Is there a good mortgage broker website? I might be looking to refinance into a 15 year fixed rate soon, and I don't really know where to start looking at rates and stuff.
You can check the daily rates mostly by just googling "15 year refinance rates" or something similar. However, I'd recommend not using one of the big online brokerages to refi, or even a national bank. Local banks should have the exact same rates, but actually care about getting you through the process. Every time I've tried to use a national bank, I've been screwed one way or the other. YMMV
Get some quotes online and then go to your local credit union.
I am in the business of saving lives.
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firewaterwordSatchitanandaPais Vasco to San FranciscoRegistered Userregular
My question is if that five year period "revolves" - like is it five years from opening the account when you can withdraw non-earned funds, or is it five years from each contribution year? Hope that makes sense...
My question is if that five year period "revolves" - like is it five years from opening the account when you can withdraw non-earned funds, or is it five years from each contribution year? Hope that makes sense...
A payment or distribution from a Roth IRA shall not be treated as a qualified distribution under subparagraph (A) if such payment or distribution is made within the 5-taxable year period beginning with the first taxable year for which the individual made a contribution to a Roth IRA (or such individual’s spouse made a contribution to a Roth IRA) established for such individual.
so yeah, it's five years from the first contribution. so if you opened the account and made a contribution in the same year, that's the year you use.
tyrannus on
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firewaterwordSatchitanandaPais Vasco to San FranciscoRegistered Userregular
edited January 2020
OK thanks. So just to put a finer point on it to make sure I understand this, if a hypothetical Roth is opened in 2000 with a 5k contribution, and that contribution is continued at 5k for the next five years, could one take a tax free ("qualified?") withdrawal of 25k in 2006? Or does each contribution year restart the 5 year clock?
Oh and one more question that just occurred to me - if I say make a max contribution to a Roth on Jan 1, and come the end of the year, I've ended up with a gross income that exceeds the income limit on Roth contributions, can that year's contribution be clawed back without penalty?
Here is my return history over the years. The number is using a time-weighted percentage instead of something a bit simpler (but I can at least just copy/paste). I can't find any reports older than 2007; which was the start of the "great recession" and probably the closest you'll come to an example of what you're worried experiencing.
2007 -- 5.16%
2008 -- (-25.90%) (my ending balance was on the order of $40k; I had only been investing since 2002 and not maximizing)
2009 -- 21.06%
2010 -- 14.09%
2011 -- (-0.86%)
2012 -- 12.32%
2013 -- 24.00%
2014 -- 6.99%
2015 -- 0.17%
2016 -- 9.38%
2017 -- 19.31%
2018 -- (-6.68%)
Some takeaways:
* Every year I experienced a negative return, the following year was double-digit positive returns. Sample size is very low, so it's tough to draw a meaningful conclusion.
* Many people pulled their funds from the market in or around 2008 and missed the wave that followed (4 of 5 years over 10% returns)
* I'm expecting a ~20-23% return in 2019. I'll update once I receive the statement.
* I can probably do some simple math and come up with slightly different numbers instead of the time weighted numbers above. They would still tell the same story.
* The main conclusion is if you're not planning to need the money within 5 years, there's value to investing in stocks via funds/IRA/etc to take advantage of returns. The level of returns (and potential loss) is based on your risk tolerance.
OK thanks. So just to put a finer point on it to make sure I understand this, if a hypothetical Roth is opened in 2000 with a 5k contribution, and that contribution is continued at 5k for the next five years, could one take a tax free ("qualified?") withdrawal of 25k in 2006? Or does each contribution year restart the 5 year clock?
Oh and one more question that just occurred to me - if I say make a max contribution to a Roth on Jan 1, and come the end of the year, I've ended up with a gross income that exceeds the income limit on Roth contributions, can that year's contribution be clawed back without penalty?
You should ask this to a qualified financial advisor or CPA who knows the law rather than relying on the thread. Those are sufficiently technical that doing the wrong thing would likely hurt you. Either find a fee only planner who will probably be happy to charge you for an hour to chat, or check with your local public library and see if they host events where someone like that would be available. I know CPL does a 'money smart week' around March/ April.
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BrodyThe WatchThe First ShoreRegistered Userregular
That makes decent sense. My brain must just be weighting losses as being worse than the dollar value involved and assuming I'll end up with a net negative.
"I will write your name in the ruin of them. I will paint you across history in the color of their blood."
