Bogleheads.org

Are you using a state-specific fund, or a nationally focused fund? If state specific, that will certainly increase the risk, and/or reduce the diversification, but you probably already knew that. Some high bracket investors use a long term state specific fund, and the Vanguard limited term tax exempt fund, which is nationally focused. This provides an intermediate duration, but shields most of the interest income from state and Federal taxes. Regards, 👍👍 I am using vanguard intermediate tax exempt fund which is Nationally focused. The mix seems to be interesting idea even though as You mentioned state specific fund might increase the Risk Thx If you live in CA, MA, NJ, NY, OH, or PA then you can consider the Vanguard state specific funds. ...

Any reasons not to do a 2 fund 80/20 FSKAX - US Total market Index / FXNAX - US Bond Index diy portfolio? Some people, in fact many people, think international stocks are worthwhile. See the first post in this thread, and view the YouTube Video. https://www.bogleheads.org/forum/viewtopic.php?t=400140 If you still want to use a 2 fund portfolio, then that's fine with me, and most other Bogleheads. I just thought you should hear a decent argument that discusses the "Why" of international stock investing. Regards, Thank you. I suppose one could also theorize that Ex-us is on sale and now'd be a good time to get on board....hmmm This is true. The P/E ratio of international stock index funds is probably under 13, while it's over 19 fo...

Shooting4Sixty wrote: ↑Sun Mar 19, 2023 8:04 pm Any reasons not to do a 2 fund 80/20 FSKAX - US Total market Index / FXNAX - US Bond Index diy portfolio?

Some people, in fact many people, think international stocks are worthwhile.

See the first post in this thread, and view the YouTube Video.
viewtopic.php?t=400140

If you still want to use a 2 fund portfolio, then that's fine with me, and most other Bogleheads.

I just thought you should hear a decent argument that discusses the "Why" of international stock investing.

Regards,

mrsmitt wrote: ↑Sun Mar 19, 2023 7:16 pm #1 Why not?

You missed the low point for BND by months. It was in mid October of 2022.

Regards,

sal14 wrote: ↑Sun Mar 19, 2023 7:15 pm Hi all,
I recently started a new job and I'm trying to figure which bonds I should use in my 401k. For my portfolio, I generally aim for roughly 65% total US market, 15% total international, and 20% bonds. I'm having trouble deciding which one I should buy or what % of each. I listed the options available in my 401k below. Thanks!

Putnam Stable Value Fund 15
BlackRock High Yield Bond Portfolio Class K (BRHYX)
Fidelity® U.S. Bond Index Fund (FXNAX)
PGIM Total Return Bond Fund -Class Z (PDBZX)

FXNAX - hands down. I suspect the expense ratio is far lower than the other choices.

Regards,

Private equity has become more popular than front row seats for Adele or Taylor Swift.

Whatever premium existed has been destroyed by prices being bid up.

Regards,

Are you using a state-specific fund, or a nationally focused fund?

If state specific, that will certainly increase the risk, and/or reduce the diversification, but you probably already knew that.

Some high bracket investors use a long term state specific fund, and the Vanguard limited term tax exempt fund, which is nationally focused. This provides an intermediate duration, but shields most of the interest income from state and Federal taxes.

Regards,

Hey all, I went in and thought I had turned of dividend reinvestment for an inherited IRA. In my Trading Profile page it says: "Account dividend and capital gains election -> Transfer to settlement fund" - and yet the dividends for the Vanguard bond fund BND in that account are being reinvested. The other holdings are not. Is there somewhere else where you turn this off? Or does BND require you revinvest? Yes, there is somewhere else to turn off the dividend reinvestment. At the holding level, instead of at the account level. I usually navigate to this in one of two ways. 1. Click on the link for the specific holding, in the specific account. Once that page is shown, look for your dividend preferences and cost basis method. There...

sport wrote: ↑Sun Mar 19, 2023 2:31 pm

retired@50 wrote: ↑Sun Mar 19, 2023 2:15 pm If I had to write a big check, I'd just transfer the money to my checking account at my local credit union.

I don't feel the need to combine the "banking" and "investing" functions.

