401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

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stingray777
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Joined: Sun Dec 08, 2019 2:57 pm

401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Mon Dec 16, 2019 12:25 pm

This my second posting, and you guys really helped me on my first post, so I decided to ask for another favor, since unfortunately I don't have any investor friend around me.

I am new to investment and IRA, and I like 3-fund plan. Don't know much about ETFs, and just want to buy and forget until retirement. I mentioned Vanguard account and TD Ameritrade account, but I am not married to them. Other options are welcomed. Pardon me for so many questions. Thanks in advance.

1. With IRA accounts, does it pull from my salary? Or you tell HR to put certain amount into them through payroll deduction? You have to claim at the tax filing, but can it be automatic, both Roth IRA and traditional IRA?

2. If you put $6000 into TRADITIONAL IRA out of your pocket, will IRS adjust the difference since this money has been already taxed? You can do it before April next year. I don't know how they calculate, but maybe treat it as $7200? Perhaps it is best that I put into Roth IRA for the simplicity, though I'd like to reduce my taxable income?

3. You have to manually purchase stocks of your choice in IRA from their website. This is not automatic. You have to do this per every paycheck, correct?

4. With Vanguard account or TD Ameritrade account in mind for IRA and HSA, the transaction (buying and selling Vauguard index funds such as VTSAX, VTIAX, VBMFX) itself is free. However, TDA charges 0.03 - 0.1% management fee on top of ER. Or do buying and selling transaction cost? I know nothing about ETF, but I heard ETF fee has become also free recently. Or is it talking about something different?

5. Do I want to use ONLY TDA, from the ease of management point of view, since I will be using it (with Lively for HSA) to invest into Vanguard index funds? Or do I want to use Vanguard for my traditional and Roth IRA at Vanguard to avoid small management fees? Is it almost pointless since the fee is too small to be considered?

6. I will have traditional IRA, Roth IRA, and HSA accounts on top of 401k. For the simplicity (and of course the cost if it is not ignorable) which is best: buying the same 3 funds in each accounts, or not to have the same fund in multiple accounts but to assign least funds in each account?

7. Can you handle traditional IRA and Roth IRA as virtually one account, without paying attention to the difference? That would make things simpler, but I don't know how IRS or myself keep track of which is taxable and not taxable.

8. This is slightly off topic, but related. Our 401k charges almost 1% fee, and that is why I want to use IRA. The 401k has SP500, the biggest money maker. Is it a bad choice to do SP500 with 401k due to the high cost? ER is the same. Do I want to use it for bond funds since they don't gain as much? How do I approach the 401k in terms of asset allocation? I am starting with $3500 into 401k.

lakpr
Posts: 5381
Joined: Fri Mar 18, 2011 9:59 am

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by lakpr » Mon Dec 16, 2019 12:59 pm

My answers in line in red font.
stingray777 wrote:
Mon Dec 16, 2019 12:25 pm
This my second posting, and you guys really helped me on my first post, so I decided to ask for another favor, since unfortunately I don't have any investor friend around me.

I am new to investment and IRA, and I like 3-fund plan. Don't know much about ETFs, and just want to buy and forget until retirement. I mentioned Vanguard account and TD Ameritrade account, but I am not married to them. Other options are welcomed. Pardon me for so many questions. Thanks in advance.

1. With IRA accounts, does it pull from my salary? Or you tell HR to put certain amount into them through payroll deduction? You have to claim at the tax filing, but can it be automatic, both Roth IRA and traditional IRA?
No, IRA as the name implies, is an "individual retirement arrangement". You cannot have it funded from the payroll, and while some employers do allow such a facility it is often with a financial form that peddles 1%+ funds. You are almost always better to set up an automatic deduction from your BANK ACCOUNT, not paycheck, if you want to automate. Set it for 3 days after your paycheck gets direct-deposited. So if you get paid on 15th and last day of the month, then set it for 3rd and 18th. Reason I suggest 3rd and 18th is that, should those dates fall on weekends, the auto-debit is done on the PREVIOUS business day which would be 1st and last day of the month, and there's a slight chance that your debit will hit first before the payroll check deposit.

