Doesnt Mitt Romney have like 200 million in his Roth IRA?
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How to Invest for Retirement
- Thread starter Piecake
- Start date
Doesnt Mitt Romney have like 200 million in his Roth IRA?
Randolph Freelander
Member
Roth? I'm not saying he doesn't, and I don't care if he does, but that's after tax so it's not particularly relevant to what the article is lamenting -- pre-tax contributions and the related non-flat income tax deductions.
Well, it is pretty much guaranteed all of his money started in a traditional roth considering his income. The point I am making is that 200 million could have easily remained in a traditional or be in some other rich guy's traditional if they preferred, for tax purposes, to have it in a pre-tax account.
Randolph Freelander
Member
Well, to be clear. They're getting no pre-tax benefit from contributing to an IRA. There's no pre-tax deduction for anyone wealthy or even barely above the median income. A traditional IRA defers taxes on gains until withdrawals, but that's not what we're talking about. A Roth has the obvious benefit of avoiding taxes upon withdrawal, but again, we're talking hard contribution limits each year. It doesn't add up to much (to someone who is wealthy). Now, I'm not completely naive, I know there's all types of loopholes and backdoors and who knows what else, and feel free to close them right up.
Focus efforts on encouraging those of lower income to contribute to their 401Ks. They'll benefit more as a percentage of their own tax bill and income than a wealthy person ever would. Focus on educating the public. I can't tell you how angry it makes me seeing someone waste entirely too much money on the lottery, for instance. It sends me into a rage. Governments running these scams should be ashamed, and should be mandated to run anti-gambling, pro-savings commercials frequently.
Not to go (further) off on a rant, but I mean, I work for Wells Fargo. In the office building I'm in, self-contained, only open to the bank, there's 2 convenience stores, both sell lottery tickets. Employees of the bank will spend 20, 40, 60 dollars at a time on lottery tickets. And they work for a bank! That's... I swear... I about pass out. Wells Fargo for one shouldn't allow that scam inside its own building, I don't care if the convenience stores are operated by an outside vendor. Beyond that, they should absolutely be educating the employees on how that is so entirely a waste of money. And the governments running these scams should be responsible for so much more.
Nevermind people living above their means, taking trips they can't afford, buying houses too big and new cars even before the last one (or two, or three) is even paid off while not putting aside one dime for the future.... but I'm not going to go on a rant or anything.
Teach the lower and middle income people to save and invest wisely. Leave the tax benefits alone.
Quiet: The power of introverts actually has some interesting thoughts on investment and risk. Basically, the people who buy lottery tickets and the wall street traders are basically wired the same. They go for the buzz of the high reward and see the risk as an obstacle that they need to run over and ignore on there way to their goal. It is more of a primal instinct than reflective thought. The only real difference is that the wall street trader likely has a shit ton more money and is playing a game that has better odds since he has a ton of money.
All of that is rather hard for me to comprehend because I am an introvert and don't chase after highs. What that means is that a number of people will probably will never be good at saving for retirement simply due to their temperament and personality, and no amount of education will likely change that.
Also, lower income people likely don't have enough money to save for retirement since their paycheck is all going towards daily expenditures.
As you might have guessed, I would be thrilled if we simply got rid of the 401k and expanded social security to a livable income (tax increases would obviously be involved).
I'm looking at setting up a Roth IRA, but I'm having an issue with having a diverse portfolio, only being able to contribute 5500 and meeting the funds minimum investments.
For example, the investors class Total US Stock Market Index fund has a minimum of 3000. If I also wanted to invest in the total international stock market index, I'd also need to fork over 3000. But now I'm over the Roth IRA contribution limit for the year.
What can I do about this? Should I just invest all my contributions to one fund this year and then start diversifying the portfolio the following year (so I can make the fund minimum contribution)?
For example, the investors class Total US Stock Market Index fund has a minimum of 3000. If I also wanted to invest in the total international stock market index, I'd also need to fork over 3000. But now I'm over the Roth IRA contribution limit for the year.
