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Re: Vanguard Total International (VTSAX) - Taxable Account

If Fund A has an annual 2% yield and 6% capital gains, and Fund B has an annual 3% yield and 5% capital gains, then they will generate the same tax burden when distributed from a tax-deferred account. You are correct about that - actually a glass of wine helped me figure that out myself. But as lon...
by Dale_G
Thu Apr 17, 2014 10:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Total International (VTSAX) - Taxable Account
Replies: 24
Views: 2238

Re: Vanguard Total International (VTSAX) - Taxable Account

calm man - 2% dividends versus 3% dividends also adds up in tax deferred account. For many folks taxes on those dividends will eventually have to paid - at ordinary tax rates. It is easy to forget about the eventual taxes on tax deferred accounts. For many it seems like eventual means forever or nev...
by Dale_G
Thu Apr 17, 2014 6:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Total International (VTSAX) - Taxable Account
Replies: 24
Views: 2238

Re: Vanguard Total International (VTSAX) - Taxable Account

I think if you are going to hold international, it still belongs in taxable unless your marginal tax rate at RMD time will be less than your current tax rate. If international is held in deferred accounts, you will eventually pay tax on the dividends without benefit of the tax credit. The tax burden...
by Dale_G
Thu Apr 17, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Total International (VTSAX) - Taxable Account
Replies: 24
Views: 2238

Re: Offsetting Losses with Gains

Is it really that simple or do I have to worry about any restrictions. E.g. Am I restricted from buying in to the same index fund for a period of time? If so, how long? Vanguard generally prohibits purchases in a fund that has been sold via phone or net for 61 days after a sale. Automatic investmen...
by Dale_G
Wed Apr 16, 2014 6:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Offsetting Losses with Gains
Replies: 5
Views: 286

Re: Offsetting Losses with Gains

Offsetting losses by selling a fund with gains doesn't make much sense unless the fund you are selling is something that you don't want to hold. In any case, selling something with a loss of XX and offsetting it by selling a fund with a gain of XX usually has a zero or negligible tax effect. The net...
by Dale_G
Wed Apr 16, 2014 5:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Offsetting Losses with Gains
Replies: 5
Views: 286

Re: Individual bonds VS bond fund

Liquidity and diversification certainly count. But more important, unless buying at issue, investors generally get flogged in the secondary market, both on the buy and sell side unless buying in $100,000 lots - and even then you have to be very careful. I am perfectly willing to let Vanguard pick th...
by Dale_G
Wed Apr 16, 2014 4:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Individual bonds VS bond fund
Replies: 7
Views: 723

Re: Can this 4% CD be trusted?

And don't be surprised if the amount you can invest in the CD is rather limited :D

Dale
by Dale_G
Tue Apr 15, 2014 3:48 pm
 
Forum: Investing - Theory, News & General
Topic: Can this 4% CD be trusted?
Replies: 21
Views: 2419

Re: Speculation on I Bond fixed rate for May 1st

Zero fixed rate - and it will likely stay there for a while. Why should the Treasury pay any real return if they don't have to?

Dale
by Dale_G
Sat Apr 12, 2014 5:17 pm
 
Forum: Investing - Theory, News & General
Topic: Speculation on I Bond fixed rate for May 1st
Replies: 32
Views: 3470

Re: Asset location strategies for taxes are OK; but not grea

I should specify that I am Canadian; we do not have Step-up In Basis to readjust the value of appreciated assets upon inheritance. Instead, at death, all assets are deemed disposed of and taxes on capital gains are due. This important difference between US and Canadian tax laws does change the adva...
by Dale_G
Fri Apr 11, 2014 11:42 pm
 
Forum: Investing - Theory, News & General
Topic: Asset location strategies for taxes are OK; but not great
Replies: 27
Views: 2642

Re: deferred comp plans

In the last century (ouch) I participated in a Top Hat NQ plan. I just grabbed three old W-2 forms to refresh my memory. I made a good deal less than the OP, but in '97 I contributed 50% of salary. In '98 and '99 I contributed 70% of salary. :shock: Maybe brave, maybe dumb, but it all worked out. I ...
by Dale_G
Fri Apr 11, 2014 11:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: deferred comp plans
Replies: 20
Views: 1440

Re: Stock markets in free fall?

