/biz/ - Business & Finance

To clarify, this is untouchable-without-penalty retirement savings, not "I have $50 in a money market account that I like definitely will use for retirement."

>>189765
I hope to be dead before retirement age because I want to live an actually fulfilling life

Don't tell me you guys spend your days talking about and managaing a few grand in stock without actually saving for your future...

>>189786
The world is full if people who didn't plan for their future because they were sure they wouldn't live that long. They're called Walmart Greeters.

>>189786
i thought this YOLO shit ended in high school

24. Had 2k£ to open personal pension but bought a car instead. Earning some beer money by giving a lift to work. I need to find better job to get at least 50% match of contributions.

30
$50-60k (I haven't checked recently)
Superfund that builds housing estates

>>189808
>Superfund that builds housing estates
What's the ROR like?

>>189816
11.5% the last few years but it will take a hit when the housing bubble pops.

>>189841
You probably could've done better over the past few years with a traditional retirement vehicle.

>>189843
I'm in Aust and our options are limited unless you want to layer up to go self managed. A lot of people blew there super on the tech bubble so laws have cracked down.

>>189796
>>189798
All about epicurean happiness my friends

29
Roth 401(k): $47,000
Roth IRA: $26,000

>he has no retirement savings

>>189765
38
150k traditional 401k

28
150k in 401k
15k in IRA

mid-40's
$1.56 million in a SEP IRA

31
26k in 401k
6k in roth

>>191065
Ouch

36
nothing
no assets
$78k salary

I think i'm already fucked so I guess I better try not to make it past 65

18
$400
Traditional

At least I have time to not fuck everything up.

>>189855
>epicurean
>epic

Get the fuck out.

29
48k in 401k
16k in roth ira
25k in taxable

In what situations am I....

exempt from a tax penalty from the IRS when taking out a loan?

I know in some situations I get taxed on the interest, but the interest is paid back into my account and then I get taxed again when I take it out (when I'm 59.5)?

What if a portion of my 401k is Roth and the other is traditional 401k? How would that change the previous situation?

If I apply for a hardship, can I get away with paying/taxed less?

23
16.5k taxable
13.5k Roth IRA

>>191112
wait how do you make that much $ and have no assets/savings?

i make a plebeian 30~k and have 11k in my roth ira

need advice. maybe iHaz or dubsteppan can come in for the win.

if I am mid 20s make mid 30k.

this is my monthly expenditure (and the amount I have after):

My estimated expenses are per month starting with 2250 (hehe could rent but need to save $)

Car Insurance -150 (2100)
School Loans -300 (1800)
Food and Beverages -400 (1400)
Gas -150 (1250)
Utilities -200 (1050)
Luxury Spending -300 to -500 (550-850)


so, I should aim to go up to employer match on 401k and then max out my roth ira?

or should I be putting more into my 401k?

>29
>about $10K in checking/savings
>about $86K in Roth IRA all invested in mutual funds
>fuck 401K my employer doesn't match enough to be work saving in
>about $10K to play around in the stock market

>>191392
In general, my opinion is that you want to get your employer match first for the free money, then go max out the Roth for the after tax benefits. Afterwards, go back to the 401k.

>Type(s) (401k, IRA, Traditional, Roth, etc)

Perhaps you dont know much about retirement accounts OP

IRAs can either be a Roth IRA or a Traditional IRA.

Then you have an employer/employee contribution matching account such as a 401(k)

You could also do a 403(b) if you are a teacher or govt worker

or a section 529 savings plan if you would like to save for your kids college.

>>191405

Investment Banker fag here...

Legitimately, mutual funds could be the biggest white collar scam ever. Manage your own Money.

Contributing to a 401k.... I'd rather be young as fuck counting 401K

>>191422
Mutual funds are great investment vehicles because there is such a wide spectrum of funds you can invest in to depending on your goals.

Do some research, see what funds have difference underlying security mixes

>>191434

Just watch them fees.

i hate putting in 401k.. i hate people putting restrictions on touching my hard-earned money...because of this i dont even use my company 50% match..

also my fathers side genes are good... all of them died around 60-65... so hopefully i'll be gone as well...

>>191455
i meant 'my fathers side genes are not good'

>>191455
but you realize the upside right? You get a tax deferred contribution into a savings account that accumulates well over time.

Also, usually you can borrow against your 401k if you ever need to take a loan out, and in turn you get a super low interest rate

>>191473
what if when i'm 65, a recession similar to the 2008 one comes... i'm fucked right..

