Various Financial Questions | TigerDroppings.com

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Lsut81
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Various Financial Questions



A few questions for the gurus of the board... In 2013, my goal is to get all of my investments in order and really begin making strides.

I've got 25k in a 401k from an old employer. I'm trying to decide what to do with it. I know I should prob roll it into a Roth of some sort, but where should I look at putting it? I've currently got a Scottrade account with a few stocks. What are the pros and cons of moving it to Scottrade, so that I only have a single account to worry about?

I've got no problem closing the Scottrade account and going with another broker if there is a better option out there? I just like them because I rarely make big buys of stocks and they are only $7 no matter what.

Another thing I would like to do is begin ramping up various investments. I could prob afford to put 20-25% of my paycheck away. I've become very interested in precious metals... What would a recommended breakdown be of money into different investment options? What percentage to each?

401k?
PM?
Roth?
Stocks?
Others?

Any advice is greatly appreciated guys!







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Broke
LSU Fan
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Member since Sep 2006
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re: Various Financial Questions


You are going to owe tax on that money if you roll it into a roth. If you roll it into a traditional IRA you won't pay tax on it. It will be deferred.





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Lsut81
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Member since Jun 2005
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re: Various Financial Questions


quote:

You are going to owe tax on that money if you roll it into a roth. If you roll it into a traditional IRA you won't pay tax on it. It will be deferred.


And the only difference between the 2 is pre or post tax?

Also, I've read that I would need to make sure that the brokerage that is accepting the 401k carries the same investments, so they can just accept the "shares" that I own in my portfolio?






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Layabout
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Member since Jul 2011
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re: Various Financial Questions


quote:

Also, I've read that I would need to make sure that the brokerage that is accepting the 401k carries the same investments, so they can just accept the "shares" that I own in my portfolio?

You're going to cash out of your existing fund and they will transfer the money to the new fund, which will have its own investment options. When you open the new account you will specify the allocation of incoming monies among the investment options.






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Lsut81
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re: Various Financial Questions


quote:

You're going to cash out of your existing fund and they will transfer the money to the new fund, which will have its own investment options. When you open the new account you will specify the allocation of incoming monies among the investment options.


Ok, I was confused about that... I thought I had read that if I cashed out, I would then be taxed. But I see what you are saying.

Is there any advantage to paying the taxes now and putting it into a Roth IRA as opposed to a regular IRA?






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Layabout
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re: Various Financial Questions


quote:

Ok, I was confused about that... I thought I had read that if I cashed out, I would then be taxed. But I see what you are saying.

The new fund would receive the cash but it would be considered a rollover so no tax would be due unless you're rolling it into a Roth IRA.

quote:

Is there any advantage to paying the taxes now and putting it into a Roth IRA as opposed to a regular IRA?

The advantage to a Roth IRA is that you pay no tax on the earnings and the appreciation of the account. If you're a young man, it makes sense to pay the tax up front on your contributions and then pay no tax on the accumulated earnings for 30-40 years. I wish I had had that option when I was younger.

The rules for rolling money into a Roth IRA are somewhat complicated. For one thing, you need to come up with the amount of the income tax out of pocket and not from the account itself. I think I would look at either leaving the money where it is or rolling it into another 401K and then opening a new Roth IRA and making your future contributions to it.



This post was edited on 1/3 at 11:13 am


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Broke
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Member since Sep 2006
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re: Various Financial Questions


quote:

Is there any advantage to paying the taxes now and putting it into a Roth IRA as opposed to a regular IRA?


It really depends on your situation. If you are 25 years old it might work better to pay the taxes now and get 30 years of tax free gains. Or you can let this ride and you'll be in a lower tax bracket when you retire as opposed to now.






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Lsut81
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Member since Jun 2005
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re: Various Financial Questions


quote:

The advantage to a Roth IRA is that you pay no tax on the earnings and the appreciation of the account. If you're a young man, it makes sense to pay the tax up front on your contributions and then pay no tax on the accumulated earnings for 30-40 years. I wish I had had that option when I was younger.


