Search found 1630 matches

by mcraepat9
Fri Mar 12, 2021 11:23 am
Forum: Personal Finance (Not Investing)
Topic: Renting for life - a bad idea?
Replies: 156
Views: 11690

Re: Renting for life - a bad idea?

We lived in a house we owned for 21 years in an affluent suburb. When we sold and moved out, we analyzed the economics. We sold the house for much more than we paid for it. When we calculated the rate of return it was 3.1% per year. The SP500 in the same period returned about 10% per year. Clearly ...
by mcraepat9
Sun Jan 24, 2021 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Any Other Bogleheads in Private Practice?
Replies: 13
Views: 1966

Re: Any Other Bogleheads in Private Practice?

Greetings all! I’m curious if there are other Bogleheads out there who are self-employed in any type of private practice. I find there are particular financial / tax planning / optimization strategies to be considered that are particular to this structure. Anyone else in the same boat? What kind of...
by mcraepat9
Thu Jan 14, 2021 5:33 pm
Forum: Personal Finance (Not Investing)
Topic: SEP/SIMPLE for solo 401(k) sponsors after hiring employees
Replies: 9
Views: 515

Re: SEP/SIMPLE for solo 401(k) sponsors after hiring employees

My read of the Form 5305-SEP seems to confirm that a SEP IRA adopted Jan 1, 2022 should not have any eligible employees other than my wife if they only worked for her in 2020 and 2021. [___ ] makes the following agreement under section 408(k) of the Internal Revenue Code and the instructions to this...
by mcraepat9
Thu Jan 14, 2021 12:35 am
Forum: Personal Finance (Not Investing)
Topic: SEP/SIMPLE for solo 401(k) sponsors after hiring employees
Replies: 9
Views: 515

Re: SEP/SIMPLE for solo 401(k) sponsors after hiring employees

If she wants to keep the backdoor Roth open, she needs to keep the 401k. The SEP and 401k both offer the maximum deferred amounts, but the SEP has that must match requirement, so it's only a temporary solution if you don't want to give the employees a 25% raise. Thanks - what about the "3 in 5...
by mcraepat9
Wed Jan 13, 2021 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: SEP/SIMPLE for solo 401(k) sponsors after hiring employees
Replies: 9
Views: 515

Re: SEP/SIMPLE for solo 401(k) sponsors after hiring employees

If she wants to keep the backdoor Roth open, she needs to keep the 401k. The SEP and 401k both offer the maximum deferred amounts, but the SEP has that must match requirement, so it's only a temporary solution if you don't want to give the employees a 25% raise. Thanks - what about the "3 in 5...
by mcraepat9
Tue Jan 12, 2021 2:56 pm
Forum: Personal Finance (Not Investing)
Topic: SEP/SIMPLE for solo 401(k) sponsors after hiring employees
Replies: 9
Views: 515

Re: SEP/SIMPLE for solo 401(k) sponsors after hiring employees

If she wants to keep the backdoor Roth open, she needs to keep the 401k. The SEP and 401k both offer the maximum deferred amounts, but the SEP has that must match requirement, so it's only a temporary solution if you don't want to give the employees a 25% raise. Thanks - what about the "3 in 5...
by mcraepat9
Sat Jan 09, 2021 7:01 pm
Forum: Personal Finance (Not Investing)
Topic: SEP/SIMPLE for solo 401(k) sponsors after hiring employees
Replies: 9
Views: 515

SEP/SIMPLE for solo 401(k) sponsors after hiring employees

My wife has a solo 401(k) with a third party administrator for her small business. It has them maximum employee restrictions possible (Age 21+, >1 yr, 1000+ hrs) and the earliest entry into the plan (written into the plan document) after achieving the 1000 hours in a year requirement is "6 mont...
by mcraepat9
Thu Jan 07, 2021 4:56 pm
Forum: Personal Investments
Topic: Pivot to Roth 401k pivot for future contributions?
Replies: 12
Views: 549

Re: Pivot to Roth 401k pivot for future contributions?

wouldn't it make more sense to stay in pre-tax and invest the tax savings in a backdoor Roth IRA instead? Or is there a reason you can't do a backdoor Roth IRA?
by mcraepat9
Sun Jan 03, 2021 7:04 pm
Forum: Investing - Theory, News & General
Topic: 401k rebalance: for Foreign, choose a lower ER (0.08% v.s. 0.73%) or a higher return?
Replies: 13
Views: 574

Re: 401k rebalance: for Foreign, choose a lower ER (0.08% v.s. 0.73%) or a higher return?

