Search found 273 matches

by Que1999
Wed Mar 06, 2024 1:16 pm
Forum: Investing - Theory, News & General
Topic: What good is tax deferred?
Replies: 122
Views: 15326

Re: What good is tax deferred?

I was always a bit perplexed by people assigning an arbitrary tax rate that they're comfortable paying when you could essentially defer taxes today all the way down to a zero tax rate, potentially even a negative tax rate with refundable credits. On top of the fact that the US tax system is highly progressive with numerous benefits you can receive by having a low 'income' across the board.... which can all be obtained by deferring as much as you can into the lower brackets. There is, of course, a second part of this plan that needs to be administered and that is tax-efficient withdrawals and consumption smoothing in retirement. But I think in most cases deferring taxes today and implementing a low progressive tax/zero debt lifestyle in reti...
by Que1999
Tue Mar 05, 2024 11:11 am
Forum: Investing - Theory, News & General
Topic: What good is tax deferred?
Replies: 122
Views: 15326

Re: What good is tax deferred?

By deferring the max to a 457, 457 DAR (deferral acceleration for retirement since I'm retiring next year -- basically doubling 457 contributions), 401k, required plus additional contributions to a government pension plan which reduced federal taxes even further, DW's spousal Traditional IRA.... which brought our household income from $195k to around $110k. Also took advantage of carryover losses for $3k, so lets say $107k household AGI. This led to a few cascading benefits of deferring into certain cliff benefits. First was making MY Traditional IRA contribution deductible so that further reduced our income to around $100k. Next was all qualified dividends being taxed at 0% instead of 15%. Savings were in VUSXX which led to all income from...
by Que1999
Sun Jan 28, 2024 9:37 am
Forum: Investing - Theory, News & General
Topic: Called to Account: 4 Overlooked Benefits of Trad. 401ks, IRAs
Replies: 86
Views: 6620

Re: Called to Account: 4 Overlooked Benefits of Trad. 401ks, IRAs

I've been using NewRetirement software for some time now, and after fiddling with the "Max Spending" vs the "Spending Needs" options something became clear to us. Lifetime fed/state tax rates were astronomically lower if we spent down our pretax funds over the years prior to RMD age, which also will allow us to consume/gift sooner rather than later. Maybe help the kids out with a down-payment, college loans, etc..... We're talking to the tune of $6m-$8m down to $1.5m lifetime fed/state taxes, simply if we smoothed out our income and withdrew more from pretax sooner rather than later. We try not to speculate on future tax-rates and SS, because IMO people always assume future doom and gloom, when the truth is no one knows ...
by Que1999
Tue Nov 07, 2023 7:28 am
Forum: Personal Consumer Issues
Topic: Retiring to Upstate NY
Replies: 160
Views: 23786

Re: Retiring to Upstate NY

This thread is nearly a year and a half old. Just wondering if the OP wound up making a decision yet and if so, is willing to share more details? I have been looking around upstate for a summer & fall residence and spending lots of time here. Prices are generally attractive....as is the general pace of life and general lack of the sense of entitlement one can find in many other areas of the US. People are so less rattled and uptight here, and forget about road rage, they never heard of it here lol Buffalo appears to be a target for the young, post college population. Good for them, Buffalo needed the resurgence. Some of the other cities are ringed by nice towns and "suburbs" but the inner city cores are often a dim sight -alt...
by Que1999
Sun Sep 10, 2023 8:54 pm
Forum: Personal Consumer Issues
Topic: [resolved] Should I buy a car to drive 100 miles a month?
Replies: 96
Views: 7858

Re: Should I buy a car to drive 100 miles a month?

As someone who is completely 'over' driving, I'd go with Uber + an Uber One membership. There's nothing I enjoy more than pulling my kindle out and reading while being driven to my destination these days, instead of being agitated dealing with all these crazy drivers. I also utilize mass transit because I'm in one of the boroughs of NYC, and it's pretty reliable for the most part. I don't wait more than 5 mins for an Uber pretty much any time of the day. On a side note, if Uber is a consideration, take a look at the Capital One Savor credit card promo, which gives you a free Uber One membership until November of 2024, along with a few other perks. I would definitely not buy a new car for that amount of driving, but I don't like driving anym...
by Que1999
Sat Sep 02, 2023 8:16 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Cash Plus Account Pilot
Replies: 462
Views: 99009

Re: Vanguard Cash Plus Account Pilot

There's a fairly comprehensive review of the Vanguard Cash Plus Account on Jonathan Ping's MyMoneyBlog . Overall his takeaway is "meh". Couple of key thoughts: It’s important to note all that is not included: No ATM or debit card. (No ATM rebates.) No checkwriting. (I did find mobile check deposit on the app.) No online bill payment service. (You can use your account number to link at your credit card’s website for example, but there is no in-house system.) No automated recurring transfers. No ability to use your money market fund as a backup overdraft source. Historical note: For a while, Vanguard did offer an “Advantage” account to select customers which did include all these things, but they abruptly discontinued it in 2019. S...
by Que1999
Sun Aug 27, 2023 1:07 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Cash Plus Account Pilot
Replies: 462
Views: 99009

