Bogleheads.org

anon_investor wrote: ↑Sat Mar 25, 2023 8:15 pm

retired@50 wrote: ↑Sat Mar 25, 2023 8:04 pm If it were me, I'd sell the company stock and use the proceeds to buy into an index fund within the same 401k plan.

Why take the firm specific risk at an employer that you no longer have any connection (and visibility) to?

Regards,

The OP probably has favorable NUA tax treatment on that company stock. I am keeping some company stock in my 401k that I received as part of an ESOP since it has NUA tax treatment and very low cost basis.

If it's inside a 401k plan, why would cost basis matter?

ETA: Never mind, I just looked up NUA.

Regards,

This is lower than Vanguard and Fidelity... I am talking about pure cash interest in Interactive Brokers.. not what you get in the money market funds. How much interest Vanguard and Fidelity pay on Cash.. without having to roll it into a money market instrument? I'm not concerned with the distinction between "cash" and "money market" sweeps--I consider them to be equivalent if they can be used to fund purchases or withdrawals, instantly, and without any pre-planning or manual selling. Fidelity pays ~4.3% and Vanguard pays ~4.6% on cash (currently). I double you can find something better than Vanguard for this purpose among the big and established players. Vanguard would be perfect, but it doesn't offer Bill Pay, and doe...

I'm trying to help a friend whose husband passed away a couple of years. Their assets are at Schwab and she should qualify for a stepped-up cost basis. I discovered in reviewing her taxes this year that the cost basis of her various investments were not updated at Schwab with the stepped-up values. (The CPA had relied on a year-end summary statement from Schwab, which maybe he shouldn't have, but it was natural to do.) A couple of questions: 1) Does Schwab normally update the cost basis automatically to the stepped-up values? If it's relevant, the assets were in a living trust belong to the couple, and are now in a living trust belonging to her. 2) How easy is it to change? Can you just call up Schwab and say "Hey, can you set the cos...

Taxable Brokerage at Fidelity (100k) (6.5%) 100k (6.5%) iShares Core S&P 500 (IVV) (ER 0.03) <- I'd use a total market fund here, like VTI. This will help you avoid a wash sale if you ever have to sell shares at a loss in the taxable account. Welcome to the forum. Avoiding wash sales means never selling at a loss in the taxable account. Since future spending cannot really be determined in advance, especially in the case of an unexpected event of some kind, medical expense, etc. It's so easy to avoid this problem, I'd just use VTI. Regards, Thank you retired@50. I originally figured that my mom could avoid wash sales in the taxable account by not automatically reinvesting dividends in the IRAs and by not making purchases in the IRAs 30 ...

If it were me, I'd sell the company stock and use the proceeds to buy into an index fund within the same 401k plan.

Why take the firm specific risk at an employer that you no longer have any connection (and visibility) to?

Regards,

After reading arcticpineapplecorp's post, the question then becomes, is the higher return of VCOBX due to the astute active management decisions, or is it because they are dealing with higher risk bonds with lower credit quality.

I don't think it would be a big mistake to use VCOBX, but you should be aware of things like credit quality and duration before purchase.

Regards,

krafty81 wrote: ↑Sat Mar 25, 2023 7:11 pm Looked that over. What a pain this will be. You apparently have to calculate your life expectancy, then do a division to get to the RMD amont. Could they make this any harder?

As I understand it, you only have to refer to the life expectancy table once, when you begin withdrawals. Then, using that number you subtract 1 each year, then drain the account in the last year. If it were me, I'd be putting these numbers in a spreadsheet as a memory aid for the decade it will take to deal with it.

As far as complexity, consider the source: IRS. Need I say more.

Regards,

Traditional IRA at Fidelity (1.35M) (86%) 157k (10%) Fidelity Money Market Fund Premium Class (FZDXX) 564k (36%) iShares Core S&P 500 (IVV) (ER 0.03) 629k (40%) Vanguard Total Bond (BND) (ER 0.03) Roth IRA at Fidelity (121k) (7.5%) 121k (7.5%) iShares Core S&P 500 (IVV) (ER 0.03) Taxable Brokerage at Fidelity (100k) (6.5%) 100k (6.5%) iShares Core S&P 500 (IVV) (ER 0.03) <- I'd use a total market fund here, like VTI. This will help you avoid a wash sale if you ever have to sell shares at a loss in the taxable account. 4. Is is reasonable to use IVV in all three accounts? Given that this is what her UBS advisor used (rather than total market funds or total world market funds), this is the easiest route for my mom's comfort. If t...

krafty81 wrote: ↑Sat Mar 25, 2023 6:43 pm So I inherited an IRA from my Dad in 2020. Wife inherited one this year. Both parents were over 80 years old. I have called Schwab and they are confused. My accountant says I have 10 years to withdraw both. I think I need to take a distribution this year for both. Schwab thinks I come under some type of lifetime rule but I do not think that applies here.

