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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: 370

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: 17
Views: 909

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: 17
Views: 909

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: 17
Views: 1462

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: 207

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: 17
Views: 1462

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: 456

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: 597

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: 18
Views: 1532

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: 21
Views: 1512

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: 578

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: 95
Views: 4353

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: 21
Views: 1512

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: 877

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: 506

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: 2501

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: 2
Views: 223

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: 7
Views: 828

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: 14
Views: 902

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: 43
Views: 2638

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: 7368

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: 2815

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: 7368

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: 385

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: 1213

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: 607

Re: Keep or sell Zero Coupon Bond?

1. it depends on your sale cost. What spread the dealers will give you? For bonds you usually get worse than the quoted price (opposite of a small investor for stocks). 2. does it matter from a capital gains vs. interest point of view, for tax? For the OP, it doesn't matter, since he holds it in an...
by grabiner
Thu Nov 20, 2014 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Keep or sell Zero Coupon Bond?
Replies: 7
Views: 866

Re: Borrowing from TSP for lot purchase

That much money from the TSP will have a high payment, plus you’ll still have a payment on the remainder of the money you have to borrow to buy the land. And the TSP loan still has potential to cost you 4 to 5 times more out of your future retirement than it will save in interest on a commercial lo...
by grabiner
Thu Nov 20, 2014 9:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Borrowing from TSP for lot purchase
Replies: 34
Views: 2118

Re: Question about HSA options

It looks like Option 2 comes out ahead but I’m wondering if I’m missing something. Shouldn’t there be something to be said for tax savings? Yes, you should adjust for the tax savings on your own contributions to the HSA, at your own tax rate. Well if I were to contribute another $1,200, the tax sav...
by grabiner
Thu Nov 20, 2014 9:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about HSA options
Replies: 4
Views: 789

Re: How much is saved by taking mass transit to work?

Check with your insurer what will happen to your rates; many insurers charge based on your commute distance, and if you regularly take public transit or vanpool, the distance drops to near zero.
by grabiner
Wed Nov 19, 2014 10:31 pm
 
Forum: Personal Consumer Issues
Topic: How much is saved by taking mass transit to work?
Replies: 51
Views: 3397

Re: Question about HSA options

It looks like Option 2 comes out ahead but I’m wondering if I’m missing something. Shouldn’t there be something to be said for tax savings? Yes, you should adjust for the tax savings on your own contributions to the HSA, at your own tax rate. Or the fact that the extra money contributed to the HSA ...
by grabiner
Wed Nov 19, 2014 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Question about HSA options
Replies: 4
Views: 789

Re: Another bond fund question do I need short term in my 40

Unless you are earmarking money for short-term use, you don't need a separate short-term fund. Total Bond Market Index holds short-term, intermediate-term, and long-term bonds, so it serves the same purpose as holding three separate funds such as Short-Term, Intermediate-Term, and Long-Term Bond Ind...
by grabiner
Wed Nov 19, 2014 9:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Another bond fund question do I need short term in my 401k?
Replies: 7
Views: 471

Re: Minimizing Taxes on Year End Bonus

I live in Massachusetts, and last year my year-end bonus was taxed at approximately 40%. I am sure this is a common problem, and am wondering if anyone has a way to maximize the amount they recieve from their bonus. Adjust your withholding. The withholding for the bonus may be based on the assumpti...
by grabiner
Wed Nov 19, 2014 9:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Minimizing Taxes on Year End Bonus
Replies: 8
Views: 1247

Re: Which bond fund for a three-fund taxable portfolio?

I understand the theory of placing bonds in tax-advantaged accounts and then rebalancing across the accounts after you sell stock from the taxable account. But that seems to work only if the amounts are large and/or stable. Say I put $50,000 in my taxable account, and in three years I want to use t...
by grabiner
Wed Nov 19, 2014 9:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which bond fund for a three-fund taxable portfolio?
Replies: 8
Views: 1562

Re: Borrowing from TSP for lot purchase

That much money from the TSP will have a high payment, plus you’ll still have a payment on the remainder of the money you have to borrow to buy the land. And the TSP loan still has potential to cost you 4 to 5 times more out of your future retirement than it will save in interest on a commercial lo...
by grabiner
Wed Nov 19, 2014 9:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Borrowing from TSP for lot purchase
Replies: 34
Views: 2118

Re: GEHA - Standard vs. HDHP Options with Baby on the Way

And you are right, I didn't factor in premiums into the equation. One thing to keep in mind, this isn't like an fsa where the money is sitting there at the start of the year. It is built as your employer makes their pass through. However, if the money isn't there yet, you can pay out of pocket, and...
by grabiner
Wed Nov 19, 2014 9:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: GEHA - Standard vs. HDHP Options with Baby on the Way
Replies: 36
Views: 2050

Re: Borrowing from TSP for lot purchase

Consider that you will be paying taxes on the borrowed money twice. TSP loans are repaid with after-tax money. When you withdraw that money after retirement, you pay taxes on it again. This isn't a real loss, because the interest goes back into the TSP; effectively, you are taking a non-deductible ...
by grabiner
Tue Nov 18, 2014 9:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Borrowing from TSP for lot purchase
Replies: 34
Views: 2118

Re: lock-up for 20 years

If you know that you won't want the money for 20 years, it's a good deal. A 20-year zero-coupon Treasury currently yields 2.99%, so you are getting an extra 1% with no risk. (And is a zero the right comparison? If the CD allows you to withdraw interest without penalty or leave it invested, this is b...
by grabiner
Tue Nov 18, 2014 9:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: lock-up for 20 years [20 year CD]
Replies: 21
Views: 2477

