Personal Finance Weekend Discussion and Victory Thread for the week of April 30, 2021 |
- Weekend Discussion and Victory Thread for the week of April 30, 2021
- $50k tax bill on $40k investment - Canada
- Save half your raise, savings sneak up on you!
- Don't rollover your 401(k) into a Traditional IRA if you ever expect to take advantage of a backdoor Roth contribution
- found my old bank statements which showed 10.25% interest rate on a 1-year CD. Is it safe to assume that things will never be like 1981 again?
- UPDATE: Mortgage Payments Increased by $750 Due to Escrow Shortage?? Help!
- Bought out lease for 12k, Honda Financial is refusing to send title
- Retirement Advice for Dad
- 60k in debt with credit cards and student loans. What to pay off first?
- Student Loans vs. Maxing 401K/Brokerage Account
- Which financial issue should I prioritize first?
- Bad equipment at doctor's office led to multiple unnecessary ER visits
- Inherited IRA Advice
- First time with real money
- Federal Job or Stay in M&A
- Advice on Next Steps for a 22 Year Old?
- So what's the verdict on getting Solar panels these days - when is it a smart investment? (in sunny SoCal if that makes a difference.
- Is it normal for a hospital not to be able to give you your total cost until after your procedure?
- Should I move back to pay off my debts quicker?
- What factors into credit line selection for Discover? Received $5k credit line but only make $35,000 a year.
- Long-term capital gain buckets (15% vs. 20%) question
- Medium term investment options
- Joint bank account for bills.
| Weekend Discussion and Victory Thread for the week of April 30, 2021 Posted: 30 Apr 2021 02:00 PM PDT 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:
A big thank you to the many PFers who take time to answer other people's questions! [link] [comments]  |
| $50k tax bill on $40k investment - Canada Posted: 30 Apr 2021 05:51 AM PDT Hey gang, so here's the situation I'm in. I was a shareholder i n a Canadian corporation. I resigned last year and my shares were paid out end of year in the amount of $40k. Just received my tax bill and it's $50k. The way this company operates, the employee purchases shares from a retiring shareholder though I own the shares outright. I then make monthly payments to the retired shareholder. If you go to a competitor you must sell your shares back to the corporation. I had purchased $120k worth of shares and had only paid off $40k. They paid the retired shareholder the balance of the shares in the amount of $80k and they paid me $40k. Problem is they paid it all via a dividend so on my T5 it looks like I received a $120k dividend that is fully taxed like income. So I owe $50k. I've spoken to other exiting shareholders and this happened to them. Some used ABIL to reduce the amount but this whole situation still seems shady as hell. Any ideas? Edit: thank you everyone. Lots of good info and a few people were bang on. Waiting to hear from my lawyer and a couple of accountants that have reached out. [link] [comments]  |
| Save half your raise, savings sneak up on you! Posted: 30 Apr 2021 08:56 AM PDT At the start of my career I comitted to diverting half of any raise to saving/investing. The idea is I still enjoy an increasing standard of living but also build retirement savings. One thing I learned more recently that makes this strategy much more powerful than I knew is we as humans are goldfish. We will adjust our standard of living to our income. By saving more up front you limit that inevitable behavioral increase. This makes a successful retirement or even an early retirement much more attainable because you're not adjusted to a higher SOL. Also because my SOL is still increasing I'm just as happy, what I'm "missing" is only noticable if I would have tatsed it then tried to save. This was all my personal conjecture, it was very cool to hear David Blanchett with a PhD and career studying ths topic arrive at the same recommendation. It works! Rational reminder episode where David Blanchett covers this topic: https://castbox.fm/vb/356522706 [link] [comments]  |
| Posted: 30 Apr 2021 03:39 PM PDT This really only applies to those who will make over $120k single or $189k joint and intend on making Roth IRA contributions via a backdoor contribution or a mega-backdoor contribution. Traditional IRA to Roth IRA rollovers are subject to something called the Pro-rata rule. This comes into play when you're intending on making Roth IRA contributions with same year contributions. Because of the pro-rata rule, you can be stuck with a tax bill if you have Traditional IRA holdings. This leaves you with three options if you want to do a backdoor Roth contribution:
Because 401(k) holdings are not subject to the pro-rata rule, it often times means that it is easier to leave your 401(k) alone as long as fund availability is decent and fees are not too high. If they are high, consider rolling over into a new employer's plan if the fund options/fees are better. [link] [comments]  |
