Search found 20979 matches

by grabiner
Sun Jan 21, 2018 6:11 pm
Forum: Investing - Theory, News & General
Topic: Does a Wider rebalancing band not make more sense?
Replies: 14
Views: 936

Re: Does a Wider rebalancing band not make more sense?

I am retired and hold a 30% stock allocation. My rebalancing strategy is to rebalance when my allocation of stocks jumps above 35% or drops under 25%. Although the strategy keeps my risk under control, I wonder if an asymmetric band would not be more profitable. What I mean is that stocks drop 10%+...
by grabiner
Sun Jan 21, 2018 6:02 pm
Forum: Investing - Help with Personal Investments
Topic: 2018 Mortgage Interest Schedule A
Replies: 5
Views: 650

Re: 2018 Mortgage Interest Schedule A

If you pay down your mortgage, the interest savings comes entirely out of the deductible interest; therefore, you should reduce your interest rate by the full 37% for deciding whether to pay it down. Your after-tax return on a mortgage prepayment would be only 2.11%. If you pay off your mortgage, yo...
by grabiner
Sun Jan 21, 2018 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: Walmart HSA Investment Options Advice?
Replies: 2
Views: 305

Re: Walmart HSA Investment Options Advice?

Your HSA, like your IRA and 401(k), is being invested for expenses in retirement. Therefore, it makes sense to have a single allocation over all three. If you use target-date funds in your IRA and 401(k), you can use them in the HSA. If you manage your own allocation, treat the HSA as part of the IR...
by grabiner
Sun Jan 21, 2018 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: How does Tax Reform affect Refi with Cash out?
Replies: 6
Views: 325

Re: How does Tax Reform affect Refi with Cash out?

Home acquisition debt is deductible; this is debt taken out to buy, build, or improve your home, or refinancing of this debt. If you take a cash-out refinance of a loan you used to buy your home, the amount of the old mortgage is home acquisition debt; any balance added to the loan is only deductibl...
by grabiner
Sat Jan 20, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1814

Re: Reconciling thoughts on Investing Vs Paying down mortgage

compounding interest :oops: It makes your savings prosper, but costs you dearly when you are the debtor. Prepay a 30 year mortgage so that it will amortize over 15 instead of 30 years, and your ROI will be over 25% without having to do the math for your specific situation. And this return is tax fr...
by grabiner
Sat Jan 20, 2018 12:21 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Portfolio Watch Evaluation -- Help Needed.
Replies: 14
Views: 772

Re: Vanguard Portfolio Watch Evaluation -- Help Needed.

Portfolio Watch is most useful for identifying the characteristics of your portfolio. If you overweight real estate, or underweight international stock, or hold taxable bonds in your taxable account, or hold mostly short-term bonds, Portfolio Watch will tell you that your portfolio deviates from a s...
by grabiner
Sat Jan 20, 2018 12:10 pm
Forum: Investing - Help with Personal Investments
Topic: Best International Small Cap Option
Replies: 5
Views: 558

Re: Best International Small Cap Option

The commission for something like VSS (Vanguard's international small-cap ETF) is a trivial cost. If you buy 100 shares at the current market price of $124.30, an $8 commission to buy, and another $8 when you sell, is an extra 0.13% expense. And that's a one-time expense; if you hold the fund for 13...
by grabiner
Sat Jan 20, 2018 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: Military TSP Question
Replies: 8
Views: 787

Re: Military TSP Question

bovineplane wrote:
Sat Jan 20, 2018 3:53 am
Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.
Don't let that happen if you are getting a match (under the new Blended Retirement System, or as a civilian under FERS); if you don't contribute in the last pay period, you won't get the match.
by grabiner
Sat Jan 20, 2018 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Advice for in-kind transfers in the midst of the Gov't shutdown
Replies: 8
Views: 468

Re: Advice for in-kind transfers in the midst of the Gov't shutdown

The usual principle for reacting to the news is to do nothing unless you know something other investors don't. Everyone knows that the government is shut down. But if you work for a government contractor, and you are now on furlough without pay, your personal financial situation has changed, and you...
by grabiner
Sat Jan 20, 2018 11:57 am
Forum: Investing - Help with Personal Investments
Topic: Advice for in-kind transfers in the midst of the Gov't shutdown
Replies: 8
Views: 468

Re: Advice for in-kind transfers in the midst of the Gov't shutdown

If you stay in the same asset class, you don't care about market movements. If you sell one stock fund Monday to buy another stock fund, and the market rises or falls Tuesday, it will take both funds up or down by the same amount. But even if you have to be out of the market for a few days (because ...
by grabiner
Sat Jan 20, 2018 11:38 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1758

Re: Why hold bond funds in tax advantaged accounts?

