401k advice

[Raybyrnes]

Newblet

The symbols are fine and andyone can look up the rest of the information needed for analysis.

The sharebuilder accoutns are OK but I think you might be better off using a Roth account to accumulate your funds in. Just my 2 cents.

Also make sure you are taking advantage of interest bearing checking accounts. Schwab currently offers a checking account that pays 4%. Many MMA are paying around 5%. Make sure you are getting the easy stuff.

[Raybyrnes]

Quick look at the funds with symbols and pretty average 401k.

With this type of scenario teh interenational fudn might be the best of the bunch so you invest up to the max in that particular fund. Then you open up a Roth IRa to counterbalance your international exposure with some form of no load index mutual fund. Set the IRA up as an automated investment program that. If you find that you are not buying adn have some additonal cash flow you can alway look to increase the funding percentage on the 401K.

[Raybyrnes]

Quick look at the funds with symbols and pretty average 401k.

With this type of scenario teh interenational fudn might be the best of the bunch so you invest up to the max in that particular fund. Then you open up a Roth IRa to counterbalance your international exposure with some form of no load index mutual fund. Set the IRA up as an automated investment program that. If you find that you are not buying adn have some additonal cash flow you can alway look to increase the funding percentage on the 401K.

[Raybyrnes]

Quick look at the funds with symbols and pretty average 401k.

With this type of scenario teh interenational fudn might be the best of the bunch so you invest up to the max in that particular fund. Then you open up a Roth IRa to counterbalance your international exposure with some form of no load index mutual fund. Set the IRA up as an automated investment program that. If you find that you are not buying adn have some additonal cash flow you can alway look to increase the funding percentage on the 401K.

[Raybyrnes]

Quick look at the funds with symbols and pretty average 401k.

With this type of scenario teh interenational fudn might be the best of the bunch so you invest up to the max in that particular fund. Then you open up a Roth IRa to counterbalance your international exposure with some form of no load index mutual fund. Set the IRA up as an automated investment program that. If you find that you are not buying adn have some additonal cash flow you can alway look to increase the funding percentage on the 401K.

[Raybyrnes]

Quick look at the funds with symbols and pretty average 401k.

With this type of scenario teh interenational fudn might be the best of the bunch so you invest up to the max in that particular fund. Then you open up a Roth IRa to counterbalance your international exposure with some form of no load index mutual fund. Set the IRA up as an automated investment program that. If you find that you are not buying adn have some additonal cash flow you can alway look to increase the funding percentage on the 401K.

[Coronita]

Drunkle has a good point… there is some uncertainty with the future of tax rates. If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k's our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

Simple example…If we were not contributing, $1,000 pretax would become $667 after tax. By leaving it in the 401k, I essentially just get a 50% return. Also, if I invest my $667 and get a 10% return, I make $66.70. The same investment in the 401k where i have $1,000 returns $100.

You're not going to get rich with your 401k plan but it could prove to be a good back up plan. You can try to get rich doing something else, but just understand that there is a tight relationship between risk and reward. For every one story of success that you hear, there are ten failures.

Oh yeah, an ADR is an American Depository Receipt. It allows a foreign company to raise capital in the US. And in order to list on a US exchange, they adhere to our rules.

 

Interesting. I have a financial advisor that advises against Roth IRA. His rationale: don't be surprised if the government changes in the future and taxes Roth IRA.

Whether you should or shouldn't max out a 401k depends on your personal tax situation. Some of us that are a working couple with a 401k maxed out is $30k off of gross income, which could put you in a much lower tax bracket.

 

One thing to note though. I'm learning from my parents as they go talk about their retirement planning that it is quite possible to for people to overcontribute to all 401k + other IRAS…Particularly if you work for companies that have deferred compensation, retirement pensions, and 401ks (yes, people of my generation probably wonder what the heck are pensions).

Overcontributing may cause you pay a lot taxes during your golden years, due to not only higher tax rates, but also perceived higher income by the IRS. Let me explain.

 

See, once you reach 70 1/2 , you are REQUIRED to make mandatory minimum withdraws each year across 401k/IRAs. It's usually a percentage of the total IRA/401k you have across the board, and that percentage increases each year after 70. Each year's mandatory minimum IRA withdrawal is subject to income tax. If you don't withdraw the minimum amount required by the IRS, the difference between what you were suppose to withdrawal and want you actually withdrew is subject to a stiff penalty (i think 50%). That penalty is in addition to what you owe on taxes.

