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Re: Deductible Investment Options for Wife

Thanks everyone for the inputs. We are going to call Vanguard on Friday and see about the process in setting up the solo 401k. I have one further question that I think I know the answer to. I assume that once the solo 401k is started it can't be rolled over into another fund like a traditional 401k...
by DSInvestor
Wed Apr 23, 2014 11:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Deductible Investment Options for Wife
Replies: 7
Views: 443

Re: Bad 401K better than nothing?

Are you going to change jobs? If yes, why not contribute and get big tax deduction? Rollover to low cost IRA when you leave. If your next employer has a great 401k, you can rollover this 401k and your Rollover IRA into new 401k to open the backdoor into Roth IRA. If you decide not to participate in ...
by DSInvestor
Wed Apr 23, 2014 12:44 am
 
Forum: Investing - Theory, News & General
Topic: Bad 401K better than nothing?
Replies: 7
Views: 449

Re: Does Asset Allocation beat the S&P 500?

can you or someone else explain why only the stock market can drop 50% but not a 3-4 fund portfolio? thank you to everyone for the great education. i am learning a lot Bonds are nowhere near as volatile as stocks. Stocks (US Stocks, International stocks, REITs) can fall 50%. If you have a portfolio...
by DSInvestor
Wed Apr 23, 2014 12:31 am
 
Forum: Investing - Theory, News & General
Topic: Does Asset Allocation beat the S&P 500?
Replies: 71
Views: 2882

Re: Need Info about a solo 401K

I'm not sure if the eligibility requirements indicate US vs foreign employees. If you have contractors that aren't employees you're good. Not sure what the implications for eligibility are if you have foreign employees in foreign countries. Vanguard Individual 401k: Mutual funds only. No admiral sha...
by DSInvestor
Tue Apr 22, 2014 5:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Info about a solo 401K
Replies: 1
Views: 122

Re: Backdoor Roth IRA implementation question

If you don't have Roth IRA accounts at either firm, you'd need to establish those first. At Vanguard, once you have the Roth IRA account opened, you can logon to your vanguard account and exchange all shares of Emerging Markets index fund in the Traditional IRA account to any fund in the Roth IRA ac...
by DSInvestor
Tue Apr 22, 2014 5:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA implementation question
Replies: 1
Views: 158

Re: Does Asset Allocation beat the S&P 500?

I left your chart out to save space, but this is a great tool. would you be able to please share with me the link you used to compare such funds? That would a great educational tool for me with this topic and future questions I might have. thank you for the post!! http://www.morningstar.com. Look u...
by DSInvestor
Tue Apr 22, 2014 3:24 pm
 
Forum: Investing - Theory, News & General
Topic: Does Asset Allocation beat the S&P 500?
Replies: 71
Views: 2882

Re: Does Asset Allocation beat the S&P 500?

Here's a morningstar growth chart that compares 10K invested in 500 Index (blue), Total Bond Market (orange), Vanguard Wellington (60/40 AA green), Vanguard Wellseley Income (40/60 AA yellow) from Jan 01, 1999 to today: http://i61.tinypic.com/2nvy0s9.png Try generating charts for different time peri...
by DSInvestor
Tue Apr 22, 2014 1:25 pm
 
Forum: Investing - Theory, News & General
Topic: Does Asset Allocation beat the S&P 500?
Replies: 71
Views: 2882

Re: Tracking Roth Contributions forever

at work we have both Roth 403b and Trad 403b , Last 2 years, and in process this year of max'ing it out, then I do the max TIRA, Probably would be good the have a higher total in the Roth side, that the measiliy $900 i put into the Roth 403b some years ago and my Roth IRAs, but guess I am endevouri...
by DSInvestor
Tue Apr 22, 2014 12:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Tracking Roth Contributions forever
Replies: 13
Views: 1858

Re: Which third fund for roth

In this thread, you indicated that you're self employed and your wife has 403b. What are the investment options in the 403b? http://www.bogleheads.org/forum/viewtopic.php?p=1991364#p1991364 Have you considered using a Solo 401k for to defer some of your self employed income? Solo 401k allows for ver...
by DSInvestor
Tue Apr 22, 2014 12:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Which third fund for roth
Replies: 6
Views: 335

Re: Which third fund for roth

You will get better responses if you tell us what you're holding in your other accounts. The suggestions for Roth IRA could be very different if your employer plans have awful investment options.

