Search found 16805 matches

by grabiner
Sat Apr 30, 2016 9:31 am
Forum: Investing - Help with Personal Investments
Topic: Question regarding cost basis methods
Replies: 7
Views: 307

Re: Question regarding cost basis methods

If you have already used average-cost and have sold the fund in the past, you have already averaged all the shares you had at that time. You can change to specific ID for new shares. But the record-keeping is worthwhile, as it can make a difference of thousands of dollars if you make large sales. (Y...
by grabiner
Sat Apr 30, 2016 9:12 am
Forum: Investing - Help with Personal Investments
Topic: Core Bond Fund Corporate Holdings
Replies: 7
Views: 503

Re: Core Bond Fund Corporate Holdings

So 211 bonds - seems like the answer reflected the number of bonds in the portfolio rather then the percent of assets held in corporates. And since there are fewer different Treasury bonds than corporate bonds, you expect the ratio not to match the bond holdings. Vanguard's page currently says that...
by grabiner
Sat Apr 30, 2016 9:07 am
Forum: Investing - Help with Personal Investments
Topic: TD Ameritrade: When is VXUS cheaper than VEU/VSS?
Replies: 7
Views: 424

Re: TD Ameritrade: When is VXUS cheaper than VEU/VSS?

You shouldn't be buying a commissioned ETF every month; it makes more sense to wait until you have enough money to buy a larger amount, or use a mutual fund with no transaction costs. If you invest $1000 per month, you lose less than two commissions by investing only every three months and leaving t...
by grabiner
Sat Apr 30, 2016 9:03 am
Forum: Investing - Help with Personal Investments
Topic: Understanding Bond Movement With Interest Rates
Replies: 20
Views: 1203

Re: Understanding Bond Movement With Interest Rates

Maybe I'm missing something, but I assume that the bonds I buy today already include some expectation of future rate increases (frequency, timing, magnitude) and that the NAV could remain constant over time despite rising rates if those actual interest rate movements are in line with those expected...
by grabiner
Sat Apr 30, 2016 8:47 am
Forum: Personal Consumer Issues
Topic: Financing a car in order to fix credit
Replies: 14
Views: 877

Re: Financing a car in order to fix credit

More credit cards won't necessarily help your score, what is important is your debt to utilization ratio. Age of credit is one thing they look at. A new card will decrease the ratio, but so will paying Down current debt. You should aim for it to be zero, but if you can't pay them off right now shoo...
by grabiner
Sat Apr 30, 2016 8:34 am
Forum: Investing - Help with Personal Investments
Topic: New: need help with unpredictable capital gains and other issues
Replies: 144
Views: 8605

Re: New: need help with unpredictable capital gains and other issues

Grabiner has given a good explanation above. Of course, you won't have the tax savings in hand until you get a refund unless you change your W-4 to allow for it. If you contribute to your 403(b), the withholding will automatically adjust for the direct benefit; for example, contributing $200 per pa...
by grabiner
Sat Apr 30, 2016 8:30 am
Forum: Investing - Help with Personal Investments
Topic: Thompson Bond Fund and Spartan Short Term Treasury Bond Index Fund
Replies: 3
Views: 421

Re: Thompson Bond Fund and Spartan Short Term Treasury Bond Index Fund

Thank you Mr. Grabiner for your information. I sold Thompson Bond Fund several weeks ago. I put half into the S & P 500 Index Fund and half with Vanguard's inflation protected bond fund. Whether this makes sense depends on your portfolio as a whole. You changed to one fund with much more risk (...
by grabiner
Thu Apr 28, 2016 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Tax efficient allocation
Replies: 10
Views: 750

Re: Tax efficient allocation

Over time, I plan to slowly convert my small cap value position over to a total stock market position--should this first be done with the funds in my taxable account? If you don't want to keep small-cap value, you should sell the whole taxable fund now, before the capital gains become larger. Also,...
by grabiner
Thu Apr 28, 2016 8:52 pm
Forum: Personal Consumer Issues
Topic: Consumer Reports Magazine & Website
Replies: 89
Views: 3817

Re: What's become of Consumer Reports?

