Search found 3066 matches

by rkhusky
Sat Sep 24, 2016 11:30 am
Forum: Investing - Help with Personal Investments
Topic: Fundamental Difference in Roth and Traditional 401k
Replies: 41
Views: 2259

Re: Fundamental Difference in Roth and Traditional 401k

randomguy wrote:Since most people should expect lower income in retirement (no savings, no payroll taxes, need less federal income taxes due to lower income), the ROTH tends to win out big.
I think you mean Traditional is better when you have lower income in retirement.
by rkhusky
Sat Sep 24, 2016 7:19 am
Forum: Investing - Help with Personal Investments
Topic: Fundamental Difference in Roth and Traditional 401k
Replies: 41
Views: 2259

Re: Fundamental Difference in Roth and Traditional 401k

One other thing to check is whether changing from Traditional to Roth would bump you up into the 28% tax bracket. If not, then putting some of your 401K contributions into Roth might be advantageous. You probably have enough in Traditional to fill out the 15% bracket, leaving the rest in the 25% bra...
by rkhusky
Fri Sep 23, 2016 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Fundamental Difference in Roth and Traditional 401k
Replies: 41
Views: 2259

Re: Fundamental Difference in Roth and Traditional 401k

We contribute the maximum amount to our retirement accounts ($6500 into each of our individual Roth IRA's and $24000 into my spouses 401(k)). As I read this thread and some of the examples presented, it strikes me that the Roth 401(k) might be the better choice in our situation. We have no more spa...
by rkhusky
Fri Sep 23, 2016 7:08 pm
Forum: Investing - Theory, News & General
Topic: Rolling a 401k from previous employer to an IRA or new 401k
Replies: 7
Views: 365

Re: Rolling a 401k from previous employer to an IRA or new 401k

Depends on the fund choices and their expense ratios in your new 401K. The IRA would have more flexibility and choice, but the 401K typically has better legal protections (see viewtopic.php?t=70513 and viewtopic.php?t=160313)
by rkhusky
Fri Sep 23, 2016 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: Fundamental Difference in Roth and Traditional 401k
Replies: 41
Views: 2259

Re: Fundamental Difference in Roth and Traditional 401k

So your example is misleading because it is unlikely to have a tax rate of 25% now AND in retirement. You would have to be withdrawing probably over 200k annually to hit 25% margins in retirement. And if you are socking away the 5 million required to have a SWR of 4% to take 200k a year in retireme...
by rkhusky
Fri Sep 23, 2016 11:39 am
Forum: Investing - Help with Personal Investments
Topic: Fundamental Difference in Roth and Traditional 401k
Replies: 41
Views: 2259

Re: Fundamental Difference in Roth and Traditional 401k

If you expect your income to drop substantially in retirement, you are most likely better off with Traditional. If the average tax rate you would pay now to invest in a Roth account is substantially more than the average tax rate you would pay on Traditional withdrawals in retirement, you are most l...
by rkhusky
Thu Sep 22, 2016 2:08 pm
Forum: Investing - Theory, News & General
Topic: Conversion to ROTH
Replies: 18
Views: 1214

Re: Conversion to ROTH

But what about that $2500 in my checking account? If I chose to leave the $10K in my tIRA, then I likely invested that $2500 in my taxable account. So after ten years, do I now have a net $5000 in my taxable account to pay the taxes on the $20K withdrawal from my tIRA? Umm, no. I've been taxed on t...
by rkhusky
Thu Sep 22, 2016 1:32 pm
Forum: Investing - Theory, News & General
Topic: Conversion to ROTH
Replies: 18
Views: 1214

Re: Conversion to ROTH

It is known that if one is maxing out tax advantaged accounts, than Roth has a slight advantage, if one has the same tax rate while accumulating and in retirement. However, most people's tax rate in retirement is lower than while working. The Roth advantage is worth a couple percent in the comparison.
by rkhusky
Thu Sep 22, 2016 12:03 pm
Forum: Investing - Theory, News & General
Topic: Conversion to ROTH
Replies: 18
Views: 1214

Re: Conversion to ROTH

To do a Roth conversion you must pay the taxes. If you keep the Traditional account, you can invest the dollars you would use to pay the taxes. Take a simple example, assuming you're in the 25% bracket both working and in retirement. Take $10,000 "extra" out of your tIRA and you'll owe $2...
by rkhusky
Thu Sep 22, 2016 8:21 am
Forum: Investing - Theory, News & General
Topic: Conversion to ROTH
Replies: 18
Views: 1214

