vania-janet/multiturn-rag-retrieval-data huggingface dataset:
Taxes  Based on the numbers you quoted (-$360) it doesn't appear that you would have a taxable event if you sell all the shares in the account.  If you only sell some of the shares, to fund the new account, you should specify which shares you want to sell. If you sell only the shares that you bought when share prices were high, then every share you sell could be considered a loss. This will increase your losses. These losses can be deducted from your taxes, though there are limits. Fees Make sure that you understand the fee structure. Some fund families look at the balance of all your accounts to determine your fee level, others treat each fund separately.  Procedure If you were able to get the 10K into the new account in the next few months I would advise not selling the shares. Because it will be 6 to 18 months before you are able to contribute the new funds then rebalancing by selling shares makes more sense. It gets you to your goal quicker.  All the funds you mentioned have low expense ratios, I wouldn't move funds just to chase a the lowest expense ratio. I would look at the steps necessary to get the mix you want in the next few weeks, and then what will be needed moving forward. If the 60/40 or 40/60 split makes you comfortable pick one of them. If you want to be able to control the balance via rebalancing or changing your contribution percentage, then go with two funds.
I have considered doing the same thing. One idea I have tossed around is investing in a REIT. A REIT is kind of like a Mutual Fund for real-estate. They normally own a large portfolio of real-estate (perhaps apartments, or commercial space, etc) and by owning a share you get some of the upward swing, without the hassle of ownership (i.e. you can sell instantaneously). The REIT sometimes handles the whole lifecycle of property management: finding renters, collecting rent, maintenance, etc. There are a lot of public REITs in the US that you can buy. Another option might be to buy shares in a Home Building company like KB Homes.  Yet another option that ties onto your lack of retirement savings is the little known fact that after tax Roth IRA contributions can be withdrawn without penalty! Since 401ks can be rolled over into a Roth IRA (normally you have to leave your employer), in theory a 401k contributions can also be cashed out you just need to be careful about tracking your contributions.
"Since most of the answers are flawed in their logic, I decided to respond here. 1) ""What if you lose your job, you can't pay back the loan"" The point of the question was to reduce the amount paid per month. So obviously it would be easier to pay off the 401k loan rather than the 3 separate loans that are in place now. Also it's stated in the question that there's a mortgage, a child with medical costs, a car loan, student loans, other debt. On the list of priorities the 401k loan does not make the top 10 concerns if they lost their job. 2) ""Consider stopping the 401k contribution"" This is such a terrible idea. If you make the full contribution to the 401k and then just withdraw from the 401k rather than getting a loan you only pay a 10% penalty tax. You still get 90% of the company match. 3) ""You lose compound interest"" While currently the interest you get on a 401k (depending on how that money is invested) is higher than the interest you pay on your loans (which means it would be advantageous to keep the loans and keep contributing to the 401k), it's very unreliable and might even go down. I think you actually have a good case for getting a loan against the 401k if a) You have your spending and budget under control b) Your income is consistent c) You are certain that the loan will be paid back. My suggestion would be to take a loan against the 401k, but keep the current spending on the loans consistent. If you don't need the extra $150 per month, you really should try to pay off the loans as fast as you can. If you do need the $150 extra, you are lowering the mental threshold for getting more loans in the future."
Are you obligated to do what they ask? Probably not, with one big caveat discussed below. Your employer sent your money and their money after every paycheck to the 401K management company. Then after a while the 401K management company followed your instructions to roll it over into an IRA. Now the IRA management company has it. Pulling it out of the IRA would be very hard, and the IRA company would be required to report it to the IRS as a withdraw. Here is the caveat. If the extra funds you put in allowed you to exceed the annual contribution amount set by the law, or if it allowed you to put more than 100% of your income into the fund, then this would be an excess contribution, and you and your employer would have to resolve or face the excess contribution penalties. Though if the 401K company and HR allowed you to exceed the annual limit they have a much more complex problem with their payroll system. The bigger concern is why they want you to pull out your $27.50 and their $27.50. Unless you were hitting the maximum limit, your $27.50 could have been invested by adjusting the percentage taken out of each check.  You could have picked a percentage to reach a goal. That money is yours because you contributed it and unless you exceed the IRS set limits it is still pre-tax retirement money. The return of matching funds may be harder to calculate. The returns for 2013 were very good. Each $1.06 of matching funds each paycheck purchased a fraction of some investment. That investment went up and down, ok mostly up, if it was invested in the broad market. I guess you should be glad they aren't asking for more due to the increase in value.  It would be very hard to calculate what happened if you have moved it around since then. Which of course you did when you moved it into an IRA. If the average employee was also given a $55 gift last year, then the suggestion to the employer is that the tax complexity you and your fellow employees face would exceed the cost of the extra funds. They should chalk it up to an expensive lesson and move on.