See asking portfolio questions:
viewtopic.php?t=6212
by DSInvestor
Mon Apr 21, 2014 11:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which third fund for roth
Replies: 6
Views: 335

Re: How is your Tax-Advantage Portfolio Different?

And I believe the Principle of Tax-Efficient Fund Placement is correct once you adjust for after-tax value . If you will retire in a 25% bracket, and you put $30,000 in a risky investment in your Roth IRA, you lose $15,000 if the investment loses half its value. If you put $40,000 in a traditional ...
by DSInvestor
Mon Apr 21, 2014 11:03 pm
 
Forum: Investing - Theory, News & General
Topic: How is your Tax-Advantage Portfolio Different?
Replies: 17
Views: 1023

Re: Tax efficient fund in taxable account.

Vanguard 500 Index VFINX Investor VFIAX Admiral. Dividends have been 100% Qualified. Would be a good fund as a replacement for Total Stock if you needed to harvest tax losses. For international stocks: Total International Stock Market VGTSX Investor VTIAX Admiral or FTSE All World ex-US VFWIX Invest...
by DSInvestor
Mon Apr 21, 2014 10:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax efficient fund in taxable account.
Replies: 5
Views: 509

Re: Tracking Roth Contributions forever

.....hmm, I think I'll just forget about Roths for 10 years till I'm 60, and the tracking any further, unless there is a catastrophe, I should not need it. , I believe what you are saying about "TIRA", is only for non-deductible TIRA, not deductible TIRA , alas I'd assume so. I've never e...
by DSInvestor
Mon Apr 21, 2014 9:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tracking Roth Contributions forever
Replies: 13
Views: 1858

Re: How is your Tax-Advantage Portfolio Different?

1) Are there specific investments (if I owned them), that are better if inside a Roth rather than a SEP IRA? No, however Roth IRA space is limited and IMO precious. If you load up Roth IRA with very aggressive holdings, you can experience catastrophic declines in Roth IRA balances. For example, I h...
by DSInvestor
Mon Apr 21, 2014 6:18 pm
 
Forum: Investing - Theory, News & General
Topic: How is your Tax-Advantage Portfolio Different?
Replies: 17
Views: 1023

Re: Tracking Roth Contributions forever

think i need to scratch this post and start a new topic. and /or do some wiki reading. for a Roth 403b and/or a Roth IRA, is it true that one does not need to track the basis after age 59.5 ? Rules for Distributions from Roth IRA are tricky. Read the link to Fairmark Distributions that I provided a...
by DSInvestor
Mon Apr 21, 2014 3:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tracking Roth Contributions forever
Replies: 13
Views: 1858

Re: How is your Tax-Advantage Portfolio Different?

1) Are there specific investments (if I owned them), that are better if inside a Roth rather than a SEP IRA? No, however Roth IRA space is limited and IMO precious. If you load up Roth IRA with very aggressive holdings, you can experience catastrophic declines in Roth IRA balances. For example, I h...
by DSInvestor
Mon Apr 21, 2014 11:33 am
 
Forum: Investing - Theory, News & General
Topic: How is your Tax-Advantage Portfolio Different?
Replies: 17
Views: 1023

Re: Unrounded Retirement Limits

I want to know the unrounded numbers so I can better plan for next year. For planning next year contributions, I have used the current contribution limit which is close enough IMO. If you will reach age 50 next year, you will have much larger contribution room because it allows for catchup contribu...
by DSInvestor
Mon Apr 21, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Unrounded Retirement Limits
Replies: 4
Views: 430

Re: Taxes and SEP IRA fund choice

Thanks for the tax tip. If I understand you correctly, if I want to up my investments in bonds, I should make sure those are in my Roth or SEP IRA. If I want to invest in international stocks and the Total Stock Market, I could do that in my taxable account with no tax consequences. Correct? Is the...
by DSInvestor
Mon Apr 21, 2014 4:12 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxes and SEP IRA fund choice
Replies: 8
Views: 566

Re: Tracking Roth Contributions forever

sorry, was this an answer to the 2nd poster? No it was a response to your thought of recharacterizing your Roth IRA contributions to Traditional IRA contributions. Traditional IRA contributions may be even more of a paperwork headache if it turns out that those contributions are non-deductible due ...
by DSInvestor
Mon Apr 21, 2014 3:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Tracking Roth Contributions forever
Replies: 13
Views: 1858