The minimum amount starts off small (roughly 3.7% of your account balance) at age 70 and gradually gets larger year after year as you get older. For example, the minimum withdraw at age 100 is roughly 15.87% of your account value. So for example, if you have $1million in all your IRAs combined, government expects you to withdraw a minimum of $37000 the year you are 70, and $158,700 if you are 100 and have $1million at that time.

The reason for this is basically simple. Uncle Sam wants a cut of your taxes, even if you don't actually plan on spending that much. There are exceptions to this rule, IE if you have beneficiaries, still work at the company with the 401k, etc. But it's something to keep in mind. Not only might you pay higher taxes in the future (most likely), you're perceived income by the IRS may actually be higher than your current income.

For example, if you are an avid saving/investor, you might end up with $5million combined in IRAs/401k when you're 70 (that's not a lot inflation adjusted say 40 years down the road). At age 70, you would be required to withdraw $180,000 that year. That $180k would be subject to income tax at that tax rate that year. At age 75, your minimum distribution is would be $218k, again subject to taxes that year.

Morale of the story, U.S. punishes avid savers.

[Coronita]

Drunkle has a good point… there is some uncertainty with the future of tax rates. If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k's our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

Simple example…If we were not contributing, $1,000 pretax would become $667 after tax. By leaving it in the 401k, I essentially just get a 50% return. Also, if I invest my $667 and get a 10% return, I make $66.70. The same investment in the 401k where i have $1,000 returns $100.

You're not going to get rich with your 401k plan but it could prove to be a good back up plan. You can try to get rich doing something else, but just understand that there is a tight relationship between risk and reward. For every one story of success that you hear, there are ten failures.

Oh yeah, an ADR is an American Depository Receipt. It allows a foreign company to raise capital in the US. And in order to list on a US exchange, they adhere to our rules.

 

Interesting. I have a financial advisor that advises against Roth IRA. His rationale: don't be surprised if the government changes in the future and taxes Roth IRA.

Whether you should or shouldn't max out a 401k depends on your personal tax situation. Some of us that are a working couple with a 401k maxed out is $30k off of gross income, which could put you in a much lower tax bracket.

 

One thing to note though. I'm learning from my parents as they go talk about their retirement planning that it is quite possible to for people to overcontribute to all 401k + other IRAS…Particularly if you work for companies that have deferred compensation, retirement pensions, and 401ks (yes, people of my generation probably wonder what the heck are pensions).

Overcontributing may cause you pay a lot taxes during your golden years, due to not only higher tax rates, but also perceived higher income by the IRS. Let me explain.

 

See, once you reach 70 1/2 , you are REQUIRED to make mandatory minimum withdraws each year across 401k/IRAs. It's usually a percentage of the total IRA/401k you have across the board, and that percentage increases each year after 70. Each year's mandatory minimum IRA withdrawal is subject to income tax. If you don't withdraw the minimum amount required by the IRS, the difference between what you were suppose to withdrawal and want you actually withdrew is subject to a stiff penalty (i think 50%). That penalty is in addition to what you owe on taxes.

The minimum amount starts off small (roughly 3.7% of your account balance) at age 70 and gradually gets larger year after year as you get older. For example, the minimum withdraw at age 100 is roughly 15.87% of your account value. So for example, if you have $1million in all your IRAs combined, government expects you to withdraw a minimum of $37000 the year you are 70, and $158,700 if you are 100 and have $1million at that time.

The reason for this is basically simple. Uncle Sam wants a cut of your taxes, even if you don't actually plan on spending that much. There are exceptions to this rule, IE if you have beneficiaries, still work at the company with the 401k, etc. But it's something to keep in mind. Not only might you pay higher taxes in the future (most likely), you're perceived income by the IRS may actually be higher than your current income.

For example, if you are an avid saving/investor, you might end up with $5million combined in IRAs/401k when you're 70 (that's not a lot inflation adjusted say 40 years down the road). At age 70, you would be required to withdraw $180,000 that year. That $180k would be subject to income tax at that tax rate that year. At age 75, your minimum distribution is would be $218k, again subject to taxes that year.

Morale of the story, U.S. punishes avid savers.

