Search found 7187 matches

by Bob's not my name
Sat May 28, 2016 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: Skip company stock purchase?
Replies: 9
Views: 805

Re: Skip company stock purchase?

We can purchase up to 10% of our gross salary per year. You pick a percentage and it is deducted from each pay. The stock is deposited in our accounts every six months and it can be sold once it is in our account. That's a 90% annualized return. Max it out. An ESPP is not an investment, it's a comp...
by Bob's not my name
Sat May 28, 2016 3:58 am
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA with RMDs in peak earning years -- other options?
Replies: 26
Views: 1763

Re: Inherited IRA with RMDs in peak earning years -- other options?

To protect against this situation, speaking very broadly, would it make more sense to leave IRAs to younger beneficiaries, and taxable assets to older beneficiaries - all other things being equal? The best option is to convert the IRA before death. Death can be sudden, of course, but when it's not ...
by Bob's not my name
Fri May 27, 2016 3:09 am
Forum: Investing - Theory, News & General
Topic: Does anyone know how the loan limits work over multiple 401(k) accounts?
Replies: 21
Views: 1194

Re: Does anyone know how the loan limits work over multiple 401(k) accounts?

Don't you take a loan withdrawing tax deferred funds, and pay back with after tax though? That's a red herring, as discussed in almost every thread on 401k loans. Relevant only if your 401k loan interest rate is higher than your conventional loan interest rate, in which situation you ought to take ...
by Bob's not my name
Thu May 26, 2016 11:56 am
Forum: Investing - Theory, News & General
Topic: Does anyone know how the loan limits work over multiple 401(k) accounts?
Replies: 21
Views: 1194

Re: Does anyone know how the loan limits work over multiple 401(k) accounts?

kmi2000 wrote:is it possible to take a loan from a former employer with a 403b? the rule is no but wondering if it's possible to transfer the money. i took a loan in the past and they charged 5% but gave you 3% back when it was paid off.
Bob's not my name wrote:I can borrow (with interest) $50k each from my current 403b and my former employer's 401k. I maintain over $100k in the old 401k so I can borrow the max $50k in an emergency.

Most plans do not allow loans post-employment.
by Bob's not my name
Wed May 25, 2016 3:48 am
Forum: Investing - Theory, News & General
Topic: Does anyone know how the loan limits work over multiple 401(k) accounts?
Replies: 21
Views: 1194

Re: Does anyone know how the loan limits work over multiple 401(k) accounts?

I can borrow (with interest) $50k each from my current 403b and my former employer's 401k. I maintain over $100k in the old 401k so I can borrow the max $50k in an emergency.

Most plans do not allow loans post-employment.
by Bob's not my name
Tue May 17, 2016 3:52 pm
Forum: Investing - Theory, News & General
Topic: The inventor of the 401(k) says he created a ‘monster’
Replies: 28
Views: 4687

Re: The inventor of the 401(k) says he created a ‘monster’

Other monsters under the bed: The Stock Market, The Bond Market, The Pension, The Bank Account, The CD, The 529, The Roth IRA, The FSA, The ESPP, Social Security. Wish I'd never invented them.
by Bob's not my name
Tue May 17, 2016 1:32 pm
Forum: Personal Finance (Not Investing)
Topic: ESPP help
Replies: 11
Views: 469

Re: ESPP help

jharkin wrote:I always flipped them the day they vested for a guaranteed minimum 15% profit.
17.6% profit.
by Bob's not my name
Tue May 17, 2016 1:31 pm
Forum: Personal Finance (Not Investing)
Topic: ESPP help
Replies: 11
Views: 469

Re: ESPP help

The 17.6% gain from the 15% discount is taxed as ordinary income. Any gain or loss from the discounted price is taxed as STCG when you sell at the earliest opportunity, which you should. tfb's article on ESPP provides the rationale for selling early and a spreadsheet tool you can use. Ordinary inco...
by Bob's not my name
Tue May 17, 2016 8:28 am
Forum: Personal Finance (Not Investing)
Topic: ESPP help
Replies: 11
Views: 469

