Bogleheads.org

Joe Public wrote: ↑Fri Jan 27, 2023 4:58 pm

jpelder wrote: ↑Thu Jan 26, 2023 8:37 amI do know that the past year has been awful for intermediate-term bonds. VBTLX (Vanguard Total Bond Market) returned -13.16% in 2022. The G Fund returned 0.13%.

The TSP website is showing that the F Fund returned -12.83% in 2022, and the G Fund returned +2.98% over that same period.

https://www.tsp.gov/fund-performance/

ruralavalon wrote: ↑Wed Jan 25, 2023 2:36 pm

dave.m wrote: ↑Tue Jan 24, 2023 9:18 am I’d like to only invest in the US funds (not the I Fund) inside my TSP. What’s the best way for me to accomplish this?

Am I correct that about 80% of equities should be in the C Fund and the other 20% be in the S fund?

Should I be using only one of the G or F funds or a mix? And if it’s a mix, at what percentage should that be?

For a two-fund portfolio in a Thrift Savings Plan (TSP) account I suggest:
1) C Fund (S&P 500 index fund); and
2) G Fund (like intermediate-term Treasury bonds)

Thank you

jpelder wrote: ↑Thu Jan 26, 2023 8:37 am

dave.m wrote: ↑Wed Jan 25, 2023 6:11 am

jpelder wrote: ↑Tue Jan 24, 2023 9:22 am The G fund is a better deal than nearly any other fixed-income option around. You get intermediate-term bond rates with no principal risk. I wouldn't bother with the F Fund.

I read elsewhere that the G fund is so great, that it offers the ability to increase the portfolio equity percentage slightly while not having any more risk than a portfolio using an intermediate bond fund. Is this valid? If so, how much more of an equity percentage? 5% ?

This passes the smell test for me, but I don't know what the magnitude of the reduced risk is (nor do I know a way to calculate it mathematically).

I appreciate you validating that comment I read elsewhere.

Ricola wrote: ↑Thu Jan 26, 2023 9:25 am Just for reference, the L fund is 25/75 Stk/Bonds.

Which L fund?

My actual advice would be to just use one of the L Funds. Is this because of the simplicity of using an L fund? Or do you think the I Fund offers additional value the 2 fund portfolio doesn’t? Some of both. The L Funds, like most reputable Target-type funds, were carefully designed by financial professionals who have studied, and continually restudied, best practices for asset allocation for retirement savers. They use sophisticated lifetime human capital/consumption models, combine them with sophisticated forward-looking asset models, and perform a large range of simulations and robustness tests to come up with their glide paths. With the TSP in particular, the G Fund is an unusual asset that could not normally be included in a marketable...

jpelder wrote: ↑Tue Jan 24, 2023 9:22 am The G fund is a better deal than nearly any other fixed-income option around. You get intermediate-term bond rates with no principal risk. I wouldn't bother with the F Fund.

I read elsewhere that the G fund is so great, that it offers the ability to increase the portfolio equity percentage slightly while not having any more risk than a portfolio using an intermediate bond fund. Is this valid? If so, how much more of an equity percentage? 5% ?

NiceUnparticularMan wrote: ↑Tue Jan 24, 2023 10:26 am My actual advice would be to just use one of the L Funds.

Is this because of the simplicity of using an L fund?
Or do you think the I Fund offers additional value the 2 fund portfolio doesn’t?

I’d like to only invest in the US funds (not the I Fund) inside my TSP. What’s the best way for me to accomplish this?

Am I correct that about 80% of equities should be in the C Fund and the other 20% be in the S fund?

Should I be using only one of the G or F funds or a mix? And if it’s a mix, at what percentage should that be?

My sister has a poor credit score, almost entirely because of some past owed debts which were quite delinquent (all while in college) but she has since settled and have continued to stay on her credit history until enough time passes. She does not work and her husband has a good job. She is not in need of a higher credit score at the moment but would still like to repair her credit score in case she does work and she and her husband's combined income would be needed in a calculation, such as a home purchase, and a credit score would be a factor. She uses the free online credit report, I think Experian and found her score is close or just below the amount she would need to open a credit card in her own name. They have two cars and both are f...

How often can I move money from one bank to the next? Can I capture some of these bonuses 2-3 times in the same calendar year with the same EF money?

KlangFool wrote: ↑Sat Feb 08, 2020 9:07 am OP,

60/40 is good enough for you at all times. So, why do you want to optimize and hope to change your AA at the right time?

