If you're getting even a decent company match, then you're still up overall on any money you put in. Plus the dollar cost averaging part everybody mentioned.
So halfway through this year I'll be getting married and moving into a house we are having built. Half the year as single, half married, plus wedding plus first time home buyer has me thinking I should consult a professional about my taxes for 2016. What would you guys recommend?
I would recommend seeing a psychologist. OK, just kidding. I don't think what you described would be outside the realm of a turbotax or something similar. However, I've always thought the cost of a CPA was fairly cheap ... so maybe check around? If you have enough itemized deductions to overcome the Alternative Minimum Tax (AMT) I would use a CPA, if not then I would probably use TurboTax.
Just go to a reputable CPA. Without knowing anything about your wife's income, it shouldn't be more than ~$300 and it will save you at least a couple hours and headaches. And fuck turbotax, you'll probably end up paying $60 minimum when all is said and done (for error ridden software) and you won't have the peace of mind or real support in the event of an audit.
Im so glad my job hinges on OPEC cutting production. I really trust these guys to do the right thing and not put their own interests in the way.
In my biased opinion, CPAs are definitely worth it (I am one but don't do public accounting anymore) Now for a real example, I'll pick on H&R Block. My friend has used Block for a couple years now. Last year, he owed taxes to Oklahoma when he filed. He paid those taxes and payments made to states are deductible on your federal return if you itemize, which he did again for this year. Block says they pull all relevant information from the prior year to your current year return, but they for some reason failed to pull in this state tax amount to his tax return this year. Had he not known to check for that, he would've missed out on an additional $1,000 deduction.
I used to always see great stuff from people who went to H&R block type places then came to us the following year "for a real cpa" - best one was a balance sheet that didn't balance (No idea how their system even allowed that on an 1120s) and on the same return someone fell asleep on the 0 key and keyed in 30,000 tax expense instead of 30. Nothing will beat the chiro who tried to write off his penis extender, but he wasn't an H&R Block guy- just a whacko
One of my good friends was a manager at Jackson Hewitt for a while and her stories were ridiculous. She said these people would come in who had barely earned anything and we're getting huge refunds due to kids and credits and blah blah, but they shop the different services as if they're negotiating for a salary. "This dude down the street said he can get me $8K, what can you offer?"
Hi, I am looking to buy a couple books to learn about personal investing. I need to begin with something that reads as if I'm 5 years old. Any suggestions? I'd like to start putting a portion of each paycheck into something like stocks for example, but I'm not sure the best approach. Can one of you beautiful gentlemen assist me in my quest to be able to retire one day? Thanks, Jake
Define personal investing. Are you looking to figure out what type of retirement account to put your money into first? Are you looking to learn how to analyze stocks?
Sorry for my ignorance here, but retirement account? I have a 401K at work that's maxed and matched by my company. So I guess both. I am looking at trying to get into buying some stocks too. So analyzing too.
I think the first part of "A random walk down Wall Street" will give you the initial information on how and why to put money in a retirement account (and which one). It will then turn you off from individual stock selection for the rest of the book. A good intro into company analysis is "One Up On Wall Street" by Peter Lynch. You will see how he thinks about the companies you see in your every day life.
So I'm young, fairly new to investing, and trying to start up a new retirement account... As a general strategy, I'm looking at SP500 index funds, and I'm leaning towards starting a traditional IRA with Vanguard. I would like to invest in the SP500, but they don't seem to offer VFINX their investor class index fund ($3k initial investment) under their IRA options. I see that they offer VFIAX their admiral class ($10k initial investment), but that's more than I'm willing to invest. The third option that they offer is their ETF - VOO (~$176/share). I will most likely be looking to max out my contribution annually. The ETF doesn't allow fractional shares, which seems to be the biggest drawback for my situation. Am I missing something as to why VFINX would not be an option under a tIRA account with them? Any devil's advocate opinions as to what alternatives I should explore?
If I only bought one share, that would be about 3% of $5500. I would be looking to buy essentially 2.6 shares per month to hit $5500 annually.
1. Max out your 401k for you and your wife 2. Max out Roth IRAs for both you and your wife 3. Any excess money after that, passive investing is the way to go. Active investing is generally a bad idea for most people, unless your name is Warren Buffett. Use a robo-advisor like Betterment or wealthfront o select a mixture of stocks and bonds, and don't bother paying much attention to it. Just let it grow without messing with it. Active investing and trying to time the market is no different than gambling. If you're doing it for fun/enjoyment and understand it is gambling, then go right ahead. If you're simply trying to grow wealth for retirement, sit back and let it do its thing. 4. Books: random walk down Wall Street, devil take the hindmost, common sense on mutual funds, millionaire next door are some good options. 5.?????? 6. Profit
I'm not necessarily living paycheck to paycheck, but I would like to invest on a monthly basis since my budget is prepared at a monthly level. I guess my main question is am I missing something as to why they wouldn't offer VFINX as an option under their tIRA account as that would allow me to use dollar cost averaging each month. I'm open to other ideas and vehicles, but that was my initial thought for a basic starting strategy.
do you have a fund that covers your living expenses for 3-6 months if you lost your job or something?
