At what age do you hope to retire/Personal Finance and Investing Thread

[FVBrewerFan]

I'm going to look into this. I'll have to look closer at what Fidelity has to offer. I have a pension, my wife has a Roth that she is funding quite well. I think I can be a bit riskier...

 

Just confirmed...Right now I'm 51% domestic, 35% foreign stocks, 7% bonds, 7% short term (not sure what this means).

 

Anyone have more insight on domestic vs foreign stocks?

 

Without seeing it, I would guess "short term" refers to short term bonds, the other 7% bonds would be intermediate/ long term bonds.

 

35% foreign stock seems like a lot. Just MY own personal preference, I don't have any foreign stock anymore. Not implying it's wrong to have any. Years ago, it made more sense to diversify that way. These days, all the world markets more or less work in tandem. It's rare that the US markets are down and other major world markets are up.

 

So I figure it's enough work to try to stay on top of individual domestic stocks and markets, why invest in something else. I differentiate between income stocks and growth stocks, way more important that domestic vs foreign. But again, that's just my opinion. For example, the difference between a domestic growth stock and an income stock is far more important to understand and balance. If I had 65% domestic growth and 35% foreign growth, I don't consider that diversified.

[PlayerHader]

Should I just transfer to a fund indexed to the S&P 500? I'm not looking to actively move this thing around a ton. In a few years I might remove a little bit of risk, but I'm still relatively early int he process (even at 33 years old).

[OldSchoolSnapper]

That's what I would do. Just buy S&P 500 tracking funds. The target date funds are fine, in fact I would recommend them to someone just getting their feet wet. If and when you learn more about things, you can simply look at what those funds are comprised of and buy them yourself at a lower fee. The knock is that they won't automatically rebalance to the allocation you want, but you can do that yourself.

 

Vanguard made this easier to do recently by lowering the minimums to $3k for their admiral shares (it was $10k per fund). At Vanguard you can also see what funds are in the target date funds. I'm not sure how it works at Fidelity, but that is another high quality institution with your best interests in mind.

 

Using a target date vs. not isn't going to cripple your retirement. But for a portfolio building for 30 years the fee associated with it can be a difference of several tens of thousands. Not something that likely matter materially, but you can see why someone active in finance would not want to just give away $30k.

[homer]

Should I just transfer to a fund indexed to the S&P 500? I'm not looking to actively move this thing around a ton. In a few years I might remove a little bit of risk, but I'm still relatively early int he process (even at 33 years old).

 

I'm 46 and my 401K is 100% in S&P index funds. I'm actually looking to move my Roth into an equal weighted index fund...waiting for money to transfer right now.

[FVBrewerFan]

I would suggest looking into Charles Schwab. I've used them for over 30 years now, and customer service has been outstanding. I also like the fact they have physical offices to visit, which I rarely need but nice to have. I even have our checking account there, mainly so I can log on and see everything in one place. But another nice perk is they refund all ATM fees no matter what the ATM network is. (I remember once I needed $20 and ATM fee was $8.50.)

 

As others have said, most of my money is in S&P 500 tracking funds. Schwab has their own funds now, as they all do, fees are extremely low on their own ETFs.

[OldSchoolSnapper]

Schwab is also excellent. I have an investor checking there but I looked at their portfolios recently and I would say any of those 3 are excellent. Schwab, Vanguard and Fidelity, really with Schwab and Fidelity getting the corner on Vanguard as of late. But all my money is at Vanguard and it's not quite worth moving.

 

The checking account is awesome for travel. Nothing like just parking $800 in there and knowing I can get to it without ATM fees or foreign transactions if I'm in Europe or something.

[MrTPlush]

There’s nothing wrong with target date funds.

 

If there’s a knock on them, it’s that they come with an extra layer of fees (since most are a fund of funds) and they’re really ‘one size fits most’ not ‘one size fits all.’ But if you’re contributing to a target date fund at a healthy clip, you’re probably setting yourself up for a successful retirement.

 

I personally don’t use them because they aren’t aggressive enough for my risk tolerance. I already have a fixed income component in the form of a small pension and cash value life insurance, so I prefer my 401(k) to be 100% equities.

 

I didn't say there was anything wrong with them or they wouldn't grow your money nicely. I just think people are leaving a lot on the table when going with a target fund. Why is there any reason to have something in short-term areas when you are 20+ years out? Why have anything in international markets which, at best, is a diversification tool with low historical returns?

 

They are made to have zero risk (essentially), but 20+ years out there is little risk in 100% stock.

[PlayerHader]

Gonna move my stuff to either the FID 500 Index vs FID low priced stock fund. Both seem to have performed well in the past. The FID 500 Index has a lower fee (and is probably a bit safer), so I am leaning that way.

