Personal Finance Advice and Education!

[jm192]

22 hours ago, Sand said:

That seems to be in error.  HR will likely need to withdraw that and send it to you as taxable monies.  Unless she's 50, then you're good.

As far as avoiding that this year it depends on how stable the income is.  You may need to triangulate on a moving target through the year if it's all over the place.  Can you setup a fixed amount withdrawal per paycheck?

Welp.  

As the world turns:  Her Last pay-stub says she contributed 19,500.  She was getting a 3% match through August, and then that went away when she switched to part time.  I'm guessing it's a book keeping thing on Prudential's side and maybe the extra is including the match even though they have separate headings for the two.

[Sand]

37 minutes ago, jm192 said:

Welp.  

As the world turns:  Her Last pay-stub says she contributed 19,500.  She was getting a 3% match through August, and then that went away when she switched to part time.  I'm guessing it's a book keeping thing on Prudential's side and maybe the extra is including the match even though they have separate headings for the two.

Even better.  I'd trust the pay stub until someone comes back at you.

[Orange&Blue]

19 hours ago, dgreen said:

I assume you’re doing FSA Feds? You can do everything through their website. There’s an app too but I find the website to be easier. I’ve heard of there being FSA cards to use to pay directly but I’ve never looked into it. I usually just pay on a points cc and then have my fsa reimburse me. Or if I get a bill I wasn’t expecting and that doctor charges extra to pay with a cc online, I just pay them directly through the website. I’ve had some payments take a long time and I get final notices but everything has eventually worked out. 

 

It can take some time to process, but every medical expense that has gone through insurance has been reimbursed.  I use GEHA and they take care of everything.  I just check occasionally that I'm using all of my allotment. 

[-OZ-]

16 hours ago, jm192 said:

Welp.  

As the world turns:  Her Last pay-stub says she contributed 19,500.  She was getting a 3% match through August, and then that went away when she switched to part time.  I'm guessing it's a book keeping thing on Prudential's side and maybe the extra is including the match even though they have separate headings for the two.

Are you sure that last amount was contributed in 2021?  Our accounting seems odd, as leave counts in the year accrued but contributions to the TSP count in the year made. So if the pay was officially contributed Jan 1, the amount contributed out of that paycheck goes towards 2022 but the leave earned (and use or lose if relevant) is part of 2021. 

[Orange&Blue]

So, I've been rethinking that target retirement accounts are crap.  I've been invested in vtivx (vanguard 2045, wife) and trrkx (t.rowe price 2045, myself) and they were awful compared to the index funds.  Vtivx is negative for the past year!  WTF???

[bcat01]

2 minutes ago, Orange&Blue said:

So, I've been rethinking that target retirement accounts are crap.  I've been invested in vtivx (vanguard 2045, wife) and trrkx (t.rowe price 2045, myself) and they were awful compared to the index funds.  Vtivx is negative for the past year!  WTF???

Not seeing where VTIVX is negative. https://investor.vanguard.com/mutual-funds/profile/performance/vtivx

[Orange&Blue]

28 minutes ago, bcat01 said:

Not seeing where VTIVX is negative. https://investor.vanguard.com/mutual-funds/profile/performance/vtivx

 

The price on 1/5/2021 was 28.26.  it's now 28.03.

https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundType=VanguardFunds&FundIntExt=INT&FundId=0306&Sc=0&fundName=0306&fundValue=0306&radiobutton2=1&beginDate=01%2F01%2F2021&endDate=01%2F31%2F2021&year=#res

[Gawain]

2 minutes ago, Orange&Blue said:

 

The price on 1/5/2021 was 28.26.  it's now 28.03.

https://personal.vanguard.com/us/funds/tools/pricehistorysearch?radio=1&results=get&FundType=VanguardFunds&FundIntExt=INT&FundId=0306&Sc=0&fundName=0306&fundValue=0306&radiobutton2=1&beginDate=01%2F01%2F2021&endDate=01%2F31%2F2021&year=#res

It threw off about $4.34 in reinvested dividends end of December. That's about a 15% return.

