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Re: Employer 401(k) vs. Vanguard IRA investments

Duckie, I can't thank you enough for the help. I'm going to look into the Back-door Roth and also see if I can convert my Roll-over IRA into my 401k. If I use the Back-door Roth, it appears that this technique would allow me to continue investing in my Roth without ever having to open a traditional...
by rkhusky
Sun Oct 19, 2014 8:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Employer 401(k) vs. Vanguard IRA investments
Replies: 16
Views: 1044

Re: Tax Loss Harvesting VTIAX

I am not sure wash sales in an IRA matter - they aren't reported for IRS purposes (as far as I know) and you can't take a loss in a IRA and apply it against your gains in non-retirement account on your taxes - the only thing that matters is the IRA balance when you start withdrawing funds out at yo...
by rkhusky
Sat Oct 18, 2014 1:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting VTIAX
Replies: 18
Views: 1201

Re: Employer 401(k) vs. Vanguard IRA investments

Thanks rkhusky, that's good information. Looking at Vanguard's recommendations I think maybe I'll go 75% FUSVX and 25% FSITX for my 401k and then maybe I'll invest some money in VTIAX. My income seems to be too high for a Roth now, so maybe I should now open a Vanguard IRA and invest in VTIAX. How ...
by rkhusky
Sat Oct 18, 2014 11:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Employer 401(k) vs. Vanguard IRA investments
Replies: 16
Views: 1044

Re: Employer 401(k) vs. Vanguard IRA investments

but at age 35 I recommend 70% stocks, 30% bonds, with 30% of stocks in international. At age 35, I would seriously consider an asset allocation of 70% (equities) and 30% (bonds). That's a bit on the conservative side. You could easily be 80% stock. For example, Vanguard's Target Retirement 2045 is ...
by rkhusky
Sat Oct 18, 2014 7:54 am
 
Forum: Investing - Help with Personal Investments
Topic: Employer 401(k) vs. Vanguard IRA investments
Replies: 16
Views: 1044

Re: Can anybody to backdoor Roth IRA investments?

I never heard of such a rule. You also must not reach age 70.5 in the contribution year or earlier because that bars you from making any traditional IRA contribution or from receiving a spousal TIRA contribution. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-C...
by rkhusky
Sat Oct 18, 2014 7:44 am
 
Forum: Investing - Theory, News & General
Topic: Can anybody to backdoor Roth IRA investments?
Replies: 9
Views: 882

Re: Is Roth 401k better even if future tax bracket is lower?

The break even point assumes that all contributions and withdrawals are taxed at the same rate. But if one doesn't have a pension or other significant sources of income, such that withdrawals span multiple brackets, one should consider the average tax rate on withdrawals, which will be smaller than...
by rkhusky
Fri Oct 17, 2014 12:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is Roth 401k better even if future tax bracket is lower?
Replies: 10
Views: 1217

Re: Vanguard REIT index fully contained within TSM index?

I would guess that the vast majority of REIT index holdings are in the TSM index. You can find the list of holdings on Vanguard's web site by clicking on Portfolio and Management and then on Portfolio holdings near the bottom of the page. It is a bit tedious in that the web site only shows 50 at a t...
by rkhusky
Fri Oct 17, 2014 11:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard REIT index fully contained within TSM index?
Replies: 2
Views: 325

Re: Tax Loss Harvesting with Emergency Fund

As suggested by the wiki, you could sell Total International and buy FTSE All World Ex-US (you could also buy Developed Market). But this does require holding 1 more fund. After 60 days (due to Vanguard's rules, unless you do the trade by mail, http://www.bogleheads.org/wiki/Frequent_trading_policy)...
by rkhusky
Fri Oct 17, 2014 8:36 am
 
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting with Emergency Fund
Replies: 7
Views: 521

Re: Is Roth 401k better even if future tax bracket is lower?

