Search found 31 matches

by TargetingFI
Mon Oct 25, 2021 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: State Income Tax Responsibility When Working Remote
Replies: 14
Views: 1181

Re: State Income Tax Responsibility When Working Remote

mhc wrote: Mon Oct 25, 2021 2:17 pm Is your company officially moving you or are you doing this on your own without your company's knowledge?

What does your payroll department say?
I'll be doing this on my own. I haven't informed my company yet but am pretty sure they'll sign off on the move.
by TargetingFI
Mon Oct 25, 2021 2:17 pm
Forum: Personal Finance (Not Investing)
Topic: State Income Tax Responsibility When Working Remote
Replies: 14
Views: 1181

Re: State Income Tax Responsibility When Working Remote

Thanks, this is very helpful--although not what I wanted to hear. :)
by TargetingFI
Mon Oct 25, 2021 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: State Income Tax Responsibility When Working Remote
Replies: 14
Views: 1181

State Income Tax Responsibility When Working Remote

I'm going to be moving from NY to Florida in 2022 and will remain with my company--working remotely. My understanding is once I gain Florida residency, I'll no longer be responsible for paying NYS and NYC income tax and my company's payroll department should stop withholding these taxes. However, in speaking with tax accountants, the messages I'm getting are unclear and, in some cases, conflicting. Also, folks that have made a similar move have communicated different experiences. For example, some are saying that, yes, as soon as they've moved, their company stopped withholding state/city income tax. I heard someone else say that since their company doesn't have a Florida-based office, they are required to continue paying NY income tax. If ...
by TargetingFI
Sun May 02, 2021 10:02 pm
Forum: Investing - Theory, News & General
Topic: Qualified Versus Unqualified Dividends
Replies: 7
Views: 1335

Qualified Versus Unqualified Dividends

I have been investing in VTSAX and VTIAX for over a decade. Looking at my 2020 tax return, I was surprised to see those two funds produced more ordinary than qualified dividends, which, of course, means more taxes for me. I'd say approximately 55-60% were ordinary dividends.

As these are index funds, and don't commonly buy/sell new new positions like actively managed funds, why are the majority of dividends ordinary?
by TargetingFI
Sun Feb 16, 2020 10:27 pm
Forum: Personal Investments
Topic: Trying to optimize my taxes
Replies: 3
Views: 803

Trying to optimize my taxes

I'm looking to FIRE in a little over a year and need to rebalance and move some stock into bonds. While I have no positions that have losses, I'm still trying to pay as little up front capital gains tax as possible. I'll be selling shares of a Fidelity fund and have the opportunity to select specific lots--mostly those that come out of the basis. My thinking is, if I can take out as much basis up front--when I'm working--on the back end when I pull the capital gains portion out I'll already be retired. With no W-2 income, I should be able to optimize my portfolio withdrawals that will enable me to be in one of the two lower tax brackets. As such, I'll be able to avoid paying any Federal capital gains tax. Is this sound thinking? Am I missin...
by TargetingFI
Wed Jan 29, 2020 10:17 am
Forum: Personal Investments
Topic: Changes to 2020 W-4 Form
Replies: 4
Views: 742

Changes to 2020 W-4 Form

The W-4 form for 2020 has changed and now has a section for "Other Adjustments," which is optional. Within that section it reads, in part: "Other income (not from jobs). If you want tax withheld for other income you expect this year that won’t have withholding, enter the amount of other income here. This may include interest, dividends, and retirement income." If you fill this part out, it sounds like your paycheck witholdings, including Federal, state, and city, will automatically be adjusted according to the numbers provided. Does that sound right? Since this is all new, I'm a tad concerned about the possible witholding outcome, including any errors that might be made by my employer (Or ADP?). Normally, I ask my employ...
by TargetingFI
Wed Jan 29, 2020 10:05 am
Forum: Forum Issues and Administration
Topic: Change password?
Replies: 6
Views: 4438

Re: Change password?

What is "dm200" and how do I get to the user control panel?
by TargetingFI
Fri Dec 27, 2019 6:04 pm
Forum: Personal Investments
Topic: Trying to avoid capital gains on a stock sale
Replies: 5
Views: 790

Trying to avoid capital gains on a stock sale

After the New Year I'm going to sell a portion of a stock I purchased, having invested 10k in one shot. The value of the investment has increased to approx. 40k. Specifically, I'm looking to sell 8k of the investment.

My question is.....is there a way to request from the brokerage firm (Vanguard), that this trade ONLY come out of the invested principal to avoid paying capital gains tax on this specific trade?

Obviously when I sell the other portion, at some point in the future, I'll be responsible for paying capital gains on whatever amount is above the cost basis at that time. However, I plan to be living in a no tax state at that time, so I'll be able to avoid paying state tax.

