Search found 1410 matches

by FinancialDave
Wed Jul 20, 2016 9:11 pm
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2661

Re: BOGLEHEAD CONTEST

Taylor Larimore wrote:Dave:

Thank you for the alert.

I have e-mailed the programmer, Ralph Arvesen.

Best wishes.

Taylor


Taylor,
Any word on what happened to the "feed" for this contest?? It is still blank.

Dave
by FinancialDave
Mon Jul 18, 2016 6:32 pm
Forum: Investing - Theory, News & General
Topic: Anti-Boglehead Claims There is a Better Way to Invest
Replies: 78
Views: 8733

Re: Anti-Boglehead Claims There is a Better Way to Invest

Last week I interviewed Paul. He was gracious and demonstrated a real care for the average investor. Moreover, he said that a target retirement fund is a wonderful option for many investors, as is a three fund portfolio. For others, he suggested various configurations of his ultimate buy and hold s...
by FinancialDave
Wed Jul 13, 2016 4:52 pm
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2661

Re: BOGLEHEAD CONTEST -- 2016 Mid-Year Report

Both contests are still showing ZERO prices??
by FinancialDave
Wed Jul 13, 2016 9:18 am
Forum: Investing - Theory, News & General
Topic: BOGLEHEAD CONTEST -- 2016 Mid-Year Report
Replies: 26
Views: 2661

Re: BOGLEHEAD CONTEST -- 2016 Mid-Year Report

What has happened to the "price feeder" for both the Boglehead contest and the Hedgefund contest, both have been showing zero prices for everything?
by FinancialDave
Mon Jun 20, 2016 11:55 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Now, to give some credit to the un-informed tax accountant she did save you some money by pulling money out of your IRA in a down market. That's fuzzy thinking. You put pre tax money into your tIRA. When you take money out you pay the (future value of the) tax on the original contribution on which ...
by FinancialDave
Sat Jun 18, 2016 3:19 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia, This is not a "flippant" response though you may want to check it amongst other Bogleheads because I have been accused of not being able to do math, and the fact of the matter is at 64 I can make mistakes, so my response is just educational in nature. First if this ever really happe...
by FinancialDave
Fri Jun 17, 2016 7:25 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave, How much would I then have to pay in taxes for that scenario? Assuming my calculations are correct, I have $5968.75 withheld and $2531.25 in the Roth. That leaves only a shortfall of only $1,500 to account for all of my $10,000, which is the short term loss from when the market went down 20%....
by FinancialDave
Fri Jun 17, 2016 11:51 am
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: Do DFA Funds Generate Risk-Adjusted "Alpha?"
Replies: 30
Views: 2058

Re: Factor-Based Investing: Do DFA Funds Generate Risk-Adjusted "Alpha?"

Here is what Morningstar reports on buy and hold DFA portfolio (no rebalancing) I built slightly over 5 years ago: http://socialize.morningstar.com/NewSocialize/PortfolioSharing/SharedPortfolioSnapshot.aspx?q=3C4FCE48781B645F It does not really look all that pretty for DFA compared to its category o...
by FinancialDave
Fri Jun 17, 2016 10:38 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia,

You've got it! Losing money can be so much fun.

:sharebeer
by FinancialDave
Thu Jun 16, 2016 6:03 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

It never matters when you convert your stock from the IRA to the Roth - I mistakenly thought I was doing myself a favor in picking the actual 52 week low for the stock to convert it to the Roth. But now we are straying from the original topic (at least somewhat.) But since I brought it up: http://i6...
by FinancialDave
Thu Jun 16, 2016 5:45 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave, After wading through your unnecessarily long and wandering examples, I still don't understand them. I especially feel like the "$4,500 is really $6,000" statement is incomprehensible. I have a headache now. :confused Gotta go check on my Roths to see if they are still there. What pa...
by FinancialDave
Thu Jun 16, 2016 3:02 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Bfwolf, It is not an argument, it is a point of view based on all the risks along the way. I think I have presented all the facts and have not distorted any of the numbers, so I might conclude that anyone who actually reads the article to the end may come away with some knowledge to help them make a...
by FinancialDave
Thu Jun 16, 2016 12:19 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Celia, I forgot to thank you for pointing out the obvious and asking an important question as to why the IRA seems to be so much less after the Recharacterization, and this by the way happens to the same degree whether you started with money from your taxable or not. I will explain in a minute. &quo...
by FinancialDave
Wed Jun 15, 2016 6:10 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Let me just admit defeat at this point and provide a better example that shows that you really only end up with $375 in your taxable account from the same transaction, if that is your goal: http://i68.tinypic.com/24wab0m.jpg Dave, This is another example I don't understand. In particular, how did y...
by FinancialDave
Wed Jun 15, 2016 10:03 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I am going to wind up my final post with the following equivalent example using money from a taxable account. :sharebeer In all examples the investor only had the capability to earn $10,000 so it needed to be split up if putting it in a taxable account to compare the two examples. Of course if the i...
by FinancialDave
Wed Jun 15, 2016 1:08 am
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2300

