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Re: 40 years of IRA and 401k Contributions

I started contributing to a workplace pre-tax savings plan (with employer match) in 1982. I thought this was a 401(k), but your table starts in 1987. Wikipedia says it got its start in 1980. I had a similar plan that I joined in the early 80's. I just pulled out my old tax returns and verified that...
by JW Nearly Retired
Tue Jan 27, 2015 1:01 am
 
Forum: Investing - Theory, News & General
Topic: 40 years of IRA and 401k Contributions
Replies: 18
Views: 2231

Re: Bond fund in taxable moved to tax exempt?

My understanding is this: since this is a bond funds, gain is not capital gain, it is from distribution of income, so I am going to have to pay taxes on it in the year I earn as opposed to a equity fund, I only pay the gain when I sell (except of course for the year end distribution). Please correc...
by JW Nearly Retired
Mon Jan 26, 2015 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund in taxable moved to tax exempt?
Replies: 5
Views: 580

Re: Bond fund in taxable moved to tax exempt?

The usual tax issues. Manage the move so you minimize cap gains tax paid. If you are in the 15% bracket you pay no caps gain tax. If so, perhaps you might only move enough yearly to stay in that bracket. Some of us are gifting assets with cap gains to kids who are in a lower bracket. Not sure what y...
by JW Nearly Retired
Mon Jan 26, 2015 11:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund in taxable moved to tax exempt?
Replies: 5
Views: 580

Re: 401k to Roth conversion for a retiree

SS can make your marginal tax rate vary in a very complex way. Putting your data into TaxCaster is far quicker and easier than trying to work through the SS taxation worksheet by hand. It might take you 5 minutes the first time. Then you can change a number or two and see the difference it makes ins...
by JW Nearly Retired
Sat Jan 24, 2015 1:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k to Roth conversion for a retiree
Replies: 15
Views: 1206

Re: Is a financial advisor going to help?

The 1% AUM advisor will be helpful in his own non-fiduciary FA fashion. Mainly, he will be 100% reliable in helping himself to a hefty portion of your investment earnings. Long term, one or two percent extra expenses devastates your portfolio compared to what it might have been. :oops: http://www.bu...
by JW Nearly Retired
Sat Jan 24, 2015 12:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is a financial advisor going to help?
Replies: 20
Views: 1930

Re: 2015 Roth IRA question

You or a spouse have to have income. Make that earned income. Interest from savings accounts for example isn't considered earned income by the IRS. http://www.irs.gov/Individuals/What-is-Earned-Income%3F But if you already have a traditional IRA you can convert it to a Roth. More precisely, what IR...
by JW Nearly Retired
Sat Jan 24, 2015 12:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2015 Roth IRA question
Replies: 5
Views: 435

Re: 401k to Roth conversion for a retiree

bena, It depends. A moderately sizeable pension (which your's sounds like), plus SS income, plus RMD income, can be a recipe for very high marginal tax rates being imposed on the RMD (e.g. 46.25% federal plus your state rate). Phase-in formulas for SS income taxation causes this. If your have a real...
by JW Nearly Retired
Fri Jan 23, 2015 11:32 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k to Roth conversion for a retiree
Replies: 15
Views: 1206

Re: Advice Needed on Where to Stow Money Next

Current retirement assets His 401k: $44k (been maxing it out the past few years and will max out this year) Something seems wrong here. "Maxing it out" would be $17.5k/yr from you, plus any employer match, plus earnings in a bull market. A few years of this ought to total a lot more. JW
by JW Nearly Retired
Tue Jan 20, 2015 7:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Where to Stow Money Next
Replies: 6
Views: 954

Re: RMD withdrawals.

If you are talking about an annual strategy, taking the RMDs at the end of the year should let you take maximum advantage of tax deferred compounding in the IRA. The RMD in dollars in a given year would be the same either way since it is based on the IRA account value on the previous December 31. B...
by JW Nearly Retired
Mon Jan 19, 2015 11:18 am
 
Forum: Personal Finance (Not Investing)
Topic: RMD withdrawals.
Replies: 40
Views: 2878

Re: SS for mom and dad: couple of questions

Thank you for your feedback everyone! 1) I actually did not even think of survivor benefits. Give this information, I believe if my dad were to pass away, my mom would receive the amount he currently collects as long as she's at FRA ($1758.90). Can she collect 50% of his benefit now, collect her be...
by JW Nearly Retired
Sun Jan 18, 2015 11:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS for mom and dad: couple of questions
Replies: 5
Views: 667

