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Re: Guidance on car insurance

My impression was that your vehicle loan will specify some required insurance amount. Does it? The lender will specify a maximum deductible for collision and comprehensive, because that protects its interest. The lender won't normally require a specific amount of liability coverage (other than the ...
by grabiner
Wed Aug 27, 2014 9:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Guidance on car insurance
Replies: 6
Views: 333

Re: HSA - how to decide if it is worth it?

Remember to count the tax savings on the HSA. The tax deduction is a clear gain, as you get the tax deduction on contributions and pay no tax on medical withdrawals, in contrast to a traditional retirement account (withdrawals are taxed) or a Roth (contributions are not deductible). Thus, uf you are...
by grabiner
Wed Aug 27, 2014 8:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSA - how to decide if it is worth it?
Replies: 8
Views: 482

Re: Cost Basis Method

The funds purchased before 2012 are noncovered, and only show average cost. I believe these can be sold at average cost while later ones are sold as SpecID. (There is a way to do it with earlier ones but it sounded too complicated for me.) They show average cost, but you can still sell them with sp...
by grabiner
Wed Aug 27, 2014 8:44 pm
 
Forum: Investing - Theory, News & General
Topic: Cost Basis Method
Replies: 8
Views: 423

Re: Pay taxes or high fees: should I sell underperforming Am

You are presumably losing 1% per year to higher expenses and taxes by holding this fund. I don't know your current basis, but suppose that you would have a 10% tax bill if you sell now. Therefore, if you sell now and switch to an index fund, you'll make up the loss in ten years. And you will actuall...
by grabiner
Wed Aug 27, 2014 8:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Pay taxes or high fees: should I sell underperforming AmCent
Replies: 6
Views: 205

Re: Paying mortgage down or invest instead?

If the time horizon for this money is long range, then an investment in the total stock market index would very likely significantly beat the return from prepaying your mortgage as calculated above. I would recommend investing the money given your very good interest rate. Are your retirement saving...
by grabiner
Wed Aug 27, 2014 8:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying mortgage down or invest instead?
Replies: 8
Views: 730

Re: Saving for a house down payment in 5-7 years...

What you want to avoid with bond investments is holding bonds with a duration exceeding your time horizon. You shouldn't hold long-term bonds for money you will need in five years, and when the purchase is two years away, you'll want to switch to short-term bonds or CDs to reduce the interest rate ...
by grabiner
Tue Aug 26, 2014 11:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Saving for a house down payment in 5-7 years...
Replies: 13
Views: 874

Re: Help get my money out of a TIRA (TSP version)

You can make the non deductible contribution and convert it before your roll the pre tax TIRA into the TSP, as long as the rollover to the TSP is completed before year end. There is no doubt that the TSP will accept the rollover, so the only reason you would want to wait and do the rollover first i...
by grabiner
Tue Aug 26, 2014 11:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help get my money out of a TIRA (TSP version)
Replies: 4
Views: 273

Re: Paying mortgage down or invest instead?

Welcome to the forum! Wiki article link: Paying down loans versus investing You have nine years left on the mortgage. If you put all your spare cash towards paying down the mortgage, it will be gone in four years, and you will have a fixed-dollar savings in the following five years. Therefore, payin...
by grabiner
Tue Aug 26, 2014 10:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paying mortgage down or invest instead?
Replies: 8
Views: 730

Re: Help get my money out of a TIRA (TSP version)

Yes, transferring your traditional IRA into the TSP will get rid of the backdoor issue. It doesn't even matter that the traditional IRA is a conduit; the TSP will accept money from any IRA, as long as the IRA has only pre-tax money. Once the traditional IRA is out of the way, you can contribute to a...
by grabiner
Tue Aug 26, 2014 10:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help get my money out of a TIRA (TSP version)
Replies: 4
Views: 273

Re: Saving for a house down payment in 5-7 years...

David G. suggested below fund to me when I asked him a similar question. Vanguard Intermediate-Term Tax-Exempt Fund VWITX, correct? Any explanation or rationale behind this recommendation? I know basically nothing about money at this point, and I was given the impression that I should be avoiding e...
by grabiner
Tue Aug 26, 2014 10:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Saving for a house down payment in 5-7 years...
Replies: 13
Views: 874

Re: 401k ER Reduction / Bond Funds

If I were to incorporate Bond Fund of America into the 401k, like Grabiner suggested, what Vanguard bond fund(s) would be recommended in the IRAs that could compliment it? You don't really need a complementary fund; Bond Fund of America is a general-purpose high-quality bond fund, similar to Vangua...
by grabiner
Tue Aug 26, 2014 10:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k ER Reduction / Bond Funds
Replies: 11
Views: 902

Re: Should we invest or pay off mortgage ?