Re: ESPP help

You could potentially have a lot of your salary tied up in that plan and be forced to just sit and watch it evaporate away if the company has a bad quarter and the stock tanks. That would be neutral if you participate continuously. You sell and buy at pretty much the same time, so if the stock tank...
by Bob's not my name
Tue May 17, 2016 8:21 am
Forum: Personal Finance (Not Investing)
Topic: ESPP help
Replies: 11
Views: 469

Re: ESPP help

The 17.6% gain from the 15% discount is taxed as ordinary income. Any gain or loss from the discounted price is taxed as STCG when you sell at the earliest opportunity, which you should. tfb's article on ESPP provides the rationale for selling early and a spreadsheet tool you can use. Since an ESPP ...
by Bob's not my name
Tue May 17, 2016 4:06 am
Forum: Personal Finance (Not Investing)
Topic: High Earner $150k/yr. Single VS Married with Kids Take Home Salary??? Help!
Replies: 40
Views: 4362

Re: High Earner $150k/yr. Single VS Married with Kids Take Home Salary??? Help!

How do we know if our health insurance premiums through work are pretax like an HSA or traditional 401k? Your W2. Health insurance premiums and health FSA contributions withheld from your pay are exempt from SS, Medicare, and ACA taxes, whereas 401k contributions are exempt only from federal income...
by Bob's not my name
Mon May 09, 2016 6:34 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs. Traditional 401(k)/IRA
Replies: 20
Views: 1436

Re: Roth vs. Traditional 401(k)/IRA

What matters is tax rates in your future. Most people make more money when they're making money, so their tax rates are lower in retirement. Add to that (1) the extraordinarily high marginal rates on some students, some graduating students, some families with children, and some families with childre...
by Bob's not my name
Mon May 09, 2016 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs. Traditional 401(k)/IRA
Replies: 20
Views: 1436

Re: Roth vs. Traditional 401(k)/IRA

Why not use a Roth 401(k) so that the money can grow tax-free? Adding to FiveK's comment: both Roth and Traditional funds grow tax-free. The difference is whether you pay tax on the gross income and make a contribution with what's left (Roth), or pay tax on the withdrawal (Traditional). Furthermore...
by Bob's not my name
Mon May 09, 2016 5:25 am
Forum: Investing - Help with Personal Investments
Topic: Beginner Investor.. Sorting thru 401k and Roth allocations
Replies: 12
Views: 1301

Re: Beginner Investor.. Sorting thru 401k and Roth allocations

My wife will back down to part time work at the end of 2016. This will take our before tax income from ~$160,000 down to $73,000 at worst and $90,000 at best. You're not in the 28% bracket. You're in the 25% bracket and next year you'll be in the 15% bracket. Tax brackets are not based on gross inc...
by Bob's not my name
Mon May 09, 2016 4:41 am
Forum: Investing - Help with Personal Investments
Topic: Roth vs. Traditional 401(k)/IRA
Replies: 20
Views: 1436

Re: Roth vs. Traditional 401(k)/IRA

ryanpeden wrote:going to begin work in June. It appears that I am going to be in a 28% tax bracket, and my income level will disqualify me from contributing directly to a Roth IRA.
This means your starting salary is over $200,000. That's outstanding.

Did you pay your last tuition bill after 12/31/15?
by Bob's not my name
Sun May 08, 2016 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Don't need RMD for Trad IRA - Do a Roth conversion?
Replies: 19
Views: 946

Re: Don't need RMD for Trad IRA - Do a Roth conversion?

Prior threads have covered the deductibility of assisted living when the person requires assistance for daily activities. Depending on where you live and what quality of care you choose, this massive deduction can allow you to stuff a six figure income into the 0% bracket. I definitely wouldn't do R...
by Bob's not my name
Sun May 08, 2016 10:13 am
Forum: Investing - Help with Personal Investments
Topic: Don't need RMD for Trad IRA - Do a Roth conversion?
Replies: 19
Views: 946

Re: Don't need RMD for Trad IRA - Do a Roth conversion?

kaneohe wrote:Does it make sense to pay 33-35% on a Roth conversion to avoid 25% on RMDs?
Or 0% when she's in assisted living. 0% is a good rate for Roth conversions.
by Bob's not my name
Sun May 08, 2016 4:20 am
Forum: Investing - Theory, News & General
Topic: Impact of student debt on homeownership rates
Replies: 10
Views: 1127

