Search found 27183 matches

by grabiner
Mon Sep 21, 2020 12:08 am
Forum: Personal Finance (Not Investing)
Topic: Front load years 401k contributions when moving from high tax state to no tax state?
Replies: 16
Views: 954

Re: Front load years 401k contributions when moving from high tax state to no tax state?

If next year I am moving from a high tax state to a no tax state for the majority of the year, regarding taxes, is it smarter to front load traditional 401k contributions while living in the high tax state or will I end up owning the same amount either way? in my state I don't get a state tax deduc...
by grabiner
Mon Sep 21, 2020 12:01 am
Forum: Personal Finance (Not Investing)
Topic: Accident Insurance vs continuing to self-insure?
Replies: 7
Views: 545

Re: Accident Insurance vs continuing to self-insure?

The problem with accident insurance is that it doesn't cover you well, as it makes a common worst case worse. The reason you buy insurance is to avoid expensive losses. If you buy accident insurance and then have a big medical bill that isn't an accident, you will lose even more money than if you ha...
by grabiner
Sun Sep 20, 2020 11:56 pm
Forum: Personal Finance (Not Investing)
Topic: loan on paid for house
Replies: 1
Views: 300

Re: loan on paid for house

Welcome to the forum! If you can pay cash at no cost, it is likely to be a better deal. You avoid closing costs, not all of which are included in the APR, so the cost of the loan is higher than the interest rate. (And this is more significant on a small mortgage; it doesn't cost twice as much to app...
by grabiner
Sun Sep 20, 2020 11:45 pm
Forum: Personal Finance (Not Investing)
Topic: The conundrum of Pennsylvania 401K contributors who are in no way "married" to the state for retirement. What to do?
Replies: 14
Views: 1403

Re: The conundrum of Pennsylvania 401K contributors who are in no way "married" to the state for retirement. What to do?

Even if you retire in a state like NJ, if you keep your taxable income relatively low you will pay low bracket state taxes. New Jersey’s are below 2% at the lower brackets. NJ exempts all retirement income from taxation if you are over 62 and your gross income is under $100K (retirement exclusion l...
by grabiner
Sun Sep 20, 2020 9:52 pm
Forum: Personal Investments
Topic: Strategies for scenarios when using taxable with no EF
Replies: 25
Views: 1605

Re: Strategies for scenarios when using taxable with no EF

I keep almost no cash in my taxable account, just enough for current expenses with a small cushion. If I need to raise cash, I can sell stock in my taxable account, and if this is significant enough to require a rebalance, sell bonds in my employer plan to buy stocks. I haven't had an emergency, but...
by grabiner
Sun Sep 20, 2020 9:31 pm
Forum: Personal Investments
Topic: Rebalancing, taxes and Retirement Accounts
Replies: 7
Views: 601

Re: Rebalancing, taxes and Retirement Accounts

See Tax-adjusted asset allocation on the wiki for how to do this. I expect to retire at a 31% marginal tax rate, so I count $10,000 in my traditional employer plan equivalent to $6900 in my Roth IRA. Since I hold all my real estate in the Roth IRA (Vanguard REIT and Global Real Estate Index), this h...
by grabiner
Sun Sep 20, 2020 8:06 pm
Forum: Personal Investments
Topic: Is there a tax-efficient, one-fund portfolio?
Replies: 25
Views: 2265

Re: Is there a tax-efficient, one-fund portfolio?

I have a second question. If you go with say, VTSAX, how do you keep your portfolio in balance if you're maxing out all your tax-advantaged accounts and still have excess cash to invest in brokerage? You can hold the same fund (or the same asset class) in both taxable and tax-advantaged. If your ta...
by grabiner
Sun Sep 20, 2020 7:49 pm
Forum: Personal Investments
Topic: Roth IRA withdrawal question for parent nearing retirement
Replies: 18
Views: 1136