If you contribute the same amount out of pocket to either account, and retire in the same bracket, traditional versus Roth is break-even. If you retire in a lower bracket, traditional is better; if you retire in a higher bracket, Roth is better. The break even point assumes that all contributions a...
by rkhusky
Fri Oct 17, 2014 8:27 am
 
Forum: Investing - Help with Personal Investments
Topic: Is Roth 401k better even if future tax bracket is lower?
Replies: 10
Views: 1217

Re: Replacing primary sump pump - how difficult

You can also buy a small electric pump, attach a garden hose, and use that to keep the water out of the pit while you do the repairs. The switches in pumps sometime go bad and you can buy replacement switches. Make sure the float has not caught on something. You can manually move the switch lever to...
by rkhusky
Fri Oct 17, 2014 8:09 am
 
Forum: Personal Consumer Issues
Topic: Replacing primary sump pump - how difficult
Replies: 18
Views: 946

Re: Any active duty military familiar with TSP?

Not directly, but you can roll over outside employer plans (401(k) etc.) and IRA's back into TSP. I don't think you can roll IRA's into the TSP (or into 401K's either). Edit: You can't roll Roth IRA's into the TSP, but apparently a Traditional IRA is OK (https://www.tsp.gov/planparticipation/transf...
by rkhusky
Thu Oct 16, 2014 3:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Any active duty military familiar with TSP?
Replies: 19
Views: 828

Re: Does "substantially identical" apply to combined securit

But if one went for 70% S&P Value + 30% S&P Growth, one could reasonably argue that their economic position has significantly changed.
by rkhusky
Thu Oct 16, 2014 1:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1418

Re: Sixth anniversary of worst week ever for stocks

My take is that I'd rather be able to sleep even if I don't get the absolute maximum theoretical expectation of gain. You make it sound like, with enough diligence, smarts and risk-taking, one can maximize their gain. However, the perfect portfolio or trading strategy is only known in hindsight. Yo...
by rkhusky
Thu Oct 16, 2014 8:18 am
 
Forum: Investing - Help with Personal Investments
Topic: Sixth anniversary of worst week ever for stocks
Replies: 51
Views: 3979

Re: -11.33% YTD, asking for some guidance

fortytwo wrote:
I'm going to look into opening an IRA with Vanguard, thanks a lot Paul!


Make note that there are two types of IRA's: Roth and Traditional. Roth is after-tax, Traditional is pre-tax, like your 401K, if your income is below a certain level.
by rkhusky
Wed Oct 15, 2014 5:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: -11.33% YTD, asking for some guidance
Replies: 57
Views: 3356

Re: -11.33% YTD, asking for some guidance

Could you explain this part please? Given that International and Bonds are more expensive than S&P 500, if you chose to look into an IRA, you could put those there. When you have multiple accounts, treat them all as a single portfolio. It is fine to have all US in one account, all bonds in anot...
by rkhusky
Wed Oct 15, 2014 5:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: -11.33% YTD, asking for some guidance
Replies: 57
Views: 3356

Re: -11.33% YTD, asking for some guidance

If you don't get a employer match, i.e. your employer is not putting in extra beyond what you are contributing, you may be better off in an IRA with Vanguard and perhaps a taxable account. I agree with a previous poster that the S&P 500 looks like your best choice, as well as the lowest cost bo...
by rkhusky
Wed Oct 15, 2014 4:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: -11.33% YTD, asking for some guidance
Replies: 57
Views: 3356

Re: -11.33% YTD, asking for some guidance

If you don't get a employer match, i.e. your employer is not putting in extra beyond what you are contributing, you may be better off in an IRA with Vanguard and perhaps a taxable account. I agree with a previous poster that the S&P 500 looks like your best choice, as well as the lowest cost bon...
by rkhusky
Wed Oct 15, 2014 4:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: -11.33% YTD, asking for some guidance
Replies: 57
Views: 3356

Re: Roth or Traditional IRA

I would stick with Traditional 401K and Roth IRA's - max out both if you can. Avoid Traditional IRA.
by rkhusky
Wed Oct 15, 2014 12:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth or Traditional IRA
Replies: 5
Views: 360

Re: Does "substantially identical" apply to combined securit

Epsilon Delta wrote:On the other hand following this to its logical conclusion TSM could be a partial wash sale with any stock.