What can I do about this? Should I just invest all my contributions to one fund this year and then start diversifying the portfolio the following year (so I can make the fund minimum contribution)?
That's what I would do. I would pick the stock that you plan to more strongly weight to invest in first. My US stock is 60% of my portfolio, so I would invest in US stock first.
Also, make sure that you are including your whole portfolio. I mean, my Roth IRA is not balanced at all, but when you take into consideration my 401k and taxable account it is.
Randolph Freelander
Member
Well, what I would do isn't necessarily what you should do. But me, knowing what I did in a sort of similar situation at a sort of similar age just a couple of years ago, I would first answer the following:
1. Do you have a job, sir?
-> a. Notably, for a company that is not yourself.
2. Do they have a good 401K plan?
-> a.Good selection of funds, particularly index funds
-> b. Low fees
-> c. What is the employer match?
-> d. Are you eligible for the full employer match this year?
-> e. Have you been contributing?
3. What is your top marginal tax rate?
4. Does your income make you eligible for
-> a. Pre-tax contributions to a traditional IRA (phases out for single taxpayers from 59000 - 69000)
-> b. After-tax contributions to a Roth IRA (phases out for single taxpayers from 114000 - 129000)
MightyKAC
Member
1. Yes I do I'm a government contractor
2. I believe my company goes through Vanguard, however the nature of my job means that I could be work at a different company by the end of the year (with the same contract mind you) so I don't know how much faith I can put in employee investment/retirement bennies.
3. I work overseas and as such don't pay state or federal taxes.
4. I'm eligible for a traditional IRA
Sorry for the late reply and thanks for all the help.
Well, if you have access to a 401k now I would definitely take advantage of it. That doesnt disappear if you change jobs, meaning that you no longer have access to a 401k, you can roll that 401k over into an IRA (best method), sit on it and combine it with your next 401k (alright), or cash out (NO!!!!).
If it was me, I would put 17,500 into your 401k (the max for this year). That 17,500 will be from your paycheck and not your lump sum savings so you will have to do a bit of finagling. I would then put 5.5K into an IRA (I like Roths, but look that up for yourself). That is pretty much the maximum retirement savings that you can do for this year, so save the rest for next year. The priority is usually 401k to the company match, then max out your IRA, then contribute to the 401k again.
If you don't have access to a 401k, I would put 5.5k into an IRA and the rest in a taxable that I would then move over to my IRA the next year. This is a bit of a gamble so make sure you are comfortable and do some research before doing this yourself since I am fairly certain you have to sell and then buy to move funds from a taxable to an IRA - meaning that the investment will be short term, and short term investments are more risky.
Now, if possible, I would put two funds in those retirement accounts. US total stock market and Total international stock market at a 60/40 ratio. If I didnt have access to that in my 401k I would try to find a close equivalent. A close equivalent would be a very low expense ratio index fund.
Before you do that, I would do some research and make sure you understand why you are doing that. If you don't understand the reason why you are investing the way you are and are comfortable with your asset allocation that will make it more likely that you will do somethign stupid like panic and sell during a recession. If you do some research and discover that you arent comfortable with a 100% stock allocation and want some bonds, then do that.
chaosblade
Unconfirmed Member
Wonder how a Roth works in his case. If he's not paying state or federal taxes a Roth seems like it would be perfect since he would end up not paying taxes at all on that money, ever? Seems almost too perfect though, I'm sure Uncle Sam would get his somehow.
But if you have the money to invest I'd say go ahead and do the 401k too if you have the money to put into it, even if you roll it over later. At 37 you are going to need to put more money in than someone who started earlier, so just taking advantage of a traditional/Roth might not get you where you want to be. Take advantage of the company match though, I thought the 17,500 max included the match so putting that much in yourself means you are missing out on free money.
If you have a 6% match for example, 16,510 will put you right on 17,500 - so that's a free $1000 (well, $990) toward your retirement.
