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Retirement-Era |OT| How to Invest For Retirement
- Thread starter TheTrinity
- Start date
- OT
I liquidated my ARK funds. That was an expensive lesson. FOMO got the better of me. I knew better and I did it anyway.
Wrong thread for penny stocks? :) If you had retirement savings in ARK... god help you
Yes. It was in my retirement accounts. I only bought about $15k worth though. So its not the end of the world but still lost a few grand all said and done.
Buy SCHD with that money. Value Growth Dividend ETF.
Its amazing. Up 7% since July and 3% dividend.
Its CAGR is on par with VTI. People think 2022 will be more value oriented than growth so its a good bet.
That being said its at ATH but alot are lol. It wikl be higher years from now barring a crash
I actually already allocated the rollover to a couple of ETF/Indexes yesterday so I'm good for now :)
I think over the years in my regular trading account, I tried to get some that were focused on dividends, but I could probably due with consolidating. I've mostly just been letting them ride. A bulk of them in my regular trading account are focused on MGK and DIA.
I need some advice.
My dad has some money in an ira account with a financial advisor in one of the big banks.
He is older and scared of losing all his money because it's risky oriented stocks/etfs/etc. They are also charging him some hefty fees.
Is there a way he can just park his money to do nothing or at least make some measly money in interest risk free?
My dad has some money in an ira account with a financial advisor in one of the big banks.
He is older and scared of losing all his money because it's risky oriented stocks/etfs/etc. They are also charging him some hefty fees.
Is there a way he can just park his money to do nothing or at least make some measly money in interest risk free?
Has he... spoken to his financial advisor about his fears? That'd be step 1.
Aside from that, GIC's are probably the closest you're gonna get - think of it like a short-term (3-5 years) loan you're giving to the government for a guaranteed 3-5% return. (numbers made up) You could also just invest in bonds, which is pretty safe. E.g. : https://www.investopedia.com/terms/...etween an,account or U.S. Treasury securities.
He needs to talk to his guy. Maybe your dad needs to allocate more to bonds and cash etc. Is he retirement age? if hes 10 years out from retiring he should stay in stocks
He's going to talk to him and he's way in retirement already.
Yeah he needs much more bonds and cash assuming he has enough to live on.
The financial advisors at banks are snake oil bullshit salespeople. He'd be a lot better off if he can find a 100% fee only fiduciary. That's only 1% of financial advisors, so they're hard to find. All the rest that claim to be fiduciaries looking out for your best interests are dual-registered as broker-dealers. There's no way of knowing when they're acting in your best interest or merely suggesting something suitable and therefor more in their interest than yours (and it's nearly always their own).
Bought some SCHD and VYM today since traditional growth doesn't seem to have a very good outlook right now. Gonna try to load up on some more VOO and VTI before February if possible, though.
yeah ARK and cannabis etf got me...ark is at least not lossy, its where it was, but i lost 50% on cannabis. thankfully most of my investments are on SnP 500 and AI.
Anyone do leveraged etfs? I wanna start investing in one or two...knowing the risk.
Just got paid today and VERY tempted to just put the vast majority of the paycheck in today and grab as much VTI as I can. I don't want to just go under the assumption that the market will be at this level for so long that I'll have time to get my 2nd W2, be able to file, and get my return to put it all into my IRA.
Naturally, I maxed out my IRA at the beginning of January lol. Oh well. I increased my 401K withholding temporarily so maybe I'll get to take advantage of this dip a little.
Question - I can withdraw my contributions from a Roth IRA, but NOT a Roth 401k, correct? Can I withdraw my contributions if I roll over a Roth 401k into a Roth IRA?
E.g, made up numbers
Contributions only, made up numbers:
Roth 401k: 20'000
Roth IRA: 10'000
I can withdraw 10k from the Roth IRA, not the 401k. If I rollover the 20'000 into the IRA, can I then withdraw 30'000 from it?
E.g, made up numbers
Contributions only, made up numbers:
Roth 401k: 20'000
Roth IRA: 10'000
I can withdraw 10k from the Roth IRA, not the 401k. If I rollover the 20'000 into the IRA, can I then withdraw 30'000 from it?
Yeah I maxed it yesterday. Seemed like too good an opportunity to get in now rather than DCA throughout the year
401k maxed out, Above income limits for ROTH. Cannot Backdoor ROTH. What is next?
