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Re: should participate in employer matches?

This may be a crazy question but if my employer matches up to 3%, and the investment options are just horrible, should I even put many own money in it? Work out the math. Suppose that you could earn 8% per year in an IRA, and 5% per year with the same risk level in your employer plan because the ex...
by grabiner
Tue Sep 30, 2014 11:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: should participate in employer matches?
Replies: 18
Views: 1075

Re: Early option exercise, non-public, large spread

I would suggest asking a tax advisor. It looks suspicious that the company can simply declare the fair market value of its shares to increase by a factor of four, and announce that in advance, giving insiders a chance to exercise options for a huge tax savings.
by grabiner
Tue Sep 30, 2014 10:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Early option exercise, non-public, large spread
Replies: 5
Views: 345

Re: Rollover old 401k into tIRA, should I have rolled into T

Welcome to bogleheads. You can still roll the IRA into the TSP, and there's a case to be made for doing so. But there's also a case for leaving it in an IRA. The answer might depend on your desired asset allocation...which is? In particular, the TSP is the place to hold your bonds, because the G fu...
by grabiner
Tue Sep 30, 2014 10:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rollover old 401k into tIRA, should I have rolled into TSP?
Replies: 3
Views: 222

Re: Is VXF tax efficient?

I thought the patented Vanguard ETF/fund structure made embedded capital gains slowly go away to the other guy. Yeah, but I wonder how often units are created/destroyed. To do so for VTI requires 100k shares, which would be $10M or so of assets. I've been wondering about the large unrealized number...
by grabiner
Tue Sep 30, 2014 12:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Is VXF tax efficient?
Replies: 11
Views: 710

Re: When is my TER charged?

The expense ratio of a fund is paid as the expenses themselves are paid. Therefore, it is paid evenly throughout the year, because employee salaries and management fees accrue daily. If your fund has a 0.12% expense ratio, your returns will be 0.01% lower than the returns of the investments themselv...
by grabiner
Tue Sep 30, 2014 12:07 am
 
Forum: Investing - Theory, News & General
Topic: When is my TER charged?
Replies: 1
Views: 282

Re: Which bond fund for taxable account in high tax bracket?

If you hold bonds in both taxable and tax-deferred, you might use short-term bonds (Limited-Term Tax-Exempt) in taxable and long-term bonds in tax-deferred. Also max out on I-Bonds every year; they are exempt from state tax, and by the time you cash them in for federal tax, you might be in a lower t...
by grabiner
Tue Sep 30, 2014 12:02 am
 
Forum: Investing - Theory, News & General
Topic: Which bond fund for taxable account in high tax bracket?
Replies: 6
Views: 834

Re: Tax efficient rebalancing

Another way to reduce the tax cost of rebalancing is to use tolerance bands. My own Investment Policy Statement says that I will only sell for a capital gain to rebalance if I am outside of the tolerance band, and I do not expect normal inflows to fix that problem; if this happens, I will only sell ...
by grabiner
Mon Sep 29, 2014 11:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax efficient rebalancing
Replies: 3
Views: 421

Re: Increasing Bond Holdings/International Equities

Would you recommend holding all of my bonds in the Total Bond Market within my taxable account, or a combination of that plus I-Bonds (and converting my Roth IRA's funds toward an equity index like Total Stock Market)? I'll consider a larger emergency fund, but I feel that 1-2 months is adequate fo...
by grabiner
Mon Sep 29, 2014 11:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Increasing Bond Holdings/International Equities
Replies: 13
Views: 1532

Re: VWILX - VG International Growth Fund

This says that the fund may hedge foreign currency. You have to look at the current annual report to see whether it actually does hedge. Most international stock funds do not hedge, as there is a cost involved, and not all investors want to hedge. However, the fund might choose to hedge a particular...
by grabiner
Sun Sep 28, 2014 10:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: VWILX - VG International Growth Fund
Replies: 1
Views: 282

Re: Is there any point in putting stock index funds in IRA?