Please let me know when the S&P500 is down another 150 points or so, I'll have to start rebalancing.

Dale
by Dale_G
Fri Apr 11, 2014 9:08 pm
 
Forum: Investing - Theory, News & General
Topic: Stock markets in free fall?
Replies: 92
Views: 6564

Re: Improvement needed

Your friend is probably a really good guy. But if the friendship depends on you contributing to his income each year, then it isn't much of a friendship. If your friend is truly a friend, he should be glad that you have learned enough about investing to do it yourself.

Dale
by Dale_G
Thu Apr 10, 2014 7:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Improvement needed
Replies: 42
Views: 1800

Re: Job Offer (Pension Closed since Interview?)

My guess is that the pension plan has been "frozen". Present employees will keep the benefits they have earned, but there will be no new contributions. I'll also guess that your chance of being included in the pension plan are zero. due to non-discrimination rules. You can always attempt t...
by Dale_G
Thu Apr 10, 2014 2:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Job Offer (Pension Closed since Interview?)
Replies: 8
Views: 1219

Re: Mortgage Prepayment Return

I've read that prepaying a mortgage is equivalent to buying a bond. I've been trying to figure out the math and frankly, have confused myself. For example, take a $100,000 loan at 5% ($536.82/month) with a total interest of $93,256.55. Apply an additional $200 to the first payment and the total int...
by Dale_G
Thu Apr 10, 2014 2:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Mortgage Prepayment Return
Replies: 4
Views: 695

Re: Asset location strategies for taxes are OK; but not grea

abuss368 wrote:This is different when Roth IRAs are involved.


Correct, but I was referring to tax deferred rather than "tax free" accounts. Roth IRAs do add another element to the equation. For various reasons, my Roth assets are not significant, but I do hold some equities there.

Dale
by Dale_G
Thu Apr 10, 2014 1:28 am
 
Forum: Investing - Theory, News & General
Topic: Asset location strategies for taxes are OK; but not great
Replies: 27
Views: 2642

Re: Tax Managed International

I just checked my FTSE Developed Markets (VEA) 1099-Div form. The 2013 dividends were 100% qualified, so Vanguard certainly has not abandoned all tax management of the fund.

Dale
by Dale_G
Thu Apr 10, 2014 1:01 am
 
Forum: Investing - Theory, News & General
Topic: Tax Managed International
Replies: 23
Views: 1181

Re: Asset location strategies for taxes are OK; but not grea

Buyer beware, particularly those who may be only 20 years from RMD time. When I retired in 2001 my taxable account was about 1/3rd of assets and the deferred accounts were about 2/3rds. The taxable account was all equity, but there was a mix in tax deferred. I did my best to get equities out of defe...
by Dale_G
Wed Apr 09, 2014 6:12 pm
 
Forum: Investing - Theory, News & General
Topic: Asset location strategies for taxes are OK; but not great
Replies: 27
Views: 2642

Re: Asset depreciation for a small business

Since you are starting with an old laptop and old furniture your original cost does not matter. You should use the fair market value of the laptop and furniture as of the date you put the property to service in the business. Old laptop, old desk, old chair, old lamp - sounds like about $200 - maybe ...
by Dale_G
Tue Apr 08, 2014 12:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Asset depreciation for a small business
Replies: 4
Views: 335

Re: My Vanguard Financial Plan...additional bond funds

It looks like Vanguard is going mainstream by recommending corporates as a complement to Total Bond Market. Since I own Total Bond, Short and Intermediate Term Investment Grade, and International, I guess it is good that Vanguard has caught on.:D I am not sure of the rationale for the 3 muni funds, ...
by Dale_G
Tue Apr 08, 2014 12:43 am
 
Forum: Personal Finance (Not Investing)
Topic: My Vanguard Financial Plan...additional bond funds
Replies: 19
Views: 1970

Re: How to rebalance if bonds all in Ira

Is all bonds in Ira make it tough to rebalance when needed or do you just adjust 5500 into bonds yearly. Yes, if the tax deferred funds are are all in bonds, rebalancing from equities to bonds can be a bit of a challenge. Adding IRA or 401k contributions to bond helps. In addition, directing equity...
by Dale_G
Mon Apr 07, 2014 1:01 am
 
