Search found 64 matches

by coffeecup333
Wed Jan 27, 2021 10:35 pm
Forum: Personal Investments
Topic: Asset Allocation/Location Review
Replies: 5
Views: 737

Re: Asset Allocation/Location Review

You didn’t post how your portfolio is allocated %-wise among Taxable/Roth/Tax Deferred. Or whether your Taxable and Roth accounts are at a mainstream provider with low costs and numerous fund choices. If you don’t have a US total stock market (TSM) fund/ETF available in your tax deferred plans, do you have a good low-ER international fund available? You could hold mid/small cap and/or US TSM in your Roths/Taxable and hold international equity in your tax deferred plan. Good point, HomeStretch. The tax deferred accounts are roughly 80%, Roths 16%, and the taxable 2% ( more or less). The taxable and roth accounts are all with vanguard. The international fund's ER is .34% but is not an index fund like the bond and the large cap in the tax def...
by coffeecup333
Wed Jan 27, 2021 9:59 pm
Forum: Personal Investments
Topic: Asset Allocation/Location Review
Replies: 5
Views: 737

Re: Asset Allocation/Location Review

Our investments are currently 84% stocks ( 71% domestic stock, 13% international) and 15% bonds. We max one of the pretax retirement accounts yearly and two roths and sometimes contribute a little to a taxable account.  We had originally set our AA at 70/30 but are also ok with letting it slide to 80/20. The taxable and the roths are currently VTIAX and the retirement accounts have a bond index fund that tracks the Barclays Aggregate index and one that tracks the S&P 500. Looking at our accounts now it seems there is no allocation to mid and small cap indexes. Should we split these accounts somewhere into the mid/small cap or the extended market index? If so, the only place I can see doing this is in the roths and losing all or some of...
by coffeecup333
Tue Jan 26, 2021 10:53 pm
Forum: Personal Investments
Topic: Asset Allocation/Location Review
Replies: 5
Views: 737

Asset Allocation/Location Review

Our investments are currently 84% stocks ( 71% domestic stock, 13% international) and 15% bonds. We max one of the pretax retirement accounts yearly and two roths and sometimes contribute a little to a taxable account.  We had originally set our AA at 70/30 but are also ok with letting it slide to 80/20. The taxable and the roths are currently VTIAX and the retirement accounts have a bond index fund that tracks the Barclays Aggregate index and one that tracks the S&P 500. Looking at our accounts now it seems there is no allocation to mid and small cap indexes. Should we split these accounts somewhere into the mid/small cap or the extended market index? If so, the only place I can see doing this is in the roths and losing all or some of ...
by coffeecup333
Fri Sep 04, 2020 10:10 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage balance at 4.375 interest...next steps?
Replies: 7
Views: 928

Mortgage balance at 4.375 interest...next steps?

We live in a condo and have plans to move to a house within a year or two. The mortgage is currently sitting around $56000 which we've stopped aggressively paying down to build up more cash for the potential house. But the interest rate is at 4.375% and in this environment I know there are lower rates since family members have gotten them. Our credit scores are excellent but refinancing doesn't seem worth it and we are not sure about using cash to pay it off with the way things are. The HELOC rates seem right around our rate earlier this year though I haven't looked at this again recently. We would like to pay the mortgage off so it doesn't drag down our budget but knowing we will be moving on soon, is this a wise idea? We paid off the mort...
by coffeecup333
Tue Sep 10, 2019 10:56 pm
Forum: Personal Investments
Topic: Can I downgrade to part-time?
Replies: 2
Views: 887

Can I downgrade to part-time?

As a really tired working parent tonight, I am looking for some new sets of eyes on these numbers. Please let me know if I'm missing something. I estimate my husband will receive a pension roughly around $40,000-$50,000 with survivorship benefits per year (after taxes) when he is eligible to retire in 7 years, more or less. I would like to match this timing and go part time by 2026 with $1,000,000 set aside to draw down between 2%-4% per year, if needed. Is this doable according to these calculations? If my husband and I currently put away $38,000 in pretax vehicles and $12,000 in Roths this is $50,000 a year added to the current values. At a conservative growth of 5.48% growth for 84 months compounded monthly, I am getting a total account ...
by coffeecup333
Mon Jun 24, 2019 4:15 pm
Forum: Personal Finance (Not Investing)
Topic: Rent/Rent or Sell/Rent?
Replies: 6
Views: 877

Re: Rent/Rent or Sell/Rent?

