Search found 24754 matches

by grabiner
Tue Nov 12, 2019 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Risk analysis of having HSA vs. PPO Plan
Replies: 1
Views: 241

Re: Risk analysis of having HSA vs. PPO Plan

Check your plan documents. I would expect that in-network expenses count towards the out-of-network deductible and maximum. Otherwise, if you had met the out-of-network maximum but not the in-network maximum, you would have an incentive to see out-of-network providers, costing the plan more money. I...
by grabiner
Tue Nov 12, 2019 10:43 pm
Forum: Investing - Theory, News & General
Topic: Dow closing
Replies: 8
Views: 1492

Re: Dow closing

The calculation of the Dow makes it more likely that it will be unchanged than other indexes would be. The Dow weights all 30 stocks equally. The index value is computed by adding all the prices, and then multiplying by a factor to keep the values consistent over time. For example, if the prices tot...
by grabiner
Tue Nov 12, 2019 10:35 pm
Forum: Personal Investments
Topic: Muni guidance for $15m portfolio
Replies: 11
Views: 2784

Re: Muni guidance for $15m portfolio

I would suggest paying down the mortgage to $1M (or $750K if the mortgage was taken out too late to be grandfathered into the $1M rule). That is a risk-free return, and it is not deductible from federal tax, so it is probably a better return than you can get on munis. In your high tax bracket, a rea...
by grabiner
Tue Nov 12, 2019 10:31 pm
Forum: Personal Investments
Topic: USRT For HSA
Replies: 2
Views: 218

Re: USRT For HSA

Instead of considering the HSA in isolation, view your HSA as part of your IRA, since both are invested for retirement expenses. Thus, choose your asset allocation first, and then choose the funds for your HSA according to where the HSA has the best options. If the only low-cost fund in your 401(k) ...
by grabiner
Tue Nov 12, 2019 10:28 pm
Forum: Personal Investments
Topic: Tax Gain Harvesting and Dividend Schedule
Replies: 33
Views: 1311

Re: Tax Gain Harvesting and Dividend Schedule

I remembered reading ETFs were more tax efficient than mutual funds, but I think paying the one basis point for the ease of reinvesting dividends is worth it. Non-Vanguard ETFs are more tax-efficient than mutual funds because the ETF structure allows funds to reduce the capital gains they would dis...
by grabiner
Tue Nov 12, 2019 10:23 pm
Forum: Personal Investments
Topic: Have a regular TSP, should I consider a Roth TSP?
Replies: 5
Views: 510

Re: Have a regular TSP, should I consider a Roth TSP?

The Roth TSP is better than the regular TSP if you will retire in a higher tax bracket than your current bracket (so that you lose a smaller percentage to taxes), or in a nearly equal bracket and can max out the Roth TSP (so that you lose the same percentage of the TSP to taxes, but have less in a t...
by grabiner
Tue Nov 12, 2019 10:17 pm
Forum: Personal Investments
Topic: Advice needed for unusual financial situation
Replies: 19
Views: 2725

Re: Advice needed for unusual financial situation

I don't know if I would put money in a high yield risk bond fund if I was struggling for income. You get a higher yield due to risk. My first google search gave me this: "High-yield bond funds invest in "junk" bonds—lower credit quality corporate bonds that carry a higher-than-market yield.Investor...
by grabiner
Tue Nov 12, 2019 10:12 pm
Forum: Personal Investments
Topic: Which BOND Fund in Taxable at 22% Tax Rate
Replies: 15
Views: 1660

Re: Which BOND Fund in Taxable at 22% Tax Rate

Will your tax bracket in retirement also be 22%? Yes, 22% probably unless more dividends from the Bond Funds push me into 24%. If you are in retirement (no earned income), and your only income is from your portfolio, a 55/45 portfolio can have no fed taxes due, assuming you are married and have not...
by grabiner
Tue Nov 12, 2019 10:04 pm
Forum: Personal Investments
Topic: Taxable account
Replies: 7
Views: 873

Re: Taxable account

Currently in my taxable account I hold VGHCX, VLXVX, VYM, VNQ. Does anyone think these are decent investments? ( I do VTSAX in my back door roth, my 401k Through my job is an S/P 500 index, and have an old 403b that is invested in 50% international vanguard fund) Not too worried right now about the...
by grabiner
Tue Nov 12, 2019 9:54 pm
Forum: Personal Investments
Topic: Buy some VYM [Vanguard High Dividend Yield]?
Replies: 25
Views: 1755

Re: Buy some VYM?

