issues opening any accounts. I chose Vanguard over Schwab because I plan to buy and hold for a while. Vanguard is owned by it's mutual funds while Schwab is a publicly owned company and Fidelity is a private business (have my 401K and roth there). Schwab and Fidelity lowered their fees and expense ratios to compete with Vanguard, but there is no guarantee that will be the direction they go in in future. I don't plan on accessing these funds for a while and don't want to worry about fees going up in the future if management changes their priorities. I am going to buy their admiral shares of total US market and will not be actively trading, so the interface is not as important to me now.
That's why I am going with them, but everyone has different priorities.
That's why I am going with them, but everyone has different priorities.
From the previous page:
It is true that Vanguard does not have the slickest website or mobile app. I am willing to deal with that.
Can't you guys just open an investment account at your bank and buy/sell Vanguard ETFs? That's what I do, never had to sign up to Vanguard. Why does it sound so complicated.
I'm thinking of selling essentially all of my taxable index funds (VTSAX and VTIAX) to take out my remaining student debt in the next few months. I have 60k left in loans (payed down from 130k over the years) and it has a 4.25% interest rate. I want to get rid of the debt for mainly psychological reasons. My investments have been doing better than 4.25% in the long run, but the debt has been causing me serious stress.
Is this a bad idea? Would I get hit hard with both short and long term capital gains taxes? I would still have a healthy 401k, Roth IRA, and a small HSA. I could continue to grow the index funds and slowly chip away at the loan for a few more years, but I'm definitely tempted to erase a huge debt all in one shot.
Is this a bad idea? Would I get hit hard with both short and long term capital gains taxes? I would still have a healthy 401k, Roth IRA, and a small HSA. I could continue to grow the index funds and slowly chip away at the loan for a few more years, but I'm definitely tempted to erase a huge debt all in one shot.
Yes, you would get hit hard with capital gains taxes. Somewhere around the realm of 15-33% for most folks. I personally would find that more stressful. Rather than selling, why not keep the funds as they are and start paying off more aggressively with future income? I understand where you're coming from. I'm paying off early a student loan that is under 2% interest. Every rational person should yell at me. But it's my last block of student debt and I'm done. And I'm using paychecks to knock it out.
One benefit of spreading out your student loan payments? The IRS caps student loan interest deduction. Don't waste that all in one year.
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Does it cost you money to trade? It doesn't on vanguards website.
I see. But it's deductible anyway so I don't really mind.
Aren't ETFs more tax-friendly?
I'm above the income limit for student loan interest deduction (I really wish they would increase the maximum, but yeah first world problem).
I guess for now I will stop adding more money to the vanguard funds and just hit the loan as aggressively as I can. Once the debt is smaller maybe I can sell a smaller portion of the index funds just to make it go away a little faster.
Same here. I know it's not good to keep checking your 401k, but I guess I am proud. I have a long ways to go, but this is the most I have ever saved.
Deductible? Tax? 1) 2% of AGI and you have to itemize and most people won't be itemizing anymore.
In Canada it subtracts the expenses from my revenue.
In any case it's a tiny fee, I don't do many trades a year since I invest everything in a single fund per account.
Right, some.days I see that I've made more that day than I'd saved in the few years before. Tbf, I was in school and transitioning careers. But I was awful with money for a long time before that. Glad I'm getting it together (you too).
Good for you! Better late than never. I didn't get my first full time job until I was 32(3 years ago) and even then, there was no 401k match and I was saving to get out of a one bedroom apartment, where I was living on the couch.
You know what's better than tax deductible? Paying nothing!
You asked why bother with vanguard, but to throw it back on you why bother investing through your bank? in the US, they offer shitty interest rates on savings accounts, so we go online for savings and use checking services. I don't know anyone who invests through their consumer bank unless they do the online Schwab as their checking account. Nobody invests thru chase or wells fargo... well maybe old people. Vanguard is free, the trades are free, why not?