[Coronita]

Drunkle has a good point… there is some uncertainty with the future of tax rates. If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k's our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

Simple example…If we were not contributing, $1,000 pretax would become $667 after tax. By leaving it in the 401k, I essentially just get a 50% return. Also, if I invest my $667 and get a 10% return, I make $66.70. The same investment in the 401k where i have $1,000 returns $100.

You're not going to get rich with your 401k plan but it could prove to be a good back up plan. You can try to get rich doing something else, but just understand that there is a tight relationship between risk and reward. For every one story of success that you hear, there are ten failures.

Oh yeah, an ADR is an American Depository Receipt. It allows a foreign company to raise capital in the US. And in order to list on a US exchange, they adhere to our rules.

 

Interesting. I have a financial advisor that advises against Roth IRA. His rationale: don't be surprised if the government changes in the future and taxes Roth IRA.

Whether you should or shouldn't max out a 401k depends on your personal tax situation. Some of us that are a working couple with a 401k maxed out is $30k off of gross income, which could put you in a much lower tax bracket.

 

One thing to note though. I'm learning from my parents as they go talk about their retirement planning that it is quite possible to for people to overcontribute to all 401k + other IRAS…Particularly if you work for companies that have deferred compensation, retirement pensions, and 401ks (yes, people of my generation probably wonder what the heck are pensions).

Overcontributing may cause you pay a lot taxes during your golden years, due to not only higher tax rates, but also perceived higher income by the IRS. Let me explain.

 

See, once you reach 70 1/2 , you are REQUIRED to make mandatory minimum withdraws each year across 401k/IRAs. It's usually a percentage of the total IRA/401k you have across the board, and that percentage increases each year after 70. Each year's mandatory minimum IRA withdrawal is subject to income tax. If you don't withdraw the minimum amount required by the IRS, the difference between what you were suppose to withdrawal and want you actually withdrew is subject to a stiff penalty (i think 50%). That penalty is in addition to what you owe on taxes.

The minimum amount starts off small (roughly 3.7% of your account balance) at age 70 and gradually gets larger year after year as you get older. For example, the minimum withdraw at age 100 is roughly 15.87% of your account value. So for example, if you have $1million in all your IRAs combined, government expects you to withdraw a minimum of $37000 the year you are 70, and $158,700 if you are 100 and have $1million at that time.

The reason for this is basically simple. Uncle Sam wants a cut of your taxes, even if you don't actually plan on spending that much. There are exceptions to this rule, IE if you have beneficiaries, still work at the company with the 401k, etc. But it's something to keep in mind. Not only might you pay higher taxes in the future (most likely), you're perceived income by the IRS may actually be higher than your current income.

For example, if you are an avid saving/investor, you might end up with $5million combined in IRAs/401k when you're 70 (that's not a lot inflation adjusted say 40 years down the road). At age 70, you would be required to withdraw $180,000 that year. That $180k would be subject to income tax at that tax rate that year. At age 75, your minimum distribution is would be $218k, again subject to taxes that year.

Morale of the story, U.S. punishes avid savers.

[Coronita]

Drunkle has a good point… there is some uncertainty with the future of tax rates. If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k's our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

Simple example…If we were not contributing, $1,000 pretax would become $667 after tax. By leaving it in the 401k, I essentially just get a 50% return. Also, if I invest my $667 and get a 10% return, I make $66.70. The same investment in the 401k where i have $1,000 returns $100.

You're not going to get rich with your 401k plan but it could prove to be a good back up plan. You can try to get rich doing something else, but just understand that there is a tight relationship between risk and reward. For every one story of success that you hear, there are ten failures.

Oh yeah, an ADR is an American Depository Receipt. It allows a foreign company to raise capital in the US. And in order to list on a US exchange, they adhere to our rules.

 

Interesting. I have a financial advisor that advises against Roth IRA. His rationale: don't be surprised if the government changes in the future and taxes Roth IRA.

Whether you should or shouldn't max out a 401k depends on your personal tax situation. Some of us that are a working couple with a 401k maxed out is $30k off of gross income, which could put you in a much lower tax bracket.

 

One thing to note though. I'm learning from my parents as they go talk about their retirement planning that it is quite possible to for people to overcontribute to all 401k + other IRAS…Particularly if you work for companies that have deferred compensation, retirement pensions, and 401ks (yes, people of my generation probably wonder what the heck are pensions).

