Bogleheads.org

muitu wrote: ↑Wed Mar 29, 2023 10:05 am
The natural evolution of working individuals as they age is that their income increases.

muitu,

"The natural evolution of working individuals as they age is that their income increases."

That is not true. Everyone peak at a different level.

KlangFool

I work at a bank. I make 45k. I put 7% into 401k with 5% match, max Roth IRA, save around $250 every paycheck into my emergency fund until I hit 10k (at 7k). Took up a 2nd job as a server - $300 to $350 for a Saturday night and Sunday brunch shift (tips + wage). $1,000ish a month from that - saving for engagement ring (4k). Think I'm doing as much as I can right now. Pay $500 in rent, $270 student loan, $200ish in electric & heat every month. I have around 45k between 401k and Roth. Once I purchase ring and hit emergency fund, excess funds will go into VTI in taxable. Been using the allocation prioritization chart on the boglehead wiki. Just want some reassurance that I'm doing everything right. Seeing the multi-million dollar portfoli...

lobsterman2112 wrote: ↑Tue Mar 28, 2023 8:11 am I have a family member in India who needs a fairly substantial loan in the near future and is asking for my help. Let's say for argument that I am going to agree to loan them the money.

The amount of the gift will be ~$20-25k. It will be via a wire transfer, not crypto.

lobsterman2112,

1) Is this amount of money substantial to you?

2) If yes, do not give/loan this amount. You cannot afford to lose this money.

3) Give/loan an amount that is not substantial to you. Or else, you will lose your family in the process.

KlangFool

OP,

A) I had faced starvation. I do not think someone in our country should starve. So, I donate money to our local food bank.

B) This has nothing to do whether it is satisfying to me. It is just an obligation to me to contribute to the community whenever I am employed.

C) Since I am not starving, I should contribute to the local food bank and stop others from starving.

KlangFool

muitu wrote: ↑Tue Mar 28, 2023 2:40 pm Once I purchase ring and hit emergency fund, excess funds will go into VTI in taxable.

muitu,

1) 401K and IRA are not retirement accounts. They are tax advantaged accounts. You can take the money out tax-free and penalty-free before 59 1/2 years old.

https://www.madfientist.com/how-to-acce ... nds-early/

2) Unless you enjoy paying a lot of taxes instead of spending your own money, why would you put your excess funds into the taxable account. You should put more money into the 401K and IRA.

3) You are in NY. You are paying a lot of taxes.

4) 4K engagement ring?

This will be very expensive for you. I will avoid anyone asking me for a 4K engagement ring while I am having a student loan.

KlangFool

Hi, you’re right. I’ll give some more details. I owe ~27k on my other vehicle. That is my only other debt. I have no student loans or credit card debt. I owe no money on the sports car and I only drive it in the summer. We have bad winters here. My mortgage is at 3.25%. I make 120k a year. Single no kids. I contribute 15% of my income to my 401k, I don’t think I max it out ever year. I have about 150k saved in retirement. Sauceonside, Sell your sport car and max out your 401K and Roth IRA. Save a lot of taxes. Why does it makes any sense to pay 20+% taxes in order to save 3+% mortgage interest? 401K and IRA are not retirement accounts. They are tax advantaged accounts. You can take the money out tax free and penalty-free before 59 1/2 year...

Ivygirl wrote: ↑Mon Mar 27, 2023 7:32 pm
I'll point out that, when you were living in actual poverty, you would not have been able to benefit from cash back or credit card rewards, because you were too poor. Poor people do not benefit from these schemes, they pay them. That is past you and me, paying. Someone who dined large at Ruth's Chris "earned" cash back that past you and me would have paid.

If you personally have never paid credit card interest, then okay, fair point, it was just past me.

Ivygirl,

Do you considered folks that faced hunger and starved regularly as in actual poverty or not?

KlangFool

Folks,

1) I come from multi generations business family. We use credit/loan/debt aka other people's money to run our business. Credit/debt is just a tool to us. We use it whenever it makes sense and profitable to us.

2) Some merchant offered 5% to 10% discount if I paid by cash. In those cases, I paid cash.