Watty wrote: Tue May 28, 2019 1:47 pm
coffeecup333 wrote: Tue May 28, 2019 10:09 am .... the capital gain right now is roughly $60k.
If you qualify for the homeowners capital gains exclusion it would be rare that keeping it as a rental would make sense unless you were very likely to move back into it some day.
Thanks, Watty. I don't think we'd move back in again one day either.
by coffeecup333
Mon Jun 24, 2019 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: Rent/Rent or Sell/Rent?
Replies: 6
Views: 877

Re: Rent/Rent or Sell/Rent?

I'm not sure there is a clear cut answer one way or the other. You mentioned the subsidy, and it sounds like that continues for more than a year (as you could use it after a 1 year lease expired). Is that for housing cost only? Or a generic subsidy to use as you please? If you decide to go the rental route, you have experience there, only you can judge if worth the hassle from 1 hour away. I would make that a separate call from paying off the mortgage. Look at the rental as a business call in isolation, is that a good investment for you with appreciation potential and ongoing cash flow. Have you assumed some periods of no rent as you switch tenants? And if you haven't lived in the place in at least 2 of 5 years you lose the cap gains excep...
by coffeecup333
Tue May 28, 2019 10:12 am
Forum: Personal Finance (Not Investing)
Topic: Diagnosed with cancer, anything else I should be doing?
Replies: 24
Views: 4717

Re: Diagnosed with cancer, anything else I should be doing?

Hello all, I was diagnosed with cancer about 4 months ago and undergoing chemotherapy now. The prognosis looks good. Last scan showed all of cancer was gone. I'm 33 years old, married, no kids, physician by occupation. I have been out of work on FMLA for last 4 months and anticipate to be out for another 2 months. I have claimed short term disability and currently being paid by long term disability insurance. I have a 1.5 million term life insurance which is active. Our estate documents were prepared last year in our state. The beneficiary on my retirement account is my wife. Anything else I should be doing or making sure I have taken care off? Appreciate all the advice in advance Tommy Sorry to hear you are going through this but glad to ...
by coffeecup333
Tue May 28, 2019 10:09 am
Forum: Personal Finance (Not Investing)
Topic: Rent/Rent or Sell/Rent?
Replies: 6
Views: 877

Re: Rent/Rent or Sell/Rent?

fabdog wrote: Mon May 27, 2019 4:45 pm Are you moving so the condo rental would be long distance?

How much capital gain can be saved if you sell now?

If you use $50K to pay off the mortgage, what does that do to your liquid/emergency funds?

Mike
Hi Mike, the condo would be about an hour away from where we will be and the capital gain right now is roughly $60k. The $50k would not put too much of a dent into our budget since we have more savings and have secure jobs. Another thought I had was to keep the condo, rent it out, and then use the equity to put a down payment on a house if we were to find something and not deal with the subsidy-just another option. Looking forward to your thoughts as another perspective in this decision.
by coffeecup333
Mon May 27, 2019 4:27 pm
Forum: Personal Finance (Not Investing)
Topic: Rent/Rent or Sell/Rent?
Replies: 6
Views: 877

Rent/Rent or Sell/Rent?

Hi All, We have a condo at the moment that we are debating if it would be best to rent or sell. I will be receiving a subsidy from my employer that I would like to use to rent a house and learn more about the areas we are interested in while having more space and saving to buy a house eventually. We are not bound to one place and with the subsidy in place can switch locations after the rental contract is up yearly to find something we like. Help me clarify if this move is worth it: 1. Is it worth taking $50k roughly from our savings/earnings to pay off the mortgage at 4.375%? 2. If we pay off the mortgage, take the going rate for rent into consideration and subtract out the expenses including property/school taxes, insurances, and maintenan...
by coffeecup333
Wed Apr 17, 2019 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 956

Re: Conversion vs Roth 401k Contribution

Rather than framing this decision as Roth 401k contribution vs Roth to Traditional conversion in the 12% federal tax bracket, I would first assess whether Traditional or Roth contributions to 401ks and IRAs are better. Traditional might be better if you can get into range for the Retirement Savings Contributions Credit. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit 50% of your contribution AGI not more than $38,500 20% of your contribution $38,501 - $41,500 10% of your contribution $41,501 - $64,000 Both your Traditional 401k and Traditional IRAs are options to lower your taxable income. You would have to do some calculations. Consider your 457b contributions baked in. Let's s...
by coffeecup333
Wed Apr 17, 2019 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 956