What are the two funds? Are they both index funds covering the same asset class?

Seems like the choice is between lower ER and higher returns last year, right?
by mcraepat9
Sun Jan 03, 2021 5:50 pm
Forum: Personal Investments
Topic: Why max 401k before 529?
Replies: 181
Views: 10707

Re: Why max 401k before 529?

I read a lot of the 529 threads, and I keep seeing "only do a 529 if you maxed out your 401k and Roth first", but I don't get it. If I max out my 401k and have nothing left over to put in a 529, how does that help? When college comes around (2 kids), I will need roughly 8 x $30,000, and i...
by mcraepat9
Sun Jan 03, 2021 5:49 pm
Forum: Personal Finance (Not Investing)
Topic: Solo 401k - Profit Sharing or Voluntary After-tax (2 for 1)
Replies: 2
Views: 215

Solo 401k - Profit Sharing or Voluntary After-tax (2 for 1)

My spouse is self-employed with a Solo 401k that has mega backdoor Roth capabilities. The business's net profit in 2020 was around $40,000 - this is within the range where a business owner is faced with a choice of $1 of employER profit sharing (pre-tax) contributions or $2 of voluntary after-tax, n...
by mcraepat9
Sat Oct 24, 2020 4:36 pm
Forum: Personal Investments
Topic: Young 20s Savings & Retirement Help
Replies: 9
Views: 980

Re: Young 20s Savings & Retirement Help

Looks like you are overlooking a backdoor Roth IRA, which seems like a no-brainer for you. I would use that after your 401k is maxed before you go to a taxable brokerage account.
by mcraepat9
Sat Oct 24, 2020 4:31 pm
Forum: Personal Investments
Topic: Recently left job - have $100K sitting in Traditional 401(k)
Replies: 15
Views: 1179

Re: Recently left job - have $100K sitting in Traditional 401(k)

You need a pretty compelling case to convince me that converting traditional to Roth makes sense at 37% fed rate. If you have a huge pension coming to you, or you already know you will be in the highest ordinary income tax bracket for life, that would be compelling. Otherwise this sounds like a move...
by mcraepat9
Tue Oct 20, 2020 10:31 pm
Forum: Personal Investments
Topic: Solo 401k - Employing Spouse
Replies: 3
Views: 433

Re: Solo 401k - Employing Spouse

Incredibly helpful, Spirit Rider. I am always impressed with the depth of your expertise in this area. Questions If it is a one-participant 401k from E-Trade, Fidelity, Schwab, or TD Ameritrade she would have had to elect the necessary employee eligibility restrictions in the adoption agreement. If ...
by mcraepat9
Sun Oct 18, 2020 7:25 pm
Forum: Personal Investments
Topic: Solo 401k - Employing Spouse
Replies: 3
Views: 433

Solo 401k - Employing Spouse

I have read through the litany of solo 401k, spouse employee, QJV posts, but can't seem to wrap my head around the implications. Situation : 1. My wife has a single member LLC (taxed as a disregard) business with self-employment income. She quit her full time job in August 2020. The expectation is t...
by mcraepat9
Fri Oct 09, 2020 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: Hidden costs of 529 and a way to overcome that
Replies: 26
Views: 2064

Re: Hidden costs of 529 and a way to overcome that

KlangFool wrote: Fri Oct 09, 2020 8:34 am FYI. 529 cost is not hidden. It is an after-tax contribution. Folks pay 20+% to 30+% taxes in order to contribute to the 529.
+1
by mcraepat9
Thu Oct 01, 2020 5:33 pm
Forum: Personal Investments
Topic: Maximizing "side" solo 401k contribution (W2 high income earner)
Replies: 49
Views: 2740

Re: Maximizing "side" solo 401k contribution (W2 high income earner)

This post is to explore the template for stashing away as much as possible in 401k (traditional/Roth) to the tune of 2 x 57,000 - (i) first 57,000 using W2 (Mega Backdoor Roth) and (ii) second 57,000 (or as much as possible) using solo 401k. Ignoring any catch-up contributions, individuals cannot c...
by mcraepat9
Thu Oct 01, 2020 4:27 pm
Forum: Personal Investments
Topic: Maximizing "side" solo 401k contribution (W2 high income earner)
Replies: 49
Views: 2740

