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Re: TSP Participant Account Balances

Interestingly, CSRS employees had the highest average Roth TSP account balances. The average FERS Roth TSP account balance was $5,719. The average CSRS Roth TSP account balance was $9,231. The average Uniformed Services Roth TSP Account balance was $3,211. This is particularly odd because it is the...
by grabiner
Fri Apr 17, 2015 9:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: TSP Participant Account Balances
Replies: 7
Views: 942

Re: selective bias

If this has previously been discussed please link and lock thread. :sharebeer Do investment firms practice selective bias techniques? For example, is it common practice for a firm to provide 100k to 10 advisors and then promote the advisors with the best results? Surely a few advisors would beat th...
by grabiner
Fri Apr 17, 2015 9:32 pm
 
Forum: Investing - Theory, News & General
Topic: selective bias
Replies: 6
Views: 617

Re: Do growth of 10k charts include fees? Found conflicting

My understanding about viewing growth charts, in general, is they reflect growth after (net of) the ER expense. Loads, advisor fees, 12b-1 fees are not reflected in the chart. I could be wrong, but this has been my take. 12b(1) fees are included in the expense ratio, so they are in the chart. To se...
by grabiner
Fri Apr 17, 2015 9:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do growth of 10k charts include fees? Found conflicting info
Replies: 12
Views: 621

Re: long term capital gain tax vs. roth conversions

Welcome to the forum! What is the stock invested in now? If it is individual stocks and a well-diversified portfolio, you might leave it as is, taking distributions only to meet needs, and adjusting your allocation accordingly. For example, if you have 20 blue-chip stocks in your taxable stock accou...
by grabiner
Fri Apr 17, 2015 9:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: long term capital gain tax vs. roth conversions
Replies: 3
Views: 136

Re: Taxes on a Muni Bond Fund

2. Any TE dividends received, on shares (original or reinvested) owned less than six months, lose their tax-preferred treatment. Believe that means they are reported as ordinary interest on Sch B, but I could be wrong. It's not quite this bad. If you sell a share at a capital loss after holding it ...
by grabiner
Fri Apr 17, 2015 8:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxes on a Muni Bond Fund
Replies: 7
Views: 955

Re: First Time Home Buyer (Pre-approval)

Also, is there utility in getting pre-approved from multiple vendors, or is it best to wait until you are shopping around for mortgages? We are using a doctor's loan if that matters. There is no purpose in getting more than one pre-approval, because the pre-approval is not of any direct benefit to ...
by grabiner
Thu Apr 16, 2015 8:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: First Time Home Buyer (Pre-approval)
Replies: 5
Views: 710

Re: Why not rebalance with reinvested dividends?

(Edit: misread strategy) In a taxable account, rebalancing with reinvested dividends is a reasonable strategy, but you should direct all your dividends to the same place to do this. Reinvesting dividends between two funds makes little sense because the dividend yields may not match the rebalancing y...
by grabiner
Thu Apr 16, 2015 8:04 pm
 
Forum: Investing - Theory, News & General
Topic: Why not rebalance with reinvested dividends?
Replies: 11
Views: 1619

Re: When did a GO (General Obligation) Bond last Default?

If you have a policy of owning only investment grade muni bonds or corporate bonds, your primary risk is not default but that the bonds are downgraded, causing the prices to fall. You realize this loss since you sell when they are downgraded. So the question is what fraction of investment grade mun...
by grabiner
Thu Apr 16, 2015 8:01 pm
 
Forum: Investing - Theory, News & General
Topic: When did a GO (General Obligation) Bond last Default?
Replies: 10
Views: 1200

Re: Taxes on a Muni Bond Fund

You probably won't have much in capital gains, though; bond funds generate almost all of their returns from interest, and most funds pay it out monthly. The current share price is $14.28, and it has been between $14.07 and $14.45 all year. If you bought 1400 shares at the low price of $14.07, and so...
by grabiner
Thu Apr 16, 2015 7:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Taxes on a Muni Bond Fund
Replies: 7
Views: 955

Re: At my age & tax bracket, is a Roth smart?

whatusername?, I guess any tax Advatage account, regardless of tax bracket, should be utilized if possible....is that your point? Thanks Yes. Gains in a Roth are tax-free. Gains in a taxable account are always subject to some tax (or, if you use munis, to lower yields than other bonds in order to a...
by grabiner
Thu Apr 16, 2015 7:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: At my age & tax bracket, is a Roth smart?
Replies: 24
Views: 2392

Re: How much riskier are munis than treasuries?