I still get the magazine, but I agree with other posters that most of the content I really want is only online. The most valuable information is the large sample comparison of reliability. If you look at online reviews, you will see that every manufacturer of cars or electronics makes some lemons, b...
by grabiner
Thu Apr 28, 2016 8:29 pm
Forum: Investing - Theory, News & General
Topic: Chart: Trying to Time the Market Can Cost You
Replies: 23
Views: 1644

Re: Chart: Trying to Time the Market Can Cost You

A subset of bogleheads seem to have strange ideas about market efficiency. Efficient markets means that investor outcomes are random , not guaranteed to lose money. An individual investor buying random stocks could just as easily outperform the market by getting lucky. If any group of investors wer...
by grabiner
Thu Apr 28, 2016 8:23 pm
Forum: Investing - Theory, News & General
Topic: When to begin taking Social Security payments?
Replies: 31
Views: 1553

Re: When to begin taking Social Security payments?

Something you may want to think about that I recently heard. By waiting til 70 for SS, that will coincide with the start of your required minimum distributions and likely impact your taxes. The solution to this is to withdraw from traditional plans before age 70, and consider converting traditional...
by grabiner
Thu Apr 28, 2016 8:19 pm
Forum: Investing - Help with Personal Investments
Topic: Advice on taxable accounts
Replies: 7
Views: 983

Re: Advice on taxable accounts

For an 80/20 allocation, I would recommend making your taxable account all stock, and holding the full bond allocation in tax-deferred (assuming you have a good bond fund in your 401(k)). If everything is with Vanguard, you can have just three funds for your whole portfolio: Total International in t...
by grabiner
Thu Apr 28, 2016 8:12 pm
Forum: Investing - Help with Personal Investments
Topic: Question: Mega Cap or S&P 500?
Replies: 8
Views: 664

Re: Question: Mega Cap or S&P 500?

The Mega Cap ETF and 500 Index are very similar, as you can see if you compare their performance. Therefore, it makes sense to use the S&P 500 if you need a large-cap-only fund, because of the lower cost. Another alternative, in a taxable account, is Tax-Managed Capital Appreciation; however, th...
by grabiner
Thu Apr 28, 2016 8:08 pm
Forum: Investing - Help with Personal Investments
Topic: Tax efficient allocation
Replies: 10
Views: 750

Re: Tax efficient allocation

The return-of-capital distributions on REITs are tax-neutral; they are not taxed but reduce your basis. That is, if you hold $1000 worth of REITs, and receive a $100 return-of-capital distribution which you reinvest, you still have $1000 invested but your basis is also still $900+100=$1000. But the ...
by grabiner
Thu Apr 28, 2016 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: Medical Billing Practices
Replies: 26
Views: 1732

Re: Medical Billing Practices

In several previous employer plans, the amount of the "Copay" for primary care or specialists was not always a simple dollar amount. Most of the time, the folks at the Physician's office were not able to tell me what the Copay was supposed to be - and often would ask me. What I did, most ...
by grabiner
Thu Apr 28, 2016 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: I-bonds versus mortgage.
Replies: 11
Views: 1423

Re: I-bonds versus mortgage.

I still don't completely follow, but regardless, why is the decision tree more complicated than comparing the mortgage interest rate to your expected return from I bonds? 4% is close to ten times the current inflation rate, doesn't that mean it offers approximately ten times the return? You have to...
by grabiner
Thu Apr 28, 2016 6:34 pm
Forum: Personal Finance (Not Investing)
Topic: mortgage pre payment, why?
Replies: 101
Views: 9965

Re: mortgage pre payment, why?