Is the purchase of a mutual fund share equivalent to purchasing partial shares of all the companies in the fund?
by rkhusky
Wed Oct 15, 2014 12:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1418

Re: Airline carry on limits

Can you take food on airplanes? Snacks like nuts and raisins? We flew SWA last month and I was surprised that they still serve peanuts. My BIL has a severe nut allergy and even the smell of nuts in an enclosed space can trigger respiratory distress. We often bring trail mix with us. Once we were as...
by rkhusky
Tue Oct 14, 2014 1:21 pm
 
Forum: Personal Consumer Issues
Topic: Airline carry on limits
Replies: 57
Views: 2682

Re: What if I make a mistake in choosing IRA

Traditional is only useful in comparison to a Roth if you can deduct the contributions (except as 1st step in backdoor Roth). See: http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits See: http://www.bogleheads.org/wiki/Traditional_versus_Roth for arguments for one or the other. If one or the ot...
by rkhusky
Tue Oct 14, 2014 8:53 am
 
Forum: Investing - Help with Personal Investments
Topic: What if I make a mistake in choosing IRA
Replies: 9
Views: 665

Re: Does "substantially identical" apply to combined securit

As the IRS has not defined "substantially identical" and there is little case law to go by, most folk would feel comfortable using the combo you suggest. It is unlikely you would get the exact proportion as a combined fund, and if you are nervous about it, you could intentionally hold a di...
by rkhusky
Tue Oct 14, 2014 8:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1418

Re: Do you rebalance now?

inbox788 wrote:Yes, what goes down must come up.


I don't think that Vanguard's Total International has returned to its high point in 2007.
by rkhusky
Tue Oct 14, 2014 7:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Do you rebalance now?
Replies: 17
Views: 1460

Re: Argh! .... TLH confusion .... Please help!

I would wait until 10/16 before I did anything. You can sell or exchange on 10/16 and have only a small partial wash sale. You can also wait until 10/24 to sell or exchange VTIAX if you like. Note that waiting until 10/24 (rather than 10/16) will be "cleaner," but won't save you much mone...
by rkhusky
Mon Oct 13, 2014 6:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Argh! .... TLH confusion .... Please help!
Replies: 19
Views: 1189

Re: Negative AGI and Roth IRA

You need earned income in order to contribute to an IRA. You can contribute all your earned income.
by rkhusky
Fri Oct 10, 2014 8:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Negative AGI and Roth IRA
Replies: 2
Views: 288

Re: Traditional 401K or Roth 401K?

Thanks all! I think my plan is to contribute enough to the traditional to get down into the lower tax bracket if necessary and put the remainder into the Roth. This seems to be the most tax advantaged scenario...thoughts? Also, at the chance of sounding really stupid, where would I actually find wh...
by rkhusky
Fri Oct 10, 2014 3:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K?
Replies: 11
Views: 1262

Re: Traditional 401K or Roth 401K?

Keep in mind that Roth 401K's are subject to RMD's (required minimum distribution) once you are 70.5. If you don't want to do the RMD's, you will need to transfer to a Roth IRA before 70.5. (Long time in the future - tax laws could change - could end up with RMD's for Roth IRA's - no need to worry n...
by rkhusky
Fri Oct 10, 2014 8:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K?
Replies: 11
Views: 1262

Re: Should we diversify our bond holdings?

I see no reason to have that little bit of TSM in Roth-Joy.
by rkhusky
Thu Oct 09, 2014 4:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should we diversify our bond holdings?
Replies: 13
Views: 895

Re: Stock/Bond Allocation in VG Target 2050

I am currently age-20 in bonds. By the time I retire I will be closer to age-10.
by rkhusky
Thu Oct 09, 2014 4:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stock/Bond Allocation in VG Target 2050
Replies: 8
Views: 555

Re: Sixth anniversary of worst week ever for stocks

Every time the Dow would drop a 1000 or so points, I would buy more stocks, thinking "it must have hit the bottom by now".
by rkhusky
Thu Oct 09, 2014 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Sixth anniversary of worst week ever for stocks
Replies: 51
Views: 3979

Re: Michigan part year capital gains taxation

If you look at MICHIGAN Nonresident and Part-Year Resident Schedule you will see that you can separate MI income from other state's income. And that there are adjustments you can make. For example: Line 8: If you are allocating your income, complete an Adjustments of Capital Gains and Losses (Form M...
by rkhusky
Thu Oct 09, 2014 2:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Michigan part year capital gains taxation
Replies: 4
Views: 308