31, so have plenty of time before retirement

quote:

The rules for rolling money into a Roth IRA are somewhat complicated. For one thing, you need to come up with the amount of the income tax out of pocket and not from the account itself. I think I would look at either leaving the money where it is or rolling it into another 401K and then opening a new Roth IRA and making your future contributions to it.


I've got cash on the side to pay it if I needed to, although I would rather not. What would be the difference with that or just cashing it out, paying the early withdrawl penalty, and then putting the remainder into a new Roth IRA?






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Lsut81
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re: Various Financial Questions


I don't want to bog this down with just the rollover question...

What about using Scottrade to house the (401k,Roth, RothIRA)? Acceptable, or should I go with another company?

Like I said, convenience wise it would be easy to put it where I would play in stocks and Scottrade seems to be the cheapest for me






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Broke
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re: Various Financial Questions


I'm a financial planner. So frick ScottTrade





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Lsut81
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re: Various Financial Questions


quote:

So frick ScottTrade




What online brokers would you recommend? Like I said, I don't do a lot of stocks, so the $7 is a great deal for me.






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Broke
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Member since Sep 2006
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re: Various Financial Questions


quote:

What online brokers would you recommend?


I have absolutely no idea. I just use the system I'm on. Never even seen an online account.






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Lsut81
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Member since Jun 2005
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re: Various Financial Questions


quote:

I have absolutely no idea. I just use the system I'm on. Never even seen an online account


Well frick Broke


What about investment percentages? If I plan on putting away about 20% of my take home, how should I distribute it? What amount would you recommend putting into each?

Retirement Acct (401, Roth, IRA)
Stocks
Precious Metals
Savings






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Broke
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Member since Sep 2006
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re: Various Financial Questions


I'm not allowed to give advice on a message board. Seriously.





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Lsut81
USA Fan
Member since Jun 2005
65387 posts
 Online 

re: Various Financial Questions


quote:

I'm not allowed to give advice on a message board. Seriously.



Understandable...

Paging Russian or anyone else

I need help






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polizei11
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Lafayette
Member since May 2009
988 posts

re: Various Financial Questions


Contribute to 401k up to company match.
Max Roth IRA ($5000)
Finish 401k up to annual limit

That's a good start.






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Lsut81
USA Fan
Member since Jun 2005
65387 posts
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re: Various Financial Questions


quote:

Contribute to 401k up to company match.


Current company doesn't have a 401k plan

quote:

Max Roth IRA ($5000)


Plan on opening one and can do that







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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8762 posts

re: Various Financial Questions


Save 3-6 months worth of expenses in a savings account.

Then start a discretionary investment account to invest in ETFs and stocks after you have maxed out your traditional IRA.






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polizei11
LSU Fan
Lafayette
Member since May 2009
988 posts

re: Various Financial Questions


That opens up other avenues.

1.) Roth or Traditional IRA
2.) Low Cost Investments (Index Funds, ETFs, Tax Free Municipal Bonds)
3.) Insurance Products
4.) Plead with your employer to get a 401k/403b/SEP-IRA
5.) Kids? 529 funds
6.) Health Savings Account? Odds are your company doesn't provide this if you don't have a 401k but worth a shot to ask.






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Lsut81
USA Fan
Member since Jun 2005
65387 posts
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re: Various Financial Questions


quote:

1.) Roth or Traditional IRA


First step... Gotta figure out to do with my old 401k

quote:

2.) Low Cost Investments (Index Funds, ETFs, Tax Free Municipal Bonds)


I'd like to do this, which is why I was asking earlier about having an IRA with the same company that I'm purchasing these through (Right now Scottrade but open to other companies)

quote:

3.) Insurance Products


Not Familiar

quote:

4.) Plead with your employer to get a 401k/403b/SEP-IRA


They are currently looking into it... We are a small company

quote:

5.) Kids? 529 funds


Nope

quote:

6.) Health Savings Account?


Have one left over from previous employer






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