NT: Official Personal Finances Thread

[s0lefunk]

What do you guys recommend doing with a 401k from a former employee, besides rolling it over to your new company?

No reason I have in not doing it, just want to weigh my options.

You’re only real options are to cash out, roll over into an IRA with current institution, or roll over into new employer’s plan. DO NOT CASH OUT!

I recommend roll over into your new employer’s plan. If you NEED the money, and options are limited, you can do a 401k loan where you can take out up to 50% as a general purpose loan (if your plan allows it). Doesn’t show up on your credit report. You’re borrowing money from yourself. Rolling it over consolidates your 401k balances into one pot thus increasing the amount you can take out as a loan. You pay back the loan using after tax deductions from your paycheck. And you can still contribute pretax dollars to your plan. The interest you pay on the loan is going back into your plan/to yourself. Also depending on your plan, the loan doesn’t impact your 401k balance so you can still earn market gains even if you’ve taken a loan.

If you default, the loan is then considered an early withdrawal which becomes taxable income and you’ll have to pay the early withdrawal penalty. If you change jobs, and can’t pay the loan off within 60 days, you can continue to make payments via e-bank transfers.

I took a loan to settle some debt that was hurting my credit score and interest payments were kicking in. Process was quick and easy. The automatic deductions and the fact I’m paying myself back vs different creditors just feels like a better situation.

 

[lilchico4life]

For those who don't have bonds allocated in their retirement portfolios, how do you have stocks allocated and in which funds? Everywhere I'm reading to have 10%-30% in bonds, but a millennial, such as myself, doesn't really need bonds in their portfolio until later on.

Bogleheads suggest a 3-Fund Portfolio consisting of total stock market, total international stock market, and total bond market. If I were to go that route without total bond market, would I distribute between total stock market and total international stock market?

Also, Warren Buffett recommends a low cost S&P 500 index fund. Does he mean to throw all your money into it and forget about it or have a core of your holdings in the S&P 500 and have other funds as well? Why not have your holdings in the total stock market instead of the S&P 500 index fund, since it's much broader and contains all stocks?

 

[drew]

Anyone know if it's better to just keep some emergency funds in a Barclays Dream account as opposed to the new savings account that they have now since the Dream account has been discontinued?



-Drew

 

[antidope]

For those who don't have bonds allocated in their retirement portfolios, how do you have stocks allocated and in which funds? Everywhere I'm reading to have 10%-30% in bonds, but a millennial, such as myself, doesn't really need bonds in their portfolio until later on.

Bogleheads suggest a 3-Fund Portfolio consisting of total stock market, total international stock market, and total bond market. If I were to go that route without total bond market, would I distribute between total stock market and total international stock market?

Also, Warren Buffett recommends a low cost S&P 500 index fund. Does he mean to throw all your money into it and forget about it or have a core of your holdings in the S&P 500 and have other funds as well? Why not have your holdings in the total stock market instead of the S&P 500 index fund, since it's much broader and contains all stocks?

I keep 0% fixed income across my portfolio I have no use for it I am too young. My equity hedge is my salary.

This is how my 401k is allocated and its very much risk ON. A 25% allocation to Emerging Markets would seem insane to most but at present I'm fine with it.

My Ira is about 70/30 US/Non US and my retail account is pretty much all US.

None of this is investment advice by any means but until I'm close to/at retirement age I see no need for me to hold any fixed income.

I do think that if you're not very interested in the markets you can't go wrong with a core satellite approach, having the core of your portfolio be an index fund (like the S&P500) and supplement that with other index names/single stock.

 

[antidope]

Anyone know if it's better to just keep some emergency funds in a Barclays Dream account as opposed to the new savings account that they have now since the Dream account has been discontinued?



-Drew

If this is purely a yield play Goldman Sachs is offering 1.80%

https://www.marcus.com/us/en/savings/high-yield-savings

 

[206to813]

I keep 0% fixed income across my portfolio I have no use for it I am too young. My equity hedge is my salary.

This is how my 401k is allocated and its very much risk ON. A 25% allocation to Emerging Markets would seem insane to most but at present I'm fine with it.

My Ira is about 70/30 US/Non US and my retail account is pretty much all US.

None of this is investment advice by any means but until I'm close to/at retirement age I see no need for me to hold any fixed income.

I do think that if you're not very interested in the markets you can't go wrong with a core satellite approach, having the core of your portfolio be an index fund (like the S&P500) and supplement that with other index names/single stock.

What kind of roi % are you getting

 

[antidope]

What kind of roi % are you getting

Pretty good so far. Hard to give cumulative numbers cause I had to switch platforms when I switched jobs but I'm 25%+ return at a minimum in every account at the moment. But a lot of that is attributed to the market environment we're in.

 

[206to813]

Pretty good so far. Hard to give cumulative numbers cause I had to switch platforms when I switched jobs but I'm 25%+ return at a minimum in every account at the moment. But a lot of that is attributed to the market environment we're in.

Wow that’s sick, I need to step my game up

 

[antidope]

Eh I take little credit for it. I got lucky in a lot of instances, I first bought NVIDIA at like 30$ and legged in a few more times well before current pricing, bought emerging markets before it rallied, and last year was just such a good market year it was hard to lose.

 

[s0lefunk]

I finally reached Excellent credit status buuuut it probably won’t last long after these vacations

 

[tay1]

Quick question about early withdrawal penalties from 401k's

So for a traditional 401k if I withdraw early, Ibhave to pay a 10% fee on the earnings along with being taxed at the current tax rate?

