The "What Are You Doing This Moment" Thread

[rms]

Depends on when you plan to retire. If it's greater than ten years, I would suggest putting 100% in the most aggressive fund and gradually diversify in less risky funds as you get closer. It's hard to really to give a more dedicated response without knowing what the portfolio's are in each fund. I'm only a CPA though so I may not be the best source, but it would also would be nice to know the tax status on the funds you're contributing as well.

edit: Is this an IRA/401(K) or something else?

this should be an IRA. It's a fed government one only, tsp.gov , is the website.

im guessing i got 35-40 years until retirement

here's the fund overview : https://www.tsp.gov/InvestmentFunds/FundsOverview/index.html

The F, C, S, and I Funds are index funds, each of which is invested in order to replicate the risk and return characteristics of its appropriate benchmark index. For example, the C Fund is invested in a stock index fund that fully replicates the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of the stocks of 500 large to medium-sized U.S. companies. The C Fund's objective is to match the performance of the S&P 500. The F, C, S, and I Funds remain invested regardless of the performance of the securities markets or the overall economy.

on tax status, i cannot make any more deposits atm since i no longer am federally employed and i know its 20% if i pull out before 65. not sure if that is everything ya need to know or not

There are entire books written about investment strategy. I agree with Dazed's opinion to an extent but it's all dependent upon how 'risk averse' you are. If you are young and don't mind taking risk, try something like emerging markets or an aggressive growth fund. If you care more about dividend income and don't want to high growth, get income driven stocks (like blue chip stocks or whatever) or bonds since they pay money every 6 months for 'x' amount of years. I would speak to an adviser if you have one available. I have a securities license but I'm so far removed from the finance realm at this point in my life that my advice won't be that great tbh. I got a degree in Finance and don't even use it anymore but it still really interests me.

It would be helpful to know what each of those funds comprises so that we could probably give you a little more info.

i'm down with the risk, this is really just side $ at the moment.

but if im going risky and aggressive, would i split it or keep it aggregated? seems like 100% is ideal for a risky option.

 

[Dak]

I think the market is in a bubble related at least in large part to all the QE. At some point the unwinding will have to occur.

 

[zabu of nΩd]

I would speak to an adviser if you have one available.

This > taking investment advice from the internet

 

[Dak]

If you do get a financial advisor, you need one with signed fiduciary duties.

 

[CiG]

dying of diabetes at 73.

73? That's wishful thinking if you have diabetes.

An entity that essentially legalizes extortion? Cool story, bro! Post a picture of you wearing your brand new Che shirt you bought on Amazon.

Unions are shit, but not having them is even shittier.

 

[Dak]

Unions are shit, but not having them is even shittier.

Unions are shit. The threat of unions is an arguably good thing though.

 

[CiG]

They mostly work in our favour here, in my experience. Teachers Unions and Police Unions are the worst imo.

 

[Dak]

Teachers Unions and Police Unions are the worst imo.

Taxpayer funded monopolies, so yeah.

 

[CiG]

Taxpayer funded monopolies, so yeah.

More concerned with the direct assault on meritocracy it has in arguably two of the most important areas of society.

 

[Dak]

More concerned with the direct assault on meritocracy it has in arguably two of the most important areas of society.

Well union and taxpayer funded are inextricable from direct assault on meritocracy.

 

[Talos of Atmora]

Well union and taxpayer funded are inextricable from direct assault on meritocracy.

With teacher's unions, it really sucks when it comes to this. Especially for low-income communities who get stuck with awful substitutes who never do their jobs to begin with.

 

[CiG]

Well union and taxpayer funded are inextricable from direct assault on meritocracy.

Yeah agreed. However a union that makes it hard for a corporation to arbitrarily fire a bunch of workers is much less an assault imo than not allowing shit cops to get fired or shit teachers to get fired because the protection of shit cops and teachers has a huge impact on society.

Unions obviously could be improved, I just wouldn't do away with them.

 

[Dazed and Brutal]

this should be an IRA. It's a fed government one only, tsp.gov , is the website.

im guessing i got 35-40 years until retirement

here's the fund overview : https://www.tsp.gov/InvestmentFunds/FundsOverview/index.html

The F, C, S, and I Funds are index funds, each of which is invested in order to replicate the risk and return characteristics of its appropriate benchmark index. For example, the C Fund is invested in a stock index fund that fully replicates the Standard and Poor's 500 (S&P 500) Index, a broad market index made up of the stocks of 500 large to medium-sized U.S. companies. The C Fund's objective is to match the performance of the S&P 500. The F, C, S, and I Funds remain invested regardless of the performance of the securities markets or the overall economy.

on tax status, i cannot make any more deposits atm since i no longer am federally employed and i know its 20% if i pull out before 65. not sure if that is everything ya need to know or not



i'm down with the risk, this is really just side $ at the moment.

but if im going risky and aggressive, would i split it or keep it aggregated? seems like 100% is ideal for a risky option.

