Search found 50 matches

by ancho
Thu Apr 05, 2018 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Re: Roth IRA overcontribution - feeling dazed by the options

I have not run the numbers myself, but as you mentioned ~43% of the conversion would be taxed twice due to your pre-tax tIRA assets. Any projection you do should include that equivalent dollar-amount in taxes being invested in a taxable account; I'd be surprised if it won. If you do go this route, ...
by ancho
Thu Apr 05, 2018 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Re: Roth IRA overcontribution - feeling dazed by the options

If you’re going to have enough space in 2018 to absorb the excess then this is a no-brainer I think; leave the excess, pay the 6% excess contribution penalty, and absorb it with 2018. I believe the form you’ll need to populate both this and next year is 5329. Thanks for the advice. I'm just wonderi...
by ancho
Wed Apr 04, 2018 6:56 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Roth IRA overcontribution - feeling dazed by the options

[Thread merged into here, see below. --admin LadyGeek] Following up on this old thread, now that I have a bit more information: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=236075 Our 2017 income puts us above the limits for Roth IRA and deductible tIRA contributions. My wife and I both mad...
by ancho
Mon Mar 05, 2018 1:20 pm
Forum: Investing - Theory, News & General
Topic: Fidelity 401k adviser pushing my coworkers towards actively managed funds - how to find an unbiased expert?
Replies: 8
Views: 1059

Fidelity 401k adviser pushing my coworkers towards actively managed funds - how to find an unbiased expert?

My employer offers a solid 401k plan through Fidelity which offers, in addition to a variety of higher-priced active funds, Fidelity index funds for US and Int'l equities at their original Fidelity expense ratios, with no additional fees whatsoever. Every year, HR has someone from Fidelity give a pr...
by ancho
Fri Jan 05, 2018 4:36 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Re: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?

Answers to your questions below: Some of the information we are missing is: How significant is the gain in the Roth? (as a percentage of the contribution): As of yesterday, roughly 21% gain on my 2017 contribution of $5500, and 25% gain on my wife's 2017 contribution of $5500. (This is gain on our 2...
by ancho
Wed Jan 03, 2018 2:14 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Re: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?

An update to the situation: it looks like this unexpected income will put our 2017 AGI around $250,000. My understanding is that this is above both the Roth IRA limit ($196,000) and the Traditional IRA Deduction limit ($119,000) for married filing jointly. We will be back well below the phase-out in...
by ancho
Fri Dec 29, 2017 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?
Replies: 18
Views: 1997

Just learned we’ll be over the Roth IRA income limit - how to avoid tax penalty?

We maxed out our Roth IRA contributions in January 2017 as usual. However, we just learned yesterday that we will likely be over the Roth income limit for 2017 due to unexpected K-1 income from a 2016 inheritance (we thought all income from the estate had been taken care of on our 2016 taxes). Am I ...
by ancho
Thu Aug 03, 2017 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: 85/15 too aggressive at age 35?
Replies: 104
Views: 13149

Re: 85/15 too aggressive at age 35?

Thanks for all the feedback so far. Seems like most feel that given my risk tolerance, I'm ok where I am, though it wouldn't be unreasonable to shift to a slightly more conservative AA. I think what I'm feeling in my gut is that we've been on a decade-long run-up and valuations are through the roof,...
by ancho
Thu Aug 03, 2017 12:25 pm
Forum: Investing - Help with Personal Investments
Topic: 85/15 too aggressive at age 35?
Replies: 104
Views: 13149

85/15 too aggressive at age 35?

My wife and I are both 35, and our $325k in retirement savings are currently at an 85/15 asset allocation, using the 3-fund portfolio (well, more like 87/13 at the moment due to drift). We're heavy savers ($50-$55k/year), and live in a VHCOL area. We would love to retire early if we can, but aren't ...
by ancho
Tue Apr 18, 2017 6:15 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund for highly unpredictable income
Replies: 1
Views: 371

Emergency fund for highly unpredictable income

My brother has asked me for advice on how large an emergency fund he needs (and thus how much of his savings he can invest). He is a fairly successful actor in his early 30s (not famous, but you've probably seen him on TV). His income his extremely unpredictable, both in timing and amount, as it's c...
by ancho
Fri Mar 17, 2017 12:16 pm
Forum: Personal Finance (Not Investing)
Topic: Increase W4 withholdings or make estimated tax payments
Replies: 18
Views: 2066