Re: Vanguard Cash Plus Account Pilot

Got the invite a few days ago, but I'm not sure what we'd benefit from opening this account. We have our checking account with Capital One for auto bill-pay and direct deposit, and keep extra cash in VUSXX (5.2% or 5.3% these days) to avoid most state/local taxes, which is a big benefit since we live in a very HCOL city. Am I missing something, or should I pass on this offer? What is the yield on the Cap One checking account? How much do you typically keep in that account? $5000, $50,000, $200,000? Some people want everything at one financial institution and place high value on that. I may use Cash Plus (if/when invited to do so) but I also don't see moving money between accounts by ACH as a big deal. I do it about once a month right now. ...
by Que1999
Sun Aug 27, 2023 10:14 am
Forum: Investing - Theory, News & General
Topic: Vanguard Cash Plus Account Pilot
Replies: 462
Views: 99009

Re: Vanguard Cash Plus Account Pilot

Got the invite a few days ago, but I'm not sure what we'd benefit from opening this account. We have our checking account with Capital One for auto bill-pay and direct deposit, and keep extra cash in VUSXX (5.2% or 5.3% these days) to avoid most state/local taxes, which is a big benefit since we live in a very HCOL city.

Am I missing something, or should I pass on this offer?
by Que1999
Sun Aug 13, 2023 9:14 am
Forum: Personal Finance (Not Investing)
Topic: Pension Overage Rollover Options and NY Taxation
Replies: 4
Views: 562

Re: Pension Overage Rollover Options and Taxation

Can you get a copy of the yearly 1099-R tax form from another retiree for both the pension and the Special 401K (for the amounts that were withdrawn)? Tell the retiree the numbers don't really matter but you want to see what fields and codes are used. Then enter the data for the pension into last year's tax software with a New York state tax add-on. Then add the data for the Special 401K withdrawal. See if the generated returns make sense to you, both federal and state. Remember that you are not the only person in your situation. Try to learn from them as most of us are in different states. And while you are at this, edit the first post so that the thread title includes "New York Taxation" at the end so those from your state will...
by Que1999
Sat Aug 12, 2023 11:18 pm
Forum: Personal Finance (Not Investing)
Topic: Pension Overage Rollover Options and NY Taxation
Replies: 4
Views: 562

Re: Pension Overage Rollover Options and Taxation

I wouldn't roll any of it to a tIRA since the tax characteristics are different (federal vs state/city). And the IRS considers all your IRAs as one big co-mingled account. In fact, I don't even see a difference between "overage" and "pension contributions" here. So there's 2 parts to the pension; there's the required amount which you must contribute which is deducted from each paycheck for as long as you're employed. This portion is different for everyone based on the age of hire. This portion of required contributions is also contributed post state/city taxes, but pre-federal. We have the ability to contribute additional on top of the required contributions which leads to an excess in the pension account. This is the p...
by Que1999
Sat Aug 12, 2023 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: Pension Overage Rollover Options and NY Taxation
Replies: 4
Views: 562

Pension Overage Rollover Options and NY Taxation

I will be retiring at some point between now and July of 2025, and will have to make a decision as to whether or not I'll be rolling over my pension overage to my Traditional IRA or leaving it in the pension fund for higher payments. I have contributed extra on top of my required amount which is all overage. Right now, this amount is around $300k. I am leaning towards rolling it over. These contributions are taken out pre-federal tax, but post NY state & city tax. So these contributions reduce my federal tax burden while working, however, do nothing for my NY state and city taxes. Apparently, at retirement, we're given the option to roll this pension overage into an account with the city called the "Special 401k". Not kidding,...
by Que1999
Tue Jul 25, 2023 11:28 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5216
Views: 832136

Re: International versus US (The official list of arguments)

I just didn't feel good about investing in US-only equities.

There was just something fundamentally wrong about only investing in a little more than half of the invest-able stock universe IMO. So I took the opportunity to tax loss harvest into VXUS when the market dropped recently and, quite honestly, I feel much better about my portfolio now.