Re: Your HSA and you

Spirit Rider, It is quite possible that the "person," the "beneficiary," and the "executor" are one in the same, especially on smaller estates. Dave That may be true, but it is not a relevant point. Who is the beneficiary is determines who will pay the taxes. As you wi...
by FinancialDave
Wed Jun 15, 2016 1:03 am
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 805

Re: RMD's and Charity Contributions

celia wrote:How does it work if you donate in-kind (ie, stocks or bonds or mutual fund shares)?


There is no reason to do that. In fact the way I understand it, say from Vanguard, they send you a check, but it is made out to your charity, so obviously the stocks or bonds have already been sold.
by FinancialDave
Wed Jun 15, 2016 12:16 am
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 805

Re: RMD's and Charity Contributions

I believe the max is $100k annually. Pub 590-B page 13.
by FinancialDave
Tue Jun 14, 2016 9:34 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Spewin, Let me just admit defeat at this point and provide a better example that shows that you really only end up with $375 in your taxable account from the same transaction, if that is your goal: http://i68.tinypic.com/24wab0m.jpg I make one concession for you in the above from the fact that the t...
by FinancialDave
Tue Jun 14, 2016 12:34 pm
Forum: Investing - Theory, News & General
Topic: "Jane Bryant Quinn: Plan for a long retirement and maybe even a 101st birthday party."
Replies: 66
Views: 6231

Re: "Jane Bryant Quinn: Plan for a long retirement and maybe even a 101st birthday party."

Wow,

I guess hoping for some comments on the interview or her book (which I think has some good ideas) is a bit much to ask?
by FinancialDave
Tue Jun 14, 2016 11:34 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I absolutely disagree with that statement because it is flat out wrong. Imagine Person 3 with $10000 in an tIRA and $2500 in taxable. If they convert and pay the taxes from the IRA then they have $7500 in RothIRA and $2500 in taxable, while if they pay the money from taxable, they have $10000 in Ro...
by FinancialDave
Mon Jun 13, 2016 8:45 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2300

Re: Your HSA and you

Spirit Rider,

It is quite possible that the "person," the "beneficiary," and the "executor" are one in the same, especially on smaller estates.

Dave
by FinancialDave
Mon Jun 13, 2016 6:58 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

The reason recharacterizing losses after the conversion helps is that you don't know there will be a loss when you do the conversion.* So compared to not converting, if you convert and it goes up you win, if you convert and it goes down you recharacterize and don't lose. * If you know the investmen...
by FinancialDave
Mon Jun 13, 2016 6:42 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Dave I probably missed it. But are you including your capital loss that you can apply to other capital gains if you have them or your income if you do not? Regards QJ QJ, No we are not adding the taxable account in the mix, that makes it comparing apples to oranges as far as whether it is smart to ...
by FinancialDave
Mon Jun 13, 2016 4:33 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Maybe taking numbers off the size of the taxable account will help - I hope so! Before Transaction 1 above you have amount "T" in your taxable account which will be plenty to pay for the conversion tax. You do the conversion, but for some reason decide to undo it. You now still have amount...
by FinancialDave
Mon Jun 13, 2016 4:25 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Mark, the numbers in your table give exactly the reason that you always hear advisors saying pay the taxes with outside money. Spewin I think we already agreed in a previous thread that it makes no difference where the taxes are paid from, on an apples to apples comparison. There is a spreadsheet i...
by FinancialDave
Mon Jun 13, 2016 4:21 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

Spewin, It is not an apples to apples comparison is the only point to be made. Try compartmentalizing the transactions because the first half of your logic is spot on - if the tax rates are equal there is no advantage. Transaction #1 you make a $10,000 conversion and pay tax X from an outside accoun...
by FinancialDave
Mon Jun 13, 2016 3:41 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

If you take the money from the IRA, it is alot easier to understand your point.


