Bogleheads.org

I have mortgage interest that I apply to my personal residence and several rental properties and I have been in a rush to get them paid off within 5 years (due to rate adjustment in 5 years). The fair comparison to a five-year adjustable-rate mortgage is a five-year bond, not a long-term bond, beca...

Given there is a lot of buzz about the 15 yr fixed rates, I was wondering if this is a good time to refinance. my current loan is 588K at 3.25% rate, 30 yr fixed paying $2626 per month. I checked for the 15 yr fixed rates. they are at 2.75-2.875% right now and the monthly payment is about $4000. Un...

Mortgage balance about $135,000. Serious missing issues: What is the interest rate on this mortgage? For how long? Are they getting the full benefit from the deduction? (If it's a 4% mortgage, $5400 in interest is much less than the standard deduction, so unless they pay high state taxes or donate ...

2. I know my 401k expenses are outrageous. My company has their 401k with Nationwide which charges a 1.6% asset fee on top of each fund's individual ER (which I've included in the ER's above). I've lobbied management to consider getting us a new plan, but no luck, so far. I think there's a good cha...

I keep a spreadsheet, which lists all my funds and the asset allocation categories. For example, I define the market as 80% large and 20% small, so Total Stock Market is 40% LG, 40% LV, 10% SG, and 10% SV. When I need to check my allocation (for my annual rebalance, or to decide where to put new mon...

In "Growth of 10k" terms they are not that different: VFWAX vs VTIAX Growth of 10k The history is not very long. Maybe more helpful to compare investor shares (although not greatly): VFWSX vs VGTSX Growth of 10k Total International did not include small-caps until it changed indexes in De...

If you could live off 3% withdraw from savings and use SS as your hedge against inflation would you go all in with 30 year treasury bills? Not taking more risk than is necessary thinking. If you are going to do this, use long-term TIPS, not Treasuries; long-term bonds have a huge inflation risk, an...

If you could live off 3% withdraw from savings and use SS as your hedge against inflation would you go all in with 30 year treasury bills? Not taking more risk than is necessary thinking. If you are going to do this, use long-term TIPS, not Treasuries; long-term bonds have a huge inflation risk, an...

I'd guess the spikes are small retail investors entering "market" buy orders instead of entering limit orders around the mid-point of the bid-ask spread. While that isn't the situation for this particular fund, it is a common phenomenon with low-volume ETFs. For example, look at the May 1...

It seems that maybe I should reallocate my 457(b) accounts to more bonds and other less tax efficient funds...This will allow me to put more of the non-qualified (taxable) money into Stock Index Funds...Does this make sense? Yes, it makes a lot of sense. You have only one retirement portfolio, even...

There are a lot of high-yield bond ETFs at expense about 0.4-0.5%, but you'll have to check the prospectus to see what they hold, and how that fits your high-yield needs.

I am the OP for this thread. I should have specified that the different nature of the two funds is not of any consequence to me - I actually own both - and for the purposes of this question I am focusing just on the durations - 5.3 and 2.3 years - and the yields - 1.56% and 1.01%. VBTLX is in a Rot...

I would expect that for the general public, the Roth is better because they don't think about taxes in planning. With a $5500 contribution limit, people will believe that this is the correct amount to save, and will contribute $5500 whether it is traditional or Roth (and spend the tax savings from a...

In comparing VBTLX (Total Bond) and VFSTX (Short-Term Investment Grade), I was surprised to see that the yields are 1.56% and 1.01% at this time. The average durations are 5.3 and 2.3 years. I believe I've seen here some consensus against long-term bond funds since the extra yield was not justified...

However, the IRS won't let you deduct this as a capital loss; you amortize the premium over time, reducing the interest payments for tax purposes. The IRS views the premium as an amount paid in advance for getting above-market payments. (Similarly, if you purchase a bond at a discount and hold it t...

It isn't evident that any of the previous replies have considered the risk involved in holding a mortgage. A mortgage isn't a credit card, car payment, or similar simple loan where if you don't pay it for some reason (medical hardship, job loss, long-term injury, etc.), you simply just deal with a ...