Re: Impact of student debt on homeownership rates

their lifetime earnings (on average) will be a million or so dollars less than those with college degrees (on average) $1M/40 years = $25,000/year. So that $30,000 investment needs to be in a CD paying 83% interest. I'll check the current rates at my credit union to see if this is a reasonable assu...
by Bob's not my name
Mon May 02, 2016 4:21 am
Forum: Investing - Help with Personal Investments
Topic: Student Loans vs. Retirement
Replies: 9
Views: 983

Re: Student Loans vs. Retirement

Gaff74 wrote:If you are below the cut-off and can still take a deduction on student loan interest, that needs to be a consideration.
At 6.5% only interest on the bottom half of the debt is deductible even if the OP is below the phaseout (which seems unlikely).
by Bob's not my name
Wed Apr 13, 2016 3:43 am
Forum: Personal Finance (Not Investing)
Topic: TSP Loan to payoff student loans
Replies: 10
Views: 1144

Re: TSP Loan to payoff student loans

I'm trying to keep my taxable income below 80k this year in order to be able to deduct student loan interest on my taxes. The deduction is limited based on AGI, not taxable income. The phaseout starts at $65,000 AGI for single filers. At $80,000 you are completely phased out. Given your interest ra...
by Bob's not my name
Sun Apr 03, 2016 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: Help me reduce my 2015 AGI!
Replies: 22
Views: 3977

Re: Help me reduce my 2015 AGI!

TropikThunder wrote:the phase out limit of $181k you mention is correct
The 2015 phaseout is $183,000 - $193,000.
by Bob's not my name
Tue Mar 15, 2016 5:18 am
Forum: Investing - Help with Personal Investments
Topic: Traditional 401k + Taxable vs Roth 401k and Taxable
Replies: 4
Views: 558

Re: Traditional 401k + Taxable vs Roth 401k and Taxable

Illinois doesn't tax Roth conversions. If you retire early (<70, maybe <75 under future rules), you'll have the opportunity to convert pre-tax savings to Roth without paying state tax, and presumably paying no more than the top federal rate, which is your rate now (you must also be subject to the AT...
by Bob's not my name
Thu Mar 10, 2016 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)
Replies: 31
Views: 2110

Re: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)

OK so after 24 posts we're getting close to addressing the question. Your gross income will be $150k so your AGI will be about $110k assuming two maxed 401k's and some pre-tax insurance premiums withheld from your pay, which puts you well into the TIRA deduction phaseout, which starts at $98k. Your ...
by Bob's not my name
Wed Mar 09, 2016 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)
Replies: 31
Views: 2110

Re: Is Roth IRA superior to Traditional IRA if you cannot deduct tIRA on state taxes? (NJ)

401k contributions are better, because they are deductible in NJ. How would you be eligible for deductible TIRA contributions in the 28% bracket? Your prior posts indicate you expect to max two 401k's this year. You may need to do backdoor Roth IRAs, because the 28% bracket and Roth phaseout are at ...
by Bob's not my name
Tue Mar 08, 2016 3:45 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

nyknicks wrote:I just take the 11k+ I would be putting towards the loan and reallocate that to my 401k.
Cool. Just remember that $11k of loan repayment uses the same gross salary as about $14,700 of 401k contributions (assuming no state tax, no credit phaseout, and a 25% federal marginal rate in 2017).
by Bob's not my name
Mon Mar 07, 2016 7:57 pm
Forum: Personal Finance (Not Investing)
Topic: Holding RSU/ESPP for ≥ 1 year
Replies: 13
Views: 1031

Re: Holding RSU/ESPP for ≥ 1 year

See tfb's article on why you shouldn't hold ESPP for the illusion of a tax benefit. http://thefinancebuff.com/employee-stoc ... pp-is.html
by Bob's not my name
Mon Mar 07, 2016 9:25 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

Let's consider two scenarios, assuming a 6% state tax: Scenario 1: Withdraw from TIRA If you withdraw $6,000 this year, you'll likely pay no federal tax if you have an education credit, and less than $500 in state taxes, so you'll net $5,500. Let's say you still need to borrow the same amount, becau...
by Bob's not my name
Mon Mar 07, 2016 5:36 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

celia wrote:Convert the tIRA to Roth this year. It may be the only time in your life you can convert and not owe any taxes.
Again, he would owe taxes, but likely less than 20%.
by Bob's not my name
Mon Mar 07, 2016 4:52 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

