Search found 26318 matches

by grabiner
Sun May 31, 2020 10:13 am
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

Whether to factor it in depends on whether the spousal benefit (half your benefit) is more or less than the disability benefit. If the spousal benefit is less than the disability benefit, she won't get any benefit on your record until you die, and then she gets your full benefit. If it is more than...
by grabiner
Sun May 31, 2020 9:45 am
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

Using this projection, if you would be over $2.4 million mark (in today's dollars) by then, would one then favor payroll deduction? I get that you are making a gamble that you actually do indeed get over the second bendpoint in your working career, but let's just work with that assumption. Yes, unl...
by grabiner
Sun May 31, 2020 8:52 am
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

Thank you. But I can tell you I haven’t reached the $2.4 million mark simply because I haven’t worked 35 years at this point. I expect to work another 25ish years. What should be done in this case? You can estimate your future earnings. For years up to 35, add your expected wages (ignoring inflatio...
by grabiner
Sun May 31, 2020 8:37 am
Forum: Personal Investments
Topic: Vandguard/TSP Evaluation
Replies: 8
Views: 693

Re: Vandguard/TSP Evaluation

You are in the 22% tax bracket. A mix of Traditional & Roth TSP is good. I checked the numbers. An E-7 with 16 years of service makes $4753 per month, which is $57,036 annually. The top of the 12% tax bracket is $52,525 ($40,125 plus $12,400 standard deduction). Thus, unless some of your pay is tax...
by grabiner
Sat May 30, 2020 10:29 pm
Forum: Personal Finance (Not Investing)
Topic: northern Delaware versus southern NJ for retirement
Replies: 17
Views: 1395

Re: northern Delaware versus southern NJ for retirement

I'm fairly certain neither Delaware nor PA tax SS benefits. I also remember reading that PA doesn't tax income from 401(k)s and IRAs. Perhaps another Boglehead living in DE or PA could confirm this? Of course DE has no sales tax. State income taxes on the wiki summarizes how taxes apply to investor...
by grabiner
Sat May 30, 2020 10:18 pm
Forum: Personal Finance (Not Investing)
Topic: Saving money or pay off debt?
Replies: 8
Views: 566

Re: Saving money or pay off debt?

You can view paying off a debt as making a risk-free investment with interest rate equal to the loan interest. If you pay off the car loan, you will "receive" money every month in the form of car payments you no longer have to make, just as if you had bought a bunch of CDs maturing every month with ...
by grabiner
Sat May 30, 2020 10:09 pm
Forum: Investing - Theory, News & General
Topic: Should I pull out of TIAA Real Estate...?
Replies: 15
Views: 726

Re: Should I pull out of TIAA Real Estate...?

What matters is not how much of TIAA Real Estate is subject to a particular risk, but how much of your portfolio is subject to that risk. If you hold TIAA Real Estate as 10% of your portfolio, which is a common recommendation, then 10% is subject to the risk of the real-estate market as a whole, and...
by grabiner
Sat May 30, 2020 10:00 pm
Forum: Personal Investments
Topic: Help buying a stock today (saturday)
Replies: 3
Views: 599

Re: Help buying a stock today (saturday)

If you place an order when the market is closed, the order will be matched with other orders when the market opens on Monday. The stock markets have an "opening cross" where they match orders to trade as many shares as possible. If you place a market order to buy, you will buy at whatever price the ...
by grabiner
Sat May 30, 2020 9:53 pm
Forum: Personal Investments
Topic: Paying off debt with taxable account + EF
Replies: 34
Views: 1146

Re: Paying off debt with taxable account + EF

I would suggest selling the taxable stock to pay off as much of the mortgage as possible, and viewing the emergency fund as offsetting the remaining debt, since it could be used at any time to pay off the debt. If you have $30K in debt and $30K in cash, you are not burdened by the debt because you a...
by grabiner
Sat May 30, 2020 7:15 pm
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

tomwood, to address your reply to me, the short way to fulfill your request is the same as the long way. I recommend you take these steps: -go to https://www.ssa.gov/myaccount/ and log in –go to “View Earnings Record” -copy “Work Year” into the first column of a spreadsheet and copy “Taxed Social S...
by grabiner
Sat May 30, 2020 12:18 pm
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

This has been an enlightening thread for me...didn't realize how much of an impact HSA payroll deductions could make on Social Security. I'm trying to figure out the math for my situation but struggling to figure it out. What if I'm the higher earning spouse, and spouse will assuredly be on my spou...
by grabiner
Sat May 30, 2020 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: FICA tax on NQSO exercise after retirement
Replies: 4
Views: 216