I am already retired (age 60) and am going to need more cash flow. I am thinking of buying $100,000 of VYM in my Schwab brokerage account (I would sell money market shares to do this.) The dividends would not be reinvested, and I would use them for living expenses. I also have a $100,000 home loan ...
by grabiner
Tue Nov 12, 2019 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: 2020 FEHB HDHP - how to calculate vs. traditional plan?
Replies: 5
Views: 405

Re: 2020 FEHB HDHP - how to calculate vs. traditional plan?

To calculate the benefit of the HDHP versus a traditional plan, first compute the day-one cost, what you will pay if you never see the doctor for anything other than a free annual checkup. With a traditional plan, this is the after-tax premium. With an HDHP, this is the after-tax premium, minus the ...
by grabiner
Tue Nov 12, 2019 1:59 pm
Forum: Investing - Theory, News & General
Topic: Debunking Bonds in Taxable
Replies: 132
Views: 14139

Re: Debunking Bonds in Taxable

Thanks for the info with respect to current situation. Those particular caveats do not affect me. However, saying that, if people are subject to these caveats and already have location of equities in taxable and bonds in tax-deferred, wouldn't they just keep them there to avoid current tax hit? Is ...
by grabiner
Mon Nov 11, 2019 11:35 pm
Forum: Investing - Theory, News & General
Topic: Debunking Bonds in Taxable
Replies: 132
Views: 14139

Re: Debunking Bonds in Taxable

If stocks earn 10% a year and taxed at 15% and bonds earn 2% and taxed at 22%, which would you rather have in taxable? If that seems extreme, then do 8% and 3%, 7% and 3.5%. etc etc. Stocks, in my case tax efficient index/passive equity funds in taxable. With the higher expected returns, I'll have ...
by grabiner
Sun Nov 10, 2019 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

A: $240K in stock, $160K in bonds, $200K mortgage B: $240K in stock, $60K in bonds, $100K mortgage C: $180K in stock, $220K in bonds, $200K mortgage D: $180K in stock, $120K in bonds, $100K mortgage You are trying to compare A to D. However, it is A and B which are comparable in risk; if the stock ...
by grabiner
Sun Nov 10, 2019 9:41 pm
Forum: Investing - Theory, News & General
Topic: TSP 3-Funds or TSP Target Date Fund?
Replies: 67
Views: 4288

Re: TSP 3-Funds or TSP Target Date Fund?

If 80% stock and 20% G fund has the same risk as 75% stock and 25% F fund, then the G fund gives a better portfolio return at the same risk level. Are these just random numbers or is 80/20 roughly the same risk as 75/25, more or less, as you write here? The TSP's models must imply a significant cor...
by grabiner
Sun Nov 10, 2019 9:36 pm
Forum: Personal Investments
Topic: Holding bonds vs 100% equities
Replies: 313
Views: 18814

Re: Holding bonds vs 100% equities

I think the great point of this discussion is adding an extra variable: the money you may have to use from your retirement portfolio at a random point (typically, if you are unemployed and your job is not stable; but could be for other reasons, imagine medical condition, you are suited, etc). It ma...
by grabiner
Sun Nov 10, 2019 6:40 pm
Forum: Investing - Theory, News & General
Topic: Wait for Social Security - breakeven returns
Replies: 103
Views: 9062

Re: Wait for Social Security - breakeven returns

Also, are you aware that each year you delay starting SS benefits from your Full Retirement Age (FRA) to age 70, your monthly benefit will grow 8% for each year you wait (and the higher benefit will benefit you/your spouse for the rest of your life)? Can you guarantee that you can get those returns...
by grabiner
Sun Nov 10, 2019 6:11 pm
Forum: Personal Investments
Topic: Holding bonds vs 100% equities
Replies: 313
Views: 18814

Re: Holding bonds vs 100% equities

I wonder if the pro 100% stocks crowd would change their views if we have another great depression, with a 80% or more crash in the stock market, or a Japan like stock market that declines for many years. None of these outcomes seem likely due to the past 10 years of US stock performance. Search in...
by grabiner
Sun Nov 10, 2019 6:06 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

Net worth does not interest me in the least. If the value of my house drops 20% on paper, that makes zero difference in my life: whether I have a mortgage or not, as you note. If my investible assets fall 20%...well, I am accumulating so that also makes no difference to me. That said, I then have t...
by grabiner
Sun Nov 10, 2019 10:07 am
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

As usual the answer is "it depends": on your mortgage rate, amount of savings, goal (no mortgage at retirement), age, etc. My opinion is paying off down any mortgage that's below 4% is silly. Taxable investing is a much better option for both flexibility and likely returns. I also don't subscribe t...
by grabiner
Fri Nov 08, 2019 10:44 pm
Forum: Investing - Theory, News & General
Topic: Wait for Social Security - breakeven returns
Replies: 103
Views: 9062

