I did this last year after changing jobs, pretty simple and penalty free. Set up the Rollover IRA Brokerage Account on Vanguard and then begin the transfer from wherever your current 401k is. My old 401k actually sent a physical check to me for the full amount of my old 401k that I then had to then send to Vanguard to fund the IRA Brokerage Account (yours may be able to go more directly, not sure)
Yea, I can see how to roll it over into a Vanguard IRA. That's pretty simple. I guess I'm asking if I can roll it over into the Market Index Fund vs the Roth/Traditional IRA.
They can send them directly. Ask vanguard to facilitate the transfer for you. It's a not so well kept secret that the place you're taking the money from intentionally makes it harder than it needs to be
I'm confused. You can roll it into a Vanguard IRA and invest it in the Total Stock Market Index Fund.
I would like to invest the money into the index fund but I don't want to be penalized for it. So do I have to roll it over into the IRA first and then invest it?
Make sure the rollover is completed within 60 days of the distribution from your old 401(k) provider.
Or he can have vanguard do it and it’s a trustee to trustee transfer, which is definitely the way I would do it to avoid the risk.
Sometimes you can't control that - it's up to the policies of the current plan administrator As long as the check isn't endorsed by the recipient it's no big deal - just forward it on to your new IRA custodian and you're good - from a tac perspective the money's not invested in the meantime and it's a pain but there's some things you just can't do anything about :peace:
That seems very odd to me, but unfortunately it’s whatever the plan document says. Fascists in the deferred comp space.
Any recommendations as far as a 529 plan? Me and my wife are maxing out 401k and want to put some money somewhere else. Started looking into it yesterday and it made my head swim. Any suggestions where to start reading with best info?
No IRAs because from what I have read we are above an income that we will get any benefit from putting money in an IRA.
You can either backdoor it or just contribute to a regular ira and pay the taxes upfront to move it to a roth
This is where stuff gets above my paygrade. While i understand it on the surface, Im trying to figure out if it is worthwhile to get a financial adviser.
I've used the one from Illinois "bright start savings" that I have been happy with. I think you may get a small tax benefit by staying within your state, maybe others can comment on that.
It depends on the state. Minnesota for instance gave no benefit to anybody when I set our plan up. Last summer they switched it to giving a tax credit to contributors regardless of where the plan is administered.
Its dependent on the state. In Michigan I can deduct up to $10k of contributions from my state taxes if I go through a state-sponsored plan.
I recommend the 529 on wealthfront (betterment competitor if you have heard of either). As someone mentioned, some states give you a little tax deduction, but it's state only and I figured it wasn't worth my time due to the difference in fees. The Oklahoma 529 I started with originally has 0.78% fees, which while low, is not as low as Wealthfront's 0.25% fee. So I'm already 0.53% ahead. On top of that, the first 10k in your account is managed for free. On top of that, betterment/wealthfront do a good job of Tax Loss Harvesting, redistributing your losses to create better growth. I have a Betterment investment account that does really well for me, but they don't offer a 529, so I started on Wealthfront, and it's returns have been awesome so far. They also do a good job helping you understand how much to save, by creating a 'gamplan' where you input ages of children, what schools they might go to etc, so you can see if you are on track or not. Sorry if it's frowned upon in here, but just trying to help you out, if you use this referral link - https://wlth.fr/2x4cnQp you and I both get an additional 5k managed free. So 15k of free managed assets to grow tax free. Hope that helps, if anyone has more questions let me know!
529 discussion got me thinking. First child due in about a month, any recommendations for investments like 529s? Any other general things fancy people do for kids?
one post up in short, start one. Even if you don't want to plan for it covering 100% of kids costs, throw a good chunk in early and let it grow tax free. I provided a referral link in post above for the Wealthfront 529 (which is nevada based), and has super low fees (0.25%) and you get the first 15k managed free.
Oh I’m doing the 529 for sure, I’m just wondering are there other things as well that people save for with kids? College is the only obvious thing that comes to mind other than maybe weddings for a girl
Girlfriend just revealed to me how much of her money she has sitting in a checking account. We'll be opening her a Marcus account this weekend.
if you/your work has an HSA you can throw some in there for all the doctor's appointments/emergencies. Can also grow money tax free for medical expenses.
It's really pretty easy once you get an understanding of everything. Take the time to read a book or two, and it will start making plenty of sense. Start with The Bogleheads Guide to Investing. Why do you work? I assume the basic answer is to make money to pay for things in your life. If you could make a significant amount more money by spending a little time in learning how to invest rather than paying someone else to do it, it seems like a no-brainer to me. And you should definitely be doing Backdoor Roth IRAs if you're above the income threshold to do it the normal way. You will take taxed money and invest it to grow tax-free for the rest of your career. When you need it for retirement, you won't owe any taxes on the money you take out. By having a combination of tax-free (backdoor roth) and tax-deferred (401k) money, you can easily control your tax bracket by choosing how much money to take out of each account each year. If you're a high-income earner, I highly recommend going to whitecoatinvestor.com and reading through a lot of the blog posts. It is geared more towards physicians, but it has a ton of good info that will benefit anyone that earns enough to be above the regular Roth IRA cutoff.
whitecoatinvestor is a good basic primer, theres an explicit book they put out that gives you rankings of what to do by priority, why, etc you'll move past it pretty quick but its worth a read to get off on the right foot I'd read it before Bogleheads stuff which tends to be more advanced
Bud Light and the Dilly Dilly actors rang the bell at the NYSE today. It was great, one of the worst days in the market in some time and these goofs are up on the perch, ringing the bell to close the market, drinking beer and yelling “Dilly Dilly!!!!”. Perfect.
Well i just made an initial $500 deposit into a t-ira with vanguard to get the ball rolling. Looks like next step will be to max out for me and my wife, so $11,000 total, and then convert to a roth ira with vanguard which i already have set up. This sound correct?
Yes, as long as neither of you already have a previous deductible ira with a bunch of money in it. If you do, that complicates things a bit due to the pro rata rule.
Crypto has desensitized me to real life investing. I didn't really think twice about the drop today, then turned on CNBC and the whole world is freaking out. 5th biggest drop in history or something like that.
Maybe I didn’t have a good pulse on the day but I thought it was the calmest 700 point drop I’ve ever seen.
Judging the size of a drop by the total points dropped is kind of silly. It’s no coincidence that the 20 largest one day gains by points and 19 of the 20 largest one day drops have in history occurred in the last 20 years, with the majority in the last 10. For reference, it takes a 7% drop to crack the single session top 20 by percentage, 4 of which occurred in 08.
Have the previous large drops always come after big years like this one? I think if this day came after a flat or down year people would be losing their shit. Everybody in the world being up 30% YOY helps cushion the blow
As long as you do it within 60 days, is there anything you need to do differently to report it on your taxes? My old provider sent me some disbursement form showing I withdrew the money.
No, unless it shows an amount in the taxable box (which in most instances for rollovers it shouldn't).