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by Bob's not my name
Sun May 06, 2018 7:33 pm
Forum: Investing - Help with Personal Investments
Topic: Quick one re: Liquidating ESPP Purchases to Diversify
Replies: 7
Views: 586

Re: Quick one re: Liquidating ESPP Purchases to Diversify

samsoes wrote:
Thu May 03, 2018 6:16 am
The 1 year LTG clock begins on the day of purchase.
The 2-year LTG clock begins on offering date. See "qualifying disposition". In any case, it's not worth waiting for unless you're already close.
by Bob's not my name
Fri Mar 02, 2018 8:39 pm
Forum: Investing - Theory, News & General
Topic: Double tax on IRA accounts to heirs
Replies: 14
Views: 1606

Re: Double tax on IRA accounts to heirs

Person A paid perhaps $135,000 (Federal + State + FICA) in order to invest $100,000. The growth results would be lower for Person A for the same investments due to tax drag. Well not FICA, those taxes are not avoided by using IRA, 401K, etc. But would probably need more that $135K before tax in ord...
by Bob's not my name
Fri Mar 02, 2018 5:16 am
Forum: Investing - Help with Personal Investments
Topic: IRA phaseout range
Replies: 4
Views: 490

Re: IRA phaseout range

Kittens wrote:
Thu Mar 01, 2018 5:15 pm
The income range is $120-135k
It's a MAGI range. Your MAGI should be about $22,000 under your gross income due to 401k contributions, FSA or HSA contributions, and pre-tax insurance premiums withheld from your pay.
by Bob's not my name
Wed Feb 28, 2018 8:20 pm
Forum: Investing - Help with Personal Investments
Topic: Max 401k or contribute to ESPP
Replies: 40
Views: 2062

Re: Max 401k or contribute to ESPP

CppCoder wrote:
Wed Feb 28, 2018 7:55 pm
a six month CD that pays 15% on maturity
3-month CD paying 17.6%
by Bob's not my name
Wed Feb 28, 2018 1:16 pm
Forum: Investing - Help with Personal Investments
Topic: Max 401k or contribute to ESPP
Replies: 40
Views: 2062

Re: Max 401k or contribute to ESPP

There is no motivation to hold. The 17.6% certain return is, for a 6-month plan period, over 90% annualized. Holding puts that at risk. The discount portion is taxed as ordinary income. Sometimes people get confused by the LTCG rules and think there's a mathematical reason to hold. There isn't.
by Bob's not my name
Wed Feb 28, 2018 9:26 am
Forum: Investing - Help with Personal Investments
Topic: Max 401k or contribute to ESPP
Replies: 40
Views: 2062

Re: Max 401k or contribute to ESPP

Is this merely a test to see which employees are stupid enough to buy the stock at a discount and hold onto it as an investment? More of a winning bet than a test. The max-and-dump people are in the wise minority. Everybody else does the arithmetic wrong. OP, there is no sacrifice in exploiting two...
by Bob's not my name
Tue Feb 27, 2018 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Max 401k or contribute to ESPP
Replies: 40
Views: 2062

Re: Max 401k or contribute to ESPP

This is a false choice. An ESPP is merely a cash flow pipe; it delays a small portion of your pay for six months and adds 17.6%. You should be able to do both.

ESPP's usually have modest and flat overhead cost, so be sure to max it out every period so this is a negligible factor.
by Bob's not my name
Tue Feb 27, 2018 8:28 am
Forum: Investing - Help with Personal Investments
Topic: Thoughts on an ESPP with 2 year contribution period?
Replies: 29
Views: 1304

Re: Thoughts on an ESPP with 2 year contribution period?

