Tag: roth ira
There are 5 entries that are tagged roth ira. Now displaying reults 1 - 5.
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Happy 2nd Birthday, Make Love, Not Debt (With Roundup Included!)
Posted on January 03, 2008 by Him
photo: LensENVY
On January 1, Make Love, Not Debt had its 2nd blogoversary! I really can't believe that this project took off the way that it did. I couldn't have done it without all of you, the readers and pfblogosphere!
Here are some posts that are pretty interesting:
2 Million is finding out the difficulties of managing cash flow as a newlywed. Her and I have had our finances intertwined for almost 3 years and we're still figuring it out.
Lazy Man has posted his alternative monthly income status report. He raked in an incredible $2,200+, mostly from his blog income!
Money and Values asks if you go the long way to avoid tolls. We dont - in Chicago tolls aren't too expensive and we hardly drive. Plus, with the addition of open road tolling we just bite the bullet and go the toll routes.
eFipo tells how he splurges on the big nights, with a good story from his New Year's celebrations. We tend to do a lot of small things since we've found many cheap forms of entertainment.
Five Cent Nickel answers a reader question on Roth IRA limits being reached after marriage. This is of particular interest since Her and I will be tying the knot this year, and pay raises may put us close to the income limit.
We're in Debt muses: when can you have too much credit? Interesting that they ask, since we're still wondering what to do with all of our credit cards with no balances.
Our 2007 Goals Status, Part 1: Contribute 50% to Roth IRAs
Posted on December 05, 2007 by Him
About a year ago we made some financial goals for ourselves. Since 2007 is coming to a rapid close, I thought we'd look at those goals and see how we did, and how we made it happen. I'm going to tackle them out of order just because that's how I feel like writing about them.
The first goal I'm going to examine is contributing 50% of the maximum allowed amount to our Roth IRAs. As the 2007 Roth IRA maximum contribution amount is $4,000, that amount is also equal to 50% of total contributions for both of our accounts. When we first came up with this goal, Her's Roth IRA had a paltry $1,695.85 in it, so we decided to allocate all of our contributions to her Roth IRA account to bring it up to about where mine is.
Last year, Her moved her Roth IRA holdings from Merrill Lynch to Vanguard. At the beginning of the year, she requested automatic deductions twice a month to total $4,000. Since I am paid twice a month, we had it coincide with my paydays, so it was like an automatic payroll deduction in that we never even saw that money. Easy as pie. (Except that I've never baked one [but Her has]).
Status: Will be completed this month.
Should We Diversify Brokerages?
Posted on March 26, 2007 by Him
Our retirement holdings will soon be with three different brokerage companies. Her's 401(k) is stuck with who manages it for her company, but the Roth IRAs can all be moved from one brokerage to another. The question is, why would we want to?
I bring up this question because I'm in the process of moving my SIMPLE IRA (here's why I'm doing this) to Vanguard. Her's Roth IRA is at Vanguard, mine is at Fidelity. I originally wanted to move my SIMPLE IRA to Fidelity to have all of my accounts in once place, but they don't allow "orphan" (just me, not my whole company) SIMPLE IRA accounts. After a little research, I found out that Vanguard, T. Rowe Price, and Schwab all allow orphaned accounts. Since Her's Roth IRA is already with Vanguard, I decided to keep everything streamlined and go with them. I never even considered other places to move my SIMPLE IRA such as a discount broker.
The main reasons I decided to move money over to Vanguard is that I wanted to take advantage of their low-cost index funds and simplify our financial lives. I can't help but wonder, is the grass greener on the other side? Am I missing out on anything by keeping our retirement funds in only a few places? What reasons would I want to have multiple brokerages?
Should We Even Have Our Retirement Accounts?
Posted on October 09, 2006 by Him
If you've looked at any of our net worth statements, you've seen that we have four retirement accounts between the two of us. Only two of these accounts, the employee sponsored ones, are actively being funded right now. If you don't want to read my long-winded analysis of our accounts, scroll to the bottom to see where this is all going. Here's a breakdown and a little history of our accounts.
His Roth IRA
My mother caught wind of the Suze Orman show sometime when I was in college. She dug up some resources and really didn't understand them, but the seed was planted. The notion was too good to be true - that putting $2,000 (the contribution limit at the time) into a Roth IRA for a few years, then letting it grow so that by the time I retired I'd have a million bucks. My parents opened up a Roth IRA account for me with Fidelity and fully funded it for my 19th birthday. For my 20th and 21st birthdays, they also funded it. It was my job to figure out how to invest so that I would retire comfortably. I've had some good luck with my investments so far, but I'll be looking to change my investment strategy soon (more on that in a later post). Since the initial contributions by my parents, no other contributions have been made.