[Orange&Blue]

5 minutes ago, Gawain said:

It threw off about $4.34 in reinvested dividends end of December. That's about a 15% return.

Not sure how I missed that.  Thanks!

[-OZ-]

Gotta love dividends. Got two in my traditional IRA last week. .03 and.01. 💰

[Ridgeback]

Any particular sites recommended for reviewing financial advisory companies? We're looking at a couple (Captrust and Edelman Financial Engines) to manage my girlfriends 401k accounts, as well as putting some capital to work, and need to settle on just one.

[JoeSteeler]

Part of my job is overseeing FSA administration. Would be glad to answer any questions anyone has.

[Sand]

On 1/7/2022 at 6:10 PM, -OZ- said:

Gotta love dividends. Got two in my traditional IRA last week. .03 and.01. 💰

Move that retirement up a few minutes.  

[ConstruxBoy]

1 hour ago, Ridgeback said:

Any particular sites recommended for reviewing financial advisory companies? We're looking at a couple (Captrust and Edelman Financial Engines) to manage my girlfriends 401k accounts, as well as putting some capital to work, and need to settle on just one.

Try BrokerCheck on the FINRA site

[-OZ-]

Been following Paul Merriman for a while now but I’ve felt his ten funds was overly conservative for us. https://www.optimizedportfolio.com/ultimate-buy-and-hold-portfolio/ 
But I figured I’d go for it with half of our traditional IRA, which I’m not adding to, mostly because I’m not adding new funds to it. Made the move  when the markets opened Jan 3rd.

 This ends up being 15% of our total investments. I think we’ll slowly add to the 50% over the next decade and eventually have the full traditional in his portfolio. This will probably be around 20-25% of everything at that point. 

Edited January 11 by -OZ-

[-OZ-]

On 1/10/2022 at 8:29 PM, JoeSteeler said:

Part of my job is overseeing FSA administration. Would be glad to answer any questions anyone has.

If we contribute $50 / pay period; so $1300 for the year, when can I withdraw the money to cover January’s medical bills? With the new year, our deductible in January means we will pay more this month than in most. Do I just have to wait until we’ve contributed enough to cover the withdrawal?

[JoeSteeler]

10 minutes ago, -OZ- said:

If we contribute $50 / pay period; so $1300 for the year, when can I withdraw the money to cover January’s medical bills? With the new year, our deductible in January means we will pay more this month than in most. Do I just have to wait until we’ve contributed enough to cover the withdrawal?

With a health FSA, the amount you elect is fully available day 1 of the plan year. if you would happen to leave the company, you would not owe those funds back, even if the whole $1,300 wasn’t deducted from your pay.

If you use your FSA card be sure to only pay for dates of service in 2022 (assuming your plan year starts 1/1/22.)

 

[-OZ-]

2 minutes ago, JoeSteeler said:

With a health FSA, the amount you elect is fully available day 1 of the plan year. if you would happen to leave the company, you would not owe those funds back, even if the whole $1,300 wasn’t deducted from your pay.

If you use your FSA card be sure to only pay for dates of service in 2022 (assuming your plan year starts 1/1/22.)

 

Thanks. I thought I had read that but it seemed odd to get basically a zero percent loan along with the tax benefits.  

Rhetorical - why have I not been doing this for the past 4 years? 

[JoeSteeler]

1 minute ago, -OZ- said:

Thanks. I thought I had read that but it seemed odd to get basically a zero percent loan along with the tax benefits.  

Rhetorical - why have I not been doing this for the past 4 years? 

Just remember, FSA is use it or lose it. Some plans have a carryover, or a grace period which helps if you can’t spend all of your funds in 2022. Read you plan documents so you know what your specific plan offers

You wouldn’t believe how many people elect an FSA and then don’t spend any of their election. Either they don’t understand what they signed up for, or forget they have it.