Overcontributing may cause you pay a lot taxes during your golden years, due to not only higher tax rates, but also perceived higher income by the IRS. Let me explain.

 

See, once you reach 70 1/2 , you are REQUIRED to make mandatory minimum withdraws each year across 401k/IRAs. It's usually a percentage of the total IRA/401k you have across the board, and that percentage increases each year after 70. Each year's mandatory minimum IRA withdrawal is subject to income tax. If you don't withdraw the minimum amount required by the IRS, the difference between what you were suppose to withdrawal and want you actually withdrew is subject to a stiff penalty (i think 50%). That penalty is in addition to what you owe on taxes.

The minimum amount starts off small (roughly 3.7% of your account balance) at age 70 and gradually gets larger year after year as you get older. For example, the minimum withdraw at age 100 is roughly 15.87% of your account value. So for example, if you have $1million in all your IRAs combined, government expects you to withdraw a minimum of $37000 the year you are 70, and $158,700 if you are 100 and have $1million at that time.

The reason for this is basically simple. Uncle Sam wants a cut of your taxes, even if you don't actually plan on spending that much. There are exceptions to this rule, IE if you have beneficiaries, still work at the company with the 401k, etc. But it's something to keep in mind. Not only might you pay higher taxes in the future (most likely), you're perceived income by the IRS may actually be higher than your current income.

For example, if you are an avid saving/investor, you might end up with $5million combined in IRAs/401k when you're 70 (that's not a lot inflation adjusted say 40 years down the road). At age 70, you would be required to withdraw $180,000 that year. That $180k would be subject to income tax at that tax rate that year. At age 75, your minimum distribution is would be $218k, again subject to taxes that year.

Morale of the story, U.S. punishes avid savers.

[Coronita]

Drunkle has a good point… there is some uncertainty with the future of tax rates. If you want to hedge against this risk some employers are now offering Roth 401k.

My wife and I earn over $200k per year. That places us in the 33% federal tax rate. By contributing to our 401k's our AGI comes in at about $190k, dropping us into the 28% federal tax rate.

Simple example…If we were not contributing, $1,000 pretax would become $667 after tax. By leaving it in the 401k, I essentially just get a 50% return. Also, if I invest my $667 and get a 10% return, I make $66.70. The same investment in the 401k where i have $1,000 returns $100.

You're not going to get rich with your 401k plan but it could prove to be a good back up plan. You can try to get rich doing something else, but just understand that there is a tight relationship between risk and reward. For every one story of success that you hear, there are ten failures.

Oh yeah, an ADR is an American Depository Receipt. It allows a foreign company to raise capital in the US. And in order to list on a US exchange, they adhere to our rules.

 

Interesting. I have a financial advisor that advises against Roth IRA. His rationale: don't be surprised if the government changes in the future and taxes Roth IRA.

Whether you should or shouldn't max out a 401k depends on your personal tax situation. Some of us that are a working couple with a 401k maxed out is $30k off of gross income, which could put you in a much lower tax bracket.

 

One thing to note though. I'm learning from my parents as they go talk about their retirement planning that it is quite possible to for people to overcontribute to all 401k + other IRAS…Particularly if you work for companies that have deferred compensation, retirement pensions, and 401ks (yes, people of my generation probably wonder what the heck are pensions).

Overcontributing may cause you pay a lot taxes during your golden years, due to not only higher tax rates, but also perceived higher income by the IRS. Let me explain.

 

See, once you reach 70 1/2 , you are REQUIRED to make mandatory minimum withdraws each year across 401k/IRAs. It's usually a percentage of the total IRA/401k you have across the board, and that percentage increases each year after 70. Each year's mandatory minimum IRA withdrawal is subject to income tax. If you don't withdraw the minimum amount required by the IRS, the difference between what you were suppose to withdrawal and want you actually withdrew is subject to a stiff penalty (i think 50%). That penalty is in addition to what you owe on taxes.

The minimum amount starts off small (roughly 3.7% of your account balance) at age 70 and gradually gets larger year after year as you get older. For example, the minimum withdraw at age 100 is roughly 15.87% of your account value. So for example, if you have $1million in all your IRAs combined, government expects you to withdraw a minimum of $37000 the year you are 70, and $158,700 if you are 100 and have $1million at that time.

