The Investment Thread (help with savings, stocks, retirement funds, etc.)

[TheLastStop123]

I had no idea that you could still withdraw principal contributions from a Roth IRA without penalty at any time. it's only gains that can't be withdrawn without a tax penalty until you're 59.5

[RiotAct]

Originally Posted by TheLastStop123

I had no idea that you could still withdraw principal contributions from a Roth IRA without penalty at any time. it's only gains that can't be withdrawn without a tax penalty until you're 59.5

oh cool, I didn't know that either.

And I believe you can also draw from your Roth if you're buying a home (but only up to $10k, and the account has to have been open for 5 years already or something like that)

[TheLastStop123]

Originally Posted by RiotAct

oh cool, I didn't know that either.

And I believe you can also draw from your Roth if you're buying a home (but only up to $10k, and the account has to have been open for 5 years already or something like that)

yeah it's good stuff

for the home thing, I could be mistaken, but I think you have to be a first-time home buyer unfortunately.

there are other exceptions too, like medical expenses if it reaches a certain % of your salary, and other unforeseen circumstances.

[cry_minarets458]

envisioning zero student debt. 6 figure paid down in just a year. been working my ass off. will keep similar income for the next year i hope just to bank deposit for a house. otherwise, wont have that high of an income when i scale back from the second job.

i have a 403b, maxed out for 2018, ~30k deposited with employer contribution and just celebrated my 2 year anniversary in the field.

moving forward, was going to start a mutual fund in July (I think minimum is $2500). how much, percentage-wise, should i be dumping into investments, stock market, etc on a yearly basis?

is it as simple as this:
1. eliminate debt
2. build emergency fund
3. any disposible income, invest

how much of the above percentage is smart to put into savings on top of an emergency fund? any body care to offer some insight? thanks

[UCFish]

After our Emergency Fund I try to throw as much as possible into savings...I max 401k.

Next year I can pay off my 401k loan I took on my house and try to save more.

Before we bought our house I just took extra money from paychecks and placed it in a Vanguard total index fund.

[cry_minarets458]

So what is a healthy percentage then to put toward investment? 10%? Or it is just analyze and see what I don’t need? I feel the latter is too variable instead of setting to a strict amount to stick aside for investment purposes. Idk I’m thinking of dumping as much as I could into a mutual fund to use that for a house deposit. If aggressive, I may be able to make a good gain in just a year. Idk tho. I’m new to all this

[Route_2]

Originally Posted by cry_minarets458

So what is a healthy percentage then to put toward investment? 10%? Or it is just analyze and see what I don’t need? I feel the latter is too variable instead of setting to a strict amount to stick aside for investment purposes. Idk I’m thinking of dumping as much as I could into a mutual fund to use that for a house deposit. If aggressive, I may be able to make a good gain in just a year. Idk tho. I’m new to all this

Just saying 'mutual fund' is a bit broad. What fund or funds are you looking at? What timeline do you have for purchasing a home? It's generally not advised to place home down payment savings in risk vehicles due to the potential for losses. If the sole purpose of these savings is for a down payment and your timeline is under 3 years, I would suggest just putting the cash into a HY savings account.

[cry_minarets458]

Originally Posted by Route_2

Just saying 'mutual fund' is a bit broad. What fund or funds are you looking at? What timeline do you have for purchasing a home? It's generally not advised to place home down payment savings in risk vehicles due to the potential for losses. If the sole purpose of these savings is for a down payment and your timeline is under 3 years, I would suggest just putting the cash into a HY savings account.

I guess these are the things I need to know. I’m hopefully looking at something in under 2 years. Idk what distribution I would go with in a mutual fund, only Bc id do through my 403b provider and they have pretty good ways to just click a button and set up the distribution based on how risky you want to be.

[cry_minarets458]

also, i'm entitled to a 3% match with my second employer in a 403b. So, I should calculate what 3% is monetary-wise, subtract that from my other job's maxed out 18,500 (where I'm just given 8% lump sum), implement that 3% value into my second job's 403b, and then get the 3% match....am i thinking about this correctly? as long as I'm still taking out no more than the 18500, that extra 3% is okay to receive? i don't know how long i have to be vested to retain this 3% if I leave the second job, but it translates to more money in the pool to make money on, right?

[Route_2]

Originally Posted by cry_minarets458

also, i'm entitled to a 3% match with my second employer in a 403b. So, I should calculate what 3% is monetary-wise, subtract that from my other job's maxed out 18,500 (where I'm just given 8% lump sum), implement that 3% value into my second job's 403b, and then get the 3% match....am i thinking about this correctly? as long as I'm still taking out no more than the 18500, that extra 3% is okay to receive? i don't know how long i have to be vested to retain this 3% if I leave the second job, but it translates to more money in the pool to make money on, right?