Re: Deductible Investment Options for Wife

Can we just put in the full amount allowed into the solo 401K at the end of the year like we do for her tIRA? She isn't a corporation or anything. This will just be 1099-MISC income for this project. We hope to have her back in a "normal W2" type position soon. We are just looking at what...
by DSInvestor
Sat Apr 19, 2014 10:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Deductible Investment Options for Wife
Replies: 7
Views: 443

Re: Advice needed for taxable portfolio over 2 million

I suggest 100% Traditional 401k contribution and Roth IRA via backdoor if necessary. I didn't see any mention of a pension and you may have lower income if/when you leave your W-2 job. Any Traditional 401k contributions that you make now give you a tax deduction in the 28% bracket. If your income is...
by DSInvestor
Sat Apr 19, 2014 10:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice needed for taxable portfolio over 2 million
Replies: 11
Views: 2210

Re: Tracking Roth Contributions forever

If you're covered by an employer plan and have income that would not allow a full tax deduction for Traditional IRA contribution, your non-deductible contributions would need to be tracked with form 8606 to avoid paying taxes on this money upon withdrawal or conversion to Roth IRA. This may be more ...
by DSInvestor
Sat Apr 19, 2014 9:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tracking Roth Contributions forever
Replies: 13
Views: 1858

Re: Deductible Investment Options for Wife

Solo 401k is fantastic for someone who is self employed. Solo 401k allows for two types of contributions: 1) Employer profit share (calculated the same way as SEP-IRA) contributions. 2) Employee salary deferral limit of 17.5K which can be up to 100% of compensation. According to Vanguard's Individua...
by DSInvestor
Sat Apr 19, 2014 9:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: Deductible Investment Options for Wife
Replies: 7
Views: 443

Re: Portfolio Help: Part 2

The taxable account is a small portion of the total portfolio today and you're contributing much more to tax advantaged accounts each year. If you wanted to use automatic transactions to purchase mutual funds, I suggest opening a taxable account at Vanguard and holding only Total Stock Market in tax...
by DSInvestor
Sat Apr 19, 2014 3:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Help: Part 2
Replies: 5
Views: 454

Re: Taxes owed in taxable account

Thanks for the replies. That helps me understand more. Let's say if I had $2 million built up in the Vanguard TSM Index Fund, what would the estimated taxes be? Again, assume a marginal tax bracket of 39.6%. Thanks again. 2013 Income return was 2.56%. If you had 2M in TSM on Dec 31, 2012, you would...
by DSInvestor
Thu Apr 17, 2014 7:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxes owed in taxable account
Replies: 18
Views: 1014

Re: Roth IRA/Traditional IRA

You may also see lots of posts talking about asset allocation (AA) which is where you hold a certain amount of stocks and bonds. The most basic asset allocation separates stocks and bonds. Within stocks, you can further divide into US stocks and Foreign stocks. Some folks like to go deeper still int...
by DSInvestor
Thu Apr 17, 2014 7:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA/Traditional IRA
Replies: 9
Views: 391

Re: Taxes owed in taxable account

I am not the OP but curious about the question and the answer. With some of you chiming in, I notice that all answers are different. Can the posters that posted the answer come back and inform which of these is closest to correct by considering 2013 as tax year and the OP bought 20k worth of fund o...
by DSInvestor
Thu Apr 17, 2014 9:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes owed in taxable account
Replies: 18
Views: 1014

Re: Taxes owed in taxable account

Dividends received in your taxable account can be Qualified or Non-Qualified. Total Stock Market tends to distribute Qualified Dividend Income. If your $20,000 distributed 2% in dividends, that's roughly $400 in Qualified Dividend Income (QDI) taxable at 20% at your level of income. Starting in 2013...
by DSInvestor
Thu Apr 17, 2014 9:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes owed in taxable account
Replies: 18
Views: 1014

Re: Just maxed 2013 Roth IRA. Should I max 2014 now too?