Re: Increase W4 withholdings or make estimated tax payments

Another question: am I correct that as long as my 2017 withholdings equal at least 100% of my prior year tax, I won't be subject to underpayment penalties? For example: 2016 total tax: $10,000 2017 total tax: $20,000 In the situation above, if my 2017 withholdings total $10,001, I wouldn't be subjec...
by ancho
Wed Mar 15, 2017 7:34 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to understand 403b fees
Replies: 11
Views: 1313

Re: Trying to understand 403b fees

Update: at my wife's request, the plan administrator provided a very clear table outlining the administrative fees, which total a whopping 1.10% on top of the fund expense ratios! The funds are mostly Vanguard Admiral share funds with Vanguard expense ratios, so to the average employee, they may thi...
by ancho
Wed Mar 15, 2017 3:30 pm
Forum: Investing - Help with Personal Investments
Topic: Where do you save for large purchases?
Replies: 42
Views: 4150

Re: Where do you save for large purchases?

We always "save" by investing in the stock market. That is: Equities and specifically broad-market stock index funds. If they go down, then we just either don't buy what we are saving for until they go up or we just buy anyways. Over the long-term, equities beat the performance pants off of savings...
by ancho
Mon Mar 13, 2017 5:14 pm
Forum: Personal Finance (Not Investing)
Topic: Increase W4 withholdings or make estimated tax payments
Replies: 18
Views: 2066

Re: Increase W4 withholdings or make estimated tax payments

Thanks, everyone. Sounds like increased withholdings are the way to go.
by ancho
Mon Mar 13, 2017 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Increase W4 withholdings or make estimated tax payments
Replies: 18
Views: 2066

Increase W4 withholdings or make estimated tax payments

Due to some changes in our tax & income situation this year, my wife and I will need to increase our paycheck withholdings or make estimated tax payments to avoid an underpayment penalty next year, for both federal and state (CA) taxes. It seems like increasing paycheck withholdings is the simplest ...
by ancho
Fri Mar 10, 2017 8:40 pm
Forum: Investing - Theory, News & General
Topic: A Returns Spreadsheet for Bogleheads
Replies: 238
Views: 52727

Re: A Returns Spreadsheet for Bogleheads

Apologies if this has been answered - I searched the thread and couldn't find it: If my available statements go back different lengths of time on different accounts, what's the best way to address it in the spreadsheet? E.g. Account 1: Opened 2008 Statements available back to 2011 Account 2: Opened ...
by ancho
Wed Mar 08, 2017 10:17 pm
Forum: Personal Finance (Not Investing)
Topic: Should I get a Chase Freedom Unlimited Visa?
Replies: 26
Views: 5805

Re: Should I get a Chase Freedom Unlimited Visa?

You don't need to "use a card just a little to keep it active," as you write. In fact, it's best to never close a no-annual-fee credit card even if you don't use it any more, since the average age of your accounts is a factor. Closing cards will keep your average account age lower. It will also redu...
by ancho
Wed Mar 08, 2017 5:28 pm
Forum: Investing - Help with Personal Investments
Topic: How to advise coworkers on 401k choices
Replies: 26
Views: 2035

Re: How to advise coworkers on 401k choices

Just to clarify, our 401k plan includes the Fidelity Freedom funds, but not the Freedom Index Funds.

But I'm 100% on board with the consensus advice from this thread - if someone asks for advice, point them to some recommended reading & keep my advice to myself.
by ancho
Wed Mar 08, 2017 4:22 pm
Forum: Investing - Help with Personal Investments
Topic: How to advise coworkers on 401k choices
Replies: 26
Views: 2035

Re: How to advise coworkers on 401k choices

I do not think you should advise them into actively managed funds with high expenses that you would not invest in yourself, especially without disclosing the consequences of higher fees. At the very least you should hold yourself to a fiduciary standard. Perhaps something like "It's better to parti...
by ancho
Wed Mar 08, 2017 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: How to advise coworkers on 401k choices
Replies: 26
Views: 2035

Re: How to advise coworkers on 401k choices

Thanks, lots of good advice. I agree that it's best to point people towards books and let them do their own learning, and if not, better that their money keeps going into the Freedom fund rather than sitting on the sidelines.