Regards,

I do the same. A transfer from Vanguard to my bank account only takes a day or two. Then I can write a personal check or use the bank's bill pay system. I use Vanguard checks only for QCD donations.

When I get to QCD age, I'll probably do the same.

Regards,

Pepper11 wrote: ↑Sun Mar 19, 2023 2:27 pm
This was very helpful. Thank you

You're welcome.

If you don't do your own income taxes, or study how your tax is actually calculated, it's easy to get mixed up on IRS rules.

Regards,

Any other BH find the metrics they use to measure their portfolio changing as they progress in their journey? Before retirement I would look at #1 and #2. I never contemplated #3. What I look at most now is just my stock / bond / cash percentages - just to make sure my portfolio stays on target. Regards, Interesting, I am finding stock / bond / cash percentages less meaningful now that I am retired, perhaps because I have implemented a LMP/TIPS ladder. But that is why I asked the question to understand how people were approaching monitoring their portfolios. It's what I look at most, but even that isn't very often. Using the word "most" in the earlier response may have been over-stating things just a bit. If I ever have to sell s...

Thank you, all! I feel well versed enough to do this myself -- and do some more learning along the way -- and agree with everyone's thoughts that it is messy. It has been a series of advisors over time, not one assigned, which is what I signed up for in a sense. I can only hope they're focused on maximizing tax efficiency with so many holdings but I'm not sure that's the case at this point. I'll spend the coming weeks digging and doing the work to get things cleaned up. Thank you again, and I'll be back with more questions in the future. If you intend to sell anything in your taxable brokerage account you may benefit from reading the wiki page on paying a tax cost to switch funds. The tax impact can be either large or small, depending on w...

If I had to write a big check, I'd just transfer the money to my checking account at my local credit union.

I don't feel the need to combine the "banking" and "investing" functions.

Regards,

TheTimeLord wrote: ↑Sun Mar 19, 2023 1:50 pm Any other BH find the metrics they use to measure their portfolio changing as they progress in their journey?

Before retirement I would look at #1 and #2. I never contemplated #3.

What I look at most now is just my stock / bond / cash percentages - just to make sure my portfolio stays on target.

Regards,

I wish you luck. Sorting out income tax snafus isn't fun.

This might help: https://www.irs.gov/taxtopics/tc154

Regards,

seanbaby wrote: ↑Sun Mar 19, 2023 1:55 pm Anything else I should consider before I switchover to the Roth 401K option?

Yes, you should consider your current marginal income tax bracket, and how you think it will compare to your marginal tax bracket once you (presumably retire) and have to start withdrawing from a traditional tax-deferred account.

More detail on this important, and often misunderstood, decision in the wiki links below.
https://www.bogleheads.org/wiki/Traditional_versus_Roth
https://www.bogleheads.org/wiki/Traditi ... h_examples

Regards,

When determining income for tax purposes in early retirement prior to Social Security, am I correct that the following are all included in calculated in Adjusted Gross Income: Traditional IRA to Roth conversions Traditional IRA withdraws Dividends in a taxable account Capital Gains from a taxable account Interest Income Are all these included and added similarly? It seems odd capital gains would be added the same as dividends. For example, if I get 10k in dividends I am taxed on 10k, but if I sell 10k of VTSAX with an 8k basis I am only taxed on 2k? If this is true, it seems your cost basis is effectively 0 on all dividends, which seems like quite the tax drag to me. Maybe I am thinking of this wrong. All those things are included in your ...

Please add fund names to the ticker symbols. I am familiar with a lot of the ticker symbols but not all of them. just added names... A couple of additional details would be helpful. Of the $2 million, what percentage is in each account? Also, what is your desired asset allocation? 60% stock / 40% bond? Something else? Regards, First IRA 700K Second IRA 400K First Roth 300K Second Roth 150K Desired allocation is probably 70 stocks/30 bonds Thank you I'd use the First IRA and/or the Second IRA to hold the $600,000 in bonds you'll want. Then, the remaining space in the First and Second IRAs can be used for stock index funds, either US or international. Finally, both Roth accounts can be all stock index funds - either US or international. No b...