3) If someone did not face starvation and hunger, the person was not poor enough.

KlangFool

OP,

A) You have 52K in the 529.

B) You have at least 15 years to put in 13K each year into Roth IRAs. 15 X 13K = 195K of Roth IRA contribution.

C) Your annual savings is about 40K per year.

D) Your annual saving over 4 years = 4 x 40K = 160K.

E) Total money to pay for college education if you insist on paying = 52K + 195K + 160K = 407K

F) Money needed for college education = 350K

G) 407K is more than 350K

H) Why do you think you need to put in more money into the 529s?

KlangFool

dogagility wrote: ↑Sun Mar 26, 2023 8:33 pm
In any event, I think it's wise for you to plan on putting some money into your 529 now.

dogagility,

I disagreed. OP had put in 52K into the 529K. OP had put in much more than he need to pay for college education anyhow. And, OP paid a lot of taxes by not maxing out the Trad 401K.

KlangFool

OP, You should max out both Roth IRAs. You should max out her 401K too. Why 529 makes any sense for you? Your income is not high enough. KlangFool Thanks for the feedback, question what did you mean that 529 does not make sense due my income being too low? I live in NYC and the state offers a tax deduction for contributions which then grows tax free. 1) Why does it makes any sense for you to pay Federal income tax in order to make an after-tax contribution to the 529? 2) Why does it makes any sense for you to do not max up your Roth IRAs first? 3) After maxing Trad 401K and Roth IRAs and then maybe 529s. 4) But, with 52K in the 529s and 13K in the Roth IRAs, you have too much in the 529s in the first place. KlangFool Thank you for the grea...

I read your reply as a 529 doesn't make any sense for him at all. Tyrael314, And, what is wrong with that? At that income level, after maxing 2 x Trad 401K and 2 X Roth IRAs, it is unlikely that OP has any money left for 529s. BTW, what is your point and question? KlangFool I was just curious why you would say a 529 doesn't make sense for him based on income. I disagree but I was wondering if I was missing something. Why would you disagree? How does it makes any sense for OP to pay a lot of taxes to contribute to 529s? OP's annual savings is not big enough to max both Trad 401Ks and Roth IRAs. KlangFool Well it doesn't once it is explained. I was asking a question because I was curious. Thanks for providing additional info. Paying for coll...

What do you mean by that? At OP's income level and tax level, why does it makes any sense for OP to do not max up the Trad 401K and do an after Federal Income tax contribution to 529? KlangFool I read your reply as a 529 doesn't make any sense for him at all. Tyrael314, And, what is wrong with that? At that income level, after maxing 2 x Trad 401K and 2 X Roth IRAs, it is unlikely that OP has any money left for 529s. BTW, what is your point and question? KlangFool I was just curious why you would say a 529 doesn't make sense for him based on income. I disagree but I was wondering if I was missing something. Why would you disagree? How does it makes any sense for OP to pay a lot of taxes to contribute to 529s? OP's annual savings is not big...

Tyrael314 wrote: ↑Sun Mar 26, 2023 1:15 pm

KlangFool wrote: ↑Sun Mar 26, 2023 9:53 am

Tyrael314 wrote: ↑Sun Mar 26, 2023 9:30 am

KlangFool wrote: ↑Sat Mar 25, 2023 6:14 am OP,

You should max out both Roth IRAs. You should max out her 401K too.

Why 529 makes any sense for you? Your income is not high enough.

KlangFool

What do you mean by that?

At OP's income level and tax level, why does it makes any sense for OP to do not max up the Trad 401K and do an after Federal Income tax contribution to 529?

KlangFool

I read your reply as a 529 doesn't make any sense for him at all.

Tyrael314,

And, what is wrong with that? At that income level, after maxing 2 x Trad 401K and 2 X Roth IRAs, it is unlikely that OP has any money left for 529s.

BTW, what is your point and question?

KlangFool

VVenti7401 wrote: ↑Sat Mar 25, 2023 9:53 pm

KlangFool wrote: ↑Sat Mar 25, 2023 6:14 am OP,

You should max out both Roth IRAs. You should max out her 401K too.

Why 529 makes any sense for you? Your income is not high enough.