I appreciate any feedback that I can get.
by TargetingFI
Sun Dec 22, 2019 11:27 am
Forum: Personal Investments
Topic: Moving to a state with no income tax
Replies: 2
Views: 844

Moving to a state with no income tax

Let's say someone moved to a no tax state in the middle of the year and gained state residency at that time. With this in mind, I have two questions. 1) Let's say that person earned W2 income in that particular year before moving. I'm assuming he/she would be responsible for paying state income tax to his/her former state of residence, even though they gained residency in a non income state prior to the end of the year. Is that correct? 2) If the individual accrues capital gains tax over the course of the year, will he/she be responsible for paying taxes to the former state of residence? Or, similarly, is it based on when he/she accrues the capital gains (i.e. whether the accrual took place prior to gaining residency in the no tax state)? T...
by TargetingFI
Sun Dec 30, 2018 7:37 pm
Forum: Personal Investments
Topic: Taking advantage of higher interest rates
Replies: 5
Views: 1129

Re: Taking advantage of higher interest rates

OK, thanks, but why have online banks, across the board, raised their rates along with the four Fed rate hikes we received this year? It would seem that there is some type of correlation, no?
by TargetingFI
Sun Dec 30, 2018 6:59 pm
Forum: Personal Investments
Topic: Taking advantage of higher interest rates
Replies: 5
Views: 1129

Taking advantage of higher interest rates

Hello:

I'm looking to open up a 1-year CD. However, I want to wait until online banks kick in higher rates based on the Fed's rate hike a couple of weeks ago. Any idea how long it usually takes for banks to adjust their CD rates?

Thanks.
by TargetingFI
Mon Nov 26, 2018 8:17 pm
Forum: Personal Investments
Topic: Contributing to a 401k in 2019
Replies: 3
Views: 520

Contributing to a 401k in 2019

If the first paycheck an employee receives in 2019 covers a working day in 2018, is a percentage of his 401k contribution in that check considered part of the 2018 contribution? I hit my full contribution level for 2018 some months back and plan on starting up again at the beginning of the New Year. However, I want to ensure that by contributing funds from my initial check that I'm not somehow going to be going over the 2018 limit.

Any insight you can provide would be helpful....

Thanks.
by TargetingFI
Fri Oct 05, 2018 9:00 am
Forum: Personal Investments
Topic: Move out of bonds into CDs?
Replies: 2
Views: 661

Move out of bonds into CDs?

I'm hoping the group can help me decide how to handle my bonds funds based on rising interest rates. Approximately 15% of my brokerage portfolio money is in bonds funds, mostly in Vanguard's Total Bond Market Index Fund (Admiral Shares). With rising interest rates that are expected to continue rising through next year, I'm considering whether it makes sense to sell most, if not all, of my shares and placing the proceeds into a CD (or multiple CDs spread out over a few months). Doing so would not create any tax liability, and I could then reinvest back into the bond funds once rates have steadied. Specifically, I'm thinking about a 1-year online CD (or CDs) as I won't need this money in the near future and can get approximately a 2.65% rate ...
by TargetingFI
Mon Aug 20, 2018 12:59 pm
Forum: Personal Investments
Topic: Vanguard Investing - Feedback Needed
Replies: 6
Views: 811

Re: Vanguard Investing - Feedback Needed

Thanks, bloom!
by TargetingFI
Mon Aug 20, 2018 12:42 pm
Forum: Personal Investments
Topic: Vanguard Investing - Feedback Needed
Replies: 6
Views: 811

Vanguard Investing - Feedback Needed

I have a Vanguard IRA, with money in one of the target date retirement funds. The fund invests in four Vanguard index funds: Total Stock Market, Total International Stock Market, Total Bond, and Total International Bond, and has a .14 expense ratio. If someone where to invest their IRA funds into each of those funds separately, outside of the Target Date fund, the expense ration would fall from .14% to .077% (looking at the admiral shares), which would be almost 50% cheaper. Of course, the advantage of a Target Date fund is that it automatically re-balances as the retirement date gets closer. However, being I don't mind doing the re-balancing myself each year, I'm thinking of moving my money into the individual funds to support a better ret...
by TargetingFI
Fri Jun 22, 2018 10:05 am
Forum: Investing - Theory, News & General
Topic: Avoiding Capital Gains Tax
Replies: 16
Views: 2604

Re: Avoiding Capital Gains Tax

BL wrote: Thu Jun 21, 2018 4:32 pm You might want to change to Specific Id so that you can look at each separate lot (dividends reinvested and other purchases) to find some with losses and sell those along with enough with those with small gains to bring up to desired amount. You may not have enough losses to accomplish this.