KlangFool

I believe I would be more comfortable with slightly more equities in my portfolio knowing I have a partial pension in retirement. Should I not be factoring my pension?

if you don't qualify for a backdoor roth because you qualify for a regular ol' Roth IRA, then you can't contribute more than the max to a Roth, but you can convert from pretax to Roth because it's not a contribution, it's a conversion. That being said, you don't have any traditional IRAs that you can convert to a Roth account so I'm not sure how you'd do a conversion. Can I open a t-IRA account? For someone utilizing a Mega Backdoor Roth, do they have to move all their money into the t-IRA and then convert to Roth? for example, if someone had $1m in an individual-401k account, and they wanted to utilize a mega backdoor roth, could they move $50k into the t-IRA and then convert that to a Roth, only paying taxes on the $50k? Or must this all...

Is there a way to use maybe a back door Roth (though, is that only for higher income earners who do not qualify for a Roth), to get more money into our Roth IRA's given the tax bracket and situation we currently find ourselves in? Anyone who can contribute to tIRA can use the back door method of contributing to Roth IRA. You cannot get more money into Roth IRA using the "back door" than you can put in through the "front door" (a direct contribution). That limit is $6k this year, $1k more if you are older than 50. However, I think you may actually be asking about Roth conversions, not the back door Roth. They are not the same thing but are often confused. I am on a public student loan forgiveness program and the monthly ...

Currently we have roughly $325k in tax advantage accounts (no retirement money in taxable accounts): We currently have $15,000 in 2040 life cycle fund of my TSP. My solo 401k has $210k. Her Roth has $50k My Roth has $50k Of the $325 total money above it is divided into a typical boglehead 3fund portfolio with roughly 56% US Stocks, 14% International, 30% Bonds. I am 40 and my wife is 34, we currently make about $115k per year gross. I've been working in my government job a little over a year and I qualify for my pension at year 5. At that time I will receive 5% of my salary in retirement. The 5% increases by 1% each year I work after the 5th year. I will be 44 years old when I hit this 5th year of employment and that that time I would like ...

Currently we are growing our emergency fund because we have a new baby on the way. Also, we are likely going to move in the next 1-3 years so this money will be shifted over to a down payment on our next house after the baby arrives healthy. Are there any banks which might offer a few hundred dollars as a bonus for opening an account with them and putting $25k-$50k+ into their account? If not, would people suggest a CD with a 1 time no penalty for early withdrawal? We are open to other ideas but as this money continues to grow in my current checking account earning almost 0% interest, it occurred to me that this larger amount of savings in the short term can be utilized for some small profits.

Just an observation to thrown in. I've been a Federal employee for 30 years and a Supervisor for 25 of those. I've had hundreds if not thousands of employees work for me . Of those employees I've supervised, plus thousands of others that I've been around, I can think of maybe 2 that were 69 years or older. My two best friends that were also Fed supervisors told me they don't know of anyone that has worked till 69. For the most part, the Federal Gov't doesn't have a problem with you working that long, but to be honest, it's very difficult to find new positions as you get older, so you will be "stuck" in the same job for a long time. Also in general gov't jobs can be mundane, same old same old. And the constant changing of polices ...

I am seeing $20 off.
Do I need to call someone to get a free version? or are people here just using the version which originally costs less than $20 and thus, it is now free?


Is anyone familiar with the free trial? It says I can do it for free and not pay until I actually file the taxes. Must i use a CC first or am I only asked for that information right before I file?

I have never done taxes myself and plan to still use my CPA this year, but want to use my own software this year also to see if we arrive at the same numbers. If we match, then next year I plan to buy my own software to do taxes myself. would this free trial be a perfect plan for me since I don't plan to file with the software for 2019 taxes anyway?

Currently my wife and I have 4 retirement accounts: Individual 401k, TSP, His Roth, Her Roth. Thanks to the help of some on this forum, while my family falls into the 12% tax bracket, we likely will have enough deductions and credits to not owe additional taxes. Is there a way to use maybe a back door Roth (though, is that only for higher income earners who do not qualify for a Roth), to get more money into our Roth IRA's given the tax bracket and situation we currently find ourselves in? My wife will be working in a few years and that is quite possibly going to move us into a slightly higher tax bracket. I am on a public student loan forgiveness program and the monthly payments are based on my AGI, so another question I would appreciate he...

ralph124cf wrote: ↑Sat Jan 04, 2020 7:43 pm The big category not mentioned so far is income taxes, (federal, state, and local, if any).

If you are a W-2 wage earner, then these normally come out of your paycheck before you see it, but you still should account for it in your budget. Don't start your budget with your take-home pay, start with the gross and account for all the paycheck deductions in your budget. This lets your see better what your are actually paying for.

