Search found 15323 matches

by grabiner
Fri Sep 04, 2015 4:33 pm
Forum: Personal Finance (Not Investing)
Topic: Did you increase home owners/flood insurance after paying off Mortgage?
Replies: 16
Views: 892

Re: Did you increase home owners/flood insurance after paying off Mortgage?

I guess the way I'm looking at it is when you have the house paid off, you are carrying the entire risk if the property were to be subjected to a natural disaster versus splitting the risk with the bank when you have a mortgage. You are taking just as much risk either way, assuming that the lender ...
by grabiner
Fri Sep 04, 2015 4:13 pm
Forum: Personal Finance (Not Investing)
Topic: Did you increase home owners/flood insurance after paying off Mortgage?
Replies: 16
Views: 892

Re: Did you increase home owners/flood insurance after paying off Mortgage?

The one change you might want to make is increasing your deductible. Your lender may insist on a lower deductible than you like, in order to protect its interest. This is more common with auto loans, because the lender may insist on a $500 deductible, and the savings from raising the deductible to $...
by grabiner
Fri Sep 04, 2015 3:55 pm
Forum: Investing - Help with Personal Investments
Topic: TSP Rebalancing
Replies: 6
Views: 557

Re: TSP Rebalancing

What matters is the percent you own in each category of your asset allocation (AA). And the TSP allows you to rebalance the percent in each AA category. It is hard to fine-tune your TSP AA because you can only specify whole percentages, but perhaps you don't really need to be that fine tuned. It do...
by grabiner
Fri Sep 04, 2015 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Figuring out our investment setup in the face of a variable rate mortgage
Replies: 3
Views: 256

Re: Figuring out our investment setup in the face of a variable rate mortgage

I view a mortgage as a negative bond holding, because it works the same way: a bond will pay you fixed amounts of money on known dates, and a mortgage requires you to pay fixed amounts of money on known dates. A variable-rate mortgage should be viewed as a negative holding in a short-term bond fund,...
by grabiner
Thu Sep 03, 2015 11:35 pm
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

I prefer to tax-adjust a taxable account for future tax costs, because I use asset allocation as a measure of risk, not present value; If you plan to sell the stock soon, you might count it at 80% value in your asset allocation. If the stock market rises by 50%, you will have $150K in stock, which ...
by grabiner
Thu Sep 03, 2015 4:04 pm
Forum: Investing - Help with Personal Investments
Topic: Is it wise to use 100% Vanguard all-in-one funds?
Replies: 45
Views: 4035

Re: Balanced funds in taxable accounts?

If only Vanguard would make all-in-one target funds specifically designed to be tax efficient! I'd certainly be willing to pay a higher expense ratio in order to save on the taxes. It's not possible. A fund must be more than 50% in munis to get the tax benefit of the muni income; this is why Tax-Ma...
by grabiner
Wed Sep 02, 2015 11:55 pm
Forum: Personal Finance (Not Investing)
Topic: Roth vs. traditional 401K - Taking advantage of low-income year
Replies: 10
Views: 813

Re: Roth vs. traditional 401K - Taking advantage of low-income year

Also, you may want to take the MAGI limits for the Lifetime Learning tax credit into account. If you are paying at least $10K in tuition during that year, keeping your MAGI below the limit can enable you to knock $2K off your federal tax bill. http://www.irs.gov/publications/p970/ch03.html Converse...
by grabiner
Wed Sep 02, 2015 7:23 pm
Forum: Investing - Theory, News & General
Topic: Is there a greater probability of buying low with ETFs than mutual funds?
Replies: 21
Views: 1408

Re: Is there a greater probability of buying low with ETFs than mutual funds?

