Jump to content
Fantasy Football - Footballguys Forums

Personal Finance Advice and Education!


Recommended Posts

Does anyone else find it odd that Biden is encouraging the establishment of a spousal / caregiver 401k while the easier answer is to simply increase the maximum annual contribution to IRAs?

Forget the politics of this question. I mean simply from the accounts perspective.

Edited by -OZ-
Link to post
Share on other sites
  • Replies 5.9k
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

Well, today we paid off the last 22 years of our mortgage.  We sold/closed our investment property last week that we bought in 2013.  We did well on it and rolled that money up with some savings and p

Can't really talk about it with RL friends and most of it is pre-tax, but sat down with the wife and figured out that the household is officially in the two comma club. Ten years ago I was unemployed

My big win was in getting educated on personal finance, getting organized, and making a plan. Details: 1. Learned the value of an HSA and contributed for 2019 and 2020. 2. Got my wife’s

3 hours ago, -OZ- said:

Does anyone else find it odd that Biden is encouraging the establishment of a spousal / caregiver 401k while the easier answer is to simply increase the maximum annual contribution to IRAs?

Forget the politics of this question. I mean simply from the accounts perspective.

I need to read up on his proposed ideas, I had read that we wanted to give tax credits instead of deductions.  In regards to your question my guess is that Biden wants the benefit for a small group not the general population.  But I agree with you that a change to IRA would make sense and be easier to adopt.  How is a caregiver going to get into a 401k?  Doesn’t make a lot of sense to me either.  IRA limits are weak and should be raised. Half of America doesn’t have access to a employer sponsored plan. The government should make IRAs contributions closer to 401ks for those without plans. 

Link to post
Share on other sites

What factors do you consider when determining when to start cutting back on life insurance. I recently turned 45 so my life insurance premiums through work jumped up a little bit. I pay for a basic coverage amount and then opt into additional coverage that's 5x my salary.

I don't feel like I should make any changes right now, but just wondering if there's general guidance on adjusting life insurance as you age.

Link to post
Share on other sites
1 hour ago, dgreen said:

What factors do you consider when determining when to start cutting back on life insurance. I recently turned 45 so my life insurance premiums through work jumped up a little bit. I pay for a basic coverage amount and then opt into additional coverage that's 5x my salary.

I don't feel like I should make any changes right now, but just wondering if there's general guidance on adjusting life insurance as you age.

For most people, insurance is a bell shaped curve.  When you are really young you insurance need is low.  As you age you begin to accumulate debts, wives, and children, your insurance need increases.  Most like to pay off debts, fund goals and/or provided income replacement with insurance.  Once the kids move out and the debts start to go down (and investments increase) then your insurance needs go down.  
 

Maybe give some thought to what you want the insurance to do for your loved ones and that will help guide you on coverage and when to decrease.  Of course there are other reason like wealth transfer where it makes sense to carry insurance until your death.  Lastly insurance is usually very affordable through work group policies you may choose to keep more insurance then you need.  Just some thoughts.  

  • Thanks 1
  • Thinking 1
Link to post
Share on other sites

Anyone ever look into becoming a signing agent as a part time retirement job?   Just closed on my refinance and I was talking to the woman about her job.   It seems like an ideal gig for part time work during retirement.  She gets to decide how many closing she wants to do.   Its all within 30 minutes of her house.   She gets paid between 80-200 per closing.   She is an independent contractor so she's on the hook for the extra payroll taxes.   Even if she only clears half of that, still not bad for what amounts to maybe 1.5 hours of work where you set your own schedule and you really don't have a boss.     

  • Like 1
  • Thanks 1
Link to post
Share on other sites

For all you podcast fans - I just started listening to Animal Spirits. Veryyy good podcast on the market, saving for retirement, Roth vs Traditional, etc.

No need to listen to them all but pick and choose based off your personal finance needs. 

  • Like 1
  • Thanks 4
Link to post
Share on other sites
1 hour ago, NutterButter said:

Anyone ever look into becoming a signing agent as a part time retirement job?   Just closed on my refinance and I was talking to the woman about her job.   It seems like an ideal gig for part time work during retirement.  She gets to decide how many closing she wants to do.   Its all within 30 minutes of her house.   She gets paid between 80-200 per closing.   She is an independent contractor so she's on the hook for the extra payroll taxes.   Even if she only clears half of that, still not bad for what amounts to maybe 1.5 hours of work where you set your own schedule and you really don't have a boss.     

I thought about it, but I can't carry a tune worth a lick. 

  • Like 1
  • Thinking 1
Link to post
Share on other sites
9 hours ago, dgreen said:

What factors do you consider when determining when to start cutting back on life insurance. I recently turned 45 so my life insurance premiums through work jumped up a little bit. I pay for a basic coverage amount and then opt into additional coverage that's 5x my salary.

I don't feel like I should make any changes right now, but just wondering if there's general guidance on adjusting life insurance as you age.

Generally, keep insurance until those you leave behind won't be in bad financial shape if you died. 