Re: Wait for Social Security - breakeven returns

Sure. That's somewhat uncommon though, because it implies that you're already 100% stocks in the portfolio. (This is what Grabiner was getting at above.) One in 10 participants have taken an extreme position, holding either 100% in equities (6% of participants) or no equities (3% of participants). ...
by grabiner
Thu Nov 07, 2019 9:59 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

I also had just logged in to ask this question. I am leaning towards investing over paying off. I am just putting what I would pay extra towards my principle in a taxable account. My question is should I choose a more aggressive allocation than my retirement allocations since I can handle the ups a...
by grabiner
Thu Nov 07, 2019 9:54 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

(I get no value from the liquidity because the mortgage balance is much less than my taxable account value.) How do you view the volatility you might have on your taxable account value Vs mortgage balance? As market is reaching new highs the difference between your current taxable account value and...
by grabiner
Thu Nov 07, 2019 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Credit score vs down payment
Replies: 25
Views: 1503

Re: Credit score vs down payment

Even if you have to pay in the 9% interest rate range for this car loan - that is OK - but if you get your debts all in order and establish a good payment record - your credit score will go up - so that the next car loan you get will have a much, much lower rate. Or you can refinance the existing l...
by grabiner
Wed Nov 06, 2019 11:19 pm
Forum: Personal Finance (Not Investing)
Topic: Best month to take RMDs?
Replies: 86
Views: 4543

Re: Best month to take RMDs?

When you take RMDs doesn't need to correspond to when you take money out of the market. If you take an RMD out of your IRA stock fund and invest it in a taxable stock fund, you keep the same stock-market exposure. If you want to take money out of the stock market but don't want to take an RMD now, y...
by grabiner
Wed Nov 06, 2019 11:15 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

1) There is another side to this. Would you put too many eggs into the house by paying off the mortgage? The amount of your net worth in the house is independent of whether you have a mortgage; you have more equity if you pay down the mortgage, but less risk on that equity. If you have a $400K hous...
by grabiner
Wed Nov 06, 2019 9:40 pm
Forum: Personal Finance (Not Investing)
Topic: Credit score vs down payment
Replies: 25
Views: 1503

Re: CREDIT SCORE VS DOWN PAYEMENT

I must be missing something, but how does (or will) an added $1,000 down payment cause a credit score to drop 60 points? Correct me if I'm wrong, but I'm loosely predicting that if I use 1000 to pay off some credit card debt my score will raise due to my utilization dropping substantially. Independ...
by grabiner
Wed Nov 06, 2019 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Health Insurance - HSA during birth year?
Replies: 27
Views: 1057

Re: Health Insurance - HSA during birth year?

I think you really need to crunch the numbers and look at the specifics of each plan. Numerous similar posts have been made in the past. As a federal employee, OP should check out the GEHA HDHP plan. The copay for maternity care is $0 after you hit the deductible, so I don't believe that you would ...
by grabiner
Wed Nov 06, 2019 9:30 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage to prepay or not prepay
Replies: 79
Views: 5534

Re: Mortgage to prepay or not prepay

It depends on your after-tax mortgage rate and the remaining term. For a fair comparison, compare the after-tax rate to the after-tax yield on a bond fund of the same duration (likely a muni fund if you can afford to max out your taxable account). The duration is the remaining term on the mortgage (...
by grabiner
Wed Nov 06, 2019 9:15 pm
Forum: Investing - Theory, News & General
Topic: Wait for Social Security - breakeven returns
Replies: 103
Views: 9062

Re: Wait for Social Security - breakeven returns

Few 62-year-olds have 100% of their investments in stock. If you hold any bonds, then you can increase your expected returns by selling bonds to buy stock, but you chose not to do this because the risk isn't worth taking. And by the same logic, you can increase your expected returns by taking risk-f...
by grabiner
Wed Nov 06, 2019 8:49 pm
Forum: Personal Investments
Topic: Income Tax Questions
Replies: 3
Views: 776

Re: Income Tax Questions

1. We file our income taxes MJF and are squarely in the 24% federal marginal tax bracket. If or I should say when the tax rates go back to the pre-Trump tax cuts and we are squarely in the 28% federal marginal tax bracket, would simply increasing our tax deferred 401k contributions by 4% give us a ...
by grabiner
Wed Nov 06, 2019 8:42 pm
Forum: Personal Investments
Topic: IRA instead of 401k with high expenses and no match
Replies: 10
Views: 411