I cannot backdoor, because of a rollover IRA, (pro rata rule)
I think my next step is to open a post-tax account, is this correct? I prefer Vanguard, what exactly is this called at vanguard?
I just opened an "investor" account, and money was placed into a money market (wallet?), I need to wait for funds to clear and then I can buy mutual funds or ETFs? and this money is continue reinvested automatically?
I also have 1.7k in a ROTH that I contributed to, what should I do with this?
I cannot backdoor, because of a rollover IRA, (pro rata rule)
I think my next step is to open a post-tax account, is this correct? I prefer Vanguard, what exactly is this called at vanguard?
I just opened an "investor" account, and money was placed into a money market (wallet?), I need to wait for funds to clear and then I can buy mutual funds or ETFs? and this money is continue reinvested automatically?
I also have 1.7k in a ROTH that I contributed to, what should I do with this?
Got a family member who found out they had a really draining fund in their 401k and is looking to make a switch. I'm kind of an amateur at all this and was wondering if anyone had any recommendations for things to look into that would be safe and have some growth. Also any advice about moving money from one fund to another.
They should be able to sign in to their 401K account online and make changes to their holdings.
The advice in the OP pretty much covers everything. In general, you can't go wrong with funds that are 1) low in expenses and 2) high in diversity. A total market fund or S&P 500 fund are the best bets in that regard, since they are diverse and should have a low expense ratio. Hard to give more specific fund suggestions without knowing what they have available (and how badly their current fund is hurting them).
If I'm starting a part time job that offers a 401k with no employer matching but I'm immediately vested, should I bother since the paycheck is pretty meager or should I just stick to a personal account?
401k is tax sheltered, so assuming you would invest it anyway, it's better of there than in a regular taxable investment account.
Without a match, I would probably invest in a personal IRA through Vanguard/Fidelity first. If that gets maxed out, then contribute to the 401K. Basically the usual priority list:
1. 401K to match for the free money
2. Personal IRA for more control over funds and fees
3. 401K to max
Since there's no match the first one gets skipped.
1. 401K to match for the free money
2. Personal IRA for more control over funds and fees
3. 401K to max
Since there's no match the first one gets skipped.
If you mean a personal account like a Roth IRA and not a taxable investment account or savings account then yeah, that's a way to go. You want either a Roth IRA or 401k for the tax benefits. I think most people will tell you to go for the Roth IRA if the 401k has no match, but the 401k at least has the convenience of coming right out of your check so you don't have to think about it. So the 401k could be nice if you don't trust yourself to actually contribute to the Roth IRA.
Thanks for the responses. I think I'll go for a personal/roth account and try to max that out for now.
This is probably a silly question but how is step 3 normally done? By increasing the contribution as much as you possibly can without issue and then turning it back down the following year?
If so, what happens if your contribution and/or matching goes beyond the limit? Or are there protections against that?
I think most employers will stop your contributions once you hit the annual maximum. Only time it would be an issue is if you have two jobs with 401k contributions and one place doesn't know how much you've contributed at your other job.
Yeah, with 2+ jobs you'd have to be on the ball for coordinating how much you're putting in.
Somewhat relatedly, a lot of employers still apply their 'match' on a per-paycheck basis, and as such, you may risk losing out if you over-contribute earlier on in the year and hit the cap in, say, October or w/e, since your contribution for future paychecks in that year would be zero.
Me, too. I put in the max in the first week of January every year. It's all still down but that's ok as it doesn't really matter long term. Putting in the money this way sure worked out the past few years, though.
I've shifted my thinking on this a lot. I'm currently in the camp of Roth *anything* not making sense for most people.
The not having to pay taxes on earnings sounds sexy at first glance but it seems like if you dig deeper it doesn't really pan out how you might think.
That said I have:
- A regular 401k
- A traditional ira (where i dump 401k from previous jobs)
- A roth ira I contribute to yearly (but this year I've reached the income level where I can't going forward)
I really like the idea of getting to withdraw contributions at any point in time with no issues (relevant mostly to the Roth IRA, but also for 401k rollovers), as well as obviously the tax-free growth.
On the other hand, I COULD use the extra hands-on money...
Ah, I see. Thank you. So most of the time its automatically handled by the job unless you've had more than one job during the year. So theoretically I could increase my contribution to the the 401k ceiling and then it'll be cut off. And then the next year when everything resets, I can readjust the contribution rate.