Is "If You Can" the best starting place for someone who knows nothing?
by ancho
Wed Mar 08, 2017 2:43 pm
Forum: Investing - Help with Personal Investments
Topic: How to advise coworkers on 401k choices
Replies: 26
Views: 2035

How to advise coworkers on 401k choices

My employer offers a 401k through Fidelity. By default, contributions go into the Fidelity Freedom retirement fund that corresponds to the employee's age. The Freedom retirement funds are actively managed, with expense ratios in the neighborhood of 0.77%. The plan offers a range of other fund choice...
by ancho
Mon Mar 06, 2017 1:30 pm
Forum: Investing - Help with Personal Investments
Topic: Please poke holes in my Tax Loss Harvesting plan
Replies: 12
Views: 1416

Re: Please poke holes in my Tax Loss Harvesting plan

Interestingly, there seems to be no option to turn off automatic reinvestment of dividends in either of our 401ks (Fidelity & Newport Group). Is that normal? Another wrinkle to iron out...
by ancho
Sat Mar 04, 2017 5:06 pm
Forum: Investing - Help with Personal Investments
Topic: Please poke holes in my Tax Loss Harvesting plan
Replies: 12
Views: 1416

Re: Please poke holes in my Tax Loss Harvesting plan

Here is one hole: I think it would be rare to have to tax-loss harvest a substantial amount. Sure, it can happen, but more likely would be the desire to TLH $500 or $1000 or something in that range. That is, purchases made in the preceding 6 months to a year. Since your replacement funds have initi...
by ancho
Sat Mar 04, 2017 4:42 pm
Forum: Investing - Help with Personal Investments
Topic: Please poke holes in my Tax Loss Harvesting plan
Replies: 12
Views: 1416

Please poke holes in my Tax Loss Harvesting plan

Since TLH opportunities are slim to none these days, it seems like a good time to make a plan so that if a correction occurs, I'm ready to act. Here's my situation: Taxable account (VG) currently holds VTSAX and VGTSX. Low-mid five figure value in total. Wife's & my IRAs (VG) hold VTSAX, VTIAX, and ...
by ancho
Fri Mar 03, 2017 3:09 pm
Forum: Investing - Theory, News & General
Topic: BND flat today despite interest rate announcement
Replies: 22
Views: 3961

Re: BND flat today despite interest rate announcement

livesoft wrote:No. It means that the FOMC meeting hasn't happened yet.
So bond prices won't actually drop until the rate increase happens, even if that outcome is all but certain?

Thanks & sorry if if this is a dumb question.
by ancho
Fri Mar 03, 2017 3:01 pm
Forum: Investing - Theory, News & General
Topic: BND flat today despite interest rate announcement
Replies: 22
Views: 3961

BND flat today despite interest rate announcement

After the announcement today that the Fed will almost certainly raise rates this month, BND is up 0.03% at the moment. Does this mean that the prospect of an interest rate rise was already completely priced in prior to today's announcement?

I'm just learning all this stuff - please enlighten me.
by ancho
Thu Mar 02, 2017 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: What are the big things to get right?
Replies: 91
Views: 14849

Re: What are the big things to get right?

Glad to see food spending mentioned. I would add: learn to cook. My wife and I go out to eat at great restaurants 2-4 times a month and cook the rest of our meals. We have delicious leftovers for lunch nearly every day. In 2016, we spent $8000 on groceries and restaurants combined. That's $11/person...
by ancho
Sun Feb 26, 2017 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: New Member Here, Looking for some suggestions
Replies: 24
Views: 2540

Re: New Member Here, Looking for some suggestions

Also, the Cash back card is 11.15% interest but $4000 of that is at 0% or 2% the other 2000 was just bad spending. My wife and I are working on keeping it paid off month to month but we are still new to this. If you're not able consistently pay off your credit card balance in full each month - and ...
by ancho
Tue Feb 14, 2017 11:20 pm
Forum: Investing - Help with Personal Investments
Topic: Self-employed 401k/IRA eligibility
Replies: 7
Views: 699