CKMAN wrote: ↑Sun Mar 19, 2023 10:26 am

nedsaid wrote: ↑Sun Mar 19, 2023 9:42 am Please add fund names to the ticker symbols. I am familiar with a lot of the ticker symbols but not all of them.

just added names...

A couple of additional details would be helpful.
Of the $2 million,
what percentage is in each account?

Also, what is your desired asset allocation? 60% stock / 40% bond? Something else?

Regards,

I'm confused as it sounds like on one hand you say to use the roth but on the other you're suggesting not to. At this point I have a fair amount in a trad IRA and it seemed prudent to diversify by stuffing the roth for a while. What variables do I need to consider? Current income is about 75k/yr and should maintain from 55-80K moving forward. I definitely want to keep it simple.... I guess what I'm saying is that you should add paying attention to income taxes to your list of considerations. The wiki page to read first is linked above. Traditional versus Roth. It involves knowing your marginal tax bracket (Federal + State) and tax filing status. If you're in a relatively low tax state (under 5%) and you're in the 12% marginal Federal tax b...

vchiu25 wrote: ↑Sun Mar 19, 2023 9:55 am At 60/40 my bond will definitely spill over into taxable.

I’m wondering how to adjust my portfolio in retirement. The two potential change I’m contemplating are

1) convert tax exempt to total bond in taxable
2) move more bond from taxable into Roth

Does either of these actions make sense?

The bonds have to go someplace.

I recently read in one of Larry Swedroe's books that putting bonds in tax deferred and Roth is preferable to using a taxable account to hold taxable bonds. "Your Complete Guide to a Successful and Secure Retirement" by Larry Swedroe and Kevin Grogan - 2nd edition 2021.

Regards,

Im 42 and hope to have the choice to retire at 59 1/2. ... I have the bulk of my holdings, 3/4 or so, in traditional IRA and the rest in a Roth 401k that will be funded w/ 15-25% of my income moving forward. It has good vanguard low cost index fund options I can match the Fidelity allocations with. By age 60, my Roth to Traditional holdings should be about 50/50 What do yal think about the above idea to move forward with? I don't know what your current marginal tax rate is, but if it's over 25-30%, then using the Roth 401k might be reconsidered. If you are able to retire at 60, then you'll have maybe 10 years before Social Security begins and 15 years before RMDs begin. That's an awful lot of time to perform partial Trad -> Roth IRA conver...

Im 42 and hope to have the choice to retire at 59 1/2. ... I have the bulk of my holdings, 3/4 or so, in traditional IRA and the rest in a Roth 401k that will be funded w/ 15-25% of my income moving forward. It has good vanguard low cost index fund options I can match the Fidelity allocations with. By age 60, my Roth to Traditional holdings should be about 50/50 What do yal think about the above idea to move forward with? I don't know what your current marginal tax rate is, but if it's over 25-30%, then using the Roth 401k might be reconsidered. If you are able to retire at 60, then you'll have maybe 10 years before Social Security begins and 15 years before RMDs begin. That's an awful lot of time to perform partial Trad -> Roth IRA conver...

I am debt free minus a low interest mortgage If you're debt free, then you wouldn't need to borrow against the policy, which defeats the purpose. Buy a term life policy and invest the rest. Don't buy exotic life insurance policies that try to serve as an investment. Here’s the pitch, in a nutshell: Over the course of their lives, most people pay oodles of interest to creditors on all manner of loans, from mortgages to cars to credit cards to college loans. This lost interest — and the interest on that interest — represents a tremendous drain on individual wealth. If, instead, you aggressively saved money within a certain type of life insurance policy, you could fund these purchases from that policy — and pay the policy back, rather than th...

However, if the market fell when I retire, withdrawing from taxable would mean selling stocks at a loss and suffering the worst brunt of SORR. Thanks in advance for any insights, and for all I've already learned from reading this wiki so far. Welcome to the forum. On the very same day you sell some VTSAX in your taxable account for a loss, you go to your tax-deferred IRA and sell a comparable amount of VBTLX (probably for a small gain) and use the proceeds to buy some VFIAX S&P 500 fund inside the IRA. Buying a similar but not identical stock index fund on the same day avoids the wash sale problem, and makes you both a buyer and a seller of stock (i.e. neutral), but all you really got rid of in your portfolio was some shares of VBTLX. ...

jebwc wrote: ↑Sat Mar 18, 2023 10:13 pm I've run some humble spreadsheet simulations that suggest if your tax rate doesn't change, then it doesn't matter whether you save pre-tax or post-tax

This comparison (unchanged tax rate) works when you're considering a tax-deferred account and a Roth account.