In less than a two-month period, from 7/17/1998 to 9/11/1998, ... the fund that dropped the least , PIMCO Emerging Markets, dropped -31% Morningstar's benchmark, -38%. Fidelity, -40%. TCW, -43%. GMO, -44% That isn't as far as stocks fell in 2008-2009, but the GMO fund is getting close (Total Stock ...

Apologizing in advance if my question displays too much ignorance, but I was wondering whether purchasing an existing-issue bond at a premium and holding it to maturity will result in a capital loss at the time it matures, and if so, whether this factor is generally priced into the premium of the b...

For example, Small-Cap Value Index Investor Shares have an 0.47% tax cost over the last ten years, but 0.93% over the fifteen years since inception, implying a cost of nearly 2% in 1998-2002 when all dividends were taxed at the top rate and the fund distributed a lot of capital gains. Small Cap Val...

It appears that you are in the 28% tax bracket. Therefore, paying down your 2.75% mortgage gives a risk-free return of 1.98%, and you won't get the benefit until you finish paying it off, so that is a long-term investment. If your extra payments cause the mortgage to go away in 7 years rather than 1...

Just a clarification. Grabiner wrote ".....if your Roth gets too large, you might retire in the 10% tax bracket. Does this just mean pay small amount of taxes ??? The problem with falling into the 10% tax bracket is that you paid too much tax with the premature conversion. If you convert a $10...

How about Lifecycle funds that contain TBM index? Is it a bad idea to have these types of index funds in your taxable account? Balanced funds, including lifecycle funds, are usually not the best choice for a taxable account. If you hold separate stock and bond funds in your taxable account, and you...

That concept is tax efficient investing. You'e supposed to put your tax efficient funds (Total Stock Market Index, Total International Market Index) in taxable accounts and tax inefficient funds (Total Bond Market Index) in tax deferred accounts. IF you have bonds in taxable accounts then use Munic...

Thanks, retiredjg--this is really helpful! If I'm planning on buying-and-holding (I'm in my 20s now, so this could be for many years), does it make sense to pay the most attention to the "10 Year" or "Since Inception" differences in before taxes/after taxes returns? The 10-year ...

I bought a car in 2001 from a Carmax which was a Toyota dealer, and the Carmax had a huge selection of off-lease cars; there were 73 1998 Toyota Camrys in stock. (For once, it did make sense for the dealer to ask, "What color do you want?" as there wasn't much more to choose between the ca...

If you have options, you may have a more difficult issue determining what is substantially identical; contact your tax advisor.

Fairmark's guide to Wash Sales and Options illustrates some of the rules.

This confuses the heck out of me too, considering how different they've become. I recently read this Morningstar piece: http://news.morningstar.com/articlenet/article.aspx?id=594471 Which seems to say "neither". Looking at the actual distributions of VCADX, which I own, they're a heck of ...

Now, during retirement, the 401k accounts have all the bonds and MRD, but you want to increase your bond holdings, so you have to sell bonds, paying deferred taxes, the rebalance stocks from the taxable account into bonds, likely taking a second tax hit. Any way to plan ahead and optimize this endp...

I don't care about credit scores. I paid cash for my last house. I have a bunch of credit cards. I don't plan to ever borrow money again. How much of an effect does it actually have on insurance rates? Would there be any difference in insurance rates between a credit score of 750 and 850? It varies...

Interesting point, but I would take issue with the claim that bond prices don't fluctuate much. If you hold a 10 year Treasury at a current yield to maturity of 1.91% and rates rise by even 1%, your implied total return on that note [if you hang onto it] is -14.14%, just in that first year! It gets...

Im told by a state farm rep that One's credit report can only be "dinged" one time within a six week period when shopping around for homeowners insurance? Inquiries for insurance are normally "soft" inquiries, reported only to you. Since they don't represent attempts to get cred...

I had my credit report run yesterday and was surprised that my overall credit score fallen some over the past couple of years. With no personal debt at all, I don't borrow money any more. Apparently that does indeed lower the total score. Sad! Did you get an actual reason code explaining the declin...

Wiki article link: Taxation of Social Security benefits OK. The relevant low base number for married filing jointly is $32,000. If you have income from your pension, your investments and your withdrawals from tax sheltered accounts in excess of $32,000, 50% of your SS benefits will be taxable. Also ...