2. If you put $6000 into TRADITIONAL IRA out of your pocket, will IRS adjust the difference since this money has been already taxed? You can do it before April next year. I don't know how they calculate, but maybe treat it as $7200? Perhaps it is best that I put into Roth IRA for the simplicity, though I'd like to reduce my taxable income?
This is taken care of by filing the tax forms. IRA contributions are deducted on Form 1040, Schedule 1, Line 19. Of course, if it's a Roth contribution, this line item will be $0. https://www.irs.gov/pub/irs-pdf/f1040s1.pdf

3. You have to manually purchase stocks of your choice in IRA from their website. This is not automatic. You have to do this per every paycheck, correct?
Correct, although at some brokerages, you CAN set automatic monthly purchases of specific securities with direct debit from your bank account. See my caution about setting such direct withdrawals only for 3rd and 18th, as in 1.

4. With Vanguard account or TD Ameritrade account in mind for IRA and HSA, the transaction (buying and selling Vauguard index funds such as VTSAX, VTIAX, VBMFX) itself is free. However, TDA charges 0.03 - 0.1% management fee on top of ER. Or do buying and selling transaction cost? I know nothing about ETF, but I heard ETF fee has become also free recently. Or is it talking about something different?
With Vanguard, and Vanguard alone, ETF and mutual funds are simply different share classes of the same underlying fund. Therefore you can buy ETF with your money, but the only limitation is that you get to buy only whole-number shares of ETF, whereas with mutual fund you can have every last penny of your money invested. So for the sake of argument, say the share price is $40.18 and you are investing $200 per month. You can buy only 4 shares of the ETF, not 5 even though the $200 investment is awful close to buying the full 5 shares. In general, buying Vanguard funds at Vanguard is the best option

5. Do I want to use ONLY TDA, from the ease of management point of view, since I will be using it (with Lively for HSA) to invest into Vanguard index funds? Or do I want to use Vanguard for my traditional and Roth IRA at Vanguard to avoid small management fees? Is it almost pointless since the fee is too small to be considered?
I think the answer for 4 is also applicable here. <<Edited to add>> If it is 0.03%, I think I would value convenience of having everything under a single umbrella than the cost; but if it is 0.1%, I think I would go to the one-time trouble of setting up accounts at Vanguard.

6. I will have traditional IRA, Roth IRA, and HSA accounts on top of 401k. For the simplicity (and of course the cost if it is not ignorable) which is best: buying the same 3 funds in each accounts, or not to have the same fund in multiple accounts but to assign least funds in each account?
Standard advice is to look at your entire portfolio as a single entity, not a union of mini-portfolios. So if you decide to have a 80:20 portfolio, for example, then you want 80% in stocks across all your tIRA, rIRA and HSA; and 20% in bonds. With this view point, you can allocate your funds tax-efficiently. More on that below.

7. Can you handle traditional IRA and Roth IRA as virtually one account, without paying attention to the difference? That would make things simpler, but I don't know how IRS or myself keep track of which is taxable and not taxable.
If they are at one single custodian, you can "virtually" use it as one account, but the custodian must have a different account number for Traditional IRA and Roth IRA. The custodian will keep track of the respective tIRA and rIRA balances

8. This is slightly off topic, but related. Our 401k charges almost 1% fee, and that is why I want to use IRA. The 401k has SP500, the biggest money maker. Is it a bad choice to do SP500 with 401k due to the high cost? ER is the same. Do I want to use it for bond funds since they don't gain as much? How do I approach the 401k in terms of asset allocation? I am starting with $3500 into 401k.

This is also partially the answer for 6. Since your 401k has high fees, make the government share in your misery by populating this fund with the asset class that produces the lowest expected returns. In other words, bonds. Since you have to pay taxes eventually in retirement on this pot of money, and only on the balance at the time of withdrawal, by having all your bonds here both the growth is constrained as well as that 1% fees in the account is shared by you and the government. Have your HSA and Roth IRA and the traditional IRA elsewhere provide you the growth.

So let's say you have $12k per year to invest (for simplicity's sake since it translates to round figure of $1000 per month).
Let's also say you have a 80:20 allocation in mind
20% of this = $2400, or $200 per month. Allocate this to an intermediate term bond fund in your 401k.
Any space left in your 401k (that would be $3500 - $2400 = $1100, since you say you want to start with $3500 in 401k), and of course the entirety of your Roth IRA and HSA, should be filled with stocks.

Another poster, in a different thread, made this observation: "You cannot outrun the fees by investing in higher yielding investments" ...


carmonkie
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Joined: Fri Jun 29, 2018 4:31 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by carmonkie » Mon Dec 16, 2019 1:21 pm

Are you using Lively for your HSA because is that where your employer deposits the money? Here is some thoughts.

