Personal Finance Advice and Education! (2 Viewers)

[Sand]

Purchased 10k in ibonds October 2022, so was over the 15 months at start of year (well, over 12 months but with the last 3 being very low interest) and redeemed last week. Buying a new 10k now is just a brand new deal with a brand new clock, just with a lower rate than in October 2022, but with part of that rate being locked in. All correct? Anything to keep in mind (plan on buying near end of month, as I know you get the full month worth of interest).

You’re getting a better rate with the new I bonds now than you are with the old bonds now.
Personally, I sold our bonds that didn’t have the fixed rate and might buy more before the next rate change (May IIRC)

Last week I sold my 0.0% fixed rate Oct 2022 iBond ($10k) and my 0.4% fixed rate Jan 2023 iBond ($10k). Will buy a $10k iBond near the end of this month.

I've also constructed the majority of a 3-year, $50k CD ladder to help protect against bad sequence of returns risk early in retirement. Retiring in 2027. I'll keep rolling over the CDs in retirement unless the market is in the tank. Also have a whole life insurance plan with a surrender value of around $50k which will probably be the first thing I offload in the case of a downturn, even ahead of the CDs.

Its just been the last couple of years that I have started working on the fixed-income component. Still learning.

You’re a few years ahead of us but I’m planning very similarly. No whole life here, we surrendered our policies back in 08 to buy land (didn’t work out nearly as well as it could have in a different location or if we had bought a rental).
Depending on your expenses you’re probably in a good spot.

I'm estimating our expenses in early retirement to be about $120k in today's dollars. About half of that will be covered by my wife's SS and my FERS pension. The $50k CD ladder is an option for covering the other half. Normally I would cover that other half by selling stocks, realizing as much untaxed LTCG as possible each year. The CDs will allow me to avoid selling in a bad market.

I'm holding off on my own SS to allow me to be able realize those untaxed LTCGs.

How many years of expenses do you plan to be able to cover with cash / bonds when you retire?
More than half our expenses will be covered by my FERS and military pension but that still leaves about $50-80k annual from our portfolio. I think we’ll put 4 years in cash / I bonds / other short term bonds but we haven’t decided yet. That will be about 16-20%, I think we’ll keep the rest in equities.

Been doing some deep diving on retirement websites and podcasts the past few weeks with work a little slower over the holidays. The Bucket Strategy vs the Glidepath vs the Pie Cake. In the end there are probably more similarities than differences. I did find it interesting that an increasing equity percentage as you move through retirement, to combat the sequence of return risk in the first decade or so, seems to mathematically be optimal.

Yep - seminal article on the bond tent below. It makes a lot of sense. Of course, he wrote this before Jerome strapped a rocket to the Fed and lit the wick. Still, in normal times this makes a lot of sense.

The Portfolio Size Effect And Optimal Equity Glidepaths

How the portfolio size effect impacts the optimal asset allocation glidepath of a lifecycle or target date fund, and how a bond tent reduces volatility risk.

www.kitces.com

 

[SFBayDuck]

Purchased 10k in ibonds October 2022, so was over the 15 months at start of year (well, over 12 months but with the last 3 being very low interest) and redeemed last week. Buying a new 10k now is just a brand new deal with a brand new clock, just with a lower rate than in October 2022, but with part of that rate being locked in. All correct? Anything to keep in mind (plan on buying near end of month, as I know you get the full month worth of interest).

You’re getting a better rate with the new I bonds now than you are with the old bonds now.
Personally, I sold our bonds that didn’t have the fixed rate and might buy more before the next rate change (May IIRC)

Last week I sold my 0.0% fixed rate Oct 2022 iBond ($10k) and my 0.4% fixed rate Jan 2023 iBond ($10k). Will buy a $10k iBond near the end of this month.

I've also constructed the majority of a 3-year, $50k CD ladder to help protect against bad sequence of returns risk early in retirement. Retiring in 2027. I'll keep rolling over the CDs in retirement unless the market is in the tank. Also have a whole life insurance plan with a surrender value of around $50k which will probably be the first thing I offload in the case of a downturn, even ahead of the CDs.

Its just been the last couple of years that I have started working on the fixed-income component. Still learning.

You’re a few years ahead of us but I’m planning very similarly. No whole life here, we surrendered our policies back in 08 to buy land (didn’t work out nearly as well as it could have in a different location or if we had bought a rental).
Depending on your expenses you’re probably in a good spot.

I'm estimating our expenses in early retirement to be about $120k in today's dollars. About half of that will be covered by my wife's SS and my FERS pension. The $50k CD ladder is an option for covering the other half. Normally I would cover that other half by selling stocks, realizing as much untaxed LTCG as possible each year. The CDs will allow me to avoid selling in a bad market.

I'm holding off on my own SS to allow me to be able realize those untaxed LTCGs.

How many years of expenses do you plan to be able to cover with cash / bonds when you retire?
More than half our expenses will be covered by my FERS and military pension but that still leaves about $50-80k annual from our portfolio. I think we’ll put 4 years in cash / I bonds / other short term bonds but we haven’t decided yet. That will be about 16-20%, I think we’ll keep the rest in equities.

Been doing some deep diving on retirement websites and podcasts the past few weeks with work a little slower over the holidays. The Bucket Strategy vs the Glidepath vs the Pie Cake. In the end there are probably more similarities than differences. I did find it interesting that an increasing equity percentage as you move through retirement, to combat the sequence of return risk in the first decade or so, seems to mathematically be optimal.

Yep - seminal article on the bond tent below. It makes a lot of sense. Of course, he wrote this before Jerome strapped a rocket to the Fed and lit the wick. Still, in normal times this makes a lot of sense.

The Portfolio Size Effect And Optimal Equity Glidepaths

How the portfolio size effect impacts the optimal asset allocation glidepath of a lifecycle or target date fund, and how a bond tent reduces volatility risk.

www.kitces.com

I'm curious if/how the seemingly increased correlation of bonds and stocks recently changes this thinking. Or maybe the last few years of that increased correlation is an anomaly and should revert.

 

[-OZ-]

Purchased 10k in ibonds October 2022, so was over the 15 months at start of year (well, over 12 months but with the last 3 being very low interest) and redeemed last week. Buying a new 10k now is just a brand new deal with a brand new clock, just with a lower rate than in October 2022, but with part of that rate being locked in. All correct? Anything to keep in mind (plan on buying near end of month, as I know you get the full month worth of interest).

You’re getting a better rate with the new I bonds now than you are with the old bonds now.
Personally, I sold our bonds that didn’t have the fixed rate and might buy more before the next rate change (May IIRC)

Last week I sold my 0.0% fixed rate Oct 2022 iBond ($10k) and my 0.4% fixed rate Jan 2023 iBond ($10k). Will buy a $10k iBond near the end of this month.

