Posted on August 01, 2023 in Guide
The useful question is not whether a traditional 401(k) or Roth 401(k) is universally better. It is which tax treatment fits your current income, likely future tax situation, and ability to save consistently.
Both accounts are workplace retirement plans. Both can invest in the options offered by the …
Posted on July 31, 2023 in Guide
Stock options are a form of equity compensation that companies offer to their employees. They give employees the right to buy a certain number of shares of the company's stock at a predetermined price. The price is typically set at a discount to the current market price.
Stock options can …
Posted on July 30, 2023 in Guide
Modified adjusted gross income (MAGI) is a calculation used by the IRS to determine eligibility for certain tax benefits, such as the Roth IRA, the Saver's Credit, and the Health Savings Account (HSA).
MAGI is calculated by taking your adjusted gross income (AGI) and adding back certain deductions, such as …
Posted on July 30, 2023 in Guide
Adjusted gross income (AGI) is a calculation used by the Internal Revenue Service (IRS) to determine your taxable income. It is calculated by taking your gross income and subtracting certain deductions and adjustments.
To calculate your AGI, you will need to gather the following information from your tax return:
Posted on July 29, 2023 in Guide
Evaluate an engineering offer's RSUs, restricted stock, options, or phantom stock by modeling vesting, liquidity, tax timing, and concentration risk.
Posted on July 25, 2023 in Guide
A target-date fund is a simple way to own a diversified retirement portfolio that becomes more conservative over time. It can be an excellent default, but the year in the fund name is not enough information to decide whether it fits you.
The SEC notes that funds with the same …
Posted on July 23, 2023 in Guide
The 5-fund investment strategy is a variation of the 3-fund and 4-fund strategies that adds a fifth fund to the mix: a real estate investment trust (REIT) fund. REITs are companies that own and operate income-producing real estate.
Adding a REIT fund to your portfolio can help to further diversify …
Posted on July 21, 2023 in Guide
A 4-fund portfolio adds an international bond fund to the familiar U.S. stock, international stock, and U.S. bond structure of a 3-fund portfolio.
That extra fund can broaden bond exposure, but it is not automatically an improvement. The right question is whether the additional diversification fits your allocation …
Posted on July 19, 2023 in Guide
A 3-fund portfolio is a simple way to own broad exposure to U.S. stocks, international stocks, and bonds. It is not a magic allocation or a promise of returns. It is a framework that makes diversification, cost control, and rebalancing easier to understand.
For a remote engineer with a …
Posted on July 17, 2023 in Guide
Build a durable long-term investing system with goals, cash reserves, a diversified allocation, automatic contributions, and a rebalancing rule.