Investing, Stock Market and Retirement Planning Thread

[columbia]

My other question is about the phase out range:
https://www.irs.gov/newsroom/irs-announ ... 0-for-2018

That's AGI or gross income? No tax deduction, if you're over the top of the range?

[NTP66]

I’d assume adjusted gross and no deduction if you’re over, myself.

Looks like the Roth limits are still **** ($5500), though they did increase the MAGI limits. I guess that evens things out.

[Beveridge]

For IRA, the phase out is on AGI. So for a traditional if you're above it, no deduction. However, that gives you a basis in your traditional IRA down the road. That money can be withdrawn tax free in the future.

Same goes for a partial phase out.

It's calculation based so it's not straight forward but it does give you a deduction down the road. You just have to keep track of it.

[columbia]

Bogle believes that there will be only a 1% (US) equity premium over bonds in the next decade.

http://www.morningstar.com/cover/videoc ... ?id=830763

[NTP66]

Nearly every single FSA limit was raised... except for the Dependent Care FSA. Jags.

[dodint]

columbia, mansplain this to me.

Your Personal Investment Performance (PIP) for the past 12 months ending 10/31/2017 is 17.98%.

Personal Investment Performance (PIP) - The rate of return earned by your entire account during the 12-month period ending on the date indicated on your annual statement. The PIP is a time-weighted return that has been calculated using the Modified Dietz method (a method used by many financial institutions and an industry standard). The PIP adjusts for the distorting effects of cash flows into or out of your account. It is an estimate; therefore, your PIP may not be the same as the 12-month performance of the TSP funds, which are time-weighted returns.

How am I doing versus more mainstream 401(k) offerings?

[Tomas]

columbia, mansplain this to me.

Your Personal Investment Performance (PIP) for the past 12 months ending 10/31/2017 is 17.98%.

Personal Investment Performance (PIP) - The rate of return earned by your entire account during the 12-month period ending on the date indicated on your annual statement. The PIP is a time-weighted return that has been calculated using the Modified Dietz method (a method used by many financial institutions and an industry standard). The PIP adjusts for the distorting effects of cash flows into or out of your account. It is an estimate; therefore, your PIP may not be the same as the 12-month performance of the TSP funds, which are time-weighted returns.

How am I doing versus more mainstream 401(k) offerings?

That's very difficult to judge without knowing what investments your portfolio has. My one-year return is 24.4%, but that's because I was fully invested in low-cost index all-STOCK funds. If your portfolio has bonds and/or if your fund fees are higher than "my" (mostly) less than 0.1%, your return would naturally be lower.

[dodint]

I'm 99% invested in TSP L-2040 https://www.tsp.gov/InvestmentFunds/Fun ... L2040.html

Mainly because I'm a lazy ****.

I guess I asked because the supposed advantage to the TSP is that it has low administration fees, was curious if that was objectively true.

[Tomas]

I'm 99% invested in TSP L-2040 https://www.tsp.gov/InvestmentFunds/Fun ... L2040.html

Mainly because I'm a lazy ****.

I guess I asked because the supposed advantage to the TSP is that it has low administration fees, was curious if that was objectively true.

So here is my completely baseless review:

Good - indeed super, super cheap - that's awesome (your fees seem to be even lower than my Vanguard or previously Fidelity index fund combination)

Somewhat of an issue - no exposure to riskier international (emerging markets) stocks. I don't see that as a big deal. I used to have emerging markets with Fidelity, but ever since this year my employer gutted the number of available funds, I simply have "just" the developed international stocks. Any "loss" due to insufficient diversification would be very limited, I think.

Definitely an issue - A super conservative allocation of funds. Both G (that one in particular) and F funds limit your return potential a lot. Vanguard 2040 has less than 14% of bonds (and that includes even riskier international bonds), your TSP L2040 has over 27% of bonds - and vast majority of that in ultra-conservative non-marketable short-term governmental bonds. Anytime the market will go up (and the odds are that during the ~20+ year long investment horizon it will go up a LOT), you will miss on those movements significantly.

This article is actually quite informative:

http://news.morningstar.com/articlenet/ ... ?id=694560

[NTP66]

Millennial Parents Outpace Gen X, Boomer Parents on Retirement Savings

Millennial parents may be out-saving parents of every other generation in terms of retirement, according to a new NerdWallet survey.

