Just want to make sure everyone saw checkman's follow up below
Tannon: Before you add an international bond fund to the mix look at the break out of types of bonds in the total bond fund. It's possible you already hold international bonds.
Here's another from wreckon:
Checkman, check out the expense ratios at Vanguard. They are as low as is available but give you an idea of what is possible.
Checkman, Adam makes a good point. But actively managed funds will be more expensive than index funds such as many of those at Vanguard.
Though that is an option I wouldn't necessarily recommend it. You could increase your contribution to the Roth 401k.
Wreckon, consider this: are you willing to pay taxes out of current resources to cover the income tax on the conversion? And the conversion will increase your taxable income for that year.
Judi, we have a real dilemma due to our current economic situation: the rates on "safe" savings (liquid and insured) are practically zero right now. To do even slightly better (such as , in a short term bond fund) requires taking more risk than you would want to incur for liquid savings. If and when interest rates rise, you are better off in your low paying liquid account, as the rate will go up but your balance won't be affected. A bond fund will likely experience a decrease in value if interest rates go up rapidly. So, we just have to hang in there and live with these low returns.
Adam had to duck out. Pat, Katherine or Delia, any thoughts for Judi?
You could look at www.bankrate.com to see if there are higher yielding savings accounts.
Judi, I agree with Pat. There are other online FDIC-insured savings accounts that pay up to 0.90%, but that's the best you're going to find right now. Try Barclays savings US or Sallie Mae.
Pebble, I prefer to roll over the 401k so you can have more investment options with lower fees. Remember that there are expenses involved in a 401k that employers often pass along to their employees.
Pebble, I agree with Delia. Firms like Vanguard and T. Rowe Price will be happy to help you make the rollover.
What about rolling 401(k)s from previous employers into those of one's current employer. Any pros or cons you guys can think of there?
It would be good to review the investment options and let that be the guide. Some 401k plans have a good selection of investment choices with low fees.
K - this would depend on the quality of the current employer's plan - and wow, they can vary wildly.
Craig, if you have other investments, I sometimes like to keep those older annuities at great interest rates. You won't find them anymore. Of course, the insurance company hopes you transfer it out...
Craig, then I would keep the money there earning 4% until interest rates come back up to offer you a competitive rate outside of the annuity. Take advantage of that legacy high interest rate.
Hi Zach! You are actually next on deck. Thanks for being patient!
Apologies for the slight technical difficulties. Please bear with us for just another minute!
Joe, your question confuses me a bit. If you haven't hit your maximum this year for the HSA you may still contribute and max that out, while at the same time asking to be reimbursed for the medical expenses.
Joe -- That sounds like a great question for our Kim Lankford who writes a lot about HSAs. We're going to forward that on to her, in case she may also be able to address it in her column.
Joe, there's no time constraints on when you put money in and take it out in your example, so go ahead and contribute while also withdrawing money. But if you don't need the money you request as a reimbursement, why not just leave the money in the account? That's another feature of HSAs I love; if you have enough in the account you can often invest the balance. That's what I do with my own HSA account.
Here's a question coming in from Zach:
Joe, the only limit I can think of is that we can no longer contribute to HSAs once we turn 65.
Zach, often those annuities will allow a 10% annual transfer or withdrawal free of those back-end surrender charges.
Zach, they particularly want to see that she's transferring it to another 403b, and will probably require you to complete their own transfer forms. Do ask them about the process.
Joe, Oh, I see what you're doing. Sure, if you want to max out the deduction without coming up with new money then you'd take the reimbursement and turn around and redeposit it, so to speak, as a remainder contribution for the year. Got it. Yes, you can do that. The HSA doesn't care.
Zach, yes, it's a tedious process, but that's how it works.
An interesting read: How an individual investor picks stocks mykip.co
Checkman, the expense ratio for mutual funds tends to vary with the type of fund: for example, emerging market funds have much higher expense ratios than a US large cap index fund. Here's a useful resource: financialplan.about.com
