Search found 1175 matches

by teen persuasion
Tue Aug 04, 2020 8:02 am
Forum: Personal Finance (Not Investing)
Topic: Idea to reduce EFC, what am I missing?
Replies: 4
Views: 218

Re: Idea to reduce EFC, what am I missing?

Have you looked at the detailed FAFSA EFC calculations? https://ifap.ed.gov/sites/default/files/attachments/2019-10/2021EFCFormulaGuideOct2019UpdateAttach.pdf That is the booklet for the previous year's FAFSA; I haven't seen the upcoming one released yet, but the process should remain similar, just ...
by teen persuasion
Mon Aug 03, 2020 9:16 pm
Forum: Personal Investments
Topic: Need advice on reducing EFC
Replies: 16
Views: 840

Re: Need advice on reducing EFC

Consider timing when you plan on filing the FAFSA. We're considering filing next in January, 2021 ** AFTER ** making 2021 ROTH IRA contributions and paying first half of 2021 property taxes. This may reduce our assets and our EFC by $ 800+. Unknown where DS will attend college at this point ... but...
by teen persuasion
Mon Aug 03, 2020 9:47 am
Forum: Personal Investments
Topic: Need advice on reducing EFC
Replies: 16
Views: 840

Re: Need advice on reducing EFC

You can walk thru the actual FAFSA calculations in this booklet https://ifap.ed.gov/sites/default/files/attachments/2019-10/2021EFCFormulaGuideOct2019UpdateAttach.pdf . Start on page 9. You will quickly see that your level of income affects the EFC, while assets (including the 529) are limited to 12...
by teen persuasion
Wed Jul 29, 2020 12:06 pm
Forum: Personal Investments
Topic: Contribution Allocation between Pre-tax and Roth 12% bracket
Replies: 41
Views: 1667

Re: Contribution Allocation between Pre-tax and Roth 12% bracket

NY There are a lot of location specific tax rules. Some states don't recognize HSA accounts (so you are taxed on their growth, which might lead you to invest differently), some tax 401k contributions on the way in, but not out (contributions only, I think), some have 529 tax credits or deductions, s...
by teen persuasion
Wed Jul 29, 2020 7:59 am
Forum: Personal Investments
Topic: Contribution Allocation between Pre-tax and Roth 12% bracket
Replies: 41
Views: 1667

Re: Contribution Allocation between Pre-tax and Roth 12% bracket

Looking at GF's numbers again, maybe she should increase her 403b to 22% traditional, so she qualifies for 10% RSC, too. Of course, that extra $4100 would have to come from somewhere...
by teen persuasion
Wed Jul 29, 2020 7:23 am
Forum: Personal Investments
Topic: Contribution Allocation between Pre-tax and Roth 12% bracket
Replies: 41
Views: 1667

Re: Contribution Allocation between Pre-tax and Roth 12% bracket

Your AGI will be reduced (from gross income) by your HSA contributions ($2600 in your post) and by any health insurance contributions thru payroll. So you will only need a few $k to trad 401k before you reach the 10% RSC level. Give yourself a bit of extra room, to compensate if your income is varia...
by teen persuasion
Tue Jul 28, 2020 2:17 pm
Forum: Personal Investments
Topic: Contribution Allocation between Pre-tax and Roth 12% bracket
Replies: 41
Views: 1667

Re: Contribution Allocation between Pre-tax and Roth 12% bracket

The way I understand this (and I have not done it before), it may be good enough to just get into the 10% tier. If you save $26k a year, 10% of that is $2,600. And 20% of that is $5,200. Well, the limit they will give you is $2,000. ...so there is no need to even get into the 20% tier. And you don'...
by teen persuasion
Mon Jul 27, 2020 12:15 pm
Forum: Personal Investments
Topic: 23 Year Old / First Job / Trying to get finances in order
Replies: 23
Views: 1463

