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Re: Max Contribution 401K Traditional vs Roth

Also keep in mind that the Roth vs Traditional answer also depends on other income that one might have in retirement, such as a pension and Social Security. One cannot just compare marginal rates while working and in retirement. You need to compare the effective tax rates on contributions and withdr...
by rkhusky
Mon Sep 01, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Max Contribution 401K Traditional vs Roth
Replies: 5
Views: 521

Re: Taxable investments - just starting out with 3 fund port

There are some posters here in the same situation. They've chosen to hang on to their pre-Boglehead investments rather than incur the significant taxation that would be involved in selling. Determine how much tax your are willing to bear and keep an eye out for opportunities to sell - a significant ...
by rkhusky
Sun Aug 31, 2014 7:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Sell/hold Taxable investments -starting out with 3 fund port
Replies: 3
Views: 292

Re: Trying to understand the 1040 Tax Table

Effective tax rate has no meaning or value. It is merely a red herring that politicians of all stripes use to deceive the voting public. All financial decisions are based on marginal rate. Incorrect. With no other income besides a withdrawal from a tax-deferred account, the effective tax rate is mu...
by rkhusky
Sat Aug 30, 2014 9:26 am
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Trying to understand the 1040 Tax Table

or perhaps, if the additional income is occurring on top of an established base of income, it is the marginal effective rate or the effective marginal rate for that extra lump of income, not the average tax rate of all the income but just the incremental additional income? Right. (To my ear, the la...
by rkhusky
Sat Aug 30, 2014 7:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Trying to understand the 1040 Tax Table

That money taken from your IRA will be taxed at your marginal rate. Effective tax rate, while interesting, is useless for decision making. All decisions to recognize additional income or accelerate deductions are based on the marginal rate. Both of these quotes are assuming that the income or IRA w...
by rkhusky
Fri Aug 29, 2014 10:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Trying to understand the 1040 Tax Table

That is incorrect. If I withdraw $100,000 from my traditional IRA, with no other income, my marginal rate is not zero. In this case, I would have saved $25K by using the traditional IRA (with a marginal rate of 25%), which I could have invested. If my effective rate on this withdrawal is 10%, I pay...
by rkhusky
Fri Aug 29, 2014 10:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Trying to understand the 1040 Tax Table

Marginal tax rate is useful for some decisions. Effective tax rate is useful for others. As an example of the latter, consider the Roth vs Traditional decision. While you typically get a tax break at your marginal rate when contributing to a Traditional Account, if you have no other sources of inco...
by rkhusky
Fri Aug 29, 2014 9:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Trying to understand the 1040 Tax Table

Marginal tax rate is useful for some decisions. Effective tax rate is useful for others. As an example of the latter, consider the Roth vs Traditional decision. While you typically get a tax break at your marginal rate when contributing to a Traditional Account, if you have no other sources of incom...
by rkhusky
Thu Aug 28, 2014 3:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2284

Re: Cost Basis Method

grabiner wrote: I sent Vanguard a secure Email identifying which lots to sell, and what I had paid for the lots.


I've used SpecID on noncovered shares without telling Vanguard. I just keep track of what I paid and received and report the info on my tax forms. Hopefully it won't come back to bite me.
by rkhusky
Thu Aug 28, 2014 10:32 am
 
Forum: Investing - Theory, News & General
Topic: Cost Basis Method
Replies: 16
Views: 1015

Re: AA of 60/40 for your Lifetime?

The more stocks you have, the better you do, but you have a higher chance for poor results. Risk vs. Reward. It appears fairly monotonic but I haven't plotted it out. If so, no sweet spot. There may not be a nominal "sweet spot" but that doesn't mean there isn't a risk adjusted "swee...
by rkhusky
Thu Aug 28, 2014 8:01 am
 
Forum: Investing - Help with Personal Investments
Topic: AA of 60/40 for your Lifetime?
Replies: 27
Views: 2307

Re: Questions: Target 2035/Three fund portfolio

Common advice is to look at the portfolio of target date funds, not the name, in deciding if it is right for you. Are you comfortable with 83% stocks or 90% stocks? As has been mentioned, consider your portfolio in total. Decide on an overall AA, then how to fund the individual pieces. Some have sug...
by rkhusky
Thu Aug 28, 2014 7:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Questions: Target 2035/Three fund portfolio
Replies: 8
Views: 609

Re: Sick Building Syndrome (Electrical Pollution)

I would check into air quality.
by rkhusky
Thu Aug 28, 2014 7:42 am
 
Forum: Personal Consumer Issues
Topic: Sick Building Syndrome (Electrical Pollution)
Replies: 17
Views: 1367

Re: AA of 60/40 for your Lifetime?

