Retirement Funds

[dm123]

To understand the background to my question. It is "free money" if you match, so your still reducing you're "take home pay" and depositing it into an account that's constantly losing.

I'm still not understanding - how does your employer match work? They only match a very small % of what you put in? (I understand usually employers match some percent up to X% of pay which is essentially free money - so for example on 100K income they'll match (say 50% on 5% of income) then the first 5K you put in - out the gate you're getting $2,500 free money.)

Regarding staying the course or not I would echo what earlier posters said with the caveat on where are you in life? I.E. if you have another long term (10 years or more? very hard to know what long term actually is) to wait for it to recoup and grow more than I view it (Like I think @aygart said) as funds being on sale and try to pick up more than usual until market starts rising again. If you're planning on tapping into these funds soon (retirement? Simcha iyh? etc) then you probably should've been moving into "less volatile" investments like bonds etc for a while - although I think that's what target date funds usually do.

Ultimately what I guess I'm saying is (depending on what you actually mean by minor employer match) deduct up to the match to get the "free money" and if you think you shouldn't be in that Target fund then move it into a fund you're more comfortable with.

[emp]

To understand the background to my question. It is "free money" if you match, so your still reducing you're "take home pay" and depositing it into an account that's constantly losing.

You might benefit from the article "Bob, the worlds worst [Market] Timer". This is relevant even if you have no employer match, but adding employer match won't change the idea.

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Of course "bob" and his investing is fictitious however the concept they are conveying is real. You can't time the market, even if you "time" the market to the worst possible time you will end up coming out far better then not being in the market at all (or being in a much lower risk investment which would be yielding much lower returns and therefore missing out when the market starts doing better). Stay consistent, in the market, and balanced.

[ushdadude]

You might benefit from the article "Bob, the worlds worst [Market] Timer". This is relevant even if you have no employer match, but adding employer match won't change the idea.

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Of course "bob" and his investing is fictitious however the concept they are conveying is real. You can't time the market, even if you "time" the market to the worst possible time you will end up coming out far better then not being in the market at all (or being in a much lower risk investment which would be yielding much lower returns and therefore missing out when the market starts doing better). Stay consistent, in the market, and balanced.

bottom line, everyone needs a written financial plan they can follow but nobody actually has one.

[yitzgar]

Does it make sense to convert a traditional IRA to a Roth now?

[herb]

Does it make sense to convert a traditional IRA to a Roth now?

depends on what your tax bracket is amongst other factors

[dm123]

Does it make sense to convert a traditional IRA to a Roth now?

Depending on your situation if you're moving pretax funds into a Roth you probably will have a tax bill, that being said if you were planning on doing it anyway, if your portfolio is down its likely a good time to consider it to minimize the taxable amount.

[yitzgar]

Depending on your situation if you're moving pretax funds into a Roth you probably will have a tax bill, that being said if you were planning on doing it anyway, if your portfolio is down its likely a good time to consider it to minimize the taxable amount.

Is there a minimum you need to convert, or does it need to be the whole amount? Do you also pay ss tax on the conversion?

[dm123]

Is there a minimum you need to convert, or does it need to be the whole amount?

You can do any amount (excluding RMD if you are 72 & up). (See page 28)

You can withdraw all or part of
the assets from a traditional IRA and reinvest them (within
60 days) in a Roth IRA.

Do you also pay ss tax on the conversion?

You pay SS Tax on pre-tax income (including employee contributions to 401k) in the year earned, so I'm pretty sure they don't double tax it when you withdraw/convert out of the 401k. Although be aware, a conversion does bump your taxable income and if you are collecting SS income may cause some or all of that income to be taxable.

[yitzgar]

You can do any amount (excluding RMD if you are 72 & up). (See page 28)
You pay SS Tax on pre-tax income (including employee contributions to 401k) in the year earned, so I'm pretty sure they don't double tax it when you withdraw/convert out of the 401k. Although be aware, a conversion does bump your taxable income and if you are collecting SS income may cause some or all of that income to be taxable.

Thanks. I'm not quite that old yet

[Yossirs]

Does anyone have the link to dans deals about the Roth IRA?
Thanks

[CountValentine]

To understand the background to my question. It is "free money" if you match, so your still reducing you're "take home pay" and depositing it into an account that's constantly losing.

Some is free like USPS for the first 1%.

[Definitions]

Is the Schwab Target 2060 Index Fund a good choice for investing a Roth IRA? I think it's called SWYNX

[ushdadude]

Is the Schwab Target 2060 Index Fund a good choice for investing a Roth IRA? I think it's called SWYNX

In general targeted funds from a reputable brokerage firm are good. Technically you can get it or cheaper by buying the individual components yourself. But this is a great set it and forget it strategy. As long as you don't buy high and sell low

[lcm]

Is there a general concensus for the best set and forget roth ira account?
To open with vanguard, td, Schwab, or fidelity?
Thanks

[ushdadude]

Is there a general concensus for the best set and forget roth ira account?
To open with vanguard, td, Schwab, or fidelity?
Thanks

You mean account or investment?
All the big guys are similar. Best set and forget investment is either total market index funds or targeted retirement fund if you want some more diversity

[lcm]

You mean account or investment?
All the big guys are similar. Best set and forget investment is either total market index funds or targeted retirement fund if you want some more diversity

Was asking both.
Anyone of the big guys have big advantage over others?
Ty for info on the investment. I guess more diversity = lower risk = lower returns?

[ushdadude]

Was asking both.
Anyone of the big guys have big advantage over others?
Ty for info on the investment. I guess more diversity = lower risk = lower returns?

Depends what you plan to do.
Fidelity is easier for backdoor ROTH conversions. Vanguard seems to be the most popular though.


Targeted retirement funds have more asset classes but aren't necessarily much lower risk. If they have increased bonds than "= lower risk = lower returns"

for example Vanguard Target Retirement 2055 Fund which is popular has about 10% bonds and it increases bond allocation (lowering risk) as you get closer to retirement.

[lcm]

Depends what you plan to do.
Fidelity is easier for backdoor ROTH conversions. Vanguard seems to be the most popular though.


Targeted retirement funds have more asset classes but aren't necessarily much lower risk. If they have increased bonds than "= lower risk = lower returns"

for example Vanguard Target Retirement 2055 Fund which is popular has about 10% bonds and it increases bond allocation (lowering risk) as you get closer to retirement.

Thank you very much for the clear info,
Much appreciated.

Sounds like I should choose fidelity if I want to do backdoor Roth conversions, although it sounds like it's also possible with others.
Or choose vanguard if I want to follow the herd

Thanks for clarifying how targeted works.

[ushdadude]

Thank you very much for the clear info,
Much appreciated.

Sounds like I should choose fidelity if I want to do backdoor Roth conversions, although it sounds like it's also possible with others.
Or choose vanguard if I want to follow the herd

Thanks for clarifying how targeted works.

I'm sorry. I confused two things. You can easily do backdoor Roth with vanguard. What is harder is a roll over from tIRA into a solo 401k to avoid pro rata rules

[ExGingi]

Is there a general concensus for the best set and forget roth ira account?
To open with vanguard, td, Schwab, or fidelity?
Thanks

Are you asking about the account or the specific investment?

I have Schwab and Fidelity (and E*Trade, and IBKR) and my overall preference between those is Fidelity.