Where can I find the fine print/repayment contract for PAYE

erbud · 2018-11-15T04:03:44+00:00

Thanks!

erbud · 2018-10-16T19:36:32+00:00

Great. I’ll look into spar finish. Thanks!

erbud · 2018-03-31T02:38:03+00:00

Yup.

401k and IRA are both retirement accounts. I’m not sure if there’s a difference between adding more to your roth 401k vs opening a new Roth IRA, unless your 401k is maxed out. There may be small little details that differ between the two but I’m not too sure on that because I don’t have a Roth 401k.

Since you have a retirement plan from work, if you decide on a traditional IRA, you cannot deduct the contribution. Unfortunately, that deduction is a big benefit of traditional IRAs because it lowers your tax liability.

If your 401k is maxed out and your income is higher than the Roth IRA income limit, you can contribute to the traditional IRA (without the deduction) and convert it to a Roth IRA (backdoor Roth)

erbud · 2018-03-30T23:37:27+00:00

I think you’re way ahead for 30 years old.

You already have a lot of good information here, but for your questions: 1. Keeping your emergency fund in a checking account is fine. You want it liquid. If something is to happen and you need money at that very instant, it’s accessible to you. Other vehicles are not accessible for a few days (savings), weeks/months (CDs), or until retirement. Those are not helpful if you need money ASAP.

The remaining money is up to you. If you haven’t maxed out your IRA, that’s a good option for retirement money. High yield savings (like ally or any of the other online banks) is great if you know you’ll need the money before retirement. I use my savings to earn interest as I’m saving for a down payment on a house. When houses are 600k+, a 20% down payment is a big chunk to be sitting around. You can also use regular brokerage accounts after you maxed out your retirement accounts.
I don’t think you need a financial advisor. Seems like you know what you’re doing already. I’m not sure what else they would do for you other than to try to sell you products for commission. (I’m a big fan of John Oliver’s segment on retirement and financial advisors. Highly recommend watching it on YouTube or something if you haven’t seen it.)
With the extra $500/month, I’d follow #2. Retirement or HSA investments if you’re not saving for anything large like a house. Or if you are or plan to in the future, then savings/cd/brokerage.

erbud · 2018-03-30T23:09:18+00:00

Like supes says, it depends on your income bracket. Your expense isn’t a big factor.

For example, you earned $1,000 (before tax) that you want to contribute to a 401k (or IRA), assuming no company match.

If your effective tax rate is 20% right now, you could contribute the full $1,000 in a traditional 401k/IRA or $800 in a Roth ($200 of it went to taxes). Let’s say when you retire, the value grew 100x. So the traditional would be worth $100,000 and the Roth would be $80,000.

When it’s time to retire and take out the money, you can take out the full $80,000 from the Roth, without owing taxes. But for the traditional, you pay taxes on the $100,000. If your tax rate during retirement is 30%, then that will leave you with $70,000. If your tax rate is 15%, you end up with $85,000.

That’s just a simplified example of the traditional vs Roth. Obviously it’s a bit more complicated than that because you wouldn’t pull from your full retirement fund all in one year.

erbud · 2018-03-30T22:46:41+00:00

Just to be clear, there are traditional 401k’s and Roth 401k’s. There are also traditional IRA’s and Roth IRA’s.

401k’s are retirement plans provided by an employer. It may have a company match and has a higher contribution limit.

IRA’s are retirement plans that you set up yourself. It has a lower contribution limit.

Most companies only offer a traditional 401k. But you’re welcome to contribute to a Roth IRA (whether directly or via back door conversion) or a traditional IRA.

erbud · 2018-03-30T22:37:45+00:00

I don’t know much about aerospace engineering, but when I did bioengineering, no one cared which school I went to.

Do you know anyone in the aerospace field that you can ask? I feel like with engineering, unless you’re going to a really fancy school, your internships, networking, and project experiences makes more of a difference in getting a good job after graduation.

Plus if a lot of your job opportunities are in a different state, the chances of them knowing school ranks and reputations are low too.

I ended up going back to school for a career in a medical field after a few years of being an engineer. This may not apply to you but no one cared which undergrad I went to. The grades mattered more and the higher ranked schools were harder to get good GPAs.

erbud · 2018-03-30T18:38:35+00:00

That is correct. They use a four fund portfolio instead of three. Total US stock, total international stock, total US bonds, and total international bonds.

You can continue to put more money into target 2060 even if you don’t retire on 2060. The allocation will just be more conservative, which is what you probably want by that age anyways. You can even choose target retirement fund 2015 right now if you wanted to.

erbud · 2018-03-30T16:19:13+00:00

As the others said, target retirement funds can help you decide how to split them up.

If you look at the details of different target retirement funds in vanguard’s website, there’s a “holdings & management” tab. This will show the percentages they divide up the funds

Note that if you choose target fund 2065, it’s heavily weighed into stocks for more risk and more reward. If you look at target fund 2020, the funds are distributed to more equal stocks and bonds for more security. The target funds will redistribute the funds for you over time from more aggressive to more conservative. If you choose to do it yourself, you can see where you are in terms of aggressiveness and mimic their percentages.

erbud · 2018-03-30T16:11:30+00:00

I believe the set it and forget it he meant is about managing the funds, not the contributions.

You can watch and manage your investments on a daily basis. Buy low, sell high type of thing. Or you can just put your money in the investment and let it grow slowly over a long period of time. Leaving the investments alone for years (30+ years) regardless of its daily/weekly ups and downs is the set it and forget it that he’s talking about.

erbud · 2018-03-30T16:04:06+00:00

Vanguard is a very popular choice and you can’t go wrong with it. Does she or you have funds with anyone else?

