Personal Finance Advice and Education! (3 Viewers)

[The Z Machine]

Apologies because I know the word "Trump" isn't allowed on this forum, but, it's in the name: Trump Fund.

Imagine being able to put 5K a year into a Roth for the first 18 years of your kids life.

Then imagine them not doing anything with it, just let it sit there for 30 or 40 years until they retire.

Put that in into a compound interest calculator- I dare you.

WOW

As someone with a 17 month and a 7 month old, this is very intriguing. Will need to research it.

Godspeed, brother. That's a doozy of an age gap.

 

[Instinctive]

Apologies because I know the word "Trump" isn't allowed on this forum, but, it's in the name: Trump Fund.

Imagine being able to put 5K a year into a Roth for the first 18 years of your kids life.

Then imagine them not doing anything with it, just let it sit there for 30 or 40 years until they retire.

Put that in into a compound interest calculator- I dare you.

WOW

As someone with a 17 month and a 7 month old, this is very intriguing. Will need to research it.

Godspeed, brother. That's a doozy of an age gap.

We tried for closer but they wouldn't implant twins and then first couple takes with surrogate didn't work.

 

[Sand]

Apologies because I know the word "Trump" isn't allowed on this forum, but, it's in the name: Trump Fund.

Imagine being able to put 5K a year into a Roth for the first 18 years of your kids life.

Then imagine them not doing anything with it, just let it sit there for 30 or 40 years until they retire.

Put that in into a compound interest calculator- I dare you.

WOW

As someone with a 17 month and a 7 month old, this is very intriguing. Will need to research it.

Godspeed, brother. That's a doozy of an age gap.

My brother and I are 17 months apart. Fought like cats and dogs while growing up. Instinctive is going to have LOADS of fun with those two.

 

[brun]

Ok, maybe the Baby Bonus isn't at capital gains rates, but treated as income on the way out. Found a good article that goes into it:

Creation of “Trump” savings accounts for individuals under 18 Effective: 2026, no end date. This is a wild one and I frankly can’t quite fully follow it or figure it out. There is a lot going on here, and I’m guessing there will be a lot of clarifications from the IRS about this before all of the details and implementation facts are known with certainty. But, to sum up, it appears the OBBBA is establishing an IRA-like account called a “Trump” savings account intended to be used as a savings vehicle for children under 18, where the funding of the account can only occur while the child is under 18. And then distributions from it will follow normal distribution rules for IRAs.

While this means these accounts aren’t going to directly benefit most of you reading this, they may nonetheless be opened by many of you on behalf of children or grand children. Contributions to Trump accounts won’t be allowed until one year after the enactment of the OBBBA, or July 4, 2026. After that, contributions will be allowed up until the calendar year in which the account beneficiary turns 18. The maximum annual contribution is $5,000 (inflation adjusted after 2027),and there will not be any tax deferral or deductions on contributions.

The government will be making $1,000 contributions per year to every child born from 2025 through 2028.And it appears the government will be automatically opening accounts for children born in those years. Investment options for Trump accounts will be limited to index exchange traded funds (“ETFs”) or mutual funds whose expense ratios are not more than 0.1% per year. Distributions are not allowed (at all, I think) until the year the beneficiary turns 18. And after that, it appears the distribution rules around Trump accounts are the same as normal IRAs; a 10% penalty on withdrawals before age 59 ½ (unless there is a penalty exception; just like with IRAs), otherwise, all distributions will be treated like normal IRA distributions where earnings are taxed as ordinary income and return of “basis” or contributions will be tax-free...

Maybe I'm not understanding this correctly. It sounds like contributions are post tax like a Roth IRA. Upon distribution, typically after 59 1/2, earnings are taxed like a traditional IRA. Investment options are limited. Other than a potential $3k over 3 years per kid, from the government. What's the big deal?

Doesn't require earnings to contribute to the "IRA" which you wouldn't have as a child or a retired grandparent giving money to the child.

Also the ability to get it earlier than 59.5 without penalty (don't remember the specifics).

As I read the original post it indicates that distributions will follow regular ira rules. So, 10% penalty if before 59 1/2.

 

[Sand]

Ok, maybe the Baby Bonus isn't at capital gains rates, but treated as income on the way out. Found a good article that goes into it:

Creation of “Trump” savings accounts for individuals under 18 Effective: 2026, no end date. This is a wild one and I frankly can’t quite fully follow it or figure it out. There is a lot going on here, and I’m guessing there will be a lot of clarifications from the IRS about this before all of the details and implementation facts are known with certainty. But, to sum up, it appears the OBBBA is establishing an IRA-like account called a “Trump” savings account intended to be used as a savings vehicle for children under 18, where the funding of the account can only occur while the child is under 18. And then distributions from it will follow normal distribution rules for IRAs.

