Search found 20189 matches

by grabiner
Fri Sep 22, 2017 8:24 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Location: 401k All Fixed Income?
Replies: 16
Views: 903

Re: Asset Location: 401k All Fixed Income?

I'd have a hard time advising a young person to hold only fixed income in a 401K. Presumably they'll add to a 401K for 30 years and all growth will be tax-deferred. Ideally your kids will have a 7-figure 401K account at retirement. You'll never have that with all bonds, however. And once your 401(k...
by grabiner
Tue Sep 19, 2017 10:16 pm
Forum: Investing - Help with Personal Investments
Topic: Tracking HSA investment income/cost basis for CA state taxes
Replies: 10
Views: 779

Re: Tracking HSA investment income/cost basis for CA state taxes

I have considered just getting a TIPS fund (which would help some for the CA taxes, though the capital gains issue would remain), but I already have i-Bonds as a large portion of my bonds allocation. You could also use an ordinary Treasury fund in the HSA, and shift your other bond holdings more to...
by grabiner
Tue Sep 19, 2017 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Financial advice pay off mortgage now or keep cash for closing
Replies: 3
Views: 499

Re: Financial advice pay off mortgage now or keep cash for closing

Unless there could be a liquidity issue at closing (for example, you might need a bridge loan), paying off the mortgage now is worthwhile. You are effectively buying a one-year CD with a 5.25% rate, since you will get all the money back in one year, either in cash or to reduce the mortgage on the ne...
by grabiner
Tue Sep 19, 2017 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: Thoughts on adjusting withholding for an expected tax credit?
Replies: 5
Views: 379

Re: Thoughts on adjusting withholding for an expected tax credit?

The IRS worksheets tell you how to adjust, but they may be oversimplified for a tax credit this big; you may want to go through Publication 505 for more details. Since you are in a 25% tax bracket, a $13,570 tax reduction is equivalent to reducing your income by $54,280. Given the value of an allowa...
by grabiner
Tue Sep 19, 2017 9:42 pm
Forum: Investing - Help with Personal Investments
Topic: Tracking HSA investment income/cost basis for CA state taxes
Replies: 10
Views: 779

Re: Tracking HSA investment income/cost basis for CA state taxes

You can keep track of your investments in a spreadsheet; software such as Quicken will also do it. This is what everyone had to do before the IRS developed covered shares. (To simplify your calculations, don't reinvest dividends automatically). Here are some spreadsheets which I use for my taxable a...
by grabiner
Tue Sep 19, 2017 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Health Savings Account>>VMVAX
Replies: 6
Views: 714

Re: Health Savings Account>>VMVAX

Since you are using the HSA for current expenses, you should keep at least one year's deductible in low-risk investments to ensure it is there. A bond fund makes sense for that part of the account. Anything beyond that is likely to be part of your retirement portfolio. Your HSA, IRA, and 401(k) will...
by grabiner
Tue Sep 19, 2017 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Location: 401k All Fixed Income?
Replies: 16
Views: 903

Re: Asset Location: 401k All Fixed Income?

If you follow the conventional wisdom of holding fixed income in tax-advantaged accounts, then it's mostly fine. One downside, that's been raised in a post very recently, is that if they need to rebalance out of stocks into fixed income per their investment policies, they may have to pay capital ga...
by grabiner
Sun Sep 17, 2017 10:24 am
Forum: Investing - Help with Personal Investments
Topic: Considering rolling over Vanguard funds to TSP
Replies: 13
Views: 999

Re: Considering rolling over Vanguard funds to TSP

I have both Vanguard and TSP accounts. I'm considering rolling over my Vanguard's Rollover IRA to my TSP. My motivation is take advantage of the lower expense ratio. This seems like a compelling reason as 66% of my total retirement would be moved to TSP (leaving just my Roth IRA at Vanguard). Befor...
by grabiner
Sun Sep 17, 2017 10:14 am
Forum: Investing - Help with Personal Investments
Topic: Bond return negative. CD or money market alternative.
Replies: 30
Views: 3045

Re: Bond return negative. CD or money market alternative.