You can see how the market perceives the risk. In one month (9/15/08-10/16/18), munis lost about 8% of their value (Vanguard Intemediate-Term Tax-Exempt, and the M* category average also lost 9%), while Treasuries were stable. Munis also have an additional risk, the risk that the tax treatment will...
by grabiner
Thu Apr 16, 2015 7:39 pm
 
Forum: Investing - Theory, News & General
Topic: How much riskier are munis than treasuries?
Replies: 32
Views: 3687

Re: Help me choose: HDHP/HSA or Regular Health Care Plan

Grabiner, if I am to have a choice here, would you recommend maxing out the HSA before the Roth, like you suggested with the 401k post-match? Right now I get the match, and try to contribute any freelance income into both of our Roth accounts, some years maxing it out, and other years not (this com...
by grabiner
Thu Apr 16, 2015 7:34 pm
 
Forum: Personal Consumer Issues
Topic: Help me choose: HDHP/HSA or Regular Health Care Plan
Replies: 13
Views: 1058

Re: Draw from Roth or taxable investments?

Whether you end up taking from taxable or Roth, you will have to make a choice of where to take it from, which will effect your Asset Allocation. However, this is an independent choice. If you decide to sell bonds, and you don't have any bonds in your taxable account, you can sell stock in the taxa...
by grabiner
Wed Apr 15, 2015 10:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Draw from Roth or taxable investments?
Replies: 7
Views: 580

Re: Help me choose: HDHP/HSA or Regular Health Care Plan

IMy thought was to put into the HSA nearly the amount that we would be paying per pay period in the premiums ($100-$135) under the regular plan and then use those "savings" for our expenses. We have a 6-9 month emergency fund, but income is fairly tight. I'd have to open up an HSA account...
by grabiner
Wed Apr 15, 2015 9:42 pm
 
Forum: Personal Consumer Issues
Topic: Help me choose: HDHP/HSA or Regular Health Care Plan
Replies: 13
Views: 1058

Re: SC international: Swap GWX for VSS?

When SCHC came out we had threads here warning of cap gains distributions on "new" small cap international funds and advising to use VSS instead. Then VSS had two years in a row of cap gains. I don't think you predict future cap gains based on past history for an index fund. The reason ne...
by grabiner
Wed Apr 15, 2015 9:00 pm
 
Forum: Investing - Theory, News & General
Topic: SC international: Swap GWX for VSS?
Replies: 5
Views: 727

Re: How much riskier are munis than treasuries?

You can see how the market perceives the risk. In one month (9/15/08-10/16/18), munis lost about 8% of their value (Vanguard Intemediate-Term Tax-Exempt, and the M* category average also lost 9%), while Treasuries were stable. Munis also have an additional risk, the risk that the tax treatment will ...
by grabiner
Wed Apr 15, 2015 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: How much riskier are munis than treasuries?
Replies: 32
Views: 3687

Re: Does this violate wash sale rule?

A wash sale occurs when you sell for a loss, and buy substantially identical securities, in either the same or a different account. In your example, you are selling Total Stock Market, and buying 500 Index in two different accounts, which should not be substantially identical. What you have to watch...
by grabiner
Wed Apr 15, 2015 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does this violate wash sale rule?
Replies: 2
Views: 337

Re: Draw from Roth or taxable investments?

Any future gains in the taxable account will be taxed, while any gains in the Roth will be tax-free until you need them, and if you don't need them during your lifetime, gains remain tax-free for your heirs for years. Therefore, you should spend your taxable account first. (The only exception would ...
by grabiner
Wed Apr 15, 2015 8:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Draw from Roth or taxable investments?
Replies: 7
Views: 580

Re: Best Funds for a Taxable Account

This is a difficult question. Normally, stock index funds are more tax-efficient than bond funds. But Given current bond yields, and the high CA tax rates on stock dividends, I would prefer holding the CA muni fund in taxable, for up to half of your bond allocation. (Holding all your bonds in one s...
by grabiner
Tue Apr 14, 2015 11:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best Funds for a Taxable Account
Replies: 8
Views: 1601

Re: 401k conversion tax when moving

In the part-year returns I have done, the state pro-rates the taxes. For instance if your AGI is $100,000, but only $50,000 is from state A, then the taxes are computed as if $100,000 was earned in state A, then that tax amount is multiplied by $50,000/$100,000 to get the tax amount for state A. I ...
by grabiner
Tue Apr 14, 2015 11:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: 401k conversion tax when moving
Replies: 15
Views: 829

