Search found 23956 matches

by grabiner
Wed Jun 19, 2019 10:33 pm
Forum: Investing - Theory, News & General
Topic: Which category to liquidate to cover a margin
Replies: 7
Views: 588

Re: Which category to liquidate to cover a margin

Do you have a 401(k) or IRA? If so, you may be able to adjust your overall allocation. For example, if you sell a bond fund to minimize taxes, but would prefer to sell stock, you can move an equal amount from stock to bonds in your 401(k). This is how I view the issue of paying off my mortgage. If I...
by grabiner
Wed Jun 19, 2019 10:14 pm
Forum: Investing - Theory, News & General
Topic: What rating bonds are considered investment grade ?
Replies: 21
Views: 1095

Re: What rating bonds are considered investment grade ?

So, how would an AAA corporate bond compare with an AA rated or A rated government bond (ie from a country other than the US, where the bond is rated AA or A). The stated intention of rating agencies is that a certain rating class (AAA, AA, etc.) means the same thing, regardless of issuing entity. ...
by grabiner
Wed Jun 19, 2019 9:59 pm
Forum: Personal Investments
Topic: Misunderstanding ETF, or portfolio analyzer broken?
Replies: 3
Views: 260

Re: Misunderstanding ETF, or portfolio analyzer broken?

The Portfolio Watch tool is horribly wrong. Sorry. Basically, it will usually fail to break down a non-Vanguard fund into any kind of subcategories and will classify the entire holding into one category. It fails even with many Vanguard funds. It views my Vanguard REIT Index as 100% mid-cap value (...
by grabiner
Wed Jun 19, 2019 9:56 pm
Forum: Personal Investments
Topic: Pay Down Mortgage vs. Investing
Replies: 8
Views: 1272

Re: Pay Down Mortgage vs. Investing

See Paying down loans versus investing on the wiki. Paying down that investment loan is a risk-free 4.125% return. Since it is an investment property, the interest is tax-deductible (or 80% tax-deductible if the income is qualified business income), so it is a 4.125% taxable return. That is still be...
by grabiner
Wed Jun 19, 2019 9:49 pm
Forum: Personal Investments
Topic: Suggestion for updating "Asking Portfolio Questions" thread
Replies: 156
Views: 16934

Re: Suggestion for updating "Asking Portfolio Questions" thread

I think the tax/AGI thing is (at least for me) to gain insight into whether suggesting a tax-exempt bond fund in taxable is worthwhile or not. Also knowing whether poster is in a state with a state-tax-exempt bond fund may be helpful, too. I'm thinking mostly NY & CA, but there are others. And ther...
by grabiner
Wed Jun 19, 2019 9:33 pm
Forum: Personal Finance (Not Investing)
Topic: Article on high deductible health plans - and the math
Replies: 118
Views: 7990

Re: Article on high deductible health plans - and the math

Apologies if someone linked it already but the NY Times published a helpful article in 2017 that I used to do the math and ultimately go with a HDHP + HSA. https://www.nytimes.com/2017/11/04/business/which-health-plan-is-cheaper.html The NY Times comparison is the same one I frequently make (start ...
by grabiner
Wed Jun 19, 2019 9:29 pm
Forum: Personal Finance (Not Investing)
Topic: Waiting to prepay mortgage until you can pay the whole thing off?
Replies: 28
Views: 3115

Re: Waiting to prepay mortgage until you can pay the whole thing off?

If the stock market stays where it is and interest rates drop, it would be worth my paying down the mortgage. As usual, appreciate the thorough walk through the logic. In the situation where rates fall, would you first look to refinance options before moving to make a pre-payment? While this would ...
by grabiner
Tue Jun 18, 2019 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Waiting to prepay mortgage until you can pay the whole thing off?
Replies: 28
Views: 3115

Re: Waiting to prepay mortgage until you can pay the whole thing off?

