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by House Blend
Wed May 20, 2015 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: I Think I Blundered On My Munis (??)
Replies: 13
Views: 1795

Re: I Think I Blundered On My Munis (??)

One thing I would like to add though - the person I talked to at Vanguard was not familiar with dividends disallowed for shares held less than six months. He even went further to consult with other people and came back and told me "they never heard of it". :annoyed And I might have said t...
by House Blend
Sun May 17, 2015 9:49 pm
Forum: Investing - Help with Personal Investments
Topic: Time to reach 1M and 2M milestones
Replies: 63
Views: 9182

Re: Time to reach 1M and 2M milestones

In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past. I have to write that my experience shows the portfolio did not slow down. Umm, no. Your first year of investing had infinite portfolio growth. I don't think you had anything near that ...
by House Blend
Sat May 16, 2015 2:09 pm
Forum: Investing - Help with Personal Investments
Topic: How bad is Wellesley for taxable?
Replies: 37
Views: 2799

Re: How bad is Wellesley for taxable?

The difference is the time value of money. If you can postpone taxes farther into the future, more money can stay invested longer. You get to keep the extra gains (minus any taxes on the gains). But this would be true of the "25% now vs 25% later" argument in the deferred vs Roth 401k dec...
by House Blend
Sat May 16, 2015 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Letter from IRS (I think they are wrong)
Replies: 21
Views: 2702

Re: Letter from IRS (I think they are wrong)

As an aside, it is really pitiful that our tax code is so complicated that even the people "running the show" can't keep up with the rules. :oops: For better or worse, it is a mistake to assume that they know what they are doing. Three times in the past 6 years, the IRS has incorrectly pr...
by House Blend
Sat May 16, 2015 12:32 pm
Forum: Investing - Help with Personal Investments
Topic: How bad is Wellesley for taxable?
Replies: 37
Views: 2799

Re: How bad is Wellesley for taxable?

Taking out 25% in tax on a little bit every year will end up with the same balance as paying 25% on the entire balance at the end....that's how I see it for now. But I'm open minded if someone can explain on my level why that is not correct. The difference is the time value of money. If you can pos...
by House Blend
Fri May 15, 2015 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: Letter from IRS (I think they are wrong)
Replies: 21
Views: 2702

Re: Letter from IRS (I think they are wrong)

As an aside, it is really pitiful that our tax code is so complicated that even the people "running the show" can't keep up with the rules. :oops: For better or worse, it is a mistake to assume that they know what they are doing. Three times in the past 6 years, the IRS has incorrectly pr...
by House Blend
Wed May 13, 2015 12:04 pm
Forum: Personal Finance (Not Investing)
Topic: capital gains to pay off mortgage
Replies: 10
Views: 718

Re: capital gains to pay off mortgage

N1CKV wrote:On another note, if your joint AGI is under 74,900 you should look to do some tax gain harvesting in the 0% LTCG rate.

First, it's Taxable Income that matters, not AGI.
Second, there's no point in it if your Taxable Income is going to remain at this level.
by House Blend
Wed May 13, 2015 11:45 am
Forum: Personal Finance (Not Investing)
Topic: Rollover IRA: Tax Help on Idiot Accident [Transfer to Wrong account]
Replies: 10
Views: 798

Re: Rollover IRA: Tax Help on Idiot Accident [Transfer to Wrong account]

I'm not sure if this applies, but in any case, you should read the instructions for Form 8606, especially the subsection headed "Return of Contributions".
http://www.irs.gov/pub/irs-pdf/i8606.pdf
Did you follow those instructions when you filed your return?
by House Blend
Mon May 11, 2015 2:38 pm
Forum: Investing - Theory, News & General
Topic: The Case FOR the Roth 401k
Replies: 46
Views: 4168

Re: The Case FOR the Roth 401k

For example, if I (32 years) am in the 28% bracket it would make sense for me to put my $100 of 401k contributions in a traditional 401k and then invest the $28 of tax savings in a (backdoor) Roth IRA (assuming income makes traditional IRA a no go). By going this route I am banking on the hope that...
by House Blend
Mon May 11, 2015 12:45 pm
Forum: Investing - Help with Personal Investments
Topic: Help With A Co-Worker's Capital Gains Dilemma
Replies: 7
Views: 607