KlangFool

Thanks for the feedback, question what did you mean that 529 does not make sense due my income being too low? I live in NYC and the state offers a tax deduction for contributions which then grows tax free.

1) Why does it makes any sense for you to pay Federal income tax in order to make an after-tax contribution to the 529?

2) Why does it makes any sense for you to do not max up your Roth IRAs first?

3) After maxing Trad 401K and Roth IRAs and then maybe 529s.

4) But, with 52K in the 529s and 13K in the Roth IRAs, you have too much in the 529s in the first place.

KlangFool

Tyrael314 wrote: ↑Sun Mar 26, 2023 9:30 am

KlangFool wrote: ↑Sat Mar 25, 2023 6:14 am OP,

You should max out both Roth IRAs. You should max out her 401K too.

Why 529 makes any sense for you? Your income is not high enough.

KlangFool

What do you mean by that?

At OP's income level and tax level, why does it makes any sense for OP to do not max up the Trad 401K and do an after Federal Income tax contribution to 529?

KlangFool

Folks,

I am not interested in starting a debate on whether there is a future for CS. My question to OP and to an extension, OP's son is this.

Are you limiting yourself and your future by going to an undergraduate degree in CS?

Would an engineering degree open more doors for you? Robotic, drone, biomedical, and so on.

Over the next 20 to 30 years, would you know what you will be working on? What foundational undergraduate degree will help you to go further?

KlangFool

Also to further elaborate on the pulling additional funds out of taxable bit. If for example, buying a 350K at 6.75% interest, shouldn't we seriously consider not financing and just paying cash? Any words of wisdom on how best to think about this? Difficult to get a 6.75% return on investments. But also don't want to tie up too much within a house. If the funds were in tax advantaged accounts, I wouldn't considering moving any. But in taxable, I think it has to at least be considered, correct? ironwood39, << avings Retirement accounts = 155k Taxable accounts = 540k Cash saved for down payment = 150k>> If you do that, you have a 350K house and a portfolio of 400K. Do you feel safe doing that? What is your asset allocation? KlangFool

OP, This is one person's opinion. Computer Science has very little threshold of entry. What is the point of spending 4 years studying something that someone in other part of the world can learn it online? A person may want to pursue a career in computer science but an undergraduate degree in computer science may not be the best way to do it. There is a higher threshold for engineering. You need the hardware/lab/resource to study engineering. It is not something you can do it online easily. What happened if we move to quantum computing? Biological computing? Does the 4 years computer science gives the person a better foundation versus someone else in the world? Or, a 4 years engineering degree? I have a BSEE and MSEE. I self studied 6 progra...

Did he apply to Carnegie Mellon? It's also in Pittsburgh, and I would rate it higher than Pitt. No kidding? It's only a number one CS program in the world, tying MIT and Stanford. And almost as hard to get into. He applied to CMU, but realistically he is unlikely to get in (regular decision hasn’t been announced yet). He is mid-1500s SAT, 4.0 UWGPA, 4.6 WGPA, Eagle Scout, good ECs (extra curriculars), and a lot of AP classes, good passion projects posted on GitHub, but CS (computer science) is crazy competive and we don’t have any hooks to the top 10 schools and he doesn’t check any of the first gen, low income or EDI goals. He is a very competitive top 10-20 school CS applicant. Many of these schools have had 40-50,000 applicants this yea...

Did he apply to Carnegie Mellon? It's also in Pittsburgh, and I would rate it higher than Pitt. No kidding? It's only a number one CS program in the world, tying MIT and Stanford. And almost as hard to get into. He applied to CMU, but realistically he is unlikely to get in (regular decision hasn’t been announced yet). He is mid-1500s SAT, 4.0 UWGPA, 4.6 WGPA, Eagle Scout, good ECs (extra curriculars), and a lot of AP classes, good passion projects posted on GitHub, but CS (computer science) is crazy competive and we don’t have any hooks to the top 10 schools and he doesn’t check any of the first gen, low income or EDI goals. He is a very competitive top 10-20 school CS applicant. Many of these schools have had 40-50,000 applicants this yea...