Vanguard does only average cost for uncovered gains/losses. Those were purchased before ?2011 or so.

Thanks, but what do you mean by "Specific Id?"
by TargetingFI
Thu Jun 21, 2018 4:21 pm
Forum: Investing - Theory, News & General
Topic: Avoiding Capital Gains Tax
Replies: 16
Views: 2604

Avoiding Capital Gains Tax

Say an individual in a post tax account has a 1mn. portfolio, 400K of which is made up of principal and 600k of capital gains. When selling assets for a particular year his goal is to remain in the 10-15% tax bracket in order to pay zero federal capital gains taxes. In order to do this, say, he can't pull any capital gains for the year as he has other income that pushes him to the limits of the 15% tax bracket.

However, let's say this individual needs to pull 30k from his investments. Is there a way he can pull from the principal portion of the portfolio instead of the appreciated portion in order not to accrue capital gains? If so, how exactly would this work?
by TargetingFI
Wed May 16, 2018 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

Yes, makes sense. Outside of cash for 3 years of living expenses (if we go that route), any money not used for the mortgage would remain in stocks. Why would you carry a mortgage at all with a $3M portfolio? You are trying to leverage debt to invest in stocks? I don't think that makes much sense in a retirement scenario, even ER. If you are going to leverage the mortgage, why would you then try to pay it off in 8-10 years? I am still confused by your plan, although with $3M it probably doesn't matter what you do. Thanks for your feedback. I'm trying to accomplish a couple of things. The main thing is to limit the amount of capital gains tax we pay in the year we retire (currently in the 24% bracket). Paying the house in cash would trigger ...
by TargetingFI
Wed May 16, 2018 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

To answer your questions, we're close to $2.9mn now. My wife and I are still working and maxing our our retirement accounts. The money left over normally would go into taxable investment accounts. However, since we're looking to buy a house in two years we're now taking the surplus and putting it into high-yielding online banking accounts. Our portfolio is about 75% stock with the rest generally being invested in bonds and cash. I don't understand your point about having bonds and that specific relationship to whether to carry a mortgage or not. Can you please elaborate? Mortgage is a negative bond. If you have a $100K mortgage at 4% and $200K in bonds at 3%, you could also pay off the mortgage and have $100K in bonds at 3%. Generally, the...
by TargetingFI
Wed May 16, 2018 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

Thanks for the input. The stock market has been very bullish for close to 10 years now, so I'm assuming this has, fortunately, turned out very well for you. That said, how would you handle a bear market than spans, say, a number of years? Would you be OK selling assets that have depreciated, for example, 30% or more? Also, am wondering how long you've been early retired? Sequence of return risks, of course, greatly decrease as you move on in your retirement. If you have 60/40 that means 40% in fixed income. If you had 25x annual expenses, that means you have 10 years of expenses in fixed income. You can sell that and not stuff that went down. Bond values can go down too, and at the same time as stocks. Fixed income does not necessarily mea...
by TargetingFI
Wed May 16, 2018 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

Just saw this thread. I am early retired now and never had any cash cushion. Studies show it is a complete waste of money. It is only psychologically beneficial, but at a cost that is not worth paying. So we have only enough cash to pay the bills for the next 2 weeks or so. Everything else is invested in a portfolio with an asset allocation of about 60/40. That makes things very simple, too. Thanks for the input. The stock market has been very bullish for close to 10 years now, so I'm assuming this has, fortunately, turned out very well for you. That said, how would you handle a bear market than spans, say, a number of years? Would you be OK selling assets that have depreciated, for example, 30% or more? Also, am wondering how long you've ...
by TargetingFI
Wed May 16, 2018 2:34 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

I agree with the other posts about paying cash for the house. To have that kind of NW and get a mortgage doesn't make sense to me. I didn't see your AA. Keeping all that cash around seems like a waste to me. Why not keep it in bonds? I could only see it if you had a very high allocation in stocks and didn't want bonds for some reason, but then I'd do a CD ladder. Thanks for your insight. Yes, we are rather over weighted in stocks right now (75%) and, with interest rates rising, I'm a tad more comfortable putting this excess money in high-yielding bank accounts versus bond funds. I like the ideal and have considered CD ladders, though, and might go that route. Once interest rates stabilize, I'll probably put some more cash into bonds. Being...
by TargetingFI
Wed May 16, 2018 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

I am confused. How much money do you have now? Do you have bonds? If you have bonds, why would you carry a mortgage in retirement? They are just canceling one another out. What do you mean that you are "working on" saving cash? Why not simply sell some of your stocks while the market is high? Most people should be able to retire comfortably on $3M. Is there some reason you are concerned? To answer your questions, we're close to $2.9mn now. My wife and I are still working and maxing our our retirement accounts. The money left over normally would go into taxable investment accounts. However, since we're looking to buy a house in two years we're now taking the surplus and putting it into high-yielding online banking accounts. Our po...
by TargetingFI
Wed May 16, 2018 2:03 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

