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    Personal Finance Coronavirus Megathread Update (January, 2021)

    January 04, 2021

    Personal Finance Coronavirus Megathread Update (January, 2021)

    Coronavirus Megathread Update (January, 2021)

    Posted: 03 Jan 2021 08:34 PM PST

    Overview

    Last March, we posted a megathread with tons of information about Coronavirus-related issues, and in September a second megathread was posted with additional information on updates to payroll tax deferrals, student loan interest waiver, and unemployment. Given the ongoing nature of the pandemic and recent U.S. governmental actions, we are posting a third installment of this megathread. Please keep in mind that politics and political discussions are still not allowed here.

    Stimulus Payments

    For the second round of stimulus payments: For non-dependent individuals, you are entitled to $600 if your AGI (Adjusted Gross Income) is below $75,000. For married couples filing jointly, it is $1,200 if your joint AGI is below $150,000. For head-of-household filers, it is $600 if your AGI is below $112,500. Taxpayers with dependent qualifying children will receive $600 per qualifying child (16 or younger, the rules are based on the child tax credit).

    As with the first stimulus - If your AGI is above the income threshold of $75,000 or $150,000, your payment will be reduced by 5% of the difference between your AGI and the income threshold. For example, if you are single and without kids, the potential maximum amount of $600 is completely phased out once your income hits $87,000. If you are married with two young children then the maximum payment of $2,400 is completely phased out once your joint income hits $174,000.

    The IRS has updated the Get My Payment portal to include information regarding the second stimulus. This is the first place you should check for the status of your stimulus payment.

    If you are not eligible based on your 2019 tax return, or are eligible for a larger amount based on your 2020 tax return, you will have to wait until you file in 2021 for the 2020 tax year to receive the owed difference of the Recovery Rebate credit. Common cases where this applies:

    • I never received the first stimulus, even though I believe I was eligible, and still get an error when checking the Get My Payment portal

    • I was a dependent in 2019 (and/or 2018 if your 2019 was not yet filed for the first stimulus), or mistakenly indicated that I could be claimed as a dependent, but cannot be claimed as a dependent for 2020 (Note: You don't just decide if you're a dependent or not, verify if you are eligible to be claimed as one as defined by the IRS.)

    • I had a child in 2020 and am now eligible for the additional amount for a qualifying dependent

    FAQs:

    • Q How will I receive my stimulus payment?

    • A 2019 tax returns returns are being used to calculate each person's stimulus payment. The bank account information provided on your 2019 tax return, whether that be for a refund deposit or debit of owed payment, will be used for direct deposit of the stimulus.

    • Q When will I receive my payment?

    • A The deadline for second stimulus payments to be sent is January 15, 2021. After this date, if you have not received the stimulus payment yet, you will have to wait to claim it as the Recovery Rebate Credit on your 2020 tax return.

    • Q I am eligible for the both the first and second and stimulus based on my 2018 and/or 2019 tax return, but will not be eligible based on my 2020 tax return. Will I need to pay back what I received?

    • A No, there was no information provided in the bills requiring payments to be returned if eligibility changes between the 2018/2019 and 2020 tax years. This is also noted in the IRS FAQs.

    • Q The Get My Payment portal says the payment was already sent and/or I received Notice 1444 in the mail saying my stimulus was sent, however I never actually received it. What do I do?

    • A See the IRS page on Payment Issued but Lost, Stolen, Destroyed or Not Received for guidance on starting a Payment Trace

    The IRS has an extensive list of Economic Impact Payment FAQs and a news release regarding the second stimulus with more information

    Be aware of potential scams related to stimulus payments or other coronavirus relief packages. CNBC has a helpful article with examples of common stimulus scams.

    At this time, a $2,000 stimulus has been proposed, but has not been passed by Congress. If that changes we will update this information to reflect that.

    Payroll Tax Deferral

    Payroll taxes consist of two related taxes: Social Security (6.2% of wages) and Medicare (1.45% of wages). Both employees and employers pay these taxes (i.e., for every $1 of social security taxes you pay, your employer also pays $1). Only the Social Security portion of payroll taxes may be deferred right now, not Medicare.

