Search found 7277 matches

by Bob's not my name
Mon Aug 15, 2016 1:34 pm
Forum: Personal Finance (Not Investing)
Topic: Parents over 80: End of life tax stragegies?
Replies: 14
Views: 2356

Re: Parents over 80: End of life tax stragegies?

Good point that the tax headroom will drop when a joint filing becomes a single filing. Survivor gets full pension? Also, tax headroom may increase when one or both or the survivor are in assisted living, as celia has pointed out. 1) Removing as much IRA money as possible at 15%, passing on cash. C...
by Bob's not my name
Fri Aug 12, 2016 3:21 am
Forum: Personal Finance (Not Investing)
Topic: Parents over 80: End of life tax stragegies?
Replies: 14
Views: 2356

Re: Parents over 80: End of life tax strategies?

I'm thinking definitely don't touch the appreciated stocks, because of the "opposite of death tax" that basis step up provides. I'm not convinced this is a definite. If the stocks represent an inappropriate risk, that risk could be mitigated by selling, IF there is opportunity to sell at ...
by Bob's not my name
Fri Aug 12, 2016 3:14 am
Forum: Personal Finance (Not Investing)
Topic: Parents over 80: End of life tax stragegies?
Replies: 14
Views: 2356

Re: Parents over 80: End of life tax stragegies?

A little bit (few hundred) could I think even be put back into a Roth, as there is taxable rental income that could be offset. Only earned income qualifies for IRA contributions. In addition, Roth contributions do not "offset" taxable income. If your goal is to increase the Roth IRA(s), t...
by Bob's not my name
Thu Aug 11, 2016 5:32 am
Forum: Personal Finance (Not Investing)
Topic: Parents over 80: End of life tax stragegies?
Replies: 14
Views: 2356

Re: Parents over 80: End of life tax stragegies?

celia wrote:7.5% of their AGI
10% starting 2017 -- the 7.5% threshold was changed by the ACA but extended to 2016 for 65-and-older taxpayers.
by Bob's not my name
Sun Aug 07, 2016 3:49 am
Forum: Investing - Theory, News & General
Topic: Dave Ramsey over simplifying Roth vs. Traditional IRA?
Replies: 52
Views: 4733

Re: Dave Ramsey over simplifying Roth vs. Traditional IRA?

MikeT, you had the math right from the beginning. It is a common error to do the math upside down and thus understate the tax cost of choosing Roth over Traditional. This common error is often denied by jumping into a "saturated case" argument in which all tax-advantaged space is filled. I...
by Bob's not my name
Thu Aug 04, 2016 6:25 pm
Forum: Investing - Help with Personal Investments
Topic: 403(b) to IRA - any issues to consider?
Replies: 11
Views: 867

Re: 403(b) to IRA - any issues to consider?

A non spouse beneficiary of a 403b has the option to do a direct rollover to an inherited Roth as well as an inherited TIRA. A non spouse beneficiary of an IRA cannot currently convert to an inherited Roth IRA. Only in the "saturated" case, in which the beneficiary and spouse are maxing a...
by Bob's not my name
Thu Aug 04, 2016 5:55 am
Forum: Personal Finance (Not Investing)
Topic: 401k or Roth 401k?
Replies: 14
Views: 754

Re: 401k or Roth 401k?

If you are contributing only the 8%, that's $6,000 into a traditional 401k and $5,500 into a Roth IRA. The $5,500 contribution to the Roth consumes $7,333 of gross income, of which $1,833 is thrown away to taxes (25% federal, no state tax). So you are contributing $7,333 of gross income to Roth and ...
by Bob's not my name
Thu Aug 04, 2016 3:29 am
Forum: Investing - Help with Personal Investments
Topic: 403(b) to IRA - any issues to consider?
Replies: 11
Views: 867

Re: 403(b) to IRA - any issues to consider?