Given the above profile, would you pay off the mortgage vs. invest ? I am leaning towards the latter, but I would love to hear your thoughts/approach on how one should think about investing #4. I'm seeking a tax efficient and moderately conservative investment strategy for #4. 6 year horizon and ne...
by grabiner
Tue Aug 26, 2014 10:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should we invest or pay off mortgage ?
Replies: 15
Views: 1467

Re: 401k transaction price different from ticker symbol pric

Different share classes of the same fund will have prices at a fixed ratio, and this may be effectively what your 401(k) is doing; each unit of the fund represents 31.83 shares of VITSX. The reason that the third decimal place varies is rounding. Vanguard only computes share prices to the nearest pe...
by grabiner
Tue Aug 26, 2014 12:36 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k transaction price different from ticker symbol prices
Replies: 1
Views: 238

Re: Bond fund in taxable account (CA resident)

Another good bond holding for your taxable account is I-Bonds; they are exempt from state tax, and the federal tax is deferred until you cash them in. (If you are less than 30 years from retirement, you can plan to hold the bonds until you retire, presumably in a lower tax bracket.)
by grabiner
Tue Aug 26, 2014 12:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund in taxable account (CA resident)
Replies: 14
Views: 939

Re: Should we invest or pay off mortgage ?

5) US Home Mortgage - 410k remaining. 7/1 ARM. 6 more years of 2.5%. Wiki article link: Paying down loans versus investing Paying off your mortgage earns 2.5%, tax deductible, with a duration of about five years. You get some of the benefit by eliminating the next six years of payments (average dur...
by grabiner
Tue Aug 26, 2014 12:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Should we invest or pay off mortgage ?
Replies: 15
Views: 1467

Re: Invest in my company's HSA or another?

I could also use the company HSA to hold only bond funds (it has a few choices, though with expense ratios a fair amount higher than I could get somwhere else). But I assume it's best to put bonds in 401k rather than HSA or Roth. It's fine to hold bonds in your HSA if that is the best option. The a...
by grabiner
Tue Aug 26, 2014 12:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Invest in my company's HSA or another?
Replies: 2
Views: 283

Re: Do vanguard funds compound monthly?

The compound return is computed based on annual compounding. If $10,000 in a fund five years ago has grown to $13,382, the fund will report a 6% annualized return. This means that an investment earning 10% compounded annually would have had the same value, but it doesn't mean that the fund itself ea...
by grabiner
Mon Aug 25, 2014 11:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do vanguard funds compound monthly?
Replies: 11
Views: 1210

Re: Hw many credit cards to own?

Credit Karma says that having only three cards gives me a major ding to my credit score. I'm OK with that since I have no need for a super high credit score. CK is commonly misinterpreted that way. All CK states is that there is a correlation between those with more accounts (not just credit cards ...
by grabiner
Mon Aug 25, 2014 11:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Hw many credit cards to own?
Replies: 117
Views: 8106

Re: AMT, TIRA, RMD, and Charitable Giving

Thanks Chaz. 590 is helpful. I hadn't realized that there was a minimum age of 70 1/2 to do this. I see that it does count as part of the RMD, but does not add to AGI, so would help from the AMT standpoint as well. Charitable contributions are still deductible under the AMT, so even if the qualifie...
by grabiner
Sun Aug 24, 2014 8:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: AMT, TIRA, RMD, and Charitable Giving
Replies: 4
Views: 532

Re: Help Requested - home purchase "cash" or mortgage

The loan costs should be offset from the returns on a low-risk investment. While you are paying 2.5% interest on your loan (presumably a five-year ARM), tax deductible, you could be earning 1.54% tax-free on Short-Term Investment-Grade, which has about the same duration as a mortgage paid off in fiv...
by grabiner
Sun Aug 24, 2014 7:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help Requested - home purchase "cash" or mortgage
Replies: 8
Views: 974

Re: Advice on 401k - Traditional vs Roth

You go Roth you pay tax you go traditional you pay tax the issue is when you pay not if you pay, and with Roth you will never pay a penny on earnings so you throw away less in that sense This is not correct once you adjust for the amount you can contribute. Suppose that you are in a 25% bracket and...
by grabiner
Sun Aug 24, 2014 6:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on 401k - Traditional vs Roth
Replies: 17
Views: 1275