I've also constructed the majority of a 3-year, $50k CD ladder to help protect against bad sequence of returns risk early in retirement. Retiring in 2027. I'll keep rolling over the CDs in retirement unless the market is in the tank. Also have a whole life insurance plan with a surrender value of around $50k which will probably be the first thing I offload in the case of a downturn, even ahead of the CDs.

Its just been the last couple of years that I have started working on the fixed-income component. Still learning.

You’re a few years ahead of us but I’m planning very similarly. No whole life here, we surrendered our policies back in 08 to buy land (didn’t work out nearly as well as it could have in a different location or if we had bought a rental).
Depending on your expenses you’re probably in a good spot.

I'm estimating our expenses in early retirement to be about $120k in today's dollars. About half of that will be covered by my wife's SS and my FERS pension. The $50k CD ladder is an option for covering the other half. Normally I would cover that other half by selling stocks, realizing as much untaxed LTCG as possible each year. The CDs will allow me to avoid selling in a bad market.

I'm holding off on my own SS to allow me to be able realize those untaxed LTCGs.

How many years of expenses do you plan to be able to cover with cash / bonds when you retire?
More than half our expenses will be covered by my FERS and military pension but that still leaves about $50-80k annual from our portfolio. I think we’ll put 4 years in cash / I bonds / other short term bonds but we haven’t decided yet. That will be about 16-20%, I think we’ll keep the rest in equities.

Been doing some deep diving on retirement websites and podcasts the past few weeks with work a little slower over the holidays. The Bucket Strategy vs the Glidepath vs the Pie Cake. In the end there are probably more similarities than differences. I did find it interesting that an increasing equity percentage as you move through retirement, to combat the sequence of return risk in the first decade or so, seems to mathematically be optimal.

Yep - seminal article on the bond tent below. It makes a lot of sense. Of course, he wrote this before Jerome strapped a rocket to the Fed and lit the wick. Still, in normal times this makes a lot of sense.

The Portfolio Size Effect And Optimal Equity Glidepaths

How the portfolio size effect impacts the optimal asset allocation glidepath of a lifecycle or target date fund, and how a bond tent reduces volatility risk.

www.kitces.com

I'm curious if/how the seemingly increased correlation of bonds and stocks recently changes this thinking. Or maybe the last few years of that increased correlation is an anomaly and should revert.

This is why the initial years get funded with I bonds, CDs, bonds which will hit maturity when you want them, and not bond funds. In retirement, three to five years out (depending on your plan) gets a heavy priority on stability over growth or accepting risk with a possibility of a higher return.

 

[Peggy]

Switched jobs back in November.

New employer contributes 1,000$ towards HSA and a match on the 401K. Previous employer did neither. Nice little win.

Max out that HSA. Also, check your 401K, if they have a ROTH 401K option take advantage of it instead of the traditional.

I told my oldest (graduated in June) to do a Roth 401k but it isn’t always the best choice. It’s a decision based on current and future tax levels.

Switched jobs back in November.

New employer contributes 1,000$ towards HSA and a match on the 401K. Previous employer did neither. Nice little win.

Max out that HSA. Also, check your 401K, if they have a ROTH 401K option take advantage of it instead of the traditional.

I told my oldest (graduated in June) to do a Roth 401k but it isn’t always the best choice. It’s a decision based on current and future tax levels.

Required mandatory withdrawals are being eliminated for Roth 401k's this year. I'm currently contributing 12% to my Roth 401k and 8% to my traditional 401k with a 4% company match. Each year I get a raise, I move a percentage from traditional into Roth.

EDIT: When I get to the point where I will fall below 4% on my traditional, I'll have to check with my plan sponsor to see if the match will go towards my Roth or my traditional. Right now it goes to my traditional. Great thing about my employer is every June they contribute $1000 towards my HSA account.

Switched jobs back in November.

New employer contributes 1,000$ towards HSA and a match on the 401K. Previous employer did neither. Nice little win.

Max out that HSA. Also, check your 401K, if they have a ROTH 401K option take advantage of it instead of the traditional.

Im in a higher tax bracket currently than I plan to be when I retire -I’m better off taking the tax savings now and adding it to my brokerage account. YMMV.

Whoa, not sure what happened above with all the quotes, but, if you have a few years of low income low tax after you retire you can roll over the regular into Roth too. That's what I'm looking at with my financial advisor right now because my early years I didn't know any better so I have a large chunk in regular 401k. Looks like we break even at about age 70 / RMD which is perfect.

 

[Snotbubbles]

Whoa, not sure what happened above with all the quotes, but, if you have a few years of low income low tax after you retire you can roll over the regular into Roth too. That's what I'm looking at with my financial advisor right now because my early years I didn't know any better so I have a large chunk in regular 401k. Looks like we break even at about age 70 / RMD which is perfect.

If you roll it over from traditional to roth, do you have to pay taxes on the gains made while in traditional or just the taxes on the amounts you personally put in?

 

[-OZ-]

If you roll it over from traditional to roth, do you have to pay taxes on the gains made while in traditional or just the taxes on the amounts you personally put in?

No taxes on gains, you’re paying tax on withdrawals or rollover from the traditional as if it was income.

 

[Desert_Power]

If you roll it over from traditional to roth, do you have to pay taxes on the gains made while in traditional or just the taxes on the amounts you personally put in?

No taxes on gains, you’re paying tax on withdrawals or rollover from the traditional as if it was income.

And you cannot withdraw the contributions (rolled amount) for 5 years.

 

[Peggy]

Whoa, not sure what happened above with all the quotes, but, if you have a few years of low income low tax after you retire you can roll over the regular into Roth too. That's what I'm looking at with my financial advisor right now because my early years I didn't know any better so I have a large chunk in regular 401k. Looks like we break even at about age 70 / RMD which is perfect.

If you roll it over from traditional to roth, do you have to pay taxes on the gains made while in traditional or just the taxes on the amounts you personally put in?

If you roll it over from traditional to roth, do you have to pay taxes on the gains made while in traditional or just the taxes on the amounts you personally put in?

No taxes on gains, you’re paying tax on withdrawals or rollover from the traditional as if it was income.

As income. I figure to be living off of cash the first few years, pre social security, so basically zero income. Just take out whatever amounts to a low tax bracket and roll it over.

 

[Runkle]

Skimming the CapitalOne page, looks like CD rates went down. Guess it's time to lock in if there's money on the sideline, before it drops below 5%.

 

[Nick Vermeil]

Here is a stumper for the tax crowd. Purchased a 2 family house in 2014, lightly renovated the rental, gut renovated the owner unit. Lived in owner unit for 4 years then moved out of town turning lower unit into another rental. Flash forward and we are thinking about selling. Discovered the renovation cost was never added to the tax returns to increase our cost basis. Is it too late to roll those expenseses into the cost basis?

