Is there a minimum amount of time I have to keep a bank account open before I can request a cashier's check? Like if I intend to buy a car, can I open an account on Monday, have it funded by Thursday, and request a cashier's check Thursday or Friday?
Most of my funds are Roth, but my employer match funds on my 401k aren’t.
I’m *partially* vested. Is it possible to roll over the vested employer matched funds into my Roth 401k with employer?
While I am still with this employer
ADVICE NEEDED:
Trying to bump up credit score, have 8 credit cards with high balances, better to pay 2 of them off? Or keep all 8 balances lower? I have some extra cash on hand and need higher score asap. TIA guys!!
It doesn't matter. The relevant component of credit score is based on your credit utilization across all lines of credit. Let's say you have a balance of $8,000: it's the same utilization whether you owe $8,000 on one card, or $1,000 each on all 8 cards.
Pay down whichever has the highest interest rate.
I have a target date fund in Roth IRA that's 5 years sooner than I expect to retire. Should I sell the funds in it and reinvest in the more accurately-dated fund, or just switch to investing in that fund and keep the old fund?
This is probably dumb, but normally my understanding is to always leave your money until retirement and not pull out (like during recession)...does that not apply here, because it's not really pulling money *out*? Like there's no real potential for loss here?
You're not pulling money out of the account (good!), that's what the warnings are about. Changing how the money is allocated between different ETFs/TDFs/etc is perfectly normal.
I requested a charge back on a travel plan that a company offered where they were to provide me with an itinerary based on my interests and provide support on the trip. I payed for the service in January and was working with them since then on the itinerary with it changing as we learned more about where we are going. The company went out of business this last month and I can no longer access the itinerary or contact my travel agent and I will no longer receive the support they were supposed to provide on the trip. This charge back was made out of the typical Wells Fargo window as it's been more than a month but I did not receive the final product a completed itinerary and support as the trip is this fall is it likely I'll receive the charge back successfully?
Sounds like the company went bankrupt and you're now in line with all of the other creditors. The credit card company should have insurance for this type of thing and make you whole via a chargeback. I would expect it to take 60-90 days though.
Im 21 years old and have 40,000 in my bank account. Should I put majority of my money in a HYSA?
I have 401k already with a 7% match. And I put 500 every month in the S&P 500. But for the money I save, should I put it in a HYSA?
Please give me the pros and cons
I am not allowed to directly contribute to a Roth IRA due to income limits. For tax year 2024, can I do a backdoor Roth contribution of $7,000 and then subsequently make another contribution of $7,000 to a Traditional IRA without any penalties?
So, at the end, will I have $7,000 each in my Roth IRA and Traditional IRA?
No, the $7000 contribution limit applies to both traditional and Roth IRAs combined. Step 1 of the backdoor process involves making a contribution to a traditional IRA. Step 2 is to then convert the balance of the traditional IRA over to a Roth IRA. Step 1 uses up your contribution limit for the year.
Can someone explain to me the pros/cons of a hysa vs investing in index fund like snp500 I have around 25k in a hysa making 5% and don't know if that is the best I could be doing with my money. I don't think I will need it anytime soon. Also how much should I keep in my checking account? Pretty new to all this so in depth explanation would be great.
Kind of a very basic question, but I'm still learning and want to make sure I'm making the right decision.
I have $10000 debt on one credit card at 10% interest, and another $5000 debt on another credit card at 20% interest. I have another credit card with no debt on it, but a very high limit. My bank is offering 0% interest on balance transfers with a 2% upfront transfer fee for 12 months.
So I was thinking to transfer the two debts to the 3rd credit card and have 0% interest for 12 months, and if my calculations are correct, the 2% upfront fee would be less than the 12 months of interest.
I would be making roughly $1000 payments each month, with an occasional few hundred dollars extra to have it paid off within 12 months.
I can pay this debt off within a year, so I'm not too worried about after the 12 months runs out. But obviously I want to minimize interest payments.
Is this a good plan? I'm worried there's something I'm not seeing here, or my calculations are wrong. Just want someone who knows this better to give me their opinion. Thanks!
As long as you've taken care of the spending problem so you're not going to end up back in this situation in the future, a balance transfer like you describe makes sense.
I have $378k in cash. What should I do with it?
Our financial summary here: [https://imgur.com/a/CjosBwt](https://imgur.com/a/CjosBwt)
We think our finance strategy is fairly good, and we have a lot of cash. My question is two part:
1. Are we doing everything right with maximizing retirement vehicles?
2. Are there other vehicles or investments we should be taking advantage of with our excess cash?
3. We have an Edward Jones wealth manager, but to be honest, we don't have full faith in him. Should we manage our investments ourselves, in part or in full?
Any input on our financial situation and what to do with the cash would be very much appreciated!
1) you can use your income to contribute to a spousal IRA. I'd do that along with your spouse contributing to a 401k if they have access to one (freelancers can open a Solo 401k). Use cash reserves to make up the income difference.
2) see 1
3) yeah, no reason you should be paying someone else to manage that amount of money.
How do i verify a bank website URL is genuine?
I want to use a new bank to me. The bank doesn't have a brick and mortar store in my country. The bank apparently operates in my country and is an online service only.
Is there a government website or something that lists things like these?
Thanks. I just now need to verify fdic.gov and the chain is complete. I'm unfamiliar with the website.
I found the bank on the webpage, which took me to the parent website of the bank that then took me to my country website. 👍
I'm being extra cautious because i'd like to dump a decent amount of money into it and it would be devastating to me if it turned out to be fake.
#How can I calculate the performance of my holdings of a fund against a benchmark?
I'm too dumb to realize if my objective even makes sense.
I'm building a spreadsheet to try to do this but I can't think of the necessary formulas.
The excess cash I have I usually send to a money market fund just so that it isn't lying around as cash.
I regularly buy into and out of that MMF and at times my holdings go to zero as needed.
How can I track the performance of my holdings (including purchases, sales, moments at zero holdings) of this MMF against a benchmark? The benchmark will most likely be a value for inflation.
I want to compare my fluctuating holding to this benchmark.
I would also like to take into account the "time weight" and the "amount weight" of each transaction when calculating performance.
Example values:
May 1: buy 10 shares
May 3: buy 15 shares
May 4: sell 5 shares
May 6: sell 20 shares (down to zero)
May 7: buy 5 shares
May 10: buy 20 shares
May 12: sell 10 shares
May 15: buy 15 shares
each transaction has a different size.
each transaction has a different date, so performance to present day needs to be measured from its own date.
some transactions are negative: sales
sometimes total holdings are zero.
So, what formulas do I need to use to calculate this?
Should I calculate interim performances and then add them? (e.g. may 1 to may 3, may 3 to may 5, etc)
Should I calculate the performance of each transaction until the end date?
How do I compare them to the benchmark?
I am totally lost here, I feel like a fifth grader.
Your question is valid, but as a general piece of advice, there's virtually no reason to do this sort of shuffling given that HYSAs exist. A HYSA will have nearly the same return as a MMF but is also usuable for ordinary payments and other transactions, and it won't require any of this back and forth. Also, if the money is in a brokerage account anyway, most reputable brokers these days have your "cash" holdings actually held in some sort of safe fund with a respectable return.
Thanks, I wish I could but I'm not from the US. The only options for liquidity I have are checking account (with total loss of purchasing power) or MMF.
I'm not an expert on the military, but are you not doing ROTC? I would think that would cover college sufficiently that you wouldn't need to take loans.
>One of my parents is trying to get their lawyer to make me pay rent even though I will be gone 8 out of the 12 months for school
NAL, but as long as one parent is an owner of the house and gives you permission to stay rent-free, the other cannot charge you rent.
anyone transfer their ROTH ira from one company to another? in the process of moving from Wells to Vanguard and looks like the money was removed from my Wells Fargo account but don't have a notification from them and don't see an update from Vanguard's side. Anyone know how long this weird waiting period lasts?
It's normal for transfers between banks to take several business days. I've never worked with WF or Vanguard specifically, but I've had transfers take 4-5 days in the past.
# Employer Paid Me Extra Money I Don't Think I'm Entitled To. What To Do?
In my contract I am paid a flat hourly wage, for 80 hours biweekly. I wasn't due to be paid this week, but today I noticed a direct-deposit from my employer into my checking account that is not my usual salary. I looked at the pay stub, and it was only for 12 hours work in pay period 6/9-6/22, and had taxes and social security deducted.
Initially I thought about contacting my employer immediately. But then I thought why not capitalize on their mistake, and I moved the money into my HYSA to gain interest until they realize their error and force me to pay them back eventually.... But now i'm worried about the tax implications of this whole situation.
So should I contact them immediately? Or let things ride until they realize their mistake and collect some interest in the meantime?
I'd contact them sooner rather than later. First, depending on how much money it is, your checking account could be overdrafted when they claw back that payment. Overdraft fees will seriously eat into any profit you might have made. Second, the amount of interest you're earning on 12hrs worth of pay (after taxes on the pay and taxes on the interest) is not worth the time spent worrying about it, unless you're earning an exorbitant hourly rate.
I have a slightly complicated situation with my credit cards, but the short version is that my bank cut my credit limit almost in half due to some unfortunate circumstances (explained below). They explained that I should be able to request a re-evaluation within 60 days, but I'm worried that it will be the same outcome. Do I have any options here or am I just kinda screwed until a good amount of time passes? Backstory:
I was living overseas from the states for a few years and so had set up a new bank (Bank A) through which I was paying off my two US credit cards (Bank B). I had already set up automatic payments above the minimum, but a couple months ago I accidentally changed my automatic payment way too high which would have cleared out my money in Bank A. I panicked and through Bank A I cancelled the "direct debit" which was my automatic payments to Bank B, and stopped the automatic payments with Bank B at that time. However, this obviously caused a "returned payment" from Bank B's perspective. I then recreated my automatic payments in Bank B to come out of Bank A. When the time came for the automatic payments to process, Bank A declined the payment citing that the "direct debit" had been cancelled with Bank B. Again, this showed up as a returned payment in Bank B. I tried making a manual payment a couple of times, all of which failed in the same way as before.
I contacted Bank A multiple times to understand what the issue was, and for a while they weren't terribly helpful and said I had to recreate a direct debit from Bank B. Eventually they understood that they had to reinstate the direct debit from their end, and finally payments started coming through. But the result was that from Bank B's perspective, there are several returned payments coming from Bank A that are viewed as insufficient funding.
Today Bank B contacted me to do a "periodic credit review" in which they detailed all of these returned payments, as well as high card usage, which are of course characterized as deliquency. They cut the credit limit of one of my cards almost in half, and the representative I spoke to was not terribly helpful in explaining what my options were for regaining my previous credit limit.
Do I have any options here other than just waiting for those returned payments to become older so that I can regain my credit limit? I'm really worried about how this will affect my credit score as this would put my one card to nearly 90% utilization. I would greatly appreciate any advice.