Just my less-educated-than-most-ITT thoughts.
But if you have the money to invest I'd say go ahead and do the 401k too if you have the money to put into it, even if you roll it over later. At 37 you are going to need to put more money in than someone who started earlier, so just taking advantage of a traditional/Roth might not get you where you want to be. Take advantage of the company match though, I thought the 17,500 max included the match so putting that much in yourself means you are missing out on free money.
If you have a 6% match for example, 16,510 will put you right on 17,500 - so that's a free $1000 (well, $990) toward your retirement.
Just my less-educated-than-most-ITT thoughts.
It doesn't. You can put up to $17,500 per year into a 401k yourself, which has no impact on how much your company is allowed to put in. If your company matches dollar-for-dollar all the way to the max (not likely, but for the sake of argument), you maxing out on contributions would result in $35,000 total going into your 401k.
chaosblade
Unconfirmed Member
Interesting, that's good to know (I can't take advantage of that yet, but hopefully someday). Don't remember where I saw that the max included the company match, I just recall it saying you had to be careful investing a lump sum to make sure you didn't eat into your match.
Easystride
Member
Interesting! You can roll over your traditional 401(k) to a traditional IRA, and it will have no affect on your contribution limits to a Roth/traditional IRA for the year?
If that's the case, I wonder if I can rollover my company 401(k) plan to a traditional IRA on a yearly basis since their funds suck so bad? Or can you only do it if you leave the company? I would like to continue to max my Roth IRA each year, and contribute as much as I can afford to my 401(k), but the lowest expense ratio available to me is .35%, and it's basically a index fund.
Randolph Freelander
Member
The employer could theoretically kick in ~34K, as the combined limit was 51K in 2013. I want to say it went up to 52K this year, but I'm not sure.
I don't have 100% definite answers on these, but it really doesnt make sense if that wasnt the case. I mean, most people will have over 5.5k when they roll over their 401k into a traditional IRA, so I can't imagine that that will wipe out your yearly contributions for IRAs or incur penalties. I think I would have heard about it if that was the case.
I am fairly sure that you can't rollover a 401k while you still have access to that 401k. So you gotta wait till you leave your company to do that.
MightyKAC
Member
Thanks for all the advice. I have a LOT to look into it seems. I WILL however be starting in on that 401k as it look like a good first step. I'm pretty sure that I'm eligible for it.
Pagusas
Elden Member
I'd love some help here guys. Started a new job and they use ADP for managing everything. This is fine except they really don't do much to talk to you about what they offer.
So today I was told to sign up for my retirement and was brought to this page with no prior explanations or real details:
Usually I've always been given premade packages and never had to choose how to invest things like this. Anyone have any recommendations on a good allocatement for someone who's 28.
So today I was told to sign up for my retirement and was brought to this page with no prior explanations or real details:
Usually I've always been given premade packages and never had to choose how to invest things like this. Anyone have any recommendations on a good allocatement for someone who's 28.
Randolph Freelander
Member
I'd love some help here guys. Started a new job and they use ADP for managing everything. This is fine except they really don't do much to talk to you about what they offer.
So today I was told to sign up for my retirement and was brought to this page with no prior explanations or real details:
Usually I've always been given premade packages and never had to choose how to invest things like this. Anyone have any recommendations on a good allocatement for someone who's 28.
You should look for fee disclosure information, investment performance charts (you should be able to find a single document that covers all funds for each of these), as well as the fact sheet and prospectus on each respective fund to learn more about their allocations and strategies. For me personally, I'd not do much or anything in the Stable/Bond category (too conservative for someone at 28), but I don't know enough about the other funds to give good recommendations).
Pagusas
Elden Member
glad im not the only one thinking the page looked sparse on detail. Its honestly a terrible site as clicking on any of the names opens the detailed PDF in the same window, with no way of going back without starting completely over and no way of "opening in new window" as just loads a blank page.
