Did Jon Snow throw his sword down and run away when he saw an ARMY coming towards him?? WELL DID HE??
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How to Invest for Retirement
- Thread starter Piecake
- Start date
Lol. He made that post before the US market even opened. BND has held steady so far. (Go figure, it's a bond index.)
+1. For people who do not have 100% of their retirement savings in stocks this may be an opportune time to rebalance, though.
I think that guy is confusing US stocks with US treasury bonds. It's the latter that is used as a safe haven.
It's not quite as simple as looking at trade in dollar amounts. Economic uncertainty has wider ranging impacts. Companies reduce investment in R&D and lending markets tighten, which has an impact on growth years down the line. We are still feeling the hurt from the 2008 recession in that regard.
Some of these new legal questions that will arise with a non-EU Britain may result in new fixed costs for US companies doing business there that are not proportional to the income. Take the US tech sector as an example. A number of companies were facing tax and/or anti-trust suits in the EU. Do they now need to relitigate these in Britain as well, paying extra legal costs? What about the safe harbor regulations that were negotiated with the EU to allow these companies to be able to legally move information across national borders - do those need to be renegotiated with Britain?
No one can say for sure whether it is better to buy right away or wait in this specific circumstance. However, statistically speaking, people who buy right away do better on average than people who wait.
Personally I would look at it as an opportunity to buy today at a low price, but I am someone who can afford to take on risk for higher expected returns. Consider investing half your money now and half when you get back if that makes you feel better.
Just to keep things in perspective, the S&P 500 is currently at about the same price it was one week ago. Basically it has given back the gains of this week (as people began to think Remain had a better chance) but nothing more. It's not the bloodbath that the Chicken Littles are making it out to be.
You can't time the market. It's on sale right now, down about 2%. By the time you come back maybe it'll be up 10% and you missed out? Maybe it'll be down 10%? The only sure thing is that it's down now -- less today than it was yesterday, and that the market always recovers.
Buy when you get back if you're someone who would be checking your account throughout your vacation.
Yeah. I invested through 2000 and 2008. This ain't shit.
Shifting to index funds several years back really lowered my stress levels about market volatility. I'm in a mix of funds I'm comfortable with, and I've seen two giant market crashes and bounce backs since I started investing. Continuing to contribute on the way down and back up again, regularly and without fail, has worked out very well.
My advice to those in the market now is, do nothing. My advice to those looking to begin investing is, go right ahead. This too shall pass. (Eventually.)
chaosblade
Unconfirmed Member
With all the hubbub about this Brexit guy destroying the world I thought maybe we would see some bigger discounts. Oh well, I've maxed my Roth for the year anyway.
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
It just keeps dropping, just keep dropping, just keep dropping, dropping, dropping.
GodParticle
Member
Does anyone have advice on finding a financial advisor? I've read that I should be looking for someone fee-based rather than commission, but I have no idea who to go to. Would my bank recommend someone?
What kind of advise are you looking for? Tax, retirement, general investing, etc.
When it comes to retirement, my advise is you don't really need one for the (this thread has you covered) unless you have an usual or complex situation. Otherwise it kind of depends.
As you said, definitely go with someone fee based (who does NOT take a % of your portfolio, but rather a per-session consultation fee), and make sure they are a fiduciary.
GodParticle
Member
Someone who can tell me what to invest in, basically. I don't really understand any of the investment talk and would just rather let someone who knows advise where to put stuff. For example, how to set up my 401k and savings account to best suit my situation
Looking at the 401k page for my company has me clueless on what to do. Right now it's set up with a huge chunk in my co. stock(coke) and a tiny portion in some automatically invested system. I kind of started late on this and only have like 56k in it and around 40k savings. Thanks for any help
Company stock is usually a bad idea.
What fund options do you have for your 401k? List the name and the expense ratio of the funds and we can help walk you through it.
GodParticle
Member
Yeah, that's why I want to get rid of it. They do our match in stock. It says my return rate has been like around 6.5% in the past 3 years, which isn't horrible, I suppose. I'll try to look it up on monday and get back on what options they offer(I have no idea what any of that is)
Oh, my plan is through Mercer if that helps
Original Famous Ray
Member
Nothing like seeing my retirement savings go down $2400 in one day! Thanks Brexit! lol
I know its "stay the course" and I'll keep doing what I'm doing for the next 20 years but I thought it was "fun" to check anyways to see how much it tanked.