While I don't have any new comments on fund placement -- bonds have seen arguments on both sides -- I am a bit sad to see the capital losses on my bond funds in my traditional IRA (which is all bonds) and Roth (has some bonds) which I can't harvest for tax purposes. If bond yields continue to rise,...
by grabiner
Sat Jan 20, 2018 12:34 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1758

Re: Why hold bond funds in tax advantaged accounts?

And taxes affect the long-term value of the portfolio. If Fund A costs an extra 1% per year in taxes compared with Fund B, then holding Fund A in taxable and Fund B in an IRA will give you 26% less in your taxable account 30 years compared to holding Fund B in taxable and Fund A in an IRA. Your two...
by grabiner
Fri Jan 19, 2018 7:19 pm
Forum: Personal Finance (Not Investing)
Topic: Qualified Dividends Chevron
Replies: 8
Views: 422

Re: Qualified Dividends Chevron

In previous years put full amount on line 9a Form 1040 from 1099 form 1a (Total Ordinary Dividends) and left line 9b Form 1040 blank even though 1099 box 1b (Qualified Dividends) shows same amount as box 1099 1a. Like many am always learning which is what I appreciate about the BH community.. Did I...
by grabiner
Fri Jan 19, 2018 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: Qualified Dividends Chevron
Replies: 8
Views: 422

Re: Qualified Dividends Chevron

You are the victim of what I consider to be very poor naming by IRS.........I think box 1 should be called Total Dividends to avoid the trap you fell into. Why they had to add that "ordinary" term escapes me. Some payments which look like dividends are not dividends at all, and thus are taxed diffe...
by grabiner
Fri Jan 19, 2018 6:13 pm
Forum: Investing - Help with Personal Investments
Topic: Why even have Bonds in a 401k?
Replies: 30
Views: 2833

Re: Why even have Bonds in a 401k?

Related question - I see VBTLX has 64% allocation in US Treasuries, isn't this tax exempt at the state level? So in my situation (I live in California) can I deduct 64% off the interest dividends from this fund on my state taxes? If so, it reduces tax liability quite a bit as CA taxes are 9.3%. 64%...
by grabiner
Fri Jan 19, 2018 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: MEC's instead of Bonds?
Replies: 18
Views: 726

Re: MEC's instead of Bonds?

One Modified Endowment Contract (MEC) that I am looking at is a completely liquid instrument that can grow a maximum of 9% in a year if the S&P gains 10.5% or more and can only lose 1% if the S&P falls or is flat. What is missing here is that the S&P value is the numerical value of the index; if yo...
by grabiner
Fri Jan 19, 2018 4:14 pm
Forum: Investing - Help with Personal Investments
Topic: Income tax on 401k vs roth 401k, please help
Replies: 5
Views: 337

Re: Income tax on 401k vs roth 401k, please help

Traditional 401(k) withdrawals will be taxed at your ordinary tax rate (or your heirs' ordinary tax rate if they inherit it), but contributions are deductible at your tax rate when you contribute. Therefore, if you are in a higher tax bracket now than you expect to be in at retirement, the tradition...
by grabiner
Fri Jan 19, 2018 12:26 am
Forum: Investing - Help with Personal Investments
Topic: 457 worth it with these fees?
Replies: 45
Views: 1244

Re: Formula to determine if Pre-tax is worth Higher Fees

My rule of thumb is that you should only consider taxable investing if the extra cost, multiplied by the number of years you will be in the plan, exceeds twice your tax rate on qualified dividends (15% for most taxpayers, plus state tax). Thus even 1.5% is worth paying unless you expect to spend mor...
by grabiner
Fri Jan 19, 2018 12:18 am
Forum: Investing - Help with Personal Investments
Topic: VCADX vs VBTLX
Replies: 4
Views: 455

Re: VCADX vs VBTLX

As a California resident which is preferable to have in a taxable account? VCADX or VBTLX? VCADX is completely tax exempt from state and federal taxes but the current yield is 2.05% vs 2.62% for VBTLX. What is the differece in risk profile? What is your tax bracket? My rule of thumb is that munis h...
by grabiner
Fri Jan 19, 2018 12:11 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1758

Re: Why hold bond funds in tax advantaged accounts?

