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Re: Maxing roth 401k vs trad 401k in high income tax bracket

possibility of lower tax rates in the future, due to state tax changes (moving), high medical expenses/deductions despite high income, lowered future income taxes (ha!), etc. You forgot the most important one... possibility of lower tax rates in the future because you retired and no longer have tha...
by learning_head
Sat Aug 09, 2014 11:06 am
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1245

Re: Maxing roth 401k vs trad 401k in high income tax bracket

+1 on thx1138 In short, Roth = Traditional if your current tax situation is same as in retirement, except yes, there are some small advantages to Roth: (1) if you contribute the maximum amount (which is same for them), more of your money is tax-advantaged (because of say 17k limit, only part of it b...
by learning_head
Fri Aug 08, 2014 9:23 am
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1245

Re: If you tax adjust, how has it changed your life?

Imagine there were no tax differences but instead your Roth IRA balances were presented to you is US dollars, your taxable accounts in Australian dollars and your Traditional IRA / 401(k) in Canadian dollars, would you feel comfortable just adding these "dollars" up or setting AA based on ...
by learning_head
Sun Jul 27, 2014 6:39 pm
 
Forum: Investing - Theory, News & General
Topic: If you tax adjust, how has it changed your life?
Replies: 16
Views: 2102

Re: The article on tax efficient placement needs to be rewri

learning_head, I don't know if you realize it, but you have provided a simplified summary of the Reichenstein paper. Kevin Did not read this paper (thanks Taylor for the link) but it does not surprise me (I had communicated with him during my investigations on this back in 2009 and learned a lot fr...
by learning_head
Thu Jul 24, 2014 5:33 pm
 
Forum: Investing - Theory, News & General
Topic: The article on tax efficient placement needs to be rewri
Replies: 75
Views: 4496

Re: Bonds beat stocks over the last 15 years

Were there any long periods when cash beat both? (what about in other countries?)
by learning_head
Thu Jul 24, 2014 5:26 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds beat stocks over the last 15 years
Replies: 93
Views: 8098

Re: "Asset Location Revisited"

This paper concludes by indicating that except in rare cases, investors should hold stocks in taxable accounts and bonds in retirement accounts . (underline mine) Thanks Taylor. For those still confused, here's a simple proof anyone should be able to follow/reproduce: Assumptions: Stock divs: 2%. S...
by learning_head
Thu Jul 24, 2014 5:05 pm
 
Forum: Investing - Theory, News & General
Topic: The article on tax efficient placement needs to be rewri
Replies: 75
Views: 4496

Re: a close look at value and momentum

Hi Larry, aside from DFA funds (which require hiring an adviser), which funds would you recommend for capturing SV? I know you just mentioned BOSVX. Is there others? Similarly, if you could suggest some Int'l SV funds that you like outside of DFA, that would be great!

Thanks!
by learning_head
Tue Jul 15, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 259
Views: 17943

Re: What to pick: RSU or stock options?

mhc wrote:You could play with an options calculator to see if the 4:1 ratio is equitable.


Any suggestions on how to do this? I am not exactly following here.
by learning_head
Sat Jun 14, 2014 1:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to pick: RSU or stock options?
Replies: 29
Views: 1744

Re: What to pick: RSU or stock options?

Yes, these are NQSOs (I edited OP to mention this too). I think I have 3 months after leaving company to exercise these though don't recall for sure. I will probably stay with the company for a while but yes, good to consider what happens if I don't.

Thanks
by learning_head
Sat Jun 14, 2014 1:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to pick: RSU or stock options?
Replies: 29
Views: 1744

What to pick: RSU or stock options?

Hi folks, would love some help with a choice that Mega-Corp is offering, i.e. a choice of RSUs or options: - take 1 RSU, or - take 4 stock options (NQ) - (could also split some RSUs / some stock options in whatever proportion I want but based on same 1-to-4 ratio as above) Both vest over 4 years (1/...
by learning_head
Sat Jun 14, 2014 9:15 am
 
Forum: Investing - Help with Personal Investments
Topic: What to pick: RSU or stock options?
Replies: 29
Views: 1744

Re: High P/E = high future returns?

