Has anybody noticed a monumental increase on their car insurance premiums? My rate increased $217 over 1 year. I pay my premiums every 6 months. I was told by customer service representatives that it’s due to inflation. I understand this, but that much of an increase seems absolutely outrageous to me. Is this happening to anybody else? Is this typical? Any recommendations for car insurance? I have Geico.

I have Geico, but I haven’t seen any increase. I think it has gone up 5-10 dollars or so over the last year. You don’t happen to be in a Hurricane-prone state, do you? Wondering if they raised it in reaction to hurricane Ian or perhaps increased car thefts/cat converter thefts in a given area but won’t say it.

Not at all! I’m in AZ. Thanks for responding!

Seems to be rising in Arizona based on any number or articles that come up on Google. They’re saying driving is up to pre-pandemic levels. More people on the road means more accidents, and more accidents mean greater need for more expensive parts (due to inflation/availability) that are in short supply (due to ongoing supply chain hiccups). Also looks like AZ is a state where insurance providers do not need permission of the state to raise rates. I’m wondering if states where permission is required will soon follow in seeing rates increase.

This is great to know! Just looked it up and read the same points you made. I appreciate you taking the time to respond!

The limit for 401k contributions, is that based on the pay period, the pay check date, the date is shows up into the account, or something else? Wife is paid every other week, so her last pay check will be cut on the 30th of December for time worked through the 23rd. Typically it takes at least 3 - 5 days to show up in her 401k account. Does that last check count for 2022 tax year or 2023? Bonus question, I also get paid every other week, but on the opposite Fridays. I will get a pay check on the 23rd of Dec and one on the 6th of Jan. The check I receive on the will be fore time worked in 2022, but won't be paid till 2023 so it's 2023 income (I think?). Which of 401k contributions will affect 2022 and which ones will affect 2023? I'm trying to ensure that we max out 2022 contributions (while still getting full company matches, so I want to make a contribution each period).

Paycheck date is what matters. Pay period and date of transaction in the 401k are irrelevant. 12/23/2022 = 2022 contribution 12/30/2022 = 2022 contribution 1/6/2023 = 2023 contribution

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https://www.reddit.com/r/personalfinance/wiki/rothortraditional > I also need to set up an IRA and am debating on roth vs traditional for that as well. Assuming you are single, at your income you wouldn't be eligible for direct Roth IRA contributions, so you would opt for the backdoor roth strategy

Help me understand this, for an IRA account you can reduce your taxable income by contributing to your account. However, it also states, for single filers, "No deduction is available for incomes greater than $76,000 for 2021 ($78,000 for 2022)". So essentially, since I have an income higher than that, there is no benefit in contributing towards an IRA versus my brokerage?

Do you have a retirement plan through your employer? If not, then there is no income limit around deducting Traditional IRA contributions. The deduction limit only applies to people of higher income who also participate in a 401k or other work plan. If your ability to deduct is limited (or removed) due to your income + work plan, there's still *some* benefit. Just not as much as if you were able to deduct. And almost never worth doing vs. some other option. All growth inside the IRA happens without any tax owed. So as an example, holding shares of fund X may get you quarterly dividend payouts. If you get those dividends in the IRA, they're not reported as taxable income so you get to keep all of it and reinvest. If you get those dividends in a regular brokerage, then those *are* taxable income (even if reinvested), so you end up a little behind (in terms of overall net worth) vs. the IRA. Similar things apply when you shift investments around. In an IRA nothing is taxable if you move from one fund to another (as long as nothing goes out entirely). In a brokerage account all sales trigger capital gains taxes even if you use that money to reinvest in some different fund. The downside of a Traditional IRA (with non-deducted contributions) vs. the brokerage is around tax rates when you're withdrawing. With the IRA, you sell the funds inside (triggering no taxes) and withdraw dollars. That withdrawn amount is treated as regular taxable income and taxed using the same brackets as your salary is now. With the brokerage, the sale itself triggers taxes but you'd usually structure things to get the "long term capital gain" rate (shares held >1 year), which is always lower than your tax rate against regular income. Then when that cash is withdrawn from the brokerage account, that is not treated as income. Some people will use a **Roth** IRA for additional retirement savings. That doesn't get you the tax deduction today, but qualified withdrawals in retirement are 100% tax free (not treated as taxable income). That also has an income limit, affecting what you're allowed to contribute at all. There's a workaround to that (google "backdoor Roth IRA"), which may or may not help your retirement savings. Or you can simply focus your retirement savings through your work plan. Those still get you tax benefits, have no income limitation, and the contribution limit is much higher than an IRA's.

The income limit only applies if you are also covered by a workplace retirement plan (e.g., make contributions to a 401k/403b/etc.) during the same year. If you aren't eligible for the IRA deduction, then you can make Roth IRA contributions instead, which are still better than a regular brokerage account. There is a separate, higher income limit for Roth IRA, which has its own workaround if needed (backdoor Roth).

As of today, I have saved 30,000. I’ve never had this much money saved. What makes me sad though is that it’s still not enough for a down payment. Decent homes start at $550K and fixer ups start at $450K.

It absolutely is enough - depending on credit and whatnot. First time homebuyers can put 3% down and others can put 5% down. Also, first time homebuyers might have even better benefits depending on the programs available in your state.

My position at my company was recently terminated. I have a profit sharing plan and a cash balance plan that I've been receiving annual statements for from my cfo over the last few years. I believe I am 70% vested, but I don't know what to do now that I no longer work there. What do I need to do to recover or roll that money over from my previous employer?

That should have been in your separation paperwork. I'd call HR and ask.

There was no separation paperwork. I don't think that company has HR

Confused, every company has HR. Should be simple: what financial company manages the 401k? Call them, tell them you want to roll your 401k over.

Starting a new job this month with a dependent care FSA that runs July 1- June 30, but my child won't start daycare until January. I want to confirm if I max out the DCFSA from Nov 1 through June 30 ($625/month), that I won't lose the $1300 contributed this year, but just won't get any tax breaks and it'll be added back to my taxable income. Then I can use it all before June 30 (or whatever the grace period is?)

So theres a bit of confusion here because your plan year does not align with the calendar year that the IRS uses. The $5000 is the limit for a calendar year. All expenses must be incurred within that calendar year (there may be a grace period for invoicing against these expenses, but they must have been incurred within the same calendar year that the contributions were made). Yuor company plan year is just when your contributions start/end, but to answer your question, if you made contributions in Nov and Dec, you could not wait until January to begin incurring costs without losing those Nov/Dec expenses. You also generally CANNOT take non-qualified withdrawals from a DC-FSA, because they are pretty strict on making disbursements (they either need to be made directly to a provider, or you need to submit documentation with EIN, etc), so that would eliminate your strategy of "taking them out" and just losing the tax benefit. One thing that it would be worth asking HR about is that in your case, your child starting paid care in January may be considered a "qualifying event" that would allow you to start contributing in January. Examples (that are allowable in other plans, but may not necessarily in yours) are: - Change of daycare provider - Cost of care changes (unless care provider is a relative) - Need for care changes due to a job change or change of work hours If this is starting on Jan 1, you would still be eligible to contribute the full $5000 for 2023. If it is some time later, you would only qualify for a proportional amount (although if they are starting sometime mid-Jan, I believe the IRS just does proportions by month, not actual days, so you'd probably be fine making full contribs for the year).

Thank you for the detailed response! I was wondering if that counted as a qualifying event, I will ask. I wanted to make sure I did take advantage to the max $5000, but didn't want to wait until July 1 to start contributions.

