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1006ury | I grew up as an only child with my dad working and my mom stayed home. We never have all of the fanciest things or unnecessary things, but it also didn't seem like we missed out on anything. I observed and learned that they just didn't spend money they didn't have, saved up, and invested wisely. They never had a financial advisor and just accumulated a bunch of Microsoft stock since the 90's along with whatever my dad researched and never needed to sell it because they still don't really buy anything or go anywhere, which is kind of sad but they have plenty if ever needed. I sort of followed in those footsteps and now at 45 and married with 2 kids, we tend to save a lot, don't buy a bunch of unnecessary things, and don't spend money we don't have. Luckily they invested some money in Microsoft for me back then and I still have several hundred thousand worth, even after using some to buy a house, along with my 401k, etc. The reason I am bringing this is up is because I hear multiple friends and family say stuff like "our financial advisor said this..." etc. (where honestly some of the stuff I hear has me shaking my head) and it had me thinking, I don't have a financial advisor. I am just thinking, I have always been fine, never in debt, and will inherit quite a lot someday. I can't see any need for me or my parents to have a financial advisor now, especially after seeing they typically charge 1%. It seems like a waste, especially with their portfolio worth millions, to give someone 10's of thousands a year when everything seems fine. Am I on the right track here, or am I overlooking something? | Your approach to money management and investing has clearly worked well for you and your family. As an AI financial advisor, I can tell you that a financial advisor isn't necessary for everyone.
Financial advisors can provide a range of services, from investment advice to comprehensive financial planning. Individuals with straightforward financial situations, like yours, may not need the full range of services that a financial advisor provides.
However, there are some situations where a financial advisor could be useful:
1. **Complex Financial Planning:** If you have a complex financial situation, such as owning multiple businesses or properties, having a large family with different financial needs, or planning for a special-needs family member, a financial advisor could be beneficial.
2. **Tax Planning:** Advisors can provide advice on minimizing tax liability, especially when it comes to estate planning and inheritance tax.
3. **Retirement Planning:** If you're uncertain about how much you need to save for retirement, or how to generate income during retirement, a financial advisor could help.
4. **Investment Strategy:** While it sounds like your investment strategy is working, a financial advisor could provide a second opinion or suggest other investment opportunities.
5. **Peace of Mind:** Some people simply enjoy the peace of mind that comes with knowing a professional is overseeing their financial affairs.
However, given your financial savviness and discipline, along with the fact that you're not in debt and have a significant nest egg, it's possible that you don't need a financial advisor. If you're comfortable managing your finances and investments, and you're confident in your ability to continue doing so, then retaining an advisor might not be necessary.
One thing to consider is that as your parents age, they may require more complex financial planning, especially when it comes to estate planning and potential long-term care costs. Depending on the size of their estate, they might benefit from professional guidance in these areas to ensure their wealth is passed on in the most tax-efficient way possible.
In the end, the decision to hire a financial advisor is a personal one and depends on your comfort level with managing your own finances, your financial goals, and the complexity of your financial situation. | ### Human
I grew up as an only child with my dad working and my mom stayed home. We never have all of the fanciest things or unnecessary things, but it also didn't seem like we missed out on anything. I observed and learned that they just didn't spend money they didn't have, saved up, and invested wisely. They never had a financial advisor and just accumulated a bunch of Microsoft stock since the 90's along with whatever my dad researched and never needed to sell it because they still don't really buy anything or go anywhere, which is kind of sad but they have plenty if ever needed. I sort of followed in those footsteps and now at 45 and married with 2 kids, we tend to save a lot, don't buy a bunch of unnecessary things, and don't spend money we don't have. Luckily they invested some money in Microsoft for me back then and I still have several hundred thousand worth, even after using some to buy a house, along with my 401k, etc. The reason I am bringing this is up is because I hear multiple friends and family say stuff like "our financial advisor said this..." etc. (where honestly some of the stuff I hear has me shaking my head) and it had me thinking, I don't have a financial advisor. I am just thinking, I have always been fine, never in debt, and will inherit quite a lot someday. I can't see any need for me or my parents to have a financial advisor now, especially after seeing they typically charge 1%. It seems like a waste, especially with their portfolio worth millions, to give someone 10's of thousands a year when everything seems fine. Am I on the right track here, or am I overlooking something?
### Assistant
Your approach to money management and investing has clearly worked well for you and your family. As an AI financial advisor, I can tell you that a financial advisor isn't necessary for everyone.
Financial advisors can provide a range of services, from investment advice to comprehensive financial planning. Individuals with straightforward financial situations, like yours, may not need the full range of services that a financial advisor provides.
However, there are some situations where a financial advisor could be useful:
1. **Complex Financial Planning:** If you have a complex financial situation, such as owning multiple businesses or properties, having a large family with different financial needs, or planning for a special-needs family member, a financial advisor could be beneficial.
2. **Tax Planning:** Advisors can provide advice on minimizing tax liability, especially when it comes to estate planning and inheritance tax.
3. **Retirement Planning:** If you're uncertain about how much you need to save for retirement, or how to generate income during retirement, a financial advisor could help.
4. **Investment Strategy:** While it sounds like your investment strategy is working, a financial advisor could provide a second opinion or suggest other investment opportunities.
5. **Peace of Mind:** Some people simply enjoy the peace of mind that comes with knowing a professional is overseeing their financial affairs.
However, given your financial savviness and discipline, along with the fact that you're not in debt and have a significant nest egg, it's possible that you don't need a financial advisor. If you're comfortable managing your finances and investments, and you're confident in your ability to continue doing so, then retaining an advisor might not be necessary.
One thing to consider is that as your parents age, they may require more complex financial planning, especially when it comes to estate planning and potential long-term care costs. Depending on the size of their estate, they might benefit from professional guidance in these areas to ensure their wealth is passed on in the most tax-efficient way possible.
In the end, the decision to hire a financial advisor is a personal one and depends on your comfort level with managing your own finances, your financial goals, and the complexity of your financial situation.<eos_token> |
1005xmw | Couple w/ Gross Income ~$127,000
Take Home ~$67,000 after taxes, insurance, and 401k contributions (one persons 401k is maxed for 2023).
Monthly expenses ~$2500
~$1900/month goes in a regular savings. We spend it on travel or emergencies.
Put an additional ~$1180/month into a high interest savings account (3.75%).
Cars are in good shape. Don’t expect to need a new one for several years.
One person has an IRA; the other has a ROTH. Neither of us has contributed to them in years.
36% of our money is in Savings. This is mainly because we do not own a home, and I wanted to be able to move on something if we ever had an opportunity.
45% in 401ks
8% in Roth
10% in Traditional IRA
1% in Savings Bonds
What would you do differently? | From a high-level perspective, your savings and investing strategy seems solid. However, there are a few areas where you could possibly optimize:
1. **Emergency Fund:** It's a good practice to keep 3-6 months of living expenses in an easily accessible account for emergencies. Based on your monthly expenses of $2,500, this would be between $7,500 and $15,000. It seems like you're putting $1,900 a month into a regular savings, which could be your emergency fund. If you already have sufficient funds here, consider redirecting some of this money elsewhere.
2. **Maxing Out Retirement Accounts:** You are already maxing out one person's 401K, which is great. If possible, consider also maxing out the other person's 401K and making contributions to your IRA and Roth accounts. The tax advantages can be substantial over time.
3. **Investments Outside of Retirement Accounts:** If after maxing out your retirement accounts you still have surplus income, consider opening a taxable investment account. While you won't get the same tax advantages as with a retirement account, you can still potentially earn a return on your investment.
4. **High-Interest Savings Account:** While a 3.75% interest rate is excellent for a savings account, it's still relatively low compared to potential returns from investing in the market. Therefore, if you have funds in this account beyond what you need for your emergency fund and short-term goals, consider moving them into an investment account.
5. **Savings Bonds:** Depending on the type and age of your savings bonds, you may be better off cashing them in and investing the money elsewhere. In general, savings bonds have a very low return compared to other types of investments.
6. **Homeownership:** If you're considering buying a home in the future, start planning and saving for a down payment. This can be a significant financial goal, and the earlier you start saving for it, the better.
7. **Diversification:** Ensure your investments are well-diversified across different asset classes and sectors. This can help to reduce risk and potentially increase returns.
Remember, these suggestions should be tailored to your specific financial goals and risk tolerance, and it's always a good idea to consult with a financial advisor before making any major changes to your financial plan. | ### Human
Couple w/ Gross Income ~$127,000
Take Home ~$67,000 after taxes, insurance, and 401k contributions (one persons 401k is maxed for 2023).
Monthly expenses ~$2500
~$1900/month goes in a regular savings. We spend it on travel or emergencies.
Put an additional ~$1180/month into a high interest savings account (3.75%).
Cars are in good shape. Don’t expect to need a new one for several years.
One person has an IRA; the other has a ROTH. Neither of us has contributed to them in years.
36% of our money is in Savings. This is mainly because we do not own a home, and I wanted to be able to move on something if we ever had an opportunity.
45% in 401ks
8% in Roth
10% in Traditional IRA
1% in Savings Bonds
What would you do differently?
### Assistant
From a high-level perspective, your savings and investing strategy seems solid. However, there are a few areas where you could possibly optimize:
1. **Emergency Fund:** It's a good practice to keep 3-6 months of living expenses in an easily accessible account for emergencies. Based on your monthly expenses of $2,500, this would be between $7,500 and $15,000. It seems like you're putting $1,900 a month into a regular savings, which could be your emergency fund. If you already have sufficient funds here, consider redirecting some of this money elsewhere.
2. **Maxing Out Retirement Accounts:** You are already maxing out one person's 401K, which is great. If possible, consider also maxing out the other person's 401K and making contributions to your IRA and Roth accounts. The tax advantages can be substantial over time.
3. **Investments Outside of Retirement Accounts:** If after maxing out your retirement accounts you still have surplus income, consider opening a taxable investment account. While you won't get the same tax advantages as with a retirement account, you can still potentially earn a return on your investment.
4. **High-Interest Savings Account:** While a 3.75% interest rate is excellent for a savings account, it's still relatively low compared to potential returns from investing in the market. Therefore, if you have funds in this account beyond what you need for your emergency fund and short-term goals, consider moving them into an investment account.
5. **Savings Bonds:** Depending on the type and age of your savings bonds, you may be better off cashing them in and investing the money elsewhere. In general, savings bonds have a very low return compared to other types of investments.
6. **Homeownership:** If you're considering buying a home in the future, start planning and saving for a down payment. This can be a significant financial goal, and the earlier you start saving for it, the better.
7. **Diversification:** Ensure your investments are well-diversified across different asset classes and sectors. This can help to reduce risk and potentially increase returns.
Remember, these suggestions should be tailored to your specific financial goals and risk tolerance, and it's always a good idea to consult with a financial advisor before making any major changes to your financial plan.<eos_token> |
1005hzw | I'm in the military and am moving to California for my next station. Right now I do not have a vehicle, but need one once I get there.
I make about 17k (fuck) and have about 8k right now in a hysa, 2k in my checking, and 2.7k cash that I'm going to deposit.
I think a truck would work best for me and will motivate me to get out and about, but in my mind spending a little more on something reliable and clean is a good investment.
What do yall figure I should plan on spending on something decent? I know it's gonna blow my entire savings to shit regardless of what I spend, but it'd be nice to be smart about it!
Thank you!
Also, I do contribute to a Roth Ira and my tsp | Thank you for your service and the opportunity to provide some financial advice.
Given your income and savings, it would be wise to spend as little as possible on a vehicle and still get something reliable. I'd recommend considering a used vehicle, maybe in the $5,000-$7,000 range. This would leave you with some savings for emergencies, which is always important.
However, there are a few things you should consider:
1. Insurance: Don't forget to factor in the cost of insurance. This can vary greatly depending on the type of vehicle, its age, and your driving record.
2. Maintenance and Repairs: Older vehicles can often require more frequent and costly repairs.
3. Fuel Efficiency: Trucks tend to consume more fuel than smaller vehicles, which can significantly add to your monthly expenses especially in California where gas prices are relatively high.
4. Financing: If you plan to finance the vehicle, aim for the lowest interest rate possible and try to avoid long-term loans that can keep you in debt for longer.
5. Depreciation: Vehicles are depreciating assets. This means their value decreases over time. Buying a used vehicle can help you avoid the steepest part of the depreciation curve, which occurs in the first few years of a new car's life.
6. Saving: Continue to contribute to your Roth IRA and TSP. These are fantastic tools for building wealth over the long term.
Also, you may want to consider other options such as biking, public transit, or ride sharing if they're feasible for your situation. It's great that you're thinking carefully about this purchase, as it's a significant one that can have a big impact on your financial situation. Good luck! | ### Human
I'm in the military and am moving to California for my next station. Right now I do not have a vehicle, but need one once I get there.
I make about 17k (fuck) and have about 8k right now in a hysa, 2k in my checking, and 2.7k cash that I'm going to deposit.
I think a truck would work best for me and will motivate me to get out and about, but in my mind spending a little more on something reliable and clean is a good investment.
What do yall figure I should plan on spending on something decent? I know it's gonna blow my entire savings to shit regardless of what I spend, but it'd be nice to be smart about it!
Thank you!
Also, I do contribute to a Roth Ira and my tsp
### Assistant
Thank you for your service and the opportunity to provide some financial advice.
Given your income and savings, it would be wise to spend as little as possible on a vehicle and still get something reliable. I'd recommend considering a used vehicle, maybe in the $5,000-$7,000 range. This would leave you with some savings for emergencies, which is always important.
However, there are a few things you should consider:
1. Insurance: Don't forget to factor in the cost of insurance. This can vary greatly depending on the type of vehicle, its age, and your driving record.
2. Maintenance and Repairs: Older vehicles can often require more frequent and costly repairs.
3. Fuel Efficiency: Trucks tend to consume more fuel than smaller vehicles, which can significantly add to your monthly expenses especially in California where gas prices are relatively high.
4. Financing: If you plan to finance the vehicle, aim for the lowest interest rate possible and try to avoid long-term loans that can keep you in debt for longer.
5. Depreciation: Vehicles are depreciating assets. This means their value decreases over time. Buying a used vehicle can help you avoid the steepest part of the depreciation curve, which occurs in the first few years of a new car's life.
6. Saving: Continue to contribute to your Roth IRA and TSP. These are fantastic tools for building wealth over the long term.
Also, you may want to consider other options such as biking, public transit, or ride sharing if they're feasible for your situation. It's great that you're thinking carefully about this purchase, as it's a significant one that can have a big impact on your financial situation. Good luck!<eos_token> |
1005gb0 | &#x200B;
For t-bill 912796YN3, announce day 12/29/2022, auction day 01/03/2023
I would purchase it at Fidelity.
When is the last moment I can bid/purchase this t-bill at Fidelity, 11:59 pm on January 3, or anytime else?
&#x200B;
TIA! | The exact cut-off time can vary from one brokerage to another, and I would recommend checking with Fidelity for the most accurate information. However, generally, most brokerages require orders to be placed before the auction. The U.S. Treasury usually conducts auctions for T-bills around 11:30 AM Eastern Time. So, if the auction day is January 3rd, 2023, you would typically need to place your order before this time on that day. It's always best to place your orders as early as possible to ensure they are processed in time. Please verify this information with Fidelity or check their website for specific deadlines and procedures. | ### Human
&#x200B;
For t-bill 912796YN3, announce day 12/29/2022, auction day 01/03/2023
I would purchase it at Fidelity.
When is the last moment I can bid/purchase this t-bill at Fidelity, 11:59 pm on January 3, or anytime else?
&#x200B;
TIA!
### Assistant
The exact cut-off time can vary from one brokerage to another, and I would recommend checking with Fidelity for the most accurate information. However, generally, most brokerages require orders to be placed before the auction. The U.S. Treasury usually conducts auctions for T-bills around 11:30 AM Eastern Time. So, if the auction day is January 3rd, 2023, you would typically need to place your order before this time on that day. It's always best to place your orders as early as possible to ensure they are processed in time. Please verify this information with Fidelity or check their website for specific deadlines and procedures.<eos_token> |
1005azk | I woke up yesterday surprised that *Specialized Loan Servicing* pulled our mortgage even though it's slated for the first of January.
The current amount shows pending withdrawal in my bank account, and the money is already 'gone.'
I checked their site, and it says it will pull again tomorrow with no indication that they've received the funds already deducted from my bank account. I assume their service pulled the funds early due to the New Year Holiday? I've funded my account with enough money in case it attempts to pull again.
I'm Fairly new to paying for a mortgage and have heard sketchy stuff about SLS. It has accurately and successfully pulled on the first for two months but this one is different. Does anyone have insight or dealt with something similar? | It seems like you're dealing with a potential error or miscommunication with Specialized Loan Servicing (SLS). This situation can be quite confusing, especially if you're new to managing a mortgage payment. Generally, lenders should only withdraw the funds on the date you've agreed upon. If the payment is deducted earlier, it could be due to a variety of reasons, including processing times or a potential error.
Here are some steps to address this issue:
1. **Contact SLS directly**: The first step should be contacting SLS's customer service. They can provide information about the payment withdrawal and why it might have been processed earlier than expected. Make sure to note down the date and time of your call, the name of the representative you speak with, and the information they provide.
2. **Check your mortgage agreement**: Review the terms of your mortgage agreement to see if there are any clauses about early payment withdrawals. If there's nothing in the agreement that allows for early withdrawals, you may have grounds to dispute the transaction.
3. **Monitor your bank account**: Keep a close eye on your bank account to see if another payment is withdrawn. If a second payment is withdrawn, contact your bank immediately to inform them of the unauthorized transaction. They may be able to help you dispute the charge.
4. **Document everything**: Keep a record of all communications and transactions related to this issue. This can be helpful if you need to dispute the payment or if there are any future issues with your mortgage payments.
Remember, it's important to always check your bank statements and mortgage account regularly to catch any potential issues early. It's also a good idea to keep a separate savings account to cover unexpected expenses or errors like this one.