While this means these accounts aren’t going to directly benefit most of you reading this, they may nonetheless be opened by many of you on behalf of children or grand children. Contributions to Trump accounts won’t be allowed until one year after the enactment of the OBBBA, or July 4, 2026. After that, contributions will be allowed up until the calendar year in which the account beneficiary turns 18. The maximum annual contribution is $5,000 (inflation adjusted after 2027),and there will not be any tax deferral or deductions on contributions.

The government will be making $1,000 contributions per year to every child born from 2025 through 2028.And it appears the government will be automatically opening accounts for children born in those years. Investment options for Trump accounts will be limited to index exchange traded funds (“ETFs”) or mutual funds whose expense ratios are not more than 0.1% per year. Distributions are not allowed (at all, I think) until the year the beneficiary turns 18. And after that, it appears the distribution rules around Trump accounts are the same as normal IRAs; a 10% penalty on withdrawals before age 59 ½ (unless there is a penalty exception; just like with IRAs), otherwise, all distributions will be treated like normal IRA distributions where earnings are taxed as ordinary income and return of “basis” or contributions will be tax-free...

Maybe I'm not understanding this correctly. It sounds like contributions are post tax like a Roth IRA. Upon distribution, typically after 59 1/2, earnings are taxed like a traditional IRA. Investment options are limited. Other than a potential $3k over 3 years per kid, from the government. What's the big deal?

Doesn't require earnings to contribute to the "IRA" which you wouldn't have as a child or a retired grandparent giving money to the child.

Also the ability to get it earlier than 59.5 without penalty (don't remember the specifics).

As I read the original post it indicates that distributions will follow regular ira rules. So, 10% penalty if before 59 1/2.

That part makes sense - put a little in and force it to grow for 60 years. Forcing that and giving those folks another pot of retirement funds is a great idea.

What will be interesting is 60 years from now seeing how many people could resist the urge to plunder the account. I figure, what, 50% will cash it out?

 

[Buckna]

Ok, maybe the Baby Bonus isn't at capital gains rates, but treated as income on the way out. Found a good article that goes into it:

Creation of “Trump” savings accounts for individuals under 18 Effective: 2026, no end date. This is a wild one and I frankly can’t quite fully follow it or figure it out. There is a lot going on here, and I’m guessing there will be a lot of clarifications from the IRS about this before all of the details and implementation facts are known with certainty. But, to sum up, it appears the OBBBA is establishing an IRA-like account called a “Trump” savings account intended to be used as a savings vehicle for children under 18, where the funding of the account can only occur while the child is under 18. And then distributions from it will follow normal distribution rules for IRAs.

While this means these accounts aren’t going to directly benefit most of you reading this, they may nonetheless be opened by many of you on behalf of children or grand children. Contributions to Trump accounts won’t be allowed until one year after the enactment of the OBBBA, or July 4, 2026. After that, contributions will be allowed up until the calendar year in which the account beneficiary turns 18. The maximum annual contribution is $5,000 (inflation adjusted after 2027),and there will not be any tax deferral or deductions on contributions.

The government will be making $1,000 contributions per year to every child born from 2025 through 2028.And it appears the government will be automatically opening accounts for children born in those years. Investment options for Trump accounts will be limited to index exchange traded funds (“ETFs”) or mutual funds whose expense ratios are not more than 0.1% per year. Distributions are not allowed (at all, I think) until the year the beneficiary turns 18. And after that, it appears the distribution rules around Trump accounts are the same as normal IRAs; a 10% penalty on withdrawals before age 59 ½ (unless there is a penalty exception; just like with IRAs), otherwise, all distributions will be treated like normal IRA distributions where earnings are taxed as ordinary income and return of “basis” or contributions will be tax-free...

Maybe I'm not understanding this correctly. It sounds like contributions are post tax like a Roth IRA. Upon distribution, typically after 59 1/2, earnings are taxed like a traditional IRA. Investment options are limited. Other than a potential $3k over 3 years per kid, from the government. What's the big deal?

Doesn't require earnings to contribute to the "IRA" which you wouldn't have as a child or a retired grandparent giving money to the child.

