nVest Advisors, LLC
Jeremy Torgerson is the CEO at nVest Advisors, LLC, a registered investment advisor firm in Texas and Colorado, and has over 10 years of experience in the finance industry. Jeremy has been a small business owner for 20 years, and has mentored small business owners and startups for several years.
Jeremy is quoted reqularly in major US financial media. He also podcasts on financial topics, and blogs on his personal finance and success blogs, thinklikearichguy.com.
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I'd move a portion to Money Market - maybe 20%, but not all of it. And increase the amount in money market by 20% each year going forward. Remember, you won't need 100% of this money the moment she arrives on-campus, and there is still 4 years (or more) of inflation happening in her college expenses coming up.
Yes, bond funds are down right now but that's mostly because there is so much interest in stocks at the moment. That can change at any time (in my opinion, it's a bit overdue). Also, remember you aren't in bonds for the GROWTH, but for the INTEREST.
Great question! Rather than blather on with my own answer, Investopedia itself has a full page on these contributions:
Best of luck to you!
It depends entirely on whether this is "play" money, or money you can't afford to lose all of. Either way, remember you are going to be extremely concentrated in an industry that still has significant legal hurdles to overcome, so while the future upside potential is definitely there long-term, it'll be a very volatile ride in the meantime.
Putting my advisor cap on, I'd always say that diversification is going to be safer than individual stocks, so I'd always advise my client investing "serious" money to go with the ETF over individual stocks. My hunch is anyone wanting cannabis stocks isn't going to be too worried about safety, but the premise is still sound. By nature, any cannabis is a new commercial industry in the US, so there will be a lot of failures, mergers, and acquisitions of these companies for the next several years.
Picking individual stocks in that kind of environment is playing Russian roulette with your money. The safer bet is the ETF.
You can avoid the taxes but I have no idea about penalties or fees from your current account. Account closure or transfer fees are pretty common - it's the broker's way of "kissing you goodbye". :)
You can definitely avoid taxes by doing what is called a DIRECT ROLLOVER. This simply means your IRA balance goes DIRECTLY from your old company to your new one (and the check is never written in your name). When you just ask for the check, and go shopping for a new IRA, this is called an INDIRECT rollover, and the IRS isn't friendly to those.
Indirect rollovers are only allowed once per year per account, the IRS will take a 20% withholding tax that you will need to claw back in your return (but that money is already out of your IRA and has to be added back a little per year), and you only have 60 days in which to make that rollover happen.
It's MUCH less complicated and simpler to just do a direct rollover. Just open the new account, and the new custodian will help you initiate the rollover from the old one directly to your new account.
I hope this helped! My best to you.
The first thing you need to know is that 403(b) plans are subject to a variety of IRS rules about withdrawals, just like the more commonly-known 401(k). If you are still working, you may not be able to withdraw any of this money as long as you are still working for the same employer. If one of them is from a former job, that one would be eligible, but if either of these are from your current employer, the money is "stuck" in the employer plan until you leave or reach age 59 1/2.
If you are eligible to roll them over, I'd say it depends on the balances involved and whether or not you want to sustain the tax burden. If the balances are still relatively small, I'd probably advise doing it, but there are several things to consider:
1) ROTH IRA contributions at your age are limited to $5500 per year, maximum. If you are going to stay under that anyway, great, but you cannot add more than that without an employer plan of some sort.
By contrast, your 403(b) allows up to $18,000 per year contributions.
Now, you can do both at the same time if you want, but just remember that without the 403(b), you're stuck contributing only $5500 a year at the most.
2) Most employer plans have multiple 403(b) vendors as options, and many allow for ROTH contributions inside your 403(b). The problem is, not all vendors offer those types of contributions, so you may need to switch vendors (this is called a Contract Exchange).
The neat thing about doing ROTH contributions through your work plan is, unlike a ROTH IRA, you can't earn too much and become disqualified from making them. You can earn too much to contribute to a ROTH IRA eventually, but that rule doesn't apply to ROTH contributions inside employer plans.
Ask your payroll or benefits dept. what your choices are. Some good (and common) ones in the 403(b) market are Vanguard and Fidelity.
3) If your 403(b)s are in fixed interest or equity indexed annuity products (most are), then it would make sense to get them into something with actual growth potential instead of the very low-interest annuities I'd wager you are in right now. This can be done through an IRA, or by doing a simple Contract Exchange into a different vendor that actually invests your money. There are several that do this, but they have to be available in your plan.
Also, remember that if these accounts are annuities, they will have surrender charges for up to 10 years (I've even seen 14-15 years in some), so you will take a hit to the money you've saved to move them.
Bottom line, even if you don't (or aren't able to) recharacterize these into a ROTH account, having multiple accounts is expensive and redundant. Here's what I'd help you do if you were my client:
1) See if your plan allows for different 403(b) vendor options, and select one that actually invests the money AND allows for ROTH contributions.
2) Exchange these 403(b) accounts for one single 403(b) that does what we need it to do (get investment growth, keep costs low, and allow for traditional or ROTH contributions). Then do most of my saving through the new 403(B).
3) Add to my ROTH IRA from after-expenses money each month as I can.
You are 100% correct that at your age, you should be focused on ROTH contributions long term, but it might make sense to just "clean up" the situation you have now, and focus on making ROTH contributions going forward.
Yours is definitely a situation that should have an advisor look over your options with you. It's not terribly complicated, but it is nuanced and specific to your employer.
Reach out to me if you have questions!