I'd love some help here guys. Started a new job and they use ADP for managing everything. This is fine except they really don't do much to talk to you about what they offer.
So today I was told to sign up for my retirement and was brought to this page with no prior explanations or real details:
Usually I've always been given premade packages and never had to choose how to invest things like this. Anyone have any recommendations on a good allocatement for someone who's 28.
The two funds I'd look into first Are the Russell 3000 index and the global equity ex us fund. Assuming the fees and expenses are at all decent, those two should be able to make up the bulk of you equities portfolio. You can add in a few percentage points of funds from the small and mid cap groups if you feel like it as well.
I cant find either of those funds on blackrock's website, as that listing doesn't show tickers, and it seems the names are not the same there.
I agree that that is an absolutely terrible format for making such an important financial decision, who was the idiotic designer who made that webpage?
Yup on all counts.
It looks like you can click on the names of each fund, and hopefully view their expense and fee details. The index funds should have the lowest of both, which is one of the main reasons to select them.
Darren870
Member
My old company used to use ADP and it is indeed crap. The target solution ones are based on your retirement year and are usually a safe bet. Fees will probably be the lowest.
When I had ADP I did 40% that, 20% in overseas (blackrock), 20% blackrock Russel, 20% small cap. Worked well for me. But this was also right after the financial crisis and everything was going up anyways.
Oh and I had to look up the fees on morningstar, you might be able to get them on the ADP site, but I think it just went to morningstar anyways. Been a while so I can't remember
Randolph Freelander
Member
Mileage may vary on that. In my 401K options, the target date funds are actually some of the highest fee options.
Fund names slightly truncated, but these are the gross annual expenses for my options (the company actually waives and reimburses some of the expenses, so the net is actually lower):
Code:
0.60% Target Today
0.60% Target 2010
0.60% Target 2015
0.58% Target 2020
0.59% Target 2025
0.59% Target 2030
0.61% Target 2035
0.60% Target 2040
0.64% Target 2045
0.62% Target 2050
1.12% Target 2055
0.51% 100% Treasury MM
0.23% Stable Value
0.06% US Bond Index
0.70% PIMCO Global Advantage Strategy Bond
0.40% Large Cap Value
0.02% (*) S&P Index
0.50% Large Cap Growth
0.06% (*) S&P Mid Cap Index
0.06% (*) Russell Small Cap Index
0.59% Small Cap
0.08% (*) NASDAQ 100 Index
0.09% (*) International Index
0.56% International Equity
0.89% Emerging Markets
(*) Indicates funds in my portfolio.charlequin
Banned
ADP is a stain on the earth. Every single part of their terrible website is terrible, and this is the version they made that is dramatically improved from the one they had two years ago.
When I did this I just had to sit down with the paper pamphlet that actually included information on the returns and fees and slowly work out what to put where.
Depends on what's on offer. The fees on the target date funds are higher than just rolling your own out of Vanguard index funds, for example.
EDIT: Beaten!
Your fund allocation is extremely similar to my own, lolz.
When I did this I just had to sit down with the paper pamphlet that actually included information on the returns and fees and slowly work out what to put where.
Depends on what's on offer. The fees on the target date funds are higher than just rolling your own out of Vanguard index funds, for example.
EDIT: Beaten!
Your fund allocation is extremely similar to my own, lolz.
4 Simple Rules for Retirement Saving
This is a good overview of how to invest for retirement. The only real disagreement I have is that he seems to think bonds are necessary. I think that depends on the person.
This is a good overview of how to invest for retirement. The only real disagreement I have is that he seems to think bonds are necessary. I think that depends on the person.
Randolph Freelander
Member
Goodbye, July. What a lousy month you turned out to be. Small caps especially took it on the chin (Russell 2000 down 7% in last 30 days).
Better August? Better August.
Better August? Better August.
Darren870
Member
I wonder how many Americans actually save for retirement and use their companies 401k. Not even all companies have to offer a 401k so its not like its mandatory.