I think PEs have reliable predictive value when they reach very extreme levels either low or high. Extreme PEs directly reflect extreme investor sentiment levels, either pervasive panic or euphoria which is what drives net buying or selling of stocks and therefore PEs. Lowest PEs occur when all hop...
by learning_head
Mon Jun 09, 2014 7:01 pm
 
Forum: Investing - Theory, News & General
Topic: High P/E = high future returns?
Replies: 20
Views: 1484

High P/E = high future returns?

It's been said a number of times on these threads that P/E (and P/E10) have some predictive power, explaining maybe 40% of future returns where higher PEs imply lower returns in following 10 years. (In part, this is based on this Vanguard paper ). So, just knowing this, I would expect that when I lo...
by learning_head
Sun Jun 08, 2014 8:56 am
 
Forum: Investing - Theory, News & General
Topic: High P/E = high future returns?
Replies: 20
Views: 1484

Re: SPIA - what do guarantee associations cover?

On the question of present value of CPI-adjusted SPIA, would the CPI-adjusted nature of it make it easier to compute because instead of using a discount rate one has to guess, one can just use CPI itself? In other words, if I have $1000/year payment, CPI-adjusted, and my life expectancy is 30 years...
by learning_head
Sat May 24, 2014 11:48 am
 
Forum: Investing - Theory, News & General
Topic: SPIA - what do guarantee associations cover?
Replies: 23
Views: 2477

Re: Why is Two Fund Less Popular Than Three Fund Portfolio?

the UK based 'LifeStrategy' fund is too overweighted towards UK equities for my liking. Not sure how much is the overweighting there but... I think everyone may want to have a pretty large home-country bias. Perhaps non-US investors should have less of it due to smaller size of their home country m...
by learning_head
Sun May 11, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Why is Two Fund Less Popular Than Three Fund Portfolio?
Replies: 145
Views: 10631

Re: SPIA - what do guarantee associations cover?

On the question of present value of CPI-adjusted SPIA, would the CPI-adjusted nature of it make it easier to compute because instead of using a discount rate one has to guess, one can just use CPI itself? In other words, if I have $1000/year payment, CPI-adjusted, and my life expectancy is 30 years,...
by learning_head
Sun May 11, 2014 8:43 am
 
Forum: Investing - Theory, News & General
Topic: SPIA - what do guarantee associations cover?
Replies: 23
Views: 2477

Re: CPI-adjusted SPIAs: buy now or later? with numbers...

- Your premise that one must buy in 5 years. - You assumption: if payout ratios do not change over 5 years. One doesn't have to buy in 5 years (can wait 20 years until 65 or even later). The payout ratios will change. To retire early, without any other floor-expense protection (no pension to speak ...
by learning_head
Sat May 03, 2014 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: CPI-adjusted SPIAs: buy now or later? with numbers...
Replies: 3
Views: 523

CPI-adjusted SPIAs: buy now or later? with numbers...

Practical question... Say a working 45 year old (in relatively high tax bracket) wants to retire early at age 50 and wants to buy a CPI-adjusted SPIA annuity to cover basic needs in 5 years from taxable funds. Should they buy now (at 45) or buy later (at 50)? Summary : financially, they would be bet...
by learning_head
Sat May 03, 2014 10:19 am
 
Forum: Investing - Theory, News & General
Topic: CPI-adjusted SPIAs: buy now or later? with numbers...
Replies: 3
Views: 523

Re: Efficiently collecting CPI-adjusted SPIA quotes

Thank you all, please keep them coming! I especially want to thank Bill M for the kind of info I was looking for. Bill, for Lincoln Financial, I had tried calling them but did not get very far (not being a financial advisor). Document that you linked is for specific age (65). So if you wanted to get...
by learning_head
Tue Apr 29, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: Efficiently collecting CPI-adjusted SPIA quotes
Replies: 14
Views: 2180

Efficiently collecting CPI-adjusted SPIA quotes

Does anyone have any tips on how to efficiently collect CPI-adjusted SPIA quotes? I know I can call Vanguard and Fidelity. It appears some companies require only going through advisors. I tried sending request via web to principal financial and immediateannuities.com which does not list CPI-adjusted...
by learning_head
Mon Apr 28, 2014 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Efficiently collecting CPI-adjusted SPIA quotes
Replies: 14
Views: 2180

Re: SPIA - what do guarantee associations cover?