Re: Roth IRA withdrawal question for parent nearing retirement

And since she has a 401(k), she can withdraw from that for part of her retirement expenses; she should have no need to touch any Roth earnings within the first four years. (She may still want to withdraw Roth contributions, depending on the tax situation.)
by grabiner
Sun Sep 20, 2020 7:47 pm
Forum: Personal Investments
Topic: Mortgage as a negative Bond
Replies: 48
Views: 8981

Re: Mortgage as a negative Bond

Resurrect. I understand the reasoning behind paying down debt with higher interest (mortgage) rather than loaning at lower interest (bond.) In this thread it says "if risk free return on bonds is lower, pay down mortgage." Isn't the risk free return when mortgages are written ALWAYS lower than the ...
by grabiner
Fri Sep 18, 2020 5:19 pm
Forum: Personal Investments
Topic: Invest quickly or save as cash for IRA investments?
Replies: 6
Views: 471

Re: Invest quickly or save as cash for IRA investments?

Hi David - Thanks for your response! Please clarify what you mean by that the transfer shouldn't be viewed as a short-term stock investment - are you referring to short-term vs long -term capital gains? It isn't a good idea to invest in the stock market for a short time period, because of the risk....
by grabiner
Fri Sep 18, 2020 5:17 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Index and IShares GOVT
Replies: 11
Views: 890

Re: Total Bond Index and IShares GOVT

Morningstar article indicates that it's both treasury and corporate bonds that have caused duration of total bond to increase. The Treasury and corporate markets didn't just grow and squelch the mortgage market, though--they underwent fundamental change, turbocharging the impact of their growth. If...
by grabiner
Fri Sep 18, 2020 2:17 pm
Forum: Personal Investments
Topic: Roth IRA withdrawal question for parent nearing retirement
Replies: 18
Views: 1136

Re: Roth IRA withdrawal question for parent nearing retirement

So it pretty much becomes a traditional IRA if you withdraw the earnings before 5 years. I'm believe no rules like this exist for traditional IRA in terms of withdrawal of earnings. Assuming that my mom may utilize the money (including earnings) within 5years, it seems more beneficial to use a trad...
by grabiner
Fri Sep 18, 2020 2:08 pm
Forum: Investing - Theory, News & General
Topic: Total Bond Index and IShares GOVT
Replies: 11
Views: 890

Re: Total Bond Index and IShares GOVT

If a company is in trouble and needs to borrow more money, it holds a larger share of the corporate bond market cap. The opposing force to the company’s desire to issue more debt is the willingness of investors to purchase that debt. A company “in trouble” generally sees the same thing happen to th...
by grabiner
Fri Sep 18, 2020 1:43 pm
Forum: Personal Investments
Topic: Invest quickly or save as cash for IRA investments?
Replies: 6
Views: 471

Re: Invest quickly or save as cash for IRA investments?

You might as well invest the money now; it is better to have it invested in something rather than letting it sit in cash. When you can make your contributions, you can sell your taxable investments to make similar investments in an IRA. Even though you may pay tax on the gains, it is likely to be a ...
by grabiner
Fri Sep 18, 2020 1:35 pm
Forum: Personal Investments
Topic: Roth IRA withdrawal question for parent nearing retirement
Replies: 18
Views: 1136

Re: Roth IRA withdrawal question for parent nearing retirement

So it pretty much becomes a traditional IRA if you withdraw the earnings before 5 years. I'm believe no rules like this exist for traditional IRA in terms of withdrawal of earnings. Assuming that my mom may utilize the money (including earnings) within 5years, it seems more beneficial to use a trad...
by grabiner
Fri Sep 18, 2020 10:59 am
Forum: Investing - Theory, News & General
Topic: VTI vs VOO vs VV tax impact?
Replies: 20
Views: 1537

Re: VTI vs VOO vs VV tax impact?

Before working things out to 6 decimal places, one needs to recognize that the index funds being compared have different benchmarks. The variation in returns of benchmark indexes that supposedly cover the "same" segment of the market is more than an order of magnitude greater than the differences s...
by grabiner
Thu Sep 17, 2020 7:29 pm
Forum: Investing - Theory, News & General
Topic: VTI vs VOO vs VV tax impact?
Replies: 20
Views: 1537

Re: VTI vs VOO vs VV tax impact?