Mark,
I was going to try that next - thanks for the comment.

I did post a spreadsheet view of just what you explained in the Non-Linear Tax Code thread.

Dave
by FinancialDave
Mon Jun 13, 2016 3:35 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2300

Re: Your HSA and you

One of the downsides to a large HSA, is if the beneficiary is not your spouse and you die while it is quite large, it will immediately be liquidated and ordinary income taxes paid, its not like a TIRA in that respect. That could have quite a tax consequence to a son, daughter, or siblings. Dave It ...
by FinancialDave
Mon Jun 13, 2016 3:30 pm
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 805

Re: RMD's and Charity Contributions

I still have to wait about 6 years. I just hope they don't change the tax law, because it's like an HSA for charities rather than medical expenses - tax-free in and tax-free out.

fd
by FinancialDave
Mon Jun 13, 2016 2:44 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2300

Re: Your HSA and you

I have an HSA bank account from when I had a HDHP through my previous employer. I am now at a different employer that does not offer a HDHP. Can I still contribute to my HSA? I have not been contributing, only drawing it down via co-pays and deductibles since the previous servicer (before HSA bank ...
by FinancialDave
Mon Jun 13, 2016 2:42 pm
Forum: Investing - Theory, News & General
Topic: Your HSA and you
Replies: 27
Views: 2300

Re: Your HSA and you

One of the downsides to a large HSA, is if the beneficiary is not your spouse and you die while it is quite large, it will immediately be liquidated and ordinary income taxes paid, its not like a TIRA in that respect. That could have quite a tax consequence to a son, daughter, or siblings.

Dave
by FinancialDave
Mon Jun 13, 2016 2:25 pm
Forum: Investing - Theory, News & General
Topic: RMD's and Charity Contributions
Replies: 17
Views: 805

Re: RMD's and Charity Contributions

Are you older than 70 1/2? If you are then you can do a direct transfer from your IRA to the 501c charity. No tax, and no deduction either for the charitable contribution. I don't think you can take the money out of your checking account after the RMD has already been paid I think you have to let th...
by FinancialDave
Mon Jun 13, 2016 1:15 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I don't understand your argument at all. The fact remains that by performing the "do-over recharacterization" your assets (which will never be taxed) are $500 higher than they would be under the first conversion. I also have no idea what inflation has to do the the Roth/Traditional analys...
by FinancialDave
Mon Jun 13, 2016 12:54 pm
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

I don't understand your argument at all. The fact remains that by performing the "do-over recharacterization" your assets (which will never be taxed) are $500 higher than they would be under the first conversion. I also have no idea what inflation has to do the the Roth/Traditional analys...
by FinancialDave
Mon Jun 13, 2016 11:49 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

We will start with 100 shares of ABC company in our IRA, worth $100/sh and make the conversion of $10,000 of stock, by taking out $2500 from our savings account for the taxes. Around the first of December of that year we see that our stock has dropped to $80, so we instantly decide to do a recharac...
by FinancialDave
Mon Jun 13, 2016 11:42 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

Re: The Myth of the Recharacterized Roth Conversion after a Loss

livesoft wrote:OK, now tell us how tax-loss harvesting is a myth, too.

There is no doubt that when your investments lost money that you lost money.


I think you answered your own question.
by FinancialDave
Mon Jun 13, 2016 11:22 am
Forum: Investing - Theory, News & General
Topic: The Myth of the Recharacterized Roth Conversion after a Loss
Replies: 79
Views: 4932