I understand that VTI and VTSAX could have just as easily gone up 2% on Tuesday and I would have lost out from not being invested. It’s impossible to time the market. However, if it goes up 2%, and assuming the direction of the market is a flip of the coin day to day, there’s still at least a chanc...
by grabiner
Wed Sep 02, 2015 7:14 pm
Forum: Investing - Theory, News & General
Topic: TLH conclusion in my situation
Replies: 20
Views: 1135

Re: TLH conclusion in my situation

Also if something is considered a wash sale I would imagine that what is considered a wash sale is based upon a dollar amount and not necessarily the whole transaction. For example, if you have $100,000 worth of VTI and then sell all of VTI but didn't sell the mutual fund equivalent VTSAX in the IR...
by grabiner
Wed Sep 02, 2015 6:58 pm
Forum: Investing - Help with Personal Investments
Topic: You've inherited a bad portfolio from your former self. What do you do?
Replies: 18
Views: 1671

Re: You've inherited a bad portfolio from your former self. What do you do?

I'm running into the opposite problem - a former "self" (sibling actually) invested in a target date fund in a taxable account and now has substantial embedded long term capital gains (this was prior to understanding what the three-fund portfolio is an its tax efficiency). Should the sibl...
by grabiner
Wed Sep 02, 2015 6:56 pm
Forum: Investing - Help with Personal Investments
Topic: You've inherited a bad portfolio from your former self. What do you do?
Replies: 18
Views: 1671

Re: You've inherited a bad portfolio from your former self. What do you do?

Sell everything that you don't want to hold forever, but keep the same asset allocation (across all your accounts). If your portfolio is currently 80% stock, and 80% stock is right for you, then it won't make much difference to your portfolio returns if you switch to 80% all in index funds; your old...
by grabiner
Wed Sep 02, 2015 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: is it worth buying ESPP?
Replies: 30
Views: 1824

Re: is it worth buying ESPP?

Don't worry about the holding period that much. Say you work at the company for 3 years: Month 1: buy Month 2: buy ... Month 12: buy Month 13: buy, and sell month 1's at same price Month 14: buy, and sell month 2's at same price ... Month 36: buy, and sell month 24's at same price Month 37: sell mo...
by grabiner
Wed Sep 02, 2015 6:46 pm
Forum: Investing - Help with Personal Investments
Topic: Is it wise to use 100% Vanguard all-in-one funds?
Replies: 45
Views: 4035

Re: Is it wise to use 100% Vanguard all-in-one funds?

Bottom line: if you choose the all-in-one route, promise yourself you will annually take a close look at the impact of those bonds in your taxable account and see what you are paying for your ultra-simple plan. It might be a small amount that is worth it to you. If not, it would be easy to fix. Unf...
by grabiner
Wed Sep 02, 2015 6:44 pm
Forum: Investing - Help with Personal Investments
Topic: Is it wise to use 100% Vanguard all-in-one funds?
Replies: 45
Views: 4035

Re: Is it wise to use 100% Vanguard all-in-one funds?

Besides the tax cost of the balanced fund in a taxable account, you may find that you have the wrong type of bonds; if you are in a 28% or higher tax bracket, or 25% in a high-tax state with a Vanguard muni fund for it, then you probably want to hold municipal bonds, which are likely to have higher ...
by grabiner
Wed Sep 02, 2015 6:29 pm
Forum: Investing - Help with Personal Investments
Topic: TLH Question to Offset Gains From Another Sale
Replies: 5
Views: 401

Re: TLH Question to Offset Gains From Another Sale

One more thought. There should be a dividend payment at the beginning of October for FUSVX, which is also when my company stock will move to a long term holding. The dividend would be somewhere in the neighborhood of $800. Is there any value in holding off the sale of FUSVX until after I receive th...
by grabiner
Wed Sep 02, 2015 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

… you should put stocks in your Roth IRA. Yes, but only stocks that go up and not ones that go down. This was not my point. Once you have decided on your desired risk-return profile, it is slightly better to put the appropriate amount of stocks in the Roth account. Whether the stock market goes up ...
by grabiner
Wed Sep 02, 2015 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