Re: FICA tax on NQSO exercise after retirement

If you don't have 35 years of work, the FICA tax is not a loss; you will pay SS tax on the salary, but the salary will also increase your SS benefit. Every $173 you pay in SS tax will increase your SS benefit by $1 per month at full retirement age, adjusted for inflation. (The usual number I use in ...
by grabiner
Sat May 30, 2020 11:52 am
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 165
Views: 8669

Re: I don't understand stock buybacks

But even in taxable accounts, if you own an index fund, then the index fund has to sell shares if a company does a buyback. If the number of shares of a company is reduced, the index fund has to likewise reduce its number of shares to rebalance. So if you own an index fund, the share buyback is for...
by grabiner
Sat May 30, 2020 11:28 am
Forum: Personal Investments
Topic: Vandguard/TSP Evaluation
Replies: 8
Views: 693

Re: Vandguard/TSP Evaluation

Taxable account VWNFX 1,273.997 shares $41,073.66 (35.7157%) This fund (Windsor II) should not be in your taxable account. It generates a lot of capital gains, which will lead to large tax bills once you get out of the range where capital gains are taxed at zero (likely after you leave the military...
by grabiner
Sat May 30, 2020 11:15 am
Forum: Personal Investments
Topic: HSA investment questions
Replies: 6
Views: 375

Re: HSA investment questions

1. Are HSA investments considered part of the overall portfolio in terms of asset allocation and rebalancing? For eg, if I want to have 80% VTSAX and 20% VBTLX, and I have a 401K, HSA and Vanguard account, I would look at all of them together to ensure the allocation percentage? Except for the amou...
by grabiner
Sat May 30, 2020 11:05 am
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

Do not use payroll deduction. Every $214 you save costs you $1 per month in (inflation-linked) FRA SS benefits for as long as either you or your spouse lives. You will probably delay SS to age 70 (with FRA at 67); dividing by 1.24 to adjust for that difference, every $173 you save costs you $1 per ...
by grabiner
Sat May 30, 2020 10:43 am
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

If you are above the second SS bend point, it is close to break-even on your own record; every $214 you save costs you $1 per month in SS benefits (adjusted for inflation). If you have a higher-earning spouse, it is probably slightly better to use payroll deduction, as the reduced SS benefit lasts ...
by grabiner
Sat May 30, 2020 10:36 am
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4868

Re: Alarming Bid/Ask Spreads on ETFs

Pretty much, I have been told here to not buy ETFs at the open or near the close of the trading day. Certainly, I don't want to trade after hours. I read that it is better to place marketable orders rather than market orders. So some nuance with trading these. What I am concerned with is that I buy...
by grabiner
Fri May 29, 2020 9:58 pm
Forum: Personal Finance (Not Investing)
Topic: When to deduct HSA from payroll, and when not to?
Replies: 42
Views: 2241

Re: When to deduct HSA from payroll, and when not to?

[*]Will your average indexed monthly earnings (AIME) be > the second bend point when you are claiming SS benefits. If yes, your benefits increase at 15¢ on the dollar. Any reduction in taxes/benefits will likely be a net positive. If no, your benefits increase at 32¢ on the dollar. Any reduction in...
by grabiner
Fri May 29, 2020 4:12 pm
Forum: Investing - Theory, News & General
Topic: Roth + Time vs Pretax + tax
Replies: 81
Views: 4118

Re: Roth + Time vs Pretax + tax

First, let me say I think that Roth has many more positives and whatever math you want to use, Roth is better. I offer two choices: A. at your retirement age you have all of your money in Pretax 401K, IRA, etc B. At your retirement age you have half of you money in Pretax 401K, IRA and the other ha...
by grabiner
Fri May 29, 2020 9:27 am
Forum: Investing - Theory, News & General
Topic: Stop-Loss vs. Stop-Limit Order - Advice Needed
Replies: 6
Views: 290

Re: Stop-Loss vs. Stop-Limit Order - Advice Needed

The problem with a stop order is that it is a poor substitute for judgement. If you bought a stock at $50 and place a stop order at $40, you have said, "Sell this stock if it falls to $40, regardless of the reason." If the market as a whole drops 20%, the stock will drop from $50 to $40 but will sti...
by grabiner
Fri May 29, 2020 9:21 am
Forum: Personal Investments
Topic: Lump sum vs Dollar Cost Averaging during volatile market
Replies: 34
Views: 1453