The Myth of the Recharacterized Roth Conversion after a Loss

Many believe that you can save money by recharacterizing a Roth conversion after a loss on your investment. I will attempt to show those with an open mind how this process is much like the riddle, described below, which is based on a fallacy. Three people check into a hotel room. The clerk says the ...
by FinancialDave
Sun Jun 12, 2016 5:37 pm
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Trueblue, If you don't need to spend any of your retirement funds in retirement, you are in a truly enviable position, but it certainly does not mean all your money should be in a Roth, that is exactly the wrong place for it if your additional income needs are very low. That means you have done well...
by FinancialDave
Sun Jun 12, 2016 4:33 pm
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Try this logic on the conversions: http://i65.tinypic.com/30xbghe.jpg In this case all tax rates are 25%. Conversions of course are agnostic to the internal investments only the tax rate on the converted amount compared to the withdrawal later. Dave Electron, Here is a picture of what I was talking...
by FinancialDave
Sun Jun 12, 2016 4:29 pm
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Electron, We may just have to agree to disagree on this point, and in fact this whole thread is about trying to risk analyze what happens when your tax rates are not equal in retirement. My answer to that is that it is very hard to predict and you will in almost all cases be better off if you don't ...
by FinancialDave
Sun Jun 12, 2016 1:04 am
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

^ If you don't need the money, RMDs turn your tax-deferred IRA funds into taxable. A Roth doesn't have that issue. In either account Roth or IRA, the money will eventually have to come out and that is when you will find out whether the choice gave you more money or less money in retirement. Certain...
by FinancialDave
Sat Jun 11, 2016 6:52 pm
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Note that if one made the choice of not doing the Roth Conversion, there would have been a legitimate reason such as a lower expected marginal tax rate in retirement. At one time I compared the Traditional IRA plus Taxable Side Account to the Converted Roth IRA in a spreadsheet and it is quite a co...
by FinancialDave
Sat Jun 04, 2016 1:41 pm
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

At the day of cashing out - I am indifferent between a Roth and a proportionally increaesed traditional assuming the withdrawl does not change my tax bracket - the traditional though bears more risk over time given exposure to risk of changing taxes - that may either be in my favor or against me Bu...
by FinancialDave
Sat Jun 04, 2016 11:49 am
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Try this logic on the conversions:

Image


In this case all tax rates are 25%.

Conversions of course are agnostic to the internal investments only the tax rate on the converted amount compared to the withdrawal later.

Dave
by FinancialDave
Sat Jun 04, 2016 11:39 am
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

Doc, Maybe this will help: http://i68.tinypic.com/2z6vybm.jpg Yes, you have to understand the baseline before you attempt to make any personal decisions -- since we can never hope to predict the future with much accuracy, your least amount of risk (IMHO) is to assume the base case and tilt it from t...
by FinancialDave
Sat Jun 04, 2016 10:41 am
Forum: Investing - Theory, News & General
Topic: Non-linear Tax Code and Roth vs Traditional IRA
Replies: 57
Views: 4261

Re: Non-linear Tax Code and Roth vs Traditional IRA

If you want to compare the Roth and IRA on an after-tax equality basis - then it is much easier if you do your examples with this in mind: Assume a flat tax rate of 20% Assume the Roth IRA limit has been increased to $6875, TIRA limit still at $5500. Now fill up each account to the limit and analyze...
by FinancialDave
Wed May 25, 2016 11:45 pm
Forum: Investing - Theory, News & General
Topic: Only 1/4 of stock held in taxable accounts
Replies: 13
Views: 1818

Re: Only 1/4 of stock held in taxable accounts

This certainly doesn't address the question raised, but it does bring up a topic that I think is very relevant here. Is the Boglehead population likewise 1/4 taxable and 3/4 tax advantaged? This is relevant for investors giving and taking advice on this board. Taxes could be a much larger cost for ...
by FinancialDave
Tue May 24, 2016 8:58 pm
Forum: Investing - Theory, News & General
Topic: "Tips to help you become a tax-efficient investor"
Replies: 3
Views: 742

Re: "Tips to help you become a tax-efficient investor"

Jacklin actually gives some bad tax advice when she implies that long term capital gains (LTCG) don't raise your tax bracket -- implying at least IMO that if you have no income or low income you can have unlimited LTCG and you won't be taxed because you will be in the lowest tax bracket where LTCG a...
by FinancialDave
Thu May 12, 2016 5:57 pm
Forum: Investing - Theory, News & General
Topic: Unexpected suspension of SS benefits
Replies: 8
Views: 1506

Re: Unexpected suspension of SS benefits

I just got a letter from SSA saying "We have received your request to stop your benefits to earn special credits that will increase the benefits you will receive at age 70..." I know this "loophole" was going to be closed a few weeks ago and had thought about requesting the susp...

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