Financial planning

[Chuychanga 133]

I have one company who runs my 401k. I have another guy who runs my Roth IRA and 529s. And I have an employee stock purchase  at 10% discount program that I’m pretty much on my own for. 

 I need help figuring out how much money to allocate to each of those and which should be a bigger priority to max out.  I feel like if I talk to the 401(k) group they’re going to steer me toward maxing it out while the guy who runs my Roth will steer me toward maxing it out first.  

  As it is now I’m maxing out the 401k and making a much smaller contribution to the Roth and just about to start buying the discounted stock but only at a couple hundred bucks a month or so.  

 Are there rules of thumb on this stuff that I should be following? Do I need an independent financial planner that can look at the whole package and steer me straight on all of this? 

Edit:   My company contributes 15% of my salary into the 401(k). It’s a Plan B, not a match. That 13% goes in regardless of what I contribute.   My understanding is that that goes toward the limit of 54k but is separate from my limit of 18.5k. 

Edited July 26, 2018 by Chuychanga

[Reagan1k 3024]

You probably would be wise to sit down with a fee-only planner who operates as a fiduciary for you to aggregate all this and help you allocate resources.

Looks like you already have the vehicles in place - you need someone to show you how / where to steer.

[Washpark 176]

If I was in your position, max roth (tax avoidance for when you retire is almost always better later given compounding nature of money), a split between 401(k) and 529.

The split between 401(k) and 529 depends on kids situation and how much you want to contribute to their college. I would not screw yourself on retirement as most people don't save enough and likely kids won't take care of you. 

If you can max out 401 (k) and significantly contribute to 529 then only would buy company stock. Stock purchase plan don't have the tax advantage and your are already invested in the company by working there. 

Unless, you can buy stock with that discount in your roth or 401k but I doubt that.

https://www.betterment.com/resources/traditional-or-roth-401k-decide-with-this-401k-calculator/

Edited July 26, 2018 by Washpark

[Wally Fairway 5539]

PM Chad Briscoe, I'm sure he could help

Or do what Reagan said

[luke duke 6412]

Post your situation on the Bogleheads forum. You will get excellent advice.

[Spur08 382]

Just now, luke duke said:

Post your situation on the Bogleheads forum. You will get excellent advice.

This, but I would do a thorough report of your portfolio for them.

[CooterBrown 18002]

I personally max out the employee stock purchase plan. No savings account is going to pay you 10% which is effectively what you earn day one assuming you don’t sell within a year.

[Tailgate 3021]

46 minutes ago, luke duke said:

Post your situation on the Bogleheads forum. You will get excellent advice.

This right here. And as another poster mentioend you need to lay out where everything is located and what type of fund/equity everything is in.

When the time is right you may want to condier rolling somethings into Vanguard. That is the company Mr. Bogle started.

[Dahobbs 17522]

I split fairly equally between roth, reg 401k, and taxable accounts. But the best mixture for you depends on your current financial situation AND the situation you expect to be in at retirement. One bit that applies almost universally: low cost index funds are your friend. Vanguard has a good selection of them. Paying someone to manage your money is largely a waste unless you have an absurd amount of money or are not willing or able to do some basic financial research. Personally, I aim for expense ratios under 1 percent and even under .1 percent for passive index funds. I will pay max of 1 percent for active management if no other choice (e.g., 401k has limited options). I actually think the max I currently pay is .8 or so. 

[52-80 19144]

anything free, take it.

if you squirrel away diligently at a macro level, then the reshuffling is less significant.

***

you sure your 401k is a 401k and not a 403b?  i've only had the former, and at a minimum, i take advantage of the full company contribution.

the roth i would also match the 401k, and if possible, max.  because my personal belief is that the US has extremely low income taxes to other comparable nations and the rates can only go up, even if your retirement annuities are lower.

dspp - max it out.  as stated above, its automatic 10% gain, minus some execution lag and taxes.  i typically execute half of mine and use it to balance my portfolio

529 i would weigh the lowest.  banking on kids getting scholarships - god help them if they end up being idiots.

 

[DaysOff 7947]

The 415© limit for 2018 is 55k, or in my case 61k because of the over 50 $6000 catchup.

I definitely would max the 401k and ira first. You will have to switch to a traditional ira in short order or do the back door roth scam because of your earnings.

[Chuychanga 133]

Thanks everybody. 5280, it’s definitely a 401k.  But instead of matching my contributions the company just puts in an automatic percentage unrelated to my contributions.  Our profit sharing also goes in there until I reach the 55k limit. 

 I cannot afford to max out all three of these sources of retirement at the same time yet.  So I guess I’m now on the hunt for a fee based independent planner to take a look at it all every few years. 

[Axle Hongsnort 208]

Necro bump - any recs for fee only financial planning fiduciaries in Austin ?

[luke duke 6412]

Just read the Boglehead forum and save yourself a shitload of money.

[hornbri 1394]

On 12/4/2020 at 9:43 PM, luke duke said:

Just read the Boglehead forum and save yourself a shitload of money.

this 

[BillyBadAss 189]

If the Boglehead "method" is basically to just buy 3 specific mutual funds and leave them alone save for a yearly re-balance, I don't quite understand why the forum is so busy.  

 

[UTexasFight 9428]

On 12/4/2020 at 1:57 PM, Axle Hongsnort said:

Necro bump - any recs for fee only financial planning fiduciaries in Austin ?

I too am interested in a response to this...

 

will give the Boglehead a read as well

[gsoda3 3245]

On 12/4/2020 at 1:57 PM, Axle Hongsnort said:

Necro bump - any recs for fee only financial planning fiduciaries in Austin ?

anyone?

[Guest Lobo]

Craig Hester, Luther King Capital Management.  

[Patrick Bateman 3910]

BKA Wealth, they do fee only and will work with you on one offs or if you need an accountability partner.  Eric Boyce is the guy and I think the lady's name is Miranda who you begin the process with.