When you invest in a taxable account you'll have the annual tax drag on dividends - even when you're re-investing them during your accumulation years.

Finally, many people wind up in a lower tax bracket when they retire. This throws the unchanged tax rate comparison out the window. No wages typically means less income. Less income means lower tax rates.

Regards,

Jade A.B. wrote: ↑Sat Mar 18, 2023 6:15 pm Retire@50

Thanks for the link. I was actually calculating more. I'll have to play with this. We're in a low bracket for last year, sure won't be next

Jade A.B.

That website that I linked doesn't typically include what is known as the Net Investment Income Tax, which may come into play. Modeling the scenario in tax software (e.g. turbo tax) would probably be the most accurate way to get an estimate.

Regards,

I am missing something, or would this be a decent purchase in a Roth IRA ? 6 years, call protected, 4.5% FDIC insured CD? It seems like a solid choice for a fixed income investment, but why inside a Roth IRA? Regards, I had made my contribution earlier this year, and have $6,000 sitting in the core money market account. Also, I sit right on the edge of the 12%-22% marginal bracket- right now I project to be just inside the 12%. In a taxable account, the dollars paid in interest might very well fall into the 22% bracket. Also, and yes this does kind of violate the nobody knows nothin philosophy, but I figure being sure of a positive 4.5% nominal for 6 years wouldn't be horribly bad as part of the bond allocation in the Roth. However, I have...

Jade A.B. wrote: ↑Sat Mar 18, 2023 3:23 pm RETIREDJG

That is an idea.we need to consider and compare numbers on, you're right. We do have a good amount, though the basis would incur a good bit of taxes also.

Thanks. Jade A.B.

According to this link you'll be paying over $109,000 in income taxes for a $500,000 withdrawal from a tax-deferred IRA. Assumes Married Filing Jointly, for tax year 2023.

Regards,

dmwones85 wrote: ↑Sat Mar 18, 2023 4:07 pm Any advice based on the above information would greatly appreciated. Thank you in advance.

Welcome to the forum.

To provide comprehensive advice it would probably be better if you posted using the Asking Portfolio Questions format.

You can edit your original post to conform to the desired format by using the pencil icon (button) in your original post.

Regards,

coachd50 wrote: ↑Sat Mar 18, 2023 1:05 pm I am missing something, or would this be a decent purchase in a Roth IRA? 6 years, call protected, 4.5% FDIC insured CD?

It seems like a solid choice for a fixed income investment, but why inside a Roth IRA?

Regards,

muffins14 wrote: ↑Sat Mar 18, 2023 2:25 pm I would not incur the taxes until you are certain you will close on the house

Me neither, but I wonder how the OP wound up in the position of having house down payment money stuck inside an IRA?

Unless we're talking about a first time home buyer situation.
See link: https://money.usnews.com/money/retireme ... uy-a-house

Regards,

Sorry to hear of your troubles. I could be misunderstanding your situation, so others please correct my thinking. If you use your carryover losses to reset your cost basis on existing investments (assumed to be stock funds): --You'll keep the same investments, and pay zero tax now, to lower your cost basis on those same investments. --However, if you must later sell the same investments for living expenses, you'll pay more in tax because of the lower cost basis. Bottom line. You pay zero tax today, to pay more in tax later, if you must later sell. And since the fed tax rate for a surviving spouse is higher ...maybe much more in tax. So I don't see how your lawyer's advice---"don't let losses expire"---helps you, if you rebuy the ...

Aguilar wrote: ↑Sat Mar 18, 2023 12:56 pm When does Treasury Direct announce new iBond rates?

I was told to wait till then to decide whether to lock in the current rate or buy when the new rate goes into effect.

This is answered in the I savings bonds wiki page. May 1 and November 1.