I prefer Morningstar's 3-year Tax Cost Ratio. Example: https://www.morningstar.com/etfs/arcx/vti/price Morningstar doesn't always know about qualified dividends (as you can see because it often gives different tax costs for ETF and Admiral shares of the same Vanguard fund); it's better to get tax i...
by grabiner
Wed Sep 16, 2020 6:59 pm
Forum: Personal Finance (Not Investing)
Topic: Pay cash for condominium?
Replies: 4
Views: 826

Re: Pay cash for condominium?

Thanks. But selling only bonds would give us an asset allocation in our "retirement accounts" that is much heavier in equities than what we have now. Shouldn't we sell both stocks and bonds so as to keep our current allocation? You may choose to do this; if so, you are making a fair trade-off betwe...
by grabiner
Wed Sep 16, 2020 6:41 pm
Forum: Investing - Theory, News & General
Topic: VTI vs VOO vs VV tax impact?
Replies: 20
Views: 1537

Re: VTI vs VOO vs VV tax impact?

I prefer Morningstar's 3-year Tax Cost Ratio. Example: https://www.morningstar.com/etfs/arcx/vti/price Morningstar doesn't always know about qualified dividends (as you can see because it often gives different tax costs for ETF and Admiral shares of the same Vanguard fund); it's better to get tax i...
by grabiner
Tue Sep 15, 2020 10:54 pm
Forum: Personal Investments
Topic: Huge loss on FDX single stock
Replies: 94
Views: 7113

Re: Huge loss on FDX single stock

Did you sell yet? If not then hear me out. It seems like the chorus of "sell" is loud. However before you rush into selling a loser stock, ask yourself these questions: 1. Do you need the money now or in the very near future? 2. How does the outlook of the company look? 3. If the company goes bankr...
by grabiner
Tue Sep 15, 2020 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: Pay cash for condominium?
Replies: 4
Views: 826

Re: Pay cash for condominium?

If you sell bonds from the IRA, you lose the low-risk return on those bonds. But if you use those bonds to avoid taking out a mortgage, you gain the risk-free return of the mortgage rate. Therefore, even if you could qualify for the mortgage, you might be better off selling bonds to pay cash for the...
by grabiner
Tue Sep 15, 2020 8:34 pm
Forum: Investing - Theory, News & General
Topic: VTI vs VOO vs VV tax impact?
Replies: 20
Views: 1537

Re: VTI vs VOO vs VV tax impact?

Many of the dividends which are not qualified are Qualified Business Income, which are only 80% taxable; this may be only slightly worse than qualified dividends, depending on your tax situation. For example, in a 22% tax bracket, you pay 15% tax on qualified dividends, and 17.6% on non-qualified QB...
by grabiner
Tue Sep 15, 2020 8:26 pm
Forum: Personal Investments
Topic: Use Brokerage Account to Pay down mortgage OR purchase Roth IRAs
Replies: 6
Views: 445

Re: Use Brokerage Account to Pay down mortgage OR purchase Roth IRAs

Since you already have a Roth IRA, you can keep your emergency fund there, keeping that part of your portfolio in low-risk bond funds. Contributions to a Roth IRA can be withdrawn tax-free and penalty-free at any time. This will allow you to take more out of your taxable account to pay down the mort...
by grabiner
Tue Sep 15, 2020 8:20 pm
Forum: Personal Investments
Topic: Huge loss on FDX single stock
Replies: 94
Views: 7113

Re: Huge loss on FDX single stock

Did you sell yet? If not then hear me out. It seems like the chorus of "sell" is loud. However before you rush into selling a loser stock, ask yourself these questions: 1. Do you need the money now or in the very near future? 2. How does the outlook of the company look? 3. If the company goes bankr...
by grabiner
Mon Sep 14, 2020 8:12 pm
Forum: Personal Investments
Topic: Starting Late
Replies: 27
Views: 3976