For me, I'll probably keep my policy until I'm 70. 30 year term for $750k, $84 monthly. I don't expect to need it when we're 60, but it will be cheap enough that it's worth keeping. It's highly unlikely that we'd need a policy after 70. We don't have a policy on the wife. Other than my expenses increasing for dating, financially I'd be fine.

  • Thanks 1
Link to post
Share on other sites
6 hours ago, NutterButter said:

Anyone ever look into becoming a signing agent as a part time retirement job?   Just closed on my refinance and I was talking to the woman about her job.   It seems like an ideal gig for part time work during retirement.  She gets to decide how many closing she wants to do.   Its all within 30 minutes of her house.   She gets paid between 80-200 per closing.   She is an independent contractor so she's on the hook for the extra payroll taxes.   Even if she only clears half of that, still not bad for what amounts to maybe 1.5 hours of work where you set your own schedule and you really don't have a boss.     

That, or plain old notarial services seem like decent options.

Link to post
Share on other sites
8 hours ago, Lion to myself said:

For most people, insurance is a bell shaped curve.  When you are really young you insurance need is low.  As you age you begin to accumulate debts, wives...

 

🤔😰🤯 Those seem like horrendous life choices.

  • Laughing 1
Link to post
Share on other sites

So not sure this is the right place to put/ask this but I'll do it anyway....I'm 49, married, no kids.  Did pretty good job saving for retirement but unfortunately it is mostly all in 401k/IRA.  Would like to retire at 55.  I know there is the 55 rule where you can access your 401k without penalty at 55 if you retire/quit the job where the 401k is at.  The issue is my employer doesn't allow partial distributions from the plan so assuming if I want to access this money I need to remove it all and then I would get slammed with taxes?  Any ideas how I can access this money but just take out $70k or so to avoid large tax charges?  Plan to start putting much more in after tax accounts, but not sure how much I can grow that in 6 years....

No debts, home mortgage free.

  • Love 1
Link to post
Share on other sites
12 minutes ago, yak651 said:

So not sure this is the right place to put/ask this but I'll do it anyway....I'm 49, married, no kids.  Did pretty good job saving for retirement but unfortunately it is mostly all in 401k/IRA.  Would like to retire at 55.  I know there is the 55 rule where you can access your 401k without penalty at 55 if you retire/quit the job where the 401k is at.  The issue is my employer doesn't allow partial distributions from the plan so assuming if I want to access this money I need to remove it all and then I would get slammed with taxes?  Any ideas how I can access this money but just take out $70k or so to avoid large tax charges?  Plan to start putting much more in after tax accounts, but not sure how much I can grow that in 6 years....

No debts, home mortgage free.

Why not just save anything surplus to the match % into an aftertax brokerage/Roth IRA? There are ways to access the 401k/IRA money early as well, but you should still have time to save enough to bridge those 4.5 years.

Link to post
Share on other sites
8 minutes ago, Desert_Power said:

Why not just save anything surplus to the match % into an aftertax brokerage/Roth IRA? There are ways to access the 401k/IRA money early as well, but you should still have time to save enough to bridge those 4.5 years.

Yes - current plan is to invest at least 24k/year into aftertax  brokerage account.  Just was seeing if there is maybe something out there I should be researching/looking at.  Even at 59.5 assuming I need to roll the entire 401k into a IRA since the plan doesn't allow partial distributions?  And then from that IRA I can get the payment amount I desire?

I have asked my company HR if there is ability to bring up change to our plan to allow partial distributions and they didn't want to take on the added cost of this.  Hoping in the next years others will request this as would make things much easier.

Link to post
Share on other sites
Just now, yak651 said:

Yes - current plan is to invest at least 24k/year into aftertax  brokerage account.  Just was seeing if there is maybe something out there I should be researching/looking at.  Even at 59.5 assuming I need to roll the entire 401k into a IRA since the plan doesn't allow partial distributions?  And then from that IRA I can get the payment amount I desire?

I have asked my company HR if there is ability to bring up change to our plan to allow partial distributions and they didn't want to take on the added cost of this.  Hoping in the next years others will request this as would make things much easier.

https://www.investopedia.com/terms/r/rule72t.asp

Converting 401k to IRA is very easy. You could also start Roth conversion ladders if you have an older 401k/IRA out there.

  • Like 4
Link to post
Share on other sites

Hoping I can get some assistance on a Capital Gains question.

So our planner who we left lastyear had us in only 1 taxable account (The rest being Traditional & Roth Ira's). Anyway, the only thing in the taxable account was a bond fund that we sold as soon as we took control of our accounts. We had only made 5K on that fund so I believe that's what we will owe Capital Gains on?

I tried looking at statements on our Vanguard account, but the only thing that I see is us buying VTSAX for the bond fund. I don't see the paperwork I need for the IRS.

Wondering if anyone has a Vanguard account and could assist?

Thanks for any help.

 

Link to post
Share on other sites
10 minutes ago, steelerfan1 said:

Hoping I can get some assistance on a Capital Gains question.

