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Old 11-07-2012, 12:52 AM   #26
bunker
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Quote:
Originally Posted by superccs View Post
aren't 401K's also sort of exwife proof?
Nope, fair game in a divorce.
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Old 11-07-2012, 12:59 AM   #27
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i get that 5% match ROTH.. too sick
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Old 11-07-2012, 07:54 AM   #28
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Originally Posted by Atomic Playboy View Post
Once you get everything in place, you shouldn't need to micromanage it, just sit back and let it build.
I thinks thats bad advice - or at least unclear. While you don't necessarily need to micromanage it I wouldn't just sit back and let it build. You still need to pay attention - even with the retirement date funds. They have adjusted their allocation philosophy in the past and doing so may put the fund outside of the area you want.

If you choose to do more than a self adjusting retirement fund you would need to make sure the allocation 1) stays within your desired allocation when impacted by market fluctuations and 2) adjusts with your changing allocation needs as you get older.

Its your future - take the time to do it right.

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Originally Posted by Ksyder View Post
I just read on the site that it is "self directed" 401k... I don't know if it is because that is cheaper or what... or more flexibility for the investor... I don't know... this is fairly new for me...
You will want to see if there is an additional cost for 'self directed'. It has been my experience that there is. Honestly - with ~60 funds I would hope that there should be at least a few good options that would remove the need for 'self directed'

Saving for retirement is a very important process. I would recommend spending time figuring out what you want to do and why. There are several good options of relatively simple portfolios that you could mimic and manage with not too much effort:

http://www.bogleheads.org/wiki/Lazy_Portfolios

A good mix of options without the high fees of active mutual funds
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Last edited by Exterous; 11-07-2012 at 08:00 AM.
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Old 11-07-2012, 07:59 AM   #29
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I used the Navy's Thrift Savings Plan which is kinda similar.

First off, it immediately doubles your investment. There is absolutely no other legitimate savings which does that. On top of which the interest is usually better than most other safe investments.
Also, no tax until you take it out. And if you are smart you will only withdraw what you need to survive so as to pay minimum taxes.
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Old 11-07-2012, 08:05 AM   #30
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Quote:
Originally Posted by bunker View Post
Nope, fair game in a divorce.
401(k)s are (mostly) lawsuit proof but not ex-wife proof.
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Old 11-07-2012, 09:29 AM   #31
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What's the most in dollar amount one can put into a 401K per year? Is there a hard limit or is it a percentage of income?

How does someone who is self-employed set up a 401K?
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Old 11-07-2012, 09:50 AM   #32
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You cannot invest in it soon enough. If you save in your 20s, you can almost double your retirement funds simply by compounding interest. The worst part is that if you don't earn enough to keep up with the inflation rates, your wasting money.

So....save in a 401k and/or get a traditional or Roth IRA (around $5k limit per year). The more you do now, the better off you'll be later. The best part about a 401k is that it will pay you an annuity and you can move its balance to bonds so you'll continue to earn, even while you draw from it.
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Old 11-07-2012, 10:10 AM   #33
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Quote:
Originally Posted by madoka View Post
What's the most in dollar amount one can put into a 401K per year? Is there a hard limit or is it a percentage of income?

How does someone who is self-employed set up a 401K?
Its $17,500 per person for 2013 or $23,000 if you are 50 or older

Self Employed can setup 401ks through most of the major plan providers (Vanguard, Fidelity etc). I believe there are additional fees you must pay though and those probably vary based on provider in terms of cost and structure
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Last edited by Exterous; 11-07-2012 at 10:12 AM.
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Old 11-07-2012, 10:16 AM   #34
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Quote:
Originally Posted by Vic Vega View Post
No, it's a huge scam.
Especially if there's no matching.

Stick that cash in a mattress or something.
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Old 11-07-2012, 11:25 AM   #35
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atm, our 401k sucks. hopefully it will get better next year.
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Old 11-07-2012, 11:31 AM   #36
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Especially if there's no matching.