Please check my follow up logic: Let's say I have $100k in stocks in a taxable account with $40k in unrealized gains. I want to sell these stocks to get cash to pay for Roth conversions. Assuming 15% Federal capital gains tax and 5% state tax, 20% of the gains, or $8k, does not belong to me. By sel...
by grabiner
Wed Sep 02, 2015 12:03 am
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

The goal of my strategy is to reduce the tax of Roth conversions. If the stock market is high, and the stock prices are expected to drop, I'd rather have the stocks in the Traditional account where the drop would result in lower taxes on the conversion. Your goal should not be to reduce your tax bi...
by grabiner
Tue Sep 01, 2015 11:30 pm
Forum: Personal Finance (Not Investing)
Topic: A few questions on HSA
Replies: 7
Views: 498

Re: A few questions on HSA

If the HDHP owner's compensation < $118.5K (2015) than it is best for them to take the full division of maximum contribution. Then the HSA contribution is not subject to FICA. This applies only if the contribution is made by payroll deduction, not all employers allow it. And it's actually better to...
by grabiner
Tue Sep 01, 2015 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: A few questions on HSA
Replies: 7
Views: 498

Re: A few questions on HSA

Thank you, David. That answers my second question. Any thoughts on my first and third question? Thanks. You can confirm these answers with IRS Publication 969. 1. You can keep your HDHP intact even if you are no longer eligible to contribute. (Edit: I misunderstood the situation; if you are only el...
by grabiner
Tue Sep 01, 2015 9:53 pm
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

I'd like to combine your idea of the tax-adjusted allocation with my thoughts of moving money between different types of funds in response to the market levels. Let's use a simplifying example and 30% Federal+State tax rate. State-0 allocation in Traditional IRA: - $100k - stocks (of which $70k are...
by grabiner
Tue Sep 01, 2015 9:36 pm
Forum: Personal Finance (Not Investing)
Topic: A few questions on HSA
Replies: 7
Views: 498

Re: A few questions on HSA

You must have a qualifying HDHP to be eligible to contribute to an HSA. But the main point of an HSA is that it can be used for future medical expenses, even after you are no longer eligible to contribute; this is in contrast to a Flexible Spending Account, which is use-or-lose. In fact, a popular H...
by grabiner
Tue Sep 01, 2015 9:32 pm
Forum: Investing - Theory, News & General
Topic: Improving the TSP [for current participants]
Replies: 100
Views: 13357

Re: Improving the TSP [for current participants]

Given the current TSP rules and limitations, here's how I think I'll have to deal with my TSP account upon retirement: First, I'll convert my entire TSP account to the G Fund. That will be temporary. I haven't held any G Fund assets since the late 1980s, when that was still required. Right now, all...
by grabiner
Tue Sep 01, 2015 9:26 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard White Paper: "An evaluation of smart beta and other rules-based active strategies" (Aug 2015)
Replies: 1
Views: 415

Re: New Vanguard White Paper: "An evaluation of smart beta and other rules-based active strategies" (Aug 2015)

This reinforces my general understanding of the situation. Stocks with different characteristics have different returns: size and value are the most significant. Criteria other than size and value might be used to generate a portfolio, but that portfolio is likely to behave similarly to other portfo...
by grabiner
Tue Sep 01, 2015 9:14 pm
Forum: Investing - Help with Personal Investments
Topic: TLH Question to Offset Gains From Another Sale
Replies: 5
Views: 401

Re: TLH Question to Offset Gains From Another Sale

You don't need to be capital-gain neutral. If you have a capital loss in FUSVX (Fidelity Spartan 500 index), selling it will give you a tax benefit; it will offset capital gains, and will offset ordinary income after the capital gains are used up. It could be slightly better to wait until next year ...
by grabiner
Tue Sep 01, 2015 9:11 pm
Forum: Investing - Help with Personal Investments
Topic: Exchange Windsor II for VGTSX, is now a good time?
Replies: 4
Views: 584

Re: Exchange Windsor II for VGTSX, is now a good time?