>>191480
yeah, if you have all your money in stocks. the older you get, the more safer your money should be in.

>>191455
My friend, you need to look into the ROTH/401k pipeline, and 72t.

http://www.mrmoneymustache.com/forum/ask-a-mustachian/help-me-understand-the-roth-conversion-pipeline-idea-and-its-benefits/
http://www.forbes.com/sites/advisor/2012/02/13/the-72t-early-distribution-from-your-ira/

>>191485
i dont underrstand the articles in that links at all... could you explain what it is about.. do they allow me to take out money earlier?
do they remove restrictions from using 401k money?

>>191497
Yes.
SEPP(72t) is kinda lame, and once started it doesn't stop until 65 to my understanding, but it gives you a small amount of your 401k money each year.

401k-ROTH pipeline is this: you switch 401k money to Traditional IRA, then you slowly shift it into ROTH IRA, you'll still pay your taxes on it, but you avoid the 401k penalty, and once put into the ROTH, it's roth money, with all the ROTH benefits of never being taxed again. Do this in incredibly low income years, and you've thus shielded your income from higher tax rates.

Just try googling those two terms and work your way through the results. I'm not entirely sure on the process because I don't expect to be doing it for another 2 years(maybe)

>>191506
Thanks sir.
I'm going online to change my 401k right now!

Age: 41
Savings: About 1M
Types: <100k in 401k
150k in private fund
250k in stocks
500k in rentals
some cash in the bank

Hoping to retire soon-ish

26
$4k is TSP (used to work for government between undergrad and grad school)
$600 401(k)

I paid a lot of grad school out-of-pocket and still have about $25k in student loans. The plus side is that I'm putting putting 6% of my income (9% after employee matching) and making $80k. I plan on putting any bonuses and shit into a roth IRA or into mutual funds.

>>194245
that is pretty nice.
but what do you mean by rentals?

>>194281
>but what do you mean by rentals?
He means Rental Properties

I'm 22 and I just inherited $70,000 CAD.
Would it make sense for me to put some of that away in a retirement savings plan NOW and invest the rest? How early is too early to save for retirement when I'm not even employed?

>>194309

Put $35k away for retirement and have fun with the rest or educate yourself so you make a decent income if you're not already doing that.

Man, if someone dropped $70k into my lap...
>Pay off student loans
>invest the rest for retirement
>enjoy having an extra $400/month to eat out, snowboard, go on trips, do whatever

I'd keep making my car payment since I'm not upside down.

>>194309
If you put that all towards retirement (preferably in some sort of tax-advantaged, bankruptcy-protected account akin to an American 401k or IRA - sorry, don't know your options on the other side of the border up there), and earned a real rate of return of 7% p.a. (about the average for the S&P 500, historically), at age 65 you would have:
-an account balance of $1,284,000, and
-an annual draw of about $990 per week (at a 4% withdrawal rate).

That's basically a fully-funded retirement, right there, without ever having to save another dime. The account could support an annual draw of effectively the median household income.

Just food for thought.

>>194388
>4% withdrawal rate
4% as a safe withdrawal rate has come under increasing scrutiny recently. It may not be the safe touchstone that it first appeared to be.

>>194388
Are that numbers taking in account inflation ?

19
Roth IRA: $5,500

>>191392
1. Employee Match
2. Roth IRA
3. 401k/Trad Roth/TSP

Its free fucking money man. I wish my employer did that.

>>194553
the rate of return on investments typically keep up with inflation but its too hard to say for sure

>>194585
wait I did post on leddit and they said allocate some amount to bank, some amount to 401k at step 3 because there are withdrawal penalties even if you opt to dip into your 401k for your first home purchase as you repay yourself back (pay back the loan) with post tax dollars

i think the logic was that the possible rate of returns generated from your investments may not be higher than the amount you are taxed for taking out 10k out against yourself (hope im making sense here)

>>189873

are you me?

24
$7k in Roth IRA
$12k in taxable accounts

Saving to buy/renovate a multiunit townhouse.

25
80k salary

10,000 floating around in checking/savings (emergency fund)
10,000 traditional 401k (fidelity)
12,000 in lazy 3 fund portfolio thru Merrill
15,000 in various equity through schwab

a-am i gonna be ok biz? This stuff keeps me up at night

>>194753
implying you aren't ahead of 90% of america

>>189765
$0

I think the risk-adjusted future value of any retirement savings will be less than the present value.

>>194757
>implying that despite that, my finances still keep me up until the early morning hours. All I can think about is how to get more, and the thought of losing it all is a crippling fear.
Thanks for the reassurance though.