Re: Maximizing "side" solo 401k contribution (W2 high income earner)

This post is to explore the template for stashing away as much as possible in 401k (traditional/Roth) to the tune of 2 x 57,000 - (i) first 57,000 using W2 (Mega Backdoor Roth) and (ii) second 57,000 (or as much as possible) using solo 401k. Ignoring any catch-up contributions, individuals cannot c...
by mcraepat9
Tue Sep 29, 2020 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: 401K Overpayment - Ex Employer Asking for Money Back
Replies: 173
Views: 12559

Re: 401K Overpayment - Ex Employer Asking for Money Back

Ok well you scared me enough to at least be a bit more proactive about this. I'm going to send this letter. What do you guys think? To Whom It May Concern: This letter is in reference to a recent notice I received regarding a supposed overpayment from my former 401K with XX. This letter confirms th...
by mcraepat9
Tue Sep 29, 2020 1:32 pm
Forum: Personal Investments
Topic: Contribute to HSA and invest - but with high fees?
Replies: 13
Views: 656

Re: Contribute to HSA and invest - but with high fees?

Hi everyone, My company’s HSA has an option to invest HSA dollars into low-cost Vanguard index funds. The current balance in the account is $2,200 and I am considering maxing it out beginning next year. I am already maxing out my traditional 401(k). The caveat is the HSA charges $2.9 a month ($34.8...
by mcraepat9
Mon Sep 28, 2020 3:46 pm
Forum: Personal Investments
Topic: New investor looking for Fidelity index fund retirement portfolio feedback
Replies: 15
Views: 1224

Re: New investor looking for Fidelity index fund retirement portfolio feedback

Thank you all for your suggestions. Figuring my tendency to be a little indecisive (which is why Betterment was a great jumping off point for me) combined with a desire to save money on high ERs and fees, I am going to go with the FIPFX (2050 target date index fund) and ride it out. Really apprecia...
by mcraepat9
Mon Sep 28, 2020 11:05 am
Forum: Personal Finance (Not Investing)
Topic: 401K Overpayment - Ex Employer Asking for Money Back
Replies: 173
Views: 12559

Re: 401K Overpayment - Ex Employer Asking for Money Back

Just got a letter from my ex-employer (that I left in 2015) about a $6400 overpayment from my 401K plan. The letter claims the portion was not vested and was distributed on error. This distribution happened in 2018, when I rolled over the funds from the 401K into a Traditional IRA account. They cla...
by mcraepat9
Sun Sep 27, 2020 9:43 pm
Forum: Personal Finance (Not Investing)
Topic: Friend on the verge of financial ruin, how to help?
Replies: 137
Views: 15898

Re: Friend on the verge of financial ruin, how to help?

I think these situations are very tough for Bogleheads in particular because BHs tend to be compulsive savers/planners so falling into a situation like this would be a rare event. But I think you have to let this woman come to you for help and then you can impart whatever wisdom (and support) you ca...
by mcraepat9
Sun Sep 27, 2020 8:59 pm
Forum: Personal Investments
Topic: New investor looking for Fidelity index fund retirement portfolio feedback
Replies: 15
Views: 1224

Re: New investor looking for Fidelity index fund retirement portfolio feedback

Too much overlap and complexity that adds little to the plan - i would suggest replacing SP500, extended market, midcap index and small cap index with Fidelity Total Market Index Fund (FSKAX). I also woudl suggest ditching EM, as that is included in FTIHX. Sustainable indexes is really a personal de...
by mcraepat9
Sat Sep 26, 2020 1:37 pm
Forum: Personal Investments
Topic: Rebalancing a TIAA 403b to the 3 funds - is this right?
Replies: 3
Views: 425

Re: Rebalancing a TIAA 403b to the 3 funds - is this right?