His SIMPLE IRA
A SIMPLE IRA (Savings Incentive Match Plan for Employees of Small Employers) is a retirement plan for small employees where pre-tax dollars are put into a retirement account. These work pretty much just like 401(k)'s, (of which there is a SIMPLE 401(k) variant - here's a comparison between the two) except for a few differences. Unlike traditional 401(k)'s there is no vesting schedule that can be applied; employers have to match employee contributions up to 3%, but no more, unlike the 401(k) maximum of 25%; and you cannot "loan" yourself money to be paid back from a SIMPLE IRA. Because of our current financial situation, I only contribute 3% - enough to get the maximum employee match, for a total of the equivalent of 6% of my salary.
His HSA
I don't really consider this a retirement account. Here was my overview of this account a few months ago.
Her Roth IRA
When my mother was telling me about Roth IRA's, I also put the bug in Her ear that she had to open one as well. And that she did - with student loan money. She's had some success with her investments as well, but trouble with the company that she held it with. Like me, she opened this account before either of us knew what the hell we were doing. Since the account was initially funded, no more money has been actively contributed to the account.
Her 401(k)
Read all about 401(k) plans here. I won't bore you with my amateurish description of one. Her contributes 6% of her salary, of which her employer matches 40%, for a total equivalent to 8.4% of her salary.
So why have I spent the time to explain all of this? Well, Nancy had a great question:
"Why are you putting money into our retirement accounts while you have...debt?"
That's a great question that I answered to in the post: Free money.
That got me thinking though - is this the most prudent financial decision? I've already reduced my retirement contributions to free up some cash for debt repayment.
Should people with as much debt as us contribute anything to their retirement accounts?
I Un-Heart Merrill Lynch Direct
Posted on March 28, 2006 by Her
A few years ago, I opened a Roth IRA with Merrill Lynch. While this was a bad idea at the time (I used borrowed money to finance the account), over the years the account hasn't continued to financially hurt me. Until now.
I did pretty well with my taxes this year - pretty much came out even with Uncle Sam. But I expect to owe some money next year, and have recently been considering opening an IRA to help reduce my future tax burden. So I was wandering around Merrill Lynch's website looking for information on an IRA when I came across their fee schedule for IRA's and Roth IRA's. Having never paid an annual fee, I was shocked to see a $50 annual fee for balances under $20,000. So I called to find out what that meant. The man told me that yes, they have started charging an annual fee of $50, and that it has already been charged to my account. I asked him why I was never notified about the fee. He said they sent out e-mails a long time ago and it was also posted on their website. I never got that e-mail, and told him so. I also argued that it took me 7 clicks to view the fee schedule and didn't feel it was fair to bury the notice under 7 clicks and then claim it was "posted" on their website. He checked my account and found that the notice had been sent to an inactive e-mail address (which I specifically recall updating last year). Simple enough, I thought: they will see my point of view and refund the fee. I asked him to void the fee. He checked with his supervisor, who said no. I told him I was very upset with their service and would be closing the account if he did not refund the fee. He put me on hold and went to ask his supervisor again. While I was on hold, I was browsing the fee schedule and I saw another $50 fee, called an "Account Termination Fee". The guy finally came back on the line and said his supervisor would not approve the refund. I asked him about the account termination fee and he said that when I closed the account they would indeed charge me another $50.
To restate: They take $50 out of my account without notifying me, provide crappy customer service, and then help themselves to another $50 when they drive me away. Is this a freaking JOKE?
I said as much to the rep and he agreed that this was unfair. He put me on hold again and a while later told me they will have to charge me the termination fee, but that he will refund it later. He gave me his name, city, and extension. I started filling out the paperwork to move the account to Vanguard as soon as I hung up. I have wanted to move my account to Vanguard for a while anyway (I was already unhappy with ML's customer service and commissions before their final assault). I am going to deposit some extra cash into my ML account before the transfer goes through so they won't liquidate my holdings (at the cost of another $180 charge) to cover my fees.
I think I'll try calling again and argue the same fight with a different rep. Maybe I can get them to refund both fees. In any case, I am pretty confident that it is going to take a LOT more work before I see any refunds!
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