OK thanks. So just to put a finer point on it to make sure I understand this, if a hypothetical Roth is opened in 2000 with a 5k contribution, and that contribution is continued at 5k for the next five years, could one take a tax free ("qualified?") withdrawal of 25k in 2006? Or does each contribution year restart the 5 year clock?
Oh and one more question that just occurred to me - if I say make a max contribution to a Roth on Jan 1, and come the end of the year, I've ended up with a gross income that exceeds the income limit on Roth contributions, can that year's contribution be clawed back without penalty?
You should ask this to a qualified financial advisor or CPA who knows the law rather than relying on the thread. Those are sufficiently technical that doing the wrong thing would likely hurt you. Either find a fee only planner who will probably be happy to charge you for an hour to chat, or check with your local public library and see if they host events where someone like that would be available. I know CPL does a 'money smart week' around March/ April.
Yeah it's sufficiently confusing enough that I'll probably get professional advice prior to taking any action.
From what I can gather off of investopedia, contributions can be withdrawn at any time:
Roth IRA withdrawal rules differ depending on whether you take out your contributions or your investment earnings. Contributions are the money you deposit into an IRA, while earnings are your profits. Both grow tax-free in your account.
You can withdraw your Roth IRA contributions at any time, for any reason, with no tax or penalties. That's because you make contributions with after-tax dollars, so you've already paid taxes on that money.
And then on the other hand their section on after tax contributions says this:
Example of After-Tax Contributions
For example, consider an individual that has $25,000 in a Roth IRA. Of this amount, $22,000 is the after-tax contribution, and $3,000 is what she has earned from her investments. Her earnings growth is, therefore, $3,000 / $22,000 = 0.1364, or 13.64%.
An emergency occurs which prompts her to withdraw $10,000 from this account. The IRS will tax the earnings portion of this withdrawal, that is, 0.1364 x $10,000 = $1,364. The after-tax contribution portion, determined to be $10,000 - $1,364 = $8,636, is tax-exempt.
Not sure I understand how this proportionality works, or if it's even the case. On the face of it, it would be kind of bullshit to be taxed twice on the contribution amount but US tax code is a nightmare so...
All theoretical at this point anyway. Would very much like to avoid touching retirement money to make a down payment unless there was a compelling reason to do so.
IANACPA but my understanding is that the IRS assumes you take proportional parts of principal and earnings. I would assume there is some sort of form that says, "Yo, I just need it from my contributions" but that form may not actually exist.
That makes decent sense. My brain must just be weighting losses as being worse than the dollar value involved and assuming I'll end up with a net negative.
There are only two times that the value of an investment matters: the day you buy, and the day you sell. Everything in between is a paper rollercoaster.
Now, that rollercoaster isn't entirely pointless. It can potentially give you a good idea of what the future value will be and help inform whether you want to sell it or not. But until you actually sell it to someone else who is buying it, the value isn't real.
And in today's example of "don't try to time the market", earnings are today, we hit like...a high for the 14 years I've been employed here yesterday, I decide to sell what small number of long-term shares I have left.
It gained another 1% today, and it's up 6% after hours.
e: 7.5%
e2: And don't worry, this isn't a major loss for me or anything :P I still made a tidy profit, and the sale was more just because our ESPP went from a 5% cap to a 10%, so I've got a TON of short-term ones right now, and my compensation started getting stock-heavy, too, so I'm getting close to an "all eggs in one basket" situation, so I tend to sell as soon as it's long-term and seems like a good time. I made a good profit off of the ones I sold already, just not as much as I could have, because I've been trained by years of the stock doing well leading up to earnings then taking on both good and bad news because the market is weird :V
Agreed. I've chopped off a lot of my gains the past year. I missed out on some of the ups since then, but I got my gains and I'm ready to drop it all back in on a downturn.
Agreed. I've chopped off a lot of my gains the past year. I missed out on some of the ups since then, but I got my gains and I'm ready to drop it all back in on a downturn.
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” - Peter Lynch
Agreed. I've chopped off a lot of my gains the past year. I missed out on some of the ups since then, but I got my gains and I'm ready to drop it all back in on a downturn.
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” - Peter Lynch
I still have money in, I've just chopped off the more volatile ones for more conservative purchases. My gains have been ridiculous I don't think it's a bad move at all. And if we're just using quotes:
"I made a fortune getting out too soon." -J.P Morgan
I am an inactive CPA and I've never heard of each contribution resetting the 5 year clock
if the investment account doesn't have gold fringe then it abides by maritime financial accounting in which case
Allegedly a voice of reason.