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

Regards,

Charles Joseph wrote: ↑Sat Mar 18, 2023 11:20 am I'm posting my portfolio here to ask if fellow Bogleheads could take a look and see if there are any flaws they notice, and any improvements that might be suggested. This has and continues to be a wonderful journey.

No international stock, at all?

Is that on purpose?

See the Ben Felix video in this thread: viewtopic.php?t=400140

Regards,

I am curious to learn the economics of running a passive equity index fund, such as for the S&P 500. Check out Rick Ferri's interview with Gerard O'Reilly and Rich Powers from Vanguard. Podcast: https://boglecenter.net/bogleheads-on-investing-with-gerard-oreilly-and-rich-powers-episode-037/ Forum discussion: https://www.bogleheads.org/forum/viewtopic.php?t=357177 Regards, I was going to recommend the same interview - very interesting overview of some of the administrative logistics for an index fund. If you are also curious about how a bond market index fund is done, Rick Ferri has a similar interview regarding BND as well. Founding Father Great, thank you for the links! I will certainly have a look. And, yes, I am definitely intereste...

CKMAN wrote: ↑Sat Mar 18, 2023 9:37 am Tried to open a trust account, send my paperwork in, and received an email asking me to log in. I tried to log in to Vanguard but the site locked me out. I called Vanguard, but they could not unlock it and said it will be two weeks to resolve the issue . I said I have a large amount of money I woul like to transfer in and if you wont fix the problem with in a day i will go somewhere else - never heard back from them. It is frustrating.

So where did you go instead?

Fidelity? Schwab? someplace else?

Regards,

Tracker968 wrote: ↑Sat Mar 18, 2023 10:12 am Thanks for the link. After reading that, it seems that I should keep the sum of all my accounts at Fidelity below $500k. That's even worse than I thought.

Maybe the wiki explanation will help.
https://www.bogleheads.org/wiki/SIPC_pr ... tual_funds

If I were you, I'd try to relax about the FDIC and SIPC limits.

The risks you should actually be concerned about are things like your stock / bond / cash mixture. This will have a much bigger impact on your account value.

Regards,

cbox wrote: ↑Sat Mar 18, 2023 7:44 am If you're retired, which safe withdrawal rate (SWR) has allowed you actually to grow your nest egg, inflation-adjusted?

This response will make me sound like a simpleton compared to the entries above, but all I did was review my spending for the 2 years prior to retirement to get a sense of what I'd need. Then, I set all the dividends in my taxable portfolio to go to my settlement fund. I've been using that money ever since. Every once in a blue moon I have to sell something, but it's rare.

This has allowed my tax-deferred and Roth accounts to continue to grow. Even my taxable account has grown, but at a slower rate than it would have, had I not been taking the dividends.

Regards,

rjbraun wrote: ↑Fri Mar 17, 2023 10:08 pm I am curious to learn the economics of running a passive equity index fund, such as for the S&P 500.

Check out Rick Ferri's interview with Gerard O'Reilly and Rich Powers from Vanguard.

Podcast: https://boglecenter.net/bogleheads-on-i ... isode-037/

Forum discussion: viewtopic.php?t=357177

Regards,

...I agree that if it's the total stock market fund, then this is an odd message, but if you've chosen to overweight real estate by using a REIT fund, then that's your choice... No, no, no. Multiple people saying that Portfolio Watch is showing a sector exposure of 0% to some sector is a smoking gun. This is a gross programming error, it can't be a legitimate result of any reasonable arithmetic. It's just not possible. REIT funds, factor tilts, dividend orientations, any of Vanguard's actively managed funds... they are not going to have zero exposure to any sector. I don't believe in the theory of micro-active-trading within the funds, but even if that were true it would be a micro-effect. It's not possible that the manager would liquidate...