Question - what is the minimum amount I have to take out this year? 10%?

Thanks.

I'd urge you to review this thread: viewtopic.php?t=400648

Especially the posts toward the bottom - with links to Morningstar articles.

Regards,

Rosie59 wrote: ↑Sat Mar 25, 2023 4:09 pm First-time poster. We currently have some of our retirement accounts at UBS.
FAFRX: $24,670
PAUAX: $41,410
...
FAFRX: $49,270
GATEX: $154,710

• Any other advice?

Welcome to the forum.

I wouldn't hold any of the funds listed above.

Front loads & high expense ratios, no thanks.

It's time to create some distance between your money and your adviser at UBS. You've certainly got the right idea about moving on.

Regards,

Vanguard will certainly have the most competitive interest rates on their settlement fund - VMFXX - but paying bills with it might be a hassle. I think if you go to the trouble of getting check-writing privileges, each check has to be for $250 or more. I highly doubt you'd have anything like online bill-pay. In other words, Vanguard doesn't want to be your bank.

I just periodically transfer money from my Vanguard settlement fund to my checking account.

Regards,

id0ntkn0wjack wrote: ↑Sat Mar 25, 2023 12:04 pm

chinchin wrote: ↑Sat Mar 25, 2023 11:17 am

id0ntkn0wjack wrote: ↑Sat Mar 25, 2023 11:02 am Has increased demand from folks moving their non-FDIC insured deposits to the safety of TBills allowed the Treasury to reduce rates?

The Treasury doesn't set rates on their debt, the market does.

So what is the driver that is causing the Market to accept lower rates on TBills?

One guess is the millions of dollars that was previously sitting in uninsured deposits at various banks has found its way into the T-bill market. More buyers means prices rise and yields fall.

Regards,

calmaniac wrote: ↑Sat Mar 25, 2023 9:12 am Most of our assets are in a taxable brokerage account. Our qualified retirement accounts are entirely fixed income. Thus, our international ETFs (VXUS, SCHF, SCHE, IEMG) are in our taxable brokerage accounts and dependably produce non-qualified dividends, which are taxed at ordinary income rates.

Questions:
Are there any ways to identify or choose more tax efficient international ETFs? If so, any articles you would suggest on this topic?
Or are non-qualified dividends just the cost of having international diversification when ETFs are in taxable?

You could consider using VEA - which is more tax efficient than VXUS. VEA is developed markets only, no emerging markets.

Source: https://www.vanguard.com/pdf/FTC_2023.pdf

Regards,

curo wrote: ↑Sat Mar 25, 2023 8:15 am I have my portfolio held with Schwab. I'm a DIY and manage my own accounts. The other day a rep. from Schwab called me and was trying to talk me into "Direct Indexing" offered at Schwab. Obviously his sales pitch was very convincing. I did a little due diligence and found out that Schwab charges 40 basis points (0.40) for this service. This sound way too high for what they offer. Also, if I wanted to get out.. it gets a little messy. I dont think its worth it.

Any thoughts?

My advice would be to avoid it.

There have been a number of threads on this topic already.
Happy reading: https://www.google.com/search?sitesearc ... index#ip=1

Regards,

rmstickler wrote: ↑Fri Mar 24, 2023 4:48 pm Hi all! Apologies in advance for the long-ish post, but I'm relatively new to investing and have quite a few questions

Welcome to the forum.

Frankly, your post isn't long enough. You should consider editing your post using the pencil icon to conform to the Asking Portfolio Questions format so forum members can provide appropriate advice. There is lots of information missing from your post that will help users provide appropriate, specific guidance.