| Posted: 30 Apr 2021 11:18 AM PDT found my old bank statements which showed 10.25% interest rate on a 1-year CD. Is it safe to assume that things will never be like 1981 again? (by the way, that CD was just $1500, but it was a ton of money for me back then) [link] [comments]  |
| UPDATE: Mortgage Payments Increased by $750 Due to Escrow Shortage?? Help! Posted: 30 Apr 2021 07:52 AM PDT I posted last night about getting an Escrow Account Disclosure Statement from PNC Bank which holds my mortgage. The statement showed that my city tax is $9,693.52 which is a 150% increase from the amount it was in 2020 of $3,841.75. Note that I own a 350 square foot studio in a condo in Hackensack, New Jersey. I went to my city's property tax website and found the amounts paid for each quarter in 2020 and the first two quarters in 2021. I confirmed the total property taxes paid for 2020 was $3,841.75. PNC's statement had a breakdown of the taxes to be paid by quarter. I recognized four of the amounts from my city's property tax website but there were another four amounts that I did not recognize. On a hunch, I checked out the property tax records for the apartments directly adjoining mine and found these four amounts are for the apartment right next to mine. I printed all of this out. Today I went to a PNC Branch thinking that meeting with a live person would resolve this quickly but I was mistaken. This branch has a mortgage person on staff but they are working remotely. A bank person contacted PNC's mortgage department and after a long time with me just sitting in his office while he listened to whatever the person on the line said, I was told an inquiry has been started and it should be completed in 15 days. He could not or would not disclose anything further. Great customer service. I contacted my city's tax collector by phone and email and they could not have been more helpful. They confirmed that there is no way my property tax could be $9,693.52. They told me that if PNC Bank's inquiry still shows my property taxes to be $9,693.52, that I should contact them for a conference call. I am really upset with PNC Bank. How sloppy their work was and now I have to wait 15 days for them to tell me what their conclusion is. I have no idea how they could make such a mistake. My apartment's tax assessed value is just $116,100. A property tax of $9,693 would be for a small home in the city I live in. Doesn't anyone check this stuff before it goes out? Obviously not. Thanks for anyone who takes the time to read this and for those who replied to my original post last night. [link] [comments]  |
| Bought out lease for 12k, Honda Financial is refusing to send title Posted: 30 Apr 2021 11:00 AM PDT Wasn't sure where to post this but since my main concern is financial, figured this would be the right subreddit. I bought out my Honda Civic lease in February, paid 12k. It clearly shows as being paid off. However, since then, Honda has been giving me the run around, refusing to send over the title. They keep changing their story about what documents they need, who needs to sign it, and where it needs to be sent. I've literally emailed, faxed, and physically mailed in the same documents to them and every time there's a new request. There's also never an update, I've been calling every week and it's only when I call that I'll get an update. I'm at my wits end and am down 12k for a car that I don't even have the title for. I'm one guy, how do I go about holding a company as big as Honda accountable and actually giving me the title for my car?? [link] [comments]  |
| Posted: 30 Apr 2021 05:50 PM PDT Hello everyone! I've been helped on here before and wanted to see if anyone has any advice! Currently, my dad just finished paying off his mortgage! He is still making gross 70k a year and my mom is not working and didn't really work much in her life as she was home raising us. They are both in 56 with expecting to be 56 soon. He has no plans of retiring anytime soon and says he'll die at the job of old age and don't doubt it! He doesn't really have much in retirement aside (50k in total) in misc accounts from what his current employer has given him and his previous job. His employer doesn't let him out any more money into his retirement unfortunately. He's asking what he can do to make sure that he is able to keep up when he cant work. I know people have recommended saving for retirement with a 401(k) for me but is that still an option for him since he is a bit older. If not what is the best option for him, he has around $20k in cash. Thank you guys! [link] [comments]  |
| 60k in debt with credit cards and student loans. What to pay off first? Posted: 30 Apr 2021 07:58 PM PDT I've been out of college for almost two years now. I expected to get this big paying job, but like most, the pandemic set me back. I carried a lot of debt from school loans and credit cards. I have a total of almost $60k a debt, which is pretty overwhelming to me. All my credit cards are pretty much maxed out and I've been making minimum payments on, and I'm not sure what to do next. What should I pay off first here/should I be trying to consolidate this?
