Search found 21652 matches

by grabiner
Tue Jun 19, 2018 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Why pay cash for a car?
Replies: 230
Views: 26881

Re: Why pay cash for a car?

I’m of the same opinion. If I can get a loan for say 1.99% and if my investments are currently making say 9 or 10%, why would I pay cash for a car? Because of the risk involved. Paying off your car loan (or not taking it out in the first place) is a risk-free, tax-free 1.99% return, and you might p...
by grabiner
Tue Jun 19, 2018 7:00 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting
Replies: 24
Views: 1662

Re: Tax Gain Harvesting

Is anyone planning to do Tax Gain Harvest to take advantage of the new low tax rate? :moneybag The tax rates on long term capital gains have not changed. So there's no extra incentive for tax gain harvesting this year as opposed to last year. And it may actually be worse if you pay state taxes on t...
by grabiner
Tue Jun 19, 2018 6:58 pm
Forum: Investing - Theory, News & General
Topic: Seeking input from folks invested in Van. Tax Managed Balanced Fund
Replies: 10
Views: 867

Re: Seeking input from folks invested in Van. Tax Managed Balanced Fund

As to income from VTMBX, were they pretty consistent in the amount of tax exempt and the amount of taxable dividends from year to year? That's a good question. I don't have my mother's statements but glancing at her tax returns it seems that they don't vary more than about 10% from year to year (wh...
by grabiner
Tue Jun 19, 2018 6:53 pm
Forum: Personal Finance (Not Investing)
Topic: Would you pay off mortgage in my situation?
Replies: 30
Views: 2193

Re: Would you pay off mortgage in my situation?

You have 200 monthly payments left, which means that the effective duration for paying down your mortgage (weighted average of the time until all future payments) is about eight years. I am sorry for a novice question but is there a calculator to compute effective duration for paying down interest....
by grabiner
Tue Jun 19, 2018 6:37 pm
Forum: Investing - Help with Personal Investments
Topic: Advice - Parking cash before it gets paid in taxes
Replies: 8
Views: 991

Re: Advice - Parking cash before it gets paid in taxes

I think you'll jump to the highest tax bracket and not the 24% fed / 9% state. Since this transaction is done, there's no point going back and debate whether you should defer your gain. It's a long-term capital gain, so it will put you into the highest state tax bracket. The federal marginal tax ra...
by grabiner
Mon Jun 18, 2018 11:29 pm
Forum: Personal Consumer Issues
Topic: Article on hotel booking sites - no bargains
Replies: 28
Views: 2694

Re: Article on hotel booking sites - no bargains

This matches my experience as well. I used to use hotels.com frequently, and often got better deals. But now I have found that it isn't worthwhile; I can check hotels.com for a list of prices, but if the hotel I want is a Comfort Inn or Courtyard, then going to choicehotels.com or marriott.com usual...
by grabiner
Mon Jun 18, 2018 11:18 pm
Forum: Personal Finance (Not Investing)
Topic: mortgage or 401k withdrawal
Replies: 4
Views: 449

Re: mortgage or 401k withdrawal

It's probably better to withdraw from the 401(k) and Roth IRA to avoid taking the mortgage, assuming the interest is non-deductible. However, don't take so much out of the 401(k) that you move up a tax bracket. Instead, withdraw the rest from the Roth IRA, and then if you want to have a Roth IRA, co...
by grabiner
Mon Jun 18, 2018 11:03 pm
Forum: Personal Finance (Not Investing)
Topic: Would you pay off mortgage in my situation?
Replies: 30
Views: 2193

Re: Would you pay off mortgage in my situation?

Sorry for bringing up another mortgage pay off thread. But I will be grateful for all your advise. I have a 3.375% 30 year mortgage with 200 monthly payments and 130K principal left. I am thinking to pay it off in next couple of months. That will use all liquidity except in our emergency fund (20K)...
by grabiner
Mon Jun 18, 2018 10:52 pm
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 13
Views: 1069

Re: Ex-dividend days: Is there typically anything out of the ordinary?

You would expect the price of a stock to drop by the amount of the dividend on ex-dividend day. There are other things at play here though. Good news could boost the stock price even with the announced dividend. In any case, the price is lower than it would have been if there had been no dividend a...
by grabiner
Mon Jun 18, 2018 10:48 pm
Forum: Investing - Theory, News & General
Topic: Seeking input from folks invested in Van. Tax Managed Balanced Fund
Replies: 10
Views: 867

Re: Seeking input from folks invested in Van. Tax Managed Balanced Fund

I don't recommend this fund even though I like the underlying investments. If you hold stocks and bonds in a taxable account, you want to hold tax-efficient stocks, and tax-exempt bonds if you are in a high tax bracket. Tax-Managed Balanced Fund does both of these, but you could do the same thing wi...
by grabiner
Mon Jun 18, 2018 10:42 pm
Forum: Investing - Theory, News & General
Topic: Do you have to invest in Bond ETF?
Replies: 7
Views: 798

Re: Do you have to invest in Bond ETF?

