Search found 3037 matches

by rkhusky
Sat Mar 05, 2016 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional vs Roth 401k/IRA
Replies: 20
Views: 1163

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 If no other income, $100K/yr withdrawn from a Traditional account would give you an effective tax rate of about 12% with mar...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: 831

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: 58
Views: 6273

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: 303

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: 831

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: 942

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: 25
Views: 2797

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: 831

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: 4137

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: 2531

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: 4137

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: 401(K) related question
Replies: 5
Views: 453

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: 1974

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: 724

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: 6006

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: 6006

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: 6006

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: 6006

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: 407

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: 6006

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 ...
by rkhusky
Thu Feb 25, 2016 9:05 am
Forum: Investing - Help with Personal Investments
Topic: Do I pay capital gains on trades within an IRA
Replies: 19
Views: 1737

Re: Do I pay capital gains on trades within an IRA

You need to pay income taxes if moving funds from a Traditional IRA to a Roth IRA or to a taxable account. As noted, the tax would be assessed at your income tax rate, not your capital gains rate.

If trading within your Traditional IRA or within your Roth IRA, then you do not pay taxes.
by rkhusky
Wed Feb 24, 2016 8:29 pm
Forum: Investing - Help with Personal Investments
Topic: Some extra cash -- open taxable account or put in a 401k
Replies: 8
Views: 704

Re: Some extra cash -- open taxable account or put in a 401k

Roth is always better than taxable or non-deductible Traditional IRA. Taxable is often better than non-deductible Traditional IRA, but you would have to check for your situation. See: https://www.bogleheads.org/wiki/Non-ded ... tional_IRA
by rkhusky
Wed Feb 24, 2016 12:30 pm
Forum: Investing - Theory, News & General
Topic: Approximating Total International Stock Index
Replies: 3
Views: 619

Re: Approximating Total International Stock Index

Keep in mind that the two funds are slowly adding small caps. Until they reach equilibrium (Nov 2016?), you will be light in the small caps.
by rkhusky
Tue Feb 23, 2016 7:55 pm
Forum: Personal Finance (Not Investing)
Topic: Computing effective tax rate
Replies: 8
Views: 538

Re: Computing effectiv tax rate

I found the ALI to be interesting. So I plan to calculate it every year to get my true compensation, as well as compute my effective tax. Fortunately, my employer puts the components on our pay stubs every paycheck, so they are easy to find.
by rkhusky
Tue Feb 23, 2016 4:13 pm
Forum: Investing - Help with Personal Investments
Topic: Tax and penalty on changing to roth ira
Replies: 18
Views: 1302

Re: Tax and penalty on changing to roth ira

If you put the funds back into an IRA within 60 days, there shouldn't be a penalty. But the OP would have to watch out for the 5 year rule when pulling money out of the Roth IRA later on.
by rkhusky
Tue Feb 23, 2016 8:36 am
Forum: Investing - Help with Personal Investments
Topic: Tax and penalty on changing to roth ira
Replies: 18
Views: 1302

Re: Tax and penalty on changing to roth ira

You should only owe taxes on the earnings. If you recharacterize, then you don't even owe taxes on earnings.
by rkhusky
Tue Feb 23, 2016 8:08 am
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6006

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

As mentioned above, remember that Traditional 401K and IRA will reduce your AGI, which in turn affects the Child Tax Credit phaseout. So, even if you are in the 15% tax bracket, you are really in a 20% marginal tax bracket with that phaseout. Similarly, if you are in the 25% tax bracket, you are rea...
by rkhusky
Tue Feb 23, 2016 7:52 am
Forum: Personal Finance (Not Investing)
Topic: where to get 3% real with the least amount of risk?
Replies: 56
Views: 6393

Re: where to get 3% real with the least amount of risk?

