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49

This seems to me irregular both in terms of risk, lack of diversification Me too. Is this a suitable allocation of assets? Putting 50% in one stock is acceptable, I think, if that one stock is a highly diversified and well-run investment company like Berkshire-Hathaway. (Apparently, half of Bill Gates' wealth is in B-H.) Of course, a giant bank isn't ...


9

Yes, this is terrible in terms of lack of diversification and concentrated risk. Conflict of interest? No, because there's no benefit to Morgan Stanley if a client owns shares of JPM. Mismanagement? Maybe, maybe not. This might be a violation of FINRA's "Know Your Client Rule" which requires a broker to assess each customer's financial situation, ...


5

Given the capital gains basis on the stock, it would be practical for her to continue to hold it. It is potentially possible that JPM grow so much over the past 10 years that it went from a moderately weighted position (10-15%) to 50% and was not sold for tax reasons. With that in mind it is hard to tell if this is mismanagement as the adviser could be ...


5

It's not correct to say that a 401(k) withdrawal is "taxed at" a certain bracket. Rather, a Traditional 401(k) withdrawal (assuming no after-tax contributions) is simply added to your taxable income, along with your wages and other income. And you are taxed based on that total income, basically the same as if the 401(k) withdrawal were wages. The 401(k) ...


5

Yes, sort of, unless Congress changes the laws. Currently, past earnings are adjusted by an "index factor" (to use the SSA term) which isn't precisely the inflation rate, but is similar. It is calculated from average wages for the past years compared to the current year. Here's a link to an example: https://www.ssa.gov/oact/progdata/retirebenefit1.html ...


2

Starting with a simple demonstration saving over 3 years With c = initial salary contribution i = salary increase r = rate of return c = 48060*0.06 i = 0.026 r = 0.1 The deposits over years grow with salary increases d0 = c = 2883.60 d1 = d0 (1 + i) = 2958.57 d2 = d1 (1 + i) = 3035.50 The accumulated savings with interest r are s = d0 (1 + r)^...


1

There is the question of what your mother's tax bracket is. If it's low, you might want to slowly rebalance the portfolio, i.e., sell a small portion of the JPM each year. This will generate a tax hit, with the offsetting benefit that you will be increasing the diversification of her portfolio. Don't forget that these are long term capital gains we're ...


1

Is this a suitable allocation of assets? All allocation of assets are of course up to the investor, the risks they are willing to take and the companies they want to support. To me it looks like borderline mismanagement, but I'm willing to be convinced otherwise. This is definitely strange, but large corporations are fairly stable. And $3.5M is a lot. ...


1

I'm 62, getting ready for retirement, and in a similar situation. I worked for a dozen years at Microsoft, purchasing ESPP, getting stock grants, etc. My stay there nearly exactly coincided with Steve Ballmer's turn at CEO. During that time (except a large drop right after I started and a dip/recovery in 2008-2009), the stock remained completely flat. ...


1

Under the current rules, yes, benefits are indexed to inflation. However, note that if you have a government pension from work not covered by Social Security, you may face an offset that could reduce the benefits.


1

When are you planning to retire? If you're 50, and your retirement age is closer to 70 than 65, and you aren't planning to die immediately after retiring, you have plenty of time for the wonder of compound interest to do its job. I would say your investment horizon is ~25 years. My recommendation is a portfolio of a cheap government bond fund and a ...


1

There are several options for you and I'm going to keep it generic. Put your nose to the books and acquire some degree of financial literacy so that you can understand the risks and rewards involved in various types of investments and be able to judge what might meet your needs as well as your risk tolerance. At the other extreme is to work with a ...


1

You might want to consider finding a local financial advisor who can better personalize your plan, as there are many other variables that need to be considered: How long do you plan to work before retiring? how much can you contribute to retirement now? What will your expenses be after retirement? Will you have any other income or will you rely solely on ...


1

When retiring and "cashing out" on a trad 401k: I understand that we are taxed at whatever income bracket we're in at the time of retirement. How is this determined? It is treated as income, and taxed as if it was income. (Keep in mind that taxes in the US are progressive; you do not pay your marginal tax rate on 100% of your earnings, but instead work ...


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