Even if liquidity isn't an issue, it can be worth waiting to prepay, because of the duration effect. Suppose that you have 10 years left on your mortgage. Making a small additional payment would be analogous to buying a 10-year, zero-coupon bond, as you don't get any benefit until the final payment ...
by grabiner
Tue Jun 18, 2019 8:18 pm
Forum: Investing - Theory, News & General
Topic: A thought on mortgage payoff vs investing
Replies: 25
Views: 2465

Re: A thought on mortgage payoff vs investing

As I’ve read quite a few different mortgage payoff vs investing posts I had a thought about the balance between the both. Curious as to what others think in order to avoid being conflicted with all or nothing. To establish a baseline, let’s assume mortgage is 3-4.5% and all tax advantaged accounts ...
by grabiner
Tue Jun 18, 2019 8:05 pm
Forum: Personal Investments
Topic: Tax-managed funds
Replies: 4
Views: 600

Re: Tax-managed funds

I've read the tax-managed fund comparison wiki but it's not entirely clear to me if the Tax-Managed Capital Appreciation Fund (VTCLX) makes sense for me given my tax bracket (35% federal / 9.3% state). A combination of 90% VTCLX and 10% VTMSX has a higher percentage of qualified dividends than VTSA...
by grabiner
Tue Jun 18, 2019 8:01 pm
Forum: Personal Investments
Topic: How Much in Muni Funds?
Replies: 6
Views: 808

Re: How Much in Muni Funds?

In NJ, Treasury bonds are particularly attractive, as NJ doesn't tax capital gains on them. As an early retiree, you might invest in a TIPS fund to ensure that this part of your portfolio tracks inflation. Another advantage of Treasuries in a high tax bracket is that they are low-risk bonds, and thu...
by grabiner
Tue Jun 18, 2019 7:57 pm
Forum: Personal Investments
Topic: Cashing out an inherited IRA or not?
Replies: 11
Views: 1081

Re: Cashing out an inherited IRA or not?

When you take the money out, it may be more efficient for tax purposes to do it over several years, so that you never bump your income by $200k in a single year. Therefore, even if you do plan to cash out the IRA, it may make sense to take out a loan, and pay it off quickly from the IRA, withdrawin...
by grabiner
Tue Jun 18, 2019 7:54 pm
Forum: Personal Investments
Topic: charitable gift account ?
Replies: 13
Views: 719

Re: charitable gift account ?

A charitable gift annuity is not as attractive as an SPIA, but it can be a beneficial way to benefit a charity while retaining a cash flow from the asset transferred. The direct comparison to an SPIA isn't quite fair. A better comparison is between the charitable gift annuity and the combination of...
by grabiner
Tue Jun 18, 2019 7:47 pm
Forum: Personal Finance (Not Investing)
Topic: Article on high deductible health plans - and the math
Replies: 118
Views: 7990

Re: Article on high deductible health plans - and the math

The federal government does, and it has several plans with large national networks, as well as HMOs available. In addition, the federal government allows direct comparisons, as every insurer which offers an HDHP offers a conventional plan as well. And the way the government subsidizes health plans ...
by grabiner
Mon Jun 17, 2019 9:54 pm
Forum: Personal Investments
Topic: IRA and taxes. Is a taxable account better?
Replies: 8
Views: 662

Re: IRA and taxes. Is a taxable account better?

I just read an article on a popular financial blog that has me concerned. It stated that a tax deferred account is taxed at a marginal rate upon withdrawal. My understanding was that the GAINS from a tax deferred account are taxed at marginal rates. If your IRA contributions were deducted (or if th...
by grabiner
Mon Jun 17, 2019 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Bequeathing an HSA
Replies: 7
Views: 714

Re: Bequeathing an HSA

If you are charitably inclined, an HSA is a good account to leave to charity, since it would otherwise become taxable immediately. If your heirs inherit an IRA, they will have to pay taxes on it as well, but they can spread the taxes over time and get tax-deferred growth in the meantime.
by grabiner
Mon Jun 17, 2019 6:16 pm
Forum: Personal Investments
Topic: Reorganizing taxable account for home down payment
Replies: 9
Views: 711

Re: Reorganizing taxable account for home down payment

How large is the difference in tax liability with a total stock market fund versus a total stock market ETF, assuming they perform the same? Zero with Vanguard (where they are share classes of the same fund), and not much even with Fidelity because total-market funds don't sell much stock. In the l...
by grabiner
Sun Jun 16, 2019 7:17 pm
Forum: Personal Investments
Topic: Convert my VG mutual funds to ETFs to save basis points?
Replies: 39
Views: 2353

Re: Convert my VG mutual funds to ETFs to save basis points?