Re: Help With A Co-Worker's Capital Gains Dilemma

Should he wait until retirement to sell these stocks and/or what strategies should be used to minimize capital gain taxes? Also, general thoughts on asset allocation and current portfolio would be appreciated. Without knowing more about how much he expects to *spend* in retirement, and what fractio...
by House Blend
Sun May 10, 2015 8:16 am
Forum: Investing - Theory, News & General
Topic: The Case FOR the Roth 401k
Replies: 46
Views: 4168

Re: The Case FOR the Roth 401k

... The Case FOR the Roth 401k is: ... The Roth 401K results in a greater amount invested (in practice). Investing $18,000 post-tax is worth more than investing $18,000 pre-tax (and then owing the taxes.) ... Having Roth funds avoids RMDs. Roth funds are more valuable than traditional funds because...
by House Blend
Fri May 08, 2015 10:22 am
Forum: Personal Finance (Not Investing)
Topic: much ado about coasting (through life)
Replies: 131
Views: 14822

Re: much ado about coasting (through life)

greg24 wrote:It is interesting how a board that is so pro-early retirement bristles at the word "coast".

Hypocrisy is something that individuals are skilled at; forums not so much.

In any case, the bristlers here may not be the ones that are hell-bent on FIRE.
by House Blend
Wed May 06, 2015 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Long term Capital Gains vs Tax loss harvesting
Replies: 13
Views: 895

Re: Long term Capital Gains vs Tax loss harvesting

I may be missing something...*but* Why defer it? At some point you will pay, and the rate you pay is the same? 15%...whether is now or in 30 years. BUT, since prices go up and they do go down, in the case they go down it is much more favorable to take that loss against income, than against the 15% ...
by House Blend
Wed May 06, 2015 2:11 pm
Forum: Investing - Help with Personal Investments
Topic: What is the "best" cost basis method to choose (Vanguard funds)
Replies: 12
Views: 1761

Re: What is the "best" cost basis method to choose (Vanguard funds)

Also, the Vanguard statement that you quote is a bit misleading. You can elect Specific ID for your covered shares, and use the average basis that Vanguard tracks automatically for your non-covered shares. (Any "election" you make online at Vanguard concerns only your covered shares.) Thi...
by House Blend
Mon May 04, 2015 5:42 pm
Forum: Investing - Help with Personal Investments
Topic: What is the "best" cost basis method to choose (Vanguard funds)
Replies: 12
Views: 1761

Re: What is the "best" cost basis method to choose (Vanguard funds)

Make sure you first understand a bit of terminology: shares purchased in 2012 or later are "covered"; shares purchased before that are "non-covered". If you want to take advantage of tax loss harvesting, and more generally, to minimize the tax costs of your sales of shares, you s...
by House Blend
Mon May 04, 2015 11:19 am
Forum: Investing - Help with Personal Investments
Topic: TREA Limits
Replies: 11
Views: 727

Re: TREA Limits

Eric76 wrote:Slightly related, but what's the new TREA expense ratio?

It's 0.865%, down half a basis point. :moneybag :moneybag :moneybag
Take a look at the new prospectus to see how it breaks down. Some components got more expensive, others less.
by House Blend
Sun May 03, 2015 4:34 pm
Forum: Investing - Help with Personal Investments
Topic: Will I want to/need to annuitize assets at TIAA-CREF?
Replies: 16
Views: 753

Re: Will I want to/need to annuitize assets at TIAA-CREF?

You should verify what your plans allow you to do as far as moving $$ out of T-C and then back in. First of all, their 403b plans usually have better ERs than their IRAs, in every product except TREA. I'm not sure you can get $$ back in their 403b plans (GRAs and GSRAs) once you rollover to elsewhe...
by House Blend
Sun May 03, 2015 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: Will I want to/need to annuitize assets at TIAA-CREF?
Replies: 16
Views: 753

Re: CREF Stock v. Fidelity Spartan 500?