So our planner who we left lastyear had us in only 1 taxable account (The rest being Traditional & Roth Ira's). Anyway, the only thing in the taxable account was a bond fund that we sold as soon as we took control of our accounts. We had only made 5K on that fund so I believe that's what we will owe Capital Gains on?

I tried looking at statements on our Vanguard account, but the only thing that I see is us buying VTSAX for the bond fund. I don't see the paperwork I need for the IRS.

Wondering if anyone has a Vanguard account and could assist?

Thanks for any help.

 

You should receive a tax statement from vanguard if you haven’t already. It’s in the Tax Center section of the site. 

  • Thanks 1
Link to post
Share on other sites
1 hour ago, steelerfan1 said:

Hoping I can get some assistance on a Capital Gains question.

So our planner who we left lastyear had us in only 1 taxable account (The rest being Traditional & Roth Ira's). Anyway, the only thing in the taxable account was a bond fund that we sold as soon as we took control of our accounts. We had only made 5K on that fund so I believe that's what we will owe Capital Gains on?

I tried looking at statements on our Vanguard account, but the only thing that I see is us buying VTSAX for the bond fund. I don't see the paperwork I need for the IRS.

Wondering if anyone has a Vanguard account and could assist?

Thanks for any help.

 

I just checked today and Vanguard said my 1099 would be available on 02/15.  As thecatch said, check the Tax Center and it should give you the date yours will be available. 

  • Thanks 1
Link to post
Share on other sites
On 1/26/2021 at 10:36 AM, yak651 said:

Yes - current plan is to invest at least 24k/year into aftertax  brokerage account.  Just was seeing if there is maybe something out there I should be researching/looking at.  Even at 59.5 assuming I need to roll the entire 401k into a IRA since the plan doesn't allow partial distributions?  And then from that IRA I can get the payment amount I desire?

I have asked my company HR if there is ability to bring up change to our plan to allow partial distributions and they didn't want to take on the added cost of this.  Hoping in the next years others will request this as would make things much easier.

Can you get a new job at 54? I’ve heard of many people taking a new easy gig at 54/55 just to access this policy. 

Link to post
Share on other sites
On 1/26/2021 at 10:09 AM, yak651 said:

So not sure this is the right place to put/ask this but I'll do it anyway....I'm 49, married, no kids.  Did pretty good job saving for retirement but unfortunately it is mostly all in 401k/IRA.  Would like to retire at 55.  I know there is the 55 rule where you can access your 401k without penalty at 55 if you retire/quit the job where the 401k is at.  The issue is my employer doesn't allow partial distributions from the plan so assuming if I want to access this money I need to remove it all and then I would get slammed with taxes? 

Did not know about this.  Good to know.   Thanks.  Is a partial distribution almost the same as a partial rollover?  I imagine if they are different, since you plan doesn't offer the one, it wouldn't offer the other either.   

You can also do a 72t distribution until you turn 59.5.  

Link to post
Share on other sites
On 1/31/2021 at 2:21 PM, steelerfan1 said:

Hoping I can get some assistance on a Capital Gains question.

So our planner who we left lastyear had us in only 1 taxable account (The rest being Traditional & Roth Ira's). Anyway, the only thing in the taxable account was a bond fund that we sold as soon as we took control of our accounts. We had only made 5K on that fund so I believe that's what we will owe Capital Gains on?

I tried looking at statements on our Vanguard account, but the only thing that I see is us buying VTSAX for the bond fund. I don't see the paperwork I need for the IRS.

Wondering if anyone has a Vanguard account and could assist?

Thanks for any help.

 

Can always call vanguard.  If nothing else, you can go pen and paper:

Buy price of bonds.  Income payments from the bonds, sell price of bonds and do the math.  

Is 5,000 the sales price or the profit?  Bonds typically don't add a large amount of income and don't often cost you a ton in capitol gains.  

  • Thanks 1
Link to post
Share on other sites
16 hours ago, jm192 said:

Can always call vanguard.  If nothing else, you can go pen and paper:

Buy price of bonds.  Income payments from the bonds, sell price of bonds and do the math.  

Is 5,000 the sales price or the profit?  Bonds typically don't add a large amount of income and don't often cost you a ton in capitol gains.  

Thanks jm,

5K was the profit from the sale.

Link to post
Share on other sites
2 minutes ago, steelerfan1 said:

Thanks jm,

5K was the profit from the sale.

If that's the profit, you should be able to just go back and see the income deposits from the bond fund and that's what you owe capitol gains on.  

FWIW going forward (and you may already know this so forgive me if I'm telling you something you know), you can deduct up to 3,000$ a year in capitol losses against your gains.  If the bonds were all you had in the taxable acct, then that won't be an option this time, but something to consider for the future.

