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Re: Which are non-taxable accounts?

Doing research, I hear terms like Taxable and Non Taxable accounts, but can someone help with what that actually means? Outside of a Muni bond within your own state, I think most anything is taxed at some point, isn't it? an IRA is taxed before you fund the account, a Roth is taxed when the account...
by retiredjg
Thu Apr 17, 2014 6:49 pm
 
Forum: Investing - Theory, News & General
Topic: Which are non-taxable accounts?
Replies: 5
Views: 430

Re: After Tax 401K Question

It sounds like you plan to roll to tIRA and convert to Roth IRA. This is unnecessary and requires more paperwork on your part at tax time. It would also get messed up if she has any money in a tIRA, SEP IRA or SIMPLE IRA. Consider just rolling directly to Roth IRA. Rather than worry about a loss and...
by retiredjg
Thu Apr 17, 2014 8:55 am
 
Forum: Investing - Help with Personal Investments
Topic: After Tax 401K Question
Replies: 7
Views: 613

Re: 401k Group Annuity Fund Selection: PIMCO or bust?

Based on my overall AA, I'd like to use my 401k as the bond portion of my portfolio. I think you may be headed in the wrong direction. I'm thinking the best choice in this ugly list is Advantus S&P 500® Index (1.26%) followed by the PIMCO fund at 1.66%. Frequently, people need to use both a sto...
by retiredjg
Wed Apr 16, 2014 8:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k Group Annuity Fund Selection: PIMCO or bust?
Replies: 8
Views: 357

Re: IRA Required Withdrawal and Tax Inefficiency

:oops: I was wrong! Again! My tax bracket is 25%! Tax as a percentage of income was 16.21%. Sorry; along with age comes bad memory about what people tell me. Does this tax bracket change make any significant differences to my original question? This mostly depends on what you have in a taxable acco...
by retiredjg
Wed Apr 16, 2014 6:54 pm
 
Forum: Investing - Theory, News & General
Topic: IRA Required Withdrawal and Tax Inefficiency
Replies: 9
Views: 804

Re: IRA Required Withdrawal and Tax Inefficiency

In the course of educating myself on personal finance I see that bond funds are recommended for regular IRAs because of bond tax inefficiencies. The income that bonds pay out then becomes deferred. However, my wife and I are at the age when we must take the required annual distribution from our IRA...
by retiredjg
Wed Apr 16, 2014 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: IRA Required Withdrawal and Tax Inefficiency
Replies: 9
Views: 804

Re: Backdoor Roth IRA Conversion - Worth it for us?

JW - can you elaborate. Do you mean that if we use my spouses account as an example (Total balance $38,096 with a IRA Basis of $24,417), I would roll in $13679 (the diff. between the total balance and the IRA basis) into her 401k, and then convert to a Roth? Not exactly. As DSInvestor said 3 posts ...
by retiredjg
Tue Apr 15, 2014 5:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth IRA Conversion - Worth it for us?
Replies: 8
Views: 600

Re: Help with Improving my Portfolio

My bad. As pointed out in another thread, it is compensation, not earned income. See page 8 of publication 590.

http://www.irs.gov/pub/irs-pdf/p590.pdf
by retiredjg
Tue Apr 15, 2014 5:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

Alana888 wrote:
You have to have income to contribute to a Roth IRA. Am I missing something?


Does that mean I can't take the mandatory distribution $ from the Inherited IRA and put them in the Roth IRA?

Do you have any earned income?
by retiredjg
Tue Apr 15, 2014 5:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

Alana888 wrote:Yes and if I don't have income I will put the money I have to withdraw from the inherited IRAinto the Roth account.

You have to have income to contribute to a Roth IRA. Am I missing something?
by retiredjg
Tue Apr 15, 2014 2:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

One thing I did notice is that if I wanted to keep only these funds in these accounts, it limits my ability to move $ between accounts without upsetting the balance. For example when I take my yearly mandatory inherited IRA distribution I can put the $ in my personal account by adding the same amou...
by retiredjg
Tue Apr 15, 2014 2:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

Looks fine to me if you can remember, in a crash, to look at your whole portfolio instead of each account.

