Search found 12119 matches

Return to advanced search

Re: Tax cost of "one fund in taxable"

The cost of holding a balanced fund in taxable is not in holding the fund, but in changing the fund. If you have separate stock and bond funds in taxable, and you want to sell bonds (to spend the money, or to hold more stocks, or to hold a different type of bonds, or to hold bonds in a different acc...
by grabiner
Sun Apr 20, 2014 7:12 pm
 
Forum: Investing - Theory, News & General
Topic: Tax cost of "one fund in taxable"
Replies: 5
Views: 373

Re: Silver, Gold or Cobra

Are these plans with the same insurer? This is probably the most important issue; if there are different doctors in the network, you want a plan which covers the doctors you see. If you have a large emergency fund, the higher deductible of the Silver plan is the best choice; the premium difference i...
by grabiner
Sun Apr 20, 2014 6:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Silver, Gold or Cobra
Replies: 2
Views: 177

Re: From Rags to Riches to Rags (NYTimes.com)

The author of the NYT piece conflates two very different things: realized income and wealth. "It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the...
by grabiner
Sun Apr 20, 2014 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: From Rags to Riches to Rags (NYTimes.com)
Replies: 4
Views: 659

Re: Taxable Acct Investing for 10-15yr Time Horizon

This is possible provided that it is consistent with your risk tolerance. You wouldn't want your home down payment to be 80% in stock, but it would be reasonable for your retirement funds to be 100% stock and your home down payment funds to be 40% in stock, which might result in an overall 80% allo...
by grabiner
Sun Apr 20, 2014 6:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Acct Investing for 10-15yr Time Horizon
Replies: 16
Views: 1012

Re: paydown strategy for mortgage

If it were long-term, I would have advised against paying it down, and suggested building a mortgage pay-down fund in municipal bonds which could be used to pay off the mortgage later if appropriate. (You are just as debt-free if you have no mortgage as if you have a $200K mortgage and $200K in bon...
by grabiner
Sun Apr 20, 2014 12:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: paydown strategy for mortgage
Replies: 36
Views: 1876

Re: What Muni Bond in Taxable Brokerage Account

With this large a portfolio, you might also look at Vanguard NJ Long-Term Tax-Exempt (VNJUX for Admiral shares). It has a transaction fee at Fidelity, but the fee is a one-time cost for each purchase, and the 0.35% lower expenses and complete exemption from AMT may make up that difference. (Alternat...
by grabiner
Sun Apr 20, 2014 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: What Muni Bond in Taxable Brokerage Account
Replies: 7
Views: 549

Re: paydown strategy for mortgage

Why anyone would want to pay off a low rate, long term Mortgage escapes me. Are all your other housing expenses going to evaporate, too ? The mortgage is no longer long-term, given the discussion here. If it were long-term, I would have advised against paying it down, and suggested building a mortg...
by grabiner
Sun Apr 20, 2014 9:48 am
 
Forum: Personal Finance (Not Investing)
Topic: paydown strategy for mortgage
Replies: 36
Views: 1876

Re: M* caution on emerging markets dividend ETFs

(EEMS also includes 6% in India and 5% in Hong Kong, which are not in EEMS unless Hong Kong is considered part of China). Isn't that like saying, "The S&P500 is 94% American companies, unless Virginia is considered part of America"? :happy Data corrected: (EEMS also includes 6% in Ind...
by grabiner
Sun Apr 20, 2014 9:44 am
 
Forum: Investing - Theory, News & General
Topic: M* caution on emerging markets dividend ETFs
Replies: 12
Views: 748

Re: M* caution on emerging markets dividend ETFs

livesoft wrote:And you own which of these (full disclosure)?


I don't own any of them, but I know that they are popular among international slice-and-dicers. My Roth IRA is full of US value and REITs, and I won't hold a dividend-weighted ETF in my taxable account.
by grabiner
Sun Apr 20, 2014 9:40 am
 
Forum: Investing - Theory, News & General
Topic: M* caution on emerging markets dividend ETFs
Replies: 12
Views: 748

M* caution on emerging markets dividend ETFs

Be Cautious with Emerging Markets Dividend ETFs What I see as the most important caution: Using the MSCI Emerging Markets Index as a guide, the emerging markets are a group of around 20 countries scattered around the globe. These economies are more different than they are similar, as each has its o...
by grabiner
Sun Apr 20, 2014 12:38 am
 