So, I was able to get through to a person at guarantee association and got this reply: Generally speaking, for covered annuities that are on benefit, a “present value” of the payments remaining on the annuity would be calculated as of the date of the triggering of the guaranty association. The prese...
by learning_head
Fri Apr 25, 2014 10:08 am
 
Forum: Investing - Theory, News & General
Topic: SPIA - what do guarantee associations cover?
Replies: 23
Views: 2477

Re: SPIA - what do guarantee associations cover?

Thanks PJW. Anyone has has a take on this or understand what the current rules mean? Thanks!
by learning_head
Mon Apr 21, 2014 3:17 pm
 
Forum: Investing - Theory, News & General
Topic: SPIA - what do guarantee associations cover?
Replies: 23
Views: 2477

Re: Backdoor Roth and Turbotax

Not an expert here but had similar situation and here is my take... Hello, I know this is probably basic, but I'm missing. I looked at http://www.bogleheads.org/forum/viewtopic.php?t=67303 and I'm still confused. In 2011 and 2012, we weren't eligible for a Roth, so I tried to do the backdoor Roth fo...
by learning_head
Tue Apr 08, 2014 5:19 pm
 
Forum: Investing - Theory, News & General
Topic: Backdoor Roth and Turbotax
Replies: 1
Views: 254

Re: Wade Pfau: Lifecycle Finance

Suppose R40 didn't give a hoot about when she retired. Instead she came to you for advice in the following situation. I want very little risk in my portfolio, but I want the portfolio to consist 100% of emerging market small cap stocks. What AA advice would you give? Might you consider suggesting t...
by learning_head
Sun Apr 06, 2014 2:32 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

Re: Wade Pfau: Lifecycle Finance

I appreciate your response grayfox... I guess this is the best R40 can do... Unfortunately, I don't think it's realistic just because of this: Make a guess about inflation, Say 3% inflation per year. (Actually inflation expectations are more like 2.5% right now, so 3% has a margin for error.) BTW, y...
by learning_head
Sun Apr 06, 2014 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

SPIA - what do guarantee associations cover?

I've looked at http://www.nolhga.com and http://www.annuityadvantage.com/stateguarantee.htm but have not found an explanation of what do state associations actually cover for inflation-adjusted SPIAs... Hoping some folks on this board would know... Say, in a state with $250,000 limit on "presen...
by learning_head
Sat Apr 05, 2014 3:03 pm
 
Forum: Investing - Theory, News & General
Topic: SPIA - what do guarantee associations cover?
Replies: 23
Views: 2477

Re: Wade Pfau: Lifecycle Finance

If you do not have flexibility in the retirement age, LCF says as you approach retirement you should be taking very little risk, because that inflexibility gives you very little risk capacity. Hi BobK, The point of the question was HOW IN PRACTICE with TODAY's products could R40 take the least amou...
by learning_head
Sat Apr 05, 2014 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

Re: Wade Pfau: Lifecycle Finance

BobK, thank you so much for all the info and great posts. I have a similar kind of question as Richard. Let's imagine a simple scenario: someone with wierd name R40 who wants to retire at 40 and provide a floor of $25k/year. I think following assumptions would be reasonable: - R40 accumulated $300K...
by learning_head
Sat Apr 05, 2014 2:33 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

Re: Wade Pfau: Lifecycle Finance

There is not any strategy that can help much, if you are only going to work to age 40, or even 50. There are simply too few years of work compared to many years of expected retirement. You have to be either wealthy, or be willing to live a simple inexpensive lifestyle in retirement. Thanks for your...
by learning_head
Tue Apr 01, 2014 7:57 pm
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

Re: Wade Pfau: Lifecycle Finance

BobK, thank you so much for all the info and great posts. I have a similar kind of question as Richard. Let's imagine a simple scenario: someone with wierd name R40 who wants to retire at 40 and provide a floor of $25k/year. I think following assumptions would be reasonable: - R40 accumulated $300K ...
by learning_head
Fri Mar 28, 2014 8:18 am
 
Forum: Investing - Theory, News & General
Topic: Wade Pfau: Lifecycle Finance
Replies: 120
Views: 16034