I would look and understand the fee structure and restrictions on the cash balance you need to have before making fund investments. Some are 2,000, mine was 1,000. If there are no transfer fees, I would suggest you consider Fidelity HSA. I just transferred why whole HSA from Discovery Benefits over to Fidelity and selected 2 of their 0 Fee Funds and a bond fund charging 0.02%. My HSA fees went from 0.25 trustee fees plus underlying fund fees down to 0.02%. You can't beat that. My HSA with discovery Benefits will continue getting my contribution and my employer match.

Going forward, yes it is a bit more work, but I will have my full HSA money invested instead of having some cash sitting idle. I am lucky that my HSA does not charge a transfer fee. If it was charging 30-50 per transfer then it would make this less appealing and not cost effective.

deikel
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Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by deikel » Mon Dec 16, 2019 1:23 pm

Just in general and to make sure: You can only contribute to an Traditional IRA OR a ROTH account, not both (technically you can, but it makes little sense other then you are in the phaseout salary range) - just making sure you realize that you can contribute 6000 USD to TIRA or Roth, not both ?

Usually you fill the company match in your 401k first (this is a 100% increase in invested money, so you don't care about the 1% fee at this time).

Then you fill T-IRA or Roth-IRA. I will make an assumption that you are in a higher tax bracket but with a lower salary, so you very likely should do T-IRA

Then fill HSA account and 401k to the legal maximum (if possible)

The TIRA money you pay in comes from your checking account and is after tax money at that point, but once you do your taxes in April and declare this money, you get the taxes on them back, making them pre tax contributions.

401k is pre-tax and automatically taken from paycheck

Keep T-IRA and Roth-IRA separate (they will have different account numbers anyway where ever you open the respective account), if you say open them at Fidelity, your overview screen will show you both, but they stay separate accounts (very much like checking and savings accounts), in fact you can have multiple TIRAs and Roths.

To keep it simple, get them at a place where you can get mutual funds (Vanguard, Fidelity, Schwab ect), buy into Mutual Funds and don't do ETFs for your 401k (their choices are fixed anyway), IRA and Roth-IRA - its much simpler that way. ETFs are useful for taxable investment accounts or if you bank with someone that has high fees (or for financial advisers to rip you off IMO), go with a low cost/low fee investment bank to start with and you don't have that issue and ETFs are a non topic.

Don't choose three funds for every acocunt, choose the three fund portfolio (if that is what you want) and pick the lower dollar amount TIRA or ROth to carry one of them ad the rest you do in your (eventually larger) 401k account - makes re-balancing much simpler. Side aspect, put the highest risk (presumed highest return) fund into the Roth - Roth gains are not taxed at all, so this account should grow best.
Everything you read in this post is my personal opinion. If you disagree with this disclaimer, please un-read the text immediately and destroy any copy or remembrance of it.

lakpr
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Joined: Fri Mar 18, 2011 9:59 am

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by lakpr » Mon Dec 16, 2019 1:25 pm

deikel wrote:
Mon Dec 16, 2019 1:23 pm
Just in general and to make sure: You can only contribute to an Traditional IRA OR a ROTH account, not both (technically you can, but it makes little sense other then you are in the phaseout salary range) - just making sure you realize that you can contribute 6000 USD to TIRA or Roth, not both ?
I think the original poster does understand this, see his other thread where multiple BH's (one of them myself) advised him. He's in the phase out range, straddling the 12% and 22% brackets with his IRA contributions. Hence the recommendation to put in just enough in tIRA to get to 12% bracket, then fill the rest with Roth.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Mon Dec 16, 2019 6:42 pm