Forum: Investing - Theory, News & General
Topic: M* caution on emerging markets dividend ETFs
Replies: 12
Views: 748

Re: SPY vs VOO [SPDR S&P 500 Index vs. Vanguard 500 Index]

One that surprises me:

26. The average holding period for the 2050 Target Retirement Date ETF (TZY) is about 3 weeks

Target-date funds are supposed to be bought and held until 2050; who is trading it so actively? (Are institutions arbitraging TZY against the underlying assets?)
by grabiner
Sun Apr 20, 2014 12:16 am
 
Forum: Investing - Theory, News & General
Topic: SPY vs VOO [SPDR S&P 500 Index vs. Vanguard 500 Index]
Replies: 4
Views: 533

Re: paydown strategy for mortgage

Thanks everyone. The advice seems to be overwhelmingly supportive of paying down the mortgage in two years. A couple of additional data points that may still not change your advice. First, our interest rate is quite low at 2.75% on our fixed mortgage. At that rate, it wouldn't be worth paying down,...
by grabiner
Sun Apr 20, 2014 12:01 am
 
Forum: Personal Finance (Not Investing)
Topic: paydown strategy for mortgage
Replies: 36
Views: 1876

Re: Switching Banks

Credit card companies encourage you to use rewards cards for one reason, to get you to carry a balance and pay interest every month. For every boglehead that pays their balance in full (we carry three rewards cards and haven't paid credit card interest since 2004), there's probably 1000 customers t...
by grabiner
Sat Apr 19, 2014 11:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Switching Banks
Replies: 23
Views: 1808

Re: Taxable Acct Investing for 10-15yr Time Horizon

Thank you so much for the advice. Just to be clear, would you recommend something similar to the following: His Roth $75K in VTIAX (22.9% of Total Portfolio, Vanguard Total International Stock Market Index Fund, ER 0.14) $15K in VBTLX (4.6% of Total Portfolio, Vanguard Total Bond Market Index Fund,...
by grabiner
Sat Apr 19, 2014 11:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Acct Investing for 10-15yr Time Horizon
Replies: 16
Views: 1012

Re: paydown strategy for mortgage

Paying off a mortgage while maxing out your tax-deferred accounts is often a good idea, and since you can pay it off quickly, it's probably the right strategy. Essentially, paying off the mortgage is itself an investment; if you put $10,000 towards your 4% mortgage today, you will owe $10,816 less i...
by grabiner
Sat Apr 19, 2014 5:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: paydown strategy for mortgage
Replies: 36
Views: 1876

Re: Question on borrowing from IRA

Thanks all. Yes I am under 59. I essentially need to liquidate 4k to show enough future cash reserves -about 6 months- on a mortgage (they don't consider funds kept in retirement). I'm finishing my residency and will be starting as an attending physician this summer. I don't actually need money to ...
by grabiner
Sat Apr 19, 2014 5:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question on borrowing from IRA
Replies: 12
Views: 608

Re: Retirement defeasance

Why not buy some TIPS and view each future payment as its own zero? You happen to own all of them, but if you want TIPS STRIPS you have them, in effect. The coupons will help defease expenses in the earlier years, and the principal is for the later years. It shouldn't be so hard to plan all that ou...
by grabiner
Sat Apr 19, 2014 5:08 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement defeasance
Replies: 29
Views: 2525

Re: Taxable Acct Investing for 10-15yr Time Horizon

Thanks Quickfoot, other than low expense ratios, are there any other drawbacks to be aware of with municipal bond funds? I used to have one a couple of years ago, but I don't have much experience with them. Would USAA Tax Exempt Fund (USATX) (ER 0.52) be a good option? The keys to any bond fund are...
by grabiner
Sat Apr 19, 2014 4:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Acct Investing for 10-15yr Time Horizon
Replies: 16
Views: 1012

Re: Taxable Acct Investing for 10-15yr Time Horizon

If your taxable account will be double what you need for your down payment (assuming normal market growth), you can keep your down-payment fund in your retirement account, and your taxable account all stock. Then, when you need to make the down payment, you can sell enough taxable stock to make the ...
by grabiner
Sat Apr 19, 2014 4:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable Acct Investing for 10-15yr Time Horizon
Replies: 16
Views: 1012

Re: Thoughts: Buy Muni's for an IRA?

