Search found 18938 matches

by grabiner
Sat Feb 18, 2017 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Is there ideal Asset LOCATION % as you get closer to retirement?
Replies: 21
Views: 882

Re: Is there ideal Asset LOCATION % as you get closer to retirement?

In retirement, it is better to spend bonds and keep stocks in your taxable account. The reason is that the income from bonds is taxed at your full rate (or, if you hold munis, you accept a lower yield to avoid paying the tax), while bonds can be sold at little or no tax cost. Meanwhile, income from ...
by grabiner
Sat Feb 18, 2017 10:37 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice regarding placement of bonds
Replies: 11
Views: 575

Re: Portfolio advice regarding placement of bonds

My normal recommendation is to hold equal amounts of Vanguard Limited-Term Tax-Exempt and CA Long-Term Tax-Exempt. This reduces your single-state risk because half your bonds are outside CA, but much more than half your bond income is exempt from CA tax. Thanks for the recommendations. I do like th...
by grabiner
Sat Feb 18, 2017 5:18 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable? 20% Tax Bracket
Replies: 5
Views: 429

Re: Bonds in Taxable? 20% Tax Bracket

I don't want to speak for him, but my state has an income tax around 5%, like some others. I usually think of myself as having a 30% tax bracket for that reason (25% + 5%). OP may be in a similar situation. If that is the source of the "20% tax bracket", 15% federal plus 5% state, then st...
by grabiner
Sat Feb 18, 2017 5:15 pm
Forum: Investing - Help with Personal Investments
Topic: Is Your Asset Allocation Reading Accurate?
Replies: 4
Views: 421

Re: Is Your Asset Allocation Reading Accurate?

While this is likely not a concern for those funds who maintain their portfolios more or less at their target allocations, it appears that VG has stretched the definition of target allocation to include what a fund may allocate. I have a bond fund that may allocate up to 20% of its portfolio to sho...
by grabiner
Sat Feb 18, 2017 5:07 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio advice regarding placement of bonds
Replies: 11
Views: 575

Re: Portfolio advice regarding placement of bonds

Tax Rate: 33% Federal, 9.3% State State of Residence: CA At current rates, CA munis are more tax-efficient for you in a taxable account. The usual advice for stocks versus bonds in taxable assumes a 15% tax cost on qualified dividends and capital gains, or a state tax which applies to munis as well...
by grabiner
Fri Feb 17, 2017 11:40 pm
Forum: Investing - Help with Personal Investments
Topic: Wash sale with ESPP: now how to deal with tax??
Replies: 2
Views: 268

Re: Wash sale with ESPP: now how to deal with tax??

The issue is that the purchase date adjustment turns some of the short-term gain into a long-term gain; it will be necessary to get the dates right in order to apportion the gain as short-term and long-term. Since the brokerage has done this correctly, you report the purchase date in TurboTax as the...
by grabiner
Fri Feb 17, 2017 11:33 pm
Forum: Investing - Help with Personal Investments
Topic: Mutual fund vs etf question
Replies: 8
Views: 439

Re: Mutual fund vs etf question

I was recently talking to my Edward Jones advisor (which I've already made a post about and am pretty sure I'm leaving them for vanguard) and was discussing switching mutual funds in my advisors solution for etf. Of course he had a list of reasons, most of which didn't make sense except for one I'm...
by grabiner
Fri Feb 17, 2017 11:27 pm
Forum: Investing - Help with Personal Investments
Topic: VEU or VSS in taxable? (FTSE ex-US vs FTSE ex-US SMALL)
Replies: 11
Views: 655

Re: VEU or VSS in taxable? (FTSE ex-US vs FTSE ex-US SMALL)

How do you find the QDI rate? Also for CA, I think the state tax rate would be 9.3%, right? QDI (qualified dividend income) is taxed at the same rate as long-term gains. This is 0% in the 10-15% brackets, 15% in the 25-35% brackets, and 20% in the 39.6% bracket. QDI does also count as investment in...
by grabiner
Fri Feb 17, 2017 11:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is it reasonable to have 100% in the stock market?
Replies: 56
Views: 5197

Re: Is it reasonable to have 100% in the stock market?

