Bogleheads.org

quantAndHold wrote: ↑Wed Feb 01, 2023 1:17 pm This whole thread is absurd and unrealistic. Any part of the country where Klang’s rule would actually result in a home purchase has a housing market where nobody is expecting any price appreciation, because of job market woes and/or population declines. Exactly the kind of market that should probably be avoided, and where you should just rent. Anyplace where job market is stable and population stable or increasing is going to not have any houses that meet Klang’s rule.

This I agree with, living in the SF Bay area, where it's perhaps instead of 80% actually 150% to own versus rent.

Thinking of doing a living trust to avoid probate in California. Looked at the trust of another single friend who had her attorney draw it up, and it is almost 30 pages long. But Quicken willmaker puts out a 5 page trust, and Dennis Cliffords sample one person trust is 9 pages. Having a hard time figuring out just how complex a living trust needs to be. Does anyone have any interesting opinions about this?

The more complicated trust has a lot of other sections that the simpler trusts don't have. EG definitions of all terms, spendthrift clause, Special distributions, accounting of trust, etc. My situation is fairly simple, single, no kids, LT partner, siblings, nieces and nephews.

I will be purchasing a bond fund in our taxable account for the first time and wanted to make sure that I understand expected return and tax equivalent yield correctly. I plan to hold the chosen fund beyond the duration. VTEB (Municipal Bond ETF): YTM 3.5% BND (US Bond ETF): YTM 4.6% BNDW (World Bond ETF): YTM 5.2% Given my tax bracket, and not having a state specific municipal bond fund available, the tax equivalent yield of the municipal bond fund would be ~4.9%. Therefore, am I correct in my understanding that, if I hold one of these funds for its duration, I should expect an after tax return of about ~3.5% (I understand that bond funds can have their NAV drop at inopportune times), and that, for my tax bracket, BNDW should have the hig...

Personal Capital does a good job, and rarely breaks. Sometimes it asks for security info.

When I shop t bills, some are zeros, and some are coupon bonds. The coupon bonds usually require you to pay accrued interest. They also seem to sometimes have higher YTM's than the Zeros. Is there any difference regarding either tax treatment or profits if I buy a bond with accrued interest?

Or is it all the same, with the YTM the thing I should care about?

A quick google search shows:

1. If you intend to have self-employment income this year, even if a small amount, then you can certainly open a Solo-401k now. Nothing illegal about that.
2. You can have multiple 401ks, solo 401ks, etc. But the overall limits of contributions apply across all of them. Just be clear about the rules for reporting if the total is over 250,000.

But if your only purpose for the solo 401k is to do the backdoor roth, why not just leave the money in your company 401k? You can just leave it there, unless the investment options are very limited or expensive. As long as you don't have a traditional IRA, you can do the backdoor IRA.

How about some sonnets? With eyes on market trends that ebb and flow, Meb Faber doth a model now devise, To follow where the winds of fortune go, And profit from the path that they advise. With ETF selection as his guiding light, He chooses those that trend in upward sway, And in the market's fluctuations, might Profit by tracking them without delay. And as the 200 day moving average, Provides a clear and steady guide, he'll use This metric to confirm the path he'll favor And make decisions with a steady muse. He doth not seek to predict the future's course, But rather takes the path that it doth lay, And in its twists and turns doth find the source Of wealth that comes with wisdom's surest way. So let us all with Faber's model see The path...

vaylie wrote: ↑Thu Jan 12, 2023 7:38 pm
Question: How much $$ do you have in your 401k that you want to roll over? Keep in mind that you have to file the 5500-EZ form if you have $250k+ and failing to file or filing late results in very very heavy penalties. Do a search in this forum to hear some horror stories. It's something to keep in mind, because you're saying that you want the *option* to do a backdoor Roth, not that you currently need to do it, right? So maybe it might be worth while to just keep things in a Rollover IRA until you get another job whose 401k might accept a rollover from an IRA.

The form 5500EZ is super easy to do online, (ETFTS website) and takes about 3 minutes. Wish the IRS made tax filing as easy! Just don't forget to do it!

My understanding is that I require self-employment income to be able to create the solo 401k. What is an easy way to earn such income that would allow me to open the solo 401k? One thing I thought of was to do something like doordash every once in a while. Do I need to create an LLC? Just get a separate EIN? Will working for doordash allow me to open the solo 401k in a justifiable (to the IRS) way? You don't need self-employment income to roll your company 401k to a solo 401k. Get an EID number, open it online or in person with Fidelity. You will need self-employment income to contribute to it though. You don't need an LLC. I have two 401k's, and only one of them get's contributions from my business, but the other stays open with some roll...