This year bond fund return is almost zero. Equity is 16%. Could CD and money market replace bond in this environment? Or even high yield bond? A CD can do the same thing; you just won't see it on your bank statement. If interest rates rise, your bond is worth less than face value, and bond traders ...
by grabiner
Sat Sep 16, 2017 11:29 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 1997

Re: 15 vs 30 year refinance vs cash out refinance

You should not focus on how much interest you are paying to the bank, but on how your debt costs you (in interest) versus how much it benefits you (in the return). I could pay off my mortgage, but I get a benefit from keeping the mortgage because it allows me to invest more (and I don't take any mo...
by grabiner
Sat Sep 16, 2017 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off debt vs. max savings
Replies: 53
Views: 5558

Re: Paying off debt vs. max savings

Again, that just is false when you say it is 'regardless of interest rates'. Maybe a concrete example would help. Let's say you can get finance a car purchase of $30k at 0.99% for 5 years and 5-year treasuries yield 1.75% - what is riskier, paying for the car in cash or borrowing to buy the car and...
by grabiner
Fri Sep 15, 2017 9:56 pm
Forum: Personal Finance (Not Investing)
Topic: Early mortgage payoff vs investing
Replies: 19
Views: 1551

Re: Early mortgage payoff vs investing

Hello! I have a question about paying off my mortgage early. I have had lots of people advise me to either a) put all my extra money into paying off my mortgage early and then, and only then, start investing, or b) put half my extra money into the early payoff and half into investments. My mortgage...
by grabiner
Fri Sep 15, 2017 9:34 pm
Forum: Personal Finance (Not Investing)
Topic: 15 vs 30 year refinance vs cash out refinance
Replies: 32
Views: 1997

Re: 15 vs 30 year refinance vs cash out refinance

If you will be in your house for less than five years, you should have either a 15-year mortgage or a 5-year ARM on the home. You don't get the benefit of the longer term in a 30-year mortgage, since you can't lock in the right to borrow at that low rate for 30 years. For similar reasons, the cash-o...
by grabiner
Fri Sep 15, 2017 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund Will Perform Best With Rising Rates?
Replies: 27
Views: 3048

Re: Which Bond Fund Will Perform Best With Rising Rates?

So, roughly match the duration to your investment horizon, no matter what you think interest rates will do. Are you really saying that a 35-year old planning for retirement in 30 years, should buy 30-year bonds (or a fund with an average maturity of 30 years) for the bond portion of his portfolio? ...
by grabiner
Thu Sep 14, 2017 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: One-Time Capital Gains Situation Late in Year from Sale of Mutual Fund
Replies: 2
Views: 255

Re: One-Time Capital Gains Situation Late in Year from Sale of Mutual Fund

If you sell your Wellington fund, this will give you additional cash. Rather than reinvesting all of that cash, use some of that cash to replace the lost income from your increased pension withholding. You do want to use withholding, rather than making an estimated tax payment. Since you are making ...
by grabiner
Thu Sep 14, 2017 9:22 pm
Forum: Investing - Help with Personal Investments
Topic: Which Bond Fund Will Perform Best With Rising Rates?
Replies: 27
Views: 3048

Re: Which Bond Fund Will Perform Best With Rising Rates?

The issue is that there is not just one interest rate. Your four example funds have about the same duration, so they will all lose 6% if all bond rates rise by 1%. But if corporate bond rates rise more (because of increased default risk), then Total Bond Market Index, which is mostly government bond...
by grabiner
Thu Sep 14, 2017 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: US stock, non-US stock, or total bond in ROTH?
Replies: 6
Views: 448

Re: US stock, non-US stock, or total bond in ROTH?