Re: Paying off house in cash

If you are going to pay cash for the house, you don't want your taxable funds to be in the stock market unless you can save at least twice the cost of the house you plan to buy. The reason is that the stock market could easily lose half its value, and you still want to be able to buy the house. It's...
by grabiner
Sun Aug 24, 2014 6:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Paying off house in cash
Replies: 6
Views: 1694

Re: AA Between Taxable and Retirement Accounts For Early Ret

I would still suggest treating everything as one portfolio, because you can reallocate freely, and you have different options. You have a better bond fund in your TSP than anywhere else, so you might want to hold all your bonds there. If you need to sell bonds in your taxable account and don't have ...
by grabiner
Sun Aug 24, 2014 6:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: AA Between Taxable and Retirement Accounts For Early Retiree
Replies: 15
Views: 1518

Re: Need Help: State-Specific Bond Funds and Moving ?

Since the OH fund, Admiral shares of the CA fund of equal duration, and Admiral shares of the nationally diversified fund of equal duration are all yielding the same after adjusting for California taxes, I don't see any urgency in unloading the OH fund. There's no Mann Act for municipal bonds. The ...
by grabiner
Sun Aug 24, 2014 6:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help: State-Specific Bond Funds and Moving ?
Replies: 6
Views: 577

Re: Capital Gain Tax on Muni Bond Funds

Hi grabiner, Sorry I am still not very clear on how the bond fund capital gain works. Assume a bond fund (not single bond) has a duration of 2 years, and I hold the fund for 5 years (no sell, no addition), do I still get capital gain when I sell or transfer the fund? If interest rates fall, bond pr...
by grabiner
Sun Aug 24, 2014 6:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Capital Gain Tax on Muni Bond Funds
Replies: 15
Views: 1126

Re: Is it worth tilting to International Small Cap?

My only other option for international exposure in my 401K is Masters Select International (MSILX) which has an ER. of 1.07. The American Europacific growth R4 (REREX) has an ER of 0.82. I guess if I have to add international to my 401k it would be REREX since it has slightly lower ER The real issu...
by grabiner
Sun Aug 24, 2014 6:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it worth tilting to International Small Cap?
Replies: 18
Views: 1832

Re: Need Help: State-Specific Bond Funds and Moving ?

You can sell your OH fund and buy a CA bond fund; there shouldn't be too much of a capital gain (which would be taxable, both federal and CA). Any OH interest you earn while a CA resident is taxed by CA, so there is no point in holding an OH bond fund any longer. Another alternative, which you might...
by grabiner
Sat Aug 23, 2014 4:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Help: State-Specific Bond Funds and Moving ?
Replies: 6
Views: 577

Re: value or small cap tilting vs time to retirement

I would recommend keeping the same relative tilt, but decreasing the overall risk. If you have 80% stock when you start working and 40% when you retire, then you could reasonably have 40% small-cap stock when you start working and 20% when you retire; you halve your exposure to both market risk and ...
by grabiner
Sat Aug 23, 2014 3:59 pm
 
Forum: Investing - Theory, News & General
Topic: value or small cap tilting vs time to retirement
Replies: 7
Views: 725

Re: Capital Gain Tax on Muni Bond Funds

Bond funds may have small changes in price because bond prices rise and fall, but they don't consistently rise, so you won't expect to pay much in capital-gains tax. If you buy a bond for $10,000 at initial issue, and hold it to maturity, you will get $10,000 back at maturity, with no capital gain o...
by grabiner
Sat Aug 23, 2014 3:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Capital Gain Tax on Muni Bond Funds
Replies: 15
Views: 1126

Re: Saving for a car

Welcome to the forum! First, congratulations on planning ahead to save for a car. Just doing this, however you save the money, puts you ahead of many people who will just wait until they need the car, and have to borrow a lot of money and pay non-deductible interest. What is your tax bracket? You mi...
by grabiner
Sat Aug 23, 2014 3:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Saving for a car
Replies: 20
Views: 1565

Re: 401k ER Reduction / Bond Funds

While it is good for you that the R3 funds were replaced by lower-cost R4 funds, this shouldn't have any effect on your asset allocation because it was an equal reduction on everything in your 401(k). The allocation you chose looks reasonable assuming you are not close to retirement: 30% US large-ca...
by grabiner
Sat Aug 23, 2014 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k ER Reduction / Bond Funds
Replies: 11
Views: 902

