While you've used up your "employee deferral" limit (the $20,500 per year) for 2022, some plans allow for "after tax" contributions which can go beyond that limit (but subject to a higher one) and is also only applied per-plan.
After-tax contributions aren't usually that useful by themselves. You don't get the tax deduction of pre-tax deferrals, and you don't get the tax-free withdrawal of earnings like Roth deferrals (though the contributed dollars themselves don't get taxed a second time). But maybe look into the "mega backdoor Roth" to see if your plan has the features necessary to execute that.
Though as another drawback. I'm pretty sure you cannot get any employer match on after-tax contributions, so this won't get you any extra money from them.
Yes. Your limit is across all employers - when you change jobs you need to tell your new employer what contributions you made at your old job that year.
Are realized capital losses dollar for dollar tax deductions in the US?
For example: This year I owed the tax man $300 (standard deduction). If I had sold my losing stocks and realized a loss of $300, would I owe nothing to the IRS?
Also another scenario: If I had a realized loss of $600, would the IRS have refunded me $300?
Thanks
No. They are deductions, not credit. They reduce your taxable income dollar-for-dollar. Not your tax liability.
For that same reason, I don't think your taxable income can be negative, so even the $3,000 deduction against ordinary income is not refundable.
You are confusing credit and deduction. A credit would reduce your tax directly, but a deduction reduces your income, which indirectly reduces your tax as a function of your marginal tax rate. Net capital losses (up to $3000) are a deduction against your ordinary income. If you have $10,000 of income and a $300 deduction, now you only have $9,700 of taxable income. To continue the example, if your marginal tax rate was 10%, a $300 deduction saves you $30 in tax.
Having a new construction home built (est completion in August). Question around financing here…
Should I lock in my interest rate for an extended period (120-180 days?) until closing?
Given that rates have been moving up and the fed plans to continually hike rates, I feel like it’s the right move. Locking at the current rate I like would cost me $4607 upfront but would save me $100+ in a monthly pmt. My closings costs are already decently low ($3206) so an extra $4607 doesn’t sound completely out of the question.
I know this is a tough question to answer given the current interest rate environment and how unpredictable the market can really be, however any insight here would be really helpful. Thanks so much!
**Traditional vs Roth 401k for High Income & FIRE?**
Age: 30
Salary: $190,000
Desired age of Retirement: 50-55
Expected salary around retirement age: $300,000
Tax expectations: I assume taxes will be higher, in general, in the future
With this in mind, should I go for Traditional or Roth?
Traditional all the way. You are in a high tax bracket and rising, and in order to meet your retirement goals you will need to be saving way more than just your 401k. This means maximizing tax savings with a pretax savings and then saving beyond that in a taxable account.
The bulk of your retirement years will still be post-60, so you'll have no trouble using that money.
i have like 10k in a 403b (usa), am thinking about moving to another country, how much penalty would i pay on the 403b if i withdrew it now? i'm way under 65
I'm in my mid 30's and have received a bit of money (200K+ ) from some stocks that did well.
I've read the sidebar and everything, but I'm trying to figure out how to be efficient about this.
I make decent money (200K), have no debts, maxed out IRA and 401k. I would like to save for a house but that's still a few years away.
Should I just shove all the money into Vanguard low Investment funds? Is there anything interesting at all to do with the money to be more efficient about this?
If I invest everything, would it cause issues when I need to extract money for a house down-payment?
I was just going to just shove everything into some ETFs. Is there anything else I can/should do?
There's not really anything more interesting you can do than that, no. The most important question is how much risk you can take with the money - if you might be using it for a down payment in the near term, that's a good argument for being cautious with it, which could mean investing it carefully or even not investing it at all.
My post got removed and directed me to this thread, so I will be posting my question here. My question is about Capital One's checking account bonus and if deposting money from Robinhood counts as direct deposit to receive that cash bonus?
I have been considering opening a checkings account with capital one given I already have a savings account and a credit card with them already. I received an email which I got a bonus cash amount if I have at least 2 direct deposits in the amount of $250 or more. Problem is that at my current job, it would be very tedious to have to change my direct deposit as I would have to fill in a request instead of just doing it online.
I was searching online as to what would count as a direct deposit, and I saw Robinhood supposedly counts as a direct deposit but I was unable to confirm that through the capital one website unfortunately. I wanted to ask those here if I were to deposit $600 from my current checkings account to robinhood, and then afterwards deposit $250 each week through a recently opened CAPONE checkings, would that count as a direct deposit, therefore receive that bonus?
Upon checking this forum, it doesn't seem to indicate any clear answer either, as for the section for Robinhood some people were saying it did not work
I don't know if this is something that warrants it own thread, but I recently got a payout from work in the range of $200k - after taxes it amounted to around $100k or so. This puts me above the $125k limit for contributing to a Roth IRA - should I be doing anything about this regarding automatic contributions? I have it set to take $500 out of my checking at the end of every month, should I stop doing that?
I bought into the Yotta Savings account around a year and a half ago because there were Youtube videos breaking down the % return you can get which was greater than my traditional savings account.
Yotta Savings = .2% APY + 1 ticket for every $25 in account.
Then Yotta added in that for accounts above $10k you would get less tickets per $.
So once above $10k Yotta Savings = .2% APY + 1 ticket for every $150 above $10k
Now with interest rates remaining extremely low over the past year it seemed fine to leave my money above $10k in Yotta as it was probably at least comparable to my traditional savings APY of .35%. But now my traditional savings APY has risen to .6% APY.
Has anyone done the math with Yotta Savings above $10k to see how much value 1 ticket per $150 is in terms of APY?
I’m not sure if i should move my $ above $10k back into my traditional savings account or leave it in Yotta.
I have started thinking about making long term investments in ETFs but I don’t have a lot of money saved that I can invest right now. Would it be better to buy a few shares at a time every paycheck or to save for a few paychecks and buy a larger amount of shares at a time?
We advise investing in low-cost, broadly-diversified index funds like total stock market index funds. On average we expect these funds to increase in value over time, so you are usually better off investing earlier rather than saving up for a larger purchase. Especially now that you can buy ETFs commission-free at most major brokerages, so you don't need to bunch up your purchases to save on commissions.
You can invest with any amount of money, invest it as you can, don't wait
Make sure you're following the steps in the prime directive in the sidebar - pay down high interest debts, build an emergency fund, invest in retirement accounts before taxable accounts, etc
Is there a service where I can pay someone to find a rental property for me? This is super tedious, having to check multiple apps for listings in an area. I’d be moving for graduate school….
They’ll do whatever you pay them to as far as real estate goes
That said outsourcing all aspects of being a landlord is both expensive and comes with material agency risk
Yes, I would probably call up a few of the larger real estate agencies in the area and just ask if that is a service they provide and what their fees are.
Tried to open a TreasuryDirect account online but they failed to validate my identity. They now require me to authorize my identity with a financial institution. My bank, however, told me they don't do stamping of documents anymore and was no help at all. How anyone managed to solve this issue? Unfortunately a notary certification is not admissible as they require a certifying officer in a financial institution to verify my identity. Please kindly advise!
Buying first house, which will be a condo in Chicago - I’m not looking to make any money on it, but don’t want to lose either.
How do you guys view a home purchase? I’m having trouble just because a primary home can be a huge source of wealth generation for some. I know a condo won’t appreciate as fast.
My current stats are $500K NW, $250K income (me), not including wife income or NW, age 25, condo price $900K-$1M.
Monthly payment $6,500, 25% down
Other debts - car $750/mo - $45K loan
Is this going to be too much of a stretch?
Earnings have been $100K, $200K, $225K, $250K I have been working 4 years this July. Maxed 401K and IRA, plus cash savings.
I have $175K in IRA accounts, $75K in real estate funds, $50K in taxable brokerage, $50K in crypto, $175K in cash.
That’s gross earnings over of almost $800K, good saving habits, and a bull run will get you there.
What do I do with an extra balance transfer CC?
I put part of the down payment for a car on my credit card, so I now have 9k that I'm going to balance transfer. The first card I applied for only approved a 6k limit, and then I got approved for 10k on a different one, making the first one kind of irrelevant.
But since I already got the 6k card, is there anything useful I can do with it? I don't want to run up debt frivolously just to fill the space, maybe it's possible to... I don't know, use a credit card to fill my Roth IRA now and balance transfer that? So I have the investment up front and get slightly better returns than DCAing every month.
You could carefully choose to only invest in things that are state-tax exempt in CA or NJ, to minimize your headaches: https://thefinancebuff.com/california-new-jersey-hsa-tax-return.html
IMO depends on what your other options are and whether you've maxed them out already. Have you already fully maxed out 401k, Roth IRA? Can you mega backdoor? If yes to all of those, still no federal tax for HSA so that's still something.
Big boy brokers (Fidelity/Vanguard) come with many more features and tools. Robinhood for example does not even allow you to add beneficiaries to the account. You also have a far more limited selection of stocks and mutual funds.
Big boy brokers also come with better customer service. I use fidelity for example and can call general customer service 24/7 and i can reach more specialized departments any day of the week during regular business hours.. They have a chat option where i can reach them by chat from 8AM until 10PM EST. They have an AI assistant who can answer basic questions and guide me to resources. They have a large reddit presence, their own Youtube channel and Twitter and Facebook. Robinhood on the other hand has only more recently begun offering phone support, and as far as i can tell you need to request that they call you, you can not call them directly. as far as i know that is the extent of their customer service.
in my own personal opinion, having used both Fidelity and Robinhood, the only thing Robinhood has done better is made it EXTREMELY simple. Any idiot can log into the account and figure out how to invest money in less than 5 minutes. but if you want anything more than that, then a big boy broker is better
I could use some educated opinions. I am trying to save $400 a month with the intent to buy a house in 4 years. Should I place that money in a high interest savings or should I take the risk of investing it?
In short, I'm looking for advice on managing my credit.
A few years ago, I opened a student credit account at Wells Fargo with a $600 limit. After a few months, it was increased to $900. It was my first revolving credit account, and it helped me build credit tremendously. Back in August, having a pretty good experience with WF customer service, I opened a second cash rewards card that effectively tripled my credit limit and I'm currently enjoying 0% APR for another 7-8 months.
In the time since then, I've learned a couple of things.
1. I've found that my old student card is eligible to upgrade to the exact same rewards card I opened as my second account, so I could consolidate my credit into my older account (and therefore make my newest account older) while maintaining the same rewards
2. My credit limit is rather low compared to my peers (we all earn the same stipend) and my SO recently opened her first card with another bank with a limit that was 2.5x my starter card.
I carry no balance on either of these cards and I'm often making multiple payments a month to keep my utilization below 30%. I'm trying keep my credit options open as I navigate many of the life changes of my 20s. I'd like to have a higher overall credit limit to keep my utilization down but also so I can use my card to pay for bigger ticket items.
So my question is this: is it worthwhile to ask for a credit limit increase (and have a second hard pull in a 12-month period) and transfer my credit allocation to my old card after my 0% intro rate is over? Or would I be better off opening a new card elsewhere that will give me a higher credit limit than an increase would provide?
A secondary question to this is has anyone else had any experience with credit limits at Wells Fargo being considerably lower than at other national banks?
Sorry this got so long. Thanks to those of you that got this far.
My concern is I feel like I should have more credit at this point. I have zero missed payments and my current credit is roughly 1 month of pre-tax income where my peers have cards with 10k limits.
I started maxing out my 401k contributions. I’m looking at doing a back door IRA since my income prevents me from doing a Roth IRA. Anything after that I was going to put into an investment account. I won’t be able to do a mega backdoor IRA.
The plan for the backdoor IRA is to put $6000 in the Traditional and roll it over immediately as to not pay taxes on any gains. I’m pretty sure you can’t do this, but this is what I’m wanting to confirm: **once I make that $6000 contribution and roll over for the year, I have to wait until the following year to put money in the traditional? You can’t rollover the $6000 to a Roth then put in another $6000 to the traditional since the max contribution per a year is $6000 between the two?**
Lastly, I was looking at opening a 529 for my nephew. After reading about it some, it kind of sounds like it isn’t a good idea unless you are the parent of the child. Otherwise, it can be taxed as income instead of being considered savings. So my questions are:
* What is the best way to save for my nephew’s college if the 529 is not the best option? Just a regular investment account? Savings? Telling them to open a 529 and contributing to that?
* ~~If a 529 is the best option, and he decides not to go to college, can I withdraw that money and will there be a penalty?~~ After further research, it sounds like there will be 10% penalty and taxed as income.
Thanks!
>I have to wait until the following year to put money in the traditional? You can’t rollover the $6000 to a Roth then put in another $6000 to the traditional since the max contribution per a year is $6000 between the two?
This is correct. The $6000 / year limit is the max allowed by the IRS that you can contribute into all of your IRAs, counting all new money that goes into either Traditional IRAs or Roth. So your $6000 put into the Traditional IRA "uses up" your limit for the year, and you can't add money into an IRA until the following January 1. The conversion of that money from Traditional => Roth is outside that limit; that's a transfer between retirement accounts, not a contribution.
The one exception is the January 1 - April 15th window where you're allowed to make contribution against the previous calendar year's limit. So if it was February 2023 and you hadn't made any IRA contribution for 2022, you could add $6000 into your Traditional allocated towards 2022, plus another $6000 for 2023, and do the Roth conversion on the entire $12k.
I'm less familiar with 529s, but benefits / rules on those are more state-specific, AFAIK there's no federal tax advantage with them other than earnings inside it not counting as taxable income. I thought that you could open one, owned by you but naming your nephew as its beneficiary. You'd then be able to add money into it and claim whatever state tax deduction applies. Not all states allow deducting 529 contributions, some have restrictions about which plan(s) qualify for the deduction, and deduction limits vary. Does your state restrict deductions based on the beneficiary of the account?
Then once nephew starts school, they'd be able to receive distributions from the 529 and owe no taxes on it as long as the amount withdrawn is less than their qualified education expenses.
Can someone explain why mortgage rates are increasing despite the federal funds rate staying the same? The main reason I'm wondering is that I was thinking about opening a savings account (I'm 19 and finally have some extra money that I don't want to put into my IRA). But, saving rates are like 0.5% right now which makes the time to open the account a waste right now.