Nobody knows what the market will do in the short term. You have more than adequate cash. I'd go ahead and contribute for 2014 and invest it in the same fund. The lifestrategy Growth fund maintains 80/20 AA and if that matches your desired asset allocation, you're good to go. What are the options in...
by DSInvestor
Wed Apr 16, 2014 9:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Just maxed 2013 Roth IRA. Should I max 2014 now too?
Replies: 21
Views: 2576

Re: B-shares

Class A shares typically involve a front end load of say 5.75% and you get a lower expense ratio of say 0.75%. Class B shares do not have a front end load but you will pay a much higher expense ratio, perhaps 1% higher than Class A shares so 1.75%. The best bet may be to sell the class A and B share...
by DSInvestor
Wed Apr 16, 2014 7:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: B-shares
Replies: 6
Views: 430

Re: IRA deduction or contribution limits if you have solo 40

Solo 401k is an employer plan so you'd be covered by an employer plan for the purposes of taking the tax deduction for Traditional IRA contributions. Coverage by an employer plan affects the amount you can deduct not the amount you can contribute to Traditional IRA. If you find yourself unable to de...
by DSInvestor
Wed Apr 16, 2014 6:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA deduction or contribution limits if you have solo 401k
Replies: 3
Views: 131

Re: Let's compare 2013 effective tax rates

I'm sorry everyone. I didn't realize I had opened yet another can of worms. From form 1040, how about line 61 divided by line 37. Then a second number which includes in the numerator any state income tax (and payments already made there). In California that's line 64. I get: 25% rate, 30% including...
by DSInvestor
Wed Apr 16, 2014 5:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Let's compare 2013 effective tax rates
Replies: 46
Views: 2150

Re: I don't understand whether there are costs to rebalancin

Assuming portfolio is entirely in taxable accounts and no tax advantaged holdings and new contributions insufficient to restore target AA, the cost to rebalance will be associated to realizing capital gains. Short term capital gains (gains on shares held 1 yr or less) are taxed at marginal tax rates...
by DSInvestor
Wed Apr 16, 2014 3:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: I don't understand whether there are costs to rebalancing
Replies: 16
Views: 1153

Re: Taxes and SEP IRA fund choice

In this thread that you started in January, you indicated that you have 25K to be invested in a taxable account? Do you still have this account and are those assets part of your long term retirement portfolio? What is your age? I ask because a good place to start for your asset allocation may be age...
by DSInvestor
Wed Apr 16, 2014 1:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxes and SEP IRA fund choice
Replies: 8
Views: 566

Re: Tax Withholding with After-Tax Adjustments to Income

Have you tried the IRS withholding calculator? http://apps.irs.gov/app/withholdingcalculator/ Yeah, I guess I've been more confident in increasing my federal withholding because of the decent online calculators. However, my state doesn't seem to have the same tools available. For instance, all the ...
by DSInvestor
Tue Apr 15, 2014 9:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Withholding with After-Tax Adjustments to Income
Replies: 6
Views: 299

Re: TSP and Backdoor Roth IRA

TSP is not an IRA. Form 8606, which handles Roth conversion, considers assets in Traditional IRA (includes Rollover IRA), SEP-IRA and SIMPLE-IRA.

You're good.
by DSInvestor
Tue Apr 15, 2014 9:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP and Backdoor Roth IRA
Replies: 2
Views: 260

Re: SEP instead of IRA?

mah001, thanks for your guidance on SEP-IRA active participant. Alan S, thank for confirming and for giving us something easier to read than the IRS notice.
by DSInvestor
Tue Apr 15, 2014 6:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP instead of IRA?
Replies: 28
Views: 940

Re: SEP instead of IRA?

A SEP that's begun today and deducted for 2013 means you and wife are 'covered by a retirement plan at work' for 2014. So your traditional IRA deduction possibilities for 2014 are potentially more limited. But a new SEP does not affect your 2013 TIRA deduction. I was under the impression that SEP-I...
by DSInvestor
Tue Apr 15, 2014 4:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: SEP instead of IRA?
Replies: 28
Views: 940

Re: 401k / Roth IRA Allocation Advice

The Lifestrategy funds or Target Retirement funds that match your desired asset location are a great way to go if you do not invest in taxable accounts. You indicated that you wanted 80/20 stock/bond AA. If you hold Lifestrategy Growth 80/20 with Four-IN-One 85/15, you will have a little more than 8...
by DSInvestor
Tue Apr 15, 2014 2:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k / Roth IRA Allocation Advice
Replies: 6
Views: 411

Re: Backdoor Roth IRA Conversion - Worth it for us?