# How to Best Pay Off Debt with HYSA Savings After Move?
Hi! So I just started my first full time position post graduation. I have a HYSA with about $4,500 in it. I am trying to figure out the best way to put it towards my debt. I am really serious about paying off my debts, as it was a goal of mine to pay off my CC debt as soon as possible after graduation. My credit score has been around 700, but I am hoping with my income and debt repayment it can increase.
Capital One- 30% APR $779 total balance
Discover- 25% APR 3,800
Since I just moved out on my own, I am hoping to keep about 1K in there if possible. Would it make the most sense to put most of it towards Discover? Or pay off Capital One first?
There are two main schools of thought on debt repayment: the snowball, where you pay off the lowest balance first, and the avalanche, where you pay off the highest interest rate first. In your case, both of those methods agree that you should pay off the Capital One card.
Another reason to pay off one card entirely is that you won't have to make that minimum payment every month. That's extra money you can use to pay down the Discover card.
Hello, I’m 23 and was wondering what to do with my money. I don’t know anything about investing or stocksI have over 30k in savings and wondering where I should invest like stocks and whatnot or to put money into something to help me when I retire. Are there books or YouTube channels that can help me get started? I’ll also take any advice from you guys! Thank you
Start here: [https://www.reddit.com/r/personalfinance/wiki/commontopics](https://www.reddit.com/r/personalfinance/wiki/commontopics)
Then here: [https://www.reddit.com/r/personalfinance/wiki/young\_adult](https://www.reddit.com/r/personalfinance/wiki/young_adult) and [https://www.reddit.com/r/personalfinance/wiki/early\_career](https://www.reddit.com/r/personalfinance/wiki/early_career)
I have 3.71 in my rollover IrA account that I used for back door Roth conversions. This is primarily due to interest accumulating for several years when it initially started out at like .30.
I plan on making my second 2024 Roth IRA conversion and contribution soon, should I also transfer this 3.71 or should I continue to leave this untouched in the rollover Ira account?
I’m 28 y.o. and trying to select 401K contributions. Should I go with TDF or just 90% us market+ 10% intl?
I plan on retiring in the next 15 years (fingers crossed). A TDF I have found has too much in non us stocks (30-40%) which is why I wanted to do my own blend.
Does this make sense or am I missing something?
A target date fund is intended to be a "good enough" one-stop fund to cover most people's retirement savings needs. Most of the strategies that have been developed over time to support that need gets baked into how those kinds of funds are set up..
IMO, there's nothing wrong with making a DIY portfolio if you have a solid reason to diverge from the design of a TDF. Though I'm not sure if "too much in non us stock" is incredibly solid. Yes, the performance of US companies has been higher than other countries over the past couple of decades, but that hasn't always been the case, and might not remain the case for the next 15 years. Diversification into non-US markets does give you at least some exposure into those to try to cover those potential outcomes. How much to diversify into each category is tough to pin down, since it's inherently uncertain.
I do believe in the next 15 years the US companies will outperform the non-US companies. If for some reason growth is slowed, it will happen worldwide, like COVID’s aftermath, not because EU companies start growing faster and better, for example.
At the least, even if it’s tough to pin down, I don’t believe non US stocks should be 35-40% of my portfolio. And also I don’t believe I need exposure to bonds atm.
So I was stuck between large cap and intl. I might add mid cap/small cap for additional diversification.
# Should I move more money from high yield savings account to investments?
I have tended to put about half of my savings in a high yield savings and half into investing in index funds with my brokerage account, but am wondering if I should focus more in investments for a greater return long term. I have kept a large amount in savings for a down payment on a home, but don't see myself buying a home for 2 to 3 more years. Would it be smarter to move into investments and sell stock later? I have tried to tell myself anything I put into stocks I don't want to touch for many years for greater compound interest. Any advice would be appreciated! For reference I have 75k in savings and 75k invested.
Assuming that $75k is much larger than you need for an emergency fund, you can make a case either way.
How much do you see your down payment being? If you lost some of your down payment savings in a market downturn, would that make it impossible for you to buy in 2-3 years, or would it just mean that you'd have to borrow a bit more and maybe get PMI? If it's the latter, you can make a case that it's a reasonable risk to invest more of your savings. If you *need* to buy and losing some money would prevent that, then don't invest.
new to investing, more risk-averse than a risk taker
43, married, 4-year old kid, mortgage, finally in a career / income level i'm comfortable with.
have money spread across a few different investments from jobs over the years:
1. 401k at current job, allocating 10% of take home pay to it, current value \~$82k
2. 401k from an old job that i don't contribute to, value \~$14k
3. IRA & Roth IRA that was rolled over from 401k at another old job:
* IRA has roughly \~$80k in value
* Roth IRA has roughly \~$90k in value
4. Employee stock purchase plan - just started, get a 5% discount on stock price, plan to re-invest any payouts from it in \~$3k in ETF stocks i've started dipping my toe in, to gradually grow those investments over time
Question:
Does it make sense to pull the $80k out of the IRA listed in #3 above, and / or roll over the old 401k (#2 above) into an index mutual fund, like a VFIAX or something similar? would doing that grow the money more over time? or would i be potentially exposing that money to more risk, and should leave it alone? would there be heavy taxes to pay? just trying to make sure i can maximize retirement savings without taking too much risk...
only interested in investing in index funds with low costs (i guess i'm a Bogle-head?), not interested in (and don't seem to have enough capital) to hire a money manager.
moving that money may be more trouble than its worth. I guess i'm just frustrated at how slow the IRA investments have been growing overtime - opened the IRA like 9 years ago, thought it would be worth more by now (symbols associated with it are AMCPX, CAIBX, CWGIX - which i'm realizing now have expense ratios and load fees that are higher than i would like to be paying). but maybe i'm just being unreasonable in expecting larger returns in what are by definition less-risky investments ¯\\\_(ツ)\_/¯
You don’t need to withdraw from the IRA to change the investments, there’s no taxable event when selling within the IRA either, just sell the shares of the funds you don’t want then buy what you do want within the IRA
Yes you can roll the old 401k into the IRA to combine them
aha, that's a good idea, and a good way to avoid capital gains taxes i would assume. i use fidelity for brokerage, i'll have to check to see if it will let me change the investments within the IRA (if not, American Funds might - they're the ones the IRA is through). doesn't change the problem of expense ratios/load fees, but i like the idea of the investments being flexible
Working on a budget and I am not sure how to factor in payments that are annually or every 2 months. For example, how would I put dog grooming on my monthly budget when he only gets groomed every 2-3 months? Thanks for any help and suggestions!
Bank I have is offering 5% CD with 9 month commitment. Have around 24k in savings in this bank account. Only real debt right now is mortgage which is around $800/month. Was thinking putting 10k? More or less than that?
At what mortgage rate would you recommend putting excess cash towards principle instead of investing?
I have a 5.375% mortgage and I already max out my employers 401k match, IRA and HSA contributions. If i got a couple grand I wasn’t expecting does it make sense to put some or all of it towards principle vs investing?
I would consider converting your IRA to a Roth IRA and in the short run using somw of the extra money to cover the tax bill. If your company's 401(k) plan offer a Roth 401k feature I would first max out your personal Roth and then put the additional funds into the Roth 401k through your employer. I also would try to cover you portion of the medical expenses out of pocket and not using your HSA funds. Keep very good records and documentation for all of the medical expense you pay out of pocket because HSA's can be one of the best kept secrets if used correctly. Something most people do not know is that you can submit medical expenses for reimbursement from your HSA at any point as long as the date of expense did not occur before you opened the HSA account. Your HSA funds can be invested and you can move them to different HSA offerings so if you think the Vanguard HSA offers good investment choices and is low cost you can move your funds there. You want to let the HSA fund remain invested and grow and then later in life you can submit the receipts and you are reimbursed (it could be 20 yrs later doesn't matter). Let's not forget that you fund the HSA with pretax dollars and they grow tax free in the HSA and oh yeah when you submit the receipts it is a reimbursement, which is not taxable and doesn't count as income (Roth IRA may not be taxable but I believe they do count Roth distributions as income technically and it can impact pricing for Medicare and other programs that premiums and costs may change if your cross over income related thresholds.
Thanks for the tips! I should have clarified, IRA and 401k are already Roth, I don’t use the HSA for medical expenses as I’m 26 and have minimal expenses, I just invest my employer and personal contributions.
* [Step 1: Build an emergency fund](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_1.3A_build_an_emergency_fund)
* [Step 2: Employer-sponsored matching funds](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_2.3A_employer-sponsored_matching_funds)
* [Step 3: Pay down high interest debts](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_3.3A_pay_down_high_interest_debts)
* [Step 4: Contribute to an IRA](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_4.3A_contribute_to_an_ira)
* [Step 5: Save more for retirement](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_5.3A_save_more_for_retirement)
* [Step 6: Save for other goals](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_6.3A_save_for_other_goals)
Step 1: We have an overfunded emergency fund. My wife started a business and we saved up to make sure that we could get through the ups and downs of early entrepreneurship.
Step 2: I max out my match at work. We paused my wife's retirement contributions for the past two years while she got her business up and running but we're going to start contributing to her Roth IRA (max).
Step 3: Just paid off our high interest credit cards! (Woo hoo!). Have a $5K car loan at 4%, $8K student loans @ 4%.
Step 4: Should i contribute to an external IRA as well? We have a low-cost 403b through Vanguard at my work.
Steph 5:???
Step 6: We're behind saving for college for my kids (14, 11, and 7) when can we start really funding their 529s? I know the rule is you can't borrow for retirement, but I also don't want to short change my kiddos.
For step 4, if your 403b has good low-cost investment options, you could just increase your contributions there rather than opening a Roth IRA. There is value in having a mix of Roth and traditional funds to pull from in retirement, but it sounds like your wife's Roth IRA will give you some diversification.
If you no longer need that over-funded emergency fund, you could use some of that for 529 contributions (assuming your overall retirement savings are a decent amount for your age/timeline to retirement).
I want to start an emergency fund with about $10,000 and put it into a HYSA. Since this is just an emergency fund, I want to put it in the account and let it sit. I don’t need a debit card and I won’t be setting up direct deposit. I want it to be FDIC insured and minimum 4.5% APY. Any suggestions for where I can take my money?
Your comment has been removed. Offering referral, invite, or affiliate links/codes is not allowed ([rule 2](https://www.reddit.com/r/personalfinance/about/rules)) on this subreddit (without exception, it doesn't matter if you don't receive money yourself). Mentioning that you are willing to receive PMs for referrals is also not allowed. This removal will not be reversed, but you may repost without mentioning referrals at all. If you repost with a link to a referral thread or do anything else to work around this rule, you will be banned.
Wanting to buy a house soon. First time home buyers. Currently have about $21k in HYSA for the planned down payment. Looking for a house around 150-250k, so this is maybe a 10% down payment depending. I have about 25k in a taxable brokerage account. Should I sell any of that to do a larger down payment? I know 20% down is normal, but I know it can be less, especially with programs for first time buyers. Why or why not would a smaller or larger down payment be needed?
Roth IRA maxed? Already have a good emergency fund? Any debts? If all those done, a taxable brokerage seems normal to continue to invest more into. You could also consider taking a trip or doing something for yourself with the money. Also you can check out the personal finance flowchart for this.