I'd be thrilled with 3% real returns for the next 10 years. what investment(s) do you think have the best chance of returning 3% real with the least amount of risk? What, no love for the 3% CD? There may not be any currently, but they do seem to pop up occasionally and without much fanfare (except ...
by rkhusky
Mon Feb 22, 2016 1:28 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6006

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

You also need to guess whether you might retire early, before taking a pension or SS. Those years may afford you the opportunity to do Roth conversions at a low tax rate.
by rkhusky
Mon Feb 22, 2016 12:35 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

Again, by your definition, if I make no contribution at all now the last dollars I will be withdrawing will be taxed at 25%. This is what you specified, correct? No. If I continue to contribute as I have been until I retire, then I will have a 25% marginal tax rate on withdrawals. That is an assump...
by rkhusky
Mon Feb 22, 2016 12:26 pm
Forum: Investing - Help with Personal Investments
Topic: Roth, Traditional, and the 15% Tax Bracket
Replies: 70
Views: 6006

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

Traditional 401k and Roth IRA will provide sufficient tax diversification. Do you have minor children? If so, the Child Tax Credit phaseout starting at $110,000 AGI is an important threshold to remember - your marginal rate will be much higher starting at $110,001 until the Child Tax Credit is phase...
by rkhusky
Mon Feb 22, 2016 8:21 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

FiveK wrote:Again, by your definition, if I make no contribution at all now the last dollars I will be withdrawing will be taxed at 25%. This is what you specified, correct?

No. If I continue to contribute as I have been until I retire, then I will have a 25% marginal tax rate on withdrawals.
by rkhusky
Sun Feb 21, 2016 7:56 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

FiveK wrote:Forum etiquette prohibits me from expounding on the answer, so I'll make it simple: Roth.

Good. You would pay 15% to contribute to Roth, knowing that the average rate on withdrawals will be 12%.
by rkhusky
Sun Feb 21, 2016 7:36 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

I think most people would say that Traditional would be clearly better if the marginal rate was 25% and the average rate was 12%, when it would cost 15% to use Roth. And I think most people would say that Roth would be clearly better if the marginal rate was 25% and the average rate was 25%, when i...
by rkhusky
Sun Feb 21, 2016 8:05 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

I think most people would say that Traditional would be clearly better if the marginal rate was 25% and the average rate was 12%, when it would cost 15% to use Roth. And I think most people would say that Roth would be clearly better if the marginal rate was 25% and the average rate was 25%, when i...
by rkhusky
Sat Feb 20, 2016 7:57 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

Would the answer change if I told you the expected average tax rate on withdrawals was 12%? How about if the expected average tax rate on withdrawals was 25%? Either can occur with a marginal tax rate of 25%. No, the answer will not change as long as the marginal rates don't change. I think most pe...
by rkhusky
Sat Feb 20, 2016 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

If marginal rates are all that matter, the answer to this scenario should be simple: Marginal tax rate on contributions is 15% (adding or subtracting $1 of Traditional contribution changes taxes by $0.15). Estimated marginal tax rate on withdrawals is 25% (adding or subtracting $1 of Traditional wi...
by rkhusky
Sat Feb 20, 2016 1:59 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

If marginal rates are all that matter, the answer to this scenario should be simple: Marginal tax rate on contributions is 15% (adding or subtracting $1 of Traditional contribution changes taxes by $0.15). Estimated marginal tax rate on withdrawals is 25% (adding or subtracting $1 of Traditional wit...
by rkhusky
Sat Feb 20, 2016 1:53 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

Polymath wrote:My guidance to to data has been yes, but did suggest they consider a percentage into Roth for diversification of retirement tax treatment savings.

