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Very helpful replies - thanks everyone!

I totally agree on the need to be conservative on the growth assumptions (and incorporating inflation adjustment). And although it seems apparent after re-reading my original post, I do like the way several of you re-framed it as shifting from one form of saving to another. While we haven't made the shift yet, we may do so later this year. Thanks again, all.

Hi Bogleheads, My household has been aggressively saving for a while. Due to part career success and part modest living, we save ~55% of our pre-tax income. A decent portion of that has been into maxing out all of our tax-advantaged accounts (401k / 403b / 457b / Roths / HSA - which we are treating as a de facto retirement account). Maxing out all of these amounts to ~85K / year going into retirement. If we hope to retire in ~XX years, and a conservative return on our current retirement investments over that time period get us to our 25x number, are we OK to slow down (read: not stop) our retirement contributions? As far as I see it, the drawbacks to this plan are: 1. Reduced Tax Deferral 2. Future Uncertainty 3. Lifestyle Creep Changing Ou...

Thanks everyone for the (as usual) very helpful replies. I was thinking about an "error" in terms of the employer not getting out in front of the skewed HCE contributions, but I better understand how / why a look back true up has to happen sometimes (and how hard it would be to predict given all the financial uncertainties for many families in 2021). In any case, it's helpful to understand that the return of contributions will be treated as taxable income in 2022, and not last year (so thankfully we won't have to dust off TurboTax to file an amended return). And to several comments, it sounds like SO's plan has transitioned to safe harbor as of 1/1/2022, so (if I understand the implications of that correctly) this situation won't ...

Hi Esteemed Bogleheads, Earlier today my SO got this letter from her employer. I'm vaguely familiar with ERISA testing, so I understand how an employer could fail the Highly Compensated Employee test, but how they are going about correcting it seems weird. Some snippets from the letter: Dear Plan Participant, The Internal Revenue Service (IRS) requires that all retirement plans subject to ERISA are tested annually to ensure that the plan does not unfairly benefit company owners and/or Highly Compensated employees (HCEs). The test compares the Average Deferral Percentage (ADP) and the Average Contribution Percentage (ACP) of HCEs with that of non-HCE participants (ADP/ACP testing). The ADP tests the employee deferral rates and the ACP tests ...

So, shame on me for waiting until New Year's Eve, but on 12/31 I finally pulled the trigger on purchasing I Bonds. That said, when I look at the transaction history on my account I see the following:

Purchase Requested: 12/31/2021
Security Issued: 1/3/2022

I'm assuming that this means that my purchase counts towards my 2022 Calendar Year Limits, and not 2021? This seems like a straightforward question but I was having trouble finding an answer online (on the TreasuryDirect site or here). If so, I'll take it as a small "dumb tax" for not being more pro-active in figuring out what I wanted to do here.

Thanks in advance for anyone who can confirm!

Wonderful, thanks!

This is all helpful and saves me time sitting on hold on the line with VG this week.

So when I submit I should include the detail as supporting detail / evidence? Or should I just keep record of it in case I get audited? Thanks all, I suspected this was a fairly common situation.

Hi all, Did some TLH earlier in 2020 during the downturn in March, so I'm working through a 1099-B, which came Sunday from VG (via a consolidated 1099 form). According to the summary on the first page, my proceeds (in box 1d) are ~15% higher than the cost basis (box 1e), implying I would owe capital gains on that difference. The line detail on the 1099-B - and on the cost basis link on VG's website - however show that my proceeds are actually a tad lower than my cost basis. This was what I was expecting, and was surprised to see the numbers in the summary. Is there an error on my 1099-B, or am I misunderstanding how these all tie together? I'm trying to get someone on the phone from Vanguard but as you might suspect with tax season and the ...

Pre-ordered it and should be arriving in the next week or so. Looking forward to it.

Thanks Hub & SimonJester, I appreciate those perspectives. I think without a tax break on the 529, we would be less inclined to contribute, but the upfront benefit makes it pretty attractive. And I'm wary of over-funding too; I figure I will more fully answer the "how much to fund" question after things settle down later in '21 or '22. $20K for now feels very safe.

[/quote] (This is in regards to withdrawing for spouse and contributing to child in 2021) Check your tax form to see how they handle the deduction. In my state, the deduction equals the contributions minus the withdrawals for each beneficiary, with a lower threshold of zero for each beneficiary. If that is the case with IL, you may still be fine if you contribute to spouse, withdraw for spouse, change beneficiaries to child, contribute to child. Or you may not be fine if it is just based on the account number, without regard to the beneficiary. In that case, you may want separate accounts for spouse and child. edit: Seems easiest to just start with separate accounts and change beneficiaries, if necessary, down the road some time. [/quote] I...

SchruteB&B wrote: ↑Tue Jul 28, 2020 9:13 am

09deaconX wrote: ↑Mon Jul 27, 2020 8:43 pm
[*]Will we be exposing ourselves to a big retroactive tax bill if we move from IL? It seems like the answer is no, unless we roll over our plan (which doesn't seem all that necessary if their ERs remain low).