If you are not paying AMT, you are probably in the 33% tax bracket, and your CA tax of 9.3% is deductible from federal tax, so it only costs you 6.2%. Your combined marginal tax rate is 39.2%; that is, $1000 of mortgage interest saves you $392 in tax. If you are paying AMT and are in the exemption ...
by grabiner
Wed Apr 27, 2016 8:34 pm
Forum: Investing - Help with Personal Investments
Topic: Tax-efficiency vs. incurred capital gains
Replies: 12
Views: 760

Re: Tax-efficiency vs. incurred capital gains

Allow me to disagree a bit. As you say, the problem isn't that LifeStrategy Growth is tax-inefficient on its own; yet one of the principles we always promote is looking at one's portfolio in aggregate. In this respect, if Coloradoso has determined that it is most tax-efficient to have all bonds in ...
by grabiner
Wed Apr 27, 2016 8:21 pm
Forum: Personal Finance (Not Investing)
Topic: Medical Billing Practices
Replies: 26
Views: 1732

Re: Medical Billing Practices

I have been billed for the estimated charge up front by one of my doctors, but I always get the itemized bill later. The proper procedure is to make the prepayment a credit on your account, rather than bill you automatically for what could be a billing error. Under your system, if there is a billing...
by grabiner
Wed Apr 27, 2016 8:02 pm
Forum: Investing - Theory, News & General
Topic: Windfall - Payoff Car or Keep it Invested
Replies: 13
Views: 901

Re: Windfall - Payoff Car or Keep it Invested

You could use the windfall to pay off the car, and then sell bonds to buy an equal amount of stock in your IRA/401(k), keeping the same stock exposure. And that would be a great deal (unless the stock investments have a huge capital gain), because you get a guaranteed 2.99% tax-free return on paying...
by grabiner
Wed Apr 27, 2016 7:57 pm
Forum: Investing - Help with Personal Investments
Topic: EM vs. Asia ex Japan
Replies: 12
Views: 806

Re: EM vs. Asia ex Japan

Another option would be not to hold either fund in your 401(k), and to hold the emerging markets fund you want (Vanguard's Emerging Markets Index, or the ETF class VWO, or iShares' ETF IEMG) in your IRA or taxable account.
by grabiner
Wed Apr 27, 2016 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: FIBAX Fidelity Intermediate Treasury index fund - State tax exempt?
Replies: 6
Views: 379

Re: FIBAX Fidelity Intermediate Treasury index fund - State tax exempt?

Treasury bonds are not taxable in any state.

Most states do tax capital gains on Treasury bonds (and bond funds), but those gains won't be very large, and if the fund does realize gains, that is actually better than realizing the same amount as income, given the lower federal tax on capital gains.
by grabiner
Wed Apr 27, 2016 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: Tax-efficiency vs. incurred capital gains
Replies: 12
Views: 760

Re: Tax-efficiency vs. incurred capital gains

The problem with LifeStrategy Growth isn't that it is tax-inefficient on its own, but that it may force you to sell prematurely. It is inherently tax-efficient as long as your tax bracket isn't too high: Total Stock Market and Total International are excellent taxable choices, and the bond funds are...
by grabiner
Wed Apr 27, 2016 7:46 pm
Forum: Investing - Help with Personal Investments
Topic: Critique Fixed Income Strategy - GNMA Dominance
Replies: 21
Views: 1358

Re: Critique Fixed Income Strategy - GNMA Dominance

However, I am aware that I am being compensated in the GNMA for the negative convexity of mortgages. I don't know how to factor that into the selection. Consider it compensation for the increased duration volatility that the negative convexity creates. Thanks for your reply. Interesting concept - d...
by grabiner
Wed Apr 27, 2016 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: Refinance or pay extra money towards principal - which is better in saving interest
Replies: 8
Views: 731

Re: Refinance or pay extra money towards principal - which is better in saving interest

The way to refinance and benefit from extra payments is to refinance to a shorter term. If you have enough extra money to make the higher payments, you can refinance your 30-year loan to a 15-year loan, lowering the rate; this comes out ahead of keeping the 30-year loan and making extra payments to ...
by grabiner
Wed Apr 27, 2016 7:40 pm
Forum: Investing - Help with Personal Investments
Topic: if you HAD to pick 2 actively managed funds???
Replies: 45
Views: 2722

Re: if you HAD to pick 2 actively managed funds???

