Search found 979 matches

by the intruder
Sat Dec 04, 2010 1:20 am
Forum: Investing - Theory, News & General
Topic: Extreme Roth Conversion Strategy?
Replies: 22
Views: 2685

[quote="market timer"][quote="the intruder"][quote="duhmel1"]How about a strategy that utilizes a 'long' index fund in one IRA and a mirror image 'short' fund in the other. Suppose the market moves 10% in the next year (either way), you will have the winner fund in the Roth IRA and the other fund re...
by the intruder
Sat Dec 04, 2010 1:12 am
Forum: Investing - Theory, News & General
Topic: 2008 panic in money markets greater than previously known
Replies: 46
Views: 5596

The crisis is still on going.... The notional value of derivative contracts held by US financial institutions is $216.5 trillion, or more than 15 times US GDP. http://www.occ.treas.gov/ftp/release/2010-71a.pdf ...that is being accounted for as par. What is the significance of your statement? The 21...
by the intruder
Sat Dec 04, 2010 12:30 am
Forum: Investing - Theory, News & General
Topic: Extreme Roth Conversion Strategy?
Replies: 22
Views: 2685

How about a strategy that utilizes a 'long' index fund in one IRA and a mirror image 'short' fund in the other. Suppose the market moves 10% in the next year (either way), you will have the winner fund in the Roth IRA and the other fund recharacterized in the traditional IRA. The increase in the wi...
by the intruder
Fri Dec 03, 2010 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA tracking
Replies: 2
Views: 602

Re: Roth IRA tracking

My 401k has roth option. Before that I could only put in normal (ie non-Roth) 401k. I have this with fidelity How does fidelity know how much of the gain in my 401k is from my roth 401k money and how much is from non-Roth. For instance say I have 50k in 401k and this year I put in 16k into roth 401...
by the intruder
Fri Dec 03, 2010 7:13 pm
Forum: Personal Finance (Not Investing)
Topic: Wills?
Replies: 27
Views: 2924

JDCPAEsq wrote:Did it myself and it was free although that doesn't include the cost of three years at an Ivy League law school. :D
Its free as long as you didnt screw it up in which case it will cost you heirs to fix it.
by the intruder
Fri Dec 03, 2010 5:32 pm
Forum: Personal Finance (Not Investing)
Topic: NYT: Roth IRA conversion can hurt college aid
Replies: 18
Views: 3724

Re: Any new thoughts on Roth IRA conversion impact on FAFSA?

This is an important topic. The government wants us to covert our IRA to a Roth, and pay some much needed taxes. It would be unfair to then penalize us from getting financial aid for our children's college costs because our Adjusted Gross Income goes up. Especially since we never actually receive t...
by the intruder
Fri Dec 03, 2010 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: Deductible and non-Deductible IRA tax issue
Replies: 6
Views: 1076

Re: Deductible and non-Deductible IRA tax issue

I will be paying income taxes on my IRA's for the first time in 2011 due to turning 70.5 in April. Will someone give me an example of how to determine the amount I need to divide by 27.4 to determine RMD. Is it simply subtracting the non-deduct. from the deduct. based on form 8606 records. Thanks, ...
by the intruder
Thu Dec 02, 2010 11:49 am
Forum: Personal Finance (Not Investing)
Topic: Moving Foreign Retirement Assets to the US
Replies: 9
Views: 4390

Re: Moving Foreign Retirement Assets to the US

Has anyone looked into moving assets from a Foreign country to a US retirement account or know of someone who did it? Have any thoughts or helpful resources? The foreign country where my wife is from is allowing the move of her retirement assets which is similar to the IRA/401k, over to the US. The...
by the intruder
Thu Dec 02, 2010 10:37 am
Forum: Investing - Help with Personal Investments
Topic: income over 250K--convert IRAs to Roths???
Replies: 28
Views: 2973

Re: income over 250K--convert IRAs to Roths???