Regards,

Isn’t the US market the most stable? International would be more towards speculative? I don't know if the US market is more or less stable than international markets (it probably varies over time), but I certainly don't see investing in companies like Nestle Foods, Shell Oil, Samsung, Toyota, etc. as speculative. These companies (and international stock index funds in general) provide consistent dividends to shareholders year after year. Regards, What about the 2 fund I am invested in? The Spartan 500 and the small cap fund do a fine job of covering the US stock market. By adding international stocks to your portfolio, you'll be increasing diversification - more diversification is generally a highly regarded quality of an investment portfo...

The system automatically did that match. I am not emotional when it comes to bear market so I am ok with not drops like 2008 and 2020. Why do I need Bonds or international stocks? See the video linked in the first post of the thread below for some reasons why you should consider adding international stocks to your portfolio. Link: https://www.bogleheads.org/forum/viewtopic.php?t=400140 Regards, Isn’t the US market the most stable? International would be more towards speculative? I don't know if the US market is more or less stable than international markets (it probably varies over time), but I certainly don't see investing in companies like Nestle Foods, Shell Oil, Samsung, Toyota, etc. as speculative. These companies (and international s...

hammockman wrote: ↑Fri Mar 24, 2023 11:24 am ...but are the actual cap gains directly impactful to calculating ACA income for credits? Any insight would be greatly appreciated.

Yes, the capital gain on the sale of a non-primary (secondary) residence will be seen as capital gain income.

More details on the MAGI calculation for ACA here: https://www.healthcare.gov/income-and-h ... come/#magi

Regards,

10b-8 wrote: ↑Fri Mar 24, 2023 10:30 am
Regarding unrealized gains and losses, where would you recommend I look those up? I don't mind doing some homework in preparation for Monday's call.

Using the Vanguard website - go to the "My Accounts" menu -> then to "Cost Basis".

You're looking for unrealized gains or losses in your taxable account.

Regards,

jackal wrote: ↑Fri Mar 24, 2023 8:13 am
Would you know where the IRS opines on this?
Thank you.

IRS Publication 550.

The wiki has some info that might help as well.
https://www.bogleheads.org/wiki/Wash_sale

Regards,

charlesschulte wrote: ↑Fri Mar 24, 2023 9:54 am I am concerned about my position in FXNAX. I am concerned about having 35% in this position with a 6 year duration. I would like to know if I should hold on to this or dump it for a shorter duration bond fund. Will this fund take many years to recover since some of the bonds they hold are 6 years old with very low yields?

What's your time horizon?

In other words, when do you expect to need the money?

Regards,

1) I’m currently doing all Roth in my 401k but being in the 24% bracket, at what point should I go traditional ? Possibly now. Do you pay state income tax? If so, what's the marginal rate? More details on this important, and often misunderstood, decision can be found in the Traditional versus Roth wiki page. Regards, Yeah I’m in WI so it’s 5.3%, with an effective rate of about 4.9% based on my 2021 tax return. So, your total marginal rate is 29.3%. (Fed + State) In my view, it's unlikely you'll be paying more than that as a retiree (probably much less), with no job, and no wages, when RMDs begin at 75 years old. Therefore, switch to traditional tax-deferred for 100% of your contributions. P.S. Don't just take my word for it. You should rea...

Looks right to me, at least as far as tax efficiency goes.

I think you get it.

Regards,

malibuboats91 wrote: ↑Fri Mar 24, 2023 8:59 am
1) I’m currently doing all Roth in my 401k but being in the 24% bracket, at what point should I go traditional?

Possibly now.

Do you pay state income tax? If so, what's the marginal rate?

More details on this important, and often misunderstood, decision can be found in the Traditional versus Roth wiki page.

Regards,

OldSport wrote: ↑Fri Mar 24, 2023 8:44 am
Is this valid??

Of course not.

If the author could predict the direction of the market or the duration of an up or down cycle he wouldn't be writing click bait articles for a low-traffic website on the internet.

His opinion isn't worth any more than any other prognosticator. The prediction business is thriving, but selling predictions is far more lucrative than following them.

Regards,

The system automatically did that match. I am not emotional when it comes to bear market so I am ok with not drops like 2008 and 2020. Why do I need Bonds or international stocks? See the video linked in the first post of the thread below for some reasons why you should consider adding international stocks to your portfolio. Link: https://www.bogleheads.org/forum/viewtopic.php?t=400140 Regards, Isn’t the US market the most stable? International would be more towards speculative? I don't know if the US market is more or less stable than international markets (it probably varies over time), but I certainly don't see investing in companies like Nestle Foods, Shell Oil, Samsung, Toyota, etc. as speculative. These companies (and international s...