Hello, Hoping to receive some guidance on rebalancing a 403b plan into a 3 fund portfolio. It is held within the TIAA deferred annuity plan. I read this very helpful Boglehead page: https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style but, admittedly, there is...
by mcraepat9
Fri Sep 25, 2020 12:56 pm
Forum: Investing - Theory, News & General
Topic: Help my try to rationalize why I should ignore Nasdaq
Replies: 40
Views: 2708

Re: Help my try to rationalize why I should ignore Nasdaq

Past performance is not indicative of future results.
by mcraepat9
Thu Sep 24, 2020 10:23 am
Forum: Personal Investments
Topic: VTWAX [Roth IRA - Three-funds to Two-funds]
Replies: 10
Views: 1074

Re: VTWAX

One of my coworkers wants to change his Roth IRA portfolio from a 3 funds portfolio. VTSAX,VTIAX, VBTLX . 70/20/10 to a 2 funds portfolio VTWAX & VBTLX 90/10. His desision comes up after he listened to Tom Cock & Don McDonald's podcast where they recommend to their listeners this two fund. ...
by mcraepat9
Wed Sep 23, 2020 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Wage Tax - New York City and Philadelphia
Replies: 4
Views: 789

Re: Wage Tax - New York City and Philadelphia

Hi friends, My married son lives in New York City. He works from home (convenience, not a requirement) for a Philadelphia company who withholds New York State income tax and of course Federal Tax for him. I see no withholding for either New York City wage tax or Philadelphia wage tax on his pay stu...
by mcraepat9
Wed Sep 23, 2020 9:59 am
Forum: Personal Investments
Topic: TLH question
Replies: 22
Views: 1369

Re: TLH question

Have you considered just using VLCAX as a TLH partner rather than VFIAX or another S&P 500 fund?
by mcraepat9
Thu Sep 17, 2020 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: Reimbursing old medical bills under a "new" HSA
Replies: 21
Views: 2065

Re: Reimbursing old medical bills under a "new" HSA

Does anyone know how to substantiate/document when an old/closed HSA was "opened"? All amounts in there were rolled over to my Fidelity HSA.
by mcraepat9
Thu Sep 17, 2020 4:40 pm
Forum: Personal Investments
Topic: Employee Fiduciary Solo 401(k) with MegaBackdoor Roth and TPA - Discussion
Replies: 141
Views: 9064

Re: Employee Fiduciary Solo 401(k) with MegaBackdoor Roth and TPA - Discussion

Just a quick question about mechanics of actually making the contribution if anyone has any input. So for my regular 401 employee deferral - my 401k contribution is taken from my business account and sent to 401k provider. How does it work for after tax contribution - does it come from my personal ...
by mcraepat9
Thu Sep 17, 2020 11:51 am
Forum: Investing - Theory, News & General
Topic: Comparing Fidelity and Vanguard fee
Replies: 3
Views: 418

Re: Comparing Fidelity and Vanguard fee

HI fellow BH, I like to setup a 3 fund portfolio for my investment. It seems that Vanguard expense are slightly higher than Fidelity. For example, for Total stock market FXAIX is 0.02 vs VTSAX 0.04 Total international market FTIHX is 0.06 vs VTIAX 0.11 Total bond FXNAX is 0.03 vs VBTLX is 0.05 I un...
by mcraepat9
Wed Sep 16, 2020 11:46 pm
Forum: Personal Investments
Topic: 2020 Traditional IRA Contribution and Deductibility
Replies: 3
Views: 261

Re: 2020 Traditional IRA Contribution and Deductibility

Traditional 401k contributions reduce your AGI and your MAGI. So yes you can use traditional 401k contributions to drop your MAGI in a way that gives you deductibility of traditional IRA contributions. This link may help you understand how AGI becomes MAGI: https://www.irs.gov/publications/p590a#en_...
by mcraepat9
Wed Sep 16, 2020 3:37 pm
Forum: Personal Investments
Topic: Prepay student loans OR megabackdoor Roth? (26 y/o in Biglaw; 190k salary; 180k debt)
Replies: 82
Views: 5377

Re: Prepay student loans OR megabackdoor Roth? (26 y/o in Biglaw; 190k salary; 180k debt)

Does the above at all affect your advice? If it doesn't affect your advice, then is that because you think it's unlikely that I'll be to fully psychologically equate the Roth IRA amounts with paying off my debt [if so, I think that that's a fair point] or is it instead for some other reason? I’m pr...
by mcraepat9
Wed Sep 16, 2020 10:17 am
Forum: Personal Investments
Topic: Prepay student loans OR megabackdoor Roth? (26 y/o in Biglaw; 190k salary; 180k debt)
Replies: 82
Views: 5377