I just got a new job currently make $58k a year and my other primary/fixed expense is $500 a month for rent. [link] [comments]  |
| Student Loans vs. Maxing 401K/Brokerage Account Posted: 30 Apr 2021 07:32 PM PDT Hey r/personalfinance! First time poster. Have lurked for a while now and have learned a ton! I'd like to run a situation by everyone and get some thoughts. Thank you in advance. TL;DR - Couple in late 20's - Pay off student loans as quickly as possible or dump everything we can into 401K/investment account? I'm 29 YO and my wife is a few years younger. I've been out of college for a little over five years and candidly, have not been the best steward of money in terms of retirement funding/investing. However, we make really good money and are very blessed. We are closing on a house within the next thirty days and it's really caused a switch to flip in terms of wanting to save money and "live below our means." We're making some serious changes (IE reducing auto debt, monthly entertainment spend, etc.) in order to start saving more. As of now, we only have around $25K in our 401K. We also have a combined ~$70K in student loan debt (we both come from low-income families of which student loans paid for everything in college). With that said, I'm struggling to decide what is more important over the course of the next 3-10 years. Compounding interest is powerful, so on one hand, I feel like we need to dump everything we can into a 401K/brokerage account. However, our loans average to around a 6% interest which is problematic so I can argue that those take precedence. It can be difficult to be real with yourself and admit shortcomings, but we have not been paying down our loans during the covid forbearance period. Ugh. Kicking myself in the head about it.. but admittance is the first step I guess, right? After monthly costs, we can allocate around $2K-3K towards one or the other. Would love to hear thoughts and opinions. I can provide more information if needed, just let me know. Again, thanks so much. Edit - Oh, employer match on 401K is 100% up to 4% for both of our companies. [link] [comments]  |
| Which financial issue should I prioritize first? Posted: 30 Apr 2021 06:11 PM PDT Let me start this off by saying I'm poor. There. I said it. Please do not go in the comments and start lecturing me about how my financial situation is garbage. I already know that and you telling me will accomplish nothing. Very recently I had medical debt go onto my credit report. As you may know, it's extremely rare for that to happen, but I guess I got the shit end of the stick. I took a hard hit to my credit (went from 665 to 600), and it's scaring me to be honest. It's only a couple hundred dollars and I can theoretically pay it within the next few months, but for reasons you are about to read, I'm not certain that's the best option yet. On the other hand, I could prioritize those several hundred dollars towards education. I'm nearly halfway through a career certification course, and to be straight up, finishing it will cost at a minimum $550, potentially more. I can theoretically bust my ass and finish it by August. With this certification, I'll be qualified for jobs that make $20,000 more per year than I make now. Obviously that kind of pay increase will make solving all the other problems (medical debt, fixing my credit, saving for a car note) WAY easier. So here's where I'm caught up. Either way, they can both theoretically be done within the next year, but the order that I do those two things does make a difference, could be a mild difference, could be a major difference, I don't know yet. If you were me, which would you prioritize first? Finishing your education to get a job that'll make fixing your finances a lot easier, or fixing your finances first to minimize the damage? [link] [comments]  |
| Bad equipment at doctor's office led to multiple unnecessary ER visits Posted: 30 Apr 2021 07:48 PM PDT My wife is pregnant and is passed due. Her doctor has asked her to get some fetal monitoring done in the office every 2 days. 2 visits in a row, the office couldn't locate the baby on the fetal monitor and sent her to the ER. On this second visit, the nurse said that the monitor they have in the office is really old and she doesn't know if it works. Thankfully everyone is okay, but we are likely being left with thousands of dollars in medical bills because the practice doesn't have working equipment. This is a practice that is affiliated with the hospital that we went to. Is there a good way to get the medical group that runs both entities to cover the costs of these visits? [link] [comments]  |
| Posted: 30 Apr 2021 10:27 AM PDT Hey ya'll. My father recently passed away unexpectedly, as a result, I am inheriting: ~ 85k in a vanguard account ~ 90k from a thrift savings plan. ~10-15k in cash after we settle property side of his estate (house, truck, RV sales + cash accounts) Both IRA's are going into inherited IRA accounts for me, and my base level understanding is that the inherited accounts need to be fully disbursed within 10 years (though I do have the rest of this year to stretch that to 10.5 years roughly). More info about me: -I make 65k/year -Have my own 401k, not much in it, around 15k currently. -14k in student debt (interest on hold for now, normally 2 loans at 4.45% and 2 at 5.05%, have made payments throughout covid) -14k owed on a vehicle (2.49%) -20k in savings (intending to purchase a home in the next few months with my partner, unmarried but plans to get married in the next couple years) I guess I'm just not sure of the best direction to go with all this as I've never been faced