paradox of choice

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Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

paradox of choice

Post by Eblana1 » Sat Aug 01, 2020 8:58 am

I am fully enveloped in rumination about how to proceed. I am newly into the FI community, have read Simple Path to Wealth, a couple other finance books, and more recently Bogleheads. I am 42 and feeling quite behind in all of this and would love to forge ahead instead of being in analysis paralysis. I need to move some accounts, re-allocate, while considering my overall portfolio for allocations and tax implications. Please help me step it up! I think once I sort out the following, I will be in such a better place.

- 42 y.o. couple, no kids
- no debt outside of a 117,00 mortgage (3.785 interest rate)
- emergency fund (80,000) - will use some to buy a used car soon
- $160,000 income from W2 jobs (combined)
- 20-25000/year LLC job


1) 457
- $51000 just started maxing out this year
- Just allocated to the following:
- 5% VIPIX (bonds)
- 15% VBTIX (bonds)
- 30% VIIIX (stocks)
- 15% VMCIX (mid cap stocks)
- 15% TISBX ( small cap - no Vanguard available)
- 15% TCIEX (international large blend - no vanguard available)
- 5% VGSNX - (Real estate)

I based this on readings from Simple Path/Bogleheads plus what is available. They are all low expense ratio, the others were higher costs.

2) Husbands 401k
- 75,000 just started maxing out this year
- all in Fidelity Advisor Freedom 2040 M (no choices available)

3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.

4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio

5) Brokerage account - advisor 1% fee (Fidelity)
- 46,000
- haven't been contributing, but probably will start after filling the other buckets
- I want to "fire" advisor, move it to vanguard (or wherever we move stuff)
- how to allocate
- will this be a tax liability by moving it?

6) IRA from husbands old job (John Hancock)
- 55000 Fidelity Advisor Freedom 2040 M
- we aren't contributing
- should we move this?

7) 403B and YURAP my old job (TIAA CREF)
- 403b - 22,000 -
- YURAP - 49,000
- about 10,000/13.27% in annuities, 84.91% in equities (VGSNX - 8.87%, VEMRX - 9.66%, VSMPX - 39.96%, VDIPX - 28.24%), and 1.81% in cash/money market. There is a target fund in there somewhere - I am struggling to fully understand it yet.
- Do I roll it elsewhere? The annuities are problematic, I know.

8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?

I want to be as great of a DIY'er as all of the people I am starting to learn about, but this seems complicated. I know I need the entire portfolio to be well balanced, with bonds in the tax efficient accounts, etc. Should I hire someone? What you *you* do?

Goals: consolidate as much as possible/as much as makes sense for best investment portfolio and tax optimization, continue to save as much as possible to eventually quit my full time job and increase my business to support me, hopefully retire early (or at least work part time since I do love my part time job and it is finally remote).

User avatar
galving
Posts: 176
Joined: Wed Oct 07, 2009 12:47 pm
Location: US Gulf Coast

Re: paradox of choice

Post by galving » Sat Aug 01, 2020 9:55 am

Welcome to the club. . .
It's a fun adventure to learn and grow your investing knowledge.
Check out the bogleheads wiki about developing an IPS (Investment Policy Statement). This is your strategic guide to investment.
My focus has been toward simplifying our overall position because it takes effort to manage all the different funds/positions/brokerage services.

Understanding your risk tolerance, your current asset allocation (% stock vs. % bond mix), and your target asset allocation is critical.
Often for new investors are surprised to find that Current vs Target differ wildly.
Example: One of my family members Target AA was 80/20 Stocks to Bonds. . . his actual was 0% Stocks/75% Bonds/25% Cash. It was eye-opening.

Many follow the 3 fund portfolio, and I can't wait to get that efficient. For now with multiple 401ks it will have to wait.