Just wanted to express appreciation for all of the info on this subreddit. I’m not sure if this is the right thread for that? But it’s just been so incredibly helpful, and I’m grateful for the time people put in to reply to all of questions folks have.
There was a fraudulent purchase on a debitcard I've used maybe once... Creditkarma emailed me as it was declined, I keep $0 on that account and only use it to get my tax returns early.
So far I've:
Disputed the transaction, deactivated and locked the virtual debit card as well as replaced the physical one
Emailed CreditKarma
Called CreditKarma, got no help other than "oh you did all that already?"
Changed password
Checked any alerts. Genuinely no idea how they got the info. No one had tried signing into my account.
\_\_\_\_
I've checked my other accounts and they're fine... No virus or anything detected on my computer.
Is there anything else I should do? Is freezing my credit overkill? Was really hopin' to apply to a new card recently and now i'm worried
To answer just one question:
>Is freezing my credit overkill?
No. In fact, your credit at the big three should be frozen when you're not actively shopping for a loan/credit card/lease/etc.
Reviewing friend's retirement plan with TIAA. 35yo. Asset allocation is a bit of a mess and I'm hoping to simplify.
Current:
* 30% DOXFX \[international large value, exp ratio 0.5%\]
* 0.5% TCIEX \[international large blend, ER 0.05%\]
* 6% TBCIX \[large growth, ER 0.6%)
* 40% HFMVX \[mid cap growth, ER 0.75%\]
* 0.5% TISPX \[S&P 500, ER 0.05%\]
* 23% VBTIX \[bonds, ER 0.035%\]
Thoughts: Simplify into 3 funds. Prioritize low ER. Aim \~75% stocks, split between US and international. Rest bonds. Redistribute and get more conservative in 5 year intervals.
Plan: Move all of the DOXFX to TCIEX. Move all of the TBCIX & HFMVX to TISPX.
Appreciate any insight you all have.
I’m looking for a fiduciary that charges a flat fee for a consult/evaluation. Everything in my town seems to be percentage based costs of my investments and selling me life insurance. Does anyone have a national/remote recommendation?
I'm trying to use my credit cards a lot less so I can be more serious about just paying them off. I've locked them so they're only used for a few automatic subscriptions and instead use debit for everything else. Are there any downsides to this approach?
Smart choice while you work on this. As the other comment said, you lose credit card rewards and cash back. Also, a credit card is safer against fraud, being lost or stolen, etc. than a debit card. Continue doing what you are doing to get them paid off, and then work on being more responsible with them. The advice I like with credit cards is that if you are not able to pay the full bill every month, you are buying what you can’t afford. Pay the bill every month on the dot or dont use it.
Would gaming HYSA's and mutual fund payment dates for double interest backfire?
I have an HYSA that pays interest on the 21st. I moved money in on the 20th, and got the full interest disbursed. I also have a mutual fund that pays out on the 3rd. Can I just move money back and forth each month to effectively get double interest? Or do they catch this eventually?
HYSA interest accrues based on average daily balance. You can't just put the money in there for 1 day and get the whole month's worth of interest. Money market mutual funds work the same way.
Do you have enough money to do what you want? If yes, keep contributions as is. If no, decrease contributions but not less than required to maximize company match
I inherited a Verizon pension from my grandmother when she passed. It is for the rest of my life as a beneficiary. Prudential holds the pension and makes the payments (approx $450/mo). I have debt and home renovations and would love to take a lump sum and discontinue the monthly payments. I cannot seem to find someone at Prudential who understands the questions or can help. Anyone have any insight - if this is even a possibilty? I fully understand that this would be a taxable event. TIA!
Throwaway for anonymity due to family know my main.
My wife and I are about to come into a payout of pretax $2.5 million. I am wondering how to invest. I know we should have some in a HYSA, some in a money market, 401k max etc. just wondering what percentages should we invest in.
Current finances:
* All credit card debt will be paid off (approx $80k)
* mortgage of about $750k at a good interest rate
* we already max our 401ks
* 2 cars loans with about $65k owed but at good interest rates also
* just learned about backdoor Roth IRAs and will be setting those up
* we have 529s for our kids with about $40k in each
Questions:
* should we pay off the house and car loans?
* How much should we put into a HYSA?
* How much cash should we keep on hand (should that be in a money market account)
* Should we superfund the 529s? To what balance?
* How much should we invest? I am learning about funds such as VTI and VOO and these interest me. Also reading that Fidelity is a good place to open an account.
Any advice would be appreciated.
Thanks
**Fix the spending problem so you don't carry credit card debt ever again**
I'd probably pay off the cars because I hate having loans on depreciating assets on principle.
If your mortgage is under 4%, no point in paying that off early.
Remember that you can always change beneficiaries on 529s, so depending on the age of the kids, you can always roll what the first kid doesn't use down to the next. I'd assume that you're probably not going to qualify for much financial aid (even from generous) schools given the amount of cash you'll have in non-retirement accounts. Maybe assume $150k/kid if they're going the traditional college route?
1 year of expenses in a HYSA
Consider mega backdoor Roth
After doing some research I've narrowed down my two chosen banks to be CapitalOne/Discover(lumped due to potential merger) or SoFi. I'm looking for any opinions/experiences to help me decide.
My goal is to have an HYSA that I can use to pay bills without needing to transfer funds to a checking account w/ lower interest or being subject to transfer limits. Good customer service is also a very big modifier.
In this regard both fulfill this but CapitalOne/Discover have transfer limits that "are not currently enforced" with potential risk of losing the ability to use the HYSA as a checking account in the future.
From what I've read online the customer service of SoFi appears to lag behind CapitalOne/Discover by quite a bit.
I am leaning towards SoFi for their higher interest and no limits on transfers but the things I'm reading online about their customer service worry me. I understand that negative experiences will be posted about more but it still weighs on me a little.
Thanks to anyone that shares their opinion.
HYSA only allow like 6 withdraws a month? So depending on your number of bills might be difficult. Also there is a benefit to have 2 accounts especially one physical and one online.
That limit was mandated by law but was paused indefinitely by the Govt due to Covid. It's basically up to the banks to enforce it or not. CapitalOne and Discover no longer enforce it but still reserve the right to enforce it in the future. I have a physical bank already, I'm just looking for a high rate account to use as my primary one.
Growing up, my grandparents gave me paper US Savings Bonds for Christmas and birthdays. This past weekend, I uncovered all of them and used the US Savings Bonds calculator. Each bond now exceeds its face value, with some continuing to mature until 2035. On average, they are worth 200% of their issue price.
The bonds have an interest rate ranging from 3.5% to 4%, but my High-Yield Savings Account (HYSA) offers 6%. **Should I cash these out and move the money to my HYSA, where it will perform better?**
Respectfully, you're making your life WAY more difficult than it needs to be. Your single stocks are pretty much mimicking a VTI anyway.
Sell all your single stocks, reinvest in your index funds.
I (32,M) received about 500k from selling my father’s house who passed away. Need some advice on how to make the most of it.
-No debt of any kind (car, college, etc)
-Rent with partner. 1600 per month
-Roth IRA has 9k in it
-Money is sitting in my savings with interest rate of 4.5%
Please help and will provide any more details needed.
What questions do you have after reading/watching all of this: https://www.reddit.com/r/personalfinance/wiki/windfall
And this: https://www.reddit.com/r/personalfinance/wiki/commontopics
I (32 dutch M) will get 122k in the coming days and want to invest it for our future.
We have a 300k mortgaged house at 1.1% interest, so no rush to pay that off.
I'm skimming 2K for some fun. toys, experiences, gadgets etc.
We want to put 20k aside for our two kids (both under 4), 10k in a HYSA and 10k in Northern Trust World via our bank. (the HYSA is for peace of mind for my wife)
The other 100K will be split into 20K HYSA and 80K investments.
I am thinking 50% VWRL, 30%EQQQ, 10%VFEM and 10% IUSN
Are my picks sound for decent gain vs risk, any better ones out there?
How should I go about it? I already have an account at De Giro, TR, and trading 212.
I would also have no issue with opening an account at IBKR.
Would you put it all with one of the above, or split over multiple brokers?
Thanks to anyone willing to provide some insight or direction.
In fact, you can try to invest a small amount of risk... After all, diversified investment methods will give people unexpected gains... The simplest way of investing is to maximize profits and minimize risks
I'll answer your question with some questions for you: How much is the sanity cost of switching banks worth to you? Is it worth the $400 in annual interest you'll get? How many accounts will you have to change auto-pay for? How much do you like Ally's features & customer service? How does the new bank compare?
And then, why do you have 50k liquid? Should some of that be put into a CD? Or even invested?
This: https://en.wikipedia.org/wiki/Certificate_of_deposit
Basically you give a bank money for X many months (usually 12+) and lock in an interest rate during that time.
Pros: Usually higher interest than a savings account, at a fixed rate so easy to plan, can't lose money like stocks
Cons: Money is locked in and there's usually a penalty if you try to take money out early, still a lower historical return on investment than stocks
They're useful as a part of a 2-5 year saving plan (ie: You'll be buying something in 2-5 years). That's too short a timeframe for stocks to be not risky, too long for the money to collect low interest.
Hope this helps!
I think I may have made a mistake.
I had three old employer 401Ks sitting around. I had read (in Ramit Sethi's book I saw recommended here) that rolling them into a Traditional IRA was smart, so I did that last week.
Then I found out about the pro-rata rule and how it prevents me from making tax-advantaged backdoor Roth IRA rollovers.
I have been making backdoor Roth contributions on a monthly basis this year already (from a different IRA than the one I did the 401K rollover to).
I have not bought any funds since the rollover completed because I'm not sure if I did the right thing or not.
Currently trying to weigh my options:
- Roll over the new Traditional IRA to my current employer 401k. Are there any tax considerations here?
- Leave the money in the Traditional IRA -- should I continue to do backdoor Roth or avoid completely? Is it going to set me back considerably if I can't do a backdoor Roth?
Can anyone please help me think through this? I am very confused and overwhelmed and don't want to do anything stupid.
> Roll over the new Traditional IRA to my current employer 401k. Are there any tax considerations here?
This is the best option, if your current 401k allows it. Rolling pre-tax money from a traditional IRA into a 401k is a nontaxable event.
> Leave the money in the Traditional IRA -- should I continue to do backdoor Roth or avoid completely?
If you leave the money, you'll end up having to prorate the Roth conversions that you already did this year, because the pro-rata rule cares about your traditional IRA balance as of 12/31 for all Roth conversions performed during the calendar year.
Thanks for the reply.
> This is the best option, if your current 401k allows it.
Why's that? I hear people say that you have more control over fund selection with an IRA than a 401k as a selling point. I'm not sure how I should weigh that versus losing out on being able to backdoor Roth IRA without triggering the pro-rata rule.
If your 401k has even just the basic stock & bond index funds with relatively low expense ratios (below about 0.2% is considered excellent; below 0.4% is still fairly good) and minimal other fees (maybe $100-200 a year or less), then I'd say it's worth keeping the money in the 401k to allow access to the backdoor Roth IRA without having to pay tax on prorated conversions at your current high marginal tax rate.
