I've started using the PayPal Savings option versus my bank. At 4.3% APY, it's over double what my credit union offers. I still have roughly 25 years until retirement, but I'll take all the free money I can find in the time being.
Stock Market & Retirement Planning
Talk to your financial advisors about CDs and if they are a good fit for you. You can get them at / through your banks. Interest rates vary depending on how much money you commit and the length of time you let the bank hold your money, but generally they are of a different magnitude than straight savings accounts. The accounts are FDIC insured up to 250K. You can pay an early withdrawal penalty to access the money if an emergency happens and you have to access the capital.
That depends on what you consider "financial literacy". They teach compound interest so that should tell you where our education system is in terms of being inadequate.
TLuke
Well-known member
Along with the advice given here, please ensure your financial accounts are secure. The wife’s inherited credit union account was hacked from the beginning of January until yesterday. Fortunately, the credit union called and discussed rather odd transactions from her member share account (not the CD’s) to the tune of $37K (Tractor Supply and Hard Rock Cafe). The only way she could access that account was through the ATM or direct transfer from the credit union. Likely the fraudsters hacked into the credit union’s server, stole her routing/account information, printed checks or other methods with that information, and spent the funds. She was not the first one to be hacked; others from the same credit union are in the same boat. 3-4 weeks to recover funds. Needless to say, Mrs. TLuke feels very violated.
- Change your passwords regularly using strong passwords. Consider a password manager, e.g. iCloud Keychain.
- Remove your credit card information from online shopping sites.
- Check statements (banks, CU’s, investments) regularly for unusual activity.
There’s always someone out there lurking to take your hard earned money.
- Change your passwords regularly using strong passwords. Consider a password manager, e.g. iCloud Keychain.
- Remove your credit card information from online shopping sites.
- Check statements (banks, CU’s, investments) regularly for unusual activity.
There’s always someone out there lurking to take your hard earned money.
That's for sure, never store your credit card info on a site.
Or at the very least, use multi factor authentication to give some extra protection
Oh for sure
TLuke
Well-known member
To make your day, Google “Andrew Biggs Alicia Munnell 401K” and their proposal (Center for Retirement Research at Boston College) to eliminate tax advantaged (pre-tax) 401K/IRA accounts to bolster Social Security. I hope their proposal does not gain traction. The pre-tax advantage was the main reason I was able to accumulate a healthy retirement account. I could not have done it only using post-tax dollars.
You may not understand the benefits of the roth 401K/IRA but you will when you eventually have to pay taxes on all of the capital gains and income from your retirement account
TLuke
Well-known member
Yes, you are correct.
I have recovered all the losses to my 401k from about 18(?) months ago. I’m back to being paper rich
Sounds crazy, but actually the real benefit is deferring money when you are in a higher bracket assuming a lower bracket in retirement. Had you been in the exact same tax bracket the whole time, it mathematically wouldn't have made a difference if you made pre-tax or post tax contributions! Key is proper planning to always be taking advantage of any tax arbitrage (or at least where we *think* rates may end up). And yes - always max your deferrals.
I have seen other criticize your advisor but you have not provided enough information to tell you if your advisor is giving good advice or not. What are your other assets, what it is your projected income requirements, what is your pension income, are you going to do Roth conversions, do you have legacy goals? What are your views on SS - do you need the income, do you look at as longevity insurance, do you have longevity it your family? If you tell me when you will die, I can calculate to the penny when you should take SS and what to do with it.
This is not the correct way to look at it. None of that takes into account the fact that all of the capital gains and income you accumulate in a roth account will be completely tax free at retirement.
It 100% does... Simplest possible scenario. Say you're in the 24% bracket and we take one year worth of deferrals to look at - we will assume $30k deferral pre-tax at age 50 and plan to retire at 65 with an 8% annualized return.
You defer 30k pre tax, it grows at 8% a year to $88,116. You withdraw at 65, pay your 24% tax ($21,148), and you net $66,968 on that one contribution.
That after tax equivalent: 30k pre tax at 24% would yield an after tax equivalent contribution of $22,800. That $22,800 grows at 8% for 15 years to $66,968 and comes out tax free.
Has anyone looked at these new AI investing platforms?
Like the Fidelity Robo-Advisor or the AI-based stock picking platforms?
Yes? I've seen small things about then, mostly IG spam ads and am curious, I'm wanting to use something automated that could grow something on the side, seems like AI could cut some of the work out and lower some of the downside.
Yeah, I think there are a couple different options out there... haven't used either.
The "robo-advisor" options are typically more digital recommendations by a brokerage on how to create a balanced and diversified portfolio based on their market outlook and your risk tolerance. Typically pulled together from a handful of that brokerage's own funds.
I bet the adds you are seeing are more for the AI-based stock picking tools. They all claim strong returns... no idea how good they actually are. You really only needed exposure to a handful of stocks last year to really beat the indexes. Could be a fun side account if you wanted to see what recommendations they were coming up with. Would probably want to add some of your own research as well vs blindly following.
Nvidia continues to be a wild ride. My investment is up over 1,300%. I may pull the initial investment off the table and then let it ride for the foreseeable future. Fully appreciate current valuation is difficult to justify.
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Take out the initial investment and let it run....I know you know you have to have "Prudent investment discipline".
Several flaws and convenient assumptions in that analysis
Don't do it. Dig into the earnings report and the guidance and you will see quite plainly that it will continue for a while
Haha I agree very simple analysis. Just illustrating a prior comment on pre vs post. Curious where the flaw is?
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The math is fine as far as you took it, but it's not reflective of real-life conditions. Add in the real-life variables you left out like capital gains, inflation, bracket creep, and changes to the tax code. Then layer the fact that with traditional IRAs you have flexibility on when and how much you withdraw or convert to a Roth to create a taxable event, while if you start with a Roth you are locked in.