Thanks. I’ve spent plenty of time there.
Tax efficient strategy is a big part of our planning with the fee-only advisors we started with a few years prior to retirement. (Not everybody would want to sign up for this kind of assistance - it costs about 1% annually on the assets we have with them at Schwab. They advise based on our “big picture”, including assets elsewhere.) We meet with them quarterly. Technically only one of those meeting each year is earmarked for tax planning, but it really is a big part of every discussion… both for current year estimated tax payments and long term game plan. My husband has always handled much of investment stuff, so this arrangement gives me peace of mind in case he dies (or looses interest/ability in handling own finances) before I do.
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Agree on your DS’s priorities. Sounds like some follow through, and if DS/wife are childless, they have a little time to get something set up. Once they have stuff set up, they can re-evaluate w/o that much time or emotional energy.
I know DD1/SIL have things ‘set up’ – DD1 understands things, and her DH sees where her logic makes sense.
DD2 is starting to understand retirement savings/investing and will learn more when she is here for a visit in July. She has some separate Roth IRA account in TD Ameritrade (login still works/info with TD Ameritrade even though they have been taken over by Schwaab), and she has decided to leave that alone for now.
The person that came to talk to the employees about their 401k/Roth talked in very broad strokes, but she has company matching and I believe she has her choices in Roth. The guy talked about a ‘targeted fund’ and gave a return amount – yes it has a high return % now because it was newly established during a very up market. When she is here, I can see on her lap top what all her investment options are, and she can always adjust her investment choices. Her current Roth IRA account as of April was a bit over $15K; she converted her prior retirement account from a state employer (auto cash out due to not being there 10 years) to IRA and then to Roth IRA - and it is in various index stock funds.
‘Transitions’ for all of us are not easy, as well as prioritizing certain things - as much as we know certain things should be done.
We have a property claim to deal with as of today (!) It seems we have water damage which is probably from recent wind/storm - somehow coming from roof and down on a wall in our formal dining room (so I didn’t see it until today) - it is with water mark across seam between ceiling and wall (which is the stain I saw looking through from our front door and looking back through our formal living room and into the dining room). On closer inspection, the water ran down and soaked some of the carpet out a few feet from the wall. We have a generous crawl space (we are in an area with high water tables, and also in the south with not far down frost line) - many houses are on slabs here. IDK if inspector will come out Monday, but no action until Monday. Of course DH is out of town until Tuesday.
We have been through a room claim before with prior insurance company (State Farm) in 2013; water damage (that one was due to a slow leak in the wall behind the family room, but it wet enough of the carpet to have the flooring replaced in the room). State Farm had a carpet evaluation done - as our carpet and padding were high end. The adjuster said he never saw carpet rated so high; we ended up having the flooring replaced with wood flooring and didn’t pay much of a difference out of pocket.
With dining room, we also will put in wood flooring; they will have to have a ‘transition’ line into the formal living room carpeting - which has a very wide room separation (there is a partial wall coming out 31 inches on both sides with the large open trim).
An unexpected ‘project’. The hail and wind damage is a $2,000 deductible (we paid more to have that). Roof was replaced n 2009 and was 30 year material. Current coverage is with IBHS Fortified Roof standards. IDK what will be done with roofing. I have a large fan facing the floor/wall area to have things start to dry out and have any mold odors away from next room (kitchen). The insurance guy on the phone told me we have a rider for $2500 to be spent on mold.
Hope the contracting company we had with the work in 2013 is active/continuing company, and is on some USAA approved list. They were good to work with and their subs were excellent too. We used one of their subs for some other work on our house.
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Okay, @1214mom, we’re gonna get this done! At least part of it. The part where you have way too much sitting in a savings account earning very little. This is a no brainer, it will take you less than five minutes. This requires no thinking, no discussing, no pondering, it’s easy, done. All you need is a cup of coffee, glass of wine, or your favorite beverage, and five minutes.
You already have an account with Fidelity. You might already even have your bank account connected to it. Just log onto your Fidelity account. At the top left of the screen, on the small print, click “open a brokerage account”. It walks you through the process, even autofills in most of your information. When you get to “Choose a core position”, chose the Fidelity Gov Money Market Fund (SPAXX). This fund’s seven day yield is 4.95% right now. Finish it up, submit, send your extra cash there. It is insured by the SIPC.