Re: 23 Year Old / First Job / Trying to get finances in order

I'm wondering about dividends though. How do taxes work for dividends that were reinvested? Thanks. Dividends (re-invested or not) are taxed as ordinary income along with salary/wages, interest, etc. Unless they are qualified dividends (many index fund dividends are), in which case they are taxed v...
by teen persuasion
Mon Jul 27, 2020 10:29 am
Forum: Personal Investments
Topic: 23 Year Old / First Job / Trying to get finances in order
Replies: 23
Views: 1463

Re: 23 Year Old / First Job / Trying to get finances in order

Welcome to Bogleheads! I love Ramit Sethi's book, especially for young people just starting out. It's been a few years since I read it, so I popped over to his blog to refresh my memory, since your direction seems a little out of sync with what I remembered of his book (especially the complexity you...
by teen persuasion
Sat Jul 25, 2020 3:54 pm
Forum: Personal Investments
Topic: Young investor- index funds, Roth IRA advice?
Replies: 9
Views: 487

Re: Young investor- index funds, Roth IRA advice?

Hi, I am looking to become a first-time investor and am feeling lost on many different aspects so any help would be greatly appreciated!! My financial situation: I currently am employed at a low-salary company and am pretty young so now is the time to start investing. I pretty much save all of my p...
by teen persuasion
Wed Jul 22, 2020 8:12 am
Forum: Investing - Theory, News & General
Topic: Article claiming 401k no longer "makes sense"
Replies: 65
Views: 6673

Re: Article claiming 401k no longer "makes sense"

Something like 40% of American families do not pay any income tax. Those families should contribute to Roth IRAs if they have compensation and their employer does not provide an employer contribution to their 401(k) or 403(b) (if there is such a plan to begin with). Generally, low income workers ca...
by teen persuasion
Wed Jul 22, 2020 7:39 am
Forum: Investing - Theory, News & General
Topic: Article claiming 401k no longer "makes sense"
Replies: 65
Views: 6673

Re: Article claiming 401k no longer "makes sense"

This author has obviously never done the real math or taxes for a lower income family of 4. EITC is huge, it's got a 21% phaseout rate by itself (plus my state matches at 30%, for another 6.3% phaseout, thus minimum marginal rate = 27.3%) on top of any direct tax avoidance via 401k contributions. Ke...
by teen persuasion
Tue Jul 21, 2020 3:05 pm
Forum: Investing - Theory, News & General
Topic: Dark side of Pretax 401Ks and IRAs
Replies: 90
Views: 8355

Re: Dark side of Pretax 401Ks and IRAs

That's part of what we did. But our tax rate in early (age 62) retirement was already 22% without doing any Roth conversions. We would have been done converting by the time we reached age 70, but received an Inherited IRA along the way. RMDs from that were required and used up some of the tax space...
by teen persuasion
Mon Jul 20, 2020 11:07 am
Forum: Personal Investments
Topic: Tax rate and Roth/Traditional IRA
Replies: 10
Views: 470

Re: Tax rate and Roth/Traditional IRA

A friend of mine had a question and I couldn't really help him with confidence He and his wife are expecting twins. they are currently in the 22% tax rate and just started maxing out their work 401k and are looking to open up a roth or a traditional. combined they make about 100k. they assume this ...
by teen persuasion
Sun Jul 19, 2020 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: EITC and investment income
Replies: 8
Views: 480

Re: EITC and investment income

Yep, 9.75%. Paying it down was an easy choice, and with that rate it goes down quickly (because most of the payment is interest instead of principal).
by teen persuasion
Sun Jul 19, 2020 10:13 am
Forum: Personal Finance (Not Investing)
Topic: EITC and investment income
Replies: 8
Views: 480

Re: EITC and investment income

Those are both good questions. FiveK beat me to the punch with a much more informed response than I could have produced. I learned a lot from the response. I ranted about the EITC a few years back in this blog post: https://www.frugalprofessor.com/etic-guest-post-on-gocurrycracker/. The EITC defini...
by teen persuasion
Sat Jul 18, 2020 9:30 am
Forum: Investing - Theory, News & General
Topic: A careful look at the Roth
Replies: 14
Views: 1614