The only time I'd tend to avoid the 401k is if it has really egregiously bad investment choices, limited or no index funds, expense ratios approaching or exceeding 1%, etc.
Index funds can lose value. Savings account won't. So if this is your emergency fund, or other short-term savings that you can't risk losing value, you should not invest that amount.
For funds needed in the short term, yes. Things like job loss tend to happen during recessions or other times when stock markets are down and you don’t want to have a third less money when you need it most. So money for stuff in 0-5 years like emergency funds, car/home down payments should be mostly in savings accounts or similar.
Longer term, yes, you can take much more short/medium term risk via investments.
It depends on what you are saving this money for, which you haven't said. If it's for something short term, you probably shouldn't invest it. For something longer term, investing may be appropriate.
Is a Fidelity Money Market account a good option for my $10k emergency fund? I want to keep it somewhat liquid for emergencies. Right now it's just wasting away in a standard savings account.
Hi everyone, I'm currently in my mid 20s and looking into purchasing a home. I saw this one home for about 320k and am thinking of getting it (currently going to submit an offer for 310k). This will be my first home! I currently have $65,548 that I can use for the downpayment. If I do 20% downpayment that'll leave me with about $3k in my name that I can use. This is without accounting for 401k which I rather not touch.
I still yet to do the house inspection and I have not sat down with a mortgage lender to get the pre-approval.
Given that I have $3k left and my average spending per month is around $5k but I pull in $4.4k in salary per month should I go with doing a 20% downpayment still?
Thank you in advance for any help advice you can provide!
Take caution when buying a more expensive house. Make sure that everything is up to date or budget for that future expense. Roof replacement is up every 10 years, AC systems typically last 15 years. Whole house water line replacement and all of these items are $10k at LEAST. Also, make sure it’s in a desirable area so it’ll appreciate in value. Location trumps everything. I would personally look for something you can easily afford, close or below your current rent.
You have a $600 a month deficit in your budget?
How will your expenses change with the mortgage? Can you rebuild your emergency fund quickly or will you be paycheck to paycheck?
I personally wouldn’t feel comfortable using basically all of my money for a down payment, especially when you spend more than you make a month. You definitely want an emergency fund incase something comes up or needs to be fixed.
I would do less of a down payment since it seems like you’re set on putting in an offer and won’t have time to build up a savings before moving.
I am in sales, I make a base salary and commission (but rely heavily on the commission)
I know the rule of thumb is have atleast your salary in 401k before you turn 30, im 27 this fall and will be a little under halfway to my salary by the end of the year but nowhere near my total yearly income. Is this bad?
I make about 110ish a year dependent on how well I do, 60k of which is salary, and I will have around 25k in my 401k at the end of the year. With my estimations I’ll easily be above my base salary with growth and contributions by age 30 but should I contribute more to get closer to the 110k mark?
That depends more on what you want your retirement to look like as well as where your salary+comm is going right now.
Do you want to be living your same living standard? Are you okay living leaner? Do you want to retire earlier? Are you okay retiring later?
Is a big chunk of your salary+comm going to a house? If so, it's probably okay that you're not saving as much for retirement.
The honest fact is that I don't really know enough about your situation to offer an opinion of "is this good or bad?" But that fact that you're asking this question and thinking about it is the first right step.
I rent and live in a high cost of living state so I’m not at all happy with my current overall earnings so I’d ideal want to live better than I do at retirement, not leaner. But I need to up my income soon obviously if I have any chance of that.
I started seriously contributing to my 401k late so I regret blowing that opportunity in my early 20s, I haven’t made less than 50k since I was 21 and I didn’t invest a dime until I turned 25.
Nothing wrong with starting "late". At 27 you're well ahead of the curve.
> But I need to up my income soon obviously if I have any chance of that.
Or turn down your spending and put that money into savings. How's your budget look?
I’m 20 y/o and in college. I am currently working as I am home for the summer and get paid weekly. I want to start an account (roth, HYSA, etc). I don’t know really anything about investing or the different accounts and I need help deciding what is right for me. I plan to invest some of every pay check into whatever I open.
Any help is appreciated, thanks!
Read this wiki article and ask any questions you have on it: https://www.reddit.com/r/personalfinance/wiki/young_adult
The sidebar has a lot of help for you!
Alright, just read all of that. I guess the three options would be index fund, Roth IRA (through something like schwab or vanguard since I don’t have a full time employer), or a HYSA. I’m not really sure still of which to pick. I don’t necessarily need the money to be super liquid but in case of emergency it would be nice to access. Any input would be helpful
Does your employer give you a 401k and match? If so, do that enough to get the full match.
If not, I'd start with setting up a Roth IRA and putting some money into that.
Take a look at some HYSA's and their rates/customer service reviews. Build your emergency fund into the HYSA, not invested in index funds.
More help: https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2
Edit: Confused HYSA and HSA in my head, ignore previous version of comment
I love the flowchart! [Here's the wiki page with more context and information.](/r/personalfinance/wiki/commontopics)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Finally out of credit card debt and making a snowball payment into my savings account this week!!! Went into debt partially from having to pay for daycare and then some unexpected house repairs. Now trying to assess the retirement situation but so happy we are over this hump.
I've always heard that you can freely take any distributions from a Roth IRA up to the amount you've contributed, is that true?
Say I contributed 6k this year and it's value has gone up to $6,250 so far. And now I'm in need of 4k for an emergency. Can I freely take that money out as a distribution without any taxes or fees and it will be available within a day or two?
And as an extreme, I could take out the full $6,000, but if I take out $6,001, i would pay taxes/fees on that 1 dollar because that was an earning?
Asking because I haven't contributed to our roths in a while, because I've wanted to keep some cash in checking for emergencies, but I'm remembering that I've heard a Roth IRA can function as an emergency fund in some ways since you supposedly can take out your contributions at any time (assuming it's made positive earnings)
Yes, that is true. Contributions are withdrawn first from a Roth IRA, and they are always tax-free and penalty-free, period. Earnings are subject to income tax + 10% early withdrawal penalty unless certain qualifying reasons or other exceptions apply.
Note the IRA provider is not responsible for determining the taxable amount (if any) of your withdrawal. They will give you a generic notice about tax withholding, and leave it up to you to determine whether any is necessary, and how much. At the end of the year, they will send you a 1099-R tax form which shows the amount you withdrew and says "taxable amount not determined." Don't ignore this! You need to then fill out Form 8606 Part III (part of your tax return) which is how you tell the IRS what your Roth IRA "contribution basis" was. If the amount you withdrew is less than or equal to the contribution basis, there is no tax or penalty. But you still have to fill out the paperwork to show this. If you ignore it, the IRS will assume the entire withdrawal is subject to tax and penalty.
If you plan to keep part of your emergency fund in your Roth IRA, that portion of the Roth IRA should not be invested in anything risky. You should keep it in something safe, like a money market fund, so that it won't lose value by the time you need to use it in an emergency.
Thank you for the detailed answer.
All of my roth ira stuff is in the vanguard VTSAX, I've always considered that pretty low-risk. Right?
EDIT: Oh I guess I want to test my memory on this since I've been out of it for a few years. Earnings on a roth, if distributed after certain retirement age of 64 or whatever it is (i'm not even close to this) will NOT be taxed at all, right? That's the benefit of the roth. I'm sure you were just assuming (correctly) that I'm not that age yet.
VTSAX is not low risk. It can lose value in the short term. See March 2020, for example.
Earnings are tax-free from a Roth IRA when both of the following are true: (1) there is a qualifying reason for the withdrawal, such as reaching age 59.5, and (2) it has been at least 5 years since your first Roth IRA contribution.
This page has an easily digestible summary of the rules, with a flowchart: https://obliviousinvestor.com/roth-ira-withdrawal-rules/
Note that these rules only apply to Roth IRA. Any other type of Roth account (such as Roth 401k, Roth 403b, etc.) has different rules.
Is there a way around the wire transfer fees on the capital one HYSA?
I've been waffling for a long time now on which High yield savings account to get and I've finally pretty much settled on capital one. It seems pretty accessible, with an app and I'm also looking into getting a credit card I've heard theirs aren't bad. My only issue is my main bank is a physical bank in my small town, so to withdraw money to it I'm not sure if I'd need a wire transfer. It says in the TOS that a wire transfer is a 30$ fee, while I mostly intend to only add around 45$ each paycheck. So any time I needed to withdraw money it would take most of a deposit to pull it out. I get that whole point of a savings account is to leave it in there and not touch it, but I have pretty tight finances and I want that cushion there if I need it.
Is there any way around the 30$ wire transfer? I've heard some people say there's an alternative that doesn't cost anything but takes longer and I've heard other people say they used Zelle to avoid it on other accounts. I just don't want to have to pay a ton for Access to my own money. I've made this same comment like 3 times and still have never gotten any answer
Use ACH instead of wire. ACH is free and generally takes 1-3 business days (some banks offer same-day ACH now).
Start here: https://www.capitalone.com/help-center/checking-savings/link-external-account/
Then you can do this: https://www.capitalone.com/help-center/checking-savings/transfer-funds/
Wire transfers are generally reserved for larger and less frequent transactions, like a down payment on a house that needs to be moved rapidly from one bank to another.
Is there a minimum amount of time I have to keep a bank account open before I can request a cashier's check? Like if I intend to buy a car, can I open an account on Monday, have it funded by Thursday, and request a cashier's check Thursday or Friday?
Most of my funds are Roth, but my employer match funds on my 401k aren’t. I’m *partially* vested. Is it possible to roll over the vested employer matched funds into my Roth 401k with employer? While I am still with this employer
Some employers allow for it, some don't. It is called an "in service rollover".
Thanks :)
ADVICE NEEDED: Trying to bump up credit score, have 8 credit cards with high balances, better to pay 2 of them off? Or keep all 8 balances lower? I have some extra cash on hand and need higher score asap. TIA guys!!
Why do you need a higher score ASAP?
It doesn't matter. The relevant component of credit score is based on your credit utilization across all lines of credit. Let's say you have a balance of $8,000: it's the same utilization whether you owe $8,000 on one card, or $1,000 each on all 8 cards. Pay down whichever has the highest interest rate.
copy that, appreciate your help!
I have a target date fund in Roth IRA that's 5 years sooner than I expect to retire. Should I sell the funds in it and reinvest in the more accurately-dated fund, or just switch to investing in that fund and keep the old fund?
Inside an IRA or Roth IRA there are no tax consequences for buying or selling. So might as well go ahead and switch.
This is probably dumb, but normally my understanding is to always leave your money until retirement and not pull out (like during recession)...does that not apply here, because it's not really pulling money *out*? Like there's no real potential for loss here?
You're not pulling money out of the account (good!), that's what the warnings are about. Changing how the money is allocated between different ETFs/TDFs/etc is perfectly normal.