Another issue, at least for some ETFs, is the time to trade. I don't disagree about the hassles of trading ETFs, but the plan is to have the ETFs sit for decades. Even as a long-term holder, you will need to trade again every time you have new money, and some additional times to harvest losses in a...
by grabiner
Sun Jun 16, 2019 6:51 pm
Forum: Personal Finance (Not Investing)
Topic: Need advice - refinancing from 30 yr. to 10 yr. fixed mortgage
Replies: 39
Views: 2268

Re: Need advice - refinancing from 30 yr. to 10 yr. fixed mortgage

Thanks all. Even though we plan to pay off our mortgage in less than 10 years, we still want some breathing room and not interested in a shorter term loan. Spoke with a trusted CPA who reviewed our situation and stated “that of the $21,459 mortgage interest paid in 2018, it appears only $8,679 prov...
by grabiner
Sun Jun 16, 2019 6:39 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: High-yield bonds behave like half bonds, half large value stocks
Replies: 2
Views: 465

Rekenthaler: High-yield bonds behave like half bonds, half large value stocks

I have often posted that higb-yield bonds should be treated like half bonds and half stocks in your portfolio. John Rekethaler, on Morningstar, did a more thorough analysis: Are High-Yield Bonds Necessary? Since most companies issuing high-yield bonds are large-cap value companies, high-yield bonds ...
by grabiner
Sun Jun 16, 2019 6:26 pm
Forum: Personal Finance (Not Investing)
Topic: Need advice - refinancing from 30 yr. to 10 yr. fixed mortgage
Replies: 39
Views: 2268

Re: Need advice - refinancing from 30 yr. to 10 yr. fixed mortgage

Are you able to itemize your mortage interest? If so then you would lose $11,000 in tax deductions so your net savings might be more like $8,000 depending on your tax bracket. If you subtract the $3,000 cost to refinance then that is down to $5,000. Some of the $3000 refinancing charge may also be ...
by grabiner
Sun Jun 16, 2019 6:24 pm
Forum: Personal Investments
Topic: Convert my VG mutual funds to ETFs to save basis points?
Replies: 39
Views: 2353

Re: Convert my VG mutual funds to ETFs to save basis points?

Another issue, at least for some ETFs, is the time to trade. I hold Vanguard FTSE All-World Ex-US as an ETF because it had no Admiral shares until recently, and thus there was a large expense difference. The problem with the ETF is that it has low volume, and thus I often have to wait for the spread...
by grabiner
Sun Jun 16, 2019 6:15 pm
Forum: Personal Investments
Topic: Reorganizing taxable account for home down payment
Replies: 9
Views: 711

Re: Reorganizing taxable account for home down payment

I can post the gain/loss from each fund if it's important. It's only important if there is one fund with such a large gain that you want to hold it forever rather than selling it now, which is unlikely for these funds. Why choose a short term bond fund versus an intermediate or a total US bond inde...
by grabiner
Sun Jun 16, 2019 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: Tax win-win - Appreciated shares contributed to a Donor Advised Fund (DAF)
Replies: 6
Views: 460

Re: Tax win-win - Appreciated shares contributed to a Donor Advised Fund (DAF)

You can bunch deductions, but be aware of the deduction limit of 30% of your AGI for appreciated stock. From Fidelity's website: When you donate cash to a public charity, you can generally deduct up to 60% of your adjusted gross income. Provided you've held them for more than a year, appreciated as...
by grabiner
Sun Jun 16, 2019 4:23 pm
Forum: Investing - Theory, News & General
Topic: For the wiki: HSA as an emergency fund
Replies: 15
Views: 1432

Re: For the wiki: HSA as an emergency fund

This might muddy the waters a bit, but the idea of paying medical expenses OOP and leaving your reimbursements inside the HSA as EF is very useful when filing the FAFSA. There is an Asset Protection amount on the FAFSA, that is subtracted from taxable assets before the Available Assets are calculat...
by grabiner
Sun Jun 16, 2019 4:15 pm
Forum: Personal Investments
Topic: ETF Tax Efficiency - Should I switch?
Replies: 5
Views: 631

Re: ETF Tax Efficiency - Should I switch?