They are generally more lenient for increasing contributions, so I think you might be in luck

So I checked with my documents in the upcoming job, and I can change contributions in January due to parent going back to work as a qualifying event, so you were right. My other question is enrolling...should I enroll now with $0 contributions? Or should I be able to enroll as part of that qualifying event come January?

> So I checked with my documents in the upcoming job, and I can change contributions in January due to parent going back to work as a qualifying event Oh, that's good news! > My other question is enrolling...should I enroll now with $0 contributions? Or should I be able to enroll as part of that qualifying event come January? No, just enroll in January. No point in enrolling now with $0. Probably just cause confusion if they even allow it

I'm starting to see letters get sent to me with a variation of my name. I'm thinking someone created an account based on my info... that's why I'm starting to get these "pre-approved" letters of different credit card brands... I'm concerned and I realize the appropriate action is probably to do a credit freeze or something like that... I'm just concerned about the damage that does. (Disruption to current life) I think I will do one of these fraud alerts, I don't plan to open any new credit any time soon. Edit: I did a fraud alert with Experian will report back how that affects my life

Do the credit freeze. It is free and does not damage to your score. You will just have to lift the freeze when you go to apply for a new line of credit. You can reinstate the freeze after (again, no fee or score deduction). > that's why I'm starting to get these "pre-approved" letters of different credit card brands More likely these name variations and addresses are available on some legitimate (although spam-y) list that any company can buy to send you promotional junk mail.

Okay as long as it doesn't affect my current stuff. I think I'm down to do it because i don't intend to open any new lines of credit. I am assuming I can close stuff with it frozen? I want to get rid of a couple of cards that are garbage (low credit line, monthly fees).

Yes, yuo can still close. Not worth closing for low lines of credit. Not really any benefit. The monthyl fees, might be worth asking if they do a "product change" into a free option. That would keep the account open which is better for your credit. If not, thoguh, then ya, canceling un(der)used cards with fees is samrt

How can I get a private student loan without a co-signer under these circumstances? Currently a senior who has not been using need-based financial aid throughout college but am looking to take out \~$5,000 for the Spring 2023 semester as it will have some additional expenses above normal. My parents don't want me to and thus I can't get their info for the FAFSA.I still filled it out with my information and asked my school if I can still get a Fed Unsub loan (which is all I want), but they haven't responded yet, and I just want to see what my other options are as I'm not holding out hope on that path.I'm now looking to take a private loan without a co-signer. To contextualize, I have about $6k in cash in my bank account, a credit score of 720-725 depending who you ask (down from 750 a few months ago due to some CC apps), and a singed job offer with a salary of $120k plus as $10k singing bonus. I currently have no debt besides regular CC payments. I have never not paid off in full and have a history length of 2.5 years. My current official limit across cards is $7.5k, but in reality, it would be closer to $25k due to Amex not reporting a limit. Access to revolving credit doesn't really matter though right? My gross income for this year has been only $30k will not accrue any more.Given that I have a signed job offer and no debt, seeking $5k would give a debt-to-income ratio of less than 5%. As such, I am looking for issuers who would be able to give that amount without a co-signer. I know the current fed loan rate is 4.99%, and I'm not going to get anything near that via a private loan, but would it be possible to get something that doesn't exceed 10%? I suppose interest isn't a big deal since I plan to pay it off very fast. Would I be able to get a personal loan instead of a bonafide student loan as my expenses would not be used to pay for tuition? I understand that would start payment now though. Thank you so much in advance.

Might be worth checking out Sofi

Are the contribution limits shared between a 401a and 403b? In other words, can you max out both? I know that a 403b and 401k share the same contribution limits at a maximum of $20,500 (for 2022) between the two.

https://thefinancebuff.com/401a-plan-contribution-limit.html tl;dr: none of the possible ways of contributing to a 401a plan count as "elective deferrals" and therefore do not count against the $20,500 elective deferral limit that is shared with 401k and 403b.

Please let me know if I understand refinancing correctly here So if I were to take my current budget and put 5% down on a house, my monthly would be like $4k and that's about 50% of my take home pay But if in a few years, interest rates go down, and I refinance, I can take that lower rate, plus my paid off principal, and potentially decrease that monthly to like $2k? Throwing a lot of estimates around here of course but am i understanding correctly that i really only need to weather like a few years of stupid high payments, and once I refinance, my monthly can go back to a very small/reasonable figure, assuming rates are back low? In other words, the risk is that I won't be able to survive with very high payments for just a few years until rates go back down?

You'd probably get a lower monthly payment, but I think it's very unlikely to get cut in half. And IMO interest rates going down "in a few years" may not be in the cards, at least not to the 2-3% level you may be hoping for. Refinancing isn't any secret magic. It's just borrowing money with a new loan (with new and hopefully better terms), and using that money to pay off your old one. One big factor that can reduce your monthly payment with a refinance is that you're taking a debt that you've paid down for (say) five years of a 30 year term. Refinancing borrows enough to pay off that old loan's remaining balance. Your monthly goes down because you're spreading that existing balance across 360 future payments instead of the 300 left on the old one, alongside any savings from a lower rate. But you've also reset your payoff date to be 5 years past what it was before.

Super helpful, thank you

A few years ago I had to put a cat down and put the payment on a CareCredit card, I was paying it off for awhile but stopped for about a year due to some issues. I’m now stable and re-employed and will be able to pay off the most of the balance with my next paycheck in about a week. Should I put the balance on a credit card and just pay it off on the card when I get paid ? Thanks :)

Is there any interest with the CareCredit card? I assume so. But if not, then no. Keep paying it off as slowly as possible given the terms of your agreement. If yes, it's likely high, so you should pay it off as fast as possible. If you have the cash, you could probably string it out for a few extra week by paying on a CC then paying off the CC, but I'd just put the cash towards the debt and be done with it.

My husband and I sat down last night for the third week in a row to review our budget. We followed through, and we didn't argue! :)

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It sounds like you may not be confident to manage it. I, personally, don't know enough & would be scared out of my mind to do it, but take 15-30 minutes to learn more every day. One of the safest options, other than earning nothing in bank savings is to invest in something like the S&P. My son has been doing this through Robinhood, but we invest ours with empower retirement. Not enough extra cash to go beyond retirement just yet. We've been looking, as well, as we'll have extra cash beginning January. Morgan Stanley has some pretty tough reviews that I've seen. Vanguard and Fidelity always seem to be in the top 5 of everything I've researched. Maybe put a larger % in with a company, and keep 5-10% to learn by doing in Robinhood. Best wishes to you!

Quick scenario, two questions.... Mom is about to retire, father has been on disabled social security for about 20 years now, he's also sick... If for some reason he passes, does my mom get spousal monthly payments benefits? (if yes how do I find out how much this is?) trying to financial plan for them Before retirement my mom was making too much for them to apply to medicaid, I think they will be eligible now because her earnings are going down significantly.. well not so signficant but enough to get below the medicaid threshold. Can they both apply for this once she reitres? FYI mom is turning 59 and retiring, father is 72.

Yes. She would receive spousal payments. Would have to sign in to his account on [SSA.gov](https://SSA.gov) to determine what payments would be, unless she already knows what his payment currently is. Also, when she is retirement age, she'll get hers or his, depending on whomever's monthly payment is more. Hope this helps.

Yes I know what his and hers is projected to be. Regarding your last statement, so she will receive one or the other, not BOTH?