Some states tax 403b and IRA distributions differently. For example, grabiner has pointed out that Maryland (which has a very high tax rate) exempts some employer plan distributions but not IRA distributions, so a Maryland taxpayer shouldn't roll over all of her employer plans into an IRA. Some 403b...
by Bob's not my name
Mon Aug 01, 2016 2:43 pm
Forum: Investing - Help with Personal Investments
Topic: Advice for a new investor: modest inheritance
Replies: 8
Views: 769

Re: Advice for a new investor: modest inheritance

I should have noted that PA taxes 401k contributions but not withdrawals, so your state tax isn't really relevant and I should have left it out.
by Bob's not my name
Mon Aug 01, 2016 9:56 am
Forum: Investing - Help with Personal Investments
Topic: Advice for a new investor: modest inheritance
Replies: 8
Views: 769

Re: Advice for a new investor: modest inheritance

Check your eligibility for education tax credits, particularly the American Opportunity Tax Credit, which is set to expire after 2017 but has been extended a couple of times. Eligibility phases out for MAGI $160,000-180,000, not inflation-adjusted. Your AGI is at the bottom of page 1 of your 1040. I...
by Bob's not my name
Mon Aug 01, 2016 5:05 am
Forum: Investing - Help with Personal Investments
Topic: Inactive employer 401k question
Replies: 12
Views: 758

Re: Inactive employer 401k question

Watty, we have 401k accounts from two past employers and one from a current employer. Should we consolidate these into one three-fund account? Not necessarily. There may be reasons to keep them separate. For example, if you are using the term "401k" loosely to include, say, a 403b account...
by Bob's not my name
Wed Jul 27, 2016 5:20 pm
Forum: Investing - Help with Personal Investments
Topic: No 401k for 5 months
Replies: 13
Views: 1347

Re: No 401k for 5 months

$1,000 credit phased out over $20,000 of income: 1,000/20,000 = 5% 5% + nominal 25% = 30% If you think it's nuts that the 30% bracket is below the 28% bracket, consider the effect of the AOTC phaseout on a family in the 25% bracket with two kids in college in one calendar year. Their marginal rate i...
by Bob's not my name
Wed Jul 27, 2016 2:00 pm
Forum: Investing - Help with Personal Investments
Topic: No 401k for 5 months
Replies: 13
Views: 1347

Re: No 401k for 5 months

You have a good grip on your numbers. I'll just say again that it may not make any difference whether your deductible 401k/TIRA contributions are for 2016 or 2017 if you aren't maxing out all that space -- you will likely be avoiding a 30% marginal rate in either case. So the increment of tax you pa...
by Bob's not my name
Wed Jul 27, 2016 3:42 am
Forum: Investing - Help with Personal Investments
Topic: No 401k for 5 months
Replies: 13
Views: 1347

Re: No 401k for 5 months

You're in the phantom 30% tax bracket due to the child tax credit phaseout, which is based on AGI. You are not eligible for deductible TIRA contributions but your non-working spouse is -- you're way, way under the phaseout for spousal TIRA deductions. So you could switch her from Roth to TIRA, and m...
by Bob's not my name
Wed Jul 20, 2016 3:11 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ help funding 401k with taxable acct

Exactly. If your gains are under 3% then the gain on a $10,000 sale would be under $300, on which you would pay under $50 in tax (federal + state).

You won't hit the one-year mark this calendar year?
by Bob's not my name
Tue Jul 19, 2016 7:03 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ help funding 401k with taxable acct

Did you inherit the assets or buy them with inherited cash? If the former, did you receive them from a trust that has held them for some years, or did you inherit direct from the deceased? These factors will determine whether you have any significant gains and whether they are long or short. Also, y...
by Bob's not my name
Fri Jul 15, 2016 3:09 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ Can I be more tax advantageous?

Since, I depend on my monthly income besides the 5k im currently contributing to my 401k would it be easiest to sell 13K at the beginning of each year and deposit in our savings and just pull each month as we need it? (hopefully if I get a raise or something changes and we can save more a month I c...
by Bob's not my name
Fri Jul 15, 2016 3:04 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ Can I be more tax advantageous?

2. For the 401k, I'm an hourly employee, my income can vary but usually just slightly at the end of the year. So do I just calculate the percentage that gets me closest to maxing out my 401k and change it to that and then towards the end of the year keep a close watch to be sure it doesn't go over ...
by Bob's not my name
Fri Jul 15, 2016 2:55 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ Can I be more tax advantageous?