And I'll accept whatever the market, US & International, decide to give me... It is what it is. :sharebeer
by Que1999
Thu Jul 20, 2023 7:53 am
Forum: Investing - Theory, News & General
Topic: The Problem with Valuation - Nick Maggiulli
Replies: 198
Views: 13191

Re: The Problem with Valuation - Nick Maggiulli

Thoughts? Is the OP still around? Has the question been fully addressed? If the question is whether valuations matter, this has been extensively discussed previously (e.g., here ). If the question is whether we'll see muted equity returns going forward, that's the view I shared previously, and shared by various analysts (e.g., here ). My off-the-cuff prediction (guess) is that the S&P will end the decade around 5600 (or that may be "fair value" implied by a P/E of 20 or a CAPE of 25). For those who don't like to click on "naked links", I'll just share that the article is one of many that argues that, in the US stock market, higher valuations (according to the usual metrics) are here to stay (for some variety of reas...
by Que1999
Tue Jul 18, 2023 8:34 am
Forum: Investing - Theory, News & General
Topic: The Problem with Valuation - Nick Maggiulli
Replies: 198
Views: 13191

The Problem with Valuation - Nick Maggiulli

The Problem with Valuation

[Link formatted by admin LadyGeek]

Thoughts?
by Que1999
Mon Jul 17, 2023 11:59 pm
Forum: Personal Finance (Not Investing)
Topic: Secure 2.0 catch-up Roth 401K
Replies: 73
Views: 8574

Re: Secure 2.0 catch-up Roth 401K

Does this affect the 457 catch-up clause at all? "Special 457(b) catch-up contributions, if permitted by the plan, allow a participant for 3 years prior to the normal retirement age (as specified in the plan) to contribute the lesser of: the elective deferral limit ($22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and in 2021). the basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions)" This is my second year of catch-up contributions prior to retirement at 44 years old, if that makes any difference. From Mercer Consulting: Special catch-up contributions under 403(b) and 457(b) plans. Certain 403(b) and 457(b) plans can allow additional catc...
by Que1999
Mon Jul 17, 2023 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: Secure 2.0 catch-up Roth 401K
Replies: 73
Views: 8574

Re: Secure 2.0 catch-up Roth 401K

Does this affect the 457 catch-up clause at all?

"Special 457(b) catch-up contributions, if permitted by the plan, allow a participant for 3 years prior to the normal retirement age (as specified in the plan) to contribute the lesser of:

the elective deferral limit ($22,500 in 2023; $20,500 in 2022; $19,500 in 2020 and in 2021).
the basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions)"

This is my second year of catch-up contributions prior to retirement at 44 years old, if that makes any difference.
by Que1999
Sun Jun 25, 2023 1:27 pm
Forum: Investing - Theory, News & General
Topic: I like "Market-on-Close" orders.
Replies: 59
Views: 7688

Re: I like "Market-on-Close" orders.

CletusCaddy wrote: Sun Jun 25, 2023 1:10 pm
Que1999 wrote: Sun Jun 25, 2023 1:08 pm
CletusCaddy wrote: Sun Jun 25, 2023 12:03 pm As a buyer you are looking for the lowest price of the day to buy.
An exercise in futility.
Then why is timing trades per this post not similarly dismissed?
Not sure that transacting at the closing price is 'timing' trades... Although I guess some could look at it that way, I sure don't. It seems like op is simply looking to remove any behavioral issues w/trading etf's during the trading day by transacting at closing nav, a la mutual fund, as well as to find out if there's any negative's he may be missing by inquiring here.
by Que1999
Sun Jun 25, 2023 1:08 pm
Forum: Investing - Theory, News & General
Topic: I like "Market-on-Close" orders.
Replies: 59
Views: 7688

Re: I like "Market-on-Close" orders.

CletusCaddy wrote: Sun Jun 25, 2023 12:03 pm As a buyer you are looking for the lowest price of the day to buy.
An exercise in futility.
by Que1999
Sun Jun 18, 2023 11:43 am
Forum: Personal Finance (Not Investing)
Topic: Calling on smart users of New Retirement and other software planners
Replies: 30
Views: 5321

Re: Calling on smart users of New Retirement and other software planners

I've used NewRetirement for about a year and a half and I love it. IMO it's probably the best you'll get in terms of retirement planning for the price. But, it's not perfect.... for example, in our case it doesn't apply NYC tax rates to income, only State taxes. This may take an extra step or two to account for like adding in an expenses increase to account for NYC taxes, which would require you to estimate your city taxes. It's not ideal, but there are workarounds. Also, I don't believe there's any way to account for child tax credits for kids under 17. Again, the workaround here would be to reduce your expenses by the equivalent amount of credits you'd receive ($2k for one kid, $4k for two, etc...) for the years the credits would apply. I...
by Que1999
Fri Mar 31, 2023 6:04 pm
Forum: Personal Finance (Not Investing)
Topic: Is it a bad decision to pay off a low interest mortgage early?
Replies: 90
Views: 9933

Re: Is it a bad decision to pay off a low interest mortgage early?

