Investing, Stock Market and Retirement Planning Thread

[NTP66]

401k/403b plan contributions are increased from $19,000 to $19,500 for 2020. IRA contributions remain the same. Lame.

[DigitalGypsy66]

The flex spending limit went up $50 this year. Praise the Maker!

[Ted]

401k/403b plan contributions are increased from $19,000 to $19,500 for 2020. IRA contributions remain the same. Lame.

The income limit for deductions on IRA contributions is so low that I assume it doesn’t apply to you. Just plow it into after-tax 401k once you hit $19,500. Same result.

[Tomas]

401k/403b plan contributions are increased from $19,000 to $19,500 for 2020. IRA contributions remain the same. Lame.

The income limit for deductions on IRA contributions is so low that I assume it doesn’t apply to you. Just plow it into after-tax 401k once you hit $19,500. Same result.

Or better yet, work for an institution that has 457b after tax account ready for you after you reach the 403b limit. That gets your another $19,500!

[Pavel Bure]

Anyone here use the Robinhood free money feature to take a million dollar position before they took the feature away?

[NTP66]

Or better yet, work for an institution that has 457b after tax account ready for you after you reach the 403b limit. That gets your another $19,500!

That'd be nice. I'm just tired of these lame ass $500 bumps.

[count2infinity]

I don't think we have a personal finances thread, so I'll just post it here. Broke the 800 mark for credit score. It was sort of an aim to get there/close to there before this coming summer as we're probably going to buy a house. I don't know if it'll help on mortgage rates much, but it's cool to see that number on my credit report.

[skullman80]

I don't think we have a personal finances thread, so I'll just post it here. Broke the 800 mark for credit score. It was sort of an aim to get there/close to there before this coming summer as we're probably going to buy a house. I don't know if it'll help on mortgage rates much, but it's cool to see that number on my credit report.

I'm over 800 too(with minor fluctuations here and there if I make a big purchase for 6 months no interest that ups my credit utilization)... i dont think it matters much once you hit the "excellent" category in credit which I think is like 780 or above? Can't remember. Target loves to help our debt ratio by increasing our RedCard limit.. it now sits at 15k hahaha.

[NTP66]

North of 760 and you're already in good shape. There are still other factors when it comes to qualifying for the best mortgage rate past the actual score, though your score is a good indicator that you'll be in good shape.

[mac5155]

My company announced some changes to our pension plan, effective in about a year and a half, and I am curious how I should evaluate my options.

Basically, I have a portable pension right now worth $X dollars. It is my understanding that my company makes periodic contributions to this. I am not sure at what rate - I probably need to find out for decision-making purposes here.

Starting in 1/2021, I will have the option to receive an extra 4.5% match of my 401k (up to a 100% match of 8% - which I am already contributing 14%). My other option is to remain in the pension plan, and continue to receive the 3.5% match on my 14% contribution (for a total of 17.5% going to a standard 401k).

I am curious how I should evaluate this. I presume that having 401k is more 'guaranteed' (as much of a guarantee as the stock market is) and gives me the control over my retirement, vs. my company controlling it.

What other factors should I be taking into account in evaluating these decisions?

[Tomas]

My company announced some changes to our pension plan, effective in about a year and a half, and I am curious how I should evaluate my options.

Basically, I have a portable pension right now worth $X dollars. It is my understanding that my company makes periodic contributions to this. I am not sure at what rate - I probably need to find out for decision-making purposes here.

Starting in 1/2021, I will have the option to receive an extra 4.5% match of my 401k (up to a 100% match of 8% - which I am already contributing 14%). My other option is to remain in the pension plan, and continue to receive the 3.5% match on my 14% contribution (for a total of 17.5% going to a standard 401k).

I am curious how I should evaluate this. I presume that having 401k is more 'guaranteed' (as much of a guarantee as the stock market is) and gives me the control over my retirement, vs. my company controlling it.

What other factors should I be taking into account in evaluating these decisions?

I am not sure I understand, but if it is:

Switch - and you get 8% extra money on top of your contributions, and you control your investment vs.
Stay - and you get 3.5% extra money on top of your contributions, and somebody else controls your investment

...then what is the reason to stay? (There must be more to the story - that's why I said "I don't understand")

[NTP66]

Switch and he gets 4.5% more, not 8% (unless I read that wrong). Personally, I’d rather be in control of my own investments.

I was accidentally put into our pension plan when I started at my current job, and basically left it out of all of my retirement calculations, figuring it to be icing on the cake when the time came. They got rid of the pension this year, so I was able to rollover the cash directly into my 403b, and they bumped up the match - single, annual deposit - at the same time.

[mac5155]

Switch and he gets 4.5% more, not 8% (unless I read that wrong). Personally, I’d rather be in control of my own investments.

I was accidentally put into our pension plan when I started at my current job, and basically left it out of all of my retirement calculations, figuring it to be icing on the cake when the time came. They got rid of the pension this year, so I was able to rollover the cash directly into my 403b, and they bumped up the match - single, annual deposit - at the same time.