You probably want to do Roth conversions on any of the IRA funds that can be converted in the zero bracket, perhaps 10% bracket as well during the tax year you will start a job.. The OP's marginal rate (federal + state + possibly education credit phaseout) in his graduation year is likely to be 30-...
by Bob's not my name
Mon Mar 07, 2016 4:32 am
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

To help you figure your lifetime learning credit, the student may receive Form 1098-T ... An institution may choose to report either payments received (box 1), or amounts billed (box 2), for qualified education expenses. However, the amounts on Form 1098-T, boxes 1 and 2, might be different from wh...
by Bob's not my name
Sun Mar 06, 2016 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

gbru316 wrote:What if you can't find a job for a few years?
This is an argument for withdrawing instead of taking on debt.
by Bob's not my name
Sun Mar 06, 2016 5:48 pm
Forum: Personal Finance (Not Investing)
Topic: Graduate School - Use IRA to pay for it?
Replies: 17
Views: 1302

Re: Graduate School - Use IRA to pay for it?

-Currently have 30k in student loans. -Need to finance an additional 25k in student loans for next year. Interest will be around 6%. -Have about 11k in a traditional IRA with Vanguard. -Recently found out from a classmate I can utilize IRA funds for college expenses and avoid the 10% early withdraw...
by Bob's not my name
Wed Mar 02, 2016 11:27 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1704

Re: Maxed out 401k, young high-income earner--what to do next?

old employer's 401k (with Vanguard). I'm strongly considering rolling over the old 401k into a Vanguard IRA for the far better investment options and lower fees. If you elaborated on why your Vanguard 401k is so much worse than a Vanguard IRA we might be able to offer additional advice. Often a Van...
by Bob's not my name
Wed Mar 02, 2016 11:25 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1704

Re: Maxed out 401k, young high-income earner--what to do next?

--I contribute 6% to my 403b (my employer matches 50 cents on the dollar up to 6%) where should I go from here? Could you elaborate on your question (you may want to start your own thread)? If your salary is $300,000, then 6% maxes your 403b. You appear to be implying that, but it's not clear. We'r...
by Bob's not my name
Wed Mar 02, 2016 6:00 am
Forum: Investing - Help with Personal Investments
Topic: Maxed out 401k, young high-income earner--what to do next?
Replies: 14
Views: 1704

Re: Maxed out 401k, young high-income earner--what to do next?

Long-time lurker I'm strongly considering rolling over the old 401k into a Vanguard IRA for the far better investment options and lower fees. If I do that, does that open up any other possibilities with regard to question #1? No, the opposite. It closes off a possibility. As a long-time lurker, you...
by Bob's not my name
Wed Feb 24, 2016 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6047

Re: Roth, Traditional, and the 15% Tax Bracket

Ybsybs wrote:Income - Standard Deduction (MFJ) - Five Personal Exemptions = Approx. AGI - Top of 15% Bracket = Amount Taxed at 25%
Personal exemptions and the standard deduction do not affect AGI. They happen on Page 2. AGI is at the bottom of Page 1.
by Bob's not my name
Wed Feb 24, 2016 9:24 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?

Tip of the hat to Carl for explaining this. I suspected this might be the case but could not believe such predation is legal. Not only are they getting all the interest up front, denying you an early payoff benefit and ensuring the bulk of the debt remains with you, they're also denying you the prop...
by Bob's not my name
Wed Feb 24, 2016 4:30 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?

Sorry, I don't follow how they can be charging more interest than the loan rate. Is it because the interest accrued while you were in school was added to the loan?
by Bob's not my name
Wed Feb 24, 2016 4:18 am
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1389

Re: Would you enroll in this ESPP? 6 months required holding period

maybe the stock keeps dropping year after year Two factors are often overlooked by employees with an ESPP opportunity: 1. If your company's stock is going monotonically downward, you have a bigger issue than your little stock loss. You need a new job. 2. Your company's performance relative to the o...
by Bob's not my name
Tue Feb 23, 2016 6:51 pm
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1389