Assuming you're contributing each pay period, some of your money will be tied up for 2 years, some less, with an average of 1 year. If you think of this as a bond fund with an average duration of 1 year and a 17.6% return, it's a pretty good deal. Even if the entire amount went in on day one and sa...
by Bob's not my name
Sun Feb 18, 2018 7:41 pm
Forum: Personal Finance (Not Investing)
Topic: student loan vs investing
Replies: 12
Views: 720

Re: student loan vs investing

3.9% unless there's a 2% state tax implied

And you pay tax on bond interest, so the relevant rate is 5% unless we're comparing to tax-free bonds.
by Bob's not my name
Sun Feb 18, 2018 7:31 pm
Forum: Personal Finance (Not Investing)
Topic: student loan vs investing
Replies: 12
Views: 720

Re: student loan vs investing

willthrill81 wrote:
Sun Feb 18, 2018 4:48 pm
Will you have enough other expenses to pass up the now higher standard deduction ($12k for singles and $24k for married filing jointly)? You'll only have about $1,250 of student loan interest to deduct.
Student loan interest is an above-the-line deduction, not an itemized deduction.
by Bob's not my name
Sun Feb 18, 2018 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: student loan vs investing
Replies: 12
Views: 720

Re: student loan vs investing

since it's deductible and my bracket is 22% that the rate is more like 3.8% Check your math. Debt should always be compared to bonds, as explained on the wiki. You are considering taxes only on the loan side. Therefore you must be assuming a tax-free investment. The Intermediate Term Tax-Exempt Bon...
by Bob's not my name
Sat Feb 17, 2018 4:18 pm
Forum: Investing - Help with Personal Investments
Topic: Investing vs paying off debt
Replies: 28
Views: 2023

Re: Investing vs paying off debt

Tax Rate: 24% Federal, 6.25% State Heath Insurance $439.72 Dental Insurance $197.17 Vision $46.58 Flex Spending $129.00 These numbers all seem wrong to me. Your tax rates are 22% federal 5.1% state. Your dental and vision seem nutty high (9X mine), but in any case you should be paying these with pre...
by Bob's not my name
Tue Feb 13, 2018 8:17 pm
Forum: Investing - Help with Personal Investments
Topic: 401k pre-tax, Roth, or a blend?
Replies: 18
Views: 1394

Re: 401k pre-tax, Roth, or a blend?

Yeah but they have to FIT in the 12% bracket, meaning that you have to get your earned income low enough to give yourself the headroom.
by Bob's not my name
Mon Feb 12, 2018 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: 401k pre-tax, Roth, or a blend?
Replies: 18
Views: 1394

Re: 401k pre-tax, Roth, or a blend?

$5,000 pre-tax will consume $5,000 gross. $5,000 Roth in the same tax bracket would consume $6,920 gross and throw away $1,920 in taxes. My point was only that you make sure you are making this comparison when you decide how much to save and how much to pay in taxes.
by Bob's not my name
Mon Feb 12, 2018 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: Pay bump, time to switch Roth to Traditional?
Replies: 14
Views: 1327

Re: Pay bump, time to switch Roth to Traditional?

Thanks, good to know. I wonder if other states will reconsider the tax-deductible Roth IRA. When I originally looked into this issue, the context was immediate exploitation (via immediate conversion), but in the course of researching it I was surprised by both the number of states that exempt retire...
by Bob's not my name
Mon Feb 12, 2018 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: Pay bump, time to switch Roth to Traditional?
Replies: 14
Views: 1327

Re: Pay bump, time to switch Roth to Traditional?

State taxes in Utah (5%) and Michigan (4.25%) are essentially equal. Michigan used to exempt $40,000 of retirement income, which favors traditional 401k, at least up to a point. I did not research Michigan taxes to see if this is still true -- the OP ought to study MI and UT tax treatment of withdr...
by Bob's not my name
Sun Feb 11, 2018 7:51 pm
Forum: Investing - Help with Personal Investments
Topic: 401k pre-tax, Roth, or a blend?
Replies: 18
Views: 1394

Re: 401k pre-tax, Roth, or a blend?

You'll get better answers if you tell us what state you're in (since states tax Roth and traditional contributions and withdrawals differently) and how much you would contribute to Roth accounts vs. traditional at the same savings rate.
by Bob's not my name
Wed Feb 07, 2018 7:32 pm
Forum: Personal Finance (Not Investing)
Topic: Dad gave me money before filing bankruptcy
Replies: 24
Views: 4571

Re: DAD GAVE ME MONEY BEFORE FILING BANKRUPTCY

novillero wrote:
Wed Feb 07, 2018 6:23 pm
a bona fire bankruptcy attorney
That is genius. May I use this phrase or have you already trademarked it?
by Bob's not my name
Wed Feb 07, 2018 5:35 pm
Forum: Personal Consumer Issues
Topic: Jogging in the cold.
Replies: 50
Views: 4011

Re: Jogging in the cold.