It doesn't matter that much; see Tax-adjusted asset allocation on the wiki. But if all else is equal, I would prefer stock in the Roth IRA. With a large traditional IRA, if the stock market rises, you will have RMDs you don't need, and putting stock in the Roth reduces those RMDs. US versus foreign ...
by grabiner
Thu Sep 14, 2017 9:04 pm
Forum: Investing - Help with Personal Investments
Topic: REIT vs. Rental Property vs. Pay off the mtg
Replies: 43
Views: 2742

Re: REIT vs. Rental Property vs. Pay off the mtg

Welcome to the forum! See Paying down loans versus investing on the wiki. In order to make a fair comparison between paying off your mortgage and investing, you would compare it to a low-risk bond of the same duration; therefore, whether you should pay off the mortgage depends on the remaining term ...
by grabiner
Thu Sep 14, 2017 8:48 pm
Forum: Investing - Help with Personal Investments
Topic: What is the largest percentage of your total portfolio value that you have exchanged to rebalance?
Replies: 58
Views: 3300

Re: What is the largest percentage of your total portfolio value that you have exchanged to rebalance?

Not sure why you suggest this as a particularly good strategy compared to the well-backtested 5/25 rule; is it just because it's what a lot of people do? If you believe in momentum then having such tight bands may in fact ding returns compared to the trip points set by the wider bands of a 5/25 (5%...
by grabiner
Thu Sep 14, 2017 10:57 am
Forum: Personal Finance (Not Investing)
Topic: Paying off debt vs. max savings
Replies: 53
Views: 5558

Re: Paying off debt vs. max savings

I think this is a 'sticky' somewhere. WHAT 0. Establish an emergency fund to your satisfaction 1. Contribute to your 401k up to any company match 2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield. 3. Max HSA 4. Max Traditional IRA or Roth (or backdoor Roth) ...
by grabiner
Thu Sep 14, 2017 10:35 am
Forum: Personal Finance (Not Investing)
Topic: Having mortgage during retirement. Max retirement saving now
Replies: 19
Views: 1702

Re: Having mortgage during retirement. Max retirement saving now

If you contribute more to your retirement accounts now, you can invest the money in low-risk bonds which earn a higher after-tax return than your deductible mortgage. When you retire, you will have enough in your retirement account to pay off the mortgage, and you can then decide whether it is a goo...
by grabiner
Thu Sep 14, 2017 10:18 am
Forum: Investing - Help with Personal Investments
Topic: 13.35% return this year on this fund? Really?!?
Replies: 2
Views: 1568

Re: 13.35% return this year on this fund? Really?!?

The relevant return for you is in the currency you spend, not the currency you invested in. If you have EUR 1000, convert it to USD 2000, and buy an investment rises 10% in USD, but the EUR rises 10% against the USD, then you now have an investment which is worth EUR 1000 and USD 2200. Now, if you s...
by grabiner
Thu Sep 14, 2017 10:12 am
Forum: Investing - Help with Personal Investments
Topic: Massive tax refund/changing tax info
Replies: 9
Views: 478

Re: Massive tax refund/changing tax info

You can see how much you have had withheld in the past few years (from your W-2's) and just decrease that amount by filling out a new W-4 at work It's been a long time, but I think you can tell them how many dollars to withhold rather than doing it by filing status and number of dependents. For exa...
by grabiner
Thu Sep 14, 2017 10:06 am
Forum: Investing - Help with Personal Investments
Topic: Massive tax refund/changing tax info
Replies: 9
Views: 478

Re: Massive tax refund/changing tax info

The extra worksheets on the W-4 work in simple situations; they tell you how many more allowances to claim for itemized deductions, and how many fewer for income not subject to withholding. For more complicated situations, use the worksheets in IRS Publication 505, Tax Withholding and Estimated Tax ...
by grabiner
Wed Sep 13, 2017 10:27 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Insurance Question
Replies: 37
Views: 2766

Re: Auto Insurance Question

It's honestly just really frustrating that 'miles driven' doesn't seem to have much weight, when to me it seems like for the same customer, driving the same car, in the same area, if you cut your mileage in half, that should relate to a 30-50% reduction in premium. But it seems more like 5-10%. Yes...
by grabiner
Wed Sep 13, 2017 9:44 pm
Forum: Investing - Theory, News & General
Topic: Medical residents: pre-tax (403b) vs taxable
Replies: 11
Views: 926