The Bogleheads will be happy to help you learn.
Good luck

User avatar
galving
Posts: 176
Joined: Wed Oct 07, 2009 12:47 pm
Location: US Gulf Coast

Re: paradox of choice

Post by galving » Sat Aug 01, 2020 9:57 am

My recommendation is not to hire an advisor.
If you feel that you need one make sure they are a one-time consulting fee only.

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whodidntante
Posts: 8628
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: paradox of choice

Post by whodidntante » Sat Aug 01, 2020 10:10 am

I recommend you start reading the Wiki here.

A low-cost (ideally < 0.2% ER) target date fund is a great choice for tax-advantaged accounts. It's a better portfolio than what most advisors and better than what most Bogleheads will recommend, in my opinion. It can't be any simpler than shoveling as much money into a single fund as you can.

For a taxable brokerage account, I like equity index ETFs, due to the favorable tax treatment that equities receive. You can also use that money to plug a budget shortfall so you can max tax-advantaged accounts.

02nz
Posts: 5420
Joined: Wed Feb 21, 2018 3:17 pm

Re: paradox of choice

Post by 02nz » Sat Aug 01, 2020 10:15 am

Go for simplicity and low cost. Get rid of the advisor. And yes move away from John Hancock.

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ruralavalon
Posts: 18800
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: paradox of choice

Post by ruralavalon » Sat Aug 01, 2020 11:04 am

Welcome to the forum :) .

It's good to see that you are debt free other than the mortgage note, What planning maximum contributions to your tax-advantaged accounts.


It is often better to coordinate investments among all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately. Select just one or two of the better funds (most diversified + lower expense ratio) in the work-based account (401k, 403b, 457, SIMPLE IRA, TSP etc.), where the choices offered are limited. Then complete the rest of the asset allocation using the nearly unlimited choices available in a taxable account or any IRAs. It is not necessary to put all elements of the desired asset allocation in each account.

This approach lets you avoid having to use sub-par, sub-optimal or high expense funds often found in work-based plans. Do not try to put all components of the asset allocation in every account.

This approach also allows for better tax-efficiency if you use taxable account too. Wiki article, "Tax-efficient Fund Placement".

What is your desired asset allocation (the stock/bond mix and the domestic/international stock mix that you want to aim for)? More information is necessary, see my questions below. Please see this for format in adding new information: "Asking Portfolio Questions".


Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
1) 457
- $51000 just started maxing out this year
- Just allocated to the following:
- 5% VIPIX (bonds)
- 15% VBTIX (bonds)
- 30% VIIIX (stocks)
- 15% VMCIX (mid cap stocks)
- 15% TISBX ( small cap - no Vanguard available)
- 15% TCIEX (international large blend - no vanguard available)
- 5% VGSNX - (Real estate)

I based this on readings from Simple Path/Bogleheads plus what is available. They are all low expense ratio, the others were higher costs.
Those are very good fund choices. For simplicity you could omit the mid-cap and small-cap funds. Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) ER 0.02% is an S&P 500 index fund, in my opinion good enough by itself for investing in U.S. stocks.

Please add the fund names and expense ratios, don't just use the ticker symbols. Most people don't memorize many ticker symbols, so would have to look up what you are talking about. Sometimes the expense ratios charged in a 401k are different than those charged the general public for the identical funds.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
2) Husbands 401k
- 75,000 just started maxing out this year
- all in Fidelity Advisor Freedom 2040 M (no choices available)
It is hard to believe that the only one fund choice is offered in his current employer's 401k plan. Please double-check this.

What funds are offered in his current employer's 401k plan? Please give fund names, tickers and expense ratios.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

To coordinate investments among all accounts, this really must be addressed first.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.
Fidelity has good index funds with very low expense ratios, you could leave the account at Fidelity if you wish. Vanguard is my personal preference, but Fidelity is also a good choice.