>>194328
Ah, but there's the thing, unfortunately.

That extra wouldn't go into snowboarding, eating out, etc. You'd get a taste of that return and would start to save the extra for more investing. That's how it happens...

>>194770
you probably will too, stock market is a bubble

learn to hedge

>>194770
you should tell me how to earn $80k a year instead
i am $35k college graduate such fail

>>194780
>implying you've ever traded a derivative in your life

26

$30,000 in investment account
$39,000 in Tax Free Savings Account (Canadafag)
$17,000 in Savings account ($7000 set aside for three more semesters for a B.Comm in Finance)

I'd say I'm making good progress. I really wanted to graduate with $100,000 in the bank, but replacing my car ruined everything.

>>194781
Negotiate the hell out of your contract. Weigh the value you bring to your business against the damage it would cause if you walked, and make a strong argument.
If they can't help you, or, if you're not in a strong spot to negotiate in, explore alternative options.

So I should be getting way more for my housing allownnce from the GI bill than I will need. The money isn't taxable income, so what is the best way to save it for retirement?

Age: 19
Savings: $1600~ USD
$1700 in graduating / stable assets (Firearms, ammunition)

>>191422
Could you elaborate a little more for us newbs?

20
4k credit union account
2k Post Office savings account
2k in the bank

Getting around 30k from the sale of my aunts house and about 12k from the sale of her furnishings/certain belongings/car/etc as per her will

>feelshalfgoodhalfbadman

I liked my aunt

>>194553
When I said "real rate of return of 7%", I meant 7% net of inflation.

So both the account balance and annual draw values are in today's dollars. The nominal (not factoring in inflation) numbers would look much higher.

>>194545
It's still reasonable as a quick and dirty rule of thumb. Nothing's perfect, but it's good enough for back of the envelope type stuff.

>>195070
just put it into a savings account, and then move it into sheltered accounts after you get a job post-college.

so if you can skim say $200/month for 4 years, you'd have $9,600. When you get a job out of college, have them withhold 100% of your paycheck for the first 2-3 months, and put it into a 401k. Then once you actually need a paycheck because you've been living off your GI money, go into HR and have them adjust the withholding to a more reasonable amount.

Ideally, you'll want to be maxing out both a 401k and an IRA every year - that would take $23,000. If you still live like a college student / soldier (sailor? marine? airman? you didn't specify), and make the investing your first priority, then you'll be fucking rich before you know it.

Nobody here has an ESOP (employee stock ownership plan)?

>glorious $5k pre tax contribution in company stock

Age 29
Roth IRA $40k
Traditional IRA $55k

>>194753
why so many funds? Son, you need consolidate to make funds management easier.

29
about £400 in a current account

What do I do?

>>195942
Start robbing banks.

do you guys ever advise taking out a loan against your (Roth) 401k?
you do have to pay after tax money but it goes back into your account. I don't know if it's worth it. I think it's only a $10k amount. there could be complications and you can default if you somehow are terminated or don't pay it back in time.

someone who's an expert on tax logistics answer please

21
0
Only grandchild on both sides so will inherit everything, no real need to save

>>195994
For you, no. You are an idiot. Stop tripping

>>195994
Only take out a loan if the money borrowed will result in you getting a return better than what you would get leaving it in the 401K and if you are 100% certain that you will be able to pay the money back; there are unpleasant penalties for not paying back a 401K loan.

In this environment of zero interest rates, it's probably a stupid idea to borrow money from your 401K. Auto loans and mortgages are low enough that it's not worth the hassle. Borrowing from a 401K is really only worthwhile if interest rates are high such as in a high interest rate environment (1982) or if you've got terrible credit and no institution will lend you for less than double digit interest rates. And I would argue that if your credit is that bad, you'd best not take a loan from your 401K because you're lousy with money and will likely default and put the borrowed 401K money to bad use.

>>196016
Unless your grandparents think that your spendthrift ways would result in you just blowing their life savings on cocaine and hookers, and decide to disinherit you, accordingly.

>>195994
If you have to ask this question, then fuck no. Keep don't touch the money.

>>195883
Sailor for a bit longer. I have something like 20k in TSP. Is there some benifit to saving the money normally and investing it later rather than doing so as it come in? That idea doesn't make much sense to me, but I have no hesitation admiting that I am uneducated on the topic.

I am good at setting and following a budget and as such have the joy of having no debts and a paid for college education, but I simply don't know the best way to use the surplus. I know that I want to set aside at least 100k immediately after finding work after school for retirement. I need to learn more about productive uses of the extra money beyond that, but that is a topic unrelated to this thread.