 

[Snotbubbles]

Here is a stumper for the tax crowd. Purchased a 2 family house in 2014, lightly renovated the rental, gut renovated the owner unit. Lived in owner unit for 4 years then moved out of town turning lower unit into another rental. Flash forward and we are thinking about selling. Discovered the renovation cost was never added to the tax returns to increase our cost basis. Is it too late to roll those expenseses into the cost basis?

I'm not a tax guy, but 8 years, I think you might be screwed. IRS only gives you 3 years to amend returns.

 

[Rattle and Hum]

Here is a stumper for the tax crowd. Purchased a 2 family house in 2014, lightly renovated the rental, gut renovated the owner unit. Lived in owner unit for 4 years then moved out of town turning lower unit into another rental. Flash forward and we are thinking about selling. Discovered the renovation cost was never added to the tax returns to increase our cost basis. Is it too late to roll those expenseses into the cost basis?

Better to ask for forgiveness than ask for permission. It's a legitimate expense so I would add to cost basis upon the sale. I'm obviously not a CPA or tax preparer so ymmv.

 

[Mitchie]

Skimming the CapitalOne page, looks like CD rates went down. Guess it's time to lock in if there's money on the sideline, before it drops below 5%.

Current CD's factor in market projections, this is not as easy to predict as many think, rates can surprise up or down. Lock in rates if you want stability.

 

[tri-man 47]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

 

[Runkle]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

No desire to switch over to Credit Karma for the Mint functionality. I have a CK account already but have no interest in bringing over Mint to it. I'm tired of Mint's frequent problems and Inuit's disinterest in fixing them.

The only thing I used Mint for was to get a single-page view of all my account totals, and, get a single-page summary of all transactions in all my accounts... this has helped me find incorrect credit card transactions, bad charges, stuff like that. I liked being able to see exactly what was happening in all my accounts easily.

Anyway, I've switched over to Fidelity's Full View... I have an account with them already through my 401k and they do basically just what I need... all my accounts listed, updated, and transactions too.

The only downside, so far, is that my Barclay credit card accounts do not update without a 2FA code, so I need to enter one to get those accounts to update. Mint had the same issue on more than just those accounts, so I'm used to it...

 

[-OZ-]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

alert. Like many, I created my own excel workbook with different tabs. One tab is expense tracking (7 years worth now), one has quarterly NW tracking, another has a drawdown plan (under construction but a good start I think), a few snapshots of the portfolio every 6-12 months which I save for prosperity, another has forecast vs reality progress towards the retirement goal.

 

[Chadstroma]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

CK sucks big hairy monkey toes.

You or your friend or whoever, can sign up for my service we offer to our clients https://usafe.finlocker.com/pfm/registration/invite?key=b29d7f89-f596-42b1-9b51-9cf2fd2a4339

It is called USafe and it is with powered by Finlocker. I pay monthly to offer it to my clients as an extra value and to essentially help keep in contact with them for future referrals and refinancing opportunities. There are two sides, USafe and then HomeScout.

USafe is basically CK, Mint and more. I believe all the functionality that was in Mint is in USafe and same with CK. And more. All about finances, budgets, spending, etc. It does have a focus on "home buying readiness".

HomeScout is basically Zillow but better. If you are not a homeowner then it has functions to search for homes if you are then it provides monthly updates on your property.

I don't have any access to your info though on USafe you can share (or not) a high level readiness report on buying a home or not.

One HUGE plus on this over CK is that they make their money by my monthly service fees so they aren't trying to sell crap like CK. No spam. No BS recommendations, etc.

 

[Peggy]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

No desire to switch over to Credit Karma for the Mint functionality. I have a CK account already but have no interest in bringing over Mint to it. I'm tired of Mint's frequent problems and Inuit's disinterest in fixing them.

The only thing I used Mint for was to get a single-page view of all my account totals, and, get a single-page summary of all transactions in all my accounts... this has helped me find incorrect credit card transactions, bad charges, stuff like that. I liked being able to see exactly what was happening in all my accounts easily.

Anyway, I've switched over to Fidelity's Full View... I have an account with them already through my 401k and they do basically just what I need... all my accounts listed, updated, and transactions too.

The only downside, so far, is that my Barclay credit card accounts do not update without a 2FA code, so I need to enter one to get those accounts to update. Mint had the same issue on more than just those accounts, so I'm used to it...

Ohh, going to have to check that out. I just need to merge BoA and Fidelity and have been doing it at BoA. If Fidelity can do it the other way around that would be a much better experience I bet.

 

[Peggy]

Social Security Question/Help

Been doing some research and read a trick in a book that's 15 year old. Wonder if the current rules still allow?

My wife's SS is almost exactly half of what mine is so whether she uses hers or half of mine it's a wash. Trick is to sign up for half of mine when she is 62. Then stop and switch to hers when she is 70. Basically getting her full benefit AND getting half of mine for eight years basically free.

Anyone heard of that?

 

[Nugget]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

alert. Like many, I created my own excel workbook with different tabs. One tab is expense tracking (7 years worth now), one has quarterly NW tracking, another has a drawdown plan (under construction but a good start I think), a few snapshots of the portfolio every 6-12 months which I save for prosperity, another has forecast vs reality progress towards the retirement goal.

I do this - I spend 5 minutes each morning updating my expenses, checking my banking apps while I have my first cup of coffee. I really enjoy the process. I also have way to many tabs and scenario plans, but I've mapped out college drawdown plans, optimal vehicle ownership, and predicted my taxes out through 2026.

 

[Nugget]

Social Security Question/Help

Been doing some research and read a trick in a book that's 15 year old. Wonder if the current rules still allow?

My wife's SS is almost exactly half of what mine is so whether she usesI don

I don't think this would work.

SSA Link

If your spouse qualifies for benefits on their own record, we will pay that amount first. If the benefit on your record is higher, they will get an additional amount on your record so that the combination of benefits equals that higher amount.

If your spouse was born before January 2, 1954, and has already reached full retirement age, they can choose to receive only the spouse's benefit and delay receiving their own retirement benefit until a later date. If your spouse is full retirement age and applying for spouse’s benefits only, they can apply online by using the retirement application.

If your spouse’s birthday is January 2, 1954 or later, the option to take only one benefit at full retirement age no longer exists. If your spouse files for one benefit, they will be effectively filing for all retirement or spousal benefits.

 

[The Z Machine]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

alert. Like many, I created my own excel workbook with different tabs. One tab is expense tracking (7 years worth now), one has quarterly NW tracking, another has a drawdown plan (under construction but a good start I think), a few snapshots of the portfolio every 6-12 months which I save for prosperity, another has forecast vs reality progress towards the retirement goal.

How well has your model predicted NW through time? Or are you not using it as a forward predictor.

 

[-OZ-]

MSN

www.msn.com

No more Mint.

I don't use any of the personal finance tools, so I'm curious what any of you guys and gals use. With Intuit discontinuing Mint, they're steering people over to Credit Karma, which is another one of their products (in addition to TurboTax and QuickBooks).