Just to be clear, your company matches you 100% up to 3% of your contribution to the plan?

The company match doesn't apply to your personal limit of $18,500, but you'd want to make sure you're only contributing that amount in total across the two plans.

[cry_minarets458]

Originally Posted by Route_2

Just to be clear, your company matches you 100% up to 3% of your contribution to the plan?

The company match doesn't apply to your personal limit of $18,500, but you'd want to make sure you're only contributing that amount in total across the two plans.

that's my understanding, yes.

job #1: i get 8% regardless of my own contribution ... currently contributing $18,500
job #2: i get 3% matched by my employer, just unsure of how long is takes to be 100% vested (if it even applies to this company, for example) ... currently contributing $0 as I am about to celebrate my 1 year anniversary and become eligible for the match


it's only 3%, but 3% is alot on the part-time/per diem scale. people tend to think it's free money, but it's actually money earned. very smart way to think of it, imo

[Benny003]

Originally Posted by cry_minarets458

So what is a healthy percentage then to put toward investment? 10%? Or it is just analyze and see what I don’t need? I feel the latter is too variable instead of setting to a strict amount to stick aside for investment purposes. Idk I’m thinking of dumping as much as I could into a mutual fund to use that for a house deposit. If aggressive, I may be able to make a good gain in just a year. Idk tho. I’m new to all this

Basically, IMO, don't invest any money you might need within the next year or two. If you're saving for a down payment on a house, don't invest that money. Put it in a high yield savings account (Ally (1.45% currently), Discover (1.5% currently), etc.).

1. Pay off high interest debt
2. Emergency fund (or simultaneously with paying off debt)
3. 401k
4. Savings for near-term goals (house, car, home improvement, etc.)
5. If you have kids, consider a 529 plan. If you have a high deductible health plan, consider funding an HSA.
6. Anything that is left over you can invest in the stock market (mutual funds, index funds, etc.)

I max out my 401k and I have an emergency fund built up, but I'm trying to save up for a new car (been driving the same car for 11 years) and home improvement stuff. So all my extra money either goes into long-term savings and an HSA that I have. Once I've taken care of some those things I'm saving for I'll think about investing in the market with my savings. The market is overpriced right now anyway. I think I'll just wait for the inevitable correction to come before putting my liquid money in the market.

[rconverse]

^How are you getting money out of your HSA for home improvements or purchase of a new vehicle? My HSA only works for health related stuff.

[Route_2]

Originally Posted by rconverse

^How are you getting money out of your HSA for home improvements or purchase of a new vehicle? My HSA only works for health related stuff.

It's a tax free deferral. If you pay out of pocket for medical expenses you can reimburse yourself at anytime from your HSA (keep your receipts).

[Benny003]

Originally Posted by rconverse

^How are you getting money out of your HSA for home improvements or purchase of a new vehicle? My HSA only works for health related stuff.

I'm not using it for home improvements or buying a new car. I was just saying my extra money after 401k savings is currently funding long-term savings and an HSA separately. Some money goes into the long-term savings account and some goes into the HSA. The HSA has an IRS contribution limit of $6850 for family health insurance plans. I'll almost be maxing that out this year. I'll probably back that off next year once I have it built up unless we know we have some big medical things coming up. The HSA account also allows it to be invested in mutual funds for everything in the account above $1000. So I'll probably do that too once it's comfortably built up assuming the market is steady.

[MDPrompter]

HSA is really just a tax shelter for the wealthy.

[rconverse]

Originally Posted by Route_2

It's a tax free deferral. If you pay out of pocket for medical expenses you can reimburse yourself at anytime from your HSA (keep your receipts).

I understand what it is, as I have one. I was just confused as to how B003 was using his or may have misread hit post.

Originally Posted by Benny003

I'm not using it for home improvements or buying a new car. I was just saying my extra money after 401k savings is currently funding long-term savings and an HSA separately. Some money goes into the long-term savings account and some goes into the HSA. The HSA has an IRS contribution limit of $6850 for family health insurance plans. I'll almost be maxing that out this year. I'll probably back that off next year once I have it built up unless we know we have some big medical things coming up. The HSA account also allows it to be invested in mutual funds for everything in the account above $1000. So I'll probably do that too once it's comfortably built up assuming the market is steady.

Gotcha. Makes sense. I must have read that wrong.