Remember that today is tax day and the Vanguard website might be very busy. :happy
by retiredjg
Tue Apr 15, 2014 8:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

About selling your funds in taxable...

Your basis is not only what you paid for the funds. It also includes all those reinvested dividends (which you have paid tax on already). You may not have as large an untaxed gain in those funds as you think.
by retiredjg
Mon Apr 14, 2014 8:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

If the LifeStrategy Moderate Growth Fund is the same as the 4 funds I mentioned, might it make sense to hold those individually so I can maximize the tax benefit of having the less tax efficient funds in the tax free accounts. Tax efficiency is mostly about what you hold in your taxable account. Ri...
by retiredjg
Mon Apr 14, 2014 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Too Late to Open Roth IRA for 2013?

I'm not sure, but is opening the account enough? I'm thinking you have to actually put the money in it. But I'm not sure.

If so, she could open it at a local bank if she has the money and then move it later....
by retiredjg
Mon Apr 14, 2014 11:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Too Late to Open Roth IRA for 2013?
Replies: 9
Views: 721

Re: Help with Improving my Portfolio

There are many ways to look at this situation. Starting with what is good about it: -you've managed to save (or possibly inherit and keep) about $925k -your home mortgage is too big, but not absolutely huge -you know you are risk averse What is scary about it: -your net worth is not $925k, because o...
by retiredjg
Mon Apr 14, 2014 9:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

Alana888, you are headed in the right direction, but we need to take time out here for a reality check. You said you don't have enough money to retire, but I'm not sure you realize you will NEVER have enough money to retire if you spend that $500k. Especially if you spend it in 5 years. The exceptio...
by retiredjg
Sun Apr 13, 2014 10:02 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Newly eligible for a 401k-Allocation question

I thought traditional IRAs were taxable accounts, no? No. A traditional IRA is a tax-advantaged account, meaning that there is some type of tax advantage. Whatever happens inside the tIRA is not taxed. Money is taxed when it is taken out of the tIRA or if it is converted to Roth IRA. Given the rout...
by retiredjg
Sun Apr 13, 2014 9:22 am
 
Forum: Investing - Help with Personal Investments
Topic: Newly eligible for a 401k-Allocation question
Replies: 14
Views: 565

Re: Newly eligible for a 401k-Allocation question

How's this: I know switching a Trad 401k to a Roth 401k is a one time deal, but can I switch it after I am unemployed or do you have to be employed and actively contributing to make the switch? You don't want to convert traditional 401k to Roth 401k - that would cause you to pay tax. When you leave...
by retiredjg
Sat Apr 12, 2014 9:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newly eligible for a 401k-Allocation question
Replies: 14
Views: 565

Re: Newly eligible for a 401k-Allocation question

I think for the time being I will stay with the Target Retirement 2010 (RRTFX) fund and deal with the 1.28 expense ratio since I will most likely be rolling it over in a year. This fund, TR 2050, does not have the stock to bond ratio that you said you are interested in. You should change it. When I...
by retiredjg
Sat Apr 12, 2014 8:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newly eligible for a 401k-Allocation question
Replies: 14
Views: 565

Re: Help with Improving my Portfolio

I'd like to go over what I think you've said because I'm not sure I have everything right. 1) I think you have about $900k total in cash and investments. However, it could be you have $500k in cash plus $900k in investments. Which is correct? 2) You are talking about 60% stock and 40% bonds, but I'm...
by retiredjg
Sat Apr 12, 2014 11:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

Do you have any idea what your current stock to bond (including cash) ratio is?
by retiredjg
Fri Apr 11, 2014 5:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Help with Improving my Portfolio