Hi, folks, Just found this board and wonder if you can help me. My husband and I together earn a little over 250K. We have about 310K in savings, not counting our IRAs and my husband's 401K. Our children have 529 savings plans for college, although our son's is still a bit underfunded, but we're no...
by the intruder
Thu Dec 02, 2010 8:49 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

In the past, James Lange has advocated converting multiple large traditional IRA (TIRA) accounts to Roth IRA (RIRA) accounts early each year, then recharacterizing all but the best performer near the end of the year. Yes, each one is the size of the desired conversion amount so only one can stay co...
by the intruder
Wed Dec 01, 2010 6:30 pm
Forum: Investing - Theory, News & General
Topic: RETIREES- Are you in higher or lower tax bracket now?
Replies: 34
Views: 4307

I answered for an elderly person for whom I am trustee. This person had $200,000 of income in 2009 and paid zero federal tax. Did a Roth conversion this year. How is that possible? Large medical deduction? Can you provide more detail? Just curious ... ML Large medical, municipal bond funds, carryfo...
by the intruder
Wed Dec 01, 2010 5:55 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

In the past, James Lange has advocated converting multiple large traditional IRA (TIRA) accounts to Roth IRA (RIRA) accounts early each year, then recharacterizing all but the best performer near the end of the year. Yes, each one is the size of the desired conversion amount so only one can stay co...
by the intruder
Wed Dec 01, 2010 5:43 pm
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

Re: Distributing an inherited IRA and paying off a mortgage

Where do you get the idea that the IRA bene will get the IRA funds even if there is a different designation in the will? The executor of the estate will demand that the IRA custodian make payment under the will and the IRA custodian will put a freeze on the distribution until it receives a court or...
by the intruder
Wed Dec 01, 2010 3:16 pm
Forum: Investing - Help with Personal Investments
Topic: Convert my Traditional IRA to a Roth IRA?
Replies: 20
Views: 3024

Re: Convert my Traditional IRA to a Roth IRA?

My IRA balance right now it 27K My tax bracket is 25% but it may drop to the 15% tax bracket if I am lucky based on what I put into my 401K for 2010 My bring home pay is 37K per year He has some tIRA and 401k already. His 401k contribution gets him down in the 15% federal bracket and presumably get...
by the intruder
Wed Dec 01, 2010 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

I can't believe this is the state of the law in New York. Although I am admitted to practice there, I'm not familiar with the recent case cited. Do you mean to say that the custodian of an IRA can't rely on the beneficiary designation and pays out to the beneficiary at its own risk? I can't believe...
by the intruder
Wed Dec 01, 2010 11:36 am
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

I can't believe this is the state of the law in New York. Although I am admitted to practice there, I'm not familiar with the recent case cited. Do you mean to say that the custodian of an IRA can't rely on the beneficiary designation and pays out to the beneficiary at its own risk? I can't believe...
by the intruder
Wed Dec 01, 2010 11:05 am
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

Re: Distributing an inherited IRA and paying off a mortgage

Whether the beneficaries of an IRA can be designated in a will depends on state law. In NY courts have upheld the designation of an IRA beneficiary under the will if there is a specific identification of the IRA in the will to be paid to a designated beneficiary. I did not state that the beneficiar...
by the intruder
Wed Dec 01, 2010 8:58 am
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

Re: Distributing an inherited IRA and paying off a mortgage

This is unusual. Most IRA custodians require that IRAs have named beneficiaires and contingent beneficiaries. If individual(s) are named as the beneficiary, once the estate is settled, the IRA balance for which they are named will go to them regardless of what the will says. The IRA will be distrib...
by the intruder
Wed Dec 01, 2010 8:40 am
Forum: Personal Finance (Not Investing)
Topic: Distributing an inherited IRA and paying off a mortgage
Replies: 34
Views: 3766

Bob's not my name wrote:
kaneohe wrote:
celia wrote:After you distribute the estate, it may make sense to convert your inherited traditional IRA to a Roth. .
I thought I had read that you can't convert an inherited TIRA to a Roth
Me too.
Only a spouse can convert an inherited tIRA to a Roth IRA.
by the intruder
Tue Nov 30, 2010 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Ozone: to answer your question you need to answer 3 questions: 1. what portion of the IRA would be exempt from Federal estate under the IRD rules? The greater the exemption the greater the income tax benefit. 2. what portion of the IRD would be allocated to IRA beneficaries? Remember IRD consists of...
by the intruder
Tue Nov 30, 2010 3:07 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

