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Re: Total Bond Mkt or tax-exempt in taxable account?

^Probably. Here's my back of envelope calculation, based on 2014 dividend yields and tax brackets. The assumption is that $1.7M was invested on 1/1/2014, all dividends taken as income. I'll start with a bonds=TBM-only portfolio. $595K TSM -> $11.6K QDI $255K TISM -> $6.1K QDI + $2.4K non-QDI (and $4...
by House Blend
Sat Jan 31, 2015 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Mkt or tax-exempt in taxable account?
Replies: 27
Views: 1812

Re: Total Bond Mkt or tax-exempt in taxable account?

The deduction is 9,100, the exemption is 3,950, added to the top of the 15% bracket of 36,900, equals 49,950. Assume 85% of SS 20,000 is taxed: 17,000. The total taxable income is 42,642, with more than 7,000 remaining headroom If TBM was replaced by IT TE, there would be over 28,000 remaining head...
by House Blend
Sat Jan 31, 2015 3:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Mkt or tax-exempt in taxable account?
Replies: 27
Views: 1812

Re: Need Help with Late IRA Contributions

Do you have any thoughts as to my question about rebalancing my portfolio into VTSMX to get the benefits of Admiral status? I would wait on that. Most likely once you start incorporating your employer's plan and fund offerings into your overall asset allocation, you'll discover that you want to use...
by House Blend
Sat Jan 31, 2015 3:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help with Late IRA Contributions
Replies: 4
Views: 334

Re: Total Bond Mkt or tax-exempt in taxable account?

I'm not sure I understand why/how qualified dividends create a 30% marginal rate on ordinary income while in the 25% bracket. Can you explain? Quick example: Say your ordinary taxable income is $5K below the top of the 15% bracket. You also have $8K of QDI/LTCG. (So, technically, your total taxable...
by House Blend
Sat Jan 31, 2015 12:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Mkt or tax-exempt in taxable account?
Replies: 27
Views: 1812

Re: Total Bond Mkt or tax-exempt in taxable account?

^The OP appears to be Single. I agree that if retiredjg's yield and deduction estimates are correct, it's pretty unlikely he'll be in the 15% bracket once the portfolio starts throwing off income. But if half of the income is tax-exempt interest (say $30K), then there's a fighting chance he would be...
by House Blend
Sat Jan 31, 2015 12:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Total Bond Mkt or tax-exempt in taxable account?
Replies: 27
Views: 1812

Re: Need Help with Late IRA Contributions

My most immediate concern right now is investing some money for last year. I earned no income for 2014 , but since the tax season hasn't ended yet, and I have a few months to earn some money, I figured I might be able to make some late contributions for last year. Is this even possible? If so, shou...
by House Blend
Sat Jan 31, 2015 11:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Need Help with Late IRA Contributions
Replies: 4
Views: 334

Re: Roth conversion to new or existing account

Now I am planning on making annual conversions from a traditional IRA. I will be converting a single fund from the traditional to the same fund in the Roth. Is there any reason to set up a new Roth account to receive each annual conversion? For instance, is it easier to recharacterize if necessary?...
by House Blend
Fri Jan 30, 2015 10:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth conversion to new or existing account
Replies: 4
Views: 364

Re: Good Wines

I had a bottle of Bogle Old Vine Zindanfel with my Rib Eye Steak ehe other night and for a nine dollar bottle of wine it was out standing. There are lots of good wines in that price range at Trader Joe's, including the Bogle Old Vine Zin. That's on my list too. I also like the Ravenswood Zins. I re...
by House Blend
Fri Jan 30, 2015 9:09 pm
 
Forum: Personal Consumer Issues
Topic: Good Wines
Replies: 37
Views: 1979

Re: 403b 457b Investing order

Most(?) 403(b) plans allow penalty-free withdrawals in retirement if you retire in the year you turn 55, or later. So, all else being equal , the 457(b) no-penalty feature isn't worth much unless you plan to retire before 55. As always, one should check the fine print in the employer's plan documents.
by House Blend
Fri Jan 30, 2015 3:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: 403b 457b Investing order
Replies: 12
Views: 382

Re: 100% of international in taxable limits taxless rebalanc

How does one go about calculating foreign tax credit alpha for a fund? It seems that you need to know that to determine how this stands against VTSAX for tax-efficiency, which I'm still not clear on (but House Blend's post had some good numbers in it). I'm not sure what you mean by "alpha"...
by House Blend
Thu Jan 29, 2015 5:27 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of international in taxable limits taxless rebalancing?
Replies: 11
Views: 832