1. I haven't made our 2016 Roth contributions yet or taken the RMD from the inherited IRA. So, should I go ahead and take the RMD and then sell 11,000 minus the RMD from the taxable account and fund the Roths for this year? Yes, that's a fine approach. I'm not sure whether you should sweat the tax ...
by Bob's not my name
Tue Jul 12, 2016 3:24 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ Can I be more tax advantageous?

Almost your entire portfolio is essentially an emergency fund since it's almost entirely liquid. You have the right idea drawing from the inherited IRA and taxable account to max your tax-advantaged savings (two Roth IRAs and your 401k). I think liquidating taxable account assets to the extent poss...
by Bob's not my name
Mon Jul 11, 2016 6:19 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

WildBill wrote:if and only if your objective is minimizing taxes in a given year
The objective is to avoid paying 30% federal income tax on IRA conversions or withdrawals at any time.
by Bob's not my name
Mon Jul 11, 2016 5:52 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

There are other instances of displacement effects in the tax code, for example the ACA taxes.
by Bob's not my name
Mon Jul 11, 2016 5:43 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

^Any earned or conversion income that pushes any 0% LTCG/QDI into the place where those LTCG/QDI will be taxed at 15% is effectively increasing taxes at a 30% marginal rate and not a 15% marginal rate. livesoft's comment refers to those taking SS. No, it doesn't. I'm not sure how to explain it bett...
by Bob's not my name
Mon Jul 11, 2016 8:56 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio review/ help funding 401k with taxable acct
Replies: 22
Views: 1620

Re: Portfolio review/ Can I be more tax advantageous?

Almost your entire portfolio is essentially an emergency fund since it's almost entirely liquid. You have the right idea drawing from the inherited IRA and taxable account to max your tax-advantaged savings (two Roth IRAs and your 401k). I think liquidating taxable account assets to the extent possi...
by Bob's not my name
Sun Jul 10, 2016 7:51 pm
Forum: Investing - Help with Personal Investments
Topic: Chances of <15% marginal income tax in retirement
Replies: 18
Views: 2403

Re: Chances of <15% marginal income tax in retirement

Georgia is one of two(I think) states where you can deduct IRA contributions while you are working but not pay taxes on IRA withdraws when you are 65. (That is within income limits and it actually partially starts a 62) There are far more than two, actually. I looked at this a few years ago, but my...
by Bob's not my name
Sun Jul 10, 2016 3:45 pm
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

Each month I deposit $458 into my Roth IRA and $458 into my wife's. Now I am going to stop these automatic deposits and save the $916 per month until I can reach the account minimums ($2500 for Vanguard) for buying new funds for the Trad IRAs. Does this make sense? I don't think it does. First, you...
by Bob's not my name
Sun Jul 10, 2016 3:39 pm
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

Are you aware that contributions to the traditional IRA are probably not tax deductible if you have a 401k at work? If you are making non-deductible contributions, you should be making them to a Roth ITA not a tIRA. If you are over the income limit for the Roth, then do a backdoor Roth. There is no...
by Bob's not my name
Sun Jul 10, 2016 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

DayOfChange wrote:our new Trad IRAs
Wait, this is a new wrinkle. You are aware that the combined contribution limit for Roth and Traditional IRAs is $5,500, right?
by Bob's not my name
Sun Jul 10, 2016 11:09 am
Forum: Investing - Help with Personal Investments
Topic: When to sell ESPP?
Replies: 8
Views: 761

Re: When to sell ESPP?

you were not in the market since you just held the company share and that too for 1 day before you initiated the sell. I agree. Your regret isn't rational. Neither is hanging onto the stock for the mythical tax advantage. Whether the 5% discount is worth the hassle is something you'll have to calcu...
by Bob's not my name
Sun Jul 10, 2016 9:38 am
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

bsteiner wrote:Most clients in your situation would leave the IRA to the spouse so she could roll it over into her own IRA and have the opportunity to complete the Roth conversion.
I agree with everything bsteiner posted. Just wanted to note that this is exactly what I did and it worked out well.
by Bob's not my name
Sun Jul 10, 2016 9:35 am
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