Re: Medical residents: pre-tax (403b) vs taxable

Actually, thinking more, maybe I figured it out. Let's say a resident is in the 15% tax bracket and will be in 25% bracket in retirement. Assume no geowth in either pre tax or taxable account. Now put $18000 pre tax in each. Pre tax at withdrawal: $18000 x (1 - 0.25) Taxable at withdrawal: $18000 x...
by grabiner
Wed Sep 13, 2017 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: How often do you put money in Vanguard
Replies: 55
Views: 3940

Re: How often do you put money in Vanguard

I invest by dollars, rather than by time. If I plan to buy a mutual fund, I normally buy it when I have $5000 available. If I plan to buy an ETF, I wait until I have enough to buy 100 shares. The reason for 100 shares is that it makes trading easier. If I see a very small spread, I will place a mark...
by grabiner
Wed Sep 13, 2017 9:16 pm
Forum: Investing - Help with Personal Investments
Topic: What is the largest percentage of your total portfolio value that you have exchanged to rebalance?
Replies: 58
Views: 3300

Re: What is the largest percentage of your total portfolio value that you have exchanged to rebalance?

My largest rebalancing moves have been 4% of my portfolio. I moved from bonds to stock in October 2008 near the market bottom (going from 86/14 back to my target 90/10), and from US stock to foreign stock in my 2015 annual rebalance (going from 47/39 to 43/43, with 10% in REITs and 4% in bonds). One...
by grabiner
Wed Sep 13, 2017 9:05 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K vs Roth 401K
Replies: 90
Views: 4566

Re: Traditional 401K vs Roth 401K

I'll also note that your "extra beer and yodels" point is in good fun, but also a great example, too, why for 90% plus the correct choice is/will always be to do a traditional 401k over a Roth 401k -- doing the traditional gives you more money in your paycheck for fun stuff/important stuff now. Sav...
by grabiner
Tue Sep 12, 2017 10:04 pm
Forum: Personal Finance (Not Investing)
Topic: Using investment funds for Home purchase
Replies: 13
Views: 1108

Re: Using investment funds for Home purchase

The most natural comparison is between mortgage rates and low-risk investments. A 15-year mortgage has a duration of about 7 years, so a fair comparison is to something like Vanguard Long-Term Tax-Exempt, which holds low-risk bonds with a 7-year duration. If the after-tax rate on a 15-year mortgage ...
by grabiner
Tue Sep 12, 2017 9:29 pm
Forum: Investing - Help with Personal Investments
Topic: Redeeming high yielding I-Bonds / financing pre Social Security
Replies: 5
Views: 680

Re: Redeeming high yielding I-Bonds / financing pre Social Security

I would hold on to those I-Bonds and tap the traditional or Roth IRA (depending on your tax bracket) in preference 3% above inflation, compounding tax-free, is a big benefit, more valuable than the loss of tax deferral for a few years. Once the I-Bonds have matured, you will have some spare cash, wh...
by grabiner
Mon Sep 11, 2017 10:07 pm
Forum: Personal Finance (Not Investing)
Topic: HSA medical payments and debit card
Replies: 6
Views: 635

Re: HSA medical payments and debit card

Once, my HSA card was rejected because there was one non-HSA item in the stuff I was buying. I thought that was pretty neat. Are you sure this was an HSA debit card and not an FSA debit card. There is no IRS requirement to verify expenditures on an HSA debit card or by any other means. I have most ...
by grabiner
Mon Sep 11, 2017 10:03 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K vs Roth 401K
Replies: 90
Views: 4566

Re: Traditional 401K vs Roth 401K

In my case, If I project a traditional tax deferred total balance of about $1.8 million around retirement age, in today's dollars, apply the RMD rate, and then add (at least) 50% of both of our social security, that will easily get us over the 25% tax bracket. When you factor in the peculiarities o...
by grabiner
Mon Sep 11, 2017 10:00 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K vs Roth 401K
Replies: 90
Views: 4566