the only muni bonds that might make sense to hold in an ira at this time would be ones with substantial prospects for capital gains. Yes , I am talking about Puerto Rico and/or Detroit but these investments are high risk high reward and it is unlikely you know more about their proospects than the p...
by grabiner
Fri Apr 18, 2014 10:36 pm
 
Forum: Investing - Theory, News & General
Topic: Thoughts: Buy Muni's for an IRA?
Replies: 4
Views: 463

Re: Extra Mortgage Payments and Emergencies

Welcome to the forum! If you make an extra payment towards principal on a mortgage, this does not eliminate the requirement to make regular payments in the future. (Depending on how your mortgage is set up, it may reduce the payments due; for example, on an ARM, the payment will reset annually based...
by grabiner
Fri Apr 18, 2014 9:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Extra Mortgage Payments and Emergencies
Replies: 1
Views: 383

Re: Let's play mortgage roulette!

Our broker is providing three options for us. I confess that the term "jumbo" loan scares me. I fear it is irresponsible or that we're somehow being taken. Please note we're in a HCOL, so our mortgage of $460,000 conforms (in our area, it must be under $470,000 to conform). Here are our t...
by grabiner
Fri Apr 18, 2014 9:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Let's play mortgage roulette!
Replies: 2
Views: 804

Re: Is it ever okay to use IRA to pay off student loan?

The decision you are making is another version of a very common decision: should you pay off a student loan or contribute to a Roth IRA? The disadvantage of paying off the student loan, in either situation, is that you will lose some tax-deferred savings. You can make that up in future years as long...
by grabiner
Fri Apr 18, 2014 8:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is it ever okay to use IRA to pay off student loan?
Replies: 5
Views: 516

Re: Thoughts: Buy Muni's for an IRA?

This won't work. All withdrawals from an IRA are taxed at your regular tax rate, no matter what the IRA was invested in. (Similarly, in most states, IRA withdrawals are taxed even if the IRA was invested in Treasury bonds which are exempt from state tax.) Therefore, if you want to hold muni bonds, h...
by grabiner
Fri Apr 18, 2014 8:20 pm
 
Forum: Investing - Theory, News & General
Topic: Thoughts: Buy Muni's for an IRA?
Replies: 4
Views: 463

Re: Tried to get credit report - security questions don't ma

Edit: Equifax was the problem for me recently when I tried to open a Pentagon Federal CU account. Turns out Equifax did not have my most recent address. I was told that they are to be informed by the credit card companies about a new address. Anyway, I was glad to get that fixed. My Equifax report ...
by grabiner
Fri Apr 18, 2014 7:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tried to get credit report - security questions don't match
Replies: 53
Views: 5947

Vanguard IRA Insights

Vanguard IRA Insights: are investors breaking from the traditional? There are three graphs in the article. 2/3 of all Vanguard IRA contributions are made to Roths, and this has been consistent for several years. (Allowing backdoor Roths doesn't have much effect here; before the backdoor was possibl...
by grabiner
Thu Apr 17, 2014 10:02 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard IRA Insights
Replies: 7
Views: 837

Re: High Yield Bonds as an Annuity?

David, is it the result of bonds in the portfolio literally defaulting, or is it a result of their market price dropping because investors see an impending default, and the fund manager selling at a loss rather than waiting for the default? Either one can happen. If a bond has a 50% chance of defau...
by grabiner
Thu Apr 17, 2014 9:51 pm
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1665

Re: Switching Banks

Thanks for the replies. Interesting about the recommendation to have more than one credit card. My credit rating is very good so I'm not trying to build it up and I prefer the simplicity of a single credit card, but I thought I had read somewhere that opening up additional credit cards was a negati...
by grabiner
Thu Apr 17, 2014 9:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: Switching Banks
Replies: 23
Views: 1808

Re: Taxes owed in taxable account

Has VTSAX ever distributed capital gains? They certainly haven't recently. It hasn't distributed a capital gain since the ETF class was created, and the ETF class should allow it to avoid future gains. I have held Total Stock Market since 1997, and my records show that the last capital gain distrib...
by grabiner
Thu Apr 17, 2014 9:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Taxes owed in taxable account
Replies: 18
Views: 990

Re: High Yield Bonds as an Annuity?

