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  1. #341
    Join Date
    Feb 2007
    Location
    Raleigh
    Quote Originally Posted by bundabergdevil View Post
    Listen, if I ask my barkeep to open up an IRA and my financial advisor to open an IPA for me, I know where Iím sending the blame!
    "Prior successes do not guarantee future returns."

    Or something like that.

    [redacted] them and the horses they rode in on.

  2. #342
    Join Date
    Feb 2007
    Location
    Raleigh
    Quote Originally Posted by Tripping William View Post
    No doubt. And devildeac will deserve every bit of it.
    Objection, Counselor.
    [redacted] them and the horses they rode in on.

  3. #343
    Join Date
    Nov 2007
    Location
    Vermont
    Hey, interesting new info on the subject of Index Funds. Big new (and very interesting) article in the latest Bloomberg Business Week concerning index funds. Great agreement among people that index funds are great for investors, but many serious entities are becoming concerned that now too much power is being placed in the hands of the largest fund companies.

    Just looking at the top three: BlackRock, Vanguard, and State Street, these companies now hold roughly $16 trillion (!) in assets, and therefore humongous voting power of the shares therein. I'd never thought about that.
    Put another way, they state that 22% of the shares of a typical S&P 500 companies are held by fund companies.

    And while their investment is passive (just buy and sell according to mkt weighting), they are not powerless. Hence the concern.

  4. #344
    What is a reasonable investment advisor fee these days?

  5. #345
    Quote Originally Posted by mpj96 View Post
    What is a reasonable investment advisor fee these days?
    This was from a large registered investment advisor:

    NewRetailWrapFee_Table.jpg

    I'm probably being petty in another thread.

  6. #346
    Join Date
    Nov 2007
    Location
    Vermont
    It really depends upon what your goals are and what your specific assets are...for some, the fees shown are definitely too high.

  7. #347
    Quote Originally Posted by budwom View Post
    It really depends upon what your goals are and what your specific assets are...for some, the fees shown are definitely too high.
    I know I have beat this drum on this thread a bunch already- should it though?

    Some sort of shared responsibility model makes sense.

    If you lose money on my behalf, why should you get paid if your job is to grow my money?

    If you grow my money, then shouldnít you be entitled to some fair share of that growth?

    Lifeís not that simple, to be sure.

  8. #348
    Quote Originally Posted by fuse View Post
    I know I have beat this drum on this thread a bunch already- should it though?

    Some sort of shared responsibility model makes sense.

    If you lose money on my behalf, why should you get paid if your job is to grow my money?

    If you grow my money, then shouldnít you be entitled to some fair share of that growth?

    Lifeís not that simple, to be sure.
    I would agree with your take based on this...do perpetual motion machines exist? (Answer truthfully while ignoring the fact that Iím working on filing a perpetual motion patent.)





    *Okay, so Iím not but that doesnít stop hundreds of people a year from trying to file them.

    I'm probably being petty in another thread.

  9. #349
    So I switched companies about 6 years ago. I did not move my traditional 401K over when I switched. My rationale was that I liked where it was and I didn't want to put too much of my $ in one place (i.e. did not want my salary and my retirement coming from the same company).

    I've tried to decide what to do with my old 401k ever since. My options are basically:
    1) roll it into my current 401K with my new company.
    2) leave it where it is in my old company's program.
    3) move it into an IRA. I make too much $ to contribute to it, but I've got a wider range of products to invest the $ in.
    4) move it into an annuity of some sort. My wife's FA recommended this b/c I don't have a guaranteed benefit retirement fund, and this would give me some level of certainty in retirement.

    I did start a new 401K with my current company and have been regularly contributing to it at the same rate I was before. I'm a "let it ride" long term investor who prefers cheap fee index funds to higher risk/return funds, but I've got a mix of everything in my portfolio. I like doing dollar cost averaging and being able to ride the market up and down. Since I'm still 20+ years from retirement, I'm not as concerned about my balance month to month. However, option 1) puts everything in one account, where 2) and 3) eliminate any dollar cost averaging. 4) was pushed by my wife's FA as a way to get guaranteed income in retirement regardless of what happens. I get the point, but I feel like there's a catch in there that I'm missing, and my guess is it's the fees.