Running at -10 F is fine but you shouldn't cross-country ski unless the temperature is above freezing.
by Bob's not my name
Fri Feb 02, 2018 6:23 pm
Forum: Investing - Help with Personal Investments
Topic: ESPP Question [Employee Stock Purchase Plan]
Replies: 13
Views: 1759

Re: ESPP Question [Employee Stock Purchase Plan]

you should never invest if you need the cash An ESPP isn't an investment really, it's more like a 3-month CD that pays 90%. Once you do without the cash for the first plan period, it is cash flow neutral and you're just taking the 90% yield. So you should invert your advice for anyone who needs the...
by Bob's not my name
Fri Feb 02, 2018 11:23 am
Forum: Investing - Help with Personal Investments
Topic: ESPP Question [Employee Stock Purchase Plan]
Replies: 13
Views: 1759

Re: ESPP Question [Employee Stock Purchase Plan]

Annualized, it's over a 90% return. And low risk. Pretty good for idiots.
by Bob's not my name
Sun Jan 14, 2018 7:44 pm
Forum: Personal Finance (Not Investing)
Topic: A half year at full pay or a full year at half pay?
Replies: 49
Views: 5131

Re: A half year at full pay or a full year at half pay?

You should definitely deny your children the adventure, learning, and broadening experience of a sabbatical so they can stay in the same school their whole lives, as God intended, because all learning happens in school. I'm sure you've done the math right, but do look very carefully at how taxes wi...
by Bob's not my name
Mon Jan 08, 2018 3:34 pm
Forum: Personal Finance (Not Investing)
Topic: MA Short Term Capital Gains Rate (12%) and Stock Options
Replies: 7
Views: 581

Re: MA Short Term Capital Gains Rate (12%) and Stock Options

It is wise to investigate the tax code of a destination state before accepting a job, so good job on that. MA's STCG rate is anomalous. However, you appear to be fixated on, what, a 3% difference in how your current compensation is taxed in your high tax state vs. how it will be taxed in MA? That's ...
by Bob's not my name
Mon Jan 08, 2018 7:42 am
Forum: Forum Issues and Administration
Topic: Misuse of adverse when averse was meant
Replies: 149
Views: 9421

Re: Misuse of adverse when averse was meant

Potential employers want to know about my prior experience and previous experience, which are the best kinds of experience. (They also want to know that I have good communication skills.) They also use the term "demonstrated experience", which reveals that they are bureaucrats stringing together wor...
by Bob's not my name
Wed Jan 03, 2018 5:16 pm
Forum: Investing - Theory, News & General
Topic: Americans spend $1 billion annually in unnecessary state tax
Replies: 147
Views: 22204

Re: Americans spend $1 billion annually in unnecessary state tax

Please note that the thread is six years old, so check your state's current tax law to see if it has changed.
by Bob's not my name
Tue Jan 02, 2018 6:49 am
Forum: Personal Finance (Not Investing)
Topic: Embarrassment Preventing Retirement Work: A factor for you?
Replies: 133
Views: 13957

Re: Embarrassment Preventing Retirement Work: A factor for you?

Since you are known to be successful, you would elevate the standing and self-respect of your new work colleagues. Hopefully you would also displace an underperforming employee and make your employer more profitable.
by Bob's not my name
Fri Dec 29, 2017 9:05 pm
Forum: Forum Issues and Administration
Topic: anybody else notice that the timestamp of posts is off by 1 hour?
Replies: 12
Views: 1537

Re: anybody else notice that the timestamp of posts is off by 1 hour?

nisiprius, please have my posts timestamped one year earlier than actual. I want to win that stock market prediction competition thingy.
by Bob's not my name
Fri Dec 29, 2017 8:15 pm
Forum: Investing - Help with Personal Investments
Topic: Will I be taxed again on my 401k?
Replies: 28
Views: 2130

Re: Will I be taxed again on my 401k?