Beachey wrote: ↑Sat Mar 25, 2023 9:06 am We just renewed my daughters, because she is a minor we had to do it in person. I was able to get an appointment within a few days (this was the end of December). We did pay to expedite but I did not pay for USPS express service. We received it the end of January (so about ~ 4 weeks by expedite) as we traveled out of the country in February.

I think it makes sense to use USPS Priority mail for the traceability. By regular mail, we got the passport within a few days. When you give them your email they send you updates that are almost as good as the Priority traceability on sending to you but sending it in might be more of a black hole.

Thanks.

KlangFool

stan1 wrote: ↑Sat Mar 25, 2023 8:54 am

KlangFool wrote: ↑Sat Mar 25, 2023 8:49 am Folks,

For people that choose expedite processing and 1-2 day delivery, how do you indicate that is what you want? There is nothing on the form to indicate that. Do you just mail your form the expedite facility and pay the extra fees on your check?

Thanks in advance.

KlangFool

There is a different PO box for expedite. Pay the $190.
The instructions also say to write "expedite" on the front of the envelope.

Thanks. Do I just pay the extra $19 for the 1-2 day delivery?

KlangFool

Folks,

For people that choose expedite processing and 1-2 day delivery, how do you indicate that is what you want? There is nothing on the form to indicate that. Do you just mail your form the expedite facility and pay the extra fees on your check?

Thanks in advance.

KlangFool

Lol you want to quit work because your employer is asking you to come back to work? Employees these days.... It is truly amazing how many posters willfully ignore the fact that 83% of the department was laid off, and focus their anger on WFH. The anger should be directed at the company. How do you know the company didn’t have to make budgeting cuts due to business being down? The anger shouldn’t necessarily be directed at the company, we don’t have the full picture here. But the other half of the story was an OP that didn’t want to go back to the office, and I’m sorry but that’s not his call. Lots of folks these days enjoy playing the victim card. What if the pandemic would have been 6 weeks long, do you think the OP would be complaining t...

OP,

You should max out both Roth IRAs. You should max out her 401K too.

Why 529 makes any sense for you? Your income is not high enough.

KlangFool

clemrick wrote: ↑Fri Mar 24, 2023 9:27 pm I renewed my passport last fall and was told I HAD to use the USPS priority envelop. Instructions from our local library that provides passport services. Got my passport in less than six weeks.

Thanks.

KlangFool

bob60014 wrote: ↑Fri Mar 24, 2023 8:54 pm USPS Priority that provides a tracking number. Turnaround time approx 4 weeks. Ymmv.

Thanks.

KlangFool

noraz123 wrote: ↑Fri Mar 24, 2023 8:50 pm

KlangFool wrote: ↑Fri Mar 24, 2023 8:19 pm Folks,

What service do you use to mail in the US passport renewal?

Thanks in advance.

KlangFool

Perhaps too naive, but I recently sent in my old passport and paperwork via regular usps.

I was able to check status this past week on their website and it showed it was received a few days after mailing it.

You are probably a lucky person. In my case, counting on luck usually does not work out for me.

KlangFool

livesoft wrote: ↑Fri Mar 24, 2023 8:36 pm

KlangFool wrote: ↑Fri Mar 24, 2023 8:30 pm

livesoft wrote: ↑Fri Mar 24, 2023 8:25 pm USPS and Bundespost.

Do you use priority mail of the USPS?

Thanks.

KlangFool

No. My spouse got a renewal recently in 6 weeks.

Thanks.

KlangFool

livesoft wrote: ↑Fri Mar 24, 2023 8:25 pm USPS and Bundespost.

Do you use priority mail of the USPS?

Thanks.

KlangFool

Folks,

What service do you use to mail in the US passport renewal?

Thanks in advance.

KlangFool

OP,

That is what I use and it works very well so far.