>>198155
The benefit is simpler taxes.

You can certainly put it into a taxable account (or an IRA if you'll be working summers, or part-time during the school year - but you need to have "earned income" to contribute to an IRA...and if you're earning income that you don't need, I assumed you'd be putting that into an IRA anyway; you can't contribute more to an IRA than you earn through wages, up to $5,500).

If you have a taxable account, you'll have to pay income taxes on your dividends for the first year of holding the security, and then pay capital gains taxes when you sell. So if you sell the the stock to re-purchase it in a retirement account, you'd lose some of the gain to taxes. And keeping track of which dividends are attributable to "short-term" (the first year of holding it) can be a bit of a pain in the neck when you're buying $200 a month.

Investing it, rather than letting the cash just pile up is perfectly fine, of course. But if you do, I highly recommend doing it in a mutual fund, rather than buying ETFs or even buying individual stocks regularly. Even if you go with someone like Scottrade, a $7 commission against a $200 monthly buy is a pretty high ratio. If you get a good S&P-tracking mutual fund (by "good" I mean no sales load, and low management fees), you'll save a bunch that otherwise would have gone to fees.

I like the Vanguard S&P funds, personally. The lowest-minimum class has an initial minimum of $3,000 though, so I'm not sure whether you'd be able to meet that just from the GI housing checks (though if you've got savings already, it's a good option). The ticker is VFINX. No loads, no 12b-1 (advertising) fee, and only 0.17% total expense ratio.
Compare that to an ETF, with a $200 (hypothetical - I have no idea how much you actually intend to skim) monthly buy, at a $7 commission - that's a 3.5% load at the front, with an extra (albeit lower as a percentage) load at the back-end, as well!

>>199273
Around two hundred is my starting point, I plan for up to four hundred once I get moved and settled.

Because college will leave me with free time compared to what I am used to in the Navy, I think I will get a job and put all the money to savings. If I just live off of my GI allowance, I should be able to hit that maximum of $5,500 and still have plenty to set aside otherwise. My confusion about retirement saving is what to do beyond an IRA. Everyone talks about IRAs, but the assumption always seems to be that no one will save anything near the maximum contributions so I have never really heard about what to do with savings beyond that.

I should have somewhere between three and six thousand dollars to start with. The middle option - something more productive than a savings account but not so long term as a retirement account is something I need to learn more about. I think this is the part about money that we generally don't teach people.

>be me
>51k/year
>17,000 in 401k
>just opened Roth IRA, only have $75 in there so far lol
>living life enjoying things

How fucked am i

>>199985
Forgot to add, 30yo male here

>>199990
p fucked

>>199993
Yeah I figured as much. The upside is most of my peers have nothing saved at all so I'm doing better than they are. Anything I can do to better myself without locking up all my cash?

>>200000

>200000

>>200000

>>200000
why are all the /biz/gets terrible

>>200000
No, you have those digits
Those digits are all you'll ever need

>>199973
Generally, the pecking order for retirement account preferences is:
1) 401k up the the maximum contribution that earns a match (if there is no match, then effectively consider the maximum match-eligible contribution to be $0).
>also 401k substitutes (TSP, 457, etc. employer-sponsored plans - same "up to the match" limit)
2) IRA - preferably a ROTH IRA, if you don't need the tax benefit now
3) Max out the rest of the 401k (or substitute). Generally, the max would be $17,500 for non-geezers.
>employer match, if any, does not count against your contribution limit

There are some weird exceptions (eligible to contribute at a 457 for one job, and a 401k for another job, for instance - if you're in that situation, and have the choice of 457 vs 403b, go with the 457, since 457 contributions don't count against 401k limits, but 403b contributions do).
>Fuckin' Congress, right?

As far as mid-term savings, the reason people don't much talk about it is because the government hasn't established special plans for that - ultimately, there's just less to discuss. The account is taxable. You benefit from deferred taxes on capital gains. Interest on bonds (or savings accounts) is taxed as ordinary income (except for *some* municipal bonds - not all). Dividends on stocks that you've held for less than a year get taxed as ordinary income. Dividends on shares held for more than 12 months are taxed at the lower capital gains rates. If you sell an investment at a gain, your gain is taxed as ordinary income if you held it for less than 12 months, and capital gains if you hold it for more than 12 months. If you sell an investment at a loss, you can use the loss to offset an unlimited amount of capital gains, but no more than $3,000 of earned income.