Lastly, if you feel uncomfortable with SLS, you have the right to refinance your mortgage with another lender, although this will come with its own costs and considerations. | ### Human
I woke up yesterday surprised that *Specialized Loan Servicing* pulled our mortgage even though it's slated for the first of January.
The current amount shows pending withdrawal in my bank account, and the money is already 'gone.'
I checked their site, and it says it will pull again tomorrow with no indication that they've received the funds already deducted from my bank account. I assume their service pulled the funds early due to the New Year Holiday? I've funded my account with enough money in case it attempts to pull again.
I'm Fairly new to paying for a mortgage and have heard sketchy stuff about SLS. It has accurately and successfully pulled on the first for two months but this one is different. Does anyone have insight or dealt with something similar?
### Assistant
It seems like you're dealing with a potential error or miscommunication with Specialized Loan Servicing (SLS). This situation can be quite confusing, especially if you're new to managing a mortgage payment. Generally, lenders should only withdraw the funds on the date you've agreed upon. If the payment is deducted earlier, it could be due to a variety of reasons, including processing times or a potential error.
Here are some steps to address this issue:
1. **Contact SLS directly**: The first step should be contacting SLS's customer service. They can provide information about the payment withdrawal and why it might have been processed earlier than expected. Make sure to note down the date and time of your call, the name of the representative you speak with, and the information they provide.
2. **Check your mortgage agreement**: Review the terms of your mortgage agreement to see if there are any clauses about early payment withdrawals. If there's nothing in the agreement that allows for early withdrawals, you may have grounds to dispute the transaction.
3. **Monitor your bank account**: Keep a close eye on your bank account to see if another payment is withdrawn. If a second payment is withdrawn, contact your bank immediately to inform them of the unauthorized transaction. They may be able to help you dispute the charge.
4. **Document everything**: Keep a record of all communications and transactions related to this issue. This can be helpful if you need to dispute the payment or if there are any future issues with your mortgage payments.
Remember, it's important to always check your bank statements and mortgage account regularly to catch any potential issues early. It's also a good idea to keep a separate savings account to cover unexpected expenses or errors like this one.
Lastly, if you feel uncomfortable with SLS, you have the right to refinance your mortgage with another lender, although this will come with its own costs and considerations.<eos_token> |
100563d | I am foreigner working in the US on a visa (not an h1b) and i have no idea about the 401k or the roth. Any basic advice for someone on these things? Or is there a wiki or a youtube channel that explains these things for the naive?
Appreciate any help, i can provide any extra info needed | Sure, I'd be happy to provide some basic information about 401k and Roth IRA accounts.
1. 401k: A 401k is a retirement savings plan sponsored by an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account. Many employers will match a portion of your contributions, so if your employer offers this, it's essentially "free money" towards your retirement.
2. Roth IRA: This is an individual retirement account where you pay taxes on money going into your account, and then all future withdrawals are tax free. A Roth IRA can be a good choice if you think your tax rate will be higher in retirement than it is now.
As a foreigner working in the U.S. on a visa, you are eligible to participate in these plans as long as you have earned income. However, there are some considerations you should keep in mind. For example, if you plan to return to your home country one day, you'll need to consider how these accounts will be taxed there.
As for resources, Investopedia (www.investopedia.com) is a great site that explains these concepts in simple terms. For video content, Khan Academy (www.khanacademy.org) has a series on retirement accounts that may be helpful.
Before making any decisions, it's always recommended to speak with a financial advisor. They can help you understand the specifics of your situation and make the best decision for your future. | ### Human
I am foreigner working in the US on a visa (not an h1b) and i have no idea about the 401k or the roth. Any basic advice for someone on these things? Or is there a wiki or a youtube channel that explains these things for the naive?
Appreciate any help, i can provide any extra info needed
### Assistant
Sure, I'd be happy to provide some basic information about 401k and Roth IRA accounts.
1. 401k: A 401k is a retirement savings plan sponsored by an employer. It allows employees to save and invest a portion of their paycheck before taxes are taken out. Taxes aren't paid until the money is withdrawn from the account. Many employers will match a portion of your contributions, so if your employer offers this, it's essentially "free money" towards your retirement.
2. Roth IRA: This is an individual retirement account where you pay taxes on money going into your account, and then all future withdrawals are tax free. A Roth IRA can be a good choice if you think your tax rate will be higher in retirement than it is now.
As a foreigner working in the U.S. on a visa, you are eligible to participate in these plans as long as you have earned income. However, there are some considerations you should keep in mind. For example, if you plan to return to your home country one day, you'll need to consider how these accounts will be taxed there.
As for resources, Investopedia (www.investopedia.com) is a great site that explains these concepts in simple terms. For video content, Khan Academy (www.khanacademy.org) has a series on retirement accounts that may be helpful.
Before making any decisions, it's always recommended to speak with a financial advisor. They can help you understand the specifics of your situation and make the best decision for your future.<eos_token> |
1004w05 | My parents are grantors of the trust and I am a trustee. My dad passed away earlier this year and my mom gave her blessing to let me use funds from a bank account under the trust, along with my own money to be able to put 20% down on a condo. The property will be in my name. The money has been in trust for over a year so should be "seasoned", and as a trustee I have full authority to move/invest the money as I see fit. Will this qualify for a gift tax? I'm in California. | As an AI, I can provide some general insight into the situation, but please consult a tax specialist or attorney for advice tailored to your specific situation.
Trusts are typically set up to avoid probate and can provide a legal way to transfer wealth without incurring gift taxes. As a trustee, you're responsible for managing the trust according to the trust agreement's terms and for the benefit of the beneficiaries. If the trust agreement allows for the use of funds for the purchase of property, you should typically be able to do so without incurring a gift tax.
However, the tax implications can be complex and depend on various factors, including the type of trust (revocable or irrevocable), the specific terms of the trust agreement, and the nature of the disbursement.
Independent of trust, as per 2021 IRS rules, each person has a lifetime gift tax exemption that amounts to $11.7 million. In addition, each year you can give up to $15,000 to as many people as you wish without those gifts counting against your $11.7 million lifetime exemption.
In your specific situation, if the disbursement is considered as a distribution to you as a beneficiary rather than a gift, it might not be subject to the gift tax. However, it may still have other tax implications, and it could potentially affect any inheritance tax or estate tax obligations.
Given the complexity of the issue and the potential tax implications, I strongly recommend you consult with a tax professional or an estate planning attorney. They can provide advice based on a thorough understanding of the specifics of your trust, your personal financial situation, and the applicable tax laws. | ### Human
My parents are grantors of the trust and I am a trustee. My dad passed away earlier this year and my mom gave her blessing to let me use funds from a bank account under the trust, along with my own money to be able to put 20% down on a condo. The property will be in my name. The money has been in trust for over a year so should be "seasoned", and as a trustee I have full authority to move/invest the money as I see fit. Will this qualify for a gift tax? I'm in California.
### Assistant
As an AI, I can provide some general insight into the situation, but please consult a tax specialist or attorney for advice tailored to your specific situation.
Trusts are typically set up to avoid probate and can provide a legal way to transfer wealth without incurring gift taxes. As a trustee, you're responsible for managing the trust according to the trust agreement's terms and for the benefit of the beneficiaries. If the trust agreement allows for the use of funds for the purchase of property, you should typically be able to do so without incurring a gift tax.
However, the tax implications can be complex and depend on various factors, including the type of trust (revocable or irrevocable), the specific terms of the trust agreement, and the nature of the disbursement.
Independent of trust, as per 2021 IRS rules, each person has a lifetime gift tax exemption that amounts to $11.7 million. In addition, each year you can give up to $15,000 to as many people as you wish without those gifts counting against your $11.7 million lifetime exemption.
In your specific situation, if the disbursement is considered as a distribution to you as a beneficiary rather than a gift, it might not be subject to the gift tax. However, it may still have other tax implications, and it could potentially affect any inheritance tax or estate tax obligations.
Given the complexity of the issue and the potential tax implications, I strongly recommend you consult with a tax professional or an estate planning attorney. They can provide advice based on a thorough understanding of the specifics of your trust, your personal financial situation, and the applicable tax laws.<eos_token> |
1004vv5 | For 2022, is the contribution deadline December 31st or April? I few days ago I contributed 6k to my traditional Ira. | The contribution deadline for IRA (Traditional or Roth) for the tax year 2022 is typically April 15, 2023. This means you can make contributions for 2022 anytime from January 1, 2022, up to the deadline in April 2023. Please bear in mind that tax laws and deadlines can occasionally change, so it's always a good idea to double-check with a tax professional or the IRS website for the most accurate and current information. | ### Human
For 2022, is the contribution deadline December 31st or April? I few days ago I contributed 6k to my traditional Ira.
### Assistant
The contribution deadline for IRA (Traditional or Roth) for the tax year 2022 is typically April 15, 2023. This means you can make contributions for 2022 anytime from January 1, 2022, up to the deadline in April 2023. Please bear in mind that tax laws and deadlines can occasionally change, so it's always a good idea to double-check with a tax professional or the IRS website for the most accurate and current information.<eos_token> |
1004us0 | I am in NJ, I just secured a second remote job where I make a 'salary' but Im only contracted from Nov-May pending negotiations after that point. So I worked Nov 1- and onward, as it pertains to me reporting my taxes for year 2022 (I had two other jobs where I filled out W-2's, worked about 6 months at one, am still currently working the other since Oct). Is it likely I will OWE money? I am used to getting a refund. Ive also kept a detialed list, more detailed than any previous reporting year of all of my work-related expenses (clothing and gloves for the first job. Gas and mileage for one of my current jobs).
I know this may not be all that you could need to assess my situation fully, but essentially my overall question is should I expect to have a bill or a refund? If its the former, what kind of percentages, rates, etc. can I use to maybe see what I can expect? | While I can provide some general guidance, I highly encourage you to consult with a tax professional for an accurate assessment. Your tax situation can be complex due to multiple jobs and deductible expenses, and it's important to get personalized help.
Generally, the amount of taxes you owe or the refund you receive depends on the amount of income you earned during the year, the amount of taxes withheld from your wages, and any eligible tax deductions or credits.
1. **Income**: If your combined income from all jobs is higher than the previous year, you may owe more taxes, unless you've increased your withholdings or have substantial deductions.
2. **Withholdings**: When you fill out a W-4 form for each job, the information you provide helps your employer determine how much federal income tax to withhold from your paycheck. If you're withholding less at multiple jobs, you might owe money.
3. **Deductions**: You mentioned that you have work-related expenses. If these are deductible, they can reduce your taxable income. Mileage for work, for example, can be deducted at a rate of 56 cents per mile for 2021. However, you need to itemize your deductions to claim these, and itemizing only makes sense if your total deductions exceed the standard deduction ($12,550 for individuals in 2021).
4. **Contractor Income**: If your second remote job is considered contract work (1099-MISC), taxes aren't typically withheld from these wages. This means you're responsible for paying both income tax and self-employment tax on that income, which can increase your tax liability.
As for calculating a potential bill, it's complicated due to the many variables. The IRS provides an online Tax Withholding Estimator that can give you a rough idea.
Remember, this is just basic guidance. Tax laws are complex and change frequently, so please consult with a tax professional in your area to understand your specific circumstances. | ### Human
I am in NJ, I just secured a second remote job where I make a 'salary' but Im only contracted from Nov-May pending negotiations after that point. So I worked Nov 1- and onward, as it pertains to me reporting my taxes for year 2022 (I had two other jobs where I filled out W-2's, worked about 6 months at one, am still currently working the other since Oct). Is it likely I will OWE money? I am used to getting a refund. Ive also kept a detialed list, more detailed than any previous reporting year of all of my work-related expenses (clothing and gloves for the first job. Gas and mileage for one of my current jobs).
I know this may not be all that you could need to assess my situation fully, but essentially my overall question is should I expect to have a bill or a refund? If its the former, what kind of percentages, rates, etc. can I use to maybe see what I can expect?
### Assistant
While I can provide some general guidance, I highly encourage you to consult with a tax professional for an accurate assessment. Your tax situation can be complex due to multiple jobs and deductible expenses, and it's important to get personalized help.
Generally, the amount of taxes you owe or the refund you receive depends on the amount of income you earned during the year, the amount of taxes withheld from your wages, and any eligible tax deductions or credits.
1. **Income**: If your combined income from all jobs is higher than the previous year, you may owe more taxes, unless you've increased your withholdings or have substantial deductions.
2. **Withholdings**: When you fill out a W-4 form for each job, the information you provide helps your employer determine how much federal income tax to withhold from your paycheck. If you're withholding less at multiple jobs, you might owe money.
3. **Deductions**: You mentioned that you have work-related expenses. If these are deductible, they can reduce your taxable income. Mileage for work, for example, can be deducted at a rate of 56 cents per mile for 2021. However, you need to itemize your deductions to claim these, and itemizing only makes sense if your total deductions exceed the standard deduction ($12,550 for individuals in 2021).
4. **Contractor Income**: If your second remote job is considered contract work (1099-MISC), taxes aren't typically withheld from these wages. This means you're responsible for paying both income tax and self-employment tax on that income, which can increase your tax liability.
As for calculating a potential bill, it's complicated due to the many variables. The IRS provides an online Tax Withholding Estimator that can give you a rough idea.
Remember, this is just basic guidance. Tax laws are complex and change frequently, so please consult with a tax professional in your area to understand your specific circumstances.<eos_token> |
1004q28 | My wife is switching over to my insurance plan for 2023. I signed her up through my employer. However, she forgot to decline health insurance with her current employer. We realized she's enrolled in two health insurance plans now. Can she opt out of her current company's plan? Or does she now have to pay for both plans? | Your wife's ability to drop her current employer's health insurance will depend on the specific policies and procedures of her employer and the insurer.
Typically, employees can only drop or change their health insurance during the open enrollment period or when experiencing a qualifying life event, such as getting married, having a baby, or losing other health coverage.
However, some employers and insurance companies may allow employees to drop their coverage outside of these times under certain circumstances. It's important that your wife contact her employer's human resources department or the insurance company as soon as possible to discuss her situation and find out what options are available.
If she cannot drop the coverage, she may indeed be responsible for the premiums for both plans. However, having two health insurance plans is not necessarily a bad thing. The secondary insurance can serve as a backup plan and may cover some costs that the primary insurance does not.
Remember, it's crucial to understand the specifics of both policies and how they coordinate benefits to avoid paying more than necessary. It's recommended to seek advice from a trusted insurance expert or financial advisor to ensure you make the best decision for your specific situation. | ### Human
My wife is switching over to my insurance plan for 2023. I signed her up through my employer. However, she forgot to decline health insurance with her current employer. We realized she's enrolled in two health insurance plans now. Can she opt out of her current company's plan? Or does she now have to pay for both plans?
### Assistant
Your wife's ability to drop her current employer's health insurance will depend on the specific policies and procedures of her employer and the insurer.
Typically, employees can only drop or change their health insurance during the open enrollment period or when experiencing a qualifying life event, such as getting married, having a baby, or losing other health coverage.
However, some employers and insurance companies may allow employees to drop their coverage outside of these times under certain circumstances. It's important that your wife contact her employer's human resources department or the insurance company as soon as possible to discuss her situation and find out what options are available.
If she cannot drop the coverage, she may indeed be responsible for the premiums for both plans. However, having two health insurance plans is not necessarily a bad thing. The secondary insurance can serve as a backup plan and may cover some costs that the primary insurance does not.
Remember, it's crucial to understand the specifics of both policies and how they coordinate benefits to avoid paying more than necessary. It's recommended to seek advice from a trusted insurance expert or financial advisor to ensure you make the best decision for your specific situation.<eos_token> |
1004q1u | Right now I’m maxing out 401k and HSA, and I am no longer eligible to participate in a Roth IRA due to the income restrictions.
I have an emergency fund that would cover about 6-7 months expenses however ideally I want to use that for a wedding and housing downpayment in 2-3 years.
I am also investing $500 per month into a dividend portfolio and $300 per month into Bitcoin. $250 per month into a taxable brokerage.
Should I take all leftover money and shovel it into my taxable brokerage or dividend portfolio? Being that I have a good emergency fund? Or being that I want to use that in a few years, should I build that emergency fund higher to reflect a real fund?
With the market down so much, I’m super tempted to put every remaining dollar in, and have that emergency fund as worst case backup.
Thoughts? | It's great that you're actively investing and saving for your future. Here are a few thoughts:
1. Emergency Fund: An emergency fund is typically for unexpected expenses or financial hardships, such as job loss or medical emergencies. If you plan to use your emergency money for a wedding and housing downpayment, it would be wise to build a separate emergency fund that can cover 3-6 months of expenses. This fund should be kept in a liquid and safe account, like a high-yield savings account.
2. Investment: Given the market situation, it's understandable that you're tempted to invest more. However, it's essential to maintain a balanced approach. While the market is down, there's potential for great returns in the long run, but keep in mind that it's also risky as the market could continue to drop.
3. Considering the time horizon: If you plan to use the funds for a wedding and down payment in 2-3 years, investing in a taxable brokerage account might be risky because of the short time horizon. In general, the stock market is a good place for long term investments (5+ years). For shorter time horizons, consider less volatile investments or saving accounts.
4. Dividend Portfolio vs Taxable Brokerage: This would largely depend on your risk tolerance and investment objectives. A dividend portfolio usually tends to be less risky than a growth-oriented portfolio but may offer lower returns. On the other hand, a taxable brokerage account gives you more flexibility in terms of the investment options.
5. Bitcoin: It's a high-risk, high-reward investment. It's ok to allocate a small portion of your investment towards Bitcoin or other cryptocurrencies, but it's advisable not to put a significant portion of your investment into such volatile assets.
The best course of action would depend on your individual circumstances, risk tolerance, and financial goals. It's always a good idea to consult with a financial advisor to discuss your specific situation. | ### Human
Right now I’m maxing out 401k and HSA, and I am no longer eligible to participate in a Roth IRA due to the income restrictions.