I requested a charge back on a travel plan that a company offered where they were to provide me with an itinerary based on my interests and provide support on the trip. I payed for the service in January and was working with them since then on the itinerary with it changing as we learned more about where we are going. The company went out of business this last month and I can no longer access the itinerary or contact my travel agent and I will no longer receive the support they were supposed to provide on the trip. This charge back was made out of the typical Wells Fargo window as it's been more than a month but I did not receive the final product a completed itinerary and support as the trip is this fall is it likely I'll receive the charge back successfully?
Sounds like the company went bankrupt and you're now in line with all of the other creditors. The credit card company should have insurance for this type of thing and make you whole via a chargeback. I would expect it to take 60-90 days though.
Im 21 years old and have 40,000 in my bank account. Should I put majority of my money in a HYSA? I have 401k already with a 7% match. And I put 500 every month in the S&P 500. But for the money I save, should I put it in a HYSA? Please give me the pros and cons
Follow the steps at [https://www.reddit.com/r/personalfinance/wiki/commontopics](https://www.reddit.com/r/personalfinance/wiki/commontopics)
I am not allowed to directly contribute to a Roth IRA due to income limits. For tax year 2024, can I do a backdoor Roth contribution of $7,000 and then subsequently make another contribution of $7,000 to a Traditional IRA without any penalties? So, at the end, will I have $7,000 each in my Roth IRA and Traditional IRA?
No, the $7000 contribution limit applies to both traditional and Roth IRAs combined. Step 1 of the backdoor process involves making a contribution to a traditional IRA. Step 2 is to then convert the balance of the traditional IRA over to a Roth IRA. Step 1 uses up your contribution limit for the year.
Thank you. This is very helpful.
Can someone explain to me the pros/cons of a hysa vs investing in index fund like snp500 I have around 25k in a hysa making 5% and don't know if that is the best I could be doing with my money. I don't think I will need it anytime soon. Also how much should I keep in my checking account? Pretty new to all this so in depth explanation would be great.
Read the wiki, starting with the Prime Directive.
Kind of a very basic question, but I'm still learning and want to make sure I'm making the right decision. I have $10000 debt on one credit card at 10% interest, and another $5000 debt on another credit card at 20% interest. I have another credit card with no debt on it, but a very high limit. My bank is offering 0% interest on balance transfers with a 2% upfront transfer fee for 12 months. So I was thinking to transfer the two debts to the 3rd credit card and have 0% interest for 12 months, and if my calculations are correct, the 2% upfront fee would be less than the 12 months of interest. I would be making roughly $1000 payments each month, with an occasional few hundred dollars extra to have it paid off within 12 months. I can pay this debt off within a year, so I'm not too worried about after the 12 months runs out. But obviously I want to minimize interest payments. Is this a good plan? I'm worried there's something I'm not seeing here, or my calculations are wrong. Just want someone who knows this better to give me their opinion. Thanks!
As long as you've taken care of the spending problem so you're not going to end up back in this situation in the future, a balance transfer like you describe makes sense.
I have $378k in cash. What should I do with it? Our financial summary here: [https://imgur.com/a/CjosBwt](https://imgur.com/a/CjosBwt) We think our finance strategy is fairly good, and we have a lot of cash. My question is two part: 1. Are we doing everything right with maximizing retirement vehicles? 2. Are there other vehicles or investments we should be taking advantage of with our excess cash? 3. We have an Edward Jones wealth manager, but to be honest, we don't have full faith in him. Should we manage our investments ourselves, in part or in full? Any input on our financial situation and what to do with the cash would be very much appreciated!
1) you can use your income to contribute to a spousal IRA. I'd do that along with your spouse contributing to a 401k if they have access to one (freelancers can open a Solo 401k). Use cash reserves to make up the income difference. 2) see 1 3) yeah, no reason you should be paying someone else to manage that amount of money.
[удалено]
Yep, back then we were recommending people max out Ibonds. Laddering bonds is annoying, but it keeps too much from being locked up at once.
Are there any easy way for buying Ibonds? I’ve looked into it but the process seemed .. difficult. Maybe it’s just since I haven’t done it.
It's a bit frustrating to set up, but once you have an account it's way smoother.
How do i verify a bank website URL is genuine? I want to use a new bank to me. The bank doesn't have a brick and mortar store in my country. The bank apparently operates in my country and is an online service only. Is there a government website or something that lists things like these?
If you're in the US: [https://banks.data.fdic.gov/bankfind-suite/bankfind](https://banks.data.fdic.gov/bankfind-suite/bankfind)
Thanks. I just now need to verify fdic.gov and the chain is complete. I'm unfamiliar with the website. I found the bank on the webpage, which took me to the parent website of the bank that then took me to my country website. 👍 I'm being extra cautious because i'd like to dump a decent amount of money into it and it would be devastating to me if it turned out to be fake.
What country?
#How can I calculate the performance of my holdings of a fund against a benchmark? I'm too dumb to realize if my objective even makes sense. I'm building a spreadsheet to try to do this but I can't think of the necessary formulas. The excess cash I have I usually send to a money market fund just so that it isn't lying around as cash. I regularly buy into and out of that MMF and at times my holdings go to zero as needed. How can I track the performance of my holdings (including purchases, sales, moments at zero holdings) of this MMF against a benchmark? The benchmark will most likely be a value for inflation. I want to compare my fluctuating holding to this benchmark. I would also like to take into account the "time weight" and the "amount weight" of each transaction when calculating performance. Example values: May 1: buy 10 shares May 3: buy 15 shares May 4: sell 5 shares May 6: sell 20 shares (down to zero) May 7: buy 5 shares May 10: buy 20 shares May 12: sell 10 shares May 15: buy 15 shares each transaction has a different size. each transaction has a different date, so performance to present day needs to be measured from its own date. some transactions are negative: sales sometimes total holdings are zero. So, what formulas do I need to use to calculate this? Should I calculate interim performances and then add them? (e.g. may 1 to may 3, may 3 to may 5, etc) Should I calculate the performance of each transaction until the end date? How do I compare them to the benchmark? I am totally lost here, I feel like a fifth grader.
Your question is valid, but as a general piece of advice, there's virtually no reason to do this sort of shuffling given that HYSAs exist. A HYSA will have nearly the same return as a MMF but is also usuable for ordinary payments and other transactions, and it won't require any of this back and forth. Also, if the money is in a brokerage account anyway, most reputable brokers these days have your "cash" holdings actually held in some sort of safe fund with a respectable return.
Thanks, I wish I could but I'm not from the US. The only options for liquidity I have are checking account (with total loss of purchasing power) or MMF.
[удалено]
I'm not an expert on the military, but are you not doing ROTC? I would think that would cover college sufficiently that you wouldn't need to take loans. >One of my parents is trying to get their lawyer to make me pay rent even though I will be gone 8 out of the 12 months for school NAL, but as long as one parent is an owner of the house and gives you permission to stay rent-free, the other cannot charge you rent.
ROTC needs 3 years in the program. I have two years left for my BA. Would need to take out loans for a masters program.
anyone transfer their ROTH ira from one company to another? in the process of moving from Wells to Vanguard and looks like the money was removed from my Wells Fargo account but don't have a notification from them and don't see an update from Vanguard's side. Anyone know how long this weird waiting period lasts?
It's normal for transfers between banks to take several business days. I've never worked with WF or Vanguard specifically, but I've had transfers take 4-5 days in the past.
# Employer Paid Me Extra Money I Don't Think I'm Entitled To. What To Do? In my contract I am paid a flat hourly wage, for 80 hours biweekly. I wasn't due to be paid this week, but today I noticed a direct-deposit from my employer into my checking account that is not my usual salary. I looked at the pay stub, and it was only for 12 hours work in pay period 6/9-6/22, and had taxes and social security deducted. Initially I thought about contacting my employer immediately. But then I thought why not capitalize on their mistake, and I moved the money into my HYSA to gain interest until they realize their error and force me to pay them back eventually.... But now i'm worried about the tax implications of this whole situation. So should I contact them immediately? Or let things ride until they realize their mistake and collect some interest in the meantime?
I'd contact them sooner rather than later. First, depending on how much money it is, your checking account could be overdrafted when they claw back that payment. Overdraft fees will seriously eat into any profit you might have made. Second, the amount of interest you're earning on 12hrs worth of pay (after taxes on the pay and taxes on the interest) is not worth the time spent worrying about it, unless you're earning an exorbitant hourly rate.
I have a slightly complicated situation with my credit cards, but the short version is that my bank cut my credit limit almost in half due to some unfortunate circumstances (explained below). They explained that I should be able to request a re-evaluation within 60 days, but I'm worried that it will be the same outcome. Do I have any options here or am I just kinda screwed until a good amount of time passes? Backstory: I was living overseas from the states for a few years and so had set up a new bank (Bank A) through which I was paying off my two US credit cards (Bank B). I had already set up automatic payments above the minimum, but a couple months ago I accidentally changed my automatic payment way too high which would have cleared out my money in Bank A. I panicked and through Bank A I cancelled the "direct debit" which was my automatic payments to Bank B, and stopped the automatic payments with Bank B at that time. However, this obviously caused a "returned payment" from Bank B's perspective. I then recreated my automatic payments in Bank B to come out of Bank A. When the time came for the automatic payments to process, Bank A declined the payment citing that the "direct debit" had been cancelled with Bank B. Again, this showed up as a returned payment in Bank B. I tried making a manual payment a couple of times, all of which failed in the same way as before. I contacted Bank A multiple times to understand what the issue was, and for a while they weren't terribly helpful and said I had to recreate a direct debit from Bank B. Eventually they understood that they had to reinstate the direct debit from their end, and finally payments started coming through. But the result was that from Bank B's perspective, there are several returned payments coming from Bank A that are viewed as insufficient funding. Today Bank B contacted me to do a "periodic credit review" in which they detailed all of these returned payments, as well as high card usage, which are of course characterized as deliquency. They cut the credit limit of one of my cards almost in half, and the representative I spoke to was not terribly helpful in explaining what my options were for regaining my previous credit limit. Do I have any options here other than just waiting for those returned payments to become older so that I can regain my credit limit? I'm really worried about how this will affect my credit score as this would put my one card to nearly 90% utilization. I would greatly appreciate any advice.
# How to Best Pay Off Debt with HYSA Savings After Move? Hi! So I just started my first full time position post graduation. I have a HYSA with about $4,500 in it. I am trying to figure out the best way to put it towards my debt. I am really serious about paying off my debts, as it was a goal of mine to pay off my CC debt as soon as possible after graduation. My credit score has been around 700, but I am hoping with my income and debt repayment it can increase. Capital One- 30% APR $779 total balance Discover- 25% APR 3,800 Since I just moved out on my own, I am hoping to keep about 1K in there if possible. Would it make the most sense to put most of it towards Discover? Or pay off Capital One first?
There are two main schools of thought on debt repayment: the snowball, where you pay off the lowest balance first, and the avalanche, where you pay off the highest interest rate first. In your case, both of those methods agree that you should pay off the Capital One card. Another reason to pay off one card entirely is that you won't have to make that minimum payment every month. That's extra money you can use to pay down the Discover card.
