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Re: HSA - must contributions be through employer?

Generally you can contribute directly, but that money will be subject to FICA unlike when employer withholds your contribution. This may not be such a bad deal; you will pay Social Security tax, but you will get a benefit from increased Social Security in return. Actually, I make more than the inco...
by grabiner
Fri Nov 28, 2014 5:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA - must contributions be through employer?
Replies: 9
Views: 876

Re: HSA - must contributions be through employer?

Generally you can contribute directly, but that money will be subject to FICA unlike when employer withholds your contribution. This may not be such a bad deal; you will pay Social Security tax, but you will get a benefit from increased Social Security in return. The Medicare part is a dead loss. Y...
by grabiner
Wed Nov 26, 2014 10:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA - must contributions be through employer?
Replies: 9
Views: 876

Re: HSA - must contributions be through employer?

pshonore wrote:Generally you can contribute directly, but that money will be subject to FICA unlike when employer withholds your contribution.


This may not be such a bad deal; you will pay Social Security tax, but you will get a benefit from increased Social Security in return.
by grabiner
Wed Nov 26, 2014 7:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA - must contributions be through employer?
Replies: 9
Views: 876

Re: Vanguard TISM estimates low QDI?

It is also noteworthy that the Total US Stock Market Index fund and the S&P500 index fund are listed at 100% qualified so far this year, but the Extended Market index fund is somewhat lower. So the issue is not restricted to just international funds. The main issue is probably turnover; the ext...
by grabiner
Wed Nov 26, 2014 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard TISM estimates low QDI?
Replies: 4
Views: 765

Re: POLL: Attitude Towards Risk

I am surprised that B and C is the least popular choice given that it is actually rational. I am very risk-tolerant (I have one of the most aggressive portfolios of anyone on the forum), so the $10 gain in expected value is enough for me to prefer B to A. But I am not completely risk-indifferent, so...
by grabiner
Wed Nov 26, 2014 7:32 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Attitude Towards Risk
Replies: 63
Views: 2435

Re: Rising Interest Rates And Bond Funds?

The rule of thumb is multiply the rise in interest rate X the funds duration to determine the drop (in %) of the NAV. This won't be finger snap instantaneous but should happen rather quickly. Actually, it is instantaneous, because it is a matter of definition. The yield to maturity of a bond is the...
by grabiner
Wed Nov 26, 2014 7:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rising Interest Rates And Bond Funds?
Replies: 9
Views: 1041

Re: best performer - very similar index funds

Past performance is not an indication of future results, and that applies here as well. Tax-Managed Capital Appreciation deviates from its benchmark (the Russell 1000) in order to be more tax-efficient, and it happens to have outperformed the index over the last ten years, but there is no reason to ...
by grabiner
Wed Nov 26, 2014 7:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: best performer - very similar index funds
Replies: 22
Views: 1451

Re: What 401k does to your IRA - Roth IRA contribution limit

I am still not sure if my wife can contribute in her IRA account. Looks like we both can do the max $6500 in the Roth accounts if I don’t make any IRS contribution. I was under the impression that the 401K is actually reported by the employer and doesn’t count for your individual IRA contribution t...
by grabiner
Wed Nov 26, 2014 12:13 am
 
Forum: Personal Finance (Not Investing)
Topic: What 401k does to your IRA - Roth IRA contribution limit
Replies: 14
Views: 1323

Re: Where to invest end of year bonus

Half: pay off auto loan Half: lifestrategy moderate (60/40) since i think your risk tolerance is low given the market highs you mentioned. Don't look at the fund for 20 years. You will be happy with the result. Don't use LifeStrategy Moderate in a taxable account, because you won't be able to sell ...
by grabiner
Tue Nov 25, 2014 10:07 pm
 
Forum: Investing - Theory, News & General
Topic: Where to invest end of year bonus
Replies: 16
Views: 1382

Re: What 401k does to your IRA - Roth IRA contribution limit

Thank you JD. So I could drop $6500 each (me and spouse) in our Roth’s. Is there still room for traditional IRA? The contribution limit per person is for traditional and Roth combined; if you contribute $6500 to a Roth, you cannot contribute anything to a traditional IRA. It might work best if your...
by grabiner
Tue Nov 25, 2014 9:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: What 401k does to your IRA - Roth IRA contribution limit
Replies: 14
Views: 1323

Re: Does investing in a 401k actually save any money?

