Bogleheads.org

mudd wrote: ↑Wed Mar 29, 2023 9:11 pm No plans to sell anything in my Roths(mine or spousal) for years to come. 46% of my networth is in those Roths and the other 54% is in FZDXX in taxable(Fidelity CMA)

I think your the only one I can remember on BH to not have tax def account.

I agree no tax problems by selling in the inherited IRA and to purchase and index is wise, but what account to purchase in?? I don't think Vanguard PAS does that type of planning. Up thread was the link how to ask questions we need more info. Retire in 6 months your going to start withdrawing money, my guess this is going to be the 1st or 2nd to pull from.

I agree with Watty, that $350k is a tax drag. At 4% its adding $14k to your income and you have to pay tax on that. I would move a lot of that to the 401k and add to equity in taxable.
Use a tax loss partner in taxable to VTI, again we have a wiki on the forum.
Others may have a better answer than me, I am thinking move the VXUS from taxable to Roth also. How much in dividends does it put out?

Sounds like you are on the right track to reach that goal of retire at 55. Welcome to the forum
Max all that you can in tax deferred and no debt other then house if you choose to buy.
Having some money in taxable brokerage at 55 will benefit you. Withdrawing from pension and 403b/457b is one way or pension and taxable might be lower tax rate.
Be tax efficient, placement of funds in taxable or tax deferred is key.
Having the right asset allocation for you is the best AA. Keep it simple 3-5 index funds and low cost. Having the market drop is great because each paycheck is buying more shares at a lower cost.

MillennialFinance19 wrote: ↑Mon Feb 06, 2023 7:27 pm

doobiedoo wrote: ↑Mon Feb 06, 2023 7:16 pm I don't carry collision nor comprehensive insurance on my car.
I do pay for uninsured motorist coverage and liability. And I have $2M umbrella liability.

Appreciate the insight. I’m prepared to buy a new Tacoma when that time comes either way, so I think I’m in the situation where it doesn’t matter. I have a $2M umbrella as well.

Just a side note, when you do purchase a replacement vehicle. If you finance they won't let you take it without proof of full coverage. Which is hard to do on weekends, they will sell you 1 month for a fee

Yes max out 403b and 457b and live off of taxable if you have monthly shortfall. That will lower magi. I would rethink a hysa, you don't want to increase taxable income. As others posted a index fund will be tax efficient and Ibonds or Savings bonds are tax deferred. Most will recommend a Roth but You can also reduce income with a Trad Ira of $6500 for 2023. Are you in education and going to have a pension at 55?

Edit Trad Ira deduction maybe partial depending on income.

Good Evening All! Was hoping to get some advice from other knowledgeable members here. I am hoping to get some guidance on what you all think I should be doing next when it comes to investing or saving now that I hit a benchmark - Combined salary of 217,816 (Wife Salary 54,576 / My Salary 163,240) - - Current taxable “savings” balance of approximately 100,000 - (60,000 in iBonds, 40,000 in vanguard cash plus acct earning 4.2%) - I currently max out my 401k / Wife contributes 15% of salary total (including 5% match) - We currently put 300 per month in a Roth IRA - We currently put 450 per month in the 529 - We currently put 1,000 a month into the vanguard cash account earning 4.2% would like to know if i should be doing anything specific wi...

redbarnyard wrote: ↑Wed Mar 22, 2023 7:04 am

GMCZ71 wrote: ↑Tue Mar 21, 2023 7:22 pm Taxable brokerage is perfect. You will probably need to transfer to your bank then transfer again to the Sep, unless both accounts are at same provider.
Also any chance you have losses in the taxable brokerage?

No losses, but I have one holding with rather minimal gains. I've just reached out to my accountant to get his take on all of this. Like is it worth the write-off to max my SEP even though it would raise my income and I'd be realizing gains? It's a little above my pay grade!

Realizing gains depends on your tax status. Did you get the bonds out of your taxable, they are a tax drag?

Taxable brokerage is perfect. You will probably need to transfer to your bank then transfer again to the Sep, unless both accounts are at same provider.
Also any chance you have losses in the taxable brokerage?

https://www.treasurydirect.gov/indiv/help/treasurydirect-help/how-do-i/ To buy gift savings bonds, follow these instructions: How do I deliver a gift savings bond? If I understand correctly, the gift I bonds are counted towards the limit of the recipient. So, if I gift $10k to my spouse, she cannot buy $10k bonds for her in the same year. If this is true, then we are back to where I started i.e. $20k limit for the couple (barring formation of trust of course). You have already bought this year for $20k. You buy today another $20k $10k gift in your account for wife and she buys $10k in her account for you. You gift those next January 2024 to each other... You can buy for 2025 now if you wish. You earn interest from today on all gifts.

https://www.treasurydirect.gov/indiv/he ... /how-do-i/

To buy gift savings bonds, follow these instructions:
How do I deliver a gift savings bond?