OP has described shifting from 100/0 to 80/20, which means that currently the entire taxable and 401k are in equity. The OP gets 2/3 of the way to the new AA by rebalancing the 401k to a bond index fund. Rather than sell $92k equity and pay cap gains, I'm suggesting that he allocate all new contrib...
by grabiner
Fri Feb 17, 2017 11:19 pm
Forum: Investing - Help with Personal Investments
Topic: 401k Decision - Trad vs Roth
Replies: 42
Views: 1214

Re: 401k Decision - Trad vs Roth

One either consideration as I am in the same boat, and I'm sure more knowledgeable Bogleheads will correct me, but I think that the fact that ALL of your withdrawals from a Traditional IRA are taxed as Ordinary income. So all of the Capital Gains that would get Long Term Cap Gain tax-rate treatment...
by grabiner
Fri Feb 17, 2017 10:01 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Roth IRA - Cost Basis Options
Replies: 9
Views: 592

Re: Vanguard Roth IRA - Cost Basis Options

roth ira, not a tax issue, understood. trying to take profit/lock in gains with partial lot sale of some holdings. don't see option to select shares. can set limit price, but cannot select the up shares and let down shares ride? It doesn't matter which shares you sell. If you bought 100 shares at $...
by grabiner
Fri Feb 17, 2017 9:57 am
Forum: Personal Finance (Not Investing)
Topic: Progress Made - What Now? (Pay off cheap mtg or invest)
Replies: 18
Views: 1421

Re: Progress Made - What Now? (Pay off cheap mtg or invest)

Paying down the 5.25% mortgage is a risk-free 3.41% return, and that is a pretty good deal despite the long term. You will also get the benefit faster than 22 years because you can throw your spare cash at that loan and pay it off much earlier. +1. A 3.41% risk-free return right now is excellent. I...
by grabiner
Fri Feb 17, 2017 9:54 am
Forum: Investing - Help with Personal Investments
Topic: Never-Ending Foreign Tax Credit Problem
Replies: 33
Views: 2347

Re: Never-Ending Foreign Tax Credit Problem

I have a significant chunk of international stock in a tax-deferred account, where one can't claim the FTC and for which we will be double-taxed once we withdraw. I decided I would rather have the higher percent of qualified dividends and lower dividends that US stocks provide in taxable. I also ha...
by grabiner
Fri Feb 17, 2017 9:50 am
Forum: Personal Finance (Not Investing)
Topic: Debt Payment Strategy/Interest Question
Replies: 25
Views: 1204

Re: Debt Payment Strategy/Interest Question

Another way to look at this is to consider what happens to your balance over time. If you have Loans A and B with a longer term on Loan B, you could apply an extra payment against either loan. If you apply it against Loan B, you will earn Loan B's interest rate on the payment, and get the benefit w...
by grabiner
Fri Feb 17, 2017 12:04 am
Forum: Personal Finance (Not Investing)
Topic: Student Loan Payoff vs. ANY Investing
Replies: 29
Views: 1161

Re: Student Loan Payoff vs. ANY Investing

Edit: my employer offers a Roth 401k as well as traditional pretax 401k . Do you have any thoughts on whether I should contribute to that or both or just pretax? Since you are planning to contribute only enough to get the match, use the pre-tax 401(k); you need less money out of pocket to get the m...
by grabiner
Thu Feb 16, 2017 11:17 pm
Forum: Personal Finance (Not Investing)
Topic: buying umbrella insurance in CA
Replies: 7
Views: 570

Re: buying umbrella insurance in CA

You want your umbrella insurance with the same company which has your home and auto insurance. And the umbrella is likely to be much less expensive, so you should primarily compare price (and, also important, other factors such as service) for the home and auto policies.
by grabiner
Thu Feb 16, 2017 11:11 pm
Forum: Investing - Theory, News & General
Topic: Flat or sublinear fund expense instead of percentage
Replies: 9
Views: 617