Re: Lump sum vs Dollar Cost Averaging during volatile market

The reason you don’t do this IS because of tax and transaction costs. Also because lump sum does win 2/3rds of the time. The reason to DCA is because of the current volatility increases the odds of being in that 1/3 of the time scenario where lump sum wins. DCA outperforms lump sum when the market ...
by grabiner
Fri May 29, 2020 9:14 am
Forum: Personal Investments
Topic: Favorite initial investor Vanguard mutual index fund; VTSAX
Replies: 33
Views: 2122

Re: Favorite initial investor Vanguard mutual index fund; VTSAX

Total Stock Market would be my choice as well, as it is the fund which best expresses Vanguard's philosophy: own the whole haystack, and pay a trivial cost. This fund was my first investment (in 1997), and I still hold it. Will it provide the best return among all current index funds for the next N ...
by grabiner
Fri May 29, 2020 9:04 am
Forum: Personal Investments
Topic: How many funds are TOO many funds & is it a good idea to invest in a newly reopened fund?
Replies: 15
Views: 1066

Re: How many funds are TOO many funds & is it a good idea to invest in a newly reopened fund?

Ideally, you should hold one fund per asset class in your asset allocation. If you split US stocks into large-growth, large-value, small-growth, and small-value (as I do), you need four funds to get the desired overall allocation, but there is little purpose in having more than four. If you hold Van...
by grabiner
Thu May 28, 2020 9:49 pm
Forum: Investing - Theory, News & General
Topic: Does reinvesting TSM dividends artificially inflate one’s position in growth stocks?
Replies: 24
Views: 1325

Re: Does reinvesting TSM dividends artificially inflate one’s position in growth stocks?

When a corporation pays a dividend (or buys back stock), its assets decline. The net effect is that stocks which pay lower dividends will become a larger part of the stock market. However, this does not create an inherent bias towards growth stocks, because stocks move between growth and value as th...
by grabiner
Thu May 28, 2020 9:40 pm
Forum: Personal Investments
Topic: Have you been following your IPS?
Replies: 36
Views: 1526

Re: Have you been following your IPS?

Yes, and it served its intended purpose; the two moves I made in March (paying off my mortgage, and rebalancing into stock at the market bottom) were the result of decisions I had made years ago. If the market keeps going up, I may need to rebalance back out of stock, also according to my IPS. Edite...
by grabiner
Thu May 28, 2020 4:52 pm
Forum: Personal Investments
Topic: Paying Off/Down Mortgage vs Investing
Replies: 15
Views: 1747

Re: Paying Off/Down Mortgage vs Investing

See Paying down loans versus investing on the wiki. When the CD matures, you may have the following four choices. A. Use the money to pay off the mortgage, B. Use the money to buy bonds. C. Use the money to pay off the mortgage, and then move an equal amount from bonds to stocks. D. Use the money t...
by grabiner
Thu May 28, 2020 7:43 am
Forum: Personal Investments
Topic: Using VGT in portfolio
Replies: 19
Views: 987

Re: Using VGT in portfolio

Thanks everyone for your invaluable inputs! I appreciate the comments, and the view points. I wanted to add that the primary reason for my large MSFT holding is that for a long time I didn't know what to do with them. Some of them are over 10 years old! So selling the old stocks would incur heavy c...
by grabiner
Wed May 27, 2020 9:25 pm
Forum: Investing - Theory, News & General
Topic: Alarming Bid/Ask Spreads on ETFs
Replies: 74
Views: 4868

Re: Alarming Bid/Ask Spreads on ETFs

I am obviously far from being an expert on any of this, but I think a market order and a marketable limit order (as mine was) are treated the same way and have a similar opportunity to be filled from sources other than the displayed book. Perhaps the experts can weigh in. The two order types (marke...
by grabiner
Wed May 27, 2020 9:14 pm
Forum: Personal Investments
Topic: Too many tax lots to keep up with? Efficiency?
Replies: 11
Views: 1031

Re: Too many tax lots to keep up with? Efficiency?

What's more, with any decent broker you don't need to pick lots because you just tell them what you want to happen ("maximize long-term gain", "maximize short-term loss", "highest cost", etc) and it picks the lots for you automatically. You should never have to think about lots or pick them yoursel...
by grabiner
Wed May 27, 2020 9:05 pm
Forum: Personal Investments
Topic: Tax-Exempt Bonds for Lower Tax Brackets
Replies: 21
Views: 1665

Re: Tax-Exempt Bonds for Lower Tax Brackets

If you intend to switch back and forth between the total bond and a tax-exempt bond depending on the yields, remember that selling a bond fund can result in capital gains taxes which might wipe out the small benefit you have gotten. And while this can also result in losses, your strategy is more li...
by grabiner
Wed May 27, 2020 8:51 pm
Forum: Personal Investments
Topic: Paying Off/Down Mortgage vs Investing
Replies: 15
Views: 1747