While I am all-index now, I have held several active funds. Vanguard Growth&Income (first Roth IRA fund; at the time, it was less expensive than the index funds because Vanguard imposed a $10 fee on index accounts under $10,000 and my Roth IRA started at $2000) Vanguard International Growth (mis...
by grabiner
Wed Apr 27, 2016 7:29 pm
Forum: Investing - Help with Personal Investments
Topic: Just leave mom's annuity money?
Replies: 7
Views: 843

Re: Just leave mom's annuity money?

My intuition tells me that she should just leave the money there--4.5% and even 3.5% guaranteed is well more than she'd earn in the cash-equivalent part of her alternative portfolio. Annuities don't pay 4.5% as a return on investment because they keep your original principal. Imagine a Ponzi scheme...
by grabiner
Wed Apr 27, 2016 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: VWO vs VSS [Vanguard Emerging Markets Stock vs. FTSE All-World ex-US Small-Cap]
Replies: 15
Views: 845

Re: VWO vs VSS

You have to decide what international risks you want to take. VXUS (Total International) is the default position, but you can choose to overweight small-cap or emerging markets, to get more risk with the potential for higher returns and better diversification. I use both, primarily for the diversifi...
by grabiner
Wed Apr 27, 2016 6:22 pm
Forum: Investing - Help with Personal Investments
Topic: Help me better understand Traditional vs Roth factors.
Replies: 26
Views: 1287

Re: Help me better understand Traditional vs Roth factors.

2) There is a SIGNIFICANT DIFFERENCE. In general, at 25% marginal tax rate, people that do Roth 401K, cannot contribute to pre-tax TIRA. It has to be Roth IRA. Hence, it is 100% Roth. Meanwhile, people that contribute to Trad. 401K, can either contribute to Roth IRA or backdoor Roth IRA. So, tax di...
by grabiner
Wed Apr 27, 2016 6:16 pm
Forum: Personal Finance (Not Investing)
Topic: mortgage pre payment, why?
Replies: 101
Views: 9965

Re: mortgage pre payment, why?

CA residents are subject to the AMT, but this may actually make mortgage deductions more valuable. ... +1 I don't understand. Can you elaborate please? I read Kitces article on AMT and it seemed like MFJ is in the AMT hump up until something like $500k income. AMT is incredibly confusing. If you ar...
by grabiner
Wed Apr 27, 2016 6:11 pm
Forum: Investing - Help with Personal Investments
Topic: New: need help with unpredictable capital gains and other issues
Replies: 144
Views: 8605

Re: New: need help with unpredictable capital gains and other issues

By the way, taking $10k from your fixed income to put 10k in 403b is not quite fair, because you are saving 15% + state % tax by using 403b. It should take less than $8.5k and it should be paying you still more in tax credits, so maybe $7-8k cost.[/color] I am still figuring things out, and trying ...
by grabiner
Wed Apr 27, 2016 5:54 pm
Forum: Personal Finance (Not Investing)
Topic: I-bonds versus mortgage.
Replies: 11
Views: 1423

Re: I-bonds versus mortgage.

mortgage 4.125% ( 75K balance ) , estimated after tax interest rate of ~4% due to deduction phaseouts The deduction phaseout affects the deductible part first. If you pay off $10K of the mortgage, you will pay $413 less in interest, and you will lose $413 in itemized deductions. This makes I-Bonds ...
by grabiner
Wed Apr 27, 2016 5:41 pm
Forum: Personal Consumer Issues
Topic: Financing a car in order to fix credit
Replies: 14
Views: 877

