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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 10:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Account Considerations
Replies: 2
Views: 507

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 5:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) Rollover to Traditional or Roth?
Replies: 5
Views: 384

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 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(a) Rollover to Traditional or Roth?
Replies: 5
Views: 384

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 1:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Are we really in the 0% bracket?
Replies: 32
Views: 3671

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 5:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Gross Annual Retirement Income Before Taxes
Replies: 25
Views: 1905

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 6:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Switch from CREF Stock to CREF Equity Index and VTIAX?
Replies: 3
Views: 309

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 2:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 34
Views: 2712

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 2:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are RMD Withdrawals Making My IRA Into A Taxable Account
Replies: 10
Views: 785

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 2:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are RMD Withdrawals Making My IRA Into A Taxable Account
Replies: 10
Views: 785

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 1:26 pm
 
Forum: Personal Consumer Issues
Topic: What is the appeal of smart watches?
Replies: 22
Views: 1920

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 8:17 am
 
Forum: Personal Finance (Not Investing)
Topic: SS Tax, RMD and Roth Conversions
Replies: 6
Views: 728

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 2:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: investing during retirment
Replies: 20
Views: 2034

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 2:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Rollover and Capital Gains Reinvestment
Replies: 2
Views: 219

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 11:48 am
 
Forum: Investing - Help with Personal Investments
Topic: 457b Question
Replies: 10
Views: 730

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 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1461

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 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3950

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 10:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1461

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 11:49 am
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 128
Views: 9179

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 11:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Is this worth it? [capital gains issue]
Replies: 7
Views: 1461

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 1:48 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 128
Views: 9179

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 1:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to think about tax lost harvesting
Replies: 19
Views: 1427

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 1:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 34
Views: 2712

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 12:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in taxable account?
Replies: 27
Views: 3409

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 11:49 am
 
Forum: Personal Consumer Issues
Topic: "You're invited to...." (nonsense talk and dinner)
Replies: 68
Views: 4185

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 9:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating return
Replies: 34
Views: 2712

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 1:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 959

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 1:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 959

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 12:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Write-off capital loss against capital gains?
Replies: 27
Views: 1267

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 10:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Help a Confused New Boglehead
Replies: 9
Views: 959

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 3:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA investment for 20-somethings
Replies: 13
Views: 758

Re: Inherited IRA investment for 20-somethings

Also, on a related note, a sixth grandchild was inadvertently left out of the IRA beneficiary designation (mentioned in the Trust as a beneficiary, but not in the paperwork with the investment company). I intend to give her the equivalent of what she otherwise would have gotten, as that was clearly...
by House Blend
Mon Oct 20, 2014 2:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA investment for 20-somethings
Replies: 13
Views: 758

Re: Help on Turbo Tax Long term cap gains

Doing the calculation without LT cap gains and doing the calculation with LT cap gains should not change his tax. No, SS income is all that is required for this to happen. The amount of SS income that is taxable depends on how much "other income" you have. Other income includes things lik...
by House Blend
Thu Oct 16, 2014 9:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help on Turbo Tax Long term cap gains
Replies: 29
Views: 1622

Re: Poll: which portion of the chart shows higher volatility

Didn't vote. No way can the eye distinguish standard deviations of 9.5 and 9.6. But I do have a problem with the formulation--you've presented the data as a time series. Yes, that's how market returns occur in real life. But the order in which data occurs has zero effect on standard deviation. The e...
by House Blend
Thu Oct 16, 2014 11:01 am
 
Forum: Investing - Theory, News & General
Topic: Poll: which portion of the chart shows higher volatility?
Replies: 26
Views: 1460

Re: Roll Over Old TIAA CREF Account?

My wife has a TIAA CREF retirement account from when she worked at a college 10 or 12 years ago. It's her account and there's not much in it. I'm tempted to suggest that she just roll it over into a VG IRA account. Get rid of it. Roll to a Vanguard IRA. Given that "there's not much in it"...
by House Blend
Thu Oct 16, 2014 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: Roll Over Old TIAA CREF Account?
Replies: 15
Views: 776

Re: TLH and Dividend Elections

My Vanguard based 401K does not allow me to elect to NOT reinvest dividends*. I'm worried about accidentally triggering a wash sale in my taxable account as a result of a reinvestment transaction in my 401K. FWIW, I deal with the issue by not holding the same fund in both places. The one asset clas...
by House Blend
Wed Oct 15, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: TLH and Dividend Elections
Replies: 5
Views: 496

Re: need advice for bond fund in taxable low income high as

Are you maxing out his and hers 401(k) plans and IRAs?

If not, you should start doing so immediately and use the windfall to cover any shortfall in income that this creates. This won't solve the immediate problem but will improve your tax-efficiency in the long run.
by House Blend
Wed Oct 15, 2014 5:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1404

Re: Very remedial help needed in understanding MUNI fund

Should I exchange it for a bigger position in VBTLX? Sort of. I assume you have tax-advantaged accounts--401(k), IRA (his & hers), 403(b),... Unless they are 100% VBTLX already, what you should do is improve your tax-efficiency by exchanging the muni fund for more shares of VTSAX or VTIAX, and ...
by House Blend
Tue Oct 14, 2014 4:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Very remedial help needed in understanding MUNI fund
Replies: 6
Views: 267

Re: Does your ROTH hold risky or stable items?

new2bogle2 wrote:Should a Roth (compared to a traditional IRA) have the more risky or more stable investment items?

Yes. My Roth is 50% Total Bond and 50% US Small Value.