Re: Conversion to ROTH

To do a Roth conversion you must pay the taxes. If you keep the Traditional account, you can invest the dollars you would use to pay the taxes.
by rkhusky
Wed Sep 21, 2016 1:39 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA - Vanguard Target Retirement vs Betterment
Replies: 27
Views: 1364

Re: Roth IRA - Vanguard Target Retirement vs Betterment

Vanguard's TR funds start at 90/10, then about 25 years from the target date start reducing stocks, such that they reach 50/50 at their date and 30/70 7 years after their date, where they stay. They adjust their holdings quarterly to keep on this glide path.
by rkhusky
Mon Sep 19, 2016 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: Why do a target fund if the AA doesn't change for another 20-25 years?
Replies: 24
Views: 2095

Re: Why do a target fund if the AA doesn't change for another 20-25 years?

inbox788 wrote:I believe the Target Date funds become equivalent to the Target Retirement Income funds sometime after retirement (between 65-80).
They become equivalent 7 years after the target date.
by rkhusky
Mon Sep 19, 2016 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Why do a target fund if the AA doesn't change for another 20-25 years?
Replies: 24
Views: 2095

Re: Why do a target fund if the AA doesn't change for another 20-25 years?

To complicate the issue a bit, why are you choosing Fidelity? You can choose any fund family, such as Vanguard, for your Roth. (Nothing against Fidelity, some people like their customer service more than Vanguard's).
by rkhusky
Mon Sep 19, 2016 11:35 am
Forum: Investing - Help with Personal Investments
Topic: Need 5.3% nominal
Replies: 25
Views: 3288

Re: Need 5.3% nominal

Doing some planning for my parents and they need to achieve a 5.3% nominal return over the next 7 years until beginning withdrawals from portfolio. If it is truly "need" and not "want", I would suggest buy CD's (and not of the Vietnamese variety) and tightening of the belt to re...
by rkhusky
Mon Sep 19, 2016 11:22 am
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2387

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

So based on what everyone has written in their posts, should we just "stay the course" even though the price/share dropped in the intermediate-term tax exempt muni bond fund? Take a loss in the principal? Hope that over time the monthly payments can make up for it? Thanks. We've owned thi...
by rkhusky
Mon Sep 19, 2016 11:20 am
Forum: Investing - Help with Personal Investments
Topic: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?
Replies: 33
Views: 2387

Re: Any concern about the drop in price of Vanguard Intermediate term municipal bond fund?

Thanks for the inputs. Much appreciated. Looks like I will just ride out the storm.....will DCA and "stay the course". It is a difficult decision in anticipation of rising interest rates. Rising interest rates have been predicted for more than 5 years. Those that moved everything to short...
by rkhusky
Mon Sep 19, 2016 10:50 am
Forum: Investing - Help with Personal Investments
Topic: Why do a target fund if the AA doesn't change for another 20-25 years?
Replies: 24
Views: 2095

Re: Target Fund Advantages

The fund would be for my Roth IRA. I currently have the Fidelity Freedom 2050 fund with the high ER of .78. So, I can switch to the Fidelity Freedom Index Fund which has a .15 ER or the FFNOX with ER of .11. I've read about the emerging markets thing as well. The ER between the two seems like a was...
by rkhusky
Mon Sep 19, 2016 10:37 am
Forum: Personal Finance (Not Investing)
Topic: Charitable Organizations That Help The Poor
Replies: 14
Views: 635

Re: Charitable Organizations That Help The Poor

The Salvation Army does a lot in terms of helping the poor, running shelters and kitchens. Large cities usually also have rescue missions. As mentioned, food banks are a good target for charitable donations - they usually have low admin costs.
by rkhusky
Sun Sep 18, 2016 6:41 pm
Forum: Investing - Help with Personal Investments
Topic: Why do a target fund if the AA doesn't change for another 20-25 years?
Replies: 24
Views: 2095

Re: Target Fund Advantages

So let me throw this at you: I'm debating between FFNOX and FIPFX. THe FFNOX is the Four in one fund, with an ER of .11%. The FIPFX is the Target Index Fund 2050, which has an ER of .15%. Any thing I should be aware of between the two? FFNOX has 14% bonds and FIPFX has 9%. FFNOX has no emerging mar...
by rkhusky
Fri Sep 16, 2016 10:37 am
Forum: Investing - Help with Personal Investments
Topic: Considering a 20% swing in my asset allocation
Replies: 41
Views: 2906