Re: Self-employed 401k/IRA eligibility

If you have a SEP IRA for ongoing contributions, you can roll your Rollover IRA into your SEP IRA to simplify accounts. This sounds like a great plan. By effectively turning my Rollover IRA into a SEP IRA, I give myself a bit more tax-deferred savings space each year (as allowed by my self-employme...
by ancho
Tue Feb 14, 2017 10:39 pm
Forum: Investing - Help with Personal Investments
Topic: Self-employed 401k/IRA eligibility
Replies: 7
Views: 699

Re: Self-employed 401k/IRA eligibility

You need to understand the difference between what is quoted as a 25% contribution and a 20% contribution. The actual contribution is always 25% of compensation . Thanks for clarifying. Makes sense. If you have no traditional IRA assets and only able to make such small contributions I would conside...
by ancho
Tue Feb 14, 2017 8:28 pm
Forum: Investing - Help with Personal Investments
Topic: Self-employed 401k/IRA eligibility
Replies: 7
Views: 699

Re: Self-employed 401k/IRA eligibility

Yes, self-employment income makes you eligible for a one-participant 401k (Solo 401k, Individual 401k, Self-Employed 401k, etc..) or a SEP IRA. If you are making the full employee deferral (2017 = $18K) at your primary employer, you will not be able to make any additional deferrals. You will only b...
by ancho
Tue Feb 14, 2017 4:30 pm
Forum: Investing - Help with Personal Investments
Topic: Self-employed 401k/IRA eligibility
Replies: 7
Views: 699

Self-employed 401k/IRA eligibility

I'm employed full-time with access to a 401k through my employer. I also earn freelance income throughout the year as a musician, which I report as self-employment income on my taxes. Does this self-employment income make me eligible to open a self-employed retirement account (Solo 401k, SEP IRA, et...
by ancho
Sat Feb 11, 2017 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to understand 403b fees
Replies: 11
Views: 1313

Re: Trying to understand 403b fees

Thanks for helping me sort through this. Sounds like we need to ask the plan administrator some questions or keep an eye on statements to see our actual fees, but it's a safe assumption they'll probably end up in the range of "higher than they should be but not high enough to ditch the plan."
by ancho
Sat Feb 11, 2017 3:41 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to understand 403b fees
Replies: 11
Views: 1313

Trying to understand 403b fees

My wife's 403b plan gives her access to Vanguard index funds at the normal Admiral Share expense ratios. However, the plan's fee disclosure also says this: Administration expenses – These are charges for services such as legal, accounting and recordkeeping expenses. In our Plan, these expenses are p...
by ancho
Sat Feb 11, 2017 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: K-1 from estate - tax implications
Replies: 3
Views: 461

Re: K-1 from estate - tax implications

This is not about the gains on securities you sold. The estate accounts may have had interest income, dividends, capital gains, etc. before the assets were distributed. Maybe the executor sold some securities to pay funeral costs, and there were gains (or losses) on those sales. Thanks, this is hel...
by ancho
Sat Feb 11, 2017 1:20 pm
Forum: Personal Finance (Not Investing)
Topic: K-1 from estate - tax implications
Replies: 3
Views: 461

K-1 from estate - tax implications

My wife and I were among the benificiaries of an estate in 2016. We received a mix of securities and cash from a brokerage account and immediately liquidated the securities as we plan to put the inheritance towards a home purchase soon. We understand that selling the shares means we will be taxed on...
by ancho
Thu Feb 09, 2017 12:24 am
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

From your other thread, why are your AA at 90/10? It does not make any sense. 1) At your saving rate, you do not need to take the risk. Even at 5% to 6% nominal return, you will reach your goal. 2) Your portfolio is big enough at 5 1/2 years of annual savings. A bear market will cause a big loss to...
by ancho
Tue Feb 07, 2017 11:59 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

KlangFool wrote: If you can save at this pace, you will hit 1 million in 10 years even with only 5% annual return. 1.6 million in 15 years. Why would you continue to work at that point?
Well, we like our jobs.