Re: Flat or sublinear fund expense instead of percentage

It would make some sense to charge, say, $20 per account and 0.10% expenses, rather than 0.15% expenses for everyone, in a fund with an average balance of $40,000. Vanguard does essentially do this with lower costs on Admiral shares for large balances. But an explicit structure with a $20 fee as abo...
by grabiner
Thu Feb 16, 2017 11:06 pm
Forum: Investing - Theory, News & General
Topic: 1099-B form from Vanguard has wrong cost basis
Replies: 4
Views: 506

Re: 1099-B form from Vanguard has wrong cost basis

Is this covered or non-covered? If it is covered, Vanguard is supposed to report the correct basis to the IRS and to you. Vanguard gets basis wrong with non-covered mutual fund shares because it uses an average-cost basis; if you used a different identification method when selling, Vanguard will rep...
by grabiner
Thu Feb 16, 2017 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Deferred vs Taxable IRA's
Replies: 8
Views: 506

Re: Tax Deferred vs Taxable IRA's

Do you mean a deductible versus non-deductible IRA? If so, the difference is that all withdrawals from a deductible IRA are taxed, while withdrawals from a non-deductible IRA are prorated between contributions and gains, and only the gains are taxed because the contributions were taxed when made. Bo...
by grabiner
Thu Feb 16, 2017 10:51 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Roth IRA - Cost Basis Options
Replies: 9
Views: 592

Re: Vanguard Roth IRA - Cost Basis Options

how do you select shares to buy and sell if no spec id? It doesn't matter for tax purposes. If you sell a fund with a short-term redemption fee (Vanguard used to have such a fee on some of its funds, and might add one to other funds in the future), shares are sold first-in-first-out for redemption ...
by grabiner
Thu Feb 16, 2017 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: Is 30% stock enough to keep up with (or beat) inflation?
Replies: 39
Views: 2994

Re: Is 30% stock enough to keep up with (or beat) inflation?

If all you need to do is beat inflation in a retirement account, 0% stock is enough; you could invest the entire account in TIPS, and longer-term TIPS have a yield above inflation. This is the lowest-risk portfolio, as it is guaranteed to have a certain amount of spending ability. This isn't what is...
by grabiner
Thu Feb 16, 2017 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Need advice on time frame for changing investments to 3- or 4-fund portfolio: all at once or bit by bit?
Replies: 6
Views: 345

Re: Need advice on time frame for changing investments to 3- or 4-fund portfolio: all at once or bit by bit?

Changing all at once makes sense, because you aren't changing your risk level. You will presumably be keeping the same amount in stock, so your old portfolio will rise or fall just as much as your new portfolio if the stock market changes. Dollar-cost averaging is often recommended if you are signif...
by grabiner
Thu Feb 16, 2017 10:36 pm
Forum: Investing - Help with Personal Investments
Topic: American Opportunity Tax Credit
Replies: 5
Views: 440

Re: American Opportunity Tax Credit

You can amend a tax return for up to three years after the date it was filed (or the due date, if you filed early). Thus, if you need to change things to claim the tax credit for 2013, you have until April 15, 2017 to amend your returns.
by grabiner
Thu Feb 16, 2017 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Debt Payment Strategy/Interest Question
Replies: 25
Views: 1204

Re: Debt Payment Strategy/Interest Question

Another way to look at this is to consider what happens to your balance over time. If you have Loans A and B with a longer term on Loan B, you could apply an extra payment against either loan. If you apply it against Loan B, you will earn Loan B's interest rate on the payment, and get the benefit wh...
by grabiner
Thu Feb 16, 2017 7:17 pm
Forum: Investing - Help with Personal Investments
Topic: Safe Indexes for modest gains
Replies: 11
Views: 1047

Re: Safe Indexes for modest gains

I can't see the benefit in selling those individual stocks though, but perhaps there is a benefit in stopping dividend-reinvestment until my portfolio evens out Since you have other accounts, the individual stocks may not be a huge part of your portfolio. I would recommend selling any individual st...
by grabiner
Thu Feb 16, 2017 12:10 am
Forum: Investing - Theory, News & General
Topic: How capital gains are distributed. IE Wellesley vs Total Stock?
Replies: 12
Views: 1031

Re: How capital gains are distributed. IE Wellesley vs Total Stock?