I have an emergency fund that would cover about 6-7 months expenses however ideally I want to use that for a wedding and housing downpayment in 2-3 years.
I am also investing $500 per month into a dividend portfolio and $300 per month into Bitcoin. $250 per month into a taxable brokerage.
Should I take all leftover money and shovel it into my taxable brokerage or dividend portfolio? Being that I have a good emergency fund? Or being that I want to use that in a few years, should I build that emergency fund higher to reflect a real fund?
With the market down so much, I’m super tempted to put every remaining dollar in, and have that emergency fund as worst case backup.
Thoughts?
### Assistant
It's great that you're actively investing and saving for your future. Here are a few thoughts:
1. Emergency Fund: An emergency fund is typically for unexpected expenses or financial hardships, such as job loss or medical emergencies. If you plan to use your emergency money for a wedding and housing downpayment, it would be wise to build a separate emergency fund that can cover 3-6 months of expenses. This fund should be kept in a liquid and safe account, like a high-yield savings account.
2. Investment: Given the market situation, it's understandable that you're tempted to invest more. However, it's essential to maintain a balanced approach. While the market is down, there's potential for great returns in the long run, but keep in mind that it's also risky as the market could continue to drop.
3. Considering the time horizon: If you plan to use the funds for a wedding and down payment in 2-3 years, investing in a taxable brokerage account might be risky because of the short time horizon. In general, the stock market is a good place for long term investments (5+ years). For shorter time horizons, consider less volatile investments or saving accounts.
4. Dividend Portfolio vs Taxable Brokerage: This would largely depend on your risk tolerance and investment objectives. A dividend portfolio usually tends to be less risky than a growth-oriented portfolio but may offer lower returns. On the other hand, a taxable brokerage account gives you more flexibility in terms of the investment options.
5. Bitcoin: It's a high-risk, high-reward investment. It's ok to allocate a small portion of your investment towards Bitcoin or other cryptocurrencies, but it's advisable not to put a significant portion of your investment into such volatile assets.
The best course of action would depend on your individual circumstances, risk tolerance, and financial goals. It's always a good idea to consult with a financial advisor to discuss your specific situation.<eos_token> |
1004k51 | January 2022, I had a tele-appointment with my psychiatrist. She was debating on whether to continue with the video calls or bring patients back into the office. The next day I see $25 out of my bank account, to which I call not only Humana, but the doctor. Humana says I have no copay, Dr says "no, our representative says it's $25." They call their representative again, calle back and tell me "I'm so sorry, it's $5. Not $25." They then ask me for proof that I owe nothing (which I give them multiple pieces of) and want to know if I want a refund, or credit. I choose refund. So fast forward to today. December 31, 2022. Both myself and the doctor have quite religiously trying to leave multiple of multiple messages to get ahold of the billing department to get $25 back and it feels like I'm calling into the void. When I see the man I'm trying to get ahold of in the office, he immediately either hides from me in another room, or straight up either doesn't acknowledge me or changes the subject saying that if I keep bringing it up, I can leave the premises. | I'm sorry to hear about the issues you're facing. Here are some steps you can take:
1. Document Everything: Keep track of all communications. This includes dates and times of calls, what was discussed, and any actions taken. Include any written correspondence such as emails or letters.
2. Write a Formal Letter: Send a formal letter detailing the situation to your doctor, the billing department, and the office manager. Include all the evidence you have that you were overcharged and that you should receive a refund. Send this letter via registered mail or another method that provides proof of delivery.
3. Contact Humana: Send them all the proof and ask them to intervene on your behalf, or at least provide you with written proof that you are not required to make a co-payment.
4. File a Complaint: If the billing department is not responsive, you might want to consider filing a complaint with your state's medical board or the Better Business Bureau.
5. Seek Legal Advice: If all else fails, you may want to consider seeking legal advice. While it seems like a lot of effort for $25, it might be necessary if the practice is unwilling to resolve the issue.
6. Change Providers: If you're not happy with how this situation is being handled, it might be worth considering finding a new psychiatrist who is more responsive and respectful.
Remember, you have rights as a patient, and you should not be overcharged or treated disrespectfully. | ### Human
January 2022, I had a tele-appointment with my psychiatrist. She was debating on whether to continue with the video calls or bring patients back into the office. The next day I see $25 out of my bank account, to which I call not only Humana, but the doctor. Humana says I have no copay, Dr says "no, our representative says it's $25." They call their representative again, calle back and tell me "I'm so sorry, it's $5. Not $25." They then ask me for proof that I owe nothing (which I give them multiple pieces of) and want to know if I want a refund, or credit. I choose refund. So fast forward to today. December 31, 2022. Both myself and the doctor have quite religiously trying to leave multiple of multiple messages to get ahold of the billing department to get $25 back and it feels like I'm calling into the void. When I see the man I'm trying to get ahold of in the office, he immediately either hides from me in another room, or straight up either doesn't acknowledge me or changes the subject saying that if I keep bringing it up, I can leave the premises.
### Assistant
I'm sorry to hear about the issues you're facing. Here are some steps you can take:
1. Document Everything: Keep track of all communications. This includes dates and times of calls, what was discussed, and any actions taken. Include any written correspondence such as emails or letters.
2. Write a Formal Letter: Send a formal letter detailing the situation to your doctor, the billing department, and the office manager. Include all the evidence you have that you were overcharged and that you should receive a refund. Send this letter via registered mail or another method that provides proof of delivery.
3. Contact Humana: Send them all the proof and ask them to intervene on your behalf, or at least provide you with written proof that you are not required to make a co-payment.
4. File a Complaint: If the billing department is not responsive, you might want to consider filing a complaint with your state's medical board or the Better Business Bureau.
5. Seek Legal Advice: If all else fails, you may want to consider seeking legal advice. While it seems like a lot of effort for $25, it might be necessary if the practice is unwilling to resolve the issue.
6. Change Providers: If you're not happy with how this situation is being handled, it might be worth considering finding a new psychiatrist who is more responsive and respectful.
Remember, you have rights as a patient, and you should not be overcharged or treated disrespectfully.<eos_token> |
1004isk | My family's portfolios are divided between 3 Schwab accounts and 2 Thrift Savings Plan accounts. I'd like to be able to track the overall performance of the portfolios vs a comparator (S&P or something) as well as the performance of each component by itself.
Any suggestions? I could just go with monthly account balances and share prices, I guess. Would love a way to automate it but the TSP makes this hard. I'd be fine with a spreadsheet even. | You're right, tracking investment performance across multiple accounts can be a challenge, especially when you add in factors like contributions and withdrawals. Here are a few options you might consider:
1. **Spreadsheets:** You can create a custom spreadsheet using Excel or Google Sheets. You'd need to manually enter the value of each account at the end of each month or quarter, then calculate the percentage change over time. To compare to the S&P 500 or another benchmark, you could use a service like Yahoo Finance to find historical prices and calculate returns over the same periods. This approach is manual but highly customizable.
2. **Aggregation Tools:** Services like Personal Capital, Mint, or Yodlee can automatically pull in data from your accounts and track performance over time. However, I'm not sure if they support Thrift Savings Plan accounts. You could reach out to their customer service to confirm.
3. **Portfolio Analysis Tools:** Services like Morningstar's Portfolio Manager or SigFig offer more advanced analysis, including comparison to benchmarks. Again, you'd need to check if they support TSP accounts.
4. **Hire a Financial Advisor:** If you're managing substantial wealth across these accounts, it might be worth hiring a financial advisor who can provide a comprehensive view of your investments and compare your performance to appropriate benchmarks.
5. **Custom Software:** If you're tech-savvy, you could use a programming language like Python along with financial data APIs to pull in your account data and perform custom analyses. This approach requires a significant upfront investment of time but offers the most flexibility.
Remember, when comparing to a benchmark like the S&P 500, make sure to take into account the risk level of your investments. It's not a fair comparison to compare the returns of a conservative portfolio to a high-risk benchmark, or vice versa. | ### Human
My family's portfolios are divided between 3 Schwab accounts and 2 Thrift Savings Plan accounts. I'd like to be able to track the overall performance of the portfolios vs a comparator (S&P or something) as well as the performance of each component by itself.
Any suggestions? I could just go with monthly account balances and share prices, I guess. Would love a way to automate it but the TSP makes this hard. I'd be fine with a spreadsheet even.
### Assistant
You're right, tracking investment performance across multiple accounts can be a challenge, especially when you add in factors like contributions and withdrawals. Here are a few options you might consider:
1. **Spreadsheets:** You can create a custom spreadsheet using Excel or Google Sheets. You'd need to manually enter the value of each account at the end of each month or quarter, then calculate the percentage change over time. To compare to the S&P 500 or another benchmark, you could use a service like Yahoo Finance to find historical prices and calculate returns over the same periods. This approach is manual but highly customizable.
2. **Aggregation Tools:** Services like Personal Capital, Mint, or Yodlee can automatically pull in data from your accounts and track performance over time. However, I'm not sure if they support Thrift Savings Plan accounts. You could reach out to their customer service to confirm.
3. **Portfolio Analysis Tools:** Services like Morningstar's Portfolio Manager or SigFig offer more advanced analysis, including comparison to benchmarks. Again, you'd need to check if they support TSP accounts.
4. **Hire a Financial Advisor:** If you're managing substantial wealth across these accounts, it might be worth hiring a financial advisor who can provide a comprehensive view of your investments and compare your performance to appropriate benchmarks.
5. **Custom Software:** If you're tech-savvy, you could use a programming language like Python along with financial data APIs to pull in your account data and perform custom analyses. This approach requires a significant upfront investment of time but offers the most flexibility.
Remember, when comparing to a benchmark like the S&P 500, make sure to take into account the risk level of your investments. It's not a fair comparison to compare the returns of a conservative portfolio to a high-risk benchmark, or vice versa.<eos_token> |
1004djv | Hello! I'm 19 years old and I currently work full time as a front desk agent. I've been looking into investing and retirement plans for a few months but everything is still so confusing to me. I'm getting a headache reading 20 different answers and all these options and IRA's and everything. I hope this subreddit could give me some advice and answer some questions I have. I'm new to all this and I haven't placed any money anywhere yet.
&#x200B;
So I opened an account with Betterment, since I saw good reviews for them. I was going to use them to save up for a trip to see my bf in December, save some money to help my parents when they're older, and then one for general investing in the future. Like for a house, new car, etc. I've looked at their IRA's for retirement and I have no idea what I'm looking at even though it's been explained to me 20 times. My employer doesn't have a 401k plan (that I've been told of, I'll ask her tomorrow), so I heard it's best in that case to open an IRA account. Is that true? And if so, my bank (Regions) has investing options as well, could I use my bank? Is it better to use my bank or something like Betterment?
Now, I don't bring a lot of money in monthly. Most of it goes to bills, and paying my car monthly, and helping my family out, so I didn't want to put in a lot but just little by little to get me started. For Betterment I was thinking of putting $5 in to each account bi-weekly. Would that be a good start?
&#x200B;
I know it's all up to me in the end where I want to put my money, but before I did anything drastic I want to hear from people who are more experienced in the world of finance than I am. Any advice?
&#x200B;
**Edit:** I'm so appreciative of everyone trying to help me understand how this all works. It looks like girlbossing my finances this year will not be easy lol | Hello there! It's great to see that you're taking steps towards financial planning at such a young age. Let's go through your queries one by one:
1. **Betterment**: Betterment is a robo-advisor that offers services like investment management and financial planning. It's a simple, low-cost option for beginner investors.
2. **IRA vs 401k**: If your employer doesn't offer a 401k, an Individual Retirement Account (IRA) is indeed a good option to start saving for retirement. There are two types of IRAs - Traditional and Roth. Traditional IRAs offer a tax deduction on contributions but you'll pay taxes on withdrawals in retirement. Roth IRAs are funded with after-tax dollars but withdrawals in retirement are tax-free. Depending on your income and tax situation, one may be more beneficial than the other.
3. **Betterment vs Bank**: While you can certainly invest through your bank, it's worth noting that a platform like Betterment might offer more investment options and potential for higher returns due to its diversification and automatic rebalancing features.
4. **Small Investments**: Starting small is perfectly fine. The most important thing is to start. Over time, even small amounts can grow due to the power of compound interest.
5. **Advice**: Set clear financial goals and prioritize them. For short term goals like your trip or buying a new car, you might want to keep your money in a savings account or a low-risk investment. For long-term goals like retirement, you can afford to take more risk.
In terms of learning about personal finance, there are plenty of free resources online. Websites like Investopedia, NerdWallet, and Khan Academy have simple, easy-to-understand guides on various financial topics.
Remember, everyone's financial situation and goals are unique. What works for one person might not work for another. It's important to do your own research and consider consulting a financial advisor for personalized advice.
Managing your finances can seem daunting at first, but once you get started, it gets easier. Best of luck on your financial journey! | ### Human
Hello! I'm 19 years old and I currently work full time as a front desk agent. I've been looking into investing and retirement plans for a few months but everything is still so confusing to me. I'm getting a headache reading 20 different answers and all these options and IRA's and everything. I hope this subreddit could give me some advice and answer some questions I have. I'm new to all this and I haven't placed any money anywhere yet.
&#x200B;
So I opened an account with Betterment, since I saw good reviews for them. I was going to use them to save up for a trip to see my bf in December, save some money to help my parents when they're older, and then one for general investing in the future. Like for a house, new car, etc. I've looked at their IRA's for retirement and I have no idea what I'm looking at even though it's been explained to me 20 times. My employer doesn't have a 401k plan (that I've been told of, I'll ask her tomorrow), so I heard it's best in that case to open an IRA account. Is that true? And if so, my bank (Regions) has investing options as well, could I use my bank? Is it better to use my bank or something like Betterment?
Now, I don't bring a lot of money in monthly. Most of it goes to bills, and paying my car monthly, and helping my family out, so I didn't want to put in a lot but just little by little to get me started. For Betterment I was thinking of putting $5 in to each account bi-weekly. Would that be a good start?
&#x200B;
I know it's all up to me in the end where I want to put my money, but before I did anything drastic I want to hear from people who are more experienced in the world of finance than I am. Any advice?
&#x200B;
**Edit:** I'm so appreciative of everyone trying to help me understand how this all works. It looks like girlbossing my finances this year will not be easy lol
### Assistant
Hello there! It's great to see that you're taking steps towards financial planning at such a young age. Let's go through your queries one by one:
1. **Betterment**: Betterment is a robo-advisor that offers services like investment management and financial planning. It's a simple, low-cost option for beginner investors.
2. **IRA vs 401k**: If your employer doesn't offer a 401k, an Individual Retirement Account (IRA) is indeed a good option to start saving for retirement. There are two types of IRAs - Traditional and Roth. Traditional IRAs offer a tax deduction on contributions but you'll pay taxes on withdrawals in retirement. Roth IRAs are funded with after-tax dollars but withdrawals in retirement are tax-free. Depending on your income and tax situation, one may be more beneficial than the other.
3. **Betterment vs Bank**: While you can certainly invest through your bank, it's worth noting that a platform like Betterment might offer more investment options and potential for higher returns due to its diversification and automatic rebalancing features.
4. **Small Investments**: Starting small is perfectly fine. The most important thing is to start. Over time, even small amounts can grow due to the power of compound interest.
5. **Advice**: Set clear financial goals and prioritize them. For short term goals like your trip or buying a new car, you might want to keep your money in a savings account or a low-risk investment. For long-term goals like retirement, you can afford to take more risk.
In terms of learning about personal finance, there are plenty of free resources online. Websites like Investopedia, NerdWallet, and Khan Academy have simple, easy-to-understand guides on various financial topics.
Remember, everyone's financial situation and goals are unique. What works for one person might not work for another. It's important to do your own research and consider consulting a financial advisor for personalized advice.
Managing your finances can seem daunting at first, but once you get started, it gets easier. Best of luck on your financial journey!<eos_token> |
1004cue | I also posted this in r/CRedit but am looking for some more advice.
Hi everyone, I am here looking for a bit of advice. I graduated college in May and never paid my last two rent payments for my Spring semester. I had a lot of personal issues this school year and did not pay because I had absolutely no money and no way to get it. It was a rather shady leasing company but that is beside the point. After working post grad, I am in the position now where I will be able to pay the outstanding balance. However, after logging into my leasing account, I received a notice about 6 months ago that the balance was being sent to collections.
I was able to see on the portal that they sent the debt to a collection agency named Carter-Young in Georgia. I have received absolutely no communication from this company by mail, email, or phone calls. My home address on the lease I signed was wrong (not my doing) so I think that may be a reason I have not received anything in the mail. So I guess what I am asking is if I should reach out to the collections agency or not, at this point. I think it is rather strange that it has been over 6 months and I have not heard anything. | Yes, it would be best for you to reach out to the collections agency and pay off the outstanding balance as soon as you can. The longer you delay, the worse it can get for your credit score. Here are the steps you can take:
1. **Verify the Debt**: Before you pay anything, make sure the debt is yours. Reach out to the collection agency, Carter-Young in Georgia, and ask them to verify the debt. They should be able to provide you with a detailed breakdown of what the debt is for.
2. **Negotiate a Payment Plan**: If you can't afford to pay the full amount at once, you can ask the collection agency if they would be willing to set up a payment plan. Make sure you get any agreement in writing.
3. **Pay the Debt**: Once you have verified the debt and have a payment plan in place, start making payments. Be sure to keep track of all payments and correspondence for your records.
4. **Check Your Credit Report**: After you've paid off the debt, check your credit report to make sure the debt has been removed. This might take a few months to reflect.
Bear in mind that the collections agency may not have your current contact information, which is possibly why you've not heard from them. However, this doesn't mean that the debt has disappeared. It can still negatively impact your credit score. It's best to act proactively and contact them to resolve this issue. | ### Human
I also posted this in r/CRedit but am looking for some more advice.