Re: Conversion vs Roth 401k Contribution

Earl Lemongrab wrote: Thu Apr 11, 2019 4:36 pm I'll post my usual caution. If you have holdings in taxable, then you will have some qualified dividends residing in the 0% capital gains slot. If so, then not all of the 12% bracket is actually 12%. There will come a point where you will bump QDivs out of 0% into 15%, giving a net tax on that converted dollar of 27%.
This is a great point. How did you arrive at 27%? Just trying to learn the calculations for myself.
by coffeecup333
Thu Apr 11, 2019 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 956

Re: Conversion vs Roth 401k Contribution

Dottie57 wrote: Thu Apr 11, 2019 2:37 pm Conversion does not incur capital gains. Every dollar converted is taxed as normal income.
Thanks for the clarification. I've edited the post to be clearer. Would a potential $19,000 Roth 401k contribution or a potentially more/less amount of conversion be more valuable in your opinion (being that conversions would lesson the overall balance to try to roll over or distribute in the end)? I am trying to plan ahead and stay under the RMDs by balancing these accounts years in advance.
by coffeecup333
Thu Apr 11, 2019 2:47 pm
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 956

Re: Conversion vs Roth 401k Contribution

Your situation isn't clear. How would you convert pre-tax amounts into post-tax amounts with 0% capital gains? Capital gains apply to taxable accounts. Do you mean that your marginal tax rate is 0%? If you are deciding between contributions to a Roth 401k and converting money from Traditional to Roth, that would imply you are paying taxes on the conversion that could have been used for a contributions instead. Otherwise, you could just do both. Is this the case? I edited my original post to be clearer. Thank you for pointing out the error. The marginal tax rate would be 12%. I am only thinking of converting because of the low enough taxable income and the belief that tax rates will go higher by the time we retire so it may be better to get...
by coffeecup333
Thu Apr 11, 2019 11:22 am
Forum: Personal Finance (Not Investing)
Topic: Conversion vs Roth 401k Contribution
Replies: 12
Views: 956

Conversion vs Roth 401k Contribution

This year we will be in a low enough tax bracket that converting some pretax monies into post tax at 12% marginal tax bracket is possible (I don't see this ever happening again). However, how can I calculate this tax-wise to figure out the amount we can convert considering our gross income? Also, if we are in a low enough bracket, which would be more valuable(we will be in a higher tax bracket going forward): is it better off contributing to a Roth 401k (457b pretax is already maxed out) since this would be tax free monies for the future, or going to the max within our tax bracket with the conversion? Contributing to the Roth 401k would reduce the amount available to convert. I have estimated the gross income to date as well as the net inco...
by coffeecup333
Wed Feb 06, 2019 1:31 pm
Forum: Personal Finance (Not Investing)
Topic: What do we need to earn?
Replies: 11
Views: 1325

Re: What do we need to earn?

Hilarious, I just choked on my coffee, literally. (Funny a second time, given the OP’s handle name). Sorry, OP. But keep in mind the 4% rule (safe withdrawal rate guaranteed to last 30 years), or the 3.5% rule (perpetual withdrawal rate). That is, if you want $x in spending per year, you need $25x in assets to $30x in assets. You can then discount that amount with the expected rate of inflation and the time period between now and your expected date of retirement. [Use the PV function in Excel]. To clarify, I am looking at making a few career decisions and since I am working abroad, will need to decide a) if I should return home, b)if I return home with the same employer, or c) find another employer upon returning which then leads to questi...
by coffeecup333
Wed Feb 06, 2019 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: What do we need to earn?
Replies: 11
Views: 1325

Re: What do we need to earn?

Hilarious, I just choked on my coffee, literally. (Funny a second time, given the OP’s handle name). Sorry, OP. But keep in mind the 4% rule (safe withdrawal rate guaranteed to last 30 years), or the 3.5% rule (perpetual withdrawal rate). That is, if you want $x in spending per year, you need $25x in assets to $30x in assets. You can then discount that amount with the expected rate of inflation and the time period between now and your expected date of retirement. [Use the PV function in Excel]. To clarify, I am looking at making a few career decisions and since I am working abroad, will need to decide a) if I should return home, b)if I return home with the same employer, or c) find another employer upon returning which then leads to questi...
by coffeecup333
Wed Feb 06, 2019 12:57 pm
Forum: Personal Finance (Not Investing)
Topic: What do we need to earn?
Replies: 11
Views: 1325

Re: What do we need to earn?

bloom2708 wrote: Wed Feb 06, 2019 10:00 am Take 60 and subtract your age (say 45). Add that number to 25 (15+25 = 40)

Multiply (your number) 40 x your annual expenses (70,000), 40 x 70,000 = 2,800,000. Multiply that number by 1.25

1.25 x 2,800,000 = $3,500,000

If you are 45 and want to retire now and spend net $70k, have $3,500,000.