Withdrawals from a Roth IRA are you tax-free, so I suggest using stock index funds because of their expected higher returns, rather than using a bond fund.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio
Withdrawals from a Roth IRA are you tax-free, so I suggest using stock index funds because of their expected higher returns, rather than using a bond fund.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
5) Brokerage account - advisor 1% fee (Fidelity)
- 46,000
- haven't been contributing, but probably will start after filling the other buckets
- I want to "fire" advisor, move it to vanguard (or wherever we move stuff)
- how to allocate
- will this be a tax liability by moving it?
Fidelity has good index funds with very low expense ratios, you could leave the account at Fidelity if you wish. Vanguard is my personal preference, but Fidelity is also a good choice.

Bond funds are not very tax-efficient so ordinarily should not be held in a taxable brokerage account. Instead hold bond funds in tax-advantaged accounts preferably tax-deferred accounts.

In a taxable brokerage account hold very tax-efficient stock index funds or stock index exchange traded funds (ETFs).

What funds do you currently have in this account? Please give fund names, tickers and expense ratios.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
6) IRA from husbands old job (John Hancock)
- 55000 Fidelity Advisor Freedom 2040 M
- we aren't contributing
- should we move this?
What fund firm or brokerage is his rollover IRA with?

What funds are offered in his current employer's 401k plan? Please give fund names, tickers and expense ratios.




Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
7) 403B and YURAP my old job (TIAA CREF)
- 403b - 22,000 -
- YURAP - 49,000
- about 10,000/13.27% in annuities, 84.91% in equities (VGSNX - 8.87%, VEMRX - 9.66%, VSMPX - 39.96%, VDIPX - 28.24%), and 1.81% in cash/money market. There is a target fund in there somewhere - I am struggling to fully understand it yet.
- Do I roll it elsewhere? The annuities are problematic, I know.
Please add the fund names and expense ratios, don't just use the ticker symbols. Most people don't memorize many ticker symbols, so would have to look up what you are talking about. Sometimes the expense ratios charged in a 401k are different than those charged the general public for the identical funds.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

It depends almost entirely on expenses and funds offered, information not provided in your post. There are three basic choices.

1) If the funds offered in the old 401k are good with low expense ratios, and there is no account maintenance fee charged for keeping the account there or only a small fee, then it may be best to leave the old 401k where it is.

2) If the new 401k offers similar or better funds with similar or lower expense ratios, and will accept a rollover from the old 401k, then it may be best to roll the old 401k over into the new 401k.

3) If neither 401k offers good funds with low expense ratios then it may be best to roll the old 401k over to an IRA at a low cost provider like Vanguard or Fidelity.

Wiki article, 401k, ”Rollover to IRA".

Additional considerations include:

1) the convenience of having one fewer account to keep track and manage, if you move the old 401k into the new plan or an IRA;

2) depending on your state, a 401k plan may have greater protection from creditors than does an IRA;

3) a rollover to an IRA may impede ability to do a Backdoor Roth IRA for higher income individuals, and

4) a 401k allows distributions penalty free starting at age 55 if no longer employed, and has other provisions for withdrawals earlier than age 59.5. Wiki article, 401k, "Move to new 401k".



Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

marcwd
Posts: 304
Joined: Tue Feb 20, 2007 10:15 am
Location: Massachusetts

Re: paradox of choice

Post by marcwd » Sat Aug 01, 2020 12:08 pm

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
I am fully enveloped in rumination about how to proceed.
I love your first sentence! Haven’t read beyond it yet...

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:03 am

galving wrote:
Sat Aug 01, 2020 9:55 am
Welcome to the club. . .
It's a fun adventure to learn and grow your investing knowledge.
Check out the bogleheads wiki about developing an IPS (Investment Policy Statement). This is your strategic guide to investment.
My focus has been toward simplifying our overall position because it takes effort to manage all the different funds/positions/brokerage services.

Understanding your risk tolerance, your current asset allocation (% stock vs. % bond mix), and your target asset allocation is critical.
Often for new investors are surprised to find that Current vs Target differ wildly.
Example: One of my family members Target AA was 80/20 Stocks to Bonds. . . his actual was 0% Stocks/75% Bonds/25% Cash. It was eye-opening.