Also the ability to get it earlier than 59.5 without penalty (don't remember the specifics).

As I read the original post it indicates that distributions will follow regular ira rules. So, 10% penalty if before 59 1/2.

That part makes sense - put a little in and force it to grow for 60 years. Forcing that and giving those folks another pot of retirement funds is a great idea.

What will be interesting is 60 years from now seeing how many people could resist the urge to plunder the account. I figure, what, 50% will cash it out?

One of the articles I read said there will be special exceptions at 18 for withdrawals, it mentioned starting a business, 1stbtime home purchase, school expenses... But also limited to no more than 50% of the value. Unclear if that survived to the final version of the bill

 

[cubd8]

Question (something I'm asking on behalf of a friend):
My friend has a daughter with an existing car loan. I think the interest rate is around 9%.
My friend's ex-wife wants to transfer the loan over to her and also attempt to refi the auto loan.

Is that a standard process to transfer the loan to a different person? Can a refi happen and then transfer that new loan to a new person?

 

[Peggy]

Ok, maybe the Baby Bonus isn't at capital gains rates, but treated as income on the way out. Found a good article that goes into it:

Creation of “Trump” savings accounts for individuals under 18 Effective: 2026, no end date. This is a wild one and I frankly can’t quite fully follow it or figure it out. There is a lot going on here, and I’m guessing there will be a lot of clarifications from the IRS about this before all of the details and implementation facts are known with certainty. But, to sum up, it appears the OBBBA is establishing an IRA-like account called a “Trump” savings account intended to be used as a savings vehicle for children under 18, where the funding of the account can only occur while the child is under 18. And then distributions from it will follow normal distribution rules for IRAs.

While this means these accounts aren’t going to directly benefit most of you reading this, they may nonetheless be opened by many of you on behalf of children or grand children. Contributions to Trump accounts won’t be allowed until one year after the enactment of the OBBBA, or July 4, 2026. After that, contributions will be allowed up until the calendar year in which the account beneficiary turns 18. The maximum annual contribution is $5,000 (inflation adjusted after 2027),and there will not be any tax deferral or deductions on contributions.

The government will be making $1,000 contributions per year to every child born from 2025 through 2028.And it appears the government will be automatically opening accounts for children born in those years. Investment options for Trump accounts will be limited to index exchange traded funds (“ETFs”) or mutual funds whose expense ratios are not more than 0.1% per year. Distributions are not allowed (at all, I think) until the year the beneficiary turns 18. And after that, it appears the distribution rules around Trump accounts are the same as normal IRAs; a 10% penalty on withdrawals before age 59 ½ (unless there is a penalty exception; just like with IRAs), otherwise, all distributions will be treated like normal IRA distributions where earnings are taxed as ordinary income and return of “basis” or contributions will be tax-free...

Maybe I'm not understanding this correctly. It sounds like contributions are post tax like a Roth IRA. Upon distribution, typically after 59 1/2, earnings are taxed like a traditional IRA. Investment options are limited. Other than a potential $3k over 3 years per kid, from the government. What's the big deal?

Doesn't require earnings to contribute to the "IRA" which you wouldn't have as a child or a retired grandparent giving money to the child.

Also the ability to get it earlier than 59.5 without penalty (don't remember the specifics).

Any idea if they’d be excluded from an asset list in the child’s name when calculating fafsa?

No idea.

 

[-OZ-]

Ok, maybe the Baby Bonus isn't at capital gains rates, but treated as income on the way out. Found a good article that goes into it:

Creation of “Trump” savings accounts for individuals under 18 Effective: 2026, no end date. This is a wild one and I frankly can’t quite fully follow it or figure it out. There is a lot going on here, and I’m guessing there will be a lot of clarifications from the IRS about this before all of the details and implementation facts are known with certainty. But, to sum up, it appears the OBBBA is establishing an IRA-like account called a “Trump” savings account intended to be used as a savings vehicle for children under 18, where the funding of the account can only occur while the child is under 18. And then distributions from it will follow normal distribution rules for IRAs.

While this means these accounts aren’t going to directly benefit most of you reading this, they may nonetheless be opened by many of you on behalf of children or grand children. Contributions to Trump accounts won’t be allowed until one year after the enactment of the OBBBA, or July 4, 2026. After that, contributions will be allowed up until the calendar year in which the account beneficiary turns 18. The maximum annual contribution is $5,000 (inflation adjusted after 2027),and there will not be any tax deferral or deductions on contributions.