Maxing Roth IRA's for both of them should give sufficient tax diversification.
by rkhusky
Sat Feb 20, 2016 12:54 pm
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

If you are far from retirement, you will have to re-make the decision every year, and there will be some years that the traditional or Roth is clearly better, so that will determine your retirement tax bracket. I don't see most people doing this every year. And I wouldn't recommend switching betwee...
by rkhusky
Sat Feb 20, 2016 10:02 am
Forum: Investing - Help with Personal Investments
Topic: Maxing Out- Traditional or Roth 401K
Replies: 79
Views: 5105

Re: Maxing Out- Traditional or Roth 401K

Note this assumption from the paper: For simplicity, I have assumed that 401(k) distributions will be the sole source of retirement income. In this case, directly comparing the marginal rate in the contribution phase vs. the effective rate in the withdrawal phase is the correct comparison. When ther...
by rkhusky
Fri Feb 19, 2016 10:35 am
Forum: Investing - Help with Personal Investments
Topic: tiny interest left in TIRA after Roth conv
Replies: 12
Views: 596

Re: tiny interest left in TIRA after Roth conv

jayhawk wrote:Whether converting or contributing to a Roth it's 5500 max unless you're over 50. So it is relevant.

You could convert $1M if you wanted to pay the taxes. However, the initial non-deductible contribution to the TIRA is limited to $5500 for the year.
by rkhusky
Tue Feb 16, 2016 1:37 pm
Forum: Personal Consumer Issues
Topic: Macbook Air - trouble with backup data?
Replies: 6
Views: 583

Re: Macbook Air - trouble with backup data?

Did you use a backup program? Or did you just copy the files over to the backup drive?
by rkhusky
Sat Feb 13, 2016 1:36 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking Help moving taxable VASGX to Roth TSP
Replies: 6
Views: 563

Re: Seeking Help moving taxable VASGX to Roth TSP

Just to reiterate, make sure you have enough being contributed with every paycheck, including the last one of the year, to at least get the matching funds. You actually want to withdraw from your taxable and contribute to your Roth when the market is lowest, so no, you do not want to wait for the ma...
by rkhusky
Fri Feb 12, 2016 11:20 pm
Forum: Investing - Help with Personal Investments
Topic: Shouldn't you have separate AA for Retirement/Non-Retirement?
Replies: 18
Views: 1412

Re: Shouldn't you have separate AA for Retirement/Non-Retirement?

Take a look at 529 account portfolios compared to retirement portfolios for the major companies like Vanguard. You will see that their AA's and glide paths are quite different.
by rkhusky
Wed Feb 10, 2016 7:55 pm
Forum: Investing - Help with Personal Investments
Topic: Confused doctor's portfolio
Replies: 18
Views: 3340

Re: Confused doctor's portfolio

Minor quibble, but all your bonds are in muni's, whereas I like a bit more diversity by adding something like Total Bond in tax advantaged. What does a total bond index add? Corporate bonds, US Treasury bonds, US Government-backed mortgage bonds, which are quite different than the holdings of the I...
by rkhusky
Wed Feb 10, 2016 4:45 pm
Forum: Investing - Help with Personal Investments
Topic: Help with TSP + 401k allocations/Overlap
Replies: 10
Views: 364

Re: Help with TSP + 401k allocations/Overlap

Yes, 5% on both - 10% total I change my answer then. You definitely want to get the match on both. You could stick with your 2040 in TSP and add S&P 500 in 401K as mentioned above. Eventually you may want to move to 2030 if your 401K balance becomes more substantial. You want less international...
by rkhusky
Wed Feb 10, 2016 4:29 pm
Forum: Investing - Help with Personal Investments
Topic: Help with TSP + 401k allocations/Overlap
Replies: 10
Views: 364

Re: Help with TSP + 401k allocations/Overlap

Are you limited to a combined $18K for the two accounts? If so, and you don't have the emerging/small int'l funds to fill that hole in the TSP, you might as well put everything in the TSP. Is everything else the same between the two - matching rate and tax implications? edit: do you get a match on T...
by rkhusky
Wed Feb 10, 2016 4:20 pm
Forum: Investing - Help with Personal Investments
Topic: Help with TSP + 401k allocations/Overlap
Replies: 10
Views: 364

Re: Help with TSP + 401k allocations/Overlap

What is the relative size of the two accounts?

Is there an emerging markets or small cap international fund in your 401K? (these are missing from TSP)

C & S cover the entire US Market (except perhaps for micro caps).

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