[Craig_MiamiFL]

On 1/10/2022 at 7:29 PM, JoeSteeler said:

Part of my job is overseeing FSA administration. Would be glad to answer any questions anyone has.

I've never understood why one would elect FSA over HSA (and invest/carryover).

Outside of being funded upfront, why would one?

[-OZ-]

6 minutes ago, Craig_MiamiFL said:

I've never understood why one would elect FSA over HSA (and invest/carryover).

Outside of being funded upfront, why would one?

We’re not eligible for HSA. Otherwise I’d agree. 

[Desert_Power]

27 minutes ago, Craig_MiamiFL said:

I've never understood why one would elect FSA over HSA (and invest/carryover).

Outside of being funded upfront, why would one?

Not all plans are HSA eligible. My wife has some chronic conditions and never has one, but we are combining plans this year. 

 

[matttyl]

1 hour ago, Craig_MiamiFL said:

I've never understood why one would elect FSA over HSA (and invest/carryover).

Outside of being funded upfront, why would one?

All depends on what employer offers.  HSA is only eligible if the health plan is compatible. You can have both. But I’m a big advocate of HSAs.  

[matttyl]

Not sure if this is the right place to ask, but didn’t want to start new thread either.  
 

Recently lost an uncle I was close with, somewhat suddenly.  Discovered I’m a listed beneficiary of estate (as are three others, all equal shares).  Could be substantial (not 7 figures).  There is a process, so this will take time.  Wife and I starting to think about how to handle.  
 

41/37 with one kid.  Zero debt other than house, which was refinanced to 2.5% about two years ago and we’re not moving.  I view that as nearly “free money” and don’t wish to pay off.  Own both cars, no immediate need to replace either.  
 

General thoughts are to plow as much money as we can into retirement assets, thus lowering taxable income, as well as college funding for kid up to deductible 529 level - and continue doing so annually.  
 

Specifically, in order of importance, $20.5k each into our 401ks, $6k each into Roths, max out HSA family contribution, lump sum into 529 plan (can only deduct $4k a year in my state) - supplement the loss of “earned income” with withdrawals from inheritance, and lower our taxes each year.  Should be able to do this for a few years.  
 

My next question is what to do with balance of inheritance from year to year. not just going to plant it in a CD.  I want it working for me, but also liquid should need of a new car or house expenses pop up - and also liquid to pay myself back the following calendar year when I make early year contributions to Roth’s and HSA.  Thoughts?  Overall plan a sound one?

[Desert_Power]

14 minutes ago, matttyl said:

My next question is what to do with balance of inheritance from year to year. not just going to plant it in a CD.  I want it working for me, but also liquid should need of a new car or house expenses pop up - and also liquid to pay myself back the following calendar year when I make early year contributions to Roth’s and HSA.  Thoughts?  Overall plan a sound one?

 

You could consider Series I bonds for funds you don't need for the next year. You get 7.1% interest on it for the first 6 months and probably something in the 5-6% range for the next 6, but you forfeit the last three months of interest if you withdraw before 5 years.

There isn't really a lot of options out there for short term liquid funds. Many would suggest keeping savings above your emergency fund level in a taxable brokerage maybe a total market or a dividend focused ETF.

You could also consider using that cash to churn bank or brokerage bonuses if you are well organized and good at bureaucracy  

[Craig_MiamiFL]

24 minutes ago, matttyl said:

Not sure if this is the right place to ask, but didn’t want to start new thread either.  
 

Recently lost an uncle I was close with, somewhat suddenly.  Discovered I’m a listed beneficiary of estate (as are three others, all equal shares).  Could be substantial (not 7 figures).  There is a process, so this will take time.  Wife and I starting to think about how to handle.  
 