But we like traveling more. 8-)
by ancho
Tue Feb 07, 2017 11:22 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

You will most likely be in 15% tax bracket when you retire. So, doing the Roth conversion at 15% does not save you any tax. So, why bother? Makes sense. Keep it all in traditional, and if we ever end up in a position to convert some at 10%, do it; otherwise don't touch it till retirement. <<while m...
by ancho
Tue Feb 07, 2017 11:01 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

Yes, but why would you want to pay 15% tax? To me, that is not good enough. It is the same that you will pay in retirement for most people. I would aim for 10% or lower before I do the Roth conversion. Hmm, 10% on the Roth conversion? Hard to imagine getting into such a low tax rate while my wife a...
by ancho
Mon Feb 06, 2017 10:25 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

Trad. 401K is a tax management tool. It let you decide when to pay your taxes and how much. So, learn how to calculate. Do you do your own tax? If you don't, it is good for you to learn. You could make a lot of money by learning it. This is a great way to think about it, and yes, we do our own taxe...
by ancho
Mon Feb 06, 2017 9:50 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

I would (and do in essence) choose option b. I can always choose to convert to Roth next year, or the year after etc. if it looks like my tax situation is different - but once I pay it to put in a Roth that option is gone. So even the goal of future tax diversification can be better managed by usin...
by ancho
Mon Feb 06, 2017 9:41 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

(B) + study how to invest tax efficiently in a taxable account. I already have a taxable Vanguard brokerage account (funded with a single investment when I was a teenager) that has grown to about $20k, all invested in VTSAX. It's my understanding that this is a reasonable tax-efficient fund choice ...
by ancho
Mon Feb 06, 2017 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

Are you 100% sure you will invest the money in taxable? If you are, you will hear different things from different people. I personally invest in Roth to give me diversification in retirement, as no one knows what taxes will be years from now. And my company match goes to trad so my calculations sho...
by ancho
Mon Feb 06, 2017 9:02 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Re: Roth vs Traditional 401k when maxing out

Why not max out with traditional 401k contributions, then make after tax contributions with the projected tax savings amount ($4,500) or more and perform a "mega backdoor Roth" rollover. Assuming her plan allows for this. This is a strategy I apply. Seems advantages to place additional savings into...
by ancho
Mon Feb 06, 2017 7:31 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs Traditional 401k when maxing out
Replies: 44
Views: 3573

Roth vs Traditional 401k when maxing out

My wife's 401k gives the option to make either traditional or Roth 401k contributions. We're maxing out our other tax-advantaged space - my traditional 401k and our Roth IRAs. We're both 35 years old, marginal tax rate is 25%. So, which would be the better option for her 401k? Option A: Max out as R...
by ancho
Mon Feb 06, 2017 7:28 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Total Bond: Investor Shares vs ETF?
Replies: 3
Views: 546

Re: Vanguard Total Bond: Investor Shares vs ETF?

Thanks - makes sense. The difference is small enough that I'd probably also lose out on the inefficiency of having to buy whole shares in the ETF and thus leaving some remaindered money uninvested.
by ancho
Mon Feb 06, 2017 7:08 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Total Bond: Investor Shares vs ETF?
Replies: 3
Views: 546

Vanguard Total Bond: Investor Shares vs ETF?

I have just under $5k in my Vanguard Rollover IRA account. I won't be able to contribute more to this account until I leave my current job and roll over my 401k, which will not happen any time soon. The account is currently 100% invested in Total Bond Market investor shares, as a small part of my ov...
by ancho
Tue Feb 09, 2016 11:33 pm
Forum: Investing - Help with Personal Investments
Topic: Unbalanced 401k contributions to avoid high-fee bond option?
Replies: 4
Views: 509

Re: Unbalanced 401k contributions to avoid high-fee bond option?

Thanks for the thoughts. We have plenty of room for rebalancing into bonds within our IRAs, which hold about 75% of our portfolio (bonds make up 10% of our portfolio, all within our IRAs). I have read the wiki on rebalancing previously, as well as the Vanguard paper, and I'm leaning towards threshho...
by ancho
Tue Feb 09, 2016 4:48 pm
Forum: Investing - Help with Personal Investments
Topic: Unbalanced 401k contributions to avoid high-fee bond option?
Replies: 4
Views: 509

Unbalanced 401k contributions to avoid high-fee bond option?

My portfolio is 90/10 equities/bonds, with a 60/40 domestic/international equity split. Total investments are $180k. Yearly 401k contribution ~$20-25k (including wife's). All the bonds are currently held in my Vanguard IRA, which I max out early in the year. Throughout the year the only money flowin...