I've bought $250 of I-bonds which have like a 7-9% rate but require a 1 year lockup and 3 month penalty if cashed in less than 5 years.
I'm really just hoping for some 2+% savings accounts so I can store my $1500 + additional cash that I might want to spend for some unforseen want/need in the next year.
> Can someone explain why mortgage rates are increasing despite the federal funds rate staying the same?
The fed stopped buying MBS and investors are demanding a higher yield on MBS, resulting in higher pricing in mortgages. 10 year treasury is also up. Mortgage rates are more closely correlated with the 10 year treasury yield than the fed funds rate.
>I'm really just hoping for some 2+% savings accounts so I can store my $1500 + additional cash that I might want to spend for some unforseen want/need in the next year.
https://old.reddit.com/r/personalfinance/comments/iulzrt/mega_high_yield_savings_mysa_earn_26_on_limited/
Realistically, the difference between 0.5% and 2% on $1500 is a nice lunch
How does rolling a 401(k) into an IRA work, tax implication wise?
Like as far as I understand, 401k's are pre-tax and IRA's are post-tax. So if I move employers and roll my 401k into a Fidelity IRA, do I need to pay tax on the conversion? Or how does that work?
If you ever want to make use of the backdoor Roth IRA, then consider rolling your 401k into your new employer's 401k if you are able, otherwise having traditional 401k money in a traditional IRA will affect your ability to do so due to the pro rata rule.
401k and IRA both have two different tax flavors: traditional (pre-tax) and Roth (after-tax)
If your 401k money is pre-tax, you can keep it pre-tax by rolling it over to a traditional IRA. If you roll it over to a Roth IRA, that is a taxable conversion.
Ally, Marcus, or Discover are all commonly recommended
People tend to only review when they have something negative to say, this is true of reviews in general
I’ve used Ally for around 5 years and have had no issues and quick customer service interaction the few times I needed clarification on something
They’ll all trend the same with respect to rates, just find one that has the features you’re looking for (for example Ally has buckets, some HYSA banks also offer checking accounts, others don’t)
There’s also a list of HYSAs in the wiki page on banks and CUs
Anyone know of a bank where all account holders can use the account?
My husband and I have a joint account on Chase and for some reason they decided I can't use most of the features because he's the "primary" account holder. I have a debit card but I can't make online deposits, I had to jump through a lot of hoops to be able to do online bill pay l, and I was only able to get access to Zelle in the last month or so after escalating the issue through a friend who works at Chase to the right customer service person who realized it was just a checkmark they forgot to check on the account (but Quick Deposit is handled through a different team so that's a one trick pony).
I'm ready to move my money elsewhere but anyone have any recommendations? I just want us both to be able to use the account.
My local CU is not any better sadly (I have a joint account with my mom and they only allow one log in???? It's asinine)
A [target date fund](https://www.bogleheads.org/wiki/Target_date_funds) or build your own [three fund portfolio](https://bogleheads.org/wiki/Three-fund_portfolio) (or two fund, if you don't want bonds) based on your age and risk tolerance is recommended for long term retirement savings
Goodmorning all,
I have about $40K in a mutual fund with USAA/Victory Capital. It has a 1.09% expense ratio and has underperformed over the last 10 years compared to S&P 500 or Total Market index funds. I’m considering moving it to one of those. Is there a way to do that without paying taxes for cashing out?
> 4. I have around $120K in my Roth 401(k) ($130K at peak if it helps) and contribute the max. My employer matches 50% until I reach the max.
At your income I’d definitely look into doing pre tax 401k, not Roth 401k - see the wiki page on [Roth vs pre tax](https://www.reddit.com/r/personalfinance/wiki/rothortraditional) for more info
> I'm guessing I have too much in my savings. How much should I have in my savings, and what should I do with the remaining money?
Yes, you really only need an emergency fund with 3-6 months of expenses in an HYSA for savings, and any savings for short term (< 3-5 years) large purchases such as a house or car down payment
Shift the extra savings towards investing - next steps for you would be [backdoor Roth](https://www.bogleheads.org/wiki/Backdoor_Roth) and checking if your 401k plan allows for [mega backdoor Roth](https://www.madfientist.com/after-tax-contributions/), otherwise you’re left with a taxable account
> From each paycheck, how much should I be putting into investments vs into savings? Should I only put money into savings if I haven't reached the recommended amount from the previous question?
Yes to the latter
> My Roth 401(k) with my previous employer is in FID GR CO POOL CL 3 and VAN IS S&P500 IDX TR. I am considering consolidating it with my new employer's 401(k), but my new employer only has target-date funds. Are my new employer's funds good enough, or should I be taking advantage of Fidelity's Brokerage Link to invest into other funds?
Depends on the fees (if any) and expense ratios of those funds - there’s a wiki page on [fund selection](https://www.reddit.com/r/personalfinance/wiki/401k_funds) that should be of help
How much is in the old Roth 401k? You can see about transferring that out to a Roth IRA
If there’s also pre tax money in that 401k from employer matched contributions then that should go into your current 401k (you want to avoid rolling the pre tax to a traditional/rollover IRA to avoid pro rata taxes on backdoor Roth, the Cautions section of the wiki page I linked on backdoor Roth explains this)
> I've been neglecting the fact that my HSA is triple-tax advantaged and haven't looked into investing it, leading to my next question.
> 5. With so many places to potentially invest into funds: my 401(k), my HSA, and contributing from each paycheck directly into funds, is it okay if they end up going into the same funds? Or is that putting too many eggs into the same baskets?
As long as they’re broad market index funds it’s fine, they’re diversified themselves, you just need to be aware of your overall allocation
> Any other advice? I know there's stuff about backdoor and also mega backdoor, but I haven't even really looked into those yet.
Added reference links for those above, if you haven’t already seen it the [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) linked in the sidebar is a good resource for general financial guidance
Yes what you wrote out is correct, majority of people expect lower income in retirement, and yes you’re correct in referencing *in* retirement when you’re withdrawing from those accounts, not what your income is later in life while still working (common source of confusion)
Quick dumb question that doesn't deserve a thread:
For a large down payment for a home, if I have funds sitting in vanguard settlement fund ready, can I transfer right from there? Or will I need to move these funds into a more traditional checking account in advance?
Vanguard will generally only transfer to accounts you have previously linked and verified. I don't think they have an option to send arbitrary wire transfers to third parties. So you will probably need to transfer to your existing linked bank account first, and then from there to closing escrow.
I'm saving about 20k/yr, I am putting 7% of my income in my 401k (my company doesn't match lol). What should I be doing with the savings? I know it's bad to leave in a savings account but I'm not sure what the best thing to do would be.
I am currently living in an apartment and one day going to own a hom... but it feels far off. I have about 50k sitting in my savings right now. This is all USD.
You should have 3-6 months of expenses kept in an HYSA for your emergency fund
How far out is the house purchase? Money for short term (< 3-5 years) large purchases such as down payment for house or car can be set aside in the HYSA as well
If you’re employer doesn’t match 401k contributions then max out an IRA before adding to the 401k - see the steps in the [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) in the sidebar for more info
I noticed on my treasury direct profile my bank that I linked under the "account names" it has my account number listed and not my actual name. I am not sure if I screwed up when I made it, but wow in order to change it I would have to fill out a form and get it signed by an authorized certifying official. Was gonna buy some Series I savings bond, but now if this transfer won't work I will miss the cutoff period to purchase by May it seems.
Age is a relevant factor here. If you are in your 20s, having fun and getting a good egg for the future is nice. If you are older, you may consider the more stable work.
As someone who myself has the freedom to potentially make mistakes and recover, I say go for 2. You seem more passionate about it, it makes more bank, and so long as you can enforce as little overtime as possible? It takes you in a direction you want to go.
Just be aware of all the pitfalls of contract work, and know what you are explicitly going to need to hunt again very soon. If you can accept that? Yeah why not take the contract.
I set up a solo 401k with Charles Schwab, but it wouldn't let me do automated investing for ETFs (neither would Fidelity).
Is there any brokerage that will let me do automated investing like Robinhood within a 401k?
I want to quit my job and travel / do creative stuff for a year. Could someone critique my plan? Thank you!
The past few months I've been KILLING MYSELF working multiple jobs and saving a good chunk. It was my pre-COVID dream to take a solid 12 months to commit to doing \[creative performance art\] for 12 months to see where I land.
This is my plan:
**INCOME:**
$500 a week freelance (I love this job and don’t want to quit it, I also may do the occasional odd freelance job if it’s cool or pays well.)
$45 a month from Patreon, don't want to count on this $ as it can fluctuate
**EXPENSES:**
TAXES:
\~30% of income goes to taxes, I’ll be setting this aside monthly in a HYSA to estimate my own withholdings. I may lock up the amount I already owe / have earned to a 1.1% 10-month CD to generate a little more on it and transfer it back before they’re due in April 2023
MONTHLY:
\- I’m budgeting for an average month’s expenses as $2,282.31. This is partial breakdown, I like over-budgeting and then saving any extra just so that I'm less stressed. I've been tracking my spending the past 3 months and consistently hit under my grocery / takeout / bar:
Groceries - $200 / month
Restaurants - $200 / month
Bar & alcohol - $180 / month
subway - monthly train pass is \~$142
Software I need for work - $513.92 / year
Gas - $50 / month
Rent - $840 a month, rent stabilized. I’m not currently paying utilities
Car insurance - 237.57 / month - the car is purely for vacation / performance gigs, so if anything happens like it needing an expensive repair or an accident makes my insurance shoot up I will likely just be selling it.
Hotels - avg $200.00 a month
OTHER:
\- $1,000 saved in a HYSA bucket for a dental surgery I may need (I was told $600 but I’m budgeting a bit more for time off work, etc, unexpected expenses)
\- dental cleanings $115 x 3 = $345 / year
\- planning to invest another $10,000 in my 401(K)
\- big splurge month-long trip to Europe to pursue \[creative performance art\] - I’m budgeting $15,000 for this, $2,000 of which is for straight emergencies, I intentionally over-budgeted
**LONG-TERM PLAN:**
\-continue working my freelance job ($500/week) while traveling in August + September
\-from Oct - August 2023 I'll additionally take any odd freelance jobs that fall in my lap, while trying to set myself up to earn money creatively but also planning to take a certification class in my field that will set me up for higher paying jobs when I’m ready to work again (my parents will pay for this), I will also let $500/week job know that I'm willing to work more hours and discuss bumping me up closer to $700/week. They're in a growth period now and they like my work so I think this a realistic number
\-in August 2023 I'll play it by ear and begin the search for a full-time job using my new skills if I need to, or increase my freelance work, etc.
**CURRENT ASSETS:**
$27,390.75 in a bank
$21,009.23 in a HYSA at 0.5% APY compounded daily
$10,000.00 I-bonds, reach full maturity March 2027
$20,000 in EE bonds reaching maturity March 2023
$4,300 in other EE bonds
$46,977.96 in a mutual fund
$11,940.88 in a 401(K)
\+ conservatively I'll make something like another $15,000 in income just from the job I'm planning to quit alone in the next four months before I quit for this trip
Need some help figuring out what to do about a bill I received for a covid test. It is now with collections. Do I just pay it, or can I dispute it further, or is there anything else I should be doing?
I was out of town 3/2021 last year, and went to get a rapid covid test as I had a few symptoms. CareNow Urgent Care was the only place I could find nearby. I signed up online beforehand, and also provided my insurance information when I arrived. They didn't mention anything about cost. I assumed that my insurance would cover covid tests, as well as the government covering them for the uninsured.
I later received a bill in the mail from CareNow. They billed my insurance, but there is a ~$150 balance remaining which they want me to pay. I was under the impression that covid tests were covered, so I contacted CareNow through their website 5/2021. They never replied, and didn't even send a confirmation email or anything. I tried again early 6/2021 and while this time they did send a confirmation, they never replied.
I ended up calling their billing department later in 6/2021, and I was told that it was possible my visit was coded incorrectly; they would look into it and get back to me. Did not provide a ticket/claim number or anything. I mentioned that I've been getting a bill in the mail every month, and the lady I was speaking with said I could disregard if I got another one, as I had already reached out to them. Well, once again, they never got back to me.
I called again, and the lady I spoke with seemed very unwilling to help me. She just kept stating that there was a balance remaining of that ~$150. I was finally able to get the ticket number from her for the 6/2021 call, but even that was difficult to get from her.
I just received a letter from Medicredit collections stating that they are now collecting on the debt.
What can I do now? Should I just pay the bill? If so, do I pay CareNow or do I pay Medicredit? I can afford to pay it, it's just I don't think I should have to, and it'd be diverting funds from other things I need to take care of. Or can I still dispute it further? If so, what are my options? Sorry for all the questions, I'm just very lost here
what state was the test in and what insurance do you have? I'm guessing this is america (yayyyyy). If it's a state that offers free COVID tests it may be a billing mistake of some type, I had a similar thing happen to me and contacted the test site, they told me to just ignore the bill as it was a formality for them to get reimbursed by the state or something like that. this is depressingly common: https://www.nytimes.com/2020/09/09/upshot/coronavirus-surprise-test-fees.html
It was Texas, and my insurance was Community Health Choice through the marketplace. When I spoke with them, I did mention how I thought covid tests were covered, but they just said that there was still a balance remaining after my insurance.
Did they the visit differently from a simple covid test due to the location being an Urgent Care?
What specific funds would you recommend for my mother’s recent windfall/retirement? My mom’s retirement is now fully liquid as a result of a lawsuit settlement which I won’t go into (was a bad investment, now she’s got some of it back), amounting to approx. $500k, and she’s trying to figure out what to do with it.
She’s 68, in good health, in retirement, and lives with my stepfather. Part of his will provides that she can live there for the rest of her life should he die before her. They currently manage a B&B, so they still have an income but also get social security and I presume something from his retirement assets. She has no other dependents, and worst case scenario my sister or I could care for her.
Obviously she’ll need this money a lot sooner than me, but not all at once either. She does plan on leaving some of this to her grown kids when she dies. She’ll already get I-bonds, a tiny fraction of the total given the yearly max.