41/37 with one kid.  Zero debt other than house, which was refinanced to 2.5% about two years ago and we’re not moving.  I view that as nearly “free money” and don’t wish to pay off.  Own both cars, no immediate need to replace either.  
 

General thoughts are to plow as much money as we can into retirement assets, thus lowering taxable income, as well as college funding for kid up to deductible 529 level - and continue doing so annually.  
 

Specifically, in order of importance, $20.5k each into our 401ks, $6k each into Roths, max out HSA family contribution, lump sum into 529 plan (can only deduct $4k a year in my state) - supplement the loss of “earned income” with withdrawals from inheritance, and lower our taxes each year.  Should be able to do this for a few years.  
 

My next question is what to do with balance of inheritance from year to year. not just going to plant it in a CD.  I want it working for me, but also liquid should need of a new car or house expenses pop up - and also liquid to pay myself back the following calendar year when I make early year contributions to Roth’s and HSA.  Thoughts?  Overall plan a sound one?

Sounds good.

Pretty much identical situation (refinance/retirement accounts/HSA). Haven't made final decision with shorter term investment options but have been looking into ibonds mentioned previously in thread (along with putting more into brokerage account)

I know many may not recommend but I get  12+ month zero APR credit cards and just payoff at end. Will probably go that route if do ibonds. 

Edited January 12 by Craig_MiamiFL

[ConstruxBoy]

43 minutes ago, Desert_Power said:

 

You could consider Series I bonds for funds you don't need for the next year. You get 7.1% interest on it for the first 6 months and probably something in the 5-6% range for the next 6, but you forfeit the last three months of interest if you withdraw before 5 years.

There isn't really a lot of options out there for short term liquid funds. Many would suggest keeping savings above your emergency fund level in a taxable brokerage maybe a total market or a dividend focused ETF.

You could also consider using that cash to churn bank or brokerage bonuses if you are well organized and good at bureaucracy  

Yeah, I Bonds and then a brokerage account with a Total Market ETF seem like the best way to go with some liquidity, although clearly not as much as a cash equivalent. 

[JoeSteeler]

Yes, HSA>>>>FSA

[Sand]

5 hours ago, Craig_MiamiFL said:

I've never understood why one would elect FSA over HSA (and invest/carryover).

Outside of being funded upfront, why would one?

FSA can be very useful for some items.  Some dental and vision procedures aren't medical, but FSA is allowed.  When I got LASIK I funded the FSA so I was using pre-tax monies.  

[NutterButter]

I paid my lasik using FSA starting in the new year and switched jobs shortly after that.  i just might have been planning it that way.   a little going away present.   

[matttyl]

1 hour ago, Sand said:

FSA can be very useful for some items.  Some dental and vision procedures aren't medical, but FSA is allowed.  When I got LASIK I funded the FSA so I was using pre-tax monies.  

HSAs can be used for lasik as well as most dental bills.  I haven’t come across any dental bills that I wasn’t able to use my HSA for.  

[Sand]

2 hours ago, matttyl said:

HSAs can be used for lasik as well as most dental bills.  I haven’t come across any dental bills that I wasn’t able to use my HSA for.  

At the time I had an FSA, but no HSA.  Regardless of that I've left my HSA alone to grow - the longer it stays in the tax free space the better the long term outcome there.

[Chadstroma]

If HSA eligible then it isn't a question, HSA is the choice as it is far superior. However, if your don't have a high deductible health plan (and a couple of other minor requirements) then it just isn't an option because it is not available to you. An HSA is on top of the list when it comes to retirement vehicles in my view. 

[-OZ-]

8 hours ago, Chadstroma said:

If HSA eligible then it isn't a question, HSA is the choice as it is far superior. However, if your don't have a high deductible health plan (and a couple of other minor requirements) then it just isn't an option because it is not available to you. An HSA is on top of the list when it comes to retirement vehicles in my view. 

It’s ALMOST  enough to make me wish we had a HDHP. 