I have had taxable T Rowe Price and Franklin Templeton Funds for many years and will likely keep them as they are for now because the taxable income from selling them would cause me to lose my health insurance subsidy (about $4000 per year) and create a hefty tax bill. Maybe not. It appears you hav...
by retiredjg
Fri Apr 11, 2014 5:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Improving my Portfolio
Replies: 45
Views: 2572

Re: Thrift Savings Plan -- the G Fund

My experience is that most federal employees don't appreciate the G Fund because all they are looking at is the bottom line - return. I know I did (before I came here and learned something :happy ) Besides return, there are two other important factors that I can think of. -One is risk - the G Fund h...
by retiredjg
Fri Apr 11, 2014 4:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thrift Savings Plan -- the G Fund
Replies: 6
Views: 676

Re: Newly eligible for a 401k-Allocation question

In the 15% tax bracket you might give consideration to using Roth 401k instead of traditional. Or use at least some Roth. It is always good to get money into Roth status at 15% or less, in my opinion. But be sure you really are in the 15% marginal bracket before taking this route. While I would ord...
by retiredjg
Thu Apr 10, 2014 9:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Newly eligible for a 401k-Allocation question
Replies: 14
Views: 565

Re: My Vanguard Financial Plan...additional bond funds

VG really can't win with regards to these plans. They've either been "cookie-cutter", or too simple, or too complicated, or insufficiently diversified, or excessively diversified, or... something. The fact that they've achieved nearly universal criticism probably means that they're pretty...
by retiredjg
Thu Apr 10, 2014 9:19 am
 
Forum: Personal Finance (Not Investing)
Topic: My Vanguard Financial Plan...additional bond funds
Replies: 19
Views: 1903

Re: Bond Allocation with 6.8% Student Loans

There are some people here who think like that and I believe there is a Wiki page which discusses it. It does make sense on paper, but it fails to take into account your emotional reaction to seeing your money disappear in a crash. If you have some bonds in your portfolio, your portfolio will drop l...
by retiredjg
Wed Apr 09, 2014 6:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation with 6.8% Student Loans
Replies: 12
Views: 800

Re: Advice Needed on Transitioning to DIY Passive Portfolio

From a strategy point of view I would prefer to liquidate everything and get into a simple 3 index fund portfolio. So, you decided you don't want to keep the Wellington and the Tax Managed Balanced Fund after all? No, haven't decided yet, but made some excellent points about why it would make sense...
by retiredjg
Wed Apr 09, 2014 5:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Newly eligible for a 401k-Allocation question

1) What are appropriate funds for a 23 year old wanting a 70/30 split? The funds you have chosen are more aggressive than 70/30. They are both probably 90/10 (didn't look up the T. Rowe fund). If you want 70/30, ignore the date in the name and find the fund that is closest to 70/30 (for both the Va...
by retiredjg
Wed Apr 09, 2014 5:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newly eligible for a 401k-Allocation question
Replies: 14
Views: 565

Re: Advice Needed on Transitioning to DIY Passive Portfolio

JaneyLH wrote: From a strategy point of view I would prefer to liquidate everything and get into a simple 3 index fund portfolio.

So, you decided you don't want to keep the Wellington and the Tax Managed Balanced Fund after all?
by retiredjg
Wed Apr 09, 2014 4:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Need turbo tax help: after-tax 401k to Roth IRA

If I'm understanding your question, these are not the same thing. However, my brain is tired and I may be missing something. The poster is rolling/transferring after tax money and the earnings from the after tax money directly to Roth IRA. That means the after tax money would not be taxed again and ...
by retiredjg
Tue Apr 08, 2014 10:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need turbo tax help: after-tax 401k to Roth IRA
Replies: 32
Views: 1257

Re: Advice Needed on Transitioning to DIY Passive Portfolio

We have $280,000 of losses carrying forward, so converting the entire taxable portfolio is possible (total unrealized capital gain $274,000). However, I might want to keep the 2 Vanguard funds already in the portfolio, Wellington and Tax-Managed Balanced with an unrealized capital gain of about $11...
by retiredjg
Tue Apr 08, 2014 10:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Reel Lawn Mowers