Re: SS for mom and dad: couple of questions

His PIA that he would have received at 66 then is $2344 (3/4's of 2344 is 1758.90). My mom's PIA at age 66 is $1141 a month before deductions. Based off of this, mom should file under my dad when she hits full retirement age and will receive half his PIA (2344/2 = $1172). Once she hits 70, she can ...
by JW Nearly Retired
Sun Jan 18, 2015 12:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS for mom and dad: couple of questions
Replies: 5
Views: 667

Re: Investment Guidance

After looking at all of the expense ratios for the funds, I am wondering if I should place all of my contributions in my 404c into either the S&P 500 fund or the Fidelity Contrafund, rather then spreading them out over the current higher expense funds that I have them in now. Any suggestions? A...
by JW Nearly Retired
Sat Jan 17, 2015 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Investment Guidance
Replies: 13
Views: 1801

Re: Wait, contributions to an IRA are tax deductible?

Most or all of the things referred to a "tax deduction" might reduce your taxable income but not your taxes directly. There are less common items called "tax credits" that reduce taxes owed dollar for dollar. I think the child tax credit would be one of those. http://www.irs.gov/...
by JW Nearly Retired
Sat Jan 10, 2015 10:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: Wait, contributions to an IRA are tax deductible?
Replies: 19
Views: 1973

Re: Wait, contributions to an IRA are tax deductible?

So, if I put $5,500 into a Roth IRA, I can then deduct the same $5,500 form my taxes and get all of that back in the form of a refund check? So, I would have that $5,500 in retirement and essentially get a free $5,500 refund check? No, you can't deduct Roth contributions. JW what about traditional ...
by JW Nearly Retired
Sat Jan 10, 2015 10:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Wait, contributions to an IRA are tax deductible?
Replies: 19
Views: 1973

Re: Wait, contributions to an IRA are tax deductible?

INTRESIS wrote:So, if I put $5,500 into a Roth IRA, I can then deduct the same $5,500 form my taxes and get all of that back in the form of a refund check? So, I would have that $5,500 in retirement and essentially get a free $5,500 refund check?

No, you can't deduct Roth contributions.
JW
by JW Nearly Retired
Sat Jan 10, 2015 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Wait, contributions to an IRA are tax deductible?
Replies: 19
Views: 1973

Re: Social Security and Pension Question:

My pension and SS cover my living expenses with some to spare. My pension is not inflation adjusted. SS obviously is. I decided on a 60%/40% AA as one that was reasonably aggressive so I'm likely to leave a nice bundle for my heirs, without going overboard on risk such that I'll leave little or not...
by JW Nearly Retired
Sat Jan 10, 2015 9:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security and Pension Question:
Replies: 36
Views: 3586

Re: Social Security and Pension Question:

My pension and SS cover my living expenses with some to spare. My pension is not inflation adjusted. SS obviously is. I decided on a 60%/40% AA as one that was reasonably aggressive so I'm likely to leave a nice bundle for my heirs, without going overboard on risk such that I'll leave little or not...
by JW Nearly Retired
Sat Jan 10, 2015 8:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security and Pension Question:
Replies: 36
Views: 3586

Re: In charge of $500k for my mom. Asking for help.

Social Security. She will be receiving ~$19,000/year in social security from my dad, which, over 20 years, increases to ~$28k. So that will certainly help! @mnvalue, good point about deferring! I'll look into that! Spousal benefits are only increased by deferring up to your full retirement age (FRA...
by JW Nearly Retired
Sat Jan 10, 2015 7:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: In charge of $500k for my mom. Asking for help.
Replies: 19
Views: 2101

Re: In charge of $500k for my mom. Asking for help.

IRS wrote: Taxable alimony and separate maintenance payments received by an individual are treated as compensation for IRA purposes.