I just made that calculation up, but it might work. Any rules for the general population are subject to be wildly inaccurate.
I will have to run your numbers later against my magic crystal calculator ball to double check if this answered my burning boglehead question of the day. I think you missed a few more 0's in those calculations.
by coffeecup333
Wed Feb 06, 2019 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: What do we need to earn?
Replies: 11
Views: 1325

Re: What do we need to earn?

Hilarious, I just choked on my coffee, literally. (Funny a second time, given the OP’s handle name). Sorry, OP. But keep in mind the 4% rule (safe withdrawal rate guaranteed to last 30 years), or the 3.5% rule (perpetual withdrawal rate). That is, if you want $x in spending per year, you need $25x in assets to $30x in assets. You can then discount that amount with the expected rate of inflation and the time period between now and your expected date of retirement. [Use the PV function in Excel]. To clarify, I am looking at making a few career decisions and since I am working abroad, will need to decide a) if I should return home, b)if I return home with the same employer, or c) find another employer upon returning which then leads to questi...
by coffeecup333
Wed Feb 06, 2019 9:54 am
Forum: Personal Finance (Not Investing)
Topic: What do we need to earn?
Replies: 11
Views: 1325

What do we need to earn?

Hi Bogleheads,

If we know we need a specific number(x) to account for annual expenses, retirement pretax/post tax contributions, and 529 contributions, etc. and are MFJ at 22% federal tax, 6.45% NY state bracket, how do we figure out what we need to earn in gross salaries?
by coffeecup333
Sun Dec 09, 2018 8:34 pm
Forum: Personal Investments
Topic: Short term or long term Roth conversions?
Replies: 3
Views: 558

Re: Short term or long term Roth conversions?

retiredjg wrote: Sat Dec 08, 2018 3:24 pm Money in an IRA may grow or shrink, but it does not have a "capital gain" or a "capital loss". So there is nothing that is considered a short term or long term capital gain or loss inside an IRA. That concept only applies to money in a taxable account.

You converted a certain dollar amount. That dollar amount will be taxed. It is OK to convert at a loss - you actually get to pay a little less in tax since you are taxed on the dollar amount, not the number of shares.
Thank you for feedback-nothing like the end of the year looming and bringing along a moment to question oneself!
by coffeecup333
Sat Dec 08, 2018 2:59 pm
Forum: Personal Investments
Topic: Short term or long term Roth conversions?
Replies: 3
Views: 558

Short term or long term Roth conversions?

I had roughly $3000+ sitting in a tIRA in the 2030 target retirement which I simplified and exchanged to the the total stock market index investor shares in Feb 2018. In July 2018, I converted this amount into a Roth IRA (same vgtsx shares). This was at a loss of $115.22 and know I will have to pay tax on this conversion. But is this conversion considered long term or short term since the tIRA was open for longer than a year or is this considered short term since the conversion was made in July 2018? I am in a very low tax bracket this year and figured the conversion would be worth it this year since a year like this may not come again. For future reference, does it make sense to convert at a loss, even if at a low tax bracket? I've roughly...
by coffeecup333
Sun Dec 02, 2018 8:47 pm
Forum: Personal Investments
Topic: The first million?
Replies: 36
Views: 6670

Re: The first million?

I am trying to figure out if the numbers I am seeing are realistic so please weigh in. Using an investment calculator, with a low six figure starting amount currently saved in our retirement/brokerage accounts and estimating 5.23% returns (keeping it very conservative after taxes and inflation), if we save and invest roughly $62,000-$70,000 annually in a combination of pre-tax, Roth IRAs, and brokerage accounts, is it possible to really reach the million dollar mark in year 9 or so? I understand the market may return negative in the years ahead but how does one go about really calculating the amount of contributions to put away per year with such unclear returns to reach this mark? I would really like to hit a point where I can be financia...
by coffeecup333
Sun Dec 02, 2018 8:39 pm
Forum: Personal Investments
Topic: The first million?
Replies: 36
Views: 6670

Re: The first million?

No added opinions on the math, as other posters have it right, I'd just ask: What's so special about $1 million? That's just a number, and a conservative safe withdrawal amount is just $40,000/year. Your goal should have a connection to (or reflect) your projected expenses. If you're planning to save $60k per year, then you are clearly a higher-than-average earner. This leads one to surmise that you are living on more than $40k per year right now. Also don't forget that $1m in 10 years is not the same as $1m today, as purchasing power is eroded owing to inflation. EDIT TO ADD: I suggest using a Monte Carlo simulator so you can see a range of possible outcomes using various rates of return. That way, you'll get a sense of what happens when ...
by coffeecup333
Sun Dec 02, 2018 8:32 pm
Forum: Personal Investments
Topic: The first million?
Replies: 36
Views: 6670

Re: The first million?