The reason for this is basically simple. Uncle Sam wants a cut of your taxes, even if you don't actually plan on spending that much. There are exceptions to this rule, IE if you have beneficiaries, still work at the company with the 401k, etc. But it's something to keep in mind. Not only might you pay higher taxes in the future (most likely), you're perceived income by the IRS may actually be higher than your current income.

For example, if you are an avid saving/investor, you might end up with $5million combined in IRAs/401k when you're 70 (that's not a lot inflation adjusted say 40 years down the road). At age 70, you would be required to withdraw $180,000 that year. That $180k would be subject to income tax at that tax rate that year. At age 75, your minimum distribution is would be $218k, again subject to taxes that year.

Morale of the story, U.S. punishes avid savers.

[Coronita]

Guaranteed Short-Term Securities Fund
Core Bond/BSAM Fund
Fidelity Advisor Balanced Account (FAIGX)
Lifetime Funds
Dryden S&P 500(R) Index Fund
Large Cap Blend / Victory fund (oooohh "victory")
Large Cap Value/AJO Fund
Oakmark Select Fund (OARLX)
Oppenheimer Capital Appreciation Fund (OPTFX)
Mid CAp Growth / Artisan Partners Fund
Mid Cap Value / Integrity Fund
AIM Small Cap Growth Fund (GTSAX)
Small Cap Value / MEA Fund
Columbia International Value Fund (NIVLX)
Oppenheimer Global Fund (OPPAX)

 

I'm sorry to say, your employer's 401k plan looks pretty sh!tty.

1 index fund. I often wonder why more employers don't just go with Vanguard.

 

 

[Coronita]

Guaranteed Short-Term Securities Fund
Core Bond/BSAM Fund
Fidelity Advisor Balanced Account (FAIGX)
Lifetime Funds
Dryden S&P 500(R) Index Fund
Large Cap Blend / Victory fund (oooohh "victory")
Large Cap Value/AJO Fund
Oakmark Select Fund (OARLX)
Oppenheimer Capital Appreciation Fund (OPTFX)
Mid CAp Growth / Artisan Partners Fund
Mid Cap Value / Integrity Fund
AIM Small Cap Growth Fund (GTSAX)
Small Cap Value / MEA Fund
Columbia International Value Fund (NIVLX)
Oppenheimer Global Fund (OPPAX)

 

I'm sorry to say, your employer's 401k plan looks pretty sh!tty.

1 index fund. I often wonder why more employers don't just go with Vanguard.

 

 

[Coronita]

Guaranteed Short-Term Securities Fund
Core Bond/BSAM Fund
Fidelity Advisor Balanced Account (FAIGX)
Lifetime Funds
Dryden S&P 500(R) Index Fund
Large Cap Blend / Victory fund (oooohh "victory")
Large Cap Value/AJO Fund
Oakmark Select Fund (OARLX)
Oppenheimer Capital Appreciation Fund (OPTFX)
Mid CAp Growth / Artisan Partners Fund
Mid Cap Value / Integrity Fund
AIM Small Cap Growth Fund (GTSAX)
Small Cap Value / MEA Fund
Columbia International Value Fund (NIVLX)
Oppenheimer Global Fund (OPPAX)

 

I'm sorry to say, your employer's 401k plan looks pretty sh!tty.

1 index fund. I often wonder why more employers don't just go with Vanguard.

 

 

[Coronita]

Guaranteed Short-Term Securities Fund
Core Bond/BSAM Fund
Fidelity Advisor Balanced Account (FAIGX)
Lifetime Funds
Dryden S&P 500(R) Index Fund
Large Cap Blend / Victory fund (oooohh "victory")
Large Cap Value/AJO Fund
Oakmark Select Fund (OARLX)
Oppenheimer Capital Appreciation Fund (OPTFX)
Mid CAp Growth / Artisan Partners Fund
Mid Cap Value / Integrity Fund
AIM Small Cap Growth Fund (GTSAX)
Small Cap Value / MEA Fund
Columbia International Value Fund (NIVLX)
Oppenheimer Global Fund (OPPAX)

 

I'm sorry to say, your employer's 401k plan looks pretty sh!tty.

1 index fund. I often wonder why more employers don't just go with Vanguard.

 

 

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