Investing General Discussion

Fogel

Fogel

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Araysar said:
I dont know. Its hard to justify sloughing off $7100 into HSA, $19500 into 401K and $6,000 into IRA every year at my age with current massive market returns, even when you account for tax free savings and lowering your AGI and tax liability. Thats $33K/year that I cant access until I need medical care or I'm ready to retire without heavy penalties. Great. But what can I do with 33K in 2021 stock market?

Outside of this hospital visit to have a baby delivery neither of us had any major medical issues and we don't anticipate any in the foreseeable future (yeah yeah, anything can happen, but you could say that for anything)

Yes you can invest the funds in all these accounts but outside of retirement and medical spending you cant use it for anything else without massive penalties.
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I don't know about HSA or 401k, but I'm pretty sure you can access your principle contribution from your IRA anytime you want, you just can't touch anything generated from your principle without paying a tax penalty
 
TJT

TJT

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Araysar said:
I dont know. Its hard to justify sloughing off $7100 into HSA, $19500 into 401K and $6,000 into IRA every year at my age with current massive market returns, even when you account for tax free savings and lowering your AGI and tax liability. Thats $33K/year that I cant access until I need medical care or I'm ready to retire without heavy penalties. Great. But what can I do with 33K in 2021 stock market?

Outside of this hospital visit to have a baby delivery neither of us had any major medical issues and we don't anticipate any in the foreseeable future (yeah yeah, anything can happen, but you could say that for anything)

Yes you can invest the funds in all these accounts but outside of retirement and medical spending you cant use it for anything else without massive penalties.
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I guess mileage may vary. I am one of the cheapest fuckers I know. I have loads of disposable income despite maxing out all that shit. The Rona has made me much more productive and I earn a lot more money because of it. Praise be.

I have a very expensive hobby but nickle and diming expenses honestly add up more comparatively. Tangent but it seems everyone I know blows tons of money on uber eats and shit. We're talking $10k a year or more and they don't even realize it.

Not trying to brag or any of that dumb shit.
 
Araysar

Loser Araysar

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Fogel said:
I don't know about HSA or 401k, but I'm pretty sure you can access your principle contribution from your IRA anytime you want, you just can't touch anything generated from your principle without paying a tax penalty
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Its the same penalty for all retirement accounts, 10% on top of it getting taxed as regular income

Retirement Plans FAQs regarding IRAs Distributions Withdrawals | Internal Revenue Service

Get answers to common questions about withdrawals or distributions from your IRA retirement plan.
www.irs.gov www.irs.gov

Thats my problem with all these tax deferred accounts, yes you make money on them with tax deferred savings, employer match, lowering tax liability and investment -- but the reqs to be able to access your own money are so restrictive that it takes literally a global epidemic (getting infected with COVID) to pull your money out without a penalty. Great if youre 65 and dying from cancer, pointless if you're 40 and healthy.

I was looking at my 401K options this morning about how to get my own money out and found out that I have none unless I'm experiencing absolute hardship.

The only other option is to take a loan against my 401K, but the institution charges me a 4.25% interest plus a loan processing fee, plus regular loan maintenance fee.

Imagine the fucking nerve of charging me 4.25% interest to lend me my own fucking money to me. I almost put my fist through the monitor.
 
Araysar

Loser Araysar

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Khane said:
The interest goes directly into your 401(k), not to the bank
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And does the loan origination fee and the recurring "loan maintenance" fee to lend me my own money to me also go directly into my 401K?
 
Khane

Khane

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Araysar said:
And does the loan origination fee and the recurring "loan maintenance" fee to lend me my own money to me also go directly into my 401K?
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I don't know what kind of fucked up 401(k) your company offers you but that kind of thing I guess would be 401(k) specific. When I first bought my house I had a total, catastrophic failure of a retaining wall during a storm that flooded my basement and I need to borrow against my 401(k) for rebuild, abatement, and repairs. I didn't have any fees (I was under the impression that would actually be illegal?) and the interest just went directly back to my own 401(k).

Sounds like you have a shit plan. Which of course, happens a lot. Most 401(k) plans are pretty lousy.
 
Araysar

Loser Araysar

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Khane said:
I don't know what kind of fucked up 401(k) your company offers you but that kind of thing I guess would be 401(k) specific. When I first bought my house I had a total, catastrophic failure of a retaining wall during a storm that flooded my basement and I need to borrow against my 401(k) for rebuild, abatement, and repairs. I didn't have any fees (I was under the impression that would actually be illegal?) and the interest just went directly back to my own 401(k).

Sounds like you have a shit plan. Which of course, happens a lot. Most 401(k) plans are pretty lousy.
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Total return in 2020 using their highly aggressive investment program (95% stocks, 5% bonds) in one of the biggest bull markets in history
1611436101237.png


I literally could have stuffed all my cash into TQQQ, turned off my brain, made 10x that return and still come out ahead even with foregoing tax deferred savings, employer match, etc.
 
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Sanrith Descartes

Sanrith Descartes

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Khane said:
There's also that tiny issue of 401(k) plans being wildly different. My current company has probably the worst set of abysmal funds available to choose from in their 401(k) plans, offers no matching, and the plan itself has an insane maintenance fee of 2%. But that comes with the territory of being employed by a consulting firm. High salary, shit benefits.
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I actually got involved with this at my company. The problem is the people in a company assigned to pick 401k programs know Jack shit about any of it. When we changed providers I made it mandatory that it include an option for a low cost S&P 500 fund. Low and behold it has one good option and that's the one it has.
 