lakpr wrote:
Mon Dec 16, 2019 12:59 pm

4. With Vanguard account or TD Ameritrade account in mind for IRA and HSA, the transaction (buying and selling Vauguard index funds such as VTSAX, VTIAX, VBMFX) itself is free. However, TDA charges 0.03 - 0.1% management fee on top of ER. Or do buying and selling transaction cost? I know nothing about ETF, but I heard ETF fee has become also free recently. Or is it talking about something different?
With Vanguard, and Vanguard alone, ETF and mutual funds are simply different share classes of the same underlying fund. Therefore you can buy ETF with your money, but the only limitation is that you get to buy only whole-number shares of ETF, whereas with mutual fund you can have every last penny of your money invested. So for the sake of argument, say the share price is $40.18 and you are investing $200 per month. You can buy only 4 shares of the ETF, not 5 even though the $200 investment is awful close to buying the full 5 shares. In general, buying Vanguard funds at Vanguard is the best option
I see. Now I know the difference on ETF. I just realized that I cannot buy regular index funds from my Roth IRA and HSA accounts. I don't have $3000 out front, so I would be buying EFTs. Thanks.
5. Do I want to use ONLY TDA, from the ease of management point of view, since I will be using it (with Lively for HSA) to invest into Vanguard index funds? Or do I want to use Vanguard for my traditional and Roth IRA at Vanguard to avoid small management fees? Is it almost pointless since the fee is too small to be considered?
I think the answer for 4 is also applicable here. <<Edited to add>> If it is 0.03%, I think I would value convenience of having everything under a single umbrella than the cost; but if it is 0.1%, I think I would go to the one-time trouble of setting up accounts at Vanguard.
I saw VTIAX (Vanguard Total International) with 0.09% management fee at TDA. So I will have Vanguard IRA accounts (both). I guess the answer is the cost. Vanguard does not charge anything. So having VTAIX (0% management fee) at Vanguard makes sense, and so does SP500 and VTSAX at TDA (0.03% low management fee).
6. I will have traditional IRA, Roth IRA, and HSA accounts on top of 401k. For the simplicity (and of course the cost if it is not ignorable) which is best: buying the same 3 funds in each accounts, or not to have the same fund in multiple accounts but to assign least funds in each account?
Standard advice is to look at your entire portfolio as a single entity, not a union of mini-portfolios. So if you decide to have a 80:20 portfolio, for example, then you want 80% in stocks across all your tIRA, rIRA and HSA; and 20% in bonds. With this view point, you can allocate your funds tax-efficiently. More on that below.
Although you have not given me a direct answer on whether having the same SP500 stock on all 4 accounts or not (identical fund combination), the cost is the driver? If the cost is all the same between the accounts, then you can have it in any way I want. I was wondering this from the management point of view.
7. Can you handle traditional IRA and Roth IRA as virtually one account, without paying attention to the difference? That would make things simpler, but I don't know how IRS or myself keep track of which is taxable and not taxable.
If they are at one single custodian, you can "virtually" use it as one account, but the custodian must have a different account number for Traditional IRA and Roth IRA. The custodian will keep track of the respective tIRA and rIRA balances
I understand. Thank you!
8. This is slightly off topic, but related. Our 401k charges almost 1% fee, and that is why I want to use IRA. The 401k has SP500, the biggest money maker. Is it a bad choice to do SP500 with 401k due to the high cost? ER is the same. Do I want to use it for bond funds since they don't gain as much? How do I approach the 401k in terms of asset allocation? I am starting with $3500 into 401k.

This is also partially the answer for 6. Since your 401k has high fees, make the government share in your misery by populating this fund with the asset class that produces the lowest expected returns. In other words, bonds. Since you have to pay taxes eventually in retirement on this pot of money, and only on the balance at the time of withdrawal, by having all your bonds here both the growth is constrained as well as that 1% fees in the account is shared by you and the government. Have your HSA and Roth IRA and the traditional IRA elsewhere provide you the growth.

So let's say you have $12k per year to invest (for simplicity's sake since it translates to round figure of $1000 per month).
Let's also say you have a 80:20 allocation in mind
20% of this = $2400, or $200 per month. Allocate this to an intermediate term bond fund in your 401k.
Any space left in your 401k (that would be $3500 - $2400 = $1100, since you say you want to start with $3500 in 401k), and of course the entirety of your Roth IRA and HSA, should be filled with stocks.

Another poster, in a different thread, made this observation: "You cannot outrun the fees by investing in higher yielding investments" ...

I understand it. You are incredibly smart! I had to read it twice on this, and absolutely amazing to me.
Thank you for your help on this thread, and my first thread. Eternally grateful because I see a light and a roadmap now.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Mon Dec 16, 2019 6:58 pm

carmonkie wrote:
Mon Dec 16, 2019 1:21 pm
Are you using Lively for your HSA because is that where your employer deposits the money? Here is some thoughts.