And for a roth 401k, if withdrawn early, theres only a 10% penalty fee on the earnings?

 

[pdino]

Quick question about early withdrawal penalties from 401k's

So for a traditional 401k if I withdraw early, Ibhave to pay a 10% fee on the earnings along with being taxed at the current tax rate?

And for a roth 401k, if withdrawn early, theres only a 10% penalty fee on the earnings?

10% federal penalty tax on 401k early withdrawal, and you will be taxed on the amount at your current income tax rate. (if you made 100k and took out 10k, it goes to 110k)
Several people have done 401k LOAN instead of withdrawal in here here and have had success with that.

10% penalty only on earnings. You put in 100k, your ROTH earned 10k = 110k. 100k you can withdraw with no penalties/taxes, 10k (earnings) will be penalized.

 

[tay1]

10% federal penalty tax on 401k early withdrawal, and you will be taxed on the amount at your current income tax rate. (if you made 100k and took out 10k, it goes to 110k)
Several people have done 401k LOAN instead of withdrawal in here here and have had success with that.

10% penalty only on earnings. You put in 100k, your ROTH earned 10k = 110k. 100k you can withdraw with no penalties/taxes, 10k (earnings) will be penalized.

Thanks. That breaks it down perfectly for me.

 

[slighted]

Does everyone here recommend a Roth vs. traditional IRA?

I have a traditional IRA on Vanguard.

 

[crcballer55]

Does everyone here recommend a Roth vs. traditional IRA?

I have a traditional IRA on Vanguard.

Roth will grow tax free once you withdraw it at retirement. Traditional is pre-tax money, but you'll have more at retirement that will be taxed upon withdrawal

 

[antidope]

I have a Roth IRA.
My 401k is traditional.

If I could do Roth 401k I would but as of now I couldn't afford to max out my 401k if I was doing Roth.

 

[antidope]

Anyone here a lender through lending club? I think crcballer55 is, wanted to pick his and everyone's brain on this. Not really a fixed income investor but I'm curious on your experience.

 

[crcballer55]

Anyone here a lender through lending club? I think crcballer55 is, wanted to pick his and everyone's brain on this. Not really a fixed income investor but I'm curious on your experience.

I'm moving my money to from LC to Prosper. of the 85 notes that have been issued, 10 have been charged off at some point with another 2 in default currently. Despite going conservative with expected returns of 8%, I was never able to manage more than 3%. I've been thinking of moving for several years, but finally made the switch to Prosper due to better expected returns and better reviews. I'll let you know how it does. I only use this as investing for medium term purchases so anything over a regular savings account is still a plus for me.

 

[$tatus $ymbol]

Need to open an IRA and at least funnel a small percent of what I’m putting back. I’ve been all in on my 401k but who know what the tax burden will be like with these scandalous fools running the country. Also need to adjust my withholding, I’m leaving money on the table that could be invested.

 

[Chopper]

I have a Roth IRA.
My 401k is traditional.
If I could do Roth 401k I would but as of now I couldn't afford to max out my 401k if I was doing Roth.

antidope I also have a Roth IRA (personal) and a traditional 401k (via work). My workplace recently started offering a Roth 401k investment.

1. Is the max contribution limit $18.5k for the sum of both 401k investment vehicles, or can I do up to $18.5k in each?
2. If you assume you're going to be in a higher tax bracket in retirement, why wouldn't you be okay with not maxing your traditional 401k in favor of beginning contributions to a Roth 401k?

 

[antidope]

I'm moving my money to from LC to Prosper. of the 85 notes that have been issued, 10 have been charged off at some point with another 2 in default currently. Despite going conservative with expected returns of 8%, I was never able to manage more than 3%. I've been thinking of moving for several years, but finally made the switch to Prosper due to better expected returns and better reviews. I'll let you know how it does. I only use this as investing for medium term purchases so anything over a regular savings account is still a plus for me.

Yeah I'm yielding 2.4% on my cash, no need for the headache.

antidope I also have a Roth IRA (personal) and a traditional 401k (via work). My workplace recently started offering a Roth 401k investment.

1. Is the max contribution limit $18.5k for the sum of both 401k investment vehicles, or can I do up to $18.5k in each?
2. If you assume you're going to be in a higher tax bracket in retirement, why wouldn't you be okay with not maxing your traditional 401k in favor of beginning contributions to a Roth 401k?

It's the sum.

I'll likely be living in a lower tax state upon retirement. I'm in NYC right now and won't be living here upon retirement.

 

[Zainjal26]

Curious guys

I have good credit and 0% utilization across all of my credit cards
Can a credit card company lower my credit line if I don’t use the card a lot?

For example I have a chase sapphire with a 12k cl limit but I don’t use it much ( a few small purchases every few weeks)
Can a cc company lower my credit line because I don’t use the card much?

 

[$tatus $ymbol]

Yeah I'm yielding 2.4% on my cash, no need for the headache.

It's the sum.

Where are you getting 2.4%? An online savings?

 

[antidope]

Where are you getting 2.4%? An online savings?

A mutual fund. Not truly cash but a cash alternative. Being that it's a mutual fund there's a bit of risk associated with it but I haven't lost a dollar yet.

 

[lilchico4life]

Ally Bank is offering 1% extra cash back on any "new" money added before 10/31. You are able to receive up to $1,000 back ($100k deposit). This is also combined with their 1.9% APY Savings. Funds must remain in account until 1/15/19. Cash back bonus deposited by 2/15.

https://allypaybacktime.com