Any Mint users switching over to Credit Karma? Other tools you might recommend? Literally asking for a friend.

alert. Like many, I created my own excel workbook with different tabs. One tab is expense tracking (7 years worth now), one has quarterly NW tracking, another has a drawdown plan (under construction but a good start I think), a few snapshots of the portfolio every 6-12 months which I save for prosperity, another has forecast vs reality progress towards the retirement goal.

How well has your model predicted NW through time? Or are you not using it as a forward predictor.

I intentionally use a conservative rate going forward. We’re currently roughly 25% higher than predicted in 2017. Not including the house which has definitely increased faster than planned.

 

[-OZ-]

Maxed the wife’s Roth IRA for the year today. So now we ignore that account until 2025.

 

[The_Man]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

 

[-OZ-]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

You probably would benefit from a FA.
I figure for us, it would be a matter of (1) tax planning, (2) getting a second set of eyes when we’re “50 meters out” from retirement, (3) if we get serious about buying a rental house, (4) connecting with one for my wife that we trust.
FWIW, I’m not 50, over the 1M mark and do it all myself. But our tax planning is easy because we don’t make much (still eligible for the Roth IRAs), 90% of our funds are in retirement accounts. And I don’t plan to retire for another decade.

 

[Ministry of Pain]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

We started a Roth-IRA a few years back and you can put quite a lot in there after you are done filling up the 401k
I think you can put up to $7,500 each in there but it also should be noted, there is a combined household income that once you pass it, you can't open a Roth to my knowledge.
I want to say $250k a year just to get a number out there, probably most don't have to worry about it but we might have some in here that would be unable to open a Roth if they haven't already done so already.

You can buy raw stocks within it, I think anyone that has owned a tech stock in the last 18 months, be it Google(NFL-Youtube), Apple or Amazon, all of them have been kicking butt
It's riskier of course but I look at stock charts over long periods of time and the market always seems to go up with a few exceptions
I use all those tech stocks I mentioned and no matter how juicy the stock tip I tend not to invest in things I don't use or don't understand

I have found that managing my own money has been better for us but I don't think I know more than financial advisors, I just am comfortable copying others I know who have had success.

 

[dino259]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

It probably would make sense especially to start setting up for potential withdrawal. Lots of factors to consider. Wife and I turn 50 this year and are sitting pretty good. I listen to a few podcasts but those most cover putting money in and not taking out. We have a high school junior and freshman so I really need to figure out the plan with college funding. How much are we looking to pay for him? How much are grandparents? We do have some 529 as a starter.

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

Then switch over to fully fund IRA. $7,000 plus $1,000 catchup for over 50. These can be either pretax or roth after tax and as someone mentioned depends on income situation. Most say to switch over to IRA after company match to have more control of investment options.

After fully funding IRA, you can go back to fund more 401k.

After that or for part of after fully funding IRA it is a matter of do you want it all in a retirement vehicle (401k or IRA) or an accessible brokerage account. If you retire no matter at what age you can access your money in retirement accounts. There maybe certain processes to follow you can access it.

These are just the type of investment vehicles. Your company controlls what you invest your 401k but you can pretty much select anything in your IRA. Most podcast suggest keeping it pretty simple and sticking to either whole stock market funds/etfs or and S&P 500 fund/etf.

There are a couple of different thought processes reguarding target date funds. These funds supposed adjust your portfolio mix to maximize your risk for when you plan to retire. Some think they are too conservative and go too much towards bonds too soon. Say you retire at 65 and that is your target date. You don't need all your money at 65 only a small percentage. And hopefully you still need money at 85, 90, or 95. That is a long time and a good portion of your money still needs to grow at a higher rate and you may be able to be more aggressive.

When searching for a financial advisor interview at least 2 or 3 people. You are still in charge of your money and your plan, you are trusting them to help you.

 

[dino259]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

It probably would make sense especially to start setting up for potential withdrawal. Lots of factors to consider. Wife and I turn 50 this year and are sitting pretty good. I listen to a few podcasts but those most cover putting money in and not taking out. We have a high school junior and freshman so I really need to figure out the plan with college funding. How much are we looking to pay for him? How much are grandparents? We do have some 529 as a starter.

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

Then switch over to fully fund IRA. $7,000 plus $1,000 catchup for over 50. These can be either pretax or roth after tax and as someone mentioned depends on income situation. Most say to switch over to IRA after company match to have more control of investment options.

After fully funding IRA, you can go back to fund more 401k.

After that or for part of after fully funding IRA it is a matter of do you want it all in a retirement vehicle (401k or IRA) or an accessible brokerage account. If you retire no matter at what age you can access your money in retirement accounts. There maybe certain processes to follow you can access it.

These are just the type of investment vehicles. Your company controlls what you invest your 401k but you can pretty much select anything in your IRA. Most podcast suggest keeping it pretty simple and sticking to either whole stock market funds/etfs or and S&P 500 fund/etf.

There are a couple of different thought processes reguarding target date funds. These funds supposed adjust your portfolio mix to maximize your risk for when you plan to retire. Some think they are too conservative and go too much towards bonds too soon. Say you retire at 65 and that is your target date. You don't need all your money at 65 only a small percentage. And hopefully you still need money at 85, 90, or 95. That is a long time and a good portion of your money still needs to grow at a higher rate and you may be able to be more aggressive.

When searching for a financial advisor interview at least 2 or 3 people. You are still in charge of your money and your plan, you are trusting them to help you.

A recent Stacking Benjamins podcast episode SB1470 goes over some not so fun financial advisor stories.

 

[Ministry of Pain]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

It probably would make sense especially to start setting up for potential withdrawal. Lots of factors to consider. Wife and I turn 50 this year and are sitting pretty good. I listen to a few podcasts but those most cover putting money in and not taking out. We have a high school junior and freshman so I really need to figure out the plan with college funding. How much are we looking to pay for him? How much are grandparents? We do have some 529 as a starter.

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

Then switch over to fully fund IRA. $7,000 plus $1,000 catchup for over 50. These can be either pretax or roth after tax and as someone mentioned depends on income situation. Most say to switch over to IRA after company match to have more control of investment options.

After fully funding IRA, you can go back to fund more 401k.

After that or for part of after fully funding IRA it is a matter of do you want it all in a retirement vehicle (401k or IRA) or an accessible brokerage account. If you retire no matter at what age you can access your money in retirement accounts. There maybe certain processes to follow you can access it.

These are just the type of investment vehicles. Your company controlls what you invest your 401k but you can pretty much select anything in your IRA. Most podcast suggest keeping it pretty simple and sticking to either whole stock market funds/etfs or and S&P 500 fund/etf.