So I understand that there are some items that contribute to a fund's tax inefficiency and thus its appropriateness in a taxable account. I am speaking specifically about fund turnover, capital gains distribution, and dividend yield. Are all these things factored into Morningstar's tax cost ratio? ...

Generally speaking are the Total Stock Market Index Fund and Total International Stock Market Index Fund just about as tax efficient at the tax managed funds? Is it okay to use the ETF version of each fund? Wiki article link: Tax-managed fund comparison Either the total-market funds or ETFs are fin...

Regarding the purchase fee: keep in mind that the purchase fee can BENEFIT you, if you hold your shares on average, longer than other shareholders, and/or have less turnover. It's not intended to be a net benefit; it is intended to allow existing shareholders to break even. If a fund receives $2M o...

Welcome to the forum! I have legacy accounts that contain investments in big-cap, profitable, mostly US companies with multi-national businesses. This happened when I used a money management firm with very low or no turnover; but I paid 1.25% fees to them all those years. - I believe the holdings ar...

I can think of five pretty compelling reasons, but by far and away the biggest is the simplest: bond funds have higher turnover. Period. Always will. But the turnover in bond funds is almost irrelevant for tax purposes, because bond prices don't change much. If an intermediate-term bond fund buys a...

ING, however, has a 10-year declining surrender charge starting at 5% in year 1 and going down to 2% in year 10. That means even if she leaves this job in 10 years or less, it wouldn't be worthwhile to rollover to an IRA. Actually, it would; if she leaves in a year, she can eat the 5% rather than p...

You could also buy puts to protect the gains. This way, you control when you sell unlike stop losses where wild swings can trigger sells, but then jump right back up. Remember the flash crash? But options are a whole other animal. :happy Appreciate a "Helper" link to this process to find ...

A stop-loss order does not protect you against losses unless you sell and never get back into the market . If you have 100 shares of s stock worth $100, and you sell when it drops to $90, you now have $9000 in cash. If you use that $9000 to buy another stock, you could have it fall to $8100 just as ...

livesoft / sammy - thanks for the tip on IJS instead of VBR for taxable! I will take a closer look at its tax consequences. I could not find on iShares site where they list the percentage of qualified dividends. iShares QDI information There is a link on the home page to 2012 Year-End Tax Informati...

learning_head wrote:Thanks grabiner - I am curious what you voted (or what your answer is if you did not vote).

I voted 1% as an appropriate risk premium, assuming a long-term investment horizon. (I don't have the choice myself, as my bonds are all in a retirement account.)

Has anyone tried the coffee? Is the coffee itself average, and is there a perception issue? I wouldn't be surprised if a blind test showed no preference between Dunkin' Donuts coffee and Vanguard coffee, while customers said they preferred Dunkin' Donuts when the cups were labeled.

Wiki article link: Tax-Adjusted Asset Allocation By putting an equal dollar value of stocks in the Roth IRA, you are taking more risk. If your Roth stocks lose $1000, that's $1000 less you will have to spend in retirement. If your taxable stocks lose $1000, that's $850 less you will have to spend. A...

To get an idea of the risk you would be taking, look at the 2008 performance of High-Yield Tax-Exempt, which holds 20% bonds rated BBB or lower and about half A's. In three months, the fund lost 15%. (It made up the losses in another six months, but you didn't know that in December 2008.)

Another concern: like most bond funds, this fund needs to be held in your IRA. I checked several emerging-markets bond ETFs with M*, and the tax cost is usually around 2% in the top bracket, which would be 1.6% in a 28% bracket. If you want to take emerging markets risk in your taxable account, you ...

I would recommend selling the fund, because you are paying a tax cost in addition to the expense cost, and you'll have a long time to make that up. If the fund distributes 2% qualified dividends, 2% long-term gains, and 1% short-term gains (reasonable for a medium-turnover active fund which is distr...

If you check out the link I mentioned, I think it presents how the numbers are used... For VEA, because 100% of it is foreign sources income (i.e. line 20 on the spreadsheet would be 100%), it would be along these lines... 1. Total foreign income / distribution = US distribution + Foreign tax (alre...

For those who are tilting, how do you maintain your allocation? Or do you just let the allocation float to wherever it goes? Tax-loss harvesting can only get you so far. I rebalance in my tax-deferred accounts, and by directing new taxable investments to the most underweighted asset class. Since my...