Investment help...newbe

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Investment help...newbe

Postby mort439 » Sat Aug 24, 2013 9:22 am

Hi, I am fairly new to the investing business even though I have had investments since 1999. It was just something I was told to do by fellow employees at my work. I didn't really know what is was about..lol Anyways I read the post by "Laura" and I have the following information and hope you guys can give me some solid advice. I have investments allll over the place and would like to consolidate if possible. Well, here it goes;

1) Head of household
2) 70,000 income
3) 2700 in a Money Market fund, 1200 in an online savings account - 1-2 months
4) File married jointly
5) 120,000 in mortgage debt at 3.25% on a 30 year loan
6) Credit debt- usually paid of monthly but due carry a debt of 100-200.00 montlhy at times
7) My wife and I both have Roth IRA's through First Investors at this time..
8) Wife- had tradionial IRA rolled into Roth- current balance of 19,600(total return/select growth funds)
9) I have had a Roth at current value of 16,700(Growth and income fund)
10) I have a TSP account also which is a tradionial IRA valued at 5,200(Military)
11) I have a 457 through my employer that is at 28,600
11) Massachusetts Tax rate is at 5.25% on income. Fed rate - 15% on taxable income over $17,850 to $72,500
12) Age 42/Wife 39
13) Allocation- 60% Stocks, 20% Bonds, 20% oversea's stocks ?
14) Would like to get into Vangaurd accounts as my current account holder is not in my best interest.
15) 120.00 a month into money market, 50.00 a month into IRA, Wife's is on hold, 457 is 100.00 a month
TSP is 5% of income monthly which is around 70.00
thanks a lot..
Mort
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Re: Investment help...newbe

Postby dbr » Sat Aug 24, 2013 10:40 am

I think really good advice along with all the suggestions that may be posted in reply is to start here and read and learn:

http://www.bogleheads.org/wiki/Getting_Started
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Re: Investment help...newbe

Postby The Wizard » Sat Aug 24, 2013 10:52 am

Yes, we can give advice, but you'll need to come up with a focused question first.
Even better, do some of the preliminary homework reading recommended and start becoming knowledgeable about this body of information...
Attempted new signature...
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Re: Investment help...newbe

Postby dickenjb » Sat Aug 24, 2013 11:24 am

Are you Head of Household or Married Filing Jointly? Can't be both.
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Re: Investment help...newbe

Postby pkcrafter » Sat Aug 24, 2013 11:30 am

Welcome, comments in blue. The problem is information is spotty, so doesn't present your case clearly.

mort439 wrote:Hi, I am fairly new to the investing business even though I have had investments since 1999. It was just something I was told to do by fellow employees at my work. I didn't really know what is was about..lol Anyways I read the post by "Laura" and I have the following information and hope you guys can give me some solid advice. I have investments allll over the place and would like to consolidate if possible. Well, here it goes;

1) Head of household
2) 70,000 income
3) 2700 in a Money Market fund, 1200 in an online savings account - 1-2 months
4) File married jointly
5) 120,000 in mortgage debt at 3.25% on a 30 year loan
6) Credit debt- usually paid of monthly but due carry a debt of 100-200.00 montlhy at times
7) My wife and I both have Roth IRA's through First Investors at this time..
8) Wife- had tradionial IRA rolled into Roth- current balance of 19,600(total return/select growth funds)<--Please list all fund names/tickers..

9) I have had a Roth at current value of 16,700(Growth and income fund)
10) I have a TSP account also which is a tradionial IRA valued at 5,200(Military)
11) I have a 457 through my employer that is at 28,600
11) Massachusetts Tax rate is at 5.25% on income. Fed rate - 15% on taxable income over $17,850 to $72,500
12) Age 42/Wife 39
13) Allocation- 60% Stocks, 20% Bonds, 20% oversea's stocks ?<--An 80/20 AA is higher than I would recommend for your ages.

14) Would like to get into Vanguard accounts as my current account holder is not in my best interest.<--IRAs can be transferred to Vanguard. Vanguard will initiate the transfers after you contact them and fill out paperwork.
15) 120.00 a month into money market,<--what is this to be used for?

50.00 a month into IRA, Wife's is on hold, 457 is 100.00 a month
TSP is 5% of income monthly which is around 70.00<--TSP is probably preferred over 457 or IRA because of super-low costs, but to be sure, you might list lowest cost funds available in the 457.



Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Re: Investment help...newbe

Postby mort439 » Sun Aug 25, 2013 8:36 am

Hi, ok I will do some more homework and get back to you. I am new at this stuff so I didn't know exactly what you needed to see. Thanks for the help...
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Re: Investment help...newbe

Postby mort439 » Thu Aug 29, 2013 7:09 am

Ok, so here I go, lol... We file Married Jointly. I was just stating that I am the only person bringing in income when I said "head of household".