Pensions are things of the past unless you are in a govt job.
401ks aren't mandatory by law, and even if they are offered its pretty low matching sometimes. I mean 4%?
Social Security will probably be gone in 50 years, and if its around I'm sure wont be enough to live off.
So then what? What happens to all the people that never saved? or never worked at a job that offered 401k and never looked into their options. I am sure there is a HUGE percentage.
Its pretty bad compared to other western countries.
I've never looked this up, just a thought I've had over the past couple of days as I've been talking to my brother and friends.
Pensions are things of the past unless you are in a govt job.
401ks aren't mandatory by law, and even if they are offered its pretty low matching sometimes. I mean 4%?
Social Security will probably be gone in 50 years, and if its around I'm sure wont be enough to live off.
So then what? What happens to all the people that never saved? or never worked at a job that offered 401k and never looked into their options. I am sure there is a HUGE percentage.
Its pretty bad compared to other western countries.
I've never looked this up, just a thought I've had over the past couple of days as I've been talking to my brother and friends.
RustyNails
Member
This year taught me that absolutely nothing can predict Dow, and all the financial stories about how Dow jumped because of the jobs earning report or it crashed because of instability in Europe are all lies straight from the pit of hell. People who talk about this are quacks. Dow goes up or down based on whether a trader on the NYSE trading floor had an argument with his spouse in the morning or not. Everything else is a chain reaction.
Randolph Freelander
Member
This is 100% true.
Well, let's put it this way, you are right about few having the savings anywhere near adequate for retirement. In fact you hit the nail on the head with most of your questions. It is a dirty question nobody asks. All the people in this thread talking about actual legit retirement plans are a small minority. The rest are fairly well fucked.
So IMO either the government will be stepping in, or people's retirement wont be worth jack shit unless its many millions cause society in general will be in trouble.
Darren870
Member
Yea, I guess I was just trying to start a conversation topic.
Probably needs its own thread though.When I started working at 22 I put the match into my companies 401k and I read the Boglehead book. Immediately opened a ROTH and increased my 401k as much as I could. I was working with others that would do the same and then their was others that said they didn't even want the free 401k match! It was 4% if I recall.
Then at 24 I left the US and moved to the UK. I only got one term of putting in 5k into my roth and 2 years of putting my money into my 401k (now an IRA).
In the UK I believe its now law that a company MUST contribute to your retirement account. I worked at 3 different companies in the UK and I think the most I had to put in was 3% and I still got ~7% from each company I worked for.
Now I am in AUS and its law that its 9.5% into your retirement account from your employer.
I haven't put any money into my US retirement accounts since I've left but I've gotten more money in both the UK and AUS then I would have in the states.
----
I guess what I am saying is that we are the minority, and it is pretty scary of what is to become if people are banking on their house for retirement and not even trying to save up a bit. To throw away a free match is ridiculous but its also ridiculous that companies don't even have to offer a retirement plan. I try to encourage my friends and my brother to save a bit more for retirement. They do the minimum and that's that. They don't make enough and can't put anything else away and say they will do it when they get older. Dat compound interest though!
I dont really have much in savings myself. And companies have been quick to do away with a lot of employee benefits. You still have some corporate jobs out there that are traditional but these days they are disappearing. And it is difficult to save when costs increase while salaries dont. Add to that every kid being on a student loan that is unforgivable and you have a bomb gonna go off in some years time.
Not gonna be pretty.
They're never going to really retire. Just work through their later years in poverty, finding part time jobs when possible to add to their meager Social Security stipend. There's an entire generation nearing retirement age, and this is their situation.
It was the first month of the year to be down, they can't all be winners. Gains for the year are still ridiculous.
Like a true long-term investor, I didnt even notice! (pats myself on the back)
Randolph Freelander
Member
Keep in mind, I pay attention by the day.