We paid off our 30-year mortgage in 8 years. We had a small taxable account on the side, but the majority of extra cash went to paying down the 4.375% mortgage. During the 8 years of the pay-down, the market did pretty good. I sat down one day after the mortgage was gone and compared the pay-down increments vs. if the cash went into our taxable equity-heavy investments instead. If we had invested the money instead of paying the mortgage off, and paid off the mortgage once the taxable reached/surpassed the remaining mortgage balance, the house would have been paid off around 4 years earlier... Nearly half the time it took with the pay-down. Of course, hindsight is 20/20, but if the market would have tanked I really believe I would have conti...
by Que1999
Wed Feb 15, 2023 11:37 pm
Forum: Personal Investments
Topic: Max 401k vs just getting down to the 12% bracket
Replies: 44
Views: 4587

Re: Max 401k vs just getting down to the 12% bracket

retiredjg wrote: Wed Feb 15, 2023 3:19 pm I nominate your picture for "best icon on a financial website anywhere!"
Ha, thanks! :sharebeer
by Que1999
Wed Feb 15, 2023 11:34 am
Forum: Personal Investments
Topic: Max 401k vs just getting down to the 12% bracket
Replies: 44
Views: 4587

Re: Max 401k vs just getting down to the 12% bracket

As to "why stop there", it is because taxes will be due in the future, and given the way the tax laws are currently, it is a near certainty (except for an Act of Congress) that deferring now at 12% or lower rate would only end up paying 15% or more in the future. Maybe, maybe not? My crystal ball has been hazy lately... in terms of future control of tax rate, I plan on performing systematic Roth conversions within the 0-12% federal brackets minus the State/City taxes I pay today (around an extra 10% combined), and will most certainly have more control over the tax rate I decide to pay when early-retired vs the little to no control I have right now while earning a paycheck. I guess it varies by situation obviously, but the plan wh...
by Que1999
Wed Feb 15, 2023 11:12 am
Forum: Personal Investments
Topic: Max 401k vs just getting down to the 12% bracket
Replies: 44
Views: 4587

Re: Max 401k vs just getting down to the 12% bracket

I'm a fan of deferring as much as you possibly can. While paying Federal tax at a 12% rate isn't bad, why stop there? You still have access to a 10% rate and a 0% rate (standard deduction). And this is not even accounting for State & local taxes, if you're subject to them. This article is a bit dated, but the principles still stand. https://www.gocurrycracker.com/roth-sucks/ As to "why stop there", it is because taxes will be due in the future, and given the way the tax laws are currently, it is a near certainty (except for an Act of Congress) that deferring now at 12% or lower rate would only end up paying 15% or more in the future. Maybe, maybe not? My crystal ball has been hazy lately... in terms of future control of tax r...
by Que1999
Wed Feb 15, 2023 10:20 am
Forum: Personal Investments
Topic: Max 401k vs just getting down to the 12% bracket
Replies: 44
Views: 4587

Re: Max 401k vs just getting down to the 12% bracket

I'm a fan of deferring as much as you possibly can. While paying Federal tax at a 12% rate isn't bad, why stop there? You still have access to a 10% rate and a 0% rate (standard deduction). And this is not even accounting for State & local taxes, if you're subject to them.

This article is a bit dated, but the principles still stand.

https://www.gocurrycracker.com/roth-sucks/
by Que1999
Thu Oct 20, 2022 9:28 am
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Rules & IRA's
Replies: 13
Views: 1115

Re: Wash Sale Rules & IRA's

All your and your spouse's accounts are subject to either the wash sale law or the related taxpayer law, both of which disallow losses if substantially identical replacement investments are purchased. The IRS and the courts have favored using the wash sale law for all taxpayer and spouse accounts, rather than the related taxpayer law, which is beneficial because the related taxpayer law can be more onerous. It's good practice to use different investments in your tax-advantaged accounts versus your taxable accounts. Many consider investments that track the same index to be substantially identical, whether they are from different vendors or inside CIT's. You are unlikely to get caught when your investments are at different brokerages or when...
by Que1999
Thu Oct 20, 2022 7:59 am
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Rules & IRA's
Replies: 13
Views: 1115

Re: Wash Sale Rules & IRA's

Thanks for the answers all, just one more question. I just watched a financial video where it was stated that contributions to a 401k into a substantially identical investment could trigger a Wash Sale Rule in our taxable account as well? I planned on resuming contributions into a 457 & 401k in early January, after harvesting losses (hopefully) in late December of this year - S&P 500 index funds. Those retirement accounts are with a different custodian than our IRA's. Is that information accurate? On our tax forms does it specify what funds we've invested in within our employer 457/401k? I can understand our IRA's, because they're held with the same custodian as our brokerage account, but this seems a little odd for our 457/401k, no...
by Que1999
Sun Oct 16, 2022 2:17 pm
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Rules & IRA's
Replies: 13
Views: 1115

Re: Wash Sale Rules & IRA's

Thanks for the responses.