Re: Financing a car in order to fix credit

I was planning on purchasing a Condo within 3 years, but for right now I just want to be able to rent in a decent neighborhood and they all do credit checks. I didn't know adding credit cards could help my score, I will definitely apply for some more, thanks! Note that landlords aren't likely to ch...
by grabiner
Tue Apr 26, 2016 10:07 pm
Forum: Personal Finance (Not Investing)
Topic: I-bonds versus mortgage.
Replies: 11
Views: 1423

Re: I-bonds versus mortgage.

debating whether to sink 10K into I-bonds , versus continue to pay down mortgage . age 43 tax bracket federal 39% state 0% mortgage 4.125% ( 75K balance ) , estimated after tax interest rate of ~4% due to deduction phaseouts The deduction phaseout affects the deductible part first. If you pay off $...
by grabiner
Tue Apr 26, 2016 9:08 pm
Forum: Investing - Help with Personal Investments
Topic: Help me better understand Traditional vs Roth factors.
Replies: 26
Views: 1287

Re: Help me better understand Traditional vs Roth factors.

OP, It is VERY SIMPLE. You are in 25% marginal tax rate. Are you married or single? A) If you are married, continue 100% to Trad. 401K until you have 2.5 million. B) If you are single, 100% to Trad. 401K until you have 1.25 million. This is reasonable if you will be in the same tax bracket for your...
by grabiner
Tue Apr 26, 2016 9:03 pm
Forum: Personal Consumer Issues
Topic: Financing a car in order to fix credit
Replies: 14
Views: 877

Re: Financing a car in order to fix credit

Why do you need to improve your score? Are you planning to buy a home in a few years? The main reason to have a good score is to get good rates for credit, so if you don't need good rates for credit, your score is not that important. (Having a good credit record may be important to employers, but th...
by grabiner
Tue Apr 26, 2016 8:47 pm
Forum: Personal Finance (Not Investing)
Topic: Home or Condo Insurance?
Replies: 3
Views: 364

Re: Home or Condo Insurance?

What matters is the legal structure, not the physical structure. If your townhouse is part of a condominium, then the condominium owns (and insures) the building, and you are responsible only for the improvements, which are covered by condo insurance. If your townhouse is legally a single-family hom...
by grabiner
Tue Apr 26, 2016 8:38 pm
Forum: Personal Finance (Not Investing)
Topic: HDHP vs. Traditional Plan: Math Problem
Replies: 12
Views: 768

Re: HDHP vs. Traditional Plan: Math Problem

Your situation is rare, but it is common for the HDHP to be a guaranteed win including the tax savings on the HSA.
by grabiner
Tue Apr 26, 2016 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card FICOs and other Scores
Replies: 7
Views: 855

Re: Credit Card FICOs and other Scores

What can you tell me about the FICO 8 score vs the Vantage 3 one? The Vantage is lower by almost 30 points, and both are provided by Trans Union, while all of the FICO 8 scores tends to be fairly consistent. Do you have score distributions? The percentile is more important than the number; if you a...
by grabiner
Tue Apr 26, 2016 8:12 pm
Forum: Investing - Theory, News & General
Topic: If you withdraw Roth IRA contributions, can you put them back in?
Replies: 6
Views: 1052

Re: If you withdraw Roth IRA contributions, can you put them back in?

Even if you can't replace the money in your Roth IRA, you can replace it elsewhere. For example, suppose that you max out your Roth IRA but not your 401(k), and need to withdraw $15,000 from your Roth IRA. You can increase your 401(k) contributions by $500 per month ($375 after tax in a 25% bracket)...
by grabiner
Tue Apr 26, 2016 8:01 pm
Forum: Investing - Theory, News & General
Topic: how do people keep AA constant with ongoing contributions?
Replies: 23
Views: 1736

Re: how do people keep AA constant with ongoing contributions?