Her Salary ~ $60000 His Salary ~ $40000 25% Tax bracket 7.95% State Tax $100,000 gross income yields taxable income under $75,301 (the 25% bracket threshold), considering pre-tax health, dental, and disability insurance premiums, minimum 401k contributions to get the company match, student loan int...
by Bob's not my name
Sun Jul 10, 2016 8:18 am
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

Assuming that you are in 25% marginal tax rate and you have not maxed your Trad. 401K. You are 25% tax aka $3,000 on the additional $12,000 that you put into student loan. Is it worth paying 25% tax to pay a 6% loan early? You did the math upside down. To apply $12,000 to the student loan you need ...
by Bob's not my name
Sun Jul 10, 2016 8:15 am
Forum: Investing - Help with Personal Investments
Topic: Aggresively paying student loans vs saving for retirment
Replies: 34
Views: 2077

Re: Aggresively paying student loans vs saving for retirment

you don't get a tax deduction for student loan debt This isn't true at all, unless I'm misunderstanding what you're saying. I can deduct up to $2500 a year from student loans interest. It's not deductible at the margin. $100,000 of debt at 6% is $6,000 of interest. So the bulk of the interest is no...
by Bob's not my name
Sun Jul 10, 2016 5:38 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor IRA for non-working spouse
Replies: 7
Views: 1005

Re: Backdoor IRA for non-working spouse

It may be useful to know that OP is about 42, lives in CA, and may be in the AMT with a total marginal rate exceeding 40%. Also, there is a $740k mortgage and a 529 plan. So: There may be a few decades until retirement, which I think argues for converting the spousal TIRA, but the tax rate is very h...
by Bob's not my name
Sun Jul 10, 2016 4:06 am
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

Regarding taxation of TIRA withdrawals and conversions, I managed the finances of an elderly couple with wealth similar to yours. Because medically necessary assisted living costs are deductible, I was able to convert several hundred thousand dollars of TIRA to Roth at very low tax rates (some at 0%...
by Bob's not my name
Sun Jul 10, 2016 3:59 am
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 6267

Re: Strategy for conversion of $1.8 million IRA

-We will have two kids in college for the next 3 years, and one In year four. This is important , I think, because it makes us eligible for the [AOTC] of $2500 for each kid as long as our AGI is below $160,000. You have it right that the American Opportunity Tax Credit is based on AGI, not gross in...
by Bob's not my name
Sat Jul 09, 2016 11:40 am
Forum: Investing - Help with Personal Investments
Topic: Roth IRA - Bonds or Stocks?
Replies: 7
Views: 639

Re: Roth IRA - Bonds or Stocks?

You're blending two separable things together: 1. Is Roth or traditional better? 2. If I have money in both Roth and traditional, does it make any difference what assets I hold where? The first question is complicated. The second isn't (although there are second order issues, e.g., I have an old 401...
by Bob's not my name
Sat Jul 09, 2016 11:19 am
Forum: Investing - Help with Personal Investments
Topic: Chances of <15% marginal income tax in retirement
Replies: 18
Views: 2403

Re: Chances of <15% marginal income tax in retirement

"Entirely" isn't the right criterion. Also, a person currently in the federal 15% bracket may have a state tax that is a substantial portion of his total tax burden, since most state taxes are flattish. Therefore, state tax treatment should be taken into account. Many states exempt some re...
by Bob's not my name
Sat Jul 09, 2016 11:02 am
Forum: Investing - Help with Personal Investments
Topic: Roth IRA - Bonds or Stocks?
Replies: 7
Views: 639

Re: Roth IRA - Bonds or Stocks?

Ultimately though, for the same pre-tax amounts in the same pre-tax asset allocation, if the marginal tax rate is the same now and in the future, then it doesn't matter which you put where. There was a link to a seeking alpha article that gave the calculations but I don't see it now. I believe your...
by Bob's not my name
Fri Jul 08, 2016 4:17 am
Forum: Investing - Help with Personal Investments
Topic: Is Backdoor Roth right for me?
Replies: 14
Views: 1301

Re: Is Backdoor Roth right for me?