Re: IRA instead of 401k with high expenses and no match

A couple of rules of thumb. Order of investments 1.401k to match 2. Roth IRA 3. Max 401k 4. Taxable investing. HSA might be 1a or 2a. 401k is better than taxable until fees exceed 1.7% Usually, even such a high-cost 401(k) is better than a taxable account. My rule of thumb is that the product of th...
by grabiner
Wed Nov 06, 2019 8:37 pm
Forum: Personal Investments
Topic: Is the effective interest rate of a loan higher when it’s early in amortization period?
Replies: 42
Views: 1603

Re: Is the effective interest rate of a loan higher when it’s early in amortization period?

If I have two loans with the same interest rate starting at exactly the same time, the amortizing loan has more interest dollars up front - so i would be better off paying that loan first.... no? When rates are equal, it is better to pay down the shorter-term loan, but only because this gives you m...
by grabiner
Wed Nov 06, 2019 8:28 pm
Forum: Personal Investments
Topic: What can I do with an annuity in a retirement plan?
Replies: 7
Views: 774

Re: What can I do with an annuity in a retirement plan?

The only thing you need to consider is that there may be a surrender fee on the annuity. It's normally reduced each year she's held it until it eventually disappears after a designated number of years. TIAA annuities don't have a surrender fee. However, you will have to check the employer's rules a...
by grabiner
Wed Nov 06, 2019 8:18 pm
Forum: Personal Investments
Topic: Parent's retirement investing help
Replies: 16
Views: 1819

Re: Parent's retirement investing help

Thanks for the replies, really helpful. Keeping it simple would be the best option for them and for me. How does tax loss harvesting play into this? Thanks It doesn't. Tax-loss harvesting requires that you have large investment losses that you can declare and other substantial investment income to ...
by grabiner
Mon Nov 04, 2019 10:02 pm
Forum: Personal Investments
Topic: capital gains timing.
Replies: 6
Views: 888

Re: capital gains timing.

It appears or income for 2019 will remain in the 12% federal bracket. This also leaves room for us to take about 10K in mutual fund capital gains from a taxable account for the year at 0%. This is a high cost, high er and high turnover account. We plan to do this. If you have a high-cost, high-ER, ...
by grabiner
Mon Nov 04, 2019 9:54 pm
Forum: Personal Investments
Topic: Muni bonds vs treasury bonds- Am I looking at this correctly?
Replies: 11
Views: 1061

Re: Muni bonds vs treasury bonds- Am I looking at this correctly?

VCADX current SEC 30 DAY 1.43%, which would have no tax due, is nearly identical to the effective rate of VWIUX (1.42%) for tax brackets listed. If I was bumped up one more tax bracket in CA it might make more sense, but the diversification of VWIUX I think wins out for me. My recommendation for mi...
by grabiner
Mon Nov 04, 2019 9:51 pm
Forum: Personal Investments
Topic: My company is moving my HSA from Optum Bank to another place
Replies: 5
Views: 687

Re: My company is moving my HSA from Optum Bank to another place

This could be more than just an inconvenience if you are a CA or NJ resident; in order to switch HSA providers, you might be forced to sell the investments, and if they are in stock, you may have a substantial state capital gain.
by grabiner
Sun Nov 03, 2019 9:58 am
Forum: Personal Finance (Not Investing)
Topic: Pay Roth conversion taxes with HSA funds?
Replies: 27
Views: 1960

Re: Pay Roth conversion taxes with HSA funds?

HSA is the most valuable saving vehicle one could have. I'm keeping mine until the end to pay for my medical expenses in retirement. Also, how is it legal to withdraw HSA to pay for anything (in this case, taxes) other than medical expenses? It is legal to use the HSA for any purpose, but withdrawa...
by grabiner
Sun Nov 03, 2019 9:41 am
Forum: Personal Investments
Topic: Reporting HSA dividends in CA
Replies: 9
Views: 594

Re: Reporting HSA dividends in CA

Have you considered just using US Treasuries to avoid CA taxes? I have, but I'd rather have an aggressive investment in there. It should still come out ahead even with the dividend state tax. If you treat the HSA as part of your portfolio, and you hold Treasuries somewhere, you might as well hold t...
by grabiner
Sat Nov 02, 2019 3:38 pm
Forum: Personal Finance (Not Investing)
Topic: Does Kiddie tax apply to grandchildren gifts?
Replies: 7
Views: 907

Re: Does Kiddie tax apply to grandchildren gifts?