Getting out of Windsor II in a taxable account is a good tax move, because Windsor II is likely to have a fairly high tax cost because of capital gains. Therefore, I recommend doing this if you can do it for a fairly low tax cost. But if you exchange Windsor II for Total International, you will need...
by grabiner
Tue Sep 01, 2015 9:08 pm
Forum: Investing - Help with Personal Investments
Topic: Market levels and stock holdings
Replies: 24
Views: 1887

Re: Market levels and stock holdings

I would suggest using a tax-adjusted allocation between traditional and Roth; you know what fraction of the traditional account will be lost to federal and state tax, so just treat that fractions as not yours. This eliminates the advantage of holding the higher-earning asset in the Roth; $7100 in a ...
by grabiner
Tue Sep 01, 2015 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: 529 tax deduction
Replies: 1
Views: 166

Re: 529 tax deduction

529 contributions are not federally deductible; the tax advantage is that they grow tax-free. If you live in a state with an income tax, the AR tax deduction won't be worth much for you, as you take a tax credit for your AR tax against the tax charged by your home state on the same income. And even ...
by grabiner
Tue Sep 01, 2015 8:01 pm
Forum: Investing - Help with Personal Investments
Topic: Exchanging funds within a Roth IRA- tax implications?
Replies: 5
Views: 336

Re: Exchanging funds within a Roth IRA- tax implications?

The only tax implication that can occur with an exchange in a Roth IRA is a wash sale with a taxable account. If you sold a fund for a loss in your taxable account, and buy a substantially identical fund (for example, the mutual fund class of an ETF you sold) in your Roth IRA within 30 days before o...
by grabiner
Tue Sep 01, 2015 7:57 pm
Forum: Investing - Help with Personal Investments
Topic: Muni Bonds
Replies: 13
Views: 977

Re: Muni Bonds

1) is there any significant difference between the intermediate muni bond funds offered through Vanguard (since I dont live in one of the states that offers a fund through Vanguard)? 2) will any of these funds be impacted by AMT? Vanguard High-Yield Tax-Exempt, despite its name, is not a junk-bond ...
by grabiner
Tue Sep 01, 2015 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: Expense Ratio vs. Tax-free in MMF
Replies: 3
Views: 231

Re: Expense Ratio vs. Tax-free in MMF

The way to do this type of comparison is to compare the yields after state taxes. If your VA tax rate is 5.75%, then a national muni fund yielding 4% (which used to be common) would have a yield of 3.77% after state taxes, so it is as good as a VA muni fund with a 3.77% yield. For bond funds, rather...
by grabiner
Mon Aug 31, 2015 11:01 pm
Forum: Investing - Theory, News & General
Topic: Aug 2015 correction: what Bogleheads did...
Replies: 123
Views: 6889

Re: Aug 2015 correction: what Bogleheads did...

I don't see a difference between rushing to rebalance every time the market hiccups and market timing..? The difference is that market timing is changing your allocation because you expect the market to perform differently under different conditions, while rebalancing is going back to the same allo...
by grabiner
Sun Aug 30, 2015 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Prepaying Mortgage Question
Replies: 24
Views: 2505

Re: Prepaying Mortgage Question

Don't think that paying extra mortgage payments is the same as investing in the stock market. They are two significantly different risk levels. You should compare paying extra mortgage payments to investing in high quality bonds (US treasuries). They have similar risk levels. You mentioned that you...
by grabiner
Sun Aug 30, 2015 10:27 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA to Taxable IRA ???
Replies: 4
Views: 277

Re: Roth IRA to Taxable IRA ???