Strictly speaking, PA doesn't tax your 401k contribution, it taxes your income. The maximum $18,500 401k contribution requires $19,070 of gross income, which PA taxes at 3% = $570, leaving $18,500.
by Bob's not my name
Fri Dec 29, 2017 8:05 pm
Forum: Investing - Help with Personal Investments
Topic: Will I be taxed again on my 401k?
Replies: 28
Views: 2130

Re: Will I be taxed again on my 401k?

Yes if you make all of your 401k contributions in PA and all of your 401k withdrawals in NC then you will pay 3% on contributions and 5.5% on withdrawals for a total of 8.5%, which is the same as doing both in MD and better than doing both in NYC or Oregon and worse than doing both in Texas or Illin...
by Bob's not my name
Fri Dec 29, 2017 7:46 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Bracket going from 15% to 22%. Should I change type of account to invest in for retirement?
Replies: 19
Views: 1901

Re: Tax Bracket going from 15% to 22%. Should I change type of account to invest in for retirement?

I'm unclear on why a $5,500 Roth contribution converts to a $5,500 403b contribution. At a 30% tax rate a $5,500 Roth contribution consumes $7,857 of gross income, so it is equivalent to a $7,857 403b contribution. However, the $7,857 is not accurate because a portion of the gross income falls into ...
by Bob's not my name
Fri Dec 29, 2017 7:24 pm
Forum: Investing - Help with Personal Investments
Topic: Will I be taxed again on my 401k?
Replies: 28
Views: 2130

Re: Will I be taxed again on my 401k?

I think only Pennsylvania taxes 401k contributions (NJ and MA tax IRA contributions, and NJ taxes 403b contributions). More than half the states have no income tax or have a tax but exempt all or a portion of retirement plan withdrawals. In many states you will want to study these exemptions carefu...
by Bob's not my name
Fri Dec 29, 2017 7:21 pm
Forum: Investing - Help with Personal Investments
Topic: Will I be taxed again on my 401k?
Replies: 28
Views: 2130

Re: Will I be taxed again on my 401k?

My undestanding is that your contributions to a pretax 401(k) plan reduce your taxable wages for federal income tax purposes only, not social security, Medicare, or state taxes. When you withdraw, you would only have to pay federal income tax and not other taxes. TravelforFun In almost every state ...
by Bob's not my name
Fri Dec 29, 2017 7:13 pm
Forum: Investing - Help with Personal Investments
Topic: Will I be taxed again on my 401k?
Replies: 28
Views: 2130

Re: Will I be taxed again on my 401k?

I think only Pennsylvania taxes 401k contributions (NJ and MA tax IRA contributions, and NJ taxes 403b contributions). More than half the states have no income tax or have a tax but exempt all or a portion of retirement plan withdrawals. In many states you will want to study these exemptions careful...
by Bob's not my name
Fri Dec 29, 2017 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

Also a question would be are all the medical premiums averse to tax? From what I read its 7.5% of your AGI max. Something else I would look into. Not sure what you mean by "averse" but I think you're referring to itemized deductions that are not relevant here. Moreover, 7.5% of AGI is the threshold...
by Bob's not my name
Fri Dec 29, 2017 4:27 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

Yeah, I think you're considering it correctly and I'm the one upside down. If you forego the $927 premium your after-tax income increases by $667. But now I'm curious about this high deductible. Does the employer offer a Health Savings Account with that high deductible plan? Yes to the high deducti...
by Bob's not my name
Fri Dec 29, 2017 4:25 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

It does look like the 401k and health will help keep taxable below the Roth threshold. The Roth threshold is based on MAGI, not taxable income. Otherwise, your statement is correct. These are important things to be clear on. AGI is at the bottom of page 1 of your 1040. (MAGI is the same or perhaps ...
by Bob's not my name
Fri Dec 29, 2017 4:15 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

Yeah, I think you're considering it correctly and I'm the one upside down.