AlexisAtEasternState wrote: Thu Nov 29, 2018 9:51 pm Try Portfolio Visualizer's Financial Goals tool.
You can have differing contribution rates and it adjusts for inflation.

https://www.portfoliovisualizer.com/financial-goals

I agree forward returns from these valuations will be lower than historical averages over the next 5-7 years
Thank you for this, exactly what I needed.
by coffeecup333
Thu Nov 29, 2018 9:05 pm
Forum: Personal Investments
Topic: The first million?
Replies: 36
Views: 6670

The first million?

I am trying to figure out if the numbers I am seeing are realistic so please weigh in. Using an investment calculator, with a low six figure starting amount currently saved in our retirement/brokerage accounts and estimating 5.23% returns (keeping it very conservative after taxes and inflation), if we save and invest roughly $62,000-$70,000 annually in a combination of pre-tax, Roth IRAs, and brokerage accounts, is it possible to really reach the million dollar mark in year 9 or so? I understand the market may return negative in the years ahead but how does one go about really calculating the amount of contributions to put away per year with such unclear returns to reach this mark? I would really like to hit a point where I can be financial...
by coffeecup333
Fri Oct 26, 2018 11:39 am
Forum: Investing - Theory, News & General
Topic: Compounding interest?
Replies: 47
Views: 6634

Re: Compounding interest?

arcticpineapplecorp. wrote: Wed Oct 24, 2018 8:58 pm take a look at the following picture. The bars show annual gains and losses (difference from beginning of each year to end of each year) and the purple dots show intra year losses (drops from peak to trough in each year). Do you see that even though there are intra year losses every year (on average of 13.8%) returns can still be positive 76% of the time (29 out of 38 years)?

Image

source: https://am.jpmorgan.com/blob-gim/138340 ... cale=en_US
This is a great chart! Thank you for sharing and helping put facts to feelings.
by coffeecup333
Thu Oct 25, 2018 9:55 pm
Forum: Investing - Theory, News & General
Topic: Compounding interest?
Replies: 47
Views: 6634

Re: Compounding interest?

Thank you for this. Using these retirement calculators and projecting a conservative 3%-5% return rate assumes a simple return but the annual rate of return of an investment is usually the effect of a series of returns (geometric mean). So if I am saving heavily, could it be that over time that my portfolio will consist more heavily of my contributions than growth attributed to compounding ? Isn't it the other way around? In the beginning, our portfolios consist more heavily of our contributions, but as time and compounding go on, our portfolio growth consists more and more of compounded growth. Using an investment calculator and plugging in a hypothetical $100,000 with a 5% return with $5000 contributions monthly after 10 years yields $93...
by coffeecup333
Thu Oct 25, 2018 2:53 pm
Forum: Investing - Theory, News & General
Topic: Compounding interest?
Replies: 47
Views: 6634

Re: Compounding interest?

Please help me understand how saving heavily and compounding returns positive growth when I see losses in my accounts? Don't the losses wipe out the power of compounding in other words? If you save heavily, say 20% out of 100k and market crash by 10% per year: Yr 0: 0$ yr 1: 20k yr 2: 38k ; 90% increase in net worth(NW) Yr 3 : 54k ; 42.6% inc. in NW Yr 4 : 69k ; 26.9% inc. in NW Yr 5 : 82k ; 19.1% inc. in NW Yr 6 : 94k ; 14.4% inc. in NW Yr 7 : 104k ; 11.3% inc. in NW Yr 8 : 114k ; 9.2% inc. in NW Yr 9 : 123k ; 7.5% inc. in NW Yr 10 : 130k ; 6.3% inc. in NW The power of compounding is great over time, but the power of saving heavily is also power enough to not see any losses due to poor return at the beginning. Thank you for this. Using th...
by coffeecup333
Wed Oct 24, 2018 10:30 am
Forum: Investing - Theory, News & General
Topic: Compounding interest?
Replies: 47
Views: 6634

Compounding interest?