Hi,

Is there any way to do a cusip lookup on prices of t-bills or t-bonds in a spreadsheet? I use Fidelity mainly. I'd like to automate my pricing in my spreadsheet.

Not sure about your math. The only thing that Vang Treasury is exempt from is State and local taxes. 1-.09= .91
4.24% / .91= 4.66 % which is still good but not 4.92%!

I have money at various places, Etrade, Schwab, and Fidelity. I like Fidelity the best. Am thinking of moving all to Fidelity but am wondering if that is wise given the limits of SIPC insurance. Apparently, Fidelity has the standard SIPC coverage of $250,000 on cash, and $500,000 on securities, and has "Excess of SIPC" of 1.9 million for cash awaiting investment, and no limit for securities, but the total coverage for all customers is 1 billion, so in a total disaster, it wouldn't go very far. I'm not sure if that is per customer or per account. The 1.9 million is fine, but the 1 billion limit for the 4.5 trillion that fidelity has under management wouldn't go very far. what do people think? If my money is mostly in T bills, etf's...

I was reviewing my T-bill holdings and noticed an interesting thing. Some of my T-bills which I purchased back in October and September, and which are coming due in January or late December, have appreciated almost to the point where they are at par. So their interest rate from now until maturity is very low, lower than I could get in one of my online banking accounts. Does it make sense to sell them early and reinvest in longer T-bills or in high-yield bank accounts (at 3.5%)? This applies to some of my tax-deferred accounts as well as my taxable accounts. I might be misunderstanding something here. But for instance, I have UNITED STATES TREAS SER AY-2023 0.12500% 03/31/2023 NTS NOTE which I paid 98.148 on 9/13. It's now at 98.840. At matu...

fabdog wrote: ↑Sat Oct 29, 2022 9:17 am

Could you explain the reasoning behind the QBI deduction and the Roth 401k?

Amounts put into deductible Solo 401K reduce the income from the business, which in turn reduces the amount that gets the QBI deduction. So for some folks they prefer to make Roth contributions to their Solo 401K

See one of many previous threads on this topic

viewtopic.php?t=372346

Mike

Thanks Mike. That wouldn't help me since I have a QBI limited business because it is a specified service trade or business, so I lose the QBI above taxable income around 169k. But now I see that if I had a biz that wasn't SSTB, it would be a good strategy. I need more deductions not less.

No fees, but the market maker gets the bid-ask spread. That's usually felt more as a seller, and in any case, pricing is so dynamic it tends to wash out in the long run I use Fidelity and they allow putting in your own limit price, and much of the time I can scalp most of the spread. Sometimes it won't go through so I have to offer to pay a little more. Limit orders don't allow you to avoid bid-ask spreads, so what you see as "scalping" the spread is some combination of market movement and normal price improvement. In any case, bid/ask spreads on Treasuries are generally pretty small, especially on medium- and long-term on-the-run securities. I usually get pretty good price improvement, so it's worth the tiny bit of extra effort.

txgolfer_19 wrote: ↑Fri Oct 28, 2022 8:14 am I’m in the beginning stages of opening up a solo 401k for my wife’s business. Due to the tax savings associated with the QBI deduction, we’re looking to have the ability to make Roth contributions rather than pre-tax. In the standard adoption plan at Schwab, it doesn’t appear to be possible to do this. Has anybody else had any luck doing this at Schwab? If not, it appears Vanguard allows such contributions, so not a problem to open one there. We have all our other accounts at Schwab already so I looked to them first.

Thank you

Could you explain the reasoning behind the QBI deduction and the Roth 401k?

Tubes wrote: ↑Fri Oct 28, 2022 8:16 pm No fees, but the market maker gets the bid-ask spread. That's usually felt more as a seller, and in any case, pricing is so dynamic it tends to wash out in the long run

I use Fidelity and they allow putting in your own limit price, and much of the time I can scalp most of the spread. Sometimes it won't go through so I have to offer to pay a little more.

Answered my own question: From IRS Publication 550.

"All debt instruments that pay no interest before maturity are presumed to be issued at a discount. Zero coupon bonds are one example of these instruments.

The OID accrual rules generally do not apply to short-term obligations (those with a fixed maturity date of 1 year or less from the date of issue). "

so now I don't know the answer. Does anyone else know?

so basically I don't owe taxes on a T bill Zero that matures in 2023 until 2023 tax year?

I'm buying some tbills laddered over the next year. The zero's often offer a little better rate (on Fidelity). If I buy a zero coupon Tbill coming due in January of 2023, will I owe taxes on imputed income for 2022? If I will owe 2022 taxes for zeros that come due in 2023, then there's little advantage of zero tbills versus coupon tbills.