with these options before. My initial plan is to max out my 401k contributions and pull from the inherited IRA's to make up the difference from my salary to minimize the tax hit. I would also like to pull from the IRA to bulk out our house down payment savings. Ideally we'd like to buy something at 250k and get to 20% equity with our down payment. My other thought, should I be using the inheritance to pay down my debt? Right now my payments are manageable for both and will be good long term accounts to have on my credit report. However, if I can pay off my student loans before interest starts back up, I think that would be a good idea long term, then roll these payments I'm currently making into additional savings, then eventually, increased mortgage payments on the house. I think I'm limiting myself at the top of the tax bracket I'm currently in, but I don't feel like I know all the factors to decide whether that is a good or bad decision. I know I will eventually pay off these accounts either way and it doesn't have to be immediate (though there is benefit of immediately paying down the student loans while interest is not accruing) But i'm not sure how to accurately calculate the tax hit that would be involved with pulling from the Inherited IRA's. Any ideas? I feel capable in managing this, but I'm not sure I should follow up and talk with a financial planner or if my ideas make any sort of fiscal sense. [link] [comments]  |
| Posted: 30 Apr 2021 01:06 PM PDT Background information I am 25 years old and am currently in the military for now. I am looking at getting out by this time next year with some disability. I joined the military at 23 with $300 to my name and now that $300 is now $55,000. I know it's not life changing money but this is the first time I've felt like an adult. So I will break down my finances. After taxes I make roughly 2k a month. So far this year I have made $17,000 roughly in capital gains (taxes I know). My bills include phone, car, and food. Which come out to roughly $700 a month. The only big purchase I can foresee in the next 12 -24 months would be purchasing a house but I can use the VA home loan instead of a down payment. I like investing on my own and am quite good at it at least I think I am but I hate the worrying/paranoia I get when it is invested. What are some safe things I can do with the money that wouldn't cause me to stress out / check robinhood every 15 mins? [link] [comments]  |
| Posted: 30 Apr 2021 12:11 PM PDT Should I work for federal government ? I currently make six figures not including bonus which can range 20-40% and this will change as I grow in experience. VP (managers) make over 200k. I work in m&a. The federal position will leverage a similar skill set and work weeks are at 50 hours per week. This position is in a vacation spot where I am not currently in a vacation area. Also wife makes around 75k but would most likely not be able to transfer offices to new location. What are the benefits of working for the government? Job security always comes up, but I worry that kills drive and motivation. Someone I knew who left a federal position once told me, I wanted to have more control over my future and didn't want to know what my salary is in 25 years. I am aware of the pension but it does not seem to keep up with the potential savings and investing from high earning career. The pay hit is heavy for the first 4-5 years to get back to where I am currently and caps out around 130-150k. I'm torn between mission and being able to live a life where I can provide really well for my family. Obviously the federal government is known for great benefits, but I'm curious to see if others have insight or experience in this. I appreciate any help or guidance on this! TLDR: Should I take a federal government position that makes less money but has great job security -in the short and long term - OR should I continue my current career path and potentially earn more in my field in m&a? [link] [comments]  |
| Advice on Next Steps for a 22 Year Old? Posted: 30 Apr 2021 06:57 PM PDT I took a look at the flowchart located in this subreddit, and found it really helpful but still had some questions that I would like advice on. Context: I'm 22 y/o, making $35-45k a year in the U.S. Just finished paying off my student loans last month. I live at home so I don't have a lot of expenses (besides car insurance, family phone bill, wifi, and a $200 monthly stipend I give my parents). I've started an emergency fund already, a fund for a house (not moving out anytime soon though), and have a 401k plan with my employer. I figured out my next steps would include starting an IRA and getting into investing (index funds). However,
I'm also meeting with a financial advisor soon next week. What questions do you think would be good to ask them in my situation? Much thanks to anyone who has read this much! [link] [comments]  |
| Posted: 30 Apr 2021 12:58 PM PDT Several times a month I get someone knocking on my door asking to talk to me about my electric bill and excited to share a great opportunity to save $ at no cost to me! Combined with the constant flood of mail advertisements from solar companies thinly veiled as some government energy savings plan has me exhausted with thinking about it. I've heard bits and pieces of cautionary tales about getting solar panels and the problems that come with them, particularly related to whether or not you actually own them or are essentially renting them. Sometimes it sounds like a potential nightmare situation and trying to google to get clear honest answers is next to impossible, so I figured this would be the next best place.