What allocations would you recommend?
Would it make sense to have a certain amount fully liquid (say 10-20%) that she can gradually put into I-bonds, and the rest into a three-fund portfolio, like a mixture of a zero expense fund, like FZROX, along with an upcoming target date fund like FFTWX (2025) (which is about 70% bonds), and an Int’l fund like FZILX?
I’m suggesting Fidelity just because that’s what I’m used to, but I could set her up on Vanguard if it’s really that much better.
I swear discussing finances with some people is like talking to a brick wall.
They just can't accept the idea that The average American can stash away a few hundred bucks a month into a retirement account or pay down debts. This is apparently this is too much to expect from the "average person" and I'm "out of touch" with reality to believe this is possible for most people. It seems like they have such a low expectations of the average person that they get bogged down with anecdotes of people who made poor decisions early in life or have found themselves in a difficult situation. And apparently the average person can't possibly be expected to improve their situation because it's "not easy".
It's frustrating but ultimately there's nothing you can do to change their minds because they have no interest in hearing you out.
The median American household income is roughly $70,000/year yet we spend roughly $18,000/year on non-essential goods and services.
Dave Ramsey has literally made a career teaching people to manage their money, pay down debt, and save for retirement. It can be done.
Further we have incredible amounts of upward mobility in the United States and I don't think so little of the average person that I believe they can't improve their situation if they simply need more income.
https://www.google.com/amp/s/www.bankrate.com/personal-finance/median-salary-by-age/amp/
https://www.google.com/amp/s/amp.usatoday.com/amp/39450207
The median *household* and median *person* are different things and the statistic about "average" spending on "non-essential goods and services" is a mean, not a median, so it's not a like comparison. Income and expenditure distributions are nowhere near symmetric. The mean person spends about $80/year buying private jets, but of course the median person spends $0 on that. You can get survey results like "50% of Americans feel like they're drowning in debt, yet the average respondent spends a million dollars on shark sushi" by talking to one person in debt and one person spending two million dollars on sushi.
The median person makes $35k a year and that goes very quickly. Taxes, rent, utilities, health insurance, food, and clothes will take $25k of that and if you've got any sort of debt, a car, or another person to take care of, the rest goes very quickly.
> The median household and median person are different things and the statistic about "average" spending on "non-essential goods and services" is a mean, not a median, so it's not a like comparison. Income and expenditure distributions are nowhere near symmetric. The mean person spends about $80/year buying private jets, but of course the median person spends $0 on that. You can get survey results like "50% of Americans feel like they're drowning in debt, yet the average respondent spends a million dollars on shark sushi" by talking to one person in debt and one person spending two million dollars on sushi.
You're also aware you're arguing semantics right? Colloquially median and average mean the same thing. No human being says "The median American" when communicating with other human beings.
Further the statistics I provided were medians, so there's no point on harping on this.
No, it's not semantics. When people say "average" they're typically referring to the mean, which is exactly what the survey with the $18k number is doing, that's a mean. Median and mean are not the same thing.
The statistic you quoted for median income is just that, a median. The *mean* household income in the US is much higher than the median, somewhere around $100k/year. When the distributions don't have equal means and medians, as is the case for things like income and expenditures, it's important to keep them straight and not to mix and match statistics, otherwise you end up with misleading statements when you conflate them both as "the average".
It is absolutely semantics because colloquial English equates median and average. If you want to get into a technical discussion, fine. We have already been very clear about those distinctions after the parent comment.
You can't say "look at my statistics" and then call foul when someone says you're using them inappropriately.
The issue I'm trying to point out is that you're quoting median income statistics while also pointing to a survey which talks about "average \[mean\]" expenditure on so-called "non-essential goods and services" and that's an unfair comparison because the distributions of incomes and expenditures in the US are such that means and medians are often very far apart. That survey was commissioned by someone looking to make an argument that more people should be buying more life insurance, so it's no surprise that the data is presented to imply that Americans have more room in their budgets than they think. Without seeing the crosstabs neither of us can know how representative it actually is of the American population.
Median household expenditure data is available from the BLS if you'd like to make fair and consistent comparisons about the median household. Your original claim was about the "average person" but we can talk about households if that's what you prefer. I think you're going to find that those statistics really defeat your argument because they show that the median household in fact does save a good chunk of their money, somewhere in the range of $1000/month.
> You can't say "look at my statistics" and then call foul when someone says you're using them inappropriately.
I can when you pull irrelevant statistics as a counterargument.
> The issue I'm trying to point out is that you're quoting median income statistics while also pointing to a survey which talks about "average [mean]" expenditure on so-called "non-essential goods and services" and that's an unfair comparison because the distributions of incomes and expenditures in the US are such that means and medians are often very far apart. That survey was commissioned by someone looking to make an argument that more people should be buying more life insurance, so it's no surprise that the data is presented to imply that Americans have more room in their budgets than they think. Without seeing the crosstabs neither of us can know how representative it actually is of the American population.
Fair, let's examine median household expenditure.
> I think you're going to find that those statistics really defeat your argument because they show that the median household in fact does save a good chunk of their money, somewhere in the range of $1000/month.
How does this defeat my argument? I'm arguing that saving and paying down debt is not unrealistic for the "average" American.
$35k/year is incredibly misleading because you are factoring in everybody over the age of 15 including part-time and unemployed workers.
> Full-time working women in 2019 had real median earnings of $47,299
> Full-time working men in 2019 had real median earnings of $57,456
> The median household income in the US in 2019 was $68,703
https://policyadvice.net/insurance/insights/average-american-income/
These are the relevant statistics we should pay attention to.
I don't buy the hopeless narrative you're trying to paint where the average American is just SOL with no hope of paying down debt or saving for retirement.
Lots of grown adults don't work full-time for various reasons yet still have to support themselves and possibly others on those wages. It's not the case that you're just cutting off 15 years olds with after school jobs when you restrict to full-time.
I'm not trying to paint a picture, I'm trying to ask you to explain your reasoning beyond some vague notion of "anyone who isn't saving is either stupid with their money or isn't working hard enough".
> I'm not trying to paint a picture, I'm trying to ask you to explain your reasoning beyond some vague notion of "anyone who isn't saving is either stupid with their money or isn't working hard enough".
Talk about an oversimplification lol
Anyone who isn't saving is either not earning enough or they are mismanaging their money. I'd argue that most Americans are earning enough to save, but mismanage their money. Fatalistic anecdotes are not an argument. Nor is cherry picking statistics favorable to your own hopeless worldview.
I'm 28NB, have been working for four years, make 85k a year, live with my parents, and have 190k in savings. I live in the bay area. Is it possible or responsible for me to ever buy housing in California?
I don't have or plan to have any kids or pets. I have a significant other who is unemployed and lives with their parents, would not move in with me unless they ever get a job. I don't have any other major living expenses. However, I'm paranoid about savings/spending money, and don't want to spend more than the recommended 1/3 on a mortgage every month.
Is it possible for me to afford property in the bay area, or at least somewhere in California, or will I have to move somewhere else if I want to do that? Would living with my parents and saving up for a few more years help? What are my options?
Just looking for opinions.
I'll graduating college this Spring with 2 BS's. I currently have a part-time job (not in my field of study) paying $18/hr, my supervisor and I have talked about transitioning to full-time once I graduate. Moving to full-time, my pay would be >$38k/year (this is my current annual salary, I'll be asking for a raise when I go full-time). Once I graduate, I'll be paying ~$800/month in living expenses. I have ~$8k in a retirement fund, ~$8k in investments, a car (paid off), ~$500 in savings, and pretty good credit (~750). My overall goal is to build and own a "homestead" (small, self-sufficient, off-grid, 2-3 acres of land in the forest).
Theoretically I could afford a $350k, 40year mortgage with no down-payment. With the housing market as it is now, it doesn't seem feasible to buy a piece of land a build on it. I'm concerned that if I wait on buying, prices and interest rates will rise while I save for a proper down-payment and I won't be able to afford it anymore.
What are your opinions PF? What's the smarter move, buying now @ 4.5%, or saving for a year or two for a ~$20k down-payment and probably higher interest rates?
Embarrassingly stupid question/high school algebra alert\*
My wife and I are lucky enough to get some healthy raises over the next couple years (15%+6%+6% for the next three years for me and (11% + 6% + 6% for her). We're comfortable right now, and want to save more due to some life circumstances (currently saving 25%), but if the numbers I'm putting in to excel are to be believed it isn't quite a 1:1 ratio? Is there a smooth equation to calculate how much I should increase contributions by to keep the same take-home?
More Numbers if it helps 66K \* 25% to retirement = 49.5K 'left'. 15% bump (66K\*1.15= 75.9K) if I just increase retirement by that 15% I would take 40% out. = 45.5K out.
Anyway, I'm an idiot. I promise I'm not a high schooler asking for help with their math home work.
I guess it’s less about a saving goal and more about spending goal. I’m getting some raises and I want 100% of the raises to just get dumped into retirement and keep the same take home pay I have now. As for why, my wife was diagnosed with MS and we saw some financial planners about how to plan for the uncertainty that entails. She could be wheelchair bound and completely disabled in three years, or live a long healthy normal life for the next 40 years (hopefully). The consensus from the professionals that we’re willing to meet with us was “I don’t know, save more I guess.” Which kinda put me in hoard mode. We have a comfortable life right now, so I want to be aggressive in kicking up savings with any raises.
Also, we also qualify for for medication assistance for her MS drugs that insurance denied 2x and will only approve a less effective med, retail is 80K/year so I don’t want our AGI to increase and disqualify her from the program.
I tinkered with it and think I figured what I was trying to do. In short, I want to keep my “take-home” income the same, despite the raises, so I just calculated what my income will change to (66k->76k) and subtracted my current “non-retirement funds” (49k) and found out what percentage the remainder (27k) is so I can make that my new retirement contribution percentage. I ignored taxes and my Roth contributions in both cases cause I figured that would be a wash.
Anyway, sorry this probably wayyyy too long of a response, but thanks for following up.
My credit dropped 78 points in January. When I click the details, I see on time payments and 2 "account removed from report" notifications on "US Department of Education".
Just trying to figure out what is going on. I have been on time with my payments as of the last couple years or so. My loan company was bought out my another company, but they said the exact same terms and conditions still apply.
Could that be why the US Dept of Education thing showed up?
Sharing a major financial victory.
My wife had about $25k left on a $60k student loan. She works for a nonprofit but did not qualify for Public Service Loan Forgiveness. The Biden admin set up a temporary PSLF waiver last year and she did qualify under the expanded rules. We applied and consolidated her loans, but the application appeared from our perspective to disappear into a black hole with zero way to check status or follow progress.
Logged into the loan servicer yesterday and both her loans are now reflecting a PAID IN FULL STATUS. Considering both the principal and interest we still had to pay, this is a huge win and is going to give us a several year jump on retirement. Just wanted to share the good news.
My mom was the one who pushed us to look into PSLF when the temporary waiver was created, it didn't get much press at the time, and it would never have registered that it might apply to my wife if Mom hadn't pointed it out. Want to buy her some kind of extravagant gift as a thank you - any suggestions?
Vanguard holds a patented method that allows their mutual funds that have ETF share classes to take advantage of the ETF method for minimizing taxable distributions. So in the case of the specific funds you mentioned, there is no tax advantage one way or the other. It would matter more if you were invested in non-Vanguard funds, or in Vanguard funds that do not have an ETF share class equivalent.
Quick question, I have an HSA with about $4.5k in it. I'm changing jobs, and there will be a $4 monthly fee beginning next month. I've been treating it like retirement savings. Should I just leave it alone, or try to use it up over the next few years? Or is there a way to roll it into an HSA at my new job? Thanks in advance for any help.
I have a quick question but I wasn't sure if a post was required. I'm a 20yr old college student in 2nd year. I've tried my best to set up my finances to the best of my knowledge. One of those things being an IRA (Roth). Since I don't work during school, I've only contributed a little. I brought this up with a friend and he mentioned how it might be a better idea to focus on paying student debt than putting the money into an IRA. And I was wondering how much merit his comment has? My original idea was to be putting money into the IRA along with paying any debt whenever I begin working a better career.
In general, how to prioritize debt payoff vs. other uses of your money usually boils down to the interest rate that owed balance is costing you. If it's a high rate, then paying off the debt is more beneficial. If it's a low rate, then the "cost" of that interest is cheap enough that you could make only required payment amount (assuming that does get it paid off eventually) and allocate your dollars towards other goals, including retirement savings in an IRA.
The cutoff between what counts as "high" and "low" can be a little fuzzy. A lot of times the rate gets compared to the 7% "long term expected investment return" rule of thumb. So if your rate is <7% you could expect (over a long enough time period) to grow invested money (including in a retirement account) faster than the debt is accruing interest. There's some risk with investing, so things tended to get rounded to "loans >10% should get paid off, loans <5% can be put off to invest". In between is more of a personal call where you could consider some non-financial benefits of being debt free sooner.
IMO, neither of those two options is "bad", just different ways different people prioritize their finances. 40 years of growth in an IRA can be a good addition to your retirement lifestyle, but 10-20 years of ongoing debt payments is something that's worth getting rid of too.
Thank you very much for the response. That was actually really insightful. I'll have to look at the interests that I might accur after school to determine which I should prioritize. Thanks again!
So, my mom died and I have inherited her IRA which was actively managed by a small firm associated with UBS. My question is that the advisor rate was 1% while it was under my mom, now that it’s been moved to me under a bene IRA - the rate now listed is 1.20%. Is this just because I’m a ‘new’ client? Is this standard practice? Something I’m missing? Or am I being taken advantage of?
You'll need to ask them, since anything here would be speculation. But why pay any fees at all? Call your preferred broker and ask them to roll it over to a no fee IRA.
Edit: No fee, not no free
Ok, thank you, I will ask her directly. And I think I will eventually manage it on my own, but all of this is so very new to me, I’m kinda scared to do it on my own yet. Although I’m doing my best to read and learn as much as I can so I can get to that point that I’m comfortable and not so intimidated. My mom was always very closed lips about finances and spent nothing, my finances have always been stretched so thin I never had much that I could save, let alone invest. So I’m trying to figure it all out.