(But it is about 2% of the total portfolio, so it doesn't really matter how it is allocated.)
by House Blend
Mon Oct 13, 2014 10:34 pm
 
Forum: Investing - Theory, News & General
Topic: Does your ROTH hold risky or stable items?
Replies: 56
Views: 3391

Re: Sorry, another wash sale question

The Vanguard Rep is correct. Not a wash. Suppose instead you sold all of your shares except for the 32.495+9.414 shares you bought on 9/22 and 9/23. Those shares would then be participating in a wash sale. So some of the loss in the sale of the other 1792.257-32.495-9.414 shares you sold would be ad...
by House Blend
Mon Oct 13, 2014 10:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Sorry, another wash sale question
Replies: 3
Views: 378

Re: Fixed Income Investments In Tax Deferred Accounts?

The conventional advice is to place your fixed income investments in tax deferred accounts, and stock mutual funds in taxable accounts. No it isn't. The conventional wisdom says to not let the relative sizes of your taxable and tax-advantaged accounts dictate your asset allocation. If that means yo...
by House Blend
Sun Oct 12, 2014 10:21 am
 
Forum: Investing - Theory, News & General
Topic: Fixed Income Investments In Tax Deferred Accounts?
Replies: 6
Views: 503

Re: Calculating RMDs

If you have multiple custodians, you can wait until they've told you how much your RMD is based on assets held with them. (This assumes all the custodians use the same age for you. :D ). Add up all these RMDs. There you have it. You can take your total RMD from any one account or split up among the...
by House Blend
Sun Oct 12, 2014 9:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Calculating RMDs
Replies: 14
Views: 1611

Re: Wash Sale Question

I just sold my entire position of VGTSX (total international) as all of it was in capital loss and purchased VFWIX (all-world ex-us). As far as I have read, this will not trigger a wash sale, correct? Correct, in my opinion. Agreed. Looks like a good move. The one thing that might bite you (a flea ...
by House Blend
Fri Oct 10, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Wash Sale Question
Replies: 10
Views: 592

Re: Threshold for [Resetting Roth Conversion]

^You probably know this, but for others reading along, you will need to have more than one Roth IRA if you are planning to do a "selective recharacterization" of multiple conversions. If all of the conversions go into the same Roth IRA, then the gains in the entire account are prorated to ...
by House Blend
Fri Oct 10, 2014 3:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Threshold for [Resetting Roth Conversion]
Replies: 16
Views: 1559

Re: diff share prices between investor, admiral, & ETF share

When a mutual fund starts out, the initial share price is generally set to some nice round number. At Vanguard, I think $10/share and $25/share are the most popular starting prices. The choice is completely arbitrary. So if a fund rolls out Investor, Admiral, and Institutional classes at different t...
by House Blend
Wed Oct 08, 2014 12:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: diff share prices between investor, admiral, & ETF shares
Replies: 5
Views: 506

Re: Three fund allocation per Vanguard Flagship CFP?

^OK, here is my view of the tax situation. Looks like she will be solidly in the 25% Federal bracket, and not in any of the nastier phase out ranges. Whether munis are a good deal or not in this situation is something that Bogleheads can spend endless hours arguing about. But IMO they aren't a no-br...
by House Blend
Tue Oct 07, 2014 11:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Three fund allocation per Vanguard Flagship CFP?
Replies: 45
Views: 4760

Re: Backdoor Roth w/ large SEP IRA - What would you do?

If I have to pay taxes on the backdoor Roth, would it still be worthwhile? My tax bracket currently is 33%. Almost 100% of it would be taxed based on the pro-rate rule. I'm assuming that for a $5500 backdoor Roth that I would pay $1815 in taxes? To echo Spirit Rider, either there is something unusu...
by House Blend
Tue Oct 07, 2014 1:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth w/ large SEP IRA - What would you do?
Replies: 14
Views: 634

Re: Is the IRA custodian responsible for initiating RMDs?

Is it the responsibility of Dreyfus to begin sending RMDs at 70-1/2 and avoid the penalty? For better or worse, the answer is no. This happened in my mother's case. She had multiple IRAs and 403(b)s, some of which had automatic RMDs setup, and some that didn't. We caught the error several years lat...
by House Blend
Tue Oct 07, 2014 11:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Is the IRA custodian responsible for initiating RMDs?
Replies: 26
Views: 1469

Re: Help with tax loss harvesting

Traveller, You have it right, and the others trying to help you have it wrong. If you harvest a loss in taxable, and hold the same fund elsewhere, whether it is in your IRA, or your spouse's IRA, or your trust account, or, ... then purchases in that other account within 30 days of the sale creates a...
by House Blend
Tue Oct 07, 2014 10:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with tax loss harvesting
Replies: 16
Views: 1108

Re: Capital loss carryover in the (almost) 15% bracket

Not sure what the problem is. First, there is no "optionality" with carryover losses: they *must* be used, first to cancel out capital gains (if any), and then if more losses remain, up to $3000 of them must be used to deduct against other income. If you're in the 15% bracket, that's savin...
by House Blend
Mon Oct 06, 2014 6:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Capital loss carryover in the (almost) 15% bracket
Replies: 7
Views: 506

Re: "Vanguard converting mutual fund accounts to brokerage?

FWIW, I will be opting out as long as possible. I prefer all dividend and cap gain distributions in my taxable mutual fund account to go straight to my (external) bank account. The new account structure only allows two choices for distributions: reinvest, or direct to a Money Market sweep account. P...
by House Blend
Mon Oct 06, 2014 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: "Vanguard converting mutual fund accounts to brokerage?
Replies: 104
Views: 10931
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