Ralph

yes mostly W-2.
Thank you for sharing this point, I wouldn't have included taxes

IMO it’s reasonable to take a pension into account when determining AA. It will take 20 years (age 60) to vest in your pension benefit of 22% of eligible salary. Consider not being too aggressive with your AA until you get closer to actually vesting in and can count on your pension income. While it will take about 20 years to have the 22% pension, my pension will be initially vested after 5 total years of work (roughly 4 more years) at a 5% pension and increase 1% per year until I am closer to 20 years, at which time it will increase a to a slightly higher percentage. Based on your advice, would you suggest I still need to wait until closer to 20 years because of the significance of 22% pension compared to 5% pension? or is there a reasona...

ruralavalon wrote: ↑Sat Jan 04, 2020 1:07 pm Congratulations on the third child this year .

Thank you. And thank you for your helpful post

Jags4186 wrote: ↑Wed Jan 01, 2020 12:48 pm This year we will be tight hitting the savings number so I decided I need to make $5,000 extra this year which I plan to do via new account bonuses. Of course, a raise would be nicer...

Would you please explain to me how you accomplished this? In detail or direct me to another link if possible. I would like to learn how I can make a little extra money each year using bonuses and promotions.

We use credit cards and auto debit from our checking account for 99% of everything we spend in a year. Currently I am going back and copy/pasting all the transactions from both into excel to find out how much money we have spent and on which items or services we are spending on in the hopes of trimming some down. Can anyone suggest some good general categories to use and help me to compartmentalize our annual transactions? So far I have food (and household items bought at the same location), house & insurance & bills (water/trash/cable plus home ins, auto ins, life ins, and mortgage and prop/school taxes), gas, travel/vacation, student loan, kids pre-k schooling, clothing, personal care (hair cuts, etc), gift/donations, retirement ...

HomeStretch wrote: ↑Wed Jan 01, 2020 1:08 pm

dave.m wrote: ↑Fri Dec 27, 2019 6:57 pm ... maybe I can get enough of an education from you and others to do my own taxes next year.

Consider buying 2019 tax prep software (like TurboTax Deluxe CD or download version) and try doing your 2019 Federal return with the tax forms/data you will be pulling together anyway for your tax accountant. If you still use the accountant to do your 2019 taxes, compare your results to the accountant’s. Figure out any differences. It’s a good exercise to prep for the goal of doing your 2020 return(s) yourself.

Checkout the ongoing TurboTax thread about the best price on Amazon. Also, when using TT Deluxe ignore any prompts to upgrade for more money to TT Premier as it is likely unnecessary.

This is a great idea, thank you

I have a student loan which is on an income based repayment plan, as I am entered into the public service loan forgiveness program. I have 9 years remaining until the remaining debt is forgiven. Keeping my AGI low each year helps me to keep the income based monthly payments also low. This is one reason I have a traditional IRA (TSP) and not a Roth TSP. It was pointed out on this forum that I currently have enough deductions to possibly not pay any federal tax. I am currently researching this to confirm it to be the case. If this is true, should I be funding the Roth over the traditional? I am in Pennsylvania and I do not get a state deduction from my TSP contributions. However, keeping the student loan payments lower each month is a real th...

My original 3 fund portfolio philosophy has been to use roughly the age in bonds and the rest in a mix of US and International equities. Though that portfolio allocation was decided upon while I was in the private sector. I now have a federal job with a pension at the end of my career and I wish to make some changes to have a more aggressive portfolio. Still utilizing a 3 fund or close to a 3 fund portfolio and assuming slightly more risk for the possibility of slightly higher returns in 30+ years from now. Basic Info: I'm 40, wife is 34, we have almost 3 young children (one due this year). I plan to work until I'm 69 giving me a pension equal to 31% of my highest salaries. While I know it is hard to know I will be able to work those 30 yea...

retiredjg wrote: ↑Wed Jan 01, 2020 5:46 pm

dave.m wrote: ↑Wed Jan 01, 2020 12:37 pm Is there a way someone can give me just a general idea about our path.

I don't do predictions like this. I will say that your situation does not scream "way behind gotta catch up" to me.

Thank you

We use credit cards and auto debit from our checking account for 99% of everything we spend in a year. Currently I am going back and copy/pasting all the transactions from both into excel to find out how much money we have spent and on which items or services we are spending on in the hopes of trimming some down. Can anyone suggest some good general categories to use and help me to compartmentalize our annual transactions? So far I have food (and household items bought at the same location), house & insurance & bills (water/trash/cable plus home ins, auto ins, life ins, and mortgage and prop/school taxes), gas, travel/vacation, student loan, kids pre-k schooling, clothing, personal care (hair cuts, etc), gift/donations, retirement a...