FIRST INVESTORS
Both wife and I have Roth IRA's
This is the breakdown;

Microsoft Corporation 2.1%
International Business Machines Corp. 2.0%
Philip Morris International, Inc. 1.6%
Johnson & Johnson 1.6%
Pfizer, Inc. 1.6%
Thermo Fisher Scientific, Inc. 1.5%
ExxonMobil Corporation 1.5%
CBS Corporation - Class "B" 1.4%
JPMorgan Chase & Co. 1.4%
3M Company 1.4%
Total 16.1%


Information Technology 17.6%
Industrials 15.8%
Consumer Discretionary 14.9%
Health Care 12.8%
Financials 10.2%
Consumer Staples 10.0%
Energy 9.8%
Materials 6.1%
Telecommunications Svcs 2.4%
Utilities 0.1%
Cash Equivalents 0.2%
Total 99.9%

Fees and Expenses
Class A Class B Institutional Class
Max Sales Charge 5.75% 1 None None
Max Deferred Sales Charge None 2 4.00% 3 None
Expense Ratio (Total Annual Fund Operating Expenses) 1.23% 4 2.01% 4 0.78% 5, 6
Expense Ratio, Net of Expense Waiver

My wife has a Roth with the following investments;

FIRST INVESTORS
1)Select Growth Fund

2)First Investors Total Return Fund

She has not put income into these accounts for years and has just been working off the rates. We plan to start depositing money.

My 457 plan investments;

Fund Performance Units & Pricing
Fund Balance# of Units Unit Price Fund Name and % of My Balances
BONDS
$2,059.19 192.9886 $10.670000 0544 PIMCO Total Return Fund Inst
7.08%
$1,472.12 139.2738 $10.570000 0799 Vanguard Total Bnd Mrkt Ind F Inst
5.06%
$293.58 27.5917 $10.640000 1229 Vanguard Infl-Prt Securities Fd Inst
1.01%
LARGE CAP VALUE
$1,162.13 58.9726 $19.706221 0896 Fidelity VIP Contrafund Port I
3.99%
$4,619.62 30.7503 $150.230000 1228 Vanguard Instit Index Fnd Inst Pl
15.88%
$4,070.02 126.4375 $32.190000 1912 American Funds Amer Mtual R6
13.99%
SMALL/MID/SPECIALTY
$2,313.80 135.0727 $17.130000 0797 TIAA-CREF Sm-Cp Blend Index Fnd Inst
7.95%
$2,887.07 87.4871 $33.000000 0816 JPMorgan Mid Cap Value Fund I
9.92%
$1,165.28 43.3995 $26.850000 1197 Vanguard Mid-Cap Index Fund Inst
4.00%
$1,078.17 75.6079 $14.260000 1225 Vanguard REIT Index Fund Inst
3.71%
GLOBAL/INTERNATIONAL
$5,031.24 285.7034 $17.610000 0798 TIAA-CREF Intl Equity Index Fnd Inst
17.29%

I also have a TSP account as follows;
60%- C fund
20-%- I Fund
20%- S Fund

The IRA's and the 457 total's are $68,000 is our main investments
The TSP is at $5500.00
And I do have a money market account with First investors at 2700.00(hasn't done much)
Finally I have an online savings account with Ally at around $1300.00
The money market and online savings is going toward our emergency funds...

Sorry if confusing but I used note pad to copy and paste this information...

Thanks,
Shane
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Re: Investment help...newbe

Postby BL » Thu Aug 29, 2013 8:24 am

I will just suggest that you keep retirement and non-retirement separate. Moving First Investors to Vanguard sounds like a smart idea. There may be closing costs, but you will soon recover from that when you move to low-cost funds. First do your reading so you understand what you are doing. Read a recommended book or two as well as study the Wiki. Individual stocks are not usually recommended. Any sales in taxable accounts need to have capital gains figured out first to see if you can handle it. Capital gains that bring your taxable income up to the top of 15% tax bracket would be at 0% tax.

Your current portfolio is much too complicated. You really only need three funds (or the equivalent) to be well diversified: Total Stock Market, total International, and a bond fund and they could be spread over all the retirement accounts so you don't need to have the same in each.

Be sure to look up Expense Ratios for the funds, as that usually determines what to choose. For example, the Vanguard Index funds are usually the lowest price good funds, except for the TSP which is the best bargain around. The Vanguard bond fund would probably be the best bond, assuming the plan doesn't throw on high fees. The Vanguard Inst Index is a S&P type fund and could be completed (Total Stock Market equivalent) with smaller amount of small/mid funds in a 4 to 1 ratio.

You need to add the available choices with ERs in the 457 plan, especially those under .5% ER. It would be easier to read if you delete number of units and price per unit as they don't matter here. You can edit what you already have by clicking on EDIT button.
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Re: Investment help...newbe

Postby mort439 » Thu Aug 29, 2013 1:25 pm

Thank you! I am in the process of moving our Roth's over to Vanguard. I was going to do a VTI , Bond and Wellington mix but you believe international would be better?
My 457 is solid being I don't think I can move the funds from one account to another(roth) without just cashing it out and then investing it. I would get taxed on that before investing it so I don't know if thats a good idea. Do you believe I should move everything to one accout? For instance the TSP? Or just keep the two seperate? I know I am all over the map on this stuff. I am not an expert by any means, lol..