Re: A careful look at the Roth

Just read the second link to Financial Samurai. Oh boy, clickbait and hyperbole! More errors of omission and outright nonsense. One bit of praise - he is narrowly looking at just whether to do Roth IRA (no mention of Roth 401k), and a few times clarifies that he's in favor of maxing your 401k first...
by teen persuasion
Sat Jul 18, 2020 9:13 am
Forum: Investing - Theory, News & General
Topic: A careful look at the Roth
Replies: 14
Views: 1614

Re: A careful look at the Roth

Read the third link, about mistakes to avoid specifically with Roth IRAs. It looks very thorough.
by teen persuasion
Sat Jul 18, 2020 8:46 am
Forum: Investing - Theory, News & General
Topic: A careful look at the Roth
Replies: 14
Views: 1614

Re: A careful look at the Roth

Just read the second link to Financial Samurai. Oh boy, clickbait and hyperbole! More errors of omission and outright nonsense. One bit of praise - he is narrowly looking at just whether to do Roth IRA (no mention of Roth 401k), and a few times clarifies that he's in favor of maxing your 401k first....
by teen persuasion
Sat Jul 18, 2020 7:52 am
Forum: Investing - Theory, News & General
Topic: A careful look at the Roth
Replies: 14
Views: 1614

Re: A careful look at the Roth

Here are a couple of articles on the Roth. One thing I will mention is IF you stay in the same tax-bracket while adding to the Roth and withdrawing from the Roth--without asset changes--you would end up with the same amount of money as you would when using an IRA in the same way. The IRA uses preta...
by teen persuasion
Fri Jul 17, 2020 8:01 am
Forum: Personal Finance (Not Investing)
Topic: FAFSA question (It's FAFSA season again!)
Replies: 47
Views: 2982

Re: FAFSA question (It's FAFSA season again!)

Interesting thread. Especially being that DD will be starting her Freshman year at a state college next month. I too believe that FAFSA was a total waste of time as she received zero aid. DW & I make too much money and we have large assets (i know rough position to be in :mrgreen: ) We basically ge...
by teen persuasion
Tue Jul 14, 2020 8:40 am
Forum: Personal Finance (Not Investing)
Topic: FICO Score: Moves back and forth every couple of months
Replies: 34
Views: 2060

Re: FICO Score: Moves back and forth every couple of months

Mine does the same thing. I suspect for you it may be the credit utilization percentage. Try paying your balance every two weeks and see what happens. Yep. I run a lot of business expense through my personal card, sometimes it can get quite high and as a result my utilization is very high. If I don...
by teen persuasion
Mon Jul 13, 2020 9:19 am
Forum: Investing - Theory, News & General
Topic: Are Roth IRAs “Pay taxes once and never again” really best?”
Replies: 131
Views: 10824

Re: Are Roth IRAs “Pay taxes once and never again” really best?”

I strongly prefer traditional for a fairly simple reason. If I retire and end up in a high tax bracket, it will mean that I have a lot of money and did well. I'm fine, even if I'm paying a bit more than I would have had I chosen the Roth option. If I retire with little, I will wish I had chosen tra...
by teen persuasion
Sat Jul 11, 2020 1:50 pm
Forum: Investing - Theory, News & General
Topic: Are Roth IRAs “Pay taxes once and never again” really best?”
Replies: 131
Views: 10824

Re: Are Roth IRAs “Pay taxes once and never again” really best?”

I think there is a lot of confusion on the topic because of the Backdoor IRA "loophole". Somebody hears about it from a friend or reads a blog post about how great it is, which it is, but they don't understand the logic on how it gets to that position of being a great thing to use. For most high ea...
by teen persuasion
Sat Jul 11, 2020 8:43 am
Forum: Investing - Theory, News & General
Topic: Are Roth IRAs “Pay taxes once and never again” really best?”
Replies: 131
Views: 10824

Re: Are Roth IRAs “Pay taxes once and never again” really best?”