Forum: Investing - Help with Personal Investments
Topic: How to rebalance if bonds all in Ira
Replies: 5
Views: 525

Re: Cash [inheritance]

Mr. digweed, you haven't provided enough information for anyone to provide any advice on what to do with the money. Much depends on how much money is involved, your eventual purpose for the money, your spending needs, your tax rate, whether the money comes from a taxable account or whether there are...
by Dale_G
Mon Apr 07, 2014 12:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Cash [inheritance]
Replies: 6
Views: 813

Re: Investment amount instead of allocation percentage

I have a dollar number in mind for a lower limit for my bonds. Basically it means that I will sell bonds to rebalance into equities during an equity crunch until I reach my bond floor. And then I will stop selling bonds to buy equities. At the moment, rebalancing into equities stops after equities h...
by Dale_G
Fri Apr 04, 2014 7:22 pm
 
Forum: Investing - Theory, News & General
Topic: Investment amount instead of allocation percentage
Replies: 21
Views: 1533

Re: Portfolio Review, TIPS Ladder, SPIA?

Gill, we are in similar circumstances, but I have a year on you. Your portfolio looks fine, there isn't much to be done with the legacy funds in taxable, just be glad for the taxable gains. My heirs will benefit from the stepped up basis, assuming that it doesn't disappear. I am also "diversifi...
by Dale_G
Tue Apr 01, 2014 5:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review, TIPS Ladder, SPIA?
Replies: 20
Views: 1688

Re: Best way to cancel credit card

I recently cancelled at card that I had for 43 years via telephone. I received an email and letter confirming the cancellation. No sales pitch. I was given 30 days to collect my cash rewards. Credit score - no problem - I don't borrow from banks - I lend to banks. In any event, I doubt my my insuran...
by Dale_G
Mon Mar 31, 2014 6:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best way to cancel credit card
Replies: 14
Views: 1531

Re: New E-book for Millennials

I didn't read the whole piece yet, but it very nice. I love the breezy style.

Thanks Bill for all of your contributions to investor education.

Dale
by Dale_G
Mon Mar 31, 2014 1:43 pm
 
Forum: Investing - Theory, News & General
Topic: Free "If You Can" Kindle and .pdf eBook
Replies: 52
Views: 7131

Re: Why does a Boglehead move to an adviser at 1.25% AUM?

Fot every time there is a season. The fee for investment advice seems high. But when I lose it, I hope my son will not blink at paying a bank trust department 1 or 2% to see that my bills are paid and I can stay in my house for a year longer. And I expect my sons would blink really hard. A 2% fee w...
by Dale_G
Fri Mar 28, 2014 10:53 pm
 
Forum: Investing - Theory, News & General
Topic: Why does a Boglehead move to an adviser at 1.25% AUM?
Replies: 63
Views: 4239

Re: Why does a Boglehead move to an adviser at 1.25% AUM?

What the investor pays has to be appropriate for the investment advisor's skills and level of difficulty of managing the investment as well as where the investor lives, the amount of work involved to set up accounts and ancillary services such as tax or financial planning. It looks like the payment...
by Dale_G
Fri Mar 28, 2014 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: Why does a Boglehead move to an adviser at 1.25% AUM?
Replies: 63
Views: 4239

Re: Help: do Ameriprise suggestions seem correct?

Can this 401K in-sevice rollover be put in a Roth IRA even if we've already maxed out our yearly contribution limit? If so, then we'd be subject to our 25% federal income tax on the amount of the rollover. Granted it wouldn't be subject to any RMDs down the line but the 401K is exempt from RMDs any...
by Dale_G
Tue Mar 25, 2014 1:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Help: do Ameriprise suggestions seem correct?
Replies: 27
Views: 2500

Re: Edward Jones Advisory Solutions account

This is the best Ed Jones thread in a long time - and it was probably started by an EJ employee rather than a victim. Definitely worth bookmarking for the next potential victim who comes along :D

Dale
by Dale_G
Mon Mar 24, 2014 1:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Edward Jones Advisory Solutions account
Replies: 58
Views: 10248

Re: Do you love your job? What do you do?