Re: Considering a 20% swing in my asset allocation

Vanguard's Target Retirement funds settle at 30/70 7 years after their target date. The Government's TSP Lifecycle funds settle at 20/80 on their target date. 30/70 is fine for your situation.
by rkhusky
Wed Sep 14, 2016 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Is A Two-Fund Portfolio All You Really Need?
Replies: 44
Views: 5160

Re: Is A Two-Fund Portfolio All You Really Need?

anoop wrote:
Leif wrote:Why go with all the complexity of two funds? Just get a Target date fund and call it a day.


Tends to have a higher expense ratio.

The .05% difference costs $50/yr for a $100K portfolio. Not much for automatic rebalancing and glide path adjustments.
by rkhusky
Wed Sep 14, 2016 8:12 am
Forum: Personal Consumer Issues
Topic: Toyota, Honda, Nissan or Chrysler Minivan?
Replies: 43
Views: 3875

Re: Toyota, Honda, Nissan or Chrysler Minivan?

Just got a new Grand Caravan to replace our 2003 Ford Windstar that still looks and runs great at 210K miles (wife wanted some of the new features that are now available). Got a great deal on the GC, which actually cost only a couple hundred dollars more than our Windstar did back in 2003. Brother-i...
by rkhusky
Tue Sep 13, 2016 12:37 pm
Forum: Investing - Help with Personal Investments
Topic: Is A Two-Fund Portfolio All You Really Need?
Replies: 44
Views: 5160

Re: Is A Two-Fund Portfolio All You Really Need?

JiveTurkey wrote:For an average Jo(e) with no understanding of investing, I'd suggest just one fund: A target date fund.

+1 (for a tax advantaged account)
by rkhusky
Tue Sep 13, 2016 12:29 pm
Forum: Investing - Help with Personal Investments
Topic: Is anyone else feeling courageous enough to buy today?
Replies: 90
Views: 6403

Re: Is anyone else feeling courageous enough to buy today?

Take a look at a 30 year total return plot and you will realize how inconsequential 1 and 2% moves in the market are. For those with a 30 year investing horizon, it doesn't matter what the share price is tomorrow or next week, but what it will be 30 years from now.
by rkhusky
Sun Sep 11, 2016 6:14 pm
Forum: Investing - Help with Personal Investments
Topic: Incorporating REIT index into already balanced portfolio
Replies: 6
Views: 695

Re: Incorporating REIT index into already balanced portfolio

Keep in mind that you already have real estate in your portfolio. Morningstar lists 4.3% of Total Stock, 14.1% of Small Cap, 4.4% of Total Int'l and 10.1% of FTSE ex-US Small Cap as being real estate.
by rkhusky
Thu Aug 18, 2016 3:36 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose a non-municipal bond fund for my taxable account
Replies: 26
Views: 1359

Re: Please help me choose a non-municipal bond fund for my taxable account

You only really need to worry about a share price drop in a muni fund if you have to sell a bunch of shares for some reason. If you are just collecting the dividends, don't worry, the price will move back up shortly.
by rkhusky
Fri Aug 12, 2016 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: 529 & Multiple Children
Replies: 26
Views: 1905

Re: 529 & Multiple Children

To repeat what randomguy said, financial aid will take into account all of your 529's, not just the one(s) for the student who is applying for aid. The ease of moving beneficiaries is likely part of the reason.
by rkhusky
Fri Aug 12, 2016 11:31 am
Forum: Investing - Theory, News & General
Topic: The annuity puzzle, and a suggestion
Replies: 108
Views: 7168

Re: The annuity puzzle, and a suggestion

Indexing to assets would require new and onerous reporting. Probably neither political party wants to mess much with current benefits and there are other stop-gap measures available. In any case I would expect minor and delayed changes at most. Just my opinion. Food stamps and some college financia...
by rkhusky
Fri Aug 12, 2016 10:58 am
Forum: Investing - Theory, News & General
Topic: The annuity puzzle, and a suggestion
Replies: 108
Views: 7168