[matttyl]

1 hour ago, -OZ- said:

It’s ALMOST  enough to make me wish we had a HDHP. 

Almost?  What more do you need?  HDHPs generally come with lower premiums.  So you’re saving money up front. 
Also, an HSA is the only financial vehicle with a (federal) tax break on the way in, ability to grow tax free, and tax free on the way out.  Nothing else has all three.  I make it a point to maximize my contributions each year for that alone.  

Edited January 13 by matttyl

[-OZ-]

21 minutes ago, matttyl said:

Almost?  What more do you need?  HDHPs generally come with lower premiums.  So you’re saving money up front. 
Also, an HSA is the only financial vehicle with a (federal) tax break on the way in, ability to grow tax free, and tax free on the way out.  Nothing else has all three.  I make it a point to maximize my contributions each year for that alone.  

🤷

I pay $25 / month for a plan with a max oop  $3,000 annual. We’re ineligible due to our being covered by tricare, and I’m not about to waive that coverage. 

Edited January 13 by -OZ-

[NutterButter]

Next open enrollment, I need to inquire if any of the plans offered come with an HSA.   The highest deductible I see of the 4 plans is 2.5k for an individual so it don't smell like it.   

Edited January 13 by NutterButter

[matttyl]

57 minutes ago, NutterButter said:

Next open enrollment, I need to inquire if any of the plans offered come with an HSA.   The highest deductible I see of the 4 plans is 2.5k for an individual so it don't smell like it.   

The minimum deductible to still possibly be an HDHP is 1,400 for an individual (2,800 for a family) this year.  The key to an HDHP is that nothing can come before that deductible (no copays for Rx or dr visits).  

[NutterButter]

15 minutes ago, matttyl said:

The minimum deductible to still possibly be an HDHP is 1,400 for an individual (2,800 for a family) this year.  The key to an HDHP is that nothing can come before that deductible (no copays for Rx or dr visits).  

Oh, so its that low.    Can you expand on that last part?   

[matttyl]

1 hour ago, NutterButter said:

Oh, so its that low.    Can you expand on that last part?   

Ok, but you might want to do some reading on it.  For background, I’m a life and health insurance agent.  An HDHP (high deductible health plan) is a term coined I think by the IRS. It means a health plan that meets the requirements set by them, each year (as the ruleS change).  For this year the lowest an individual deductible can be is 1,400 (though most hdhps have higher deductibles).  The key is that you can’t have any “up front benefits” prior to meeting that set deductible.  Say your deductible just reset with the calendar year and you went to the doctor today and got an Rx for something.  You’d pay full price for both (so you wouldn’t have a $20 dr visit copay for instance, or a $15 tier 1 drug copay) - which could be $100 for the dr visit and $70 for the Rx.  Both of those paid amounts can be paid for from the HSA, and both would go towards your deductible (and max out of pocket) for the plan/calendar year.  

[Chadstroma]

6 hours ago, -OZ- said:

🤷

I pay $25 / month for a plan with a max oop  $3,000 annual. We’re ineligible due to our being covered by tricare, and I’m not about to waive that coverage. 

Union worker?

[-OZ-]

5 minutes ago, Chadstroma said:

Union worker?

Military retirement

[NutterButter]

Still not sure if my high deductible plan even offers an HSA as the summary of coverage sheet I have does list copays, but even if it does, at first thought, seems you're really banking on no one needing medical care.   Current plan has zero deductible and zero co-insurance and costs $1800 more in premiums while high deduct plan has a $2.5k deductible, 50% coinsurance and $6k max out of pocket.    If you can stay healthy, it seems like a good move, but just the occasional injury makes the decision a lot murkier.   

[Random]

We've had an HSA for 10+ years, max contribution every year, and haven't used any of it in the past 5 or so years.