See Paying a tax cost to switch funds on the wiki. You can estimate the extra tax cost you would pay every year for keeping your current index fund, versus the capital-gains tax you would pay if you sell it, and decide whether switching is worthwhile. (Usually, switching is worth while, but a large-...
by grabiner
Sun Jun 16, 2019 4:10 pm
Forum: Personal Investments
Topic: Convert my VG mutual funds to ETFs to save basis points?
Replies: 39
Views: 2353

Re: Convert my VG mutual funds to ETFs to save basis points?

It's interesting that: 1) fractional shares of ETFs can be bought at Vanguard; Fractional ETF shares can be created by conversion, or by dividend reinvestment, but they can't be bought normally. The only way to dispose of a fractional share is to sell your entire balance; any fractional shares will...
by grabiner
Sun Jun 16, 2019 4:05 pm
Forum: Personal Investments
Topic: Reorganizing taxable account for home down payment
Replies: 9
Views: 711

Re: Reorganizing taxable account for home down payment

Welcome to the forum! I don't like the advisor's proposed portfolio, which is too complex and has several expensive funds. You can get a fine portfolio at Fidelity paying less than 0.1% rather than Fidelity's 1.38%, with just three funds: Fidelity Total Stock Market Index, Fidelity Total Internation...
by grabiner
Sun Jun 16, 2019 3:47 pm
Forum: Personal Investments
Topic: Switch American Funds ira's to Vanguard.
Replies: 3
Views: 342

Re: Switch American Funds ira's to Vanguard.

Whether you move from American to Vanguard is independent of what you should do with the funds. If you switch to Vanguard, your portfolio is currently 60% stock, and that is the right risk level for you, then you can move 60% of the money to a Vanguard stock fund and 40% to a Vanguard bond fund. If ...
by grabiner
Sun Jun 16, 2019 3:43 pm
Forum: Personal Investments
Topic: For those of you who have a factor diversified portfolio, what is yours?
Replies: 34
Views: 2200

Re: For those of you who have a factor diversified portfolio, what is yours?

I overweight small and value, but not other factors. For US stock, I have 1/8 LG, 3/8 LV, 1/8 SG, 3/8 SV, with large defined as the top 80%, and value defined as the lower half of P/B or P/E (corresponding to the split in traditional value indexes, although my value is held in Vanguard's VFMF). This...
by grabiner
Sun Jun 16, 2019 8:51 am
Forum: Personal Finance (Not Investing)
Topic: Article on high deductible health plans - and the math
Replies: 118
Views: 7990

Re: Article on high deductible health plans - and the math

I actually heard a version of this argument a few years ago on the radio in DC during the federal goverment's open season. One insurer which didn't offer an HDHP said, "Could you afford to pay the $3000 deductible with an HDHP?" In fact, the HDHP with a $3000 deductible cost $1500 less than this co...
by grabiner
Sat Jun 15, 2019 4:28 pm
Forum: Personal Investments
Topic: Incentive for choosing traditional over Roth IRA in Pennsylvania?
Replies: 7
Views: 676

Re: Incentive for choosing traditional over Roth IRA in Pennsylvania?

How would this apply to 401K’s in PA? Traditional vs Roth. The same? From a web search Pennsylvania's tax treatment of 401(k) plans is essentially the opposite from the federal system's. In Pennsylvania, your 401(k) contributions are fully taxable in the year you make them. Investment profits are s...
by grabiner
Fri Jun 14, 2019 10:10 pm
Forum: Personal Finance (Not Investing)
Topic: Article on high deductible health plans - and the math
Replies: 118
Views: 7990

Re: Article on high deductible health plans - and the math

The other problem with HDHPs, which was emphasized in the article, is that people with HDHPs are discouraged from using medical services, whether those services should be used or not. Yes, and sadly, if you bring up anything during the "free" annual physical, you are almost always billed for a sepa...
by grabiner
Fri Jun 14, 2019 10:03 pm
Forum: Investing - Theory, News & General
Topic: Actually calculating costs basis over 40 year period
Replies: 6
Views: 586