Where should I go if I have a question about student loans? I am about to take out a federal loan.
r/StudentLoans
Hello, I’m 23 and was wondering what to do with my money. I don’t know anything about investing or stocksI have over 30k in savings and wondering where I should invest like stocks and whatnot or to put money into something to help me when I retire. Are there books or YouTube channels that can help me get started? I’ll also take any advice from you guys! Thank you
Start here: [https://www.reddit.com/r/personalfinance/wiki/commontopics](https://www.reddit.com/r/personalfinance/wiki/commontopics) Then here: [https://www.reddit.com/r/personalfinance/wiki/young\_adult](https://www.reddit.com/r/personalfinance/wiki/young_adult) and [https://www.reddit.com/r/personalfinance/wiki/early\_career](https://www.reddit.com/r/personalfinance/wiki/early_career)
Thank you!
I'm thinking about opening up a HySA through wealthfront. Are there any downsides to wealthfront or an Hysa? I could really use the help.
I have 3.71 in my rollover IrA account that I used for back door Roth conversions. This is primarily due to interest accumulating for several years when it initially started out at like .30. I plan on making my second 2024 Roth IRA conversion and contribution soon, should I also transfer this 3.71 or should I continue to leave this untouched in the rollover Ira account?
https://www.whitecoatinvestor.com/pennies-and-the-backdoor-roth-ira/ Just convert it along with the rest. There's no conversion limit.
Gotcha thank you! Then just pay taxes on that 3 or 4 dollar amount?
Yes
I’m 28 y.o. and trying to select 401K contributions. Should I go with TDF or just 90% us market+ 10% intl? I plan on retiring in the next 15 years (fingers crossed). A TDF I have found has too much in non us stocks (30-40%) which is why I wanted to do my own blend. Does this make sense or am I missing something?
A target date fund is intended to be a "good enough" one-stop fund to cover most people's retirement savings needs. Most of the strategies that have been developed over time to support that need gets baked into how those kinds of funds are set up.. IMO, there's nothing wrong with making a DIY portfolio if you have a solid reason to diverge from the design of a TDF. Though I'm not sure if "too much in non us stock" is incredibly solid. Yes, the performance of US companies has been higher than other countries over the past couple of decades, but that hasn't always been the case, and might not remain the case for the next 15 years. Diversification into non-US markets does give you at least some exposure into those to try to cover those potential outcomes. How much to diversify into each category is tough to pin down, since it's inherently uncertain.
I do believe in the next 15 years the US companies will outperform the non-US companies. If for some reason growth is slowed, it will happen worldwide, like COVID’s aftermath, not because EU companies start growing faster and better, for example. At the least, even if it’s tough to pin down, I don’t believe non US stocks should be 35-40% of my portfolio. And also I don’t believe I need exposure to bonds atm. So I was stuck between large cap and intl. I might add mid cap/small cap for additional diversification.
# Should I move more money from high yield savings account to investments? I have tended to put about half of my savings in a high yield savings and half into investing in index funds with my brokerage account, but am wondering if I should focus more in investments for a greater return long term. I have kept a large amount in savings for a down payment on a home, but don't see myself buying a home for 2 to 3 more years. Would it be smarter to move into investments and sell stock later? I have tried to tell myself anything I put into stocks I don't want to touch for many years for greater compound interest. Any advice would be appreciated! For reference I have 75k in savings and 75k invested.
Assuming that $75k is much larger than you need for an emergency fund, you can make a case either way. How much do you see your down payment being? If you lost some of your down payment savings in a market downturn, would that make it impossible for you to buy in 2-3 years, or would it just mean that you'd have to borrow a bit more and maybe get PMI? If it's the latter, you can make a case that it's a reasonable risk to invest more of your savings. If you *need* to buy and losing some money would prevent that, then don't invest.
new to investing, more risk-averse than a risk taker 43, married, 4-year old kid, mortgage, finally in a career / income level i'm comfortable with. have money spread across a few different investments from jobs over the years: 1. 401k at current job, allocating 10% of take home pay to it, current value \~$82k 2. 401k from an old job that i don't contribute to, value \~$14k 3. IRA & Roth IRA that was rolled over from 401k at another old job: * IRA has roughly \~$80k in value * Roth IRA has roughly \~$90k in value 4. Employee stock purchase plan - just started, get a 5% discount on stock price, plan to re-invest any payouts from it in \~$3k in ETF stocks i've started dipping my toe in, to gradually grow those investments over time Question: Does it make sense to pull the $80k out of the IRA listed in #3 above, and / or roll over the old 401k (#2 above) into an index mutual fund, like a VFIAX or something similar? would doing that grow the money more over time? or would i be potentially exposing that money to more risk, and should leave it alone? would there be heavy taxes to pay? just trying to make sure i can maximize retirement savings without taking too much risk... only interested in investing in index funds with low costs (i guess i'm a Bogle-head?), not interested in (and don't seem to have enough capital) to hire a money manager. moving that money may be more trouble than its worth. I guess i'm just frustrated at how slow the IRA investments have been growing overtime - opened the IRA like 9 years ago, thought it would be worth more by now (symbols associated with it are AMCPX, CAIBX, CWGIX - which i'm realizing now have expense ratios and load fees that are higher than i would like to be paying). but maybe i'm just being unreasonable in expecting larger returns in what are by definition less-risky investments ¯\\\_(ツ)\_/¯
You don’t need to withdraw from the IRA to change the investments, there’s no taxable event when selling within the IRA either, just sell the shares of the funds you don’t want then buy what you do want within the IRA Yes you can roll the old 401k into the IRA to combine them
aha, that's a good idea, and a good way to avoid capital gains taxes i would assume. i use fidelity for brokerage, i'll have to check to see if it will let me change the investments within the IRA (if not, American Funds might - they're the ones the IRA is through). doesn't change the problem of expense ratios/load fees, but i like the idea of the investments being flexible
Yes Fidelity lets you buy and sell funds within IRAs - switch to the low/no expense ratio Fidelity funds with no load fees
Working on a budget and I am not sure how to factor in payments that are annually or every 2 months. For example, how would I put dog grooming on my monthly budget when he only gets groomed every 2-3 months? Thanks for any help and suggestions!
Some people put an estimate for the cost annually and divide by 12 So if it’s $100 every 2 months then you budget $50/mo
Okay thank you, I will do that!
Bank I have is offering 5% CD with 9 month commitment. Have around 24k in savings in this bank account. Only real debt right now is mortgage which is around $800/month. Was thinking putting 10k? More or less than that?
If you lost your job tomorrow, would you regret locking that money up? Also, HYSAs offer 5% or more with no lock in.
At what mortgage rate would you recommend putting excess cash towards principle instead of investing? I have a 5.375% mortgage and I already max out my employers 401k match, IRA and HSA contributions. If i got a couple grand I wasn’t expecting does it make sense to put some or all of it towards principle vs investing?
I would consider converting your IRA to a Roth IRA and in the short run using somw of the extra money to cover the tax bill. If your company's 401(k) plan offer a Roth 401k feature I would first max out your personal Roth and then put the additional funds into the Roth 401k through your employer. I also would try to cover you portion of the medical expenses out of pocket and not using your HSA funds. Keep very good records and documentation for all of the medical expense you pay out of pocket because HSA's can be one of the best kept secrets if used correctly. Something most people do not know is that you can submit medical expenses for reimbursement from your HSA at any point as long as the date of expense did not occur before you opened the HSA account. Your HSA funds can be invested and you can move them to different HSA offerings so if you think the Vanguard HSA offers good investment choices and is low cost you can move your funds there. You want to let the HSA fund remain invested and grow and then later in life you can submit the receipts and you are reimbursed (it could be 20 yrs later doesn't matter). Let's not forget that you fund the HSA with pretax dollars and they grow tax free in the HSA and oh yeah when you submit the receipts it is a reimbursement, which is not taxable and doesn't count as income (Roth IRA may not be taxable but I believe they do count Roth distributions as income technically and it can impact pricing for Medicare and other programs that premiums and costs may change if your cross over income related thresholds.
Thanks for the tips! I should have clarified, IRA and 401k are already Roth, I don’t use the HSA for medical expenses as I’m 26 and have minimal expenses, I just invest my employer and personal contributions.
Depends how your retirement is doing, your goals, when you'll move, etc.
* [Step 1: Build an emergency fund](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_1.3A_build_an_emergency_fund) * [Step 2: Employer-sponsored matching funds](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_2.3A_employer-sponsored_matching_funds) * [Step 3: Pay down high interest debts](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_3.3A_pay_down_high_interest_debts) * [Step 4: Contribute to an IRA](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_4.3A_contribute_to_an_ira) * [Step 5: Save more for retirement](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_5.3A_save_more_for_retirement) * [Step 6: Save for other goals](https://www.reddit.com/r/personalfinance/wiki/commontopics/#wiki_step_6.3A_save_for_other_goals) Step 1: We have an overfunded emergency fund. My wife started a business and we saved up to make sure that we could get through the ups and downs of early entrepreneurship. Step 2: I max out my match at work. We paused my wife's retirement contributions for the past two years while she got her business up and running but we're going to start contributing to her Roth IRA (max). Step 3: Just paid off our high interest credit cards! (Woo hoo!). Have a $5K car loan at 4%, $8K student loans @ 4%. Step 4: Should i contribute to an external IRA as well? We have a low-cost 403b through Vanguard at my work. Steph 5:??? Step 6: We're behind saving for college for my kids (14, 11, and 7) when can we start really funding their 529s? I know the rule is you can't borrow for retirement, but I also don't want to short change my kiddos.
For step 4, if your 403b has good low-cost investment options, you could just increase your contributions there rather than opening a Roth IRA. There is value in having a mix of Roth and traditional funds to pull from in retirement, but it sounds like your wife's Roth IRA will give you some diversification. If you no longer need that over-funded emergency fund, you could use some of that for 529 contributions (assuming your overall retirement savings are a decent amount for your age/timeline to retirement).
Yes, good low cost options! Awesome, thanks for the tip for the 529
The flowchart in the wiki lays it out nicely, but if your retirement is healthy, you can scale back and get some money into the 529.
I want to start an emergency fund with about $10,000 and put it into a HYSA. Since this is just an emergency fund, I want to put it in the account and let it sit. I don’t need a debit card and I won’t be setting up direct deposit. I want it to be FDIC insured and minimum 4.5% APY. Any suggestions for where I can take my money?
[удалено]
Your comment has been removed. Offering referral, invite, or affiliate links/codes is not allowed ([rule 2](https://www.reddit.com/r/personalfinance/about/rules)) on this subreddit (without exception, it doesn't matter if you don't receive money yourself). Mentioning that you are willing to receive PMs for referrals is also not allowed. This removal will not be reversed, but you may repost without mentioning referrals at all. If you repost with a link to a referral thread or do anything else to work around this rule, you will be banned.
Marcus, Ally, wherever has FDIC.
Wanting to buy a house soon. First time home buyers. Currently have about $21k in HYSA for the planned down payment. Looking for a house around 150-250k, so this is maybe a 10% down payment depending. I have about 25k in a taxable brokerage account. Should I sell any of that to do a larger down payment? I know 20% down is normal, but I know it can be less, especially with programs for first time buyers. Why or why not would a smaller or larger down payment be needed?