No, sorry. A change of 401(k) administrator is not an out, otherwise many would flee a bad plan. I'd suggest you only deposit up to the match, but use an IRA if you'd like to save more. A plan with high fees can easily negate the tax benefits and then some.
Things are more complicated for non-spouse beneficiaries of a 401(k) account. If you have not deposited the money yet, you may wish to contact the plan administrator and have them do a trustee-to-trustee transfer. If you take possession of the money (by depositing that check) then it will be considered a distribution and won't be eligible for a roll-over deposit. Required minimum distributions will still apply, but those are based on when your mother would have reached the age 70.5, rather than 62. It's not clear to me why they chose that number unless it was something specific to the rules of her 401(k) plan.
If there is  no match and you are disciplined enough to contribute without it coming directly out of your paycheck, dump the 401K.  The reason: Most 401K plans have huge hidden fees built into the investment prices. You won't see them directly, but 3% is not uncommon. 3% is a horrible drag on your investment performance. Get an IRA or Roth IRA and pick something with low fees.  Bonus: You will have a lot more investment choices!
"For what it's worth, the distribution I'm currently using is roughly ... with about 2/3 of the money sitting in my 401(k). I should note that this is actually considered a moderately aggressive position. I need to phone my advisor (NOT a broker, so they aren't biased toward things which are more profitable for them) and check whether I've gotten close enough to retirement that I should readjust those numbers. Could I do better? Maybe, at higher risk and higher fees that would be likely to eat most of the improved returns. Or by spending far more time micromanaging my money than I have any interest in. I've validated this distribution using the various stochastic models and it seems to work well enough that I'm generally content with it. (As I noted in a comment elsewhere, many of us will want to get up into this range before we retire -- I figure that if I hit $1.8M I can probably sustain my lifestyle solely on the income, despite expected inflation, and thus be safely covered for life -- so this isn't all that huge a chunk of cash by today's standards. Cue Daffy Duck: ""I'm rich! I'm wealthy! I'm comfortably well off!"" -- $2M, these days, is ""comfortably well off."")"
Which strategy makes more sense: Check your new Fidelity 401k plan. Make sure it has a good group of funds available at very low fees. If it does, roll over your Principal 401k to your new 401k. Call Principal and have them transfer the funds directly to Fidelity. Do not have them send you a check. If the new plan doesn't have a good fund lineup, or has high fees, create a rollover IRA and roll your old 401k plan into it. Again, have Principal transfer the funds directly. Consider using Vanguard or other very-low-cost funds in your IRA. Taking the money out of your old 401k to pay toward your mortgage has several disadvantages. You will pay taxes and a penalty. Your mortgage rate is very good, and since you are probably in a high tax bracket and perhaps itemize deductions, the effective rate is even less. And you lose liquidity that might come in handy down the road. You can always change your mind later, but for now don't pay down your mortgage using your 401k money. As a result of being under 20%, I am paying mortgage insurance of   about $300/mo. This is wasted money. Save aggressively and get your mortgage down to 80% so that you can get rid of that PMI. If you are earning a high salary, you should be able to get there in reasonably short order. If you are maxing out your 401k ($18,000 per year), you might be better off putting it on pause and instead using that money to get rid of the PMI. I have no 'retirement' plans because I enjoy working and have plans to   start a company, and essentially will be happy working until I die You are young. Your life will change over time. Everyone young seems to choose one of two extremes:  In the end, very few choose either of these paths. For now, just plan on retiring somewhere close to normal retirement age. You can always change your plans later.
The problem is that short-term trends are really unpredictable.  There is nobody who can accurately predict where a fund (or even moreso, a single stock or bond) is going to move in a few hours, or days or even months. The long-term trends of the entire market, however, are (more or less) predictable.  There is a definite upward bias when you look at time-scales of 5, 10, 20 years and more.  Individual stocks and bonds may crash, and different sectors perform differently from year to year, but the market as a whole has historically always risen over long time scales. Of course, past performance never guarantees future performance.  It is possible that everything could crash and never come back, but history shows that this would be incredibly unlikely.  Which is the entire basis for strategies based on buying and holding (and periodically rebalancing) a portfolio containing funds that cover all market sectors. Now, regarding your 401(k), you know your time horizon.  The laws won't let you withdraw money without penalty until you reach retirement age - this might be 40 years, depending on your current age.  So we're definitely talking long term.  You shouldn't care about where the market goes over a few months if you won't be using the money until 20 years from now. The most important thing for a 401(k) is to choose funds from those available to you that will be as diverse as possible.  The actual allocation strategy is something you will need to work out with a financial advisor, since it will be different for every person.  Once you come up with an appropriate allocation strategy, you will want to buy according to those ratios with every paycheck and rebalance your funds to those ratios whenever they start to drift away.  And review the ratios with your advisor every few years, to keep them aligned with large-scale trends and changes in your life.