I think Klang Fool touches upon a good concept. We have had all kinds of accounts over the years: a SEP-IRA when I was a sole proprietor, traditional IRAs both deductible and non-deductible (in years when we made over the income limits), Roths, and Roth conversions in a "down" year for me, income-w...
by teen persuasion
Fri Jul 10, 2020 9:47 pm
Forum: Investing - Theory, News & General
Topic: A portfolio is like a birthday cake:
Replies: 30
Views: 2844

Re: A portfolio is like a birthday cake:

My mom (with a culinary degree) once told me a basic boxed cake mix yields a superior result than most from-scratch recipes. No need to reinvent the wheel. Seems to fit well with investing in basic total stock/bond index funds at Vanguard/Fidelity/Schwab for your cake layers. A home baked cake can b...
by teen persuasion
Fri Jul 10, 2020 8:22 am
Forum: Investing - Theory, News & General
Topic: Separate bucket AAs -and- account types to bridge the gap to 59.5?
Replies: 22
Views: 1270

Re: Separate bucket AAs -and- account types to bridge the gap to 59.5?

Sounds like a really good plan. But what happens if you want to retire at 50 and you only had five years worth of Roth contributions to covert as you say? Other than simply “not retire at 50“. Herein lies my question about a taxable being used much sooner (13-18 years) and thus would it / should it...
by teen persuasion
Thu Jul 09, 2020 7:46 am
Forum: Investing - Theory, News & General
Topic: Separate bucket AAs -and- account types to bridge the gap to 59.5?
Replies: 22
Views: 1270

Re: Separate bucket AAs -and- account types to bridge the gap to 59.5?

Sounds needlessly complicated to me. We plan to use a Roth conversion ladder to access tIRA balances pre-59.5. We have 5*minimal expenses in Roth contributions right now. Effectively, we need to cover only 4 years gap (late December 202x conversion, January 1 202x+5 withdrawals possible). Convert th...
by teen persuasion
Sun Jul 05, 2020 8:29 pm
Forum: Personal Finance (Not Investing)
Topic: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?
Replies: 28
Views: 3050

Re: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?

It comes out to being $2700. Its not bank breaking just alarming because our loan estimated stated 2 months. Not even a month later and the final disclosure is 2.5x what we were originally shown. Yikes, $900/month escrow. Our PITI was $900, and we had an ugly 9.75% mortgage. The OP said it covered ...
by teen persuasion
Sat Jul 04, 2020 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?
Replies: 28
Views: 3050

Re: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?

YesWeCan713 wrote:
Sat Jul 04, 2020 2:01 pm

It comes out to being $2700. Its not bank breaking just alarming because our loan estimated stated 2 months. Not even a month later and the final disclosure is 2.5x what we were originally shown.
Yikes, $900/month escrow. Our PITI was $900, and we had an ugly 9.75% mortgage.
by teen persuasion
Sat Jul 04, 2020 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?
Replies: 28
Views: 3050

Re: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?

Since property taxes are typically paid three months at a time, this does not seem unreasonable at all. You will find that there is a lot of latency and slop in the operations of mortgage servicers. It's actually good for you that they are certain to have the money on hand for THEM to fulfill YOUR ...
by teen persuasion
Sat Jul 04, 2020 10:11 am
Forum: Personal Finance (Not Investing)
Topic: Reassessing the frugal emergency fund
Replies: 17
Views: 2126

Re: Reassessing the frugal emergency fund

My concept of emergency fund has evolved over time, to tiers of EF. Initially it was extra cash held in checking/savings. Then we got an HSA. The HSA savings are to cover a medical emergency itself (the medical bills). But as regular medical bills arrive in non-emergency times, we pay them out of po...
by teen persuasion
Sat Jul 04, 2020 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Employer not paying unused PTO after termination
Replies: 22
Views: 3124

Re: Employer not paying unused PTO after termination

Company policy matters, and can change. Find a current policy manual. When DH was ready to quit, he investigated the payout policies for PTO, sick leave, etc. He had accrued quite a bit over a dozen years. PTO was paid out 100%, and sick leave 50%, IIRC. A few months later, he heard thru the grapevi...
by teen persuasion
Sat Jul 04, 2020 8:47 am
Forum: Personal Finance (Not Investing)
Topic: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?
Replies: 28
Views: 3050

Re: Lender is asking for 5 months of Property Taxes and Homeowner's Insurance. Is this normal?