KlangFool

Today I ran across the following post on Twitter: "This is the most unstable situation I've ever seen in public equity markets. 7 companies - $AAPL $MSFT $AMZN $GOOGL $TSLA $NVDA $META - make up 24.22% of $SPX and 51.13% of $NDX. That's concentration risk that's off the charts." I'm curious about how to properly think about this situation (including whether it might make sense to consider switching from market cap-weighted to equal weight index funds or ETFs, such as Invesco S&P 500 Equal Weight ETF). I'm aware that equal weight funds / ETFs imply slightly different sector exposures, slightly higher volatility, and some tilt toward small-cap stocks. For the context, my investing horizon is 15-20 years. Please share your thoug...

Normchad wrote: ↑Thu Mar 23, 2023 10:39 am Purdue is well known as a very good engineering and CS school. I’d have no qualms about sending my kid there.

I don’t know much about Pitt.

+1.

KlangFool

OP,

Do not put all your eggs in one basket! 100% stock and 100% US stock is simply a bad idea. That has nothing to do with whether someone should stop investing in stock.

To answer your question, at no point, I will be 100% stock or 0% stock.

KlangFool

OP,

It is very simple.

A) Sell your TSLA stock and diversify. If it drops another 50% or 80%, your leverage is gone.

B) You do not need this job. If the work life balance is not good enough, quit and find something else.

C) Your portfolio is so big that the severance pay would be a round off error. Why put up with all those pain and suffering for such a small amount of money?

D) You are being penny wise and pound foolish. What is 70K aka up to 1 year of severance pay really worth to you? It is a very small amount of money.

KlangFool

I think an 18 year old is too young to handle whatever amount will be in the account. saver1, 1) Why should you think that way? 2) Why can't your kid save their own money? 3) My kids were given money every year since they were born. It is their money. We held their money in our taxable brokerage account. But, they can spend it whenever they want to. 4) The money was moved into their Roth IRAs and their taxable account when they were 18 years old. 5) They had been handling their own money for a very long time. Starting with a few hundreds and then a few thousands. 6) They graduated college with their own savings and investment of 20K to 30K each. 7) Isn't it better to teach your kids to save their own money instead of you saving money for t...

Work-life balance is a catch word for getting paid while staying home or wherever. I belong to a large advanced R/D group (not S/W) including Western Europe and East Asia. The arrangement is not for cheap labor. The majority in the foreign countries hold advanced degrees and many of them are highly experienced. They are as good as those in the US and well paid, but the cost is still lower. I see no downside in shifting more workloads abroad. In light of the wfh rage, it is about time for employers to take a fresh look. 8301, It goes both way. At OP's pay level of 70K per year, it is not worthwhile for OP to stay at a job with a lousy work life balance. Does anyone in your team work at this pay level? It is time for the employee to take a f...

OP,

Sell your single stock and diversify. Or else, be willing to lose all your leverage when your single stock crashes.

KlangFool

Work-life balance is a catch word for getting paid while staying home or wherever. I belong to a large advanced R/D group (not S/W) including Western Europe and East Asia. The arrangement is not for cheap labor. The majority in the foreign countries hold advanced degrees and many of them are highly experienced. They are as good as those in the US and well paid, but the cost is still lower. I see no downside in shifting more workloads abroad. In light of the wfh rage, it is about time for employers to take a fresh look. 8301, It goes both way. At OP's pay level of 70K per year, it is not worthwhile for OP to stay at a job with a lousy work life balance. Does anyone in your team work at this pay level? It is time for the employee to take a f...

kchico wrote: ↑Tue Mar 21, 2023 7:10 pm
Things are getting difficult at work and I am feeling like pulling the plug and retire but I do not feel ready because everything changed in last 2 weeks. My company eliminated 10 people in a team 12 and I now have a crazy work load and I am being forced to go back to the office which I am not a fun off after really enjoying working from home for a few years after Covid. I am 38 and my wife 39 and we have two kids 7 and 4.

kchico,

Just say no!

You do not really need this job. You can take a few years off and find something else. If you are willing to quit and lose this job anyhow, why can't you just say no to start?

Just work your normal 40 hours. If they do not like it, they can let you go.

KlangFool

OP,

You should sell your single stock regardless of whatever your decision with your employment.

