Search found 701 matches

by fyre4ce
Fri Aug 07, 2020 8:41 pm
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 297
Views: 13370

Re: Asymmetric risk in the Roth vs Traditional question

I'm very confused by the wording in a couple of these points, can you clarify? To try to quantify the asymmetry, I did an analysis (inspired by this thread ) to compare the outcomes of over-contributing and under-contributing to tax-deferred accounts. Assumptions: Current tax laws are in place at r...
by fyre4ce
Fri Aug 07, 2020 7:32 pm
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 297
Views: 13370

Re: Asymmetric risk in the Roth vs Traditional question

To try to quantify the asymmetry, I did an analysis (inspired by this thread ) to compare the outcomes of over-contributing and under-contributing to tax-deferred accounts. Assumptions: Married couple with a single earner, $105,000 salary Standard deduction of $24,800 (this puts them in the 12% brac...
by fyre4ce
Fri Aug 07, 2020 5:37 pm
Forum: Investing - Theory, News & General
Topic: Asymmetric risk in the Roth vs Traditional question
Replies: 297
Views: 13370

Re: Asymmetric risk in the Roth vs Traditional question

Who pays more taxes in retirement than during their working years? That doesn't even make sense. Traditional is better for this reason and a bunch of other reasons. Always prefer Traditional over Roth. Possibly single people who work for themselves and can no longer take schedule C deductions in re...
by fyre4ce
Fri Aug 07, 2020 12:17 pm
Forum: Personal Finance (Not Investing)
Topic: Roth vs. Traditional - Marginal or Effective
Replies: 29
Views: 1438

Re: Roth vs. Traditional - Marginal or Effective

I submit that the T vs R analysis doesn't have this asymmetry (or at least to nearly the same degree as a "how much to save" type analysis). If you over-predict future income, you'll pay a bit too much tax later. If you under-predict future income, you'll pay a bit too much tax now. The magnitude o...
by fyre4ce
Thu Aug 06, 2020 10:00 pm
Forum: Personal Finance (Not Investing)
Topic: Roth vs. Traditional - Marginal or Effective
Replies: 29
Views: 1438

Re: Roth vs. Traditional - Marginal or Effective

Lots of Ford assembly line workers who counted on a pension lost their jobs. Lots of workers at Bethlehem Steel lost pensions and healthcare. The OP is an administrator, not a teacher. That said, sure, if you want to assume some conservative pension, go ahead. I would discount it by 25% at least. B...
by fyre4ce
Thu Aug 06, 2020 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Roth vs. Traditional - Marginal or Effective
Replies: 29
Views: 1438

Re: Roth vs. Traditional - Marginal or Effective

I’ve been a reader here for about 10 years now and have appreciated the advice and conversation among you all. I am 31 and have contributed the max to a Roth IRA for 8 years (66k balance with Vanguard - VFFVX). I want to be sure that a Roth is the best option for me. My household income is $100k. A...
by fyre4ce
Thu Aug 06, 2020 10:23 am
Forum: Personal Finance (Not Investing)
Topic: Math help for Cash Balance Plan
Replies: 2
Views: 345

Re: Math help for Cash Balance Plan

The formula for future value of taxable investments is available on the wiki: https://www.bogleheads.org/wiki/Taxable_account The formula, especially calculating future basis, isn't super-simple, but there it is. Comparing the future after-tax value of the tax-deferred investment with a taxable inve...
by fyre4ce
Tue Aug 04, 2020 5:44 pm
Forum: Personal Consumer Issues
Topic: Does a couple really "need" an SUV?
Replies: 222
Views: 11045

Re: Does a couple really "need" an SUV?

Didn't read the long discussion, but I'll weigh in anyway. Most people don't need SUV's or trucks. I'm convinced that over-paying for vehicles is a major obstacle for most Americans to building wealth. SUV's and trucks (and yes, also sports cars) make the problem worse, due to their high up-front a...
by fyre4ce
Tue Aug 04, 2020 1:12 pm
Forum: Personal Consumer Issues
Topic: Does a couple really "need" an SUV?
Replies: 222
Views: 11045

Re: Does a couple really "need" an SUV?