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firewaterwordSatchitanandaPais Vasco to San FranciscoRegistered Userregular
edited January 2020
Yeah I think I have a handle on it now. Looking at this article, as long as contributions withdrawn don't dip into earnings it's not a taxable event. Problem is once the 60-day window expires, one can't redeposit anything past the yearly limit, so yeah, I probably won't mess with this.
I still don't really understand why there's a MAGI limit on Roths but I guess that's just how it is. But hey it's a good problem maybe have I guess, all things considered.
I am an inactive CPA and I've never heard of each contribution resetting the 5 year clock
Yeah I misunderstood this - didn't realize the 5 year clock only applied to qualified distributions of earnings. Reading the comments of that NJ story I looked at earlier, it was just an incorrect response by the writer.
IANACPA but my understanding is that the IRS assumes you take proportional parts of principal and earnings. I would assume there is some sort of form that says, "Yo, I just need it from my contributions" but that form may not actually exist.
I'm pretty sure that's how it works with traditional IRAs. In that example above, if you had $22,000 of non-deductible contributions to your IRA, and $3000 of earnings, I think the example they give about 13% of a withdrawal being earnings would be correct.
But I'll have to look into this a little, because that's not how I understood it to work with Roths. My assumption has been that you always withdraw contributions first. In that example, the entire $10,000 would be a return of your contributions. Then if you took $10,000 again, same thing, none of it is earnings. Then if you took another $3000, it would be $2000 contributions, and $1000 of gain. And the remaining $2000 would be all earnings, if and when you withdrew it.
But I haven't looked this up in a while, so I could be wrong, I'll have to check. In my experience (I'm a tax preparer), people generally either don't touch their roth until retirement, or they pull the entire amount out early. I've never known someone to make an early, but only partial, withdrawal.
Thinking of selling company stock: my employer has an employee stock ownership program, where they match up to 60% of the amount, up to a certain amount that varies by job level within the company. There’s no vesting period. Since I’ve been contributing enough to max out the employer match amount, stock in my employer is making up a significant portion of my retirement savings (about 30% at the moment).
I don’t want to get too specific about my employer, but it’s a large Canada-based multinational corporation that has produced reliable dividends since the day it was founded, is pretty well regulated, and which is currently considered undervalued on the stock market.
Basically, how much is too much when it comes to putting my eggs in this particular basket? My thought had been to pull out a third of it and put it into index ETFs in my TFSA, so that it’d make up no more than about 20% of my total wealth, and to try to maintain it at that level. But (and this may fall into trying to time the market), I’m reluctant to pull out while the stock is trading below what it “should” be at.
Thoughts?
Civics is not a consumer product that you can ignore because you don’t like the options presented.
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daveNYCWhy universe hate Waspinator?Registered Userregular
Thinking of selling company stock: my employer has an employee stock ownership program, where they match up to 60% of the amount, up to a certain amount that varies by job level within the company. There’s no vesting period. Since I’ve been contributing enough to max out the employer match amount, stock in my employer is making up a significant portion of my retirement savings (about 30% at the moment).
I don’t want to get too specific about my employer, but it’s a large Canada-based multinational corporation that has produced reliable dividends since the day it was founded, is pretty well regulated, and which is currently considered undervalued on the stock market.
Basically, how much is too much when it comes to putting my eggs in this particular basket? My thought had been to pull out a third of it and put it into index ETFs in my TFSA, so that it’d make up no more than about 20% of my total wealth, and to try to maintain it at that level. But (and this may fall into trying to time the market), I’m reluctant to pull out while the stock is trading below what it “should” be at.
Thoughts?
Generally you don't want your paycheck and your retirement savings to be one and the same, so to speak. Enron and all that.
Shut up, Mr. Burton! You were not brought upon this world to get it!
You may want to talk some details with @Jragghen and how he handled his stock. This, again, goes by personal approach, but I personally would not want more than maybe 10% of my wealth in company-specific stock. Regardless of your number, selling it regularly (once a year, every 6 mos, every quarter) will keep your holding amount low.
You may want to consult with a CPA regarding your personal financial situation. My understanding is that selling the stock counts as income; so selling only a specific percentage may keep you from crossing into another tax bracket. Also potential capital gains taxes, blah blah.