Vanguard did some analysis on the subject: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations/ The more stocks you have, the better you do, but you have a higher chance for poor results. Risk vs. Reward. It appears fairly monotonic but I haven't plotted it out. If...
by rkhusky
Wed Aug 27, 2014 11:09 am
 
Forum: Investing - Help with Personal Investments
Topic: AA of 60/40 for your Lifetime?
Replies: 27
Views: 2307

Re: Really dumb question from a newbie. passive investing

What would be "active" investing? Trying to time the market. Although there are various levels of active/passive investing. But generally, if your Asset Allocation does not change based on market conditions, you are passive. Target Date funds change their asset allocation over time as you...
by rkhusky
Tue Aug 26, 2014 9:52 am
 
Forum: Investing - Theory, News & General
Topic: Really dumb question from a newbie. passive investing
Replies: 6
Views: 774

Re: Catastrophe Brewing - Longevity

Thanks Alan. If the article is correct, and new 2015 longevity tables will show that the 'average' 65 year old will live to age 87.7, then waiting until 70 to draw Social Security becomes almost a no-brainer for most of us. John Perhaps SS will lower the premium for waiting to collect, since it is ...
by rkhusky
Tue Aug 26, 2014 9:49 am
 
Forum: Investing - Theory, News & General
Topic: Catastrophe Brewing - Longevity
Replies: 12
Views: 2485

Re: Total world stock or diversification

Why is total world not diversified? It owns more then 6000 stocks (although the index it follows has more than 7000).

Is it at an advantage when companies like Burger King drop out of Total Stock Market and move to Total International? How often does that happen?
by rkhusky
Tue Aug 26, 2014 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Total world stock or diversification
Replies: 3
Views: 420

Re: How Does Vanguard Re-Balance VBIAX

I imagine they do it by buying/selling stocks/bonds as appropriate on a daily basis. However, they also have more resources than we do, so they can probably buy/sell shares to a certain extent amongst their various funds to reduces taxes and investment costs. I imagine they also have a sophisticated...
by rkhusky
Mon Aug 25, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: How Does Vanguard Re-Balance VBIAX
Replies: 4
Views: 546

Re: Is it me, or are "collectibles" worthless in 2014?

Is Ebay still the best place to sell things? I have friends who sell stuff on Craigslist.
by rkhusky
Sun Aug 24, 2014 8:06 am
 
Forum: Personal Consumer Issues
Topic: Is it me, or are "collectibles" worthless in 2014?
Replies: 79
Views: 6013

Re: Capital Gain Tax on Muni Bond Funds

For the past year the low price is $15.82 and the high is $15.89. The fund share price does not vary much. If you happen to buy at the low and sell at the high, your cap gain is only 0.44%. Unless you actively manage your sales, on average your gains will likely be offset by losses and your overall ...
by rkhusky
Sat Aug 23, 2014 11:48 am
 
Forum: Investing - Help with Personal Investments
Topic: Capital Gain Tax on Muni Bond Funds
Replies: 15
Views: 1133

Re: VTSMX in Roth IRA and Taxable Account

If you plan on tax-loss harvesting in your taxable account, watch out for wash sales (buying in Roth, selling in taxable, within 30 days of each other). And re-invested dividends count in the wash sale rules.
by rkhusky
Wed Aug 20, 2014 8:02 am
 
Forum: Investing - Help with Personal Investments
Topic: VTSMX in Roth IRA and Taxable Account
Replies: 8
Views: 508

Re: Incorporating new asset classes

c1 and c2 are probably time dependent. It is unlikely that e is normal. This is similar to Fama-French modeling (or factor analysis).
by rkhusky
Tue Aug 19, 2014 9:13 am
 