I am really confused about how to invest tax efficiently. I am 25 years old and like a lot of people my age I currently have plenty of room for both stocks and bonds in my Roth IRA. But I am wondering if it makes since to put my stocks in my Roth because taxable accounts will be taxed at the capita...
by grabiner
Sun Sep 28, 2014 10:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is there any point in putting stock index funds in IRA?
Replies: 9
Views: 857

Re: VXUS and Muni Bonds tax efficiency

Is total world stock from Vanguard more efficient that total us or international? It should be just as tax-efficient as the individual funds, as it holds the same stocks and should not distribute capital gains. It might actually have a slightly lower tax cost, but for the wrong reason: Total World ...
by grabiner
Sun Sep 28, 2014 10:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: VXUS and Muni Bonds tax efficiency
Replies: 9
Views: 702

Re: Increasing Bond Holdings/International Equities

The I-Bond is a good choice. FYI, the tax exempt bonds in vanguard are here at the bottom of the page... https://investor.vanguard.com/mutual-funds/vanguard-mutual-funds-list?assetclass=bond If you live in one of the states listed, then get the state-specific one. The generic intermediate tax exemp...
by grabiner
Sun Sep 28, 2014 10:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Increasing Bond Holdings/International Equities
Replies: 13
Views: 1532

Re: Much too Aggressive!!

I've got a question for everyone but the OP. What role should taxes play in how much of the $1.3m in company stock they liquidate, and over what time period they liquidate (how much to sell when)? I suppose in order to answer that, the original poster might need to tell us what the capital gains is...
by grabiner
Sun Sep 28, 2014 10:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Much too Aggressive!!
Replies: 9
Views: 1323

Re: Is VXF tax efficient?

According to Morningstar, VXF has over 30% of potential capital gains exposure. How does that affect a new purchase within a taxable account? This is not a serious concern for an ETF or mutual fund with an ETF class. An active fund with a larger potential capital gains exposure would be expected to...
by grabiner
Sat Sep 27, 2014 10:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is VXF tax efficient?
Replies: 11
Views: 710

Re: Best option for taxation optimization

My plan is to stop investing in Fidelity's REIT and start a taxable account with Vanguard's REIT at $10,000. I would continue to max out my 401K in US and international funds. I would also direct a small portion to all bond index with Fidelity (to keep allocation balance). Again, Fidelity's all bon...
by grabiner
Sat Sep 27, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best option for taxation optimization
Replies: 2
Views: 432

Re: Is VXF tax efficient?

According to Morningstar, VXF has over 30% of potential capital gains exposure. How does that affect a new purchase within a taxable account? This is not a serious concern for an ETF or mutual fund with an ETF class. An active fund with a larger potential capital gains exposure would be expected to...
by grabiner
Sat Sep 27, 2014 10:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is VXF tax efficient?
Replies: 11
Views: 710

Re: Investing $40K of taxable savings

I would like to do Emerging Markets, but the minimum for Admiral Shares are $50K and I don't have that. Admiral shares of Emerging Markets Index are available for $10K, as with other index funds. But it doesn't make sense to have a separate emerging markets fund unless you also have an allocation t...
by grabiner
Sat Sep 27, 2014 10:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investing $40K of taxable savings
Replies: 22
Views: 1604

Re: Mutual Fund Dividend and How Mutual Fund Grow

More shares is not the goal, total return (capital gains + dividends) on your investment is the goal. If the price of a fund goes up 6% and you get paid a 2% dividend then your gain (ignoring taxes) is 8%, not just the 2% dividend. But, capital gain or dividend fluctuate over time. To me, it's so s...
by grabiner
Fri Sep 26, 2014 9:42 pm
 
Forum: Investing - Theory, News & General
Topic: Mutual Fund Dividend and How Mutual Fund Grow
Replies: 3
Views: 498

Re: If I sell ETF fund it will have a closing position cost?

If your brokerage charges commissions, it will likely charge one commission for a single order in a single day. Thus, if you want to sell your 1000 shares and you place an offer to sell at $50, you pay only one commission if someone buys 400 shares and someone else buys 600 shares a few minutes late...
by grabiner
Fri Sep 26, 2014 9:27 pm
 
Forum: Investing - Theory, News & General
Topic: If I sell ETF fund it will have a closing position cost?
Replies: 5
Views: 480

Re: What 3 funds should I have in my taxable account?