Okay, so, this is obviously very individual-dependent, but "retirement account" and "employee stock" don't...really occupy the same headspace for me. My employee stock is NOT for retirement. Quick background:
My company, when I was hired, had a cap of 10% of your income could be put into company stock. The company has "enrollment" periods, which last close to 6 months. The purchase price of the stock is the lowest during that period, with a 15% discount. So if you turn around and sell it immediately - free profit (unless something drastic happens during the period between the purchase and when we get it), you're taxed at income rate. If you don't, and hold onto it, it's effectively a "I defer a portion of my paycheck to the whims of the market for a lower tax rate." On the aggregate (I was hired in 2006), it's worked out well, aside from the one tanking. Anyway, I didn't take much advantage of it early on because I was busy building emergency savings/finishing paying off some debts from school, and they soon reduced it to 5% of our paycheck when the market contracted.
Stock account was handled by UBS (it's since changed to eTrade), while our retirement accounts (401k, employer matching, etc) are handled by Fidelity. So they've always been "separate" for me in how I think about them. My stock account turned into a "here's an investment I regularly sell off to get some extra cash at a lower tax rate/when I want to do a big purchase" - my ESPP was my down payment on my car, the down payment on my house. I just had to sell off HUGE amounts (over time in the latter case because I kept trying to buy and failing and had to sell more to keep up with the market ). They paid for my wedding and honeymoon. Etc.
Recently, they bumped back up to 10%, and my compensation also shifted to include a lot of restricted stock units - as of this morning, somewhere around 60% of my employee stock value was in "unvested" RSUs which I technically don't "have" yet. I'm still trying to figure out the right "balance" (and the sudden move to be close to historical high for the stock ever complicates things) with where things are at now, mine actually ends up on the low end - below 10% of net worth. Of course, I have the double-whammy of my wife working for the same company too (completely different departments, but yeah), so I've got extra incentive to not be too heavily invested in our stock.
As a sidenote, I'm going to be looking into this in more detail next week (talking to a planner, etc), but apparently we have some thing which allows us to contribute more to our 401k than the theoretical limit? With how our stock is doing today, I'm going to be taking some of my "income" stock account and moving it into my "retirement" stock account, to learn how that works.
My understanding is that selling the stock counts as income; so selling only a specific percentage may keep you from crossing into another tax bracket. Also potential capital gains taxes, blah blah.
I've actually had to amend tax forms with this, so I feel like I can give like a...95% certainty answer? You pay income tax on any gains from a discount from your employer. Some employers do this automatically (mine does), others do not (my wife's former employer didn't). If they DO do it, make sure you're using the correct capital gains (market value, not purchase price), because otherwise you're paying taxes twice. I had to amend 3 years' worth of taxes and got hundreds of dollars back from it <_<.
If you hold onto a stock for a year or less, you pay income tax on any gains (assuming there are gains). If you hold onto it for more than a year, you pay capital gains tax which is almost DEFINITELY lower.
If you end up selling a lot, think about pre-paying some taxes that quarter, because you can get hit with a penalty for under-paying when you file your taxes. Combo of selling some last year, coupled with the new IRS withholding tables and the SALT cap fucked us with that for 2018.
My rulestick with company stock awards/buying programs is this.
Say instead of stock, you got a cash bonus instead. Would you feel comfortable taking all that cash and buying stock all in a single company?
Most of the time that'd be considered a risky move.
I'm not saying you shouldn't take advantage (and I've got a ton of RSUs for my employer myself...), but I think sometimes people discount the risk because they never saw the cash to start with.
Aioua on
life's a game that you're bound to lose / like using a hammer to pound in screws
fuck up once and you break your thumb / if you're happy at all then you're god damn dumb
that's right we're on a fucked up cruise / God is dead but at least we have booze
bad things happen, no one knows why / the sun burns out and everyone dies
My rulestick with company stock awards/buying programs is this.
Say instead of stock, you got a cash bonus instead. Would you feel comfortable taking all that cash and buying stock all in a single company?
Most of the time that'd be considered a risky move.
I'm not saying you shouldn't take advantage (and I've got a ton of RSUs for my employer myself...), but I think sometimes people discount the risk because they never saw the cash to start with.
That's a good way to explain it. It is a nice perk, but if the company is not doing well, stocks go down. So now if you get laid off you now also have a less valuable asset as a cushion.
Random other company retirement stuff: Look up how your company does 401k matching, if they do it.
In the fine print, mine does it per-paycheck, as you contribute. If you hit the cap early, they then review at the end of the year and match as a lump sum. So you lose out on potential gains from the matches in months you don't contribute (but on the flip-side, you'd lose out on the gains from your OWN contributions from the earlier months).