Didn't read the long discussion, but I'll weigh in anyway. Most people don't need SUV's or trucks. I'm convinced that over-paying for vehicles is a major obstacle for most Americans to building wealth. SUV's and trucks (and yes, also sports cars) make the problem worse, due to their high up-front an...
by fyre4ce
Tue Aug 04, 2020 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: I was recently given a 14% raise and...
Replies: 47
Views: 6148

Re: I was recently given a 14% raise and...

I recently rewrote the Managing a Windfall wiki page:

https://www.bogleheads.org/wiki/Managing_a_windfall

Most of it is overkill for a 14% raise but it'd still be worth a read through to see if any details apply to you.
by fyre4ce
Mon Aug 03, 2020 9:36 pm
Forum: Personal Finance (Not Investing)
Topic: Help me find the flaw here (Hypothetical: Old car replacement cost v new car repair cost)
Replies: 4
Views: 394

Re: Help me find the flaw here (Hypothetical: Old car replacement cost v new car repair cost)

I think I agree with your reasoning. In simple terms, you have one uninsured lower-value vehicle and one insured higher-value vehicle. The value of the uninsured vehicle is more than the deductible on the insured vehicle. Which one should you prioritize protecting? The uninsured vehicle. This is, ho...
by fyre4ce
Sat Aug 01, 2020 11:37 pm
Forum: Personal Investments
Topic: Paying 7y/o son as household worker
Replies: 82
Views: 5309

Re: Paying 7y/o son as household worker

The consensus opinion (and the one I tend to agree with) is that this would be abusive of the tax code. People can, and do, commit worse tax fraud, but that's no reason to break the rules yourself. My standard for tax aggressiveness is what I'd be comfortable explaining to an IRS auditor. I would no...
by fyre4ce
Thu Jul 30, 2020 4:11 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage Question: any reason NOT to put 15% down with no PMI?
Replies: 8
Views: 434

Re: Mortgage Question: any reason NOT to put 15% down with no PMI?

I assume this is compared to 20% down, and the interest rates are the same. In that case, the only reasons to put more down is if the cash-flow with 15% down would be onerous, and/or if the expected after-tax rate of return of the money is less than the after-tax interest rate of the mortgage. Other...
by fyre4ce
Mon Jul 27, 2020 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: Way out of financial catastrophe?
Replies: 94
Views: 15651

Re: Way out of financial catastrophe?

Yeah, I remember reading this horror story as well. Glad you were able to find a way out that at least minimized the pain.

I wonder if there were any kind of insurance that would cover this sort of thing.
by fyre4ce
Mon Jul 27, 2020 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: At what amount ($) of income does going from Sole Prop to LLC Taxed as S Corp make sense?
Replies: 26
Views: 2042

Re: At what amount ($) of income does going from Sole Prop to LLC Taxed as S Corp make sense?

There are also tax implications for the business pass-thru deduction. Sole proprietors get to deduct all net business profit (minus 1/2 SE tax), whereas S-corp owners only get to deduct business profit, which is exclusive of wages. There are income limits for SSTB's (specified service trades and bus...
by fyre4ce
Mon Jul 27, 2020 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: When to self insure for things like cars? (prefer mathematical model)
Replies: 91
Views: 6333

Re: When to self insure for things like cars? (prefer mathematical model)

No one has actually given you a mathematical model, so I'll give it a go. Here's a rather simplistic model based on the Kelly criterion. The model is for someone who has just bought insurance and is considering canceling it for a full refund, because that makes the formulas simpler. If you don't ye...
by fyre4ce
Mon Jul 27, 2020 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: Should I sell our second 2009 Hyundai car?
Replies: 4
Views: 314

Re: Should I sell our second 2009 Hyundai car?