...I have seen discussions about the inherent NAV erosion in VWEHX, which apparently is something deliberate on the part of the Wellington managers. I can't remember the exact cause, though I believe it has something to do with managing bond purchases and sales only with income in mind, at a detrim...
by grabiner
Thu Apr 17, 2014 9:21 pm
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds as an Annuity?
Replies: 23
Views: 1665

Re: How is bond average maturity measured/reported

I believe that Vanguard and Morningstar calculate maturity differently for callable bonds; Morningstar uses final maturity, while Vanguard uses maturity adjusted for call provisions. Consider a bond issued in 2009 which matures in 2039 and which is callable in 2019. Since interest rates have fallen ...
by grabiner
Thu Apr 17, 2014 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: How is bond average maturity measured/reported
Replies: 4
Views: 232

Re: How Are Catch Up Contributions Made?

I'm in the exact same boat. I max out my TSP and also max out a Roth with Vangaurd. I had previously heard that if you max max out the catch up contributions you lose the 5% agency max, is this true? If you max out contributions before the end of the year , you lose the match for the pay periods in...
by grabiner
Thu Apr 17, 2014 9:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: How Are Catch Up Contributions Made?
Replies: 15
Views: 1362

Re: Tried to get credit report - security questions don't ma

The same thing happened to me with Equifax. In April 2013, Equifax asked me, "You may have an auto loan, opened in or about March 2013. Which of these banks holds the loan?" I don't have one, but someone could have opened an auto loan in my name, which is why I want to check my Equifax cr...
by grabiner
Wed Apr 16, 2014 11:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tried to get credit report - security questions don't match
Replies: 53
Views: 5947

Re: IRA Required Withdrawal and Tax Inefficiency

In the course of educating myself on personal finance I see that bond funds are recommended for regular IRAs because of bond tax inefficiencies. The income that bonds pay out then becomes deferred. However, my wife and I are at the age when we must take the required annual distribution from our IRA...
by grabiner
Wed Apr 16, 2014 10:40 pm
 
Forum: Investing - Theory, News & General
Topic: IRA Required Withdrawal and Tax Inefficiency
Replies: 9
Views: 905

Re: Asset Allocation in taxable account

Welcome to the forum! I'm active duty military and looking to invest in a taxable account with the purpose of building equity to be used to purchase a retirement home in 10-15 years. Will likely work approx. 10 years after military retirement but I do not want a mortgage once fully retired. Situatio...
by grabiner
Wed Apr 16, 2014 10:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation in taxable account
Replies: 4
Views: 714

Re: I don't understand whether there are costs to rebalancin

My own strategy is to have a tolerance band for rebalancing, and only rebalance to the edge of the band. For example, if you have a 5% tolerance, you are willing to let your US stock be anywhere between 35% and 45% of your portfolio. With this tolerance, and with dividends not reinvested, you have r...
by grabiner
Wed Apr 16, 2014 10:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: I don't understand whether there are costs to rebalancing
Replies: 16
Views: 1141

Re: B-shares

You should sell the B shares and not wait for them to convert to A shares. The reason is that you have already lost the redemption fee; it just hasn't been deducted from your account. For example, suppose you have a B share with a 5% redemption fee and a 1% 12b(1) fee which converts to an A share in...
by grabiner
Wed Apr 16, 2014 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: B-shares
Replies: 6
Views: 422

Re: Taxable account

Since you are using your taxable account for retirement, you should treat the taxable and tax-deferred accounts as a single portfolio. If you want to hold small-cap value, you could hold Small-Cap Value Index (which is available as a fund, or as the ETF VBR), but it would probably be better to hold ...
by grabiner
Wed Apr 16, 2014 9:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxable account
Replies: 2
Views: 389

Re: HSA cost benefit analysis

All I needed to see was the premium savings(2160-771.60 = 1388.40) plus the employer contribution($1,000), that's $2388.40 which is almost your deductible of $2,500? Am I missing something? You are missing something which makes it even more attractive; contributing to the HSA is tax-deductible, and...
by grabiner
Wed Apr 16, 2014 9:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA cost benefit analysis
Replies: 23
Views: 1653

Re: Last Minute Help with Foreign Tax Paid and 1099R

Not knowing how much foreign tax was withheld from your distributions, I am going to punt and suggest completing form 1116. It looks scary but for passive investments in funds (RIC) it is really quite simple. The foreign tax $ listed in the Foreign Tax Paid form is small: $163.55 for one fund and $...
by grabiner
Tue Apr 15, 2014 1:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Last Minute Help with Foreign Tax Paid and 1099R
Replies: 12
Views: 325