Hi everyone, I am here looking for a bit of advice. I graduated college in May and never paid my last two rent payments for my Spring semester. I had a lot of personal issues this school year and did not pay because I had absolutely no money and no way to get it. It was a rather shady leasing company but that is beside the point. After working post grad, I am in the position now where I will be able to pay the outstanding balance. However, after logging into my leasing account, I received a notice about 6 months ago that the balance was being sent to collections.
I was able to see on the portal that they sent the debt to a collection agency named Carter-Young in Georgia. I have received absolutely no communication from this company by mail, email, or phone calls. My home address on the lease I signed was wrong (not my doing) so I think that may be a reason I have not received anything in the mail. So I guess what I am asking is if I should reach out to the collections agency or not, at this point. I think it is rather strange that it has been over 6 months and I have not heard anything.
### Assistant
Yes, it would be best for you to reach out to the collections agency and pay off the outstanding balance as soon as you can. The longer you delay, the worse it can get for your credit score. Here are the steps you can take:
1. **Verify the Debt**: Before you pay anything, make sure the debt is yours. Reach out to the collection agency, Carter-Young in Georgia, and ask them to verify the debt. They should be able to provide you with a detailed breakdown of what the debt is for.
2. **Negotiate a Payment Plan**: If you can't afford to pay the full amount at once, you can ask the collection agency if they would be willing to set up a payment plan. Make sure you get any agreement in writing.
3. **Pay the Debt**: Once you have verified the debt and have a payment plan in place, start making payments. Be sure to keep track of all payments and correspondence for your records.
4. **Check Your Credit Report**: After you've paid off the debt, check your credit report to make sure the debt has been removed. This might take a few months to reflect.
Bear in mind that the collections agency may not have your current contact information, which is possibly why you've not heard from them. However, this doesn't mean that the debt has disappeared. It can still negatively impact your credit score. It's best to act proactively and contact them to resolve this issue.<eos_token> |
10049g4 | Hi guys I've been 18 for a few months now and now have enough of my expensive cover to finally beginning investing seriously. I know the general information of investing but I'm really struggling on where to first open an account and what to consider for opening a brokerage account to invest into stocks, bond, etc. and the goal is long term to put money and money in until I'm 60. Any tips on where to begin, much help will be appreciated. As well as how the hell do I do my tax returns or do I even have to and how to I even put investing in their. | Hello, it's great to see your enthusiasm about getting into investing. Here are some steps to guide you through the process:
1. **Choosing a brokerage account**: There are several online brokerage firms that cater to different investing needs. Some, like Vanguard and Fidelity, are known for their low-cost mutual funds and extensive research. Others, like Robinhood and Webull, are more suited for active traders. Consider factors like fees, minimum balance requirements, types of investments offered, and the availability of educational resources when choosing a broker.
2. **Diversify your portfolio**: Once you have opened your brokerage account, it's time to choose your investments. For long-term growth, consider a diversified mix of stocks, bonds, and mutual funds. This can help reduce risk and increase potential returns. For instance, a common starting point is a "60/40" portfolio, which is 60% stocks and 40% bonds.
3. **Understanding tax implications**: As an investor, you will need to pay taxes on any profits you make from your investments, which are called capital gains. This includes any dividends you receive. You'll receive a 1099 form from your broker at the end of the year detailing your gains and losses. This information should be included when you file your tax return.
4. **Filing your tax return**: There are several tax preparation software options like Turbotax, H&R Block, etc. that can guide you through the process of filing your tax return. They'll ask you questions about your income and expenses, and use your answers to fill out your tax forms. If your financial situation is complicated, you might want to consider hiring a tax professional.
5. **Invest for the long term**: It's important to keep in mind that investing is for the long term. It can be tempting to react to short-term market fluctuations, but it's generally better to stick to your investment plan and keep your money invested.
6. **Contribute regularly**: Try to contribute to your investments on a regular basis, even if it's a small amount. This is known as dollar-cost averaging and can be an effective way to grow your investments over time.
Remember, investing involves risk, including the potential loss of principal, and it's important to do your own research and consider seeking advice from a qualified professional. | ### Human
Hi guys I've been 18 for a few months now and now have enough of my expensive cover to finally beginning investing seriously. I know the general information of investing but I'm really struggling on where to first open an account and what to consider for opening a brokerage account to invest into stocks, bond, etc. and the goal is long term to put money and money in until I'm 60. Any tips on where to begin, much help will be appreciated. As well as how the hell do I do my tax returns or do I even have to and how to I even put investing in their.
### Assistant
Hello, it's great to see your enthusiasm about getting into investing. Here are some steps to guide you through the process:
1. **Choosing a brokerage account**: There are several online brokerage firms that cater to different investing needs. Some, like Vanguard and Fidelity, are known for their low-cost mutual funds and extensive research. Others, like Robinhood and Webull, are more suited for active traders. Consider factors like fees, minimum balance requirements, types of investments offered, and the availability of educational resources when choosing a broker.
2. **Diversify your portfolio**: Once you have opened your brokerage account, it's time to choose your investments. For long-term growth, consider a diversified mix of stocks, bonds, and mutual funds. This can help reduce risk and increase potential returns. For instance, a common starting point is a "60/40" portfolio, which is 60% stocks and 40% bonds.
3. **Understanding tax implications**: As an investor, you will need to pay taxes on any profits you make from your investments, which are called capital gains. This includes any dividends you receive. You'll receive a 1099 form from your broker at the end of the year detailing your gains and losses. This information should be included when you file your tax return.
4. **Filing your tax return**: There are several tax preparation software options like Turbotax, H&R Block, etc. that can guide you through the process of filing your tax return. They'll ask you questions about your income and expenses, and use your answers to fill out your tax forms. If your financial situation is complicated, you might want to consider hiring a tax professional.
5. **Invest for the long term**: It's important to keep in mind that investing is for the long term. It can be tempting to react to short-term market fluctuations, but it's generally better to stick to your investment plan and keep your money invested.
6. **Contribute regularly**: Try to contribute to your investments on a regular basis, even if it's a small amount. This is known as dollar-cost averaging and can be an effective way to grow your investments over time.
Remember, investing involves risk, including the potential loss of principal, and it's important to do your own research and consider seeking advice from a qualified professional.<eos_token> |
10048b4 | Hi everyone, I have been having some trouble lately. I am a full time student and a part time worker looking for side gigs so I can save money when I go to veterinary school (which can put me in over $250,000 in debt). I don’t know anything about stocks or trading or side gigs at all, and I’m looking into affiliate marketing and drop shipping but I don’t even know if these are viable incomes to start with. I don’t have a lot of time to do anything not online on the side since I’m traveling to and from work and school all week long. Can someone give me some good advice? Something you would do if you were in my shoes?
I really appreciate it my Reddit family! | Hello! It's great to see your motivation and eagerness to find additional income streams. Here are some suggestions:
1. **Affiliate Marketing**: If you have a decent following on social media, or you're willing to build one, affiliate marketing can be a good source of income. You promote a company's product or service, and for every sale made through your referral, you get a commission. It's important to promote products or services that you believe in and that are related to your interests or field of study.
2. **Drop Shipping**: This involves selling products without having to stock or deliver them yourself. You set up an online store, customers place orders, and the supplier ships the products directly to the customer. However, this requires a good understanding of e-commerce, marketing, and customer service. It can also be quite time-consuming.
3. **Freelancing**: If you have skills such as writing, graphic design, social media management, or data entry, you could offer your services on freelance platforms like Upwork or Fiverr.
4. **Online Tutoring**: As a student, you might be able to tutor other students in subjects you excel in. Websites such as Chegg Tutors and Tutor.com allow you to tutor from anywhere.
5. **Stock Trading**: While investing in the stock market can be profitable, it's also risky, especially if you don't have much knowledge or experience. Before you start trading, it's important to learn as much as you can about the stock market. Start by investing a small amount that you can afford to lose.
6. **Online Surveys or Reviews**: Some companies will pay for your opinion on their products or services. This is a relatively easy way to make money online, but it's usually not very lucrative.
Before you start, it's important to do thorough research and consider the time commitment each option requires. Remember, there's no quick way to make money – it takes time and effort. And always be wary of scams that promise quick and easy money. Good luck! | ### Human
Hi everyone, I have been having some trouble lately. I am a full time student and a part time worker looking for side gigs so I can save money when I go to veterinary school (which can put me in over $250,000 in debt). I don’t know anything about stocks or trading or side gigs at all, and I’m looking into affiliate marketing and drop shipping but I don’t even know if these are viable incomes to start with. I don’t have a lot of time to do anything not online on the side since I’m traveling to and from work and school all week long. Can someone give me some good advice? Something you would do if you were in my shoes?
I really appreciate it my Reddit family!
### Assistant
Hello! It's great to see your motivation and eagerness to find additional income streams. Here are some suggestions:
1. **Affiliate Marketing**: If you have a decent following on social media, or you're willing to build one, affiliate marketing can be a good source of income. You promote a company's product or service, and for every sale made through your referral, you get a commission. It's important to promote products or services that you believe in and that are related to your interests or field of study.
2. **Drop Shipping**: This involves selling products without having to stock or deliver them yourself. You set up an online store, customers place orders, and the supplier ships the products directly to the customer. However, this requires a good understanding of e-commerce, marketing, and customer service. It can also be quite time-consuming.
3. **Freelancing**: If you have skills such as writing, graphic design, social media management, or data entry, you could offer your services on freelance platforms like Upwork or Fiverr.
4. **Online Tutoring**: As a student, you might be able to tutor other students in subjects you excel in. Websites such as Chegg Tutors and Tutor.com allow you to tutor from anywhere.
5. **Stock Trading**: While investing in the stock market can be profitable, it's also risky, especially if you don't have much knowledge or experience. Before you start trading, it's important to learn as much as you can about the stock market. Start by investing a small amount that you can afford to lose.
6. **Online Surveys or Reviews**: Some companies will pay for your opinion on their products or services. This is a relatively easy way to make money online, but it's usually not very lucrative.
Before you start, it's important to do thorough research and consider the time commitment each option requires. Remember, there's no quick way to make money – it takes time and effort. And always be wary of scams that promise quick and easy money. Good luck!<eos_token> |
10043f4 | Hello all:
I'm a 33 y/o male living/ working in NYC. I'm employed in the legal industry. My salary is approximately $150K per year. I would like to start effectively saving for a home (preferably multi-family). I would like to stay in NYC long-term. However, I'm also open to surrounding suburbs.
Regarding assets, I have approximately $2,700.00 in checking; $68,600.00 in savings ($13,000.00 of which is set aside to help pay off my upcoming wedding); $5,520.00 in a brokerage acct; $40,000.00 in a Roth IRA; $45,000 in a Traditional IRA; and $13,800 in an HSA.
Regarding liabilities, I pay $900 a month for rent; I typically carry $1,500 in credit card debt (which I pay off at the end of each month); I have approximately $69,000 in student debt (which I plan to dump my savings towards once repayment starts); I also will be taking over payment for a Parent Plus loan in my mom's (70 y/o) name (the balance of which is $98,000.00).
Otherwise, I drive a crappy old car and try to maintain a low cost lifestyle, although I do travel for 1-week vacations about 2x per year. I recently became eligible for my job's 401K program and plan to max it out.
Do you have any advice on how I can better arrange my finances and start saving up for a down-payment on a home? My target is 20% on a $900K (or less) home. Obviously, prices in the NYC-metro are insane. However, it is where all my family is located. | Hello,
Based on your information, it's great that you have a clear goal and that you are actively saving and investing. Here is a personalized plan to help you save for your home:
1. **Budgeting**: The first step to saving is always to know where your money is going. A clear and concise budget will help you understand your spending habits and identify areas where you can cut back.
2. **Debt Repayment**: You mentioned that you plan to dump your savings towards your student loan once repayment starts. This is a great plan, as it will help to reduce the amount you pay in interest over time. However, you also have a Parent Plus loan. Depending on the interest rates of your student loan and the Parent Plus loan, you might want to consider paying off the one with the higher interest rate first.
3. **Max out your retirement contributions**: You stated that you recently became eligible for your job's 401K program and plan to max it out. This is a great move as it allows you to save for retirement in a tax-efficient way.
4. **Down Payment Saving Plan**: Given that you want to save for a 20% down payment on a $900K home, you would need to save $180,000. If you hope to buy in 5 years, you would need to save roughly $36,000 per year or $3,000 per month. Right now, after considering your rent and credit card payments, if you are able to save/invest about 40% of your income, you should be able to reach your goal.
5. **Emergency Fund**: Make sure you have 3-6 months of living expenses set aside in an easily accessible account. This will provide a financial safety net in case of unexpected expenses or loss of income.
6. **Invest**: Any money that you are saving for your down payment that you won't need for at least a few years could be invested in a low-risk portfolio to help it grow. However, keep in mind that all investments come with risk.
Remember, everyone's financial situation is unique, so what works for one person might not work for another. It's important to regularly review your finances and adjust your plan as necessary. | ### Human
Hello all:
I'm a 33 y/o male living/ working in NYC. I'm employed in the legal industry. My salary is approximately $150K per year. I would like to start effectively saving for a home (preferably multi-family). I would like to stay in NYC long-term. However, I'm also open to surrounding suburbs.
Regarding assets, I have approximately $2,700.00 in checking; $68,600.00 in savings ($13,000.00 of which is set aside to help pay off my upcoming wedding); $5,520.00 in a brokerage acct; $40,000.00 in a Roth IRA; $45,000 in a Traditional IRA; and $13,800 in an HSA.
Regarding liabilities, I pay $900 a month for rent; I typically carry $1,500 in credit card debt (which I pay off at the end of each month); I have approximately $69,000 in student debt (which I plan to dump my savings towards once repayment starts); I also will be taking over payment for a Parent Plus loan in my mom's (70 y/o) name (the balance of which is $98,000.00).
Otherwise, I drive a crappy old car and try to maintain a low cost lifestyle, although I do travel for 1-week vacations about 2x per year. I recently became eligible for my job's 401K program and plan to max it out.
Do you have any advice on how I can better arrange my finances and start saving up for a down-payment on a home? My target is 20% on a $900K (or less) home. Obviously, prices in the NYC-metro are insane. However, it is where all my family is located.
### Assistant
Hello,
Based on your information, it's great that you have a clear goal and that you are actively saving and investing. Here is a personalized plan to help you save for your home:
1. **Budgeting**: The first step to saving is always to know where your money is going. A clear and concise budget will help you understand your spending habits and identify areas where you can cut back.
2. **Debt Repayment**: You mentioned that you plan to dump your savings towards your student loan once repayment starts. This is a great plan, as it will help to reduce the amount you pay in interest over time. However, you also have a Parent Plus loan. Depending on the interest rates of your student loan and the Parent Plus loan, you might want to consider paying off the one with the higher interest rate first.
3. **Max out your retirement contributions**: You stated that you recently became eligible for your job's 401K program and plan to max it out. This is a great move as it allows you to save for retirement in a tax-efficient way.
4. **Down Payment Saving Plan**: Given that you want to save for a 20% down payment on a $900K home, you would need to save $180,000. If you hope to buy in 5 years, you would need to save roughly $36,000 per year or $3,000 per month. Right now, after considering your rent and credit card payments, if you are able to save/invest about 40% of your income, you should be able to reach your goal.
5. **Emergency Fund**: Make sure you have 3-6 months of living expenses set aside in an easily accessible account. This will provide a financial safety net in case of unexpected expenses or loss of income.
6. **Invest**: Any money that you are saving for your down payment that you won't need for at least a few years could be invested in a low-risk portfolio to help it grow. However, keep in mind that all investments come with risk.
Remember, everyone's financial situation is unique, so what works for one person might not work for another. It's important to regularly review your finances and adjust your plan as necessary.<eos_token> |
1003u24 | Thanks everyone for the comments, I wish everyone the best and Happy New Year! | Thank you! Happy New Year to you too! May this new year bring you prosperity and financial well-being. If you have any financial questions or need advice in the coming year, don't hesitate to ask. | ### Human
Thanks everyone for the comments, I wish everyone the best and Happy New Year!
### Assistant
Thank you! Happy New Year to you too! May this new year bring you prosperity and financial well-being. If you have any financial questions or need advice in the coming year, don't hesitate to ask.<eos_token> |
1003rme | It's been very tough for me. I'm going to have to let go of the car. It started with not being able to afford the insurance but now I know in order to get back on my feet and rebuild my credit which was in the 700s not even 4 months ago I need to let go of it.
Is this possible? What methods are there to this? I will be talking to the bank on Tuesday and making an appointment but would like some advice here. | I'm sorry to hear about your situation. Financial challenges are difficult to navigate, but you're making the right decision by seeking advice and trying to take control of your situation.
If you can't afford your car anymore, there are a few options you might consider:
1. **Sell Your Car:** If the market value of your car is more than what you owe on your loan, selling your car could be a good option. You can use the proceeds to pay off your loan and potentially have some money left over.
2. **Trade-In Your Car:** If you're planning on getting a cheaper vehicle, you might consider trading in your current car. Dealerships will often accept trade-ins and apply the value towards a new vehicle.
3. **Refinance Your Loan:** If your credit score is still in a decent place, you might be able to refinance your car loan to get a lower monthly payment. This would extend the length of your loan, but it could make the payments more manageable.
4. **Voluntary Repossession:** If you can't sell or trade in your car, giving it back to the bank (voluntary repo) is an option. However, this will likely hurt your credit score and the bank may still require you to pay the difference if the car sells for less than the loan balance.
5. **Loan Deferment or Modification:** Some banks may offer loan deferment (delaying payments for a period) or loan modification (changing the terms of your loan) if you're experiencing financial hardship.
Before you make any decisions, it's important to understand how each option will impact your finances and your credit score. Consider speaking with a credit counselor or financial advisor before you talk to your bank. They can help you understand your options and make a plan that's best for your situation. Also ensure to check current market value of your car, amount left on your loan and your current credit score. | ### Human
It's been very tough for me. I'm going to have to let go of the car. It started with not being able to afford the insurance but now I know in order to get back on my feet and rebuild my credit which was in the 700s not even 4 months ago I need to let go of it.
