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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.
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.
Generally, keep insurance until those you leave behind won't be in bad financial shape if you died.
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?
https://www.investopedia.com/terms/r/rule72t.asp
You should receive a tax statement from vanguard if you haven’t already. It’s in the Tax Center section of the site.
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.
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.
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.
Can always call vanguard. If nothing else, you can go pen and paper:
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.
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.
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.
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.The Z Machine 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).
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.
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.
Thanks Andrew.
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.
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.
Do you have equity in your current house? Rates are super low so you could try to pull some out via a refinance.The Z Machine said:
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.The Z Machine said:
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.
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
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.b-snatchers said:
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.steelerfan1 said:
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.b-snatchers said:
I've let Schwab manage my 401K and Prudential manage my wife's 401K for their fee, though 1.25% does seem high.b-snatchers said:
Those seem like horrendous life choices.