    The Secretary of the Treasury has been directed to defer the collection of Social Security taxes on those making a gross income of less than $104,000 / year ($4,000 or less per bi-weekly paycheck) starting September 1.

    Implementing seems to be optional by employers and many employers have decided to not implement this.

    The IRS had issued Notice 2020-65 indicating that taxes deferred must be withheld and paid between January 1, 2021 and April 30, 2021, or interest and penalties will start accruing on May 1, 2021. The window to payback the deferred taxes has been extended under the new stimulus bill to December 31, 2021. Deferred taxes must be paid by January 1, 2022 or interest and penalties will start accruing.

    See the previous megathread for FAQs regarding the payroll tax deferral

    Coronavirus-Related Distributions from Retirement Plans

    Penalty-free withdrawals from retirement accounts for Coronavirus-Related Distributions ended December 30, 2020. If you made one of these withdrawals during 2020, remember that you have three years to pay the income taxes on the withdrawal. The IRS has an article with Coronavirus-related relief for retirement plans and IRAs questions and answers with more info.

    Flexible Spending Account (FSA) Rollover

    FSA account balances typically do not rollover year-to-year. The second stimulus package allows for FSA balances at the end of 2020 to be rolled over and used in 2021. Any FSA balance remaining at the end of 2021 may also be rolled over and used in 2022.

    Unemployment Benefits

    Pandemic Unemployment Assistance (PUA) provides benefits to individuals typically not eligible for unemployment insurance, such as independent contractors or gig workers. Under the CARES Act these benefits were set to expire Dec 31, 2020. It has now been extended to March 14, 2021. Please visit your state's PUA website for more information.

    The previous unemployment relief of $300/week from the federal government and $100/week from the state expires Dec 26, 2020 (see the previous megathread for more information and FAQs regarding this executive order from August). Under this new bill, federal unemployment will provide an additional $300/week through March 14, 2021, and the maximum number of weeks that unemployment can be claimed has been increased from 39 weeks to 50 weeks.

    If you lost your job or are at risk of losing your job:

    Please read the information available in the Job Loss Megathread: unemployment resources, state-specific information, and help

    If you have any questions regarding those resources, feel free to ask here, but please be as specific as possible with your current situation and what steps you have taken so far.

    Student Loan Interest and Payment Waiver

    The CARES Act suspended federally-held student loan payments and interest charges until September 30, 2020. The Executive Order signed in August extended this to December 31, 2020. The new bill has further extended this date to January 31, 2021.

    Key points:

    Read https://myfedloan.org/borrowers/covid/ for more information and updates.

    Stock market turbulence

    It's very natural to be feel concerned when there's a large drop in the stock market, especially after such a long period of growth, but it's important to keep perspective and avoid making rash decisions.

    First, take a deep breath. Market downturns are not uncommon or unusual. Between 1980 and 2017, there were 11 market corrections and 8 bear markets.

    Trying to time the market rarely turns out well and most people trying to enter or exit the market based on emotion, gut feelings, and everyone's predictions end up doing far worse than if they had simply continued business as normal. Stick to your plan and stay the course.

    To quote Warren Buffett: "to buy or sell on current news is just crazy".

    Don't make an emotional decision, don't try to predict where the market is headed in the short run, and make decisions for the long run. You're investing for decades, not trying to predict the Dow Jones or S&P 500 next week, next month, or even next year.

    Being financially prepared and practicing sound finances

    1. Budget your money and reduce expenses. Fundamental to a sound financial footing is knowing where your money is going. Budgeting helps you see your sources of income less your expenses. You should minimize your expenses to the extent practical.

    2. Build an emergency fund. An emergency fund should be a relatively liquid sum of money that you don't touch unless something unexpected comes up. For most people, 3 to 6 months of expenses is good. A larger emergency fund may be warranted if your income is variable or uncertain. If you're in credit card debt, aim for one month of expenses and focus the rest of your money on paying down debt.

    3. Don't check out of your finances. Continue following the steps in "How to handle $" as best possible starting at the beginning of the flowchart. If you can't make rent, contact your landlord. If you have trouble paying your mortgage, see below. If there are bills you can't pay, research your options and contact the company. Simply not paying a bill without any communication is almost certainly not your best option.