Just saw this thread. I am early retired now and never had any cash cushion. Studies show it is a complete waste of money. It is only psychologically beneficial, but at a cost that is not worth paying. So we have only enough cash to pay the bills for the next 2 weeks or so. Everything else is invested in a portfolio with an asset allocation of about 60/40. That makes things very simple, too. Thanks for the input. The stock market has been very bullish for close to 10 years now, so I'm assuming this has, fortunately, turned out very well for you. That said, how would you handle a bear market than spans, say, a number of years? Would you be OK selling assets that have depreciated, for example, 30% or more? Also, am wondering how long you've ...
by TargetingFI
Wed May 16, 2018 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

2) Having three years of living expenses in cash protect us, in large measure, from sequence of return risk 3 years of living expenses in cash doesn't really protect you from sequence of return risk. But if it helps you sleep better at night I guess it won't hurt given your massive portfolio. 3) The three years of cash will be consistent for the first 6-8 years of retirement, as we’ll slowly replenish the funds by selling small portions of our mutual funds I don't understand your plan for selling mutual funds to cash. If you only sell a small amount every year, then you won't have a consistent 3 years of cash for the first 6-8 years. You need to sell a lot every year. $50,000 or so. I suppose you could bunch it up. Some arbitrary "sel...
by TargetingFI
Sat May 12, 2018 6:31 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

delamer wrote: Thu May 10, 2018 9:22 pm Why not pay cash for the house?

It would only take about 10% of your assets and it would reduce your expenses. Your remaining assets would probably throw off enough income to cover your annual expenses (assuming around $60K).
All my stock funds have appreciated, so I'd be dealing with a large capital gains tax in order to pay all cash. On the flip side, I'm wondering if there are ways to keep my ordinary income within the two lower tax brackets in my initial years of retirement (am looking more into this). If so, I'll pay zero taxes on my capital gains during that time.

On a separate note, and fyi, about half our net worth is in retirement buckets, so we won't be generating as much income versus had we had all money in post tax.
by TargetingFI
Sat May 12, 2018 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Re: Need Input on My Early Retirement Plan.....

2) Having three years of living expenses in cash protect us, in large measure, from sequence of return risk 3 years of living expenses in cash doesn't really protect you from sequence of return risk. But if it helps you sleep better at night I guess it won't hurt given your massive portfolio. 3) The three years of cash will be consistent for the first 6-8 years of retirement, as we’ll slowly replenish the funds by selling small portions of our mutual funds I don't understand your plan for selling mutual funds to cash. If you only sell a small amount every year, then you won't have a consistent 3 years of cash for the first 6-8 years. You need to sell a lot every year. $50,000 or so. I suppose you could bunch it up. Some arbitrary "sel...
by TargetingFI
Thu May 10, 2018 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Need Input on My Early Retirement Plan.....
Replies: 45
Views: 7316

Need Input on My Early Retirement Plan.....

I'm very interested in hearing from forum members about my early retirement plans, which I outline below. Does my plan, in your mind, make logical sense or not? My wife and I are planning on retiring in two years when I'm 51 and she's 50. At that time we're looking to purchase a home in another state (are currently renting) and want to set aside enough cash to: 1) put $125k down on an approx. $350K home and set aside an additional 10K in closing costs 2) pay for moving expenses (10k) 3) purchase a new car (25k) 4) have enough cash left to cover three years worth of living expenses (70k x 3 = $210k) In total, this would be $380K in cash. We’re targeting a net worth at that time of $3.35mn. Outside of the cash, the rest of our money is, and w...
by TargetingFI
Sat Mar 10, 2018 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Obtaining a mortgage in retirement...
Replies: 9
Views: 1316

Re: Obtaining a mortgage in retirement...

Thanks, all. Very helpful info.
by TargetingFI
Sat Mar 10, 2018 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: Obtaining a mortgage in retirement...
Replies: 9
Views: 1316

Obtaining a mortgage in retirement...

Hello: My wife and I are looking to retire early within the next 2-3 years. Currently we rent but, at that time, we're going to head south and purchase a home. The plan is to put down, say, 50%. While we have the ability to purchase the house in full with cash, I'd rather keep the other 50% in the market--allowing it to compound for a while before paying off the balance of the mortgage. While we won't be able to show W-2 income since neither of us will be working anymore, we will have well over $1mn. in post tax brokerage accounts to show mortgage companies (the plan is to use these funds to pay off the mortgage). Also, for what it's worth, we have stellar FICO scores. So, my question is, based on the above situation, will we potentially ha...