How matching works is something that tends to get glossed over in a lot of places of work. My job matches via traditional contributions instead of Roth; so I need to keep my contributions split to get the full match.
Random other company retirement stuff: Look up how your company does 401k matching, if they do it.
In the fine print, mine does it per-paycheck, as you contribute. If you hit the cap early, they then review at the end of the year and match as a lump sum. So you lose out on potential gains from the matches in months you don't contribute (but on the flip-side, you'd lose out on the gains from your OWN contributions from the earlier months).
I certainly missed out on contributions from my first years at my company because they didn't use a true-up system and I maxed out early. Kick myself for it all the time.
It’s very good now; I have very low debt utilization, never missed a payment and I have an active account that dates back to 2006, but one aspect is that I don’t actually have a lot of open accounts, since I try to avoid accruing debt whenever possible.
I’m starting to look out for credit cards with a generous cash back or rewards program so I can get into the habit of using a card, then paying off most/all of it before it rolls over into the next payment period and accrues interest. Any suggestions on where to look/where not to look, and whether this strategy has any major drawbacks? Right now I have a credit card with my credit union, and a card with Capital One that honestly isn’t very good, but it’s very old and has a really high credit limit in case of REALLY big emergencies, so I want to avoid closing it.
I'm not much of one for understanding how to maximize miles or stuff like that with airline cards - they tend to be the big rewards ones - and I also avoid annual fee cards (although in many cases they can certainly more than pay for themselves if you use the benefits). Others might have better recommendations with that.
Cards of mine which get the most use:
Amazon card - 5% back on amazon purchases
Costco card - Technically annual fee in that you have to be a member. 4% gas, 3% restaurants and travel, 2% at Costco, 1% anywhere else
Double Cash - default card for most things, since it's 2%
I also carry around my Chase Freedom, which has rotating benefits by quarter and sometimes is worth using the 5%. Only other "regular" category not covered is groceries (I DO have a 3% for that, but it's annoying to pay for reasons I won't get into, so I tend to not use it).
Don't plan on paying off "most" - pay off all. You'll take a hit when you first apply, so if you plan on applying, I'd do so en masse?
But yeah, the majority of my purchases are through the costco card and the double cash, tbh.
That’s what I do now, but there always seems to be rumblings that consistently maintaining a zero balance can lead to perceived inactivity in use, which can harm scores.
I use the Amazon Prime card for all my Amazon purchases and then an Amex Gold for everything else (4x points at grocery stores and restaurants, 3x points with airlines booked through Amex or the airlines directly). There are probably better cards for cash back, but I'm trying to amass airline miles and the Amex is pretty good for that. There is a $250/year fee, but you get $10/month off Doordash and $100 airline fee credit which I use to buy Southwest gift cards which I then use to buy flights.
Keeping a zero balance doesn't affect you negatively, if you're using a card. If the card isn't used regularly, it gets dropped from your report.
Some people keep old cards active by using them for a small expense once every few months or using them for one specific subscription.
I'm not sure what your score is now, but you may also want to temper your expectations. For example, anything above 750 is excellent; and anything above 700 is very very good.
The Costco and Double Cash cards are both very well received by those who have them. Like others here, I also have a Amazon card that's my current main card.
Do not pay ~18% interest on something because you think it might game your credit card FICO score.
Also, that score literally doesn't matter unless you are planning on taking out a loan sometime soon. Not that you should let it go to hell, but unless you are getting a mortgage this year it's not something you should think about.
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ChanusHarbinger of the Spicy Rooster ApocalypseThe Flames of a Thousand Collapsed StarsRegistered Userregular
just make sure to use any cards you have every once in a while and then pay them off
i have my older ones just set to one of my monthly subscriptions and then i autopay the balances every month
If you'd like to monitor 2 of your bureau scores, I recommend setting up an account at either Credit Karma or Credit Sesame. They don't spam your email with card offers and their apps are very simple dashboards.
Both are great for checking in periodically.
Also multiple cards offer credit score monitoring, though it's typically only one bureau. Discover, Barclay's, and I think Chase come to mind. I'm sure Citi (Costco card) has something too.
Keeping a zero balance doesn't affect you negatively, if you're using a card. If the card isn't used regularly, it gets dropped from your report.
Some people keep old cards active by using them for a small expense once every few months or using them for one specific subscription.