    4. There's more good stuff you should be doing in this video from Bogleheads and the PF wiki.

    Most mortgage owners eligible for reduced or suspended payments for up to 12 months under the CARES Act

    Key points:

    1. The CARES Act covers about 70% of all mortgages in the U.S. (those backed by Fannie and Freddie, FHA, VA, or USDA). Many companies have similar policies for most other types of loans. If you aren't sure what kind of loan you have, ask your servicer.

    2. In most cases, you will not owe the missed payments as lump sum. There was a lot of confusion about this. The new guidance says that lump sums are not required for GSE and federal loans.

    3. You can't just stop paying your mortgage. Contact your servicer to find out if you are eligible for this or if your servicer has adopted a similar policy.

    4. Requesting mortgage relief/deferral will appear on your credit reports and may affect your eligibility for refinancing (but doesn't affect your actual credit score).

    5. For more info, the CFPB published step-by-step information about how to request payment relief.

    Refinancing

    If you're in the market for refinancing your mortgage, it may be worth considering, but if you don't have a healthy emergency fund and extra cash, you may not want to refinance right now due to the up-front costs.

    Effective Dec 1, 2020, refinancing mortgages backed by Fannie Mae and Freddie Mac will incur a 0.5% adverse mortgage fee.

    Relief for Renters

    The Executive Order signed in August required certain federal agencies to take steps to limit foreclosures or evictions. It did not include a list of specific actions or policies.

    Following this in September, the CDC ordered Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID-19 that expires December 31, 2020. The new bill extends this order through January 31, 2021.

    Read Protection for Renters from the CFPB and visit the NLIHC page for COVID-19 Rental Assistance programs for additional information and resources

    Other megathreads

    submitted by /u/PersonalFinanceMods
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    Weekday Help and Victory Thread for the week of January 04, 2021

    Posted: 04 Jan 2021 03:00 AM PST

    If you need help, please check the PF Wiki to see if your question might be answered there.

    This thread is for personal finance questions, discussions, and sharing your success stories:

    1. Please make a top-level comment if you want to ask a question! Also, please don't downvote "moronic" questions! If you have not received your answer within 24 hours, please feel free to start a discussion.

    2. Make a top-level comment if you want to share something positive regarding your personal finances!

    A big thank you to the many PFers who take time to answer other people's questions!

    submitted by /u/IndexBot
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    Can someone explain 401(k)s to me

    Posted: 04 Jan 2021 07:20 AM PST

    I am a college senior and I have been working with this tech company for 4 years over the summer. They just sent me this email about their 401(k) plan. Is this something I should take advantage of? I know nothing about 401(k)s. Thank you.

    https://ibb.co/tpwF9Jq

    Update: Thank you for all the advice everybody! I'm new to this whole world and reading your comments has been super helpful in deciding what to do. I don't know why they don't make this required learning in high school. Appreciate all your help and happy new year

    submitted by /u/chompy7
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    When considering a new job opportunity, be sure to include the difference of ALL benefits in your analysis.

    Posted: 04 Jan 2021 09:08 AM PST

    I just started a new job, and while the total compensation package is higher, the medical benefits (health, dental, and vision) cost almost $6,000/yr more, I am giving up a $2,000 per year company provided HSA contribution, and the new company pays ~$1,500 less in 401k contribution. So at a quick glance it looks like a nice pay jump, but the actual net pay increase is nearly $10k less per year than if I hadn't take all those other factors into consideration.

    submitted by /u/MBisme
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    2.375% on 30 year, no points, no lender fees, appraisal waiver.

    Posted: 04 Jan 2021 07:02 PM PST

    Seems like one to pull the trigger on, agree?

    230k balance 26 years remaining 3.625% rate

    submitted by /u/Flurb789
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    Are we too cash heavy?

    Posted: 04 Jan 2021 07:48 AM PST

    Posting on a throwaway account due to financials. My wife(34) and I (32) live in an HCOL city with decent paying jobs for here and no children as of yet. I am just looking for some input for some outsiders I suppose.

    We both have dumped 6k into our Roth IRA's for 2021 already. I put 10% into a 401K with a 2.5% match. Wife is unionized and contributes to a pension.

