Jonathan Clements: Three Questions That Can Change Your Finances…And Your Life Preachin' to the choir here :)
We started our kids in IRAs when they were in their early teens, 2K was the max. Now at age 37 and 32 they have 160K and 130K respectively all in Roths (converted from trad IRAs). It's kinda our annual 'gift' to them. Keeps money out of Washington, too.
Their spouses, however, had no such plans established for them and so, even tho they have started plans now, they probably will never fully 'catch up' due to the early compounding. They're talking 401's and 403's to supplement.
My biggest concern right now is getting our two kids to participate more in the selection of funds as there will come a day when we can no longer do it. Our daughter in particular does some reading, and I gave both of them charts showing values at various percents over time (both accumulation and deposit.) To their credit they seem to understand the M* 9-box matrix (imperfect as it is), they know to look at the ER and the risk ratings, to look for stock overlap, and they like the "committee" approach employed at D&C and Primecap, for example. Hey, maybe I didn't do such a bad job :)
Anyway, it's been a fun 20-25 years.
best, hawk
In Rare Move, Vanguard Beefs Up International Exposure In Target Date Funds
Scott Burns Annual Letter: A Lovely But Insanely Difficult Idea FYI: The most treasured fantasy of investing is the belief that winners can be picked. If you put together enough computers, enough data and enough talent to find the secret, you’ll have the key to consistently picking winners. Riches beyond imagining wait behind the door it unlocks.
But reality interferes.
Click the graphic below to view a color-coded, rank-ordered list of asset class returns over the last 1
5 years. Last year we showed it as a roulette wheel, which it really is, but this year we’re showing it as you would see it presented by most students of investing.
Regards,
Ted
http://assetbuilder.com/company/2015_annual_letter.aspx
Fidelity Offers To Pay Customers For New IRA business Here's
Fidelity's page on the promotion, and a third party page listing
all the current Fidelity promotions for bringing in new money. It looks like Fidelity's IRA promotion pays the most right now.
I haven't yet seen is a declaration of tax treatment. What's implied is that the match is treated like other earnings in the IRA. But the IRS might consider the match a contribution. (It looks like rebates from a Fidelity Amex card into an IRA may be treated as contributions - I haven't looked carefully, but
Fidelity's footnote 1 to this card suggest issues exist.)
Edit - Fidelity Amex card rebates that go into an IRA are indeed considered same year contributions (and thus limit the additional amount that you can contribute). This is on their
FAQ page for the card. The question to look at is: "How do the Fidelity Rewards Credit Cards work if I elect to deposit my rewards in a tax-advantaged IRA or a
529 plan at Fidelity?"
The bonus is structured somewhat differently - it is based on the amount that you contribute (so it is more like an employer 401k match than a third party contribution to an IRA). That may or may not make a difference in the tax treatment.
Jonathan Clements: Three Questions That Can Change Your Finances…And Your Life Hi
@TedLikely for yourself, too; but over the years the biggest challenge I have found with trying to get folks to put aside monies for investing was to change their spending habits.
One change that did help a lot was the, although slow, introduction of 401k plans into company plans. This addition made saving and investing easier.
I always tried to help with the understanding of compounding of investing profits. One of the most critical parts for growing monies, eh?
There remain too many I know who would comment about once a year over the past 30 years that; "I want to get together and talk about investing." I had one such comment 3 months ago and I recall the comment from the same person, starting 2
5 years ago. The couple has put aside some monies with an adviser (my understanding), but they have mostly lost the value of compounding time. Instead of investing earlier in their lives, they did things and purchased "stuff" that have little value today and these items did not greatly enhance their lives.
I know you fully understand all of this. Just some personal notes.
Take care,
Catch
Fidelity Offers To Pay Customers For New IRA business
Jonathan Clements: Three Questions That Can Change Your Finances…And Your Life
Buy a Healthcare Fund to Pay for Your Rx I would have thought that the IRS already knew you had coverage or not? Are there not some other circumstances with 0Care that one might have to pay extra taxes?
I'm drawing a blank as to what those conditions are.
With respect to whether the IRS knows you had coverage - it appears that there are reporting requirements imposed by ACA on the providers of "minimum essential coverage" (MEC), though I haven't checked deeply into these. On the other hand, there are protections for "personal health information" (PHI) built into HIPAA.
Here's an articlediscussing this. It sounds like the IRS does get the information it needs (including SSN), but I'd still like to see that spelled out more clearly.
http://www.workplaceprivacyreport.com/2015/02/articles/hipaa/aca-information-reporting-creates-data-privacy-and-security-issues/It seems to depend on what constitutes PHI ...
"The Affordable Care Act maintains strict privacy controls to safeguard personal information. The IRS will not have access to personal health information,” said HHS spokesperson Erin Shields Britt, to Kaiser Health News.
http://www.healthcareitnews.com/news/irs-face-lawsuit-over-theft-60-million-patient-health-recordsAs far as extra taxes go, remember that it was the ACA that added the 3.8% net investment tax and the 0.9% Medicare tax on wages above certain thresholds. Though I doubt that's what you had in mind when you asked whether there were other situations where the ACA added taxes.
http://www.irs.gov/Affordable-Care-Act/Affordable-Care-Act-Tax-Provisions
You Need To Know About This Healthcare ETF I think I will keep my PJP up 13.95% ytd five year average total return 33.47. Just wish I had bought it five years ago instead of two. You could not go wrong with almost any health care fund or etf in recent years. Lots of great funds and etfs to choose from.
Buy a Healthcare Fund to Pay for Your Rx as I go down that list of "personal Consumption" categories I See EVERY one of them Decreasing in my Life.... Except Healthcare
including Food and Beverages....Know I wont eat or drink as much (spending) as I Did
Depending on Insurance changes and your Health situation spending could be 50%+, that's kinda scary...buy supplement policies?
Lipper Mutual Fund Category Performance Report; As Of 2/26/15 Diversified +14.06(5yr)...Good Benchmark for your funds (beat it), Careful on Sector(+10%) funds exp. Bio/Healthcare (bad Grouping for a category)
Foreign....why bother?...
Fixed Income =4.4% avg...that's all there is..enjoy better than cash or Cds
A Primer for Mutual Fund Investing OR:Send me a one-time (renewable) fee and I send you my previously (free) posted report "how to use Mutual funds to YOUR advantage", A limited offer to first 50 requests