The government will be making $1,000 contributions per year to every child born from 2025 through 2028.And it appears the government will be automatically opening accounts for children born in those years. Investment options for Trump accounts will be limited to index exchange traded funds (“ETFs”) or mutual funds whose expense ratios are not more than 0.1% per year. Distributions are not allowed (at all, I think) until the year the beneficiary turns 18. And after that, it appears the distribution rules around Trump accounts are the same as normal IRAs; a 10% penalty on withdrawals before age 59 ½ (unless there is a penalty exception; just like with IRAs), otherwise, all distributions will be treated like normal IRA distributions where earnings are taxed as ordinary income and return of “basis” or contributions will be tax-free...

Maybe I'm not understanding this correctly. It sounds like contributions are post tax like a Roth IRA. Upon distribution, typically after 59 1/2, earnings are taxed like a traditional IRA. Investment options are limited. Other than a potential $3k over 3 years per kid, from the government. What's the big deal?

Doesn't require earnings to contribute to the "IRA" which you wouldn't have as a child or a retired grandparent giving money to the child.

Also the ability to get it earlier than 59.5 without penalty (don't remember the specifics).

As I read the original post it indicates that distributions will follow regular ira rules. So, 10% penalty if before 59 1/2.

That part makes sense - put a little in and force it to grow for 60 years. Forcing that and giving those folks another pot of retirement funds is a great idea.

What will be interesting is 60 years from now seeing how many people could resist the urge to plunder the account. I figure, what, 50% will cash it out?

Considering college and how many people take loans at a high rate, I’ll take the over. Many won’t because they’ll forget about the account.

 

[Payne]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

 

[ConstruxBoy]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

One thing you might not have thought of: if you plan on retiring early and using the Rule of 55, then leave it in the 401k. Can't use that on IRAs.

 

[Payne]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

One thing you might not have thought of: if you plan on retiring early and using the Rule of 55, then leave it in the 401k. Can't use that on IRAs.

That's not the plan, but neither was losing my job due to a merger after 30 years. That's why I'm exploring options.
Would like to be as flexible as possible.

 

[Instinctive]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

One thing you might not have thought of: if you plan on retiring early and using the Rule of 55, then leave it in the 401k. Can't use that on IRAs.

That's not the plan, but neither was losing my job due to a merger after 30 years. That's why I'm exploring options.
Would like to be as flexible as possible.

I basically never recommend converting to an IRA because you lose the backdoor. If at 50 thats not and won't be an issue, then it would come down to rule of 55 and to expense ratios on funds offered.

 

[Sullie]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .8% - .9% range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

I went back and re-read this and I had mistyped this. I meant that he quoted me between eight tenths of one percent and nine tenths of one percent or between .8% and .9%. I've corrected my mistake above there. My apologies for any confusion.

 

[Desert_Power]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

One thing you might not have thought of: if you plan on retiring early and using the Rule of 55, then leave it in the 401k. Can't use that on IRAs.

Same thing with the 72t I believe. But you could roll it back into a future 401k.

 

[-OZ-]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

One thing you might not have thought of: if you plan on retiring early and using the Rule of 55, then leave it in the 401k. Can't use that on IRAs.

Can’t use previous employer’s plan. Roll it into your current employer or the IRA. If back door Roth contributions are a factor roll it into your current employer

 

[Peggy]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

 

[-OZ-]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

You’re right, but if that’s really 0.08%, that’s not bad at all if their service is decent.

 

[Sand]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

You’re right, but if that’s really 0.08%, that’s not bad at all if their service is decent.

I don't remember Fidelity ever being that low. Maybe 0.8%. Vanguard used to (and maybe still does) have a service for 0.3%. If .08% and OP doesn't want to deal with it that's a great deal. But considering ~4% is a reasonable withdrawal rate having another .8-1.5% taken from that dramatically increases the stash you need. Super simple math, but if you wanted to live off of 4% (and take out 100k per year) paying 1% means you need 830k more to be safe. That's a big extra nut.

 

[Orange&Blue]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

IRA balance?

 

[-OZ-]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

You’re right, but if that’s really 0.08%, that’s not bad at all if their service is decent.

I don't remember Fidelity ever being that low. Maybe 0.8%. Vanguard used to (and maybe still does) have a service for 0.3%. If .08% and OP doesn't want to deal with it that's a great deal. But considering ~4% is a reasonable withdrawal rate having another .8-1.5% taken from that dramatically increases the stash you need. Super simple math, but if you wanted to live off of 4% (and take out 100k per year) paying 1% means you need 830k more to be safe. That's a big extra nut.