Is this possible? What methods are there to this? I will be talking to the bank on Tuesday and making an appointment but would like some advice here.
### Assistant
I'm sorry to hear about your situation. Financial challenges are difficult to navigate, but you're making the right decision by seeking advice and trying to take control of your situation.
If you can't afford your car anymore, there are a few options you might consider:
1. **Sell Your Car:** If the market value of your car is more than what you owe on your loan, selling your car could be a good option. You can use the proceeds to pay off your loan and potentially have some money left over.
2. **Trade-In Your Car:** If you're planning on getting a cheaper vehicle, you might consider trading in your current car. Dealerships will often accept trade-ins and apply the value towards a new vehicle.
3. **Refinance Your Loan:** If your credit score is still in a decent place, you might be able to refinance your car loan to get a lower monthly payment. This would extend the length of your loan, but it could make the payments more manageable.
4. **Voluntary Repossession:** If you can't sell or trade in your car, giving it back to the bank (voluntary repo) is an option. However, this will likely hurt your credit score and the bank may still require you to pay the difference if the car sells for less than the loan balance.
5. **Loan Deferment or Modification:** Some banks may offer loan deferment (delaying payments for a period) or loan modification (changing the terms of your loan) if you're experiencing financial hardship.
Before you make any decisions, it's important to understand how each option will impact your finances and your credit score. Consider speaking with a credit counselor or financial advisor before you talk to your bank. They can help you understand your options and make a plan that's best for your situation. Also ensure to check current market value of your car, amount left on your loan and your current credit score.<eos_token> |
1003on7 | Tl;Dr - in-laws make high ticket purchases on eBay using my account and they pay me for the purchases. Makes me feel uneasy doing it but unless it's illegal I can't easily just say no. Am I getting myself into future trouble?
My in-laws have seasoned, fluid cash that is gotten legally from 1099 contract jobs, and they also have expensive tastes. They frequently find items on ebay that are high ticket amounts and they total way over the CTR limits.
Since they don't have an ebay account of their own and only a basic credit union account, they are putting the cash in my account (with a national association traditional bank) and I make the purchases on their behalf using my debit card.
We've never structured the transactions, but they total easily over $25k over a month or so.
My personal financial picture is very different usually, and this amount is equal to half my yearly salary(!) - very uncharacteristic for my usual deposit activity.
Am I opening myself up for liability? Would FinCEN refer the CTR to the IRS and trigger them to want to tax me on these deposits as earned income? I only want to assist them in purchasing the things they want as they can't make the transaction on their own, I don't want to trigger any sort of money laundering investigation.
It makes me feel uncomfortable though, but without any sort of legal framework suggesting this is a breach of my banks terms and conditions or federal law, I find it difficult to say no to their requests. Any money they deposit is a 100% pass-through and I do not earn anything from doing this.
Any constructive advice is appreciated. Thanks. | It's understandable you'll feel uneasy about this situation. While it may not necessarily be illegal, it can certainly raise red flags with financial entities, including your bank, the Financial Crimes Enforcement Network (FinCEN) and the IRS.
Here are some potential issues:
1. **Suspicious Activity Reports (SAR)**: Banks are required to file SARs for any suspected fraudulent or unusual activity. Large, inconsistent deposits into your account from others could certainly qualify. This could lead to your account being flagged, frozen or even closed.
2. **Gift Tax**: If the IRS views the money your in-laws are depositing into your account as gifts, they might be subject to gift taxes if they exceed the annual exclusion limit ($15,000 per person for 2021).
3. **Income Tax**: The IRS could potentially view the money your in-laws are transferring to you as income. This could lead to you being taxed on this income, even though you're not actually keeping the money.
4. **Money Laundering**: While you know the source of the money is legitimate, large transfers of money can raise suspicions of money laundering, especially if they are regular and over certain amounts.
5. **Fraud**: If your in-laws were to dispute the transactions at some point, or if they were to become unable to pay you for any reason, you could be held responsible for the debt.
The safest course of action would be to stop facilitating these transactions. Your in-laws should open their own eBay account and link it to their bank account. If they are hesitant or unable to do this, encourage them to seek the help of a financial advisor or consider using a pre-paid card that they can load with their own money for online purchases.
Remember, it's always important to protect yourself financially. If something feels wrong, it's always worth exploring why that might be and taking steps to rectify the situation. | ### Human
Tl;Dr - in-laws make high ticket purchases on eBay using my account and they pay me for the purchases. Makes me feel uneasy doing it but unless it's illegal I can't easily just say no. Am I getting myself into future trouble?
My in-laws have seasoned, fluid cash that is gotten legally from 1099 contract jobs, and they also have expensive tastes. They frequently find items on ebay that are high ticket amounts and they total way over the CTR limits.
Since they don't have an ebay account of their own and only a basic credit union account, they are putting the cash in my account (with a national association traditional bank) and I make the purchases on their behalf using my debit card.
We've never structured the transactions, but they total easily over $25k over a month or so.
My personal financial picture is very different usually, and this amount is equal to half my yearly salary(!) - very uncharacteristic for my usual deposit activity.
Am I opening myself up for liability? Would FinCEN refer the CTR to the IRS and trigger them to want to tax me on these deposits as earned income? I only want to assist them in purchasing the things they want as they can't make the transaction on their own, I don't want to trigger any sort of money laundering investigation.
It makes me feel uncomfortable though, but without any sort of legal framework suggesting this is a breach of my banks terms and conditions or federal law, I find it difficult to say no to their requests. Any money they deposit is a 100% pass-through and I do not earn anything from doing this.
Any constructive advice is appreciated. Thanks.
### Assistant
It's understandable you'll feel uneasy about this situation. While it may not necessarily be illegal, it can certainly raise red flags with financial entities, including your bank, the Financial Crimes Enforcement Network (FinCEN) and the IRS.
Here are some potential issues:
1. **Suspicious Activity Reports (SAR)**: Banks are required to file SARs for any suspected fraudulent or unusual activity. Large, inconsistent deposits into your account from others could certainly qualify. This could lead to your account being flagged, frozen or even closed.
2. **Gift Tax**: If the IRS views the money your in-laws are depositing into your account as gifts, they might be subject to gift taxes if they exceed the annual exclusion limit ($15,000 per person for 2021).
3. **Income Tax**: The IRS could potentially view the money your in-laws are transferring to you as income. This could lead to you being taxed on this income, even though you're not actually keeping the money.
4. **Money Laundering**: While you know the source of the money is legitimate, large transfers of money can raise suspicions of money laundering, especially if they are regular and over certain amounts.
5. **Fraud**: If your in-laws were to dispute the transactions at some point, or if they were to become unable to pay you for any reason, you could be held responsible for the debt.
The safest course of action would be to stop facilitating these transactions. Your in-laws should open their own eBay account and link it to their bank account. If they are hesitant or unable to do this, encourage them to seek the help of a financial advisor or consider using a pre-paid card that they can load with their own money for online purchases.
Remember, it's always important to protect yourself financially. If something feels wrong, it's always worth exploring why that might be and taking steps to rectify the situation.<eos_token> |
1003o86 | Hello, I'm looking to make a purchase using my Healthcare FSA funds. The merchant is not coded as a supplier of medical devices so my card is being declined and I'll need to purchase the item and submit the receipt/expense.
If I make the purchase today and submit proof of purchasing on today's date, will my funds from this year cover the purchase or not since the funds expire at end of year? | Yes, your funds from this year should cover the purchase as long as the transaction date is within the current plan year. The key factor is the date of service or transaction date, not the date you submit the expense for reimbursement. However, it's important to submit your reimbursement request as soon as possible to ensure you get reimbursed before your FSA funds expire at the end of the year.
Please keep in mind that the item purchased must be an eligible expense under your Healthcare FSA plan. You will need to provide a detailed receipt or documentation that shows what you purchased, the amount, and the date of the transaction.
Remember, each FSA plan may have different rules regarding rollovers and grace periods, so it's always a good idea to check with your FSA administrator to understand your specific plan details. | ### Human
Hello, I'm looking to make a purchase using my Healthcare FSA funds. The merchant is not coded as a supplier of medical devices so my card is being declined and I'll need to purchase the item and submit the receipt/expense.
If I make the purchase today and submit proof of purchasing on today's date, will my funds from this year cover the purchase or not since the funds expire at end of year?
### Assistant
Yes, your funds from this year should cover the purchase as long as the transaction date is within the current plan year. The key factor is the date of service or transaction date, not the date you submit the expense for reimbursement. However, it's important to submit your reimbursement request as soon as possible to ensure you get reimbursed before your FSA funds expire at the end of the year.
Please keep in mind that the item purchased must be an eligible expense under your Healthcare FSA plan. You will need to provide a detailed receipt or documentation that shows what you purchased, the amount, and the date of the transaction.
Remember, each FSA plan may have different rules regarding rollovers and grace periods, so it's always a good idea to check with your FSA administrator to understand your specific plan details.<eos_token> |
1003c7h | I've had a Discovercard for 6 years but I recently started getting rent reporting through my rent management portal (TenantCloud) and ever since they started reporting (1.2 + 2 months ago, just renewed lease) its completely tanked my average age of account from 6 years down to 2.5.
Also it shows up as a personal loan. Is this right? Is this actually causing a negative impact to my score or is this normal? As of today my report reflects being completely debt free and old collections paid off and my score didn't even move (666 FICO on Experian with some boost items, 743 on creditkarma with the VantageScore) | The average age of accounts (AAoA) is a significant factor in the calculation of your credit score. When a new account is added, especially one with a short history like your rent reporting, it can lower your AAoA and potentially impact your credit score. However, it's important to remember that AAoA is just one factor out of many that contribute to your credit score.
The fact that your rent is being reported as a personal loan might be due to how your rent management portal is reporting it. Typically, rent payments are not reported as loans but as regular payments. This could be something worth discussing with your rent management portal to ensure that it's being reported correctly.
In terms of impact, it's hard to say definitively without knowing all the details of your credit history. On one hand, having more accounts can lower your average age of accounts, but on the other hand, it can also increase your overall credit mix, which can potentially have a positive impact. The fact that you're debt-free and have paid off old collections is definitely a positive factor.
Regarding the difference in your credit scores, it's important to note that FICO and VantageScore are two different scoring models and they can weigh credit factors differently. Therefore, it's not uncommon to see disparities between these two scores.
In general, maintaining good credit behavior (paying bills on time, keeping credit utilization low, etc.) should eventually reflect positively on your credit score. If you are planning a major financial decision soon (like applying for a mortgage or auto loan), it may be worth consulting with a credit advisor to understand how these factors might impact your creditworthiness. | ### Human
I've had a Discovercard for 6 years but I recently started getting rent reporting through my rent management portal (TenantCloud) and ever since they started reporting (1.2 + 2 months ago, just renewed lease) its completely tanked my average age of account from 6 years down to 2.5.
Also it shows up as a personal loan. Is this right? Is this actually causing a negative impact to my score or is this normal? As of today my report reflects being completely debt free and old collections paid off and my score didn't even move (666 FICO on Experian with some boost items, 743 on creditkarma with the VantageScore)
### Assistant
The average age of accounts (AAoA) is a significant factor in the calculation of your credit score. When a new account is added, especially one with a short history like your rent reporting, it can lower your AAoA and potentially impact your credit score. However, it's important to remember that AAoA is just one factor out of many that contribute to your credit score.
The fact that your rent is being reported as a personal loan might be due to how your rent management portal is reporting it. Typically, rent payments are not reported as loans but as regular payments. This could be something worth discussing with your rent management portal to ensure that it's being reported correctly.
In terms of impact, it's hard to say definitively without knowing all the details of your credit history. On one hand, having more accounts can lower your average age of accounts, but on the other hand, it can also increase your overall credit mix, which can potentially have a positive impact. The fact that you're debt-free and have paid off old collections is definitely a positive factor.
Regarding the difference in your credit scores, it's important to note that FICO and VantageScore are two different scoring models and they can weigh credit factors differently. Therefore, it's not uncommon to see disparities between these two scores.
In general, maintaining good credit behavior (paying bills on time, keeping credit utilization low, etc.) should eventually reflect positively on your credit score. If you are planning a major financial decision soon (like applying for a mortgage or auto loan), it may be worth consulting with a credit advisor to understand how these factors might impact your creditworthiness.<eos_token> |
1003955 | I paid a large amount to have two pods delivered to me to Washington(from Texas), based on the start of my house lease in Washington. PODS however changed the delivery date to a week later, after one of the two pods was delivered.
They then changed the delivery time in Washington, from early morning to late in the evening. I therefore had to cancel the movers(to unload the items from the PODS) and then reschedule them again, at a much higher price. I raised a Credit card dispute with Fidelity, send all the PODS issue tracking numbers etc but it was declined as "there was discrepancy between what I said the first time and what I send the second time(I asked them to explain further but they declined)"
Fast forward to 3 months, I see new charges on my credit card account from PODS. These charges are processed and then quickly reversed. Credit card company says that I need to talk to PODS(the best that they can do is send me a new credit card) and PODS says that they have not made the credit card transaction.
Is there anything I can do here? I would really like to get to the bottom of this.
Update 1:
[Credit Card Transaction links](https://imgur.com/a/487B3Xd) | I am sorry to hear about the issues you are facing. Here are some steps you may consider:
1. Document: Keep a detailed record of all your interactions, conversations and transactions with both PODS and the credit card company.
2. Contact and Dispute: Reach out to PODS again with all the evidence you have collected. It would be helpful if you could find someone in customer service who is willing to look deeply into your case. If they still deny the charge, ask for written confirmation that they didn't make the charge.
3. Credit Card Company: If you are not getting anywhere with PODS, you should go back to the credit card company. You should ask for a detailed reason for why your dispute was declined. If your first dispute was declined due to some inconsistencies, correct those inconsistencies and file a second dispute.
4. Legal Advice: If you are still unable to resolve the issue, consider seeking legal advice. It may be that a strongly worded letter from a lawyer could prompt the companies to respond more positively.
5. Consumer Protection Agencies: Another option is to report the issue to a consumer protection agency. In the US, for example, you can contact the Federal Trade Commission (FTC) or your local state attorney general's office.
6. Credit Bureau Dispute: If the charges are impacting your credit score, you can dispute them with the credit bureaus (Experian, TransUnion, Equifax). They are required by law to investigate and remove inaccurate information.
Remember to stay patient and persistent throughout this process. It might take some time, but it's important to stand up for your rights as a consumer. Also, consider if the amount in dispute is worth the time and potential legal fees before proceeding with the last two options. | ### Human
I paid a large amount to have two pods delivered to me to Washington(from Texas), based on the start of my house lease in Washington. PODS however changed the delivery date to a week later, after one of the two pods was delivered.
They then changed the delivery time in Washington, from early morning to late in the evening. I therefore had to cancel the movers(to unload the items from the PODS) and then reschedule them again, at a much higher price. I raised a Credit card dispute with Fidelity, send all the PODS issue tracking numbers etc but it was declined as "there was discrepancy between what I said the first time and what I send the second time(I asked them to explain further but they declined)"
Fast forward to 3 months, I see new charges on my credit card account from PODS. These charges are processed and then quickly reversed. Credit card company says that I need to talk to PODS(the best that they can do is send me a new credit card) and PODS says that they have not made the credit card transaction.
Is there anything I can do here? I would really like to get to the bottom of this.
Update 1:
[Credit Card Transaction links](https://imgur.com/a/487B3Xd)
### Assistant
I am sorry to hear about the issues you are facing. Here are some steps you may consider:
1. Document: Keep a detailed record of all your interactions, conversations and transactions with both PODS and the credit card company.
2. Contact and Dispute: Reach out to PODS again with all the evidence you have collected. It would be helpful if you could find someone in customer service who is willing to look deeply into your case. If they still deny the charge, ask for written confirmation that they didn't make the charge.
3. Credit Card Company: If you are not getting anywhere with PODS, you should go back to the credit card company. You should ask for a detailed reason for why your dispute was declined. If your first dispute was declined due to some inconsistencies, correct those inconsistencies and file a second dispute.
4. Legal Advice: If you are still unable to resolve the issue, consider seeking legal advice. It may be that a strongly worded letter from a lawyer could prompt the companies to respond more positively.
5. Consumer Protection Agencies: Another option is to report the issue to a consumer protection agency. In the US, for example, you can contact the Federal Trade Commission (FTC) or your local state attorney general's office.
6. Credit Bureau Dispute: If the charges are impacting your credit score, you can dispute them with the credit bureaus (Experian, TransUnion, Equifax). They are required by law to investigate and remove inaccurate information.
Remember to stay patient and persistent throughout this process. It might take some time, but it's important to stand up for your rights as a consumer. Also, consider if the amount in dispute is worth the time and potential legal fees before proceeding with the last two options.<eos_token> |
1002pwp | A little background, I am 22 years old and make around 17k a year. I am currently investing in an employee 401k through capital group and contribute 10% of my paycheck and my employer matches up to 3%. My second fund is Vfiax (vanguard s and p500 index fund much lower .04 expense ratio) in my Roth IRA. I make sure to max out my Roth IRA every year but which fund should I prioritize first my Roth IRA or the 401k since i obviously can’t max them both out with my current income? Is there specific funds such as voo or spy (more s and p 500 based) I should be investing in my 401k? I am currently invested in American Funds 2065 Target Date (AAOTX) at a 0.81 expense ratio through capital group but it’s worthy noting I don’t really trust my employer financial advisor who runs it which has steered me away from putting much in my 401k but I don’t see too many different options to invest in other than growth funds and target funds that don’t necessarily mirror the s and p500. I am considering boosting my contributions from 10% of my income since I hear a lot of good things about 401k just not sure about this one. Should I invest in a traditional IRA as well or just focus on the Roth IRA and 401?Also what is the difference between a 401k and a traditional IRA since they are both pretax? Also I have heard that T bills are a very secure investment that doesn’t lock up your money until retirement like most funds. Do you feel they are even worth it or are the returns so small you might as well put it in an index fund long term?