Understood ~ I was just amazed that this guest on the program suggested viewers do that because of recent market losses. I had to rewind it and view it twice because I couldn't believe my own ears..... Recharacterizing a conversion after the market declines does make sense. If you converted $10,000...
by grabiner
Sun Aug 30, 2015 9:11 pm
Forum: Investing - Help with Personal Investments
Topic: Cost Basis Question
Replies: 3
Views: 275

Re: Cost Basis Question

As far as the IRS is concerned, you have only one "basis" for all your IRAs, regardless of where you keep them, so there is no reason to keep them separate. The basis is zero unless your IRAs contain money which was not already taxed (such as non-deductible contributions). If you have a $2...
by grabiner
Sun Aug 30, 2015 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: Have inherited portfolio and starting new job...advice on 401K's and profit sharing plans?
Replies: 4
Views: 395

Re: Have inherited portfolio and starting new job...advice on 401K's and profit sharing plans?

You should participate in the company plans because of the tax benefit. If you sell funds from your individual account to buy similar funds in your 401(k), you will pay the capital-gains tax that you have to pay anyway when you sell from your taxable account, but you will get tax-deferred growth fo...
by grabiner
Sun Aug 30, 2015 7:14 pm
Forum: Investing - Theory, News & General
Topic: Roth IRA to Taxable IRA ???
Replies: 4
Views: 277

Re: Roth IRA to Taxable IRA ???

You may prefer either a Roth or traditional IRA; see Traditional versus Roth on the wiki. However, you cannot normally convert a Roth to a traditional IRA, so the slide makes no sense. (If you made a contribution or conversion to a Roth IRA, you may recharacterize it as a traditional IRA through Oct...
by grabiner
Sun Aug 30, 2015 7:08 pm
Forum: Investing - Theory, News & General
Topic: Aug 2015 correction: what Bogleheads did...
Replies: 123
Views: 6889

Re: Aug 2015 correction: what Bogleheads did...

I did some tax loss harvesting, but I did it the week before the main decline, because I already had losses in my Emerging Markets Index at the time. I also took advantage of the decline to make a move that wasn't really a harvest. With the addition of small-cap to Emerging Markets Index, and the fa...
by grabiner
Sun Aug 30, 2015 6:54 pm
Forum: Investing - Help with Personal Investments
Topic: Where to place my bond and which bond?
Replies: 3
Views: 392

Re: Where to place my bond and which bond?

What are your 401(k) options? If your 401(k) has a low-cost bond fund, that might be the best place to hold bonds. If the stock funds are less expensive than the bond funds, then you should hold stocks in the 401(k), and bonds in your taxable account. If you do hold bonds in your taxable account, th...
by grabiner
Sun Aug 30, 2015 6:26 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating value of mortgage interest deduction
Replies: 13
Views: 1054

Re: Calculating value of mortgage interest deduction

I think folks in the 33% marginal income tax bracket lose a bit of their itemized deductions, so the amounts calculated by the OP are probably not accurate. I suggest that one get out their TurboTax from 2014 and simply add $1,000 of mortgage interest and see how much their taxes were reduced. Mayb...
by grabiner
Sat Aug 29, 2015 3:36 pm
Forum: Investing - Theory, News & General
Topic: [Wiki suggestion] Invest in taxable or 401(k)?
Replies: 7
Views: 504

Re: [Wiki suggestion] Invest in taxable or 401(k)?

I updated the wiki article with the new rule of thumb, and I will also use it when giving advice on the forum, as this is a common question requiring advice. FiveK, thank you very much for your help. I try to get things right, but I don't always think of all the details, and I believe that when I cr...
by grabiner
Sat Aug 29, 2015 2:26 pm
Forum: Personal Finance (Not Investing)
Topic: what could cause a credit score decline if no obvious issue on credit report?
Replies: 25
Views: 1653

Re: what could cause a credit score decline if no obvious issue on credit report?