Re: pay for insurance pre-tax or post-tax?; Roth 401k questi

For #1, I wonder whether I am placing too much emphasis on the second bend point for Social Security? (On the other hand, maybe everyone else – mostly with much higher incomes – is placing too little emphasis on it? :happy ) For some reason, I had gotten it into my head that I need to maximize my F...
by grabiner
Tue Apr 14, 2015 10:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: pay for insurance pre-tax or post-tax?; Roth 401k question
Replies: 3
Views: 435

Re: Low fees vs. tax deferred bond allocations

With current low yields on bonds, there isn't that much tax difference between holding bonds or stocks in taxable. Thus, if your 401(k) has better stock than bond options (say, if it has a low-cost S&P 500 index), it's best to hold stocks there, and hold your bonds elsewhere, including a taxable...
by grabiner
Tue Apr 14, 2015 10:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low fees vs. tax deferred bond allocations
Replies: 10
Views: 674

Re: Raiding Taxable to Max Out Tax-Deferred Space

You asked if there is ever a situation where you might not want to sell taxable to max out tax-deferred. Here are some reasons you might not want to sell taxable funds and move the money to tax-deferred funds: In all of your reasons, you neglect the tax benefit on contributions. It is true that $30...
by grabiner
Tue Apr 14, 2015 9:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Raiding Taxable to Max Out Tax-Deferred Space
Replies: 18
Views: 1117

Re: Windfall in a foreign currency [NZ dollars, UK resident]

It doesn't matter what the windfall is in now, since it can be converted into anything else at essentially no cost. Are GBP or NZD better for you? The reason NZD are paying higher interest rates is that investors expect the NZD to fall against other currencies; this is not a free lunch. And for you,...
by grabiner
Tue Apr 14, 2015 9:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Windfall in a foreign currency [NZ dollars, UK resident]
Replies: 5
Views: 563

Re: When to sell actively managed funds in taxable acct

On the other hand, I checked out that Natixix Small Cap Value fund. The expense ratio is high and the tax cost ratio at Morningstar is high, but it sure has been a performer. I have to admit I would find it hard to get rid of. Actually, that fund would be my first choice to get rid of. It has distr...
by grabiner
Tue Apr 14, 2015 9:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to sell actively managed funds in taxable acct
Replies: 21
Views: 1683

Re: Roth IRA Contribution Withdrawals

How do you keep track of the amount converted? For example, I plan to convert my traditional 401(k) to a Roth 401(k) this year (with Fidelity as the custodian), and then in a few years, when I'm no longer with my employer, I will roll my Roth 401(k) over to my Roth IRA (with Vanguard). Do I need to...
by grabiner
Tue Apr 14, 2015 9:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Contribution Withdrawals
Replies: 13
Views: 3186

Re: Best Funds for a Taxable Account

Thanks for all the replies! I'm leaning towards buying VCAIX in my taxable account. Are there any advantages to holding the Total Market in a taxable account and buying the Total Bond Market for my IRA, vs. buying VCAIX in taxable? This is a difficult question. Normally, stock index funds are more ...
by grabiner
Mon Apr 13, 2015 10:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best Funds for a Taxable Account
Replies: 8
Views: 1601

Re: New York Times article on bond funds

Thanks for your insightful comment, ogd. And they do have a last-resort option, which is to force redemptions in-kind making the accuracy of the NAV irrelevant. A well-informed correspondent told me that as far as he knows redemptions in kind have only occurred when the fund shareholder was a) a la...
by grabiner
Sun Apr 12, 2015 11:03 pm
 
Forum: Investing - Theory, News & General
Topic: New York Times article on bond funds
Replies: 24
Views: 3313

Re: Moving to an expensive new home - mortgage paydown quest

California lets you deduct home mortgage interest. 39.9%+9.3%=48.9% deduction. State tax is deductible from federal, so that is 39.6%+(60.4%*9.3%)=45.2%. (If you can't deduct state tax because of AMT, then the rate is 28%+9.3%=37.3%.) But since that only applies to the first $1,000,000 in mortgage ...
by grabiner
Sun Apr 12, 2015 10:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Moving to an expensive new home - mortgage paydown question
Replies: 6
Views: 1004

