Bogleheads.org

We may or may not be in a lower tax bracket in retirement, but we use Roths in addition to our maxed 401ks as a way to diversify tax options down the road. Roths also have greater flexibility than a tIRA should we need to withdraw funds for college or otherwise before retirement. I may be wrong, but...

are you maximizing all available tax-advantaged retirement space already: IRA/Roth IRA (x 2 if married), 401k (x 2 if married), HSA? Do that, then you can cash flow part of college by diverting income from retirement savings. Those retirement accounts come with large tax advantages so I would not s...

Thanks for the advice. livesoft, I never thought about it that way, and that gives me some comfort in continuing on our current path.

How necessary is it for you to buy a house rather than rent given high COL? Given that you don't earn enough to save for a down payment and max retirement accounts, something has to give and it will obviously be a personal choice which way you go. People here may lean toward recommending that you re...

letsgobobby wrote:Is this a governmental or non governmental 457? And what are the investment choices in it? Do you get a state tax benefit for 529 contributions?

Governmental 457 with reasonable ERs and investment choices through Fidelity. No 529 state tax benefit.

We are trying to decide how to save for our child's college education. We agree that one should save in retirement accounts first, and as such we max out our 401k/403b and Roth IRAs. Our dilemma is that my wife has a 457 that we do not max out. We have not opened a 529, and each month that goes by I...

If she already has good credit and is financially prudent enough to save for 20% down, I don't think your great credit is going to be necessary for her to get a better rate. At some point around 740 credit score, it doesn't make much difference to qualify for the best rate. I would echo the caution ...

I wonder if the people who are so negative on law school are considering the alternative--OP staying with a job paying $40-50K? At least, after going to law school, he has a very good chance to get a job paying close to $200K. He'll quickly realize this is nothing impressive in Manhattan, and the h...

If you're in the 25% bracket with a mid-40k income after standard deduction and 401k contributions, you're barely in that bracket. I would not contribute more to the Roth but increase your 401k so you remain in the 15% bracket. Then convert to Roth during 2L assuming you have very little income that...

The question is always whether the alternative is preferable, and I think there's a good likelihood the alternatives would leave you in a better financial position after 10-15 years. But that means taking on more risk and/or more debt, so it depends on whether you're comfortable with that. Someone w...

Kenyan, I was also incredulous. I just checked his statement against two houses with which I have more than passing knowledge. He wasn't off by much. Based on the homes you described, you were fortunate to take advantage of some of the biggest tech-driven economic booms and inflationary periods the...

I like the Roth for its flexibility and also view our Roths the same way as a potential back-up college savings plan. But I also believe in maxing out 401ks. Tough call. What about maxing out 401ks and trying to see if you can cut expenses/earn more money during the year, then fund Roth 2013 next Ap...

I don't think there's any way you should try to convince your wife to continue driving that car, no matter how much you save. The only options are driving it yourself or getting rid of it. Sorry if I have missed it, but have you said whether you are willing to just swap cars? I think that's what I'd...

Which tax bracket are you in? Since you mentioned the new 2013 $5.5k Roth limit, are you aware you have until April 2014 to max your wife's 2013 Roth IRA? That might help you manage cash flow to max 2013 401ks and max the Roths.

tyrion wrote:

kflorian wrote:For the first time in my life I will have cash available after making the maximum possible contributions to my tax-advantaged accounts.

Are you sure? 401k/403b, backdoor Roth, I-bonds?

Also 457 if public sector. And 529s/Coverdell if you have kids.

Even though I think you should wait, I've seen worse homebuying scenarios and you seem level-headed. I just don't think there's a rush to buy, and my standard advice would be to wait until you're ready to settle into a situation for the long haul. Marriage, a new career and kids can change your need...

I would wait. Too many balls in the air with your fiancee in school and finding tenants, not enough money saved for a down payment, not enough money left over for an emergency fund. Regardless of the still-low interest rates and your sense that housing values may rise, it doesn't seem like the ideal...

Now, I'm NOT saying it's a good idea to have $400,000 wrapped up in a house, and only $30,000 in investments... But I do think that having a $1 million in investments and a $400,000 house paid for is a safer, easier to sleep position than having $1.3 million in investments and a $300,000 mortgage o...

I don't think there's one right answer here, and much of this depends on your personal situation, risk tolerance, investing horizon and overall asset allocation. I think anyone can justify his/her decision as rational based on these factors. I would say that younger people who prioritize paying off ...

The easiest way for me to disprove the double-tax misconception is to consider the alternative of a consumer loan. If you borrowed $50k from your bank, you'd be paying that back with after-tax money as well. The 401k serves as your lender but at a better interest rate. The biggest pitfalls of 401k l...

I would prioritize retirement. That doesn't mean you have to devote all savings to retirement, but I would figure out a priority list. I'd probably do it like this: first get the 401k match, second max out Roth IRA, then split the rest between 401k and home down payment savings. You could tap the Ro...

To me, it boils down to two questions: how solid is the $360K offer, and how likely is it that your home is going to appraise at $360K? If your $360K buyer has weak credit and very little down, I would probably go with the cash buyer. You (or your agent) should contact the $360K buyer's lender to fi...

First thing I would do - redirect some of your 12-month e-fund to a Roth IRA and max out 2012 contribution. I think 12 months in cash is more than you need since you're not a homeowner and don't appear to have a family. And you can always access it later if you truly need it. After that, I would pro...

That is the going rate for Rutgers in NJ. If you went to Stevens Institute of Technology (private) - double it!!! The State University of New York with room and board runs around $20K in-state and $26-$27K out of state. It really is ridiculous to have to pay $100K for a 4 year degree - engineering ...