I know I'm pretty dumb on all of this, but I'm the opposite. To me, it doesn't make much sense to min-max Traditional vs Roth tax considerations since:
- Taxes in the US now are ridiculously low relative to other developed countries and history
- The government is going to have massive bills (infrastructure, health care, climate change mitigation, etc...) coming up that it's going to need to fund somehow
- If you're doing things right today, you'll be one of the richy riches targeted for higher taxes when it comes time to withdraw (and probably rightfully)
The only thing keeping me from going all in on Roth would be if I felt the political sentiment was against them so much that there would be a risk that politicians would retroactively kill the tax benefits. The certainty of no taxes on that money in the future beats modest tax benefits today and an almost certain higher tax rate in the future.
My thinking as well. Also my 401k contributions going to traditional would not be enough to change the tax bracket I'm in, eliminating one of the other reasons I'd consider traditional over Roth.
Ugh I want to retire at 57, that would put me at 30 years in the government w/ FERS. I'm in year 2.
I'm currently capping out my 401k and my Roth IRA each year.
29 years old.
~ 100k in Roth and rollover IRAs. ~30k in 401k (tsp) and 20k in cash.
I already saved up and bought a house w/ 20%.
My issue is, I feel like I'm doing everything right. I want to retire at 32 years in the workforce, and none of the math I do says Ill be able to do it.
I've been busting my ass saving, a massive amount of money since I started full time employment (at 25). I know I'm fortunate and I make good money, how do people even begin to retire?!
I'm currently capping out my 401k and my Roth IRA each year.
29 years old.
~ 100k in Roth and rollover IRAs. ~30k in 401k (tsp) and 20k in cash.
I already saved up and bought a house w/ 20%.
My issue is, I feel like I'm doing everything right. I want to retire at 32 years in the workforce, and none of the math I do says Ill be able to do it.
I've been busting my ass saving, a massive amount of money since I started full time employment (at 25). I know I'm fortunate and I make good money, how do people even begin to retire?!
The more I think about it the more I feel like a traditional IRA is probably better overall, even for lower income people like me who will certainly have higher taxes in the future. The primary value in a traditional IRA over a Roth comes from the ability to invest your tax savings.
The tax savings come off the top. For simplicity, say all your IRA funds come out of your highest bracket which is 25%. You max out your Roth investment with $6000. That's $1500 in tax savings, which you can put in your 401K and still be tax advantaged. That amounts to $7500 invested in tax sheltered retirement accounts, instead of $6000 invested and $1500 paid in taxes with a Roth. You come out with the same after tax/after investment dollars either way.
I say this as somebody who invests in a Roth every year, lol.
The tax savings come off the top. For simplicity, say all your IRA funds come out of your highest bracket which is 25%. You max out your Roth investment with $6000. That's $1500 in tax savings, which you can put in your 401K and still be tax advantaged. That amounts to $7500 invested in tax sheltered retirement accounts, instead of $6000 invested and $1500 paid in taxes with a Roth. You come out with the same after tax/after investment dollars either way.
I say this as somebody who invests in a Roth every year, lol.
Curious to see your math, because you should have no problems at all retiring at 57 if you are maxing out a 401K and a Roth every year.
Honestly, a lot of the FIRE types are either tech peeps making 200+K a year, small business entrepreneurs who can massively sock away their earnings in individual retirement accounts, and/or saving something like 80% of their earnings.
....That, and relying on the past 10 years of a massive bull run.
Though out of curiosity, what are your estimates using for RoR, and/or what's your pension plan look like?
If you're maxing 401k and roth (or the govt equivalent) every year, I would think you'd hit that number easily by 57....though it admittedly depends on what RoR ends up looking like, as well as how big you anticipate your yearly spending will end up being to get to an estimate for the 25x valuation you'd need to hit (assuming the 4% rule).
Doing a quick assumption of 7% annual return with your rough numbers (130k currently, and ~2100 a month for 26k going forwards) puts you just under 3 mil in 28 years, or 2 mil with 5% (for post-inflation).
What makes you think you can't retire at 57? That all sounds perfectly reasonable to me.
I'll admit the fidelity "retirement score" tracker is doing most of the heavy lifting on my negativity.
Well I'm 29 so in general my mortgage is 1300 but I put away 1800 on it because I intend to sell this and move into a proper house in the next ~3-5 years so it's as good as saving in a low yield savings account.
And then ~1-1.5k in monthly credit card bills (paid in full)
That's really all I've got.