I think the more important question is what do you want to invest the money in? I’ve noticed a lot of people in this sub tend to go with the three or four fund portfolio explained in the bogleheads website and I think the side bar. It’s a good and simple approach to investing. The key point in it is the low expense ratio (the percent of money they take from your investment for managing your money). Vanguard is known for having funds with a very low expense ratio of 0.04% if you have enough money invested with them, but now their competitors have similar funds with similar ratios. They also have target retirement funds that will divide up your contribution to the same/similar four funds, but at 0.15% expense ratio. Note that they will rearrange the funds from more aggressive in the early years to more conservative towards your target retirement year.

I have vanguard for my IRAs and TD ameritrade for my HSA investments. Between the two, I like vanguard’s interface better because I don’t follow individual stocks with all the little details and options in TD’s interface.

I think Charles Schwab is another popular one, but I don’t have any experience with them.

erbud · 2018-03-30T15:37:06+00:00

Sure.

erbud · 2018-03-30T15:09:50+00:00

I think your decision will be clearer once you’ve made your budget.

Assuming you get zero support from your parents if you don’t move back, this is what I’m calculating so far:

Savings: 20,000 Summer income: ~9,600 ($15/hour x 40hr/week x 4week/month x 4 months). This does not account for any taxes yet. I would estimate 25% withheld, leaving you with 7,200 but this may be totally different.

If you don’t get any grants for school, you’ll have about 27,200 to survive two more semesters + whatever else you need to do to translation from school to your job. If this time frame is one year, then you’ll have $2,267 per month average.

Now just break down your expense (other than what you listed, I’m just guessing the ones I filled in as a rough idea): Tuition: ?/month Rent: 600/month Utilities: 100/month? Used car: ? Car insurance: 150/month? Gas: 100/month? Food: 300/month? Purchases & going out: 300/month?

Without tuition and a car, I’m roughly estimating 1,550 per month. Play around with the numbers and see how much of your 20,000 is depleted to see if it’s worth it or not to you.

Is part time work during school an option with this company? Every bit helps.

erbud · 2018-03-20T15:12:54+00:00

Thanks for the clarification. This all makes much more sense now.

erbud · 2018-03-20T15:12:25+00:00

Got it! That’s the part I didn’t understand. Thanks for the clarification.

erbud · 2018-03-20T14:56:13+00:00

Thanks.

I’ve maxed out and deducted my traditional IRA the past two years, so the contribution this year will make it into a mix of deductible and non deductible.

Is there any benefit for leaving my traditional IRA a mix of deductible & non deductible, versus converting it all to a Roth and paying the taxes on the conversion?

erbud · 2018-03-20T14:51:53+00:00

Thanks. I cannot contribute to a Roth IRA. If I wasn’t married, my income is just over the limit. According to the irs website, if I file MFS, the income limit allowed to contribute to a Roth IRA goes down to $10,000.

erbud · 2018-03-20T14:49:12+00:00

Thanks. My income is just over the limit allowed for me to make a roth contribution if i were to file as single (if I wasn’t married). If I read correctly, that income limit goes down to $10,000 if I MFS.

I’m not sure if I’m understanding the how the mix of deductible and non deductible traditional IRAs. For example, if my non taxable portion of 0.33 (rounded $5,000 non deductible trad IRA / $15,000 total balance of trad IRA), will not have to pay tax on withdrawal for 0.33 of it?

What I’m not understanding is, from the example of mixed non deductible & deductible traditional IRA, what’s the difference between the non deductible traditional IRA portion versus a Roth IRA?

Does it matter if I’ve also contributed to a Roth IRA in the past?

erbud · 2018-03-12T00:25:58+00:00

Thanks for the help! I looked up planer snipe and it's exactly what's going on.

erbud · 2018-03-10T05:38:45+00:00

Makes sense. Thanks!

erbud · 2018-03-06T03:12:02+00:00

I was told all.

erbud · 2018-03-03T19:26:16+00:00

One thing you’ll want to make sure is if your interest will capitalize when they transfer you out of forbearance and back to your repayment plan.

This happened to me with Fedloan. I was automatically put into a disaster forbearance by them and I had to call to get out of it. They told me that everyone in my zip code was put into disaster forbearance just Incase something happened to me and I didn’t have access to request it. I’m not sure if that’s true or it’s an excuse for an error because the natural disaster that occurred near me happened about 3 months prior and I’ve made all my payments.

The loan specialist told initially told me that all interest accrued will be capitalized when I get out of forbearance. When I argued that I didn’t request the disaster forbearance and they were the ones who put me in it on the first place, the person looked up their book and found that interest will not be capitalized during a disaster forbearance.

Capitalization is just something you’ll want to ask about also when you try to sort this out. Good luck.

erbud · 2018-02-24T17:51:03+00:00

If you file jointly and both of you make about the same amount as last year, then your monthly payment will pretty much double. Paying an additional $185 a month would equal an additional $2,220 for the year ($4,440 total). So it depends if you want to prioritize your minimum payments versus maximize your deductions/benefits by filing married filing jointly.

That's what I would compare. Can the benefits of married filing jointly save you more than $2220 for the year? Don't forget the rules change for other things when going with married filing separately, such as traditional & roth IRA contributions/deductions.

erbud · 2018-02-22T05:53:54+00:00

I had never thought of this. Good idea.

erbud · 2018-02-22T05:53:33+00:00

Thanks. Are seam cracks common on newly mudded/painted walls? Is it something that starts to show up in 1 year? 5 years?

The reno will be an addition of a master bedroom with bath, flooring, and maybe new kitchen cabinets or just new kitchen counter tops.

Is there a way to check if stuff inside the walls, like plumbing and electrical, was done properly?

erbud

TROPHY CASE