KlangFool

kchico wrote: ↑Tue Mar 21, 2023 7:10 pm

Age: 38 and 39

Total Portfolio: $1.75M

Taxable
$270k

His 401K:
$284k
81% Fidelity 500 Index (FXAIX)
10% Fidelity International Index (FSPSX)
9% Vanguard International Growth Admiral (VWILX)
Company match? 4%

His Roth IRA at E-trade
$190k

Traditional IRA at E-trade
$400k

Her Roth IRA at E-trade
$70k

Her Roll-Over IRA at E-trade
$300k

Her Traditional IRA at E-trade
$230k

kchico,

I do not see a portfolio of 1.7m. Please redo your calculation.

KlangFool

TechRunnerZenDad wrote: ↑Tue Mar 21, 2023 6:41 pm

KlangFool wrote: ↑Tue Mar 21, 2023 9:43 am OP,

1) What is your annual savings/investment?

2) I do not think your annual expense is 70K per year. The numbers do not add up.

3) Gross income = annual savings/investment + annual expense + taxes.

Use this formula to check your numbers.

KlangFool

Hi KlangFool.

Went through my 2022 tax returns to get the following numbers:
Total income (Line 9 1040): 407,020
Total Fed taxes (Line 24 1040) 80,755
Total State Taxes (Line 12 PA-40) 12,952
Total Local Taxes 6,582
401K 41,000
IRA 12,000
After-Tax 401k 21,200
Brokerage 94,500
I-bonds 10,000
Savings 30,000
529 32,000

That leaves 66,031 for expenses

How long have you being earning this income?

KlangFool

OP,

1) What is your annual savings/investment?

2) I do not think your annual expense is 70K per year. The numbers do not add up.

3) Gross income = annual savings/investment + annual expense + taxes.

Use this formula to check your numbers.

KlangFool

We invest 15% of our monthly income to employer 401K and Roth IRA. We save an additional 15% towards a house-fund. Our house fund has grown to about $240k. Ideally, I'd like to use some (or all) of that money towards a home at some point, and then max out Roth/401K moving forward. PNWpilot, 1) If you believe that buying a house is a lousy financial deal, why do you choose to pay a lot of taxes by putting 15% into the house fund? Max the Roth/401K now. Why do you need 240K in the 20% down payment fund? Do you plan to buy a 1.2m house? 2) It is very simple. Do not buy the house until the PITI is significantly lowered than $2,000 per month. So, buy the house in the coming housing crash. Only buy the house when it is cheap enough. KlangFool I ...

We invest 15% of our monthly income to employer 401K and Roth IRA. We save an additional 15% towards a house-fund. Our house fund has grown to about $240k. Ideally, I'd like to use some (or all) of that money towards a home at some point, and then max out Roth/401K moving forward. PNWpilot, 1) If you believe that buying a house is a lousy financial deal, why do you choose to pay a lot of taxes by putting 15% into the house fund? Max the Roth/401K now. Why do you need 240K in the 20% down payment fund? Do you plan to buy a 1.2m house? 2) It is very simple. Do not buy the house until the PITI is significantly lowered than $2,000 per month. So, buy the house in the coming housing crash. Only buy the house when it is cheap enough. KlangFool

TheTimeLord wrote: ↑Mon Mar 20, 2023 11:03 am

KlangFool wrote: ↑Mon Mar 20, 2023 10:57 am OP,

1) It does lose it's nominal value. Aka, you know exactly the dollar value.

2) Accessibility, you can get at it when you want it. It is not subject to someone's else decision. Aka, HELOC does not qualify since it can be cancelled.

3) It does not cost you to use the money. For example, you have to pay interest in order to use it.

4) Cash or cash equivalent.

KlangFool

I am going to be honest, I couldn't to save my life come up with a consistent BH definition for cash. People use the term all the time and I get the gist but to me it is a term without definition in the BH universe.

If the nominal value can change, it is not cash. Physical cash, checking and saving account, MMF. It is not that hard.

KlangFool

OP,

1) It does lose it's nominal value. Aka, you know exactly the dollar value.

2) Accessibility, you can get at it when you want it. It is not subject to someone's else decision. Aka, HELOC does not qualify since it can be cancelled.

3) It does not cost you to use the money. For example, you have to pay interest in order to use it.

4) Cash or cash equivalent.

KlangFool