Correct, unless you rollover the IL plan to another plan you will not deal with a recapture tax. I have been in the Illinois 529 plan since 2001 and there have always been decent, cost effective choices so I would expect that there will continue to be.

I did a perusal through their plan options yesterday and it didn't look like the markup on the Vanguard funds was too heavy, but good to hear from someone who's gone through and made the investments.

Are you married filing jointly? You should check to see if you can withdraw and contribute the same year to the same account and still get the tax deduction. And how switching beneficiaries mid-year works. Might be better to create two accounts. Yes we are, but it looks at least in IL there isn't a difference in our contribution limit if we do single vs. MFJ. RE: changing beneficiaries, it looks like we can do that at any time using a 2 page form. From the form on Bright Start website: As the Account Owner, you may change the Designated Beneficiary at any time without adverse income-tax consequences if the new Designated Beneficiary is a Member of the Family of the current Designated Beneficiary. If the new Designated Beneficiary is not a ...

This looks like a fine plan to me. I see no glaring holes. Do consider how much you want to save in the 529 and avoid over-saving in possible. I ended up with a target of saving 60% of the cost of in-state tuition+room+board at the flagship universities. If we end up paying full sticker price we can cash flow the rest, but if the kids get any scholarships or go to a less expensive college then we won't have over-saved. There is no right answer here. I'm officially jealous of your state's 529 tax deduction: I get no tax deduction benefit in my state. Thanks luminous. There's not much to be jealous when it comes to the state of IL and taxes, but I suppose this is one of them: $10K/yr for individuals and $20K/yr for married filing jointly are...

Esteemed Bogleheads, I come with a humble request for you to review and beat up my 529 plans. I've done some research in the past couple of weeks, but admittedly only had a surface level understanding before then. Context: My SO and I are expecting our first child any day now, and thus college savings and the 529s are on the mind (among other things). We are thinking we would like to at least partially or fully fund undergraduate expenses. We have 6 mos. of living expenses in the emergency fund, and we have (or are on track to) fully fund other tax advantaged spaces (401k/HSA/IRAs), so any dollars we'd earmark for the 529 would otherwise be going into traditional brokerage account. Additionally, my SO is getting a master's degree - will pau...

Also, if you went to college you should check with school's career management center. The couple times I've really re-vamped my resume my undergrad and then grad schools provided free (and thoughtful) advice and guidance.

Thanks to you both.

retired@50, it looks like all the activity is documented in Vanguard, so I'm not expecting there to be any issues. SpecID looks perfect for my needs.

HomeStretch, thanks for the tip - fortunately I turned off the auto-reinvest a year or two after moving to VG, so fortunately I didn't make a bad problem that much worse.

Before the COVID-19 pandemic sent the markets tumbling, one of the things on my to-do list was to "clean up" the investments in my brokerage account. Early on in my career I used my father's financial advisor, who was more than happy to steer me to a range of different high ER mutual funds as well as a bunch of different stocks. All told, I had 34 different mutual funds and stocks before I switched over to Vanguard. While I quickly moved to wind down my high ER funds, today I still have a ton of different stocks. With the market crash, it looks like as of today there are a decent chunk of those stocks that are now losers / worth less than when they were originally purchased. It seems pretty straightforward to me that I should go a...

Thanks everyone for the prompt, thoughtful, and thorough responses that are a hallmark of this forum. Several of you mentioned additional complexities that I wasn't aware of / didn't fully appreciate.

I'll continue doing some digging, and decide if it's worth spending the political capital to push for it.

niceguy7376 wrote: ↑Thu Sep 05, 2019 8:51 am Is the current 401k a safe harbor plan?
Who manages the plan?
What are the fees and the investment options.

What is the size of the company?

It's my understanding that it is safe harbor (in that employer matches are vested immediately). Fidelity manages the plan - and its my understanding that they have recently made the MBR process streamlined on their site - so I don't imagine they will have any issue executing it if my company makes the change.

I'm not sure if the specific investment options have bearing on the conversation, but I can say that the 401k offers a range of low ER indexes available.

We're a small company (350) with a relatively entrepreneurial culture, which is why I'm considering this.

Hi all, Looking for some supporting information / practical advice on how to make the case to my employer to allow for the mega backdoor roth (MBR). Has anyone convinced your company's decision makers (in HR / sr. leadership) that they ought to structure the plan to allow for the MBR? In practical terms, my request is for them to allow our 401k plan to: 1. Allow for non-deductible traditional contributions above and beyond the $19k deductible contributions 2. Allow for in-service withdrawals for those non-deductible contributions While its my understanding that it would be a relatively low cost for them to make these changes, I think I need to be ready to put forth why these changes would represent a meaningful benefit to a subset of their ...