Link to post
Share on other sites
On 1/25/2021 at 2:33 PM, NutterButter said:

Anyone ever look into becoming a signing agent as a part time retirement job?   Just closed on my refinance and I was talking to the woman about her job.   It seems like an ideal gig for part time work during retirement.  She gets to decide how many closing she wants to do.   Its all within 30 minutes of her house.   She gets paid between 80-200 per closing.   She is an independent contractor so she's on the hook for the extra payroll taxes.   Even if she only clears half of that, still not bad for what amounts to maybe 1.5 hours of work where you set your own schedule and you really don't have a boss.     

How would you get into something like this?

Link to post
Share on other sites
13 minutes ago, JoeSteeler said:

How would you get into something like this?

I didn't probe her for too many details, but here's what I got out of her.   There's an exam you need to take to get certified (if that's even the correct term) so there's a good amount of studying for that.   Once you pass that exam,  apparently you can just go somewhere online to just sign up for the openings (this part was a little fuzzy) that title companies post.   She also formed an llc; not sure if that's required.   The way she made it sound, its all pretty straightforward. 

  • Like 1
  • Thanks 1
Link to post
Share on other sites

Cross posted to the mortgage thread:

I've only ever bought 1 home, so I'm kinda clueless on this stuff...

Say I want to buy a new home and move.  The challenge that I'm facing is that there is a VERY limited stock of houses that meet my needs... I want to stay in the same neighborhood, and the size/layout are critical, so there's only about 50 total that meet my needs and some of those are out of my price range.  If average turnover is 20 years, that's only 2.5 houses / year that are available and if I eliminate the ones out of my price range, then a house is likely to come up every 6 mo. or so.    Therefore, I need to be able to move quickly to put an offer on a home that comes up for sale, since they don't turn over that often.  But getting a 20%+ payment would require selling my home to get the equity out.  So, how do I accomplish this?

One idea I had was to pull $50k our of my 401k and $50k out fo wife's 403b.  Use that plus some savings to get to 20% down.  Then, after the move, put my current house up for sale.  Once sold, take the proceeds and repay the 401k/403b loans.

What's the downside to this plan?  How do I line up the financing now so that I can move quickly on a home that comes up for sale?  Are there tax implications for taking this loan and repaying it?  What if the repayment happens in another calendar year?

Are there any other options besides trying to list my house at the same time and placing a contingency offer?

Link to post
Share on other sites
4 hours ago, jm192 said:

If that's the profit, you should be able to just go back and see the income deposits from the bond fund and that's what you owe capitol gains on.  

FWIW going forward (and you may already know this so forgive me if I'm telling you something you know), you can deduct up to 3,000$ a year in capitol losses against your gains.  If the bonds were all you had in the taxable acct, then that won't be an option this time, but something to consider for the future.

Thank you again! I can see where we sold off the bond fund for the VTSAX in groups but nothing specific with the exact profit made. I'm going to wait for the 2/15 statement to come out and if I cant figure that out I will call Vanguard. I did not know about that 3k thing either as I haven't been at this very long.

Link to post
Share on other sites

Anyone know where to input a closed investment for a capital loss in TurboTax?

For round numbers: I purchased a $100 stake in an LLC in 2018. The LLC held an asset that generated $20 paid to me in 2019. This was reported on a 1099-DIV in box 3: "Return of Principal/Cost Basis" and not as a dividend/gain last year.

In 2020 the underlying asset was disposed and the LLC closed. I received no further money and no 1099-DIV for 2020 as there was no money coming my way. 

 

Where in TurboTax can I input the -$80 capital loss so I can offset other capital gains?

Link to post
Share on other sites
Just now, shades said:

Anyone know where to input a closed investment for a capital loss in TurboTax?

For round numbers: I purchased a $100 stake in an LLC in 2018. The LLC held an asset that generated $20 paid to me in 2019. This was reported on a 1099-DIV in box 3: "Return of Principal/Cost Basis" and not as a dividend/gain last year.

In 2020 the underlying asset was disposed and the LLC closed. I received no further money and no 1099-DIV for 2020 as there was no money coming my way. 

 

Where in TurboTax can I input the -$80 capital loss so I can offset other capital gains?

 

think the right answer is under Personal > Investment Income (1099-B or Broker Statements) > Stocks, Mutual Funds, Bonds, Other 

Then: Add More Sales > click "NO, I did NOT get a 1099-B or brokerage statement for this sale" > Type of Investment as "Everything Else"

Then: Input my Net Proceeds as $0 and the date of sale the date the LLC dissolved. 

Then: Acquired through Purchase, input only $80 as my "cost or other basis" (not the full $100 as the Box 3 on the 1099-DIV reported a reduction in cost basis in 2019) and then date of original purchase, and it seems to call it an $80 Loss on my Schedule D. Is that right?

 

IRS pub. 551 refers to "nontaxable corporate distributions" as a reduction in cost basis so I think that lines up with my 1099-DIV calling box 3 "return of capital. To the extent of your cost (or other basis) in the stock, the distribution reduces your basis and is not taxable. Any amount received in excess of your basis is taxable to you as capital gain"

 

Link to post
Share on other sites
18 hours ago, The Z Machine said:

What's the downside to this plan?  How do I line up the financing now so that I can move quickly on a home that comes up for sale?  Are there tax implications for taking this loan and repaying it?  What if the repayment happens in another calendar year?