>>200115
con't.

If you have a shorter-term need for the funds, normally you would be told to consider bonds, since capital preservation is presumably more important to you than potential for longer-term gains (which come at the expense of short-term volatility). Personally, given:
1) current shit interest rates, and
2) virtually 100% likelihood that the Fed will raise interest rates in the next couple of years
I'd avoid bonds like the plague. There's effectively no benefit to buying bonds over holding the money in a savings account right now.

I don't know what you intend this money to be used for. If it's retirement, and you're planning to max out your IRA and 401k after graduation, then there's no harm sticking it in a S&P500 mutual fund. If you want it to be a house down-payment, you might prefer keeping it in CDs that you structure to mature on or around your graduation date.

Personal finance is personal. The best thing to do with money depends on what you want it to do for you.

>>200148
Thanks for the information.

So, 401k match, roth IRA, rest of 401k limit, and then a mutual fund for retirement. I'll be sure to look into all of this stuff further.

As for the rest, I am tempted to say "I just want more money" but that sounds pretty pointless. Essentially, I will have much more money than I will need or want to spend for the next five to ten years. Rather than leave the money doing nothing or getting spent on toys I don't need or really want, I'd rather make use of it.

I figure I ought to be able to make things so that I will not have to worry about money later on when I am interested in a home and a family. It'd be nice if that money could be made into enough that I would later have freedom to choose how and how much I want to work rather than being tied to things for the sake of a paycheck.

And I want to give. I don't have any dreams or desires of being super wealthy and owning a dozen vacation homes, but I would like the freedom to decide to do something like pay for a nephew's education or something along those lines.

I don't want to have a ton of money to count, I want to have a decent amount of money to be able to do things.

>>200200
There have been studies on "how much income does it take to make you happy?". The general consensus is that your day-to-day life doesn't really get much better once you get past $75,000 or so.

My goal for the next 10 years is to save enough money to buy an apartment building that will cash flow $75k per year, passively. Getting a 15% cash-on-cash return is not difficult if you have a 25% down payment. So that would mean buying a property worth $2 million, which would require a $500k down payment.

Doesn't mean any of that needs to be your goal - just sharing mine, as a reference point that may or may not be useful.

So assuming I start a low 40k starting pretax (30k post?) this December, does this sound ok?
15k per year across 401k match, roth IRA, and then putting the rest in something more liquid? Having -all- of my money locked up in retirement would kinda suck.

Age: 23
Savings: None yet, it goes back into merchandise at the moment in order to net returns
Type(s): Real Estate, waiting for the market to go down hard again across the U.S. or somewhere specific like California so I can swoop in and pick up rental properties.

>>200033

srs bsns = srs gets

>>200761
California landlord here, the time was 2009-2011 to scoop cheap properties

>>202358

I think your bubble will pop again sometime in the next year. Worst case scenario I have to try Florida instead after the next oil spill.

Hi guys,

I was sitting at work and wished I could masturbate. However, I can't so I end up thinking some funny things.

Wouldn't a Roth 401k contribution technically be a larger possible contribution?

Hear me out. So the max for a Roth 401k and a traditional 401k are both $17.5 k if you are under 50. If you are 50, you can contribute $23k but that's irrelevant.

So if you put in $17.5 k Roth 401k, that's money that's already TAX DEDUCTED. It will grow tax deferred. If you are in a 20% bracket, that would technically be 21 k that you can put into your account!

Versus if you contribute 17.5 k 401k money, it will be less because it goes in pre-tax! Then of course, when you pull your money out, it's taxed.

In general, which one would you go for?

I'm a low earner (35k) and am young, so I think Roth 401 k works better but you can argue going either way.

How can I become a portfolio manager at this rate? Should I go for a CFA? MBA?

Thank you

Age: 30
Savings: $60k
Type: Gov't TSP; L2040 fund
I also will get 45-50% pension on my high 3 when I retire.

Age:21
I just deposited 2.5k into a Roth IRA. Have literally no idea what to do with it and its just sitting there. I have about 5k more in savings but I don't want to put anymore into the IRA until I know what I'm doing. Any good resources on how to get started?

>>202396
>Wouldn't a Roth 401k contribution technically be a larger possible contribution?

Yes it would.
However, the tax rate of most people who can actually afford to max out a Traditional 401k tends to be high enough to make the deduction attractive. If you're paying 28% federal, plus another 5-6% state income tax, the Traditional will save you say 1/3rd of your contributions in taxes. So maxing a Roth 401k represents $26,250 worth of gross income, which is a lot.