Many follow the 3 fund portfolio, and I can't wait to get that efficient. For now with multiple 401ks it will have to wait.

The Bogleheads will be happy to help you learn.
Good luck
Thank you! It has been a fun adventure, although like many I can't believe I didn't know this before and wish I did! I will check that out - this resource can be overwhelming at first but the guidance here is already incredible. I will work on the IPS and the asset allocation goal and update my post asap. All of this has been eye opening. I am so happy to have found you all. Many thanks!

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:04 am

marcwd wrote:
Sat Aug 01, 2020 12:08 pm
Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
I am fully enveloped in rumination about how to proceed.
I love your first sentence! Haven’t read beyond it yet...
Ha! When I edit with updates hopefully I can get you unstuck.

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:11 am

ruralavalon wrote:
Sat Aug 01, 2020 11:04 am
Welcome to the forum :) .

It's good to see that you are debt free other than the mortgage note, What planning maximum contributions to your tax-advantaged accounts.


It is often better to coordinate investments among all accounts, in other words treat all accounts together as a single unified portfolio, rather than view each account separately. Select just one or two of the better funds (most diversified + lower expense ratio) in the work-based account (401k, 403b, 457, SIMPLE IRA, TSP etc.), where the choices offered are limited. Then complete the rest of the asset allocation using the nearly unlimited choices available in a taxable account or any IRAs. It is not necessary to put all elements of the desired asset allocation in each account.

This approach lets you avoid having to use sub-par, sub-optimal or high expense funds often found in work-based plans. Do not try to put all components of the asset allocation in every account.

This approach also allows for better tax-efficiency if you use taxable account too. Wiki article, "Tax-efficient Fund Placement".

What is your desired asset allocation (the stock/bond mix and the domestic/international stock mix that you want to aim for)? More information is necessary, see my questions below. Please see this for format in adding new information: "Asking Portfolio Questions".


Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
1) 457
- $51000 just started maxing out this year
- Just allocated to the following:
- 5% VIPIX (bonds)
- 15% VBTIX (bonds)
- 30% VIIIX (stocks)
- 15% VMCIX (mid cap stocks)
- 15% TISBX ( small cap - no Vanguard available)
- 15% TCIEX (international large blend - no vanguard available)
- 5% VGSNX - (Real estate)

I based this on readings from Simple Path/Bogleheads plus what is available. They are all low expense ratio, the others were higher costs.
Those are very good fund choices. For simplicity you could omit the mid-cap and small-cap funds. Vanguard Institutional Index Fund Institutional Plus Shares (VIIIX) ER 0.02% is an S&P 500 index fund, in my opinion good enough by itself for investing in U.S. stocks.

Please add the fund names and expense ratios, don't just use the ticker symbols. Most people don't memorize many ticker symbols, so would have to look up what you are talking about. Sometimes the expense ratios charged in a 401k are different than those charged the general public for the identical funds.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
2) Husbands 401k
- 75,000 just started maxing out this year
- all in Fidelity Advisor Freedom 2040 M (no choices available)
It is hard to believe that the only one fund choice is offered in his current employer's 401k plan. Please double-check this.

What funds are offered in his current employer's 401k plan? Please give fund names, tickers and expense ratios.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

To coordinate investments among all accounts, this really must be addressed first.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.
Fidelity has good index funds with very low expense ratios, you could leave the account at Fidelity if you wish. Vanguard is my personal preference, but Fidelity is also a good choice.