I'm looking for advice as to what 3 funds I should carry in my Vanguard taxable account. Right now I have VBTLX, VGTSX, and VTSAX. However, from what I've gleaned on the forums one should not carry VBTLX in a taxable account? I'm looking at suggestions as to what I should replace it with? Also woul...
by grabiner
Fri Sep 26, 2014 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: What 3 funds should I have in my taxable account?
Replies: 8
Views: 1410

Re: Order of investing [Prioritizing Investments]

The TSP also has a Roth option, so you can choose to make Roth investments even if you put everything in the TSP. That said, as much as I like the TSP, I would recommend putting enough in the TSP to get the employer match and to cover your entire bond allocation, and then using a Roth IRA before put...
by grabiner
Fri Sep 26, 2014 9:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Order of investing [Prioritizing Investments]
Replies: 11
Views: 1082

Re: Extended market index fund in a taxable account?

be careful of nonqualified dividends on extended market--I have put this in my Roth Therefore, if you want a small-cap tilt in a taxable account, you might want to use Tax-Managed Small-Cap; unlike other small-cap indexes, it has 100% qualified dividends. You also need less Tax-Managed Small-Cap th...
by grabiner
Tue Sep 23, 2014 9:00 pm
 
Forum: Investing - Theory, News & General
Topic: Extended market index fund in a taxable account?
Replies: 11
Views: 798

Re: It's pretty freaky watching your stocks go up & down all

This is why it is often recommended that new investors move into the market gradually (dollar-cost averaging). If you just inherited $200K that you want to put into 80% stock, you might have $20K in the market the first month, so that a typical one-day move of 1% will be just $200. After eight month...
by grabiner
Tue Sep 23, 2014 8:53 pm
 
Forum: Investing - Theory, News & General
Topic: It's pretty freaky watching your stocks go up & down all day
Replies: 60
Views: 5420

Re: Need help choosing a fund of funds that will maintain 70

Just split it between LifeStrategy Growth (80/20) and LifeStrategy Moderate Growth (60/40)--voila, 70/30. Only for today. As one fund grows faster or slower than the other your ratio will drift around a bit. But not significantly. Suppose that you put $10,000 in each fund, and the bond market doesn...
by grabiner
Tue Sep 23, 2014 8:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need help choosing a fund of funds that will maintain 70/30
Replies: 22
Views: 908

Re: Dilemma: manual buy & lower cost vs auto plan & higher c

If you switch from ETF A to ETF B, would you pay a capital-gains tax? If you would, that is a good reason not to switch, as that cost is likely to be more than any expense difference.
by grabiner
Mon Sep 22, 2014 10:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Dilemma: manual buy & lower cost vs auto plan & higher cost
Replies: 6
Views: 360

Re: Mother-in-law Investment Help

Lump sum vs. DCA. I realize there are two schools of thought on this one, but I'd prefer to lump sum it if I can. Bonds. With the current bond environment, is it too risky to put a large lump sum in the total bond market? Is there a better fund than Total Bond Market? The reason to DCA rather than ...
by grabiner
Mon Sep 22, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Mother-in-law Investment Help
Replies: 9
Views: 800

Re: Master thread for Washington DC Area Bogleheads

At yesterday's meeting I mentioned that if you wait to take Social Security until age 70, but take Medicare at 65, your lifetime Medicare premiums are higher. I couldn't recall why the premiums will be higher. Here Larry Kotlikoff explains why. When inflation is low, like it is now, there is a disa...
by grabiner
Mon Sep 22, 2014 9:57 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 11
Views: 1605

Re: Break-even point for HSA account

I was wondering if one of the BH can help me figure out how to calculate the benefits of having an HSA account with a high-deductible plan when taxes are incorporated in the equation. My HSA: -My company will match my first $1500 contribution to the HSA -I will contribute $5050 for me and my wife, ...
by grabiner
Sun Sep 21, 2014 10:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: Break-even point for HSA account
Replies: 8
Views: 829

Re: should i liquidate this fund due to 12B-1?

Normally, when you sell a taxable fund, you would also need to be concerned about tax on capital gains. However, since this is a bond fund, it doesn't have significant capital gains; the amount you currently hold should be about equal to the amount you paid, including all the reinvested dividends. T...
by grabiner
Sun Sep 21, 2014 10:21 am
 
Forum: Investing - Help with Personal Investments
Topic: should i liquidate this fund due to 12B-1?
Replies: 4
Views: 416

Re: Duration Considerations of the TSP G Fund

There is no reason to expect long-term Treasuries to have a negative correlation with the stock market. In 2007-2009, they did, but if a stock-market decline occurs with rising interest rates, long-term Treasuries will lose money. If you do want to hold bonds other than the G fund, long-term TIPS (o...
by grabiner
Sat Sep 20, 2014 11:20 am
 
Forum: Investing - Theory, News & General
Topic: Duration Considerations of the TSP G Fund
Replies: 5
Views: 744