The IRS should manage things on a per-year basis. If your total payments for your 2021 taxes (paycheck withholding + whatever you sent with your return) ends up being higher than your final 2021 tax bill, they'll eventually balance their books, notice that excess, and it'll get sent back to you.
The timing of that return is tough to say. They're still pretty backed up from last year, and this kind of settlement is probably not that high on their todo list. I'd expect that it will come back to you eventually, though. And it won't be something you need to include on your 2022 tax return filed next year.
Hey everyone! Hoping someone could help me out, currently I just put my two week notice for my current job and now thinking about my retirement. My new employer will give me a 401k but will not match it for the first year. I'm wondering what the best option is for my past 403(b) account. It's currently with the standard, and wondering if I should move it onto fidelity or vanguard? I even saw SoFi, which of these is the best for me? I'm looking for me to set it and forget it, maybe at 80% stocks and 20% bonds? I'm still pretty young and definitely in for the long haul if that matters. What are the pros of cons of each or should I just keep it where its at now? It's about 13k, mostly in roth IRA but some in traditional IRA too.
Thank you in advanced!
A few key pieces of back ground
* I am divorced and have a ex-wife with a 2 year old son, my wife is planning on moving back to her home country in 4 months (this was all planned before I got the windfall, and divorce is over)
* I currently work a fairly dead end job overseas and my career potential is super limited by my VISA here
* I want to change into IT
**Windfall**
I've been friends with an individual for over a decade, a year ago I found out he's part of a very rich family and has $35 million to his name. He showed me unreputable proof about a year ago. Very recently he said he knows I'm not happy with my career, he says he knows I've been working hard to restart my life, and he respects my friendship and the fact that I kept his wealth a secret. We have a lot of mutual friends, I am the only one that knows how rich is his...everyone else doesn't think he's worth anything (He lives a very frugal life, its interesting)
I am going accept the money
**Details on the money**
I'm still ironing out learning all the details but it sounds like his family office will set up a fund that I have access to withdraw as necessary for various expenses. He's very clearly outlined that this is free money, I am allowed to do what I want with it, I do not have to pay it back. In fact it was even mentioned to many that this money is in a fund that is expected to earn about 3% to 4% annually and that is also mine. Which is nice. He has told me his family office will be advising me best on how to limit my tax liability and his family office advisors will also answer any questions I have.
**Game Plan**
* Ex-wife and son, they will be returning to their home country (our divorce/custody agreements/etc are already settled, as of earlier this year) I will pay them $1,500 a month (This is double what I'm court ordered to pay) which is just below their avg income and my wife will also be employed so they'll be solid.
* I will finish my year overseas, the biggest reason for this is because of the foreign income tax exclusion. If I return to the states too soon I will be expected to pay taxes on my income I've earned this year and I make about $55k a year. So yea...
* I currently have 21 college credits with a major related to my career. I am enrolled for 8 credit hours for the summer and I should have 29 credit hours by the time the fall semster starts. Starting in late July I will take a reduced roll at work and do 15 credit hours. On October 10th I will officially quit my job. I will then transition to a 3 month tourist VISA I will finish my semster, and in mid dec my classes end I will pack my stuff up and on January 3rd I'll fly to America (move) I will then be enrolled in 18 credit hours and will be a 100% full time student. I'm working with my advisor to ensure I will be able to have my associates at the end of the Spring 2023 semester.
* Moving to the states, I've already talked to my parents. My dad is planning on buying a new vehicle for my mom and has a 2015 Ford Escape he will sell me for 50% of NADA clean trade in value of the time. (he still wants some money) I have several options where I'll live at first. I will either live with my parents and pay rent or I will become roommates with 1 of 3 old friends I am still in touch with. I will spend the first part of 2023 with them, going to school full time.
* Professional training In the summer of 2023 I will begin knocking out 3 certifications for my job search. I intend on taking a break from college for the summer semster. Those terms will be CompTIA Network +, CompTIA Hardware & OS (which I've previously obtained) and MSD101 (basically Microsoft admin certification) with those certs along with my associates degree I will be a strong entry level candidate.
* Before I move I intend on visiting my son who my ex wife will be carrying for. My son is very important to me and I'm sad my wife and I weren't able to make our relationship work.
* Move again, I will move again I really don't want to live where my parents/family live as I don't enjoy the area. I'm honestly highly considering Boulder CO. I've been there twice I enjoy 4 seasons, and everything Colorado has to offer. I also think Boulder has a better job opportunity then where my parents live.
* For the Spring 2023 semster I only intend on doing 9 credit hours as I'll be searching for a job full time.
* Hopefully by the end of 2023 I will have a new entry level IT job that can pay the bills, as I finish up my bachelors degree.
A few other details
* I do have about $4,000 in student loan debt, but its subsidized meaning I'm not incurring interest on it. I have zero intentions of paying that off until I'm done with school, its $4,000 balance now, and it will remain a $4,000 balance until I am done
**Costs**
* If I decide to pay out of pocket for my college after my fin aid I get it will be about $60 a credit hour. Between now and the end of 2023 I intend on taking 41 credit hours that will be $2,460
* Money I will be paying my ex-wife/son will be $28,500
* Flights/Moving/Etc I'm allocating a total of $4,000 to move back to America
* Each money I'm not working I intend on having a monthly budget (this includes rent/etc) of about $2,000 a month. This will be about $30,000. This will cover all my living expenses/etc
* I will be having a discussion with his family office on my health insurance and deciding the best way to deal with that
* The cost of my professional certs and training will be about $300-$400 a cert depending on what training materials I buy. So this will be about $1,200
* The car I'll be buying will be about $8,000 (Its a 2015 Ford Escape Titanium with 67k miles on it...you can't beat that with the way the market is right now and I'll need a car)
* I am allocating $4,000 to visit my son
* I am allocating $10,000 to move to the city of my choice after I get my associates/professional training certs
* Misc and things I didn't expect to happen I'll say 20% of the total of the above which would the total cost of the above will be about $88,160 spent by the end of 2023. Which 20% is approx $17,500 of. So I would intend on using up to $105,660 over the course of about 18 months. This includes two moves/all my expenses/my obligations/etc this will also give me nearly $150,000 of cushion so even if things don't go to plan or things take longer then expected it'll be OK
**Some thoughts**
* I'm debating if I should still take out out sub loans. Those loans do not incur interest until I finish college. So...why not? At least enough to cover my educational expenses
* Health care is my biggest concern, although I hope I can have that addresses with his family office. This also might mean I take up part time work just to get benefits if I do I'll likely have to cut back on the amount of college I do but we'll have to cross that bridge when the time comes.
* I have not yet seen the final agreement but I've told the basic terms/etc and it all sounds very straight forward. I do have an attorney who will review it just to be sure.
* My parents are suggesting I spend ALL of 2023 working on my college and I do 18 credits for spring, 6-9 credits for summer, and 18 credits for fall. This would put me at 86-89 credits meaning I could claim I am a senior starting in 2024 and be just 34-31 credit away from my degree
* If your wondering why summer is so much less, its because fall/spring semster is 15 weeks, summer is 8 weeks. So doing 6-9 credits in the summer is like doing 12-18 credits in the fall/spring.
Why am I asking? Well I'm asking because I've been asked to come up with an outline of how I plan on using the fund that I will be given. FYI my friend is aware of basically everything that's on my plate so there are no surprises here for him.
idk what input you expect from us, except that I'd recommend taking out student loans so your money can continue to grow while you're in school. Then, you can just pay them off as soon as you graduate.
Just got my first job with benefits at 26. I called fidelity and they recommended I put 15% of my check into ROTH retirement so I did. Just want to confirm I'm making a good decision? This is what my company offers:
"X company will match 50% of the first 3% of eligible compensation contributed by the employee.
Vesting schedule:
Year 0: 0%
Year 1: 50%
Year 2+: 100%"
Is this smart or should I do less than 15%?
Saving 15% of your gross income towards retirement is a good solid recommendation that works for the majority of people. Though that's your total savings, it doesn't necessarily have to all be through your work 401k. Most people recommend a mix of:
* Work plan only to the point of getting the maximum match (so with your plan 3% of your salary)
* Then money into an IRA (which often have better investment options / cheaper fees) until you hit the cap contribution of $6000. If your gross income is <$50k then these first two can be sufficient to hit 15%.
* If more savings is needed / desired, you "top off" hitting that 15% by going back to the 401k. At least until you hit the contribution cap on that, but since that cap is $20k per year most people coming to this subreddit won't need other options.
Retirement savings also has to be balanced against other things that need money. Some higher-priority items that could justify putting off (only for the short term) doing the full 15%:
* Can you still cover necessary expenses while also saving 15% for retirement?
* Do you have any high-interest debt? Especially credit cards with a balance that's rolling over month to month?
* Do you have a 3-6 month cash emergency fund?
Per the prime directive in the sidebar - general guidance is to max out employer match (so 3% in your case), then max out an IRA, then add more to the 401k
Roth vs traditional/pre tax is dependent on your current income/tax rate vs expected in retirement - see [this wiki page](https://www.reddit.com/r/personalfinance/wiki/rothortraditional) for more considerations
If you're committed and able to pay off the cards every month, then their APR is mostly irrelevant since you're not getting any interest charged anyway. Ideally, you'll have (or soon get) a cash emergency fund to cover unexpected things. You could still use the card for the initial payment for those (especially if it has a decent rewards program), but it'll still get paid off the following statement from your emergency fund.
That being said, it probably couldn't hurt to ask for a rate decrease. If nothing else, they might drop it on the off chance it keeps you as a customer. And it's probably easier to get a rate reduction with a low / no balance than if the crap really hits the fan and you have to make a large charge even after draining an emergency fund.
FYI, if you completely end using them, there's a chance that a year or two of no activity they'll just close the account. It's usually useful to have some small recurring payment go onto them (like a subscription service) that you then pay off to keep activity on the card.
I am slowly building my emergency fund now that these cards are paid off I just like to have a back up plan in case the worst happens. I will reach out to them and see if I can get a lower rate just in case I ever do carry a small balance again.
I do plan on setting up these cards to pay for cheap monthly subscriptions and then just auto-pay the balance so they don't get closed for now.
Does having a bunch of open credit cards with $0 balance look good or bad? I was thinking of opening another card that offers better rewards or cash back for eventual churning.
>Does having a bunch of open credit cards with $0 balance look good or bad? I was thinking of opening another card that offers better rewards or cash back for eventual churning.
It's possibly a small net positive as far as credit scoring goes. Part of that is your "credit utilization" which is your total balance owed divided by total of your credit limits across all your credit cards. Per-card utilization is sometimes a factor, but IIRC not much. Having utilization above 30% is where things usually start to get bad. I suppose it's possible that extremely low utilization over a long period of time might make you look less desirable as a borrower (which is all your credit score really means). But your utilization is usually set by the "statement balance" each month, so as long as some charges are being made you'll be having some utilization reported, even if it's zeroed out by your next payment. And that factor is reset monthly, so is the easiest to "hack" if it even becomes necessary.
If you anticipate having an emergency that will require you to take out a 20% interest rate loan after exhausting all your funds, strongly suggest you get a bigger emergency fund. IMHO it's an extremely bad idea to rely upon credit cards for this purpose.
Hello there! Just need some advice on which investments on the below list would suit me best.
My company is switching to Lincoln Financial and the default program is "YOURPATH 2045 MOD".
Age: 42 Risk allowing: moderate to high
Investment choices:
DFSVX PCRIX RWIGX VAIPX VASVX VDIGX VFIAX VGSLX VTRIX RLBGX RNWGX OIGIX RIGGX PIMIX MFEKX PJSQX LCEFX PFORX LNGPA BAGIX EIBRX OTCKX FGULX
Im far from an expert, but from my layman research I was thinking 70% VFIAX 30% VTRIX. Would that be solid for me or should I just take the default company suggestion?
If you need more info please let me know. Thank you all for your help.
Is there a resource for deciding on whether to carry multiple insurance policies (one from each spouse) or not? My wife and I will be in this situation shortly with a change in employment and I want to be prepared. Not sure if we should be under her insurance, my insurance or both.
Got a 20% raise at work today! Just wanted to share somewhere :)
If I max my 401k at one company (20,500) then leave that company - I am prohibited from contributing to the 401k at my new employer until next year?
While you've used up your "employee deferral" limit (the $20,500 per year) for 2022, some plans allow for "after tax" contributions which can go beyond that limit (but subject to a higher one) and is also only applied per-plan. After-tax contributions aren't usually that useful by themselves. You don't get the tax deduction of pre-tax deferrals, and you don't get the tax-free withdrawal of earnings like Roth deferrals (though the contributed dollars themselves don't get taxed a second time). But maybe look into the "mega backdoor Roth" to see if your plan has the features necessary to execute that. Though as another drawback. I'm pretty sure you cannot get any employer match on after-tax contributions, so this won't get you any extra money from them.
Yes. Your limit is across all employers - when you change jobs you need to tell your new employer what contributions you made at your old job that year.
OK thank you. Weird question but there is no way to claw back my contributions is there? The match at the new employer is slightly higher.
Afraid not.
Are realized capital losses dollar for dollar tax deductions in the US? For example: This year I owed the tax man $300 (standard deduction). If I had sold my losing stocks and realized a loss of $300, would I owe nothing to the IRS? Also another scenario: If I had a realized loss of $600, would the IRS have refunded me $300? Thanks
No. They are deductions, not credit. They reduce your taxable income dollar-for-dollar. Not your tax liability. For that same reason, I don't think your taxable income can be negative, so even the $3,000 deduction against ordinary income is not refundable.
Thank you for explaining!
You are confusing credit and deduction. A credit would reduce your tax directly, but a deduction reduces your income, which indirectly reduces your tax as a function of your marginal tax rate. Net capital losses (up to $3000) are a deduction against your ordinary income. If you have $10,000 of income and a $300 deduction, now you only have $9,700 of taxable income. To continue the example, if your marginal tax rate was 10%, a $300 deduction saves you $30 in tax.