    Investments are as follows:

    Taxable accounts- $230,000ish. In FXAIX, FSKAX, QQQ, AMD, and a little AAPL

    My Roth and 401K balance- $36,000
    Her Roth- $26,000

    Our day to day bank has:
    Checking account balance- $15,000
    Savings account- $5,000

    Capital One (HYSA)- $140,000.
    This is what I'm wondering about. We are hovering around a 450K net worth with a lot of it just sitting in cash earning .4%. Now we do have plans to buy a house, hopefully within 5 years, and hopefully not in our HCOL city. Unfortunately our jobs cannot come with us so we would have to start over once we move out of the city, so I am trying to pad our pockets I guess.

    Am I stupid for missing out on this record bull run?


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    New grad (30yrs old) wondering if I should aggressively pay student loans before any retirement savings or try both together

    Posted: 04 Jan 2021 04:03 PM PST

    Basically the title. I've heard so many opinions such as making minimum payments on loans so I can get a house soon and save for retirement vs aggressively paying off loans and saving for a house then worrying about the retirement way down the road. I have 100,000 in student loan debt and will be making about 70,000 once my job starts in a few months.

    ​

    Due to my age my wife and I are very eager for a house and kids but we have very little saved (10,000) so we feel extremely limited with options.

    submitted by /u/twinkie_terminator
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    Considering Bankruptcy at 20

    Posted: 04 Jan 2021 08:03 AM PST

    Hello all,

    This is a throwaway account as I am fairly embarrassed about my situation, but am in need of guidance. Please ask any questions you deem necessary, I am honestly desperate.

    I have a small consulting and reselling business that I have been running since March 2019. It had done pretty well for itself - well enough for me to leave my full-time job making roughly $67,000 a year after taxes late December 2019.

    After COVID, my company's sales tanked. I believe March 18th, 2020 sparked a dry spell as far as _new_ clients went. I ran out of money in June, kicked out of my upscale apartment ($2,363/mo) in October (on my birthday lol), haven't been able to make a payment on my car since July, and have mentally broken down more times than I can count. My credit is complete sh*t (470). All my decent checking accounts have been overdrawn and charged off (Chase ($1,079), Huntington ($5,067), Key ($2,560)). I owe $39,000 on my $32,000 2016 Lexus (loan since 02/19, I put 36k miles on it in one year). I have over $35k in credit card debt as well due to clients canceling orders mid-project (bought inventory I have no clue what to do with anymore (Chase Ink Business - Charged off as well)). When I ran out of liquid in June, I paid my W2 & 1099 staff with cash advances from our AMEX. The SBA was of no help to me. I had my relief application open since March and it was rejected in May. Was in recon until November where it was finally put out of its misery and rejected for the second time because my personal credit was shit.

    I have accrued a tremendous amount of debt, but it doesn't end there. I got a certified letter from my local court when I used to live in my apartment. My old landlord is suing me for damages amounting to a 5 figure sum. I do not have money for a lawyer anymore. I am p*ss poor.

    My company is slowly picking back up. We had 18 full-time clients before COVID, but now we have 3. Better than 0 I guess. I am getting orders, but I have no clue what to do about my quickly worsening personal financial situation. My credit score was 755 in December 2019. I feel disgusting every time I get a call from my banks, collection agencies. I just want to hide under my bed. I can't live like this anymore. I wanted to get married in 2022, I wanted to buy a house, I had a lot of aspirations for the future. I was not always a debt-ridden individual.

    But I'm not really deserving of a future like that anymore. Too many bad decisions and I was too ignorant.

    So here's my bright idea - bankruptcy.

    Is this a good idea for my situation? Is it too late for me to pull the trigger? How long will this decision affect me in the future, and will it disqualify me further from securing any lines of credit in the future? Will my life have a chance to be normal? Chapter 7 or 13? Can they come after my family for debt in my name? I have no co-signers on my loans, but I know that doesn't stop some of these collection agencies. My mom and my sister have gotten calls from agencies asking for me.

    submitted by /u/throwawayofabrokeman
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    Cashing Out Life Insurance!

    Posted: 04 Jan 2021 06:10 PM PST

    Hi all,

    My dad has a MetLife life insurance policy that he would like to cash out and just invest instead. He purchased this policy over 20 years ago when I was born, and I am no longer dependent on his income.

