Many 401K, roth and Roth 401K options along w/529B quesiton

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Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Many 401K, roth and Roth 401K options along w/529B quesiton

Post by Nutaboutgolf »

Single vet in my early 30s with nothing saved up for investment. I am expecting at least a $10K disability payment. I currently have 6 months for an emergency fund saved up and my only debt is a car which I'm hoping the $10K will pay off cover.

My company only offers a Roth 401K and a tradition 401K. They take .52% off the top and still charge around 1%-1.5% for each fund. No matching.

For taxes I'm in the 25% bracket plus 5.5% state tax. What do you guy recommend I invest in? I've heard the best deal is Vanguard index funds due to the low expensive ratio. But I'm wondering if you guys recommend a Roth only or Roth and traditional. I also want to be absolutely sure it is not recommended to go through my company since it takes .52% off the top and doesn't match.

I also get money for the GI Bill (not taxable income)and will be in school for another three years. I have heard you can 529B for yourself...Since I'm currently going to school, does it make any sense to open one up for myself and am actually paying tuition?
Default User BR
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Joined: Mon Dec 17, 2007 6:32 pm

Post by Default User BR »

If you don't use the company plan, you are limited to the Roth and/or Traditional IRA contribution of $5000. You're in a relatively high aggregate bracket, so tax-deferral is a good idea. Even with a less that stellar plan, that is useful. Besides, you might change jobs in a few years and be able to roll over the plan. Once an opportunity to defer is gone, it's gone.

I'd advise listing what your plan does offer, along with ERs.



Brian
Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Post by Nutaboutgolf »

Thanks. Any insights on the 529B? I don't think I'll be able to invest much more than $5000 for 2011, really depends on my settlement as it possbily could be significantly more than what I'm expecting. Also, I have already contrubuted about $1000 in my companies Roth 401k but have stopped.

The last number is the expense ratio.

RBLSX FMT/RUSSELL LIFEPOINTS BAL STRATEGY 1.08
SSGXX FMT/SSGA TREASURY MONEY MARKET 0.54
DFEQX DFA SHORT-TERM EXTENDED QUALITY 0.57
NO TICK BLACKROCK CAPITAL MGMT 0.65
VIPSX VANGUARD INLFATION PROT SECUIRTYS 0.6
PTTRX PIMCO TOTAL RETURN INSTL 0.81
NO TICK METROPOLITAN WEST LARGE CAP VALUE 0.8
TRVLX T. ROWE PRICE VALUE 1.1
VIVAX VANGUARD VALUE INDEX 0.61
DODGX DODGE AND COX STOCK 0.77
VFINX VANGUARD 500 INDEX 0.53
JANSX JANUS FUND 0.97
RGAGX AMERICAN GROWTH FUND OF AMERICA 0.69
NO TICK ZEVENBERGEN CAP INVESTMENTS LLC 0.85
IWS ISHARES RUSSELL MID-CAP VALUE INDEX EFT 0.6
NO TICK DISCIPLINED GROWTH INVESTORS 0.95
AVFIX AMERICAN BEACON SM CAP VALUE INST 1.2
NO TICK COLUMBUS CIRCLE INVESTORS 0.95
NO TICK BRANDES INVESTMENT PARTNERS, LP 0.85
TGVIX THORNBURG INTERNATIONAL VALUE 1.27
ODMAX OPPENHEIMER DEVELOPING MARKETS 1.18
SGGDX FIRST EAGLE GOLD FUND 1.21
FREAX NUVEEN REAL ESTATE SECURITIES 1.14
XLE SPDR ENERGY SECTOR EFT 0.56
XLV SPDR HEALTH CARE SECTOR EFT 0.56
Default User BR
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Joined: Mon Dec 17, 2007 6:32 pm

Post by Default User BR »

This 401(k) is not so bad. Even with the extra fee there are a few choices that make sense. You certainly want to make sure you max your IRAs first, of course. As I said, if you leave the job the plan money can be rolled over to a cheaper account.

I don't know much about 529 plans.



Brian
xerty24
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Joined: Tue May 15, 2007 3:43 pm

Post by xerty24 »

Does your state give a tax break on the 529 contributions? If so, it's almost certainly right to contribute to that for any expected school costs. If you're not saving more than $5K beyond your school, I'd stick to your traditional IRA for the deduction. Probably after that, the deductible 401k.
Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Post by Nutaboutgolf »

Does anyone have a fund selection advice?
Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Post by Nutaboutgolf »

Found out the state does not tax the 529b
Alan S.
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Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Post by Alan S. »

To clarify, does the state allow you to deduct your 529 contribution?
Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Post by Nutaboutgolf »

Alan S. wrote:To clarify, does the state allow you to deduct your 529 contribution?
Correct; I'm allowed to deduct my contribution
Topic Author
Nutaboutgolf
Posts: 41
Joined: Wed Jun 08, 2011 9:33 pm

Post by Nutaboutgolf »

What do you recommend, I stick to the companies plan? Or go to Vangaurd for a TIRA or Roth?
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