Growth in a 401k dodges taxes, which means more of the gains get reinvested. Effectively, it's a boosted return rate. Like any investment, a 401k can lose value. During the period before retirement, lower stock and bond prices actually help you buy more shares than you could if prices were high, so the real question is what the funds are doing at the time you start pulling money back out. That concern is why investors generally, not just 401k investors, should change their investment mix over time, to balance oossible risk against time to recover and possible reward.  And if your employer matches 401k contributions to any degree, that too improves your effective gains and buffers you against some of ghe risk. Hence the general advice that if you don't fund your 401k at least enough to max out the company match, you're leaving free money on the table.
"The interest rate is determined by your 401(k) provider and your plan document.  Of course you may be able to influence this, depending on your relationship with the provider.  I'm very certain that prime+1% is not the only rate that is possible.  However, your provider is constrained by IRC 4975(d), which states that the loan must be made ""at a reasonable rate of interest.""   The definition of ""reasonable rate of interest"" would probably need to go to court and I do not know if it has.  The IRS probably has internal guidelines that determine who gets thrown to the dogs but they would not make those public because it takes away their discretion.  Because of the threat of getting pounded by the IRS, I think you will have a hard time getting a provider to allow super high or super low interest rate loans. Note: I am not a lawyer."
My observations is that this seems like hardly enough to kill   inflation. Is he right? Or are there better ways to invest? The tax deferral part of the equation isn't what dominates regarding whether your 401k beats 30 years of inflation; it is the return on investment.  If your 401k account tanks due to a prolonged market crash just as you retire, then you might have been better off stashing the money in the bank.  Remember, 401k money at now + 30 years is not a guaranteed return (though many speak as though it were).  There is also the question as to whether fees will eat up some of your return and whether the funds your 401k invests in are good ones. I'm uneasy with the autopilot nature of the typical 401k non-strategy; it's too much the standard thing to do in the U.S., it's too unconscious, and strikes me as Ponzi-like.  It has been a winning strategy for some already, sure, and maybe it will work for the next 30-100 years or more.  I just don't know.  There are also changes in policy or other unknowns that 30 years will bring, so it takes faith I don't have to lock away a large chunk of my savings in something I can't touch without hassle and penalty until then. For that reason, I have contributed very little to my 403b previously, contribute nothing now (though employer does, automatically.  I have no match.) and have built up a sizable cash savings, some of which may be used to start a business or buy a house with a small or no mortgage (thereby guaranteeing at least not paying mortgage interest).  I am open to changing my mind about all this, but am glad I've been able to at least save a chunk to give me some options that I can exercise in the next 5-10 years if I want, instead of having to wait 25 or more.
There's no one answer. You need to weigh the fees and quality of investment options on the one side against the slowly vesting employer contribution and tax benefits of 401k contributions in excess of IRA limits.
"Keep in mind one possible gotcha on depositing a bonus into your 401K: Tax withholding. Depending on whether your employer combines your bonus onto a regular paycheck, you can be bitten if you allocate a large chunk to your 401K.  I suspect your bonus is, like most, subject to an arbitrary federal withholding requirement of 25%, and if you allocate 100% of the bonus to your 401K, the 25% withholding may come out of what would ordinarily be the take-home in your ""regular"" paycheck - leaving you with a literal take-home of zero for one pay period.  There are lots of variables in that calculation, obviously, but it's one a lot of people seem to overlook."
Don't forget to also build up an emergency fund - retirement saving is important, but you don't want to be caught in a situation where you need money for an emergency (lose your job, get hit by a bus, etc.) and it's all locked away in your 401(k).
Post-86 After tax contributions to a 401k are after tax.   The earnings on that money is taxable, but not the contributions. This means: You'll have $15,000 in the 401k and $10,000 is considered after-tax and $5,000 is considered pre-tax. The after-tax portion can be converted to a Roth IRA without paying taxes or penalties. New in September 2014 The IRS has made substantial changes that now enable this to happen.   You can request a distribution from your 401k provider where they divide the money into pre-tax and after-tax funds.  In my example, you'd get a check for $10,000 that you could send to a Roth IRA and a check for $5,000 you could add to a traditional Roll-over IRA. Neither of those would be taxable events and you'd end with a Roth IRA with $10K and a Traditional, Rollover IRA with $5K in it. Notes:
If you were looking to maximize your ability to save in a qualified plan, why not setup a 401K plan in Company A and keep the SEP in B? Setup the 401K in A such that any employee can contribute 100% of their salary.  Then take a salary for around 19K/year (assuming under age 50), so you can contribute and have enough to cover SS taxes.   Then continue to move dividends to Company A, and continue the SEP in B.  This way if you are below age 50, you can contribute 54K (SEP limit) + 18K (IRA limit) + 5500 (ROTH income dependent) to a qualified plan.