Forum: Investing - Theory, News & General
Topic: Incorporating new asset classes
Replies: 1
Views: 209

Re: VWALX - 15.5 maturity vs 6.2 duration. Real sensitivity

Vanguard recently changed how they report maturity, so that may be why it seems so high now compared to the past. They are reporting something called "stated maturity" whereas before it was "effective maturity", if I recall correctly. Morningstar reports the latter. Distribution ...
by rkhusky
Mon Aug 11, 2014 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: VWALX - 15.5 maturity vs 6.2 duration. Real sensitivity?
Replies: 3
Views: 454

Re: Where to buy little plastic bottles?

dratkinson wrote:Recall suggestion to put all bottles in a leak-proof baggy, as a second line of defense.

I do that now, but would prefer non-leak bottles.
by rkhusky
Mon Aug 11, 2014 3:58 pm
 
Forum: Personal Consumer Issues
Topic: Where to buy little plastic bottles?
Replies: 24
Views: 1620

Re: So where's that inflation many forecasted?

What happens to me is that I tend to pay selective attention to the things that increase. Things that do not increase don't get noticed because it's what you expect. Things that decrease tend to get attributed to one's own shrewd buying. Which is why you need a uniform statistical measure of inflat...
by rkhusky
Mon Aug 11, 2014 3:51 pm
 
Forum: Investing - Theory, News & General
Topic: So where's that inflation many forecasted?
Replies: 43
Views: 2663

Re: Reminder: Check your 401K contribution rates

I just use a fixed dollar amount.
by rkhusky
Mon Aug 11, 2014 2:18 pm
 
Forum: Investing - Theory, News & General
Topic: Reminder: Check your 401K contribution rates
Replies: 27
Views: 3708

Re: Where to buy little plastic bottles?

Nalgene makes a travel set that you can buy on amazon.com. 8 bottles in the set of various sizes and shapes. They're sturdier than most bottles this size, and in many years of travel use, I've never had one leak. I'm always having trouble with water-like liquids leaking out due to pressure changes ...
by rkhusky
Mon Aug 11, 2014 2:16 pm
 
Forum: Personal Consumer Issues
Topic: Where to buy little plastic bottles?
Replies: 24
Views: 1620

Re: "Russan Gang Amasses Over A Billion Stolen Passwords"

And in case some folks missed it, VG bumped up the allowable length of their password field to 20 characters. If there is any *one* password item to change to make a password tougher to break, length is it. If you're not using a 20ish character PW on VG's site yet, please make a note to change it. ...
by rkhusky
Mon Aug 11, 2014 7:35 am
 
Forum: Personal Consumer Issues
Topic: "Russan Gang Amasses Over A Billion Stolen Passwords"
Replies: 87
Views: 7480

Re: Why is Germany such a small part of European Index Funds

If the market cap is not representative of the economies of the countries, should one under or over-weight them somehow? Like people recommend for REIT's.
by rkhusky
Mon Aug 11, 2014 7:26 am
 
Forum: Investing - Theory, News & General
Topic: Why is Germany such a small part of European Index Funds?
Replies: 6
Views: 915

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

If the US replaces the income tax with a federal sales tax, then those that invested in tax-deferred would pay no tax on their investment and those with Roth would see no tax benefit. It's difficult to predict the future, especially if you are 40+ years from retirement.
by rkhusky
Sat Aug 09, 2014 6:47 am
 
Forum: Investing - Theory, News & General
Topic: Maxing roth 401k vs trad 401k in high income tax bracket
Replies: 13
Views: 1245

Re: Tell Vanguard they need 2 factor authentication

I think you need to make a serious distinction between a situation like Target where Target's systems were breached due to a vulnerability in their system, and a situation where an individual has his account stolen from because someone was able to log onto their account. Exactly right. You help pre...
by rkhusky
Sat Aug 09, 2014 6:34 am
 
Forum: Personal Consumer Issues
Topic: Tell Vanguard they need 2 factor authentication
Replies: 52
Views: 2372

Re: Timing cap gains & losses fun

Broadly both, but more specifically, they were purchased during or after March 2012. I mentioned 2009 because IIRC, that's when brokerages had to start calculating and providing basis information for covered shares. Reporting did not start until 2011. Mutual fund reporting did not start until 2012.
by rkhusky
Fri Aug 08, 2014 1:26 pm
 