Please help me understand how saving heavily and compounding returns positive growth when I see losses in my accounts? Don't the losses wipe out the power of compounding in other words?
by coffeecup333
Wed Sep 19, 2018 10:47 am
Forum: Personal Consumer Issues
Topic: Recommendations for traveler's Insurance for 65 years+
Replies: 13
Views: 1404

Re: Recommendations for traveler's Insurance for 65 years+

delamer wrote: Tue Sep 04, 2018 9:54 pm Are you looking for reimbursement if travel is interrupted, medical evacuation coverage, or health insurance if you need treatment outside the US?
Health insurance if treatment is needed is what we are looking for primarily.
by coffeecup333
Mon Sep 03, 2018 2:47 pm
Forum: Personal Consumer Issues
Topic: Recommendations for traveler's Insurance for 65 years+
Replies: 13
Views: 1404

Recommendations for traveler's Insurance for 65 years+

Looking for traveler's insurance for two adults over 65+ years. One has high blood pressure but both will be abroad for 1.5 months and roughly 3 months. Anyone have any experience with this? Any recommendations on what to look for/watch out for? Would traveler's insurance keep coverage going abroad if they took a break to go back home to the US (at home in the US they are covered with their own insurance policy)?
by coffeecup333
Sun Jul 15, 2018 7:23 am
Forum: Personal Investments
Topic: To Roll Over or Leave Vested?
Replies: 3
Views: 602

Re: To Roll Over or Leave Vested?

Yes it's guranteed 5% growth. It's really a very small amount so it won't matter much in our retirement picture. After your inputs and thinking it over, I'll be leaving it. Thank you as always, Bogleheads.
by coffeecup333
Fri Jul 13, 2018 12:45 pm
Forum: Personal Investments
Topic: To Roll Over or Leave Vested?
Replies: 3
Views: 602

To Roll Over or Leave Vested?

I worked for government and left after vesting. I left all my contributions in the tier I was in when I left so it's been earning 5% growth every year. The tiers have changed now so I am lucky that if I ever go back, I can stay in this tier with all the associated benefits. But I am not sure where life will take me at the moment. So the question I have been debating is this....is it wise to roll this over into a traditional IRA avoiding the federal and penalty taxes or leave it compounding at 5% until 55 years of age (when I will have to take a distribution based on their calculations). There is a COLA after 62 years and 5 years of retirement which I will meet. If I take all the contributions out now and come back to the same retirement sys...
by coffeecup333
Fri Jul 13, 2018 10:46 am
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 2338

Re: Total returns

Subtracting the expense ratios off the top of these returns gives me 27.44% and 27.23% which are no where near the benchmarks. So there must be some other math in here as suggested. Others have already pointed out that you should have *added* the expense ratio to the fund returns. Let me add that for an index fund that invests in international stocks, comparing fund returns with the returns of the benchmark is an exercise in futility, whether you adjust for ER or not. The reason involves fair value pricing. In brief, because the US market is open when overseas markets are closed and vice-versa, the prices of international funds get adjusted daily at close in anticipation of the effects of the day's events on overseas markets. In the olden ...
by coffeecup333
Thu Jul 12, 2018 4:58 pm
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 2338

Re: Total returns

https://investor.vanguard.com/mutual-funds/profile/performance/vgtsx/cumulative-returns https://investor.vanguard.com/mutual-funds/profile/performance/vtiax/cumulative-returns According to the links above, the benchmark returns were 21.41%. Expense ratios: .11% vtiax and .17% for vgtsx Returns: 27.55% vtiax and 27.40% vgtsx Subtracting the expense ratios off the top of these returns gives me 27.44% and 27.23% which are no where near the benchmarks. So there must be some other math in here as suggested. Regarding the question about the AAs and returns, all the calculators out there have a rate of return as an input to figure out retirement, savings, etc. but my investments are divided based on an AA into the 3 fund categories. What I'm tryin...
by coffeecup333
Thu Jul 12, 2018 4:14 pm
Forum: Personal Finance (Not Investing)
Topic: What rate of return are you using for retirement projections?
Replies: 106
Views: 14697

Re: What rate of return are you using for retirement projections?

averagedude wrote: Sat Jul 07, 2018 9:19 am The projections i am using are somewhat conservative:
Stocks. 3.5% real return
Bonds. 0.5% real return
Cash. 0.0% real return

With your portfolio using these numbers will give you a 1.6% real return.
This is exactly the kind of calculations I was looking for. How do you get 1.6% as the real return from the projections above?
by coffeecup333
Wed Jul 11, 2018 3:26 pm
Forum: Investing - Theory, News & General
Topic: Total returns
Replies: 20
Views: 2338