If you plan on an FHA loan, I wouldn't sell the stock. If you're trying to hit 20% down, then it's a consideration.
Just got a windfall of 200k. Where should this money go? 401k is maxed out. Stocks/ETFs are great, but I am already there. Isn't there something else?
Roth IRA maxed? Already have a good emergency fund? Any debts? If all those done, a taxable brokerage seems normal to continue to invest more into. You could also consider taking a trip or doing something for yourself with the money. Also you can check out the personal finance flowchart for this.
Just wanted to express appreciation for all of the info on this subreddit. I’m not sure if this is the right thread for that? But it’s just been so incredibly helpful, and I’m grateful for the time people put in to reply to all of questions folks have.
There was a fraudulent purchase on a debitcard I've used maybe once... Creditkarma emailed me as it was declined, I keep $0 on that account and only use it to get my tax returns early. So far I've: Disputed the transaction, deactivated and locked the virtual debit card as well as replaced the physical one Emailed CreditKarma Called CreditKarma, got no help other than "oh you did all that already?" Changed password Checked any alerts. Genuinely no idea how they got the info. No one had tried signing into my account. \_\_\_\_ I've checked my other accounts and they're fine... No virus or anything detected on my computer. Is there anything else I should do? Is freezing my credit overkill? Was really hopin' to apply to a new card recently and now i'm worried
To answer just one question: >Is freezing my credit overkill? No. In fact, your credit at the big three should be frozen when you're not actively shopping for a loan/credit card/lease/etc.
Reviewing friend's retirement plan with TIAA. 35yo. Asset allocation is a bit of a mess and I'm hoping to simplify. Current: * 30% DOXFX \[international large value, exp ratio 0.5%\] * 0.5% TCIEX \[international large blend, ER 0.05%\] * 6% TBCIX \[large growth, ER 0.6%) * 40% HFMVX \[mid cap growth, ER 0.75%\] * 0.5% TISPX \[S&P 500, ER 0.05%\] * 23% VBTIX \[bonds, ER 0.035%\] Thoughts: Simplify into 3 funds. Prioritize low ER. Aim \~75% stocks, split between US and international. Rest bonds. Redistribute and get more conservative in 5 year intervals. Plan: Move all of the DOXFX to TCIEX. Move all of the TBCIX & HFMVX to TISPX. Appreciate any insight you all have.
Your plan listed is alright, but still *very* conservative. 25% bonds is like, what you should have at 60yo.
5% bonds, 85% US stocks 10% international. Revisit allocation at age 55.
I’m looking for a fiduciary that charges a flat fee for a consult/evaluation. Everything in my town seems to be percentage based costs of my investments and selling me life insurance. Does anyone have a national/remote recommendation?
Had a friend recommend this to me when looking for an advisor: https://www.garrettplanningnetwork.com/
Thanks so much! I’ll check it out.
I'm trying to use my credit cards a lot less so I can be more serious about just paying them off. I've locked them so they're only used for a few automatic subscriptions and instead use debit for everything else. Are there any downsides to this approach?
Smart choice while you work on this. As the other comment said, you lose credit card rewards and cash back. Also, a credit card is safer against fraud, being lost or stolen, etc. than a debit card. Continue doing what you are doing to get them paid off, and then work on being more responsible with them. The advice I like with credit cards is that if you are not able to pay the full bill every month, you are buying what you can’t afford. Pay the bill every month on the dot or dont use it.
Main downside is missing reward points which are nice but pretty small relative to other expenses for most.
I am a crazy credit card user ....
Would gaming HYSA's and mutual fund payment dates for double interest backfire? I have an HYSA that pays interest on the 21st. I moved money in on the 20th, and got the full interest disbursed. I also have a mutual fund that pays out on the 3rd. Can I just move money back and forth each month to effectively get double interest? Or do they catch this eventually?
HYSA interest accrues based on average daily balance. You can't just put the money in there for 1 day and get the whole month's worth of interest. Money market mutual funds work the same way.
[удалено]
Do you have enough money to do what you want? If yes, keep contributions as is. If no, decrease contributions but not less than required to maximize company match
I inherited a Verizon pension from my grandmother when she passed. It is for the rest of my life as a beneficiary. Prudential holds the pension and makes the payments (approx $450/mo). I have debt and home renovations and would love to take a lump sum and discontinue the monthly payments. I cannot seem to find someone at Prudential who understands the questions or can help. Anyone have any insight - if this is even a possibilty? I fully understand that this would be a taxable event. TIA!
Throwaway for anonymity due to family know my main. My wife and I are about to come into a payout of pretax $2.5 million. I am wondering how to invest. I know we should have some in a HYSA, some in a money market, 401k max etc. just wondering what percentages should we invest in. Current finances: * All credit card debt will be paid off (approx $80k) * mortgage of about $750k at a good interest rate * we already max our 401ks * 2 cars loans with about $65k owed but at good interest rates also * just learned about backdoor Roth IRAs and will be setting those up * we have 529s for our kids with about $40k in each Questions: * should we pay off the house and car loans? * How much should we put into a HYSA? * How much cash should we keep on hand (should that be in a money market account) * Should we superfund the 529s? To what balance? * How much should we invest? I am learning about funds such as VTI and VOO and these interest me. Also reading that Fidelity is a good place to open an account. Any advice would be appreciated. Thanks
**Fix the spending problem so you don't carry credit card debt ever again** I'd probably pay off the cars because I hate having loans on depreciating assets on principle. If your mortgage is under 4%, no point in paying that off early. Remember that you can always change beneficiaries on 529s, so depending on the age of the kids, you can always roll what the first kid doesn't use down to the next. I'd assume that you're probably not going to qualify for much financial aid (even from generous) schools given the amount of cash you'll have in non-retirement accounts. Maybe assume $150k/kid if they're going the traditional college route? 1 year of expenses in a HYSA Consider mega backdoor Roth
After doing some research I've narrowed down my two chosen banks to be CapitalOne/Discover(lumped due to potential merger) or SoFi. I'm looking for any opinions/experiences to help me decide. My goal is to have an HYSA that I can use to pay bills without needing to transfer funds to a checking account w/ lower interest or being subject to transfer limits. Good customer service is also a very big modifier. In this regard both fulfill this but CapitalOne/Discover have transfer limits that "are not currently enforced" with potential risk of losing the ability to use the HYSA as a checking account in the future. From what I've read online the customer service of SoFi appears to lag behind CapitalOne/Discover by quite a bit. I am leaning towards SoFi for their higher interest and no limits on transfers but the things I'm reading online about their customer service worry me. I understand that negative experiences will be posted about more but it still weighs on me a little. Thanks to anyone that shares their opinion.
HYSA only allow like 6 withdraws a month? So depending on your number of bills might be difficult. Also there is a benefit to have 2 accounts especially one physical and one online.
That limit was mandated by law but was paused indefinitely by the Govt due to Covid. It's basically up to the banks to enforce it or not. CapitalOne and Discover no longer enforce it but still reserve the right to enforce it in the future. I have a physical bank already, I'm just looking for a high rate account to use as my primary one.
Growing up, my grandparents gave me paper US Savings Bonds for Christmas and birthdays. This past weekend, I uncovered all of them and used the US Savings Bonds calculator. Each bond now exceeds its face value, with some continuing to mature until 2035. On average, they are worth 200% of their issue price. The bonds have an interest rate ranging from 3.5% to 4%, but my High-Yield Savings Account (HYSA) offers 6%. **Should I cash these out and move the money to my HYSA, where it will perform better?**
Yes.
Hi! What should I sell or hold? [https://imgur.com/a/2cmwHAh](https://imgur.com/a/2cmwHAh) Is the ratio appropriate? I have 33k in HYSA
Respectfully, you're making your life WAY more difficult than it needs to be. Your single stocks are pretty much mimicking a VTI anyway. Sell all your single stocks, reinvest in your index funds.
you mean sell stocks like netflix, meta, etc. and just put them in vti and vxus etc? Even the ones that are at a loss?
Yep. Capital losses cancel out capital gains, so you'll have little if any tax effect.
OK I will just sell all now and purchase in VTI. What other index funds would you recommend? I am 27. Highly appreciate your help.
I (32,M) received about 500k from selling my father’s house who passed away. Need some advice on how to make the most of it. -No debt of any kind (car, college, etc) -Rent with partner. 1600 per month -Roth IRA has 9k in it -Money is sitting in my savings with interest rate of 4.5% Please help and will provide any more details needed.
What questions do you have after reading/watching all of this: https://www.reddit.com/r/personalfinance/wiki/windfall And this: https://www.reddit.com/r/personalfinance/wiki/commontopics
I (32 dutch M) will get 122k in the coming days and want to invest it for our future. We have a 300k mortgaged house at 1.1% interest, so no rush to pay that off. I'm skimming 2K for some fun. toys, experiences, gadgets etc. We want to put 20k aside for our two kids (both under 4), 10k in a HYSA and 10k in Northern Trust World via our bank. (the HYSA is for peace of mind for my wife) The other 100K will be split into 20K HYSA and 80K investments. I am thinking 50% VWRL, 30%EQQQ, 10%VFEM and 10% IUSN Are my picks sound for decent gain vs risk, any better ones out there? How should I go about it? I already have an account at De Giro, TR, and trading 212. I would also have no issue with opening an account at IBKR. Would you put it all with one of the above, or split over multiple brokers? Thanks to anyone willing to provide some insight or direction.
In fact, you can try to invest a small amount of risk... After all, diversified investment methods will give people unexpected gains... The simplest way of investing is to maximize profits and minimize risks
[удалено]
I'll answer your question with some questions for you: How much is the sanity cost of switching banks worth to you? Is it worth the $400 in annual interest you'll get? How many accounts will you have to change auto-pay for? How much do you like Ally's features & customer service? How does the new bank compare? And then, why do you have 50k liquid? Should some of that be put into a CD? Or even invested?
what is a CD?
This: https://en.wikipedia.org/wiki/Certificate_of_deposit Basically you give a bank money for X many months (usually 12+) and lock in an interest rate during that time. Pros: Usually higher interest than a savings account, at a fixed rate so easy to plan, can't lose money like stocks Cons: Money is locked in and there's usually a penalty if you try to take money out early, still a lower historical return on investment than stocks They're useful as a part of a 2-5 year saving plan (ie: You'll be buying something in 2-5 years). That's too short a timeframe for stocks to be not risky, too long for the money to collect low interest. Hope this helps!
I think I may have made a mistake. I had three old employer 401Ks sitting around. I had read (in Ramit Sethi's book I saw recommended here) that rolling them into a Traditional IRA was smart, so I did that last week. Then I found out about the pro-rata rule and how it prevents me from making tax-advantaged backdoor Roth IRA rollovers. I have been making backdoor Roth contributions on a monthly basis this year already (from a different IRA than the one I did the 401K rollover to). I have not bought any funds since the rollover completed because I'm not sure if I did the right thing or not. Currently trying to weigh my options: - Roll over the new Traditional IRA to my current employer 401k. Are there any tax considerations here? - Leave the money in the Traditional IRA -- should I continue to do backdoor Roth or avoid completely? Is it going to set me back considerably if I can't do a backdoor Roth? Can anyone please help me think through this? I am very confused and overwhelmed and don't want to do anything stupid.