Re: Help with tax loss harvesting

Keep in mind that you don't necessarily lose your whole loss because of a dividend buy, just the amount of the dividend, i.e. if your dividend was $5.24 and the loss was $2,000, the whole $2K is not washed out.
by rkhusky
Wed Oct 08, 2014 6:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with tax loss harvesting
Replies: 16
Views: 1072

Re: Frequent taxable contributions negate tax loss harvestin

Say on October 5, 2014, the $3k of VTSAX I purchased on October 1, 2014 goes down to $1k resulting in a $2k loss. If the stock market dropped by 67% in a couple days, I might be thinking of other things besides TLH. But if I did keep my wits about me, I would sell the other $100K I have in VTSAX, w...
by rkhusky
Wed Oct 08, 2014 4:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Frequent taxable contributions negate tax loss harvesting?
Replies: 7
Views: 611

Re: Why Wouldn't You Tilt To Small Value?

The 10 largest holdings are conglomerates that are the equivalent of many smaller businesses. They should have MUCH more weighting than your local pizza place down the street. That is a really great point. If one broke Nabisco and others like it into separate companies, one for each brand or produc...
by rkhusky
Wed Oct 08, 2014 1:42 pm
 
Forum: Investing - Theory, News & General
Topic: Why Wouldn't You Tilt To Small Value?
Replies: 52
Views: 2895

Re: 401K fund choices, (advice)

So while I am ecstatic with all my VG choices and plan to invest 90% in the low costs US/international/bond funds from VG.. I was asking if there was any side dishes I should consider such as global bonds or global real estate. Also, what's the feeling on adding reits and tips in addition to the co...
by rkhusky
Wed Oct 08, 2014 11:46 am
 
Forum: Investing - Help with Personal Investments
Topic: 401K fund choices, (advice)
Replies: 4
Views: 297

Re: Yet another TLH question

lifebeckonss wrote:I am thinking of changing it such that the SCV goes in Roth, and only Total Stock and Total Intl. remain in taxable. Better for both tax efficiency and ease of TLH I think.


Yes, SCV throws off a lot of dividends, which are taxed.

Do you have bonds somewhere?
by rkhusky
Wed Oct 08, 2014 8:06 am
 
Forum: Investing - Help with Personal Investments
Topic: Yet another TLH question
Replies: 16
Views: 823

Re: How to diversify first time ROTH with high minimums?

Vanguard Target Retirement 2030 fund (VTHRX) has about 75% stock and Vanguard will automatically rebalance it daily for you. Vanguard will also gradually dial down the stock exposure as you get older. All for a reasonable 0.17% expense ratio. Target Retirement 2035 has about 85% stock and 2040 has a...
by rkhusky
Wed Oct 08, 2014 7:55 am
 
Forum: Investing - Help with Personal Investments
Topic: How to diversify first time ROTH with high minimums?
Replies: 6
Views: 287

Re: Feedback on Vanguard funds

I would suggest you use the Vanguard Target Retirement 2030 fund (VTHRX) until you figure out what you really want to do. It is about 75% stock and Vanguard will automatically rebalance it for you. Vanguard will also gradually dial down the stock exposure as you get older. All for a reasonable 0.17%...
by rkhusky
Wed Oct 08, 2014 7:46 am
 
Forum: Investing - Help with Personal Investments
Topic: Feedback on Vanguard funds
Replies: 8
Views: 715

Re: Yet another TLH question

This is probably a beginner question (I apologize), but if OP is only using TLH for taxable does it matter whether or not dividends are re-invested in the Roth IRA? Yes because if replacement shares are purchased in an IRA then the tax loss is disallowed. And it is only that portion equal to the re...
by rkhusky
Tue Oct 07, 2014 7:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Yet another TLH question
Replies: 16
Views: 823

Re: Yet another TLH question

One option to avoid this mild annoyance is to hold different things in taxable and tax advantaged.