Re: Pay cash for flight on sale, or use FF mileage quandry

I'm just curious, how do you all manage to find seats available with your miles? Seems like the last few years every time we want to use our miles on United or AA there are no seats available unless we want to use even more miles to waive the restriction and that's with planning far in advance. Try...
by grabiner
Sat Aug 23, 2014 3:21 pm
 
Forum: Personal Consumer Issues
Topic: Pay cash for flight on sale, or use FF mileage quandry
Replies: 29
Views: 1939

Re: look at small value etfs

yes , but in fact if you own smaller and more valuey stocks you can then own less equity overall and have a lower risk portfolio without having lower returns, as long as combine with high quality bonds, not HY You have to decide how much exposure you want to market, size, and value, and construct a...
by grabiner
Sat Aug 23, 2014 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: look at small value etfs
Replies: 34
Views: 2934

Re: Is it worth tilting to International Small Cap?

I am planning to hold both of the value index in my roth ira. By doing this I will not have enough space for my VTIAX (total international index) so I have pick up a higher ER international fund in my 401k. The one available right now is REREX American Funds EuroPacific Fund R4 (ER of 0.82). I am n...
by grabiner
Sat Aug 23, 2014 2:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it worth tilting to International Small Cap?
Replies: 18
Views: 1832

Re: Pay cash for flight on sale, or use FF mileage quandry

How much can you normally get for miles? The value depends on how easy it is to use them, and what trips you take. 1.5 cents is a good rule of thumb, if 25,000 miles normally gets you a domestic ticket that would cost $375. (This is what I use, as I live near Washington and thus can often get United...
by grabiner
Fri Aug 22, 2014 9:34 pm
 
Forum: Personal Consumer Issues
Topic: Pay cash for flight on sale, or use FF mileage quandry
Replies: 29
Views: 1939

Re: What documents should you never throw away?

You should keep the supporting documents for your tax returns until after the expiration of the statute of limitations for the IRS to audit you. I keep my actual tax returns forever, but toss the supporting documents after six years. Likewise. You may need an old tax return for some other purpose s...
by grabiner
Fri Aug 22, 2014 9:27 pm
 
Forum: Personal Consumer Issues
Topic: What documents should you never throw away?
Replies: 17
Views: 1614

Re: Do you tip on the tax? [Restaurants]

I learned that the tradition was not to tip on the tax, since you weren't served anything for the tax. This led to rules of thumb such as tripling the tax in a state with a 5% sales tax to get 15% on the bill. When the restaurant adds the tip to the bill (for a large party, or if you are using coupo...
by grabiner
Fri Aug 22, 2014 9:23 pm
 
Forum: Personal Consumer Issues
Topic: Do you tip on the tax? [Restaurants]
Replies: 124
Views: 4872

Consider the cost of exposure

If you have room in your investments, you can get more exposure to small-cap and value either by holding more small-cap value stock, or by holding the same amount of a fund with deeper small-cap and value exposure. And given the low cost of VBR (0.09%), increasing your allocation there is likely to ...
by grabiner
Fri Aug 22, 2014 9:14 pm
 
Forum: Investing - Theory, News & General
Topic: look at small value etfs
Replies: 34
Views: 2934

Re: look at small value etfs

JKL tax cost looks like it's right in line with the others, at least according to M* (with the exception of IJS which is extra-efficient). JKL had a great 10 years-- #1 in category/ Added: does this tax cost calculation consider qualified dividends? Sometimes they don't, and that could be one issue...
by grabiner
Fri Aug 22, 2014 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: look at small value etfs
Replies: 34
Views: 2934

Re: Is it worth tilting to International Small Cap?

I am a serious slice-and-dicer. I have half my US stock in small caps, and would have half my international in small caps as well, but I reduce the weight because of costs, both taxes and expenses. I have 3/8 of my international stock in developed markets large, 1/4 in emerging large, 1/4 in emergin...
by grabiner
Fri Aug 22, 2014 8:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it worth tilting to International Small Cap?
Replies: 18
Views: 1832

Re: convince me not to use traditional IRA for house downpay

I would suggest withdrawing from taxable unless there is a big capital gain involved. If you take $20,000 from taxable, and need that money later, you can take $20,000 from your Roth IRA penalty-free at any time (and, if you would rather take it from your traditional IRA, convert $20,000 in the trad...
by grabiner
Fri Aug 22, 2014 8:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: convince me not to use traditional IRA for house downpayment
Replies: 23
Views: 2212

Re: Low Tax Bracket & Almost Retired - Tax Exempt or Not??