Vanguard User wrote: ↑Thu Mar 23, 2023 11:07 pm
The system automatically did that match. I am not emotional when it comes to bear market so I am ok with not drops like 2008 and 2020. Why do I need Bonds or international stocks?

See the video linked in the first post of the thread below for some reasons why you should consider adding international stocks to your portfolio.

Link: viewtopic.php?t=400140

Regards,

LifeExplorer wrote: ↑Thu Mar 23, 2023 11:24 pm So I need to roll over about $300K 401K from my previous employer into an IRA account.

What should I do with that money once it’s in my IRA? What would you purchase? I am in my 50s and have plenty of other investments.

Without any other context, I'd say invest it according to your desired asset allocation. 60/40 or whatever you've chosen for your stocks / bonds / cash percentages.

If you want specific advice, consider posting your portfolio details in the Asking Portfolio Questions format.

Regards,

8301 wrote: ↑Thu Mar 23, 2023 7:17 pm

retired@50 wrote: ↑Thu Mar 23, 2023 6:55 pm

8301 wrote: ↑Thu Mar 23, 2023 5:57 pm
The 7 day SEC yield of VCTXX is 2.42% as of today. The equivalent T-bill yield is close to 4% for me without CA tax which is a little lower than the expected T-bill rate at next auction.

I'm curious what your Federal tax bracket is and what sort of T-bill you're considering.

Regards,

32% or 35%. I may park money in 4-week T-bill and buy back VCADX.

What interest rate are you seeing for a 4-week T-bill that would net you "close to 4%" - how close?

According to my calculations, to net 4% after paying 32% in Federal taxes you'd have to see a headline rate of 5.88%

Regards,

Your settlement fund and the listed mutual funds you own should appear in a similar fashion to the screen image below.

Note the text above the (Settlement fund) phrase. It shows as Federal Money Market Fund. The ticker symbol isn't used, but it's VMFXX.

Also, below the settlement fund details are the two funds I happen to own in this IRA. VBTLX and VTABX.

Is this how your screen looks?

If one of the listed mutual funds is VMFXX - Federal Money Market fund, then you can just use the transact ... interface to sell it and as you work through the screens you can direct the proceeds to go into your settlement fund.



Regards,

8301 wrote: ↑Thu Mar 23, 2023 5:57 pm
The 7 day SEC yield of VCTXX is 2.42% as of today. The equivalent T-bill yield is close to 4% for me without CA tax which is a little lower than the expected T-bill rate at next auction.

I'm curious what your Federal tax bracket is and what sort of T-bill you're considering.

Regards,

Today I ran across the following post on Twitter: "This is the most unstable situation I've ever seen in public equity markets. 7 companies - $AAPL $MSFT $AMZN $GOOGL $TSLA $NVDA $META - make up 24.22% of $SPX and 51.13% of $NDX . That's concentration risk that's off the charts." I'm curious about how to properly think about this situation (including whether it might make sense to consider switching from market cap-weighted to equal weight index funds or ETFs, such as Invesco S&P 500 Equal Weight ETF). I'm aware that equal weight funds / ETFs imply slightly different sector exposures, slightly higher volatility, and some tilt toward small-cap stocks. For the context, my investing horizon is 15-20 years. Please share your thou...

Thanks, both. Retired@50 - I do pay 1% to both planners. I've never really considered that cost as part of my "expenses" for the year, as it is never something I pay out proactively, but makes sense to do so. Appreciate the context on how this group typically approaches money management. Happy to help out. I realize you never have to write a check to your planners, as they just dip into your cookie jar of money, perhaps monthly or quarterly. In any event, if both you and the planners are withdrawing from the portfolio, that's a cost that must be reckoned with. I'm not saying you cannot succeed if you continue to use the 1% AUM model, but I think it will make things far easier if you spend a few months, or even up to a year, to le...