There are a couple of different thought processes reguarding target date funds. These funds supposed adjust your portfolio mix to maximize your risk for when you plan to retire. Some think they are too conservative and go too much towards bonds too soon. Say you retire at 65 and that is your target date. You don't need all your money at 65 only a small percentage. And hopefully you still need money at 85, 90, or 95. That is a long time and a good portion of your money still needs to grow at a higher rate and you may be able to be more aggressive.

When searching for a financial advisor interview at least 2 or 3 people. You are still in charge of your money and your plan, you are trusting them to help you.

Am I allowed to ask what would happen if you had your kids take out loans for school to fill in for anything they don't achieve by way of scholarship and such?
Let me say it another way, I would ask my son or daughter to get thru college first as much as they could on their own. If it takes 5-6-7 years and there is a sabbatical mixed in along the way. all good but I would want them to earn the degree and then inform them that i will take all those loans they grabbed along the way and pay them off

I only say it that way because it sounds like you have done well for yourself and you have the luxury to pay for their college but I might not tell them all that.
Children can change a lot when they go to college and other people are teaching them and surrounding them 24/7 away from mom n dad
Many kids fail in college or come home in less than a year or two, it can be a real adjustment for many.

I'm sure you have given it some thought
You seem to know exactly what you're doing, good tips in there about withdrawal and that is something I would like to discuss more with folks like you.
It's hard to put into words but I will try...
Having liquidity 10-15 years ahead of the magic number of 59.5 or whatever age you can start withdrawing
And you might see your 401k double from the age of 60 to say 65 so maybe you want to leave it in there but at a certain point, who is all the money going to?
It doesn't get any easier to travel and stroll around National Parks as you age or enter your 60s and 70s, it's great to have all this money but what good is it if you're dead?
So I would like to hear more about withdrawals
I know there is a fear of outliving your money so I get it but we also can't just sit on it all until we are so old we can't enjoy any of it.

I hear so many people talking about 75-80-85, many will never make it that long.

 

[dino259]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

It probably would make sense especially to start setting up for potential withdrawal. Lots of factors to consider. Wife and I turn 50 this year and are sitting pretty good. I listen to a few podcasts but those most cover putting money in and not taking out. We have a high school junior and freshman so I really need to figure out the plan with college funding. How much are we looking to pay for him? How much are grandparents? We do have some 529 as a starter.

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

Then switch over to fully fund IRA. $7,000 plus $1,000 catchup for over 50. These can be either pretax or roth after tax and as someone mentioned depends on income situation. Most say to switch over to IRA after company match to have more control of investment options.

After fully funding IRA, you can go back to fund more 401k.

After that or for part of after fully funding IRA it is a matter of do you want it all in a retirement vehicle (401k or IRA) or an accessible brokerage account. If you retire no matter at what age you can access your money in retirement accounts. There maybe certain processes to follow you can access it.

These are just the type of investment vehicles. Your company controlls what you invest your 401k but you can pretty much select anything in your IRA. Most podcast suggest keeping it pretty simple and sticking to either whole stock market funds/etfs or and S&P 500 fund/etf.

There are a couple of different thought processes reguarding target date funds. These funds supposed adjust your portfolio mix to maximize your risk for when you plan to retire. Some think they are too conservative and go too much towards bonds too soon. Say you retire at 65 and that is your target date. You don't need all your money at 65 only a small percentage. And hopefully you still need money at 85, 90, or 95. That is a long time and a good portion of your money still needs to grow at a higher rate and you may be able to be more aggressive.

When searching for a financial advisor interview at least 2 or 3 people. You are still in charge of your money and your plan, you are trusting them to help you.

Am I allowed to ask what would happen if you had your kids take out loans for school to fill in for anything they don't achieve by way of scholarship and such?
Let me say it another way, I would ask my son or daughter to get thru college first as much as they could on their own. If it takes 5-6-7 years and there is a sabbatical mixed in along the way. a;; good but I would want them to earn the degree and then inform them that i will take all those loans they grabbed along the way and pay them off

I only say it that way because it sounds like you have done well for yourself and you have the luxury to pay for their college but I might not tell them all that.
Children can change a lot when they go to college and other people are teaching them and surrounding them 24/7 away from mom n dad
Many kids fail in college or come home in less than a year or two, it can be a real adjustment for many.

I'm sure you have given it some thought
You seem to know exactly what you're doing, good tips in there about withdrawal and that is something I would like to discuss more with folks like you.
It's hard to put into words but I will try...
Having liquidity 10-15 years ahead of the magic number of 59.5 or whatever age you can start withdrawing
And you might see your 401k double from the age of 60 to say 65 so maybe you want to leave it in there but at a certain point, who is all the money going to?
It doesn't get any easier to travel and stroll around National Parks as you age or enter your 60s and 70s, it's great to have all this money but what good is it if you're dead?
So I would like to hear more about withdrawals
I know there is a fear of outliving your money so I get it but we also can't just sit on it all until we are so old we can't enjoy any of it.

I hear so many people talking about 75-80-85, many will never make it that long.

For college, my thought is to let them think they have to pay for it all themselves and work through it that way. Then on the backend see where they are and make some payments towards any loans they need as a gift/reward for a successful college career. The thought is that give them some "skin" in the game.

 

[Peggy]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

We started a Roth-IRA a few years back and you can put quite a lot in there after you are done filling up the 401k
I think you can put up to $7,500 each in there but it also should be noted, there is a combined household income that once you pass it, you can't open a Roth to my knowledge.
I want to say $250k a year just to get a number out there, probably most don't have to worry about it but we might have some in here that would be unable to open a Roth if they haven't already done so already.

You can buy raw stocks within it, I think anyone that has owned a tech stock in the last 18 months, be it Google(NFL-Youtube), Apple or Amazon, all of them have been kicking butt
It's riskier of course but I look at stock charts over long periods of time and the market always seems to go up with a few exceptions
I use all those tech stocks I mentioned and no matter how juicy the stock tip I tend not to invest in things I don't use or don't understand

I have found that managing my own money has been better for us but I don't think I know more than financial advisors, I just am comfortable copying others I know who have had success.

Backdoor Roth if you exceed the income limits. (Note: You can only do this if you don't have any other IRA accounts with money in them outside of an employer plan, 401k etc.)

Contribute $8,000 (you're over 50) non-tax deductible to IRA from your bank account. Call the bank the next day and have them do an IRA to Roth IRA conversion, all $8,000 with no tax withheld.

 

[Peggy]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

I like to do things myself and would avoid anyone that wants to invest your money for you because they will charge a healthy expense fee which is the one thing you truly control. My company pays for an advisor that I meet with for an hour 4 times a year. That is worthwhile for me even if I end up paying $400 or so for each meeting after I retire because he answers all my questions and reviews my accounts for mistakes.

I read a lot of books.
Just Keep Buying by Nick Maggiulli is good for the basics
All About Asset Allocation by Richard Ferri is good for asset allocation.