Yes total AA. The best is one that keeps you from selling when the markets have plummeted into the abyss

Yes get out of bonds in taxable. You don't want to add more income to your wages. Be tax efficient. I don't think I read what AA you want to be at?

This is all wrong. Not going to waste a lot of time correcting it and I don’t know why you’re quoting from legislative committee reports, which might not reflect the law enacted by Congress and signed by the President. It would suffice to say that in a bank failure insured depositors (because of the FDIC guarantee on insured deposits) always get paid first up to the insured limit followed by secured creditors (up to the amount secured by their security interest). There is also national and state law provisions (for State charted banks) mandating “depositor preference” priorities for paying depositors ahead of all general unsecured creditors. By the way, SVB no longer exists as such. The FDIC, as Receiver, is now the legal entity operating ...

After the 2008 banking crisis changes were made to who gets paid first. Title I of the Dodd-Frank Act requires each banking entity to periodically submit to the FDIC and the Federal Reserve a resolution plan that must address the company’s plans for its rapid and orderly resolution under the U.S. Bankruptcy Code. Title II of the Dodd-Frank Act provides the FDIC with new powers to resolve by establishing the orderly liquidation authority (OLA). Under the OLA, the FDIC may be appointed receiver for any U.S. financial company that meets specified criteria, including being in default or in danger of default, and whose resolution under the U.S. Bankruptcy Code (or other relevant insolvency process) would likely create systemic instability. Title...

PlayingLife wrote: ↑Fri Mar 10, 2023 6:19 am

Jack FFR1846 wrote: ↑Sun Mar 05, 2023 12:54 pm
On timing, why? If you need to change percentages, change percentages.

"On timing, why?" ---> If you've got a 90% stock to 10% bond portfolio and your preference is to get to 80% stock and 20% bond, do BH's following a 3 fund portfolio typically just make the switch regardless to what's happening in the market? They simply reset the allocation and that's the end of it?

Yes.. It works the other way too. Market downturn and your AA goes to 70/30, you buy back to 80/20 and thats the end of it.

If you have the correct AA for you then the math tells you to be a buyer or seller. If you rely on emotion you loose money. We are older and are at 55/45 and used to be at your AA but can't handle that anymore.

Ckprocker wrote: ↑Wed Mar 08, 2023 6:33 pm Understand but looking for a brief overview of a few examples of what it might look like.
So if there is a gain of 20k, then the 20k is considered income and taxed? Is that more or less in the ballpark?
And that 20k would go towards your Adjusted Gross Income come tax time?

One example could be your retired and only have $25k in SS income and you sell your VTSAX with $20k long term gain, you pay $0 tax.

2022 rates
Married, filing jointly

$0 to $83,350. is 0 bracket

$83,351 to $517,200. is 15%

My AA is 60/40 and previously most of that 40in bonds was held in BIV. I'll likely be retiring soon (read: 0-5yrs from now) at between 50-55 years old. We hold a significant amount of bonds in taxable since my tax advantaged space is mostly used up. FWIW, I currently have the money sitting in a 2yr Treasury ladder with an APY of 5.02% for the duration. Unless you have changed alot since your post in Aug you still have space in deferred. jjunk » Sun Aug 14, 2022 7:24 am Here's my situation. I am 48, about to be 49. s 60/40 US Stocks/Fixed income. Our Roth and 401k are completely in Vanguard Balanced Index which is 60/40 by nature. My taxable account, which makes up 2/3 of my assets, is closer to 70/30 which makes my current AA more like 66/...

To retire in your 50's or cut back hours won't you need $ taxable?

If you do keep it in taxable you don't want it to make income (cd bond mm) your high tax bracket.

Are you familiar with tax loss harvesting?

My AA is 60/40 and previously most of that 40in bonds was held in BIV. I'll likely be retiring soon (read: 0-5yrs from now) at between 50-55 years old. We hold a significant amount of bonds in taxable since my tax advantaged space is mostly used up. FWIW, I currently have the money sitting in a 2yr Treasury ladder with an APY of 5.02% for the duration. Unless you have changed alot since your post in Aug you still have space in deferred. jjunk » Sun Aug 14, 2022 7:24 am Here's my situation. I am 48, about to be 49. I was planning to retire this year, but a series of events have made it so I'll likely work for another year, possibly 2-3. Our AA is 60/40 US Stocks/Fixed income. Our Roth and 401k are completely in Vanguard Balanced Index which...