Is there a website that explains what push means in the context of a lawn mower? I always thought of pushing a mower as standing behind and pushing it (as opposed to pulling it) like you used to push a car to get it started. Any mower you have to push should be a push mower, but apparently not many...
by retiredjg
Tue Apr 08, 2014 10:15 pm
 
Forum: Personal Consumer Issues
Topic: Reel Lawn Mowers
Replies: 19
Views: 881

Re: I saw a "Boglehead" on my flight yesterday!

sscritic wrote:P.S. For the curious: it was a Chinese meal, of course.

Made me laugh!
by retiredjg
Tue Apr 08, 2014 10:05 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: I saw a "Boglehead" on my flight yesterday!
Replies: 65
Views: 7451

Re: Advice for [Religious Investor]

This wheel has already been invented. I'm not sure how helpful it is for us to try to re-invent this wheel since most of us know nothing about what is permitted and what is not permitted. The OP's friend needs to do research on that subject and make his own decisions. There apparently are ways to wo...
by retiredjg
Tue Apr 08, 2014 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice for [Religious Investor]
Replies: 39
Views: 2966

Re: Need turbo tax help: after-tax 401k to Roth IRA

You have to remember that you did not do a trustee to trustee rollover to Roth IRA. Is that true even though all 3 of these accounts (401k > T-IRA > Roth IRA) are with the same trustee (T Rowe)? Yes, at least that is my understanding (not an expert). The custodian does not matter. The steps you too...
by retiredjg
Tue Apr 08, 2014 9:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need turbo tax help: after-tax 401k to Roth IRA
Replies: 32
Views: 1257

Re: Advice Needed on Transitioning to DIY Passive Portfolio

I don't have any problem with the portfolio simpleton suggested except it is one portfolio for the two of you (the way we usually do it). As I understand it, you each need a separate portfolio because you want to keep your money separate. This would not be hard to do and it would look a lot like the...
by retiredjg
Tue Apr 08, 2014 7:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Need turbo tax help: after-tax 401k to Roth IRA

Any other suggestions? Because the Aftertax 401k > Roth is such a popular strategy I'm baffled this is such a chore for TurboTax. You have to remember that you did not do a trustee to trustee rollover to Roth IRA. You did a trustee to trustee rollover to tIRA. Then you yourself converted to Roth IR...
by retiredjg
Tue Apr 08, 2014 6:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Need turbo tax help: after-tax 401k to Roth IRA
Replies: 32
Views: 1257

Re: Starting a Taxable Investment Account

I'd suggest this. http://www.bogleheads.org/wiki/How_to_campaign_for_a_better_401(k)_plan As bad as your plan is, it is not bad enough to not use it unless you expect to be there for many years. Even if you expect to be there a long time, the 401k might improve. I would also suggest traditional 401k...
by retiredjg
Tue Apr 08, 2014 9:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Starting a Taxable Investment Account
Replies: 18
Views: 1445

Re: My Vanguard Financial Plan...additional bond funds

I find it somewhat surprising that the CFP suggested holding 7 funds. However, I see some logic to some of it. -adding on some extra corporate bonds as suggested by Jack Bogle -maybe not holding all your muni bonds in one state that is financially stressed (but it depends on how much of your portfol...
by retiredjg
Tue Apr 08, 2014 9:45 am
 
Forum: Personal Finance (Not Investing)
Topic: My Vanguard Financial Plan...additional bond funds
Replies: 19
Views: 1903

Re: Retired: When to move?

Saving$ wrote:Thank you for posting this. Very helpful.