This conversion equation doesn't really apply to a 30-year old. He doesn't earn enough to be disallowed from contributing to a Roth, so he isn't concerned with converting. And his tax rate is probably lower than his (future) peak earning years, so his conversion decision would be easier. Andy, do y...
by the intruder
Tue Nov 30, 2010 10:53 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

The Wiki example ignores the effect that high state taxes have on making a Roth conversion a poor investment choice. For example, many single taxpayers in the federal 25% bracket will be above the 33% bracket if they live in OR (9%), CA (9.5%) or NYC (10.5%). If taxpayers in these areas move to a n...
by the intruder
Tue Nov 30, 2010 10:17 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

I think what has been the biggest "Duh!" moment for me was the somewhat obvious illumination that if the income tax on his Roth conversion is 35% (or more) and estate tax is 45%, the savings are not as great as I was erroneously thinking. Unanticipated consequences can quickly eat into the 10% savi...
by the intruder
Tue Nov 30, 2010 9:35 am
Forum: Personal Finance (Not Investing)
Topic: How to handle accidental after-tax 401k contribution?
Replies: 10
Views: 2524

If the plan allows it I would definitely rollover the after-tax portion to a Roth IRA. I do this yearly with my after-tax contributions, and it is a very easy process to roll into a Vanguard Roth IRA. I would just make sure your plan allows in-service distributions with no suspension. Good to know ...
by the intruder
Tue Nov 30, 2010 9:04 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

I am pretty skeptical of converting at a rate you believe to be higher than your rate in retirement, especially if the difference is large. Yes, the fact that you effectively have more (after-tax) assets in the Roth has value, but not that much. As an example, if you converted to a Roth at 33% toda...
by the intruder
Mon Nov 29, 2010 12:10 pm
Forum: Investing - Theory, News & General
Topic: Can I retire? by Mike Piper -- rollover question
Replies: 13
Views: 2482

Another point: It's a good idea to roll your 401(k) into an IRA rollover account, and keep your (traditional) IRA separate. Federal laws give protection against lawsuits of up to $1.5 million for a traditional IRA, another $1.5 million for an IRA rollover. It's possible to fold 401(k) money into a ...
by the intruder
Sun Nov 28, 2010 7:02 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Bob : The gift of capital assets duing life has an estate tax benefit in that appreciaton of the property after transfer is excluded from the estate. If the property is worth $1M on date of gift but $1.25M on the date of death of the transferror, the transferror's estate has been reduced by $1.25M b...
by the intruder
Sun Nov 28, 2010 6:15 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

Thanks for your reply. 2. Distributions of earnings are not subject to income tax after the IRA is in existence for 5 tax years and the distribution is paid on account of death. If owner dies before the IRA has been in existence for 5 years the income can be deferred to the fifth year. Heirs will t...
by the intruder
Sun Nov 28, 2010 3:04 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

1. If the heirs are in a lower tax bracket at distribution then it would be better to leave the t-IRA to them instead of paying higher taxes on the conversion. 2. After the t-IRA is converted, a distributon of the the earnings from the Roth within 5 years of the conversion will be taxable. 3. There...
by the intruder
Sun Nov 28, 2010 10:26 am
Forum: Investing - Help with Personal Investments
Topic: Roth husband wife 10 year age difference
Replies: 20
Views: 2013

Assume the IRA doubles in value before withdrawal, and assume a 33% federal + state tax rate: Mfinal tIRA = 2*Minitial*0.67 Mfinal Roth = 0.67*Minitial*2 Wow! You sure put that simply. I have mentally strugged with yes this, then that along with but then this and you get that. Thanks. At ages 57 an...
by the intruder
Fri Nov 26, 2010 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: Credit impact of debt collection
Replies: 3
Views: 966

Re: Credit impact of debt collection

I just came across a letter from a debt collection agency acting on behalf of the Virginia Department of Taxation saying that I owe a balance of $40. The backstory is that I used to be a resident of VA in 2008. Since then I've moved around quite a bit including separate deployments to Iraq and Afgh...
by the intruder
Wed Nov 24, 2010 2:40 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Thank you all for pointing out some of the many nuances to consider. So at the risk of hijacking my own post, let's take a real case: my father. He is a single widower, 87 years old and in reasonably good physical health (but with dementia). He has the following major assets: -- Traditional IRAs: $...
by the intruder
Wed Nov 24, 2010 11:37 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