Re: Traditional 401K vs Roth 401K

http://myphotos.mypclinuxos.com/images/patrick013/screen09112017174702.png The above is from a 2017 Merrill Lynch Tax Planner. Not very detailed no doubt. Have to get a Ernst & Young Tax Manual one of these days. Know of a better one ? Details are on the wiki: Taxation of Social Security benefits T...
by grabiner
Mon Sep 11, 2017 5:21 pm
Forum: Investing - Theory, News & General
Topic: Wiki article - Bitcoin
Replies: 37
Views: 3851

Re: Wiki article - Bitcoin

I suggested in the wiki discussion that the page be named "Cryptocurrency", and that "Bitcoin", "Ethereum", and any other cryptocurrency which becomes popular redirect to the page.
by grabiner
Mon Sep 11, 2017 5:11 pm
Forum: Investing - Help with Personal Investments
Topic: Late starters trying to reduce skew between taxable & tax deferred
Replies: 21
Views: 2484

Re: Late starters trying to reduce skew between taxable & tax deferred

HSA is your best option if you are eligible. There are a number of threads about saving receipts etc., and some controversy over this. However, future spending is going to include health care dollars, so utilizing this as a tax deferred savings vehicle would make sense for you. CA doesn't recognize...
by grabiner
Mon Sep 11, 2017 5:08 pm
Forum: Investing - Help with Personal Investments
Topic: What index funds that will benefit from resent disasters
Replies: 21
Views: 1687

Re: What index funds that will benefit from resent disasters

Looking for suggestions on index funds that will benefit from resent disasters in Texas and Florida! None more than any other. The reason is that investors already know about the disasters, and have bought and sold investments at prices reflecting the new reality. For example, with a lot of refiner...
by grabiner
Mon Sep 11, 2017 5:02 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional 401K vs Roth 401K
Replies: 90
Views: 4566

Re: Traditional 401K vs Roth 401K

We can't know your future filing status, future tax rates, how 401K withdrawals will affect your tax liability or your Social Security and Medicare benefits, or even whether these programs will exist as we know them. Today you feel certain your future tax rate will be lower, but that could change. ...
by grabiner
Sun Sep 10, 2017 4:12 pm
Forum: Personal Finance (Not Investing)
Topic: Financial Checkup
Replies: 13
Views: 1793

Re: Financial Checkup

Regarding my federal tax rate, Your probably right. Turbo tax doesn't tell me exactly what it is at, all I know is I hit alternative minimum tax. The way to find your marginal tax rate is to add $1000 to your income (or subtract $1000 from your deductions if that is what you are considering changin...
by grabiner
Sun Sep 10, 2017 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Financial Checkup
Replies: 13
Views: 1793

Re: Financial Checkup

Debt: 195k on 315k home, 3.5% interest 2. Considering the extra childcare costs may limit my ability to save, should we just try to wipe out the mortgage quickly to free up that money to channel into the taxable? I wouldn't recommend it. You give up liquidity, and with this low a rate, you get litt...
by grabiner
Sun Sep 10, 2017 3:10 pm
Forum: Investing - Theory, News & General
Topic: Mutual fund record keeping & Calculating cost basis
Replies: 7
Views: 668

Re: Mutual fund record keeping & Calculating cost basis

Is it necessary to keep any records for covered shares (i.e. purchased after 2011)? Yes, because the brokerage might not get records right; for example, there could be a wash sale it doesn't know about. Here is an example which Vanguard got wrong; this was with a non-covered share, but I would expe...
by grabiner
Sun Sep 10, 2017 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: How many funds in your retirement accounts?
Replies: 56
Views: 4656

Re: How many funds in your retirement accounts?

I currently have eleven asset classes excluding cash, and twelve funds counting my taxable account, Roth IRA, employer plans, and HSA, also excluding cash. I do my best to have one fund per asset class, which is the minimum required to get a particular allocation. This doesn't always work out becaus...
by grabiner
Sun Sep 10, 2017 2:44 pm
Forum: Investing - Help with Personal Investments
Topic: Do I-bonds (vs TIPS) make any long term sense in taxable space?
Replies: 9
Views: 827

Re: Do I-bonds (vs TIPS) make any long term sense in taxable space?