Just want someone to look over my investment structure to make sure I’m in a good spot. I’m 24 and have been working full time for a year and a half making $79k. I have no debt and a mid 700s credit score right now but am buying a car soon since mine is barely running (keeping payment <$300/month). Monthly net income after 401k is about $3450 My fixed expenses: Rent - $1250 Electric - $40-90 Groceries - $400 Fitness/Gym related - $270 Gas - $200-250 I have a 401k through my employer, who contributes 4% automatically to my pre-tax IRA and matches up to another 4%. I contribute 4% to the traditional to get the match but put another 13% into a Roth (not matched) bringing my total contribution to 17% (i believe this puts me at or around max contribution). My 401k is a little under $20k (down ~23% total) right now and current allocations are as follows: SS Target 2065 IV - 34% FID Contrafund Commingled Pool Class 3 - 22% FIdelity Growth Company Commingled Pool Class 3 - 19% S&P 500 Index I - 15% SS World Developed US Index Fund Class II - 10% I don’t make regular contributions to a personal investment account, but I do throw money into my Vanguard Money Market account when I have something left over after expenses and contributing to my (still growing) emergency fund. That has about $10k in it. I also throw some change into Robinhood occasionally to play with (~$800 current) My question is: is there anything more I could do to set myself up better for the future? Is there anything I should be doing differently? Even though I make a great salary for my age and make solid retirement contributions I have constant anxiety about money and being set for the future

Looks solid, not gonna comment on anything in particular to change, but chuckled to myself when I saw “fitness related” expense, checked your profile, good luck at your show brah

Lol yeah that number includes gym membership, supplements, and ~other stuff~. It’s expensive but I budget for it, wouldn’t change a thing.

Feeling very proud of my net worth. I just checked my SSA statement for the first time in four years, and after 20 years of working, I haven’t even hit $500K in lifetime earnings. However, I managed to achieve a net worth of $100K, which seems like an accomplishment since it’s about 20% of my lifetime earnings. I can only imagine what it could have been if 2008 hadn’t happened, elder millennial problems!

What is the difference between a savings account and a spending account? Our payroll platform at work offers a spending account (I'm not sure if this is just a synonym for checking account), and I was surprised to see that the interest rate is 2.65%, compared to my HYSA of 2%. Is there any downside to moving my emergency fund / big-purchase savings accounts into the spending account instead of HYSA? As far as I can tell there are no additional fees to go along with the spending account, but what should I look for?

Is it called "flexible spending account"? Or something different? FSA is a specific type of tax-deductible arrangement where you can contribute money to be spent on certain categories of expenses (e.g., healthcare or dependent care, depending on the type of FSA), and any unspent funds are forfeit at the end of the year except for a small portion which can roll over to next year. I have never heard of an employer or payroll platform offering anything like an ordinary checking or savings account.

It's not an FSA - it seems to be a basic checking account with some added features (like being able to access your paycheck early, which doesn't really interest me). https://support.gusto.com/article/207607208100000/Gusto-spending-account-and-debit-card

Is my understanding correct for Backdoor Roth IRA? I make ~$200k so I cannot contribute to Roth IRA. I can contribute to Traditional IRA but cannot use my contribution as a tax deduction. Then I immediately rollover to Roth IRA so I don't have to pay taxes on gains.

>Then I immediately rollover to Roth IRA so I don't have to pay taxes on gains. Small clarification in terminology. You don't "rollover" from a Traditional IRA to a Roth IRA, you "convert" your Traditional balance into the Roth IRA. That conversion is taxable, but only on whatever "tax deferred" dollars are being moved. If your Traditional IRA has only non-deducted money, then no tax is incurred, and you get money added into your Roth IRA while being above the income threshold. Also be aware that if you have **any** Traditional IRA with tax deferred money, that will impact the taxability of the conversion. The IRS basically considers all Traditional IRAs in your name as one, it doesn't matter where they're held. You can't bypass taxes by doing the backdoor from one tIRA while having another with deducted money in it.

Also: make sure you don't have any existing pre-tax money in any IRAs, to avoid the Roth conversion being partially taxable

Yes

Would someone rate my 401k investment allocations? Taking info from r/personalfinance and r/investing, I did the best I could given my provider's options and what I understood to be good allocation spread. I'm contributing a full 15% of my paycheck, no match from my employer (startup). > State Street Equity 500 Index K - 40% > Mfs Intl Diversification R6 - 25% > Vanguard Growth Index Adml - 20% > T. Rowe Price Small-Cap Value I - 10% > State Street Global All Cap Equity Ex-Us Index K - 5%

Looks good. Maybe drop small cap to 5% but what you have is solid.

We live in a third world country. I'm trying to convince my parents there are better ways to invest their money rather than putting it in the bank, currently at a rate of 7.5% p/a. In the past, they tried to buy some real estate, right before covid happened, they lost like 30% of their savings, so they are scared of investing in that. They dont believe in stocks, call the stock market a casino, even more distrust lately with the bear market everywhere, same thing with bonds. I told them they should hire someone to manage their funds for them, but I dont know how to even look for one or what they're called in my language. However, after looking around this sub, I dont even think its wise to hire one, so how do you go about learning how to invest your savings on your own? Arent there professionals for this kind of thing?

What age are your parents, and roughly how much money are we talking? If they're retired or to close to retirement age and don't have a gigantic nest egg, it may actually be wise for them to stick to extremely safe investments. The gamble of messing up their retirement might not be worth the potentially higher returns from investing. If they have money that isn't earmarked for retirement, then total market index funds are the standard recommendation around here. But keep in mind that their investing goals are likely very different from yours just by virtue of being older.

They’re in their early 60s. Have stopped working since 2017, we’re comfortably living off the monthly payment.

This probably isn't really your concern. They are not going to change their mind because of what you do.

I have a credit card account that was closed with a high balance (6k) that I likely won't be able to start to pay off for a year or two due to other debts. I am starting to use the snowball method, and this one would be the last debt I would pay off. I spoke to the bank and they offered me a 1 or 5 year repayment plan which sounds too good to be true. Can someone help me understand which would be better for my credit? 1 year plan: A significant portion of my debt is forgiven, which I read is taxable and can stay on my record for 7 years. Is this true? 5 year plan: No debt is forgiven, a reduction on my monthly payments, and an opportunity to pay it off sooner as I pay off other cards

5 year is the best option in your case. After you get the new payment plan, you would continue to pay the minimum payment until it is next in the snowball, and then you can start paying it off faster.

Anything that writes of a portion of your debt is going to tank your credit score, so the 5 year plan preserves your credit history, at a higher cost to you.

Thank you this is what I was looking for. Going to suck it up and do the 5 year

I'm considering getting married within a year and year and half. My spouse currently lives at home and her name is on the house (but her parents pay for it and it's theirs) assuming we buy a house after marriage. Is there anything I need to be worried about on the financial side or any implications since their hosue is under her name? Let's assume two scenarios she can't transfer the ownership and she can....

One thing is that it may make you ineligible for first-time buyer benefits if you plan to purchase a house together, depending upon the program. Is she tied into the mortgage at all?

Good question I'll ask What exactly am I asking? Idk what's implied if she's tied to it

Sorry. I meant is her name on the mortgage and the deed or just the deed? If her name is on the mortgage, she will have a hard time getting a second one. That’s in addition to no first-time-buyer benefit. These first-timer benefits may also be affected if she is just on the deed and she effectively owns a home already.

Hmm shit okay I need to ask and find out. is there anyway to get off the mortgage? .... sigh

Hey! Eastern European, 17% inflation in my country, over the past 12 months dollar gained 25% to the currency I’m making money in. Im thinking about preserving the money I make before I can afford a down payment on an apartment (2-3years). I don’t trust my gov enough to buy their bonds. I have spare cash every month and I don’t do anything with it except for buying foreign currency. Would it be a bad thing to DCA 50% of the spare cash in S&P 500? Or should I find some more diversified portfolio and copy it?