The reasoning is that it will take years for tax-free earnings inside the Roth to match the tax bill you have to pay going in. Why would someone think it is important for the Roth earnings to at least match the taxes that will have to be paid? The taxes will have to be paid regardless or not of the...
by the intruder
Wed Nov 24, 2010 11:15 am
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Conversion Myth - It takes years to pay off
Replies: 52
Views: 8445

Re: Roth IRA Conversion Myth - It takes years to pay off

I recently read this in Kiplinger's magazine and was so surprised by this tidbit that I thought I would share it. Perhaps I'm the last to know. http://www.kiplinger.com/magazine/archives/7-myths-about-roth-ira-conversions.html We’ve seen elaborate mathematical support for the proposition that if yo...
by the intruder
Tue Nov 23, 2010 11:39 pm
Forum: Personal Finance (Not Investing)
Topic: CFP okay for completing tax returns? Or go with CPA?
Replies: 15
Views: 1736

Re: CFP okay for completing tax returns? Or go with CPA?

Someone recommended a CFP who has a business completing taxes. I'm thinking that it would be beneficial to have a CPA instead, especially in the case of an audit. Does it matter? Should I go ahead and interview the CFP, or look only for a CPA? Thank you! Is the CFP going to sign as the paid prepare...
by the intruder
Tue Nov 23, 2010 11:24 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Planning: 2010 the year to roll a trad IRA into a ROTH?
Replies: 8
Views: 1708

If you convert (not a rollover) the $2000 t-IRA to a Roth IRA by Dec 31, 2010 you have until Oct 15, 2011 (if you file for an extension) to elect one of the following options: If you wait until January of 2011 to do the conversion you can bump all the dates mentioned up by a year and you may qualif...
by the intruder
Tue Nov 23, 2010 6:13 pm
Forum: Personal Finance (Not Investing)
Topic: CFP okay for completing tax returns? Or go with CPA?
Replies: 15
Views: 1736

Re: CFP okay for completing tax returns? Or go with CPA?

Someone recommended a CFP who has a business completing taxes. I'm thinking that it would be beneficial to have a CPA instead, especially in the case of an audit. Does it matter? Should I go ahead and interview the CFP, or look only for a CPA? Thank you! Is the CFP also a CPA, enrolled agent or tax...
by the intruder
Tue Nov 23, 2010 5:59 pm
Forum: Personal Finance (Not Investing)
Topic: Do you use an escrow account for your mortgage?
Replies: 68
Views: 18108

No escrow. I take my estimated annual property tax and insurance payment amounts and divide it by 26. Each time I receive a paycheck, this amount is transferred automatically to my online bank savings account where it earns interest. By the end of the year, I have the amount of cash I need to pay t...
by the intruder
Mon Nov 22, 2010 4:26 pm
Forum: Investing - Theory, News & General
Topic: Why the Roth IRA Bias?
Replies: 133
Views: 30091

Could you provide a example as to how delaying RMDs to 70 1/2 would increse one's tax bracket taking into account that tax brackets are adjusted for inflation. Thought provoking, but if we consider everything in real (as opposed to nominal) terms, perhaps not such a puzzle. Let's turn it around and...
by the intruder
Mon Nov 22, 2010 11:14 am
Forum: Investing - Help with Personal Investments
Topic: Tax Planning: 2010 the year to roll a trad IRA into a ROTH?
Replies: 8
Views: 1708

Re: Tax Planning: 2010 the year to roll a trad IRA into a R

Hello, This is a quick tax-related question. I have a $1700 traditional IRA from a previous year when I needed to reduce my AGI to qualify for a tax credit. It is up about $300 from the purchase price. I have already maxed out my ROTH IRAs for 2010. Does it make sense to roll over the Traditional I...
by the intruder
Sun Nov 21, 2010 6:58 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Act 2010 FREE version available for download
Replies: 5
Views: 1885