You're welcome. Happy my experience was helpful to you. :happy
by retiredjg
Mon Apr 07, 2014 10:22 pm
 
Forum: Personal Consumer Issues
Topic: Retired: When to move?
Replies: 43
Views: 3977

Re: Advice for [Religious Investor]

LadyGeek posted some links. Here's another. http://www.forbes.com/sites/timothyspangler/2011/04/05/islamic-funds-sharia-law-and-investment-structures/ . And google is your friend for this type of question. There are several types of investing based on a person's moral obligations or preferences. Thi...
by retiredjg
Mon Apr 07, 2014 10:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice for [Religious Investor]
Replies: 39
Views: 2966

Re: Starting a Taxable Investment Account

When I'm trying to figure out someone's needs, I need to be able to see everything in one place. And it really helps for the info to be in an order I'm accustomed to so I can find what I need quickly. You may have presented the right info, but it is in 3 different places. That means the person tryin...
by retiredjg
Mon Apr 07, 2014 9:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Starting a Taxable Investment Account
Replies: 18
Views: 1445

Re: Advice Needed on Transitioning to DIY Passive Portfolio

To get a survivor's benefit, we would have had to accept a far lower pension amount. Since hubby's parents are long-lived, he's a little younger than me, and he's very healthy, we elected a $100/month survivor benefit for me as we had to have something in order to assure I retain Federal employee m...
by retiredjg
Mon Apr 07, 2014 7:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Starting a Taxable Investment Account

BillFromMA wrote: I'll spell out me situation shortly. I just need to collect all the info. Thanks again!

You will be amazed at how much you learn just by doing this.
by retiredjg
Mon Apr 07, 2014 10:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Starting a Taxable Investment Account
Replies: 18
Views: 1445

Re: Advice Needed on Transitioning to DIY Passive Portfolio

Our riskiest scenario is if he dies before me leaving me with just SS and not his pension, so I will definitely wait until I'm 70 so I can maximize this. Ordinarily, the spouse has a survivor's benefit on the pension. Is there a reason you think the pension would simply disappear? Either way, I don...
by retiredjg
Mon Apr 07, 2014 10:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Advice Needed on Transitioning to DIY Passive Portfolio

When you talk about my aggressive ratio, I assume this is stocks vs. bonds? Yes, the 70/30 stock to bond ratio is quite aggressive for your ages. I thought to be more aggressive in equities since we have my husband's Federal pension with COLA, which we could live off of 100% if we needed to. You ca...
by retiredjg
Mon Apr 07, 2014 10:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Advice Needed on Transitioning to DIY Passive Portfolio

The reason for "his" and "hers" is that we are both on our second marriage and due to our divorce experiences we both agreed we would keep our accounts separate this time around. This is reasonable but will require a somewhat different approach - two portfolios instead of one. O...
by retiredjg
Mon Apr 07, 2014 9:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice Needed on Transitioning to DIY Passive Portfolio
Replies: 48
Views: 2894

Re: Starting a Taxable Investment Account

I think you might benefit from more specific suggestions. That requires more information about your situation.

See the link at the bottom of this message for how to do that, if you want.
by retiredjg
Sun Apr 06, 2014 8:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Starting a Taxable Investment Account
Replies: 18
Views: 1445

Re: Do I convert my traditional IRA to a Roth IRA?

The answer mostly depends on your tax bracket. Compare your taxable income, line 43 on form 1040, to this chart. http://www.moneychimp.com/features/tax_brackets.htm

Your tax bracket in retirement will affect this too. Will you have a pension? If so, will it be sizable or tiny?
by retiredjg
Sun Apr 06, 2014 6:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do I convert my traditional IRA to a Roth IRA?
Replies: 9
Views: 887

Re: American Funds?

A 70 year old person in poor health may not need to change investments at all. Even if the current investments are poor, they might be better than paying a load (front, middle, or back end) and high annual expenses for American Funds. There is nothing wrong with the funds themselves. The problem is ...
by retiredjg
Sun Apr 06, 2014 6:53 pm
 
Forum: Investing - Theory, News & General
Topic: American Funds?
Replies: 37
Views: 2859
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