Thanks for info, guys. I looked into this probably about a year ago, but decided I needed to really just get my savings account to a place where if something happened I'm covered. Then I bought a house, my wife needed a new car, etc. my savings suffered a little but I made sure I kept it at an adequate amount. Now I'm ready to start building investments even if smaller amounts to begin with. /no one cares
Numbers 1 and 2 always pop up, and rightfully so,but I have some questions about that. Just doing very simple guesswork here, maxing out two 401ks is $36K right? Two IRAs is another $11K. So $47K per year. Throw in company match and just call it $50K for a round number. But 401ks and IRAs also have income limits right? Like $250K per year or something? What I'm getting at is, if you're young and you're putting $50K per year away, you're going to have a shit ton of money at retirement. So much so that you'd easily be able to retire many years earlier than 65, except that those accounts are both penalized for early withdrawal. If you are making under any income limits but can contribute $50K plus per year, shouldn't some of that go to after-tax non-retirement accounts that can be accessed penalty free prior to your mid 60s? I could be way off, but I've always wondered that.
I would imagine the argument would be if at any time you feel like you've gotten as much as you need in your 401k you could then contribute your whole $50k into a taxable account so why not take advantage of the tax savings now instead of later.
might throw 10k in wealthfront for shits and giggles not the best use of the money but kind of want to trial their system before putting more into it will talk myself in and out of this 10 times before acting
If you want to try betterment instead, let me know and I can PM you a referral. You would get 6 months free out of it.
401Ks do not have income limits. Roth IRAs do, though. watson answered this how I would as well. If it were me, I would want to take advantage and maximize any tax advantage I could. Put it in a Roth or 401K tax-free and let it continue to grow tax-free while you're young. You could always reassess this plan as you're older, if you save enough to retire early and are concerned about early withdrawal penalties.
http://www.thesimpledollar.com/betterment-vs-wealthfront/ There's a good article that goes over both in comparison. Pretty similar overall. Also, am I remembering correctly that you're either a med student or resident, or am I confusing you with someone else? If so, you should spend a lot of time reading whitecoatinvestor.com. It's awesome.
my wifes a resident, will definitely look at that article and yeah have already cruised through that guys book and spent a good bit of time on his site
So I am getting married soon and about to rearrange all of our finances. Got a few investing questions: 1) Both of our employers have matches and we will contribute to get the maximum match. We also have a 25k emergency account in betterment, reserve cash, high yield liquid savings account, no debt, etc. After matching with both of our employers what should be our next move? I have heard max out 401k, max out an IRA, or get into index funds like Vanguard. 2) When people say open a Vanguard account do they simply mean get an IRA through Vanguard or purchase their individual index funds? What is the difference between getting an IRA through Vanguard and selecting those index funds through the IRA as opposed to getting the index funds through Vanguard individually? Just kind of confused on that whole situation. 3) Is the only benefit to an IRA over a 401k is that you can withdraw any of the principle amount at any point without penalty? Just looking for some general investing direction on where to go after I have my match set up, all emergency and monthly accounts good to go, and no debt. TIA
Disclaimer: I'm not a financial guy. I'm fairly new to investing and I've done a ton of reading on the subject recently and can offer an opinion, though. http://www.thesimpledollar.com/roth-ira-vs-401k/ That article does a good job explaining 401k vs Roth IRA. My priority would be: 1. Max out all 401ks. Tax-deferred. Grows tax free. No-brainer. 2. Max out Roth IRAs for you and spouse. You pay with after-tax dollars, giving you tax diversity in retirement with your 401k, allowing you to stay in a lower tax bracket in retirement. If you don't have Roth IRAs, vanguard is a good site, although you'll have to read up on which investments to choose. It's pretty easy, just takes some reading. 3. If you still have money leftover, that's awesome. Invest in stocks/bonds with a cheap roboadvisor like betterment or wealthfront. Or get more hands-on and do it yourself for cheaper through vanguard.
Joystick Izzy you should share what you've been reading and how you came to these conclusions. I would also say if kids could be involved 529 plans could be in order, further tax advantages.
Mainly lots of blog posts and message board posts on whitecoatinvestor.com (geared towards physicians/dentists/etc) and Bogleheads.org. Also listening to some random retirement investing podcasts. 529s are on my radar, because I have kids, but I've got a ton of debt to pay back from dental school, so I don't have a good handle on 529 plans yet, as its lower down the list. I know they can be a good tax break, depending on which state you live in.
34 states offer the contribution to either be partially or fully deductible. Even if you aren't in one of those states that tax free nature of the account is a no brainer. Also, you retain control of the account, unlike other custodial accounts. You can also attribute the account to another family member later. Your son is a genius and goes to school on a full ride? That account you started can be transferred to a grandchild and can be earning tax free that entire time.
My emergency fund can last me a year because I feel if I lose my job I'll enjoy being unemployed too much.
Im pretty sure the kids have to be born already to do the 529, correct? Everytime ive opened one the social security number was required so I had to wait a few weeks after the actual birth. IMO the 529 is one of the best investing tools.
First of all give yourself a pat on your back because you have your shit together. Second I think you are talking about opening a taxable account. Basically its where you will invest your money after maxing out all of your IRA or tax deferred accounts. The only thing I would advise to keep in mind is liquidity. If you invest too much in tax deferred and you get in a cash crunch then you usually have to pay a stiff penalty to get access to that money. Its happened to me before (was able to avoid being forced to use it) but investing in a taxable account isn't all that bad. Like everything else just keep a good balance of tax deferred vs taxable .... and that's kind of an individual preference if you ask me.
You can set it up with you as beneficiary and then transfer it to your kid when it receives a SS#. Im with you, I think its fantastic and rare in its protection and flexibility.