Re: Actually calculating costs basis over 40 year period

You keep a spreadsheet (or use accounting software, which does the equivalent). Here is a link to several of my spreadsheets You don't need to pay for Microsoft Office; these spreadsheets work fine on OpenOffice.
by grabiner
Fri Jun 14, 2019 9:50 pm
Forum: Investing - Theory, News & General
Topic: please educate me on bond funds
Replies: 12
Views: 1511

Re: please educate me on bond funds

My $1/year explanation in post is a great example. A bond paying $1/year for $10 is a 10% yield. If new bonds offer 20% then the NAV (resale price of the originally $10 bond) will go down to $5. The $1/year payout is fixed but now that it costs $5 to get it, the yield has risen to 20% to match newl...
by grabiner
Fri Jun 14, 2019 9:41 pm
Forum: Investing - Theory, News & General
Topic: Negative Duration Bond ETF
Replies: 13
Views: 1491

Re: Negative Duration Bond ETF

What is the list of negative duration bonds? How can a common investor using E*Trade create one? From what I understand, a negative duration bond will actually increase in value if interest rates go up (the opposite of 'normal' bond behavior). You can't buy a negative-duration bond directly. An act...
by grabiner
Fri Jun 14, 2019 9:26 pm
Forum: Personal Investments
Topic: Higher dividend VG MF than VTSAX ? [Vanguard Mutual Fund]
Replies: 20
Views: 1527

Re: Higher dividend VG MF than VTSAX ?

Thank you people for all the explanations. More studying to do. What other funds do you guys own other than VTSAX ? BTW do you all tell the dividends to reinvest ? I currently use reinvest in my IRA. But in taxable account, would it be really messy at selling time to do taxes for sell basis when so...
by grabiner
Fri Jun 14, 2019 9:20 pm
Forum: Personal Investments
Topic: Incentive for choosing traditional over Roth IRA in Pennsylvania?
Replies: 7
Views: 676

Re: Incentive for choosing traditional over Roth IRA in Pennsylvania?

What is your marginal Fed Rate compared to PA rate of 3 .07%? Traditional still reduces your federal tax so it is beneficial as it offsets the state income tax. Roth gives you no tax benefit in the present. And this is offset by the tax rate in retirement. If you will retire at the same federal mar...
by grabiner
Fri Jun 14, 2019 9:15 pm
Forum: Personal Investments
Topic: Max out 401k or TSP
Replies: 20
Views: 979

Re: Max out 401k or TSP

Bond and S&P expenses in 401k look fine but drop the global, that’s a ripoff. Look at your portfolio allocation as one big pie and hold international elsewhere. And hold bonds in the TSP as well; the 401(k) bond fund is essentially equivalent to the TSP F fund, but you have the G fund which has no ...
by grabiner
Fri Jun 14, 2019 9:12 pm
Forum: Personal Finance (Not Investing)
Topic: Article on high deductible health plans - and the math
Replies: 118
Views: 7990

Re: Article on high deductible health plans - and the math

This article is not primarily about the math, but about human behavior. The math is usually in favor of high-deductible plans, but the way people use them is detrimental to both their health and finances. Suppose you have the choice between an HDHP costing $7000 per year with a $3000 deductible, or ...
by grabiner
Fri Jun 14, 2019 7:20 pm
Forum: Investing - Theory, News & General
Topic: When to sell and buy funds or stocks
Replies: 9
Views: 1556

Re: When to sell and buy funds or stocks

Suppose that your stock gained 6% annually. The 20-year-old lot, now worth $10000, has a basis of $3118. The 15-year-old lot, also worth $10000, has a basis of $4173. On your current sale, you have a capital gain of $5827 if you sell the newer lot, and $6882 if you sell the older lot. Then, when yo...
by grabiner
Thu Jun 13, 2019 8:04 pm
Forum: Personal Investments
Topic: Vanguard Backdoor Roth IRA Monthly Automatic Investments
Replies: 5
Views: 415