Since I have the employer-sponsored 401k, I seem to be out of the running for the TIRA, and I seem to make too much to contribute directly to the Roth. Does the backdoor make sense for me? I'm not sure what you mean when you say your employer-sponsored 401k takes you out of the running for a tradit...
by Bob's not my name
Thu Jul 07, 2016 3:53 pm
Forum: Investing - Help with Personal Investments
Topic: Only cheap fund is S&P 500; should I pay more for bonds and international?
Replies: 22
Views: 1998

Re: Only cheap fund is S&P 500; should I pay more for bonds and international?

Other bogleheads are better at this but I'd say these are useful options for constructing a portfolio, especially when complemented by your IRAs: Funds available in his 401(k) 0.47% BLACKROCK INTERN INDEX A 0.11% BLACKROCK S&P 500 INDEX INSTL 0.66% COLUMBIA MIDCAP INDEX FD CL A 0.45% COLUMBIA SM...
by Bob's not my name
Thu Jul 07, 2016 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: Only cheap fund is S&P 500; should I pay more for bonds and international?
Replies: 22
Views: 1998

Re: Only cheap fund is S&P 500; should I pay more for bonds and international?

My wife does have a 401k plan through work, but it's similar to my plan in terms of options and strictly worse in terms of expense ratios. I thought I'd try to straighten out my 401k and IRA first and then figure hers out next. Until then, we're only contributing enough to max out the company match...
by Bob's not my name
Wed Jul 06, 2016 2:43 pm
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

Yeah but in 2017 I would prioritize the 401k.
by Bob's not my name
Wed Jul 06, 2016 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

I believe the OP is saying he'll switch on New Year's Day, since this year his marginal income is taxed at 18.75%, whereas next year it is taxed at 28.75%. On second read I think you're right -- I didn't pick up on this. I thought he was saying he was going to change the allocation when he hit 37,6...
by Bob's not my name
Wed Jul 06, 2016 9:43 am
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

Like I said, my plan was to contribute 8% to Roth 401K and $4K to Roth IRA the rest of this year and then switch over to traditional once I am in the 25% tax bracket. All of the money I have left over (after these contributions) will increase my emergency funds and go towards rent/security deposit/...
by Bob's not my name
Wed Jul 06, 2016 9:26 am
Forum: Investing - Help with Personal Investments
Topic: 401K and ESPP Investing
Replies: 17
Views: 843

Re: 401K and ESPP Investing

TOJ wrote:Question:

On these ESPP plans, is the quarterly withholding pre-tax or after-tax?
percentage of gross, not net

That is neither pre-tax nor after-tax. ESPP contributions aren't tax-exempt.
by Bob's not my name
Wed Jul 06, 2016 8:58 am
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

Salary is about $62,000 I calculated that my taxable income should be right around $38K (just into the 25% tax bracket) for 2016 (I started work last month). You calculated this incorrectly. 7 months at $62,000 would be about $36,000 of gross income, not taxable income. Maybe you have another $2,00...
by Bob's not my name
Wed Jul 06, 2016 4:27 am
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

Note that the 25% is a marginal tax rate. Meaning you'll pay 25% only on the income between $37,650 and $91,150. You'll save 10% (by being in the 15% tax bracket) on any income you can divert to a traditional 401k vs. an after-tax account (including Roth IRA or Roth 401k). In the 25% bracket (next ...
by Bob's not my name
Wed Jul 06, 2016 4:24 am
Forum: Investing - Help with Personal Investments
Topic: Starting first 401K, please review
Replies: 17
Views: 800

Re: Starting first 401K, please review

Salary is about $62,000 I calculated that my taxable income should be right around $38K (just into the 25% tax bracket) for 2016 (I started work last month). You calculated this incorrectly. 7 months at $62,000 would be about $36,000 of gross income, not taxable income. Maybe you have another $2,00...
by Bob's not my name
Tue Jul 05, 2016 3:52 am
Forum: Investing - Help with Personal Investments
Topic: Only cheap fund is S&P 500; should I pay more for bonds and international?
Replies: 22
Views: 1998

Re: Only cheap fund is S&P 500; should I pay more for bonds and international?

I'm maxing out contributions both to the Roth IRA and the 401k, which means that the 401k is growing about three times as fast as the IRA. 1. You don't mention your spouse's retirement accounts, which means either that you are NOT maxing contributions or you are not looking at your asset allocation...

Go to advanced search