So I guess I'm going to have IRA dividends go to the settlement fund, and then after the 31 days have passed, transfer that $$ back into the IRA at my desired allocation?
by Que1999
Sun Oct 16, 2022 10:28 am
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Rules & IRA's
Replies: 13
Views: 1115

Wash Sale Rules & IRA's

I will be attempting to TLH for the first time this year. I *think* I understand most of the rules you have to adhere to in order to avoid triggering the Wash Sale rule, except for how the rule applies to reinvestment of dividends in Traditional/Roth IRA accounts.

Just to be clear, I plan on harvesting losses from our domestic funds (VTSAX/VFIAX/VOO/VTI) into VTIAX/VXUS for re-balancing purposes in our taxable account. We have dividend reinvestment set to ON in our Traditional/Roth IRA's, which hold VTSAX. Do we need to set dividend reinvestment in our IRA's to OFF for the 30+/- days in order to not trigger the Wash Sale rule?
by Que1999
Sun Jul 24, 2022 2:27 pm
Forum: Personal Consumer Issues
Topic: Retiring to Upstate NY
Replies: 160
Views: 23786

Re: Retiring to Upstate NY

5- Rather not be TOO car-dependent. We're just not really fans of driving and cars in general, unless the drives are relatively short trips Upon further reflection this is really an overwhelmingly important point. 99% of what I enjoyed about living in upstate NY involved driving on probably what you'd consider long trips. I would have been miserable and frustrated without that. It seems like a lot of the comments are assuming you'll come around on that issue but there are people who just don't, and that's okay, especially since you have the NYC option. I think you're right. I figured I'd just throw that in for the input, but I'm assuming we won't be able to get away from the whole car thing living upstate. Which is fine, if everything else...
by Que1999
Sat Jul 23, 2022 5:43 pm
Forum: Personal Consumer Issues
Topic: Retiring to Upstate NY
Replies: 160
Views: 23786

Re: Retiring to Upstate NY

Some of the lovely older tree-shaded neighborhoods in Niskayuna, NY, supposedly " One of the happiest towns in America ", check pretty much all your boxes, with the exception of low taxes. But housing prices are certainly WAY lower than downstate. Fun fact: the surviving co-author of Boglehead classic The Millionaire Next Door has chosen to continue living in a modest home in this town for decades, despite a net worth of what I imagine must be millions in frugally stewarded and invested royalties from the book. Public property tax assessor records say FMV of his home is $225K and Zillow says market value is $288K. His annual property taxes are in the $6K to $7K range. Great place to raise kids. Excellent public library system, lo...
by Que1999
Sat Jul 23, 2022 11:04 am
Forum: Personal Consumer Issues
Topic: Retiring to Upstate NY
Replies: 160
Views: 23786

Re: Retiring to Upstate NY

Some of the lovely older tree-shaded neighborhoods in Niskayuna, NY, supposedly " One of the happiest towns in America ", check pretty much all your boxes, with the exception of low taxes. But housing prices are certainly WAY lower than downstate. Fun fact: the surviving co-author of Boglehead classic The Millionaire Next Door has chosen to continue living in a modest home in this town for decades, despite a net worth of what I imagine must be millions in frugally stewarded and invested royalties from the book. Public property tax assessor records say FMV of his home is $225K and Zillow says market value is $288K. His annual property taxes are in the $6K to $7K range. Great place to raise kids. Excellent public library system, lo...
by Que1999
Sat Jul 23, 2022 9:39 am
Forum: Personal Consumer Issues
Topic: Retiring to Upstate NY
Replies: 160
Views: 23786

Retiring to Upstate NY

I will be retiring at some point between January 2023 & July of 2025, when DW & I will both be in our early-mid 40's. DW early-retired a few years ago to stay home with the kids; 8 &11. We both initially were planning to move out of NY State, but since our pre-medicare retiree health insurance is tied to the NYC/Long Island/Upstate regions, we have come to the realization that it is probably better for us to stay here as opposed to relocating to another State and having to worry about ACA insurance, subsidies, income limits, etc... So I am wondering, what are some nice Upstate NY areas that will check off all our boxes? 1- Good public schools 2- Low crime 3- Low cost of living/taxes (at least for NY) These are the three most imp...
by Que1999
Tue Jun 21, 2022 7:41 am
Forum: Personal Investments
Topic: VTIAX vs VXUS Backtesting Results
Replies: 2
Views: 603

VTIAX vs VXUS Backtesting Results

Can someone explain why VTIAX has outperformed VXUS here, despite the lower expense ratio? https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2022&lastMonth=12&calendarAligned=true&includeYTD=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=0&absoluteDeviation=5.0&relativeDeviation=25.0&leverageType=0&leverageRatio=0.0&debtAmount=0&debtInterest=0.0&maintenanceMargin=25.0&leveragedBenchmark=false&reinvestDividends=true&showYield=false&showFactors=false&factorModel=3&portfolioNames=false&portfol...
by Que1999
Sat Jun 11, 2022 8:16 pm
Forum: Personal Investments
Topic: How are the "100% Stocks" people doing?
Replies: 256
Views: 41785

Re: How are the "100% Stocks" people doing?