 

[SFBayDuck]

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

It's allowed for the company match to go into a Roth 401K, but the plan/company have to allow it. I've asked mine twice now, and they keep saying "it's not on our roadmap at this time." I'm assuming there must be some unfavorable cost or tax implications for the employer to doing this, otherwise why wouldn't they? Anyone know?

So I would like to hear more about withdrawals

Here's a 60 part blog series on the topic. See you in a few weeks (I'm only about a quarter of the way through at this point!). It gets pretty geeky and math-y, but it sure is a deep dive on various withdrawal strategies.

Backdoor Roth if you exceed the income limits. (Note: You can only do this if you don't have any other IRA accounts with money in them outside of an employer plan, 401k etc.)

Contribute $8,000 (you're over 50) non-tax deductible to IRA from your bank account. Call the bank the next day and have them do an IRA to Roth IRA conversion, all $8,000 with no tax withheld.

Check to see if your company allows post-tax 401K contributions with an in-plan rollover to a Roth. I had to enroll at work and then call Fidelity once to set up the rollover, but once I did that the money gets pulled from my paycheck, hits my 401K, and is instantly and automatically rolled over to a Roth. My company just rolled this out last year and it's a great way to still take advantage of the full tax benefits of a traditional all the way up to the $23K/$30.5K limit, while being able to get funds into a Roth. So hypothetically you could get another $38,500 ($69K total employer/employee limit...although I'm not clear if you can add another $7,500 catchup on top of that to make the maximum total of $76,500....not that I can save that much anyway!!!!)

 

[Ministry of Pain]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

We started a Roth-IRA a few years back and you can put quite a lot in there after you are done filling up the 401k
I think you can put up to $7,500 each in there but it also should be noted, there is a combined household income that once you pass it, you can't open a Roth to my knowledge.
I want to say $250k a year just to get a number out there, probably most don't have to worry about it but we might have some in here that would be unable to open a Roth if they haven't already done so already.

You can buy raw stocks within it, I think anyone that has owned a tech stock in the last 18 months, be it Google(NFL-Youtube), Apple or Amazon, all of them have been kicking butt
It's riskier of course but I look at stock charts over long periods of time and the market always seems to go up with a few exceptions
I use all those tech stocks I mentioned and no matter how juicy the stock tip I tend not to invest in things I don't use or don't understand

I have found that managing my own money has been better for us but I don't think I know more than financial advisors, I just am comfortable copying others I know who have had success.

Backdoor Roth if you exceed the income limits. (Note: You can only do this if you don't have any other IRA accounts with money in them outside of an employer plan, 401k etc.)

Contribute $8,000 (you're over 50) non-tax deductible to IRA from your bank account. Call the bank the next day and have them do an IRA to Roth IRA conversion, all $8,000 with no tax withheld.

and

-I didn't know anything about this

 

[SFBayDuck]

I read a lot of books.
Just Keep Buying by Nick Maggiulli is good for the basics
All About Asset Allocation by Richard Ferri is good for asset allocation

I just read Maggiulli's book, and have the Ferri book in my Amazon cart right now.

I also really liked The Psychology of Money by Morgan Housel. Nineteen chapters but all really short (audiobook chapters are all between 5 and 19 minutes). In fact I gifted the book for xmas to my daughter, step-son, and two nephews who are all in their 20s. I told them if they read it and came to me with 10 bullets and/or questions they took away from reading/listening to the book I would put $250 in a Roth for them. What a great present, right? So far only one has even started to read it, and one even left it at our house when he flew back to Arizona


I also spend an hour or two walking the dog everyday, so I'm a big podcast guy.

Have listened to these focused on retirement, markets, and investing for some time:

• Retirement Answer Man (another good one for those asking about withdrawal strategies)
• Money for the Rest of Us
• Animal Spirits
• Ask the Compound
• Compound and Friends
• Baron's Streetwise

I've been searching for some new ones focused on Financial Independence and Retirement in the past month or two.
So far I've liked:

• ChooseFi
• Two Sides of Fi

And I'm currently checking out some others:

• Mad Fientist
• Retire with Style
• Retirement Starts Today
• Retiring with Enough
• The Financial Independence Show
• .....and probably another couple I can't recall.

Any others people like? I couldn't get into Stacking Benjamins, too much banter and inside jokes (although Animal Spirits and The Compound and Friends can both fall into that as well, I do still enjoy those).

 

[-OZ-]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

It probably would make sense especially to start setting up for potential withdrawal. Lots of factors to consider. Wife and I turn 50 this year and are sitting pretty good. I listen to a few podcasts but those most cover putting money in and not taking out. We have a high school junior and freshman so I really need to figure out the plan with college funding. How much are we looking to pay for him? How much are grandparents? We do have some 529 as a starter.

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

Then switch over to fully fund IRA. $7,000 plus $1,000 catchup for over 50. These can be either pretax or roth after tax and as someone mentioned depends on income situation. Most say to switch over to IRA after company match to have more control of investment options.

After fully funding IRA, you can go back to fund more 401k.

After that or for part of after fully funding IRA it is a matter of do you want it all in a retirement vehicle (401k or IRA) or an accessible brokerage account. If you retire no matter at what age you can access your money in retirement accounts. There maybe certain processes to follow you can access it.

These are just the type of investment vehicles. Your company controlls what you invest your 401k but you can pretty much select anything in your IRA. Most podcast suggest keeping it pretty simple and sticking to either whole stock market funds/etfs or and S&P 500 fund/etf.

There are a couple of different thought processes reguarding target date funds. These funds supposed adjust your portfolio mix to maximize your risk for when you plan to retire. Some think they are too conservative and go too much towards bonds too soon. Say you retire at 65 and that is your target date. You don't need all your money at 65 only a small percentage. And hopefully you still need money at 85, 90, or 95. That is a long time and a good portion of your money still needs to grow at a higher rate and you may be able to be more aggressive.

When searching for a financial advisor interview at least 2 or 3 people. You are still in charge of your money and your plan, you are trusting them to help you.

Am I allowed to ask what would happen if you had your kids take out loans for school to fill in for anything they don't achieve by way of scholarship and such?
Let me say it another way, I would ask my son or daughter to get thru college first as much as they could on their own. If it takes 5-6-7 years and there is a sabbatical mixed in along the way. a;; good but I would want them to earn the degree and then inform them that i will take all those loans they grabbed along the way and pay them off

I only say it that way because it sounds like you have done well for yourself and you have the luxury to pay for their college but I might not tell them all that.
Children can change a lot when they go to college and other people are teaching them and surrounding them 24/7 away from mom n dad
Many kids fail in college or come home in less than a year or two, it can be a real adjustment for many.