Let's assume overall tax rates stay the same for 30 years since none of us has a crystal ball. Let's further assume that someone who is in the 33% marginal tax bracket during his working career will be in the 28% tax bracket when he retires. Let's further assume he's an index fund investor and over...
by grabiner
Tue Nov 25, 2014 9:37 pm
 
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 62
Views: 5757

Re: bond fund yield variation and the case for long-term fun

How long does it take for a bond fund distribution yield to reflect an interest rate increase or decrease ? Is it a different speed for short/intermediate/long term funds ? The distribution yield changes very little, but I don't think this is what you actually care about. If you buy a 10-year bond ...
by grabiner
Tue Nov 25, 2014 9:29 pm
 
Forum: Investing - Theory, News & General
Topic: bond fund yield variation and the case for long-term fund
Replies: 18
Views: 1371

Re: How did you handle the 2008 bear market ?

This is a very good question to be asking, as you don't really know how you will react to a bear market until you encounter one. My first bear market was in 2001-2002, when I was 80% stock. I kept the 80% stock allocation, but sold some stock to take a capital loss, and used the money to pay off a c...
by grabiner
Tue Nov 25, 2014 9:18 pm
 
Forum: Investing - Theory, News & General
Topic: How did you handle the 2008 bear market ?
Replies: 69
Views: 3635

Re: Vanguard Ultra-Short-Term Bond Fund coming in early 2015

Vanguard already has a similar fund for taxable investors; Short-Term Tax-Exempt has a duration of about one year. (Limited-Term Tax-Exempt is the muni fund with similar duration to the current short-term funds.)
by grabiner
Tue Nov 25, 2014 9:05 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Ultra-Short-Term Bond Fund coming in early 2015.
Replies: 39
Views: 4199

Re: Where to invest end of year bonus

I would suggest paying off the car loan. The 1.9% interest is non-deductible, so you earn 1.9% tax-free and risk-free. And since you pay the loan off now, you get a large short-term benefit; if you invested in a municipal bond fund with a similar yield, you would get only a long-term benefit.
by grabiner
Tue Nov 25, 2014 9:01 pm
 
Forum: Investing - Theory, News & General
Topic: Where to invest end of year bonus
Replies: 16
Views: 1382

Re: student loans vs retirement accounts

What is the purpose of the non-retirement account? If you don't need this money until you retire, you can sell funds in this account to max out your retirement accounts, and use anything to spare to pay down your loans.
by grabiner
Tue Nov 25, 2014 8:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: student loans vs retirement accounts
Replies: 14
Views: 1692

Re: Vanguard: "Updated capital gains estimates "

I seem to recall that Form 2210 is a difficult one to fill out, even with Turbotax. This is correct, because the issue in filling out the form is getting the necessary data. You have to compute how much income you received in each of the four quarters. (Accounting software makes this easier; you ca...
by grabiner
Tue Nov 25, 2014 8:43 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard: "Updated capital gains estimates "
Replies: 14
Views: 1923

Re: Vanguard: "Updated capital gains estimates "

I just upped my 4th quarter estimated tax payments. I don't know how we can be expected to make equal payments in each quarter when the end of year distributions are so variable. If your four estimated tax payments aren't each 25% of the amount due for the full year, you can file Form 2210 to repor...
by grabiner
Tue Nov 25, 2014 12:52 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard: "Updated capital gains estimates "
Replies: 14
Views: 1923

Re: Carrying alternatives for phone, credit cards, money

Am I the only one who leaves the auto insurance card in the glove compartment? I don't carry my health insurance card with me, don' see the point. Keeping a copy of your health insurance card is important if you have a medical emergency and can't get to wherever you kept the original. If you don't ...
by grabiner
Tue Nov 25, 2014 12:12 am
 
Forum: Personal Consumer Issues
Topic: Carrying alternatives for phone, credit cards, money
Replies: 25
Views: 1960

Re: Vanguard: "Updated capital gains estimates "

Why the heck is Life Strategy Conservative Growth throwing off such a huge long term capital gain compared to all the other Life Strategy funds? This makes estimated tax planning difficult, as the 2014 estimated long term capital gain is 9 times higher than the 2013 long term capital gain. I guess ...
by grabiner
Tue Nov 25, 2014 12:05 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard: "Updated capital gains estimates "
Replies: 14
Views: 1923

Re: Are mutual funds bad? SWPPX

ETF's have very distinct tax, liquidity, and pricing characteristics. For instance a Mutual Fund must pass on any capital gains it realizes within the fund to the holders of the fund, while an ETF can reinvest the cap gains thus shielding the fund holder from the tax liability. This is not correct....
by grabiner
Mon Nov 24, 2014 11:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are mutual funds bad? SWPPX
Replies: 13
Views: 1032

Re: AA: Which BONDS funds to buy?