Help would be appreciated, as I am new to tbills.

Thanks so much!

I've been doing Backdoor Roths for the last 5 years or so. The way I do them is I contribute to a nondeductible IRA and then convert it to a Roth, keeping a separate account for each Roth. This is getting tedious to have multiple accounts. I am 66 years old, still working (plan to keep working at least till 70), and wondering if I need to keep each conversion in a separate account? My first Roth contribution was decades ago. As I understand the Five Year rule, every time you convert to a Roth, the 5 year clock starts. Since I am older than 59.5 I am not sure if it still applies. Can I combine all my Backdoor Roths, or will this give problems with the 5 year rule? For future Backdoor Roth conversions, can I just convert the Traditional IRA i...

I would agree. Having had Kaiser coverage for many years (not Medicare) it is great for fairly routine stuff, but not for complex diagnostic puzzles or very high tech treatments. I'm 65 now, and looking forward to being able to go anywhere on Original Medicare. What's nice is that if I don't like/trust a given doc, I can go elsewhere, which is hard in an HMO like Kaiser. I can also fly anywhere in the USA to get state of the art treatment if I need it. But costs are quite different, as Medicare advantage is $75 month here, and includes everything, whereas Medigap is at least $100 for Plan G, and drug Part D is at least $20 or so. But if you can afford the difference, do it, unless you plan to stay healthy the rest of your life! And you can ...

I want to find a fee-only financial advisor to help me asset allocate and manage my portfolio. I don't want to pay a percentage of assets as that ends up being quite expensive. I'd like to find someone I can meet with 2-3 hours maybe once or twice a year. I have a few questions: 1. Do I need to find someone near me (San Jose California)? Or can I just find anyone in the USA and meet with them by phone or Zoom. 2. How should I do a search? Should I look on yelp? is https://www.napfa.org/ useful? 3. What questions should I ask? I assume I should ask some of these following questions: 1. What are your hourly fees? 2. Will you work with me on an hourly basis, or do you only do a percentage of assets fees? 3. will you help me manage accounts at ...

There is an error in the OP post.

There is $13000 in his wife's IRA. $5500 pretax, $5500 nondeductible, and roughly $2000 in investment gains. This is a snakepit. You might be able to xfer the pretax money to the 401k, but basically it's going to be very complicated as the backdoor roth only works well if you have NO money in IRA's. I'd get professional advice. You can't xfer the other $5500 to a 401k.

JW-Retired wrote: ↑Sun Oct 28, 2018 11:02 am motaska,


But very the first thing you need to understand and practice, is how to fill out the IRS 8606 tax form that must be filed with your taxes for any year you do any of this. Don't try to just wing it with tax software as you are very likely to misunderstand one of the menu questions.
JW
Welcome to the Forum!

This is essential. Search google for advice, as Turbotax almost certainly will screw it up and make your IRA to Roth conversion taxable!!!

I can highly recommend the Moto G5 Plus, as the bootloader can be easily unlocked, and the phone can be rooted. Not sure if the new Moto G6 is equally easy to root. Make sure you buy the universal version, not the Verizon version, as that one has locked bootloader.

The G5 Plus is a very nice phone, and is cheap! (Under $250)

Here's a difficult question, I hope someone knows the answer. I exercised Incentive Stock Options ISO's in late November 2016. The spread between the exercise price and the current price of the not publicly traded stock created AMT income that was quite significant. Also had a W-2 job that year. The AMT income meant that I owed $30,000 extra in taxes, which I paid before April 15 with an extension request. I then filed my final tax return in a Timely Way in October. I received a small refund. I never filed any estimated taxes. A few months later I got a notice from the IRS that they felt that I should have paid estimated taxes going all the way back to the first Quarter of 2016. This doesn't make any sense to me because a) I only decided to...

Wow! I love this forum!!!

You answered all of my questions. I had a typo, separate IRA should have been SEP-IRA.

And the inherited IRA is not from my spouse, but from mom, so no issues there.

Again, thanks a million for clarifying all of this. Now I can make my 2016 contribution.

Hi all, I have a detailed procedural question about doing a back door Roth this year. Here are the details: I have a personal 401(k) into which I have rolled several traditional IRA accounts including a SEP-IRA. The accounts won't be fully rolled over and closed until perhaps April 14, 2017 . After that I will have a 401(k), some pre-existing Roth accounts, and a inherited IRA. So by December 31, 2017 there will be no IRAs in my accounts. But on December 31, 2016 I did have several traditional IRA accounts. I would like to make a nondeductible IRA contribution for 2016, and later for 2017. And then obviously convert them both to Roth's. Question: 1. Is it okay to open a new IRA account and make a nondeductible contribution to this account e...