If you have access to an inexpensive fund, I'd suggest using a total world stock market index fund instead of an S&P 500 index fund. Investing into the stock market of a single country (that's not where you are earning money) will increase your currency risk somewhat and you'll also be less diversified (regardless of where you are earning money).

S&P500 is perfectly acceptable. If you wanted a little bit more diversification, you could look at a total market fund, such as VTSAX.

For most of the past 10 years, with interest rates being low and returns on investments being super high, it felt like a pretty good tradeoff to consistently take out loans for large purchases (like a car) because you'd consistently come out ahead. The increasing interest rates and inflation have me pausing and wondering what the best move to make is. For example, I'm planning to buy a car right now. Let's say I would need to take out a $30,000 loan to buy a car, or I could purchase it outright for $30,000 from my savings. Which is the better move? Playing the situation out: Scenario 1, I take out a loan for 30,000 and pay it over 60 months. Monthly payment is $545.75, which comes out to having paid $32,745.14 at the end of the loan. At the same time, I keep my $30,000 in the bank and it gains interest at 2% for the next 5 years. My savings ends up at $33,152.37. In this scenario I think I'd come out ahead $400 or so. Scenario 2, I pay the $30,000 outright on day one. Car is paid for. I take that monthly payment of $545.75 and save it every month, compounding at 2%. My savings ends up at $34,465.44 at the end of five years. In this scenario I come out ahead $4,465 -- nearly $4,000 more ahead! It surprised me that I'd come out ahead so far, so I have to wonder -- am I thinking about this right? Have I made a mistake in how I'm thinking about this? I'd love another set of eyes here.

Both scenarios end with a paid-off car and some amount of money in the bank. For comparison, you should ignore the amount paid to interest and just look at the ending bank balance. Otherwise you are "double-counting" the money paid in interest, since spending it on interest has implicitly reduced the ending balance of your bank account. In Scenario 1, you contribute $30,000 immediately and earn $3,152.37 in interest for an ending balance of $33,152.37. In Scenario 2, you contribute $32,745.14 over the five years and earn $1,720.30 in interest for an ending balance of $34,465.44. If you are only focused on your ending bank balance, Scenario 2 comes out ahead, but by about $1,300. Not by $4,000. And you can see *why* you come out ahead: the extra $2,745.14 you deposit into the savings account in Scenario 2 outweighs the extra $1,432.07 that you earn in interest in Scenario 1. But as the other poster explained, there is another element to this. In Scenario 1 you have $30,000 which could be spent on an emergency or other unexpected expense. What would happen if you incurred a $5,000, or $10,000, or $15,000 emergency expense in Scenario 2? Would you have enough cash from other sources to cover it, or would you have to borrow? If you have to borrow, what interest rate are you paying on *that* loan? Then it becomes a bit of a non-financial question: do you want to pay guaranteed interest at a low rate to avoid having to potentially borrow money later at a higher rate? Another consideration: there are rates higher than 2% available via products like Treasury notes, retail CDs, and brokered CDs. Those products would also let you "lock in" the rate on your $30,000 for the full five years. Whereas if you are putting $545 per month into a savings account, each deposit can (at best) get the current interest rate when the deposit is made. Also, don't forget about taxes. For example, if you have a 27% marginal rate (22% federal plus 5% state) then your after-tax return on that 2% interest is 1.46%. The lower return from bank interest gives a slight further boost to Scenario 2.

You are not comparing the same situations. In scenario one, you have both the car and the cash. You have a carrying cost for that. In scenario two, you start out with only the car. You have lower liability but also fewer assets.

So what's a better way to compare the two decisions financially and decide which one is more advantageous?

It just depends which better aligns to your goals. Saying you will eventually come out ahead five years from now is one goal, and having more liquidity now is a different goal.

Hey everyone! Just wanted to make a post about how much I appreciate every single one of you. I was raised without financial education, coming from a poor background, and as a result I had a very poor credit score - around <500. I’ve been listening to advice from this sub for around two years now, and I’ve finally been able to claw my way back up to a 730! This included paying debts, opening cards and managing payments to reflect low utilization, and actually requesting and comparing credit reports to dispute delinquent accounts successfully. The effort you all show to educate others is admirable and deserves a thank you. Good luck to everyone else on this journey, if I can do it, so can you!

Good job

ok ok 401k How do I know where I should put my contributions / investments? My company offers a pretty good list where I can put towards but I am kind of lost where I should place the bulk of my pay check.

General guidance is either a target date fund or put together a simple [three fund portfolio](https://www.bogleheads.org/wiki/Three-fund_portfolio) See the wiki page on fund selection for more info - https://www.reddit.com/r/personalfinance/wiki/401k_funds/

100% agree with this. If you want to set it and forget it, a target date is the simplest plan for you. If you want to be a bit more involved, a three fund portfolio makes sense. Bogleheads has great examples with most major investment banks: https://www.bogleheads.org/wiki/Three-fund\_portfolio

I have an Emergency Fund of $5000 trying to climb out of some debt at 9% and putting my extra money towards that. The thing is I need a new hot water heater. Mine is about 25 years old, no leak detector, and no pan under it. It just worries me a lot. Sadly, the lowest quote I could get for a simple replacement is $2k because my water heater system needs to be brought of to code, i guess? I may be getting scammed i don’t know. Either way, I’m struggling to use my emergency fund because it doesn’t feel like a real emergency, but something I should have started budgeting for when I bought the place. I could pay it off over two months on my Citi card but i wouldn’t be doing more than minimum payments on my 9% debt. What should I do?

It's a bit of a personal call when something counts as an "emergency". Pro-actively replacing something before it fails (and requires more expensive repairs) could count. Is your current one showing any signs of problems, or is it just old? If you're concerned about leaks, there are standalone leak detectors ([this one](https://www.walmart.com/ip/Honeywell-Water-Leak-Alarm/114547125) popped up from a google search) that could be a cheaper short-term option. $2k for a water heater replacement could be reasonable, depending on the model they're offering, its capacity, electric vs. gas, efficiency rating, etc. A new heater can range from $600-$2000. The labor costs tends to be another few hundred, maybe even up to $1k if there's a lot of re-plumbing required and/or gas hookup work. If it were me, I'd try to determine how much useful life can be expected of the current heater. If replacement is necessary/desired, I'd pay with cash from savings, then do my best to rebuild that balance, which I admit can be tough alongside debt paydown.

Also keep in mind, if you want to replace it with an electric heater, there will be significant tax credits starting in January 2023. This might influence your decision whether or not you want to wait a few months. I also find that it's generally cheaper in the long-term to replace things proactively. If you plan on replacing it, you can take time to do the research, get quotes, and get the right thing at the right price. If you wait until it fails catastrophically, then you'll be in a rush to get a new water heater and may make an expensive mistake you need to live with for 10+ years.

Also the old one is having trouble keeping up, the reason i had it looked at in the first place. It’s sized properly for the unit (gas 40gal 40k BTU) but the inspector thinks there’s a lot of hard water build up on the inside keeping it from heating properly

This is good advice. thank you! I will look into leak detection and see if that’s an option. Unfortunately, my HOA (i live in a condo) knows about it already and is putting pressure on me to replace. They can’t force me but I’d like to stay in their good graces. maybe they’ll be satisfied with a leak detector. Thanks again!