Re: Starting Late

This may be overly forward, but...you have $+160k of non-mortgage debt and a very high mortgage rate. Worrying about an investment portfolio right now is putting the cart before the horse. You need to dedicate your financial energy towards reducing your debt burden. Investments will come...but you ...
by grabiner
Mon Sep 14, 2020 8:02 pm
Forum: Personal Investments
Topic: Allocation at RMD
Replies: 17
Views: 1208

Re: Allocation at RMD

Since you have the TSP, you have a better bond fund there than you can get at retail. Therefore, it makes sense to put as much of your bond allocation as possible in the G fund. If the TSP is all G fund, you can take an RMD from the TSP, and then add an equal amount to another bond fund in either yo...
by grabiner
Mon Sep 14, 2020 7:57 pm
Forum: Personal Investments
Topic: Inheriting TSP from father, how to open inherited IRA?
Replies: 11
Views: 714

Re: Inheriting TSP from father, how to open inherited IRA?

The TSP funds will be sold and the money transferred as cash. Then you buy whatever you want. I don't know how to answer how Vanguard makes money from the inherited IRA. As I understand it, you will pay the cost of the funds you buy. Vanguard is not in the business of "making money". But the funds ...
by grabiner
Mon Sep 14, 2020 7:53 pm
Forum: Personal Investments
Topic: Inheriting TSP from father, how to open inherited IRA?
Replies: 11
Views: 714

Re: Inheriting TSP from father, how to open inherited IRA?

I just need to understand how to calculate the "witholdings" for tax purposes from the IRA or if i should just hold back 22% (my tax bracket) Withholdings only need to be made when you withdraw from the inherited IRA. The withdrawals will be taxable, so you need to have withholding or estimated tax...
by grabiner
Mon Sep 14, 2020 7:41 pm
Forum: Personal Investments
Topic: Is there a tax-efficient, one-fund portfolio?
Replies: 25
Views: 2265

Re: Is there a tax-efficient, one-fund portfolio?

If you want to hold a single balanced fund, I prefer Vanguard's Target Retirement funds. The advantage over LIfeStrategy is that the TR funds change allocation according to your age, and do most of it with new money, avoiding capital gains. In contrast, if you use LifeStrategy Growth, you expect to...
by grabiner
Mon Sep 14, 2020 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off sub 4% mortgage interest rate early
Replies: 147
Views: 11010

Re: Paying off sub 4% mortgage interest rate early

Where I get hung up a bit is on the fact that a house is not a risk-free asset, and it is one that is almost always owned via leverage. Thus, paying down the mortgage isn’t necessarily a “risk free” proposition in terms of ultimately realizing the return on your investment, which only happens after...
by grabiner
Sun Sep 13, 2020 10:07 pm
Forum: Personal Investments
Topic: What to do with monthly surplus?
Replies: 29
Views: 4018

Re: What to do with monthly surplus?

Vanguard Target Retirement X Fund in taxable, where X is the year you expect to need the money. I don't recommend this fund in taxable. Given your tax situation, you might prefer to hold bonds or stocks in taxable. In a high tax bracket, if you hold bonds in taxable, they should be munis. And even ...
by grabiner
Sun Sep 13, 2020 7:29 pm
Forum: Personal Investments
Topic: What to do with monthly surplus?
Replies: 29
Views: 4018

Re: What to do with monthly surplus?

+1. If you include an international total market in your portfolio, put it the taxable account so you can deduct the dividends on your income taxes. I think you mean deduct the foreign taxes paid, not the dividends. See link: https://www.bogleheads.org/wiki/Foreign_tax_credit Check your own tax sit...
by grabiner
Sun Sep 13, 2020 7:21 pm
Forum: Personal Investments
Topic: Pay Off Rental Property or Keep it Leveraged?
Replies: 10
Views: 738

Re: Pay Off Rental Property or Keep it Leveraged?