Re: Vanguard Backdoor Roth IRA Monthly Automatic Investments

I have seen in fact threads that brag “I contributed to Roth IRA for 20xx already, anyone else?” On January 2nd This depends on having the money available. I always have the money available because I have a large taxable account, and accumulate my December dividends in my money-market fund. On Janu...
by grabiner
Thu Jun 13, 2019 7:56 pm
Forum: Investing - Theory, News & General
Topic: When to sell and buy funds or stocks
Replies: 9
Views: 1556

Re: When to sell and buy funds or stocks

In many cases it's not a realistic option, but there can be exceptions where it would be handy to take this into consideration What about if you have the 1999 lots and 2004 lots, and whatever you buy, and you plan to sell the replacement the same year? Given enough time, selling the 2004 lot should...
by grabiner
Wed Jun 12, 2019 11:04 pm
Forum: Investing - Theory, News & General
Topic: Investing or Tax Advice (not determined)
Replies: 8
Views: 558

Re: Investing or Tax Advice (not determined)

Also, we are thinking of using a highly appreciated stock in a taxed account for a charitable entity, or to write check from taxed cash, or do a QCD. Advantages? Disadvantages? Giving the appreciated stock is better than giving cash, as long as you stay under the 30% of AGI deduction limit for givi...
by grabiner
Wed Jun 12, 2019 10:46 pm
Forum: Personal Investments
Topic: Investment Help Needed for a Friend
Replies: 10
Views: 1192

Re: Investment Help Needed for a Friend

Tax Rate: 12% Federal, 9% State State of Residence: CA You''ll need to recheck these numbers. The bottom of the 9.3% CA tax bracket is well above the top of the 12% federal tax bracket, so unless your friend has much higher CA than federal income (HSA contribution and a lot of income from the HSA? ...
by grabiner
Wed Jun 12, 2019 10:35 pm
Forum: Personal Investments
Topic: Inheritance quadrupled my portfolio--I need advice
Replies: 13
Views: 2905

Re: Inheritance quadrupled my portfolio--I need advice

4.) Should I start Social Security at 66 (“full retirement age”) or wait until 70 when my payments would be larger? Obviously this affects the previous question as Social Security and my pension will give me about 25% of my desired income annually. Assuming you are in good health, waiting until 70 ...
by grabiner
Wed Jun 12, 2019 10:25 pm
Forum: Personal Investments
Topic: High tax, short horizon, forthcoming home purchase, what to do?
Replies: 7
Views: 731

Re: High tax, short horizon, forthcoming home purchase, what to do?

Grabiner, thanks, that's a great point: the fraction of income that I'll keep for retirement in munis, whose duration is too short , does justify a longer bond duration elsewhere. Still, it feels grossly undiversified to go all-in on munis and their risks (e.g., looming pensions, and the current fa...
by grabiner
Wed Jun 12, 2019 10:17 pm
Forum: Personal Investments
Topic: Jack Bogle: Vanguard Balanced Index is "Very Tax Efficient Fund"
Replies: 13
Views: 2966

Re: Jack Bogle: Vanguard Balanced Index is "Very Tax Efficient Fund"

I own VBIAX as well and like it. It's a set it and forget it fund. Below is a comparison of the after-tax returns of VBIAX (1st column) and VTMFX - Tax Managed Balanced fund (2nd column). Comparing the total returns is not a fair comparison, since Balanced Index is 60% stock and Tax-Managed Balance...
by grabiner
Wed Jun 12, 2019 10:12 pm
Forum: Investing - Theory, News & General
Topic: When to sell and buy funds or stocks
Replies: 9
Views: 1556

Re: When to sell and buy funds or stocks

Everything that you say is right. But this is not my point. I'm trying to look at strategies whenever everything else is equal. For instance, if you are young and you have to rebalance on taxable. Better to sell funds that you got 1 year ago than the ones you got 10 years ago. A realistic example w...
by grabiner
Tue Jun 11, 2019 9:39 pm
Forum: Personal Investments
Topic: HSA investment advice
Replies: 25
Views: 2309

Re: HSA investment advice

Unless someone is too cash strapped to pay for medical expenses out of pocket and retain the receipts for later, then it makes sense to be very aggressive in an HSA. Put fixed income investments in tax-deferred accounts like a 401k or traditional IRA. You don't need to be cash-strapped to want to p...