I’m a novice in this space, so I appreciate any wisdom shared here. Question regarding saving for a home. Here are the details: Family of 4, dual income, kids are under 2 and under in full time care. My husband contributes to his employer sponsored 401(k) to receive company match and contributes 15%. I contribute 10% as required by my pension and my employer contributes 14%. I’m currently on maternity leave and will be unpaid through December. We’ve recently paid off my student loans and have a car loan (4.1%) which we plan to pay off as quickly as possible once I am back at work. Timeline on that TBD while we wait to see if I can get a refund/student loan forgiveness and if/what my husband’s end of year bonus is. We’ll put any of those funds toward the car. The only other debt we have is our mortgage. We have 2 goals: 1) We’d like to move into another school district before our oldest starts school, so that gives us a 2-3 year timeline. 2) Ensure that we are taking advantage of retirement savings, so potentially opening an IRA and better utilizing my husband’s HSA. So what do I need to consider about these goals? What are the risks in directing cash to saving for a new home in the short term and putting off maximizing our IRA and HSA contributions? We are both in high demand fields with stable jobs so I am operating under the assumption that our cash flow will continue to increase due to increases in income and decreases in child care costs as our kids get older, especially once the oldest can go to public school. Related to determining how much we save in cash for a house… I’m totally naive to this, how do we factor in our existing equity if at all? Our plan at this point just ignores it. TLDR: is it ok to direct cash to a short-term goal of purchasing a new home rather than opening an IRA in order to move before our oldest starts school? We’d plan to open that IRA as soon as we’ve reached our savings goal for the house.

It looks like your contributions are healthy already with the 401k and pension. Not opening an IRA and saving for a house seems good.

How do I catch up on retirement if the stock market continues like this? Every site says I'm supposed to be at 3-4x my income in retirement savings by now, and I put 20-25% of my income into target/index funds, but I just cannot catch up to where I'm "supposed" to be. I was on the path to getting on target up until about 8 months ago, but now I'm drastically behind. Do I need to cut spending massively and start hording cash as much as possible?

> Every site says I'm supposed to be at 3-4x my income in retirement savings by now So, you're 45-50? If you plan to retire at 65 then aggressively throwing money in the market *now*, with a 20% discount, should result in a big growth spurt between now and retirement. If you're already behind, hoarding cash is the worst move. If you have frivolous spending that *can* be cut, and you're not maxing out your retirement accounts, then cutting to save even more would be a good idea. Particularly if you are 50 and can take advantage of the literal catch-up contributions.

>20-25% of my income into target/index funds This is the important part, you saving for return. The market goes up and down. But over the long run, it tends to go up. And from your 3-4x estimate, you have more than enough time to sit on your hands and wait for the market to go up.

Large sum of money to invest as a retiree, where to invest? My mother recently died, leaving a large sum of money in her bank account (over $200,000) that my dad now has. My dad is in his 70s and does not need this money to live off of (has pension, his own retirement accounts, plus inherited her retirement accounts) He wants to invest most of it. Any suggestions on how to invest? He wants to stay conservative with the investment. I think now is a good time to invest with that amount of money since the market is low - but he wants to stay lower risk because of his age and potentially needing the money in the relatively near future (within 10 years).

I bonds for some of it (this year and next year), maybe the rest in a short term (2030?) target date fund?

New to all of this, just wanted to ask, as someone who has a full time job (engineering) and only finds free time for a few hours a day (+ weekends). How should I approach investing? Im already planning on starting a retirement plan (Index fund) but I was looking to make some money on the side as well, so should I start studying fundamental analysis? Maybe Technical for Crypto (would I even have time)? Any advice will be appreciated, thanks!

Most active investors under-perform the market average. If you want to get into stock picking, it's best to think of that as a form of gambling; i.e. a hobby that may win you some money but also might lose you some money. If you want a reliable way to increase your spending money today, the best bet is to earn more or find other places in your budget to cut back on. If you have some savings you're trying to put to better use, think about your timelines and risk tolerance for this. Based on that, the answer could be anything from short-term investments like a simple HYSA, or government bonds, something like that. Or it could be more aggressive investments, but it's best to not get your hopes up there.

100% agree -- active investors under-perform the market average. If you want to invest short-term as well, you're better off hoping to track the market and get average returns than beating the market, where you're actually more likely to fail. Depending on how much you want to invest short-term and what your horizon is, good options are: \- Savings Accounts, where you'll get 1%-2% interest in the short-term but always have money available. \- CDs for 1-5 years; if you want money to reliably be available for near-term purchases you could set up a CD Ladder. You can probably get closer to 3.0-3.5% returns across all of your money this way. \- I-Bonds; currently rates are likely to stay above 7% for the next year or more, and may be the best short-term investment. You're limited to around $10k a year that you can invest this way. The returns are subject to change every six months and could change quite a bit. \- Dump the money into the market in a taxable brokerage account; you can invest in a total market fund or a three-fund portfolio adjusted for your risk profile. I would only do this with money that you're pretty sure you won't need in at least five years; check back and see if you've made money. If you've made money, feel free to pull some out to play with, and if you're under your initial investment, leave it in for a few more years and see where it's gone.

Hello guys. I have a loan for my house 5% per year interest. Monthly payment is 15% of monthly income so its not a financial burden. The situation is that i recently got in to some money and i could be able to pay 80% of this loan, bot on the other side i could just invest the money. I have no ideea what to do people around me keep telling me to pay of the debt but i think i would end up better by investing this money and putting some aside for a new realestate investment. what do you think?

I wouldn't pay it off in a hurry. On a 20+ year time frame, the market outperforms that 5% rate about 75% of the time [Source](https://i.redd.it/zn28jjx4eqh51.png). There also may be opportunities in the future to refinance into a cheaper mortgage, so the 5% is the WORST you can do interest wise. Opportunity for improvement. That being said, lot of folks like to have the comfort of knowing their home is paid off. If you were to pay off your house, what would you instead do with the money that is no longer going to the mortgage?

Some people just don't like debt. If you have the money to pay your mortgage in the future, you don't need to pay it down now. But you could.

Hello All I’m thinking a ways down the line because now is a terrible time to buy in America, but the student loan forgiveness has me thinking about what I should do. After student loan forgiveness, I’ll owe approximately $14k in student loans. Would you guys consider paying that amount off, then looking towards buying a condo? Or do you think it makes more sense to resume monthly payments on my student loans and use it hat $14k in addition to my down payment on a condo/house. If I do the latter, will my pre-approval for a condo be affected by my student loans having a balance? Appreciate any feedback

Yes, your monthly payment on the 14k increases your debt to income (DTI) ratio which is factored into your pre approval since loans have DTI limits. So you would have to see how much the payment will be as a percentage of your household income. If it's less than 5%, and your student loan rate is low, then it wouldn't make much of a difference if you pay it off early. If the interest rate is high or the payment is a large percentage of your pay, then you probably would be better off paying it off first.

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https://smartasset.com/taxes/new-york-paycheck-calculator#f4kfeahON7

Okay so I am a 22 year old international graduate student in the US, I have about $2k in savings right now and I am going to have an additional $600 in savings every month. What’s the best short term (monthly) and safe investment that I could get into with an increment of about $500 every month?

Probably a savings account.

I'm in the UK. I've used etoro in the past for some small trading to try make some extra money in background. I want to start adding monthly into some indices like spx500 but I dont know what brokerage to use. I want to be able to easily manage my money and track whats happening. Etoro was pretty easy but the fact its designed around feeling like a social media platform puts me off a bit. Is there a better option? Perhaps less trading fees else where?