I notice that Vanguard Target Retirement Fund (VTINX) and Lifestrategy Income Fund (VASIX) also have "LT Capital Gains" and "ST Capital Gains" listed vs Balanced Index Fund (VBIAX) does not. Is this because the lst two funds have an active manage component even though they are &...
by grabiner
Wed Feb 15, 2017 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Progress Made - What Now? (Pay off cheap mtg or invest)
Replies: 18
Views: 1421

Re: Progress Made - What Now? (Pay off cheap mtg or invest)

Paying down the 5.25% mortgage is a risk-free 3.41% return, and that is a pretty good deal despite the long term. You will also get the benefit faster than 22 years because you can throw your spare cash at that loan and pay it off much earlier. An additional benefit is that this rental property is g...
by grabiner
Wed Feb 15, 2017 11:17 pm
Forum: Personal Finance (Not Investing)
Topic: Jumbo Mortgage Dilemma - Increased Downpayment or Investing Cash
Replies: 8
Views: 615

Re: Jumbo Mortgage Dilemma - Increased Downpayment or Investing Cash

I would prefer the 80/20. The 4.125% on the 85/15 is effectively 6.125% on the extra 5% you didn't put down and 4% on the rest. And unlike an 80/10/10 loan, you can't pay down the 6.125% first (unless you pay down the loan to 80% and then refinance.) Since 6.125% is a very high rate for a loan, it's...
by grabiner
Wed Feb 15, 2017 11:14 pm
Forum: Personal Finance (Not Investing)
Topic: 401k, Income Taxes, and Moving During Calendar Year
Replies: 15
Views: 379

Re: 401k, Income Taxes, and Moving During Calendar Year

It's true, I don't pay state income taxes and haven't for 6-7 years - and I've never worked in Mass. Obviously a local CPA is the best person to confirm this for you. But I am not saying you can deduct all $18000 against your state income; I think they are more likely to take the total days or mont...
by grabiner
Wed Feb 15, 2017 10:45 pm
Forum: Investing - Theory, News & General
Topic: TLH and Tax Efficiency
Replies: 4
Views: 394

Re: TLH and Tax Efficiency

Having read well the wiki on tax-efficient fund placement, I have a question about taxable allocations: Is it ever better to hold emerging markets separately from total international in a taxable account? Here's my thinking: You add risk of capital gain events and have less qualified dividends. But...
by grabiner
Wed Feb 15, 2017 10:39 pm
Forum: Investing - Theory, News & General
Topic: How capital gains are distributed. IE Wellesley vs Total Stock?
Replies: 12
Views: 1031

Re: How capital gains are distributed. IE Wellesley vs Total Stock?

I notice that Vanguard Target Retirement Fund (VTINX) and Lifestrategy Income Fund (VASIX) also have "LT Capital Gains" and "ST Capital Gains" listed vs Balanced Index Fund (VBIAX) does not. Is this because the lst two funds have an active manage component even though they are &...
by grabiner
Wed Feb 15, 2017 10:35 pm
Forum: Investing - Theory, News & General
Topic: Please list value funds you currently use
Replies: 60
Views: 4070

Re: Please list value funds you currently use

I hold Vanguard Value Index and Small-Cap Value Index in my Roth IRA, and Guggenheim S&P 600 Pure Value (RZV) in my HSA. I don't tilt my international to value because there is no value fund or ETF that I believe to be worth the cost and extra taxes, compared to my Developed Markets ETF and Emer...
by grabiner
Wed Feb 15, 2017 10:27 pm
Forum: Investing - Help with Personal Investments
Topic: Slice and Dice for efficient charitable giving?
Replies: 2
Views: 203

Re: Slice and Dice for efficient charitable giving?

I wouldn't recommend slicing and dicing just for charitable giving; your own costs (higher expense, rebalancing) are likely to outweigh any benefit. In addition, since you are donating a lot to charity, getting rid of the absolutely lowest-basis shares won't matter much, since you will donate the ne...
by grabiner
Wed Feb 15, 2017 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: Paying off a 7 Year ARM at 2.875% or Invest?
Replies: 10
Views: 837

Re: Paying off a 7 Year ARM at 2.875% or Invest?