Totally agreed. The only reason imo to even consider paying that much is if it increases your confidence and they do all the planning, including taxes and estate planning, well.

 

[Runkle]

Maybe stupid question, but something I've never looked into before. Regarding tax-loss harvesting...

If I sell a collectible, coin, memorabilia, junk silver, etc., normally that's taxed at 28%. But, if I offset the profit with an equal loss by selling a depressed stock, then there's no tax. Then, after 31 days I maybe buy back that stock, or invest in something else, and it recovers, and I hold it for 1+ years, that is the normal 15% long term capital gains tax rate, right? So I can effectively dodge the 28% tax rate by offsetting with an investment type that would only be taxed 15%?

 

[Sand]

Maybe stupid question, but something I've never looked into before. Regarding tax-loss harvesting...

If I sell a collectible, coin, memorabilia, junk silver, etc., normally that's taxed at 28%. But, if I offset the profit with an equal loss by selling a depressed stock, then there's no tax. Then, after 31 days I maybe buy back that stock, or invest in something else, and it recovers, and I hold it for 1+ years, that is the normal 15% long term capital gains tax rate, right? So I can effectively dodge the 28% tax rate by offsetting with an investment type that would only be taxed 15%?

Yep - the cost is the opportunity cost in that 31 days.

 

[pecorino]

Beginning my online journey into looking at health insurance for my wife and daughter. I'm covered by my work plan but they're raising rates so much on families that I want to shop around. Where do I even begin?

 

[matttyl]

Beginning my online journey into looking at health insurance for my wife and daughter. I'm covered by my work plan but they're raising rates so much on families that I want to shop around. Where do I even begin?

I’m an agent, pm me if you’d like and we can talk about your options in general.

 

[Judge Smails]

Beginning my online journey into looking at health insurance for my wife and daughter. I'm covered by my work plan but they're raising rates so much on families that I want to shop around. Where do I even begin?

I’m an agent, pm me if you’d like and we can talk about your options in general.

I’d be interested as well. Paying very high COBRA for Cigna Open Access PPO now. Income will lower after this year so hoping can find cheaper options on the open market

 

[matttyl]

Beginning my online journey into looking at health insurance for my wife and daughter. I'm covered by my work plan but they're raising rates so much on families that I want to shop around. Where do I even begin?

I’m an agent, pm me if you’d like and we can talk about your options in general.

I’d be interested as well. Paying very high COBRA for Cigna Open Access PPO now. Income will lower after this year so hoping can find cheaper options on the open market

Happy to help, and everyone’s situation is different. I will say that you likely won’t be able to shop until open enrollment, and those rates and plans won’t be known until then (late this fall).

 

[Instinctive]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash. No equity, no bonus, all base.

From a personal finance perspective, I'm 100% sure that all base is better than some bonus/target that may or may not come true. I'm pretty sure getting cash instead of equity (especially because the amount of cash is higher than what I expected to get in a cash + equity valuation model) because if I had stock options or RSUs or whatever I'd just sell them when they vested and put the money back into a market index. Now, I can just put that amount of the cash into a market index, right?

Anything I may be missing / overthinking?

 

[ConstruxBoy]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash. No equity, no bonus, all base.

From a personal finance perspective, I'm 100% sure that all base is better than some bonus/target that may or may not come true. I'm pretty sure getting cash instead of equity (especially because the amount of cash is higher than what I expected to get in a cash + equity valuation model) because if I had stock options or RSUs or whatever I'd just sell them when they vested and put the money back into a market index. Now, I can just put that amount of the cash into a market index, right?

Anything I may be missing / overthinking?

What about taxes?

 

[Instinctive]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash. No equity, no bonus, all base.

From a personal finance perspective, I'm 100% sure that all base is better than some bonus/target that may or may not come true. I'm pretty sure getting cash instead of equity (especially because the amount of cash is higher than what I expected to get in a cash + equity valuation model) because if I had stock options or RSUs or whatever I'd just sell them when they vested and put the money back into a market index. Now, I can just put that amount of the cash into a market index, right?

Anything I may be missing / overthinking?

What about taxes?

You pay taxes on salary anyway, including equity compensation. So you lose a little bit of deferring, I think? Whenever you sell your company's stock you'd have a taxable event, and you pay taxes whenever an RSU vests on FMV. So instead of taxation at vesting and sale, you do face taxation up front. That's worth a certain $$, although offset by any option-based equity comp's chances of not even vesting.