We delayed our bathroom/kitchen renovations to buy equities. Absolutely loving this opportunity to buy some of the biggest/best companies in the world at a discount!

:sharebeer
by Que1999
Sat Jun 11, 2022 7:24 am
Forum: Personal Investments
Topic: Admiral vs ETFs: Some Numbers
Replies: 33
Views: 6691

Re: Admiral vs ETFs: Some Numbers

watchnerd wrote: Mon Mar 07, 2022 3:27 pm
Bill Bernstein wrote: Wed Jan 19, 2022 7:01 pm Hi all:

Just for chuckles, I compared the returns as of 1/18 for the first 9 Admiral/ETF pairs that came to mind.
In each and every case, the Admiral class shares beat the ETF shares. In each case, I chose the longest Morningstar eval period:
VTSAX/VTI 10 bp over 15 years
That doesn't seem to match the situation any longer; if I compare VTI to VTSAX using the Morningstar interactive graph and set the timeframe to Max.

VTSAX +179,825.90 | +1,798.26%

VTI +179,894.99 | +1,798.95%

VTI seems to be ahead by a hair.

Things seem to have changed in the last 15 years
So, is it fair to say it's time to convert my MF, especially my VTIAX holdings, to ETF?
:confused
by Que1999
Wed Jun 01, 2022 11:33 pm
Forum: Personal Finance (Not Investing)
Topic: Pension: Lump Sum Rollover vs Higher Payments
Replies: 9
Views: 884

Re: Pension: Lump Sum Rollover vs Higher Payments

Watty wrote: Wed Jun 01, 2022 11:14 pm I might have missed it but a few more questions.

1) Is the pension adjusted for inflation?

2) Were the numbers you posted for a 100% survivor benefit for your spouse? There can be all sorts of special cases but to me it would take a compelling situation, which is possible, to make any of the other options a good choice if you are married.
No COLA, and the numbers posted had no survivor benefit. If I go, those numbers go with me... And I agree, the options don't seem very compelling to me either.
by Que1999
Wed Jun 01, 2022 11:32 pm
Forum: Personal Finance (Not Investing)
Topic: Pension: Lump Sum Rollover vs Higher Payments
Replies: 9
Views: 884

Re: Pension: Lump Sum Rollover vs Higher Payments

As with most "lump sum vs. annuity" and "when to start taking Soc. Sec.?" issues, all you need to know is how long you will live and what your investment return rate will be. ;) In your case, unless you expect either a) a short lifespan, or b) investment returns above ~7%/yr, the annuity is attractive (based on some eyeballing I did using the tools below). There are a couple of scenario evaluation tools on rows 73-117 of the 'Misc. calcs' tab in the personal finance toolbox (works best in Excel). Might be worth the time to look at those, although you'll still have to guess at lifespan and investment return. In any case, whatever you pick will likely turn out well. Congratulations and good luck! Thank you! I will check i...
by Que1999
Wed Jun 01, 2022 10:13 pm
Forum: Personal Finance (Not Investing)
Topic: Pension: Lump Sum Rollover vs Higher Payments
Replies: 9
Views: 884

Re: Pension: Lump Sum Rollover vs Higher Payments

OP, How secure is the Pension? What will the Pension Benefit Guarantee Corp insure? https://www.pbgc.gov/ What is your Cashflow situation between Retirement and when Pension begins? Are there options for your wife to collect if you pass? Or just what was presented? WoodSpinner I am a government employee with the City of New York, and from what I've heard the pension is well-funded at near 80%. I haven't checked into the PBGC too much, but I didn't notice my pension plan in the insured list provided on the website in the quick search I just did. The plan is to keep 2 years in cash from January 2023 to July 2025, and Roth-convert about $40,000 in 2023 & $40,000 in 2024, which would keep our tax burden very low. We also have access to the...
by Que1999
Wed Jun 01, 2022 9:15 pm
Forum: Personal Finance (Not Investing)
Topic: Pension: Lump Sum Rollover vs Higher Payments
Replies: 9
Views: 884

Pension: Lump Sum Rollover vs Higher Payments

Hi Bogleheads, I've recently come to the decision that I will be retiring a bit earlier than planned, at the end of this year. So now comes the big decision with the pension; take the money & run or leave it in the pension fund for higher pension payments for life. I am currently 41 years old, and the two pension options available commencing in July of 2025 are: https://i.postimg.cc/25Lz5FXc/Vested-Pension-Estimate-06-02-2022.png The actual numbers are a few grand higher than these numbers, since I am out of contract. Let's say the numbers are closer to $75,000 & $105,000. If I roll over the $300,580 to my IRA, I would be receiving the lower $75,000 pension. If I leave the money in the fund, I'd be receiving the higher payment. The ...
by Que1999
Sun May 22, 2022 11:32 am
Forum: Personal Investments
Topic: Pension Rollover Opportunity in Bear Market?
Replies: 3
Views: 510

Re: Pension Rollover Opportunity in Bear Market?