Re: 100% of international in taxable limits taxless rebalanc

If say the QDI percentage for an international fund is 70%, then 30% of the dividends is non-qualified and taxable, at perhaps the 15% federal tax rate. And what you are saying is that the amount of federal tax due to this is actually less than the foreign tax credit I can claim back? If so, it sou...
by House Blend
Thu Jan 29, 2015 2:30 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of international in taxable limits taxless rebalancing?
Replies: 11
Views: 832

Re: 403b 457b (government) and h&r block

One of these is elective deferrals (your 403b contributions). The other is not elective deferrals (your 457b contribution). That's not likely what is happening. It's just a bug or design flaw. 457(b) and 403(b) elective deferral limits are separate. Either one might have mandatory employee contribu...
by House Blend
Thu Jan 29, 2015 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: 403b 457b (government) and h&r block
Replies: 6
Views: 475

Re: 100% of international in taxable limits taxless rebalanc

If one is in the 15% tax bracket they want only qualified dividends in their taxable account. Why? Because there are zero taxes on all qualified dividends. Therefore, international with their varying percentage of ordinary dividends work best in tax advantaged accounts for those in the 15% tax brac...
by House Blend
Wed Jan 28, 2015 10:11 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of international in taxable limits taxless rebalancing?
Replies: 11
Views: 832

Re: Re-balancing investments, how to achieve desired allocat

In terms of grad school, I am going into the sciences which is typically funded by grants, fellowships, scholarships and I would receive a stipend to live off of. I don't plan to go to grad school if I need to pay out of pocket. My plan is to be able to live modestly and be able to contribute the m...
by House Blend
Wed Jan 28, 2015 9:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Re-balancing investments, how to achieve desired allocation?
Replies: 17
Views: 2336

Re: 40 years of IRA and 401k Contributions

FWIW, there was a 10 year stretch, roughly 1987-1997, when few people would have been maxing out a 401(k) and an IRA. There was no such thing as a Roth in those days (much less Backdoor), and the rules for deductibility of IRA contributions were such that few people who had a high enough salary to a...
by House Blend
Tue Jan 27, 2015 11:26 am
 
Forum: Investing - Theory, News & General
Topic: 40 years of IRA and 401k Contributions
Replies: 18
Views: 2256

Re: How do you rebalance with overlapping funds?

You can use a Morningstar X-Ray to see past the overlap. http://portfolio.morningstar.com/Rtport/Free/InstantXRayDEntry.aspx But once you pick the 9 box allocation you like best, you then have an exercise in multivariate optimization to figure out which combinations of your existing funds best appro...
by House Blend
Tue Jan 27, 2015 10:47 am
 
Forum: Investing - Help with Personal Investments
Topic: How do you rebalance with overlapping funds?
Replies: 4
Views: 325

Re: Old Age Penny Pinchers

I think it's pretty clear that having SS income is an asset. So is (equity in) a house. Where I differ is with the notion that one should convert all assets into a lump dollar value and call that "wealth". I suppose something like that is necessary if you buy into the notion that there is ...
by House Blend
Mon Jan 26, 2015 4:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Clements - 4 strategies for those close to retirement]
Replies: 25
Views: 3279

Re: Scary taxes :(

As a thought experiment only ;-), the OP might want to add up the combined incomes and taxes of the OP and his/her Ex, and compare that with what it would have been had they been filing MFJ. The marriage tax bracket penalty is smaller than it used to be AFAIR, but shows up in the higher brackets. Ex...
by House Blend
Mon Jan 26, 2015 3:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Scary taxes :(
Replies: 18
Views: 3164

Re: Small and value: are they diversifiers?

In short: if we are talking about a diversification benefit from low correlation, the emperor has no clothes. Small-cap blend, large-cap value, or small-cap value all have high correlation with the S&P 500 and provide almost no synergistic, risk-reduction, low-correlation benefits. A slightly d...
by House Blend
Mon Jan 26, 2015 1:13 pm
 
Forum: Investing - Theory, News & General
Topic: Small and value: are they diversifiers?
Replies: 6
Views: 901

Re: Drinking water

At the house I grew up in, the tap water was foul. Worst I've tasted anywhere on the planet. I think it was due to high calcium content; not sure. In any case, it was unpleasant even to brush your teeth with it. So my parents bought bottled water for 40+ years. All of the water we drank, plus the wa...
by House Blend
Mon Jan 26, 2015 9:22 am
 