 

[Sand]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash.

Getting to the important bit. You getting paid in a greeting card envelope or 8x11 manilla envelopes?

 

[Instinctive]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash.

Getting to the important bit. You getting paid in a greeting card envelope or 8x11 manilla envelopes?

lol. direct deposit like anything else. Just all base salary, no bonus, no equity, etc.

 

[The Z Machine]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash.

Getting to the important bit. You getting paid in a greeting card envelope or 8x11 manilla envelopes?

lol. direct deposit like anything else. Just all base salary, no bonus, no equity, etc.

I mean, if the job is good and the pay is high enough, what's wrong with being a wage slave?

 

[Instinctive]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash.

Getting to the important bit. You getting paid in a greeting card envelope or 8x11 manilla envelopes?

lol. direct deposit like anything else. Just all base salary, no bonus, no equity, etc.

I mean, if the job is good and the pay is high enough, what's wrong with being a wage slave?

That's pretty much my thought. Although "wage slave" implies some form of underpayment or being taken advantage of, which I don't think is happening here.

 

[The Z Machine]

I've decided to leave my firm this year, and one of the things I've been doing is looking at another actual work for someone job. I have an offer, and it meets my total comp targets...but it is 100% cash.

Getting to the important bit. You getting paid in a greeting card envelope or 8x11 manilla envelopes?

lol. direct deposit like anything else. Just all base salary, no bonus, no equity, etc.

I mean, if the job is good and the pay is high enough, what's wrong with being a wage slave?

That's pretty much my thought. Although "wage slave" implies some form of underpayment or being taken advantage of, which I don't think is happening here.

It's a term of art for the Reddit set.

All us W-2 schulbs are wage slaves. Most folks don't get RSUs or any form of equity unless we buy it (sometimes at a discount).

 

[-OZ-]

It's a term of art for the Reddit set.

All us W-2 schulbs are wage slaves

Of all the Reddit tropes, this one is the dumbest. You see people droning on about how horrible life is, how we’re slaves, etc. probably by an angsty 14yo.

 

[BassNBrew]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

Google isn't my friend here. I must not be using the right terms because I see nothing preventing this if you pay the taxes.

 

[Peggy]

Have a fairly large amount of money in previous employer 401k (Empower). I am 50.

I asked months ago but am now more serious about doing something.

Should I:
Move to new employer 401k (Fidelity - I have not created or started this yet. Trying to get situated. A lot of moving parts going on right now.)
Move to Fidelity IRA
Keep it at Empower
Move portion to new 401k and balance to IRA (if that is even possible)

Plan to research and find a Fidelity advisor for additional assistance.

Edit: Also have Roth through Fidelity. A portion of my former 401k is Roth.

My experience is purely anecdotal, I'm just an IT guy not a financial advisor nor expert, your mileage may vary, the usual disclaimers, etc. Roughly 60% of my retirement is in a couple of different buckets at Fidelity (401k & 401k Roth), 20% is in my company stock, 20% is with Vanguard.

Just giving you a heads up on what I would expect Fidelity would say. When I spoke with Fidelity, the person I spoke with told me we (my wife and I) could comfortably retire now but he said he wanted me to move all of our money over to Fidelity so he could manage it at less than 1% per year (he said .08 - .09 range) and he said he wanted to put our money into IRA's, different buckets, etc. so that he could lessen the tax burden upon withdrawal, maximize investment but he maintained that at this point, most of our money would be in conservative investments. I didn't get too far into the weeds regarding which specific types of IRA's, etc. because I'm not quite sure if I'm going with Fidelity or another company upon retirement. I wanted to do some more research on which place best suits our needs.

They all try to get that 1% from you, just say no thanks you already have a financial advisor. The only thing you have full control over is your expenses and you don't want to start by giving 1% off the top right off the bat.

Also wouldn't carry a IRA balance because you lose the backdoor. Keep it in 401k.

Google isn't my friend here. I must not be using the right terms because I see nothing preventing this if you pay the taxes.

You have to pay taxes based on the total sum of all IRAs. Govmt looks at them as one big IRA. That often makes it not worth it, plus a big hastle when filing taxes. Trust me, I missed the rule for 3 years as my wife had converted a bunch of 401k to an IRA and filing amended returns was not fun.

Without an IRA balance the backdoor conversation is a no-tax event.