Do you have an Apple Store near you? I would take it there and get a diagnostic for free. Here's one Apple discussion where someone had a similar problem: https://discussions.apple.com/thread/3015073?start=0&tstart=0 If you figure out what's wrong and don't want to pay Apple, you could go to iFi...

I woud also agree that you should PLAN on holding property 5-7 years but the FACT is that San Francisco properties really are NOT comparable to another "major US city" and there is a real potential for values to double over the next couple of years just like it has happened for at least t...

Regardless of whether you have money or not, my first question would always be, is this the most cost-effective way to achieve your end goal? In my book, that means consider public universities as the default option, then make a return-on-investment argument for why you need to go somewhere more exp...

Coverdells can be used for non-college education (e.g. private high school). Yes, but: Is there really enough time to reap investment gains and get much tax benefit? I decided not, and did not use their Coverdells for my kids' high school tuition. Keith Depends on when you decide to start funding a...

I will second Redfin. I used all the major real estate sites but found Redfin was the most up-to-date and accurate. And I found the e-mail alerts were every bit as good as the ones my agent's system sent me.

+1. I would max out each year if Vanguard offered this for new investors.

Also, keep in mind that Lending Club charges some pretty big fees unless you're willing to put $5,000 in this year and then $5,000 more next year. To qualify for a No-Fee IRA through SDIRA Services you must have an initial minimum balance of $5,000 or more in Lending Club Notes and maintain this min...

In all honestly, I like the idea of being completely debt-free, including the mortgage. To me, that makes no sense for a 30 year-old to be worrying about that. Getting invested and getting tax-advantaged space filled is a much better goal to me. I agree with this. I am surprised by how many 30-some...

In all honestly, I like the idea of being completely debt-free, including the mortgage. To me, that makes no sense for a 30 year-old to be worrying about that. Getting invested and getting tax-advantaged space filled is a much better goal to me. I agree with this. I am surprised by how many 30-some...

Loan basics: Get pre-approved and find a lender who not only has great rates but is extremely responsive. If you face a bidding war, you don't want a lender who will take days to verify your borrowing ability with your seller. Put at least 20% down; if you can't afford 20%, wait and save. House cha...

Let me put it this way: If you are of the appropriate age, taking cash out of a mortgage to invest, while not delaying Social Security, seems very inadvisable to me. Along the same lines, isn't this entire calculation going to be different depending on how close you are to retirement? I have 25-30 ...

We spend less than $90/month on a 12-month promotion for broadband and cable. I refuse to spend more than $100 on those two things; at the end of my promotion, I will either cut cable, switch providers, downgrade service or negotiate another discount. Cable to me is not worth much more than I'm payi...

I think my kids will have to justify the extra cost if they want to go to private school since our UCs are such good public schools. I don't think I'd be too interested in them going to a private school that rates below the UCs unless they were getting enough scholarship money to make it less expen...

On the Ivy thing, I have one of those pieces of paper, and I'd say many bright kids can do as well going to a top in-state public school. If you work in a field that requires another degree, your graduate school matters much more, so I'd just make certain the undergrad is good enough that it has a t...

For us it may be a matter of what we can pay rather than what we expect our kids to pay. We're in the gray area between middle class and wealthy, which means we make too much for financial aid, too little to give our kids a full ride without seriously reducing our retirement savings over the long te...

You mentioned that your wife is losing her job. This is a big factor that changes what I was going to advise. How certain are you that you can still afford your expenses on your income alone and still have money left over? Having been in your underwater shoes for a brief period before our housing ma...

Maybe customs/laws are different where I live, but it seems weird to me to call it your "neighbor's fence," since that suggests only one of you bears responsibility for a downed fence between your yards. I've had fence problems on both sides of my property, and each time have come up with ...

I cashed out a whole life policy last year purchased on my behalf years ago, and I invested the proceeds elsewhere. There was a small taxable gain of a few hundred dollars. The settlement says there is a 10% penalty on the gain because it was cashed out before age 59-1/2. Can anyone confirm?

I think it really just depends on your market and your timeframe. Our market has very low inventory and bidding wars at the moment. We got our house because we chose not to have the contingency of selling, while other bidders had that contingency. Sure, there was some risk, but things worked out and...

My friend and I used to ride our bikes down to this one gas station where some guy sold all of these (now) worthless cards in plastic holders. God only knows how much I wasted. I remember arguing with my Dad and telling him how valuable they would be. I wish I'd have bought shares of the 500 index ...

I wouldn't save my house down payment money in the stock market. I'd be in a high-interest savings account or short-term bond funds. A 2.5-year horizon is not long enough to withstand stock volatility unless you're completely fine with waiting well beyond 2.5 years in a market downturn. It might be ...

It might be difficult to find many cards worth $5 each. At least it wouldn't be worth my time. And from what I understand, what few buyers exist want to have cards graded for condition. I would just keep what you want for sentimental value and then try to unload the rest as a big lot on Craig's List...

It sounds like you've been doing well by Boglehead standards by maxing out retirement, living below your means and building home equity quickly. The one non-BH thing you described was taking out a loan for a new car, though that isn't necessarily bad if you're doing it because the interest rate is l...

I would focus more on maxing out retirement accounts ahead of prepaying your mortgage and car loan. I know others here would disagree. But in my view your retirement savings seem behind for your ages, so I'd really try to get moving there as fast as possible, especially with your low interest rates....

I was thinking about taking a 50k loan from 401k as a downpayment for an investment property. Everything I read so far in this thread sounds like this is a very bad move. I wouldn't take out a 401(k) loan for any reason unless you had a like amount of liquid cash elsewhere that you could use to pay...

Applied a month ago for a refi and have had only one contact. They did seem to extend the rate lock another month to the end of February, but I'm starting to wonder if they can even meet that timeline. I haven't been proactive because I'm not desperate to refi quickly, but may have to become the squ...