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An additional question. and I hope it does not get lost down here.
Are we on a good, poor, or average track for retirement based on what we currently have in our retirement accounts and what we are saving, and ball park what I will receive in a pension. Is there a way someone can give me just a general idea about our path.

4) From a financial perspective, it makes best sense to let HSA ride completely untouched until the funds are used for Medicare premiums. This perspective assumes you can afford to let it ride and the HSA account has reasonable investment and no additional fees. This approach surprises many. This is not correct for the OP, nor for other investors who cannot max out retirement accounts. If you have a $1000 medical bill, it is better to withdraw $1000 from your HSA and contribute $1000 to your Roth IRA (or $1333 more to your TSP), rather than pay $1000 from your bank account and not have the $1000 to invest in a retirement account. The HSA is a better account to invest in, but once you have made the contribution, you have already gotten that...

I had this evil thought: Do you suppose the accountant would ever tell you: "If you didn't have to pay me, then the money you save could be contributed to your retirement plan reducing your taxable income such that you would save $2,000 on taxes?" Great point. I was away on vacation, but I will check last year's returns and let you know if I paid taxes. I do know that my Adjusted Gross Income was not $0 though, it was something around $70k_ish, so would that not put me in the 12% bracket? And with my side business, I pay quarterly estimates, and I still had to pay those, does that not count? What about the money withheld from my paycheck each month for SS and Medicare, etc, I assume those cannot count right, we are just talking a...

4) From a financial perspective, it makes best sense to let HSA ride completely untouched until the funds are used for Medicare premiums. This perspective assumes you can afford to let it ride and the HSA account has reasonable investment and no additional fees. This approach surprises many. This is not correct for the OP, nor for other investors who cannot max out retirement accounts. If you have a $1000 medical bill, it is better to withdraw $1000 from your HSA and contribute $1000 to your Roth IRA (or $1333 more to your TSP), rather than pay $1000 from your bank account and not have the $1000 to invest in a retirement account. The HSA is a better account to invest in, but once you have made the contribution, you have already gotten that...

Have you used tax prep software? How about your spouse? Has she used tax prep software? Maybe she is the CFO in your family? Clearly I have far less of a handle on this situation than i thought, and I didnt think I had a good handle previously. No software, we hire an accountant. Sounds like they aren't doing as good of a job as you could offer though. The sound of 0% is great! I cannot help you with life insurance. The standard rule of thumb is if you or your spouse dies, how does that impact the family going forward. While getting life insurance is not meant to be winning the lottery, I do think you will want enough such that 4% withdrawal rate could pay for things. Don't forget that there are SS income for the survivors in your situatio...

Triple digit golfer wrote: ↑Tue Dec 24, 2019 3:05 pm Using your 83k taxable income from above, you would be around 8-9k in federal income tax, less 6k child tax credits gets you down to 2-3k federal income taxes before any other deductions that I missed.

health insurance premiums, student loan interest deduction and half self employment tax deductions

I do not have a detailed budget, .... I have a $1M term life insurance policy, which I have had for a few years. Do I need to consider additional insurance? You probably do need more insurance. As for budget, I would like to know why you are paying income taxes. Your income does not seem high enough. What do you pay for health insurance? Are you able to contribute to Roth IRAs? If not, why not? What would you roughly suggest: how much more insurance? I wish I was not paying income tax, but I am not savvy enough to figure out what to do differently. I am open to ideas though, so please share any tips you have or ask questions If I need to give more information. High deductible health insurance plan, subsidized through the fed, costs me abou...

Many tax questions, I wil try to answer. I am making slightly different money this year compared to last year, but last year I was upper end 12% and expect this to be about the same. $115 income. - $24.4 standard deuction - $6k 3 kids - $4.6 into TSP - $3k for side business deductions that's $77k I'm no tax expert, but I believe the $6k is a credit, not a deduction. You're right, I am sorry. I was just trying to give a few quick examples to show the projected 12% bracket. I didn't want the focus to be as much on my tax bracket as the other areas, but there were multiple questions about the tax bracket so I wanted to show why I expect to be at 12%. Additional items, not counting the kids, would be $2,500 student loan tax deduction and $1,50...

HomeStretch wrote: ↑Mon Dec 23, 2019 9:10 am My general advice is to save at least 10-15% per year towards retirement (including your pension contribution).

