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Re: Transferring S&P 500 index fund in kind

^Yes, it seems that we have different attitudes. I think it is similar to how some people dislike tracking error more than others. But here it is more like what I would call "internal tracking error", in that I don't like it when being out of market results in lower returns than my asset a...
by House Blend
Fri Nov 21, 2014 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transferring S&P 500 index fund in kind
Replies: 13
Views: 1176

Re: Transferring S&P 500 index fund in kind

I find it interesting that people are always so freaked out about being out of the market. It should be the case on average that being out of the market is harmful only to the extent of losing expected return multiplied by the length of exposure. That turns out to be a trivial amount for short time...
by House Blend
Fri Nov 21, 2014 3:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transferring S&P 500 index fund in kind
Replies: 13
Views: 1176

Re: Vanguard Split Acct - did I cause this? (NOT)

Try asking Vanguard to open Roth-3, with a fresh account number, and transfer all funds from Roth-1 and Roth-2 into it.

Image
by House Blend
Thu Nov 20, 2014 9:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Split Acct - did I cause this? (NOT)
Replies: 23
Views: 1809

Re: Fund placement and expenses

I think this thinking is incorrect and my thinking above, using weighted average ER, is correct. I don't think you've framed the problem well. In any case, I think the basic objective should be to minimize the total dollar cost of the funds selected (i.e., fund balance times ER), subject to meeting...
by House Blend
Wed Nov 19, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: Fund placement and expenses
Replies: 7
Views: 481

Re: Poll: Net cost of your checking account annually?

If we go back to the era of 5% interest on cash deposits, I'll be earning considerably more than $10/year at my credit union. But not nowadays. Less than $10. Last time I paid any fees to them whatsover was about 5 years ago, when I found out a month late that they had started charging $1/month for ...
by House Blend
Wed Nov 19, 2014 1:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Net cost of your checking account annually?
Replies: 44
Views: 2234

Re: What financial tools/software do you use?

The financial software I use I wrote myself. Most of it is in scripting languages, combined with web scraping tools like wget for grabbing NAVS etc. For example, whenever I have occasion to login to VG, I save the "Balances & Holdings" page to a local file, and then run a script that e...
by House Blend
Wed Nov 19, 2014 1:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: What financial tools/software do you use?
Replies: 35
Views: 2209

Re: Vanguard launches new offering ... [Vanguard merchandise

Sure, keeping a low profile and not flashing wealth is a basic survival skill (cf. "Nebraska" or any number of pulp novels). So for those of you worried about Vanguard logos on their t-shirts/mugs/bumpers, I assume you also: drive a car that barely runs (or always use public transit) live ...
by House Blend
Wed Nov 19, 2014 12:16 pm
 
Forum: Personal Consumer Issues
Topic: Vanguard launches new offering ... [Vanguard merchandise]
Replies: 90
Views: 9010

Re: Should you use a 401k if you'll def. be in a higher brac

A theoretical question: if an investor knows they will 100% definitely have much greater taxable income in retirement due to large assets from inheritance, sale of business, lottery winnings, etc, should they ever contribute to a tax deferred 401k in the present? Let's say the taxable account balan...
by House Blend
Mon Nov 17, 2014 5:04 pm
 
Forum: Investing - Theory, News & General
Topic: Should you use a 401k if you'll def. be in a higher bracket?
Replies: 18
Views: 2314

Re: VTIAX [Vanguard Total International - predicted dividend

I've noticed that the Q4 dividend for TSM is usually about 30% of the total dividend for the entire year. (The year 2012 was a bit anomalous. There was a panic at year end when companies accelerated dividends in anticipation of tax increases.) On that basis, I figure that the Q4 dividend for VTSAX s...
by House Blend
Fri Nov 07, 2014 9:35 pm
 
Forum: Investing - Theory, News & General
Topic: VTIAX [Vanguard Total International - predicted dividend?]
Replies: 6
Views: 1542

Re: VTIAX [Vanguard Total International - predicted dividend

Yes, that's a tough one. I track dividends fairly closely for tax-planning purposes. I'm much better at predicting Q4 dividends for TSM. All I can say is that my current crystal ball projection for the Q4 distribution from VTIAX is $0.25/share, for a total of $0.92/share in all four quarters combine...
by House Blend
Fri Nov 07, 2014 2:39 pm
 