What are your motivations for wanting to sell the car? You didn't include any information about your overall financial situation, but $3000 plus $440/year doesn't seem like a big amount of money to me. What would you do with the money if you sold it? Also, what's the parking situation? Parking two c...
by fyre4ce
Mon Jul 27, 2020 1:59 am
Forum: Personal Finance (Not Investing)
Topic: Tax strategies
Replies: 5
Views: 1026

Re: Tax strategies

I recently rewrote the Managing a windfall page on the Bogleheads wiki and compiled a list of tax strategies there. They aren't specific to windfall recipients; they could apply to everyone. They are: Optimally timing the exercise of incentive stock options, sale of stock, etc. If applicable, approp...
by fyre4ce
Mon Jul 27, 2020 1:48 am
Forum: Personal Finance (Not Investing)
Topic: How Much House Can I Afford - Tough Question
Replies: 12
Views: 1704

Re: How Much House Can I Afford - Tough Question

Did an analysis like this recently. I don't have the time to apply these to your situation right now, but it goes like this: [planned non-housing expenses (food, vacations, etc.)] + [saving for known future expenses (wedding, new car, kids' college, etc.)] + [housing expenses] + [taxes] + [maximum t...
by fyre4ce
Sun Jul 26, 2020 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Car Purchase Advice
Replies: 10
Views: 1149

Re: Car Purchase Advice

Double post
by fyre4ce
Sun Jul 26, 2020 11:23 pm
Forum: Personal Finance (Not Investing)
Topic: Car Purchase Advice
Replies: 10
Views: 1149

Re: Car Purchase Advice

A few things: My wife looked at the Q5 and it was a solid contender. She actually liked the feel of the SQ5 more, which is odd because she’s not a performance person. In any case, she settled on a Lexus NX300h and we’re very happy with it. Gets much better gas mileage too. My general rule is to have...
by fyre4ce
Sun Jul 26, 2020 12:31 pm
Forum: Personal Finance (Not Investing)
Topic: Driveway On Neighbor's Land
Replies: 139
Views: 4235

Re: Land Border Issues & Aggressive Neighbor - Help Wanted Please

The first thing I would do is contact your title insurance company. I'm not sure if they even handle these types of claims, but if they do it's your best bet. Frankly, you should have reached out to them early on in the process (if you have it), rather than have an ongoing discussion with the aggres...
by fyre4ce
Sat Jul 25, 2020 1:05 pm
Forum: Personal Finance (Not Investing)
Topic: Forgo a year of retirement contributions to spend on self?
Replies: 45
Views: 3960

Re: Forgo a year of retirement contributions to spend on self?

Come back and ask that question when you have no debt, a paid off house, and $1M in liquid savings. Then we can have an interesting discussion. Until then, it’s a really bad idea, so the answer is no.
by fyre4ce
Thu Jul 23, 2020 4:58 pm
Forum: Personal Finance (Not Investing)
Topic: Take the entire IRA SPIA (annuity) as income?
Replies: 44
Views: 1770

Re: Take the entire IRA SPIA (annuity) as income?

What I don't know for sure is if an SPIA purchased within an IRA (or similar) generates the monthly/annual income withIN the IRA, and one removes money from the IRA as desired, or if the SPIA payments automatically arrive as taxable income. (I guess we'll be finding out about this in a few more yea...
by fyre4ce
Thu Jul 23, 2020 11:31 am
Forum: Personal Finance (Not Investing)
Topic: When to self insure for things like cars? (prefer mathematical model)
Replies: 91
Views: 6333

Re: When to self insure for things like cars? (prefer mathematical model)

Let me give you an example. Let's say you had 10k to your name and your had a 15k car, buying comprehensive and collision insurance should be a no brainer. Now let's say you had 100 million, obviously you wouldn't need insurance on a 15k car, you'd just write a check without blinking. What is the t...
by fyre4ce
Wed Jul 22, 2020 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Best option to pay for large unexpected expense
Replies: 40
Views: 2614

Re: Best option to pay for large unexpected expense

Hi all, First time poster. I got the bad news this week that a very large oak tree on my property is diseased and needs to be removed this year. I’ve gotten 4 quotes from arborists and all are around $15,000. I don’t just have $15K liquid so my options as I see it are 1) cash out part of an IRA and...
by fyre4ce
Wed Jul 22, 2020 12:37 pm
Forum: Personal Consumer Issues
Topic: Negotiating with landlord on installing radon mitigation system
Replies: 43
Views: 2105