The downside is that you’re taking $100k out of the market.  But this may still be your best option though.  There are no tax implications for taking the loan or repaying no matter the year.  You will owe interest even if you pay off early but you need to check with your 401k providers for the details on that.  You will want to get Pre-Approved (not pre-qualified) for the new loan to make you a strong buyer.  You will need to qualify for both payments if your intentions are to buy the new home before selling your current. 

Home Equity loan is another option instead of the retirement plan loans.  That would add another payment to your situation in regards to being Pre-Approved though.  The 401k loan payments do not get added to your debt payments when a lender looks to Pre-Approve you.  

  • Like 2
Link to post
Share on other sites
On 1/31/2021 at 3:21 PM, steelerfan1 said:

Hoping I can get some assistance on a Capital Gains question.

So our planner who we left lastyear had us in only 1 taxable account (The rest being Traditional & Roth Ira's). Anyway, the only thing in the taxable account was a bond fund that we sold as soon as we took control of our accounts. We had only made 5K on that fund so I believe that's what we will owe Capital Gains on?

I tried looking at statements on our Vanguard account, but the only thing that I see is us buying VTSAX for the bond fund. I don't see the paperwork I need for the IRS.

Wondering if anyone has a Vanguard account and could assist?

Thanks for any help.

 

Do you have access to the account history online?  If so, if you navigate to My Accounts -> Balances & Holdings, there is a menu item under the account title called “Cost Basis.”  On that page there are 3 options; select “Realized Gain & Losses.”   This will show you the proceeds from the bond fund sale, the cost basis, and what gain/loss you have (and if it is short or long term).  
 

Under My Accounts, you can select “Dividends & Capital Gains”.  Here you can select the date range to see what income you received.  On a bond fund, you pay income tax on the interest payments received (unless it was a municipal bond fund).  You pay capital gains tax on the difference between the sale and purchase price.  
 

You should get a 1099 in a week or so. This tax document will also give you all the info you need to file your taxes. 
 

 

  • Thanks 1
Link to post
Share on other sites
48 minutes ago, Lion to myself said:

The downside is that you’re taking $100k out of the market.  But this may still be your best option though.  There are no tax implications for taking the loan or repaying no matter the year.  You will owe interest even if you pay off early but you need to check with your 401k providers for the details on that.  You will want to get Pre-Approved (not pre-qualified) for the new loan to make you a strong buyer.  You will need to qualify for both payments if your intentions are to buy the new home before selling your current. 

Home Equity loan is another option instead of the retirement plan loans.  That would add another payment to your situation in regards to being Pre-Approved though.  The 401k loan payments do not get added to your debt payments when a lender looks to Pre-Approve you.  

Thanks for the feedback.  In order to get "pre-approved" for the loan for the new house, I assume I must execute the 401k loans before the application, so that I show i have enough liquid to cover the down payment.  Or is there another way?

Link to post
Share on other sites
1 hour ago, The Z Machine said:

Thanks for the feedback.  In order to get "pre-approved" for the loan for the new house, I assume I must execute the 401k loans before the application, so that I show i have enough liquid to cover the down payment.  Or is there another way?

Is the 20% required by the HOA? You have home equity in your current home, perhaps a home equity loan for the 20%? You should start a conversation with your preferred lender.

  • Like 1
Link to post
Share on other sites
3 hours ago, The Z Machine said:

Thanks for the feedback.  In order to get "pre-approved" for the loan for the new house, I assume I must execute the 401k loans before the application, so that I show i have enough liquid to cover the down payment.  Or is there another way?

No. You will not have to execute the loans until you are ready to buy (seller accepts your offer). Your lender will want to know the source of the funds so most likely you will provide your 401k statements as proof of funds.  Your approval will be contingent on carrying that out.  As Dezbelief stated above, the next step would be to engage your lender and have this discussion. 

  • Like 1
  • Thanks 1
Link to post
Share on other sites
4 hours ago, Andrew74 said:

Do you have access to the account history online?  If so, if you navigate to My Accounts -> Balances & Holdings, there is a menu item under the account title called “Cost Basis.”  On that page there are 3 options; select “Realized Gain & Losses.”   This will show you the proceeds from the bond fund sale, the cost basis, and what gain/loss you have (and if it is short or long term).  
 

Under My Accounts, you can select “Dividends & Capital Gains”.  Here you can select the date range to see what income you received.  On a bond fund, you pay income tax on the interest payments received (unless it was a municipal bond fund).  You pay capital gains tax on the difference between the sale and purchase price.  
 

You should get a 1099 in a week or so. This tax document will also give you all the info you need to file your taxes. 
 

 

Thanks Andrew.

Looking at that it shows that there is $21 in short term gain and $534 long term for total of $555.00.

Now this is only showing the bond fund when it was transferred over into Vanguard from Ameriprise, so it's not showing the initial purchase. I guess we will need to go through the Ameriprise stuff to see if there's anything there?