Re: Tax form 1116 questions

I tried using IRS freefile site for 1116 and it got rejected with this code: "Issue : Business Rule F1116-012 - If for any country in Form 1116, Line 2 'ForeignIncRelatedExpensesAmt' has a non-zero value, then [ForeignIncmRelatedExpensesStmt] must be attached to Line 2. The following informatio...
by learning_head
Thu Mar 20, 2014 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

Hi grabiner, HouseBlend, I think one of our big questions here has been for state taxes on line 2: - do we account for just 2013 state taxes (in full), or - do we account for part of 2013 / part of 2012 state taxes as reflected on Schedule A, line 5 I think reasons to think that line 5 of Schedule A...
by learning_head
Sun Mar 09, 2014 11:16 am
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

<deleted>
by learning_head
Sat Mar 08, 2014 10:31 am
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

@HouseBlend: Thanks for response. I corrected my earlier post based on it. Only other difference I wanted to note is that [Full foreign income + State Taxed Income - Federal AGI] formula I came up with (thanks for correcting it) only applies when State Taxed Income <= US sourced part of Federal AGI....
by learning_head
Tue Mar 04, 2014 11:27 am
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Form 8960 (Net Investment Income Tax)

@sscritic: you are right, thanks for catching - I should not have said "modified 2013 AGI". I remove "modified" word. It does not change my (and OP's) main question though: why are we combining numbers from line 5 of Schedule A (which is a combination of state tax related payment...
by learning_head
Mon Mar 03, 2014 5:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Form 8960 (Net Investment Income Tax)
Replies: 6
Views: 1548

Re: Tax form 1116 questions

So, for state taxes - do you mind answering my question #2? I think part of your reply already suggests that indeed effective state tax rate for current year is needed to properly get the number (i.e. as current year 2013 state tax rate * total foreign sourced income in 2013)... Would you put this ...
by learning_head
Mon Mar 03, 2014 5:24 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

Hi grabiner, You need to determine what fraction of your taxable income was foreign. For VWO and VEA, since Vanguard website says "The foreign income percentage for this fund was 100%.", I believe ALL of their reported qualified and non-qualified reported numbers are foreign-sourced, right...
by learning_head
Sun Mar 02, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

livesoft wrote:OK, if someone else doesn't, I will plug in your numbers into TurboTax, but give me at least a week to do that (and hope grabiner or others answer in the meantime).


Thanks livesoft, it would be interesting to see what it shows this time around - maybe they fixed the bugs from earlier year :-)
by learning_head
Sun Mar 02, 2014 7:12 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Tax form 1116 questions

No, I don't have Turbo Tax but when I did try it in 2011, it did NOT come up with correct numbers - it double counted real estate taxes on lines 3a and 3b, and I think put State taxes on line 3a instead of line 2 (and also mishandled early withdrawal penalty too) according to my notes... So, I would...
by learning_head
Sun Mar 02, 2014 7:09 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Tax form 1116 questions

Hi folks, I apologize for long post but I have very specific questions. I am hoping some of the detail-oriented members here that like to go into nitty-gritty details might have had similar questions in the past and/or know how to resolve them... Also, below is a scenario that might be applicable to...
by learning_head
Sun Mar 02, 2014 7:02 pm
 
Forum: Investing - Theory, News & General
Topic: Tax form 1116 questions
Replies: 29
Views: 2205

Re: Form 8960 (Net Investment Income Tax)

Wonder if anyone has updates on this? I am confused just as OP about line 9b on 8960. If I am to follow the instructions, it looks like I can deduct Schedule A line 5 state income tax (which in turn has some payments for 2012 income and other payments are for 2013 income) and then, to find part that...
by learning_head
Sat Mar 01, 2014 6:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Form 8960 (Net Investment Income Tax)
Replies: 6
Views: 1548

Personal Defined Benefits Plan

Has anyone had any experience with this? http://www.forbes.com/sites/robertberger/2014/02/24/3-stealth-retirement-savings-moves-for-the-wealthy/?ss=personalfinance Finally, for self-employed individuals, a personal defined benefit plan may enable you to save more than $100,000 a year in a tax-deferr...
by learning_head
Wed Feb 26, 2014 8:54 am
 
Forum: Investing - Theory, News & General
Topic: Personal Defined Benefits Plan
Replies: 15
Views: 1592

Re: When tax-efficient taxable investing isn't?