[SFBayDuck]

2 hours ago, NutterButter said:

Still not sure if my high deductible plan even offers an HSA as the summary of coverage sheet I have does list copays, but even if it does, at first thought, seems you're really banking on no one needing medical care.   Current plan has zero deductible and zero co-insurance and costs $1800 more in premiums while high deduct plan has a $2.5k deductible, 50% coinsurance and $6k max out of pocket.    If you can stay healthy, it seems like a good move, but just the occasional injury makes the decision a lot murkier.   

 

I know some employers will contribute some or all of the deductible to your HSA, which makes the math look a whole lot better.  I resisted for a few years before finally switching a few years ago (I had used an FSA for years), and while I did have to use some of the HSA money in that first year to cover some larger, unexpected medical bills, I haven't had to touch it since. 

My current plan requires $1,500 be kept in cash, but everything else gets invested.  I just consider it another retirement savings vehicle now, and it would really take something significant to have me touch it anytime soon.  That being said I do upload all receipts to a folder in Google Drive and update a spreadsheet with the total amount I could pull out at any time by "reimbursing myself".  As of right now, I could only pull out about 33% of what I've saved even if I wanted to.  

[Chadstroma]

3 hours ago, -OZ- said:

Military retirement

Oh ya... that makes sense now that I think of it being I know you went with a VA loan. 'vid still has me a little fuzzy in the head. 

[Chadstroma]

3 hours ago, NutterButter said:

Still not sure if my high deductible plan even offers an HSA as the summary of coverage sheet I have does list copays, but even if it does, at first thought, seems you're really banking on no one needing medical care.   Current plan has zero deductible and zero co-insurance and costs $1800 more in premiums while high deduct plan has a $2.5k deductible, 50% coinsurance and $6k max out of pocket.    If you can stay healthy, it seems like a good move, but just the occasional injury makes the decision a lot murkier.   

You can get an HSA on your own if you qualify. 

With the HSA, you either use the pre-tax dollars on deductible and other health care costs or you keep it and it turns into a retirement vehicle that basically is the best of both worlds of a tradtional IRA and ROTH IRA. 

[matttyl]

12 hours ago, SFBayDuck said:

 

I know some employers will contribute some or all of the deductible to your HSA, which makes the math look a whole lot better.  I resisted for a few years before finally switching a few years ago (I had used an FSA for years), and while I did have to use some of the HSA money in that first year to cover some larger, unexpected medical bills, I haven't had to touch it since. 

My current plan requires $1,500 be kept in cash, but everything else gets invested.  I just consider it another retirement savings vehicle now, and it would really take something significant to have me touch it anytime soon.  That being said I do upload all receipts to a folder in Google Drive and update a spreadsheet with the total amount I could pull out at any time by "reimbursing myself".  As of right now, I could only pull out about 33% of what I've saved even if I wanted to.  

Smart keeping receipts like that.  Current tax law does indeed allow you to reimburse yourself, even years later.  Also keep in mind that you can pay Medicare premiums (part B and D, NOT a Medicare supplement) from an HSA, so it’s not just “medical expenses.”  If I make it to 65 (or whatever Medicare age will be for us) and have significant HSA $ first off I’ll be happy that I’ve had a healthy life, but it will just be my Medicare prepayment fund.

Choosing an HSA (HDHP plan) really depends on a lot of factors/math, and what your employer offers.  If they offer a low cost traditional plan (non HDHP) and you expect some medical claims, more than likely that’s your best choice.  Me personally, I haven’t myself had any significant medical spending in years knock on wood (though my wife and child both have).  My employer only offers an HDHP, though, and it’s the only plan that financially makes sense that my wife’s employer offers.  

[matttyl]

13 hours ago, SFBayDuck said:

 

Edited January 14 by matttyl

[matttyl]

Not sure what happened above with last post.  Anyway, anyone here familiar with, or better yet actually done a ROTH IRA conversion?  If I’m understanding it right, this could be huge for lots of people.