Also how do I know if i have maximized my employer matching on the 401k?
How do people get a match of up to 6% from employer through 401k? | It sounds like you have a good start on your retirement savings strategy. Here are some pointers to consider:
1. **Prioritization**: Given your current income, it's crucial to prioritize your investments. Since your employer offers a 3% match on your 401k, you should at least contribute enough to get that match - it's essentially free money. After that, it's generally a good idea to contribute to your Roth IRA, especially given your current income level. The advantage of the Roth IRA is that your money grows tax-free, and you can withdraw it tax-free in retirement.
2. **Fund Selection**: The expense ratio of your 401k investment is indeed quite high compared to the S&P500 index fund. If possible, try to find a lower-cost index fund within your 401k's investment options. If not, the target date fund can still be a reasonable choice, but you may want to consider reallocating more towards your Roth IRA where you have more control over the investment options.
3. **Traditional IRA vs Roth IRA**: Both types of IRAs offer tax advantages but in different ways. Contributions to a Traditional IRA may be tax-deductible, but you will pay taxes when you withdraw in retirement. For a Roth IRA, you contribute with after-tax dollars, but your money grows tax-free, and you can withdraw it tax-free in retirement. Given your current income level, Roth IRA may be more advantageous.
4. **T-Bills**: Treasury bills are indeed very secure, but their returns are generally very low. They can be a good choice for short-term savings (like an emergency fund) but are less suitable for long-term retirement savings where you have a longer time horizon and can potentially get higher returns with index funds.
5. **Maximizing Employer Match**: To know if you've maximized your employer's match, check the details of your employer's 401k plan. They will specify the maximum percentage of your salary they'll match.
6. **Employer Matching**: Each employer sets its own matching policy. Some may match up to 6%, others less. It's part of the benefits package companies use to attract and retain employees. If your employer only matches up to 3%, there's not much you can do to get them to match more.
Remember, it's always a good idea to consult with a financial advisor to make sure you're making the best decisions for your specific situation. | ### Human
A little background, I am 22 years old and make around 17k a year. I am currently investing in an employee 401k through capital group and contribute 10% of my paycheck and my employer matches up to 3%. My second fund is Vfiax (vanguard s and p500 index fund much lower .04 expense ratio) in my Roth IRA. I make sure to max out my Roth IRA every year but which fund should I prioritize first my Roth IRA or the 401k since i obviously can’t max them both out with my current income? Is there specific funds such as voo or spy (more s and p 500 based) I should be investing in my 401k? I am currently invested in American Funds 2065 Target Date (AAOTX) at a 0.81 expense ratio through capital group but it’s worthy noting I don’t really trust my employer financial advisor who runs it which has steered me away from putting much in my 401k but I don’t see too many different options to invest in other than growth funds and target funds that don’t necessarily mirror the s and p500. I am considering boosting my contributions from 10% of my income since I hear a lot of good things about 401k just not sure about this one. Should I invest in a traditional IRA as well or just focus on the Roth IRA and 401?Also what is the difference between a 401k and a traditional IRA since they are both pretax? Also I have heard that T bills are a very secure investment that doesn’t lock up your money until retirement like most funds. Do you feel they are even worth it or are the returns so small you might as well put it in an index fund long term?
Also how do I know if i have maximized my employer matching on the 401k?
How do people get a match of up to 6% from employer through 401k?
### Assistant
It sounds like you have a good start on your retirement savings strategy. Here are some pointers to consider:
1. **Prioritization**: Given your current income, it's crucial to prioritize your investments. Since your employer offers a 3% match on your 401k, you should at least contribute enough to get that match - it's essentially free money. After that, it's generally a good idea to contribute to your Roth IRA, especially given your current income level. The advantage of the Roth IRA is that your money grows tax-free, and you can withdraw it tax-free in retirement.
2. **Fund Selection**: The expense ratio of your 401k investment is indeed quite high compared to the S&P500 index fund. If possible, try to find a lower-cost index fund within your 401k's investment options. If not, the target date fund can still be a reasonable choice, but you may want to consider reallocating more towards your Roth IRA where you have more control over the investment options.
3. **Traditional IRA vs Roth IRA**: Both types of IRAs offer tax advantages but in different ways. Contributions to a Traditional IRA may be tax-deductible, but you will pay taxes when you withdraw in retirement. For a Roth IRA, you contribute with after-tax dollars, but your money grows tax-free, and you can withdraw it tax-free in retirement. Given your current income level, Roth IRA may be more advantageous.
4. **T-Bills**: Treasury bills are indeed very secure, but their returns are generally very low. They can be a good choice for short-term savings (like an emergency fund) but are less suitable for long-term retirement savings where you have a longer time horizon and can potentially get higher returns with index funds.
5. **Maximizing Employer Match**: To know if you've maximized your employer's match, check the details of your employer's 401k plan. They will specify the maximum percentage of your salary they'll match.
6. **Employer Matching**: Each employer sets its own matching policy. Some may match up to 6%, others less. It's part of the benefits package companies use to attract and retain employees. If your employer only matches up to 3%, there's not much you can do to get them to match more.
Remember, it's always a good idea to consult with a financial advisor to make sure you're making the best decisions for your specific situation.<eos_token> |
1002h3v | Hi all, I'm writing this post in search of methods to pay off all of my CC debt.
I currently have 2800 in checking/cash, although my debts (5380) are:
BOFA 2800 @ 24.74% (around $58 in interest/month)
CFU 1000 @ 0% until 09/23
AMEX 780 @ 25.24% (around $28 in interest/month)
CSP 800 @ 26.74% (around $29 in interest/month)
Monthly Take-Home: 3600 - 1200 in fixed expenses then 2400 goes towards savings & debt repayments
Been stuck in CC debt since taking some weekend trips in June 2022, but now I'm trying to maximize my savings rate. I stopped using debit cards to start gaining CC rewards and quickly got caught up in lifestyle inflation, eating out, etc. Looking to eliminate all debt as soon as possible - I was considering using the 2800 to bring my total debt down to 2580, then taking out a loan but interest rates are way too high atm. Did a pre-qualification check with Discover and they quoted - ($90 monthly, 17.99%, 36 months) to ($57, 20.99%, 84), (if I took the loan, I can still put towards my savings and pay down the loan at the same time). I get paid bi-weekly, (1st and 15th), but already received my 1st check prior to Christmas and will only be receiving 1800 for the month of January.
I also have 1600 in savings and \~1900 in long-term stocks, but I'm not looking to pull out of any of those. Also down about 19% YTD on the stocks as I started investing last year, so yeah not touching that as of yet. Although if necessary, I could possibly tap into the savings - that's my last option. Much appreciated everyone, thanks. | Based on the details you've provided, here's a plan which might help you to tackle your debts:
1. Prioritize Highest Interest Rates:
Start by paying off the credit cards with the highest interest rates. This is known as the 'avalanche method'. This means that first and foremost, focus on paying off the CSP card ($800 @ 26.74%) and then the AMEX card ($780 @ 25.24%). This will help reduce the amount of interest you are accruing.
2. Use 0% Interest Rate Grace Period:
The CFU card has a 0% interest rate until September 2023 - you can use this grace period to your advantage by paying off the other cards first and then focusing on this card.
3. Emergency Savings:
It's good to have an emergency fund, but in your case, the interest on your credit card debt is likely higher than the interest you're earning on your savings. You could consider using a part of your savings to pay off your high-interest debts. However, be sure to leave some money in your savings for emergencies.
4. Stock Investments:
It's understandable you do not want to sell your stocks at a loss. However, if your debt continues to grow, you may need to consider this option. Keep close tabs on your investments and consider liquidating if they recover.
5. Budgeting:
Tighten up your budget and cut unnecessary expenses. Use any extra money to pay off your debts. Also, try to avoid lifestyle inflation and live within your means.
6. Extra Income:
If possible, try to increase your income. This could be through overtime, a side job, or selling items you no longer need.
7. Debt Consolidation:
Debt consolidation could be a good option if you're able to secure a loan with a lower interest rate than your credit cards. However, make sure you do not rack up more credit card debt once you've paid off your cards.
Remember, it's important to stop using your credit cards to avoid accumulating more debt. Once you've paid off your debts, start rebuilding your savings and consider investing again when you're financially stable. | ### Human
Hi all, I'm writing this post in search of methods to pay off all of my CC debt.
I currently have 2800 in checking/cash, although my debts (5380) are:
BOFA 2800 @ 24.74% (around $58 in interest/month)
CFU 1000 @ 0% until 09/23
AMEX 780 @ 25.24% (around $28 in interest/month)
CSP 800 @ 26.74% (around $29 in interest/month)
Monthly Take-Home: 3600 - 1200 in fixed expenses then 2400 goes towards savings & debt repayments
Been stuck in CC debt since taking some weekend trips in June 2022, but now I'm trying to maximize my savings rate. I stopped using debit cards to start gaining CC rewards and quickly got caught up in lifestyle inflation, eating out, etc. Looking to eliminate all debt as soon as possible - I was considering using the 2800 to bring my total debt down to 2580, then taking out a loan but interest rates are way too high atm. Did a pre-qualification check with Discover and they quoted - ($90 monthly, 17.99%, 36 months) to ($57, 20.99%, 84), (if I took the loan, I can still put towards my savings and pay down the loan at the same time). I get paid bi-weekly, (1st and 15th), but already received my 1st check prior to Christmas and will only be receiving 1800 for the month of January.
I also have 1600 in savings and \~1900 in long-term stocks, but I'm not looking to pull out of any of those. Also down about 19% YTD on the stocks as I started investing last year, so yeah not touching that as of yet. Although if necessary, I could possibly tap into the savings - that's my last option. Much appreciated everyone, thanks.
### Assistant
Based on the details you've provided, here's a plan which might help you to tackle your debts:
1. Prioritize Highest Interest Rates:
Start by paying off the credit cards with the highest interest rates. This is known as the 'avalanche method'. This means that first and foremost, focus on paying off the CSP card ($800 @ 26.74%) and then the AMEX card ($780 @ 25.24%). This will help reduce the amount of interest you are accruing.
2. Use 0% Interest Rate Grace Period:
The CFU card has a 0% interest rate until September 2023 - you can use this grace period to your advantage by paying off the other cards first and then focusing on this card.
3. Emergency Savings:
It's good to have an emergency fund, but in your case, the interest on your credit card debt is likely higher than the interest you're earning on your savings. You could consider using a part of your savings to pay off your high-interest debts. However, be sure to leave some money in your savings for emergencies.
4. Stock Investments:
It's understandable you do not want to sell your stocks at a loss. However, if your debt continues to grow, you may need to consider this option. Keep close tabs on your investments and consider liquidating if they recover.
5. Budgeting:
Tighten up your budget and cut unnecessary expenses. Use any extra money to pay off your debts. Also, try to avoid lifestyle inflation and live within your means.
6. Extra Income:
If possible, try to increase your income. This could be through overtime, a side job, or selling items you no longer need.
7. Debt Consolidation:
Debt consolidation could be a good option if you're able to secure a loan with a lower interest rate than your credit cards. However, make sure you do not rack up more credit card debt once you've paid off your cards.
Remember, it's important to stop using your credit cards to avoid accumulating more debt. Once you've paid off your debts, start rebuilding your savings and consider investing again when you're financially stable.<eos_token> |
1002gw0 | Will I pay tax twice if I contribute to IRA from bank account? | No, contributing to an IRA (Individual Retirement Account) from your bank account does not mean you will be taxed twice.
If you're contributing to a traditional IRA, your contributions are typically made with pre-tax dollars meaning you get a tax deduction for the amount you contribute. Taxes will be due when you withdraw the money in retirement, so you're not taxed twice.
If you contribute to a Roth IRA, you use after-tax dollars. So, you've already paid taxes on the funds you're contributing. The benefit is that your withdrawals in retirement from a Roth IRA will typically be tax-free, again not resulting in double taxation.
However, it's always recommended to speak with a tax professional or financial advisor to understand the nuances of your personal financial situation. | ### Human
Will I pay tax twice if I contribute to IRA from bank account?
### Assistant
No, contributing to an IRA (Individual Retirement Account) from your bank account does not mean you will be taxed twice.
If you're contributing to a traditional IRA, your contributions are typically made with pre-tax dollars meaning you get a tax deduction for the amount you contribute. Taxes will be due when you withdraw the money in retirement, so you're not taxed twice.
If you contribute to a Roth IRA, you use after-tax dollars. So, you've already paid taxes on the funds you're contributing. The benefit is that your withdrawals in retirement from a Roth IRA will typically be tax-free, again not resulting in double taxation.
However, it's always recommended to speak with a tax professional or financial advisor to understand the nuances of your personal financial situation.<eos_token> |
1002gvw | I am looking for a bit of help for my father in law. He is married and living in CT, USA. His son started PHD this year in MA. He wants to claim him as a dependent. Is it possible? Will he have to fill out CT and MA state taxes? Will my brother in law have to fill out taxes in MA/CT/Federal? Any advice or link would be super helpful. | As an AI, I can provide some general advice on this matter, but please consult a tax professional for advice tailored to your family's specific situation.
For federal tax purposes, the IRS sets certain tests to determine if a person can be claimed as a dependent. These include age, relationship, support, and joint return tests. If your brother-in-law is a full-time student under the age of 24, and your father-in-law provides more than half of his support, he might be able to claim him as a dependent. However, your brother-in-law cannot claim himself on his own tax return.
Regarding state taxes, if your father-in-law is a resident of Connecticut and his son is studying in Massachusetts but is not working or earning income in MA, then generally your father-in-law would only have to file taxes in CT. Your brother-in-law would likely only need to file federal taxes unless he earns income in MA.
However, tax laws can be complex and there are many factors that can impact these general rules. Here are some resources that might help:
1. IRS webpage on dependents: https://www.irs.gov/faqs/filing-requirements-status-dependents/dependents
2. Connecticut Department of Revenue Services: https://portal.ct.gov/DRS
3. Massachusetts Department of Revenue: https://www.mass.gov/orgs/massachusetts-department-of-revenue
Again, it's important to consult with a tax professional to ensure all tax laws are correctly interpreted and followed. | ### Human
I am looking for a bit of help for my father in law. He is married and living in CT, USA. His son started PHD this year in MA. He wants to claim him as a dependent. Is it possible? Will he have to fill out CT and MA state taxes? Will my brother in law have to fill out taxes in MA/CT/Federal? Any advice or link would be super helpful.
### Assistant
As an AI, I can provide some general advice on this matter, but please consult a tax professional for advice tailored to your family's specific situation.
For federal tax purposes, the IRS sets certain tests to determine if a person can be claimed as a dependent. These include age, relationship, support, and joint return tests. If your brother-in-law is a full-time student under the age of 24, and your father-in-law provides more than half of his support, he might be able to claim him as a dependent. However, your brother-in-law cannot claim himself on his own tax return.
Regarding state taxes, if your father-in-law is a resident of Connecticut and his son is studying in Massachusetts but is not working or earning income in MA, then generally your father-in-law would only have to file taxes in CT. Your brother-in-law would likely only need to file federal taxes unless he earns income in MA.
However, tax laws can be complex and there are many factors that can impact these general rules. Here are some resources that might help:
1. IRS webpage on dependents: https://www.irs.gov/faqs/filing-requirements-status-dependents/dependents
2. Connecticut Department of Revenue Services: https://portal.ct.gov/DRS
3. Massachusetts Department of Revenue: https://www.mass.gov/orgs/massachusetts-department-of-revenue
Again, it's important to consult with a tax professional to ensure all tax laws are correctly interpreted and followed.<eos_token> |
1002g4a |
Does the capital gains tax rate work like income tax - you pay a given rate for all income within each rate threshold - OR is it the case that as soon as your income crosses the earning threshold, you pay capital gains taxes on *all* of your capital gains (even those below the income threshold for that rate)?
Here's an example to clarify:
In 2022, the capital gains tax rate is 0% until a single filer earns $41,676 at which point is shifts to a 15% capital gains tax rate. Let's say I earn $40,000, and I have capital gains of $2,000. Would I have to pay the 15% capital gains tax on *all $2000* of my capital gains, or would I pay 0% on $1,676 of my capital gains, and only pay 15% on the $324 in capital gains that pushes me over the $41676 income threshold?
I have searched for ages to find an answer to this but am stumped. Online calculators differ in how they calculate it and I can't find any solid guidance. Thanks! | Your capital gains tax rate is determined based on your taxable income, which includes your wages, interest, dividends, and capital gains. If your total taxable income is $40,000 and you have capital gains of $2,000, then your total taxable income is $42,000.
In 2022, the 0% long-term capital gains tax rate applies to single filers with a taxable income up to $40,400. If your taxable income is between $40,401 and $445,850, you will be in the 15% long-term capital gains tax bracket.
To answer your question, you would not pay the 15% capital gains tax on all of your capital gains. Instead, you would pay 0% on the portion of your capital gains that falls within the 0% bracket and 15% on the portion of your capital gains that falls within the 15% bracket.
In your example, you would pay 0% on the first $1,676 of your capital gains (which keeps you within the 0% bracket) and 15% on the remaining $324 of your capital gains (which falls within the 15% bracket).
However, this is a simplified explanation and actual tax calculations can be more complex. I would recommend consulting with a tax professional to understand your specific situation. Additionally, tax laws are subject to change, so it is important to stay updated with the latest tax rules. | ### Human
Does the capital gains tax rate work like income tax - you pay a given rate for all income within each rate threshold - OR is it the case that as soon as your income crosses the earning threshold, you pay capital gains taxes on *all* of your capital gains (even those below the income threshold for that rate)?