 

Also, thank for the SM pitch. Not in for a lot but its up nicely.

Link to post
Share on other sites
20 minutes ago, steelerfan1 said:

Thanks Andrew.

Looking at that it shows that there is $21 in short term gain and $534 long term for total of $555.00.

Now this is only showing the bond fund when it was transferred over into Vanguard from Ameriprise, so it's not showing the initial purchase. I guess we will need to go through the Ameriprise stuff to see if there's anything there?

 

Also, thank for the SM pitch. Not in for a lot but its up nicely.

Normally the cost basis (for you the purchase price at Ameriprise) transfers over.   You could call Vanguard and ask if that is the case.  

  • Thanks 1
Link to post
Share on other sites
1 hour ago, Andrew74 said:

Normally the cost basis (for you the purchase price at Ameriprise) transfers over.   You could call Vanguard and ask if that is the case.  

It should but I had issues with RBC when my FIL passed. He left my wife and her two sisters some stocks. It wasn’t a huge amount (still welcome, obviously not a good reason why but he was a good guy and made sure he left it to them) but I think RBC flailed on the form they sent the IRS. It was a couple years ago and earlier this year I got an @ $25k tax bill and was like WTF. Well, the cost basis that the IRS had was $0 (like I found stock certificates on the ground) and it was all short term gains. I freaked out a bit but then went through my tax forms to make sure I didn’t miss anything. I hadn’t and I had to fill out why everything was long term due to inheritance and the cost basis was based on the date of passing. 6 months later and I now am getting a $500 refund once they sort it all out. I used TurboTax and did it right so I’m just going to take it and not question anything. Long story, but it’s good to have the original cost basis and proof as RBC could have cared less since I moved it all to Fidelity.

Edited by stbugs
  • Like 1
Link to post
Share on other sites
2 hours ago, stbugs said:

 It was a couple years ago and earlier this year I got an @ $25k tax bill and was like WTF. Well, the cost basis that the IRS had was $0 (like I found stock certificates on the ground) and it was all short term gains. 

When all the paperwork doesn't line up this seems to be what the IRS always does.  I guess it gets people to respond to it.

Link to post
Share on other sites
14 minutes ago, Sand said:

When all the paperwork doesn't line up this seems to be what the IRS always does.  I guess it gets people to respond to it.

Yep or just pay the bill if you freak out. I was, shall we say, caught off guard. I mean a bill for that much is problematic. I was pretty sure I hadn’t screwed up that bad so I printed out the tax forms and went line by line. It’s almost not funny how somehow it changed to a refund owed after I meticulously listed out the day of passing and all the stock prices and how the law said it’s based on that day’s cost basis and always considered long term gains. I’d say I’m in the minority of how people respond. 

Link to post
Share on other sites
On 2/5/2021 at 1:09 PM, The Z Machine said:

Cross posted to the mortgage thread:

I've only ever bought 1 home, so I'm kinda clueless on this stuff...

Say I want to buy a new home and move.  The challenge that I'm facing is that there is a VERY limited stock of houses that meet my needs... I want to stay in the same neighborhood, and the size/layout are critical, so there's only about 50 total that meet my needs and some of those are out of my price range.  If average turnover is 20 years, that's only 2.5 houses / year that are available and if I eliminate the ones out of my price range, then a house is likely to come up every 6 mo. or so.    Therefore, I need to be able to move quickly to put an offer on a home that comes up for sale, since they don't turn over that often.  But getting a 20%+ payment would require selling my home to get the equity out.  So, how do I accomplish this?

One idea I had was to pull $50k our of my 401k and $50k out fo wife's 403b.  Use that plus some savings to get to 20% down.  Then, after the move, put my current house up for sale.  Once sold, take the proceeds and repay the 401k/403b loans.

What's the downside to this plan?  How do I line up the financing now so that I can move quickly on a home that comes up for sale?  Are there tax implications for taking this loan and repaying it?  What if the repayment happens in another calendar year?

Are there any other options besides trying to list my house at the same time and placing a contingency offer?

Do you have equity in your current house?  Rates are super low so you could try to pull some out via a refinance. 

 

I dont know the rules but I am generally aware that it can be very costly to pull money out of 401k, etc.  Also think very beneficial to keep yourself fully invested. 

Edited by Redwes25
Link to post
Share on other sites
On 2/5/2021 at 1:09 PM, The Z Machine said:

Cross posted to the mortgage thread:

I've only ever bought 1 home, so I'm kinda clueless on this stuff...

Say I want to buy a new home and move.  The challenge that I'm facing is that there is a VERY limited stock of houses that meet my needs... I want to stay in the same neighborhood, and the size/layout are critical, so there's only about 50 total that meet my needs and some of those are out of my price range.  If average turnover is 20 years, that's only 2.5 houses / year that are available and if I eliminate the ones out of my price range, then a house is likely to come up every 6 mo. or so.    Therefore, I need to be able to move quickly to put an offer on a home that comes up for sale, since they don't turn over that often.  But getting a 20%+ payment would require selling my home to get the equity out.  So, how do I accomplish this?