If she has more alimony income than she needs she should probably be saving it in an IRA rather than a taxable account.
JW
by JW Nearly Retired
Sat Jan 10, 2015 5:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: In charge of $500k for my mom. Asking for help.
Replies: 19
Views: 2101

Re: Starting on my tax returns - forms to expect

I had no existing tIRA prior to 2014. In January 2014 I opened a tIRA at VG and contributed $5,500 for the 2014 tax year. I then converted that amount to my existing Roth at VG. This will end up being a non deductible contribution to the tIRA due to income. I have already received a 1099-R showing ...
by JW Nearly Retired
Sat Jan 10, 2015 11:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Starting on my tax returns - forms to expect
Replies: 3
Views: 631

Re: Backdoor Roth, pro rata, old 401Ks and SEP-IRA

Except for a Roth IRA, anything with "IRA" in it's name is brought in pro-rata for the tax calculation..... i.e., tIRA, rollover IRA, SEP IRA, Simple IRA.

See the IRS 8606 form to see exactly how it gets brought in. 401k's are in the clear.
JW
by JW Nearly Retired
Fri Jan 09, 2015 9:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth, pro rata, old 401Ks and SEP-IRA
Replies: 2
Views: 489

Re: Social Security and Pension Question:

My wife and I are both retired. In addition to our investments, we each receive Social Security and one of us has a pension. Our investment portfolio is currently 62/38 for stocks/bonds. This definitely is not in line with having bond percentages approximate age. However, both SS and pension are pe...
by JW Nearly Retired
Fri Jan 09, 2015 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security and Pension Question:
Replies: 36
Views: 3586

Re: 529 plan non-parent owner and financial aid

According to http://www.investopedia.com/articles/younginvestors/07/college-cost-reduction.asp: Good and Bad News for 529 Plan Savers The new legislation also brings a change in the way that financial aid is determined for 529 plan beneficiaries. The good news is that if the owner of the plan is no...
by JW Nearly Retired
Fri Jan 09, 2015 2:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: 529 plan non-parent owner and financial aid
Replies: 9
Views: 527

Re: I have to leave Ameriprise

I need to leave Ameriprise. The best I can figure we are paying $16K a year in fees, all Ameriprise funds have front load (of course). The loads on 50% of the funds were 5% or more. We need 54K from investments for 2015 and 2016 after that ~40K. Total SS ~40K starting 2017. Risk level Moderate. How...
by JW Nearly Retired
Thu Jan 08, 2015 9:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: I have to leave Ameriprise
Replies: 22
Views: 3068

Re: Just left meeting with my advisor....

At 52, and investable assets of over 1 million, I am concerned about taking on this responsibility, but believe I have no other choice. What I am asking for is the experience from anyone that can relate to my situation, and (if you don't mind), how your portfolio did on 2014 for comparison. I'm ove...
by JW Nearly Retired
Thu Jan 08, 2015 9:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Just left meeting with my advisor....
Replies: 57
Views: 7774

Re: SS now or IRA

You are starting a thread just like your previous one of a few days ago?
viewtopic.php?f=1&t=154683&p=2319619

Might be best to merge this into the old one to avoid our having to ask for all the same additional information again.
JW
by JW Nearly Retired
Wed Jan 07, 2015 3:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: ss vs Ira
Replies: 12
Views: 847

Re: ROTH IRA Question

Why husband can't deduct? He doesn't have retirement plan at work and we are within limit i believe... I know that roth is better but as i understand we are in the high bracket now so saving a lot in tax... :idea: Yikes, I think you are right. His phase out range is $181k-$191k. The IRS language is...
by JW Nearly Retired
Wed Jan 07, 2015 11:33 am
 
Forum: Investing - Theory, News & General
Topic: ROTH IRA Question
Replies: 17
Views: 2220

Re: ROTH IRA Question

It was not asked, and JW was surgical in answering what was asked, but... If you have the choice a Roth contribution is always better than a non-deductible tIRA contribution. In this case the husband is eligible for a Roth (same rules as for the wife) and since he can't deduct the tIRA contribution...
by JW Nearly Retired
Tue Jan 06, 2015 8:56 pm
 
Forum: Investing - Theory, News & General
Topic: ROTH IRA Question
Replies: 17
Views: 2220

Re: ROTH IRA Question

Hi, Finaly i know my income for 2014 but before i do any ira contributions i want to make sure i fall into the income limit. My income for 2014 is $190k. My husbands income is around $5k in 2014. I contributed $25k to 401k at work. My husband doesn't have any retirement plans at work. I want to max...
by JW Nearly Retired
Tue Jan 06, 2015 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: ROTH IRA Question
Replies: 17
Views: 2220