Originally Posted by mdmarvich

HSA is really just a tax shelter for the wealthy.

All I know is that before the worst legislation ever passed in the history of the world (ACA), I didn't need an HSA.

[scrock25]

The affordable care act was not the impetus towards high deductible plans, they were around and trending well before it became legislation. The fact that somebody had the foresight to indeed use an HSA as an investment vehicle was a great idea though.

[rconverse]

Originally Posted by scrock25

The affordable care act was not the impetus towards high deductible plans, they were around and trending well before it became legislation. The fact that somebody had the foresight to indeed use an HSA as an investment vehicle was a great idea though.

Agree that it's a nice vehicle now. Point still stands. Prior to the ACA, I didn't need an HSA and neither did anyone I know. Now, despite paying top dollar for insurance, it's basically worthless unless you spend $4k out of pocket. Then, you can tap into said insurance. In other words, modern day insurance for a single adult is pretty much worthless unless you have pre-existing conditions.

Edit: Anyway, this isn't the thread to discuss the worst legislation that this country has ever seen. There's another thread to discuss that atrocity. :thumsbup

[scrock25]

I’d say that a HDHP is better for a single healthy person, TBH. But again, those have nothing to do with the ACA.

[scrock25]

Having to save to cover the deductible is just the nature of the beast now, thankfully being able to see some returns on that $$ takes a bit of the sting out of it all.

[Benny003]

Originally Posted by rconverse

I understand what it is, as I have one. I was just confused as to how B003 was using his or may have misread hit post.



Gotcha. Makes sense. I must have read that wrong.



All I know is that before the worst legislation ever passed in the history of the world (ACA), I didn't need an HSA.

Originally Posted by scrock25

The affordable care act was not the impetus towards high deductible plans, they were around and trending well before it became legislation. The fact that somebody had the foresight to indeed use an HSA as an investment vehicle was a great idea though.

I had an HSA in 2009 I think before the ACA was even conceived. Our company that I part own provided the option since health insurance costs were increasing at absurd rates just as they continue to do today.

Agreed that using an HSA makes more sense if you're healthy and have the income (or employer contributions) to fund the HSA. For me it makes a lot of sense.

[scrock25]

I just think it’s hilarious that there are people out there who think high deductible plans/the necessity for an HSA are here as a result of the ACA, they’re not.

[Nick@Night]

I wish I would have started in a HDHP with a HSA earlier than I did (2015). I'm just now approaching $10k in the account, and recently put everything above the minimum required balance in an investment fund.

[MDPrompter]

Originally Posted by rconverse

All I know is that before the worst legislation ever passed in the history of the world (ACA), I didn't need an HSA.

I did...I had high deductible + HSA well before ACA...market was already headed quickly in that direction. Here's the proof...page 3.

[MDPrompter]

Originally Posted by scrock25

I just think it’s hilarious that there are people out there who think high deductible plans/the necessity for an HSA are here as a result of the ACA, they’re not.

Yeah, those people are complete idiots...like flat earthers or 9/11 truthers.

[MDPrompter]

Originally Posted by mdmarvich

I did...I had high deductible + HSA well before ACA...market was already headed quickly in that direction. Here's the proof...page 3.

https://www.ahip.org/wp-content/uplo...ft_2.14.17.pdf

[rconverse]

Originally Posted by mdmarvich

I did...I had high deductible + HSA well before ACA...market was already headed quickly in that direction. Here's the proof...page 3.

That's great for you. Most people, including myself, not only didn't need that but, had no idea what it was after the most poorly drafted, irresponsible piece (if you caould call it that) of legislation was ever written.

[UNC41]

Originally Posted by rconverse

That's great for you. Most people, including myself, not only didn't need that but, had no idea what it was after the most poorly drafted, irresponsible piece (if you caould call it that) of legislation was ever written.

Why do you keep tying HDHPs and HSAs to the ACA? It's the direction the industry was heading prior to the ACA and would have happen regardless of whether or not the legislation passed.

Personally, my insurance, both when I was single and as I approach adding a child to my plan for the first time, have been better post-ACA than they were before it.

[Climb2safety]

Originally Posted by rconverse

That's great for you. Most people, including myself, not only didn't need that but, had no idea what it was after the most poorly drafted, irresponsible piece (if you caould call it that) of legislation was ever written.

???dont need that????

As in, you prefer to pay for your family’s medical expenses with AFTER tax dollars???

You if all people, who wants to cut taxes by 50%, but prefers to use after tax dollars only for medical expenses apparently.

You just don’t know what you’re doing do you?