Stick that cash in a mattress or something.
Hopefully that mattress can help with inflation...
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Old 11-07-2012, 11:45 AM   #37
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Hopefully that mattress can help with inflation...
Sure it can, it's an air mattress. I just let a bit of air out every year to give the money room to grow.
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Old 11-07-2012, 01:52 PM   #38
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I was thinking about all those people that lost a significant chunk of their 401k in the financial collapse and you're natural gut tells you they aren't worth it, as some people lost up the 50% of their 401k worth

However then I started to thinking about it more and realized that that 50% that was lost was likely all from gains in the stock market and/or from employee matching. I'd like to know the percentage of 401k worth that actually came from cash contribution, vs interest accrual and employee matching. I'm guessing at the end of the term of a 401k, the actual percentage of cash contributed to it might only amount to 20-40% of the total value. So in this case even if you took a 50% hit, you are still showing a net gain compared to keeping that money in the bank the whole time. Not only that, but if you can wait a few years, the market is bound to rebound.

I think the key thing is to keep in mind the actual cash value you've contributed into your 401k. Also if there is no employer matching I think there are much better options. I'm planning on contributing up to the amount my employer will match, and then have an IRA on the side that I would like ultimately to turn into a self-directed IRA and invest in real estate
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Old 11-07-2012, 01:59 PM   #39
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My company doesn't match but it pays 100% of premium on health care. O.o

I don't see the point of 401k with the company, but I'm still debating the traditional/ROTH IRA.
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Old 11-07-2012, 02:19 PM   #40
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It's free money. For every dollar I put in up to 5% of my salary, my employer puts in $2. Even if I got a 0% return it would still be worth it because I am essentially tripling my money just from the employer contribution.
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Old 11-07-2012, 02:29 PM   #41
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It's free money. For every dollar I put in up to 5% of my salary, my employer puts in $2. Even if I got a 0% return it would still be worth it because I am essentially tripling my money just from the employer contribution.
Wow that's really sweet for your employer to contribute double.
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Old 11-07-2012, 02:47 PM   #42
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If your company offers any kind of 401k matching, it's basically them giving you extra money for free.
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Old 11-07-2012, 03:35 PM   #43
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Wow that's really sweet for your employer to contribute double.
Yeah but as he said only up to 5 percent.
In the Navy it started at 20 and after a couple years it was 100 percent (which is actually doable for a month at a time while underway).
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Old 11-07-2012, 03:39 PM   #44
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You can have mine if you want. I heard they suck so I'm quitting my 401(k).
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Old 11-07-2012, 03:41 PM   #45
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Yeah but as he said only up to 5 percent.
In the Navy it started at 20 and after a couple years it was 100 percent (which is actually doable for a month at a time while underway).
Damn nice - I'm jealous. Even if it's only up to 5%, that's still the equivalent of a 5% bonus to your pay.
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Old 11-07-2012, 03:50 PM   #46
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I was thinking about all those people that lost a significant chunk of their 401k in the financial collapse and you're natural gut tells you they aren't worth it, as some people lost up the 50% of their 401k worth

However then I started to thinking about it more and realized that that 50% that was lost was likely all from gains in the stock market and/or from employee matching. I'd like to know the percentage of 401k worth that actually came from cash contribution, vs interest accrual and employee matching. ...
Matching and tax savings could be more than half of it, but the gains shouldn't be ignored -- if you hadn't put the money into the 401k you could have invested it elsewhere.

BUT: if you didn't panic during the collapse, you didn't lose 50%.

The people who lost 50% did things like panic-selling all of their stock fund shares in the 401k then moved the money to money funds. That then earned 0% when the market recovered.

The S&P 500 is back where it was before the collapse. If you had an S&P or large cap or Target fund and left it alone you would be fine. And if you kept putting money into stock funds during late 2008 through 2010 you would have some very nice gains on that money.