Maybe I wasn't clear, especially in my choice of subject line. I'm not asking whether Spartan 500 Index is a good substitute for CREF Stock -- they're different in ways I understand and can compensate for in our other tax-advantaged accounts at lower cost than sticking with CREF Stock -- but rather...
by House Blend
Thu Apr 30, 2015 12:12 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

HouseBlend - I assume in your computational examples, you are talking about taxable income (other + SS), correct? Which examples? Also, Taxable Income is a precise term that equals AGI minus exemptions minus deductions. Line 43 of the Form 1040. The 55.5% rate example for a Single that I linked to ...
by House Blend
Wed Apr 29, 2015 4:07 pm
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

Doc, You quoted me in two places, but I'm assuming your question was about the 55.5% rate. Nice to see that JW has already cooked up an example with MFJ. Here is an old post where I first mentioned this rate--it includes a realistic example for a Single where it would happen. http://www.bogleheads.o...
by House Blend
Wed Apr 29, 2015 10:51 am
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

There is a similar article on the wiki, showing the marginal tax rates: Taxation of Social Security benefits Correct. The Scott Burns article is just a rehash of something that's been known for a while. A good way to avoid that 39%, or even 46%, marginal tax is to have a high enough taxable income ...
by House Blend
Wed Apr 29, 2015 10:43 am
Forum: Investing - Theory, News & General
Topic: RE Social security being taxed--new chart by Scott Burns
Replies: 41
Views: 4675

Re: RE Social security being taxed--new chart by Scott Burns

There is a similar article on the wiki, showing the marginal tax rates: Taxation of Social Security benefits Correct. The Scott Burns article is just a rehash of something that's been known for a while. A good way to avoid that 39%, or even 46%, marginal tax is to have a high enough taxable income ...
by House Blend
Tue Apr 28, 2015 9:37 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

So is this understanding correct? --The QDI tax benefit remains when paired with a TLH. --The LTCG tax benefit is lost when paired with a TLH. To a first approximation, yes. If you have $5K in qualified dividends, no realized cap gains, and $5K in carryover losses, you pay the low rate on $5K of QD...
by House Blend
Tue Apr 28, 2015 2:50 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

To be fair, we have to consider the percentage of qualified dividends in each fund right? So it seems that the equivalent total amount of taxes owed on dividends that you can cancel out (assuming a 25% marginal income tax bracket) would range from a low of $3,000 (assuming none of the dividends are...
by House Blend
Tue Apr 28, 2015 2:14 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

I assume for people to do this they need to use SpecID in Vanguard funds? I use AvgCost so I haven't seen loses in years. Is TLH moot if you do it that way? Here is a recent thread on average basis and TLH that may be helpful. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=162979 Bottom l...
by House Blend
Tue Apr 28, 2015 2:04 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

The problem (if you can consider it that) is when one is constantly adding money to taxable every month there are not many opportunities to TLH as one is always in a situation of wash sale rule, i.e. buying security 30 days prior to sale at loss. In a typical TLH situation, the most recent shares y...
by House Blend
Tue Apr 28, 2015 1:53 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

2. The amount of dividends paid by the investments in your taxable account is not greater than $3,000 in the calendar year, and the amount of your capital losses (either current in excess of your capital gains or carried over from previous years as defined in the previous paragraph) is at least equ...
by House Blend
Tue Apr 28, 2015 9:55 am
Forum: Investing - Help with Personal Investments
Topic: How Long Do You Have to Own a Bond ETF to Get a Dividend?
Replies: 4
Views: 327

Re: How Long Do You Have to Own a Bond ETF to Get a Dividen

Short version: there is no way to "game" the system out of free dividends, or to get ripped off. (Although, in a taxable account, when you buy and sell funds in relation to when dividends are distributed can have varying tax consequences.) Bond mutual funds accrue dividends continuously. T...
by House Blend
Mon Apr 27, 2015 1:31 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

^There is no "optionality" for capital losses. They *must* be used to offset gains. If any losses are leftover, then the next $3000 of them *must* be used to offset ordinary income. If losses still remain, then they carry over. The rubber meets the road on the "Capital Loss Carryover ...
by House Blend
Mon Apr 27, 2015 1:08 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting: How do you do it in practice?
Replies: 40
Views: 2481

Re: Tax Loss Harvesting: How do you do it in practice?

TLH opportunities generally take a while to develop, unless you invest a lump sum shortly before a market correction. Since I keep track of cost basis myself, one thing I monitor (with a software assist) is how much of a loss I could harvest from Fund X if its price drops to $Y, or how low the price...
by House Blend
Sun Apr 26, 2015 8:25 pm
Forum: Investing - Help with Personal Investments
Topic: How do Traditional 401k vs Roth 401k withdrawals work?
Replies: 9
Views: 748

Re: How do Traditional 401k vs Roth 401k withdrawals work?