Re: Tax Act 2010 FREE version available for download

Tax Act 2010 free version is available at http://www.taxact.com/tax-preparation/free-tax-software.asp Note that the AMT patch has not been passed into law and the program as coded may give surprising results although for planning purposes you can elect to use the higher exemption amount of last yea...
by the intruder
Sun Nov 21, 2010 6:27 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Act 2010 FREE version available for download
Replies: 5
Views: 1885

Re: Tax Act 2010 FREE version available for download

Tax Act 2010 free version is available at http://www.taxact.com/tax-preparation/free-tax-software.asp Note that the AMT patch has not been passed into law and the program as coded may give surprising results although for planning purposes you can elect to use the higher exemption amount of last yea...
by the intruder
Sun Nov 21, 2010 8:52 am
Forum: Investing - Help with Personal Investments
Topic: Deferred Comp Plan--keep it or leave it?
Replies: 8
Views: 1599

If your employer files for bankruptcy your non qualified deferred comp is subject to the claims of the employer's creditors. Are you willing to take the risk of not getting paid? If you delay your payment beginning 2011 when would be the next time that you start your distributions? I thought there i...
by the intruder
Sat Nov 20, 2010 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: The "New" Muni Fund Outlook: Today's WSJ Analysis
Replies: 23
Views: 3450

There is no spread when you buy the bonds at par, e.g., new issue. http://www.munibondadvisor.com/UnderwritingSpread.htm Also Google "muni bond yield burning". Adrian anenu@tampabay.rr.com The article comfirms my statement that there is no spread when bonds are purchased at par in a new issue. "For...
by the intruder
Sat Nov 20, 2010 2:17 pm
Forum: Investing - Help with Personal Investments
Topic: The "New" Muni Fund Outlook: Today's WSJ Analysis
Replies: 23
Views: 3450

Vanguard Intermediate Term Tax-Exempt (VWITX) mentioned as a high-quality fund. No reason to own individual munis when Vanguard offers good diversification (especially important now) at a very low cost. The diversification aspect is overlooked by people who recommend buying individual muni bonds. T...
by the intruder
Sat Nov 20, 2010 12:00 pm
Forum: Personal Finance (Not Investing)
Topic: Longevity Insurance Instead of LTC
Replies: 9
Views: 2734

Re: Longevity Insurance Instead of LTC

I have been shopping for LTC insurance for my 48 year old healthy wife. I have issues that make me uninsured. I have more or less concluded that the cost and ability of honestly covering LTC risks are high, hard to do and not at all clear. But I am wondering about "Longevity Insurance" that would k...
by the intruder
Sat Nov 20, 2010 11:32 am
Forum: Investing - Theory, News & General
Topic: Charlie Rose show on MBS
Replies: 2
Views: 859

Re: Charlie Rose show on MBS

Right now I'm watching Charlie Rose interviewing the authors of a new book on the development of mortgage-backed securities. Not the financial crisis per se, but more the history of how the whole system evolved. Quite informative and interesting IMO. Just thought I'd share that with other Boglehead...
by the intruder
Sat Nov 20, 2010 8:40 am
Forum: Personal Finance (Not Investing)
Topic: Do you use an escrow account for your mortgage?
Replies: 68
Views: 18108

Unless you live in a state like CA where you get 2% interest there is no reason to give a bank an escrow account since all banks adjust the escrow payment upward each year for increases in property taxes. I would rather invest the funds that would otherwise be held in escrow in a savings account.
by the intruder
Fri Nov 19, 2010 7:47 pm
Forum: Investing - Theory, News & General
Topic: Negative Article About Investing in the Stock Market on HP
Replies: 22
Views: 2531

For retired Colonel Roger Potyk, the flash crash was the last straw. In 2008, Potyk and his wife lost $75,000 on the Lehman Brothers bond they held when the bank collapsed. Why would a retired Colonel held $75,000 in a single company bond? I also wondered about that. Why not a bond index fund? I di...
by the intruder
Fri Nov 19, 2010 11:08 am
Forum: Personal Finance (Not Investing)
Topic: Federal tax on co-owned home sale
Replies: 17
Views: 2655

John/Hondo......thanks for clarifying. so this must one of rare cases when spouses are treated worse? I wonder what the reasoning was? No the law was intended to benefit spouses who are joint tennants by the entirety by treating the surviving spouse as owner of 1/2 of the property even if they did ...