Re: Seeking clarity about income and capital gains taxes

I started playing around with taxcaster just as DSInvestor suggested. One thing I find a bit baffling is that at some point if I could live entirely off taxable gains that I could report a realized gain of just over 100,000 and pay no tax, income or capital gains. I'm not talking about IRA contribu...
by JW Nearly Retired
Tue Jan 06, 2015 1:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Seeking clarity about income and capital gains taxes
Replies: 22
Views: 1744

Re: Question over inheritance, retirement accounts and taxab

I don't think I'd ask. If he wanted to give you money at this point, that is what he would be doing already. You've already changed his asset allocation and you've already affected his taxes. Adding on a sale of funds each year that would affect his taxes more and keeping up with the gifting thing ...
by JW Nearly Retired
Tue Jan 06, 2015 10:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Question over inheritance, retirement accounts and taxable
Replies: 11
Views: 945

Re: Seeking clarity about income and capital gains taxes

Question: Is my modified gross income $87,600 or is it $111,000? Neither. Your standard deduction (and exemptions) reduces taxable income but doesn't reduce your AGI (or MAGI). With $100k salary and the $23k of cap gains your AGI will be $123k. The best way to reduce your AGI is to make 401k or oth...
by JW Nearly Retired
Mon Jan 05, 2015 11:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Seeking clarity about income and capital gains taxes
Replies: 22
Views: 1744

Re: Social Security election change? Q for my 71 yr Mom

drawpoker wrote:You are saying that =
E A C H of these women are entitled to approx. $2,700 monthly checks following his death?

Yep.... and there is more.
http://www.reuters.com/article/2013/05/ ... 0120130509
JW
by JW Nearly Retired
Sun Jan 04, 2015 8:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security election change? Q for my 71 yr Mom
Replies: 21
Views: 2266

Re: Newbie contemplating firing advisor to save AUM

Do I simply take returns and multiply by 0.2 to get my capital gains? Probably worth selling. If this is the case, can I just talk to Vanguard and have them move funds over? Log into your account and you should be able to see the exact cost basis of each position online. (You might have to click a ...
by JW Nearly Retired
Sun Jan 04, 2015 10:37 am
 
Forum: Investing - Help with Personal Investments
Topic: Newbie contemplating firing advisor to save AUM
Replies: 24
Views: 2683

Re: Withhold Taxes from Pension?

I adjusted the % withholding for pension, SS, & RMDs for the total tax to come out about right for both Federal and State tax. It seems simpler and more auto-pilot adjustable than paying quarterly estimated taxes. Will find out how exactly close I was pretty soon.
JW
by JW Nearly Retired
Sat Jan 03, 2015 2:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Withhold Taxes from Pension?
Replies: 19
Views: 1192

Re: Earned income calculation for IRA contribution

Count what's in box 1 on the W-2.
JW
by JW Nearly Retired
Fri Jan 02, 2015 12:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Earned income calculation for IRA contribution
Replies: 3
Views: 294

Re: Simple question on tax loss harvesting

Is there a dollar increment where you fall out of this loop? For instance, here's my situation this year: I have short term gains of 3k, short term losses of 10k and 40k in long term gains. Am I correct that in the end, I'll effectively pay tax on 33k in long term? If these are all realized gains/l...
by JW Nearly Retired
Mon Dec 29, 2014 9:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Simple question on tax loss harvesting
Replies: 28
Views: 1599

Re: range of "expected" total annual expenses in 401(k)?

My mom's 401(k) is with Lockheed Martin. Yes, I'm aware of the recent lawsuit brought against them regarding their fees. The question I have is their funds do not list an exact/actual expense ratio but rather a range of expected expenses. Even the investment management fees and the annual administr...
by JW Nearly Retired
Sat Dec 27, 2014 12:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: range of "expected" total annual expenses in 401(k)?
Replies: 7
Views: 914

Re: Funds for a taxable account

Don't put bonds in a taxable account if you have a tax deferred alternative place to hold them.
JW
https://www.bogleheads.org/wiki/Princip ... y_of_bonds
by JW Nearly Retired
Fri Dec 26, 2014 7:08 pm
 
Forum: Investing - Theory, News & General
Topic: Funds for a taxable account
Replies: 11
Views: 1612