So would you count the 5% into TSP plus the 4+% pension contribution as 9+% going into retirement, or would you also count the 5% match as 14+%?
Thank you

livesoft wrote: ↑Sun Dec 22, 2019 9:09 am I didn't see a breakdown of how the current budget is spent. Since you accept criticism, why not post a factual budget?

I do not have a detailed budget, though I have totaled expenses to find out what we spend in a year. We eat out maybe 1-2 times per month and do not take an expensive family vacation, we buy used cars and run them into the ground, we are not ones who keep up with the Jones. But please let me know what you'd need to see to better offer me advice and I will start working on the budget. Thank you

livesoft wrote: ↑Sun Dec 22, 2019 9:09 am I think now you should be worried about life insurance.

I have a $1M term life insurance policy, which I have had for a few years. Do I need to consider additional insurance?

Many tax questions, I wil try to answer.

I am making slightly different money this year compared to last year, but last year I was upper end 12% and expect this to be about the same.

$115 income.
- $24.4 standard deuction
- $6k 3 kids
- $4.6 into TSP
- $3k for side business deductions
that's $77k

livesoft wrote: ↑Sun Dec 22, 2019 1:33 pm

nclion wrote: ↑Sun Dec 22, 2019 1:19 pmWhy do you suspect that he pays no federal income taxes? I have paid federal taxes for my entire 26 year federal government career.

Because more than 40% of US families don't pay any federal income tax and his income is not high and there are a lot of dependents. Plus with that income, I would not be paying any federal income taxes.

See also: Family with $200,000 income from 2011.

I read this, though didn't fully understand all the tax information. It would be great if I didn't pay any federal taxes, but I did last year and expect to this year. Do I need a new adviser?

SandysDad wrote: ↑Sat Dec 21, 2019 10:48 am
As for planning..... when I was about your age, I tried some extensive modeling. What I quickly found out was unless you know: your future income, inflation, and your investment returns in advance; you simply can't predict it with much confidence (ie how much to save, when you can retire etc).

Thank you for the sound advice.

Let me start by confirming that you have a good handle many of the financial balls that need to be juggled. I'm not yet able to provide a recipe for you, but I'll offer a stream-of-consciousness list of factors and questions for your consideration. 1) What included in $70K of expenses? Federal taxes? State Taxes? Wage taxes (i.e. social security and medicare)? I'm wanting to understand 2 things: - did you forget to tell us anything and - what are the puts and takes to your expenses when your wife leaves the workforce 2) Why is rent on 900 sq.ft. relevant? Are you planning to downsize from your home with a 3rd child on the way? It seems only fair that my response be long commiserate with your post. It may be more than you can swallow, but I...

Welcome to the forum! Glad to have you! 1. Sometimes contractors will give you a free quote for certain jobs, like reroofing a house. Realistically, though, it can be difficult to predict everything that can (and will) break down. If there is a certain amount that you're pretty sure you'll spend in xyz years (like a car), I might try to set aside money for that. Otherwise, I'd probably just use my emergency fund for unexpected expenses (and build the emergency fund back up afterwards). 2. As far as estimating whether you're in track for funding your children's education and your retirement, have you tried using a financial goals simulator? Wealthfront has an online simulator that lets you input expected expenses (like buying a home, fundin...

WoodSpinner wrote: ↑Sat Dec 21, 2019 9:29 am
First let me say up you are doing the big things RIGHT! It’s clear you have a firm grasp on your families goals, finances, and a good list of key questions.

3. Not clear what the yearly expense for the school is, and how much is already covered by your current expenses. Can you clarify?

WoodSpinner

Thank you for the nice thought.

to answer 3. Yes, I am projecting the total cost for all 3 children to attend this school in k-12. The amount per child will change when they are in different levels of the school and there are discounts when the second or third kid is in school all at the same time. So I estimated the total cost. I hope that part in my first post answers this question.

Hello, I am new to this forum though I have read for awhile and have implemented a 3 fund portfolio for a number of years. I am hoping to get some perspective on where we are in terms of our portfolio, investments and future plans. Please offer advice as you see fit, I can take criticism well so please do not hold back valuable advice to help my family simply for fear of being too harsh. I additionally welcome ideas or direction moving forward as I hope this small picture of our financial life will be used to help our family path into the future. Some Basic info: I am 40 and my wife is 34 we have a 5 year old son a 2.5 year old daughter and currently my wife is pregnant with our third and likely final child. I have a federal job, which I ha...

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