Also the referred IRS rule above that 'a fund of funds in taxable account cannot claim foreign tax credit' still valid? If so, then Is there way to find if a VG fund is a fund of funds? This was changed by the Regulated Investment Company Modernization Act of 2010 . Some of us are sitting here with...
by grabiner
Mon Nov 24, 2014 11:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: AA: Which BONDS funds to buy?
Replies: 22
Views: 3951

Re: Aetna HDHP or GEHA HDHP (federal employee)

One more thing, should I do as the Wiki suggests and: Go in TSP for match (5%)- no brainer, not asking about this max out HSA Invest more in TSP or independent Roth account? This really depends on your investment choices. The TSP G fund is better than anything you can hold in a Roth IRA, while the ...
by grabiner
Mon Nov 24, 2014 11:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Aetna HDHP or GEHA HDHP (federal employee)
Replies: 46
Views: 3136

Re: HSA vs 401K

So I contribute $6,000 to the 401K to get employer match. I contribute $6,650 to the HSA. That leaves $4,850 to invest. I now have two options: a) Pay the medical bills with the $4,850 and leave the HSA to grow. b) Pay the medical bills from the HSA and invest the $4,850 in my 401K. I would claim o...
by grabiner
Mon Nov 24, 2014 11:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA vs 401K
Replies: 22
Views: 1902

Re: TSP Roth and Muni fond fund question in my portfolio

Since you are maxing out the TSP and still have investment money left over, the Roth is likely to be a good deal, because it effectively lets you tax-defer more money. See Traditional versus Roth: Maxing out your retirement accounts on the wiki. Normally, you don't want to have too much in Roth acco...
by grabiner
Sun Nov 23, 2014 10:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP Roth and Muni fond fund question in my portfolio
Replies: 3
Views: 414

Re: order of investing?

Speaking of HSAs, does anyone know how to start one. I emailed HR at work this week and they said I wasn't eligible through them (I went from full time to part time work recently) but that I may be able to open one somewhere else. I would be grateful if anyone who can point me in the right directio...
by grabiner
Sun Nov 23, 2014 10:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: order of investing?
Replies: 19
Views: 1314

Re: order of investing?

2. Why does roth IRA rank above 401k? I thought pretax investments were always best? Whether a Roth or traditional account is better is variable; the tax benefit may be higher when you contribute (prefer traditional) or when you withdraw (prefer Roth), but it is usually close. However, the Roth IRA...
by grabiner
Sun Nov 23, 2014 10:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: order of investing?
Replies: 19
Views: 1314

Re: IRA Contribution Question and Age

ANY earnings or gains in a traditional retirement account will be taxed as regular income. Taxable accounts receive a break on dividends and capital gains. Roths have no taxes. If you plan to invest in things that would benefit from the lower dividend/capital gains rates, it would be foolish to inv...
by grabiner
Sun Nov 23, 2014 9:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRA Contribution Question and Age
Replies: 18
Views: 1695

Re: Tax efficiency for Norwegian investor

Vanguard doesn't pay any taxes on its US funds; Vanguard reports the taxable distributions to the IRS (the US tax bureau), and US-based taxpayers must then report the distributions on their US tax returns and pay the tax on them. Does Norway have a foreign tax credit, so that you can deduct tax paid...
by grabiner
Sun Nov 23, 2014 7:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax efficiency for Norwegian investor
Replies: 2
Views: 244

Re: IRA Contribution Question and Age

Is there an age or time till retirement past which it is generally considered preferrable to invest in a taxable account instead of making contributions to a traditional IRA or 401K? Same question for a Roth IRA? A Roth IRA can't possibly be worse than a taxable account, as long as you meet the rul...
by grabiner
Sun Nov 23, 2014 7:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRA Contribution Question and Age
Replies: 18
Views: 1695