After Tax money to IRA - convert to Roth IRA, pay no taxes as long as the conversation is 100% of your IRA balance.

 

[Peggy]

Google IRA aggregation rule and pro-rata rule.

Here's how it works:
IRA Aggregation Rule: The IRS considers all of your non-Roth IRAs (traditional, SEP, and SIMPLE IRAs) as a single, aggregated account when calculating the taxable portion of a Roth conversion or distribution.
Pro-Rata Rule: If your aggregated traditional IRA balance contains both pre-tax (deductible contributions and earnings) and after-tax (nondeductible contributions) money, any Roth conversion must be done proportionally. You cannot selectively convert only the after-tax portion to avoid taxes.
Example: If your total traditional IRA balance is $50,000, with $10,000 being after-tax contributions (20%) and $40,000 being pre-tax (80%), then any conversion to a Roth IRA will be treated as 20% tax-free and 80% taxable, regardless of which specific IRA account the funds are coming from.

 

[BassNBrew]

Google IRA aggregation rule and pro-rata rule.

Thanks. I will look into it. I was reading the posts above as that you can't do it, not that you just have to pay taxes. My strategy is when the next time the market takes a 25-30% dump, I'll convert and eat the taxes. Wish I was prepared to do this in early April as most of the stocks I bought around then have 2x and my total balance is up 40%.

 

[Peggy]

So if you had an IRA balance of 63,000 you wouldn't want to do a backdoor roth. Because the 7000 dollars is already after tax money and then you'd pay taxes on 90% of it (63,000 out of 70,000) again when you convert it.

 

[Peggy]

Google IRA aggregation rule and pro-rata rule.

Thanks. I will look into it. I was reading the posts above as that you can't do it, not that you just have to pay taxes. My strategy is when the next time the market takes a 25-30% dump, I'll convert and eat the taxes. Wish I was prepared to do this in early April as most of the stocks I bought around then have 2x and my total balance is up 40%.

So that's not a backdoor. That's just an IRA to IRA Roth conversion. I'm assuming the money in there is pretax so converting it is paying tax only once, the first time. The strategy to do that is doing it when you're in a low tax bracket. Just like I plan to do early in retirement for my 401k starting next year at a 11.5% effective tax rate. Then never pay taxes again.

I suppose trying to time the market might help taxes, but I think the better option is to wait until you're in a low tax bracket.

 

[tj1123]

Looking for some financial advice, well not me my 22 year old daughter.

Here some info:
Just graduated college. No college loans
Has a Discover card that she pays in full every month, well I do right now, but not for long.
Owns a 2021 Honda Civic (well I own it, but its hers)
Going to plan to live at home for a year or two.
Going into the Pharmaceutical industry.
What is the best way to handle her paychecks, or best place to put her money I guess is what I'm asking? If I need to provide some more info, I certainly will.

 

[Payne]

Looking for some financial advice, well not me my 22 year old daughter.

Here some info:
Just graduated college. No college loans
Has a Discover card that she pays in full every month, well I do right now, but not for long.
Owns a 2021 Honda Civic (well I own it, but its hers)
Going to plan to live at home for a year or two.
Going into the Pharmaceutical industry.
What is the best way to handle her paychecks, or best place to put her money I guess is what I'm asking? If I need to provide some more info, I certainly will.

I'm sort of in the same boat. Oldest (21) just graduated with two bachelors. Started her Master program two weeks ago.

She did get a loan for her Masters.
Car is hers (we bought)
Also has a Discover card. However, she took a trip to Europe and realized she needed a VISA.
Her and I opened a Roth for her when she first got a job. She puts money into that monthly. Just a little, but some is better than none.
She has a savings and checking account as well as a higher paying % account with Capital One.

 

[Peggy]

Looking for some financial advice, well not me my 22 year old daughter.

Here some info:
Just graduated college. No college loans
Has a Discover card that she pays in full every month, well I do right now, but not for long.
Owns a 2021 Honda Civic (well I own it, but its hers)
Going to plan to live at home for a year or two.
Going into the Pharmaceutical industry.
What is the best way to handle her paychecks, or best place to put her money I guess is what I'm asking? If I need to provide some more info, I certainly will.

Roth 401k while in her early lower tax bracket years. If there is any company match contribute at least that or you're giving away money.

 

[Buckna]

Looking for some financial advice, well not me my 22 year old daughter.