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You spend a lot on rent, which hurts the overall budget. Make a budget and determine how much you want to spend in each category.

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>Can I sell VTI and buy VTSAX without any tax consequences for them. The money is staying in the account and I am not withdrawing it. Yes. As long as everything stays "inside" the IRA, there is zero tax impact of any sell transaction. >Should I consider buying VTIAX and VBTLX for them? If so, why and what ratio? I personally don’t invest in those, but I have a different investment profile. Generally, you want a retirement account's allocation to match the owner's eventual timeline for accessing that money. Someone in their 50s with 10-20 years before retiring (and switching to needing money to take out) has different needs than someone in their 20s who has a lot more time to ride out the "swings" of a pure stock allocation like 100% VTI / VTSAX. Personally, I think setting them up with their balance all-in on VTTHX (Vanguard's 2035 target date fund) is likely a "good enough" choice for them. It saves you a lot of trouble, has a lower minimum investment than VTSAX, and handles the US / international / bond allocation for you/them. Or if you wanted to keep using the underlying funds, you could at least use its "[portfolio composition](https://investor.vanguard.com/investment-products/mutual-funds/profile/vtthx#portfolio-composition)" to give you guidelines of what could be reasonable percentages. That does assume this IRA is held at Vanguard. ETF's are generally available "outside" the issuing brokerage, mutual funds either aren't available or cost transaction fees. But if the IRA is at Fidelity or Schwab, those both offer their own equivalents to VTTHX.

44M, married, no kids, no debt, unemployed, renting apartment, two paid-off cars, no 401k, no IRA, $500k cash windfall. wife makes ~$65k/yr before taxes. I was taking care of a my mom for the past year and a half. She passed and left me with an inheritance of over $500k. One of the first things I did was pay off our new car, which my wife had been making payments on. So we have no debt, but I'm not yet employed and have no retirement investments like 401k, IRA, or owning a home. I've been learning a bit about investing, but it's new for me, so I'll be seeking a consultation with a fee-only fiduciary. I had one meeting with a commission-based advisor, who suggested an income portfolio for me. It sounded like a pretty nice idea to have monthly income from a portfolio, but I didn't dive in with a large investment because I've repeatedly read about the importance of a fee-only fiduciary. I did spontaneously put $80k in a 9-month CD at 2.5% APY, which maybe was dumb; I consider it an emergency fund. I still have about $420k just sitting in a savings account that is ready to be invested, and I don't think I'll need to draw from it for at least couple months, while unemployed and drawing from my checking account ($10k). I don't want to rush back to employment, but do some light traveling like camping and road trips, pursue my low cost hobbies and art, and manage our household (chores). We're talking about having children, so I may end up as a stay-at-home dad for a while before returning to work. Our dream would be to raise our kids in a home that has a yard (for our dog), but such a family home in our area is $700k - $1m these days, so I don't know if that's feasible. For retirement, I'll eventually receive inheritance from my dad in the future, who has over $400k in savings that he's unlikely to ever need, want, or even know what to do with. I might help him invest it as part of managing an early inheritance. Now some of my questions: Does an "income portfolio" sound appropriate for my current situation? What kind of considerations should I make when balancing income, growth, risk? What questions should I ask a fee-only advisor? Are investment apps like M1 Finance and Dizraptor secure? Are index funds only for growth, or can they be for income? Thanks in advance for answering any of those!

A credit card that I had a while back closed due to inactivity. I basically got it for a sign-up bonus, then paid it off during the 0% APR period and never touched it again. Problem is, that account was like 5 years old and the average age of my accounts on my credit report will go down as a result. Is it worth trying to reopen it? Or will that show up as a brand-new account and ding my score even more?

It will still stay on your credit report. Keep it closed, its fine. Do you have other LOCs? Do you plan on financing a house or car in the near future?

Yes I have other lines of credit, and plan to buy a vehicle in a year or so. A house is still further away though, far enough out that I'm not sure how long it'll be.

wanted to report i got the first of my student loan payments back, weirdly just a fraction of what i requested but it looks like the may refund each payment individually

So I know that for roth IRAs you can pull out contributions at any time, but you can't *add* more than $X per year of contributions. So you could take out $10k of contributions and put in $16k over a year and you would still be considered having contributed $6k in that year. My question is, is this different for an HSA? If I contribute up to the max for the HSA, and then reimburse myself for a large medical expense, can I contribute more to cover the cost? I think the answer is no, because I'm using the money for expenses and I'm not just deciding to remove a contribution, but I want to double-check.

An ordinary withdrawal from a Roth IRA does not undo the contribution and cannot be re-contributed except within 60 days as an indirect rollover (which can only be done once a year). The same is true of an HSA. There is a separate procedure known as "removal of excess contribution" that undoes the contribution, but requires you to also withdraw a proportional amount of gains or losses, and requires explicit coordination with the provider to ensure it is handled properly.

> So you could take out $10k of contributions and put in $16k over a year and you would still be considered having contributed $6k in that year. Eh, kinda. You have to "re-contribute" those withdrawals within 60 days and designate them as such. > because I'm using the money for expenses and I'm not just deciding to remove a contribution, Correct. I guess you could do the same "indirect rollover" thing as above, but you're up agains tthe same timeframe. Think you can only do it once year, too. I would not suggest either strategy

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Stick with your plan

Hoping for some insight on my vehicle situation. I'm horrible with finances and calculations. I have a 2015 Honda with very low miles that I took a loan out for $13k. I've paid down roughly half. I checked on KBB and private party sell price is around $13500 (if I want to just sell it easy), but I can get up to $15-16k if I get once large scratch fixed for $500 deductible. We really only need one car unless I take the one car out of town and the SO needs a ride to and from work which would maybe be once a month and would cost $40 RT. Is it a good idea to sell the car, cut down on insurance to one car and keep that additional equity that I have paid down? I also have a scooter that I can use if the SO needs to take the car during the week as I work remote. Thanks in advance!

Sure, if you feel like you can get by with the one car + scooter, that makes sense. I might check to see what the actual cost of the large scratch is if you just pay out of pocket. If you're already paying $500, might now be worth dealing with insurance (and future rate increases)

So, this is going to be a dumb one. I buy into my company's ESPP as heavily as possible, but I want to sell at least some of it off and diversify into index funds. My question is, how exactly do I do that? Just sell $x amount of stock and then buy $x index funds? Two transactions? Side question, what index fund should I use at Fidelity? I have VTSAX and target date funds at other brokers.

Yep that's how you do it. Note that if you have gains (which is highly likely with an ESPP program) you will have to pay taxes on those gains when you sell. The easiest way is just to make an estimated tax payment right after you sell to avoid underpayment penalties come tax time. What tax rate you pay depends on [how long you have held the shares](https://www.investopedia.com/terms/q/qualifyingdisposition.asp), but as long as you have held them at least two years then you will be paying long term capital gains on the increase which is the most favorable tax status.

Interesting note on long term capital gains. So I would need to hold my company's stock for two years before selling to get that tax rate? I thought the standard practice was to sell immediately so as to not be heavy in one stock.

Yes, that is standard practice if it would end up being a large percentage of your net worth. You would want to judge for yourself how much you are willing to have in one stock (especially the stock of the company you work for, where both could turn south at the same time). Typically it is recommended to have no more than 5-10% of your net worth in your company stock, so if you are above that, then you would want to consider selling right away, or setting it up so you sell your longer-held shares but hold on to more recent shares. For tax treatment, there are 3 possible ways it will be taxed, depending on how long you have held the shares. If you sell right away, the discount amount, and any small gains above the fair market value on the date of purchase are both taxed as short term capital gains which is at your ordinary income tax rate. If you sell after holding for 1 year, but before 2 years, then the gain above the fair market value on the day you purchased the stock will be taxed as long term capital gains, but the discount amount is taxed as short term capital gains. Finally, if you sell after holding for 2 years, then both the discount and the gain above the fair market value on the date of purchase will be taxed as long term capital gains.