A few hours ago you were talking about 98% and 99%; now you're talking about 18% and 82%. That doesn't make sense either. Not me Your probably confused with another Post Sorry, my fault; that was in this thread but posted by someone else. In any case, it still doesn't make sense that you'd go from 18% to 82% (which still doesn't seem all that high, incidentally) by simply adding funds. I'm assuming when you mentioned three funds you have some variation on the three-funds discussed here. You'd have to have a very inappropriate allocation now to see such a change in success probability. Basically Target Ret 2025 Tr Sel $443K Instl 500 Index Trust $264K Inst Tot Bd Mkt Ix Tr 163K I don't know if you're interested, but you can use the Vanguard...

I have decided that I would like to semi-retire early, at age 42, and work only for pleasure and likely part-time at lower paying jobs, supplementing investment income. I want to reduce my taxable income as much as possible starting in 2024. Current situation: 1. $1.3M in brokerage 2. $930K in 401K 3. $260K ROTH IRA 4. $1.2M in stock options at the company I am leaving, most of which has been held for over a year 4. About to get ~$200K (after tax withholdings) in severance 5. About to get ~$600K of equity out of a home sale (not taxed) I think I'll need on average ~$100K a year to live based on my new budget right now, which may go up/down based on costs in any given year. My goal is to have ~20-30K of that come from part-time work, so reg...

I received a call yesterday from a gentleman at Gulf Coast Western offering an opportunity to invest in an oil well. They specialize in exploration and development of domestic oil and gas reserves. Currently partnership opportunity is for 4 wells in Colorado. Minimum $50k. My interest is strictly academic at this point but has anyone ever heard of this entity? Has anyone on here ever ventured into a partnership opportunity like this? If so, how was your experience? If it's such a great opportunity, why are they calling strangers rather than having friends and family invest? My thoughts exactly The quote below is often associated with gold mines, but I suppose the same could be said about an oil well. A mine is a hole in the ground. The dis...

I'm trying to understand brokerage CD's and YTM. I have done a lot of reading and still have a lot to learn but I am still confused. My advisor is telling me the current brokerage CD's are paying approx. 5% YTM for 3 months. I'm finding hard to believe that I will get 5% on my money for the 3 months. Ex. if I purchase for $10k at the end of 3 months I will be paid $500 in interest totaling $10.5K My thoughts are I would get 1.25% for the 3 months, which I would receive $120 in interest. Please educate me on the interest paid on brokerage CD's. I'm eager to learn.! The 5% figure is an annual rate of return. You're correct that 5% / 4 would be the 3-month return. Regards, Thank you, more confirmation my new "Fiduciary" advisor is f...

grumpy30000 wrote: ↑Thu Mar 23, 2023 12:06 pm I'm trying to understand brokerage CD's and YTM. I have done a lot of reading and still have a lot to learn but I am still confused.

My advisor is telling me the current brokerage CD's are paying approx. 5% YTM for 3 months. I'm finding hard to believe that I will get 5% on my money for the 3 months. Ex. if I purchase for $10k at the end of 3 months I will be paid $500 in interest totaling $10.5K

My thoughts are I would get 1.25% for the 3 months, which I would receive $120 in interest.

Please educate me on the interest paid on brokerage CD's. I'm eager to learn.!

The 5% figure is an annual rate of return. You're correct that 5% / 4 would be the 3-month return.

Regards,

I would suggest that if you do keep assets split at multiple firms, that you put all your tax-deferred IRA money into one account at one firm. This will make RMD calculations easier as you get older and possibly lose some cognitive ability. Regards, The OP doesn't need to nibble his or her RMD partly out of each account. It can all be taken from one account if the other places know not to do that automatically. I agree (individual nibbling isn't required), but there is still the burden of adding up multiple IRA balances from Dec. 31 of the prior year and doing the math on the RMD worksheet. If the OP experiences any cognitive decline this sort of arithmetic exercise could prove challenging in later years. Obviously, it's the OP's call as t...

8301 wrote: ↑Thu Mar 23, 2023 10:37 am My CA tax exempt munis (interm. & long terms) show significant long term capital losses. Are there any downsides with TLH and buying them back after a wash sale period? I badly need offset both LTCG and STCG from selling employer stock shares. Is it safe to assume that there may be no drastic price upswing of CA munis? I am in the CA 9.3% tax bracket and also subject to NIIT and Medicare surcharge.