Forum: Personal Consumer Issues
Topic: Drinking water
Replies: 45
Views: 3020

Re: Preparing for RMDs

I recognize I'll get bitten big time by RMDs and will have to suffer the bite -- I'm just trying to minimize some of the teeth to this bite. Any thoughts? Good problem to have. To help mitigate RMD growth, you'd want the slowest growing assets in your portfolio in tax-deferred. (This applies to the...
by House Blend
Sun Jan 25, 2015 3:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: Preparing for RMDs

Donating to charity from an ira is the same as 100% tax. Many people with large estates (defined to mean more money than they or their heirs "need") and large charitable ambitions don't see it that way. If you don't want the money that is fine but it doesn't help you pay for health care o...
by House Blend
Sat Jan 24, 2015 9:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: Preparing for RMDs

Consider a HYPOTHETICAL single Boglehead with no children/grandchildren, and guaranteed income in excess of expenses. You have > $1M in tax-deferred accounts and > $1M in Roth. Why are you converting the tax-deferred assets to Roth if there is a 99% probability that you'll never spend those dollars...
by House Blend
Sat Jan 24, 2015 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: Roth IRA phase out calculator

It depends on 4 variables: MAGI, age, tax year, and filing status. I'm assuming the tax year is 2014. There's no way you could know what your MAGI will be for 2015 to any degree of accuracy. Example: if you are single, the phase-out range for 2014 is MAGI $114K to $129K. If you were 50+ in 2014, you...
by House Blend
Sat Jan 24, 2015 8:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth IRA phase out calculator
Replies: 7
Views: 676

Re: How do I utilize a VG Taxable account?

^Yes, and the Bogleheads wiki has some helpful articles.
https://www.bogleheads.org/wiki/Category:Tax_considerations

Maybe take a look at the article on Cost Basis Methods.
by House Blend
Sat Jan 24, 2015 8:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: How do I utilize a VG Taxable account?
Replies: 19
Views: 2336

Re: Preparing for RMDs

I will receive a federal pension of 90k plus cola. Pension will cover my expenses and allow me to save 1000-1500 a month. I believe I will be in the 25% tax bracket once retired. A $90K pension with 1 exemption and standard deduction puts you maybe $10K below the start of the 28% bracket. (Perhaps ...
by House Blend
Sat Jan 24, 2015 3:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: Preparing for RMDs

House Blend: I will only have the 1 standard exemption/itemized deductions. I will not be eligible for SS. I have no dependents. My retirement fund is primarily to cover any unanticipated expenses that can't be covered by emergency funds. Beneficiaries may be in a lower tax bracket. OK, that clarif...
by House Blend
Sat Jan 24, 2015 3:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: Preparing for RMDs

I will receive a federal pension of 90k plus cola. Pension will cover my expenses and allow me to save 1000-1500 a month. I believe I will be in the 25% tax bracket once retired. A $90K pension with 1 exemption and standard deduction puts you maybe $10K below the start of the 28% bracket. (Perhaps ...
by House Blend
Sat Jan 24, 2015 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 66
Views: 4855

Re: How do I utilize a VG Taxable account?

2) which fund(s) should I put in my taxable account? 3) next year can I directly transfer money from this account into my Roth? Or must I cash out money from the taxable account and then fund the Roth? 4) I assume there is nothing much tricky about a taxable account but this is my first time utiliz...
by House Blend
Fri Jan 23, 2015 2:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: How do I utilize a VG Taxable account?
Replies: 19
Views: 2336

Re: vwitx, vbtix, vt tax placement

Most(?) brokerages do not offer Admiral shares of Vanguard mutual funds.

The usual workaround is to hold Vanguard ETFs (same ER as Admiral), but in this case there is no ETF share class of Intermediate Tax-Exempt.

In order to get Admiral shares, you'd need a Vanguard account.
by House Blend
Fri Jan 23, 2015 1:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: vwitx, vbtix, vt tax placement
Replies: 3
Views: 516

Re: When/how to invest monthly savings into taxable?