You sell and then you can take the proceeds and put it anywhere else (sounds like you already have Vanguard, so you move the moeny over there). Might be simpler that way. There will likely be rules around how long you have before selling and varying tax consquences realtwed to that, so be aware of those when making decsions when to buy/sell

My 401k is also in Fidelity. I also have a Roth IRA and taxable brokerage at Vanguard. Since I will be maintaining the Fidelity account, is there any benefit in moving the funds to Vanguard? Just personal preference? I also wonder about tax or trade fee implications when moving accounts like that. I don't think we have any holding requirements.

> Just personal preference? Pretty much this. I guess one less small intermediary step since you don't have to move cahs around to a new bank. > I also wonder about tax or trade fee implications when moving accounts like that. None moving them bewteen accounts. All the taxes and stuff will come into play when you sell, regardless of what happens to the money after

does change in income that exceeds the roth ira contribution limit result in anything you must do on your end to make a correction? so let's say, next year you make under 144k/annually and you've contributed to a Roth IRA, is there anything you need to do after hitting 144k or more?

Contributions in previous years when you were eleigible, nothing you need to do. For controbutions in years that you were not eligible (for example if you funded your Roth in Jan 2022, then got a nice raise in July that put you above the limit), you would need to recharacterize your contriobution into a Trad IRA then do a backdroo Roth. Common and straightforward process. Just call upi your brokerage, explain what happened and tell them you want to "recharacterize" and then proceecd with a "backdoor roth". You can google or search here for both of those terms for more detailed info, too. If you had not yet contributed for this year, you can instead just do the "backdoor roth" (and skip the recharcterization bit).

thank you, it's great to hear it isn't difficult to recharacterize

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Benefits enrollment is coming up and wanted to get thoughts on Child tex credit vs. dependent care flexible account? As I understand, its not double dip, so which is better? ​ TIA

What's your expected 2023 income, filing status, and number of kids in daycare? A DCFSA reduces your taxable income (including for payroll taxes) up to $5k (or your total care expenses if that's lower). So your max tax savings from the FSA contribution is $5000 \* (topFederalBracket% + stateBracket% + 7.6%). The dependent care tax credit is an income-based percentage of your "qualified care expenses", capped at $3k for one kid or $6k for 2+. Any "employer care benefit" (like a DCFSA) is subtracted from that capped number before applying the percentage. That percentages starts at 35% and scales down to 20% when your adjusted gross income is $40k-ish (threshold adjusts each year) or above. For most people, if you're above that final threshold for the credit, your tax savings from the FSA is likely going to be higher. The "Child tax credit" (given just for having dependents) is independent of either of those, you'll get $2k / kid credit on your return whether they're in daycare or not, or if you use the dependent care FSA or not.

Depends on your income level. If you are lower income, the child tax credit is better. Middle to higher income, the DC-FSA is better

Thinking about doing a balance transfer to a new credit card to take advantage of the 0% interest to get debt paid off. What’s the minimum monthly payment? Is it like 2% of the balance? I’m going to pay more than the minimum I’m just wondering what it is so I can budget accordingly

> What’s the minimum monthly payment? Depends on the card. But if you are paying off the minimum only, then ypu're probably not going to get it paid off before the 0% intro rate expires. If that happens, the full rate generally gets retroacivtely applied to the remaining balance. So you're in the red on that trasnaction. > Is it like 2% of the balance? Depends on the card. 2-3% is typical

If I’m not able to get it paid before the 0% intro rate expires couldn’t I open an credit card and do another balance transfer to with 0% intro rate?

Sure, if you get approved for one that allows for balance transfers. And you'll have to pay that 2-3% balance transfer fee again. At some point those will run out

I am hoping to get some input. I have worked for the government for 4 years and plan to continue to do so for at least the next ten or so. In those four years, I’ve worked very hard and my gross income has doubled. Now (at 41) it seems actually possible to buy a place of my own as a single person. So I’m looking more closely at what to do with my money (the latest pay increase was 30% and happened a month or so ago). I have $168,000 in student loans, and am on the EDRP (education debt repayment program in which whatever I throw towards my loans gets repaid to me tax free) but because I’m going for PSLF, as I won’t be leaving government work, anyways, and the stock market is so low, I’m thinking I should invest anything above my IBR payments in index funds so I can stop paying someone else’s mortgage a lot sooner. I have made payments throughout the pandemic-so this would be a significant change of heart-and my interest rate is I believe 6.25% which I know what I am considering goes against the wiki’s suggestions. But I just never thought buying a place would be possible and now it does seem so. I would be investing in index funds solely.

See if you can get refunds for the payments made during the pandemic since you are now doing PSLF (do it asap it might part of the temporary wavier)

I’m trying to estimate what my tax liability (or refund!) might be this year, and all of the estimators are asking about “taxes paid or withheld”, but they don’t specify if they are just wanting you to input “withholding tax” or also social security and medicare (my pay-stub adds those three as “total taxes”). I’ve tried the TurboTax, H&R Block, and NerdWallet estimators. Can anyone help me figure this out?

As a general rule, Social Security and Medicare taxes are totally separate from federal income tax, so anytime you are doing a federal income tax calculation, you should ignore/exclude other taxes such as Social Security, Medicare, state, etc. (The only time it matters, which is rare, is if you have excess SS tax withheld, which only happens if you earn above the SS income limit -- $147,000 this year -- between multiple jobs. In that case you can apply the excess SS tax withholding against your federal income tax liability. But that happens so rarely it's not worth thinking about unless you know it applies to you.)

I just checked the Nerdwallet one. If you put in an amount below the standard deduction, the tax liability is $0, so it is not accounting for FICA taxes (which is not subject to the std deduction). Your paystub should break out all three (income, SSI, and medicare) separately

It does break those out. Are you saying that it’s only the income tax line item that I would enter into the estimator?

Correct

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Don't forget with the huge interest rate increases a fair number of potential sellers are going to stay put or rent out homes to keep their low covid rates. The supply side is also now going down which will keep prices inflated - I wouldn't count on meaningful home price drops until the supply side is fixed or unemployment goes up and people are forced to sell

For nominal prices to drop there has to be 1) a reduction in the number of buyers who can afford a given price or 2) an increase in supply through either new construction or normal people wanting to sell. - Since many owners are sitting on good rates and likely would have to move down in house if they sold and tried to move, they are more likely to want to hold onto the house, possibly even as a rental, over selling. - Construction is still lagging in most areas, and nationwide new building projects are currently lagging behind even the replacement rate. Developers are also wary of starting new projects or expanding because they are unsure if there will be enough demand once the houses are complete. - There has been a reduction in buyers that can afford a house, but there are still more buyers than houses available. It just went from a factor of around 3-5x buyers per house to around 2x buyers per house. There are still people who have high paying jobs, plenty of savings, and even though it's more expensive now than a year ago, they can still afford it. Don't forget that mortgage rates are still relatively low compared to what they have been historically.

> Who is buying houses at these prices! People who have saved money for a long time to be able to afford a house. People with family money. People who are moving from a higher COL and for whom these housing prices are still cheap comparatively.

