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Old 12-29-2013, 10:52 PM   #26
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I think a lot of it is security as well. Contribute enough to get the match, and invest post-tax dollars in an account you have access to in an emergency, etc.

Although people don't realize the power of pre vs. post tax.
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Old 12-29-2013, 11:14 PM   #27
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This is why people should do the math to see how little it really affects their net income when contributing more to a pre-tax account. Or at least be curious enough to have someone else show them the math.
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Old 12-29-2013, 11:20 PM   #28
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Quote:
Originally Posted by lag View Post
I wonder, statistically, how many working people could max their 401k's comfortably.
If you start at your first paycheck at your first job, comfortably is defined by "you don't miss it ever". I max it and have since 1985.


I have been paying attention lately as I've just been lucky over the years.....aka.....moved old 401k from previous employers into rollover IRA before the 08 dive and told them to match the funds I already had (fidelity to fidelity). Well, there's no stable value fund, so for several years, I ignored it (not knowing that) and because of it, I am a financial genius. Over 50% sat in money market as the market crashed. I looked as it started coming up and got into equities of some sort.



My question: I am researching and in the quest to diversify. I have most in equities: Contrafund, fidelity low price stock, S&P index fund with some in China Region, which isn't following the dow, Thompson Bond Fund, lotsa US Savings bonds, some silver physical (couple thousand).

Thinking of VNQ (reit index). I want to diversify.......what else. Separate into mid cap, euro bond? Retiring within 10 years and will put 2 kids through college before then. Looking for % suggestions now along with funds/index. All with fidelity and can buy anything they sell.
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Old 12-29-2013, 11:22 PM   #29
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Quote:
Originally Posted by FightingFalcon View Post
Atrocious handwriting.

And I fully disagree on the actively managed funds topic. I've done very well on actively managed funds over the past 14 years.
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Old 12-29-2013, 11:24 PM   #30
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I'm pretty sure you have more money than most people on this board.

Just be careful as you get closer to retirement age. The fact that you're still heavily Into equities within 10 years of retirement concerns me. Especially with two kids to put through school. It's kind of too late now but do you have any 529s setup for the kids?

Edit: this is to Jack.
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Old 12-29-2013, 11:25 PM   #31
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Atrocious handwriting. And I fully disagree on the actively managed funds topic. I've done very well on actively managed funds over the past 14 years.
The point is that actively managed funds have, generally speaking (happy SoapBox?), higher management fees without any better performance.
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Old 12-29-2013, 11:58 PM   #32
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Didn't Nick start an investment forum a few years ago?

I've been thinking about starting a Roth IRA.

Background: I am under 30, and am putting 15% into my 401k (managed by Trow). I get an additional 8% match from my employer, in five more years that will be 10%. I live a frugal life and actively budget (YNAB), I usually have an extra $100-250 each month that I put towards my mortgage. My mortgage is at 4%, and just over 110k. According to a target calculator my current 401k balance is on track with where it should be, I also just enabled the 1% yearly increase for my 401k.

I had two thoughts of how to fund an IRA 1) dropping my 401k by a few % 2) stop paying extra on my mortgage.
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Old 12-29-2013, 11:58 PM   #33
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Quote:
Originally Posted by FightingFalcon View Post
The point is that actively managed funds have, generally speaking (happy SoapBox?), higher management fees without any better performance.
Well, sometimes you have to ante up if you want to invest your retirement like I do, 100% frozen concentrated orange juice futures.
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Old 12-30-2013, 12:02 AM   #34
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Is the max contribution of $17,500 including what your employer matches?

IBhereletmegooglethatforyou

Edit: Apparently it does not.

I really need to get a financial advisor. I'm great at saving but terrible at investing. I have enough saved, and at my present savings rate, that I'll have enough to pay off my house in 2 years (by the time I turn 33) and still have a nice nest egg in the bank. I have a 1 year old that I want to start saving for a college fund, but everything I've read indicates that I'm better off just maxing my 401k rather than a 529 and eating the penalties if I have to draw from it at that time. (This is assuming that I wasn't maxing my 401k, which I'm obvious not... )

Last edited by quentinberg007; 12-30-2013 at 12:09 AM.
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Old 12-30-2013, 12:03 AM   #35
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Quote:
Originally Posted by FightingFalcon View Post
I'm pretty sure you have more money than most people on this board.

Just be careful as you get closer to retirement age. The fact that you're still heavily Into equities within 10 years of retirement concerns me. Especially with two kids to put through school. It's kind of too late now but do you have any 529s setup for the kids?

Edit: this is to Jack.
My mom set up 529s for both kids and we can pay for their college. We could certainly put more into the 529.

I know I'm somewhat standing in a trap with the market going nuts and know I should get into other hedges to a market drop. Just don't know what exactly what to do. I would research the heck out of anything, so don't be afraid to throw something at me.

Another question.....I looked into doing a REIT (still looking) and found that most are stock in companies who are mostly in real estate (mall owners, building management, commercial buildings) but is it still an equity or no? I don't want to fool myself that I'm hedging by getting a real estate investment only to find its just something else that follows the Dow.
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Old 12-30-2013, 12:04 AM   #36
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Quote:
Originally Posted by WRXin19087 View Post
Well, sometimes you have to ante up if you want to invest your retirement like I do, 100% frozen concentrated orange juice futures.
I prefer to short sell frozen concentrated orange juice futures.
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Old 12-30-2013, 12:07 AM   #37
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Originally Posted by quentinberg007 View Post
Is the max contribution of $17,500 including what your employer matches?