Re: The annuity puzzle, and a suggestion

I think the threat of SS benefits being indexed to income or to assets in the future is very real. Accordingly I hope to compare the difference between taking SS at 62 and avoiding the indexing for a while versus spending down assets and taking SS at 70. I imagine it will depend on how the indexing ...
by rkhusky
Sat Mar 05, 2016 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional vs Roth 401k/IRA
Replies: 20
Views: 1320

Re: Traditional vs Roth 401k/IRA

Will you have a pension? Other sources of income? When do you plan to retire? If you retire early before taking pension or SS, you can do Roth conversions in low income years. If no other income, $100K/yr withdrawn from a Traditional account would give you an effective tax rate of about 12% with mar...
by rkhusky
Sat Mar 05, 2016 7:09 am
Forum: Investing - Help with Personal Investments
Topic: Opinions on wash sale with Target Retirement funds
Replies: 12
Views: 919

Re: Opinions on wash sale with Target Retirement funds

For a specific example: $100K of TR 2035 is currently equivalent to $71K of TR 2030 + $17K of Total Stock Market + $12K of Total International.
by rkhusky
Fri Mar 04, 2016 12:40 pm
Forum: Investing - Theory, News & General
Topic: What to do if bonds have negative returns?
Replies: 68
Views: 8078

Re: What to do if bonds have negative returns?

alec wrote:Pay off debt.


No, go further in debt. That will be a great day when the bank pays me for my mortgage.
by rkhusky
Fri Mar 04, 2016 12:26 pm
Forum: Investing - Help with Personal Investments
Topic: 529 State Tax Re-capture
Replies: 4
Views: 358

Re: 529 State Tax Re-capture

Is a rollover to another 529 plan considered a nonqualified withdrawal? I would have thought the latter is for a withdrawal that is not used for education purposes. But states can define things as they like.
by rkhusky
Fri Mar 04, 2016 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: Opinions on wash sale with Target Retirement funds
Replies: 12
Views: 919

Re: Opinions on wash sale with Target Retirement funds

A closer in target fund would have more equities and you'd be supplementing it with even more equities throwing off your allocation. Unless you are using "closer in" different than I am. If you wanted a 2035, 2030 would be closer in to me. I use closer in to mean closer to the target date...
by rkhusky
Fri Mar 04, 2016 11:59 am
Forum: Personal Finance (Not Investing)
Topic: Should I decline my employer's health plan as I already have one?
Replies: 10
Views: 1038

Re: Should I decline my employer's health plan as I already have one?

Secondary insurance is a pain. Providers often don't know how to submit claims and insurance providers have odd ways of paying. Not to mention that it takes at least 2x as long for processing.
by rkhusky
Fri Mar 04, 2016 10:08 am
Forum: Investing - Help with Personal Investments
Topic: New Vanguard accounts
Replies: 31
Views: 3555

Re: New Vanguard accounts

We haven't done it as we would have to link the new accounts to our bank accounts and get everything notarized again, which is a big pain with $10 California-mandated notary fees for each notary stamp. That seems odd, so I did a quick Google search, whose results indicated that the maximum a notary...
by rkhusky
Fri Mar 04, 2016 9:57 am
Forum: Investing - Help with Personal Investments
Topic: Opinions on wash sale with Target Retirement funds
Replies: 12
Views: 919

Re: Opinions on wash sale with Target Retirement funds

One way that I may be able to do this without a ton of hassle is buy a target fund further out than I need/want in all my accounts (except taxable) and then buy the total stock market in the taxable to make the allocation where I want to be. Actually, what you want is to put a closer-in target fund...
by rkhusky
Thu Mar 03, 2016 11:40 am
Forum: Investing - Theory, News & General
Topic: Maxing Roth 401K vs Trad 401K
Replies: 47
Views: 4595

Re: Maxing Roth 401K vs Trad 401K

- Imagine the ROTH IRA is already maxed out. - You are maxing out your 401k regardless if it's Roth or Trad. = if it's Roth, then the $18000 grows and you don't pay taxes upon retirement. = if it's Trad, then the $18000 grows and you pay taxes upon retirement. The tax savings that you've invested i...
by rkhusky
Thu Mar 03, 2016 7:46 am
Forum: Investing - Help with Personal Investments
Topic: Starting an employer 401k, help with asset allocations, etc.
Replies: 46
Views: 2899

Re: Starting an employer 401k, help with asset allocations, etc.