Here's an example to clarify:
In 2022, the capital gains tax rate is 0% until a single filer earns $41,676 at which point is shifts to a 15% capital gains tax rate. Let's say I earn $40,000, and I have capital gains of $2,000. Would I have to pay the 15% capital gains tax on *all $2000* of my capital gains, or would I pay 0% on $1,676 of my capital gains, and only pay 15% on the $324 in capital gains that pushes me over the $41676 income threshold?
I have searched for ages to find an answer to this but am stumped. Online calculators differ in how they calculate it and I can't find any solid guidance. Thanks!
### Assistant
Your capital gains tax rate is determined based on your taxable income, which includes your wages, interest, dividends, and capital gains. If your total taxable income is $40,000 and you have capital gains of $2,000, then your total taxable income is $42,000.
In 2022, the 0% long-term capital gains tax rate applies to single filers with a taxable income up to $40,400. If your taxable income is between $40,401 and $445,850, you will be in the 15% long-term capital gains tax bracket.
To answer your question, you would not pay the 15% capital gains tax on all of your capital gains. Instead, you would pay 0% on the portion of your capital gains that falls within the 0% bracket and 15% on the portion of your capital gains that falls within the 15% bracket.
In your example, you would pay 0% on the first $1,676 of your capital gains (which keeps you within the 0% bracket) and 15% on the remaining $324 of your capital gains (which falls within the 15% bracket).
However, this is a simplified explanation and actual tax calculations can be more complex. I would recommend consulting with a tax professional to understand your specific situation. Additionally, tax laws are subject to change, so it is important to stay updated with the latest tax rules.<eos_token> |
1002fe9 | Hi there! I am in my late 20s and my parents have decided to gift me 45K for a future down payment. They want me to find my own place and start paying for mortgages as soon as possible. I plan to focus on getting a new job in 2023 and won't start home searching until late 2023 / early 2024. My question is, what would be the best way to handle the $45K cash? As a newbie in /personalfinance, I am not sure if there's a better way than deposit them in my AMEX online savings account with a 3.3% APY.
Thank you and happy new year everyone! | Happy New Year! That's a generous gift from your parents, and it's great to see you're thinking ahead about the best way to manage it.
You have a couple of options depending on your risk tolerance and financial goals.
1. **High-yield savings account:** This is the safest option, and it seems like you're already considering it. An APY of 3.3% is excellent for a savings account. The money would be easily accessible and FDIC insured, which means you wouldn't risk losing it. This is a good option if you want to ensure the full amount will be available when you're ready to buy a home.
2. **Certificates of Deposit (CDs):** If you don't need access to the cash for a while, you could consider putting the money in a CD. CDs typically offer higher interest rates than savings accounts, but your money is locked away until the CD matures (anywhere from a few months to a few years).
3. **Invest in the market:** If you're willing to take on a bit of risk, you could consider investing some of the money in a diversified portfolio of stocks and bonds. This could potentially give you a higher return than a savings account or CD, but it also comes with the risk that you could lose money.
4. **Pay down debt:** If you have any high-interest debt, it could be beneficial to use some of the money to pay this down. The interest you're paying on the debt is likely higher than what you'd earn in a savings account or CD.
5. **Contribute to a retirement account:** You could also consider contributing some of the money to a retirement account, like a Roth IRA. This would give the money a chance to grow over time, and you could withdraw the contributions (but not the earnings) without penalty if you needed them for your down payment.
Remember, it's always a good idea to have an emergency fund in place before investing or tying up your money. In your case, it's also important to keep in mind that you'll need access to the money in a few years for your down payment. This means you might not want to tie up all of it in investments or accounts with penalties for early withdrawal.
Before making any decisions, you may want to consult with a financial advisor who can take a closer look at your overall financial situation and help you make the best decision. | ### Human
Hi there! I am in my late 20s and my parents have decided to gift me 45K for a future down payment. They want me to find my own place and start paying for mortgages as soon as possible. I plan to focus on getting a new job in 2023 and won't start home searching until late 2023 / early 2024. My question is, what would be the best way to handle the $45K cash? As a newbie in /personalfinance, I am not sure if there's a better way than deposit them in my AMEX online savings account with a 3.3% APY.
Thank you and happy new year everyone!
### Assistant
Happy New Year! That's a generous gift from your parents, and it's great to see you're thinking ahead about the best way to manage it.
You have a couple of options depending on your risk tolerance and financial goals.
1. **High-yield savings account:** This is the safest option, and it seems like you're already considering it. An APY of 3.3% is excellent for a savings account. The money would be easily accessible and FDIC insured, which means you wouldn't risk losing it. This is a good option if you want to ensure the full amount will be available when you're ready to buy a home.
2. **Certificates of Deposit (CDs):** If you don't need access to the cash for a while, you could consider putting the money in a CD. CDs typically offer higher interest rates than savings accounts, but your money is locked away until the CD matures (anywhere from a few months to a few years).
3. **Invest in the market:** If you're willing to take on a bit of risk, you could consider investing some of the money in a diversified portfolio of stocks and bonds. This could potentially give you a higher return than a savings account or CD, but it also comes with the risk that you could lose money.
4. **Pay down debt:** If you have any high-interest debt, it could be beneficial to use some of the money to pay this down. The interest you're paying on the debt is likely higher than what you'd earn in a savings account or CD.
5. **Contribute to a retirement account:** You could also consider contributing some of the money to a retirement account, like a Roth IRA. This would give the money a chance to grow over time, and you could withdraw the contributions (but not the earnings) without penalty if you needed them for your down payment.
Remember, it's always a good idea to have an emergency fund in place before investing or tying up your money. In your case, it's also important to keep in mind that you'll need access to the money in a few years for your down payment. This means you might not want to tie up all of it in investments or accounts with penalties for early withdrawal.
Before making any decisions, you may want to consult with a financial advisor who can take a closer look at your overall financial situation and help you make the best decision.<eos_token> |
10028z9 | Does anyone know of a 401k calculator that also takes after tax contributions into account? All the ones I have found online only do the math up to the max pre tax contribution limit. | It seems that many mainstream 401k calculators may not have the feature to include after-tax contributions. However, some sophisticated financial planning software might have this option. For instance, software like WealthTrace, Quicken, or Personal Capital may provide more customizable calculations.
Alternatively, you can manually calculate the impact of after-tax contributions. Here's a simple way to do it:
1. Calculate how much you plan to contribute after-tax each year.
2. Assume a reasonable rate of return (say, 5-7% annually).
3. Multiply your contribution by 1 plus the assumed rate of return, then raise it to the power of the number of years until you retire.
4. Repeat this for each year you plan to make contributions, and sum up all these amounts.
This will give you a rough estimate of your 401k balance at retirement, including after-tax contributions.
Remember, it's advised to consult with a financial advisor to understand the implications of pre-tax and after-tax contributions to your 401k. | ### Human
Does anyone know of a 401k calculator that also takes after tax contributions into account? All the ones I have found online only do the math up to the max pre tax contribution limit.
### Assistant
It seems that many mainstream 401k calculators may not have the feature to include after-tax contributions. However, some sophisticated financial planning software might have this option. For instance, software like WealthTrace, Quicken, or Personal Capital may provide more customizable calculations.
Alternatively, you can manually calculate the impact of after-tax contributions. Here's a simple way to do it:
1. Calculate how much you plan to contribute after-tax each year.
2. Assume a reasonable rate of return (say, 5-7% annually).
3. Multiply your contribution by 1 plus the assumed rate of return, then raise it to the power of the number of years until you retire.
4. Repeat this for each year you plan to make contributions, and sum up all these amounts.
This will give you a rough estimate of your 401k balance at retirement, including after-tax contributions.
Remember, it's advised to consult with a financial advisor to understand the implications of pre-tax and after-tax contributions to your 401k.<eos_token> |
10024zn | I did look, so apologies for another FSA question. I need to finish the purchases today, and I’m the dummy who put it off.
I have a little money left to spend, and an FSA card that Amazon recognizes for those kinds of expenses. There are specific items I want, that I think they should be listed as FSA/HSA eligible (filters for a CPAP machine, for example) but they are not.
Similarly, I’d like a blood pressure monitor, but there are some models listed as eligible, and some that aren’t; the one I want isn’t eligible and the card rejects the purchase. Weird.
1) is Amazon the true decider of what is eligible vs what isn’t? A personal bp monitor is a personal bp monitor, regardless of manufacturer, right?
2) Assuming I make the purchase with a personal account and then request reimbursement, what happens if the item(s) exceed the remaining balance - will I get at least reimbursed to the balance, or only to the items that stay under? Ie if I purchase 101.00 (including sales tax) of items but only have 99.00 in the balance, will I be reimbursed 99, or something less, or not at all on a single receipt?
Happy new year all, thank you. | Happy New Year! No worries about the questions, that's what I'm here for!
1) While Amazon does have a list of FSA/HSA eligible items, they are not the ultimate decider. The IRS determines the eligibility of these items. That being said, each FSA administrator can impose additional restrictions on what is and isn't eligible. So, a blood pressure monitor would typically be considered a qualifying medical device, but the specific model might not be listed as eligible on Amazon due to these restrictions or possibly due to a lack of necessary documentation from the manufacturer.
2) If you make a purchase with a personal account and then request reimbursement, the amount you get reimbursed will depend on your FSA balance. If you have $99 in your FSA and you submit a claim for $101, you will receive a reimbursement of $99 as that's all the money available in your FSA. However, it's important to ensure the items you're purchasing are indeed eligible for reimbursement before doing so.
As always, keep all your receipts and explanations of benefits associated with your FSA expenses. You may need them for your records or in case of an audit. It's also a good idea to check with your FSA administrator to confirm the eligibility of items and the process for reimbursement. | ### Human
I did look, so apologies for another FSA question. I need to finish the purchases today, and I’m the dummy who put it off.
I have a little money left to spend, and an FSA card that Amazon recognizes for those kinds of expenses. There are specific items I want, that I think they should be listed as FSA/HSA eligible (filters for a CPAP machine, for example) but they are not.
Similarly, I’d like a blood pressure monitor, but there are some models listed as eligible, and some that aren’t; the one I want isn’t eligible and the card rejects the purchase. Weird.
1) is Amazon the true decider of what is eligible vs what isn’t? A personal bp monitor is a personal bp monitor, regardless of manufacturer, right?
2) Assuming I make the purchase with a personal account and then request reimbursement, what happens if the item(s) exceed the remaining balance - will I get at least reimbursed to the balance, or only to the items that stay under? Ie if I purchase 101.00 (including sales tax) of items but only have 99.00 in the balance, will I be reimbursed 99, or something less, or not at all on a single receipt?
Happy new year all, thank you.
### Assistant
Happy New Year! No worries about the questions, that's what I'm here for!
1) While Amazon does have a list of FSA/HSA eligible items, they are not the ultimate decider. The IRS determines the eligibility of these items. That being said, each FSA administrator can impose additional restrictions on what is and isn't eligible. So, a blood pressure monitor would typically be considered a qualifying medical device, but the specific model might not be listed as eligible on Amazon due to these restrictions or possibly due to a lack of necessary documentation from the manufacturer.
2) If you make a purchase with a personal account and then request reimbursement, the amount you get reimbursed will depend on your FSA balance. If you have $99 in your FSA and you submit a claim for $101, you will receive a reimbursement of $99 as that's all the money available in your FSA. However, it's important to ensure the items you're purchasing are indeed eligible for reimbursement before doing so.
As always, keep all your receipts and explanations of benefits associated with your FSA expenses. You may need them for your records or in case of an audit. It's also a good idea to check with your FSA administrator to confirm the eligibility of items and the process for reimbursement.<eos_token> |
100245w | I am currently putting money each pay in to a savings account for my son, but the interest is minimal. Should I put this into a PA 529 or a high yield savings account? This money will be for him later in life naturally. | Both a 529 plan and a high yield savings account have their own unique advantages and considerations.
A PA 529 plan is a tax-advantaged savings plan designed specifically for future education costs (K-12 tuition, post-secondary, etc.). The funds in the account grow tax-free and withdrawals for qualified educational expenses are also tax-free. Moreover, depending on your state, you might also be eligible for state income tax deductions for your contributions.
However, the funds in a 529 plan are meant to be used for educational expenses. If the money is withdrawn for non-educational expenses, it will be subject to income tax and an additional 10% federal tax penalty on earnings.
On the other hand, a high-yield savings account is more flexible. It isn't tied to educational expenses, so it can be used for anything. While it doesn't have the same tax advantages as a 529 plan, it might provide a slightly higher interest rate than a regular savings account, depending on the bank.
In conclusion, if you are sure that the funds will be used for your son's education, a 529 plan might be more beneficial due to its tax advantages. But, if you're unsure about the purpose of the funds, or if you think they might be used for non-educational expenses, a high-yield savings account would give you more flexibility.
It's also worth noting that you can use a combination of both. You might consider speaking to a financial advisor to determine the best plan considering your specific circumstances. | ### Human
I am currently putting money each pay in to a savings account for my son, but the interest is minimal. Should I put this into a PA 529 or a high yield savings account? This money will be for him later in life naturally.
### Assistant
Both a 529 plan and a high yield savings account have their own unique advantages and considerations.
A PA 529 plan is a tax-advantaged savings plan designed specifically for future education costs (K-12 tuition, post-secondary, etc.). The funds in the account grow tax-free and withdrawals for qualified educational expenses are also tax-free. Moreover, depending on your state, you might also be eligible for state income tax deductions for your contributions.
However, the funds in a 529 plan are meant to be used for educational expenses. If the money is withdrawn for non-educational expenses, it will be subject to income tax and an additional 10% federal tax penalty on earnings.
On the other hand, a high-yield savings account is more flexible. It isn't tied to educational expenses, so it can be used for anything. While it doesn't have the same tax advantages as a 529 plan, it might provide a slightly higher interest rate than a regular savings account, depending on the bank.
In conclusion, if you are sure that the funds will be used for your son's education, a 529 plan might be more beneficial due to its tax advantages. But, if you're unsure about the purpose of the funds, or if you think they might be used for non-educational expenses, a high-yield savings account would give you more flexibility.
It's also worth noting that you can use a combination of both. You might consider speaking to a financial advisor to determine the best plan considering your specific circumstances.<eos_token> |
10023cs | Hi Everyone,
I just started a new job and have some questions on where I should put my 401k allocations. I was hoping to put some in VTSAX and SP500 index funds, but I'm not sure which ones they are and how much of a percentage I should put in each. If you could point me in the right direction, I would greatly appreciate it. I'm 44, with about 100k in securities and just 36k in 401k as I have been overseas for the last 15 years. Would like to do a RothIRA but I think I make too much money to do that. Here are the fund names:
Target Date Income Fund
Target Date 2025 Fund
Target Date 2030 Fund
Target Date 2035 Fund
Target Date 2040 Fund
Target Date 2045 Fund
Target Date 2050 Fund
Target Date 2055 Fund
Target Date 2060 Fund
Target Date 2065 Fund
Short-Term Fixed Income Fund
Stable Value Fund
Government Inflation-Protected Bond Fund
Core Bond Fund
Intermediate Bond Fund
High Yield Bond Fund
Large Cap Value Index Fund
Large Cap Value Fund
S&P 500 Index Fund
Large Cap Growth Index Fund
Large Cap Growth Fund
S&P MidCap 400 Index Fund
Small Cap Index Fund
Small Cap Core Fund
Small Cap Blend Fund
International Large Cap Value Fund
International Large Cap Index Fund
International Small Cap Index Fund
Emerging Market Equity Index Fund
JPMorgan Chase Common Stock Fund
&#x200B;
Thanks in advance! | Hello,
Considering your age and the amount you have in securities and 401k, you should aim for a diversified portfolio with a mix of stocks and bonds that aligns with your risk tolerance and time horizon.
Here's a simplified breakdown for you:
1. **S&P 500 Index Fund**: This fund is similar to VTSAX as it tracks large-cap U.S companies. VTSAX, however, tracks the entire US stock market, including small, mid, and large-cap companies. If you want to mimic VTSAX, you could consider allocating a portion to the S&P MidCap 400 Index Fund and Small Cap Index Fund as well. You might consider putting a significant portion here, say 50-60% of your 401k.
2. **Target Date Fund**: This is a fund that automatically adjusts the mix of stocks and bonds over time. The fund is managed to become more conservative as it approaches a specific retirement date. You might choose your target date fund based on your expected retirement age. For instance, if you're 44 now and plan to retire at 65, the Target Date 2042 Fund would be close. If such a fund isn't available, you might consider the Target Date 2040 or 2045 Fund.
3. **Bond Funds**: You can allocate some portion to bond funds to balance the risk from stock funds. You can consider Core Bond Fund, Government Inflation-Protected Bond Fund, or Stable Value Fund for this purpose. You might consider putting 20-30% of your 401k here.
4. **International Funds**: To add some global diversity to your portfolio, you could invest a portion in the International Large Cap Index Fund and Emerging Market Equity Index Fund. You could allocate 10-20% of your 401k here.
To start, you could have a ratio of 60% stocks (with a mix of large-cap, mid-cap, and small-cap), 20% bonds, and 20% international. However, it's important to regularly review and adjust these percentages based on your personal circumstances and market conditions.
As for the Roth IRA, you're correct that there are income limits to contribute directly. However, you might be able to contribute to a Traditional IRA and then convert it to a Roth IRA, a process known as a "backdoor Roth IRA".