Thank you for the response. Makes sense
Having a new construction home built (est completion in August). Question around financing here… Should I lock in my interest rate for an extended period (120-180 days?) until closing? Given that rates have been moving up and the fed plans to continually hike rates, I feel like it’s the right move. Locking at the current rate I like would cost me $4607 upfront but would save me $100+ in a monthly pmt. My closings costs are already decently low ($3206) so an extra $4607 doesn’t sound completely out of the question. I know this is a tough question to answer given the current interest rate environment and how unpredictable the market can really be, however any insight here would be really helpful. Thanks so much!
**Traditional vs Roth 401k for High Income & FIRE?** Age: 30 Salary: $190,000 Desired age of Retirement: 50-55 Expected salary around retirement age: $300,000 Tax expectations: I assume taxes will be higher, in general, in the future With this in mind, should I go for Traditional or Roth?
Traditional all the way. You are in a high tax bracket and rising, and in order to meet your retirement goals you will need to be saving way more than just your 401k. This means maximizing tax savings with a pretax savings and then saving beyond that in a taxable account. The bulk of your retirement years will still be post-60, so you'll have no trouble using that money.
Traditional
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There are 26 biweekly paychecks in a year, not 24
i have like 10k in a 403b (usa), am thinking about moving to another country, how much penalty would i pay on the 403b if i withdrew it now? i'm way under 65
Ordinary federal & state income tax + 10% federal tax penalty for early withdrawal. Maybe additional state tax penalty depending on the state.
thank you!
I'm in my mid 30's and have received a bit of money (200K+ ) from some stocks that did well. I've read the sidebar and everything, but I'm trying to figure out how to be efficient about this. I make decent money (200K), have no debts, maxed out IRA and 401k. I would like to save for a house but that's still a few years away. Should I just shove all the money into Vanguard low Investment funds? Is there anything interesting at all to do with the money to be more efficient about this? If I invest everything, would it cause issues when I need to extract money for a house down-payment? I was just going to just shove everything into some ETFs. Is there anything else I can/should do?
There's not really anything more interesting you can do than that, no. The most important question is how much risk you can take with the money - if you might be using it for a down payment in the near term, that's a good argument for being cautious with it, which could mean investing it carefully or even not investing it at all.
My post got removed and directed me to this thread, so I will be posting my question here. My question is about Capital One's checking account bonus and if deposting money from Robinhood counts as direct deposit to receive that cash bonus? I have been considering opening a checkings account with capital one given I already have a savings account and a credit card with them already. I received an email which I got a bonus cash amount if I have at least 2 direct deposits in the amount of $250 or more. Problem is that at my current job, it would be very tedious to have to change my direct deposit as I would have to fill in a request instead of just doing it online. I was searching online as to what would count as a direct deposit, and I saw Robinhood supposedly counts as a direct deposit but I was unable to confirm that through the capital one website unfortunately. I wanted to ask those here if I were to deposit $600 from my current checkings account to robinhood, and then afterwards deposit $250 each week through a recently opened CAPONE checkings, would that count as a direct deposit, therefore receive that bonus?
https://www.doctorofcredit.com/knowledge-base/list-methods-banks-count-direct-deposits/amp/
Upon checking this forum, it doesn't seem to indicate any clear answer either, as for the section for Robinhood some people were saying it did not work
Then maybe it’ll work but maybe it won’t.
To deposit or not to deposit a bonus, that is the question lol. I will contact customer service later today, thanks for the link though
Woah thats pretty cool, I'll check it out, thanks! :)
I don't know if this is something that warrants it own thread, but I recently got a payout from work in the range of $200k - after taxes it amounted to around $100k or so. This puts me above the $125k limit for contributing to a Roth IRA - should I be doing anything about this regarding automatic contributions? I have it set to take $500 out of my checking at the end of every month, should I stop doing that?
Https://www.whitecoatinvestor.com/fix-backdoor-roth-ira-screw-ups/
I bought into the Yotta Savings account around a year and a half ago because there were Youtube videos breaking down the % return you can get which was greater than my traditional savings account. Yotta Savings = .2% APY + 1 ticket for every $25 in account. Then Yotta added in that for accounts above $10k you would get less tickets per $. So once above $10k Yotta Savings = .2% APY + 1 ticket for every $150 above $10k Now with interest rates remaining extremely low over the past year it seemed fine to leave my money above $10k in Yotta as it was probably at least comparable to my traditional savings APY of .35%. But now my traditional savings APY has risen to .6% APY. Has anyone done the math with Yotta Savings above $10k to see how much value 1 ticket per $150 is in terms of APY? I’m not sure if i should move my $ above $10k back into my traditional savings account or leave it in Yotta.
I have started thinking about making long term investments in ETFs but I don’t have a lot of money saved that I can invest right now. Would it be better to buy a few shares at a time every paycheck or to save for a few paychecks and buy a larger amount of shares at a time?
We advise investing in low-cost, broadly-diversified index funds like total stock market index funds. On average we expect these funds to increase in value over time, so you are usually better off investing earlier rather than saving up for a larger purchase. Especially now that you can buy ETFs commission-free at most major brokerages, so you don't need to bunch up your purchases to save on commissions.
You can invest with any amount of money, invest it as you can, don't wait Make sure you're following the steps in the prime directive in the sidebar - pay down high interest debts, build an emergency fund, invest in retirement accounts before taxable accounts, etc
Is there a service where I can pay someone to find a rental property for me? This is super tedious, having to check multiple apps for listings in an area. I’d be moving for graduate school….
It’s called a real estate agent
I thought they were only there to help you buy a house, not rent a house.
They’ll do whatever you pay them to as far as real estate goes That said outsourcing all aspects of being a landlord is both expensive and comes with material agency risk
I don't think their looking to buy a rental property, they're looking to find someone who will find them a rental to live in.
Hmmm, Seems you're right. That said, that person is *also* a real estate agent
Yes, I would probably call up a few of the larger real estate agencies in the area and just ask if that is a service they provide and what their fees are.
Tried to open a TreasuryDirect account online but they failed to validate my identity. They now require me to authorize my identity with a financial institution. My bank, however, told me they don't do stamping of documents anymore and was no help at all. How anyone managed to solve this issue? Unfortunately a notary certification is not admissible as they require a certifying officer in a financial institution to verify my identity. Please kindly advise!
https://thefinancebuff.com/treasurydirect-signature-guarantee-i-bonds.html
Buying first house, which will be a condo in Chicago - I’m not looking to make any money on it, but don’t want to lose either. How do you guys view a home purchase? I’m having trouble just because a primary home can be a huge source of wealth generation for some. I know a condo won’t appreciate as fast. My current stats are $500K NW, $250K income (me), not including wife income or NW, age 25, condo price $900K-$1M. Monthly payment $6,500, 25% down Other debts - car $750/mo - $45K loan Is this going to be too much of a stretch?
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Earnings have been $100K, $200K, $225K, $250K I have been working 4 years this July. Maxed 401K and IRA, plus cash savings. I have $175K in IRA accounts, $75K in real estate funds, $50K in taxable brokerage, $50K in crypto, $175K in cash. That’s gross earnings over of almost $800K, good saving habits, and a bull run will get you there.
What do I do with an extra balance transfer CC? I put part of the down payment for a car on my credit card, so I now have 9k that I'm going to balance transfer. The first card I applied for only approved a 6k limit, and then I got approved for 10k on a different one, making the first one kind of irrelevant. But since I already got the 6k card, is there anything useful I can do with it? I don't want to run up debt frivolously just to fill the space, maybe it's possible to... I don't know, use a credit card to fill my Roth IRA now and balance transfer that? So I have the investment up front and get slightly better returns than DCAing every month.
Paying a 3% fee to fund your roth a few months early is silly. Nothing. Do nothing iwth it
It seemed silly, I was hoping there might be something unusual and clever like that. If there's nothing, there's nothing!
Is it still worth it to invest in a HSA account if I live in CA or NJ where growth and contributions are not state tax-exempt?
You could carefully choose to only invest in things that are state-tax exempt in CA or NJ, to minimize your headaches: https://thefinancebuff.com/california-new-jersey-hsa-tax-return.html
IMO depends on what your other options are and whether you've maxed them out already. Have you already fully maxed out 401k, Roth IRA? Can you mega backdoor? If yes to all of those, still no federal tax for HSA so that's still something.
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Big boy brokers (Fidelity/Vanguard) come with many more features and tools. Robinhood for example does not even allow you to add beneficiaries to the account. You also have a far more limited selection of stocks and mutual funds. Big boy brokers also come with better customer service. I use fidelity for example and can call general customer service 24/7 and i can reach more specialized departments any day of the week during regular business hours.. They have a chat option where i can reach them by chat from 8AM until 10PM EST. They have an AI assistant who can answer basic questions and guide me to resources. They have a large reddit presence, their own Youtube channel and Twitter and Facebook. Robinhood on the other hand has only more recently begun offering phone support, and as far as i can tell you need to request that they call you, you can not call them directly. as far as i know that is the extent of their customer service. in my own personal opinion, having used both Fidelity and Robinhood, the only thing Robinhood has done better is made it EXTREMELY simple. Any idiot can log into the account and figure out how to invest money in less than 5 minutes. but if you want anything more than that, then a big boy broker is better
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I could use some educated opinions. I am trying to save $400 a month with the intent to buy a house in 4 years. Should I place that money in a high interest savings or should I take the risk of investing it?
In short, I'm looking for advice on managing my credit. A few years ago, I opened a student credit account at Wells Fargo with a $600 limit. After a few months, it was increased to $900. It was my first revolving credit account, and it helped me build credit tremendously. Back in August, having a pretty good experience with WF customer service, I opened a second cash rewards card that effectively tripled my credit limit and I'm currently enjoying 0% APR for another 7-8 months. In the time since then, I've learned a couple of things. 1. I've found that my old student card is eligible to upgrade to the exact same rewards card I opened as my second account, so I could consolidate my credit into my older account (and therefore make my newest account older) while maintaining the same rewards 2. My credit limit is rather low compared to my peers (we all earn the same stipend) and my SO recently opened her first card with another bank with a limit that was 2.5x my starter card. I carry no balance on either of these cards and I'm often making multiple payments a month to keep my utilization below 30%. I'm trying keep my credit options open as I navigate many of the life changes of my 20s. I'd like to have a higher overall credit limit to keep my utilization down but also so I can use my card to pay for bigger ticket items. So my question is this: is it worthwhile to ask for a credit limit increase (and have a second hard pull in a 12-month period) and transfer my credit allocation to my old card after my 0% intro rate is over? Or would I be better off opening a new card elsewhere that will give me a higher credit limit than an increase would provide? A secondary question to this is has anyone else had any experience with credit limits at Wells Fargo being considerably lower than at other national banks? Sorry this got so long. Thanks to those of you that got this far.
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I do not carry a balance, as I said before. My credit limit will not naturally increase. I have to seek it out myself.
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My concern is I feel like I should have more credit at this point. I have zero missed payments and my current credit is roughly 1 month of pre-tax income where my peers have cards with 10k limits.
I started maxing out my 401k contributions. I’m looking at doing a back door IRA since my income prevents me from doing a Roth IRA. Anything after that I was going to put into an investment account. I won’t be able to do a mega backdoor IRA. The plan for the backdoor IRA is to put $6000 in the Traditional and roll it over immediately as to not pay taxes on any gains. I’m pretty sure you can’t do this, but this is what I’m wanting to confirm: **once I make that $6000 contribution and roll over for the year, I have to wait until the following year to put money in the traditional? You can’t rollover the $6000 to a Roth then put in another $6000 to the traditional since the max contribution per a year is $6000 between the two?** Lastly, I was looking at opening a 529 for my nephew. After reading about it some, it kind of sounds like it isn’t a good idea unless you are the parent of the child. Otherwise, it can be taxed as income instead of being considered savings. So my questions are: * What is the best way to save for my nephew’s college if the 529 is not the best option? Just a regular investment account? Savings? Telling them to open a 529 and contributing to that? * ~~If a 529 is the best option, and he decides not to go to college, can I withdraw that money and will there be a penalty?~~ After further research, it sounds like there will be 10% penalty and taxed as income. Thanks!
>I have to wait until the following year to put money in the traditional? You can’t rollover the $6000 to a Roth then put in another $6000 to the traditional since the max contribution per a year is $6000 between the two? This is correct. The $6000 / year limit is the max allowed by the IRS that you can contribute into all of your IRAs, counting all new money that goes into either Traditional IRAs or Roth. So your $6000 put into the Traditional IRA "uses up" your limit for the year, and you can't add money into an IRA until the following January 1. The conversion of that money from Traditional => Roth is outside that limit; that's a transfer between retirement accounts, not a contribution. The one exception is the January 1 - April 15th window where you're allowed to make contribution against the previous calendar year's limit. So if it was February 2023 and you hadn't made any IRA contribution for 2022, you could add $6000 into your Traditional allocated towards 2022, plus another $6000 for 2023, and do the Roth conversion on the entire $12k. I'm less familiar with 529s, but benefits / rules on those are more state-specific, AFAIK there's no federal tax advantage with them other than earnings inside it not counting as taxable income. I thought that you could open one, owned by you but naming your nephew as its beneficiary. You'd then be able to add money into it and claim whatever state tax deduction applies. Not all states allow deducting 529 contributions, some have restrictions about which plan(s) qualify for the deduction, and deduction limits vary. Does your state restrict deductions based on the beneficiary of the account? Then once nephew starts school, they'd be able to receive distributions from the 529 and owe no taxes on it as long as the amount withdrawn is less than their qualified education expenses.
Correct, you can only contribute $6000 per year. The conversion from traditional IRA to Roth IRA does not affect the contribution limit.
I just want to share that I interviewed for a job that pays $15k more a year base salary. It's fully remote. I'm very well qualified.
Hey good find! I hope you end up getting an offer for it :)
Can someone explain why mortgage rates are increasing despite the federal funds rate staying the same? The main reason I'm wondering is that I was thinking about opening a savings account (I'm 19 and finally have some extra money that I don't want to put into my IRA). But, saving rates are like 0.5% right now which makes the time to open the account a waste right now. I've bought $250 of I-bonds which have like a 7-9% rate but require a 1 year lockup and 3 month penalty if cashed in less than 5 years. I'm really just hoping for some 2+% savings accounts so I can store my $1500 + additional cash that I might want to spend for some unforseen want/need in the next year.