IBhereletmegooglethatforyou
no 17.5k is your deferral. the company match can be another 17.5k which is a max of 25% of your salary.
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Old 12-30-2013, 12:08 AM   #38
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Quote:
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I prefer to short sell frozen concentrated orange juice futures.
Sounds like someone has had an early glimpse at the crop report.
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Old 12-30-2013, 12:09 AM   #39
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Originally Posted by WRXin19087 View Post
Sounds like someone has had an early glimpse at the crop report.
http://i.imgur.com/qpW75is.jpg
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Old 12-30-2013, 12:11 AM   #40
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Quote:
Originally Posted by FightingFalcon View Post
I prefer to short sell frozen concentrated orange juice futures.
Frozen futures have less liquidity.
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Old 12-30-2013, 12:55 AM   #41
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Does your employer offer any matching?
Yes, they do. They match 100% up to 5% but nothing beyond. As of right now I only do the 5% because I wanted to get a lot of my student loans paid off. At the end of January I will have the majority of my student loans paid and will have extra disposable income that I would like to invest.

Quote:
Originally Posted by Indocti Discant View Post
well two things here.. is he looking to invest more into his 401k? or is he looking to invest more outside his 401k?
I am possibly looking into investing outside of my 401K. However, my guess is I can't do anything outside of my work 401K and get it tax free.

Edit: I guess I should also add that I don't have any credit card debt. The only real debt I have is a mortgage and will only have a few thousand of student loans after January.

Last edited by csperformance; 12-30-2013 at 01:09 AM.
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Old 12-30-2013, 01:10 AM   #42
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maybe a Roth IRA, but I dont know the details around that.
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Old 12-30-2013, 01:16 AM   #43
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So explain the math for me on putting more into my 401k

I have it set at 4% so the company will match 3.5%. This is the most they will match.

I believe the max i can put into 401k is 11% I make roughly $65k how much more out of my paycheck will i miss vs the tax savings?


4% is $59 per check.
11% is $137 per check.

Each check my taxable income would be $78 less. After benefits and **** i end up with 2/3 of my check. I would save the 2/3 of the $78?
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Old 12-30-2013, 01:25 AM   #44
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Quote:
Originally Posted by hkerekes View Post
So explain the math for me on putting more into my 401k

I have it set at 4% so the company will match 3.5%. This is the most they will match.

I believe the max i can put into 401k is 11% I make roughly $65k how much more out of my paycheck will i miss vs the tax savings?


4% is $59 per check.
11% is $137 per check.

Each check my taxable income would be $78 less. After benefits and **** i end up with 2/3 of my check. I would save the 2/3 of the $78?
Payroll taxes are not impacted by 401k. That is all calculated based on your gross earnings. 401k just reduces your federal income tax burden. If you made $65k and you put $5k in your 401k, your federal income tax is based off $60k before deductions and all that comes into play. So, whatever your top tax rate is, that is usually the percentage reduction of tax burden on your 401k investment.

Last edited by quentinberg007; 12-30-2013 at 01:30 AM. Reason: Clarified
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Old 12-30-2013, 01:30 AM   #45
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Thanks qberg. I might just max it out at 11 since i already maxed my FSA at 2500. Its all going towards Lasik, just have to submit 1 bill.

Going to be a bit less in my weekly check but we have zero credit card debt and the mustang loan is 2.9%

Anyone suggest i should throw everything at the loan and then max the 401k?
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Old 12-30-2013, 01:31 AM   #46
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Using your rough math, at 4% you're paying about a $1000 in taxes more than you would at 11%

Assuming a 22% tax rate, honestly didn't look up the rate for $65k

The net income difference is $3500, but you're investing ~$4500 more a year.


If putting 11% over 4% puts you in a lower tax bracket the tax savings are even greater.


So far as the car loan, at 2.9% it's easy to have your money make more than that in the market = it's better to invest the money you would use to pay off the loan rather than pay off the loan. The issue that most financial advisers have, now that you already have the loan, is that people still don't use the money to invest and still just blow it on other things... why they'd usually always recommend just paying of the loan. They know otherwise the money is usually *usually* otherwise squandered.
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Old 12-30-2013, 01:34 AM   #47
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Quote:
Originally Posted by lag View Post
Using your rough math, at 4% you're paying about a $1000 in taxes more than you would at 11%

Assuming a 22% tax rate, honestly didn't look up the rate for $65k

The net income difference is $3500, but you're investing ~$4500 more a year.


If putting 11% over 4% puts you in a lower tax bracket the tax savings are even greater.
So i should be maxing it out and it would save me $1000 in taxes and it would only cost me $3500?
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Old 12-30-2013, 01:38 AM   #48
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Yup, it would "cost you" $3500 to save an extra $4500 a year.
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Old 12-30-2013, 01:41 AM   #49
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Makes sense now that someone explained it.
Thanks, now i get to explain it to the woman.
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Old 12-30-2013, 01:43 AM   #50
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do you have a company match?

that's a huge reason to usually edge upwards when it comes to the deferral rate.
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