This morning while looking at my VG Portfolio Analysis I noticed an alert message. It said : Portfolio Alert. Some of your sector weightings differ from the markets. Now while that is nice to know, why tell me? Shouldn't Vanguard be telling its portfolio managers? All of my investments are in Vanguard's index funds. The portfolio target is 50/50 with weightings of 70/30 domestic / internationals in both stocks and bonds. I do not trade in these accounts. Anyone out there know what's going on? You say you're invested in index funds, but which ones? I agree that if it's the total stock market fund, then this is an odd message, but if you've chosen to overweight real estate by using a REIT fund, then that's your choice. Regards, Nothing fancy...

catnamedspot wrote: ↑Fri Mar 17, 2023 5:02 pm Some people here seem to say that when you transfer to a brokerage account your funds automatically become ETF. I thought that indeed was NOT that case (in a prior threads I've read on the transfer).

It's not the case. You're correct.

Your mutual funds will stay as mutual funds, unless you call Vanguard and ask for the tax-free conversion to the ETF share class - assuming you hold a mutual fund that is eligible for the conversion.

Regards,

john0608 wrote: ↑Fri Mar 17, 2023 4:49 pm
- i assume if i take SS early ($45K approx) i could still perform some Roth conversions (maybe $75k) or does that not really make sense?

thanks in advance for any and all opinions.

Performing Roth conversions while collecting Social Security might lead to some weird marginal tax rates and outcomes.

See this post: viewtopic.php?p=6960716#p6960716

Also, see the "Cautions" section of this wiki page: https://www.bogleheads.org/wiki/Roth_IRA_conversion

Regards,

My point earlier was that none of these products actually keep up with inflation. They collect tax on inflation. A win-win for Uncle Sam. This is true of every investment. Tax is, alas, assessed on the increase in the number of dollars, not in real value. Yet this never seems to be brought up except when TIPS are being criticized, as if it were some special disadvantage of TIPS. It is rare to see any chart of the historical return of stocks that takes taxes into account. To its credit, one edition of Stocks for the Long Run actually did include such a chart, the only one I think I've ever seen--but it is not in the current edition. No special criticism of TIPS was intended, other than that "inflation protected" is an overstatemen...

Based on a quick glance at Morningstar, LIPPX and VFIFX don't seem substantially identical to me, but as you probably already know, the forum opinions you'll get won't matter, it's the IRS opinion that counts.

VFIAX seems like a suitable tax loss partner for VTSAX and VFIFX to me.

Finally, feel free to review the tax loss harvesting wiki page and the associated links from other sites.

Regards,

My point earlier was that none of these products actually keep up with inflation. They collect tax on inflation. A win-win for Uncle Sam. This is true of every investment. Tax is, alas, assessed on the increase in the number of dollars, not in real value. Yet this never seems to be brought up except when TIPS are being criticized, as if it were some special disadvantage of TIPS. It is rare to see any chart of the historical return of stocks that takes taxes into account. To its credit, one edition of Stocks for the Long Run actually did include such a chart, the only one I think I've ever seen--but it is not in the current edition. At least with stock funds you have a chance of out-performing inflation (i.e. gaining additional purchasing p...

Shooting4Sixty wrote: ↑Fri Mar 17, 2023 2:29 pm I just edited my post. Its in a traditional IRA/Rolledover Acct

In that case, have at it.

Sell now, and use the proceeds to buy what you'd like. Presumably some stock and/or bond index funds.

Regards,

I finally took the steps to transfer my e jones accounts to fidelity! I now have the following holdings to figure out what to do with. FUND NAME - % OF ACCT AWSHX AMERICAN WASHNTN MUTUAL INVESTRS CL A - 22% AGTHX AMERICAN GROWTH FUND OF AMERICA CLASS A - 18% SMCWX AMERICAN SMALL CAP WORLD CLASS A - 14% ABNDX AMERICAN BOND FUND OF AMERICA CLASS A - 13% ANWPX AMERICAN NEW PERSPECTIVE CLASS A - 13% CWGIX AMERICAN CAPITAL WORLD GRTH & INC A - 10% LGMAX LOOMIS SAYLES GLOBAL ALLOCATION CLASS A - 4% AHITX AMERICAN HIGH INCOME TRUST CLASS A - 4% NEWFX AMERICAN NEW WORLD FUND CLASS A - 2% Do any of you have some pointers on how I can make educated choices on what to do with my old jones acct holdings? If the holdings above are in a taxable acco...

It sounds like panicking, and adding complexity, and another login to remember.

I'd skip this idea if it were me.

Regards,