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If you end up being able to you can transfer traditional to Roth at no or very low tax rates. This is superior to simply having the Roth (if you can transfer enough to get to where you want to go). So all is not lost here. I have everything in traditional or a 401k. Not sweating it.Binky The Doormat said:
No it's not a bad thing in the big picture, but I'm not wanting to pay a penny more in taxes than I already do. If I can offset that by deferring taxes, I will.
So I reached out to another financial planner in our area. Fee only, all of the same certifications (CFA, NAPFA, etc), $175 an hour to create the plan. Here is what they offer and below are the answers to my questions:
Agree, my will is like 15 years old and I need to update. That said all my financial assets have survivor benefit clauses that I keep updated, but in the end...in my case, it could lead to litigation. I don't want that at all.
Yea, 15 years is way past time to update. Depending on major life changes and complexity of your assets an annual review may be in order. I think most people are good every 5 years though. But 15? Geesh... top 10 songs of 2002 for perspective.....
Agreed, the question is the ideal breakdown. Which is really hard to know and depends on the individual.
Agreed on checking out dimensional. Lesser known doesn't make it bad but it's hard to beat vanguard.
Roth IRAs are limited to $5,500 but Roth 401ks can have contributions up to $18,000 of your own money (same as a traditional 401k).
Man, 2002.. in my first year of dental practice, 24 years old, was in fantastic shape, was banging my 19 year old assistant with the most perfect D breasts on a 105 pound frame, and was living from friday night happy hour to friday night happy hour. I was awesome then.
It is $5500 total for IRA for any combination of Roth or not.
I think that's the gig though. If I do a straight financial plan I can do hourly. I can then do Vanguard if I want on my own. If I want DFA, I'd have to go the percentage route, as individual investors can't buy it - must be through their preferred CFP's.
Thanks Dino, Sand made it seem like you could contribute more than the $5.5K to a Roth IRA.dino259 said:
I don't really disagree with the theory behind this, but there's really no way in hell I'd consider trying to do my own will or trust. You don't need to go to a mega-bigtime attorney, but there are plenty of reasonable attorneys who can handle this paperwork at a reasonable price. I don't provide legal advice to my clients - why would I try to be my own lawyer on something like this? I understand there are websites that walk you through this, but still.Chadstroma said:
Regarding wills, it depends on how complicated the situation is. Legal Zoom or the equivalent is fine for something straightforward. A lot of attorneys aren't going to do anything more than copy and paste names into a standard form in that situation, which is what an online service will do. For trusts or a more complicated will, I'd hire an attorney without question.
Just move money from a tax-deferred account into a Roth (and pony up the taxes). I've never understood the rationale of a 5.5K max contribution when you could just dump funds in from other sources.
I wouldn't trust myself with my own will and trust (and other legal instruments) and I didn't. I really do not have much in way of assets either as the Great Recession hit us hard and we are still trying to climb out of that hole. I was lucky that one of my first 'real' jobs back in the workforce back in 2012 was with a company that offered free legal services via Hyatt legal plans. It was about a year into our first child with our second on the way. So, it was great timing. Our assets at that time was almost non-existent other than a new home and retirement accounts. But we took advantage of it and had everything done. Once done, I asked the lawyer how much it would have all cost and the figure was around $2,500 (that is a trust, will, living will, POA, and medical POA each for my wife and myself). At that time- there is no way that I would have had $2,500 to drop on this. It would have been hard for me to come up with $250 at that time. If I did not have that opportunity, I would have looked into some DIY services for these things as a poor alternative (pun intended). If you have enough 'assets' that you have a computer and internet access and it is not paid for by your parents- then you need a will. A simple one will do and I don't think it costs much on these DIY options. If you have a few bucks and/or kids, then a trust starts to become needed as well. The more money the more this is needed and the more you need a pro to do it for you. If you have the money to spend on these things- then absolutely, don't skimp and save a few bucks to do it yourself. But if it you don't have the bucks- then at least get a will put together to get your affairs in order and make things much easier on loved ones in the event you pass.
5% fee? That can't possibly be right. And then he places you in American Funds? Nothing wrong with American Funds but if you are paying an advisor to manage your money they should not just be placing your money in open ended mutual funds(individual stocks, low cost etfs etc.)
There are many more posters much more knowledgeable than I am but you are crazy to be paying someone a 5% fee to do your investing.
Ok, this makes more sense. He is selling you an "A" share mutual fund with a front end sales charge of normally 5.75% but it is reduced to 5% because of a discount that you already own some American Funds. It is a one time fee up front and not charged annually. However, the annual expense ratio will be around .65% each year.
the fee was already addressed, but for the index fund, one of the keys is to not chase past results. For sure you want a good fund but I pick my ETFs and ride. FWIW, I probably need to rebalance soon.
only had it on my work computer which was wiped. (yeah, that was dumb of me) so I'm looking for a good prefab sheet that I can input my own funds, target allocation and have it automatically update. I can probably put one together myself but it's so much easier to edit one already made. I've searched on google but haven't found a new one I like enough yet.
"Dimensional’s ability to better target the driving forces behind stock returns allows them to have outperformed other index funds."
These are just factor funds, aka "smart beta." Or "dumb alpha" as I like to call them. They poo-poo active management but these factor funds are just a different form of active management. There was a study recently published by tOSU researchers that basically said these factors are basically BS p-hacking and almost all are statistically insignificant; the ones that aren't don't have nearly the benefit promised. This includes everyone's favorite "value stock" factor.
I still follow the yield hunters website and buy what he buys, mostly preferred stocks and exchange traded debt. I don't buy much, most of my cash went towards a real estate transaction recently so I've been a bit out of the game.
rental property? I'm still trying to figure out whether buying a rental home in a beach community we like makes sense long term. We're in no rush so hopefully there will be a downturn in that market in the next couple years, a buying opportunity. But the current debate I'm having with the wife is whether to build a large cabin (I've mentioned this in other threads) on land we own, but the rental community isn't big so I doubt we'd rent it out. But the cabin would be close enough to use a few times each month. It's the whole investment vs. use discussion.
definitely. Everything is a waste outside of basic food, water, basic level shelter, basic transportation to your employment, retirement savings, health care, and elite level reconstructive and cosmetic dental work.
do you have a link to that study?