Re: Help Creating the most tax efficient allocation with $10

i have $102,000 in stocks in a taxable account that i will be liquidating and would like suggestions on what funds i should buy to make it the most tax efficient since it will be in a taxable account this money wont be used for atleast 7 to 10 years What are you going to use it for? If you are 7 ye...
by grabiner
Sun Nov 23, 2014 7:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Creating the most tax efficient allocation with $100k
Replies: 4
Views: 505

Re: TSP G-Fund: Is this the only fixed-income component I ne

Questioning what you have in bonds when you are 90% stocks isn't meaningful. I would think the G fund would be just fine. Those current allocations to TIPS and munis could easily go away and I wouldn't get side-tracked by all the noise about corporates. Having said all that, if there is any academi...
by grabiner
Sun Nov 23, 2014 7:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP G-Fund: Is this the only fixed-income component I need?
Replies: 6
Views: 650

Re: portfolio suggestions for the truly aged.

I would not sell anything with significant capital gains at this stage in the game. Let those step up in basis on death, don't throw away 1/4-1/3 of the value for nothing. If she is in the 15% federal tax bracket, she can sell stocks for a long-term gain and pay no capital-gains tax on the gain as ...
by grabiner
Sun Nov 23, 2014 7:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: portfolio suggestions for the truly aged.
Replies: 20
Views: 1981

Re: HSA vs 401K

I too am contemplating the switch from standard to hdhp/hsa but worry about essentially taking money from my retirement and putting it into an hsa. Our normal yearly medical costs are around 3k after prescriptions, visits, and other random costs. We could not afford to fund the hsa while bearing th...
by grabiner
Sun Nov 23, 2014 10:59 am
 
Forum: Personal Finance (Not Investing)
Topic: HSA vs 401K
Replies: 22
Views: 1902

Re: ACA subsidy and income calculation

The draft IRS forms for ACA reconciliation are now available for review. Form 8962 http://www.irs.gov/pub/irs-dft/f8962--dft.pdf MAGI is Line #2a plus 2b for dependents. Instructions for Form 8962 http://www.irs.gov/pub/irs-dft/i8962--dft.pdf Page 4 has the "worksheet" to formulate answer...
by grabiner
Sun Nov 23, 2014 1:37 am
 
Forum: Personal Finance (Not Investing)
Topic: ACA subsidy and income calculation
Replies: 5
Views: 613

Re: What percent "Boglehead" are you?

1 Develop a workable plan - 10 (if anything, I save too much) 2 Invest early and often - 10 3 Never bear too much or too little risk - 9 (high-risk portfolio, but it's right for me) 4 Diversify - 10 5 Never try to time the market - 10 6 Use index funds when possible - 10 (all index now, have used ac...
by grabiner
Sun Nov 23, 2014 12:58 am
 
Forum: Investing - Theory, News & General
Topic: What percent "Boglehead" are you?
Replies: 119
Views: 6278

Re: HSA vs 401K

Some things to remember about HSA: 2. Depending on your income, tax bracket, and number of years worked, $1 put into HSA might cause you to lose a lot more than $1 in social security old age benefits. While a very degenerate case, this applies to either new immigrants, or people who spend very litt...
by grabiner
Sat Nov 22, 2014 5:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA vs 401K
Replies: 22
Views: 1902

Re: Mortgage reamortization after lump sum payment?

Once you have paid down the mortgage, refinancing to a shorter term might be a good idea; you could continue making about the same payments, or lower payments, but at a lower interest rate. A 15-year mortgage should carry a rate much less than 5.5%, even thought it is no longer your primary residence.
by grabiner
Sat Nov 22, 2014 4:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgage reamortization after lump sum payment?
Replies: 10
Views: 918

Re: Low cost HSA and 529 for 21 year old

I believe my state does allow me to deduct $5k from my state and possibly city taxes, but I think the benefit ends up being quite small because federal taxes will increase. To compute the effective state tax benefit of this or any other deduction, multiply your state tax rate by (1-federal tax brac...
by grabiner
Sat Nov 22, 2014 4:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low cost HSA and 529 for 21 year old
Replies: 5
Views: 524

Re: Tax Loss Harvesting -- go for it?