Total returns

A few questions I hope can be clarified: 1) I am invested in total international index admiral and investor shares. Looking at the total returns for 2017, the investor shares have returned 27.40% vs the benchmark of 27.41% and the admiral shares have a total return of 27.55% vs the 27.41% benchmark. If they are measuring the same index, why is there a difference in return in share classes? I called the Vanguard representatives to clarify this but it seems no one seems to know (with the explanation difference in expense ratios also don't account for this). Anyone know why this is? 2) What are capital returns, income returns, and total returns? Clearly they equal the total return but how are they calculated? What are they used for? 3) How can...
by coffeecup333
Tue Jul 10, 2018 4:29 pm
Forum: Personal Investments
Topic: VGTSX in Traditional IRA-Convert to Roth?
Replies: 12
Views: 1218

Re: VGTSX in Traditional IRA-Convert to Roth?

Thank you all for all the help! I have some numbers to crunch.
by coffeecup333
Sat Jul 07, 2018 10:34 pm
Forum: Personal Investments
Topic: VGTSX in Traditional IRA-Convert to Roth?
Replies: 12
Views: 1218

Re: VGTSX in Traditional IRA-Convert to Roth?

It might be better to roll the tIRA into your existing 401k (or similar) if available. Based on your backdoor Roth comment, your marginal rate may be higher now than in retirement. If so, you would be worse off to convert now instead of after retirement. Unfortunately, I don't have that option. Our rates may stay the same if it is traditional retirement but I am hoping to retire early. I didn't think to calculate the taxes paid on this. If I do keep it in there based on the numbers, how would this affect me when doing a backdoor Roth? My understanding is that this and any interest earned would also have to be accounted for, causing maybe a bigger tax bill. I was just looking to simplify and make things efficient now but glad you were able ...
by coffeecup333
Sat Jul 07, 2018 10:24 pm
Forum: Personal Investments
Topic: VGTSX in Traditional IRA-Convert to Roth?
Replies: 12
Views: 1218

Re: VGTSX in Traditional IRA-Convert to Roth?

JW-Retired wrote: Sat Jul 07, 2018 9:25 am It's all about your tax rate now versus your tax rate in the future. What rate will you pay on this conversion now?
JW
Roughly, if it is traditional retirement we will be staying in the same brackets (pending any more tax law changes). However, we are both hoping to retire early and use the various tax saving strategies out there to avoid staying in the same brackets. With this being said, I am aiming for simplicity and efficiency now. Good point about looking at the rate of conversion I would pay now. Do you have any recommended calculators I can use?
by coffeecup333
Sat Jul 07, 2018 10:19 pm
Forum: Personal Investments
Topic: VGTSX in Traditional IRA-Convert to Roth?
Replies: 12
Views: 1218

Re: VGTSX in Traditional IRA-Convert to Roth?

If you can't roll the traditional IRA into an employer plan, it is probably worth converting. If you don't convert it now, you will have to convert it when you need a backdoor Roth, and you'll probably be in a higher tax bracket then. And if you never need a backdoor Roth, you still simplify your portfolio (and, for example, get Admiral shares), which may be worth the possible small tax cost. Great points. Unfortunately I can't roll this amount into an employer plan and now lean more toward converting with your feedback. However, the international component of my AA would only be filled by a) adding to my husband's Roth which is dedicated to the international AA with the $5500 allowed (slow-going) and/or b) adding to it in the taxable acco...
by coffeecup333
Fri Jul 06, 2018 12:45 pm
Forum: Personal Investments
Topic: VGTSX in Traditional IRA-Convert to Roth?
Replies: 12
Views: 1218

VGTSX in Traditional IRA-Convert to Roth?

I have a little over $3000 sitting in a Traditional IRA invested in VGTSX from a time when I was able to contribute. My Roth currently is in VTSAX and taxable is also in VGTSX to make up my desired AA (bonds are in employer accounts). Does it make sense to roll this amount into the Roth? I was using the traditional IRA space (+ taxable)to slowly grow the international portion of my overall AA so how can I keep this allocation going? If I roll into the Roth, should I just buy VGTSX there? At some point, I will have to use the traditional IRA to do backdoor Roth conversions when I am no longer eligible to contribute to a Roth and was thinking it would be better to make things efficient and easy now.
by coffeecup333
Tue Mar 13, 2018 10:46 am
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Re: Balancing the Same Funds Across Taxable/Tax Deferred Accounts

rkhusky wrote: Fri Mar 09, 2018 2:35 pm You could look for similar, but not identical, funds to put in each account. For example, you could use Vanguard FTSE All-World ex-US (VFWIX) in Taxable, since you have Total Int'l in the Roth IRA. You already have S&P 500 in the 401K and Total Stock in the Roth IRA.