Forum: Investing - Theory, News & General
Topic: VTIAX [Vanguard Total International - predicted dividend?]
Replies: 6
Views: 1542

Re: IRA for young kids - undecided IRA or something else

I've got 2 young kids, an almost 1 year old and a 3 year old. [...snip...] Or, I figure I could just open a Roth IRA for them and fund it with that money. Better re-figure that. You cannot contribute to an IRA unless you have earned income. (Granted, there probably are some 1 and 3 year olds with e...
by House Blend
Thu Nov 06, 2014 11:25 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA for young kids - undecided IRA or something else
Replies: 4
Views: 436

Re: Questions about TIAA-CREF account

It's dangerous to be helping out a friend when you don't understand the landscape. 1. There are a lot of things worse than CREF Stock. It is ok as 100% of a Boglehead equity holding. Forget about the variable annuity aspect; during accumulation it is essentially equivalent to a mutual fund (but with...
by House Blend
Thu Nov 06, 2014 11:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Questions about TIAA-CREF account
Replies: 14
Views: 1148

Re: question about "avoid buying the dividend"

It's not a great big deal. It's basically stale advice. The tax considerations are what they are, but the real meaning of the advice is "don't get taken by a dishonest sales technique" which... surely ???? ... is not used any more. Yes, it is amazing how many new Bogleheads starting a tax...
by House Blend
Wed Nov 05, 2014 2:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: question about "avoid buying the dividend"
Replies: 17
Views: 2003

Re: Cash - Throw it on the table!

I keep more cash reserves than strictly necessary, because I prefer to keep cash flow planning simple. I prefer not to fuss with arranging for cash to arrive in advance of a bill coming due. I also don't measure the balance in months of expenses. Part of the reason for this is that I typically have ...
by House Blend
Wed Nov 05, 2014 1:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Cash - Throw it all on the table!!!
Replies: 51
Views: 3740

Re: Christine Benz Interviews Bill Bernstein

My employer already does this. Participation in the plan is mandatory. Everyone is saving 15% of salary (5% out of your paycheck, and they add a 10% match). And you cannot touch this money, or take loans against it, or roll it over, until you are at least age 55 and no longer working there. (Volunt...
by House Blend
Tue Nov 04, 2014 10:15 pm
 
Forum: Investing - Theory, News & General
Topic: Christine Benz Interviews Bill Bernstein
Replies: 33
Views: 3847

Re: Should one auto-reinvest dividends in taxable?

One should do whatever one prefers. I suspect that most re-investors have no interest in tax-loss harvesting and are happy with average cost basis accounting. If maximizing your after-tax returns matters to you, you'll be using Specific Share ID and not reinvesting. BTW #1: I manage my 81yo mother's...
by House Blend
Tue Nov 04, 2014 5:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should one auto-reinvest dividends in taxable?
Replies: 19
Views: 2039

Re: Christine Benz Interviews Bill Bernstein

A sample of his comments: "I think what we have to do is to try to put Humpty Dumpty back together again. The Humpty Dumpty in this case being the old DB system, which very few people have anymore, the old defined-benefit system. And you do that by taking away people's discretion, which the ol...
by House Blend
Tue Nov 04, 2014 11:31 am
 
Forum: Investing - Theory, News & General
Topic: Christine Benz Interviews Bill Bernstein
Replies: 33
Views: 3847

Re: Dividend payout

How does the 60 day holding period requirement relate to the ex-dividend date/date of record? Thanks! I believe it doesn't in any way at Vanguard, presuming they're who you're talking about. Reinvestment or taking payout of distributions does not affect their frequent-trading policy. If you're talk...
by House Blend
Tue Nov 04, 2014 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Dividend payout
Replies: 13
Views: 1153

Re: Should I dabble with tax exempt bond funds?

Looking at what Vanguard has to offer it seems like I could invest in a few different state bond funds (which have surprising returns YTD). Would something like Ohio Long Term Tax Exempt (VOHIX) (0.16%) be a wise move? Absolutely not. You would be taking a concentrated position in a handful of long...
by House Blend
Sun Nov 02, 2014 7:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I dabble with tax exempt bond funds?
Replies: 6
Views: 780

Re: Why does FSGDX have such a low yield compared to VTIAX?