KlangFool wrote: ↑Mon Feb 20, 2023 12:34 pm

benevo wrote: ↑Mon Feb 20, 2023 9:44 am
- since my AA is 80/20, I planned to allocate the amount to 80% stock index fund, 20% to my bond index funds of my 3-fund portfolio (yes, I already fund fully my tax-advantaged accounts).

benevo,

From tax efficiency standpoint, if your AA is 80/20, you should be 100% stock in your taxable account and keep the 20% bond in your tax-advantaged accounts. I hope that is what you mean.

KlangFool

Plus 1 Tax loss harvest in taxable and change stock to bond in deferred.
Maybe keep small amount in cash for upcoming spend. roof, car etc.

WOMoney wrote: ↑Thu Feb 16, 2023 5:14 pm

You are 28 years old... my hindsight advice to you is:




Where would I put the money that I would save if I didn't double/triple car payments? And I'm already maxing my Roth IRA.

If your AA is correct for you and won't sell in the down turn use a stock index in taxable.

What we do: Taxable only use Large cap or SP500 index dividends not reinvested. Only keep small amount in mm or hysa.
Roth and IRA/401 use VTSAX dividends reinvested.

Taxable and Roth are mostly equity.

Is this in your taxable account? If yes its best to have the bonds in tax deferred and equities in taxable and Roth.

Welcome to Bogleheads.

Besides using tax loss harvesting for tax reduction it also helps to get unwanted securities out of your portfolio. You can post yours for better advise.

Key points we do:
Taxable only use Large cap or SP500 index... can only harvest in taxable with dividend not reinvested.
Roth and IRA/401 use VTSAX dividends reinvested.

Taxable and Roth are mostly equity.
Ira or 401 is the place for bond/mm/fixed and any left over equity.

Welcome
Have you seen Taylors thread on the 3 fund in our forum. It might have that link.
viewtopic.php?t=88005

bmcgin
No this is not about you. We/I are not saying your wrong just a counter view so others might learn. No regrets needed on your part, like I said you do you.
Sounds like your good at it also

edit: some investors want to be simple target date or one fund, others need to do something more often.

Hi all, I'm 29 and starting my career 61,568 Gross income. 3,240 401k. 6,000 roth ira. 8,124 total expenses/bills 8,583 or 30% for taxable brokerage (VOO). 14,304 or 50% for cash in a savings account (3.5% savings acc) taxable brokerage, and cash be? You should hold a different fund in taxable from what you have in Roth and 401k. I could not tell from your post if thats the case already. Tax loss harvest will come in to play at some point. Please read up on it in the wiki. Keep your cash (3.5%) in taxable low, you don't want to have a tax drag. Set a limit, if interest income get to $1500+ per year move some cash to VOO or up your 401k contributions. You can funnel $22,500 into your 401(k), 403(b) and other such plans for 2023, up from the...

You have a good plan. Do you qualify for savers credit? I’m not business minded and I am not looking for investment properties so I can see why you’d want cash for that. Save as much as you can and enjoy Yea I have an ef. We don't have savers credit here in America I think. Your income might be too high: singles with incomes up to $34,000 in 2022 or $36,500 in 2023. Taxpayers who contribute to qualified employer-sponsored retirement plans, IRAs, or ABLE plans are required to complete IRS Form 8880 to claim the Saver's Tax Credit. Contributions to both traditional and Roth IRAs are eligible for the Saver's Tax Credit. Workers that can deduct IRA contributions can do so and also claim the credit. Voluntary after-tax contributions to a qualif...

I am putting new money in money market funds. If I miss an upswing, I am ok with it. I do not always have to make the most amount possible. There's too much uncertainty and fixed returns are improving. OP, FYI, the above is terrible advice. In the last 4 months, the S&P 500 is up 14%. Time in the market is better than timing the market. yep, extremely bad advice. A guaranteed risk-off 5% gain is extremely bad advice..ok. I've been timing the market all year and am paying 2022 taxes because of it. Making money is better than losing money and sometimes that means time out of risk. Pigs get slaughtered. Good for you! I have a friend, his goal is to pay $1mil in taxes which means he made a huge profit. Boglehead way is be tax efficient, sp...