Also note that a dividend doesn't necessarily wash out an entire loss, just the amount of overlap. But avoiding them probably reduces paperwork a bit.
Yes, VFWIX is a great equivalent. Thanks for the suggestion and feedback!
by coffeecup333
Fri Mar 09, 2018 6:41 am
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Re: Balancing the Same Funds Across Taxable/Tax Deferred Accounts

This feels like several questions. 1. If you don't want to follow livesoft's suggestion, another option is don't buy the same fund in the Roth within 30 days of selling for a loss in taxable.... Another option is to use similar but different funds in each account. Of course you might be wanting to use those funds in your loss-harvesting trades so you'd be back to where you started. 2. Don't worry for 1 second about investor vs admiral shares. The difference is not enough money to care about. So it sounds like all I have to do is turn off the dividend reinvestment option, continue contributing to all accounts. When I see a TLH opportunity since the dividend reinvesting is already off, I can go ahead with it and find a matching fund-waiting ...
by coffeecup333
Fri Mar 09, 2018 6:32 am
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Re: Balancing the Same Funds Across Taxable/Tax Deferred Accounts

I am planning to keep these accounts forever so TLH will probably be in the picture at some point. OK, but that's not a problem. When I sell to tax-loss harvest, I can simply look to see if there will be a wash sale which takes less than a few seconds to determine. And if there will be a wash sale, then I can decide at that time whether to create the wash sale or wait to sell at a loss or do something extra to avoid the wash sale. In the meantime (that is, when I am not thinking about selling at a loss), life goes on its merry way without worries. There is just way too much unnecessary drama about tax-loss harvesting. Your experience and knowledge are what give you the comfort to make those decisions. For all of us starting on this and wan...
by coffeecup333
Thu Mar 08, 2018 9:17 pm
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Re: Balancing the Same Funds Across Taxable/Tax Deferred Accounts

I'm glad there was no internet when I started investing in a taxable account. I just did it and didn't worry about anything. And it turned out there was nothing to worry about. Hint: An easy way to never create wash sales down the road is to never sell any shares for a loss in a taxable account. Think about that seriously. How often do you think you will even have to think about selling shares for a loss? I'll give you the answer: Almost never. Yes, it is much easier sometimes not knowing what we don't know but in the case of the IRS getting involved, I would rather avoid it. I am planning to keep these accounts forever so TLH will probably be in the picture at some point. I've read your posts on TLH and enjoy your insights on this board. ...
by coffeecup333
Thu Mar 08, 2018 9:12 pm
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Re: Balancing the Same Funds Across Taxable/Tax Deferred Accounts

It's a bit confusing. Generally, one of the benefits of having, say, all of your VTSAX in Roth and all of your VTIAX in taxable is that you then qualify for the admiral shares. For example, if you have $10k in each, you could have $5k Total Stock, $5k Total International in both accounts, but then you would qualify for investor shares. If you put $10k Total Stock in Roth, $10k Total International in taxable, then you would get admiral shares of both. So, I'm not sure why you're saying "but I would be starting with the Investor shares then". As for your question about avoiding the wash sale, whatever you hold in taxable you could still hold in tax advantaged, but you would need to make sure dividend reinvestment is turned off so t...
by coffeecup333
Thu Mar 08, 2018 1:51 pm
Forum: Personal Investments
Topic: Balancing the Same Funds Across Taxable/Tax Deferred Accounts
Replies: 13
Views: 1602

Balancing the Same Funds Across Taxable/Tax Deferred Accounts

After a year of understanding and creating an AA and balancing it across our tax deferred accounts, we've come to a point we can open a taxable and put some money into it monthly. I've spent weeks reading about tax loss harvesting and the international tax credit that's possible with keeping the Total International Stock Index in a taxable and know that both the Total Stock Market Index Fund and the Total International Stock Index are both highly recommended for taxable (which I already have in our Roths). I will be starting with at least the $3000 required for investor shares and will be adding to this amount monthly. I would like to keep my taxable split eventually at some point 50/50 between both the VTIAX and the VTSAX but how can I sta...
by coffeecup333
Fri Feb 16, 2018 8:06 pm
Forum: Personal Investments
Topic: Going from non-admiral funds to admiral
Replies: 14
Views: 1851

Re: Going from non-admiral funds to admiral

I just did this with my account but the Vanguard representative had me sell and rebuy to get to Admiral shares for my Roth. Is there a problem with this vs. converting with the Admiral button?