$300K vs. $30K/year? Absolutely take the pension. That lump sum would only produce about $1500/month ($18,000/year) in a fixed annuity. Am i reading this right when you say "I would get a higher pension for life to the tune of $30K/year." ? Does this mean the $300K lump sum gives you an additional $30K/year? It's not entirely clear, but that's what it sounds like to me. But also, I am always biased to collecting lifetime income of any flavor. The SWAN (sleep well factor) is extremely important, especially in portfolio downturns. A good foundation of income, even fixed, is vital, even just to avoid emotion-driven mistakes. (Look for Taylor's comments on fixed annuities over the past several year.) https://i.postimg.cc/RZD8ytZc/Scr...
by Que1999
Sun May 22, 2022 11:00 am
Forum: Personal Investments
Topic: Pension Rollover Opportunity in Bear Market?
Replies: 3
Views: 510

Pension Rollover Opportunity in Bear Market?

The other day I was checking my most recent pension statement. I have two options at retirement, like many people, and that is to take the lump sum payment (which we call our Final Withdrawal), or to leave all the excess contributions I've made over the past 17 or so years inside the pension fund. If I take the withdrawal, which I am, I would roll it all over; a portion would go to the Traditional IRA and another portion would go to the Roth IRA, because I've made excess pre-tax and post-tax contributions into the pension fund for many years. The total would come out to around $235k to Traditional & $65k to Roth - $300k total. If I leave the money in, I would get a higher pension for life, to the tune of around $30k per year. Also, the ...
by Que1999
Mon May 09, 2022 9:45 pm
Forum: Investing - Theory, News & General
Topic: Is this market pullback a good time to do more Roth conversions than planned?
Replies: 41
Views: 4408

Re: Is this market pullback a good time to do more ROTH conversions than planned?

Workinprogress wrote: Mon May 09, 2022 4:12 pm I have already done about 55K of conversions this year in 22% bracket. This is already 5K more than planned.
Should I consider more, given current valuations? It will crimp my budget to pay additional taxes out of pocket.
I would be converting VTSAX, if that makes a difference.
You're trying to time your Roth conversions, and timing the market is probably never a good idea. Ask yourself this, if you convert an additional $5k now, and the market continues dropping another 5%, 10% or 15%, how will you react? Will you regret not converting at the bottom?

I would say just stick to your plan, especially if you're gonna be pinching pennies to pay the conversion taxes.
by Que1999
Sun Apr 10, 2022 4:23 pm
Forum: Investing - Theory, News & General
Topic: Why save over 25x?
Replies: 598
Views: 58745

Re: Why save over 25x?

Yeah, I struggle with this all the time myself. I guess, the more you have the better, right? Having more saved = higher chance of retirement success... But I think the real question is: when is enough, enough? Because, we can all work forever and increase our likelihood of retirement success till we fall into the grave, but by then it's too late! For example, we have already saved around $1.3m in our retirement/brokerage accounts, and only spend $40-50k per year, maybe less! We are a frugal household, and many of the things we enjoy doing are free or very low-cost, & have no debt/mortgage. We also have 2x pensions kicking in; one in 2025 at $72k annually and the second in 2036 at $14k. No COLA's. As well as Social Security... According...
by Que1999
Sun Mar 06, 2022 6:18 pm
Forum: Personal Investments
Topic: VTIAX vs. VXUS ER (.11% vs .07%)
Replies: 15
Views: 2748

Re: VTIAX vs. VXUS ER (.11% vs .07%)

Recently, Vanguard lowered the expense ratios of many ETF's. One of those ETF's was VXUS, in which the expense ratio dropped from .08% to .07%. As someone who prefers to invest in mutual funds vs. ETF's (bid-ask spreads, prefer to trade at end of day NAV, etc), is the time approaching now where the ETF ER benefits are starting to outweigh the simplicity of investing in mutual funds? Should my new money start going into VXUS instead? I've thought about this too, but if I were to engage with ETFs, I'd just call Vanguard and convert some mutual fund shares to the ETF share class every once in a while. That way the bulk of the holding is in the lower ER ETF, but your continued contributions can just go into the mutual fund share class for ease...
by Que1999
Sun Mar 06, 2022 6:02 pm
Forum: Personal Investments
Topic: VTIAX vs. VXUS ER (.11% vs .07%)
Replies: 15
Views: 2748

VTIAX vs. VXUS ER (.11% vs .07%)

Recently, Vanguard lowered the expense ratios of many ETF's. One of those ETF's was VXUS, in which the expense ratio dropped from .08% to .07%. As someone who prefers to invest in mutual funds vs. ETF's (bid-ask spreads, prefer to trade at end of day NAV, etc), is the time approaching now where the ETF ER benefits are starting to outweigh the simplicity of investing in mutual funds?

