Retirement Funds

[aygart]

I remember reading that Vanguard has some kind of tax advantage for their mutual funds througha patent but that could be just for their S&p 500 fund I'm not sure

anyone else know anything about it?

Not applicable to a retirement account

[Shmulie]

Not applicable to a retirement account

True, I missed that part...

[ShimshonK]

Hi,

So for retirement funds:

FDEWX Or VFFVX

Any difference??

Looks pretty much the same to me.
I do want to clarify that you are intentionally choosing 2055, correct?
They should have funds for every 5 year period, and if you pick one too early/late, the allocation will shift at a non-ideal time for you (no way to know exactly, but the idea is that the year you choose is about when you plan to retire/use the money).

[biobook]

Hi,

So for retirement funds:

FDEWX Or VFFVX

Any difference??

Little difference, but I agree with ShimshonK's earlier suggestion that you might want to keep investments in one place, so if you've already got fidelity funds, that would give FDEWX a slight edge - easier to compare your investments, and makes it less likely you'll forget about one of them.  Also, Morningstar has given a high rating to Fidelity Freedom Index funds.
https://www.morningstar.com/articles/1029667/the-best-target-date-funds-for-2021-and-beyond

The rumors I've heard are that Vanguard has lower expense ratios on many products, while the other brokerages have better customer service.  Since you're already a customer at Fidelity, I would suggest taking advantage of that, telling them your situation, and that you're trying to decide which one of their target date funds is a good choice for you.  They also can see your other investments there, and maybe they'd take that into consideration. 

I think customer service people are getting paid salary, not a commission to sell certain products.  I'm sure their advice is at least as good as random people on an online discussion board. 

[sruly101]

Looks pretty much the same to me.
I do want to clarify that you are intentionally choosing 2055, correct?
They should have funds for every 5 year period, and if you pick one too early/late, the allocation will shift at a non-ideal time for you (no way to know exactly, but the idea is that the year you choose is about when you plan to retire/use the money).

correct, I’m 30 so 2055 is my retirement fund.

I dot have yet any other investment, and have my investment account with fidelity (if it matters)

[AsherO]

Hi,

I just started a IRA account and will start a 401K as well, as of now I’m not in the “investing” business and I’m not interested in being busy with it.

Where should I invest the money for it to sit till retirement?
I’m not interested in taking big risks, and I’m in my low 30s (if it matters)

Thank Much

Delayed response here, and it’s been said already in this thread in other words, but you’re at the age when you can most afford to take big (diversified) risks, because even if you lose in the short term you’ll more than make up for those losses on the long term due to the cyclical nature of markets.

[ShimshonK]

Have you found someone who does this?

Just to circle back on this, you can search for fee-only fiduciary financial advisors near you on the The National Association of Personal Financial Advisors website (https://www.napfa.org/).
Checked Lakewood, don't see any frum names FWIW

[ushdadude]

Just to circle back on this, you can search for fee-only fiduciary financial advisors near you on the The National Association of Personal Financial Advisors website (https://www.napfa.org/).
Checked Lakewood, don't see any frum names FWIW

they don't actually have to be near you.

[Der Deutsche Jude]

I’ve only recently discovered that one’s eligibility to contribute to an IRA can be severely limited if you have a 401K at work (Traditional IRA) especially after getting married (Roth and Traditional) and especially if filing separately (Roth & Traditional don’t allow you to contribute if earning more than $10K!).

Are people aware of this? I feel like every article says you can contribute to both but this is probably not true for many people on this forum.

https://www.nerdwallet.com/article/investing/ira-contribution-limits

[farmbochur]

To be precise, income constraints impact the ability to deduct traditional IRA contributions. You are still able to make the contributions. This gives rise to the backdoor roth, a term I'd recommend googling.

[ushdadude]

To be precise, income constraints impact the ability to deduct traditional IRA contributions. You are still able to make the contributions. This gives rise to the backdoor roth, a term I'd recommend googling.

can't do backdoor roth if you have a traditional IRA without being hit with a tax bill.
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
great tutorial

[ushdadude]

I’ve only recently discovered that one’s eligibility to contribute to an IRA can be severely limited if you have a 401K at work (Traditional IRA) especially after getting married (Roth and Traditional) and especially if filing separately (Roth & Traditional don’t allow you to contribute if earning more than $10K!).

Are people aware of this? I feel like every article says you can contribute to both but this is probably not true for many people on this forum.

https://www.nerdwallet.com/article/investing/ira-contribution-limits

find out if your work plan is a 401k or traditional IRA. they are not the same thing

[Sport]

Can one contribute to an ira in the same year they contributed to a 403b but left the non for profit mid year?

[Der Deutsche Jude]

find out if your work plan is a 401k or traditional IRA. they are not the same thing

Mine in particular is a 401K, I wasn’t aware of an IRA from employer

[Der Deutsche Jude]

To be precise, income constraints impact the ability to deduct traditional IRA contributions. You are still able to make the contributions. This gives rise to the backdoor roth, a term I'd recommend googling.

Are these contributions done through back door method able to be withdrawn penalty free at any time as can be done with a Roth IRA? How about if done through Mega Backdoor method (I may be one of the few that actually has access to this). Thanks.

[ushdadude]

if you have a 401K at work (Traditional IRA

What did you mean by this?

Mine in particular is a 401K, I wasn’t aware of an IRA from employer

Many small businesses use simple or sep IRAs

[Kobe Bryant]

I’ve only recently discovered that one’s eligibility to contribute to an IRA can be severely limited if you have a 401K at work (Traditional IRA) especially after getting married (Roth and Traditional) and especially if filing separately (Roth & Traditional don’t allow you to contribute if earning more than $10K!).

Are people aware of this? I feel like every article says you can contribute to both but this is probably not true for many people on this forum.

https://www.nerdwallet.com/article/investing/ira-contribution-limits

The reason being that it is true for most people on this forum. Most married couples file jointly.
 
Deduction limits for TIRA are as follows (2021):

MFJ

• If neither spouse is covered by a plan at work,  any amount.
• If you’re covered by a plan at work, up to $105K. phases out between $105K-$125k
• If your spouse is covered by a plan at work, up to $197K. Phases out between $197k-$207K

Income limits to contribute to a RIRA are as follows (2021):

MFJ

• <$198k - $6K (>50 YO $7K.) Phases out between $198K-$208k

As mentioned by @farmbochur . For high income earners who aren’t eligible, one can contribute to a Non-deductible IRA and then attempt a backdoor Roth conversion (I would hire a CFP as it can definitely get complicated.)

[Kobe Bryant]

Are these contributions done through back door method able to be withdrawn penalty free at any time as can be done with a Roth IRA? How about if done through Mega Backdoor method (I may be one of the few that actually has access to this). Thanks.

One can withdraw the principle from Non-deductible IRA penalty free.

[EJB]

can't do backdoor roth if you have a traditional IRA without being hit with a tax bill.
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
great tutorial

So get rid of your IRA with deducted contributions. 

[Cat18]

i thought a good strategy would be to FIRST save up for a "simcha", down payment & rainy day funds BEFORE contributing to retirement accounts, assuming no employee match, as any monies would be locked up till retirement.

what i mean by simcha fund is enough money to cover every bris, bar mitzvah, vort, wedding, sheva berachos and support for my kids. obviously depending on family size and how much you spend, this fund goal can easily be $500k plus.

am i wrong? what's recommended?  i would love to max out retirement accounts (incl 529) and make significant contributions to my simcha fund, but its not realistic.