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Message
Various Financial Questions
Posted on 1/3/13 at 9:49 am
Posted on 1/3/13 at 9:49 am
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!
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!
3
Posted on 1/3/13 at 9:58 am to Lsut81
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.
Posted on 1/3/13 at 10:04 am to Broke
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?
Posted on 1/3/13 at 10:13 am to Lsut81
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.
Posted on 1/3/13 at 10:17 am to Layabout
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?
Posted on 1/3/13 at 11:07 am to Lsut81
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 1/3/13 at 11:13 am
Posted on 1/3/13 at 11:09 am to Lsut81
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.
Posted on 1/3/13 at 11:17 am to Layabout
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?
Posted on 1/3/13 at 11:25 am to Lsut81
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
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
Posted on 1/3/13 at 11:30 am to Lsut81
I'm a financial planner. So frick ScottTrade
Posted on 1/3/13 at 11:35 am to Broke
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.
Posted on 1/3/13 at 12:07 pm to Lsut81
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.
Posted on 1/3/13 at 12:25 pm to Broke
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
Posted on 1/3/13 at 1:01 pm to Lsut81
I'm not allowed to give advice on a message board. Seriously.
Posted on 1/3/13 at 1:08 pm to Broke
quote:
I'm not allowed to give advice on a message board. Seriously.
Understandable...
Paging Russian or anyone else
I need help
Posted on 1/3/13 at 1:18 pm to Lsut81
Contribute to 401k up to company match.
Max Roth IRA ($5000)
Finish 401k up to annual limit
That's a good start.
Max Roth IRA ($5000)
Finish 401k up to annual limit
That's a good start.
Posted on 1/3/13 at 1:25 pm to polizei11
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
Posted on 1/3/13 at 1:39 pm to Lsut81
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.
Then start a discretionary investment account to invest in ETFs and stocks after you have maxed out your traditional IRA.
Posted on 1/3/13 at 1:40 pm to Lsut81
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.
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.
Posted on 1/3/13 at 1:43 pm to polizei11
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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