I make contributions to my retirement account to stock and bond funds in the appropriate proportions to keep my target allocation. In my taxable account, I check my allocation when I make a contribution, and use that to direct the contributions. And every year, when I make my IRA contribution, I do ...
by grabiner
Tue Apr 26, 2016 7:35 pm
Forum: Investing - Help with Personal Investments
Topic: how to convert pre-tax funds to purchase a primary residence
Replies: 1
Views: 198

Re: how to convert pre-tax funds to purchase a primary residence

Section 72(p) deals with loans from retirement plans. If you withdraw money under a qualifying loan agreement, the money is not taxed at all (unless you fail to pay back the loan, or leave the employer and do not pay back the loan immediately). However, you have to check your plan rules; section 72(...
by grabiner
Tue Apr 26, 2016 7:23 pm
Forum: Investing - Help with Personal Investments
Topic: Help me better understand Traditional vs Roth factors.
Replies: 26
Views: 1287

Re: Help me better understand Traditional vs Roth factors.

1. The idea that a Roth is better if you'll be in a higher tax bracket in retirement seems like an oversimplification. When I contribute to traditional accounts, my effective tax savings is 25% because I'd be in the 25% bracket whether or not I contributed to traditional accounts at all. When I eve...
by grabiner
Tue Apr 26, 2016 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: 3.5M taxable bonds
Replies: 38
Views: 3291

Re: 3.5M taxable bonds

If you value diversification, a muni/TIPS split is reasonable, particularly because this gives better diversification among types of bonds; TIPS will outperform all other bonds if inflation rises unexpectedly, and underperform if inflation remains low. TIPS bond fund or individual TIPS? In taxable?...
by grabiner
Tue Apr 26, 2016 6:57 pm
Forum: Investing - Help with Personal Investments
Topic: 3.5M taxable bonds
Replies: 38
Views: 3291

Re: 3.5M taxable bonds

If you value diversification, a muni/TIPS split is reasonable, particularly because this gives better diversification among types of bonds; TIPS will outperform all other bonds if inflation rises unexpectedly, and underperform if inflation remains low.
by grabiner
Tue Apr 26, 2016 6:20 pm
Forum: Investing - Help with Personal Investments
Topic: 3.5M taxable bonds
Replies: 38
Views: 3291

Re: 3.5M taxable bonds

There is one way to hold total bond in a tax-efficient manner - Vanguard's Total Bond Market Variable Annuity. Inside the VA, the dividends would not be taxed until the annuity is tapped. The expense ratio is a little higher than Total Bond outside the VA, but not crazy high by any means (.48%). I ...
by grabiner
Tue Apr 26, 2016 6:12 pm
Forum: Personal Finance (Not Investing)
Topic: mortgage pre payment, why?
Replies: 101
Views: 9965

Re: mortgage pre payment, why?

What about the phase out in the tax code? High earners can have up to 80% of their tax deduction phased out. If you pay state income taxes, the amount of itemized deductions which are phased out is almost always less than your state tax, so the phase-out behaves just as if it were an increase in yo...
by grabiner
Tue Apr 26, 2016 6:03 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated taxes and allowances
Replies: 5
Views: 566

Re: Estimated taxes and allowances

This seems to indicate that you can use the W-4 worksheets, but if those worksheets give the wrong withholding for your situation and you don't use them, you are only entitled to claim a number of allowances which is justified by your own calculation of the tax you expect to owe for the year, not t...
by grabiner
Mon Apr 25, 2016 9:29 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for confirmation on tax efficiency regarding TSP
Replies: 8
Views: 578

Re: Looking for confirmation on tax efficiency regarding TSP

@Grabiner, thank you good advice! Yes, as I've been reading it seems G fund has the best bang for the risk-cost. One thing to remember: if you are deployed at some point and get tax free pay, you want to contribute to the Roth TSP with that income. @Baw703916, I'm not sure why tax-free pay would be...
by grabiner
Mon Apr 25, 2016 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated taxes and allowances
Replies: 5
Views: 566

Re: Estimated taxes and allowances

Can I report any number of allowances that I want to my employer, as long as I follow the rules for the amount of tax that I am supposed to pay each quarter? My income will be greater than last year, and above $150k. It appears that if I pay 110% of what I paid last year, divided into equal payment...

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