I'm sure you have given it some thought
You seem to know exactly what you're doing, good tips in there about withdrawal and that is something I would like to discuss more with folks like you.
It's hard to put into words but I will try...
Having liquidity 10-15 years ahead of the magic number of 59.5 or whatever age you can start withdrawing
And you might see your 401k double from the age of 60 to say 65 so maybe you want to leave it in there but at a certain point, who is all the money going to?
It doesn't get any easier to travel and stroll around National Parks as you age or enter your 60s and 70s, it's great to have all this money but what good is it if you're dead?
So I would like to hear more about withdrawals
I know there is a fear of outliving your money so I get it but we also can't just sit on it all until we are so old we can't enjoy any of it.

I hear so many people talking about 75-80-85, many will never make it that long.

For college, my thought is to let them think they have to pay for it all themselves and work through it that way. Then on the backend see where they are and make some payments towards any loans they need as a gift/reward for a successful college career. The thought is that give them some "skin" in the game.

Just what we’re doing - each kid (5 kids) knows they get tuition covered at an in state school. For us that’s about $10k / year now. No more, other than a year with the post 911 GI Bill which will cover room and board. Anything more is on them.

Our oldest is in community college at $5k / year, son #2 has a full ride to our local university and lives at home for now. He just made the President’s list (4.0) in his first semester and is earning $25/hr working at our local credit union. He’ll probably get a job from them when he graduates.

 

[Desert_Power]

• Money for the Rest of Us

I've been searching for some new ones focused on Financial Independence and Retirement in the past month or two.
So far I've liked:

• ChooseFi
• Two Sides of Fi

And I'm currently checking out some others:

• Mad Fientist

All of these are in my rotation . Based on that, Retire Sooner and Ready for Retirement may be up your alley. A lot of the podcasts in this space can too easily devolve into tangents/jokes or get too full of advertising.

 

[Sand]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

You probably would benefit from a FA.
I figure for us, it would be a matter of (1) tax planning, (2) getting a second set of eyes when we’re “50 meters out” from retirement, (3) if we get serious about buying a rental house, (4) connecting with one for my wife that we trust.
FWIW, I’m not 50, over the 1M mark and do it all myself. But our tax planning is easy because we don’t make much (still eligible for the Roth IRAs), 90% of our funds are in retirement accounts. And I don’t plan to retire for another decade.

Pay a fee only advisor, then report back to us with his recommendations. We'll tell you if he's full of ****. And if the word "annuity" comes out of his mouth punch him in it and walk out. Or anything about unregistered securities or REITs. Or anything about universal/whole life.

 

[Buckna]

For investing I believe it is generally assumed to start with the 401k to get the full company match. A lot more companies offer both 401k and 401k roth. Not sure if company match can go into 401k roth but am leaning to no. $23,000 for 2024 plus catchup contributions.

It's allowed for the company match to go into a Roth 401K, but the plan/company have to allow it. I've asked mine twice now, and they keep saying "it's not on our roadmap at this time." I'm assuming there must be some unfavorable cost or tax implications for the employer to doing this, otherwise why wouldn't they? Anyone know?

I am not an expert but I don’t believe the IRS allows matching contributions or profit sharing to go into a Roth 401k. Essentially because the money would never get taxed if they allowed it.

 

[SFBayDuck]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

You probably would benefit from a FA.
I figure for us, it would be a matter of (1) tax planning, (2) getting a second set of eyes when we’re “50 meters out” from retirement, (3) if we get serious about buying a rental house, (4) connecting with one for my wife that we trust.
FWIW, I’m not 50, over the 1M mark and do it all myself. But our tax planning is easy because we don’t make much (still eligible for the Roth IRAs), 90% of our funds are in retirement accounts. And I don’t plan to retire for another decade.

Pay a fee only advisor, then report back to us with his recommendations. We'll tell you if he's full of ****. And if the word "annuity" comes out of his mouth punch him in it and walk about. Or anything about unregistered securities or REITs. Or anything about universal/whole life.

Can you unpack your stance on REITs? Seems to me like a decent component of the alternatives bucket (5-15% of your portfolio, depending). I’ve got REITs, crypto, art (Masterworks), GLD, I had private RE loans for a while (via Groundfloor). The idea being to have things relatively uncorrelated to equities, and REITs, from my admittedly somewhat shallow research, are in the 50-70% range for correlation.

Or are you just talking about private REITs?

 

[SFBayDuck]

I am not an expert but I don’t believe the IRS allows matching contributions or profit sharing to go into a Roth 401k. Essentially because the money would never get taxed if they allowed it.

It's allowed....

The SECURE 2.0 Act now enables employers to make matching contributions directly to employees' Roth 401(k)s.

....but I think what you're saying has something to do with why a company wouldn't want to do it - there must be an additional cost or tax to doing so vs matching in a traditional.

 

[Sand]

When does it make sense to go to a financial planner? I'm 54, have literally done no financial planning my entire life except 25 years of putting in enough $ to max out the 401K match from my job and my wife's, entirely in an S&P 500 Index fund. And somehow we're closing in on being millionaires, not yet but close enough (plus old enough) to feel like maybe I should actually have a plan. She got a big promotion last year, and after our younger kid finishes college in 2025 it seems like we're suddenly going to be way more flush than ever before - actually for the first time, to be honest

Want to get a Roth going but I think we now make too much for that. I guess I'm going to max out what we can put in the 401K annually starting in 2025, and should probably diversify, but other than that, what would be a good first step?

You probably would benefit from a FA.
I figure for us, it would be a matter of (1) tax planning, (2) getting a second set of eyes when we’re “50 meters out” from retirement, (3) if we get serious about buying a rental house, (4) connecting with one for my wife that we trust.
FWIW, I’m not 50, over the 1M mark and do it all myself. But our tax planning is easy because we don’t make much (still eligible for the Roth IRAs), 90% of our funds are in retirement accounts. And I don’t plan to retire for another decade.

Pay a fee only advisor, then report back to us with his recommendations. We'll tell you if he's full of ****. And if the word "annuity" comes out of his mouth punch him in it and walk about. Or anything about unregistered securities or REITs. Or anything about universal/whole life.

Can you unpack your stance on REITs? Seems to me like a decent component of the alternatives bucket (5-15% of your portfolio, depending). I’ve got REITs, crypto, art (Masterworks), GLD, I had private RE loans for a while (via Groundfloor). The idea being to have things relatively uncorrelated to equities, and REITs, from my admittedly somewhat shallow research, are in the 50-70% range for correlation.

Or are you just talking about private REITs?

Sorry - just private REITs. They're illiquid and usually range from a horrific deal to a plain scam. Publicly traded REITs are fine. I have a chunk of VNQ and it's a good asset class.

 

[-OZ-]

• Money for the Rest of Us

I've been searching for some new ones focused on Financial Independence and Retirement in the past month or two.
So far I've liked:

• ChooseFi
• Two Sides of Fi

And I'm currently checking out some others:

• Mad Fientist

All of these are in my rotation . Based on that, Retire Sooner and Ready for Retirement may be up your alley. A lot of the podcasts in this space can too easily devolve into tangents/jokes or get too full of advertising.