I'm not sure what your score is now, but you may also want to temper your expectations. For example, anything above 750 is excellent; and anything above 700 is very very good.
The Costco and Double Cash cards are both very well received by those who have them. Like others here, I also have a Amazon card that's my current main card.
I don’t mind saying; my score is 780 right now, and I’m hoping to crack 800.
I WISH I had a Costco nearby, and I would definitely grab that card if so. Alas, the closest one is over 90 minutes away.
If you'd like to monitor 2 of your bureau scores, I recommend setting up an account at either Credit Karma or Credit Sesame. They don't spam your email with card offers and their apps are very simple dashboards.
Both are great for checking in periodically.
Also multiple cards offer credit score monitoring, though it's typically only one bureau. Discover, Barclay's, and I think Chase come to mind. I'm sure Citi (Costco card) has something too.
I have credit karma, which is how I determined that the number of accounts on my report was negatively impacting my score. It’s definitely useful, but my concern on accuracy came about when I noticed they don’t use the FICO method, which is what the vast majority of lenders go by
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Get some quotes online and then go to your local credit union.
Saw an article (https://www.nj.com/advice/2020/01/why-did-new-jersey-tax-this-roth-ira-withdrawal.html?outputType=amp) about someone getting taxed on a non-earnings withdrawal, and as far as I understand it, it's because a five year waiting period didn't elapse(?).
My question is if that five year period "revolves" - like is it five years from opening the account when you can withdraw non-earned funds, or is it five years from each contribution year? Hope that makes sense...
https://www.law.cornell.edu/uscode/text/26/408A
so yeah, it's five years from the first contribution. so if you opened the account and made a contribution in the same year, that's the year you use.
Oh and one more question that just occurred to me - if I say make a max contribution to a Roth on Jan 1, and come the end of the year, I've ended up with a gross income that exceeds the income limit on Roth contributions, can that year's contribution be clawed back without penalty?
Here is my return history over the years. The number is using a time-weighted percentage instead of something a bit simpler (but I can at least just copy/paste). I can't find any reports older than 2007; which was the start of the "great recession" and probably the closest you'll come to an example of what you're worried experiencing.
Some takeaways:
* Every year I experienced a negative return, the following year was double-digit positive returns. Sample size is very low, so it's tough to draw a meaningful conclusion.
* Many people pulled their funds from the market in or around 2008 and missed the wave that followed (4 of 5 years over 10% returns)
* I'm expecting a ~20-23% return in 2019. I'll update once I receive the statement.
* I can probably do some simple math and come up with slightly different numbers instead of the time weighted numbers above. They would still tell the same story.
* The main conclusion is if you're not planning to need the money within 5 years, there's value to investing in stocks via funds/IRA/etc to take advantage of returns. The level of returns (and potential loss) is based on your risk tolerance.
You should ask this to a qualified financial advisor or CPA who knows the law rather than relying on the thread. Those are sufficiently technical that doing the wrong thing would likely hurt you. Either find a fee only planner who will probably be happy to charge you for an hour to chat, or check with your local public library and see if they host events where someone like that would be available. I know CPL does a 'money smart week' around March/ April.
The Monster Baru Cormorant - Seth Dickinson
Steam: Korvalain
Yeah it's sufficiently confusing enough that I'll probably get professional advice prior to taking any action.
From what I can gather off of investopedia, contributions can be withdrawn at any time: And then on the other hand their section on after tax contributions says this: Not sure I understand how this proportionality works, or if it's even the case. On the face of it, it would be kind of bullshit to be taxed twice on the contribution amount but US tax code is a nightmare so...
All theoretical at this point anyway. Would very much like to avoid touching retirement money to make a down payment unless there was a compelling reason to do so.
There are only two times that the value of an investment matters: the day you buy, and the day you sell. Everything in between is a paper rollercoaster.
Now, that rollercoaster isn't entirely pointless. It can potentially give you a good idea of what the future value will be and help inform whether you want to sell it or not. But until you actually sell it to someone else who is buying it, the value isn't real.