Upon further research, I found out that I made a large purchase of $7200 (air ticket for 6) in June on a united airline card that exceed the credit limit of $5500. Maybe that was one of the reason of a loss of 20 points just in July. :oops: Should have asked for a credit increase before the purchas...
by grabiner
Sat Aug 29, 2015 10:58 am
Forum: Personal Consumer Issues
Topic: Prius owners and rest of Bogleheads
Replies: 33
Views: 2302

Re: Prius owners and rest of Bogleheads

Look at the cost and the value involved. Given your driving, a hybrid will probably save you a lot of gas; subtract those gas savings to the price and see whether you could get an equally good conventional-engine car for that price. I made the same decision in 2006, although I guessed wrong. I wante...
by grabiner
Sat Aug 29, 2015 10:53 am
Forum: Personal Finance (Not Investing)
Topic: Long Term Cap. Gains Affect on AMT Tax Credit
Replies: 2
Views: 208

Re: Long Term Cap. Gains Affect on AMT Tax Credit

The reason that selling the shares will give you AMT credit is not that they are long-term gains, but that they have a different regular and AMT basis. You said that you paid $3500 in AMT, which implies that you received about $12,500 in AMT-only income. For the purposes of this example, I will assu...
by grabiner
Sat Aug 29, 2015 10:34 am
Forum: Personal Finance (Not Investing)
Topic: what could cause a credit score decline if no obvious issue on credit report?
Replies: 25
Views: 1653

Re: what could cause a credit score decline if no obvious issue on credit report?

Credit scoring models are complex. Most models have multiple scorecards for different types of customers, and sometimes a nearly-neutral action can move you from Scorecard X to Scorecard Y and cause your score to change significantly, or an action which should be positive may move you from a good sc...
by grabiner
Sat Aug 29, 2015 10:04 am
Forum: Investing - Help with Personal Investments
Topic: 3 Fund Portfolio - is it ok to Substitute Total Bond with Tax-Exempt Bond?
Replies: 3
Views: 555

Re: 3 Fund Portfolio - is it ok to Substitute Total Bond with Tax-Exempt Bond?

Intermediate-Term Tax-Exempt is the standard recommendation for a 3-fund portfolio in a taxable account, assuming that you are in a high enough tax bracket that munis are appropriate. Another alternative is the new Tax-Exempt Bond Index (which is likely to have a slightly longer duration, and thus a...
by grabiner
Sat Aug 29, 2015 10:02 am
Forum: Investing - Help with Personal Investments
Topic: one vanguard fund for a roth
Replies: 4
Views: 582

Re: one vanguard fund for a roth

Since you have a traditional IRA as well as a Roth IRA, and you will use both of them for your retirement needs, you should consider them part of the same allocation. If you convert your Traditional IRA to a Roth IRA, you can leave the money in the same fund it came from; this will keep your allocat...
by grabiner
Sat Aug 29, 2015 9:57 am
Forum: Investing - Help with Personal Investments
Topic: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?
Replies: 14
Views: 607

Re: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?

Advantage to etfs for tax loss harvesting since you have no lockout periods to deal with. You still have the IRS's 31-day wash-sale rule, and if your replacement fund pays a dividend (likely for the late-August harvesters who will receive September dividends), the dividend becomes non-qualified unl...
by grabiner
Sat Aug 29, 2015 9:37 am
Forum: Investing - Help with Personal Investments
Topic: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?
Replies: 14
Views: 607

Re: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?

To jump in with a follow on question... When you buy a traditional fund the fund company needs to keep track of you to distribute dividends, send out a prospectus, and probably other things I can't think of at the moment. That all costs money. Are any of those costs reduced or eliminated with an ET...
by grabiner
Sat Aug 29, 2015 9:26 am
Forum: Investing - Help with Personal Investments
Topic: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?
Replies: 14
Views: 607

Re: Index ETF or index funds: should I use ETF if there is no commission fee in a taxable account?

This can't happen; ETF redemptions occur in-kind, so there are no capital gains or losses realized. (Redemptions usually reduce the unrealized capital gain, by getting rid of lower-basis shares.) It can and has happened during the financial crisis of 2008. It happened to some small ETFs that held l...

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