Three extra months of escrow is STAGGERING? We paid off our mortgage years ago, but 3 months would have been about $1k for us, in NY. How high are your property taxes? I don't know if this varies by state rules, but there was a minimum balance that our escrow had to maintain monthly, can't recall ex...
by teen persuasion
Thu Jul 02, 2020 11:58 pm
Forum: Personal Investments
Topic: To ROTH, or not to ROTH?
Replies: 11
Views: 1342

Re: To ROTH, or not to ROTH?

OP, are you income eligible to make a direct Roth contribution? Or do you need to do a backdoor Roth contribution? How will your severance be paid out - in a lump sum this year, or partially over 2020-21? IOW, which year(s)'s AGI will it impact? If your future income might prevent you from making di...
by teen persuasion
Thu Jul 02, 2020 11:40 pm
Forum: Personal Investments
Topic: Funding Early Retirement With Roth 401k/Mega Backdoor
Replies: 13
Views: 1041

Re: Funding Early Retirement With Roth 401k/Mega Backdoor

Is this why the traditional is better for FIRE? Because not only is it more efficient, it's actually the only way to do what I want to do? Traditional is better for FIRE, because traditional gives you a tax break (at your highest rate, because it comes off the top) during employment (when your inco...
by teen persuasion
Thu Jul 02, 2020 11:37 am
Forum: Personal Finance (Not Investing)
Topic: COVID 19 changing the public vs. private school value equation?
Replies: 29
Views: 2809

Re: COVID 19 changing the public vs. private school value equation?

Anecdotal experiences this year- Our public district was all over the place. First of all, it was a quick drop into "school is closed" with zero warning. Initially teachers were told to prep 2 weeks of review (no new work) while longer-term plans were developed. We picked up packets of worksheets fo...
by teen persuasion
Thu Jul 02, 2020 7:32 am
Forum: Personal Investments
Topic: Funding Early Retirement With Roth 401k/Mega Backdoor
Replies: 13
Views: 1041

Re: Funding Early Retirement With Roth 401k/Mega Backdoor

The MMM forum has a whole thread devoted to how to access retirement accounts pre 59.5. https://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/ Our plan is to create a Roth conversion ladder to gain access before 59.5 w/o penalty...
by teen persuasion
Wed Jul 01, 2020 8:53 am
Forum: Personal Investments
Topic: How do I fund FIRE?
Replies: 18
Views: 2515

Re: How do I fund FIRE?

Have you tried running scenarios on I-ORP? I tried a few with the basics you provided, plus a minimal SS (since you said retire at 40). First using the home page inputs only, got $69k annual income (it's optimizing for level spendable income). Second went to extended tab, only changed to do Roth con...
by teen persuasion
Wed Jul 01, 2020 7:59 am
Forum: Personal Investments
Topic: How do I fund FIRE?
Replies: 18
Views: 2515

Re: How do I fund FIRE?

A discussion of this issue by Michael Kitces https://www.kitces.com/blog/tax-efficie ... g-needs/
by teen persuasion
Wed Jul 01, 2020 7:41 am
Forum: Personal Investments
Topic: How do I fund FIRE?
Replies: 18
Views: 2515

Re: How do I fund FIRE?

I think the answer is: 1. Withdraw from taxable to the top of the 0% LTCG bracket until exhausted or 59.5 2. If taxable is exhausted before 59.5, withdraw from Roth contributions until exhausted or 59.5 3a. If at 54.5 or earlier Roth contributions are expected to be exhausted before 59.5, Roth conv...
by teen persuasion
Wed Jul 01, 2020 6:34 am
Forum: Investing - Theory, News & General
Topic: Can unusued reimbursement requests from old HSA transfer to new HSA?
Replies: 10
Views: 683

Re: Can unusued reimbursement requests from old HSA transfer to new HSA?