It gained another 1% today, and it's up 6% after hours.
e: 7.5%
e2: And don't worry, this isn't a major loss for me or anything :P I still made a tidy profit, and the sale was more just because our ESPP went from a 5% cap to a 10%, so I've got a TON of short-term ones right now, and my compensation started getting stock-heavy, too, so I'm getting close to an "all eggs in one basket" situation, so I tend to sell as soon as it's long-term and seems like a good time. I made a good profit off of the ones I sold already, just not as much as I could have, because I've been trained by years of the stock doing well leading up to earnings then taking on both good and bad news because the market is weird :V
"Price Purchased" < "Price Sold"
THEN
Itshappening.gif
Selling Board Games for Medical Bills
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” - Peter Lynch
I still have money in, I've just chopped off the more volatile ones for more conservative purchases. My gains have been ridiculous I don't think it's a bad move at all. And if we're just using quotes:
"I made a fortune getting out too soon." -J.P Morgan
Selling Board Games for Medical Bills
if the investment account doesn't have gold fringe then it abides by maritime financial accounting in which case
I still don't really understand why there's a MAGI limit on Roths but I guess that's just how it is. But hey it's a good problem maybe have I guess, all things considered.
Yeah I misunderstood this - didn't realize the 5 year clock only applied to qualified distributions of earnings. Reading the comments of that NJ story I looked at earlier, it was just an incorrect response by the writer.
I'm pretty sure that's how it works with traditional IRAs. In that example above, if you had $22,000 of non-deductible contributions to your IRA, and $3000 of earnings, I think the example they give about 13% of a withdrawal being earnings would be correct.
But I'll have to look into this a little, because that's not how I understood it to work with Roths. My assumption has been that you always withdraw contributions first. In that example, the entire $10,000 would be a return of your contributions. Then if you took $10,000 again, same thing, none of it is earnings. Then if you took another $3000, it would be $2000 contributions, and $1000 of gain. And the remaining $2000 would be all earnings, if and when you withdrew it.
But I haven't looked this up in a while, so I could be wrong, I'll have to check. In my experience (I'm a tax preparer), people generally either don't touch their roth until retirement, or they pull the entire amount out early. I've never known someone to make an early, but only partial, withdrawal.
I don’t want to get too specific about my employer, but it’s a large Canada-based multinational corporation that has produced reliable dividends since the day it was founded, is pretty well regulated, and which is currently considered undervalued on the stock market.
Basically, how much is too much when it comes to putting my eggs in this particular basket? My thought had been to pull out a third of it and put it into index ETFs in my TFSA, so that it’d make up no more than about 20% of my total wealth, and to try to maintain it at that level. But (and this may fall into trying to time the market), I’m reluctant to pull out while the stock is trading below what it “should” be at.
Thoughts?
Generally you don't want your paycheck and your retirement savings to be one and the same, so to speak. Enron and all that.
You may want to consult with a CPA regarding your personal financial situation. My understanding is that selling the stock counts as income; so selling only a specific percentage may keep you from crossing into another tax bracket. Also potential capital gains taxes, blah blah.
My company, when I was hired, had a cap of 10% of your income could be put into company stock. The company has "enrollment" periods, which last close to 6 months. The purchase price of the stock is the lowest during that period, with a 15% discount. So if you turn around and sell it immediately - free profit (unless something drastic happens during the period between the purchase and when we get it), you're taxed at income rate. If you don't, and hold onto it, it's effectively a "I defer a portion of my paycheck to the whims of the market for a lower tax rate." On the aggregate (I was hired in 2006), it's worked out well, aside from the one tanking. Anyway, I didn't take much advantage of it early on because I was busy building emergency savings/finishing paying off some debts from school, and they soon reduced it to 5% of our paycheck when the market contracted.
Stock account was handled by UBS (it's since changed to eTrade), while our retirement accounts (401k, employer matching, etc) are handled by Fidelity. So they've always been "separate" for me in how I think about them. My stock account turned into a "here's an investment I regularly sell off to get some extra cash at a lower tax rate/when I want to do a big purchase" - my ESPP was my down payment on my car, the down payment on my house. I just had to sell off HUGE amounts (over time in the latter case because I kept trying to buy and failing and had to sell more to keep up with the market
Recently, they bumped back up to 10%, and my compensation also shifted to include a lot of restricted stock units - as of this morning, somewhere around 60% of my employee stock value was in "unvested" RSUs which I technically don't "have" yet. I'm still trying to figure out the right "balance" (and the sudden move to be close to historical high for the stock ever complicates things) with where things are at now, mine actually ends up on the low end - below 10% of net worth. Of course, I have the double-whammy of my wife working for the same company too (completely different departments, but yeah), so I've got extra incentive to not be too heavily invested in our stock.
As a sidenote, I'm going to be looking into this in more detail next week (talking to a planner, etc), but apparently we have some thing which allows us to contribute more to our 401k than the theoretical limit? With how our stock is doing today, I'm going to be taking some of my "income" stock account and moving it into my "retirement" stock account, to learn how that works.