I would look and understand the fee structure and restrictions on the cash balance you need to have before making fund investments. Some are 2,000, mine was 1,000. If there are no transfer fees, I would suggest you consider Fidelity HSA. I just transferred why whole HSA from Discovery Benefits over to Fidelity and selected 2 of their 0 Fee Funds and a bond fund charging 0.02%. My HSA fees went from 0.25 trustee fees plus underlying fund fees down to 0.02%. You can't beat that. My HSA with discovery Benefits will continue getting my contribution and my employer match.

Going forward, yes it is a bit more work, but I will have my full HSA money invested instead of having some cash sitting idle. I am lucky that my HSA does not charge a transfer fee. If it was charging 30-50 per transfer then it would make this less appealing and not cost effective.
Hi,
I do not receive any HSA contribution from the employer, and they do not have a set HSA account, so I am free to choose. Did you consider Lively with TD Ameritrade when you were considering Fidelity?
I had HSA bank, Health Equity and Fidelity also listed in my selection, but people seemed to agree that Lively with ameritrade would be the best option. Lively is better than HSA Bank. Health Equity can be linked with Vanguard, but higher fees than others. A few people mentioned Fidelity, so I am sure it is great, but I don't know if it is greater than Lively since there is no fees there except from TDA. I am not saying it is not. I have not researched it.

Upon checking, Lively has no minimum cash amount to be kept before investment. You just cannot use it for medical expense if you do not keep enough cash.

I am starting every single account, except for my current Simple IRA plan. So there is no transfer. Thanks!

lakpr
Posts: 5381
Joined: Fri Mar 18, 2011 9:59 am

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by lakpr » Mon Dec 16, 2019 7:05 pm

@stingray777,

Glad my post helped. Just another suggestion, you may want to put the international stocks fund in your 401k, if you have any space left after accounting for the bonds first. This way, you CAN have everything under one umbrella at TDA. With 401k contributions, fund minimums don’t apply.

I am sure I will get flak for saying this: international stocks have performed worse than domestic stocks for close to 25 years now. There is only a 2 or 3 year period when international stocks outperformed domestic, I believe 2001 to 2004. I fully expect this underperformance to continue in the foreseeable future.

Thus, following the principle of having government share the misery but keep the joy to myself ;), I stock bonds and international stocks in 401k, domestic stocks only in Roth IRA and HSA.

I freely admit that I could be wrong in my forecast. I hedge my bets by limiting the international stocks to just 15% of my overall portfolio. (55:15:30).

Edited to add: I see you are considering Fidelity for HSA above. That is an excellent choice. Buy your Roth also at Fidelity, one of their zero funds, those funds have zero minimums and zero fees. Every last dollar of yours gets invested.
Last edited by lakpr on Mon Dec 16, 2019 7:10 pm, edited 2 times in total.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Mon Dec 16, 2019 7:06 pm

lakpr wrote:
Mon Dec 16, 2019 1:25 pm
deikel wrote:
Mon Dec 16, 2019 1:23 pm
Just in general and to make sure: You can only contribute to an Traditional IRA OR a ROTH account, not both (technically you can, but it makes little sense other then you are in the phaseout salary range) - just making sure you realize that you can contribute 6000 USD to TIRA or Roth, not both ?
I think the original poster does understand this, see his other thread where multiple BH's (one of them myself) advised him. He's in the phase out range, straddling the 12% and 22% brackets with his IRA contributions. Hence the recommendation to put in just enough in tIRA to get to 12% bracket, then fill the rest with Roth.
Thank you, lakpr.

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beyou
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Location: Northeastern US

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by beyou » Tue Dec 17, 2019 8:28 am

You commented on fees in your 401k, but didn’t see info about any matching. If your employer matches then deposit to 401k up to the amount matched. If they match $1 for $1 you double your money immediately, the high fees matter less. And if you ever move to a new employer or if this employer improves their 401k, you can reduce the annual the fees later, but still retain the large initial return of matching.

Another suggestion to consider, since you indicated less than $3000 in an ira, and a desire to set it and forget it, consider Vanguard Target Date Funds, which have $1000 min and you can simplify by holding a single find that holds same underlying investments. These automatically rebalance, and reduce risk over time, as set and forget as you can get. They may have a similar fund in your 401k, most 401k’s have such a choice. If you use Vanguard for your ira accounts, you can use portfolio watch. Enter outside investments so you can see entire picture in one place (total invested, asset allocation across stocks and bonds).