Forum: Investing - Theory, News & General
Topic: Timing cap gains & losses fun
Replies: 8
Views: 476

Re: Timing cap gains & losses fun

AnimalCrackers wrote:I plan to liquidate a taxable account that will have a balance of about $8k in stock and bond ETFs (purchased no earlier than March 2012)

...

because the purchases were after 2009 or something,


Which is it? Purchased on or after March 2012? Or after 2009?
by rkhusky
Fri Aug 08, 2014 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Timing cap gains & losses fun
Replies: 8
Views: 476

Re: Moving Average Backtest destroys Buy/Hold. Try for yours

These type of strategies may work sometimes, but other times they don't. You need to check over multiple starting and ending points. And there are thousands of people trying these strategies, including big trading houses with Harvard/MIT grads using all sorts of complex formulas. One may work for a...
by rkhusky
Thu Aug 07, 2014 2:20 pm
 
Forum: Investing - Theory, News & General
Topic: Moving Average Backtest destroys Buy/Hold. Try for yourself.
Replies: 59
Views: 4404

Re: Moving Average Backtest destroys Buy/Hold. Try for yours

I changed the date to 1/3/2008 and SPY won. These type of strategies may work sometimes, but other times they don't. You need to check over multiple starting and ending points. And there are thousands of people trying these strategies, including big trading houses with Harvard/MIT grads using all so...
by rkhusky
Thu Aug 07, 2014 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: Moving Average Backtest destroys Buy/Hold. Try for yourself.
Replies: 59
Views: 4404

Re: Rebalancing question

I get more excited when there are big losses in stocks, because then I can buy low. I am almost perversely disappointed when the market continually gains, because I know that I will continue to buy and fear that I am buying high. By fixating on the portfolio percentages and mechanically rebalancing,...
by rkhusky
Wed Aug 06, 2014 1:34 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing question
Replies: 30
Views: 917

Re: "Russan Gang Amasses Over A Billion Stolen Passwords"

On second glance....... over a billion is a big number... population of the earth is maybe 7.5 billion? Deduct a few billion for unconnected folk in China, India, the third world, etc., and a couple billion more for infants, juveniles, the elderly who don't use password sites, etc. Do they have the...
by rkhusky
Wed Aug 06, 2014 11:54 am
 
Forum: Personal Consumer Issues
Topic: "Russan Gang Amasses Over A Billion Stolen Passwords"
Replies: 87
Views: 7480

Re: Stop Passing Up This Great Deal - In Money Magazine

IMO, the worst statement in the article was in the graphic which said "Saving in a Roth 401(k) at 45 beats using a regular one no matter what happens to your taxes in 20 years." Really?! Even if your tax rate is zero at retirement. And then the graphic shows the differences if your tax bra...
by rkhusky
Wed Aug 06, 2014 8:33 am
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 11085

Re: "Strong passwords"

"This particular case doesn't affect us directly." I wonder what that means. Seems like it would affect pretty much everybody directly, at least potentially. They are not stealing passwords in order to make odd posts under your username on Bogleheads. On the other hand, if you use the sam...
by rkhusky
Wed Aug 06, 2014 8:21 am
 
Forum: Personal Consumer Issues
Topic: "Russan Gang Amasses Over A Billion Stolen Passwords"
Replies: 87
Views: 7480

Re: Approximating TSM with SSgA Index Funds

Another poster had SVSCX for SSgA SC Ind Sec Lend.
by rkhusky
Tue Aug 05, 2014 9:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Approximating TSM with SSgA Index Funds
Replies: 7
Views: 378

Re: REITS-worth the time to add 10% into portfolio

REITs are about 3-4% of the total US market (which you already have). What makes REITs so special that you would overweight them over Materials or Utilities (which are a similarly small part of the market)? It's accurate to say that they are 3-4% of the total US publicly available stock market. The...
by rkhusky
Tue Aug 05, 2014 8:54 am
 
Forum: Investing - Help with Personal Investments
Topic: REITS-worth the time to add 10% into portfolio
Replies: 33
Views: 2655

Re: REITS-worth the time to add 10% into portfolio

Title says it all. In a 3 fund portfolio, is current thought to add REIT?? Question is more accurately stated as "Add more REIT?" because the fully diversified Total Stock Market already has REIT's. Do you want 10% more than what is in TSM (i.e. ~13% not 3.3%)? Or a total of 10% for your ...
by rkhusky
Tue Aug 05, 2014 8:38 am
 
Forum: Investing - Help with Personal Investments
Topic: REITS-worth the time to add 10% into portfolio
Replies: 33
Views: 2655

Re: Best allocation for new 401K deposits?