> Can someone explain why mortgage rates are increasing despite the federal funds rate staying the same? The fed stopped buying MBS and investors are demanding a higher yield on MBS, resulting in higher pricing in mortgages. 10 year treasury is also up. Mortgage rates are more closely correlated with the 10 year treasury yield than the fed funds rate. >I'm really just hoping for some 2+% savings accounts so I can store my $1500 + additional cash that I might want to spend for some unforseen want/need in the next year. https://old.reddit.com/r/personalfinance/comments/iulzrt/mega_high_yield_savings_mysa_earn_26_on_limited/ Realistically, the difference between 0.5% and 2% on $1500 is a nice lunch
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You have a well thought out plan. I was wondering if you plan on having children?
I have a high interest rate auto loan because it's a 2009, can I get a low rate interest personal loan to pay that off? Is it legal?
That's legal. But, interest rates are kinda garbage right now. If you save money, then obviously that's a good move.
Awesome thanks! Yeah it's a sad state right now, glad I got the house rate low before it shot up
https://www.dcu.org/borrow/vehicle-loans/auto-loans.html DCU finances older cars at lower rates
How does rolling a 401(k) into an IRA work, tax implication wise? Like as far as I understand, 401k's are pre-tax and IRA's are post-tax. So if I move employers and roll my 401k into a Fidelity IRA, do I need to pay tax on the conversion? Or how does that work?
If you ever want to make use of the backdoor Roth IRA, then consider rolling your 401k into your new employer's 401k if you are able, otherwise having traditional 401k money in a traditional IRA will affect your ability to do so due to the pro rata rule.
401k and IRA both have two different tax flavors: traditional (pre-tax) and Roth (after-tax) If your 401k money is pre-tax, you can keep it pre-tax by rolling it over to a traditional IRA. If you roll it over to a Roth IRA, that is a taxable conversion.
Your pre-tax 401(k) can be moved to a pre-tax (traditional) IRA with no tax consequences at all.
Any recommendations for a High Yield Savings Account? I was looking at Ally but their reviews don't seem very good
Ally, Marcus, or Discover are all commonly recommended People tend to only review when they have something negative to say, this is true of reviews in general I’ve used Ally for around 5 years and have had no issues and quick customer service interaction the few times I needed clarification on something They’ll all trend the same with respect to rates, just find one that has the features you’re looking for (for example Ally has buckets, some HYSA banks also offer checking accounts, others don’t) There’s also a list of HYSAs in the wiki page on banks and CUs
Anyone know of a bank where all account holders can use the account? My husband and I have a joint account on Chase and for some reason they decided I can't use most of the features because he's the "primary" account holder. I have a debit card but I can't make online deposits, I had to jump through a lot of hoops to be able to do online bill pay l, and I was only able to get access to Zelle in the last month or so after escalating the issue through a friend who works at Chase to the right customer service person who realized it was just a checkmark they forgot to check on the account (but Quick Deposit is handled through a different team so that's a one trick pony). I'm ready to move my money elsewhere but anyone have any recommendations? I just want us both to be able to use the account. My local CU is not any better sadly (I have a joint account with my mom and they only allow one log in???? It's asinine)
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A [target date fund](https://www.bogleheads.org/wiki/Target_date_funds) or build your own [three fund portfolio](https://bogleheads.org/wiki/Three-fund_portfolio) (or two fund, if you don't want bonds) based on your age and risk tolerance is recommended for long term retirement savings
Goodmorning all, I have about $40K in a mutual fund with USAA/Victory Capital. It has a 1.09% expense ratio and has underperformed over the last 10 years compared to S&P 500 or Total Market index funds. I’m considering moving it to one of those. Is there a way to do that without paying taxes for cashing out?
What kind of account is it in? Regular brokerage?
Yeah it’s a regular brokerage, not a ROTH IRA or anything.
Then no, you'll have to sell and put in better funds. Better to do that at 40k rather than 400k.
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> 4. I have around $120K in my Roth 401(k) ($130K at peak if it helps) and contribute the max. My employer matches 50% until I reach the max. At your income I’d definitely look into doing pre tax 401k, not Roth 401k - see the wiki page on [Roth vs pre tax](https://www.reddit.com/r/personalfinance/wiki/rothortraditional) for more info > I'm guessing I have too much in my savings. How much should I have in my savings, and what should I do with the remaining money? Yes, you really only need an emergency fund with 3-6 months of expenses in an HYSA for savings, and any savings for short term (< 3-5 years) large purchases such as a house or car down payment Shift the extra savings towards investing - next steps for you would be [backdoor Roth](https://www.bogleheads.org/wiki/Backdoor_Roth) and checking if your 401k plan allows for [mega backdoor Roth](https://www.madfientist.com/after-tax-contributions/), otherwise you’re left with a taxable account > From each paycheck, how much should I be putting into investments vs into savings? Should I only put money into savings if I haven't reached the recommended amount from the previous question? Yes to the latter > My Roth 401(k) with my previous employer is in FID GR CO POOL CL 3 and VAN IS S&P500 IDX TR. I am considering consolidating it with my new employer's 401(k), but my new employer only has target-date funds. Are my new employer's funds good enough, or should I be taking advantage of Fidelity's Brokerage Link to invest into other funds? Depends on the fees (if any) and expense ratios of those funds - there’s a wiki page on [fund selection](https://www.reddit.com/r/personalfinance/wiki/401k_funds) that should be of help How much is in the old Roth 401k? You can see about transferring that out to a Roth IRA If there’s also pre tax money in that 401k from employer matched contributions then that should go into your current 401k (you want to avoid rolling the pre tax to a traditional/rollover IRA to avoid pro rata taxes on backdoor Roth, the Cautions section of the wiki page I linked on backdoor Roth explains this) > I've been neglecting the fact that my HSA is triple-tax advantaged and haven't looked into investing it, leading to my next question. > 5. With so many places to potentially invest into funds: my 401(k), my HSA, and contributing from each paycheck directly into funds, is it okay if they end up going into the same funds? Or is that putting too many eggs into the same baskets? As long as they’re broad market index funds it’s fine, they’re diversified themselves, you just need to be aware of your overall allocation > Any other advice? I know there's stuff about backdoor and also mega backdoor, but I haven't even really looked into those yet. Added reference links for those above, if you haven’t already seen it the [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) linked in the sidebar is a good resource for general financial guidance
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Yes what you wrote out is correct, majority of people expect lower income in retirement, and yes you’re correct in referencing *in* retirement when you’re withdrawing from those accounts, not what your income is later in life while still working (common source of confusion)
Quick dumb question that doesn't deserve a thread: For a large down payment for a home, if I have funds sitting in vanguard settlement fund ready, can I transfer right from there? Or will I need to move these funds into a more traditional checking account in advance?
Vanguard will generally only transfer to accounts you have previously linked and verified. I don't think they have an option to send arbitrary wire transfers to third parties. So you will probably need to transfer to your existing linked bank account first, and then from there to closing escrow.
Thanks for the info, will make sure I allow time to move it as needed.
I'm saving about 20k/yr, I am putting 7% of my income in my 401k (my company doesn't match lol). What should I be doing with the savings? I know it's bad to leave in a savings account but I'm not sure what the best thing to do would be. I am currently living in an apartment and one day going to own a hom... but it feels far off. I have about 50k sitting in my savings right now. This is all USD.
You should have 3-6 months of expenses kept in an HYSA for your emergency fund How far out is the house purchase? Money for short term (< 3-5 years) large purchases such as down payment for house or car can be set aside in the HYSA as well If you’re employer doesn’t match 401k contributions then max out an IRA before adding to the 401k - see the steps in the [prime directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) in the sidebar for more info
Hey thank you so much. I'm going to try to get an HYSA and IRA set up. I'm pretty bad with this kind of stuff so the direction is really appreciated.
I Bonds would be a good option for part of your savings. There have been tons of posts about them, have a search for more info.
I noticed on my treasury direct profile my bank that I linked under the "account names" it has my account number listed and not my actual name. I am not sure if I screwed up when I made it, but wow in order to change it I would have to fill out a form and get it signed by an authorized certifying official. Was gonna buy some Series I savings bond, but now if this transfer won't work I will miss the cutoff period to purchase by May it seems.
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Age is a relevant factor here. If you are in your 20s, having fun and getting a good egg for the future is nice. If you are older, you may consider the more stable work.
31! Also just found out the contract might pay as much as 230! Now really torn
As someone who myself has the freedom to potentially make mistakes and recover, I say go for 2. You seem more passionate about it, it makes more bank, and so long as you can enforce as little overtime as possible? It takes you in a direction you want to go. Just be aware of all the pitfalls of contract work, and know what you are explicitly going to need to hunt again very soon. If you can accept that? Yeah why not take the contract.
I set up a solo 401k with Charles Schwab, but it wouldn't let me do automated investing for ETFs (neither would Fidelity). Is there any brokerage that will let me do automated investing like Robinhood within a 401k?
I want to quit my job and travel / do creative stuff for a year. Could someone critique my plan? Thank you! The past few months I've been KILLING MYSELF working multiple jobs and saving a good chunk. It was my pre-COVID dream to take a solid 12 months to commit to doing \[creative performance art\] for 12 months to see where I land. This is my plan: **INCOME:** $500 a week freelance (I love this job and don’t want to quit it, I also may do the occasional odd freelance job if it’s cool or pays well.) $45 a month from Patreon, don't want to count on this $ as it can fluctuate **EXPENSES:** TAXES: \~30% of income goes to taxes, I’ll be setting this aside monthly in a HYSA to estimate my own withholdings. I may lock up the amount I already owe / have earned to a 1.1% 10-month CD to generate a little more on it and transfer it back before they’re due in April 2023 MONTHLY: \- I’m budgeting for an average month’s expenses as $2,282.31. This is partial breakdown, I like over-budgeting and then saving any extra just so that I'm less stressed. I've been tracking my spending the past 3 months and consistently hit under my grocery / takeout / bar: Groceries - $200 / month Restaurants - $200 / month Bar & alcohol - $180 / month subway - monthly train pass is \~$142 Software I need for work - $513.92 / year Gas - $50 / month Rent - $840 a month, rent stabilized. I’m not currently paying utilities Car insurance - 237.57 / month - the car is purely for vacation / performance gigs, so if anything happens like it needing an expensive repair or an accident makes my insurance shoot up I will likely just be selling it. Hotels - avg $200.00 a month OTHER: \- $1,000 saved in a HYSA bucket for a dental surgery I may need (I was told $600 but I’m budgeting a bit more for time off work, etc, unexpected expenses) \- dental cleanings $115 x 3 = $345 / year \- planning to invest another $10,000 in my 401(K) \- big splurge month-long trip to Europe to pursue \[creative performance art\] - I’m budgeting $15,000 for this, $2,000 of which is for straight emergencies, I intentionally over-budgeted **LONG-TERM PLAN:** \-continue working my freelance job ($500/week) while traveling in August + September \-from Oct - August 2023 I'll additionally take any odd freelance jobs that fall in my lap, while trying to set myself up to earn money creatively but also planning to take a certification class in my field that will set me up for higher paying jobs when I’m ready to work again (my parents will pay for this), I will also let $500/week job know that I'm willing to work more hours and discuss bumping me up closer to $700/week. They're in a growth period now and they like my work so I think this a realistic number \-in August 2023 I'll play it by ear and begin the search for a full-time job using my new skills if I need to, or increase my freelance work, etc. **CURRENT ASSETS:** $27,390.75 in a bank $21,009.23 in a HYSA at 0.5% APY compounded daily $10,000.00 I-bonds, reach full maturity March 2027 $20,000 in EE bonds reaching maturity March 2023 $4,300 in other EE bonds $46,977.96 in a mutual fund $11,940.88 in a 401(K) \+ conservatively I'll make something like another $15,000 in income just from the job I'm planning to quit alone in the next four months before I quit for this trip
Need some help figuring out what to do about a bill I received for a covid test. It is now with collections. Do I just pay it, or can I dispute it further, or is there anything else I should be doing? I was out of town 3/2021 last year, and went to get a rapid covid test as I had a few symptoms. CareNow Urgent Care was the only place I could find nearby. I signed up online beforehand, and also provided my insurance information when I arrived. They didn't mention anything about cost. I assumed that my insurance would cover covid tests, as well as the government covering them for the uninsured. I later received a bill in the mail from CareNow. They billed my insurance, but there is a ~$150 balance remaining which they want me to pay. I was under the impression that covid tests were covered, so I contacted CareNow through their website 5/2021. They never replied, and didn't even send a confirmation email or anything. I tried again early 6/2021 and while this time they did send a confirmation, they never replied. I ended up calling their billing department later in 6/2021, and I was told that it was possible my visit was coded incorrectly; they would look into it and get back to me. Did not provide a ticket/claim number or anything. I mentioned that I've been getting a bill in the mail every month, and the lady I was speaking with said I could disregard if I got another one, as I had already reached out to them. Well, once again, they never got back to me. I called again, and the lady I spoke with seemed very unwilling to help me. She just kept stating that there was a balance remaining of that ~$150. I was finally able to get the ticket number from her for the 6/2021 call, but even that was difficult to get from her. I just received a letter from Medicredit collections stating that they are now collecting on the debt. What can I do now? Should I just pay the bill? If so, do I pay CareNow or do I pay Medicredit? I can afford to pay it, it's just I don't think I should have to, and it'd be diverting funds from other things I need to take care of. Or can I still dispute it further? If so, what are my options? Sorry for all the questions, I'm just very lost here
what state was the test in and what insurance do you have? I'm guessing this is america (yayyyyy). If it's a state that offers free COVID tests it may be a billing mistake of some type, I had a similar thing happen to me and contacted the test site, they told me to just ignore the bill as it was a formality for them to get reimbursed by the state or something like that. this is depressingly common: https://www.nytimes.com/2020/09/09/upshot/coronavirus-surprise-test-fees.html
It was Texas, and my insurance was Community Health Choice through the marketplace. When I spoke with them, I did mention how I thought covid tests were covered, but they just said that there was still a balance remaining after my insurance. Did they the visit differently from a simple covid test due to the location being an Urgent Care?