First off, if your not investing in Roth IRA you need to start and also transfer out of the traditional IRA if that's what your in. By virtue of compound interest, you're better off footing the tax bill today rather than down the line. However, I would wait until the new tax policy kicks in to do this because it will ultimately save a marginal amount of money with a lower tax rate. Additionally, you want all your funds in equity with a 35-40 year horizon for retirement. There's no reason to worry about a bubble in the short term because the markets will rally as they always do. What you don't want to happen is that you have funds caught in a downswing five or so years from retirement. Otherwise, max out your contribution limit and forget about the market until you get to that point. These funds are diversified at an aggregated level so it's not like dumping your money into dogecoin or some shit.

The S&P is fair spot to park your funds for the long haul, but I would personally opt into the riskiest fund possible.

 

[rms]

Would I have to contact the tsp people to confirm which type of IRA it is?

 

[Dazed and Brutal]

Would I have to contact the tsp people to confirm which type of IRA it is?

oh you're in a TSP.... I had a tsp when I was in the army and we could access and manage funds online. If they have a rep, I would recommend consulting them on the particulars. There won't be any penalty for the transfer so long as you get it done with 30-90 days or so (can't remember the exact deadline). I remember them having a Roth option, but I've since transferred them to an IRA since ETSing.

edit: there definitely a roth tsp. I'm sure you can transfer it.

 

[zabu of nΩd]

First off, if your not investing in Roth IRA you need to start and also transfer out of the traditional IRA if that's what your in. By virtue of compound interest, you're better off footing the tax bill today rather than down the line.

How do you know that? With a Roth contribution, you pay tax on all the money up front, but there's no telling when (or if) you pay on all the money withdrawn from a traditional IRA, because it's withdrawn over many years of retirement. Any money left untaxed has more time to keep compounding.

You neglected to mention the possibility of having a lower tax rate in retirement anyway, along with the fact that an individual's financial situation is deeply personal and complex, where things like lifestyle and spending habits need to be factored in before any sound asset allocation decisions can be made. These are two basic things anyone qualified to give financial advice would know (not that giving financial advice on a web forum is ever a good idea to begin with), so just stop.

 

[Dazed and Brutal]

How do you know that? With a Roth contribution, you pay tax on all the money up front, but there's no telling when (or if) you pay on all the money withdrawn from a traditional IRA, because it's withdrawn over many years of retirement. Any money left untaxed has more time to keep compounding.

You neglected to mention the possibility of having a lower tax rate in retirement anyway, along with the fact that an individual's financial situation is deeply personal and complex -- two basic things anyone qualified to give financial advice would know (not that giving financial advice on a web forum is ever a good idea to begin with), so just stop.

Well it just depends where he is tax wise at the moment. I believe that new tax policy won't hold for 35 years and he will actually have higher taxes in the future, but this is just conjecture. The tax policy going into effect currently is phasing a lot of it's benefits over eight years so it might be prime time to load up a Roth fund. I mean he's talking about 35 years or so into the future so I don't think he has sense of exactly of the lifestyle he will wanting at that point and should probably re-evaluate it as time goes. The whole point is to start saving early regardless.

I already disclosed that I'm only a CPA, but I think I'm qualified enough to lend some advice. It's up to him to decide and you can feel free to chime in.

 

[zabu of nΩd]

Well it just depends where he is tax wise at the moment. I believe that new tax policy won't hold for 35 years and he will actually have higher taxes in the future, but this is just conjecture. The tax policy going into effect currently is phasing a lot of it's benefits over eight years so it might be prime time to load up a Roth fund. I mean he's talking about 35 years or so into the future so I don't think he has sense of exactly of the lifestyle he will wanting at that point and should probably re-evaluate it as time goes. The whole point is to start saving early regardless.

I already disclosed that I'm only a CPA, but I think I'm qualified enough to lend some advice. It's up to him to decide and you can feel free to chime in.

I absolutely do not agree that you're qualified to give advice here, sorry. You don't seem to understand that financial advice goes beyond the letters after your name -- it involves a one-on-one relationship where you get to know someone personally and understand how their lifestyle affects their finances.

 

[Dazed and Brutal]

I absolutely do not agree that you're qualified to give advice here, sorry.

word. do you even know about the deductibility of traditional ira/tsp limitations? forced distributions? or that many people end having to back-door into roth ira's in the future anyway?

edit: I'll dig into the minutia if you want me to. it's not nearly as simple as being in a lower tax bracket at retirement

 

[Dazed and Brutal]

I absolutely do not agree that you're qualified to give advice here, sorry. You don't seem to understand that financial advice goes beyond the letters after your name -- it involves a one-on-one relationship where you get to know someone personally and understand how their lifestyle affects their finances.

I agree, but he still needs to save as much as possible now and aggressively given the 35 year timeline. There's no way to be precise about his "lifestyle" at the moment and there's no reason to fret over market crashes in the short term given the natural ebbs and troughs of the market and that he will be investing in index funds. At some point he does want to temper the investments and move things around, but that's a null point today. You'd be an idiot diversifying into bonds for a retirement forecasted out 35 years.

edit: Plenty of people have recommended seeking the advice of a financial advisor which he should absolutely do before committing to anything concrete. I'm speaking on things I learned while in grad school. However, getting so hung up on the man's lifestyle 35 years away from retirement is silly. I'm sure he's sensible enough to save what he can while still budgeting for short to long goals and such.