I'm wondering if there is a recommended way to route savings into a Vanguard taxable account. Probably there are as many good ways of doing it as there are Bogleheads. I make one monthly purchase in taxable, manually. It has to be manual, because the amount available depends on what else is happeni...
by House Blend
Fri Jan 23, 2015 11:05 am
 
Forum: Investing - Help with Personal Investments
Topic: When/how to invest monthly savings into taxable?
Replies: 32
Views: 2822

Re: Some help with Roth vs pre-tax

I guess I don't see what you mean. The AGI is the AGI. It does not go up if I sock money away after tax. While I am at the upper end of the 28% bracket, I am not at 33% before any Roth contribution, and therefore I am not at 33% after any Roth contribution. The after tax contribution is immaterial ...
by House Blend
Thu Jan 22, 2015 7:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some help with Roth vs pre-tax
Replies: 11
Views: 665

Re: Some help with Roth vs pre-tax

The data doesn't add up: If you are at the top of the 28% bracket, and you move the dial from more tax-deferred to more Roth, say hello to the 33% Federal bracket. So your current tax-deferrals *are* keeping you in a lower bracket. For most Bogleheads under most circumstances, tax rates will go down...
by House Blend
Thu Jan 22, 2015 5:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some help with Roth vs pre-tax
Replies: 11
Views: 665

Re: Boglehead Beer

I love this thread. My current favorite beer is oatmeal stout. You must try Founder's Breakfast Stout. Amazing stuff; I've never had anything that tops that. Purists may quibble that it doesn't qualify as a "true" oatmeal stout; in any case, it has oats, chocolate, and coffee. Somewhat re...
by House Blend
Wed Jan 21, 2015 1:54 pm
 
Forum: Personal Consumer Issues
Topic: Boglehead Beer
Replies: 475
Views: 67727

Re: Is a Traditional Annuity ever worth it?

Selfa, It's important to understand which flavors of Traditional your employer is offering. It is common for employee contributions to go into an SRA or GSRA contract, and for employer matches to go into an RA or GRA. The SRA and GSRA contracts allow transfers out without penalty or delay (and pay l...
by House Blend
Wed Jan 21, 2015 10:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Is a Traditional Annuity ever worth it?
Replies: 18
Views: 1388

Re: why did my portfolio perform so badly in '14 ?

1. If you have the option of rolling tIRA dollars into your T-C RA contract, that would certainly be an easy way to increase your allocation to TRAD. I like that way of doing it better than my suggestion of opening a T-C IRA for holding TREA. (This is all assuming that you want/need a higher allocat...
by House Blend
Wed Jan 21, 2015 9:23 am
 
Forum: Investing - Help with Personal Investments
Topic: why did my portfolio perform so badly in '14 ?
Replies: 13
Views: 3297

Re: TIAA CREF International Choices

I think the best option is to open a Vanguard IRA and use it to buy Total International.

Failing that, I agree that you have identified the two best options, and their plusses and minuses. (Another item for consideration is that CREF Stock is not an index fund.)
by House Blend
Tue Jan 20, 2015 11:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: TIAA CREF International Choices
Replies: 1
Views: 245

Re: Adjusted Livesoft Income (ALI)

Counting tax-deferred contributions into retirement accounts leads to double counting of income: once when it goes in, and a second time when it comes out. If you modify ALI to include Roth withdrawals, then it can be triple counted: contribute; Roth convert; withdraw. AHBI (Adjusted House Blend Inc...
by House Blend
Tue Jan 20, 2015 10:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Adjusted Livesoft Income (ALI)
Replies: 31
Views: 3035

Re: why did my portfolio perform so badly in '14 ?

The only reason I have cash in my Roth is that my only under-weight category is bonds, and there's the issue of what's a good fixed-income investment these days. OK, but CDs in a Roth are clearly better. When you (House Blend) mention "the liquid form of Traditional at 3%" you're talking ...
by House Blend
Tue Jan 20, 2015 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: why did my portfolio perform so badly in '14 ?
Replies: 13
Views: 3297

Re: Poll: What Percent of TIPS in Taxable Account

Suppose you are in the 15% Federal bracket, and don't have enough room in tax advantaged space for all of your bonds. Which would you rather put in your taxable account, the VG TIPS fund, or TBM? While you may prefer TBM for the steadier income stream, the main tax factors affecting this decision ar...
by House Blend
Tue Jan 20, 2015 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: What Percent of TIPS in Taxable Account
Replies: 27
Views: 1673

Re: Which of 7 cost-basis methods? (Poll)

Average works ok for those who are willing to pay more tax than necessary and unwilling to learn about the alternatives. Specific ID for everyone else. Edit : LGUT fails when you are donating shares. There, what you want are the lowest cost long-term shares. Another failure mode: tax gain harvesting.
by House Blend
Tue Jan 20, 2015 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Which of 7 cost-basis methods? (Poll)
Replies: 11
Views: 881

Re: Asset allocation & taxes

^Many Bogleheads do not tax-adjust their asset allocation. Among those who do not, I think the most common (rational) justification is that if tax-adjusting says that your "true" risk exposure is 55/45, whereas your IPS dictates 60/40, then your odds of long-term success are still going to...
by House Blend
Tue Jan 20, 2015 10:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation & taxes
Replies: 7
Views: 650

Re: why did my portfolio perform so badly in '14 ?