I hold bonds (VGIT and VGSH) and REITs (VNQ) in my taxable account. I do this for two reasons: 1) I believe that it will be easier for me to pay more taxes now than later. My small business provides me with a fairly substantial income right now. But I think it is highly unlikely that I will have th...
by grabiner
Fri Jan 19, 2018 12:00 am
Forum: Investing - Help with Personal Investments
Topic: VBINX or separate equity and bond funds?
Replies: 2
Views: 292

Re: VBINX or separate equity and bond funds?

In a tax-deferred account, it doesn't matter. You can reallocate as needed; if you want to sell stocks, you can sell a balanced fund, and then move some money from a balanced fund into a bond fund or a more conservative balanced fund (Wellington to Wellesley).
by grabiner
Thu Jan 18, 2018 11:43 pm
Forum: Personal Finance (Not Investing)
Topic: cash vs in investments percentage
Replies: 3
Views: 399

Re: cash vs in investments percentage

It shouldn't be a percentage; rather, it should be based on need. Your emergency fund should be in cash, as should any money for a specific expense you expect in the next year (for example, a new car, or a tax bill you will need to pay in April). Money that is being saved for expenses more than a ye...
by grabiner
Thu Jan 18, 2018 9:17 pm
Forum: Investing - Help with Personal Investments
Topic: Domestic SCV? [Small Cap Value]
Replies: 37
Views: 4404

Re: Domestic SCV? [Small Cap Value]

About RZV, I think it's a reasonable choice for a tax advantaged account. But when it comes to net assets, it's not that high, and not that far off asset numbers where ETFs get shut down. In a taxable account, I'd be worried that if RZV became unpopular, you'd end up paying some taxes that you woul...
by grabiner
Wed Jan 17, 2018 9:51 pm
Forum: Investing - Theory, News & General
Topic: Automatic rebalancing and bond maturity
Replies: 6
Views: 451

Re: Automatic rebalancing and bond maturity

The principle you are thinking of is that you should not hold a bond fund if your time horizon is shorter than its duration. If you hold a bond fund with a 5-year duration for 5 years, you will make up any losses from rate increases with the higher yields. For this purpose, your time horizon is the ...
by grabiner
Wed Jan 17, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Which to Max First: 401k or HSA?
Replies: 13
Views: 800

Re: Which to Max First: 401k or HSA?

Put enough into the 401(k) to get the employer match, but then max out the HSA in preference to anything else. The reason is that these are the two investments with a big immediate bonus. With a 50% employer match, you get an immediate 50% return on money put into the 401(k). And with a tax deductio...
by grabiner
Wed Jan 17, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable: State-Specific Muni Fund?
Replies: 10
Views: 952

Re: Bonds in Taxable: State-Specific Muni Fund?

I'm now in the exact situation as the OP - I also live in MA. If I went with VMATX in taxable and then moved to another state, would I then be required to sell VMATX for another state muni fund or a VWITX, for example? I don't think you would be required to sell, but there wouldn't be any point in ...
by grabiner
Wed Jan 17, 2018 9:37 pm
Forum: Investing - Help with Personal Investments
Topic: Withdrawals from Index Funds and Taxes
Replies: 3
Views: 415

Re: Withdrawals from Index Funds and Taxes

Welcome to the forum! You can reduce the tax cost by setting your sales to specific identification. For example, if you bought 100 shares for $20, and 100 shares for $25, and you now need to sell 100 shares at $30, you can specify which shares you sell. You can choose to sell the shares bought at $2...
by grabiner
Wed Jan 17, 2018 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA vs Taxable account international funds
Replies: 2
Views: 192

Re: Roth IRA vs Taxable account international funds

If you can hold everything in your 401(k) and Roth IRA, that is better than holding anything in a taxable account. You do lose the foreign tax credit on international stock funds, but you avoid the tax on dividends and capital gains, which is a larger effect. If you must hold a taxable account, US a...
by grabiner
Wed Jan 17, 2018 9:27 pm
Forum: Investing - Help with Personal Investments
Topic: Is a Stable Value fund just a Variable Annuity?
Replies: 25
Views: 1553

Re: Is a Stable Value fund just a Variable Annuity?