The kiddie tax applies to a child regardless of the source of the money. If your grandson is a student and is under 24, he uses the kiddie tax rules to pay tax on the capital gain, but not on the amount of the gift. If his summer earnings are less than the standard deduction, then he can use the sta...
by grabiner
Sat Nov 02, 2019 3:27 pm
Forum: Personal Investments
Topic: Mortgage or Bonds at 50 !
Replies: 36
Views: 2673

Re: Mortgage or Bonds at 50 !

It is really case by case. In my case, the mortgage rate is 3.25% fixed for 30 year. My tax bracket is 48% fed, state, NIIT all combined. So the effective rate is 1.69%. I buy VCADX which is intermediate(5 year) CA muni bond at 1.44% right now, for better flexibility. It is just a wash or splitting...
by grabiner
Sat Nov 02, 2019 3:14 pm
Forum: Personal Investments
Topic: International ETF in Taxable Account?
Replies: 21
Views: 3395

Re: International ETF in Taxable Account?

How significant is the tax advantage for foreign investments in taxable accounts when having a fed+state+NII marginal at 50.1%? At that tax rate, the higher yields on foreign stocks make US stocks in a taxable account more attractive. My standard example, which is close to the behavior of typical t...
by grabiner
Sat Nov 02, 2019 3:09 pm
Forum: Personal Investments
Topic: Mortgage or Bonds at 50 !
Replies: 36
Views: 2673

Re: Mortgage or Bonds at 50 !

If you can pay off your mortgage before you retire that will really lower your expenses. Lower expenses = smaller pot of investments needed in retirement. But if you have enough money to pay off your mortgage, you are in the same situation whether you have actually paid it off or not. You can keep ...
by grabiner
Sat Nov 02, 2019 2:58 pm
Forum: Personal Investments
Topic: Reporting HSA dividends in CA
Replies: 9
Views: 594

Re: Reporting HSA dividends in CA

Harry Sit (The Finance Buff) has a good article on CA (and NJ) treatment of HSA's https://thefinancebuff.com/california-new-jersey-hsa-tax-return.html One addition I would make. The advice "Don't sell when you have a loss" simplifies the accounting, but may cost you money, particularly in NJ. In NJ...
by grabiner
Fri Nov 01, 2019 10:04 pm
Forum: Personal Finance (Not Investing)
Topic: HRA vs HSA ?
Replies: 3
Views: 466

Re: HRA vs HSA ?

The HSA has two advantages over the HRA. The more important advantage is that you can contribute your own money to the HSA, getting a tax deduction, and tax-free growth. (Even if you spend the money from the HSA on medical expenses, you still get the benefit of tax-free growth, as the money you spen...
by grabiner
Fri Nov 01, 2019 9:56 pm
Forum: Personal Investments
Topic: Muni Bond Fund -- New Jersey resident
Replies: 6
Views: 560

Re: Muni Bond Fund -- New Jersey resident

If you hold Treasury bonds in your IRA, NJ won't tax the gains, even on withdrawal. This might be a better option for some of your bonds. (However, if you retire in a state other than NJ, you will pay state tax on the entire IRA withdrawal.) If you have an HSA, Treasury bonds are particularly attrac...
by grabiner
Fri Nov 01, 2019 9:52 pm
Forum: Personal Investments
Topic: Worried about “buying the dividend” vs Inflation/Interest
Replies: 3
Views: 603

Re: Worried about “buying the dividend” vs Inflation/Interest

I am no expert here (most of my portfolio is tax-advantaged). But according to the Wiki, it appears that the limitation is holding the mutual fund for more than 60 days, if you don’t sell for 61 days you are good. Link here: https://www.bogleheads.org/wiki/Non-qualified_dividends How this applies t...
by grabiner
Fri Nov 01, 2019 9:44 pm
Forum: Personal Investments
Topic: Looking for Variable Annuity help!
Replies: 9
Views: 692

Re: Looking for Variable Annuity help!

The surrender fee has probably been lost already; it just hasn't been deducted from your balance. If you sell the annuity now, you pay the 5%. If you keep the annuity for five more years, you will pay more than 5% compared to the low-cost investment alternatives. Therefore, it is worth selling the a...
by grabiner
Fri Nov 01, 2019 9:39 pm
Forum: Personal Investments
Topic: Still don’t understand Bond Index Funds..
Replies: 10
Views: 2137

Re: Still don’t understand Bond Index Funds..

I have a similar question about how bond index work that may be applicable to this thread vs starting a whole new. Suppose I buy a bond index fund, let's say VBTLX. Suppose at time of purchase the weighted average coupon rate of the bond index fund is X, general interest rates are Y, and the market...