Should my new money start going into VXUS instead? Is buying VTIAX and then converting to VXUS a suitable option, or are there any risks associated with converting periodically to ETF's (probably a few times a year)?..

TIA.
by Que1999
Tue Feb 15, 2022 8:21 pm
Forum: Personal Investments
Topic: When to spend a Roth IRA funds in retirement?
Replies: 40
Views: 6500

Re: When to spend a Roth IRA funds in retirement?

It is hard to generalize when it comes to taxes. While I am planning to do Roth conversions, I would not anticipate ever converting all my tax-deferred. I will continue to have a standard deduction that can absorb some level of taxable distributions every year. Of course RMDs begin eventually at 72 and eliminates some flexibility, but in a perfect world I would want to drag some tax-deferred to the end for this reason (to offset standard deduction). In terms of last, I think one wants to have some of both (tax deferred and tax free). I think this would depend on if your standard deduction will be filled up with pension/social security income. If that's the case, as it will be when I retire, then I'd think you'd want as much of your retirem...
by Que1999
Mon Feb 14, 2022 9:25 pm
Forum: Personal Investments
Topic: Roth Conversion strategy during downturns
Replies: 41
Views: 3436

Re: Roth Conversion strategy during downturns

Timing Roth conversions = timing the market.

You're basically asking whether or not you should dollar cost average your Roth conversions or lump sum them... No one knows where the market is going. It could be at record highs a month from now, or it could continue to descend into a 50% decline. It never ceases to amaze me to see how many times we can ask the same questions about investing, just in a different way.

That being said, in general, it's a pretty good strategy to convert when the market is on a significant decline from highs. This is a pretty good article I'd recommend that might help you with your decision.

https://ofdollarsanddata.com/dollar-cos ... -lump-sum/
by Que1999
Fri Jan 14, 2022 12:17 pm
Forum: Personal Finance (Not Investing)
Topic: Should we put more toward our mortgage?
Replies: 219
Views: 21758

Re: Should we put more toward our mortgage?

That's a great rate; I'd ride that pony into the sunset and not pay one more cent than necessary. Max out retirement accounts, fund taxable, get some work done on the house to increase it's value maybe? I paid my 30-year fixed 4.375% mortgage off in 8 years, and even that to me was a tough decision since I knew at the end of the day I'd come out ahead if I just invested in index funds. Let time & inflation decrease the value of that mortgage payment over 30 years until it's inconsequential, all while increasing the value of the property. At a 3% rate of inflation, a $1600 monthly payment would turn into an $885 payment after 20 years, and by the time you're paying the mortgage off it would have turned into a $659 payment in today's doll...
by Que1999
Wed Jan 05, 2022 8:22 pm
Forum: Personal Consumer Issues
Topic: Don't pay full price for SiriusXM radio
Replies: 649
Views: 112415

Re: Don't pay full price for SiriusXM radio

I got the $5.99 monthly price for good a couple weeks ago when I chatted them up online to cancel. They basically offered me this promo price without having to call to reinstate it every 6 months, which I have done consistently probably for the last 5 years or so. Needless to say, I jumped on it as I was reassured the price would never increase from the $5.99 price as long as I didn't call to cancel...

I'll take it! :beer
by Que1999
Sun Jan 02, 2022 4:51 pm
Forum: Personal Finance (Not Investing)
Topic: Post-Tax Additional Pension Contributions to Roth IRA?
Replies: 2
Views: 340

Re: Post-Tax Additional Pension Contributions to Roth IRA?

I contributed both pretax and after tax dollars to my 401k for several years before I retired. When I retired I moved the pretax dollars to a traditional-IRA and the after tax dollars to a Roth (I had to do the t-IRA in order to do the after tax to the Roth). All earnings from the after-tax went into the t-IRA. Yes, I understand that's the case for 401k's, 457's, 403's, but wasn't sure if it's the same for extra pension fund contributions. I know co-workers who have rolled over the pre-tax contributions from the fund into a Traditional IRA, however, I don't know anyone who has rolled over the extra after-tax contributions into a Roth IRA. I would think it should be, I just wanted to confirm if anyone was familiar with this situation. Also,...