Re: Paying Off/Down Mortgage vs Investing

See Paying down loans versus investing on the wiki. When the CD matures, you may have the following four choices. A. Use the money to pay off the mortgage, B. Use the money to buy bonds. C. Use the money to pay off the mortgage, and then move an equal amount from bonds to stocks. D. Use the money to...
by grabiner
Wed May 27, 2020 8:43 pm
Forum: Personal Investments
Topic: Using VGT in portfolio
Replies: 19
Views: 987

Re: Using VGT in portfolio

Since you are a software engineer for Microsoft, your non-investment income is exposed to the risk of Microsoft and the tech sector. If some of your compensation is in stock or options, your salary will decline if tech stocks fall. Even if you are paid a straight dollar salary, your salary is more l...
by grabiner
Wed May 27, 2020 4:35 pm
Forum: Personal Investments
Topic: Young Investor
Replies: 7
Views: 590

Re: Young Investor

Some of the Fund Choices and expense ratio are: Target Date Fund for her age Blackrock LifePath Index 2060 .06% That is the obvious choice for getting started, and it's fine for the future as well if she is OK with the allocation. It is very simple to manage, gives her a diversified portfolio all a...
by grabiner
Wed May 27, 2020 4:26 pm
Forum: Investing - Theory, News & General
Topic: Roth + Time vs Pretax + tax
Replies: 81
Views: 4118

Re: Roth + Time vs Pretax + tax

Unless your taxes right now are 0%, pretax is almost always better. Always do pretax until you're forced to do Roth , because you can pay 0% taxes on all of it if you plan correctly. Don't bother trying to predict the future; just do pretax as you may regret it later if you don't. With pretax you h...
by grabiner
Tue May 26, 2020 8:25 pm
Forum: Personal Finance (Not Investing)
Topic: Eight 2019 taxes questions - could use some guidance
Replies: 7
Views: 678

Re: Eight 2019 taxes questions - could use some guidance

1. I have a form 1099-B from eTrade regarding some company stock that vested and I sold in 2019. In the Totals Summary in the 1099-B, the form says under Short term gains or losses that I have $36k in proceeds.This # is also listed under Realized gain or loss. This info is labeled Box B (basis not ...
by grabiner
Tue May 26, 2020 8:07 pm
Forum: Investing - Theory, News & General
Topic: Indexed ETFs vs Mutual Funds for taxabe
Replies: 3
Views: 371

Re: Indexed ETFs vs Mutual Funds for taxabe

Non-Vanguard index funds sometimes distribute capital gains, which ETFs can usually avoid. (At Vanguard, the mutual fund and ETF are share classes of the same fund). The gains won't be too large for an S&P 500 or total-market index. Still, if you want to stay with Schwab, I would prefer Schwab's ETF...
by grabiner
Tue May 26, 2020 8:00 pm
Forum: Personal Investments
Topic: CA tax treatment of HSA
Replies: 18
Views: 886

Re: CA tax treatment of HSA

This account is provided through my employer, so I am not sure if I can move. Is there a way to do it without incurring extra taxes? Yes, you may transfer funds from one HSA to another without incurring any taxes. But only if you can transfer the funds in kind. If your old provider converts the mut...
by grabiner
Tue May 26, 2020 7:56 pm
Forum: Personal Investments
Topic: Muni bonds in taxable vs total bond in tax advantaged
Replies: 4
Views: 517

Re: Muni bonds in taxable vs total bond in tax advantaged

In the top tax bracket in CA, there is a strong tax advantage to holding CA munis in taxable, and a moderate advantage to holding non-CA munis as well. You might split evenly between Vanguard Limited-Term Tax-Exempt and CA Long-Term Tax-Exempt so that half your munis are in CA but more than half you...
by grabiner
Tue May 26, 2020 7:51 pm
Forum: Personal Investments
Topic: Which balance fund in taxable acct for 10% tax bracket?
Replies: 11
Views: 915

Re: Which balance fund in taxable acct for 10% tax bracket?