I am retired now, but I was an R&D guy for nearly 45 years. I had my fingers in electronics, fluids, optics and thermodynamics, sometimes all at the same time. The object was to make things bigger (or smaller), better, faster and cheaper. Improving technology sometimes permitted all four of thes...
by Dale_G
Mon Mar 24, 2014 1:54 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you love your job? What do you do?
Replies: 134
Views: 10111

Re: Time to see where things stand with High Yield Bonds

Ho hum. I continue to clip the coupons - or rather I let Vanguard continue to clip the coupons. Over the long term, Vanguard High Yield continues to provide better returns than the rest of the Vanguard bond funds. That is as expected, because HY bonds are more risky. Yeah, I know, HY bonds aren't re...
by Dale_G
Fri Mar 21, 2014 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: Time to see where things stand with High Yield Bonds
Replies: 14
Views: 1385

Re: Help me settle a debate -- Risk in Retirement

I'd buy a beach-house or figure out some other way to raise my standard of living in a way that that I and my spouse, kids and grandkids could enjoy now and for years to come and eventually inherit. I don't understand the "I saved millions and now have no use/need/want for it other than to lea...
by Dale_G
Fri Mar 21, 2014 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: Help me settle a debate -- Risk in Retirement
Replies: 61
Views: 4222

Re: Help deciding to surrender Variable Annuity or not

I can't answer all of your questions, but the $18,000 gain would be taxed as ordinary income - not at the capital gains rate.

Dale
by Dale_G
Wed Mar 19, 2014 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help deciding to surrender Variable Annuity or not
Replies: 22
Views: 1095

Re: Who cares about inflation in retirement?

I hate inflation. I suspect if we are ever visited by an advanced society, they will consider our "benign" target of 2% inflation to be on a par with burning witches in Salem. In 2001 , $1000 before taxes of my pension purchased $1000 worth of goods. That same nominal $1000 now purchases $...
by Dale_G
Sat Mar 15, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: Who cares about inflation in retirement?
Replies: 55
Views: 3765

Re: Dividends Taxed Differently ?

If there are no further replies, I believe I have my answer. Thank you all. May not. Let's make sure you understand. 1. You will pay taxes on the dividend whether you "reinvest" in the fund or direct the dividends to your money market account (or have Vanguard send the dividend to your ba...
by Dale_G
Fri Mar 14, 2014 7:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dividends Taxed Differently ?
Replies: 24
Views: 1166

Re: Where do you keep intermediate-term holdings?

As a retiree I have my choice of the taxable account (88% equities, 11% munis, 1% cash) or the tax deferred/tax exempt account (98.5% bonds, 1.5% equities). I won't sell anything from the Roth account, so that leaves the traditional IRA or taxable account, whichever proves more tax efficient. At the...
by Dale_G
Thu Mar 13, 2014 6:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where do you keep intermediate-term holdings?
Replies: 8
Views: 956

Re: Need Help! New law firm partner taxes

supalong, I encourage you to plug away at doing your own taxes. The 113th Congress has 128 lawyers in the House and 45 in the Senate, and lawyers tend to thrive on complexity. :D
If you are ever elected to a legislative position, I hope you remember your trials and tribulations. :sharebeer

Dale
by Dale_G
Thu Mar 13, 2014 7:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Need Help! New law firm partner taxes
Replies: 11
Views: 833

Re: "The Average Investor Should Use a Financial Adviser"

Note, the new Vanguard program not only provides advice, but automatically carries out rebalancing and other mechanics of managing a portfolio on an on-going basis. It looks very reasonable for smaller accounts. If they want my business (or later actually my wife's), they will need a fee that decrea...
by Dale_G
Wed Mar 12, 2014 7:22 pm
 
Forum: Investing - Theory, News & General
Topic: "The Average Investor Should Use a Financial Adviser"
Replies: 51
Views: 6991

Re: Total Market Investors Are Not Dumb

The Smart Alpha / Smart Beta teams both have flashy uniforms, wonderful cheerleaders, a nice stadium and coaches who promise almost promise great success. The team mascot hasn't been chosen yet, but it is likely to be a nerdy looking guy with a very big head - indicating a giant brain. We'll see how...
by Dale_G
Mon Mar 10, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Total Market Investors Are Not Dumb
Replies: 11
Views: 2348

Re: bond ltd term vs intermediate switch

There is no reason to drag it out. Selling everything at one time also makes tax reporting simpler.