I've actually had to amend tax forms with this, so I feel like I can give like a...95% certainty answer? You pay income tax on any gains from a discount from your employer. Some employers do this automatically (mine does), others do not (my wife's former employer didn't). If they DO do it, make sure you're using the correct capital gains (market value, not purchase price), because otherwise you're paying taxes twice. I had to amend 3 years' worth of taxes and got hundreds of dollars back from it <_<.
If you hold onto a stock for a year or less, you pay income tax on any gains (assuming there are gains). If you hold onto it for more than a year, you pay capital gains tax which is almost DEFINITELY lower.
If you end up selling a lot, think about pre-paying some taxes that quarter, because you can get hit with a penalty for under-paying when you file your taxes. Combo of selling some last year, coupled with the new IRS withholding tables and the SALT cap fucked us with that for 2018.
Say instead of stock, you got a cash bonus instead. Would you feel comfortable taking all that cash and buying stock all in a single company?
Most of the time that'd be considered a risky move.
I'm not saying you shouldn't take advantage (and I've got a ton of RSUs for my employer myself...), but I think sometimes people discount the risk because they never saw the cash to start with.
fuck up once and you break your thumb / if you're happy at all then you're god damn dumb
that's right we're on a fucked up cruise / God is dead but at least we have booze
bad things happen, no one knows why / the sun burns out and everyone dies
That's a good way to explain it. It is a nice perk, but if the company is not doing well, stocks go down. So now if you get laid off you now also have a less valuable asset as a cushion.
Selling Board Games for Medical Bills
In the fine print, mine does it per-paycheck, as you contribute. If you hit the cap early, they then review at the end of the year and match as a lump sum. So you lose out on potential gains from the matches in months you don't contribute (but on the flip-side, you'd lose out on the gains from your OWN contributions from the earlier months).
I certainly missed out on contributions from my first years at my company because they didn't use a true-up system and I maxed out early. Kick myself for it all the time.
It’s very good now; I have very low debt utilization, never missed a payment and I have an active account that dates back to 2006, but one aspect is that I don’t actually have a lot of open accounts, since I try to avoid accruing debt whenever possible.
I’m starting to look out for credit cards with a generous cash back or rewards program so I can get into the habit of using a card, then paying off most/all of it before it rolls over into the next payment period and accrues interest. Any suggestions on where to look/where not to look, and whether this strategy has any major drawbacks? Right now I have a credit card with my credit union, and a card with Capital One that honestly isn’t very good, but it’s very old and has a really high credit limit in case of REALLY big emergencies, so I want to avoid closing it.
Cards of mine which get the most use:
I also carry around my Chase Freedom, which has rotating benefits by quarter and sometimes is worth using the 5%. Only other "regular" category not covered is groceries (I DO have a 3% for that, but it's annoying to pay for reasons I won't get into, so I tend to not use it).
Don't plan on paying off "most" - pay off all. You'll take a hit when you first apply, so if you plan on applying, I'd do so en masse?
But yeah, the majority of my purchases are through the costco card and the double cash, tbh.
Some people keep old cards active by using them for a small expense once every few months or using them for one specific subscription.
I'm not sure what your score is now, but you may also want to temper your expectations. For example, anything above 750 is excellent; and anything above 700 is very very good.
This guide may help: https://clark.com/story/credit-score-guide-what-to-know-how-to-improve/
The Costco and Double Cash cards are both very well received by those who have them. Like others here, I also have a Amazon card that's my current main card.
Also, that score literally doesn't matter unless you are planning on taking out a loan sometime soon. Not that you should let it go to hell, but unless you are getting a mortgage this year it's not something you should think about.
i have my older ones just set to one of my monthly subscriptions and then i autopay the balances every month
Both are great for checking in periodically.
Also multiple cards offer credit score monitoring, though it's typically only one bureau. Discover, Barclay's, and I think Chase come to mind. I'm sure Citi (Costco card) has something too.
I don’t mind saying; my score is 780 right now, and I’m hoping to crack 800.
I WISH I had a Costco nearby, and I would definitely grab that card if so. Alas, the closest one is over 90 minutes away.
I have credit karma, which is how I determined that the number of accounts on my report was negatively impacting my score. It’s definitely useful, but my concern on accuracy came about when I noticed they don’t use the FICO method, which is what the vast majority of lenders go by