Nice little calculator to see how much tax and what brackets your income and cap gains are in. https://engaging-data.com/tax-brackets/ We sold the rental in spring of 2021 close to the top. Tried to tax loss harvest with VLCAX index, lol :moneybag market kept going up. Other things you could do. Max out 401k and if your doing the roth 401 switch back to regular 401. If your doing Roth ira switch it to trad ira in the year you sell rental. HSA or other tax deferred options you are eligible for to lower your work income. Try not to have interest income that year(cd-hysa etc) Realtor and contractor fees are deductions so pay for repairs in the same year you sale the property. Sell in 1 quarter so you don't have rent income for the whole year. ...

Welcome to the forum, both of you.
I didn't read in your post if the rentals had a mortgage balance, I did see the house was paid off. Looks like your getting great help from other posters.

Credit score could take a hit. Wife and I are in the 800's and use card for cashback always. Each card reports balances at a different time of the month to fico bureau. Our due date is 15th and always pay 3 days early and some times pay 2 times in between if balance is getting too high. One time I must have missed the fico reporting day and the wifes score dropped by 100 and mine by 30 points. The balance was paid in full by the 12th but the credit utilization was too high for a day or so. You might want to pay weekly to protect fico score. I am wondering if I should go ahead and pay off credit card balances weekly to help improve score. At 789 now. But my average credit age is only 4 1/2 years. I have 5 hard inquiries. 7% utilization. 0 d...

jstage wrote: ↑Thu Feb 09, 2023 5:06 pm Thank you all for the replies! I'll look into these! And yes...definately planned on paying off completely a bit early to avoid any disastrous mishaps.

Credit score could take a hit. Wife and I are in the 800's and use card for cashback always. Each card reports balances at a different time of the month to fico bureau. Our due date is 15th and always pay 3 days early and some times pay 2 times in between if balance is getting too high. One time I must have missed the fico reporting day and the wifes score dropped by 100 and mine by 30 points. The balance was paid in full by the 12th but the credit utilization was too high for a day or so.
You might want to pay weekly to protect fico score.

Admiral wrote: ↑Thu Feb 09, 2023 3:56 pm

Sachay wrote: ↑Thu Feb 09, 2023 2:57 pm Anything else to consider?

Interest on CDs is taxable federally.

Are all your pre-tax retirement accounts fully maxed? If not, put the money there and stop pre-paying a low-rate mortgage. Since it seems you have no real use for the money/it's not earmarked for anything--after all, you've been locking it up in home equity--then I'd consider I Bonds or possibly munis. 4% interest on $10k is $400... before taxes.

Plus 1 on this.
Don't make your taxable income higher, make it lower by maxing pretax.
If our taxable starts making too much interest ($3k maybe) I up the equity index fund in taxable and lower it in Ira's.

Lump sum it.

After you do look at your AA then adjust it within your 401 if needed.

Received a moderate windfall recently and this is the first time I have had significant enough taxable investment Not reinvest dividends or coupons Sadly my E-trade portfolio only pays .01% on cash, so I hate to leave it idle a full year until tax time. Wish it had a decent MMF sweep option. I've also been reading up on Loss harvesting, and plan to attempt that when/if it makes sense. You need to be tax efficient, might be time to switch to Fido or Schwab for mm. Turn dividends off in taxable reinvest on your timeline. Avoiding wash sale. Was this windfall this year? If so a market loss means TLH to off set windfall... Your taxable should be mostly equity index then readjust 401/ira to bond/fixed to meet your AA. Roth should be 90-100% equ...

JayRod wrote: ↑Sat Feb 04, 2023 8:35 am I really appreciate all the responses. Seems to be no one “right” answer. Lots of personal preference and individual psychology. You guys are great.

Yes many answers, keep reading the forum. Is the wife good with a 90/10?

Welcome to Bogleheads :happy Just some things to consider: learn to do your own taxes get your asset allocation (AA) right for you and wife be tax efficient, https://www.bogleheads.org/wiki/Tax-efficient_fund_placement your AA is for all accounts as one not to mirror in each account So as an example your $192k in taxable could be mostly stock and tax deferred could be changed to cd, bond treasuries etc. to keep AA the same. You are still beating the mortgage rate just not in taxable. Your income is not higher and taxes are not higher. Lets say the market is down but its time to fund both Roths. You fund anyway and get more shares at a lower price in Roth and use the loss in taxable to lower taxes. Or market is higher and you sell with a gai...

ZOOM678 wrote: ↑Thu Jan 26, 2023 11:06 pm
I have a 401k thru work at Fidelity that we don’t touch and would be happy if it never was touched.