2) If she will be in the income range were more of her social security becomes taxable with more income then her effective tax bracket could be a lot higher than 15% even though it looks like that is the tax bracket she is in. I am not sure how interest on muni bonds is handled in this situation so...
by grabiner
Thu Aug 21, 2014 11:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low Tax Bracket & Almost Retired - Tax Exempt or Not??
Replies: 11
Views: 1125

Re: Mixing life funds and other investment options

Why are people so opposed to the idea of mixing life funds with other investment options? Is there any situation where it makes sense to do both? You give up the simplicity of the target-date funds if they are not all, or almost all, of your portfolio. It is no easier to manage a portfolio which is...
by grabiner
Thu Aug 21, 2014 9:42 pm
 
Forum: Investing - Theory, News & General
Topic: Mixing life funds and other investment options
Replies: 7
Views: 502

Re: Moved from VBR to PXSV in tax Deferred this week

So, I finally made the jump from VBR to PXSV in my IRAs this week. PXSV has trailed VBR this year, so figured this would be a good time to pull the trigger especially since the fee waiver was extended another year. +1 I will be buying a large chunk of this in the next couple of months. Does Vanguar...
by grabiner
Thu Aug 21, 2014 9:33 pm
 
Forum: Investing - Theory, News & General
Topic: Moved from VBR to PXSV in tax Deferred this week
Replies: 16
Views: 1152

Re: tIRA - Tax deductions

If you hit the deduction phaseout, you could decide to recharacterize your traditional contribution to a Roth. You can recharacterize retroactively, but before the tax filing deadline, so you don't have to worry about this until next year when you file your taxes. If you are over the limit for Roth...
by grabiner
Thu Aug 21, 2014 9:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: tIRA - Tax deductions
Replies: 9
Views: 619

Re: When to put money into bond fund rather than home princi

You have me just about ready to put money into that LT Tax Exempt fund, but I'm still not able to shake off interest rate risk fears given the current bond prices. If you keep the mortgage, this doesn't concern you, because your mortgage is a negative bond. If rates rise, the market price of your b...
by grabiner
Thu Aug 21, 2014 9:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to put money into bond fund rather than home principal
Replies: 14
Views: 1653

Re: Low Tax Bracket & Almost Retired - Tax Exempt or Not??

I'm confused. Based on the info below, it looks like muni's are a better deal in either the 15 or 25 % brackets. What am I missing? Baird Intermediate (BMBIX) ave duration: 4.62 ave credit: AA 30-day SEC yield: 1.66 iShares 3-7 year Treasury (IEI) ave duration: 4.52 ave credit: AA 30-day SEC yield:...
by grabiner
Thu Aug 21, 2014 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low Tax Bracket & Almost Retired - Tax Exempt or Not??
Replies: 11
Views: 1125

Re: High cost 401k, or taxable brokerage?

But if you have high 401k fees, either from the fund e/r or the 401k load fees (it doesn't matter where--only the total), then the 401k fees can exceed the tax on the capital gains in the taxable brokerage scenario. And, since the capital gains rate is only 15%, it's actually quite easy for many 40...
by grabiner
Wed Aug 20, 2014 9:09 pm
 
Forum: Investing - Theory, News & General
Topic: High cost 401k, or taxable brokerage?
Replies: 13
Views: 814

Re: Do we plunder our retirement to pay off student debt?

Don't think of it as "plundering". If you could invest in a fund which paid 6.8% risk-free (5.3% after federal and state tax), would you do it? That is effectively what you do by paying down the 6.8% loan; $10,000 paid against the loan will increase your net worth by $10,680 next year. Thu...
by grabiner
Wed Aug 20, 2014 8:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do we plunder our retirement to pay off student debt?
Replies: 30
Views: 2594

Re: Low Tax Bracket & Almost Retired - Tax Exempt or Not??

Thanks for the quick replies. Is putting the bond fund into tax advantage spaced a no-brainer? We have equal room in both advantaged and tax free. If you are in the 15% tax bracket, then bond funds should go into tax-deferred accounts such as IRAs, because stock funds will be almost tax-free anyway...
by grabiner
Wed Aug 20, 2014 8:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low Tax Bracket & Almost Retired - Tax Exempt or Not??
Replies: 11
Views: 1125
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