Re: Best Funds for a Taxable Account

If you want to hold bonds in your taxable accounts, and you live in CA, VCAIX could be a possibility. There are other tax advantaged funds you can hold in your taxable accounts such as Vanguard's Tax Managed Balanced Fund that makes sales/transactions purposely to reduce tax consequences. I would n...
by grabiner
Sun Apr 12, 2015 10:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best Funds for a Taxable Account
Replies: 8
Views: 1601

Re: When to sell actively managed funds in taxable acct

I believe that The Primecap Odyssey Aggressive Growth fund is the only fund on your list which is both moderate-cost and tax-efficient. With only 13% turnover, it doesn't turn most of its income into capital gains. It's still probably costing you 0.5% per year (compared to a growth index, or to the ...
by grabiner
Sun Apr 12, 2015 10:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to sell actively managed funds in taxable acct
Replies: 21
Views: 1683

Re: Tax bill > anticipated; best strategies to fund?

If you need money for a very short time (for example, waiting for transactions to settle), you can draw on the HELOC; the interest cost will be trivial if you pay back the amount drawn next month. Do you have bonds in your 401(k) or Roth IRA? If you do, then you could sell the bonds in your taxable ...
by grabiner
Sun Apr 12, 2015 9:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax bill > anticipated; best strategies to fund?
Replies: 11
Views: 1036

Re: Should I Refinance Mortgage or Pay Extra on Principle?

Thanks. I appreciate the replies. If I decided not to refinance, but had $500 - $750/month available, would you still think it makes sense to pay down the principle early. Or would you just pay the required loan amount and put the extra in a brokerage account for stock purchases? The goal is to put...
by grabiner
Sun Apr 12, 2015 9:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I Refinance Mortgage or Pay Extra on Principle?
Replies: 5
Views: 747

Re: Federal Tax Bracket Question

This is helpful, folks! Thank you, Thank you! I'm looking at form 1040 now. Line 43 includes taxable interest from line 8a, ordinary dividends from line 9a and capital gains from line 13. How do the capital gains (in my case they're long term) end up being taxed at a lower rate than regular income ...
by grabiner
Sun Apr 12, 2015 8:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Federal Tax Bracket Question
Replies: 20
Views: 1428

Re: Should I Refinance Mortgage or Pay Extra on Principle?

Wiki article link: Paying down loans versus investing I would consider refinancing to be about break-even on a risk-adjusted basis, compared to keeping the mortgage and not making extra payments . If you refinance, you reduce your interest payments, but you also reduce the duration of the mortgage; ...
by grabiner
Sat Apr 11, 2015 3:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I Refinance Mortgage or Pay Extra on Principle?
Replies: 5
Views: 747

Re: Cost basis update

For selling non-covered shares of mutual funds by specific identification, Vanguard requests that you include the following information (quoted from a Vanguard form letter): Your name. Your address. The last four digits of your Social Security number. The Vanguard(R) fund and account number from whi...
by grabiner
Sat Apr 11, 2015 3:37 pm
 
Forum: Investing - Theory, News & General
Topic: Cost basis update
Replies: 3
Views: 507

Re: Jane Bryant Quinn: Prepay your mortgage

The antidote for Ric Edelman? If so, it's a pretty mild antidote. She doesn't say "Always", and she does say "Before you start a prepayment plan, however, consider what else you might do with that money." More completely, "Before you start a prepayment plan, however, consid...
by grabiner
Sat Apr 11, 2015 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Jane Bryant Quinn: Prepay your mortgage
Replies: 31
Views: 3653

Re: Move money from Variable Annuity to taxable?

Another alternative would be to move the money to a lower-cost variable annuity, such as Vanguard's. There would be no tax consequences until the money is withdrawn, although even Vanguard's variable annuities have higher expenses than the mutual funds. If your mother cashes in the annuity all at on...
by grabiner
Sat Apr 11, 2015 3:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Move money from Variable Annuity to taxable?
Replies: 3
Views: 517

Re: explanation of interest rates and bonds

There is an example on the wiki: Bonds: advanced topics If a $10,000 bond with a 5% yield becomes worth $9653 four years before maturity, its yield rises to 6%, because a 6% yield on $9653 would earn the same payments. Thus, if the interest rates on competing bonds rise from 5% to 6%, the price of t...
by grabiner
Sat Apr 11, 2015 3:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: explanation of interest rates and bonds
Replies: 6
Views: 727

Re: Bond: Mutual Fund or ETF?