Howdy We went in January and found that 2 or 3 days in BA was fine. We mostly walked around the city and enjoyed the food and wine. Off topic, but the best part of the trip was going to El Calafate in Patagonia and taking day trips from there. El Calafate is a cozy mountain town and the National Parks and glaciers in Patagonia are spectacular. W B Similar to WildBill and others on this thread, I agree that ~2 days in BA is perfectly sufficient to hit the touristy stuff. I also wholeheartedly agree about El Calafate; that (and El Chalten) were our favorite parts of our 1.5 weeks in Argentina and you should seriously consider spending a few days down there if you already haven't. The Perito Moreno Glacier, the lakes and mountains of Patagoni...

I can't speak much to the cost / Medicaid coverage aspect of this decision, but in terms of resources and access to ABA Seattle and Salt Lake City are two places with a lot of great resources. Beyond ABA services, Seattle has some best in class centers around inclusive education (Haring Center) and adult activity / training center (Burnett Center).

My perception of SLC is more anecdotal, as I know someone who uprooted his family to move there for his son. Obviously the decision process is multi-faceted; good luck to you in your decision.

Regarding Illinois' fiscal situation, the legislature just passed a progressive income tax increasing to 7.99% (it's now a flat 4.95%), which will go to the voters to approve in November 2020, as it will take a constitutional amendment. Without making any political statement (forbidden here), for planning purposes just assume you'll be paying that (starting in 2021), if you make more than $250K . Real estate taxes are also on the rise (mine just went up 17.7% this year), but when you combine the lower housing cost with the higher taxes, Chicago is far more affordable than NYC, Boston, DC, LA and San Francisco. To this point, I would just clarify that the bump into progressive taxes starts at $250K including for married couples filing joint...

We often use Blue Apron or one of the many other services. If you decide to use it a heads up trick that we tend to use is to cancel your subscription, change to another one, and then wait for the first one to email you a special offer to 'come back'. Between my wife and I we almost never pay full price for the meals. They will often have come back and get $20 off next 3 weeks, or come back and get a free meal (or even week). Can be a hassle switching, but worth the savings IMO. 3 days of meals for 2 people for $40 (with discount) cannot be beat. Just don't accidentally order 2 kits in one week... This is the correct response. I have a friend at one of these shops; she will tell you while they all skew a bit in differently in who they targ...

I just set up an HSA with Fido, my first experience with them. My employer will be making regular monthly contributions to my HSA account. Currently, the incoming funds go into a cash sweep account. Since I pay medical bills OOP, I plan to use this account for long-term investing, and I would like the contributions to automatically go into the Fidelity Total Index fund (FSKAX) without me having to log-in twice a month to do a manual exchange. But I can’t figure out how to specify this as the default investment election. Appreciate if someone could share with me how I go about this. Thank you. I was on Fidelity earlier this morning with the exact same question! I'm not getting any more employer contributions until December (long story) but ...

Ask her to supply examples of her funds are doing compared to a total vsic index fund. Demand some examples. How has it done maximizing alpha? How long is this fund been around? How is it doing right now compared to the rest of the market? Using the fund the OP referenced (https://olui2.fs.ml.com/MLIAP/MLIAPViewDynamicPDF.aspx?IC=15808&PC=FMDN&CC=MER&DT=ManagerProfileColorPDF) as the basis, we can estimate that. Feel free to double check my math: This fund looks like its inception was just 2009 (how convenient for their marketing purposes). Looking at their 10 year annualized gross returns (given in that report at 13.0% from 4/1/09 to 3/31/19), when I pull up VTSAX and do a quick calc I'm seeing 13.6% gross returns (closing pri...

Q5: Once I do decide where/how to invest the money, do you recommend dollar cost averaging it in over the next year or lump sum? My advisor said that because market is at all time highs it may be smarter to DCA. Once you get clarity on your other questions about where to invest this money, the academic answer is to invest it all at once into the market. While you do A) expose yourself to the chance you invest just before a big crash, you also are B) missing out on any gains you see in the market over that period in which you DCA - and since the market generally goes up in the long run, B outweighs A. Considering your long-term investment horizon, the risk of A is further mitigated in my mind. That said, you might prefer the lower risk, low...

To underscore the importance of not trying to time the market, play this game 10 times and see how you fare: https://qz.com/487013/this-game-will-sh ... right-now/

Didn't do all these today but in the recent past. 2. I bought a Wahl Clippers and cut my son's hair and my own at home. No hair disaster . :D As a child, my mother would sometimes cut my hair. It is quite a money saver. My Wahl Clippers cost $18. Hair cuts for two is $50. On the one hand, I am very happy that I still have a full head of hair at my age (most of the guys I have known since we were in our 20's are now mostly very bald), some men just shave their heads - and some look very good. I, however, have a large and "odd shaped" head - so that is not for me. In 2009 I bought a pair of clippers for about $25 at Walmart. Haven't paid for a hair cut since - just a simple #3 buzz cut all the way around every month or so. Back of ...