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Tue Dec 17, 2019 8:44 am

lakpr wrote:
Mon Dec 16, 2019 7:05 pm
@stingray777,

Glad my post helped. Just another suggestion, you may want to put the international stocks fund in your 401k, if you have any space left after accounting for the bonds first. This way, you CAN have everything under one umbrella at TDA. With 401k contributions, fund minimums don’t apply.

I am sure I will get flak for saying this: international stocks have performed worse than domestic stocks for close to 25 years now. There is only a 2 or 3 year period when international stocks outperformed domestic, I believe 2001 to 2004. I fully expect this underperformance to continue in the foreseeable future.

Thus, following the principle of having government share the misery but keep the joy to myself ;), I stock bonds and international stocks in 401k, domestic stocks only in Roth IRA and HSA.

I freely admit that I could be wrong in my forecast. I hedge my bets by limiting the international stocks to just 15% of my overall portfolio. (55:15:30).

Edited to add: I see you are considering Fidelity for HSA above. That is an excellent choice. Buy your Roth also at Fidelity, one of their zero funds, those funds have zero minimums and zero fees. Every last dollar of yours gets invested.
I am still debating on my asset allocation. What I came up with was:
HSA___27%___(International) VXUS
tIRA___18%___VTSAX
R-IRA__27%___VTI & VTSAX
401k__27%___VFIAX

Swapping 401k with HSA is the same, so I can do that In my 401k, I can have in 401k:
DFA Large Cap International Portfolio In (DFALX) (ER: 0.23%) (YTD:21.98)

I went back to the original post, and people (including you, I think) recommended SP500 only, until it grows much bigger in 401k since I don't have anything right now. I am still reluctant on bonds. Since I am new to this, I have no experience of sleepless nights. If the market gets a big dent, dark time, it does not mean I don't have income. I cannot sell the funds anyway, because they are locked up until my retirement. BUT, I don't have an iron heart.

I will check on Fidelity to see if this is better than Lively/TDA.
Thank you!

lakpr
Posts: 5381
Joined: Fri Mar 18, 2011 9:59 am

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by lakpr » Tue Dec 17, 2019 10:47 am

@stingray777,

Yes I did, and do, advocate for not bothering with bonds until you have about six figures in the portfolio, before you start to slice and dice. But since you were also running into the minimum investments issues with Vanguard (and that's the primary motivation of choosing the ETF version), I suggest that Fidelity is a better fit for you, since they have funds with no minimums. The following portfolio is an example (using same percentages as yours):

Roth IRA : Fidelity Zero Index Fund FZROX : 27%
HSA : Fidelity Zero Index Fund FZROX : 27%
Trad. IRA : Fidelity Total Stock Market Fund FSKAX : 18%
401k : Vanguard 500 Index fund : 27%

Fidelity HSA is the best there is, their customer interface is also excellent (my wife's 403b plan is with Fidelity). Better than Lively or HSA Bank or any other outfit. Fidelity also has excellent diversified international index funds that you can add to your portfolio when you do get to $100k or more balance. Where Vanguard's advantage shines is in Taxable accounts. In taxable accounts, Vanguard index funds do not distribute capital gains. But this is not an issue for you in tax-advantaged accounts listed above.

carmonkie
Posts: 260
Joined: Fri Jun 29, 2018 4:31 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by carmonkie » Tue Dec 17, 2019 11:08 am

stingray777 wrote:
Mon Dec 16, 2019 6:58 pm
carmonkie wrote:
Mon Dec 16, 2019 1:21 pm
Are you using Lively for your HSA because is that where your employer deposits the money? Here is some thoughts.

I would look and understand the fee structure and restrictions on the cash balance you need to have before making fund investments. Some are 2,000, mine was 1,000. If there are no transfer fees, I would suggest you consider Fidelity HSA. I just transferred why whole HSA from Discovery Benefits over to Fidelity and selected 2 of their 0 Fee Funds and a bond fund charging 0.02%. My HSA fees went from 0.25 trustee fees plus underlying fund fees down to 0.02%. You can't beat that. My HSA with discovery Benefits will continue getting my contribution and my employer match.