Kiroy

Kiroy

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Araysar said:
Total return in 2020 using their highly aggressive investment program (95% stocks, 5% bonds) in one of the biggest bull markets in history
View attachment 330649

I literally could have stuffed all my cash into TQQQ, turned off my brain, made 10x that return and still come out ahead even with foregoing tax deferred savings, employer match, etc.
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mines 13 with vangaurd's targeted retirement funds, which i'll keep maxing every years with my retirements accounts. Going to start shoving an extra couple grand a month into growth etfs though.
 
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Araysar

Loser Araysar

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Kiroy said:
mines 13 with vangaurd's targeted retirement funds, which i'll keep maxing every years with my retirements. Going to start shoving an extra couple grand a month into growth etfs though.
Click to expand...

These faggots are literally charging me money to manage it 10x worse than I could on my own.
 
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Sanrith Descartes

Sanrith Descartes

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If your 401k has shitty options, see if it has the option to self direct into equities. Fidelity netbenefits 401k has something called brokeragelink. Half the cash in your 401k can be slid into the brokeragelink which let's you buy stocks, ETFs etc. 50% is better than nothing.
 
Araysar

Loser Araysar

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Sanrith Descartes said:
If your 401k has shitty options, see if it has the option to self direct into equities. Fidelity netbenefits 401k has something called brokeragelink. Half the cash in your 401k can be slid into the brokeragelink which let's you buy stocks, ETFs etc. 50% is better than nothing.
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No I already checked and posted about it here. There is no self directed option with TransAmerica
 
Sanrith Descartes

Sanrith Descartes

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Araysar said:
No I already checked and posted about it here. There is no self directed option with TransAmerica
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Then the only other option is to run the IRS calculator and see if you qualify to deduct any money in an IRA. If you do, hit the 401k up to the free money max and shove the rest into the IRA. Also, as shitty as it sounds, calculate you tax savings on the money in the 401k. Even though the return is ass, the tax savings needs to be calculated. If your tax bracket is high enough the tax savings might make up for the shitty return.
 
Jysin

Jysin

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Sanrith Descartes said:
If your 401k has shitty options, see if it has the option to self direct into equities. Fidelity netbenefits 401k has something called brokeragelink. Half the cash in your 401k can be slid into the brokeragelink which let's you buy stocks, ETFs etc. 50% is better than nothing.
Click to expand...

My company has their 401k through Fidelity and I have far greater than that in Brokeragelink. At least 75% or more IIRC.
 
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Furry

Furry

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Araysar said:
Thats my problem with all these tax deferred accounts, yes you make money on them with tax deferred savings, employer match, lowering tax liability and investment -- but the reqs to be able to access your own money are so restrictive that it takes literally a global epidemic (getting infected with COVID) to pull your money out without a penalty. Great if youre 65 and dying from cancer, pointless if you're 40 and healthy.
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You can withdraw without penalty, but its generally tedious. SEPP and a couple similar withdraws are the only way. That's why I like my IRA. I could go grab enough to buy a nice car from that tomorrow if I needed.

Of course, when it comes time to retire, you could get a check to 'rollover' your account and put on your fuzzy hat and return to the motherland.
 
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Khane

Khane

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If you take SEPP withdrawals don't you have to continue those until you reach 59.5? You like that you could choose to buy a car and then have to continue withdrawing from your IRA and pay taxes at whatever your current salary rate is until you reach 59.5?
 
Locnar

Locnar

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I know we've discussed 401ks and other tax deffered accounts before but:

If your 401k plan is that bad, you guys may have a good case against them. Walmart was sued for having a shit 401k plan and were forced to rectify it.

Araysar , you say you are in some plan that has 5 percent in bonds, then you posted a shitty yearly return. Why any of it in bonds? Does your 401k at least have a low fee S&P index fund? If not, they need to be sued.

About not having access to your money. MOST 401k's have decent 401k loan programs so you can access money quick and basically free (you pay the interest back to yourself).

Also, you don't have to wait until 65 to access your money without penalty, if you retire early you can start withdrawing early. I think starting at age 55. Your HSA money can be accessed for health (obviously) but then for any reason you want after 65.

Unlike what someone posted above, i'd prioritize:

-401k first (to take advantage of match, and also its more time restricted and dependent on your actual paychecks in the calender year so more a hassle to max)
-HSA second because its fantastic overall tax savings but you can add money to it to max it straight from your bank account, and you can do it up until like April the next year.
-RothIRA last, like the HSA you can contribute straight from personal funds and have until like Spring of the next year.

I'm like Sanrith, very frugal and try to be as efficient as I can. Luckily my employer has a good 401k and HSA plan and also allows me to self direct my 401k investments which i've recently begun to do and im up 20 percent so far this year (thanks spacs). But even if it did not allow me to self direct, I could not pass up on the tax savings. I would just consider my 401k/HSA as my "safe bet" money and go wild with what was left over in my non-retirement accounts to balance it. (which is what i've been doing actually).

Its not prudent to yolo your entire net worth anyways.
 
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