Thank you for your time and consideration
Ken

This stands out to me and I don't think it was addressed in the thread. Won't there be an rmd forcing you to pull from the 401?

why the market is going up? windfall in mid March, approximately 15% of my investable net worth. If we were still in the October-December bear territory 3600-3900 SPY , I'd be comfortable lump suming in. Right now we are still 15% from all time highs, but by mid March we may get to 4200 or higher, which I would NOT be comfortable lump summing in with underlying market fundamentals. And when it gets to 5000, you'll be kicking yourself for sitting on the sidelines... Well if I invest at 4500 and it crashes to 3200 I'd be livid. If I put in at 3700 and it crashes to 3200, it would suck much less. In general the market does go up over time, but fundamentals & earnings seem decoupled from recent market behavior. I do not understand this. Al...

Very true Silk. I was just giving another option.

Silk McCue wrote: ↑Tue Jan 24, 2023 8:20 am

GMCZ71 wrote: ↑Tue Jan 24, 2023 8:10 am Don't forget about your taxable account, any interest income?

Also I didn't see anyone mention drawing a little from Trad to put in a taxable account. Or Split 50/50 convert to Roth and withdraw to taxable.

Why would anyone recommend not putting it all in Roth since no taxes are due on funds withdrawn and they have ready access to those funds just like a Taxable account for which taxes on gains would be due.

Cheers

From memory op has room up to $80k of total income where long term cap gain is 0 tax. I could be wrong

Have you read wiki on tax efficient placement?
Ibonds are tax deferred but cd's are not. Stock index that is different from your other accounts would be best in taxable watch for tax loss harvesting. At the same time exchange some stock index to bond or cd in tax deferred. So you keep your AA. It does not have to be 100% stock in taxable, we are about 75/25 in taxable.

Don't forget about your taxable account, any interest income?

Also I didn't see anyone mention drawing a little from Trad to put in a taxable account. Or Split 50/50 convert to Roth and withdraw to taxable.

Never have maxed out a Roth IRA in January, never will. I dollar cost average over the course of a year for all investments. Is there an advantage to maxing out in January? Do you have the money to do it in January? If you do whats it doing? checking, money market, index? Is the $6-7k a small % or large % of your total portfolio? If you only have $50k total in all accounts then dca. If your $700k or higher its just noise put it in January . :happy Are those amounts chosen by you or based on some research you've read? I just used those for an example to show the math. If the January lump sum of $6k is 10% of all your money that is hard for someone to lump sum. On the other hand if the $6k is 1% then the lump sum is noise. Your AA is within ...

Do you have the money to do it in January? If you only have $50k total in all accounts then dca. If your $700k or higher its just noise put it in January. :happy Historically lump sum beats DCA(or periodically) investing. I believe Vanguard says 70% of time but would like to see research prior to changing my behavior. Thanks Lets say $100k portfolio split between taxable- tax def and Roth $60k stock $40k bond In January you move $6k from checking to Roth. Same day or week you need to adjust tax deferred so you stay at your 60/40. Instead January you exchange $6k of stock in taxable to Roth (creates a gain or loss) your AA stays the same. After the January purchase: If the market goes up you need to rebalance. If market goes down you need t...

Great advice so far. Welcome to the forum.
You are not the first, your post reminds me of Sheepdogs story.
viewtopic.php?t=25126

advantage to maxing out in January? Do you have the money to do it in January? If you do whats it doing? checking, money market, index? Is the $6-7k a small % or large % of your total portfolio? If you only have $50k total in all accounts then dca. If your $700k or higher its just noise put it in January. :happy Historically lump sum beats DCA(or periodically) investing. I believe Vanguard says 70% of time Yes if your 100% stocks that's historically true. But what if your not 100% stocks? What's the research say about lump sum vs DCA for say 60/40 or 60/20/20? Responses have me genuinely curious but would like to see research prior to changing my behavior. Thanks Lets say $100k portfolio split between taxable- tax def and Roth $60k stock $...

Normally I have maxed the Roth in January every year... but for 2023 for some reason I feel like waiting due to recent events.. although I have the money now to invest but I also bought some land that I want to pay off too.. I have about $17k left to pay and the interest rate is 6.5%... not sure what I should prioritize.. I don't. I don't have the money. I buy as I earn. If there is anything extra remaining after maxing out, it goes to taxable. I do not exchange taxable for Roth IRA. Never thought about it. Hopefully your taxable is a tax partner for your Roth and other accounts. We use vtsax in Roth and tax deferred. SP500 or large cap in taxable dividends not reinvested. Exchange in January to Roth might have gain or tax loss. Last Jan 2...