If you are worried about small caps, compare with VFWAX. Not the exact same index as FSGDX, but closer to it than VTIAX. The start date on this fund is 9/27/2011, so we'll begin from there. Morningstar gives me these numbers for 9/27/2011 to 11/01/2014: FSGDX $13983.75 VTIAX $14171.35 VFWAX $14194.0...
by House Blend
Sat Nov 01, 2014 1:10 pm
 
Forum: Investing - Theory, News & General
Topic: Why does FSGDX have such a low yield compared to VTIAX?
Replies: 11
Views: 1753

Re: Taxable Account Considerations

Welcome to the forum. 1. Learn about the Backdoor Roth IRA. This should work out especially swell if neither you nor spouse have any existing trad IRAs. No need to worry about bumping into income limits this way. http://www.bogleheads.org/wiki/Backdoor_Roth_IRA Priority 1 will then be using 2 x $550...
by House Blend
Thu Oct 30, 2014 9:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Account Considerations
Replies: 3
Views: 792

Re: 401(a) Rollover to Traditional or Roth?

Is there a simple way to estimate what the taxes I will be paying on the $8k rollover. Is it just 25% of $8k = $2k? I guess I will have to factor in any capital gains on the account holdings as well? (Disclaimer: I have no idea on what has been happening on this $8k). This sounds confused on two fr...
by House Blend
Wed Oct 29, 2014 4:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) Rollover to Traditional or Roth?
Replies: 5
Views: 403

Re: 401(a) Rollover to Traditional or Roth?

Contributions and transfers (rollovers) are completely different. You can max out an IRA, and do a rollover of $1,000,000 from a 401(a) to the IRA in the same year. Main reason to choose Roth would be that you expect your marginal tax rate this year to be lower than normal. If you are expecting your...
by House Blend
Wed Oct 29, 2014 1:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) Rollover to Traditional or Roth?
Replies: 5
Views: 403

Re: Are we really in the 0% bracket?

I think that the horse may have already been beaten to death, but I see a few spots others may have missed where it might still be twitching. So pardon me for butting in and flogging it a bit more just to be safe. MFJ, 2014 numbers: $73800 top of 15% bracket $7900 two exemptions $12400 standard dedu...
by House Blend
Wed Oct 29, 2014 12:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Are we really in the 0% bracket?
Replies: 32
Views: 3896

Re: POLL: Gross Annual Retirement Income Before Taxes

My retired mother's income consists of pension (no SS), RMDs, dividends, and interest. No cap gains or drawdowns of investments; RMDs are currently being re-invested. So in some sense you could argue that her RMDs shouldn't count as income (of course for IRS purposes, it does). But my guess was that...
by House Blend
Tue Oct 28, 2014 4:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Gross Annual Retirement Income Before Taxes
Replies: 25
Views: 1994

Re: Switch from CREF Stock to CREF Equity Index and VTIAX?

I too would prefer 70% Equity Index and 30% VTIAX. This gives you almost exactly the target benchmark for CREF Stock, and includes Emerging Markets, Small Caps (foreign and domestic), etc. CREF Stock is not an index fund, but does seem to be fairly passive. At least it seems that way for a fund that...
by House Blend
Mon Oct 27, 2014 5:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Switch from CREF Stock to CREF Equity Index and VTIAX?
Replies: 3
Views: 384

Re: Calculating return

It seems to me some posters on this thread wanted to know how to compare their actual investment experience with contributions to what it might have been had they been invested differently. XIRR, as much work as it would be, gets that answer. What an investor should be interested in computing is a ...
by House Blend
Mon Oct 27, 2014 1:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 35
Views: 3026

Re: Are RMD Withdrawals Making My IRA Into A Taxable Account

If you will be spending the RMDs, then the only thing to worry about is having the well run dry. For example, if your IRA earns a constant 4% every year, then I think your peak RMD will occur at age 90 or so, and then rapidly drop from there. Actually, the percentage peaks at 92 (RMD=balance/1.9). ...
by House Blend
Mon Oct 27, 2014 1:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are RMD Withdrawals Making My IRA Into A Taxable Account
Replies: 10
Views: 807

Re: Are RMD Withdrawals Making My IRA Into A Taxable Account

I wouldn't treat the IRA as equivalent to taxable. (Unless you are in the 0% bracket.) If you will be spending the RMDs, then the only thing to worry about is having the well run dry. For example, if your IRA earns a constant 4% every year, then I think your peak RMD will occur at age 90 or so, and ...
by House Blend
Mon Oct 27, 2014 1:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are RMD Withdrawals Making My IRA Into A Taxable Account
Replies: 10
Views: 807

Re: What is the appeal of smart watches?