Going forward, yes it is a bit more work, but I will have my full HSA money invested instead of having some cash sitting idle. I am lucky that my HSA does not charge a transfer fee. If it was charging 30-50 per transfer then it would make this less appealing and not cost effective.
Hi,
I do not receive any HSA contribution from the employer, and they do not have a set HSA account, so I am free to choose. Did you consider Lively with TD Ameritrade when you were considering Fidelity?
I had HSA bank, Health Equity and Fidelity also listed in my selection, but people seemed to agree that Lively with ameritrade would be the best option. Lively is better than HSA Bank. Health Equity can be linked with Vanguard, but higher fees than others. A few people mentioned Fidelity, so I am sure it is great, but I don't know if it is greater than Lively since there is no fees there except from TDA. I am not saying it is not. I have not researched it.

Upon checking, Lively has no minimum cash amount to be kept before investment. You just cannot use it for medical expense if you do not keep enough cash.

I am starting every single account, except for my current Simple IRA plan. So there is no transfer. Thanks!
I did not consider Lively with TD Ameritrade. My main goal was to cut down on the fees following the 3-fund portfolio, and the 0 cost fund made it that much more appealing. For me the trustee fees started to add. I am not concerned about portability at this time. If I ever move this, I can sell the fidelity funds and buy the corresponding ETF and transfer out, but knocking on wood this HSA is for the long run.

The rest of my investments are in Vanguard and I can say, I am pleased with the look of Fidelity and ease of use of Fidelity. I do not think you can't go wrong with Fidelity.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Tue Dec 17, 2019 9:16 pm

carmonkie wrote:
Tue Dec 17, 2019 11:08 am
stingray777 wrote:
Mon Dec 16, 2019 6:58 pm
carmonkie wrote:
Mon Dec 16, 2019 1:21 pm
Are you using Lively for your HSA because is that where your employer deposits the money? Here is some thoughts.

I would look and understand the fee structure and restrictions on the cash balance you need to have before making fund investments. Some are 2,000, mine was 1,000. If there are no transfer fees, I would suggest you consider Fidelity HSA. I just transferred why whole HSA from Discovery Benefits over to Fidelity and selected 2 of their 0 Fee Funds and a bond fund charging 0.02%. My HSA fees went from 0.25 trustee fees plus underlying fund fees down to 0.02%. You can't beat that. My HSA with discovery Benefits will continue getting my contribution and my employer match.

Going forward, yes it is a bit more work, but I will have my full HSA money invested instead of having some cash sitting idle. I am lucky that my HSA does not charge a transfer fee. If it was charging 30-50 per transfer then it would make this less appealing and not cost effective.
Hi,
I do not receive any HSA contribution from the employer, and they do not have a set HSA account, so I am free to choose. Did you consider Lively with TD Ameritrade when you were considering Fidelity?
I had HSA bank, Health Equity and Fidelity also listed in my selection, but people seemed to agree that Lively with ameritrade would be the best option. Lively is better than HSA Bank. Health Equity can be linked with Vanguard, but higher fees than others. A few people mentioned Fidelity, so I am sure it is great, but I don't know if it is greater than Lively since there is no fees there except from TDA. I am not saying it is not. I have not researched it.

Upon checking, Lively has no minimum cash amount to be kept before investment. You just cannot use it for medical expense if you do not keep enough cash.

I am starting every single account, except for my current Simple IRA plan. So there is no transfer. Thanks!
I did not consider Lively with TD Ameritrade. My main goal was to cut down on the fees following the 3-fund portfolio, and the 0 cost fund made it that much more appealing. For me the trustee fees started to add. I am not concerned about portability at this time. If I ever move this, I can sell the fidelity funds and buy the corresponding ETF and transfer out, but knocking on wood this HSA is for the long run.

The rest of my investments are in Vanguard and I can say, I am pleased with the look of Fidelity and ease of use of Fidelity. I do not think you can't go wrong with Fidelity.
hmmm. Maybe Fidelity is the way to go. I liked LIvely because I can upload receipts and keep them there until I claim the reimbursement. Thank you for opening up a door for me. I will sleep on it, but Fidelity sounds very attractive. Thank you so, very much.

retire2022
Posts: 1198
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by retire2022 » Tue Dec 17, 2019 9:35 pm

stingray

IRS publication 17 is your everything you need to know regarding federal income taxes here is page on IRA, Pages 119-132 for calendar year 2018:

https://www.irs.gov/pub/irs-pdf/p17.pdf

If you use acrobat pdf reader using the "find" function you can search the pdf for 401k as well, best there are 67 entries