If you do that with Fidelity, or there are other easy, safe options with many other brokerage firms if you have accounts, you don’t even have to think about what to do with money. Sure, there are probably better options, but maybe you don’t want to worry about it or make decisions. This is an excellent place to park it while you’re waiting to figure it out. And if you leave it there and do nothing, well, around 5% adds up quickly. There’s one thing off your list. I probably spent more time writing this post than it will take you to do this. 
And if I didn’t motivate you to do this, maybe at least there’s someone else out there who has money parked, earning nothing, that might decide to spend five minutes and get it done!
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You make a good point… maybe in the next couple of days.
I actually do have the $s in a high yield savings account, but I
I know I could do better.
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Do you know what kind of yield it’s getting? Maybe it’s close to 5%, some accounts are pretty good. My bank account is getting less than 0.1%, so it’s pretty sickening.
The IT on USAA got the rep’s link working so got an inspection lined up for Wednesday; they gave a new claim number (our policy number plus a three digit number, which went up one with the new claim number - the old number will be deleted). So we have all these phone numbers and people now on the ‘team’ - local inspector and their corporate assigner, USAA desk adjuster and adjuster. With the text messages, I asked for a phone call on Monday - will see if that ‘happens’ but will be calling after 9 am in order to start scouting out the right repair companies (and find out who is on a USAA recommended list if they have one like State Farm).
So now I have ‘time’ to get rooms ready for work coming in.
Just glad things are not worse.
Throwing another suggestion out there for those doing some estate planning with likely amounts to pass down. We never terminated our kids’ 529’s even after graduation. We continue to contribute to both monthly to set up college funds for the grandchildren (hopefully to come) which will grow without being subject to cap gains.
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Agree, and at least in my state, offers me one of the very few deductions against state income.
@busdriver11 @1214mom a my high yield savings account at Vanguard is earning about 4.5%. And my savings account at TD (previously) was earning 4 % b/c I had a larger amount (had to talk to the bank to make sure it was classified correctly to get that return vs the infinitesimal amount in a regular savings).
thinking that’s not too bad or worth putting in a more volatile money market — right? Thinking 1214mom might not be in that bad a position if the savings account returns are in that vicinity…?
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I have around $10k in a Discover savings account. I am notified whenever the rate changes, and it’s super-easy to move money into my Chase checking account if/when necessary. FDIC insured of course.
High yield savings accounts can pay out pretty well, depending upon which one you choose. I don’t know what @1214mom’s savings account pays, but it sounded like she wasn’t too happy with it. I was just recommending that she do something easy, with a company she already had an account with. There are many options, but I was merely going for the quickest option. Inertia is a powerful force, and if I have to open something up at a different bank or investment firm that I have to track separately, I might not do it. Personally, I have enough accounts at different places, so I’m just going to do the best with what I have already.
Supposedly there are some high yield savings accounts paying around 5%, but I’m too lazy to chase them. As far as TD Ameritrade, they were sucked up by Schwab, and I don’t think they offer a high yield savings account any more, however, they have a great money market fund (SWVXX) that I throw whatever stocks I sell into, that is paying 5.15% right now. Personally, I’m not that concerned about volatility of a money market, everything is insured, but I just want my money that’s sitting there not in stocks or ETFs to earn something decent. Vanguard’s high yield savings account sounds great.
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This is what my youngest son said is his plan. He will be getting a fairly good increase in salary this year and plans to put the extra into a Roth IRA while maxing his traditional 401k. Funny I sent him some copy and paste from this thread and the Boglehead link and he said that was his plan but he’s staying with traditional for now. I’m so glad our kids are actually thinking about this and making it a priority. Neither of my younger two are including SS in their retirement funding…if it’s still there, it will be a bonus.
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My son managed to tune me out the multiple times I explained the benefit of fully funding the Roth 401K and not directing any money to the traditional 401K. He decided on his own to allocate half to each account.