I would say that a variable annuity is a wrapper. Inside a variable annuity, you can hold different types of investments, such as stock funds, bond funds, real-estate funds, and stable-value funds. TIAA offers all four of these in its annuities.
by grabiner
Wed Jan 17, 2018 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: Confusing employer treatment of multi-state W-2
Replies: 5
Views: 416

Re: Confusing employer treatment of multi-state W-2

Since you are new to the forum, I should also warn you that nothing on this forum should be considered tax advice; check with your state tax advisor or the state tax bureau to see how to report your income.
by grabiner
Wed Jan 17, 2018 8:23 pm
Forum: Investing - Help with Personal Investments
Topic: Help with tax efficient asset allocation for taxable account
Replies: 16
Views: 1327

Re: Help with tax efficient asset allocation for taxable account

Total Bond Market 2.6% Limited-Term Tax-Exempt 1.80% / (1 - 0.22) = 2.3% Intermediate-Term Tax-Exempt 2.14% / (1 - 0.22) = 2.74% New York Long-Term Tax-Exempt 2.26% / (1 - 0.22 - 0.0645) = 3.15% Average yield for Limited-Term Tax-Exempt and New York Long-Term Tax-Exempt (2.3% + 3.15%) / 2 = 2.72% I...
by grabiner
Wed Jan 17, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1814

Re: Reconciling thoughts on Investing Vs Paying down mortgage

So it is a question of how do I deploy excess cash flows that come in on a monthly basis. Option 1: Investing in taxable account with expected return of 7% and S.D of say 10% Option 2: Pay back mortgage that costs 2.75% (from 2018 none of which will be deductible) Option 3: Invest in fixed instrume...
by grabiner
Tue Jan 16, 2018 10:09 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17313

Re: Why Buy Bonds If You Have A Mortgage?

inbox788, The question assumes that the choice is between A) Invest in the bond Versus B) Pre-paying mortgage It is the wrong question. The correct question is between A) Invest in your portfolio aka in my case (60/40) Versus B) Pre-paying mortgage Actually, there are two different choices: Do you ...
by grabiner
Tue Jan 16, 2018 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: Confusing employer treatment of multi-state W-2
Replies: 5
Views: 416

Re: Confusing employer treatment of multi-state W-2

Some states have special rules for working from home: you are considered to be working at your regular work location if you could have worked there but work for home instead. However, it doesn't look like MA does this. Therefore, you would apportion your income on your MA nonresident form; if you wo...
by grabiner
Tue Jan 16, 2018 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Got raise. Taxes taking 41% of it?
Replies: 30
Views: 3858

Re: Got raise. Taxes taking 41% of it?

I know it doesn't feel like at this time but Medicare and SS taxes are "investments/savings/benefits" for your future. Hopefully, they will be there for you like they are and will be for me and my spouse. I am retired and will begin to collect SS at age 70 in March. It is almost equal to my pension...
by grabiner
Tue Jan 16, 2018 9:24 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1814

Re: Reconciling thoughts on Investing Vs Paying down mortgage

However, as you near retirement, when you look at a portfolio from the point of view to support expenses, it might make sense to pay down the mortgage even if it is at a lower cost. Let us look at an example. Expenses without mortgage: 40,000 Mortgage Expenses : 28,000 Mortgage left: 240,000 Mortga...
by grabiner
Tue Jan 16, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: Taking Profits From Index Funds in a Bull Market
Replies: 4
Views: 1123

Re: Taking Profits From Index Funds in a Bull Market

Selling your investments to buy things which you need is a good decision, regardless of the state of the market. The reason you are investing money is so that you can spend it, so the spending is the purpose of your investments. You may also want to sell stock in a bull market for an unrelated reaso...
by grabiner
Tue Jan 16, 2018 8:59 pm
Forum: Investing - Help with Personal Investments
Topic: 403b am I better off skipping 403b?
Replies: 10
Views: 905

Re: 403b am I better off skipping 403b?

After maxing out a Roth IRA (for 2017 as well if you haven't done it yet), you should use the 403(b). Hold asset classes in your IRA for which your 403(b) has more expensive options; for example, if the international funds cost much more than the US funds in the 403(b), hold an international index i...
by grabiner
Tue Jan 16, 2018 8:52 pm
Forum: Investing - Help with Personal Investments
Topic: In this case, put bonds in taxable?
Replies: 10
Views: 752

Re: In this case, put bonds in taxable?

In the 12% tax bracket, and living in TX (I assume) so that there is no state tax, qualified dividends and long-term gains are tax-free. Therefore, it makes sense to use stocks in your taxable account, as they get no tax benefit from the tax shelter of the IRA. You can take enough capital gains each...
by grabiner
Tue Jan 16, 2018 8:47 pm
Forum: Investing - Help with Personal Investments
Topic: Help with tax efficient asset allocation for taxable account
Replies: 16
Views: 1327

Re: Help with tax efficient asset allocation for taxable account

Just to clarify: isn't having both limited-term and long-term funds redundant? I mean if minimizing risk and federal tax exemption is goal I can go with Intermediate-Term Tax-Exempt Fund, right? The idea is to use Limited-Term Tax-Exempt and NY Long-Term Tax-Exempt, so that you can get an intermedi...
by grabiner
Tue Jan 16, 2018 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: AA mix vs paycheck mix percentages
Replies: 12
Views: 516