I found this in Publication 590: Recognizing Losses on Traditional IRA Investments If you have a loss on your traditional IRA investment, you can recognize (include) the loss on your income tax return, but only when all the amounts in all your traditional IRA accounts have been distributed to you a...
by grabiner
Sat Nov 22, 2014 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting -- go for it?
Replies: 20
Views: 2575

Re: Wash sale

While it won't be a wash sale, selling Total International to buy International Growth may cost you in taxes in the long run; I would expect International Growth to lose about half a percent per year to capital-gains distributions. (It hasn't distributed any gains recently because it had losses from...
by grabiner
Sat Nov 22, 2014 4:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Wash sale
Replies: 5
Views: 640

Re: Investment interest expense and muni bonds

NB. Mortgage interest IS deductible, regardless of whether or not you own muni bonds. This is incorrect. To quote from Turbotax as a convenient source: "If you used the proceeds of a home mortgage to purchase or "carry" securities that produce tax-exempt income (municipal bonds) , or...
by grabiner
Fri Nov 21, 2014 11:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Investment interest expense and muni bonds
Replies: 8
Views: 1017

Re: 15 vs 30 mortgage on a condo I plan on renting after 5 y

the reason I am not positive I want a 15 is because I plan on renting the condo in 5 to 7 years, similar condos rent for currently rent for about $1250, meaning I would have to put extra money towards the monthly costs instead of breaking even with the 30 year. Unless you have liquidity issues, you...
by grabiner
Fri Nov 21, 2014 10:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 mortgage on a condo I plan on renting after 5 years
Replies: 15
Views: 1128

Re: Aetna HDHP or GEHA HDHP (federal employee)

Whenever I have examined the guide's arithmetic on premiums, deductibles, employer deposits, and taxes, I have always found the guide to be accurate. For some reason, though, the dental estimates have been wrong for two years. Another complaint I've had in the past had to do with the guide characte...
by grabiner
Fri Nov 21, 2014 10:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Aetna HDHP or GEHA HDHP (federal employee)
Replies: 46
Views: 3136

Re: Paid off our Mortgage this evening!

This is a more common issue with auto insurance; the lender will require collision and comprehensive, often with a low deductible such as $500, to protect its own interest. When the car loan is paid off, you can drop collision and comprehensive, or keep them with a $1000 or $2000 deductible to redu...
by grabiner
Fri Nov 21, 2014 5:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paid off our Mortgage this evening!
Replies: 75
Views: 7574

Re: Quit Cobra to go on Obamacare?

Insurance companies can and do deny claims that you thought were covered by reading the plan disclosure. For example: -- I select a doctor based on that insurance company's list of providers. I even tell the doctor's office my insurance information when I make the appt. I go to the doctor, and even...
by grabiner
Thu Nov 20, 2014 10:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Quit Cobra to go on Obamacare?
Replies: 23
Views: 2876

Re: Paid off our Mortgage this evening!

I am not sure if there are other advantages to paying off mortgage. For example if you are living next to a stream that barely has any water but you lender will force you to get a flood insurance. I don't have experience but I am guessing there are advantages to not having mortgage. My lender requi...
by grabiner
Thu Nov 20, 2014 10:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paid off our Mortgage this evening!
Replies: 75
Views: 7574

Re: HSA with post-deductible health FSA question

Welcome to Bogleheads. That's a tough first question :-) I am not an expert on this but I'll refer you to the wiki: Flexible spending arrangement - Bogleheads . When you say "limited" FSA, I assume you mean a "limited purpose FSA"? As I understand it, if you have a HSA, then you...
by grabiner
Thu Nov 20, 2014 10:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA with post-deductible health FSA question
Replies: 3
Views: 391

Re: TGH question - Gift to family

you will lose your money (you gave it away); and the recipient is stuck with your gains and the taxes (at their tax rate, not yours), too. I don't see how giving your spouse saves you any taxes. Do you? Thanks livesoft. I was thinking whether gifting appreciated stock to my littlle (like he is 1 ye...
by grabiner
Thu Nov 20, 2014 10:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Gain Harvesting - Charity / Gift to family
Replies: 16
Views: 1433

Re: Do I payoff my house or rentals?

That's what I was thinking. Paying my house first. Do you know any website in which I can learn more about the implications and consequences with the taxes once I pay off the house? I know right now that I can deduct the loan interest, however there is a phase out because of our income. So even tho...
by grabiner
Thu Nov 20, 2014 10:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I payoff my house or rentals?
Replies: 5
Views: 613
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