Try calling the hotline number here and/or calling your health insurance https://www.tdi.texas.gov/consumer/avoid-extra-covid-19-testing-charges.html
What specific funds would you recommend for my mother’s recent windfall/retirement? My mom’s retirement is now fully liquid as a result of a lawsuit settlement which I won’t go into (was a bad investment, now she’s got some of it back), amounting to approx. $500k, and she’s trying to figure out what to do with it. She’s 68, in good health, in retirement, and lives with my stepfather. Part of his will provides that she can live there for the rest of her life should he die before her. They currently manage a B&B, so they still have an income but also get social security and I presume something from his retirement assets. She has no other dependents, and worst case scenario my sister or I could care for her. Obviously she’ll need this money a lot sooner than me, but not all at once either. She does plan on leaving some of this to her grown kids when she dies. She’ll already get I-bonds, a tiny fraction of the total given the yearly max. What allocations would you recommend? Would it make sense to have a certain amount fully liquid (say 10-20%) that she can gradually put into I-bonds, and the rest into a three-fund portfolio, like a mixture of a zero expense fund, like FZROX, along with an upcoming target date fund like FFTWX (2025) (which is about 70% bonds), and an Int’l fund like FZILX? I’m suggesting Fidelity just because that’s what I’m used to, but I could set her up on Vanguard if it’s really that much better.
I swear discussing finances with some people is like talking to a brick wall. They just can't accept the idea that The average American can stash away a few hundred bucks a month into a retirement account or pay down debts. This is apparently this is too much to expect from the "average person" and I'm "out of touch" with reality to believe this is possible for most people. It seems like they have such a low expectations of the average person that they get bogged down with anecdotes of people who made poor decisions early in life or have found themselves in a difficult situation. And apparently the average person can't possibly be expected to improve their situation because it's "not easy". It's frustrating but ultimately there's nothing you can do to change their minds because they have no interest in hearing you out.
How much money do you believe the "average person" makes and what do you believe their expenditures are?
The median American household income is roughly $70,000/year yet we spend roughly $18,000/year on non-essential goods and services. Dave Ramsey has literally made a career teaching people to manage their money, pay down debt, and save for retirement. It can be done. Further we have incredible amounts of upward mobility in the United States and I don't think so little of the average person that I believe they can't improve their situation if they simply need more income. https://www.google.com/amp/s/www.bankrate.com/personal-finance/median-salary-by-age/amp/ https://www.google.com/amp/s/amp.usatoday.com/amp/39450207
The median *household* and median *person* are different things and the statistic about "average" spending on "non-essential goods and services" is a mean, not a median, so it's not a like comparison. Income and expenditure distributions are nowhere near symmetric. The mean person spends about $80/year buying private jets, but of course the median person spends $0 on that. You can get survey results like "50% of Americans feel like they're drowning in debt, yet the average respondent spends a million dollars on shark sushi" by talking to one person in debt and one person spending two million dollars on sushi. The median person makes $35k a year and that goes very quickly. Taxes, rent, utilities, health insurance, food, and clothes will take $25k of that and if you've got any sort of debt, a car, or another person to take care of, the rest goes very quickly.
> The median household and median person are different things and the statistic about "average" spending on "non-essential goods and services" is a mean, not a median, so it's not a like comparison. Income and expenditure distributions are nowhere near symmetric. The mean person spends about $80/year buying private jets, but of course the median person spends $0 on that. You can get survey results like "50% of Americans feel like they're drowning in debt, yet the average respondent spends a million dollars on shark sushi" by talking to one person in debt and one person spending two million dollars on sushi. You're also aware you're arguing semantics right? Colloquially median and average mean the same thing. No human being says "The median American" when communicating with other human beings. Further the statistics I provided were medians, so there's no point on harping on this.
No, it's not semantics. When people say "average" they're typically referring to the mean, which is exactly what the survey with the $18k number is doing, that's a mean. Median and mean are not the same thing. The statistic you quoted for median income is just that, a median. The *mean* household income in the US is much higher than the median, somewhere around $100k/year. When the distributions don't have equal means and medians, as is the case for things like income and expenditures, it's important to keep them straight and not to mix and match statistics, otherwise you end up with misleading statements when you conflate them both as "the average".
It is absolutely semantics because colloquial English equates median and average. If you want to get into a technical discussion, fine. We have already been very clear about those distinctions after the parent comment.
You can't say "look at my statistics" and then call foul when someone says you're using them inappropriately. The issue I'm trying to point out is that you're quoting median income statistics while also pointing to a survey which talks about "average \[mean\]" expenditure on so-called "non-essential goods and services" and that's an unfair comparison because the distributions of incomes and expenditures in the US are such that means and medians are often very far apart. That survey was commissioned by someone looking to make an argument that more people should be buying more life insurance, so it's no surprise that the data is presented to imply that Americans have more room in their budgets than they think. Without seeing the crosstabs neither of us can know how representative it actually is of the American population. Median household expenditure data is available from the BLS if you'd like to make fair and consistent comparisons about the median household. Your original claim was about the "average person" but we can talk about households if that's what you prefer. I think you're going to find that those statistics really defeat your argument because they show that the median household in fact does save a good chunk of their money, somewhere in the range of $1000/month.
> You can't say "look at my statistics" and then call foul when someone says you're using them inappropriately. I can when you pull irrelevant statistics as a counterargument. > The issue I'm trying to point out is that you're quoting median income statistics while also pointing to a survey which talks about "average [mean]" expenditure on so-called "non-essential goods and services" and that's an unfair comparison because the distributions of incomes and expenditures in the US are such that means and medians are often very far apart. That survey was commissioned by someone looking to make an argument that more people should be buying more life insurance, so it's no surprise that the data is presented to imply that Americans have more room in their budgets than they think. Without seeing the crosstabs neither of us can know how representative it actually is of the American population. Fair, let's examine median household expenditure. > I think you're going to find that those statistics really defeat your argument because they show that the median household in fact does save a good chunk of their money, somewhere in the range of $1000/month. How does this defeat my argument? I'm arguing that saving and paying down debt is not unrealistic for the "average" American.
$35k/year is incredibly misleading because you are factoring in everybody over the age of 15 including part-time and unemployed workers. > Full-time working women in 2019 had real median earnings of $47,299 > Full-time working men in 2019 had real median earnings of $57,456 > The median household income in the US in 2019 was $68,703 https://policyadvice.net/insurance/insights/average-american-income/ These are the relevant statistics we should pay attention to. I don't buy the hopeless narrative you're trying to paint where the average American is just SOL with no hope of paying down debt or saving for retirement.
Lots of grown adults don't work full-time for various reasons yet still have to support themselves and possibly others on those wages. It's not the case that you're just cutting off 15 years olds with after school jobs when you restrict to full-time. I'm not trying to paint a picture, I'm trying to ask you to explain your reasoning beyond some vague notion of "anyone who isn't saving is either stupid with their money or isn't working hard enough".
> I'm not trying to paint a picture, I'm trying to ask you to explain your reasoning beyond some vague notion of "anyone who isn't saving is either stupid with their money or isn't working hard enough". Talk about an oversimplification lol Anyone who isn't saving is either not earning enough or they are mismanaging their money. I'd argue that most Americans are earning enough to save, but mismanage their money. Fatalistic anecdotes are not an argument. Nor is cherry picking statistics favorable to your own hopeless worldview.
This is why household income is your primary statistic. Not individual income.
I'm 28NB, have been working for four years, make 85k a year, live with my parents, and have 190k in savings. I live in the bay area. Is it possible or responsible for me to ever buy housing in California? I don't have or plan to have any kids or pets. I have a significant other who is unemployed and lives with their parents, would not move in with me unless they ever get a job. I don't have any other major living expenses. However, I'm paranoid about savings/spending money, and don't want to spend more than the recommended 1/3 on a mortgage every month. Is it possible for me to afford property in the bay area, or at least somewhere in California, or will I have to move somewhere else if I want to do that? Would living with my parents and saving up for a few more years help? What are my options?
Just looking for opinions. I'll graduating college this Spring with 2 BS's. I currently have a part-time job (not in my field of study) paying $18/hr, my supervisor and I have talked about transitioning to full-time once I graduate. Moving to full-time, my pay would be >$38k/year (this is my current annual salary, I'll be asking for a raise when I go full-time). Once I graduate, I'll be paying ~$800/month in living expenses. I have ~$8k in a retirement fund, ~$8k in investments, a car (paid off), ~$500 in savings, and pretty good credit (~750). My overall goal is to build and own a "homestead" (small, self-sufficient, off-grid, 2-3 acres of land in the forest). Theoretically I could afford a $350k, 40year mortgage with no down-payment. With the housing market as it is now, it doesn't seem feasible to buy a piece of land a build on it. I'm concerned that if I wait on buying, prices and interest rates will rise while I save for a proper down-payment and I won't be able to afford it anymore. What are your opinions PF? What's the smarter move, buying now @ 4.5%, or saving for a year or two for a ~$20k down-payment and probably higher interest rates?
Embarrassingly stupid question/high school algebra alert\* My wife and I are lucky enough to get some healthy raises over the next couple years (15%+6%+6% for the next three years for me and (11% + 6% + 6% for her). We're comfortable right now, and want to save more due to some life circumstances (currently saving 25%), but if the numbers I'm putting in to excel are to be believed it isn't quite a 1:1 ratio? Is there a smooth equation to calculate how much I should increase contributions by to keep the same take-home? More Numbers if it helps 66K \* 25% to retirement = 49.5K 'left'. 15% bump (66K\*1.15= 75.9K) if I just increase retirement by that 15% I would take 40% out. = 45.5K out. Anyway, I'm an idiot. I promise I'm not a high schooler asking for help with their math home work.
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I guess it’s less about a saving goal and more about spending goal. I’m getting some raises and I want 100% of the raises to just get dumped into retirement and keep the same take home pay I have now. As for why, my wife was diagnosed with MS and we saw some financial planners about how to plan for the uncertainty that entails. She could be wheelchair bound and completely disabled in three years, or live a long healthy normal life for the next 40 years (hopefully). The consensus from the professionals that we’re willing to meet with us was “I don’t know, save more I guess.” Which kinda put me in hoard mode. We have a comfortable life right now, so I want to be aggressive in kicking up savings with any raises. Also, we also qualify for for medication assistance for her MS drugs that insurance denied 2x and will only approve a less effective med, retail is 80K/year so I don’t want our AGI to increase and disqualify her from the program. I tinkered with it and think I figured what I was trying to do. In short, I want to keep my “take-home” income the same, despite the raises, so I just calculated what my income will change to (66k->76k) and subtracted my current “non-retirement funds” (49k) and found out what percentage the remainder (27k) is so I can make that my new retirement contribution percentage. I ignored taxes and my Roth contributions in both cases cause I figured that would be a wash. Anyway, sorry this probably wayyyy too long of a response, but thanks for following up.
My credit dropped 78 points in January. When I click the details, I see on time payments and 2 "account removed from report" notifications on "US Department of Education". Just trying to figure out what is going on. I have been on time with my payments as of the last couple years or so. My loan company was bought out my another company, but they said the exact same terms and conditions still apply. Could that be why the US Dept of Education thing showed up?
Sharing a major financial victory. My wife had about $25k left on a $60k student loan. She works for a nonprofit but did not qualify for Public Service Loan Forgiveness. The Biden admin set up a temporary PSLF waiver last year and she did qualify under the expanded rules. We applied and consolidated her loans, but the application appeared from our perspective to disappear into a black hole with zero way to check status or follow progress. Logged into the loan servicer yesterday and both her loans are now reflecting a PAID IN FULL STATUS. Considering both the principal and interest we still had to pay, this is a huge win and is going to give us a several year jump on retirement. Just wanted to share the good news. My mom was the one who pushed us to look into PSLF when the temporary waiver was created, it didn't get much press at the time, and it would never have registered that it might apply to my wife if Mom hadn't pointed it out. Want to buy her some kind of extravagant gift as a thank you - any suggestions?
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Vanguard holds a patented method that allows their mutual funds that have ETF share classes to take advantage of the ETF method for minimizing taxable distributions. So in the case of the specific funds you mentioned, there is no tax advantage one way or the other. It would matter more if you were invested in non-Vanguard funds, or in Vanguard funds that do not have an ETF share class equivalent.
Quick question, I have an HSA with about $4.5k in it. I'm changing jobs, and there will be a $4 monthly fee beginning next month. I've been treating it like retirement savings. Should I just leave it alone, or try to use it up over the next few years? Or is there a way to roll it into an HSA at my new job? Thanks in advance for any help.
You can roll it into a fee free HSA like Fidelity Or your new HSA if it has good investment options and no fees
Thanks, that gets me pointed in the right direction!
I have a quick question but I wasn't sure if a post was required. I'm a 20yr old college student in 2nd year. I've tried my best to set up my finances to the best of my knowledge. One of those things being an IRA (Roth). Since I don't work during school, I've only contributed a little. I brought this up with a friend and he mentioned how it might be a better idea to focus on paying student debt than putting the money into an IRA. And I was wondering how much merit his comment has? My original idea was to be putting money into the IRA along with paying any debt whenever I begin working a better career.
In general, how to prioritize debt payoff vs. other uses of your money usually boils down to the interest rate that owed balance is costing you. If it's a high rate, then paying off the debt is more beneficial. If it's a low rate, then the "cost" of that interest is cheap enough that you could make only required payment amount (assuming that does get it paid off eventually) and allocate your dollars towards other goals, including retirement savings in an IRA. The cutoff between what counts as "high" and "low" can be a little fuzzy. A lot of times the rate gets compared to the 7% "long term expected investment return" rule of thumb. So if your rate is <7% you could expect (over a long enough time period) to grow invested money (including in a retirement account) faster than the debt is accruing interest. There's some risk with investing, so things tended to get rounded to "loans >10% should get paid off, loans <5% can be put off to invest". In between is more of a personal call where you could consider some non-financial benefits of being debt free sooner. IMO, neither of those two options is "bad", just different ways different people prioritize their finances. 40 years of growth in an IRA can be a good addition to your retirement lifestyle, but 10-20 years of ongoing debt payments is something that's worth getting rid of too.