My advice? Don't check your accounts and stay the course!
I know its "stay the course" and I'll keep doing what I'm doing for the next 20 years but I thought it was "fun" to check anyways to see how much it tanked.
My advice? Don't check your accounts and stay the course!
RumblingRosco
Member
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I believe you mean Fee Only? Fee Based can charge you a fee, and take commission on what they try to sell you on. The name Fee Based is meant to confuse people.
quackamole
Member
For someone who only makes a little bit above 30k, which is the better option, traditional or roth IRA?
I would personally recommend a Roth IRA because you will be paying taxes now at a tax bracket that would be favorable for a Roth. If you expect to get paid more in the future you can always convert to a traditional IRA. However I prefer the Roth setup because this means you are paying taxes right away and don't pay taxes at withdrawal. Plus you can basically leave the money in to grow for as long as you want, there is not cut off date for starting withdrawal like there is with a traditional ira.
My wealthfront account is down 9%.
Being somebody new to this, is this the part where I dump more money in?
Walter White Walker
Member
If you truly want to be hands-off what are the Target Date retirement fund options in your 401k? If you have a good option with reasonable fees you just put everything in the 401k in that and that's that. It really can be as simple as that.
Just keep going with your normal plan. If you have money on the sidelines I guess it's a judgment call as to whether to toss it in, but in general you should just follow your investment plan regardless of things like this. (Assuming it's a good plan you are comfortable with.)
I put money into the 401k at the end of the month, so I figure, I'll just get better prices from that buy. Yay.
GodParticle
Member
Haha...so maybe I'm better off reading this thread
I don't even know what a Target Date fund means or what kind of fees are involved. I'm going to look the plan site over and see what I can figure out and get back with more info
A Target Date fund will have a year in its name, e.g.,
"Vanguard Target Retirement 2045"
"Fidelity Freedom 2050"
"T.RowePrice Target 2025"
The idea is that you put your money in a fund with a date that is approximately when you are planning to retire, then you don't need to touch it again.
If you can post a link to the funds that are offered in your plan, someone here will give you good advice on what to do.
GodParticle
Member
I think I saw some of those as options the last time I looked. I'll be looking over it when I get back to work and see what they have
I wish target date funds existed for my employer's 401k. Not for me, as I like to rebalance manually each year, but for my coworkers who have admitted to me they have no idea what funds they should be invested in. Wouldn't be surprised to see most of the population share that uncertainty.
wild wild rice
Member
What's the word on deferred compensation plans? I have a little information book here, but honestly I'm struggling to comprehend whether this is a good decision or if there is something better I should look into. Looking for friendly advice!
I am a state employee so I currently have my pension, social security and a small 403(b) I have sitting around from a previous employer as my retirement portfolio.
I am a state employee so I currently have my pension, social security and a small 403(b) I have sitting around from a previous employer as my retirement portfolio.
FrenchMovieTheme
Member
how does a roth IRA "tax you now"? i opened one up last year (maxed out the $5500) and deposited money from my checking/bank account. are they just assuming the $5500 was already taxed to begin with or am i going to get a bill on that?
For a traditional IRA, your contributions get deducted from your adjusted gross income when you file your taxes. This results in those contributions not being taxed. With a Roth IRA, you do not get that option.
So yea, its already taxed
Assuming you're talking about non-qualified deferred compensation (and not something like a 457b or 401k)?
The devil's in the details. I have the option to get my bonus as deferred compensation, but after crunching the numbers it didn't seem worth it. I could only defer for a maximum of 5 years, and if I left the company it would be paid out immediately. If my career is going well, my marginal tax rate should be higher in 5 years than it is now and I'd be taxed on the gains at my marginal rate rather than at capital gains. The most aggressive allocation I could opt for in the deferred account was a 40% bond allocation, which is likely to be a drag as well. There are also utility issues, like lack of legal protection if the company were to go bankrupt and the loss of liquidity.
The only scenario that seems to make sense to me would be if I knew I was going to retire within the next few years, then I planned my retirement to be in January so as to minimize my yearly income and get into a lower tax bracket. But possible that your plan may give more favorable terms.