    I just wanted to know if it would be a smart move to cash out this policy and just invest (VTSAX/VTI for example) instead. And what would the tax implications be?

    Policy Info (Amounts Altered for this Post):

    Net Gain Amount: $3,600

    Surrender Penalty: N/A

    Net Cash Amount Available: $22,000

    Cash Value - Base: $7,500

    Death Benefit Amount: $100,000

    Paid-Up Additional Insurance Cash Value: $14,500

    Paid-Up Additional Insurance: $0

    Am I correct to believe that

    • $3,600 will be the taxable gain (taxed at ordinary income rate)
    • $22,000 would be the amount my parents receive upon cash out

    Thanks in advance!

    submitted by /u/pokeagogo
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    I am bad with money, have a little more than usual, and want to start paying down credit card debt.

    Posted: 04 Jan 2021 08:06 PM PST

    Hi all,

    So I have $3100 in credit card debt. With some unexpected bonuses from work and getting a little extra in my last paycheck because my employer opted to pay out for a couple of unused PTO days (thanks covid) instead of roll it over to 2021, I have more money than I usually do. I got my yayas out and bought the dumb stuff I wanted and paid my note/bills for the month already. I have $2000. I probably need $150 for groceries and transit costs until next pay day.

    Should I just put all my money towards my credit card and get it out of the way? A piece of me wants to have some money leftover (I never really have had like a sizable savings before) but another piece just wants to try to get as much paid off as possible.

    What is the actual smart thing to do?

    submitted by /u/OpalOnyxObsidian
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    Best Roth IRA brokerage account?

    Posted: 04 Jan 2021 05:40 PM PST

    I am 24 years old and Im looking to open my first roth ira account. I plan on maxing out my contribution. I heard good things about fidelity, vanguard and Charles Schwab. Which do you guys recommend? I also plan on opening an investment account eventually if thats any consolation

    submitted by /u/ordalehomes
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    Bipolar episode at work. Got put on medical leave. Can’t go back to that company. What do I do? How do I get disability?

    Posted: 04 Jan 2021 06:39 PM PST

    I have bipolar disorder and went manic during video chat and during my shifts and got put on leave. I'm not planning on going back. What do I do? Do I tell the psych I need to be on disability? My company pays for medical leaves but unsure how disability works. Is that something my psych fills out and hands to my employers insurance? How do I go about getting disability? I am a mental liability currently. I am in California.

    submitted by /u/Current-Wear8063
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    How to remove an unknown eviction on my credit?

    Posted: 04 Jan 2021 07:20 AM PST

    Hi. I found out that I have an eviction on my credit after trying to apply for a new apartment. I was not living at the address when the eviction apparently happened, and I believe my parents somehow used my credit back then. I'm not sure how all of that works, so sorry if I'm missing anything, but I just want to know how does someone go about removing an eviction they have no knowledge of? I've been living at a new apartment for a year and a half now and never heard of the eviction which was apparently 2 years ago. I also don't see the eviction on my actual credit report.

    If more information is needed I'll try to answer the best that I can. I'd just really like to move. Thank you in advance. I just don't understand how this works.

    ​

    Edit: Hello! I just want to thank you everyone for their responses! I believe I've gotten it resolved. The people who said I had an eviction got my name confused with my father's apparently. Hoping it gets completely resolved once I make calls here and there for the apartment. Thank you everyone.

    submitted by /u/MaknaTea
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    Questions from a newly married couple:

    Posted: 04 Jan 2021 04:57 PM PST

    1. Can we both contribute $6000 each towards Roth IRA for tax year 2020? (We got married during the lockdowns in a public park with 2 people in attendance. 10/10 decision tbh) Guessing anyone is fine for Roth IRA among Schwab, ETrade, Fidelity etc. from the wiki.