I third the Vanguard Target Retirement funds. Just pick the date that has the stock/bond ratio that you want. If you are not sure, and since you want to be aggressive and have a ways to go before retirement, go with TR 2050. It is 90% stock and won't start decreasing for another 10 years or so, whic...
by rkhusky
Wed Mar 02, 2016 11:52 am
Forum: Investing - Theory, News & General
Topic: Maxing Roth 401K vs Trad 401K
Replies: 47
Views: 4595

Re: Maxing Roth 401K vs Trad 401K

doesn't it always make sense to choose the Roth 401k? Because you are investing more money into tax advantaged vehicles... i've heard the argument that you can make up the difference by investing the deferred tax amount into a taxable account. but you'll still have to pay capital gains taxes on thi...
by rkhusky
Mon Feb 29, 2016 8:07 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio questions!
Replies: 20
Views: 1660

Re: 401(K) related question

You should max out your retirement accounts before contributing to a 529. Kids can get loans for college. You can't get a loan to fund retirement.
by rkhusky
Mon Feb 29, 2016 8:00 pm
Forum: Investing - Help with Personal Investments
Topic: EJones to TSP Allocation?
Replies: 29
Views: 2137

Re: EJones to TSP Allocation?

Put it all in Lifecycle 2030. The TSP will handle all rebalancing and will gradually move to a more conservative allocation as you get closer to retirement, all for free! You just contribute and they do all the rest.
by rkhusky
Sun Feb 28, 2016 3:34 pm
Forum: Investing - Help with Personal Investments
Topic: Please help me choose new job's 401(k) mutual fund elections
Replies: 9
Views: 851

Re: Please help me choose new job's 401(k) mutual fund elections

I would go with Vanguard Institutional, Mid Cap and Small Cap in the ratio of 80/10/10 in the 401K. I would use Total Bond in Traditional IRA and Total International in Traditional & Roth IRA, as it fits to your AA. If you need/want some bonds in the 401K too, you could look at the American Fund...
by rkhusky
Sat Feb 27, 2016 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6634

Re: Roth, Traditional, and the 15% Tax Bracket

Traditional 401k and Roth IRA will provide sufficient tax diversification. ... I believed that for years until I learned my mega-corp's mega-bank 401k provider resolutely refuses to allow segregated withdrawal. If your 401k is 75% traditional and 25% Roth, that is the mix that is going to come out ...
by rkhusky
Fri Feb 26, 2016 4:02 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6634

Re: Roth, Traditional, and the 15% Tax Bracket

Although, they could have up to about 60% in Roth and still be okay. As we seem to be converging on agreement, I'd like to agree here also but simply don't understand to what whole the 60% refers. For the above example, If 0% - 60% of the $95K withdrawal is Roth, then one is still being optimal. If...
by rkhusky
Fri Feb 26, 2016 2:29 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6634

Re: Roth, Traditional, and the 15% Tax Bracket

In the first years of contributing, m.v.m. advocates see "if I make no traditional contributions, my marginal withdrawal rate will be 0% - therefore I will make traditional contributions." The problem with this is that for some (many?) people, it would be better to contribute to Roth in t...
by rkhusky
Fri Feb 26, 2016 1:50 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6634

Re: Roth, Traditional, and the 15% Tax Bracket

However, it's better to do the calculations directly with the actual contributions, withdrawals and tax brackets, rather than relying on simple rules of thumb. Agreed, if you allow that "tax brackets" should be "marginal rates" to allow for all the effects of the tax code. I mea...
by rkhusky
Fri Feb 26, 2016 11:17 am
Forum: Investing - Help with Personal Investments
Topic: Help me allocate my 401k funds
Replies: 6
Views: 489

Re: Help me allocate my 401k funds

The breakdown will depend on the relative amounts that you have in the 401K and the Roth, which will change over the years because you can put more in the 401K. If you want to approximately match the Vanguard Target Retirement 2050+ funds, they are about 54/36/10 in terms of US/Int'l/Bonds. As Ducki...
by rkhusky
Fri Feb 26, 2016 7:34 am
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6634

Re: Roth, Traditional, and the 15% Tax Bracket

Back to the couple in the 15% contribution bracket who have invested enough in previous years to withdraw $95.5K/yr (or whatever we assume for the top of the 15% bracket). Consequently, any traditional contribution in this year would put them into the 25% withdrawal bracket, while their withdrawal ...

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