    I saw some posts upthread that some had looked into these guaranteed benefit Annuities and concluded the fees were just too high. What's your tolerance for fees? Is 1.5% too high? 2.5%?
    "There can BE only one."

  10. #350
    Join Date
    Nov 2007
    Location
    Durham, NC
    Quote Originally Posted by Highlander View Post
    So I switched companies about 6 years ago. I did not move my traditional 401K over when I switched. My rationale was that I liked where it was and I didn't want to put too much of my $ in one place (i.e. did not want my salary and my retirement coming from the same company).

    I've tried to decide what to do with my old 401k ever since. My options are basically:
    1) roll it into my current 401K with my new company.
    2) leave it where it is in my old company's program.
    3) move it into an IRA. I make too much $ to contribute to it, but I've got a wider range of products to invest the $ in.
    4) move it into an annuity of some sort. My wife's FA recommended this b/c I don't have a guaranteed benefit retirement fund, and this would give me some level of certainty in retirement.

    I did start a new 401K with my current company and have been regularly contributing to it at the same rate I was before. I'm a "let it ride" long term investor who prefers cheap fee index funds to higher risk/return funds, but I've got a mix of everything in my portfolio. I like doing dollar cost averaging and being able to ride the market up and down. Since I'm still 20+ years from retirement, I'm not as concerned about my balance month to month. However, option 1) puts everything in one account, where 2) and 3) eliminate any dollar cost averaging. 4) was pushed by my wife's FA as a way to get guaranteed income in retirement regardless of what happens. I get the point, but I feel like there's a catch in there that I'm missing, and my guess is it's the fees.

    I saw some posts upthread that some had looked into these guaranteed benefit Annuities and concluded the fees were just too high. What's your tolerance for fees? Is 1.5% too high? 2.5%?
    I would just roll it into your current 401k, or failing that roll it into an IRA. Are you sure you aren't incurring fees by keeping it with your old company's servicer? I know that was the case for me when I switched jobs (the company covers those fees for employees, but once you leave they don't and the servicer starts charging them to your account balance). It may be different for you, but something to check into.

    I wouldn't do the annuity option, seems like you can get better results with investing with the amount of time you have before retirement.

    *I am NOT an expert or in any way qualified to give this advice, this is a layman's opinion based on my experience researching and dealing with my own retirement options (I'm just a bit younger than you I'm guessing).

  11. #351
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by fuse View Post
    I know I have beat this drum on this thread a bunch already- should it though?

    Some sort of shared responsibility model makes sense.

    If you lose money on my behalf, why should you get paid if your job is to grow my money?

    If you grow my money, then shouldnít you be entitled to some fair share of that growth?

    Lifeís not that simple, to be sure.
    My finances are generally simple (not true for everyone, of course) and I have done my research, put my money in various index funds, some bank CDs, and I don't have to pay anyone anything (thus far).
    I think there should be more seminars available on this topic so that smart folks like the people on this forum gain some knowledge and confidence. Unfortunately, where I live, there are plenty of seminars, all of them hosted by
    people trying to sell you something (e.g. variable annuities, ack) you probably don't want. I enjoy helping friends with the basics, but there are levels of complexity out there I wouldn't touch.

    I also like the concept of the shared responsibility model, but the current model widely in use is highly beneficial to the advisor community, less beneficial to the investor community. I'm not holding my breath waiting for that to change.

  12. #352
    Quote Originally Posted by Highlander View Post

    I've tried to decide what to do with my old 401k ever since. My options are basically:
    1) roll it into my current 401K with my new company.
    2) leave it where it is in my old company's program.
    3) move it into an IRA. I make too much $ to contribute to it, but I've got a wider range of products to invest the $ in.
    4) move it into an annuity of some sort. My wife's FA recommended this b/c I don't have a guaranteed benefit retirement fund, and this would give me some level of certainty in retirement.
    Before rolling into an IRA, you might want to research backdoor Roth conversions. A legal way to get money into a Roth IRA without tax consequences.