Re: Why is there no mutual fund that truly behaves like rent

The TIAA-CREF real estate fund sounds a lot like what you describe. But a garden variety REIT funds should also do the trick. Owning a REIT funds "feels" more risky than owning a house and renting it out. But that's just because a REIT funds is being "appraised" on a daily basis...
by grabiner
Sat Sep 20, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Why is there no mutual fund that truly behaves like rental?
Replies: 36
Views: 2469

Re: Hypothetical Question

We are a 69 year old retired couple with an allocation of 60% Bonds and 40% stocks in IRAs. I model our finances using Jim Otar's program and the outcomes are favorable for us. We own our home, have little debt (An auto lease - as I like cars and trade up every 3 years) and have the cash/iBonds for...
by grabiner
Fri Sep 19, 2014 6:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Hypothetical Question [Portfolio help]
Replies: 10
Views: 722

Re: Florida prepaid college plan. Dumb or undumb?

It looks like a good deal, because of the options. If you move out of Florida, the child retains the right to in-state tuition at a Florida college. And if your child decides to go to college somewhere else, you can use the same amount nationwide (although this may or may not cover the costs). The a...
by grabiner
Thu Sep 18, 2014 9:05 pm
 
Forum: Investing - Theory, News & General
Topic: Florida prepaid college plan. Dumb or undumb?
Replies: 14
Views: 1109

Re: Invest in Betterment or Bank for 4 years.

I would like to invest in vanguard but they require a min of 10,000 for the fund I wish to select, So i can put money aside over the course of 4 years, but am not sure if i should put it in betterment so it can grow a little. i have ally bank earning .9% savings account, so its tempting just to lea...
by grabiner
Thu Sep 18, 2014 8:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Invest in Betterment or Bank for 4 years.
Replies: 9
Views: 620

Re: Help: Inlaw's extra cash

Thanks for the reply supernova. They also asked if they should put the money in gold and silver. I know absolutely zero about gold and silver and don't recall seeing it recommended on this forum. Gold and silver can frequently lose value; look at charts of gold prices to see how often gold went way...
by grabiner
Thu Sep 18, 2014 8:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help: Inlaw's extra cash
Replies: 8
Views: 542

Re: Is this an exception to buying Mortgage Points?

My bank is offering 4.25% fixed 30 year mortgage loan for $225,750. They will reduce my closing costs by $1,128 if I use this option. I do not have all the numbers with the estimated closing costs with me (I can post later), but if I put 25% down at 4.25% I will save $1,128 in costs. If I put down ...
by grabiner
Thu Sep 18, 2014 8:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this an exception to buying Mortgage Points?
Replies: 18
Views: 1525

Re: Question about popularity of HSAs

Hsa's hit the tax trifecta. Tax free in, tax free growth, tax free out ( when used for qualifying expenses). I don't know of any other investment vehicle that does that. You forgot one. It also ignores FICA taxes when you make contributions. :wink: This only works if your insurance is through your ...
by grabiner
Wed Sep 17, 2014 11:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about popularity of HSAs
Replies: 23
Views: 1388

Re: Which debt to tackle first?

Lastly, I am not sure what you mean when you say "aren't given credit for paying ahead" on the mortgage. Like with a car loan (or cc payment), any overpayment is applied to future payments. In other words, you pay enough over time and your monthly payment would be reduced to 0 for a month...
by grabiner
Wed Sep 17, 2014 10:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Which debt to tackle first?
Replies: 21
Views: 1214

Re: TSP Withdrawal Strategies - Fedsmith Article

rkhusky and Ybsybs, The Fedsmith article indicated that it is allowable to specify from which fund, e.g., the G fund, a withdrawal could be made. The benefit would be to not have to sell any C fund shares during a market downturn. Your proposed withdrawal method, with subsequent rebalancing seems t...
by grabiner
Wed Sep 17, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: TSP Withdrawal Strategies - Fedsmith Article
Replies: 24
Views: 1874

Re: No taxes when selling stocks in an Inherited IRA?

If I'm understanding this correctly, basically I can use an IRA as the perfect playground to practice buying and selling stocks without tax consequences? Well you can trade stocks without tax consequence in an IRA. However if your trading should result in a gain your gains will be taxed at ordinary...
by grabiner
Wed Sep 17, 2014 9:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: No taxes when selling stocks in an Inherited IRA?
Replies: 12
Views: 1048

Re: Is this an exception to buying Mortgage Points?