Furthermore, if one submits a market order at Schwab, the ask price will go up between the time you click your submit button and the time your order is actually executed, so it is very likely that you will pay more than you thought you would. That is, you will end up paying the full spread and it w...
by grabiner
Sat Apr 11, 2015 3:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond: Mutual Fund or ETF?
Replies: 12
Views: 858

Re: Corporate bond defined maturity funds

David, Please help me understand that your model is a better idea through the following questions. A. Since I have already built the ladder, how do you propose I implement your idea? B. Even if I was now five years from retirement and I decided to implement your idea, do I not run the risk of losin...
by grabiner
Sat Apr 11, 2015 3:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Corporate bond defined maturity funds
Replies: 8
Views: 556

Re: Long-term care hybrid insurance - is this a good idea?

Grabiner is correct. Most insurance companies use different morbidity and mortality assumptions for the hybrid products than for the stand alone ones. There are also human behavior aspects to it like hybrid owners tend to delay claims longer than stand alone LTC policy holders. And the hybrid makes...
by grabiner
Sat Apr 11, 2015 3:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-term care hybrid insurance - is this a good idea?
Replies: 12
Views: 1400

Re: Anyone in VFSVX? Why?

Additional example: I have 11,500 shares of VEMAX and enjoy the same low ER as as VWO. I notice a large, persistent premium develop. I convert into that premium and enjoy undue financial reward = free money (as to me) in the form of excess shares that the equivalent investor, investing the same fun...
by grabiner
Sat Apr 11, 2015 3:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Anyone in VFSVX? Why?
Replies: 70
Views: 10295

Re: Re:

The etf has a pretty large bid ask spread of about 72bp. Which is incurred on the way in and the way out. So the front end and back end load of 75bp seems to be in line with the market. Vanguard: Average bid-ask spread says that the average spread is 12 basis points. It might have been 72 when you ...
by grabiner
Sat Apr 11, 2015 2:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Anyone in VFSVX? Why?
Replies: 70
Views: 10295

Re: Corporate bond defined maturity funds

A ladder of different defined-maturity funds is equivalent to a single fund. If you build a 5-year ladder, you have equal amounts of 1-year, 2-year, 3-year, 4-year, and 5-year bonds, which is essentially what a short-term corporate fund such as Vanguard Short-Term Corporate ETF (VCSH) or Short-Term...
by grabiner
Sat Apr 11, 2015 2:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Corporate bond defined maturity funds
Replies: 8
Views: 556

Re: New grad; pay off loan or max 401k?

Well, the oldest grandson is graduating in May (mechanical engineer) and has accepted a very good job. I've counseled him throughout his education and now the personal finance course is getting serious. He'll be getting the Bogle book etc and formal budget work hasn't started. This question relates...
by grabiner
Fri Apr 10, 2015 8:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: New grad; pay off loan or max 401k?
Replies: 9
Views: 940

Re: Planning Washington DC Sightseeing

One of my favorite things in DC: Lunch at the Museum of the American Indian. But isn't that just a MacDonald's? The cafe at the Museum of the American Indian has traditional dishes from all over the Americas. I often eat there when I am in the area at lunchtime (at that museum or one of the others ...
by grabiner
Fri Apr 10, 2015 8:50 pm
 
Forum: Personal Consumer Issues
Topic: Planning Washington DC Sightseeing
Replies: 58
Views: 2782

Re: Long-term care hybrid insurance - is this a good idea?

The other advantage of the hybrid products is that underwriting is more lenient, because the risks balance out. Long-term-care insurance is more expensive for the insurer if you are in poor health, and thus insurers won't offer it unless you meet medical standards. An annuity is more expensive for t...
by grabiner
Fri Apr 10, 2015 8:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Long-term care hybrid insurance - is this a good idea?
Replies: 12
Views: 1400

Re: Sniff test on this portfolio?

C shares don't pass the sniff test. I wouldn't be surprised if the advisor said, "These funds are only appropriate for a long-term investment" (which is correct), and neglected to say, "These funds are guaranteed to underperform an alternative if held as a long-term investment." ...
by grabiner
Fri Apr 10, 2015 8:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Sniff test on this portfolio?
Replies: 10
Views: 1092

Re: Corporate bond defined maturity funds

I think these kinds of bond funds with maturity dates are great for laddering positions like you're doing. There is obviously more risk in a corporate bond than a Treasury bond or a CD, but I tend to think the risk is quite small in a real sense. I have more faith in major corporations to repay the...
by grabiner
Fri Apr 10, 2015 8:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Corporate bond defined maturity funds
Replies: 8
Views: 556
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