Saturday, June 27, 2009

401K Contributions, 1997-2008

So this week I did not make too much progress on possible portfolio consolidation or asset allocation. However, I feel much better about the fact that my portfolio isn't exactly where I want it to be. One of my favorite PF bloggers, Get Rich Slowly, sounds like he is at the exact same stage that I am! It's a good reminder that personal finance is a process, and there's also something else to learn and do. There's never going to be a moment where I am "done."

Anyway, the other big factor that affects long-term performance besides asset allocation (in addition to time) is savings. I recently took a hard look at exactly how much I have been saving in my 401K over time. I've made a handy chart so I can share what I discovered:

I was a bit shocked that in the middle years the % gross salary contributed was not higher, as I even have a withholding for I filled out requested that 10% of my salary be withheld. The decline that begins around 2003 was due to my idea to buy an apartment; I thought I'd need the money for a downpayment (didn't happen). In 2007 I was in grad school and did not work much, so I didn't make any contributions. However, I did open a SEP-IRA for tax purposes and put in about $1,200.

Well, what's done is done. And, at least I did start contributing to my 401K almost as soon as I began working (only a one year delay). I'm planning to max out my contribution for this year, and I made good progress last year as well.

Onward and (hopefully) upward, both in terms of contributions and returns!

Saturday, June 20, 2009

Potentially Good News on Roth IRAs

An article in the Wall Street Journal caught my eye tonight, as I still have my 401ks and IRA on my mind. The article claims that there will be new rules for Roth IRAs and that the income limit, which I currently exceed, will be lifted. Apparently the rules about income for converting (but not funding) will demolish the income limit. The catch? There are taxes involved. This is all new to me because once I saw the income limits I stopped investigating Roth IRAs. When (if) I convert my 401k to a Roth IRA, I will have to pay income tax on the contributions and the earnings.

So how would this influence my decision to transfer my old 401K? The article answers just that question:
“If you’re thinking about doing a Roth conversion, leave your 401(k) alone” rather than rolling it into an IRA beforehand to keep your share of nondeductible contributions higher in the calculation above, says John Carl, president of the Retirement Learning Center LLC in New York

Another factor to consider when I try to decide what to do with the old 401K. Does anyone else spend this much time strategizing around where to keep assets? I don't even have a lot of assets, relatively speaking.

Thursday, June 18, 2009

Reconsidering Consolidation

After some thought and after blogging about all of the different accounts and institutions, I think it would be good if I could at least rollover an old 401K to my IRA. However, my big hangup about this is that I REFUSE to liquidate i.e. sell the funds in that account in order to transfer it. The funds are down significantly since I bought them at least 5 years ago and I do not want to lock in those losses. So I'm going to try to do an in-kind transfer. Fidelity sells all of the funds in the account, so I don't see why I could not. I have to talk to my broker and get the form tomorrow.

All of this writing about my messy investment portfolio is making me self-conscious. I want to write about an area that I do feel like I have a good handle on -- credit cards. I am much more of a risk taker when it comes to credit cards and I'm tempted to take even more risk. I'll write about it soon.

Tuesday, June 16, 2009

Organizing My Portfolio Part Ia

Sadly, Cake is not providing a holistic view of my portfolio. It is the closest of all the tools I've found, but there are still issues. One of my institutions is not in their system and one of them I've added but for some reasons my positions don't appear in my portfolio. This would all be okay but you can't add positions manually. C'est la vie, but my Excel sheets are looking better and better. I think I might be a little bitter too because the Cake ratings for many of my positions are Ds or Fs. Not that I don't hate many of my holdings (I didn't choose them, my ex-boyfriend who is my financial planner did), but it hurts to see external validation for how bad some of them are. So I think I need to bite the bullet and stop searching for the perfect tool to see my portfolio and start figuring out an asset allocation strategy and then how to get to that ideal allocation.

Sunday, June 14, 2009

Organizing My Portfolio: Part I

Like many people, I have the securities portion of my vast wealth (haha) spread across several different accounts with different institutions. These include the following:
  • My current 401K
  • An as-of-yet-unrolled-over 401K
  • An IRA, SEP-IRA and a securities account at one institution
  • A just for fun online brokerage account
For those keeping count that is 6 accounts with 4 institutions.

Most financial planners or finance-types would probably be horrified by this list. I'm less concerned about all of the different accounts and more so about finding out what I own across my portfolio so I can analyze it as a whole. That's an informal goal for this year. My curiosity about my portfolio was piqued in October when it came crashing down by about 50%.

I did this manually in an Excel grid, tallying all of the positions in each account and then analyzing my overall portfolio by type. This is the graph I created based on that info:

These are my own categories which I am sure are slightly unorthodox. As for the balance or lack of balance in my portfolio, analyzing that is my next step.

After reading an article in the Wall Street Journal, I was excited to learn I could possibly get some help with this task. I'm currently trying out some of the interactive portfolio trackers discussed in the story and will post an update soon. I had previously searched for a tool to do this and hadn't come up with much. I used the Markewatch Portfolio Analyzer but could not for the life of me figure out where to find the "analyzer" part of the tool that the site claims gives you a portfolio asset allocation analysis.

While this probably seems like a basic thing to do for most personal finance gurus, for me it is the top of the pyramid. I've got the budgeting, saving, credit card, checking account part of the equation down. Now it's time to take my investing to the next level. I'll share aspects of all of these as I go.