Given the above, it seems like a good investment, but I have no clue on how to judge it properly and want to understand more. I read somewhere that buying the panels yourself and then hiring a company to install them is the most pragmatic way of doing it, but again, no way to accurately judge if it's a wise financial investment. Any recommendations? Is there an unbiased resource out there? Thanks in advance! EDIT: I did the Google sunroof thing and here's what it says: [link] [comments]  |
| Is it normal for a hospital not to be able to give you your total cost until after your procedure? Posted: 30 Apr 2021 03:21 AM PDT So I recently got surgery and during the whole process I was not able to get a total cost. I was told it was too difficult to get since they did not know if anything extra were to happen (emergency situations or if I took longer to recover). Even the week of the procedure, I was told to pay almost 2k but this amount wouldn't "necessarily pay for the whole procedure". I check my benefits today and I realize that this surgery was way more expensive than I thought. I wish I could've shopped around now because the service I got did not reflect what I paid. My question is, in the future, what can I do to better financially plan for surgeries? Apparently hospitals don't give you costs upfront, so how do people budget and shop around in this market? [link] [comments]  |
| Should I move back to pay off my debts quicker? Posted: 30 Apr 2021 12:16 PM PDT Hello everyone. I moved to Alexandria, VA from Columbia, SC in January of this year. I am 36. I currently work for an energy company here making 77k base that I can increase with overtime. I like living up here but I really don't like my job at all. It's not what I thought it was going to be and I dread going to work. Been applying everywhere up here and back home. I applied for a job at a nuclear plant in upstate South Carolina, they are offering me 91K base salary that I can increase with overtime as well and they are giving me 8k lump sum for relocation. I am tempted to take it. I knew the cost of living is higher up here, I pay $1600/month on rent here. On top of that I have student loans to pay back (80K left to pay off). I believe moving back will allow me to pay back my school loans a lot faster. I have to break my lease if I do take the offer. Gotta pay 6 months worth of rent to break the lease and I will get my security deposit back. I can pay to break the lease. I don't know what to do? What do you guys think? I have no other debts other than the student loan. [link] [comments]  |
| Posted: 30 Apr 2021 05:59 PM PDT It just seems so odd to me, my other 2 Capital One cards only allow me $600 each and I get rejected when I ask for an increase. Is this just how Discover is? I have only ever had Capital One and a Care Credit card. [link] [comments]  |
| Long-term capital gain buckets (15% vs. 20%) question Posted: 30 Apr 2021 12:59 PM PDT I searched the forum but couldn't find an answer to this question. Do long-term capital gain buckets work the same was as ordinary income buckets? That is, suppose you're single and you have $0 ordinary income but make $500k profit from LTCG (keeping this simple by ignoring deductions). Are you then taxed 0% on the first $40k, 15% on $41k-441,450k, then 20% on the rest? Or since you've earned above $441,450 you're taxed 20% on it all? [link] [comments]  |
| Medium term investment options Posted: 30 Apr 2021 03:43 PM PDT Hey all just looking for some advice on short to medium term investing strategies and the pros and cons. My wife and I currently have about 50k sitting in a savings account doing a whole lot of nothing (.05% interest). We had this cash set aside here in hopes of purchasing a house this year but with Covid and now the fact that our employer has been bought out we will be moving to another state for employment. We will be renting at first until we learn the area and likely won't be purchasing anything for around 18-24 months. What would you suggest would be the best route to invest this money in the interim? HYSA, CD Ladder, Index/ETF fund, stocks, other? With that timeframe I'm comfortable with some risk but obviously would like to mitigate that as much as possible. Curious to hear from anyone who is/has been in a similar position, thanks! [link] [comments]  |
| Posted: 30 Apr 2021 05:20 PM PDT My girlfriend and I are moving to Arizona within the next 4-5 weeks. We would like to open a joint account to put all the bills like rent, food, utilities etc. and split everything 50/50. What kind of account/bank would you recommend for this kind of thing? Preferably something where we can earn points? [link] [comments]  |
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