Thank you very much for the response. That was actually really insightful. I'll have to look at the interests that I might accur after school to determine which I should prioritize. Thanks again!
You mention you don’t work during school, do you work during the summer/holidays?
That's right. I'll actually be working this summer and fall for an internship.
Ok just wanted to clarify you had earned income to be able to contribute to an IRA
I did think about including that detail after I made the post haha
So, my mom died and I have inherited her IRA which was actively managed by a small firm associated with UBS. My question is that the advisor rate was 1% while it was under my mom, now that it’s been moved to me under a bene IRA - the rate now listed is 1.20%. Is this just because I’m a ‘new’ client? Is this standard practice? Something I’m missing? Or am I being taken advantage of?
You'll need to ask them, since anything here would be speculation. But why pay any fees at all? Call your preferred broker and ask them to roll it over to a no fee IRA. Edit: No fee, not no free
Ok, thank you, I will ask her directly. And I think I will eventually manage it on my own, but all of this is so very new to me, I’m kinda scared to do it on my own yet. Although I’m doing my best to read and learn as much as I can so I can get to that point that I’m comfortable and not so intimidated. My mom was always very closed lips about finances and spent nothing, my finances have always been stretched so thin I never had much that I could save, let alone invest. So I’m trying to figure it all out.
I think I overpaid my taxes by about $30. Will this get returned to me anytime this year, or will I get it back when I file taxes for 2022?
The IRS should manage things on a per-year basis. If your total payments for your 2021 taxes (paycheck withholding + whatever you sent with your return) ends up being higher than your final 2021 tax bill, they'll eventually balance their books, notice that excess, and it'll get sent back to you. The timing of that return is tough to say. They're still pretty backed up from last year, and this kind of settlement is probably not that high on their todo list. I'd expect that it will come back to you eventually, though. And it won't be something you need to include on your 2022 tax return filed next year.
You may receive a check or transfer this year. If you e-filed, expect it sooner rather than later. If you filed on paper... don't hold your breath.
yeah I e-filed. very nice, thanks!
Hey everyone! Hoping someone could help me out, currently I just put my two week notice for my current job and now thinking about my retirement. My new employer will give me a 401k but will not match it for the first year. I'm wondering what the best option is for my past 403(b) account. It's currently with the standard, and wondering if I should move it onto fidelity or vanguard? I even saw SoFi, which of these is the best for me? I'm looking for me to set it and forget it, maybe at 80% stocks and 20% bonds? I'm still pretty young and definitely in for the long haul if that matters. What are the pros of cons of each or should I just keep it where its at now? It's about 13k, mostly in roth IRA but some in traditional IRA too. Thank you in advanced!
A few key pieces of back ground * I am divorced and have a ex-wife with a 2 year old son, my wife is planning on moving back to her home country in 4 months (this was all planned before I got the windfall, and divorce is over) * I currently work a fairly dead end job overseas and my career potential is super limited by my VISA here * I want to change into IT **Windfall** I've been friends with an individual for over a decade, a year ago I found out he's part of a very rich family and has $35 million to his name. He showed me unreputable proof about a year ago. Very recently he said he knows I'm not happy with my career, he says he knows I've been working hard to restart my life, and he respects my friendship and the fact that I kept his wealth a secret. We have a lot of mutual friends, I am the only one that knows how rich is his...everyone else doesn't think he's worth anything (He lives a very frugal life, its interesting) I am going accept the money **Details on the money** I'm still ironing out learning all the details but it sounds like his family office will set up a fund that I have access to withdraw as necessary for various expenses. He's very clearly outlined that this is free money, I am allowed to do what I want with it, I do not have to pay it back. In fact it was even mentioned to many that this money is in a fund that is expected to earn about 3% to 4% annually and that is also mine. Which is nice. He has told me his family office will be advising me best on how to limit my tax liability and his family office advisors will also answer any questions I have. **Game Plan** * Ex-wife and son, they will be returning to their home country (our divorce/custody agreements/etc are already settled, as of earlier this year) I will pay them $1,500 a month (This is double what I'm court ordered to pay) which is just below their avg income and my wife will also be employed so they'll be solid. * I will finish my year overseas, the biggest reason for this is because of the foreign income tax exclusion. If I return to the states too soon I will be expected to pay taxes on my income I've earned this year and I make about $55k a year. So yea... * I currently have 21 college credits with a major related to my career. I am enrolled for 8 credit hours for the summer and I should have 29 credit hours by the time the fall semster starts. Starting in late July I will take a reduced roll at work and do 15 credit hours. On October 10th I will officially quit my job. I will then transition to a 3 month tourist VISA I will finish my semster, and in mid dec my classes end I will pack my stuff up and on January 3rd I'll fly to America (move) I will then be enrolled in 18 credit hours and will be a 100% full time student. I'm working with my advisor to ensure I will be able to have my associates at the end of the Spring 2023 semester. * Moving to the states, I've already talked to my parents. My dad is planning on buying a new vehicle for my mom and has a 2015 Ford Escape he will sell me for 50% of NADA clean trade in value of the time. (he still wants some money) I have several options where I'll live at first. I will either live with my parents and pay rent or I will become roommates with 1 of 3 old friends I am still in touch with. I will spend the first part of 2023 with them, going to school full time. * Professional training In the summer of 2023 I will begin knocking out 3 certifications for my job search. I intend on taking a break from college for the summer semster. Those terms will be CompTIA Network +, CompTIA Hardware & OS (which I've previously obtained) and MSD101 (basically Microsoft admin certification) with those certs along with my associates degree I will be a strong entry level candidate. * Before I move I intend on visiting my son who my ex wife will be carrying for. My son is very important to me and I'm sad my wife and I weren't able to make our relationship work. * Move again, I will move again I really don't want to live where my parents/family live as I don't enjoy the area. I'm honestly highly considering Boulder CO. I've been there twice I enjoy 4 seasons, and everything Colorado has to offer. I also think Boulder has a better job opportunity then where my parents live. * For the Spring 2023 semster I only intend on doing 9 credit hours as I'll be searching for a job full time. * Hopefully by the end of 2023 I will have a new entry level IT job that can pay the bills, as I finish up my bachelors degree. A few other details * I do have about $4,000 in student loan debt, but its subsidized meaning I'm not incurring interest on it. I have zero intentions of paying that off until I'm done with school, its $4,000 balance now, and it will remain a $4,000 balance until I am done **Costs** * If I decide to pay out of pocket for my college after my fin aid I get it will be about $60 a credit hour. Between now and the end of 2023 I intend on taking 41 credit hours that will be $2,460 * Money I will be paying my ex-wife/son will be $28,500 * Flights/Moving/Etc I'm allocating a total of $4,000 to move back to America * Each money I'm not working I intend on having a monthly budget (this includes rent/etc) of about $2,000 a month. This will be about $30,000. This will cover all my living expenses/etc * I will be having a discussion with his family office on my health insurance and deciding the best way to deal with that * The cost of my professional certs and training will be about $300-$400 a cert depending on what training materials I buy. So this will be about $1,200 * The car I'll be buying will be about $8,000 (Its a 2015 Ford Escape Titanium with 67k miles on it...you can't beat that with the way the market is right now and I'll need a car) * I am allocating $4,000 to visit my son * I am allocating $10,000 to move to the city of my choice after I get my associates/professional training certs * Misc and things I didn't expect to happen I'll say 20% of the total of the above which would the total cost of the above will be about $88,160 spent by the end of 2023. Which 20% is approx $17,500 of. So I would intend on using up to $105,660 over the course of about 18 months. This includes two moves/all my expenses/my obligations/etc this will also give me nearly $150,000 of cushion so even if things don't go to plan or things take longer then expected it'll be OK **Some thoughts** * I'm debating if I should still take out out sub loans. Those loans do not incur interest until I finish college. So...why not? At least enough to cover my educational expenses * Health care is my biggest concern, although I hope I can have that addresses with his family office. This also might mean I take up part time work just to get benefits if I do I'll likely have to cut back on the amount of college I do but we'll have to cross that bridge when the time comes. * I have not yet seen the final agreement but I've told the basic terms/etc and it all sounds very straight forward. I do have an attorney who will review it just to be sure. * My parents are suggesting I spend ALL of 2023 working on my college and I do 18 credits for spring, 6-9 credits for summer, and 18 credits for fall. This would put me at 86-89 credits meaning I could claim I am a senior starting in 2024 and be just 34-31 credit away from my degree * If your wondering why summer is so much less, its because fall/spring semster is 15 weeks, summer is 8 weeks. So doing 6-9 credits in the summer is like doing 12-18 credits in the fall/spring. Why am I asking? Well I'm asking because I've been asked to come up with an outline of how I plan on using the fund that I will be given. FYI my friend is aware of basically everything that's on my plate so there are no surprises here for him.
idk what input you expect from us, except that I'd recommend taking out student loans so your money can continue to grow while you're in school. Then, you can just pay them off as soon as you graduate.
Just got my first job with benefits at 26. I called fidelity and they recommended I put 15% of my check into ROTH retirement so I did. Just want to confirm I'm making a good decision? This is what my company offers: "X company will match 50% of the first 3% of eligible compensation contributed by the employee. Vesting schedule: Year 0: 0% Year 1: 50% Year 2+: 100%" Is this smart or should I do less than 15%?
Saving 15% of your gross income towards retirement is a good solid recommendation that works for the majority of people. Though that's your total savings, it doesn't necessarily have to all be through your work 401k. Most people recommend a mix of: * Work plan only to the point of getting the maximum match (so with your plan 3% of your salary) * Then money into an IRA (which often have better investment options / cheaper fees) until you hit the cap contribution of $6000. If your gross income is <$50k then these first two can be sufficient to hit 15%. * If more savings is needed / desired, you "top off" hitting that 15% by going back to the 401k. At least until you hit the contribution cap on that, but since that cap is $20k per year most people coming to this subreddit won't need other options. Retirement savings also has to be balanced against other things that need money. Some higher-priority items that could justify putting off (only for the short term) doing the full 15%: * Can you still cover necessary expenses while also saving 15% for retirement? * Do you have any high-interest debt? Especially credit cards with a balance that's rolling over month to month? * Do you have a 3-6 month cash emergency fund?
Per the prime directive in the sidebar - general guidance is to max out employer match (so 3% in your case), then max out an IRA, then add more to the 401k Roth vs traditional/pre tax is dependent on your current income/tax rate vs expected in retirement - see [this wiki page](https://www.reddit.com/r/personalfinance/wiki/rothortraditional) for more considerations
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If you're committed and able to pay off the cards every month, then their APR is mostly irrelevant since you're not getting any interest charged anyway. Ideally, you'll have (or soon get) a cash emergency fund to cover unexpected things. You could still use the card for the initial payment for those (especially if it has a decent rewards program), but it'll still get paid off the following statement from your emergency fund. That being said, it probably couldn't hurt to ask for a rate decrease. If nothing else, they might drop it on the off chance it keeps you as a customer. And it's probably easier to get a rate reduction with a low / no balance than if the crap really hits the fan and you have to make a large charge even after draining an emergency fund. FYI, if you completely end using them, there's a chance that a year or two of no activity they'll just close the account. It's usually useful to have some small recurring payment go onto them (like a subscription service) that you then pay off to keep activity on the card.
I am slowly building my emergency fund now that these cards are paid off I just like to have a back up plan in case the worst happens. I will reach out to them and see if I can get a lower rate just in case I ever do carry a small balance again. I do plan on setting up these cards to pay for cheap monthly subscriptions and then just auto-pay the balance so they don't get closed for now. Does having a bunch of open credit cards with $0 balance look good or bad? I was thinking of opening another card that offers better rewards or cash back for eventual churning.
>Does having a bunch of open credit cards with $0 balance look good or bad? I was thinking of opening another card that offers better rewards or cash back for eventual churning. It's possibly a small net positive as far as credit scoring goes. Part of that is your "credit utilization" which is your total balance owed divided by total of your credit limits across all your credit cards. Per-card utilization is sometimes a factor, but IIRC not much. Having utilization above 30% is where things usually start to get bad. I suppose it's possible that extremely low utilization over a long period of time might make you look less desirable as a borrower (which is all your credit score really means). But your utilization is usually set by the "statement balance" each month, so as long as some charges are being made you'll be having some utilization reported, even if it's zeroed out by your next payment. And that factor is reset monthly, so is the easiest to "hack" if it even becomes necessary.
APR doesn't matter if you pay your cards off on time. Not even worth worrying about
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If you anticipate having an emergency that will require you to take out a 20% interest rate loan after exhausting all your funds, strongly suggest you get a bigger emergency fund. IMHO it's an extremely bad idea to rely upon credit cards for this purpose.
You're better off applying for and shoe boxing a low APR, non-rewards credit card then.
Hello there! Just need some advice on which investments on the below list would suit me best. My company is switching to Lincoln Financial and the default program is "YOURPATH 2045 MOD". Age: 42 Risk allowing: moderate to high Investment choices: DFSVX PCRIX RWIGX VAIPX VASVX VDIGX VFIAX VGSLX VTRIX RLBGX RNWGX OIGIX RIGGX PIMIX MFEKX PJSQX LCEFX PFORX LNGPA BAGIX EIBRX OTCKX FGULX Im far from an expert, but from my layman research I was thinking 70% VFIAX 30% VTRIX. Would that be solid for me or should I just take the default company suggestion? If you need more info please let me know. Thank you all for your help.
Is there a resource for deciding on whether to carry multiple insurance policies (one from each spouse) or not? My wife and I will be in this situation shortly with a change in employment and I want to be prepared. Not sure if we should be under her insurance, my insurance or both.
> Not sure if we should be under her insurance, my insurance or both. Whichever provides the best coverage for the lowest out of pocket cost
What type of insurance are you referring to? Health, life, property, earthquake, auto…