^ Although we are squarely in the "official" 25% marginal income tax bracket and pay an effective rate of about 10%, when we do that exercise, we get in the high forties for the marginal rate. Bob's not my name has written about this: http://thefinancebuff.com/your-marginal-tax-rate.html ...
by learning_head
Wed Feb 19, 2014 9:36 am
 
Forum: Investing - Theory, News & General
Topic: When tax-efficient taxable investing isn't?
Replies: 51
Views: 3984

Re: When tax-efficient taxable investing isn't?

If I put muni bonds in taxable and stocks in tax-advantaged, I save that 0.58% drag, for this particular blend of domestic and international holdings. That's assuming I hold muni bonds equivalent in risk, duration, yield, etc, to my current tax-advantaged holdings. I believe muni bonds normally sho...
by learning_head
Tue Feb 18, 2014 11:16 pm
 
Forum: Investing - Theory, News & General
Topic: When tax-efficient taxable investing isn't?
Replies: 51
Views: 3984

Re: Questions about filling out PenFed IRA CD forms

Due to IRA CD maturity in another institution around end of month I will literally have 5 calendar days next week to transfer the funds to Penfed and open the CDs. By what I am hearing on this thread, it would be almost impossible... So, I wonder, has anyone had experience wiring the money to Penfe...
by learning_head
Wed Feb 05, 2014 8:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Questions about filling out PenFed IRA CD forms
Replies: 118
Views: 7011

Re: How do you use Penfed?

Yesterday night decided to open one more (taxable) CD account online before the rates changed today. Took 5 minutes from logging in to Penfed site to having CD confirmation page with new account number and CD showing up along with my other accounts. Most of that 5 minutes I was double checking that ...
by learning_head
Sat Feb 01, 2014 11:25 am
 
Forum: Investing - Theory, News & General
Topic: How do you use Penfed?
Replies: 24
Views: 2630

Re: Help! Paralyzed by bond choices. Is MM the answer?

So assuming you are the sole member-owner (e.g., no spouse), you are insured for $500K with two beneficiaries across all POD accounts. You could easily bump that to $1M by opening a couple of $1,000 CDs and naming a couple of charities or good friends as beneficiaries of those small CDs. Hi Kevin, ...
by learning_head
Thu Jan 30, 2014 1:04 am
 
Forum: Investing - Help with Personal Investments
Topic: Help! Paralyzed by bond choices. Is MM the answer?
Replies: 27
Views: 2518

Re: Question about PenFed Certificate Opening

The day they receive your funds is the day whose rates you get. So you will have to overnight any application that includes a check to ensure you get the 3.04%. I wonder what it means that they have your funds... Cash in the account or check in the paperwork? If they have your check, and sit on it ...
by learning_head
Thu Jan 30, 2014 12:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Question about PenFed Certificate Opening
Replies: 17
Views: 1685

Re: How do you use Penfed?

I had opened accounts online with them. Had account number and online access within 10-20 minutes of starting as I recall. Did not receive mail paperwork until some time later, but by then I already had opened CDs, etc and did not really need to wait for that snail-mailed paperwork for anything (exc...
by learning_head
Thu Jan 30, 2014 12:49 am
 
Forum: Investing - Theory, News & General
Topic: How do you use Penfed?
Replies: 24
Views: 2630

Re: Penfed question: indirect IRA rollover

On a side note: those that wonder if they still have time to transfer IRA to Penfed, this process takes two days, if you already have IRA account opened with Penfed: 1 day to withdraw money from your current IRA to some taxable account (via cashier's check); second day to wire the money and fax in t...
by learning_head
Wed Jan 29, 2014 12:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Penfed question: indirect IRA rollover
Replies: 2
Views: 186

Penfed question: indirect IRA rollover

Question for those that have done indirect IRA rollover to Penfed; i.e. rollover via money distributed to your taxable account and then adding IRA CD to your Penfed IRA account with that money later, within 60 days: what supporting documentation has Penfed required for this? Or was the money + free-...
by learning_head
Wed Jan 29, 2014 12:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Penfed question: indirect IRA rollover
Replies: 2
Views: 186
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