If you don't need the liquidity, paying down the rental loan gives you a risk-free 5.8% return, probably 80% taxable (qualified business income). That is much better than you can get on any low-risk investment, so it's worth doing. If you would otherwise be investing in stocks, you can still do this...
by grabiner
Sun Sep 13, 2020 7:12 pm
Forum: Personal Investments
Topic: Energy Sector ETF - Hold or Sell?
Replies: 19
Views: 961

Re: Energy Sector ETF - Hold or Sell?

Since this is in a taxable account, selling it for the tax loss and buying some other stock fund makes sense. The reason this is particularly good for you is that you will come out ahead even if the replacement stock does no better than the ETF you hold (which is a reasonable assumption). With the t...
by grabiner
Sun Sep 13, 2020 4:22 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off sub 4% mortgage interest rate early
Replies: 147
Views: 11010

Re: Paying off sub 4% mortgage interest rate early

Unless you are walking away from your home, the value of your collateral has no difference on what you won to the bank. Also that is not my analysis for my house but a simple analysis to make my point which you still miss. You are totally missing the point. Let’s say you purchase a car worth $40,00...
by grabiner
Sun Sep 13, 2020 11:10 am
Forum: Personal Finance (Not Investing)
Topic: Paying off sub 4% mortgage interest rate early
Replies: 147
Views: 11010

Re: Paying off sub 4% mortgage interest rate early

Like I said above, pay off the mortgage when you are close to retirement if you plan on staying in the house. A paid off house and retirement is a pretty sweet deal. If you plan on selling the house, it is a wash. If you would rather pay down the mortgage ahead of sale, go for it. Personally, if I ...
by grabiner
Sat Sep 12, 2020 8:49 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off sub 4% mortgage interest rate early
Replies: 147
Views: 11010

Re: Paying off sub 4% mortgage interest rate early

I paid a 2.625% 9-year mortgage (1.78% after state and federal tax) completely off in March and April of this year. However, it wasn't worth even paying down until March; I had been making the minimum payment for six years. What changed is that interest rates dropped, so that I could earn more on mo...
by grabiner
Sat Sep 12, 2020 8:33 pm
Forum: Investing - Theory, News & General
Topic: I want to verify if FXNAX is the Fidelity Equivalent of Vanguard's VBTLX
Replies: 18
Views: 1167

Re: I want to verify if FXNAX is the Fidelity Equivalent of Vanguard's VBTLX

The way to check something like this is to look at the fund descriptions (say, from the prospectus). Both funds say, "This fund attempts to track the Barclays Capital Aggregate Bond Index", which implies that they are equivalent. (Two funds tracking different indexes are not equivalent, but they may...
by grabiner
Sat Sep 12, 2020 8:27 pm
Forum: Investing - Theory, News & General
Topic: Any further reason to hold DLS?
Replies: 32
Views: 2029

Re: Any further reason to hold DLS?

Not sure I am understanding what you are disagreeing with. Morningstar shows that the NAV of DLS in 2006 was around 60. The NAV in 2020 is 60. So, as far as I am concerned, the only money that I made with this over the last 14 years has been the dividends. And since DLS is dividend-weighted, that g...
by grabiner
Sat Sep 12, 2020 8:13 pm
Forum: Personal Investments
Topic: Best Time to Sell Stock
Replies: 4
Views: 591

Re: Best Time to Sell Stock

If your tax rate on long-term gains is the same this year and in the future, then there is a tax advantage for holding the stock as long as possible. If you sell the stock to buy something else, you pay tax on the gain now, so you can't reinvest quite as much money, and you will still pay tax on any...
by grabiner
Sat Sep 12, 2020 8:04 pm
Forum: Personal Investments
Topic: Checking my understanding of tax consequences in a taxable account
Replies: 7
Views: 682

Re: Checking my understanding of tax consequences in a taxable account

I am continuing my research into taxable investing with the intent of starting a taxable account after the first of the year. I'm looking at buying shares of FXAIX in this account and will have an initial investment of a few thousand and intend to put a few hundred in each month going forward. Acco...
by grabiner
Sat Sep 12, 2020 7:55 pm
Forum: Personal Investments
Topic: Buy and hold investor: when to sell?
Replies: 17
Views: 1194

Re: Buy and hold investor: when to sell?