But in interests of fairness, July wiped out the Dow's gains for the year, it's currently below 2013 year end. S&P is still up 4.3%, Nasdaq is up 4.1% (including today). Small caps, which are 16% of my holdings, are down 4.4% on the year. Mid-Caps (also 16% of holdings) are up 1.6%. I was up ~6% after June, but July has cut gains nearly in half.
Oh well, that's life. It's not the first bad month, I've actually been down 4 of the 7 months this year. January and July were terrible. March and April weren't horrible, but they were net negative. February, May, and June were outstanding enough to keep my head above water.
But in interests of fairness, July wiped out the Dow's gains for the year, it's currently below 2013 year end. S&P is still up 4.3%, Nasdaq is up 4.1% (including today). Small caps, which are 16% of my holdings, are down 4.4% on the year. Mid-Caps (also 16% of holdings) are up 1.6%. I was up ~6% after June, but July has cut gains nearly in half.
Oh well, that's life. It's not the first bad month, I've actually been down 4 of the 7 months this year. January and July were terrible. March and April weren't horrible, but they were net negative. February, May, and June were outstanding enough to keep my head above water.
I'd love some help here guys. Started a new job and they use ADP for managing everything. This is fine except they really don't do much to talk to you about what they offer.
So today I was told to sign up for my retirement and was brought to this page with no prior explanations or real details:
Usually I've always been given premade packages and never had to choose how to invest things like this. Anyone have any recommendations on a good allocatement for someone who's 28.
This mix of funds looks a lot like what my company offers (other than the fact that Fidelity manages the 401K, so the target date funds are their own, for example).
In my case, the bulk of my retirement funds (80%) are in the appropriate target date fund, and the rest is split between PIMCO Total Return and a foreign stock fund. I used to do a little more micromanagement (within the confines of the relatively limited choices), but the target date funds tended to have the best returns anyway, so I've become a complete 'set it and forget it' type of person.
(While we don't use ADP for our 401K, our time reporting system is moving to ADP. And yes, their website sucks.)
Keep in mind, I pay attention by the day.
But in interests of fairness, July wiped out the Dow's gains for the year, it's currently below 2013 year end. S&P is still up 4.3%, Nasdaq is up 4.1% (including today). Small caps, which are 16% of my holdings, are down 4.4% on the year. Mid-Caps (also 16% of holdings) are up 1.6%. I was up ~6% after June, but July has cut gains nearly in half.
Oh well, that's life. It's not the first bad month, I've actually been down 4 of the 7 months this year. January and July were terrible. March and April weren't horrible, but they were net negative. February, May, and June were outstanding enough to keep my head above water.
I just use a total US index and a total international index, for simplicity. But then I'm a lot more hands (and eyes
) off than you. I figure, a drop in the market means I get to buy at a discount. Yesterday my month end paycheck hit, and the 401k contribution goes through at the end of the day. It goes into Vanguard's S&P500, so I got a 2% discount over the previous day. Woo!Oh, and it was the one year rather than YTD change I was thinking of with the markets; the S&P500 is up 13% over last year at this time. (When I do the month end numbers one of my data points compares how we're doing to the prior year, so I had that fresh in my brain.)
On a side note, to start the year I rebalanced the Roth IRA's belonging to my wife and myself to be 50% international and 50% domestic total market indexes. We have quite a bit in each one, so I've been watching how they move this year with a mind to potentially re-balance next year. As of yesterday, the difference between the balances was $20. :lol
Randolph Freelander
Member
I have a contribution going in today, so I guess there's that, particularly with all the indices still down on the day.
Yesterday wasn't the worst day of the year for me, though. Again, this is data that no sane person should probably have any business of knowing, but July 31 was only the fourth worst day of the year (for someone with my particular allocations).