1995: What is the appeal of email? 1998: Who really needs the internet apart from tech geeks? 2002: Why text when I can call someone? 2007: Who needs a phone that's "smart"? 2009: A tablet that's connected to the internet? What's the appeal? 2014: Who would wear wear a smart watch? 1978: ...
by House Blend
Mon Oct 27, 2014 12:26 pm
 
Forum: Personal Consumer Issues
Topic: What is the appeal of smart watches?
Replies: 22
Views: 2010

Re: SS Tax, RMD and Roth Conversions

Probably not a huge mistake either way, but I would stick with the 15% bracket on the theory that left tail risks are the ones that matter, and those are generally accompanied by tax rates that are lower than you expected. When in doubt, under-convert. Remember that 15% is a bracket , and only in ve...
by House Blend
Sun Oct 26, 2014 7:17 am
 
Forum: Personal Finance (Not Investing)
Topic: SS Tax, RMD and Roth Conversions
Replies: 6
Views: 750

Re: investing during retirment

I have about 50k cash 500k in funds at vanguard I am trying to find some income portfolios with vanguard that will give me a monthly income of 1,200 to 1,500 from my 500k at vanguard +100 to dbr. Don't get deceived by the notion that one must live off dividends, and so pursue strategies that tilt y...
by House Blend
Fri Oct 24, 2014 1:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: investing during retirment
Replies: 20
Views: 2075

Re: Roth IRA Rollover and Capital Gains Reinvestment

No worries. You can buy or sell in a tax-advantaged account whenever it is convenient and be assured that you will be treated fairly in terms of dividends and cap gain distributions. (In a taxable account, it is not as clean; cf. "buying a dividend".) Whatever cap gains and dividends have ...
by House Blend
Fri Oct 24, 2014 1:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Rollover and Capital Gains Reinvestment
Replies: 2
Views: 230

Re: 457b Question

^With a 20 year age difference, I can see more than one strategy for prioritizing the filling of tax-advantaged accounts. For example, suppose you are a typical Boglehead over-saver, and A. expect to have far more assets in retirement than you need. (And hope to pass on the excess to your [grand]chi...
by House Blend
Fri Oct 24, 2014 10:48 am
 
Forum: Investing - Help with Personal Investments
Topic: 457b Question
Replies: 10
Views: 743

Re: Is this worth it?

Although I expect to stay in the 15% tax bracket I would like a little "wiggle room" in the future if equity should not be sold. This doesn't make much sense to me. If you expect to stay in the 15% bracket, or nearly so, there's no point at all in tax gain harvesting. Realize gains only w...
by House Blend
Fri Oct 24, 2014 10:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1471

Re: Yes, 100% of economists were dead wrong about yields

Pizzasteve510 wrote:
WallyBird wrote:I am certain that interest rates will go up.

What I don't know it's when they will go up.

I am certain that interest rates will go down.

What I don't know it's[sic] when they will go down.

The first law of economics:
Never put a prediction and a date on the same page.
by House Blend
Thu Oct 23, 2014 9:48 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 4071

Re: Is this worth it?

And could you explain the last sentence in you post: "This doesn't make much sense to me. If you expect to stay in the 15% bracket, or nearly so, there's no point at all in tax gain harvesting. Realize gains only when needed. Your beneficiaries will enjoy the step-up in basis." (Watty has...
by House Blend
Thu Oct 23, 2014 9:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1471

Re: Why do Engineers Think They’ll Be Good at Picking Stocks

That one is easy. Player A is named Edward O. Thorp. (A mathematician, not an engineer.) http://en.wikipedia.org/wiki/Edward_O._Thorp Short answer: the wheel is not perfectly balanced, and there is enough bias to overcome the house edge. Thorp played blackjack , a non random game. As to the claim o...
by House Blend
Thu Oct 23, 2014 10:49 am
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 135
Views: 10627

Re: Is this worth it?