The stock funds I bought in 2009 are up ~55% since then, plus the money from dividends.
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Old 11-07-2012, 03:53 PM   #47
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Matching and tax savings could be more than half of it, but the gains shouldn't be ignored -- if you hadn't put the money into the 401k you could have invested it elsewhere.

BUT: if you didn't panic during the collapse, you didn't lose 50%.

The people who lost 50% did things like panic-selling all of their stock fund shares in the 401k then moved the money to money funds. That then earned 0% when the market recovered.

The S&P 500 is back where it was before the collapse. If you had an S&P or large cap or Target fund and left it alone you would be fine. And if you kept putting money into stock funds during late 2008 through 2010 you would have some very nice gains on that money.

The stock funds I bought in 2009 are up ~55% since then, plus the money from dividends.
Sad to say I know some people that did this, even after I advised them not to. They cashed out of the market during the crisis, then when the market recovered, bought into it again, then complained about how much money they lost. Personally I actually increased my 401k contribution during the crash, because basically during that time you're buying into it at bargain basement prices.
/facepalm
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Old 11-07-2012, 04:24 PM   #48
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Originally Posted by Scarpozzi View Post
You cannot invest in it soon enough. If you save in your 20s, you can almost double your retirement funds simply by compounding interest. The worst part is that if you don't earn enough to keep up with the inflation rates, your wasting money.

So....save in a 401k and/or get a traditional or Roth IRA (around $5k limit per year). The more you do now, the better off you'll be later. The best part about a 401k is that it will pay you an annuity and you can move its balance to bonds so you'll continue to earn, even while you draw from it.
This is why Ill be I'll be deferring the maximum($17500) into my 457b starting next year. I'll probably do that for 10 years to build a sizable nest egg. I gotta make up for the no saving in my 20s. I'll be 31 in May.

Fortunately, doing so also substantially decreases my student loan payments.

Last edited by Wreckem; 11-07-2012 at 04:26 PM.
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Old 11-07-2012, 04:27 PM   #49
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People who lose money on 401ks are idiots who sell when they should be buying. Smart people had huge gains in their 401k from the financial collapse.
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Old 11-07-2012, 06:07 PM   #50
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Originally Posted by jagec View Post
Sure it can, it's an air mattress. I just let a bit of air out every year to give the money room to grow.





Quote:
Originally Posted by Wreckem View Post
People who lose money on 401ks are idiots who sell when they should be buying. Smart people had huge gains in their 401k from the financial collapse.
I've recently been reading various Bogle-oriented materials. My thinking a year ago, in response to the "financial downturns can be a good thing, because then you're buying shares cheap!" line that the 401k rep would say. All I could think was "Yeah, but you have to shed a lot of value to get there."
Now the thinking is more for the long-term. I suggested that he include that in his sales pitch for those (like me) who didn't see that end of it. The idea of course is that the downturn will be temporary, and the market's history shows that this is quite likely to happen. So yeah, your 401k will go to hell, for awhile. Maybe a year or two or three or four. Then the market will probably start to recover.

I would also say, not necessarily "smart." Maybe "uninformed" instead? Apparently, the tendency is for people to freak out and sell after the market has gone way down. Then, still nervous, they don't get back in until after it's gone back up. The reaction is emotional, and not long-term.
I have seen the light! Though it's about 40 years away.



Quote:
Originally Posted by Juddog View Post
Sad to say I know some people that did this, even after I advised them not to. They cashed out of the market during the crisis, then when the market recovered, bought into it again, then complained about how much money they lost. Personally I actually increased my 401k contribution during the crash, because basically during that time you're buying into it at bargain basement prices.
/facepalm
A relative did this too, though I think he lucked out a bit on the timing and had a slight gain, at least at face value. So he says, anyway.
I would like to know though where he sold and then got back in again, to see if he did in fact have a face value gain, and also to see how much more stock he could have picked up had he just stayed in and kept contributing the whole time.
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