A few more to consider:
Pete the planner
Weird finance
Mindy on money
Money scope podcast
Catching up to FI
Mile high FI
Earn and invest
All the hacks
The Clark Howard show
Risk parity radio (uses a lot of soundbites but I like it anyway)

I like stacking Benjamins, but totally understand it isn’t everyone’s cup of Joe.

 

[Buckna]

I am not an expert but I don’t believe the IRS allows matching contributions or profit sharing to go into a Roth 401k. Essentially because the money would never get taxed if they allowed it.

It's allowed....

The SECURE 2.0 Act now enables employers to make matching contributions directly to employees' Roth 401(k)s.

....but I think what you're saying has something to do with why a company wouldn't want to do it - there must be an additional cost or tax to doing so vs matching in a traditional.

Thats interesting, thanks for finding that. Even the IRS website does not reflect that legislation change yet. My guess would be the following two requirements are why most employers don’t offer it yet: 1) must be 100% vested and 2) can't be excluded from gross income. Most employers want graduated vesting to encourage employee retention (plus they get contributions back when employees leave early) but I’d guess the biggest reason is it must be included in gross income. That means someone is paying taxes on the contribution when its put in, I can’t see most employers wanting to foot that bill and it would be complicated to figure out since our tax system is such a mess.

If the legislation is only a year or two old, its too soon for most plan admins to have figured out how to incorporate it which you hinted at in your previous post. Roth 401k’s were added via legislation in 2006, its almost 20 years later and tons of employers still don’t offer them yet. It took my own former company (a massive financial institution, over a decade to offer it as an option.)

 

[Peggy]

Backdoor Roth if you exceed the income limits. (Note: You can only do this if you don't have any other IRA accounts with money in them outside of an employer plan, 401k etc.)

Contribute $8,000 (you're over 50) non-tax deductible to IRA from your bank account. Call the bank the next day and have them do an IRA to Roth IRA conversion, all $8,000 with no tax withheld.

Check to see if your company allows post-tax 401K contributions with an in-plan rollover to a Roth. I had to enroll at work and then call Fidelity once to set up the rollover, but once I did that the money gets pulled from my paycheck, hits my 401K, and is instantly and automatically rolled over to a Roth. My company just rolled this out last year and it's a great way to still take advantage of the full tax benefits of a traditional all the way up to the $23K/$30.5K limit, while being able to get funds into a Roth. So hypothetically you could get another $38,500 ($69K total employer/employee limit...although I'm not clear if you can add another $7,500 catchup on top of that to make the maximum total of $76,500....not that I can save that much anyway!!!!)

Way ahead of ya. Been doing that for a while. Yes you get the catch up on top of that if over 50. And the $8,000 regular backdoor Roth is on top of that outside the employer account. I'm over 50 so for me in 2024:

$30,500 Roth 401K
$46,000 ($76,500 minus $30,500 above) After Tax 401k rolled into Roth IRA twice a year
$8,000 regular backdoor Roth IRA
$9,300 HSA

Total = $93,800 that will grow tax free forever in the future.

 

[Peggy]

Actually I've switched the $30,500 above into regular 401k this year, not Roth. I've been screwing that up the past several years. Being in the highest tax bracket in my life right now it's much better to do regular 401K while in a high tax bracket and then roll it over into a Roth and paying the tax after retirement when in a low tax bracket.

 

[Peggy]

I read a lot of books.
Just Keep Buying by Nick Maggiulli is good for the basics
All About Asset Allocation by Richard Ferri is good for asset allocation

I just read Maggiulli's book, and have the Ferri book in my Amazon cart right now.

I also really liked The Psychology of Money by Morgan Housel. Nineteen chapters but all really short (audiobook chapters are all between 5 and 19 minutes). In fact I gifted the book for xmas to my daughter, step-son, and two nephews who are all in their 20s. I told them if they read it and came to me with 10 bullets and/or questions they took away from reading/listening to the book I would put $250 in a Roth for them. What a great present, right? So far only one has even started to read it, and one even left it at our house when he flew back to Arizona


I also spend an hour or two walking the dog everyday, so I'm a big podcast guy.

Have listened to these focused on retirement, markets, and investing for some time:

• Retirement Answer Man (another good one for those asking about withdrawal strategies)
• Money for the Rest of Us
• Animal Spirits
• Ask the Compound
• Compound and Friends
• Baron's Streetwise

I've been searching for some new ones focused on Financial Independence and Retirement in the past month or two.
So far I've liked:

• ChooseFi
• Two Sides of Fi

And I'm currently checking out some others:

• Mad Fientist
• Retire with Style
• Retirement Starts Today
• Retiring with Enough
• The Financial Independence Show
• .....and probably another couple I can't recall.

Any others people like? I couldn't get into Stacking Benjamins, too much banter and inside jokes (although Animal Spirits and The Compound and Friends can both fall into that as well, I do still enjoy those).

Used to be into podcasts when my commute was 90 plus minutes. Now it's only 15. The gift/kids cracks me up, lol.

 

[Peggy]

$30,500 Roth 401K
$46,000 ($76,500 minus $30,500 above) After Tax 401k rolled into Roth IRA twice a year
$8,000 regular backdoor Roth IRA
$9,300 HSA

Just a little jealous here. We’re capped at $37,500 ($23,500 into TSP, 2 x Roth IRA at $7k each) into tax advantaged accounts. No HSA but we do use an FSA.

But why are you rolling into the Roth while:

Actually I've switched the $30,500 above into regular 401k this year, not Roth. I've been screwing that up the past several years. Being in the highest tax bracket in my life right now it's much better to do regular 401K while in a high tax bracket and then roll it over into a Roth and paying the tax after retirement when in a low tax bracket.

Not a 100% sure I understand the question.

The After Tax 401K money you roll into a Roth IRA outside of the employer retirement account (I do it twice a year) because you pay taxes on gains if you leave it in the retirement account. You don't once it's rolled over into the Roth IRA. Mega Backdoor Roth loophole.

The other two options for the first $23,000 ($30,500 if over 50) in the employer retirement account is either 401K (pre-tax) or 401K Roth (after-tax). Mathematically they are the equivalent but the general theory is to pay taxes when you are young and in a lower tax bracket (401K Roth) and defer taxes when older in a higher tax bracket (401K). For the deferred 401K you can pay taxes when you withdraw and use it in retirement. Or if you know you're going to be in a low tax bracket in the early years of retirement you withdraw up to the max for that low tax bracket, pay the tax then, and put the money back into a roth where it can continue to grow tax free.

 

[-OZ-]

The After Tax 401K money you roll into a Roth IRA outside of the employer retirement account (I do it twice a year) because you pay taxes on gains if you leave it in the retirement account. You don't once it's rolled over into the Roth IRA. Mega Backdoor Roth loophole.

Never mind, I misunderstood the after tax part. We don’t have that option.