Wouldn't it be easier to invest new contributions to my 401K in this 70/30 ratio? Yes. You will still need to rebalance occasionally, but it will be less often than if you put new money all into stocks. Once your portfolio gets big enough, your contributions will have little effect on your AA becau...
by rkhusky
Tue Aug 05, 2014 7:38 am
 
Forum: Investing - Help with Personal Investments
Topic: Best allocation for new 401K deposits?
Replies: 5
Views: 504

Re: Do I need a small cap index if I already have total mark

Tilting to small caps increases the risk in your portfolio with an increased potential for higher gains, but also the potential for larger occasional losses. You can also increase risk (and potential higher gains) by increasing your percentage of stocks versus bonds. By tilting towards a market segm...
by rkhusky
Mon Aug 04, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: Do I need a small cap index if I already have total market ?
Replies: 58
Views: 5411

Re: Funding a 592 for grandchildren after retirement?

Question 2- Does it make sense to convert tax-deferred funds to a 529 rather than a Roth? Right now I don't think so for many reasons, but would like to get input on this. You don't convert tax-deferred funds to a 529. You would withdraw the tax-deferred funds (and pay tax) and then deposit in the ...
by rkhusky
Mon Aug 04, 2014 10:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Funding a 529 for grandchildren after retirement?
Replies: 19
Views: 816

Re: W/ AA - consider all accounts as one, including spouse?

You need multiple funds in each account in order to rebalance. You can't sell bonds in her IRA and only buy stock in yours. You can't sell International in your 401K and only buy US in your IRA.
by rkhusky
Thu Jul 31, 2014 2:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: W/ AA - consider all accounts as one, including spouse?
Replies: 23
Views: 1086

Re: Great Cliff Asness Primer on Quant Investing

I thought this was going to teach me how to be one of those rich nerds on Wall Street doing quant investing of stocks. :(
by rkhusky
Thu Jul 31, 2014 12:55 pm
 
Forum: Investing - Theory, News & General
Topic: Great Cliff Asness Primer on Quant Investing
Replies: 4
Views: 675

Re: The emerging market portion of Total International Stock

arcticpineapplecorp. wrote:Finally, is the emerging market portion of VTIAX invested in the same companies (and same ratios of large/mid/small) as the actual Emerging Market Index Fund (VEMAX)?


VEMAX does not have small small companies.
by rkhusky
Wed Jul 30, 2014 7:29 am
 
Forum: Investing - Theory, News & General
Topic: The emerging market portion of Total International Stock
Replies: 5
Views: 1194

Re: Was ready to pull plug on Janus..until

well I had them all in 2008..If I had a more balanced fund out that time say 50-50 stock bond split during the crash, I still would have been better off with my 100% in Janus equity funds. I guess maybe you are talking a much longer bear market?..Is that were the bond allocation pays off? How was y...
by rkhusky
Tue Jul 29, 2014 4:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4057

Re: Was ready to pull plug on Janus..until

My old 457 has both Janus Twenty and Vanguard Institutional Index Fund as their options in the category "US Large Cap Equity Fund". Janus Twenty was one of the first funds I ever owned, which I bought directly from Janus for my IRA. I picked it because it was at the top of the heap at the...
by rkhusky
Tue Jul 29, 2014 4:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4057

Re: Was ready to pull plug on Janus..until

I get you have to compare apples to apples, but I'm trying to justify the move to Vanguard total stock market index when the funds I'm currently in have outperformed over an 8 year period. I chose 8 because that's where my records started. You stated "still liking janus" when you only sho...
by rkhusky
Tue Jul 29, 2014 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Was ready to pull plug on Janus..until
Replies: 66
Views: 4057
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