Re: AA mix vs paycheck mix percentages

Are all your new investments coming from the paycheck? If not, then you should arrange for your total investments to match your asset allocation, to minimize rebalancing. That's what I have long done. I hold all my bonds in my employer plan, but I also invest in a Roth IRA and a taxable account. Whe...
by grabiner
Tue Jan 16, 2018 8:33 pm
Forum: Investing - Help with Personal Investments
Topic: Tax implications of rebalancing
Replies: 7
Views: 517

Re: Tax implications of rebalancing

In my taxable account I have $3000 in a short term bond fund, $160,000 in Wellesley, the $238,753 in the Total Stock market and an additional $112,609 in another Total Stock Market account. For some reason I wanted to keep the money I inherited separate. I may need $200,000 of my taxable money to b...
by grabiner
Tue Jan 16, 2018 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: Bond Allocation with TSP G/F Funds
Replies: 10
Views: 668

Re: Bond Allocation with TSP G/F Funds

Welcome to the forum! Access to the F and G Funds is throwing me off.  I could cover all of my bond allocation in my TSP, but don't know if I should (would a bond index fund offer something they don't?).  I see a lot of praise for both of those TSP funds, and believe that the G fund offers some infl...
by grabiner
Tue Jan 16, 2018 8:23 pm
Forum: Investing - Theory, News & General
Topic: Case study Broker trade executions
Replies: 212
Views: 21781

Re: Case study Broker trade executions

Does it matter that jhfenton's test with VSS was for only one share? I don't want to go back and reread the thread, but I seem to remember some info that odd lot orders might receive different (and more favorable) treatment than 100+ share orders. On the flip side, I was thinking of a MOO buy order...
by grabiner
Tue Jan 16, 2018 8:17 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17313

Re: Why Buy Bonds If You Have A Mortgage?

But you can't "hold the bonds for their duration", can you? Think about it. You on day one are going to purchase shares in a bond fund. Then at the end of the month, the first mortgage payment comes due. You haven't had time to hold it for the duration ... the bond fund has one duration and you hav...
by grabiner
Mon Jan 15, 2018 10:08 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17313

Re: Why Buy Bonds If You Have A Mortgage?

Well, one thing is that you a) Assume that bonds are completely safe in your analysis: Here is the last 50 years of real long term bond rates taken from the DFA data matrix http://i65.tinypic.com/15p5nxe.jpg Does that look like a completely risk free asset? The bond-like return from paying down you...
by grabiner
Mon Jan 15, 2018 7:31 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17313

Re: Why Buy Bonds If You Have A Mortgage?

Well, one thing is that you a) Assume that bonds are completely safe in your analysis: Here is the last 50 years of real long term bond rates taken from the DFA data matrix http://i65.tinypic.com/15p5nxe.jpg Does that look like a completely risk free asset? The bond-like return from paying down you...
by grabiner
Mon Jan 15, 2018 7:23 pm
Forum: Investing - Theory, News & General
Topic: International stocks underperformed for the last 20 years.
Replies: 148
Views: 15518

Re: International stocks underperformed for the last 20 years.

can someone kindly explain why VWO (Vanguard Emerging Markets Stock Index Fd) is not tax efficient but VXUS(Vanguard Total International Stock ETF) is more efficient than VWO? how much is the difference? Generally the larger the group you are looking at (Total World ex-US is pretty all encompassing...
by grabiner
Sun Jan 14, 2018 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?
Replies: 22
Views: 1492

Re: Move to Tax-Exempt Bond in 32% Tax Bracket? What Proportion?

My rule of thumb is that 25% is the break-even for taxable versus tax-exempt bonds; that is, bonds of comparable risk will have comparable returns at a 25% tax rate. Sorry Grabiner to keep on asking you bond questions ... I never did really understand them. Why is 25% the break-even point? Do we no...
by grabiner
Sun Jan 14, 2018 7:10 pm
Forum: Investing - Help with Personal Investments
Topic: Does Global Wellesley Get the Foreign Tax Credit?
Replies: 5
Views: 637

Re: Does Global Wellesley Get the Foreign Tax Credit?

Whether the fund is eligible for the foreign tax credit or not, it should be held in a tax-sheltered account. I'm not sure how the global variant will come out, but the US version of Wellesley scores 9, 3, and 16 on Percent Rank in Category, tax analysis, at morningstar relative to all funds that h...