Publication 590a page 22 explains what you can or cannot transfer to

https://www.irs.gov/pub/irs-pdf/p590a.pdf

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Tue Dec 17, 2019 9:53 pm

lakpr wrote:
Tue Dec 17, 2019 10:47 am
@stingray777,

Yes I did, and do, advocate for not bothering with bonds until you have about six figures in the portfolio, before you start to slice and dice. But since you were also running into the minimum investments issues with Vanguard (and that's the primary motivation of choosing the ETF version), I suggest that Fidelity is a better fit for you, since they have funds with no minimums. The following portfolio is an example (using same percentages as yours):

Roth IRA : Fidelity Zero Index Fund FZROX : 27%
HSA : Fidelity Zero Index Fund FZROX : 27%
Trad. IRA : Fidelity Total Stock Market Fund FSKAX : 18%
401k : Vanguard 500 Index fund : 27%

Fidelity HSA is the best there is, their customer interface is also excellent (my wife's 403b plan is with Fidelity). Better than Lively or HSA Bank or any other outfit. Fidelity also has excellent diversified international index funds that you can add to your portfolio when you do get to $100k or more balance. Where Vanguard's advantage shines is in Taxable accounts. In taxable accounts, Vanguard index funds do not distribute capital gains. But this is not an issue for you in tax-advantaged accounts listed above.
Thank you for another consideration. In fact, the low beginning balance can be overcome easily. I am putting $6000 into T-IRA within a week or so, because I have not invested at all this year (Don't even have IRA account). So I can buy whatever I want with Vanguard from there. When the next year hits in 2 weeks, I can put $3000 into my R-IRA from my emergency fund in January, then start buying Vanguard Admiral Share. It will come back to the original amount in 6 months. No problem.

Now, I am not married to Vanguard, but I had a thought. Vanguard has its own philosophy. Amazon has its own philosophy. Both are customer driven. I don't know about Walmart, but maybe it has its very unique philosophy that made them great like no one else. So maybe Vanguard is the way to go. I am thinking about both IRAs at Vanguard and buy VTSAX from each.

In order to automate the bi-weekly process, maybe I will set up an autopay in my checking account that will put money into Vanguard accounts, then set an automatic contribution in Vanguard. Is that what many people do?

Then, use Fidelity for HSA - thanks to carmonkie...
Here are my (hopefully last) questions:
1. You do not recommend buying Fidelity international funds now, only later. Why? Why do I want all of my funds into US stocks now? Diversification?
2. I see two large international funds: FZILX (no ER) and FSPSX (0.035%). Which one do you recommend? Both have no minimum. Nothing is free, and it will catch up and sneak up on you, so FSPSX? Oh, I see FTIHX (0.06%) as well.

Thank you, lkpr!
Last edited by stingray777 on Tue Dec 17, 2019 10:13 pm, edited 2 times in total.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Tue Dec 17, 2019 9:56 pm

retire2022 wrote:
Tue Dec 17, 2019 9:35 pm
stingray

IRS publication 17 is your everything you need to know regarding federal income taxes here is page on IRA, Pages 119-132 for calendar year 2018:

https://www.irs.gov/pub/irs-pdf/p17.pdf

If you use acrobat pdf reader using the "find" function you can search the pdf for 401k as well, best there are 67 entries

Publication 590a page 22 explains what you can or cannot transfer to

https://www.irs.gov/pub/irs-pdf/p590a.pdf
Hi, retire2022. I love your name. Is that when you retire? Or at least it is your plan?
I will check these PDFs out tomorrow. Thank you.

Topic Author
stingray777
Posts: 77
Joined: Sun Dec 08, 2019 2:57 pm

Re: 401k, tIRA, Roth IRA, HSA --- ahhhh too many to manage!?

Post by stingray777 » Sun Dec 22, 2019 2:34 pm

deikel wrote:
Mon Dec 16, 2019 1:23 pm

Don't choose three funds for every acocunt, choose the three fund portfolio (if that is what you want) and pick the lower dollar amount TIRA or ROth to carry one of them ad the rest you do in your (eventually larger) 401k account - makes re-balancing much simpler. Side aspect, put the highest risk (presumed highest return) fund into the Roth - Roth gains are not taxed at all, so this account should grow best.
I apologize. I read every word again, and I totally missed this part (in fact, I had read the first paragraph and skipped the rest)- Don't do 3 funds in each account (even the funds are the same). That is what I am going to end up doing. Thanks for all the other advise as well. It is really good to know I am on the right path with the help of all the BHs! You are deeply appreciated.

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