I finally sat down and typed it out for him, showing his current tax rates and projected future rates. I also estimated the value of an 401K account in 50 years to show him how high his RMDs will be.
As soon as he read my explanation, he pivoted to all Roth 401K.
I realize that you have already tried to educate him, and I share your frustration (assuming you are frustrated as I was with mine!).
Perhaps this article could help:
I fully admit that no one knows what will happen with tax rates & brackets, but if your children are high earners–even leaving the current tax rates as is–they will be in higher brackets soon. I recognize that YOU know all of this!
I agree with your children about not including SS in their calculations.
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I’m actually not frustrated. I’m pleased he’s taking time to figure this out.
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Speaking of higher yielding versus virtually no yielding savings, what annoys me is the way my bank is constantly trying to figure out ways to park money in lower yielding accounts despite my efforts to keep in in higher yielding locations. I feel like its a war of attribution I have to be constantly vigilant to win. One of their tricks is are “cash sweeps.” For example, in my brokerage account, every interest or dividend-yielding product throws off its payments and even full balances on maturity into a “cash sweep” that earns 0% interest. They refuse to have any option for me to setup those sweeps to auto-transfer for deposit into a savings or money market instead, and they don’t have any online tools that allow be to select it for transfer myself. I can’t even email them and ask. The only way they will transfer is by verbal confirmation with a broker. There’s enough products that its throwing cash into these sweeps every day or two and all I can do is waste the time every few weeks to manually have a call to authorize it being moved into something that generates interest. They would be happy to let it sit there interest free.
Even worse, there’s another account which is a broker-managed where they do all the trading. I explicitly asked for the higher equity ratio possible. But they say their rules require at least 2% of the balance at any given time be in a cash sweep which is again earning 0% and for which I cannot control or even force the withdrawal of. For example, if I called and tried to withdraw the amount in the sweep, they would sell other products and leave the cash there.
They also like to have higher interest accounts “expire.” I will complain the interest rate is too low, they will say they have a new savings account or money market they can move it to with a higher yield then without warning or notification I will later find it back to almost 0% and they will say that the high yield was for a limited term. So it’s a shell game where I constantly need to call them, press for whatever the latest yield earning liquid account is and set it up and transfer only to have to do so again.
I get they would prefer to hold my money interest free, but it’s ridiculous how aggressive they are about it. I have some secondary accounts, like Fidelity, where they will automatically move things to a decent yield money market. Yet my primary bank/brokerage plays these games.
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That’s really bad. If any possible way, I’d try to get everything out of that bank and switch it to someone who is not trying to keep your money and make it as difficult as possible to get a greater return. You actually have to manually call them to move it into an interest generating product? Really scammy, and that would anger me enough to find a way to transfer it. Though I’ll bet they don’t make that easy, either.
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Virtually all my savings, etc. are in Vanguard where I have a personal advisor. They sweep into a money market fund that earns $$$.
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I wonder why it is, if this tax change was so good, that they made it permanent for businesses, but not for individuals? I expect that with the expiration of the elimination of the 10K SALT limitation that I will end up benefiting with the expiration, along with others who have large deductions that were limited, but it looks like a lot of people are going to have their taxes increase.
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I’ve considered moving a few times but it would be a decent sized project with a lot of complications so I keep putting it off. We have so many tentacles in the bank. Over 16 accounts, tons of auto deposits and electronic transfers setup, our primary credit card is issued as a companion option to having our accounts there, all my adult kids get free banking services for all their accounts there as a result of my primary account balance, etc. Some of those accounts would be impossible to simply “move” – I would have to liquidate and trigger a lot of capital gains and in other cases early termination fees. There are perks, they just don’t excuse the pettiness of these games. For example, all accounts and services are free, even wires, notary services, etc. I don’t pay ATM fees anywhere (they will even reimburse what the third party company charged), no foreign currency conversion fees, etc. I have email and phone access to my banker or a person on their team so no dealing with a call center. Anything I need they Fedex next day at their expense, etc. Their credit card gives me United Club access which we use fairly often. I also have access to instant lines of credit if wanted, though I rarely use it anymore – when rates were lower, I did use it to arbitrate some higher yielding investments.