Re: Negotiating with landlord on installing radon mitigation system

For those of you who are actually experts in this area, how strong is the evidence on the cancer risk of radon? I was always under the impression that it was quite sketchy and that the limits were based on data on miners that worked underground as opposed to true living environments. Are we talking...
by fyre4ce
Wed Jul 22, 2020 12:43 am
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

unclescrooge wrote:
Tue Jul 21, 2020 7:16 pm
Yes, always happy to help.
Thanks, PM sent!
by fyre4ce
Wed Jul 22, 2020 12:36 am
Forum: Investing - Theory, News & General
Topic: Article claiming 401k no longer "makes sense"
Replies: 74
Views: 7615

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

grabiner wrote:
Tue Jul 21, 2020 8:34 pm
A medium-income family with children might be able to contribute enough to 401(k) plans to qualify for the earned income tax credit, which creates a marginal rate much higher than 12%.
Also the Saver's credit.
by fyre4ce
Tue Jul 21, 2020 3:06 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

<snip> I'm in North East Los Angeles next to Pasadena. While I don't have any remodeling experience, this was my 21st (or 22nd) home purchase so I'm very comfortable with real estate, especially in terms of raising capital and reaching out to people to ask when I needed advice. We decided to buy th...
by fyre4ce
Tue Jul 21, 2020 12:25 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

I did something you are considering with house B a few years ago. We bought a house that was uninhabitable for $1.3 million, and spent several months rebuilding it. We could not live in it during construction, partially because it was uninhabitable also it was unsafe, and we had 2 kids, aged 2 year...
by fyre4ce
Tue Jul 21, 2020 11:33 am
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

Please explain how you are going to audit your “cost plus” concept. Ie, Do you REALLY expect every contractor to amortize the cost of their trucks, trailers, tools aND consumables—in detail? Good luck with that. Auditing would be tricky, but I have a few ideas. In my business, labor rates and the l...
by fyre4ce
Mon Jul 20, 2020 6:35 pm
Forum: Personal Consumer Issues
Topic: Advice on a more livable place
Replies: 145
Views: 12052

Re: Advice on a more livable place

Culturally, California is a good fit. Your housing budget might work for a 3-4 bedroom townhouse, but not for a house with a yard, unless you want to live someplace that has hot weather, bad schools, and isn't a good cultural fit. It really comes down to what you consider southern california. Want ...
by fyre4ce
Mon Jul 20, 2020 6:25 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

<snip> Absolutely, there is profitable business in building homes, that is what support the construction industry. Are you planning to become a home builder? Will you serve as your own GC (Owner-builder)? that will save some money, but it is a LOT of work, and transfers a lot of the risk onto you. ...
by fyre4ce
Mon Jul 20, 2020 6:04 pm
Forum: Personal Finance (Not Investing)
Topic: Taking out mortgage after a home purchase for cash
Replies: 2
Views: 350

Re: Taking out mortgage after a home purchase for cash

What's the reason for not just taking a mortgage concurrently with the new purchase? This is the usual way it's done.
by fyre4ce
Mon Jul 20, 2020 5:53 pm
Forum: Investing - Theory, News & General
Topic: Dark side of Pretax 401Ks and IRAs
Replies: 90
Views: 8366

Re: Dark side of Pretax 401Ks and IRAs

The article is rubbish because it ignores the up-front tax deduction that pretax savings gets. Edit: Also, generally taxable is worse than either pretax or Roth. Roth is always going to be at least as good as taxable (and better in all but the rarest of cases). Pretax can theoretically be worse than...
by fyre4ce
Mon Jul 20, 2020 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

<snip> Perhaps you have discovered a hidden gem, but that is just as unlikely as being identify a "bargain" stock. An active real estate market like the Bay Area is pretty efficient, it seem unfathomable that there is $1m just laying around to be plucked. Unless you are doing a lot of the work your...
by fyre4ce
Mon Jul 20, 2020 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

Hi, I also live in a very HCOL Zip code in SoCal. My advice is to buy in the best school district, and the least amount of house that will satisfy your family’s basic needs. I personally would never consider tearing a house down to the studs after having already purchased the home and lived in it f...
by fyre4ce
Mon Jul 20, 2020 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

I think you're significantly underestimating the cost and frustration of new construction assuming you haven't built a home before. We're in the Bay Area and Socal may be a bit lower, but I would expect to pay $400–500/sqft including soft costs for new construction with decent finishes. It's not un...
by fyre4ce
Mon Jul 20, 2020 4:12 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