Question: My job that I've been with for 2 1/2 yrs offers a 401k, but doesn't match. I have an account, but it's still sitting with my old employer. The fact that my new job doesn't match and how I've heard so many mixed things about 401k has lead me to not signing up. I'm 40; I need to be doing something to save for retirement. Any advice would be appreciated. Should I invest in 401 anyway or put the money I was going to put in there someplace else? If someplace else, where? Also who would I talk to about money someplace else. I, admittedly, am really bad about all of this stuff, but need to change. My wife and I make 100k combined and should be getting things more together for our future. She has a 401k going, but that's about all we have. Thanks again
"The question you should be asking yourself is this: ""Why am I putting money into a 401(k)?"" For many people, the answer is to grow a (large) nest egg and save for future retirement expenses. Investors are balancing risk and potential reward, so the asset categories you're putting your 401(k) contribution towards will be a reflection on how much risk you're willing to take. Per a US News & World Report article: Ultimately, investors would do well to remember one of the key tenants of investing: diversify. The narrower you are with your investments, the greater your risk, says Vanguard's Bruno: ""[Diversification] doesn't ensure against a loss, but it does help lessen a significant loss."" Generally, investing in your employer's stock in your 401(k) is considered very risk. In fact, one Forbes columnist recommends not putting any money into company stock. FINRA notes: Simply stated, if you put too many eggs in one basket, you can expose yourself to significant risk. In financial terms, you are under-diversified: you have too much of your holdings tied to a single investment—your company's stock. Investing heavily in company stock may seem like a good thing when your company and its stock are doing well. But many companies experience fluctuations in both operational performance and stock price. Not only do you expose yourself to the risk that the stock market as a whole could flounder, but you take on a lot of company risk, the risk that an individual firm—your company—will falter or fail. In simpler terms, if you invest a large portion of your 401(k) funds into company stock, if your company runs into trouble, you could lose both your job AND your retirement investments. For the other investment assets/vehicles, you should review a few things: Personally, I prefer to keep my portfolio simple and just pick just a few options based on my own risk tolerance. From your fund examples, without knowing specifics about your financial situation and risk tolerance, I would have created a portfolio that looks like this when I was in my 20's: I avoided the bond and income/money market funds because the growth potential is too low for my investing horizon.
You have a small emergency fund.  Good! Be open about your finances with each other.  No secrets, except around gift-giving holidays. Pay off the debts ASAP.  Don't accumulate more consumer debt after it's paid off. I wouldn't contribute anything more to the 401k beyond what gives you a maximum match.  Free money is free money, but there are lots of strings attached to tax-advantaged accounts. Be sure you understand what you're investing in.  If your only option is an annuity for the 401k, learn what that is. Retire into something.  Don't just retire from something.  (Put another way: Don't retire.)  Don't wait until you're old to figure out what you want to retire into. Save like crazy before you have kids.  It's much harder afterwards.
"There are certain allowable reasons to withdraw money from a 401K.  The desire to free your money from a ""bad"" plan is not one of them.   A rollover is a special type of withdrawal that is only available after one leaves their current employer.  So as long as you stay with your current company, you cannot rollover.  [Exception: if you are over age  59.5] One option is to talk to HR, see if they can get a expansion of offerings.  You might have some suggestions for mutual funds that you would like to see.  The smaller the company the more likely you will have success here.  That being said, there is some research to support having few choices.  Too many choices intimidates people. It's quite popular to have ""target funds""  That is funds that target a certain retirement year.  Being that I will be 50 in 2016, I should invest in either a 2030 or 2035 fund.  These are a collection of funds that rebalances the investment as they age.  The closer one gets to retirement the more goes into bonds and less into stocks.   However, I think such rebalancing is not as smart as the experts say.  IMHO is almost always better off heavily invested in equity funds.  So this becomes a second option.  Invest in a Target fund that is meant for younger people.  In my case I would put into a 2060 or even 2065 target. As JoeTaxpayer pointed out, even in a plan that has high fees and poor choices one is often better off contributing up to the match.  Then one would go outside and contribute to an individual ROTH or IRA (income restrictions may apply), then back into the 401K until the desired amount is invested.   You could always move on to a different employer and ask some really good questions about their 401K.  Which leads me back to talking with HR.  With the current technology shortage, making a few tweaks to the 401K, is a very cheap way to make their employees happy. If you can score a 1099 contracting gig, you can do a SEP which allows up to a whopping 53K per year.  No match but with typically higher pay, sometimes overtime, and a high contribution limit you can easily make up for it."
Since there is no match on the 401k, it seems to me that your first priority should be your IRA (Roth or otherwise). I don't know what your salary is, but most 22 year-olds won't be maxing out both an IRA and 401k on only 10% of their incomes, so the rest of the list may be irrelevant.