Dale
by Dale_G
Mon Mar 10, 2014 12:42 am
 
Forum: Investing - Help with Personal Investments
Topic: bond ltd term vs intermediate switch
Replies: 2
Views: 356

Re: Retirees: About your retirement

Retirement was never a goal. The journey of life was important; retirement was just a way point along the way. I retired at 64, even though I could have retired much earlier. I really enjoyed my job, but looking back, I probably should have retired earlier. I am encouraging my sons to retire early. ...
by Dale_G
Sun Mar 09, 2014 6:33 pm
 
Forum: Investing - Theory, News & General
Topic: Retirees: About your retirement
Replies: 55
Views: 5496

Re: How To Be An Index Investor

The enemy of a good plan ...

No need for perfection Rick, your advice is well respected despite the lack of "perfection".

Dale
by Dale_G
Thu Mar 06, 2014 7:45 pm
 
Forum: Investing - Theory, News & General
Topic: How To Be An Index Investor
Replies: 23
Views: 2674

Re: Trading Authorization on Wife's Account?

I just hope you assessed her risk tolerance correctly and refrained from trading so she can have an opportunity to see it grow over time. Setting up "account authorization" requires that both parties agree to the authorization. Both parties can transact on the account, so dear wife or hub...
by Dale_G
Thu Mar 06, 2014 7:40 pm
 
Forum: Investing - Theory, News & General
Topic: Trading Authorization on Wife's Account?
Replies: 40
Views: 1379

Re: Trading Authorization on Wife's Account?

4nursebee wrote:Does not trading authorization = shared passwords = work around of any POA issues?


No to shared passwords, I have full authorization to manage my wife's account (and she to mine). It can be done from our own on-line accounts using our own account access logins and passwords.

Dale
by Dale_G
Thu Mar 06, 2014 6:56 pm
 
Forum: Investing - Theory, News & General
Topic: Trading Authorization on Wife's Account?
Replies: 40
Views: 1379

Re: Cash for Bear Market investing

I have no cash in reserve for potential bear markets. My bond holdings provide an adequate resource for rebalancing - and in the meantime provide meaningful income. Setting an asset allocation with rebalancing bands works very well. My guess is that portfolio returns using this technique far exceeds...
by Dale_G
Thu Mar 06, 2014 6:44 pm
 
Forum: Investing - Theory, News & General
Topic: Cash for Bear Market investing
Replies: 63
Views: 2929

Re: How Many Funds Do You Have in Taxable?

I have 10 funds in taxable, but all is not what it seems. Total Stock Market and Total international make up the bulk of the taxable account. But due to tax loss harvesting, we also own: VV (Large Cap ETF) + VTMSX (Tax Managed Small Cap) in proportion to = Total Stock Market VEU (FTSE All World ex-U...
by Dale_G
Wed Mar 05, 2014 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: How Many Funds Do You Have in Taxable?
Replies: 97
Views: 4900

Re: How are retirees from 2000 doing today ?

According to Wade's numbers, the year 2000 retirees will provide a good test of the 4% rule. Odds are that it will all work out, but I am glad that I am not depending on it. I retired in October 2001, about midway through the internet crunch. I've withdrawn well less than 4%, and my assets in nomina...
by Dale_G
Sun Mar 02, 2014 2:14 am
 
Forum: Investing - Theory, News & General
Topic: How are retirees from 2000 doing today ?
Replies: 30
Views: 3630

Re: Guaranteed 7% return too good to be true??

It would be 100% of my allocation.

Dale
by Dale_G
Sat Mar 01, 2014 11:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Guaranteed 7% return too good to be true??
Replies: 19
Views: 3052

Re: Tax treatment of nonqualified plan

Yes, you certainly should have gotten a W-2. Been there, done that.

Dale
by Dale_G
Sat Mar 01, 2014 5:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax treatment of nonqualified plan
Replies: 11
Views: 405

Re: Help: do Ameriprise suggestions seem correct?

Take your time beach lover - you want to do this right. The people you talk to at Ameriprise earn commissions on everything they can talk you into. The higher the fees, the more money goes directly into their pocket - and out of yours. Their fees are "standard" in the way robbing 7-11s in ...
by Dale_G
Fri Feb 28, 2014 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help: do Ameriprise suggestions seem correct?
Replies: 27
Views: 2500
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