I appreciate the help..


shane
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Re: Investment help...newbe

Postby BL » Thu Aug 29, 2013 4:46 pm

mort439 wrote:Thank you! I am in the process of moving our Roth's over to Vanguard. I was going to do a VTI , Bond and Wellington mix but you believe international would be better?

**Take a look at the Three-fund portfolio: http://www.bogleheads.org/wiki/Three-Fund_Portfolio

My 457 is solid being I don't think I can move the funds from one account to another(roth) without just cashing it out and then investing it. I would get taxed on that before investing it so I don't know if thats a good idea. Do you believe I should move everything to one accout? For instance the TSP? Or just keep the two seperate? I know I am all over the map on this stuff. I am not an expert by any means, lol..

**No, you can't move what is in the 457 while you are working there. But you should be able to change to different funds. Again I reference the above link.

**Also can you now invest in TSP or is that from a previous job? If it is for your current job that is the best place to be. Do you get any match at 457? Always do the match for free money.

**What are the ERs and what is available in 457? If you have some in each category below .5 ER they would do.




I suggest you consider putting in all that is allowed into the TSP each year you can. There is nothing else that can compare to the ERs there and you can get well-diversified funds there. The only shortage is no Emerging markets in the international fund. See the Wiki here for info on TSP: http://www.bogleheads.org/wiki/TSP

The usual recommendation is:
401k (or 457) to the match
Roth or tIRA
fill the 401k (or TSP, 457) Please don't call TSP a 401k because it is not, even though somewhat similar.)
then taxable ( including I-Bonds, CDs, etc.)

You can probably get a good choice from 457 using: Look up ERs
Vanguard total bond
Vanguard institutional Index (S&P)
Vanguard Mid-cap
Vanguard Small-cap (do you have?)
Vanguard (do you have?) or TIAA-CREF International (?ER cost?)


The above is similar to the three fund portfolio (see above). You could have the same in your Roth IRA at Vanguard or mix and match to get the same overall with your desired AA (asset allocation). At Vanguard you could even do just one fund in your Roth such as a Target Retirement (Just look at % stocks/bonds) or Life Strategy Aggressive, Moderate,or Conservative.


I appreciate the help..


shane
Last edited by BL on Fri Aug 30, 2013 8:56 am, edited 1 time in total.
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Re: Investment help...newbe

Postby mort439 » Fri Aug 30, 2013 6:52 am

Sir, thank you for responding..I will look into the ER's in regards to the 457. I have the TSP because I am currently in the military(reservist). I have heard here that The TSP is a good place to have your money because of the low costs. As a reservist I can only do a traditional 401k and not the Roth they advertise for active duty troops.



thanks
shane
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Re: Investment help...newbe

Postby mort439 » Fri Aug 30, 2013 12:18 pm

Well I looked into transferring my First Investors Roth into the TSP but they don't accept Roth IRA's.. So that brings me back to Vanguard I guess...That was not what I wanted to hear..Oh well...
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Re: Investment help...newbe

Postby BL » Fri Aug 30, 2013 12:52 pm

mort439 wrote:Well I looked into transferring my First Investors Roth into the TSP but they don't accept Roth IRA's.. So that brings me back to Vanguard I guess...That was not what I wanted to hear..Oh well...


Vanguard is still very good and is the best most here can get.

Could you put most of your military pay into the TSP? Maybe even Roth TSP would make sense, if available, if you will have a good pension at age 60.
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Re: Investment help...newbe

Postby mort439 » Sat Aug 31, 2013 2:09 am

I can have a defined pension plan as early as 6 years from now...if I stay at same rate it will be around 25,000 a year...I currently work in a hazardous duty job. I can put the majority of my military pay into the TSP but I can't change it to a roth. They won't let reservists go into the roth.


thanks
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Re: Investment help...newbe

Postby HurdyGurdy » Sun Sep 01, 2013 1:31 am

http://www.bogleheads.org/wiki/Military_finances points to a link (http://www.dfas.mil/militarymembers/rot ... itary.html) that says that reservists may use Roth TSP starting October 2013.
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Re: Investment help...newbe

Postby mort439 » Sun Sep 01, 2013 6:04 pm

hahahaha wonderful I just sent out the paperwork to Vangaurd....thanks for the info.. I guess I'll have to decide in October what to do..everyone here pretty much says to go into the TSP if then can..it is the cheapest...
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Re: Investment help...newbe

Postby mort439 » Sun Sep 01, 2013 6:19 pm

Based upon the link you referenced I believe I can invest in a roth in October 2013 but they are still not taking transfers of Roth IRA accounts to TSP accounts. I will still have to invest my roth elsewhere(Vanguard) as far as transfers are concerned. Thanks for the update though,

shane
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