Here some info:
Just graduated college. No college loans
Has a Discover card that she pays in full every month, well I do right now, but not for long.
Owns a 2021 Honda Civic (well I own it, but its hers)
Going to plan to live at home for a year or two.
Going into the Pharmaceutical industry.
What is the best way to handle her paychecks, or best place to put her money I guess is what I'm asking? If I need to provide some more info, I certainly will.

Nice if no loans, and living at home let's her start saving right away.

-If her new job offers any 401k match contribute up to that amount to start.
-If company offers a Roth 401k option, considering using that instead of a normal 401k option as presumably she's just starting out and her tax bracket will be low compared to later in her career.
-ROTH IRA contributions what she can afford up to the max of $7K a year.
-Depending on her personal goals (does she want to buy a house some day?) either put some aside in a taxable brokerage account or contribute more to the 401k.
-IMHO - let her have some portion/amount to spend/enjoy life as well. With no loans and no rent payment, she's going to be able to get a good headstart on her financial well-being. Might consider something like charging her "rent" every month and that is the extra portion that goes into savings over and above the 401k match percentage.

That's my advice but curious what others may suggest to change or add!

 

[Instinctive]

Google IRA aggregation rule and pro-rata rule.

Thanks. I will look into it. I was reading the posts above as that you can't do it, not that you just have to pay taxes. My strategy is when the next time the market takes a 25-30% dump, I'll convert and eat the taxes. Wish I was prepared to do this in early April as most of the stocks I bought around then have 2x and my total balance is up 40%.

So that's not a backdoor. That's just an IRA to IRA Roth conversion. I'm assuming the money in there is pretax so converting it is paying tax only once, the first time. The strategy to do that is doing it when you're in a low tax bracket. Just like I plan to do early in retirement for my 401k starting next year at a 11.5% effective tax rate. Then never pay taxes again.

I suppose trying to time the market might help taxes, but I think the better option is to wait until you're in a low tax bracket.

I mean, sort of. That IS what the backdoor is. It's just that if you have an existing tIRA, the door is not open to you.

 

[tj1123]

Looking for some financial advice, well not me my 22 year old daughter.

Here some info:
Just graduated college. No college loans
Has a Discover card that she pays in full every month, well I do right now, but not for long.
Owns a 2021 Honda Civic (well I own it, but its hers)
Going to plan to live at home for a year or two.
Going into the Pharmaceutical industry.
What is the best way to handle her paychecks, or best place to put her money I guess is what I'm asking? If I need to provide some more info, I certainly will.

Nice if no loans, and living at home let's her start saving right away.

-If her new job offers any 401k match contribute up to that amount to start.
-If company offers a Roth 401k option, considering using that instead of a normal 401k option as presumably she's just starting out and her tax bracket will be low compared to later in her career.
-ROTH IRA contributions what she can afford up to the max of $7K a year.
-Depending on her personal goals (does she want to buy a house some day?) either put some aside in a taxable brokerage account or contribute more to the 401k.
-IMHO - let her have some portion/amount to spend/enjoy life as well. With no loans and no rent payment, she's going to be able to get a good headstart on her financial well-being. Might consider something like charging her "rent" every month and that is the extra portion that goes into savings over and above the 401k match percentage.

That's my advice but curious what others may suggest to change or add!

Preciate the reply!!! I should have said that, company does have a 401k and it matches either 4 or 5% cant remember right off hand, but do plan to put at least that amount to not loose any money.

 

[-OZ-]

So if you had an IRA balance of 63,000 you wouldn't want to do a backdoor roth. Because the 7000 dollars is already after tax money and then you'd pay taxes on 90% of it (63,000 out of 70,000) again when you convert it.

I might misunderstand this, as we’ve never had to use the back door, but wouldn’t the taxes be on $6,300 (90% of the $7,000 converted) and not the $63,000 remaining in the traditional IRA?

 

[Peggy]

So if you had an IRA balance of 63,000 you wouldn't want to do a backdoor roth. Because the 7000 dollars is already after tax money and then you'd pay taxes on 90% of it (63,000 out of 70,000) again when you convert it.

I might misunderstand this, as we’ve never had to use the back door, but wouldn’t the taxes be on $6,300 (90% of the $7,000 converted) and not the $63,000 remaining in the traditional IRA?

Yes. 63/70 is the 90% applied to the 7k. But the 7k is already after tax money if you're trying to do a backdoor. So you'd essentially be paying tax twice, or 1.9 times.

The same math is 0% if you dont carry an IRA balance.