Let's assume I have $1,000,000 in my Traditional 401k and $1,000,000 in my Roth 401k when I get to retirement. Can I choose how much money to pull out from each of the 401k accounts? And is the money I take out from my Traditional 401k what is considered as my "taxable income"? So for exa...
by House Blend
Sun Apr 26, 2015 8:04 am
Forum: Investing - Help with Personal Investments
Topic: How do Traditional 401k vs Roth 401k withdrawals work?
Replies: 9
Views: 748

Re: How do Traditional 401k vs Roth 401k withdrawals work?

Let's assume I have $1,000,000 in my Traditional 401k and $1,000,000 in my Roth 401k when I get to retirement. Can I choose how much money to pull out from each of the 401k accounts? And is the money I take out from my Traditional 401k what is considered as my "taxable income"? So for exa...
by House Blend
Sat Apr 25, 2015 8:29 am
Forum: Personal Finance (Not Investing)
Topic: Should I use Roth funds for new car (lump sum) purchase?
Replies: 15
Views: 1292

Re: Should I use Roth funds for new car purchase?

^It looks like you are in a zone where (a) your marginal tax rate is high, and (b) you aren't actually in danger of bumping into a higher tax bracket by making TIRA withdrawals. If anything, you might be in "danger" of dropping into a lower bracket, due to reaching the point where the maxi...
by House Blend
Fri Apr 24, 2015 10:40 am
Forum: Investing - Theory, News & General
Topic: Why does FSGDX have such a low yield compared to VTIAX?
Replies: 23
Views: 3878

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

But the fact that dividends are reinvested more frequently in the Vanguard fund gives the Vanguard fund an advantage. No. In a mutual fund, dividends are reinvested continuously. Dividend (and cap gain) distributions are simply bookkeeping formalisms that have no net effect on fund returns. Of cour...
by House Blend
Fri Apr 24, 2015 9:37 am
Forum: Investing - Theory, News & General
Topic: Is tax loss harvesting that powerful ?
Replies: 44
Views: 3236

Re: Is tax loss harvesting that powerful ?

I do not have long-term losses. I tax-loss harvest losses before they go long-term. I have carryover short-term losses from years ago. livesoft, This seems to imply that there is an advantage to a short-term tax-loss over a long-term. Is there? No, almost never. The only time it matters is when you...
by House Blend
Thu Apr 23, 2015 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion Benefit
Replies: 3
Views: 319

Re: Roth Conversion Benefit

Welcome to the forum. It's true that after you take your 2015 RMD out, you can convert leftover amounts still in the IRA to a Roth IRA. And by the way, there is no "12% Tax Bracket". From the numbers you present, you should be solidly in the 15% bracket, with or without an RMD.[*] So if yo...
by House Blend
Wed Apr 22, 2015 12:07 pm
Forum: Investing - Theory, News & General
Topic: What rate of return do you use when planning for retirement?
Replies: 59
Views: 4851

Re: What rate of return do you use when planning for retirem

When I am feeling optimistic, I use 1% & 5% real for bonds & stocks, but the rest of the time, I go with 0% & 4% real. But I am long past the point of financial independence, and use estimates like these primarily to model what future tax brackets I might land in. To determine if your re...
by House Blend
Wed Apr 22, 2015 11:27 am
Forum: Investing - Help with Personal Investments
Topic: Another TREA question
Replies: 6
Views: 464

Re: Another TREA question

FWIW, the expense ratio is updated once a year when the new Prospectus is issued. That's on May 1. So wait a couple of weeks and you'll see if the recent trend of slight decreases in ER will continue. I will speculate that most of that decrease is attributable to the sharp runup in AUM post-crash an...
by House Blend
Tue Apr 21, 2015 5:03 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 828
Views: 116149

Re: What Movie Have You Recently Watched?

Saw Gone Girl and thought it predictable, at times silly, and overall boring... SPOILERS: OK, since several recent posters have put Gone Girl on the table for discussion and I saw it recently, let me add my $0.02. I rated it 3 stars out of 5; most critics seem to have liked it more than I did. I do...
by House Blend
Tue Apr 21, 2015 4:49 pm
Forum: Investing - Help with Personal Investments
Topic: move retirement plan from VALIC to Vanguard ?
Replies: 4
Views: 431

Re: move retirement plan from VALIC to Vanguard ?