Apologies in advance for serving up some unsolicited comments: 1. Why hold any cash whatsoever in the Roth? 2. What kind of contracts do you have at T-C? Any GSRA or SRA? The liquid form of Traditional at 3% is in my opinion a far better bargain than (a) cash, (b) short bonds, (c) CDs earning <= 3%....
by House Blend
Tue Jan 20, 2015 10:21 am
 
Forum: Investing - Help with Personal Investments
Topic: why did my portfolio perform so badly in '14 ?
Replies: 13
Views: 3297

Re: 1099-DIV error(?)

or am I missing something? Foreign taxes (for international funds) for one, and dividends from bond funds in which the share price does not reflect accrued dividends. If you buy shares of such a fund in mid-month, you won't get the full dividend. For vetting a 1099, I would compare with your end-of...
by House Blend
Mon Jan 19, 2015 6:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: 1099-DIV error(?)
Replies: 14
Views: 1460

Re: Investment product idea: Splitting up Total US Stock

Why doesn't a mutual fund company offer 2 mutual funds, which together sum up to a Total US Stock Market Index fund? Apologies for chiming in late; I missed this thread the first time around.... This idea seems to get rediscovered here on Bogleheads once a year or so. FWIW, I gave some thought to t...
by House Blend
Mon Jan 19, 2015 11:13 am
 
Forum: Investing - Theory, News & General
Topic: Investment product idea: Splitting up Total US Stock
Replies: 20
Views: 2114

Re: How much food to you really keep?

There's probably 4-5 pounds of various kinds of pasta, and 2-3 pounds of rice. That's enough for 28 servings or so to at least put off starvation. Maybe another 20 servings of cereal. That plus other random stuff packed on the shelves could probably sustain two people for one month or so. But probab...
by House Blend
Thu Jan 15, 2015 1:40 pm
 
Forum: Personal Consumer Issues
Topic: How much food to you really keep?
Replies: 57
Views: 4189

Re: How Important Is SC To Portfolio?

Does it really matter? Do you think 5-10% of an extended market index will make much difference over a lifetime? The advisor is arguing that it won't. No and I think the advisor is right. But I overweight Small and Small Value slightly anyway, because I am interested in watching the long term behav...
by House Blend
Thu Jan 15, 2015 11:41 am
 
Forum: Investing - Help with Personal Investments
Topic: How Important are Small Cap stocks To Portfolio?
Replies: 4
Views: 689

Re: Rollover to Roth from 401K, IRA - sequence of moves

Are you over 59.5? Many employers do not allow rollovers out of their plans except for those who are either former employees, or over age 59.5. But some do. If your current employer allows after-tax contributions--which is not the same as a Roth 401(k) contribution--and allows transfers/rollovers ou...
by House Blend
Thu Jan 15, 2015 11:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Rollover to Roth from 401K, IRA - sequence of moves
Replies: 2
Views: 441

Re: Expense Ratios Comparison Total Stock 2008 vs. 2013

For more fun with funds, our wiki does have some linkage to help guide you into the EDGAR database, where all of the old Annual Reports are archived. https://www.bogleheads.org/wiki/Category:Vanguard_SEC_filings I used it to locate the December 2007 Annual Report for TSM. Here's the sequence of ERs ...
by House Blend
Wed Jan 14, 2015 5:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Expense Ratios Comparison Total Stock 2008 vs. 2013
Replies: 9
Views: 805

Re: Expense Ratios Comparison Total Stock 2008 vs. 2013

I remember that thread. I was the one (maybe others too) who specifically brought up the trend in ER for Admiral shares of TSM. Indeed, the data I got was from the last Annual Report--that gives you the last 5 years of ERs. I also happen to have a prospectus for TSM dated April 2006 handy (in electr...
by House Blend
Wed Jan 14, 2015 5:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Expense Ratios Comparison Total Stock 2008 vs. 2013
Replies: 9
Views: 805
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