For long-term savings, the higher yield on TIPS may outweigh the tax deferral on I Bonds, but only if you know the term. If you buy a 30-year TIPS and need the money in 20 years, you risk losing some of your principal because of rising rates. An I Bond can be cashed in at any time after five years a...
by grabiner
Sun Sep 10, 2017 2:35 pm
Forum: Investing - Help with Personal Investments
Topic: Max TSP/401k or contribute to Roth IRA
Replies: 2
Views: 265

Re: Max TSP/401k or contribute to Roth IRA

If you qualify for public service loan forgiveness, then every dollar your reduce you loan payments is as good as a dollar of tax reduction; the balance will never be paid, so it doesn't matter how it grows. Therefore, it makes sense to treat the income-linked payment as another tax. If you are in t...
by grabiner
Sat Sep 09, 2017 3:23 pm
Forum: Investing - Theory, News & General
Topic: SEC plans to approve Vanguard request to list actively managed ETFs
Replies: 10
Views: 1162

Re: SEC plans to approve Vanguard request to list actively managed ETFs

I wouldn't mind seeing their investment grade actively managed bond funds turned into ETFs. I use Vanguard's actively managed bond funds. I don't think I would use the ETF share class. But that said, the intermediate investment grade fund distributed a significant amount of both short and long term...
by grabiner
Sat Sep 09, 2017 3:14 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Total World Index Distribution Question
Replies: 4
Views: 423

Re: Vanguard Total World Index Distribution Question

I would guess that a lot of foreign stocks do not pay dividends quarterly, as is the US practice. If a foreign stock pays dividends every four months, it will pay no dividend in the first quarter. If it pays every six months, it will pay only in the second and fourth quarters. If it pays every two m...
by grabiner
Sat Sep 09, 2017 2:05 pm
Forum: Investing - Help with Personal Investments
Topic: Company Sold, Now does this make sense?
Replies: 13
Views: 2072

Re: Company Sold, Now does this make sense?

I do think these two bond funds look reasonable to get me down to 60/40 Stock/Bonds.. Vanguard High-Yield Tax-Exempt Fund Admiral Shares(VWALX) Vanguard Intermediate-Term Tax-Exempt Fund Admiral Shares (VWIUX) Do a mock tax return (with tax software) and see whether you will owe Alternative Minimum...
by grabiner
Sat Sep 09, 2017 2:01 pm
Forum: Investing - Help with Personal Investments
Topic: NC Bailey Tax Protected,Fees and Fund Choices
Replies: 19
Views: 1998

Re: NC Bailey Tax Protected,Fees and Fund Choices

Grabiner (above) said: You might also check whether you can roll the 401(k) directly to a Roth and keep the Bailey advantage; I don't know whether NC taxes this transaction as if you had withdrawn from the 401(k) (no tax) or as if you had converted the 401(k) to a traditional IRA and then converted...
by grabiner
Fri Sep 08, 2017 10:33 pm
Forum: Personal Finance (Not Investing)
Topic: Paying Taxes Quarterly
Replies: 21
Views: 2021

Re: Paying Taxes Quarterly

I will be retiring in a few months and will no longer have W2 income, only withdrawals from tax deferred retirement accounts. I understand the dates the quarterly payments are due to IRS but am a bit unclear as to the under-payment and over-payment (I've heard there are over-payment penalties). Her...
by grabiner
Fri Sep 08, 2017 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Company Sold, Now does this make sense?
Replies: 13
Views: 2072

Re: Company Sold, Now does this make sense?

Ok. I just sold my company and looking to create a moderate risk index/etf portfolio. 70% stock is not normally considered moderate risk, particularly if you are retired; 50-60% would probably be better As you have seen, you can build a good portfolio with Vanguard or Schwab, and you have the eleme...