    2. Can we use 1098-T for tuition credits if one of us was a student during the year?

    3. Our combined AGI would come out somewhere around $130K-$140K with incomes pretty evenly matched. Are the any advantages of contributing to traditional IRA as opposed to Roth IRA? We were thinking Roth IRA since there are no further tax implications when we withdraw it.

    submitted by /u/newlymarriedtaxQ
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    Refinancing after losing job

    Posted: 04 Jan 2021 05:39 PM PST

    Hope this is the right spot for this, looking for help. I got fired from a job in December 2018 (sales job, not hitting numbers). I was ashamed of myself and didn't tell anyone, not even my girlfriend who I own a home with. I worked from home/remote so nothing seemed off when I wasn't leaving the house. It took some time, but I finally landed a great job that I love that I've been at since June 2019. We've been looking to refinance as the rates are great right now. When I told our agent I've been in my position for 18 months he said he needed 2 years worth of employment history so I gave the name of my previous company. To be clear, they asked for contact info for our current companies, but not my previous one. They're also going to need 2 years of tax returns. Obviously my 2019 returns were low, but for all they know I got a different position with a raise at the same company (this year I'll have cleared $100k, but 2019 return was about $46k since it was only half a year). How much do I need to worry about them pulling up my past? Obviously I should've told my girlfriend long ago, but I'm past that now unless I expect the agent to stop the process and ask where my returns from my previous employer are etc.

    submitted by /u/scootinby
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    Should I pay off my mortgage first or student loans?

    Posted: 04 Jan 2021 06:50 PM PST

    Mortgage: $340k at 3.375%

    Student loans: $160k at varying interests rates (4-7%); mixture of federal and private loans

    Income: $200k annual

    Misc: my current savings account is at $25k, my 401k is at $40k, and i am 28 years old.

    submitted by /u/mochagazelle
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    Question about student loan and saving account

    Posted: 04 Jan 2021 08:02 PM PST

    Hi, I have about 5k of student loan left and I'm on a 10 year repayment plan giving $200 per month. My company also pays for my student loan (about $100) per month. For the past 2 years, I have been continuing paying my 200 + 100 from my company. This has significantly reduced the principal amount on my student loans. (Smartest choice i made) lol

    My question is, should I stop contributing and save that income for something else? Like my savings account where ill get interest? Or work towards paying off the entire 5k. I know the $100 will continue coming in from my company.

    submitted by /u/jiggy19921
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    Ditching TurboTax

    Posted: 04 Jan 2021 07:54 PM PST

    I hate TurboTax, they market that they're free but I always have to pay to use the HSA forms.

    Any recommendations for a free or even just cheaper than $50 alternative? I have a pretty basic W2 return besides the HSA and a backdoor Roth.

    submitted by /u/platyp00s
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    Used wrong name on debit card when online shopping. What now?

    Posted: 04 Jan 2021 07:53 PM PST

    I was purchasing some clothes earlier today and didn't notice I put the wrong name when it asked for the name on my debit card until later. Everything else seems to be correct though. I can't cancel or change my order anymore. I sent an email to the company but they've yet to respond. The charge says pending on my account.

    What would happen? Am I gonna get in trouble or will the purchase most like go through as normal?

    submitted by /u/iinternetdaddyy
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    Can you pay off a loan as soon as you get it?

    Posted: 04 Jan 2021 07:49 PM PST

    First of all, I don't know anything about how finances work in the US, so I'm sorry if what I'm proposing is extremely dumb

    So my girlfriend needs to up her credit score for her to get a personal unsecured loan(she has no credit history). We are in the process of researching and she has not applied to anything as of yet.

    She currently has a checking account with Wells Fargo (she has had it for about 3 years now with bi-monthly deposits from her job) and we were thinking of getting a secured personal loan of 3K and paying it off as soon as we can - this would mean not using the money we get for the loan and just use it to pay it back.

    Would this be enough for us to up significantly her credit score? Our main goal is to get an unsecured personal loan of 4k

    Thank you for your help

    submitted by /u/Sciencemusk
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    My bank ruled a charge back in my favor, vendor's bank did not

    Posted: 04 Jan 2021 02:27 PM PST

    Apologies if this belongs in legal advice. Pre pandemic I purchased some airline tickets through an agency, then the world shut down, the airline went bankrupt and the country I was flying to shut their borders. The agency offered us a flight credit or half our money back. Instead I disputed the charge with my credit company and they approved a charge back based on the fact that I paid for services that I did not receive.