GodParticle
Member
Ok, I think I found that option. They offer a ready mix plan with a date close to my retirement. So, do I just put everything in that and let it ride? Or can I say put 20%(is that too much) into my co. stock(coke) and the rest in the ready mix?
chaosblade
Unconfirmed Member
That's ultimately up to you, but most people here are recommend heavily against keeping retirement funds in a single company stock. A stock like Coke is obviously not likely to lose your money in the long run, but the question is whether it will match the growth of the overall market. Betting that it will is a pretty big risk.
And you would want to change your the option you buy in to as well as move your existing funds. That way all future contributions go into the target date fund instead of the company stock.
It all depends on what the program is for the company stock. What is the discount you get it for? How long do you have to hold before you can sell it? Could you sell it and reallocate it to a 401k?
Obviously there's a big risk having a large concentration in one company, however if possible it may make sense to buy as much company stock as you can, sell it as soon as you can and diversify with the proceeds. Then repeat.
What is the expense ratio of the "ready mix" fund? Those kind of funds are a good 'set it and forget it' approach to retirement - IF the costs are low. If it's higher than ~.25% then it's better to go with index funds.
Which leads to the next question - do you have any index funds on offer (look for the word 'index')? What are their expense ratios?
Most people would not advise holding company stock, and especially not that much. I hold some because it gives a good dividend (~4%) but I'm trying to get my share down to ~5% of total investments. Diversification is your friend - definitely don't hold that much company stock.
Randolph Freelander
Member
My two cents is own no company stock any longer than you have to. If you get full value from a match or discretionary contribution immediately, move it immediately. Coca-Cola (KO) is around 1% of the S&P 500. Owning 20% is severely overweighting it in your portfolio. But I say don't own any of it except through funds that track or otherwise include the S&P. You earn your living from the company, but you shouldn't bet your retirement on it.
GodParticle
Member
Ok, I'll do some more digging on the details and get back. I didn't see anything that mentioned index funds or associated costs. It was kind of an automated system where you just selected from the different plans. From what I understand, they pay our match in company stock. Would I continually have to unload it?
Yes, pretty much. If it's in a 401k you'll incur no penalty for selling and moving the funds to a different investment. Depending on your broker you may have some transaction fees for selling stock (none at mine), but YMMV.
GodParticle
Member
Tried sifting through and found some more info for you. The first link is how it directs me if I choose to rebalance existing. The second is the one it recommended for my future investments. Is the gross expense ratio the cost part? If so, it's a lot higher than you recommended. I don't see index options, but maybe of those are? What's funny is having most of everything in coke stock has been a better return than the historical on that plan I selected from what I can gather
Investment options:
http://imgur.com/wSBZXsy
My future investment:
http://imgur.com/Y6qg6H6
vinnygambini
Why are strippers at the U.N. bad when they're great at strip clubs???
That's the opposite of what I have been doing
I guess everyone has a different strategy.
That's the opposite of what I have been doing
I guess everyone has a different strategy.
Holding your own company's stock is doubling down on the company. If something goes really wrong, you could lose your job and your investments simultaneously.
Randolph Freelander
Member
I don't like that expense ratio. At an initial glance, the only fund I see that I like is the Northern Trust S&P 500 Index Fund. The rest seem like they might be managed funds, but I can't know for sure. (Managed funds carry higher expenses.)
What I'd like for you to do is to look at funds in the international, mid-cap, bond, and large cap categories in your image to see the expenses and portfolios. Then you might see if you can cobble together a collection of funds that might see less of their gains negated by high expense ratios. This increases the burden on you to find the right splits, and that's unfortunate, but we can help on that.
I have told people before that even if the rest of the funds are all junk, the fact that you have the S&P 500 index fund is great. It would be the largest part of your investment mix anyway, and it could be 90-100% of your mix if you listened to Warren Buffett. And even if further diversification is your goal, we might be able to help you achieve it with a blend of the S&P 500 fund in this account and perhaps others via an IRA.
SaviourMK2
Member
My problem is that come this August, i'll have started my 2nd year of unemployment.
Last time I was unemployed, I had a 4 year work gap, my resume is shit and I'm going to hit 29 this October.
I get slower, fatter, and interviews will typically end in me being turned don for someone they think will have last longer than me.
Retirement is something I don't think I'll ever be able to save up for at the rate I'm going.
Last time I was unemployed, I had a 4 year work gap, my resume is shit and I'm going to hit 29 this October.
I get slower, fatter, and interviews will typically end in me being turned don for someone they think will have last longer than me.
Retirement is something I don't think I'll ever be able to save up for at the rate I'm going.