Personal Finance Advice and Education! (22 Viewers)

[jm192]

Cool personal note, the 401K check showed up in the mail yesterday. Going to upload it to Fidelity and that's another account we don't have to think about.

At one point, we had:

My 401K: Schwab
My 2nd 401K and Roth: Fidelity
Wife's 401K: Prudential
Wife's Roth and Taxable brokerage Account: Vanguard
HSA $$ account: HSA Bank
HSA Investment account: TD Ameritrade (which became Schwab)
2nd HSA: Health Equity

Now it's down to:
Fidelity for my 401K, All HSA$, Roth
Vanguard for her Roth, Taxable brokerage
Prudential for her 401K.

 

[Orange&Blue]

Have a couple of questions

I work for the government. Wife owns an LLC but doesn't earn much. Combined we have $1.1M in 401(k), IRA, and brokerage account. Brokerage is $300k with $150k cost basis.

I plan to retire in 17 years if not sooner. I would draw FERS pension and SS. Wife probably wouldn't get much as she doesn't pay into it.

We have 3 kids with oldest about to be a junior. Oldest kid has 529s valued at $65k.

We have a house on a 30yr note (3.5%, $125k principal left, value $400k) that we don't intend to sell anytime soon.

No other debt.

My questions:
1) Due to a death in the family, we are now joint owners of a house in Nashville. Principal remaining is $325k and valued at 500k. 12 years left on the 15 year note. Joint owner wants to rent for sentimental reasons. I want whatever is best financially. We would need a management company as neither live close.

My concern is that this will really screw my oldest on any financial assistance. Thoughts on what to do?

2) I've been thinking of maxing out my 401(k) and selling from brokerage to make up for living expenses. Would help reduce FAFSA impact but not sure the overall positive gains are worth the financial hit of 15% capital gains. Thoughts?

3) Since wife is sole proprietor of her LLC, can we move money from the brokerage to fund her 401(k)?

 

[gianmarco]

Btw, I don't remember seeing that new i-bond rate discussed.

Currently a pretty strong 1.1% fixed rate and a combined rate of 3.98%.

That's not much lower than my current HYSA rate and a solid fixed rate for the future.

I go back and forth on it.

I've always said if we got any real fixed rate, I'd be in. My hangup: As you said, HYSA (and even money market accounts) are running similar to slightly better. Obviously, the I-bonds require a 1 year wait until you can redeem. Money market funds and HYSA don't have the liquidity issues.

My other thought: Being 25-30 years from retirement: Do I just want to throw that money into stocks and go for a higher return?

Finally, Thinking out loud: It seems like at times, that 1% is going to add substantial value. But at other times, you're going to be giving up better returns to buy into/hold onto that 1%.

Just another tool in diversification. Like you said, at times it will underperform, other times it will outperform.

Not a bad place to sock away some funds that can be both semi-short term but also be long term if you don't need and the landscape changes.

 

[-OZ-]

Being 25-30 years from retirement: Do I just want to throw that money into stocks and go for a higher return?

Is retirement the only purpose for these funds?

The only bonds, including I bonds, we own have a much shorter target. Their purpose is 1-15 years out, although we might keep them longer if we don’t have any emergencies, the markets don’t fall our first years in retirement and we decide to not buy the lake house (or use these funds for that).

If your only purpose of the I bonds is 25+ years away, I wouldn’t buy them. They’re not a great way to rebalance a portfolio, so I wouldn’t use them for that purpose if you want a 90/10 - just go 10% BND, SGOV, TLT… etc (I’m not sure which is best but SGOV is almost like cash)

 

[-OZ-]

max out our IRAs (Roth first than traditional

Explain please. You don’t get to Max both.

 

[Orange&Blue]

max out our IRAs (Roth first than traditional

Explain please. You don’t get to Max both.

you are right. i conflated IRAs and 401(k).

edited my post

 

[Sand]

1) Due to a death in the family, we are now joint owners of a house in Nashville. Principal remaining is $325k and valued at 500k. 12 years left on the 15 year note. Joint owner wants to rent for sentimental reasons. I want whatever is best financially. We would need a management company as neither live close.

IMO, someone should rent ten houses or zero. This is a huge PIA. Sell it. Simplify, simplify, simplify.

2) I've been thinking of maxing out my 401(k) and selling from brokerage to make up for living expenses. Would help reduce FAFSA impact but not sure the overall positive gains are worth the financial hit of 15% capital gains. Thoughts?

Monies in a taxable account give you flexibility. Maybe start stuffing monies into a Roth or, even better, an HSA (since you're govt. maybe an HSA isn't possible) than more into pre-tax accounts? Not sure how much it will move the FAFSA needle. Maybe run some scenarios and see if it matters.

3) Since wife is sole proprietor of her LLC, can we move money from the brokerage to fund her 401(k)?

Sounds reasonable, but monetary flexibility is worth something.

 

[Peggy]

Using cash, brokerage, savings whatever to pay yourself so you can use the paycheck to funnel money into tax sheltered accounts is a no-brainer. Don't over think it, just do it why you have the means to

 

[Orange&Blue]

1) Due to a death in the family, we are now joint owners of a house in Nashville. Principal remaining is $325k and valued at 500k. 12 years left on the 15 year note. Joint owner wants to rent for sentimental reasons. I want whatever is best financially. We would need a management company as neither live close.

IMO, someone should rent ten houses or zero. This is a huge PIA. Sell it. Simplify, simplify, simplify.

2) I've been thinking of maxing out my 401(k) and selling from brokerage to make up for living expenses. Would help reduce FAFSA impact but not sure the overall positive gains are worth the financial hit of 15% capital gains. Thoughts?

Monies in a taxable account give you flexibility. Maybe start stuffing monies into a Roth or, even better, an HSA (since you're govt. maybe an HSA isn't possible) than more into pre-tax accounts? Not sure how much it will move the FAFSA needle. Maybe run some scenarios and see if it matters.

3) Since wife is sole proprietor of her LLC, can we move money from the brokerage to fund her 401(k)?

Sounds reasonable, but monetary flexibility is worth something.

apparently you can only do up to 25% of the companies gross income.