Although I expect to stay in the 15% tax bracket I would like a little "wiggle room" in the future if equity should not be sold. This doesn't make much sense to me. If you expect to stay in the 15% bracket, or nearly so, there's no point at all in tax gain harvesting. Realize gains only w...
by House Blend
Thu Oct 23, 2014 10:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1471

Re: Why do Engineers Think They’ll Be Good at Picking Stocks

In engineering field as a manager and in my heart I believe that everything can be explained with an equation to a reasonable degree OK Humor mode on :happy :D I give my Eng students the following problem you are a customer at a Casino. By careful observation you note that Player A wins regularly a...
by House Blend
Wed Oct 22, 2014 12:48 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 135
Views: 10627

Re: When to think about tax lost harvesting

Sorry, I wasn't clear. I'm expecting around the same capital gains distributions this year, $10,000 long-term. Just an estimate. Ouch. What do you have in taxable that is generating $10K in cap gain distributions ? If you are already tapping the account for expenses and spending that $10K anyway, t...
by House Blend
Wed Oct 22, 2014 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to think about tax lost harvesting
Replies: 19
Views: 1446

Re: Calculating return

To make them comparable, you'd need to determine the ending value of Vanguard Total Stock Market Index Fund Admiral Shares VTSAX (TSM) assuming the same investments as were made into your account. There may be web sites that will help with this computation, but I went ahead and did it using the Dis...
by House Blend
Wed Oct 22, 2014 12:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 35
Views: 3026

Re: Bonds in taxable account?

What would you do if you were currently in a high tax bracket (high income with 28% tax or higher, which is why you're stuck using a taxable account in the first place), but you anticipate going to a lower tax bracket within 5-10 years due to retiring early? Which of these options (if any) would yo...
by House Blend
Wed Oct 22, 2014 11:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in taxable account?
Replies: 27
Views: 3485

Re: "You're invited to...." (nonsense talk and dinner)

VictoriaF wrote:There may even be stool pigeons at each table who pretend to be regular attendees like yourself and share with you some of their "successes" with similar products.

Those are called shills, not stool pigeons.

(Not that I have any experience in either domain...)
by House Blend
Wed Oct 22, 2014 10:49 am
 
Forum: Personal Consumer Issues
Topic: "You're invited to...." (nonsense talk and dinner)
Replies: 105
Views: 9312

Re: Calculating return

^First, unless your account was 100% (domestic) stock, there's no reason at all to compare your rate of return with the return of Total Stock Market. Second, even if your account was 100% invested in TSM, you still wouldn't have earned 14.8%, because you were adding money at regular intervals. Yes, ...
by House Blend
Tue Oct 21, 2014 8:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 35
Views: 3026

Re: Help a Confused New Boglehead

Aha a light bulb moment! Yes, we even have an emoticon for that: :idea: FInd out if I can roll my pre-tax TIRA into my 401K. If I can, then I can also fund a new traditional and then convert (after the TIRA is no longer). Or just convert the existing traditiional (pre-tax) $10K and pay the taxes an...
by House Blend
Tue Oct 21, 2014 12:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 968

Re: Help a Confused New Boglehead

I thought that having the traditional IRA (the small 10K one) would interfere with my ability to do a Roth conversion. House Blend made a good point that we could still convert some of my husband's 401K if we decide to go this route. Thanks. By failing to use the backdoor Roth for your husband, you...
by House Blend
Tue Oct 21, 2014 12:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 968

Re: Write-off capital loss against capital gains?

One question that I've had is: Do you have to use the capital losses to offset any gains? Or can you save the losses and only apply them against income and non-qualified capital gains? Yes to the first, no to the second. (Also, you meant to say "short term capital gains". I don't think th...
by House Blend
Tue Oct 21, 2014 11:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Write-off capital loss against capital gains?
Replies: 27
Views: 1291

Re: Help a Confused New Boglehead

Welcome to the forum. 1. Looks like taxable will remain a small fraction of the total portfolio, given that you have just a few more years to retirement. I would recommend using 100% stocks for it, such as TSM. No point in using tax-exempt bonds in my opinion, if you expect your tax rate to drop sig...
by House Blend
Tue Oct 21, 2014 9:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 968

Re: Inherited IRA investment for 20-somethings

Hmm. I may have to go back to the attorney on this. The official IRA beneficiaries of course can't be changed, but the fact that my mother listed her sixth grandchild in the trust as being an intended beneficiary of the IRA (mistakenly, as it turned out), along with the other grandchildren, I thoug...
by House Blend
Mon Oct 20, 2014 2:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA investment for 20-somethings
Replies: 13
Views: 770
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