My bank is offering 4.25% fixed 30 year mortgage loan for $225,750. They will reduce my closing costs by $1,128 if I use this option. They are also offering me 4.125% for fixed 30 years if I pay $846. Or they will offer 4.0% for 30 years fixed if I pay $1,800. This isn't technically buying points, ...
by grabiner
Wed Sep 17, 2014 9:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is this an exception to buying Mortgage Points?
Replies: 18
Views: 1525

Re: Ack! Bought a Dividend!

Total Stock Market has a 2% dividend yield, so its quarterly dividends are about 0.5%. They are usually completely qualified, which makes the tax cost 0.08%. If the risk-adjusted return of the stock market is 3% more than cash, then staying in cash for one week has an effective cost of 0.06%. Thus i...
by grabiner
Tue Sep 16, 2014 11:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Ack! Bought a Dividend!
Replies: 26
Views: 2462

Re: Best Vanguard Value Fund in Taxable Account?

If you hold a value fund in a taxable account, it should be an index. The T. Rowe Price fund, and likewise US Value and Capital Value, will probably cost you 1% per year in taxes. Small-Cap Value Index and Value Index cover the whole value half of the market, so you can put them in whatever proporti...
by grabiner
Tue Sep 16, 2014 11:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best Vanguard Value Fund in Taxable Account?
Replies: 2
Views: 536

Re: Low down payment and invest or big down payment?

I've always been averse to debt and always thought putting 20% down minimum for home loan was the way to go, if not more. I was working towards 35%. A friend said he put 5% down, got 3% interest/30 yr fixed and invests what would have been the 20% downpayment. He thinks he can always get more than ...
by grabiner
Tue Sep 16, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low down payment and invest or big down payment?
Replies: 7
Views: 1035

Re: Tax Stupid Investment

Thank you Artsdoctor for your response. I have to read that wiki several times to understand marginal tax rate. Thinking that that the govt owns 1 /3 of of our tax deferred funds makes sense actually and oddly makes me feel better, that we did not make sume huge mistake by being good savers for ret...
by grabiner
Tue Sep 16, 2014 11:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Stupid Investment
Replies: 16
Views: 1709

Re: Is USD the best currency to choose for index fund invest

Here's one way to look at the math. The euro is worth $2. You buy EUR 1000 of stock, which costs you $2000. The euro values of European markets don't move, but the euro falls to $1.60 by the time you sell. You sell your stock for EUR 1000, then convert it back to dollars, and have $1600. The euro i...
by grabiner
Tue Sep 16, 2014 9:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: [from Euro country, use USD to invest in US index funds?]
Replies: 19
Views: 1222

Re: Should I put money in HSA account if health care is cove

My employer does not provide a HSA account, but I was able to create one via HSA bank. The fund is not carried over to the next year. Any amount I don't use it lost and it starts over again every year. The fund is owned by the plan. My employer has no relationship to the HSA account I have created....
by grabiner
Mon Sep 15, 2014 11:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I put money in HSA account if health care is covered?
Replies: 5
Views: 764

Re: Should I put money in HSA account if health care is cove

If your emplouer covers any medical expenses which would normally be subject to the high deductible, you probably aren't eligible for an HSA. Most often, coverage like this is through a Health Reimbursement Agreement (HRA), a plan which accumulates money that is used to pay for medical expenses; unu...
by grabiner
Sun Sep 14, 2014 1:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I put money in HSA account if health care is covered?
Replies: 5
Views: 764

Re: You may want to rethink the odds of ever needing LTCi

And everything said so far could also be said of homeowners insurance. Most people never use it, and when it is needed the coverage is often incomplete and some insurers are bad about paying claims. And when a home is damaged, often a person could afford to pay for repairs without insurance. And st...
by grabiner
Sun Sep 14, 2014 1:07 am
 
Forum: Personal Finance (Not Investing)
Topic: You may want to rethink the odds of ever needing LTCi
Replies: 89
Views: 8722

Re: 401(k) 20% Mandatory Tax Withholding

Only rollover distributions have mandatory withholding. Not true, or at least not true when I rolled mine over 20 years ago. Nothing was withheld. Direct rollovers (money sent from the 401(k) to the IRA custodian) have no withholding because they are not taxable. Withdrawals eligible for indirect r...
by grabiner
Sun Sep 14, 2014 12:50 am
 
Forum: Personal Finance (Not Investing)
Topic: 401(k) 20% Mandatory Tax Withholding
Replies: 24
Views: 1927
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