There's certainly no harm in harvesting the losses. If you're willing to sit out of the market for a while, you could consider holding the cash proceeds in the CA muni money market fund VCTXX.

I have no idea what will happen to CA muni bond fund share prices in the interim.

Regards,

The percentage in equities (~30%) makes me uncomfortable ... because if she has enough, why take that risk? I've been telling her when she needs cash to draw that down first. Is this the right call? Welcome to the forum. Generally speaking, holding around 25% - 30% in equity is what's supposed to help the portfolio keep up with inflation. I think Vanguard's most conservative blended fund is the LifeStrategy Income fund with a 20% stock / 80% bond mix. In your mother's case, with a low withdrawal rate, she'll likely be fine under almost any future circumstance, but I'd still consider using a 30/70 mix to be a prudent choice. She may live another 20 years, and quite often, medical costs can spike in late retirement years. Having a portfolio ...

deltaneutral83 wrote: ↑Thu Mar 23, 2023 9:19 am I have a very small nominal amount , i.e. biscuit money, from my VIOV holding in my taxable showing up. Held at Merrill. I know it probably goes Ex-D right about now but this isn't that? Anyone else with VIOV seeing this?

I would imagine it's either related to the recent 2:1 split, or the upcoming $0.1844 dividend per share.

Otherwise, no idea.

Regards,

Marseille07 wrote: ↑Thu Mar 23, 2023 1:07 am Bond funds don't lock in rates, as the fund manager keeps shuffling bonds.

If locking in is your goal, you need to buy bonds directly.

+1

It's nice to want to "lock" something in, but that requires the cooperation of the person or entity on the opposite side of the trade.

Regards,

InvestforSuccess wrote: ↑Wed Mar 22, 2023 7:35 pm What's the best tool out there now for tracking net worth and asset allocation? Historically we've used Vanguard's portfolio tracker and the ability to manually add outside accounts, but I am planning to move from Vanguard to Merrill Edge so this won't be an option going forward.

I use a spreadsheet, updated quarterly. It's of my own making, but you might find something useful in this wiki page(s) (linked below).

See links:
https://www.bogleheads.org/wiki/Tools_and_calculators

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

Regards,

InvestforSuccess wrote: ↑Wed Mar 22, 2023 7:24 pm Is anyone aware of a financial planning tool that's usable by the ordinary investor? We have an advisor that we pay hourly to run scenarios for us, but our situation keeps changing and we don't want to have to keep paying her by the hour to run additional scenarios (scenario being things like, "if my wife takes a job that only pays half of what she currently makes, will we still be on track?")

Try this page: https://retirementplans.vanguard.com/VG ... h_sec=n#!/

Play around with each of the options.

Welcome to the forum.

Regards,

msaffer wrote: ↑Wed Mar 22, 2023 4:44 pm ... Thanks.

Congratulations on your first post.

Who had the over/under on 4 years, 5 months before posting?

Regards,

dips wrote: ↑Sun Mar 19, 2023 9:32 pm ...I was looking various options where it could gain some profit.

I guess it depends on how you define profit.

Unless or until any of those options are paying a higher rate than inflation (after taxes), you're still losing purchasing power.

If "profit" is simply having a higher number of dollars than when you started, any of them will work.

Regards,

McQ wrote: ↑Sun Oct 30, 2022 11:49 pm
I hope you will understand that cognitive dissonance prevents me from accepting the truth of your dismissal of older data; years of sweat equity on my part would be rendered futile.

This sounds a little bit like what an active stock picking fund manager would say when confronted with the reality of a SPIVA report.

Regards,

jginseattle wrote: ↑Wed Mar 22, 2023 5:27 pm I almost feel as if now I don't need to bother to read the book.

+1
It's not often you get a 3,600 word summary about a book.

Regards,

It's sort of Fight Club Rule 1 on this forum with regards to discussing Crypto and other "greater fool" investments, so we should probably drop that line of inquiry. A more generic approach is to say it's okay to sell an investment that has lost money unless you believe (with some confidence) that it will gain value faster than the alternative investment you will buy from the proceeds of the sale. So, someone decided to buy Company X's stock when it was hot instead of a total market index fund, and X lost 50% of its value within weeks. Should they sell the loser and use the money to buy total stock marrket, or hope and wait for X to recover? Unless they feel it is likely that Company X will grow faster than the total market in th...