Re: Prepay student loans OR megabackdoor Roth? (26 y/o in Biglaw; 190k salary; 180k debt)

I haven't read thru this whole thread, so take this with a grain of salt.....but as a former big law attorney myself, my advice: Pay off the debt as fast as you can. Look, you might end up ahead by investing. In fact, you probably will. But if the firm hits a rough patch (and I've been at firms tha...
by mcraepat9
Mon Sep 14, 2020 3:24 pm
Forum: Personal Investments
Topic: Simplifying Investing
Replies: 13
Views: 954

Re: Simplifying Investing

Target date fund seems like an obvious choice. With a taxable account, I still would suggest the three fund portfolio. I think it's best to create wide rebalancing bands that can let you just check on it once a year and only rebalance when new money comes in or if you are beyond the bands. I don't r...
by mcraepat9
Mon Sep 14, 2020 1:39 pm
Forum: Personal Investments
Topic: Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA
Replies: 11
Views: 909

Re: Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA

One thing to note, which is what I do. I put contributions that are going into After-Tax > Roth into my taxable brokerage account with Fidelity and allow that cash to settle. I then call Fidelity and ensure they move it from Taxable to NP After-Tax and then from NP After-Tax to Roth in the same day...
by mcraepat9
Mon Sep 14, 2020 11:03 am
Forum: Personal Investments
Topic: Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA
Replies: 11
Views: 909

Re: Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA

Spirit Rider, thank you so much for your feedback. I know you are one of the most cautious on this subject, and your response is inspiring a lot of confidence that I am able to do this well. I do hope people who are detail-oriented and conscientious can, if they want to, follow this roadmap to acces...
by mcraepat9
Sun Sep 13, 2020 11:21 pm
Forum: Personal Investments
Topic: Maximum amount to put into retirement account per year
Replies: 10
Views: 1082

Re: Maximum amount to put into retirement account per year

Probably traditional 401k, but really depends on your fed/state marginal tax rates.

Once you max all of your 401k, IRA and HSA, you are pretty much out of options for tax advantaged retirement unless you are self employed and want to consider a DB plan.
by mcraepat9
Sun Sep 13, 2020 8:30 pm
Forum: Personal Consumer Issues
Topic: Books or Courses on leadership that helped your career
Replies: 51
Views: 2754

Re: Books or Courses on leadership that helped your career

What Got You Here Won't Get You There, Marshall Goldsmith
by mcraepat9
Sun Sep 13, 2020 8:00 pm
Forum: Personal Investments
Topic: Roth Ira and ROth Solo 401k
Replies: 18
Views: 1053

Re: Roth Ira and ROth Solo 401k

Some simple definitions: 1. IRA stands for individual retirement account. An individual owns and controls this account. 2. 401K accounts are set up and controlled by a company . Any work you do for which you are paid a W-2 is money that does not qualify for a Solo 401K. A Solo 401K has higher costs...
by mcraepat9
Sun Sep 13, 2020 5:10 pm
Forum: Investing - Theory, News & General
Topic: Is Vanguard mutual to etf conversion considered a "buy/sell" event for tlh?
Replies: 4
Views: 348

Re: Is Vanguard mutual to etf conversion considered a "buy/sell" event for tlh?

No it’s not a taxable event if it’s a conversion of a vanguard MF to vanguard ETF of the same fund done via Vanguards methods.
by mcraepat9
Sun Sep 13, 2020 3:51 pm
Forum: Personal Investments
Topic: Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA
Replies: 11
Views: 909

Roadmap for Mega Backdoor Roth-Enabled Solo 401(k) Without TPA

After reading through countless posts on Bogleheads and TFB for weeks, I think I am ready to execute on the below plan for a non-prototype solo 401(k) that has the capability of making voluntary employee after-tax contributions with in-service distributions to a Roth IRA (i.e. the mega backdoor Roth...
by mcraepat9
Sat Sep 12, 2020 1:26 pm
Forum: Personal Finance (Not Investing)
Topic: Tax deductions for (temporarily?) discontinued sole proprietorship activity
Replies: 10
Views: 575

Re: Tax deductions for (temporarily?) discontinued sole proprietorship

1. What expenses are you looking to deduct against other income? Health insurance + LTCI? You could only do that against your self-employment net profit. 2. Does your new W-2 job have access to employer subsidized health insurance? You can't use the self-employed health insurance deduction for any m...