Appears that you would have a wash of about $130. That may or may not be important to you, given that you are TLH $2K.
by rkhusky
Tue Oct 07, 2014 4:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Yet another TLH question
Replies: 16
Views: 823

Re: today's WSJ page 1...interesting

According to Morningstar, PowerShares DWA Momentum Portfolio has a turnover ratio of 75% and an expense ratio of 0.65%. Inception was 2007, so there is a bit of history, but not much. It appears that they did well in 2012 and this year, which is probably why they are getting press. In 2008, 2009 and...
by rkhusky
Tue Oct 07, 2014 8:12 am
 
Forum: Investing - Theory, News & General
Topic: today's WSJ page 1...interesting
Replies: 22
Views: 3273

Re: Can I open up a Roth IRA for my 6 year old?

Actually a family I know operates their own business employs their seven year old to do paper shredding every other week. I think he earned about $3,000 last year which they carefully logged and paid at a reasonable rate. Their son contributed most of this to his Roth, and in this case I see nothin...
by rkhusky
Mon Oct 06, 2014 9:55 am
 
Forum: Investing - Theory, News & General
Topic: Can I open up a Roth IRA for my 6 year old?
Replies: 32
Views: 3146

Re: Can I open up a Roth IRA for my 6 year old?

kaneohe wrote:Possibly you may be mixing up different concepts.
1)For the child to own the Roth, he/she would need to have earned income to make the contribution.
2) If the child is simply the beneficiary of the Roth, he/she does not need to have earned income.

Fixed #2
by rkhusky
Sun Oct 05, 2014 9:05 pm
 
Forum: Investing - Theory, News & General
Topic: Can I open up a Roth IRA for my 6 year old?
Replies: 32
Views: 3146

Re: Roth or not?

Next step, I am not sure about. As per the wiki, "To do this with Vanguard, you buy shares (or open a new account) in a Roth IRA, and fund it by "selling" shares in your Traditional IRA" - Will I have this option available for sure? I guess my question is what if I never have th...
by rkhusky
Sat Oct 04, 2014 9:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth or not?
Replies: 13
Views: 1339

Re: Roth or not?

Gemini wrote:Thanks rhusky.

I don't want to mess this up, so is there a step by step guide on how to do this.


See: http://www.bogleheads.org/wiki/Backdoor_Roth_IRA and the External Links at the bottom.
by rkhusky
Sat Oct 04, 2014 2:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth or not?
Replies: 13
Views: 1339

Re: Roth or not?

You should definitely be putting money into a Roth IRA. If your income is too high, you can do it via the Backdoor Roth, which involves contributing to a non-deductible Traditional IRA and then immediately converting to a Roth. You should contribute to the Roth and max out your 401K, once the latter...
by rkhusky
Sat Oct 04, 2014 12:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth or not?
Replies: 13
Views: 1339

Re: Roth or Traditional if you have a pension?

gtt561 wrote:
rkhusky wrote:Do you have a Roth option in your 457(b)? If so, some of the discussion may still be useful.

No, I do not have a Roth option.


Then your options are the Traditional 457b and the Roth IRA.
by rkhusky
Sat Oct 04, 2014 10:49 am
 
Forum: Investing - Theory, News & General
Topic: Roth or Traditional if you have a pension?
Replies: 28
Views: 1708

Re: Traditional 401K or Roth 401K?

You probably should be doing some rough prognostication before deciding between Roth and Traditional. See http://www.bogleheads.org/wiki/Traditional_versus_Roth. If you are in the 15% bracket now, but expect to be in the 25% in retirement, Roth might be better. If you expect a sizable pension, you m...
by rkhusky
Sat Oct 04, 2014 7:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K or Roth 401K?
Replies: 11
Views: 1262

Re: Roth or Traditional if you have a pension?

Do you have a Roth option in your 457(b)? If so, some of the discussion may still be useful.
by rkhusky
Sat Oct 04, 2014 7:35 am
 
Forum: Investing - Theory, News & General
Topic: Roth or Traditional if you have a pension?
Replies: 28
Views: 1708

Re: Roth or Traditional if you have a pension?

For 2013, married filing jointly with standard exemptions and deductions, your first $20K is taxed at 0%, the next $18K is taxed at 10% ($20K-$38K), the next $55K ($38K-$93K) is taxed at 15%, and the next $74K ($93K-$167K) is taxed at 25%. So, in this scenario, if you are expecting a pension of $93K...
by rkhusky
Fri Oct 03, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Roth or Traditional if you have a pension?
Replies: 28
Views: 1708
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