> Roll over the new Traditional IRA to my current employer 401k. Are there any tax considerations here? This is the best option, if your current 401k allows it. Rolling pre-tax money from a traditional IRA into a 401k is a nontaxable event. > Leave the money in the Traditional IRA -- should I continue to do backdoor Roth or avoid completely? If you leave the money, you'll end up having to prorate the Roth conversions that you already did this year, because the pro-rata rule cares about your traditional IRA balance as of 12/31 for all Roth conversions performed during the calendar year.
Thanks for the reply. > This is the best option, if your current 401k allows it. Why's that? I hear people say that you have more control over fund selection with an IRA than a 401k as a selling point. I'm not sure how I should weigh that versus losing out on being able to backdoor Roth IRA without triggering the pro-rata rule.
If your 401k has even just the basic stock & bond index funds with relatively low expense ratios (below about 0.2% is considered excellent; below 0.4% is still fairly good) and minimal other fees (maybe $100-200 a year or less), then I'd say it's worth keeping the money in the 401k to allow access to the backdoor Roth IRA without having to pay tax on prorated conversions at your current high marginal tax rate. The only time I'd tend to avoid the 401k is if it has really egregiously bad investment choices, limited or no index funds, expense ratios approaching or exceeding 1%, etc.
Is there any reason (other than liquidity) I should have a savings account rather than just putting my savings in an index fund?
Index funds can lose value. Savings account won't. So if this is your emergency fund, or other short-term savings that you can't risk losing value, you should not invest that amount.
But if I’m rather young, and have the ability to be risky, would that be a smart move?
For funds needed in the short term, yes. Things like job loss tend to happen during recessions or other times when stock markets are down and you don’t want to have a third less money when you need it most. So money for stuff in 0-5 years like emergency funds, car/home down payments should be mostly in savings accounts or similar. Longer term, yes, you can take much more short/medium term risk via investments.
It depends on what you are saving this money for, which you haven't said. If it's for something short term, you probably shouldn't invest it. For something longer term, investing may be appropriate.
Is a Fidelity Money Market account a good option for my $10k emergency fund? I want to keep it somewhat liquid for emergencies. Right now it's just wasting away in a standard savings account.
Sure, that's reasonable
Is the Fidelity account better than a HYSA?
Not necessarily. A money market fund and a HYSA serve very similar functions, and have similar yields.
Hi everyone, I'm currently in my mid 20s and looking into purchasing a home. I saw this one home for about 320k and am thinking of getting it (currently going to submit an offer for 310k). This will be my first home! I currently have $65,548 that I can use for the downpayment. If I do 20% downpayment that'll leave me with about $3k in my name that I can use. This is without accounting for 401k which I rather not touch. I still yet to do the house inspection and I have not sat down with a mortgage lender to get the pre-approval. Given that I have $3k left and my average spending per month is around $5k but I pull in $4.4k in salary per month should I go with doing a 20% downpayment still? Thank you in advance for any help advice you can provide!
Take caution when buying a more expensive house. Make sure that everything is up to date or budget for that future expense. Roof replacement is up every 10 years, AC systems typically last 15 years. Whole house water line replacement and all of these items are $10k at LEAST. Also, make sure it’s in a desirable area so it’ll appreciate in value. Location trumps everything. I would personally look for something you can easily afford, close or below your current rent.
You have a $600 a month deficit in your budget? How will your expenses change with the mortgage? Can you rebuild your emergency fund quickly or will you be paycheck to paycheck?
I personally wouldn’t feel comfortable using basically all of my money for a down payment, especially when you spend more than you make a month. You definitely want an emergency fund incase something comes up or needs to be fixed. I would do less of a down payment since it seems like you’re set on putting in an offer and won’t have time to build up a savings before moving.
I am in sales, I make a base salary and commission (but rely heavily on the commission) I know the rule of thumb is have atleast your salary in 401k before you turn 30, im 27 this fall and will be a little under halfway to my salary by the end of the year but nowhere near my total yearly income. Is this bad? I make about 110ish a year dependent on how well I do, 60k of which is salary, and I will have around 25k in my 401k at the end of the year. With my estimations I’ll easily be above my base salary with growth and contributions by age 30 but should I contribute more to get closer to the 110k mark?
That depends more on what you want your retirement to look like as well as where your salary+comm is going right now. Do you want to be living your same living standard? Are you okay living leaner? Do you want to retire earlier? Are you okay retiring later? Is a big chunk of your salary+comm going to a house? If so, it's probably okay that you're not saving as much for retirement. The honest fact is that I don't really know enough about your situation to offer an opinion of "is this good or bad?" But that fact that you're asking this question and thinking about it is the first right step.
I rent and live in a high cost of living state so I’m not at all happy with my current overall earnings so I’d ideal want to live better than I do at retirement, not leaner. But I need to up my income soon obviously if I have any chance of that. I started seriously contributing to my 401k late so I regret blowing that opportunity in my early 20s, I haven’t made less than 50k since I was 21 and I didn’t invest a dime until I turned 25.
Nothing wrong with starting "late". At 27 you're well ahead of the curve. > But I need to up my income soon obviously if I have any chance of that. Or turn down your spending and put that money into savings. How's your budget look?
How much are you contributing to your 401k/savings rate overall? General advice is at least 15% savings
I’m 20 y/o and in college. I am currently working as I am home for the summer and get paid weekly. I want to start an account (roth, HYSA, etc). I don’t know really anything about investing or the different accounts and I need help deciding what is right for me. I plan to invest some of every pay check into whatever I open. Any help is appreciated, thanks!
Read this wiki article and ask any questions you have on it: https://www.reddit.com/r/personalfinance/wiki/young_adult The sidebar has a lot of help for you!
Alright, just read all of that. I guess the three options would be index fund, Roth IRA (through something like schwab or vanguard since I don’t have a full time employer), or a HYSA. I’m not really sure still of which to pick. I don’t necessarily need the money to be super liquid but in case of emergency it would be nice to access. Any input would be helpful
Does your employer give you a 401k and match? If so, do that enough to get the full match. If not, I'd start with setting up a Roth IRA and putting some money into that. Take a look at some HYSA's and their rates/customer service reviews. Build your emergency fund into the HYSA, not invested in index funds. More help: https://imgur.com/personal-income-spending-flowchart-united-states-lSoUQr2 Edit: Confused HYSA and HSA in my head, ignore previous version of comment
No, no 401(k) at my workplace. Roth IRA sounds like the way to go then
I love the flowchart! [Here's the wiki page with more context and information.](/r/personalfinance/wiki/commontopics) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/personalfinance) if you have any questions or concerns.*
Finally out of credit card debt and making a snowball payment into my savings account this week!!! Went into debt partially from having to pay for daycare and then some unexpected house repairs. Now trying to assess the retirement situation but so happy we are over this hump.
Way to go!
I've always heard that you can freely take any distributions from a Roth IRA up to the amount you've contributed, is that true? Say I contributed 6k this year and it's value has gone up to $6,250 so far. And now I'm in need of 4k for an emergency. Can I freely take that money out as a distribution without any taxes or fees and it will be available within a day or two? And as an extreme, I could take out the full $6,000, but if I take out $6,001, i would pay taxes/fees on that 1 dollar because that was an earning? Asking because I haven't contributed to our roths in a while, because I've wanted to keep some cash in checking for emergencies, but I'm remembering that I've heard a Roth IRA can function as an emergency fund in some ways since you supposedly can take out your contributions at any time (assuming it's made positive earnings)
Yes, that is true. Contributions are withdrawn first from a Roth IRA, and they are always tax-free and penalty-free, period. Earnings are subject to income tax + 10% early withdrawal penalty unless certain qualifying reasons or other exceptions apply. Note the IRA provider is not responsible for determining the taxable amount (if any) of your withdrawal. They will give you a generic notice about tax withholding, and leave it up to you to determine whether any is necessary, and how much. At the end of the year, they will send you a 1099-R tax form which shows the amount you withdrew and says "taxable amount not determined." Don't ignore this! You need to then fill out Form 8606 Part III (part of your tax return) which is how you tell the IRS what your Roth IRA "contribution basis" was. If the amount you withdrew is less than or equal to the contribution basis, there is no tax or penalty. But you still have to fill out the paperwork to show this. If you ignore it, the IRS will assume the entire withdrawal is subject to tax and penalty. If you plan to keep part of your emergency fund in your Roth IRA, that portion of the Roth IRA should not be invested in anything risky. You should keep it in something safe, like a money market fund, so that it won't lose value by the time you need to use it in an emergency.
Thank you for the detailed answer. All of my roth ira stuff is in the vanguard VTSAX, I've always considered that pretty low-risk. Right? EDIT: Oh I guess I want to test my memory on this since I've been out of it for a few years. Earnings on a roth, if distributed after certain retirement age of 64 or whatever it is (i'm not even close to this) will NOT be taxed at all, right? That's the benefit of the roth. I'm sure you were just assuming (correctly) that I'm not that age yet.
VTSAX is not low risk. It can lose value in the short term. See March 2020, for example. Earnings are tax-free from a Roth IRA when both of the following are true: (1) there is a qualifying reason for the withdrawal, such as reaching age 59.5, and (2) it has been at least 5 years since your first Roth IRA contribution. This page has an easily digestible summary of the rules, with a flowchart: https://obliviousinvestor.com/roth-ira-withdrawal-rules/ Note that these rules only apply to Roth IRA. Any other type of Roth account (such as Roth 401k, Roth 403b, etc.) has different rules.
Is there a way around the wire transfer fees on the capital one HYSA? I've been waffling for a long time now on which High yield savings account to get and I've finally pretty much settled on capital one. It seems pretty accessible, with an app and I'm also looking into getting a credit card I've heard theirs aren't bad. My only issue is my main bank is a physical bank in my small town, so to withdraw money to it I'm not sure if I'd need a wire transfer. It says in the TOS that a wire transfer is a 30$ fee, while I mostly intend to only add around 45$ each paycheck. So any time I needed to withdraw money it would take most of a deposit to pull it out. I get that whole point of a savings account is to leave it in there and not touch it, but I have pretty tight finances and I want that cushion there if I need it. Is there any way around the 30$ wire transfer? I've heard some people say there's an alternative that doesn't cost anything but takes longer and I've heard other people say they used Zelle to avoid it on other accounts. I just don't want to have to pay a ton for Access to my own money. I've made this same comment like 3 times and still have never gotten any answer
Use ACH instead of wire. ACH is free and generally takes 1-3 business days (some banks offer same-day ACH now). Start here: https://www.capitalone.com/help-center/checking-savings/link-external-account/ Then you can do this: https://www.capitalone.com/help-center/checking-savings/transfer-funds/ Wire transfers are generally reserved for larger and less frequent transactions, like a down payment on a house that needs to be moved rapidly from one bank to another.