One idea I had was to pull $50k our of my 401k and $50k out fo wife's 403b.  Use that plus some savings to get to 20% down.  Then, after the move, put my current house up for sale.  Once sold, take the proceeds and repay the 401k/403b loans.

What's the downside to this plan?  How do I line up the financing now so that I can move quickly on a home that comes up for sale?  Are there tax implications for taking this loan and repaying it?  What if the repayment happens in another calendar year?

Are there any other options besides trying to list my house at the same time and placing a contingency offer?

So your concern is that you wouldn't want to put in an offer contingent on your existing home sale? What kind of loan can you get approved for with existing savings? I'm not sure why having 20% down should be a particular hurdle. You'd only pay the PMI until you sell your existing home. Not a big deal at all compared with giving up market returns.

Link to post
Share on other sites

Question for y'all to see, maybe I'm missing something.

We're a few years away from buying a new vehicle, and I've been investing the money. I'm not concerned about a drop with the time and the fact that if the account drops we can either get a less expensive vehicle, wait, or finance.

So, just looking at it now, I've put in $20k, the account is at $30k.  We'll probably buy another Highlander or something similar. For the sake of simplicity, assume the vehicle costs $30k. (It will probably be more, especially with tax and all but roll with it as it doesn't change the point of the question). 

Assuming these are all LTCG, why would one pay $1500 in tax (15% of $10,000) when financing is 1.79% (Navy Federal rates today)? Assuming a 60 month loan and not paying it off early, the interest is still less than the capital gains tax. 

Edited by -OZ-
Link to post
Share on other sites
On 2/6/2021 at 7:33 AM, The Z Machine said:

Thanks for the feedback.  In order to get "pre-approved" for the loan for the new house, I assume I must execute the 401k loans before the application, so that I show i have enough liquid to cover the down payment.  Or is there another way?

Out of curiosity, any reason you skipped past the home equity suggestion? I've been considering the same dynamics you describe re: timing of buy/sell and just assumed I'd bridge with home equity (which would be quickly repaid once the house sells) and never even considered doing anything with 401K.

Link to post
Share on other sites

So, would like some thoughts on the accounts we have set up. This is probably a TLDR, but am throwing it out there anyway.

When we left Ameriprise last April, the wife was in a Simple IRA and a Roth IRA. The Simple allowed her to contribute more than the 6K annually.

When we transferred all of the accounts over to Vanguard she was put in a Traditional IRA instead of the Simple. This of course limits her to the 6K annual contribution.

Since this is the first year we are going it on our own we figured we can set up a Simple IRA account sometime in the next few months that way the contributions can be increased.

I started thinking though that with me being about 8 years out from retirement and her being 6 years younger than I and the good possibility of us relocating to another state when I retire which would drastically reduce her income, would it make sense instead of opening the Simple IRA for her just to put the funds into our taxable account that way they could be accessed when needed?

Her only being able to put 6K in the IRA for a tax shelter will sting us a bit during tax time now, but it would be nice to know we have the option of getting cash before she reaches 59.5.

 

Is this wise or should you always go for the IRA?

 

Link to post
Share on other sites

I am starting to take more of an active role in my investments. I have a financial advisor who seems to be doing a good job with my investments.

I did finally start to look at one investment with him which is a rollover IRA.

It is called the American Funds PMC Active Core Portfolio - Moderate growth. It invests in numerous funds and overall its been doing well.

I look and realized that they were charging a 1.25% management fee and was wondering if this was too much?

I guess the more this fund makes, the less money they would be taking out, but wanted to get your advice on whether to look for something else for this rollover IRA.

Thanks!

 

Edited by b-snatchers
Link to post
Share on other sites
3 minutes ago, b-snatchers said:



I look and realized that they were charging a 1.25% management fee and was wondering if this was too much?

 

Not only is that too much, but if your advisor is pushing products such as these, I’d probably be looking for a new, fee-only advisor. Is the current one a fiduciary?

Link to post
Share on other sites
10 minutes ago, Gawain said:

Not only is that too much, but if your advisor is pushing products such as these, I’d probably be looking for a new, fee-only advisor. Is the current one a fiduciary?

The current one is not a fiduciary (or at least I don't think). I am sorry to say I don't know for sure. We have been using him for years as he is someone who works at our local bank - he is the VP of investments there

Link to post
Share on other sites
2 hours ago, b-snatchers said:

I am starting to take more of an active role in my investments. I have a financial advisor who seems to be doing a good job with my investments.

I did finally start to look at one investment with him which is a rollover IRA.

It is called the American Funds PMC Active Core Portfolio - Moderate growth. It invests in numerous funds and overall its been doing well.

I look and realized that they were charging a 1.25% management fee and was wondering if this was too much?

I guess the more this fund makes, the less money they would be taking out, but wanted to get your advice on whether to look for something else for this rollover IRA.