Re: Would you enroll in this ESPP? 6 months required holding period

danaht wrote:A couple years ago that 15% gain would have been taxed as a long term capital gain if held for more than 1 year.
I don't know if that was ever the case, but it wasn't the case 15 years ago.
by Bob's not my name
Tue Feb 23, 2016 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: Would you enroll in this ESPP? 6 months required holding period
Replies: 17
Views: 1389

Re: Would you enroll in this ESPP? 6 months required holding period

17.6% return, not 15%. 15/85 = 17.6%. You are right that the six-month holding period makes it far less attractive, but still attractive, I'd say. If the stock is eternally flat, the annualized return with no holding period is 91%, but only 24% with the holding period (since a 3-month investment is ...
by Bob's not my name
Mon Feb 22, 2016 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5120

Re: Maxing Out- Traditional or Roth 401K

The great part about saving for retirement is that you get to do it differently each year. So when you are 90% sure you won the game with a pension expected and high SS but don't feel like retiring early and doing Roth conversions, you can switch from trad 401k + Roth IRA to Roth 401k + Roth IRA. I...
by Bob's not my name
Mon Feb 22, 2016 4:16 am
Forum: Personal Finance (Not Investing)
Topic: Don't forget to claw back your ACA tax
Replies: 5
Views: 1523

Re: Don't forget to claw back your ACA tax on line 62

Are you talking about this or something else? If you are married filing jointly and either you or your spouse had wages or RRTA compensation of more than $200,000, your employer may have withheld Additional Medicare Tax even if you do not owe the tax. In that case, you may be able to get a refund o...
by Bob's not my name
Sun Feb 21, 2016 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: Don't forget to claw back your ACA tax
Replies: 5
Views: 1523

Don't forget to claw back your ACA tax

I almost overlooked this, since it's the first year my "wages" (gross minus insurance premiums and FSA contributions) exceeded $200,000, and I'm embarrassed to say I didn't scrupulously read all 105 pages of the 1040 instructions, I just kinda followed last year's return since I thought no...
by Bob's not my name
Sat Feb 20, 2016 12:30 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5120

Re: Maxing Out- Traditional or Roth 401K

The example couple doesn't have the option of maxing out traditional accounts, since they are above the income limit for deductible traditional IRAs. Provided they max out traditional 401k's, however, they are eligible for direct Roth IRA contributions.
by Bob's not my name
Sat Feb 20, 2016 9:33 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (7%)?

Updated OP to include taxable income. $38,200, in 25% bracket. Will calculate whether contributing to 401k to get down to 15% bracket is advantageous. I assume that's your 2015 taxable income, which puts you less than $750 into the 25% bracket. Only that $750 is taxed at 25%. So in 2016 you'll prob...
by Bob's not my name
Sat Feb 20, 2016 8:24 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5120

Re: Maxing Out- Traditional or Roth 401K

I read the article and I think it's very good, particularly its comments on how selective assumptions are often used to justify Roth, whereas examination of the range of possibilities reveals that Roth wins only in a minority of these. The article is rather dated now, most notably because top margin...
by Bob's not my name
Sat Feb 20, 2016 7:42 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (7%)?

I have about $34,000 left. Interest rate averages out to 6%. Priorities are repaying the grad school loans first (you can deduct additional undergrad interest over $2500 for undergrad loans in MA) and getting the interest paid each year down to the $2500 Federal max tax deduction. Not following the...
by Bob's not my name
Sat Feb 20, 2016 7:13 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (7%)?

You are perhaps $2000 into the 25% bracket. Putting $2000 into the 401k (if it still offers low cost options) or a traditional deductible IRA to avoid the 25% might be advantageous. Is your health insurance possibly offered as a pretax, or are FSA or HSA an option? Last time I looked, 401k contribu...
by Bob's not my name
Sat Feb 20, 2016 5:51 am
Forum: Investing - Help with Personal Investments
Topic: 27, ROTH contribution or pay down debt (39% of payments to interest this past year)?
Replies: 32
Views: 2342

Re: 27, ROTH contribution or pay down debt (7%)?

I have about $34,000 left. Interest rate averages out to 6%. Priorities are repaying the grad school loans first (you can deduct additional undergrad interest over $2500 for undergrad loans in MA) and getting the interest paid each year down to the $2500 Federal max tax deduction. Not following the...

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