All A while ago, I posted about cleaning up our finances (we have multiple 401ks, Rollover IRA, Traditional IRAs (non-deductible) etc. We have moved the rollover IRA for her into her 401k and now both are left with a 401k each, and a traditional IRA that we contribute $5500 per year to that is non-...
by DSInvestor
Tue Apr 15, 2014 1:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA Conversion - Worth it for us?
Replies: 8
Views: 609

Re: TRAD. IRA CONVERSION TO ROTH USING RMD

I agree with pshonore. Your RMD cannot be converted to Roth IRA. If you want to convert, you must first take a distribution to satisfy RMD and then whatever assets are remaining in TIRA can be converted to Roth IRA. I see from your other posts that you are married. If you're still working you and yo...
by DSInvestor
Tue Apr 15, 2014 12:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Trad. IRA Conversion to Roth Using RMD
Replies: 2
Views: 166

Re: 401k / Roth IRA Allocation Advice

Is there a fee to use that Financial Engines service? If you seek 80/20 AA, do not use Vanguard Target Retirement 2050 as that is 90/10 AA. Further, your Roth IRA is holding Fidelity Four-In-One index which is 85/15 AA. I would suggest picking a TR fund with AA just under 80/20 in the 401k if you wi...
by DSInvestor
Tue Apr 15, 2014 12:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k / Roth IRA Allocation Advice
Replies: 6
Views: 411

Re: Should I be using standard or itemized deduction?

What's annoying about Standard vs Itemized is that if you are 65 or older (or blind), they just increase your Standard deduction by some amount. They do NOTHING to benefit older folks who are still itemizing deductions due to large property tax and/or state income tax payments. Or have I missed som...
by DSInvestor
Tue Apr 15, 2014 12:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I be using standard or itemized deduction?
Replies: 10
Views: 693

Re: Should I be using standard or itemized deduction?

Look at Schedule A Itemized Deductions to see what kinds of deductions you can itemize:
http://www.irs.gov/pub/irs-pdf/f1040sa.pdf

If your state income taxes are higher than the standard deduction amount, then you can itemize deductions. Take a look to see if you can itemize anything else.
by DSInvestor
Tue Apr 15, 2014 12:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I be using standard or itemized deduction?
Replies: 10
Views: 693

Re: IRA Contributions AFTER 70 1/2 years of age??

Isn't anyone going to help the OP out on the real question? 401K/SEP-IRA We have beaten the traditional IRA to death; it's time to move on (me, to my current soap). Alan S posted something about 401k/SEP/SIMPLE in this fairmark thread: http://fairmark.com/forum/read.php?2,57460 Yes, a qualified ret...
by DSInvestor
Tue Apr 15, 2014 11:29 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA Contributions AFTER 70 1/2 years of age??
Replies: 12
Views: 740

Re: Almost out of time: Roth, Intrm Investment OR Intrm Bond

If you need more time to study your options, just put your 2013 contribution in the Short term fund that you already own and take your time. There are no tax consequences to exchange to a different fund inside IRA accounts. IMO, for emergency funds return of your money is more important than return ...
by DSInvestor
Tue Apr 15, 2014 11:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Almost out of time: Roth, Intrm Investment OR Intrm Bond Idx
Replies: 13
Views: 507

Re: traditional ira question

If you want your 2014 contribution and conversion to be handled by the same tax return 2014, make sure to make your 2014 contribution and full conversion before Dec 31, 2014. It is OK to do two Roth IRA conversions in one year. Vanguard will send you a 1099-R for 2014 showing your total conversion a...
by DSInvestor
Tue Apr 15, 2014 10:09 am
 
Forum: Investing - Help with Personal Investments
Topic: traditional ira question
Replies: 17
Views: 496

Re: traditional ira question

Looks right, assuming you didn't do any Roth conversions in calendar 2013. The total basis from line 14 will appear in line 2 of the 2014 8606. Your 2014 contributions will appear in Line 1 and/or 3 depending on when your 2014 contributions are made. That will bring your IRA basis up to 11K. Assumin...
by DSInvestor
Tue Apr 15, 2014 9:55 am
 
Forum: Investing - Help with Personal Investments
Topic: traditional ira question
Replies: 17
Views: 496
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