See Paying down loans versus investing on the wiki. Because your loan is adjustable-rate, you will get the full benefit from any prepayment in five years, when the ARM resets and you must either pay off the loan or start paying the new market rate. Therefore, a prepayment is equivalent to buying a f...
by grabiner
Wed Feb 15, 2017 10:05 pm
Forum: Investing - Help with Personal Investments
Topic: ETFs that Mimic VG Wellesley's & VG Wellington's Equity Investments
Replies: 16
Views: 1261

Re: ETFs that Mimic VG Wellesley's & VG Wellington's Equity Investments

I've heard a lot of good things about these two funds. Would either be suitable for a "bond" component AA in a Roth IRA? No, because both funds have stocks and bonds; either is suitable for an IRA in which you want to hold both of them. For example, if your Roth IRA should hold $6500 in b...
by grabiner
Wed Feb 15, 2017 10:01 pm
Forum: Investing - Help with Personal Investments
Topic: Help with HSA investement
Replies: 5
Views: 360

Re: Help with HSA investement

View everything as one portfolio. You are investing your HSA for health expenses in retirement, and your IRA for all your expenses in retirement. If you want to have more conservative investments in the HSA, that is fine; keep your overall asset allocation, and hold the Total Bond Market Instutional...
by grabiner
Wed Feb 15, 2017 9:56 pm
Forum: Investing - Help with Personal Investments
Topic: Never-Ending Foreign Tax Credit Problem
Replies: 33
Views: 2347

Re: Never-Ending Foreign Tax Credit Problem

How do you do your taxes? Tax software should get a reasonable Form 1116, even if it isn't completely right. (With TurboTax, you need to go to the form to get the best treatment of charitable deductions, and no tax software can get the state tax right because you have to fill out your state tax form...
by grabiner
Wed Feb 15, 2017 9:48 pm
Forum: Investing - Help with Personal Investments
Topic: Investing Small
Replies: 9
Views: 665

Re: Investing Small

If you can get $1000 to get started, put it in a Target Retirement fund; you can always switch to individual funds later once the account becomes big enough. Vanguard will let you contribute $100 per month automatically into an existing Roth IRA, but you can't open an account with automatic contribu...
by grabiner
Wed Feb 15, 2017 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Safe Indexes for modest gains
Replies: 11
Views: 1047

Re: Safe Indexes for modest gains

You can't get a safe return of 5-7%. 5-7% is about the expected return from a mostly-stock portfolio, which would lose 30-50% in a market decline like 2007-2009. An all-stock portfolio would have lost 55%-60%. This is just the way the market works; a low-risk investment expected to return $20 next y...
by grabiner
Tue Feb 14, 2017 9:20 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs. Traditional 401(k) for someone with LOTS in taxable?
Replies: 41
Views: 2386

Re: Roth vs. Traditional 401(k) for someone with LOTS in taxable?

From the wiki page: "You should also reduce the value of your taxable account by about 25% if you are early in your career, and 15% if you are near or in retirement," I'm curious as to the 25% vs. 15% - either way, it's cap gains and mostly qualified dividends presumably, right? Why would...
by grabiner
Tue Feb 14, 2017 9:12 pm
Forum: Investing - Help with Personal Investments
Topic: Requesting tax efficient investing advice
Replies: 28
Views: 2078

Re: Requesting tax efficient investing advice

I looked up Vanguards 500 offerings and confirmed your finding: The ETF:VOO and Admiral:VFIAX both have expense ratio of 0.05% while the Investor Class:VFINX has an expense ratio of 0.16%. 1. Since I am investing $11K in each of spouse + my account in the backdoor roth IRA, I can go with the Admira...
by grabiner
Tue Feb 14, 2017 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: Medical deduction for NJ
Replies: 11
Views: 5514