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OP
OP
Well hold the phone here. If Ether_Snake is Canadian it's a bit of a moot point as we don't have access to investing directly through Vanguard. We also don't have access to any of their mutual funds so that's out the window too. They're talking about bringing in some (https://www.vanguardcanada.ca/indiv...d/prelim-filing-four-mutual-funds.htm?lang=en) but I'm not sure if they're live yet, and they're kind of lame funds anyway.
For commission free trades, as noted in my OP, you'll want to use Questrade.
Myself, I started elsewhere (Scotia iTrade) and I'm too lazy to move it over. Plus yeah, I make very few trades a year so I'm ok with it.
For commission free trades, as noted in my OP, you'll want to use Questrade.
Myself, I started elsewhere (Scotia iTrade) and I'm too lazy to move it over. Plus yeah, I make very few trades a year so I'm ok with it.
In general, yes, but not for Vanguard funds / ETFs. Vanguard uses a patented structure where its ETFs are just another class of mutual fund shares. This causes their fees to be equivalent.
And even outside of Vanguard, I don't view the tax efficiency of ETFs as being a huge win. There are aspects of ETFs such as bid-ask spread that can have their own costs.
Finally started regularly contributing to my Roth IRA before I can even think about it... I only bought FSMTX and FTIGX because I feel like that's the most straightforward option for someone who doesn't know much about this.
I've contributed for last year and this year, which feels good--however, it's been a few months now and I am unsure what type of growth I should be expecting. Looks like my account balance has just hovered around the same spot, even dropping slightly. I assume this is a 'put money in and forget about it' sort of account, but I just want to double check that what I'm doing is fine in the long run--buying FSTMX and FTIGX, specifically.
I've contributed for last year and this year, which feels good--however, it's been a few months now and I am unsure what type of growth I should be expecting. Looks like my account balance has just hovered around the same spot, even dropping slightly. I assume this is a 'put money in and forget about it' sort of account, but I just want to double check that what I'm doing is fine in the long run--buying FSTMX and FTIGX, specifically.
You aren't doing anything wrong. Those funds are fine, 2018 just hasn't been a great year for stocks so far.
When I started investing the market was negative for over a year. This stuff happens; you just need to roll with it. If it stresses you out, stop checking your account balance.
Look at the Dow Jones s&p 500 and nasdaq and their performance the last 15 months.
This is less retirement-related, and more about general savings.
My wife and I recently sold our home due to moving and don't plan to re-buy a home for at least 2 years, but it could be upwards of 10 years. That means we have a decent amount of money from the sale of the home sitting in our savings account earning 0.1% interest, which is obviously abysmal. It's only been there for literally a few days, but we're anxious to get it into something that'll earn more interest without any significant risk to the money itself, as we want to put it towards our next home within that 2-10 year time frame.
With that said, years ago, I would have put the money into a shorter-term bond or CD, as those used to give >2-4% interest rates, but they are obviously pretty worthless these days. Money Market accounts at our bank are basically in the 0.1% to 0.3% range at best.
Considering all this, we're at a loss as to how best store the money while we wait. Does anyone have a suggestion for a low- or (essentially) no-risk investment we can keep the money in for 2-10 years that beats our 0.1% interest rate?
My wife and I recently sold our home due to moving and don't plan to re-buy a home for at least 2 years, but it could be upwards of 10 years. That means we have a decent amount of money from the sale of the home sitting in our savings account earning 0.1% interest, which is obviously abysmal. It's only been there for literally a few days, but we're anxious to get it into something that'll earn more interest without any significant risk to the money itself, as we want to put it towards our next home within that 2-10 year time frame.
With that said, years ago, I would have put the money into a shorter-term bond or CD, as those used to give >2-4% interest rates, but they are obviously pretty worthless these days. Money Market accounts at our bank are basically in the 0.1% to 0.3% range at best.
Considering all this, we're at a loss as to how best store the money while we wait. Does anyone have a suggestion for a low- or (essentially) no-risk investment we can keep the money in for 2-10 years that beats our 0.1% interest rate?