I don't think she's interested in getting fancy (i.e. other than index funds) anyhow. I just wish there was a way she could get TIAA Trad too, but unless Duke allows splitting your money between two different plans, which seems highly unlikely, I think Vgd is the way to go. Actually it is very like...
by House Blend
Tue Apr 21, 2015 12:01 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1279
Views: 248883

Re: U.S. stocks in freefall

Bump.
by House Blend
Tue Apr 21, 2015 11:56 am
Forum: Investing - Help with Personal Investments
Topic: 500 Index or Large Cap Index
Replies: 8
Views: 797

Re: 500 Index or Large Cap Index

VLCAX is a fine TLH partner. But I like VG Total Stock Market even better.
More stocks, lower expense ratio.
by House Blend
Mon Apr 20, 2015 5:24 pm
Forum: Investing - Theory, News & General
Topic: Pay taxes for parent to convert to Roth?
Replies: 4
Views: 616

Re: Pay taxes for parent to convert to Roth?

I understand where you're coming from, but it may put your father (or mother, as his likely primary beneficiary) in an uncomfortable position. Family dynamics can vary, but if anyone involved has a tendency to obsess over ethical dilemmas, here's a plausible scenario. Fast forward 10+ years. Mom is ...
by House Blend
Mon Apr 20, 2015 8:52 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1279
Views: 248883

Re: U.S. stocks in freefall

Bump.
by House Blend
Sun Apr 19, 2015 8:31 pm
Forum: Personal Finance (Not Investing)
Topic: question regarding elective deferral limits (401(a) and 457)
Replies: 1
Views: 225

Re: question regarding elective deferral limits (401(a) and

The elective deferral limit of $18K + $6K catchup applies to 403(b)+401(k)+401(a) combined. The limit for 457(b) is separate from that, and also allows for catch-up, so that's another $18K+$6K you can do. (Unless maybe the employer limits 457 contributions for other reasons.) My employer's plan has ...
by House Blend
Sun Apr 19, 2015 7:54 am
Forum: Investing - Help with Personal Investments
Topic: Coming to terms with low risk tolerance
Replies: 46
Views: 3573

Re: Coming to terms with low risk tolerance

I settled on 40% stocks, 5% real estate, 55% bonds/cash. I know that in the long run this will hurt me financially. But I rationalize it with the intangible cost of financial anxiety. Maybe tomorrow I'll wake up with a more rational mind and switch to the "ideal" asset allocation for my a...
by House Blend
Fri Apr 17, 2015 1:14 pm
Forum: Investing - Help with Personal Investments
Topic: Can I have a ROTH account?... I'm so confused!
Replies: 6
Views: 1015

Re: Can I have a ROTH account?... I'm so confused!

We are a one-income family. My husband contributes to a 401K through his job. I have a Spousal Traditional IRA account I have contributed to for the last few years, just enough to make sure we don't need to pay any income tax that year (never the full amount until 2014, when I put in $5500). Please...
by House Blend
Fri Apr 17, 2015 8:59 am
Forum: Personal Consumer Issues
Topic: How do you quickly cool food?
Replies: 34
Views: 2524

Re: How do you quickly cool food?

FWIW, if your beer needs to be ice cold to be drinkable, it isn't beer. The dilemma for me is whether to store it in the fridge or in the basement, where the temp stays in the low 50s most of the year. Fridge storage improves the shelf life, but then you need to let it warm up at room temp for an ho...
by House Blend
Thu Apr 16, 2015 5:14 pm
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3683

Re: How many baskets for your eggs?

For 403(b), you can have umpteen 403(b) accounts at umpteen different vendors, but as long as they are all in your name, you can satisfy the RMD by taking it all out of one 403(b). 401(k) accounts do not have this feature. And as mentioned already, you can meet your IRA RMD by making a withdrawal f...
by House Blend
Thu Apr 16, 2015 11:54 am
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3683

Re: How many baskets for your eggs?

Simplicity is good, but do you have to have it for RMDs? Can't you take the full RMD out of one account or provider and calculate it for yourself? Nice thought, but TSP RMD is separate from IRA RMD. The TIAA RMD may also be separate -- is it IRA or 403b or 457? The first RMD from TSP requires decis...

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