In some cases, the margin is wide: The survey found that of those saving for retirement, millennial parents (ages 18-34) are contributing a median of 10% of their annual income to their retirement savings. Generation X parents (ages 35-54) are contributing a median of 8%, while baby boomer parents (ages 55+) are contributing a median of just 5% of their annual income. All respondents to this survey question were employed, so retired baby boomers did not skew that generation’s contribution rate.

I'm actually a little surprised by this.

[count2infinity]

I'm not... we're not buying homes, so may as well save money in retirement accounts. That plus with inflation and stagnant wages, you have to contribute more, sooner to catch up to that 8% or 5% that generations before us were saving.

I'm right at the median (unless it includes company matched funds, then it's a bit more).

[NTP66]

You may not be buying homes, but other surveys show that they're struggling to both save in general and make their normal bill payments. Small sample size (for any of these surveys), obviously.

[count2infinity]

Keep in mind that this survey is for only millennial parents. I'm curious as to what % of millennials are actually parents.

[count2infinity]

And do you have a link on them not being able to save money or pay bills? I know I've heard that a large portion (maybe even majority) of Americans don't even have $500 in savings. How do these millennials compare?

[NTP66]

The last story I heard about this topic was on the local news. I can't confirm that it was referencing the same survey, but here you go: https://www.cnbc.com/2017/10/03/how-man ... ement.html

[count2infinity]

Interesting... here's a graphic from that same survey that goes against the "normal bill payments" idea:

[NTP66]

That second graphic is just frightening. As for budgeting, that's one area that should be mandatory in school. It wasn't when I was in school, and doesn't appear to have changed (in this area, at least).

[count2infinity]

It certainly is not taught to the extent it should be. I think it's one of those things that parents figure the school is teaching the child, and the school is figuring the parent is teaching the child.

[NTP66]

I'm basically my entire family's financial advisor because of it. It's one area that I'm going to make sure my daughter understands at an early age to give her a leg up.

[robbiestoupe]

Millennial Parents Outpace Gen X, Boomer Parents on Retirement Savings

Millennial parents may be out-saving parents of every other generation in terms of retirement, according to a new NerdWallet survey.

In some cases, the margin is wide: The survey found that of those saving for retirement, millennial parents (ages 18-34) are contributing a median of 10% of their annual income to their retirement savings. Generation X parents (ages 35-54) are contributing a median of 8%, while baby boomer parents (ages 55+) are contributing a median of just 5% of their annual income. All respondents to this survey question were employed, so retired baby boomers did not skew that generation’s contribution rate.

I'm actually a little surprised by this.

Figure that most baby boomers are still grandfathered (hehe) into pension plans where they work. They are also more secure in knowing they will get social security when they are of age. Gen X and millennials cannot say the same.

Case in point, my dad is looking to retire in the next couple of years. He says if he puts in enough time where he is currently employed, his pension payments will be equal to what he's making right now. My pension payments (Gen X) will be exactly what I make as an NHL player right now - nada.

[dodint]

I didn't start using a Budget spreadsheet until the end of my military enlistment. It changed my life, I can't speak highly enough about the importance of at least writing down all of your bills and comparing it against all of your income. It's so empowering.

Friend of mine owns two homes and has two kids. Doesn't budget and seems okay with it. I'd be homeless.

[NTP66]

I likely won’t have much in the way of a pension (through my current job; first place I have enrolled in one), but my retirement plan is based solely off our own earnings, not taking into account social security (because I half heartedly expect that to be extinct in the years to come).

Using Excel to budget early on was definitely a smart mov, and being able to see where every penny goes is invaluable. That said, I haven’t actually had a “budget” in a long time. My income and spending has been pretty consistent for a while now, and my wife and I really only “plan” out bigger expenditures, which mainly consists of home improvement items now.

[mac5155]

Made $1000 in stock valuation today; thanks Walmart! all in a day's work...

[columbia]

This is total fan boy stuff, but I'm pretty geeked to have recently received a very nice PM from the esteemed Taylor Larimore.
http://money.cnn.com/galleries/2012/pf/ ... mag/2.html

He was a paratrooper and fought in the Battle of the Bulge....he's 93.

[NTP66]

This is total fan boy stuff, but I'm pretty geeked to have recently received a very nice PM from the esteemed Taylor Larimore.
http://money.cnn.com/galleries/2012/pf/ ... mag/2.html

He was a paratrooper and fought in the Battle of the Bulge....he's 93.

You nerd.