  13. #353
    Quote Originally Posted by davec View Post
    Before rolling into an IRA, you might want to research backdoor Roth conversions. A legal way to get money into a Roth IRA without tax consequences.
    There would definitely be tax consequences.

  14. #354
    Quote Originally Posted by Highlander View Post
    3) move it into an IRA. I make too much $ to contribute to it, but I've got a wider range of products to invest the $ in.
    Why canít you contribute to an IRA? Your income level should only affect deductibility. If itís not deductible, then Iíd backdoor Roth the contributions.

  15. #355
    Quote Originally Posted by davec View Post
    Before rolling into an IRA, you might want to research backdoor Roth conversions. A legal way to get money into a Roth IRA without tax consequences.
    I do not think that means what you think it means. 🤣

  16. #356
    Quote Originally Posted by Jeffrey View Post
    There would definitely be tax consequences.
    If he makes too much for a deductible IRA contribution, he can still make a non-deductible contribution. That money goes into the IRA on an after-tax basis. You then convert the IRA into a Roth IRA. Since the contribution was after-tax, no taxes are owed. This only works if you have no other IRA assets. Otherwise, the IRS treats conversions on a pro-rata basis with regard to pre-tax and after-tax money.

  17. #357
    Quote Originally Posted by davec View Post
    If he makes too much for a deductible IRA contribution, he can still make a non-deductible contribution. That money goes into the IRA on an after-tax basis. You then convert the IRA into a Roth IRA. Since the contribution was after-tax, no taxes are owed. This only works if you have no other IRA assets. Otherwise, the IRS treats conversions on a pro-rata basis with regard to pre-tax and after-tax money.
    I thought the OP was asking about what to do with their old 401k? If they convert their old 401k to a Roth IRA (via a backdoor Roth conversion), then there will definitely be tax consequences. Nevertheless, with 20 more years until retirement, it might be prudent. Of course, it's impossible to say without a lot more information about the OP's unique financial situation.

    No doubt, the OP can make Roth IRA contributions, regardless of their income level, as I stated above. IMO, these are two different issues, which is why I made two separate posts above.

    I keep making the same mistake, I really should stop posting on this thread.

  18. #358

    Post

    Quote Originally Posted by Jeffrey View Post
    I thought the OP was asking about what to do with their old 401k? If they convert their old 401k to a Roth IRA (via a backdoor Roth conversion), then there will definitely be tax consequences. Nevertheless, with 20 more years until retirement, it might be prudent. Of course, it's impossible to say without a lot more information about the OP's unique financial situation.

    No doubt, the OP can make Roth IRA contributions, regardless of their income level, as I stated above. IMO, these are two different issues, which is why I made two separate posts above.

    I keep making the same mistake, I really should stop posting on this thread.
    Converting the old 401k to a Roth would certainly generate a tax bill. I was mentioning the backdoor Roth as a possibility since the OP did not seem to currently have any IRA assets. No worries!

  19. #359
    Join Date
    Nov 2007
    Location
    Durham, NC
    Apologies if an answer to this is buried here somewhere, and I realize the answer may not be totally straightforward, but for a 401k invested for aggressive growth, what would be some target expense ratios? Are there some general ranges that would map to "surprisingly low/great deal", "pretty typical", and "my god you shouldn't be paying such high fees/expenses"?

  20. #360
    Join Date
    Nov 2007
    Location
    Vermont
    Quote Originally Posted by Acymetric View Post
    Apologies if an answer to this is buried here somewhere, and I realize the answer may not be totally straightforward, but for a 401k invested for aggressive growth, what would be some target expense ratios? Are there some general ranges that would map to "surprisingly low/great deal", "pretty typical", and "my god you shouldn't be paying such high fees/expenses"?
    a lot of guys will charge you 1%; I'd go with a suitable index fund for a tiny fraction of that, that's just me.

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