Re: Medical deduction for NJ

Welcome to the forum! does it make a difference if NJ resident or non resident? The medical deduction on your NJ tax is the same whether you are a resident or nonresident; see the NJ-1040NR form. However, if you are a nonresident of NJ, you can take a credit against your home-state tax based on your...
by grabiner
Mon Feb 13, 2017 11:39 pm
Forum: Investing - Help with Personal Investments
Topic: Requesting tax efficient investing advice
Replies: 28
Views: 2078

Re: Requesting tax efficient investing advice

OP, Many people assume that the cost of investing in the taxable account is high. But, the answer is actually not necessarily true. With the spreadsheet, a person can calculate the actual cost. At 25% or lower marginal tax rate, the annual cost is about the same as investing in the some 401K accoun...
by grabiner
Sun Feb 12, 2017 11:50 pm
Forum: Investing - Help with Personal Investments
Topic: Requesting tax efficient investing advice
Replies: 28
Views: 2078

Re: Requesting tax efficient investing advice

Consider that with your current income the income from even a tax efficient taxable account such as equity index funds will throw you into a higher bracket sooner than you think. This may be indirectly true even though the qualified dividends are taxed at 15%; your marginal federal tax rate on qual...
by grabiner
Sun Feb 12, 2017 11:48 pm
Forum: Personal Finance (Not Investing)
Topic: To those who avoid FICA with HSA payroll contributions
Replies: 32
Views: 2713

Re: To those who avoid FICA with HSA payroll contributions

Obviously investing is risker. Odds are you will end with a lot more money though. Investing doesn't need to be riskier. You can use the money you would have otherwise contributed to Social Security to buy long-term TIPS in your IRA, which are guaranteed to outperform inflation (although not necess...
by grabiner
Sun Feb 12, 2017 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: To those who avoid FICA with HSA payroll contributions
Replies: 32
Views: 2713

Re: To those who avoid FICA with HSA payroll contributions

If the numbers show that it is probably more beneficial to pay the FICA taxes, why is the IRS so concerned with people who are claiming unreasonably low salaries compared to their distributions? The employer also pays half'; an employer who underpays a worker by $10,000 (for example, not withholdin...
by grabiner
Sun Feb 12, 2017 7:31 pm
Forum: Personal Finance (Not Investing)
Topic: To those who avoid FICA with HSA payroll contributions
Replies: 32
Views: 2713

Re: To those who avoid FICA with HSA payroll contributions

Let me give you a simplify approximate number. Let's say you pay SS tax on your 60K of income. So, SS taxed income is 60K. The first bend point monthly number is $885. So, in order to cross the first bend point, your social security taxed income need to be 35 (years) X 12 (months) X 885 = $371,700....
by grabiner
Sun Feb 12, 2017 5:52 pm
Forum: Personal Finance (Not Investing)
Topic: To those who avoid FICA with HSA payroll contributions
Replies: 32
Views: 2713

Re: To those who avoid FICA with HSA payroll contributions

I made an estimate on the wiki: Payroll Deduction: Health Savings Account . If you are over the second bend point, saving $214 in FICA taxes by payroll deduction reduces your Social Security benefit by $1 per month, adjusted for inflation. This is close to break-even. If your spouse will get 50% of ...
by grabiner
Sun Feb 12, 2017 1:25 pm
Forum: Personal Finance (Not Investing)
Topic: The old debate on taxes now vs later
Replies: 25
Views: 2429

Re: The old debate on taxes now vs later

IMHO I think the prospect of RMD's depleting one's net egg are a little overblown. As is often pointed out, you don't have to spend the RMD's, you can reinvest them minus the taxes paid. The depletion increases with one's marginal tax rate, of course. It is, without a doubt, more noticeable in the ...
by grabiner
Sun Feb 12, 2017 12:30 pm
Forum: Investing - Help with Personal Investments
Topic: Can I buy index funds that aren't ETFs?
Replies: 10
Views: 837

Re: Can I buy index funds that aren't ETFs?

Thank you all for your help. I think I'm going to sell my shares, totaling around $3500 and buy into Wellington. Thanks again everyone. This is probably not the right thing to do if the investment is in your taxable account. Wellington is a fine fund for an IRA, but it will have a higher tax cost t...

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