Yes. Switch and get 4.5% more, for a total of 8% match.

Far as I can tell, the pension is 5% annually. So I stay as is and get 3.5% 401k and 5% pension, or change and get 8% 401k.

Sounds like I lose a half of a percent, but am able to control the asset mix.

[NTP66]

I’ve seen far too many people lose their pensions by no fault of their own, so I’m a bit biased here.

[mac5155]

That's where I'm at too, it's the devil you know type of situation.

I am curious what happens with the money in the pension. My pension is currently valued at about 30% of what my 401k value currently is.

[NTP66]

Marcus online savings now down to 1.70%. @DigitalGypsy66: Did you actually stick with them? I only have a few bucks in my online savings account, but do have a fairly large no-penalty CD open with them for a few more months.

[mac5155]

Switch and he gets 4.5% more, not 8% (unless I read that wrong). Personally, I’d rather be in control of my own investments.

I was accidentally put into our pension plan when I started at my current job, and basically left it out of all of my retirement calculations, figuring it to be icing on the cake when the time came. They got rid of the pension this year, so I was able to rollover the cash directly into my 403b, and they bumped up the match - single, annual deposit - at the same time.

Yes. Switch and get 4.5% more, for a total of 8% match.

Far as I can tell, the pension is 5% annually. So I stay as is and get 3.5% 401k and 5% pension, or change and get 8% 401k.

Sounds like I lose a half of a percent, but am able to control the asset mix.

Bit of a curve ball here. My pension is at 5% of base salary funding currently. In 7 years, assuming I stay with the company for that long, it goes to 6%. Then to 7% in 12 years, and 8% in 17 years. The quarterly ROR is 1%, AFAIK.

The 401k is actually 8% match on 6% contribution. Anything over 6% is still only 8%. As I mentioned I'm currently at 12% contribution.

They really should force you to take classes on this **** in school.

[Beveridge]

It really should be part of school.

Go the 401k route.
-Be in control of where money is funded
-1% Quarterly return can and should easily be beat
-Take it with you when you go.

You don't surpass the 6% until 12 years out but even then you're still behind in the return rate not to mention other factors that I would be skipping my way to the 401k option.

[mac5155]

Im also trying to figure out the reasoning here - I'm guessing its lump sum vs paid throughout the year for the company. They have to make annual contributions to the pensions at the beginning of the year, right? Moving that to paycheck matches means spread out over the year. Not to mention, being hopeful that there are idiots out there who decide to contribute zero or less than 6% to not realize all the 'free money'.

BTW: I am curious what my 401k balance SHOULD be at my current age? Is there a general rule of thumb? Everything online I see is 'average of $25k by 30'. I'm more curious of "at least your yearly gross salary by 30".

[DigitalGypsy66]

Marcus online savings now down to 1.70%. @DigitalGypsy66: Did you actually stick with them? I only have a few bucks in my online savings account, but do have a fairly large no-penalty CD open with them for a few more months.

Where did you end up going? I didn't get the rate drop yet. Very disappointing. I always seem to jump into these things as the rates crash.

[NTP66]

Source of the post BTW: I am curious what my 401k balance SHOULD be at my current age? Is there a general rule of thumb? Everything online I see is 'average of $25k by 30'. I'm more curious of "at least your yearly gross salary by 30".

I prefer working backwards. Figure out what you want your income to be based on your spending, etc., and then you can come up with a goal to work towards.

[NTP66]

Marcus online savings now down to 1.70%. @DigitalGypsy66: Did you actually stick with them? I only have a few bucks in my online savings account, but do have a fairly large no-penalty CD open with them for a few more months.

Where did you end up going? I didn't get the rate drop yet. Very disappointing. I always seem to jump into these things as the rates crash.

I opened a Citibank checking & savings account for the $400 bonus. Garbage rate, but the bonus money is where it's at these days. The money's only tied up for 90-something days, so I'll be looking for a new home for it early next year. I'm trying to avoid bonuses that require direct deposit for now.

[mac5155]

Source of the post BTW: I am curious what my 401k balance SHOULD be at my current age? Is there a general rule of thumb? Everything online I see is 'average of $25k by 30'. I'm more curious of "at least your yearly gross salary by 30".

I prefer working backwards. Figure out what you want your income to be based on your spending, etc., and then you can come up with a goal to work towards.

That's a tough one. I figure no less than my current income. But I should have a lot less bills by then too.

[NTP66]

Fewer bills, but higher medical costs.

[willeyeam]

I always find myself having no idea how much I'll want to spend when I'm 65. I'd like to think I'll have a second house and some nice country club dues to pay and a dock for my yacht, but who tf knows?

On a serious note, house should be paid by then, no debt.. just monthly living costs if I lived in the same spot as now, wouldn't be too much cash at all.