It sounds like the issue revolves around the online portal thru the current HSA provider. That's a perk that doesn't exist for every HSA provider, so it probably won't carry over to a future (different) provider. You need to keep your own records.
by teen persuasion
Tue Jun 30, 2020 9:14 pm
Forum: Personal Consumer Issues
Topic: Elementary school in Fall - choose Virtual or In-person
Replies: 120
Views: 8270

Re: Elementary school in Fall - choose Virtual or In-person

We haven't been offered choices yet, but the CSD did an online survey to ask preferences, experiences. One issue that was discussed is transportation - how do you bus kids and maintain social distancing? There's no way our rural district can expect parents to transport, the infrastructure won't allo...
by teen persuasion
Mon Jun 29, 2020 8:50 pm
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 287
Views: 12675

Re: Asymmetric risk in the Roth vs Traditional question

3. Roth assets amplify risk (whether measured as after-tax asset volatility, after-tax max drawdown, or risk of an asset shortfall) and would require a somewhat more conservative allocation to hold risk constant vs trad assets to hold risk constant. Isn't this just a consequence of a Roth dollar be...
by teen persuasion
Mon Jun 29, 2020 11:57 am
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 287
Views: 12675

Re: Asymmetric risk in the Roth vs Traditional question

Is there not a viable argument that the Roth reliably reduces risks in virtually every case where contributors/converters are married with children, such that the marginal tax rate forecast becomes the most unreliable aspect of the prediction? In contrast to predicting future marginal tax rates (wh...
by teen persuasion
Mon Jun 29, 2020 10:43 am
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 287
Views: 12675

Re: Asymmetric risk in the Roth vs Traditional question

Is there not a viable argument that the Roth reliably reduces risks in virtually every case where contributors/converters are married with children, such that the marginal tax rate forecast becomes the most unreliable aspect of the prediction? In contrast to predicting future marginal tax rates (wh...
by teen persuasion
Mon Jun 22, 2020 8:37 am
Forum: Personal Finance (Not Investing)
Topic: Reduce 401k for College Savings or tap Taxable?
Replies: 7
Views: 575

Re: Reduce 401k for College Savings or tap Taxable?

Are you also funding a Roth IRA for your spouse? You could shift money from her taxable into Roth every year, too.
by teen persuasion
Sat Jun 20, 2020 10:34 am
Forum: Personal Finance (Not Investing)
Topic: Learning how to do your own taxes?
Replies: 48
Views: 2664

Re: Learning how to do your own taxes?

Another vote here for using IRS forms, paper or electronic, to learn the process. I do use TurboTax (after a first run on paper), for the efiling, but I find the Q & A format slow (because the software has to go thru and ask you about everything possible) and sometimes confusing (not quite sure abou...
by teen persuasion
Tue Jun 16, 2020 8:28 am
Forum: Investing - Theory, News & General
Topic: Frequency of Withdrawals in Retirement
Replies: 50
Views: 4057

Re: Frequency of Withdrawals in Retirement

Our expenses are lumpy, so our withdrawals are lumpy too. That said, I've paid a few bills directly from the taxable account at Fidelity, but most bills are paid from our local B&M bank account. That account has a requirement for at least 1 direct deposit (or EFT) every month to remain a free check...
by teen persuasion
Sun Jun 14, 2020 10:37 am
Forum: Personal Finance (Not Investing)
Topic: Health insurance (ACA) for adult child 26+
Replies: 16
Views: 922

Re: Health insurance (ACA) for adult child 26+

Applying for ACA coverage is more complicated than I expected. We applied when DH was between jobs a few years back. If/when we use it again, we will definitely use a navigator to do the application for us - the navigators know all the ins and outs of the process and options and gotchas. A few thing...