Re: Roth IRA Conversion

Hi JW, I'm not sure I understand the question, my apologies. All I've ever done is just write a check to Fidelity for the maximum amount every January, and never really paid attention to anything more. (1) Did you deduct the yearly contribution on your tax return? People who make more than a fairly...
by JW Nearly Retired
Thu Dec 25, 2014 3:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Conversion
Replies: 9
Views: 503

Re: Roth IRA Conversion

Belmont,
What is your post-tax contribution basis in the tIRA, if any? If you are in the highest tax bracket now at age 34, it seems quite possible you have not had a low enough income to make deductible contributions for some considerable time.
JW
by JW Nearly Retired
Thu Dec 25, 2014 3:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Conversion
Replies: 9
Views: 503

Re: I failed SS login

* Anyway, here's my current problem. After going thru all this to get access to my account, guess what, they refuse to give me an estimate of future retirement benefits on my record because I am already drawing survivors benefits on another record (late husband) All of my earnings record is listed ...
by JW Nearly Retired
Wed Dec 24, 2014 5:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: I failed SS login
Replies: 32
Views: 3412

Re: New investor. Doesn't qualify for Roth. Help

I am single. Make over 129K. This says zero allowable contributions. But I will look into this back door Roth ira At your income level you are not allowed to contribute directly to a Roth and you are likewise not allowed to take a tax deduction for contributing to a traditional IRA (tIRA). However,...
by JW Nearly Retired
Tue Dec 23, 2014 12:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: New investor. Doesn't qualify for Roth. Help
Replies: 29
Views: 2112

Re: 70-Year Old Retiree: Taxes, Etc

0% tax rate???? You have almost $200k gross income! Sorry, looks like your federal tax might be as high as around $30000.
JW
by JW Nearly Retired
Tue Dec 23, 2014 11:38 am
 
Forum: Personal Finance (Not Investing)
Topic: 70-Year Old Retiree: Taxes, Etc
Replies: 16
Views: 1715

Re: Performed backdoor Roth and accountant did not file 8606

Really, it (Backdoor) kind of is skirting the rules to some extent. The intent was that people that make too much money can't contribute to a Roth IRA. That wasn't a problem before 2010, because if you made too much money to contribute to a Roth, you also made too much money to convert money to a R...
by JW Nearly Retired
Fri Dec 19, 2014 11:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Performed backdoor Roth and accountant did not file 8606
Replies: 52
Views: 4296

Re: Federal Taxes - Sticker Shock (And how to reduce)

Morning! I received my last pay stub of the year and was immediately floored by the total amount of Federal taxes paid. Income this year was approximately $150k with Federal taxes of about $17k. Using TaxCaster, I should receive a small refund, probably around $500 or so given what I can itemize on...
by JW Nearly Retired
Fri Dec 19, 2014 10:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Federal Taxes - Sticker Shock (And how to reduce)
Replies: 58
Views: 5460

Re: Am I in two many investments.

I transferred $760,000 to Vanguard around December 3rd, 2014. I am using the CFP service because I am not comfortable enough to pick the investments. I am in about 12-13 funds with a 65% stock to 35% bond mix. BigDawg, I know nothing about the Vanguard CFP service and I don't see much of a descript...
by JW Nearly Retired
Thu Dec 18, 2014 1:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Am I in two many investments.
Replies: 17
Views: 1867

Re: Performed backdoor Roth and accountant did not file 8606

The accountant says the form was not filed and that it is not required. He says the contribution was characterized as a rollover on my return and that should be fine. The amount that was "backdoored" was listed on line 16a. What do I need to do to fix this? What are the consequences here?...
by JW Nearly Retired
Thu Dec 18, 2014 12:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: Performed backdoor Roth and accountant did not file 8606
Replies: 52
Views: 4296

Re: Am I in two many investments.

This fund shows down 11.27% for yesterday. Not sure why. Or am I not reading this right. Google finance actually shows it gaining. I guess I still have a lot to learn. I'm glad I'm using the CFP. VEXRX Vanguard Explorer Fund Admiral Shares 0.35% 187.424 $84.40 – $10.72 – 11.27% Mutual funds are req...
by JW Nearly Retired
Thu Dec 18, 2014 10:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Am I in two many investments.
Replies: 17
Views: 1867
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