Code:
2/3/2014 -2.773%
1/24/2014 -2.364%
4/10/2014 -2.342%
7/31/2014 -2.046%
4/4/2014 -1.591%
1/13/2014 -1.331%
3/13/2014 -1.234%
7/17/2014 -1.214%
4/7/2014 -1.131%
1/29/2014 -1.102%
4/25/2014 -1.070%
4/11/2014 -1.014%
1/2/2014 -1.006%
http://www.vox.com/2014/8/1/5909633/28-charts-that-explain-americans-financial-lives
Vox had some good graphs explaining our retirement crisis today. So, basically only 17% of Americans might be prepared for retirement (that 250k might not be enough for some/most)
Barkley's Justice
Member
Guys, I'll be the first to tell you I have no idea what I'm doing with this stuff. Which is why I appreciate this thread.
Previously, I had all my money in VFIAX and I thought it was doing rather well?
I knew I should diversify that a bit, so based off of OP I siphoned money from VFIAX into VGTSX & VTSMX. And I hate to say it, but I'm doing much worse now.
I don't know if it's a temporary thing? I'm contemplating going all-in with VFIAX again? What do you think?
Previously, I had all my money in VFIAX and I thought it was doing rather well?
I knew I should diversify that a bit, so based off of OP I siphoned money from VFIAX into VGTSX & VTSMX. And I hate to say it, but I'm doing much worse now.
I don't know if it's a temporary thing? I'm contemplating going all-in with VFIAX again? What do you think?
Barkley's Justice
Member
Sorry, was this in regards to me?
If so, here is my breakdown. I bought the other 2 funds about 2 weeks ago:
Large U.S. stocks - 69%
Mid/Small U.S. stocks - 8.20%
International stocks - 22.8%
Well, apparently the markets took a huge nosedive this month, so that is probably the reason for your steep decline. the SP500 experienced a steep decline as well, so unless international and small caps did worse, you likely would have 'lost' the same if you stuck with the SP500
If you are investing for the long term, don't worry about short term noise. It does not matter. You are better off with exposure to international stocks, so just keep with the plan. If you feel nervous about big drops, you might want to consider investing in bonds to keep you from panicking and selling. I probably wouldn't do that now since you would be selling stocks real low, but something to think about for the future
Barkley's Justice
Member
OK, cool. Thanks.
Are there any other funds you would recommend aside from the 3 I am currently in? This is for long-term growth. Thanks again.
Nope, that is exactly what I am in. The only other fund I would recommend is a Total Bond Fund (I dont invest in it), but that is something that you personally need to figure out if you want to reduce volatility by investing in bonds. Personally, I really don't care about volatility right now since I still have 35 years left to invest I feel like volatility really doesnt matter.
Like I said though, other smart people have different views and you gotta do what you are comfortable with.
Yeah, don't make decisions based off of the last two weeks. You just happened to balance your portfolio at a time when the markets went down right after. You would have lost just as much with your original US fund only strategy.
I think your percentages look good, stick with it!
Yep, I think the most important thing is to come up with a solid plan and STICK WITH IT. Reacting to short term market fluctuations is not sticking with it. Create an investment plan that works for you and will work for you in the future. Decide what you are going to do when you get older, when you are close to retirement, and when you are finally taking money out of your investments for retirement. Obviously, you might decide to do other things or change, but make sure that the changes you make are done in planning mode, not reaction mode.
Ether_Snake
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Question about RRSP (Canadian 401k); if I contribute more than my limit this year, does it mean I can just offset my tax credit to another year, or do I get some sort of penalty? Cause I'm guessing if I write off the maximum from my taxes, additional contributions having no impact would mean no penalty right?
I'm going to get a bonus and want to invest it in the same funds and let it start growing now, even though I'd end up contributing over my limit. If there is no penalty, the year I buy a house I was thinking I could make 0 contributions to my RRSP and just use the previous years' excess contributions. Good or bad idea?
I'm going to get a bonus and want to invest it in the same funds and let it start growing now, even though I'd end up contributing over my limit. If there is no penalty, the year I buy a house I was thinking I could make 0 contributions to my RRSP and just use the previous years' excess contributions. Good or bad idea?