Re: SoCal house purchase/construction

My thought is that if the third property has that much potential and your estimates to scrape and rebuild are accurate it won't sell for $1.2M. That's the asking price to generate interest and professional flippers/developers/builders will bid it up higher. They are doing the same math you are doin...
by fyre4ce
Mon Jul 20, 2020 2:24 pm
Forum: Personal Finance (Not Investing)
Topic: Should I raid my kids college fund to buy a new computer?
Replies: 29
Views: 2716

Re: Should I raid my kids college fund to buy a new computer?

Pay cash and be done with it. I think my last trip to Costco cost me half that just on food and supplies.
by fyre4ce
Mon Jul 20, 2020 1:02 pm
Forum: Personal Finance (Not Investing)
Topic: SoCal house purchase/construction
Replies: 19
Views: 1498

SoCal house purchase/construction

This thread is a follow-up from this thread a few months ago about a search for housing. Another long-ish post but thanks in advance for those who read it. We've been exploring both rent and buy options, and have been leaning toward buy, mostly because rental houses in our price range tend to be run...
by fyre4ce
Sun Jul 19, 2020 1:55 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpectedly taking on parents' debt: pay it all or?
Replies: 33
Views: 4122

Re: Unexpectedly taking on parents' debt: pay it all or?

Do they have any other income or assets? Do you have any siblings? My mom does some work that will probably give them $1k/month. Enough to pay some basic bills. No other assets. I have one sibling but he is an addict so won’t be helpful for this situation. I asked about the sibling because if there...
by fyre4ce
Sun Jul 19, 2020 10:41 am
Forum: Personal Finance (Not Investing)
Topic: Unexpectedly taking on parents' debt: pay it all or?
Replies: 33
Views: 4122

Re: Unexpectedly taking on parents' debt: pay it all or?

Do they have any other income or assets?

Do you have any siblings?
by fyre4ce
Sat Jul 18, 2020 11:01 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA - withdraw from it to pay expenses first?
Replies: 21
Views: 1059

Re: Inherited IRA - withdraw from it to pay expenses first?

It would help to know some numbers for your financial picture, particularly: planned future income for you and spouse, and traditional, Roth, and taxable balances. In general, the best strategy is to blend traditional, Roth, and taxable withdrawals so that you keep your marginal tax rate roughly the...
by fyre4ce
Sat Jul 18, 2020 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Selling and downsizing/renting vs aging in place
Replies: 18
Views: 1762

Re: Selling and downsizing/renting vs aging in place

What are the chances of them continuing to work for a few more years and delaying SS payments to allow them to increase? Wouldn t each additional year worked ,with a delay in SS, be worth about an extra $150 a month? I've tried to tell them that but they want to collect SS ideally the day they qual...
by fyre4ce
Thu Jul 16, 2020 6:00 pm
Forum: Personal Finance (Not Investing)
Topic: Mom Has $2K Net Worth at 62 - Want to Help
Replies: 120
Views: 11195

Re: Mom Has $2K Net Worth at 62 - Want to Help

As has already been stated, investments matter very little at this point. She just doesn't have enough capital for it to matter. She needs to boost income and cut expenses. Specific changes that are needed: -The house needs to be sold. She can't afford it. She needs to rent or buy a cheap place. The...
by fyre4ce
Thu Jul 16, 2020 4:47 pm
Forum: Personal Finance (Not Investing)
Topic: 2019 California income tax - paper return
Replies: 12
Views: 818

Re: 2020 California income tax - paper return

Update: I called the FTB, and they told me they processed my return and were showing the balance due, but weren't showing a payment. Strange- who knows what happened to the check. I paid online today to avoid any penalty. They said if they find the check after they receive my online payment, they'l...
by fyre4ce
Thu Jul 16, 2020 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: 2019 California income tax - paper return
Replies: 12
Views: 818

Re: 2020 California income tax - paper return

Update: I called the FTB, and they told me they processed my return and were showing the balance due, but weren't showing a payment. Strange- who knows what happened to the check. I paid online today to avoid any penalty. They said if they find the check after they receive my online payment, they'l...