Thanks!

 

I looked up the fund for you: American Funds PMC Active Core Portfolio - Moderate growth. It looks like a well-diversified static allocation portfolio mixed between domestic and international stocks and bonds.

This is Vanguard's 0.13 expense ratio LifeStrategy Moderate Growth Fund. This is not an apples-to-apples comparison as I simply went off of the selected fund's strategy of "Moderate Growth". The American Funds portfolio is 73% equities to fixed income, while the Vanguard is 60%.

Over the past eight years, the Vanguard fund has returned 8.5% to 7.75% for the American Funds portfolio.

Note the listed expense ratio in the link to the American Funds portfolio is 0.53, so I'm not sure if the 1.25% fee you were quoted includes that, or is on top of it.

So for every $10,000 invested in the portfolio that your advisor selected, you pay $112-165 more without evidence of outperformance over this particular simpler set and forget option.

  • Like 2
Link to post
Share on other sites
8 hours ago, steelerfan1 said:

Is this wise or should you always go for the IRA?

Simple IRAs are tied to an employer and you won’t be able to open one up just for yourself.  Nothing wrong with going after tax if you need to build that up for withdrawals before 59 1/2.  If eligible for the Roth still, then that could be a nice option.  You can access contributions before 59 1/2.  

  • Thanks 1
Link to post
Share on other sites
3 hours ago, b-snatchers said:

The current one is not a fiduciary (or at least I don't think). I am sorry to say I don't know for sure. We have been using him for years as he is someone who works at our local bank - he is the VP of investments there

This is an advisory account so he is acting as a fiduciary on this account but not necessarily every account you have with him.  D House brings up an excellent question, is the 1.25% inclusive of the portfolio cost which is .53% or is in on top of that.  Going with low cost option makes sense if your ready to go it alone especially if you only rely on the advisor for only asset management.  Good advisors add a lot more value than just asset management, so you will need to decide if he is worth it.  

  • Like 1
Link to post
Share on other sites
5 hours ago, b-snatchers said:

I am starting to take more of an active role in my investments. I have a financial advisor who seems to be doing a good job with my investments.

I did finally start to look at one investment with him which is a rollover IRA.

It is called the American Funds PMC Active Core Portfolio - Moderate growth. It invests in numerous funds and overall its been doing well.

I look and realized that they were charging a 1.25% management fee and was wondering if this was too much?

I guess the more this fund makes, the less money they would be taking out, but wanted to get your advice on whether to look for something else for this rollover IRA.

Thanks!

 

I've let Schwab manage my 401K and Prudential manage my wife's 401K for their fee, though 1.25% does seem high.  

I've slowly been reading/learning over the last 2-3 years and feel pretty confident in taking over the asset management at this point.  

Most of what they bring you, you can learn/do yourself.

#1:  Beat the tax man.  Max your 401K, your roth IRA, any other tax deferred accounts.  Get a good accountant.  You don't NEED a financial advisor here.  It may be a wakeup call from someone trained in finances to say "Why the hell are you leaving free money on the table?"  But you certainly don't need them.

#2.  Investing wisely:  Most financial advisors seem to recommend index funds.  It's rare that I've heard anyone say "my financial advisor told me to buy Apple."  The investing part is actually pretty simple.  Buy good, low cost index funds with a history of strong growth and leave them alone.  They'll be worth more in 10 years than they are today.  Be more aggressive when you're younger and transition into more conservative as you get closer to retirement.  A good advisor will tell you to start with a lower percentage of bonds today and slowly increase it as you age.  (Though I'd argue bonds aren't really worth buying at this point).  

The value of an advisor here is really 1 thing.  Understanding your own risk tolerance.  The markets can take big dives.  And if you freak out when the plummets come, you'll sell low.  Likewise if things really have a huge positive swing, people get tempted to buy in during the upshoot for fear of missing out.  (It sounds so obvious:  Buy low and sell high, but there's some black magic that happens when the $$ signs start to drop.)  The one really powerful thing an advisor does is talks you out of this behavior.  Some people just need another hand on the button to say no.  If you're confident in being able to account for your own risk tolerance--you should be good to go.  

The other stuff beyond that I think comes down to tax loss harvesting and charitable contributions of assets--which you can learn on your own and again--ultimately comes down to a good accountant.  

I don't think advisors are bad people or anything like that.  They provide a service.  A guy I work with says he has no desire to learn any of this and doesn't want the headaches that come with it.  He's more than happy to pay the service and that's great.  If that's you--pay your advisor.  Your accounts will almost certainly continue to succeed.  

Me:  I look at it like mowing the lawn.  I enjoy mowing the lawn.  Gives me some time with my headphones and I don't want to pay someone else for something I can do and I enjoy.  I enjoy numbers/math.  I certainly enjoy learning about money and how to keep more of it.  And as I get more and more comfortable doing it myself, I don't want to pay someone for something I enjoy doing.  

Edited by jm192
  • Like 4
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.


×
×
  • Create New...