Please consider this as a general guideline. It's important to have a detailed discussion with a financial advisor who can provide personalized advice based on a thorough understanding of your financial situation, risk tolerance, and retirement goals. | ### Human
Hi Everyone,
I just started a new job and have some questions on where I should put my 401k allocations. I was hoping to put some in VTSAX and SP500 index funds, but I'm not sure which ones they are and how much of a percentage I should put in each. If you could point me in the right direction, I would greatly appreciate it. I'm 44, with about 100k in securities and just 36k in 401k as I have been overseas for the last 15 years. Would like to do a RothIRA but I think I make too much money to do that. Here are the fund names:
Target Date Income Fund
Target Date 2025 Fund
Target Date 2030 Fund
Target Date 2035 Fund
Target Date 2040 Fund
Target Date 2045 Fund
Target Date 2050 Fund
Target Date 2055 Fund
Target Date 2060 Fund
Target Date 2065 Fund
Short-Term Fixed Income Fund
Stable Value Fund
Government Inflation-Protected Bond Fund
Core Bond Fund
Intermediate Bond Fund
High Yield Bond Fund
Large Cap Value Index Fund
Large Cap Value Fund
S&P 500 Index Fund
Large Cap Growth Index Fund
Large Cap Growth Fund
S&P MidCap 400 Index Fund
Small Cap Index Fund
Small Cap Core Fund
Small Cap Blend Fund
International Large Cap Value Fund
International Large Cap Index Fund
International Small Cap Index Fund
Emerging Market Equity Index Fund
JPMorgan Chase Common Stock Fund
&#x200B;
Thanks in advance!
### Assistant
Hello,
Considering your age and the amount you have in securities and 401k, you should aim for a diversified portfolio with a mix of stocks and bonds that aligns with your risk tolerance and time horizon.
Here's a simplified breakdown for you:
1. **S&P 500 Index Fund**: This fund is similar to VTSAX as it tracks large-cap U.S companies. VTSAX, however, tracks the entire US stock market, including small, mid, and large-cap companies. If you want to mimic VTSAX, you could consider allocating a portion to the S&P MidCap 400 Index Fund and Small Cap Index Fund as well. You might consider putting a significant portion here, say 50-60% of your 401k.
2. **Target Date Fund**: This is a fund that automatically adjusts the mix of stocks and bonds over time. The fund is managed to become more conservative as it approaches a specific retirement date. You might choose your target date fund based on your expected retirement age. For instance, if you're 44 now and plan to retire at 65, the Target Date 2042 Fund would be close. If such a fund isn't available, you might consider the Target Date 2040 or 2045 Fund.
3. **Bond Funds**: You can allocate some portion to bond funds to balance the risk from stock funds. You can consider Core Bond Fund, Government Inflation-Protected Bond Fund, or Stable Value Fund for this purpose. You might consider putting 20-30% of your 401k here.
4. **International Funds**: To add some global diversity to your portfolio, you could invest a portion in the International Large Cap Index Fund and Emerging Market Equity Index Fund. You could allocate 10-20% of your 401k here.
To start, you could have a ratio of 60% stocks (with a mix of large-cap, mid-cap, and small-cap), 20% bonds, and 20% international. However, it's important to regularly review and adjust these percentages based on your personal circumstances and market conditions.
As for the Roth IRA, you're correct that there are income limits to contribute directly. However, you might be able to contribute to a Traditional IRA and then convert it to a Roth IRA, a process known as a "backdoor Roth IRA".
Please consider this as a general guideline. It's important to have a detailed discussion with a financial advisor who can provide personalized advice based on a thorough understanding of your financial situation, risk tolerance, and retirement goals.<eos_token> |
10020a3 | Hey guys - I’m looking to upgrade my savings account to an HYSA. After doing some digging, there’s two finalists that I like:
Marcus by Goldman Sachs
- 3.3% APY
- large institution that I have positive experiences with already
- funds available same day if need be
- fabulous UX (I work in UX so that’s important to me)
SalemFive Direct
- 4.1% APY
- small bank in Salem, MA that I’ve never worked with before (hence my anxiety about utilizing them as my emergency fund)
- funds are slow to transfer if in a pinch and they don’t even have an app
So really for me it’s a question of which route is better for me…I feel way more comfortable with GS but that 4.1% SalemFive offers is tempting. I tend to be risk averse to a fault so I’m trying to gauge what’s worth taking a little more risk here. Btw, they’re both FDIC insured with no minimum length requirement for either account.
What would you recommend? | Choosing between the two would depend on your priority.
If your main concern is the highest possible return on your savings, the SalemFive Direct HYSA clearly has a higher interest rate. It's worth noting that while the funds take longer to transfer, they are still accessible. The lack of an app might be inconvenient, but it doesn't prevent you from accessing or managing your account.
On the other hand, if convenience, speed of fund access, and a better user experience are important factors for you, then Marcus by Goldman Sachs might be the better choice. The lower interest rate is a trade-off for better service and easier account management.
Since your comfort level is also a factor, and you've had positive experiences with Goldman Sachs before, this option might be more appealing to you.
Remember, these rates aren't fixed and can change over time. What's most important is to choose the account that best fits your needs and comfort level. Please consult with a financial advisor before making any decisions. | ### Human
Hey guys - I’m looking to upgrade my savings account to an HYSA. After doing some digging, there’s two finalists that I like:
Marcus by Goldman Sachs
- 3.3% APY
- large institution that I have positive experiences with already
- funds available same day if need be
- fabulous UX (I work in UX so that’s important to me)
SalemFive Direct
- 4.1% APY
- small bank in Salem, MA that I’ve never worked with before (hence my anxiety about utilizing them as my emergency fund)
- funds are slow to transfer if in a pinch and they don’t even have an app
So really for me it’s a question of which route is better for me…I feel way more comfortable with GS but that 4.1% SalemFive offers is tempting. I tend to be risk averse to a fault so I’m trying to gauge what’s worth taking a little more risk here. Btw, they’re both FDIC insured with no minimum length requirement for either account.
What would you recommend?
### Assistant
Choosing between the two would depend on your priority.
If your main concern is the highest possible return on your savings, the SalemFive Direct HYSA clearly has a higher interest rate. It's worth noting that while the funds take longer to transfer, they are still accessible. The lack of an app might be inconvenient, but it doesn't prevent you from accessing or managing your account.
On the other hand, if convenience, speed of fund access, and a better user experience are important factors for you, then Marcus by Goldman Sachs might be the better choice. The lower interest rate is a trade-off for better service and easier account management.
Since your comfort level is also a factor, and you've had positive experiences with Goldman Sachs before, this option might be more appealing to you.
Remember, these rates aren't fixed and can change over time. What's most important is to choose the account that best fits your needs and comfort level. Please consult with a financial advisor before making any decisions.<eos_token> |
1001yy6 | Hi there PF — Throwaway account here. I was hoping to get some alternative perspectives on a major home expansion that I am considering undertaking and the future implications/options of having a significant amount of equity tied up in my primary residence.
Situation: Current home is too small for long term growing family. A major expansion project to increase the square footage by ~30% would allow us to stay long term. Highly desirable area, so the neighborhood certainly can ‘support’ it from a long term financial perspective. Moving is not seriously being considered as we love the neighborhood and replacing current mortgage with a new jumbo at todays rates is not ideal.
Current home value : ~$1.3M
Current mortgage: $950k @ 2.99% 30Yr Fixed
Project Cost: $450k. Post completion, house priced at conservative comps will likely be worth ~$1.8M.
Dilemma: I am highly considering funding this project in cash. Bonus points for thoughts on financing options for ~$100k of the total project costs. Assuming all cash, I would have about $690k (original down payment + project cost) tied up in my primary residence. Emergency funds, retirements savings, and post tax savings accounts wouldn’t be impacted by funding in cash.
The main opportunity cost is having the project funds as dry powder for other investment opportunities.
(1) What potential downsides should I consider with having so much equity tied up in my main residence? And is this crazy 🙂
(2)Any future options for liquidity of that equity other than a HELOC or refinance?Really would hate to replace the 2.99 with a larger note at a much higher rate…
Really appreciate any thoughts on this scenario and happy to answer questions! | Hello there! You've asked some very thoughtful questions. Here's some guidance for you:
1) Having a significant amount of equity tied up in your primary residence:
Equity in your home is not a liquid asset and it's not an asset you can easily turn into cash should you need it. While home equity can be a great way to finance big-ticket items like a home expansion, it does come with risks. Home values can fluctuate based on factors beyond your control, and if the market declines, you could lose a significant portion of your investment.
Another point to consider is that having too much of your net worth tied up in your property could limit your ability to invest in other areas, such as the stock market or retirement funds, which may offer higher returns. It also limits your ability to diversify your portfolio, which is typically a key strategy in managing financial risk.
2) Options for liquidity:
You mentioned HELOCs and refinancing, which are indeed the most common ways to tap into home equity. Another option you might consider is a home equity loan, which works like a traditional loan and comes with a fixed interest rate.
Another option could be a cash-out refinance. This is where you refinance your mortgage for more than you owe and take the difference in cash. You would still have just one monthly mortgage payment. However, you'd be extending the amount of time that you're in debt for your home.
Finally, you could consider a reverse mortgage, but these are typically recommended for older homeowners who have no other sources of income. They can be risky and come with high fees.
3) Funding the project:
While you have the option to fund this project in cash, which would not affect your emergency funds and retirement savings, it might make sense to explore financing options. This could help you preserve cash for other potential investment opportunities or unforeseen expenses.
A home equity loan or a construction loan could be potential options for financing the $100k of the total project costs. The rates on these loans are often quite competitive, especially if you have a good credit score.
Please note that while these are general guidelines, it's always best to consult with a professional financial advisor who can look at your individual circumstances and provide advice tailored to your needs. | ### Human
Hi there PF — Throwaway account here. I was hoping to get some alternative perspectives on a major home expansion that I am considering undertaking and the future implications/options of having a significant amount of equity tied up in my primary residence.
Situation: Current home is too small for long term growing family. A major expansion project to increase the square footage by ~30% would allow us to stay long term. Highly desirable area, so the neighborhood certainly can ‘support’ it from a long term financial perspective. Moving is not seriously being considered as we love the neighborhood and replacing current mortgage with a new jumbo at todays rates is not ideal.
Current home value : ~$1.3M
Current mortgage: $950k @ 2.99% 30Yr Fixed
Project Cost: $450k. Post completion, house priced at conservative comps will likely be worth ~$1.8M.
Dilemma: I am highly considering funding this project in cash. Bonus points for thoughts on financing options for ~$100k of the total project costs. Assuming all cash, I would have about $690k (original down payment + project cost) tied up in my primary residence. Emergency funds, retirements savings, and post tax savings accounts wouldn’t be impacted by funding in cash.
The main opportunity cost is having the project funds as dry powder for other investment opportunities.
(1) What potential downsides should I consider with having so much equity tied up in my main residence? And is this crazy 🙂
(2)Any future options for liquidity of that equity other than a HELOC or refinance?Really would hate to replace the 2.99 with a larger note at a much higher rate…
Really appreciate any thoughts on this scenario and happy to answer questions!
### Assistant
Hello there! You've asked some very thoughtful questions. Here's some guidance for you:
1) Having a significant amount of equity tied up in your primary residence:
Equity in your home is not a liquid asset and it's not an asset you can easily turn into cash should you need it. While home equity can be a great way to finance big-ticket items like a home expansion, it does come with risks. Home values can fluctuate based on factors beyond your control, and if the market declines, you could lose a significant portion of your investment.
Another point to consider is that having too much of your net worth tied up in your property could limit your ability to invest in other areas, such as the stock market or retirement funds, which may offer higher returns. It also limits your ability to diversify your portfolio, which is typically a key strategy in managing financial risk.
2) Options for liquidity:
You mentioned HELOCs and refinancing, which are indeed the most common ways to tap into home equity. Another option you might consider is a home equity loan, which works like a traditional loan and comes with a fixed interest rate.
Another option could be a cash-out refinance. This is where you refinance your mortgage for more than you owe and take the difference in cash. You would still have just one monthly mortgage payment. However, you'd be extending the amount of time that you're in debt for your home.
Finally, you could consider a reverse mortgage, but these are typically recommended for older homeowners who have no other sources of income. They can be risky and come with high fees.
3) Funding the project:
While you have the option to fund this project in cash, which would not affect your emergency funds and retirement savings, it might make sense to explore financing options. This could help you preserve cash for other potential investment opportunities or unforeseen expenses.
A home equity loan or a construction loan could be potential options for financing the $100k of the total project costs. The rates on these loans are often quite competitive, especially if you have a good credit score.
Please note that while these are general guidelines, it's always best to consult with a professional financial advisor who can look at your individual circumstances and provide advice tailored to your needs.<eos_token> |
1001vpz | I'm curious how folks here process saving for college and balancing out giving children options/risks of over-saving/valuing private colleges. My partner and I are fortunate to have a good, steady income and are currently maxing out our tax-protected retirement accounts. Both of us were also lucky enough to graduate college without any significant debt (one of us did four years at a private college, the other did 2 years private/2 years public) thanks to parental support. On one hand, we want to give our children the same opportunities but on the other hand, looking at projected costs it's hard to fathom that a private school is providing adequate value for the cost difference.
I've put together a projection in excel to help us plan for our 529. If our kids follow the standard timeline (i.e. no gap years), they'd be entering school in Fall of '29 and Fall of '31.
By my projections the future value for four years of private school would be around $440K (1st child) and $465K (2nd child) while public school would be around $160K/$170K. If we were to fully fund each child's 529 to plan for private school and they attended public school instead, each of the 529s would be left with over $325K after graduation.
Obviously there are options for that leftover money including graduate school, rolling it over into their own children's (or other relative's) 529s, and now rolling it into Roth's, but on the other hand, $650K is a significant chunk of change to wrap up in an account where non-qualified withdrawals are penalized.
Anyway, I'm not exactly asking "what should I do" because I realize this is about personal values more than anything else, but I am curious - how have other people processed making this decision? | Planning for your children's education is a significant financial decision and you're right that it involves personal values as much as it does financial strategy. Here are a few strategies to consider:
1. **Balanced Approach**: Instead of fully funding the 529 plan for the projected cost of a private college, you could aim to save enough to cover the cost of a public university. This provides a base level of support. If your children decide to attend a more expensive school, they could supplement your support with scholarships, grants, work-study, or loans.
2. **Flexible Saving**: Consider saving in accounts that provide more flexibility. While 529 plans offer tax advantages for education expenses, they impose penalties for non-qualified withdrawals. A Roth IRA, on the other hand, can be used both for retirement and education expenses. Contributions can be withdrawn at any time without tax or penalty, and earnings can be withdrawn tax-free for education expenses.
3. **Encourage Independence**: Encourage your children to take ownership of their education. They can contribute to their 529 plan from part-time jobs, apply for scholarships, or choose a more affordable school. This can instill a sense of responsibility and help them appreciate their education more.
4. **Consider Post-Graduate Studies**: If you're concerned about over-saving, remember that 529 plans can be used for post-graduate studies. If your children decide to pursue further education, having funds set aside can be a big help.
5. **Transfer Funds**: Unused money in a 529 plan can be transferred to another beneficiary. If one child does not use all the money, it can be used for the other child or even for a future grandchild.
6. **Invest in Your Retirement**: It's often said that you can borrow for college, but you can't borrow for retirement. If you're already maxing out your retirement accounts and have extra to save, you might consider putting more into a taxable brokerage account. This gives you more flexibility and can provide a safety net for unforeseen expenses.
Remember, everyone's situation is unique. It's also a good idea to discuss your plans with a financial advisor who can provide personalized advice based on your circumstances and goals. | ### Human
I'm curious how folks here process saving for college and balancing out giving children options/risks of over-saving/valuing private colleges. My partner and I are fortunate to have a good, steady income and are currently maxing out our tax-protected retirement accounts. Both of us were also lucky enough to graduate college without any significant debt (one of us did four years at a private college, the other did 2 years private/2 years public) thanks to parental support. On one hand, we want to give our children the same opportunities but on the other hand, looking at projected costs it's hard to fathom that a private school is providing adequate value for the cost difference.
I've put together a projection in excel to help us plan for our 529. If our kids follow the standard timeline (i.e. no gap years), they'd be entering school in Fall of '29 and Fall of '31.
By my projections the future value for four years of private school would be around $440K (1st child) and $465K (2nd child) while public school would be around $160K/$170K. If we were to fully fund each child's 529 to plan for private school and they attended public school instead, each of the 529s would be left with over $325K after graduation.
Obviously there are options for that leftover money including graduate school, rolling it over into their own children's (or other relative's) 529s, and now rolling it into Roth's, but on the other hand, $650K is a significant chunk of change to wrap up in an account where non-qualified withdrawals are penalized.
Anyway, I'm not exactly asking "what should I do" because I realize this is about personal values more than anything else, but I am curious - how have other people processed making this decision?
### Assistant
Planning for your children's education is a significant financial decision and you're right that it involves personal values as much as it does financial strategy. Here are a few strategies to consider:
1. **Balanced Approach**: Instead of fully funding the 529 plan for the projected cost of a private college, you could aim to save enough to cover the cost of a public university. This provides a base level of support. If your children decide to attend a more expensive school, they could supplement your support with scholarships, grants, work-study, or loans.
2. **Flexible Saving**: Consider saving in accounts that provide more flexibility. While 529 plans offer tax advantages for education expenses, they impose penalties for non-qualified withdrawals. A Roth IRA, on the other hand, can be used both for retirement and education expenses. Contributions can be withdrawn at any time without tax or penalty, and earnings can be withdrawn tax-free for education expenses.
3. **Encourage Independence**: Encourage your children to take ownership of their education. They can contribute to their 529 plan from part-time jobs, apply for scholarships, or choose a more affordable school. This can instill a sense of responsibility and help them appreciate their education more.
4. **Consider Post-Graduate Studies**: If you're concerned about over-saving, remember that 529 plans can be used for post-graduate studies. If your children decide to pursue further education, having funds set aside can be a big help.
5. **Transfer Funds**: Unused money in a 529 plan can be transferred to another beneficiary. If one child does not use all the money, it can be used for the other child or even for a future grandchild.
6. **Invest in Your Retirement**: It's often said that you can borrow for college, but you can't borrow for retirement. If you're already maxing out your retirement accounts and have extra to save, you might consider putting more into a taxable brokerage account. This gives you more flexibility and can provide a safety net for unforeseen expenses.
Remember, everyone's situation is unique. It's also a good idea to discuss your plans with a financial advisor who can provide personalized advice based on your circumstances and goals.<eos_token> |
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