Re: HSA cost benefit analysis

Have you, yet, personally encountered a situation where you actually had to pay the full deductible? Based on other postings in the forum, I get the impression that people judge, quite correctly, that an economic analysis favors the high deductible plan--they can afford the risk and it is beneficia...
by grabiner
Tue Apr 15, 2014 12:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA cost benefit analysis
Replies: 23
Views: 1653

Re: Last Minute Help with Foreign Tax Paid and 1099R

Not knowing how much foreign tax was withheld from your distributions, I am going to punt and suggest completing form 1116. It looks scary but for passive investments in funds (RIC) it is really quite simple. The foreign tax $ listed in the Foreign Tax Paid form is small: $163.55 for one fund and $...
by grabiner
Tue Apr 15, 2014 12:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Last Minute Help with Foreign Tax Paid and 1099R
Replies: 12
Views: 325

Re: Tax Treatment of HSA in California

I understand that they are handed similar to a brokerage account, however, there's a few specific points that I am not completely clear on as it relates to California. Are the maintenance fees somehow tax deductible in California? Are capital losses on the HSA account deductible in California? Are ...
by grabiner
Tue Apr 15, 2014 12:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Treatment of HSA in California
Replies: 9
Views: 491

Re: Asset location question

Vanguard International Value is an actively managed fund, and is thus much more likely to distribute capital gains than any of your tax-managed and index funds. It should go in an IRA. Of the index funds you hold, Value Index is probably the least tax-efficient, because value funds have higher divid...
by grabiner
Tue Apr 15, 2014 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset location question
Replies: 4
Views: 192

Re: Roth IRA vs Traditional

You can use a deductible IRA regardless of whether you have the Roth, as long as you meet the eligibility requirements. Contributing to a Roth now (whether frontdoor or backdoor) is the best way for you to get tax deferral if you are ineligible for a deductible IRA. The problem occurs in the other d...
by grabiner
Mon Apr 14, 2014 10:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA vs Traditional
Replies: 3
Views: 343

Re: Asset allocation vs. pooling for admiral shares

My own philosophy is that I am willing to deviate from my target allocation within my rebalancing limits without rebalancing, so I should also be willing to make the same deviation to save a few dollars in expenses. Thus, my Investment Policy Statement says that I will deviate within the rebalancing...
by grabiner
Mon Apr 14, 2014 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocation vs. pooling for admiral shares
Replies: 9
Views: 789

Re: Use brokerage window for REITS and TIPS?

Despite the reported expense, TIAA Real Estate is an excellent investment. It holds the real estate directly, rather than holding an index of REITs. Therefore, the expense ratio includes the management costs, while the expense ratio of a REIT fund does not include the costs that the REITs themselves...
by grabiner
Mon Apr 14, 2014 10:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Use brokerage window for REITS and TIPS?
Replies: 7
Views: 472

Re: Taxes and SEP IRA fund choice

Taxes don't matter in a tax-deferred account; if you invest in the wrong fund, you can switch without penalty. If your entire portfolio is tax-deferred (excluding cash in bank accounts and emergency funds), you can put any fund in any account for the same tax cost, so your investments should be dete...
by grabiner
Mon Apr 14, 2014 10:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxes and SEP IRA fund choice
Replies: 6
Views: 403

Re: TaxAct HSA Question

I have the same situation. My premium pass-through (paid by the health plan, not the employer) is not reported with code W, but I have to tell TaxAct that it is code W so that it goes in the right place on the Form 8889, as a contribution which I cannot deduct but which reduces my deductible limit. ...
by grabiner
Fri Apr 11, 2014 10:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: TaxAct HSA Question
Replies: 8
Views: 466

Re: Corporate Bond in Tax-deferred vs Muni Bonds in Taxable

So for tax-deferred accounts you'd hold treasuries and/or corporate. But what got me thinking is when you do have to pay taxes on withdraws, what will be the after tax return be? Will it be better to just hold munis in taxable? The after-tax rate of return is the same as the pre-tax return. If you ...
by grabiner
Fri Apr 11, 2014 10:38 pm
 
Forum: Investing - Theory, News & General
Topic: Corporate Bond in Tax-deferred vs Muni Bonds in Taxable
Replies: 8
Views: 762
Next

Return to advanced search