    Today I received an email from the agency that *their* bank decided the dispute in the agency's favor. They sent me a contract to review and sign so that they can go ahead and send me my 1/2 refund. I've read enough posts here to know there's no such thing as free money, but could they send this dispute to a collections agency or something?

    I'm hesitant to even open the link to the contract because they'll be notified that I did, so I haven't read it yet.

    Thanks for your help PF

    submitted by /u/CuriousityCat
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    'Lost' 529 plan

    Posted: 04 Jan 2021 10:15 AM PST

    My father set up a 529 college plan for my eldest daughter. He passed away several years ago and my daughter will be going to school in the Fall. Unfortunately he designated his wife (my step mother) as the trustee and she does not remember anything about the fund (how much or where it is located). Is there a way to 'find' the fund? I have my father's and daughter's ssn's. He was living in Oklahoma City at the time he set up the fund. Would appreciate any help/thoughts.

    submitted by /u/FluidAngle6757
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    accidentally made rollover IRA account instead of Roth IRA--should I still contribute for 2020?

    Posted: 04 Jan 2021 04:29 PM PST

    Hello!

    In December, I created a rollover IRA account (thinking I could ask for it to be a Roth rollover account at the point of rollover (I'm very new to this)) with the intention of rolling over my 403b from my last job. However, when I called them this morning, they told me to create a new Roth IRA account instead and that the rollover IRA account would just disappear if I leave it alone. So the Roth IRA was created today.

    My questions are: 1) can I make a $6k contribution (with no rollover) to the rollover IRA account I accidentally made so that I can make a contribution for 2020? 2) is that not a good idea for any reason? and 3) can I later transfer that into the Roth IRA account?

    Thank you so much! Here's to everyone else like me who is trying to make more financial moves this year!

    submitted by /u/majuchida
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    Student asset on FAFSA

    Posted: 04 Jan 2021 04:10 PM PST

    Unfortunately, I have no option to skip the cash, savings, checking account question this year. I saved up ~5k so that I can pay my car and health insurance/food/gas for 2021-2022 Would 5k affect my financial aid? Or should I open a Roth IRA and leave it in there without investing since FAFSA doesnt ask for retirment account? I read in some other post that I can withdrawal it without a penalty as long as I dont invest the money I put.

    submitted by /u/moohooh
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    Reality check on buying a first home?

    Posted: 04 Jan 2021 06:55 PM PST

    Hi all,

    I am starting to consider purchasing my first home but wanted to get some input on whether I'm jumping the gun. I've read a lot of buying vs. renting articles and done some of the calculators and it seems like everything is pointing to buying but I want to make sure its not just confirmation bias!

    Background:

    • 24yo in Seattle, WA making currently making 85K base with additional 20K in annual bonus/stock comp. Stable industry with promotions almost certain every 3-4 years
    • Currently paying 2.7K/mo for rent in a luxury apartment but still maxing out my 401K (pls don't scold me, I know I'm paying way more for rent than I should be but I WFH and am home almost 24/7 so having a "nice" place is important to me. I keep my other spending under control. Unfortunately, I expect my rent to increase at least 300/mo when my lease is up in the fall)
    • Nominal (~2k) federal student debt - planning to pay off as soon as COVID forbearance ends, no other debt (I put all my spending on credit cards but pay off the balance each month in full)
    • Assets: 45K cash, 110K stocks, 50K Roth IRA, 5K 401K (changed jobs in 2020, rolled over previous 401K to Roth IRA)

    I am ideally looking for a home around 550K-600K and am planning to live there for at least 5 years (which is the breakeven on most of the rent vs. buy calculators I've done). This home is going to be more of a starter home for myself. I would like to start a family in my 30s and would probably like to buy a more family friendly home at that point but would likely keep this home as a rental property - potentially renting to my parents who are planning to move to Seattle after retiring in ~5 years.

    My current plan for a downpayment/closing costs would be the 45K cash and as much of the 110K stocks as is needed. I won't be touching my IRA and will continue to max out my 401K. There is a chance my parents would kick in some money for the downpayment but I don't want to depend on them for any assistance.

    Am I delusional or does this sound like a reasonable plan?

    submitted by /u/momo1215
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