If you forego the $927 premium your after-tax income increases by $667.

But now I'm curious about this high deductible. Does the employer offer a Health Savings Account with that high deductible plan?
by Bob's not my name
Fri Dec 29, 2017 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

Non-covered spouse (me) will contribute to Roth IRA...unless tIRA makes sense? In 2017, I did a backdoor Roth. I suggest both spouses make direct Roth IRA contributions in 2018. If you can't afford the $11,000 ($5,500 each), which consumes $15,000 of gross income, I would prioritize the 401k. If on...
by Bob's not my name
Fri Dec 29, 2017 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

OK so your marginal rate on insurance premiums is: 22% federal 4.73% state + county 1.45% Medicare tax --------------- 28.18% $927/month pre-tax = $1291 post-tax equivalent And I agree with cherijoh, while also applauding your interest in calculating true cost. $927/month = $11,000/year is quite hig...
by Bob's not my name
Fri Dec 29, 2017 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

OK thanks for the details. So: 22% federal marginal rate. Over the SS threshold so no SS at the margin. 1.45% Medicare tax. Is your county tax going up? The Indiana Department of Revenue announced that the counties of Allen, Clinton, Fountain, LaGrange, Marion, Sullivan and Vermillion have changed t...
by Bob's not my name
Fri Dec 29, 2017 3:46 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

The 22% MFJ bracket tops out at $165,000 taxable income. Assuming one maxed out 401k, the standard deduction, and maybe $2,500 of pre-tax health, dental, vision, and disability insurance premiums and FSA contributions, that would equate to $210,000 gross income.
by Bob's not my name
Fri Dec 29, 2017 3:37 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

I'm starting to get confused. Let's stick to 2018. What will your gross income be? Will each spouse be under the $128,700 SS limit? Is only one spouse covered by an employer retirement plan? (The max contribution is $18,500, not $18,000.) Will the non-covered spouse make a deductible TIRA contributi...
by Bob's not my name
Fri Dec 29, 2017 3:24 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

Well, for starters you are not in the 24% bracket. Your taxable income could be about $65,000 less than your gross.
by Bob's not my name
Fri Dec 29, 2017 3:17 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate tax savings of employer health insurance?
Replies: 25
Views: 713

Re: How to calculate tax savings of employer health insurance?

I may be misunderstanding what you're after, but I think your math is both upside down and incomplete. The incomplete part is that pre-tax health, dental, and vision insurance premiums withheld from your pay are exempt from federal and state income tax, SS tax, Medicare tax, and ACA tax. The upside ...
by Bob's not my name
Thu Dec 28, 2017 2:34 pm
Forum: Investing - Theory, News & General
Topic: What would you do in our situation: Roth 403b or Traditional 403b?
Replies: 57
Views: 2346

Re: What would you do in our situation: Roth 403b or Traditional 403b?

continue to utilize the Roth IRA contributions as well If you want to get really fancy you can do a state-deductible back door Roth IRA. This is only possible if you are eligible to to deduct tIRA contributions and if the extant tIRAs you mention are in only one spouse's name. In that situation the...
by Bob's not my name
Thu Dec 28, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: What would you do in our situation: Roth 403b or Traditional 403b?
Replies: 57
Views: 2346

Re: What would you do in our situation: Roth 403b or Traditional 403b?

Presumably their heirs would pay a relatively high marginal rate on inherited tIRA distributions (because the heirs would still be working). Continued tax mitigation would include converting to Roth in the 0% marginal rate years of assisted living. I did this as trustee and everyone inherited Roth ...
by Bob's not my name
Thu Dec 28, 2017 1:49 pm
Forum: Investing - Theory, News & General
Topic: What would you do in our situation: Roth 403b or Traditional 403b?
Replies: 57
Views: 2346

Re: What would you do in our situation: Roth 403b or Traditional 403b?

Trying to establish only 2018 marginal rate, which we ought to have done at the beginning of the thread. State tax on future withdrawals depends on state of residence at time of withdrawal, state tax rate, state treatment of IRA withdrawals, and, in this instance and if the OP lives in IA until deat...