Withdrawals from a Roth IRA are you tax-free, so I suggest using stock index funds because of their expected higher returns, rather than using a bond fund.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio
Withdrawals from a Roth IRA are you tax-free, so I suggest using stock index funds because of their expected higher returns, rather than using a bond fund.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
5) Brokerage account - advisor 1% fee (Fidelity)
- 46,000
- haven't been contributing, but probably will start after filling the other buckets
- I want to "fire" advisor, move it to vanguard (or wherever we move stuff)
- how to allocate
- will this be a tax liability by moving it?
Fidelity has good index funds with very low expense ratios, you could leave the account at Fidelity if you wish. Vanguard is my personal preference, but Fidelity is also a good choice.

Bond funds are not very tax-efficient so ordinarily should not be held in a taxable brokerage account. Instead hold bond funds in tax-advantaged accounts preferably tax-deferred accounts.

In a taxable brokerage account hold very tax-efficient stock index funds or stock index exchange traded funds (ETFs).

What funds do you currently have in this account? Please give fund names, tickers and expense ratios.

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
6) IRA from husbands old job (John Hancock)
- 55000 Fidelity Advisor Freedom 2040 M
- we aren't contributing
- should we move this?
What fund firm or brokerage is his rollover IRA with?

What funds are offered in his current employer's 401k plan? Please give fund names, tickers and expense ratios.




Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
7) 403B and YURAP my old job (TIAA CREF)
- 403b - 22,000 -
- YURAP - 49,000
- about 10,000/13.27% in annuities, 84.91% in equities (VGSNX - 8.87%, VEMRX - 9.66%, VSMPX - 39.96%, VDIPX - 28.24%), and 1.81% in cash/money market. There is a target fund in there somewhere - I am struggling to fully understand it yet.
- Do I roll it elsewhere? The annuities are problematic, I know.
Please add the fund names and expense ratios, don't just use the ticker symbols. Most people don't memorize many ticker symbols, so would have to look up what you are talking about. Sometimes the expense ratios charged in a 401k are different than those charged the general public for the identical funds.

You can simply add this to your original post using the edit button (the pencil icon near the upper right corner of your post), it helps a lot of all of your information is in one place.

It depends almost entirely on expenses and funds offered, information not provided in your post. There are three basic choices.

1) If the funds offered in the old 401k are good with low expense ratios, and there is no account maintenance fee charged for keeping the account there or only a small fee, then it may be best to leave the old 401k where it is.

2) If the new 401k offers similar or better funds with similar or lower expense ratios, and will accept a rollover from the old 401k, then it may be best to roll the old 401k over into the new 401k.

3) If neither 401k offers good funds with low expense ratios then it may be best to roll the old 401k over to an IRA at a low cost provider like Vanguard or Fidelity.

Wiki article, 401k, ”Rollover to IRA".

Additional considerations include:

1) the convenience of having one fewer account to keep track and manage, if you move the old 401k into the new plan or an IRA;

2) depending on your state, a 401k plan may have greater protection from creditors than does an IRA;

3) a rollover to an IRA may impede ability to do a Backdoor Roth IRA for higher income individuals, and

4) a 401k allows distributions penalty free starting at age 55 if no longer employed, and has other provisions for withdrawals earlier than age 59.5. Wiki article, 401k, "Move to new 401k".



Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?

Thanks so much for your patient response and help. I will read the Wiki article and 'Asking Questions' and edit asap. I have the breakdown for my 457 but will have to dive into the rest more effectively. Hopefully you will be here when I do this, as it might take a couple of days. I honestly am so grateful to have found this community and am grateful for your taking the time to sift through this with me.

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:17 am

galving wrote:
Sat Aug 01, 2020 9:57 am
My recommendation is not to hire an advisor.
If you feel that you need one make sure they are a one-time consulting fee only.
Thanks! I won't. This platform and community is amazing.

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:20 am

whodidntante wrote:
Sat Aug 01, 2020 10:10 am
I recommend you start reading the Wiki here.

A low-cost (ideally < 0.2% ER) target date fund is a great choice for tax-advantaged accounts. It's a better portfolio than what most advisors and better than what most Bogleheads will recommend, in my opinion. It can't be any simpler than shoveling as much money into a single fund as you can.