The time to sell an investment is when the investment no longer meets your needs, or when you need to sell something in order to spend the money. An individual stock which is too large a percentage of your portfolio is a good example of an investment which no longer meets your needs; it increases yo...
by grabiner
Fri Sep 11, 2020 10:45 pm
Forum: Personal Investments
Topic: Is there a tax-efficient, one-fund portfolio?
Replies: 25
Views: 2265

Re: Is there a tax-efficient, one-fund portfolio?

If you want to hold a single balanced fund, I prefer Vanguard's Target Retirement funds. The advantage over LIfeStrategy is that the TR funds change allocation according to your age, and do most of it with new money, avoiding capital gains. In contrast, if you use LifeStrategy Growth, you expect to ...
by grabiner
Fri Sep 11, 2020 10:36 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 20078
Views: 2746333

Re: U.S. stocks in free fall

Does anyone know where all the money that's flowing out of the market during this correction is going? Treasuries have been relatively flat, as has gold. Are investors just moving to large cash positions, perhaps to combat uncertainty around the election? Money doesn't flow out of the market when t...
by grabiner
Fri Sep 11, 2020 10:32 pm
Forum: Personal Investments
Topic: Simplifying portfolio to a 4-fund tax efficient mix
Replies: 3
Views: 519

Re: Simplifying portfolio to a 4-fund tax efficient mix

In CA, in your high tax bracket (28.1% or 33.1% tax on qualified dividends), it is probably better to hold CA munis in taxable and stocks in tax-deferred rather than stocks in taxable and bonds in tax-deferred. (For diversification reasons, you may not want all your bonds in CA munis; half Vanguard ...
by grabiner
Fri Sep 11, 2020 10:16 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 20078
Views: 2746333

Re: U.S. stocks in free fall

Does anyone know where all the money that's flowing out of the market during this correction is going? Treasuries have been relatively flat, as has gold. Are investors just moving to large cash positions, perhaps to combat uncertainty around the election? Money doesn't flow out of the market when t...
by grabiner
Fri Sep 11, 2020 12:05 am
Forum: Personal Finance (Not Investing)
Topic: Income earned in NJ for an expat/NJ sourced income for nonresident - TAX ADVICE NEEDED
Replies: 7
Views: 441

Re: Income earned in NJ for an expat/NJ sourced income for nonresident - TAX ADVICE NEEDED

If I use a mailing address/address of record in another state, preferably at a rental property in say TX or FL, does this problem go away? Your mailing address doesn't determine whether you are a resident for tax purposes, nor does it affect what income is taxed as a non-resident. NJ, like most sta...
by grabiner
Thu Sep 10, 2020 6:12 pm
Forum: Personal Investments
Topic: Taxable account for a retirement
Replies: 10
Views: 2114

Re: Taxable account for a retirement

Can someone help me understand on how I can put vanguard total stock market & total international in a taxable account and the bonds inside my Roth IRA? This is my portfolio. VTSAX 70%, VTIAX 20%, VTBLX %10%. How I can rebalance my portfolio? Is my contribution unlimited in a taxable account? Asset...
by grabiner
Mon Sep 07, 2020 4:21 pm
Forum: Investing - Theory, News & General
Topic: cash covered put, TLH and wash sale
Replies: 1
Views: 138

Re: cash covered put, TLH and wash sale

Here is Fairmark's guide to Wash Sales and Options Selling a put is considered a purchase for wash sale purposes if the put is deep in the money. Also, selling one put and buying another may be a wash sale. As usual, there isn't a clear definition of what is "deep in the money" or when two puts are ...
by grabiner
Mon Sep 07, 2020 4:07 pm
Forum: Personal Investments
Topic: Which shares to sell in taxable?
Replies: 6
Views: 496

Re: Which shares to sell in taxable?

Suppose I am considering making a medium-large purchase by selling shares of VTSAX held in my taxable account. I have been buying VTSAX with my biweekly paycheck so there are many different tax lots to choose from. I can envision two situations that would result in similar tax bills: one where I se...