Re: Glidepath (target date) investments distort asset alloca

... conventional wisdom ignores empirical evidence that younger workers with less secure employment and scant savings are far likelier to raid their retirement accounts to meet basic living expenses. Since they’re also more likely to lose their jobs in a recession, which in turn is likelier to occu...
by grabiner
Tue Nov 18, 2014 9:39 pm
 
Forum: Investing - Theory, News & General
Topic: Glidepath (target date) investments distort asset allocation
Replies: 20
Views: 2750

Re: Effect of market dip midstream

Given the same overall return, a market decline midway through will give about the same total return if you make a constant investment every year. If your investment returns a fixed 10%, then the first year's investment will return 10% compounded for 20 years, the second will return 10% compounded f...
by grabiner
Tue Nov 18, 2014 9:30 pm
 
Forum: Investing - Theory, News & General
Topic: Effect of market dip midstream
Replies: 6
Views: 947

Re: HSA Questions

Oooh, one more question - are there any restrictions limiting the frequency at which you can change investments in an HSA (similar to the once-per-year limitation in a 529 plan)? Not that I will be trading frequently, but wondering about any limitations on rebalancing once per quarter or twice per ...
by grabiner
Tue Nov 18, 2014 9:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA Questions
Replies: 9
Views: 780

Re: Which bond fund for a three-fund taxable portfolio?

If you want to hold all your bonds in taxable, I would suggest splitting evenly between NJ Long-Term Tax-Exempt and Limited-Term Tax-Exempt; this would get you an average intermediate-term duration, and reduce the single-state risk because only half your bonds are in NJ, while subjecting much less t...
by grabiner
Tue Nov 18, 2014 9:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Which bond fund for a three-fund taxable portfolio?
Replies: 8
Views: 1562

Re: Online ETF graphs that show growth minus fees (expns rat

Thanks for the input. I'm learning a lot but I apparently have more to learn. I thought that growth chart shows what would have happened if I invested $10K in each of those funds 10 years ago. So I don't understand why that's not apples and apples? There are two issues in an apples-to-apples compar...
by grabiner
Tue Nov 18, 2014 9:08 pm
 
Forum: Investing - Theory, News & General
Topic: Online ETF graphs that show growth minus fees (expns ratio)?
Replies: 14
Views: 1185

Re: Cost to furnish a condo

One thing to be careful about is the size of the furniture. The rooms of condos can be much smaller than houses so you need to adjust the size of the furniture. I found out the hard way when my couch did not fit when I moved into my condo. :oops: And wait until you actually buy the condo to buy any...
by grabiner
Tue Nov 18, 2014 12:10 am
 
Forum: Personal Consumer Issues
Topic: Cost to furnish a condo
Replies: 29
Views: 2664

Re: Online ETF graphs that show growth minus fees (expns rat

They account for everything but loads/ sales charges and tax drag (need to see that in table form under tax cost). And for tax costs, it's better to check with the fund provider; M* doesn't always know about qualified dividends, so it often overestimates ETF tax costs. (You can see this by comparin...
by grabiner
Tue Nov 18, 2014 12:00 am
 
Forum: Investing - Theory, News & General
Topic: Online ETF graphs that show growth minus fees (expns ratio)?
Replies: 14
Views: 1185

Re: Emergency and earmarked funds - investing ideas

2. Can someone explain the tax implications to me? I understand that with a tax-exempt bond fund, earnings are not taxable until I sell. But what happens when I sell? If I buy $60k and then it goes up to $65k, and I sell. I recognize $5k in income for taxes? I am tired of having to pay taxes on my ...
by grabiner
Mon Nov 17, 2014 11:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Emergency and earmarked funds - investing ideas
Replies: 8
Views: 957

Re: GEHA - Standard vs. HDHP Options with Baby on the Way

I worked out a similar example at the DC Bogleheads meeting yesterday; here's a day-one cost comparison; this is the amount you pay if you never see a doctor for anything other than an annual checkup. If you are in the 28% tax bracket, you are probably maxing out SS, so contributing to the HSA by pa...
by grabiner
Mon Nov 17, 2014 11:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: GEHA - Standard vs. HDHP Options with Baby on the Way
Replies: 36
Views: 2050

Re: Can active funds reliably beat the index? Actually, Yes

Surprised to see that the managerial factor was more important than the expense factor. Cause and effect are likely to be backwards for managerial ownership. The manager decides how much he wants to hold in the fund after seeing the performance records; if a manager has managed a fund which did bad...
by grabiner
Sun Nov 16, 2014 10:12 pm
 
Forum: Investing - Theory, News & General
Topic: Can active funds reliably beat the index? Actually, Yes.
Replies: 37
Views: 4661

Re: Target Date Fund all I need?

floatingdoc wrote:If I might piggback a question here, how come the lifestrategy series paid capital gains when the underlying funds did not??? Aren't they all index funds?


The Total Bond Market Index fund did pay capital gains, and those gains were passed along to the LifeStrategy and Target Retirement funds.
by grabiner
Sun Nov 16, 2014 9:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Target Date Fund all I need?
Replies: 19
Views: 2565

Re: Social Security - Death and Taxes

Here's a summary of the rules for taxation of Social Security benefits from our wiki. For tax purposes, it doesn't matter what type of benefits they are, only how much they are and what your other income is. If you have high income (of any kind), 85% of your benefits are likely to be taxable. (In ad...
by grabiner
Sun Nov 16, 2014 9:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security - Death and Taxes
Replies: 1
Views: 419
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