For a taxable brokerage account, I like equity index ETFs, due to the favorable tax treatment that equities receive. You can also use that money to plug a budget shortfall so you can max tax-advantaged accounts.
Thank you!I will get to reading! The target date fund was on my mind. I guess since it in itself would be well-balanced in terms of asset allocation I wasn't sure how to allocate the overall picture. I have some updating and reading to do and will edit/post. Much appreciated.

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Sun Aug 02, 2020 4:22 am

02nz wrote:
Sat Aug 01, 2020 10:15 am
Go for simplicity and low cost. Get rid of the advisor. And yes move away from John Hancock.
Ok thank you! Sound advice.

User avatar
BolderBoy
Posts: 4883
Joined: Wed Apr 07, 2010 12:16 pm
Location: Colorado

Re: paradox of choice

Post by BolderBoy » Sun Aug 02, 2020 10:24 am

Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.

4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio
These are the easiest. Set up the Roth IRAs (at Vanguard). Have VG initiate and complete the transfer of the existing Fidelity-held rIRA. Put it all in the VTSAX fund. In general, rIRA money is the last money you touch in retirement, so it should be allowed to grow the most (stocks grow faster than bonds, usually). Use the same principle for your husband's rIRA.
8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?
Do the solo401k. You can put more into it than in a SEP-IRA and you also want to allow for possible backdoor Roth IRA contributions if the option arises later. Where you setup the solo401k will depend upon if you want the option to roll an existing tIRA into it.

Welcome to the forum.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

Topic Author
Eblana1
Posts: 8
Joined: Sat Aug 01, 2020 7:08 am

Re: paradox of choice

Post by Eblana1 » Mon Aug 03, 2020 8:45 pm

BolderBoy wrote:
Sun Aug 02, 2020 10:24 am
Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.

4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio
These are the easiest. Set up the Roth IRAs (at Vanguard). Have VG initiate and complete the transfer of the existing Fidelity-held rIRA. Put it all in the VTSAX fund. In general, rIRA money is the last money you touch in retirement, so it should be allowed to grow the most (stocks grow faster than bonds, usually). Use the same principle for your husband's rIRA.
8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?
Do the solo401k. You can put more into it than in a SEP-IRA and you also want to allow for possible backdoor Roth IRA contributions if the option arises later. Where you setup the solo401k will depend upon if you want the option to roll an existing tIRA into it.

Welcome to the forum.
BolderBoy wrote:
Sun Aug 02, 2020 10:24 am
Eblana1 wrote:
Sat Aug 01, 2020 8:58 am
3) Roth IRA - advisor fee 1% - Fidelity
- 70,000 maxed out yearly
- When we ‘fire’ him, I will move it to Vanguard likely.
- how to allocate? I want to make sure my overall portfolio is allocated well, not just this one account.

4) New Roth IRA
- we will be opening and maxing out a ROTH IRA for my husband
- again, how to allocate to fit overall portfolio
These are the easiest. Set up the Roth IRAs (at Vanguard). Have VG initiate and complete the transfer of the existing Fidelity-held rIRA. Put it all in the VTSAX fund. In general, rIRA money is the last money you touch in retirement, so it should be allowed to grow the most (stocks grow faster than bonds, usually). Use the same principle for your husband's rIRA.
8) New SEP or solo 401k
- I have about 18000 waiting to be invested from my LLC (just changed from sole proprietorship), can I do this as a lump sum, or only 25%/year
- given the entire picture, SEP or solo 401k?
Do the solo401k. You can put more into it than in a SEP-IRA and you also want to allow for possible backdoor Roth IRA contributions if the option arises later. Where you setup the solo401k will depend upon if you want the option to roll an existing tIRA into it.

Welcome to the forum.
Thank you so much! Great places to start. I can't wait to update the post as needed but this is also immensely helpful to simultaneously get the ball rolling. Right now I think* the SOLO 401K money will be coming straight from a banking account.

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