[nodakfan17]

I’ve noticed interest in personal finance has increased in recent years (which is great). That might be partly due to the proliferation of information on the internet and also a resolve to avoid pitfalls from the most recent financial crisis. However, I suspect the 10-year bull market has also driven interest significantly. People love a winning team, but their allegiance is currently being tested.

[GAME05]

A positive attribute that has coincided with the rise of hipsterism and the appreciation of old ways is self-sufficiency. The skill of homesteading is popular, more people are canning and making food from scratch, etc. With the growth of do-it-yourself tools it seems natural that more people are doing their own investing, too. That and it can help correct some pitfalls of the past. Baby Boomers invested as if they were bulletproof, Gen X and Y took it to a whole 'nother level of reckless, and this current Gen Z seems to be a lot smarter about things and more careful.

[TURBO]

There is a generation Y?

 

I thought it was Baby Boomers, X, Millennials, and Z...

[nodakfan17]

There is a generation Y?

 

I thought it was Baby Boomers, X, Millennials, and Z...

I believe Generation Y is another term for Millennials.

[TURBO]

There is a generation Y?

 

I thought it was Baby Boomers, X, Millennials, and Z...

I believe Generation Y is another term for Millennials.

 

Ok, I'll take your word for it, never heard them referred to as that before.

 

Is that an attempt by the Millenials to remove the negative connotations associated with the word Millenial" perhaps?

[nodakfan17]

I think Gen Y was actually a placeholder for that generation until demographers settled on Millennials.

[homer]

Every new generation has a negative connotation associated with it u til they are replaced by the next generation.

[GAME05]

No, I think I actually mean "Gen Z" but instead got the letter wrong. My bad.

[OldSchoolSnapper]

Interesting note that Mr. Money Mustache publicly announced his divorce 2 days ago.

 

http://www.mrmoneymustache.com/2018/12/31/divorce/

[nodakfan17]

Very interesting and thank you for sharing. I hope they resolve things as amicably as possible. Purely speculative on my part, but I’m guessing Mrs Money Mustache didn’t like living on $50K per year when her husband’s blog was earning 10 times that annually.

[OldSchoolSnapper]

I poked around via the rumor mill and some rumblings of his wife's Instagram page, and apparently, the "Mustachian Way" had nothing to do with it. But, nobody will ever be able to verify that. It sounded more like the same old tale of growing apart.

[OldSchoolSnapper]

Another bump that Spectrum is offering Internet for $15 a month. I had it installed and it is getting speeds of about 30 mbps down and 5-6 up. It's totally adequate for browsing, streaming video, etc. It is a targeted offer, only certain zip codes and sections get it, however contrary to popular belief, eligibility is NOT dictated by income, age, etc. I believe those constraints can GET you qualified for the offer but if your area is zoned for the promo you can get it, as I have and don't fit any of the guidelines.

 

It is also not a promotional price, it is indefinite, until the price of that base package increases a few dollars, etc. Pretty stoked about it though, incredible deal.

[nodakfan17]

Short-term CD rates are pretty competitive these days.

 

There’s a good chance your bank is offering a 1-year CD around 2%. I finally put half of my emergency fund in a short-term CD. For years, it wasn’t even worth the paperwork, as short-term CD rates hovered above zero. The yield curve is pretty flat right now, which means there isn’t a huge difference between short-term and long-term rates. The 1-year CD rate at my bank is at 2%, but the 5-year CD rate is under 3%.

[PlayerHader]

2% on my savings account through Ally Bank.

[nodakfan17]

2% on my savings account through Ally Bank.

That’s pretty good. I’ve always been tempted to chase yield, but have stuck with the local guys who employ a lot of people in my town. Also, free suckers

[OldSchoolSnapper]

Essentially all of the large chains and online banks are offering 2% now, just must of them require a minimum balance or monthly deposit or some other stipulation. I had been getting 1.05% for years but just clicked two boxes and moved it to 2+% with CIT (not Citi).

 

Savings accounts are still pretty lame for anything other than emergency funds or someone actively saving for a down payment or something, but why use .05% when you can get 2%? It's easy enough.

[PlayerHader]

Essentially all of the large chains and online banks are offering 2% now, just must of them require a minimum balance or monthly deposit or some other stipulation. I had been getting 1.05% for years but just clicked two boxes and moved it to 2+% with CIT (not Citi).

 

Savings accounts are still pretty lame for anything other than emergency funds or someone actively saving for a down payment or something, but why use .05% when you can get 2%? It's easy enough.

 

I agree. We are building a savings for a down payment to build or buy a home, likely within the next year.

 

It's great having a 2% growth option for that.