Vanguard also has a tax managed balanced fund at 50/50. This fund is not appropriate in a 10% or 12% bracket; it holds municipal bonds, which are likely to earn less after tax than corporate bonds of comparable risk in this low a bracket. I would suggest a LifeStrategy fund (if you expect your allo...
by grabiner
Tue May 26, 2020 7:44 pm
Forum: Personal Investments
Topic: Capital gain conundrum
Replies: 10
Views: 1083

Re: Capital gain conundrum

I would suggest selling the fund. It loses about 2% per year more than an index fund does to higher expenses and taxable capital gain distributions. Thus, if you have a capital gain of half the fund value, it will take less than four years for the saved expenses to exceed the capital gain. It is als...
by grabiner
Tue May 26, 2020 7:39 pm
Forum: Personal Investments
Topic: Vanguard Balanced Index Fund Admiral Shares; Only Fund to invest
Replies: 10
Views: 1732

Re: Vanguard Balanced Index Fund Admiral Shares; Only Fund to invest

(Tax-Managed Balanced Fund) What exactly makes it tax managed. Pardon my financial ignorance. Working on it. Thanks The fund holds 51% stocks, tracking the Russell 1000 mid-and-large-cap index, but selecting stocks for lower dividend yields. The other 49% is municipal bonds, which produce tax-exempt...
by grabiner
Tue May 26, 2020 7:28 pm
Forum: Personal Investments
Topic: Young Investor
Replies: 7
Views: 590

Re: Young Investor

With the Saver's Credit as a subsidy on IRA/401(k) contributions, she will owe little or no tax anyway, so a Roth is better than a traditional account for her. She should also set her withholding so that she has nothing withheld; this will give her more money to put into an IRA or 401(k). The best w...
by grabiner
Mon May 25, 2020 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Help understanding Credit Utilization (new to credit cards)
Replies: 14
Views: 643

Re: Help understanding Credit Utilization (new to credit cards)

Credit utilization is calculated when they send you the bill. Not necessarily, I have a credit card that reports on the last calendar day of each month (which is not the same as the statement date). However, the balance reported to the credit bureau is usually the statement balance; this is what I ...
by grabiner
Mon May 25, 2020 3:19 pm
Forum: Personal Investments
Topic: Where to allocate International Index Funds? Opinions welcomed for this new portfolio
Replies: 10
Views: 869

Re: Where to allocate International Index Funds? Opinions welcomed for this new portfolio

Sorry one more question, based on my previous updated AA: I wonder if it's better to put the VTIAX (Total International) in my Sep IRA so I can meet my International Allocation of 20% or Should I just leave the International out at this point and fund it in my taxable account once I have the funds?...
by grabiner
Mon May 25, 2020 12:51 pm
Forum: Personal Investments
Topic: Where to allocate International Index Funds? Opinions welcomed for this new portfolio
Replies: 10
Views: 869

Re: Where to allocate International Index Funds? Opinions welcomed for this new portfolio

How would I compare VTIAX vs VWFAX if put in a tax advantaged account? It seems like international funds do not have a SEC yield.. I assume you mean VFWAX, FTSE All-World Ex-US. In a tax-deferred account, Total International makes more sense, as it is a more complete index, including small-caps. (I...
by grabiner
Mon May 25, 2020 11:45 am
Forum: Personal Finance (Not Investing)
Topic: How Much should I fund my HSA and Why?
Replies: 28
Views: 5766

Re: How Much should I fund my HSA and Why?

The reason to max out an HSA in preference to a Roth IRA or unmatched 401(k) is that the HSA has the best tax treatment, while all three can be used for retirement savings. You will have medical costs in retirement, and the HSA (which should be a relatively small part of your portfolio) can pay thos...
by grabiner
Mon May 25, 2020 11:38 am
Forum: Personal Finance (Not Investing)
Topic: How to document and reconcile carry forward losses used to offset income with brokerage?
Replies: 6
Views: 375

Re: How to document and reconcile carry forward losses used to offset income with brokerage?

Not exactly sure what you are trying to accomplish. Consumption and continued carryover of remaining losses occurs naturally on your tax return every year if it is completed properly. As far as I know, most tax software will apply the losses correctly and maintain the balance for carryover to the n...
by grabiner
Mon May 25, 2020 11:31 am
Forum: Investing - Theory, News & General
Topic: Why bonds may be the only thing propping up the stock market
Replies: 13
Views: 1798

Re: Why bonds may be the only thing propping up the stock market

There is a logical argument behind this. Investors will choose investment based on the trade-off between risk and return. This is easiest to see with bonds; when Treasury bond yields rise, corporate yields also rise, as investors won't buy corporate bonds unless they are adequately compensated for t...
by grabiner
Mon May 25, 2020 11:21 am
Forum: Investing - Theory, News & General
Topic: Order of investing accounts, what to do when getting to brokerage?
Replies: 10
Views: 721

Re: Order of investing accounts, what to do when getting to brokerage?

What is the proper order of investing accounts to maximize gains and reduce taxes? 401(k) up to the employer match; this is usually an immediate 50% or 100% return. HSA; the tax subsidy gives this a big immediate return. 401(k) or (usually Roth) IRA up to the max; which one goes first here depends ...