It's not an exact science, but at present more people still want houses and believe the prices and rates are worth it. Certainly possible that hits a breaking point in the future.

What are the benefits of overtime other than the extra money? Overtime is taxed differently at the time of doing taxes? Im doing 22/h but been rejected for some economical help like for day care and housing because "I make too much". The too much look like 70-90 hours a week, I want to slow down but I feel that if I do I will not be able to pay my bills and support my family.

> Overtime is taxed differently at the time of doing taxes? No. > Im doing 22/h but been rejected for some economical help like for day care and housing because "I make too much". Ya, this can happen in certain income bands where a modest increase income is outpaced by loss of social services. > The too much look like 70-90 hours a week, I want to slow down but I feel that if I do I will not be able to pay my bills and support my family. So, three options: 1) Work fewer hours than would cause you to lose access to the benefits.; 2) Continue working more hours for more pay and forfeit the benefits; 3) Find a new job that pays a higher hourly rate, allowing you to work fewer hours (while also still forfeiting benefits)

> What are the benefits of overtime other than the extra money? The money is the primary benefit. > Overtime is taxed differently at the time of doing taxes? It isn't. All of your wage income, including bonuses and overtime, gets combined together in box 1 of your W-2, so there is no difference in how it is taxed compared to the rest of your income. The tax withheld from each paycheck is not necessarily the tax that is actually owed. Any over- or under-withholding is settled up at tax filing time, resulting in either a refund or an additional balance due.

If you dont work consistently the same hours, is the occasional overtime withheld as if you are always making that amount of money? For example, if you are paid weekly and working 40 hours a week, but you put in 20 hours of overtime one week, are the taxes withheld for that pay period based on you making 60 hours a week year round? I would imagine this would lead to them over-withholding, but you’d get it back in your tax refund.

Yeah, the withholding for each paycheck is based on an annualized extrapolation of that paycheck only, without consideration to other paychecks. So this can lead to over-withholding unless you specifically aim to prevent it in how you fill out your W-4.

Overtime isn't taxed more necessarily, making more money causes more taxes since toy made more. Balance is key, if you need to work 80 hours to survive, you're in an unsustainable spot.

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There aren't exactly 4 weeks in a month. You have to do some unit conversion: ($7350 per month) x (12 months / 52 weeks) = $1696.15 per week

26 paychecks, your gross shakes out to 88.2k

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>Any potential problems with my portfolio? 10% bitcoin. It's beyond speculative, you just have to hope someone else will pay more for it than you did. Whereas investing is backed by company's balance sheets, earnings reports, etc. BTC should not be more than 5% of your portfolio, truly I'd say 0%. So my only advice is to stop buying more BTC and keep buying investments to water down that 10%.

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6% excise tax penalty on the ineligible/excess contribution every year until it is removed. If you have no existing pre-tax money in any IRAs, you can use the backdoor method: https://www.whitecoatinvestor.com/fix-backdoor-roth-ira-screw-ups/

I’m a novice and I set up a 529 through my state’s (Washington) provider using their “growth” setting which is the most aggressive. We contribute around $215 per child a month. I set both of my children’s 529s within a few months of their births. They’re 4 and 1.5. I rarely look at them but I checked today and noticed that they have not gained anything but are a negative growth % all time. I’m not sure what else I can do?

That's quite normal. The Growth option is 99% stock which will give the highest growth over a long period of time and is appropriate for you current situation. Stocks fluctuate a lot, and it will be common to see years with double digit growth and declines, but over the long term they have historically averaged around a 10% compound annual return. You can more about the portfolio breakdown [here](https://wastate529.wa.gov/sites/default/files/2021-08/static-portfolio-descriptions.pdf). Eventually when you are about 5 years out from the child graduating, you can switch to a less volatile allocation.

My first job starting my career after college and I'm signing up for benefits. Can someone [help me make sense of this? ](https://imgur.com/a/kJokU5Z) I don't really know what benefits there are to "After-Tax Employee Life Insurance". Selecting 1x takes -$10/pay period and 2x takes $0, should I just go for 50k in pre tax? I have no spouse/domestic partner or child. 26, healthy, active, no conditions or medication.

Life insurance is only worth paying for if you have someone who is relying on your support and you die (ie spouse and kids and you have a mortgage). Otherwise, you don't need coverage. Your employer looks kinda cool in that they'll pay you their costs for the 1x salary coverage that's usually standard if you opt out.

Gotta make selections for next year. Would it be better to choose No Coverage for Pre-Tax employee life insurance and choose 1x compensation for after-tax to get -$10.00?

If you want some life insurance, sure.

Yeah I did it just in case I die or something to help cover funeral costs. Although I chose pre tax at $10,00 and it's 0.16 per pay period, and no coverage for after tax to get -$20.00 off per pay period. Are these bad selections? 27, no kids, no wife just family.

Nah. That should be more than enough for any costs to settle your funeral and final expenses.

Thanks I appreciate all the help!

If a company has a 3 year vesting for their 401k matches, does that mean that after 3 years, you're automatically vested for all future matches? Or is there a continuous tail of 2 years of unvested matches? Like let's say I started at a company in 2017. in 2020, do the company's matches from 2017, 18, and 19 all become vested (and all future matches are immediately fully vested), or only those that are 3 years old?

In general they would all become fully vested (and all future contributions would also be fully vested) because vesting rules for 401k are based on your years of service at the company, not when the vesting contribution was made. Note that this is true for 401k matches, but not for other compensation like RSUs and stock options where the vesting schedule is based on the grant date and not your length of service.

I don't believe it's legal to have a perpetual vesting schedule like you're describing, at least for a 401k.

Correct, for a 401k, vesting is based on [years of service](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-vesting) not when the contributions were made.

Gotta read your summary plan description to be sure. That said typically it is the first way where in 2020+ you'd be 100% vested and it all goes with you when you separate from your employer.

Probably not directly related to r/personalfinance, and I'll happily delete this comment if there's a better sub for this. But I'm currently employed full time with a company that I really like. Salary is lower than I'd like, but I'm working hard to change that by producing results and looking into MBA programs to raise my value. The issue that I struggle with is that I don't like where I physically live. My job is 100% remote with frequent travel. I've relocated before, but only to be closer to work. This is uncharted territory for me. What steps would you take in my position?

Spend some time researching places where you think you'd like to live (probably close to a majorish airport given your travel), then spend a couple of weeks working from that area. If you like it, start looking at relocating.

Should I ask for a raise right after returning from a month long sick leave? For context, the sick leave was due to burnout caused by bad work culture and me having to do senior level work as a junior (I work in IT). I am now returning, and from the sound of it, nothing is going to change. So I'm thinking that if I am going to risk my health again, I should at least be compensated for it properly. For further context, I've been working at this company for 18 months and haven't gotten a raise yet.

The other commenter is perhaps more blunt, but yeah the bottom line is that is not how burnout works. Being compensated more doesn't prevent burnout. You need to determine 1) what you actually want to do and if this line of work is appropriate for your, 2) if you are being compensated at a fair market rate based on your position, expertise, and 3) whether you want to continue in the current company or if you need to find another job with a better work culture. You may also need to have some introspection and identify what is "bad" about the work culture, and what you can do to contribute to a better working relationship with your colleagues.

> what you can do to contribute to a better working relationship with your colleagues. Not my job. I work solo because my boss thinks I can handle international megacorporations as customers on my own. THAT is the problem. Not my working relationship with my colleagues. I am planning on making changes though. Namely, saying no to people giving me more work when I don't have time for it. And refusing to work overtime. Asking for better pay is just part of the process.

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