Given your age, I would say that you should have some bonds. The reason is that you don't really know how you will react to a bear market; there hasn't been one since 2009, when you probably didn't own any stock. I recommend no more than 80% stock until you know your reaction. If there is a bear mar...
by grabiner
Mon Jun 18, 2018 10:37 pm
Forum: Investing - Theory, News & General
Topic: SEC Yield vs Distribution Yield
Replies: 11
Views: 17687

Re: SEC Yield vs Distribution Yield

Useful info in this thread but a quick question - I am looking at VWITX (Vanguard Intermediate Term Tax-Exempt) : SEC yield 2.39% and latest Distribution Yield: 2.79% and VBTLX (Vanguard Total Bond) : SEC yield 3.12% and latest Distribution Yield: 2.76% Also I noted that VWITX declined only 1.77% Y...
by grabiner
Mon Jun 18, 2018 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional IRA to Roth
Replies: 5
Views: 515

Re: Traditional IRA to Roth

See Traditional versus Roth on the wiki. Whether it is better to have Traditional or Roth dollars depends on your tax rate now and when you withdraw the money. If you are over the limit for making deductible contributions to a Traditional IRA, you are probably in a fairly high tax bracket, and there...
by grabiner
Mon Jun 18, 2018 10:21 pm
Forum: Investing - Help with Personal Investments
Topic: Diversify within Roth account?
Replies: 14
Views: 920

Re: Diversify within Roth account?

Correct me if I'm wrong but shouldn't you put international in your taxable account because the foreign tax fee is a write off in a taxable account. While this is true, the higher yields and lower qualified dividend percentage on international funds offset this benefit. Currently, the tax cost is a...
by grabiner
Mon Jun 18, 2018 10:15 pm
Forum: Investing - Help with Personal Investments
Topic: Advice - Parking cash before it gets paid in taxes
Replies: 8
Views: 991

Re: Advice - Parking cash before it gets paid in taxes

You could view this as a negative bond which matures in April. If you buy a CD or bond which matures in April, you will be in exactly the same situation as if you had neither the CD nor the tax bill. If you buy a bond which matures after April, you are taking interest-rate risk, although that may be...
by grabiner
Mon Jun 18, 2018 10:06 pm
Forum: Investing - Help with Personal Investments
Topic: Calculating After Tax yield on CD
Replies: 4
Views: 450

Re: Calculating After Tax yield on CD

A CDs after tax yield is calculated on paid interest per year but the CD compounds without the taxes. So calculating the ATY is not so straight forward. I calculate ATY on this CD to be 1.51% First, can you please explain this part a bit more? If in the US, you would pay taxes when the interest is ...
by grabiner
Mon Jun 18, 2018 5:59 pm
Forum: Investing - Help with Personal Investments
Topic: New to VG. Tax hit on trsfr of proprietary fund?
Replies: 9
Views: 547

Re: New to VG. Tax hit on trsfr of proprietary fund?

The fund was in a taxable account, not an IRA. When I said it "dropped to earth", I meant that according to my new understanding, it became a taxable event when liquidated. I was not expecting that. I'm in a low tax bracket with a gross income of $34,000, including Social Security. This makes it lo...
by grabiner
Mon Jun 18, 2018 5:00 pm
Forum: Investing - Help with Personal Investments
Topic: New to VG. Tax hit on trsfr of proprietary fund?
Replies: 9
Views: 547

Re: New to VG. Tax hit on trsfr of proprietary fund?

The fund was in a taxable account, not an IRA. When I said it "dropped to earth", I meant that according to my new understanding, it became a taxable event when liquidated. I was not expecting that. I'm in a low tax bracket with a gross income of $34,000, including Social Security. This makes it lo...
by grabiner
Sun Jun 17, 2018 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: Tax implications of holding Wellesley Emergency in taxable
Replies: 8
Views: 820

Re: Tax implications of holding Wellesley Emergency in taxable

You can do the calculations yourself. See the distributions page of Welleley and then multiply each 2017 number by your number of shares: https://investor.vanguard.com/mutual-funds/profile/distributions/vwinx Then put that on your tax return (Form 1040 Schedule B) and see effect. You can also see t...
by grabiner
Sun Jun 17, 2018 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Monthly Estimated Cap Gain Distributions
Replies: 3
Views: 488

Re: Vanguard Monthly Estimated Cap Gain Distributions

Realized gains are gains which have already happened, and thus which will be distributed at the end of the year (plus any future gains or minus any future losses.) These do have predictive value Unrealized gains will not be distributed unless they are realized first. In high-turnover actively-manage...
by grabiner
Sun Jun 17, 2018 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: Take Advantage of Stable Value Fund?
Replies: 22
Views: 1286

Re: Take Advantage of Stable Value Fund?

LT Treasury is pretty unusual for your bond allocation. Are you aware of the duration risk? As far as I can tell, as long as the duration of the bond fund is somewhat lower than your investment horizon, generally speaking bond fund holders tend to benefit in rising rate environments from rising yie...
by grabiner
Sun Jun 17, 2018 9:56 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Balanced Index Fund Admiral Shares (VBIAX)
Replies: 22
Views: 1896

Re: Vanguard Balanced Index Fund Admiral Shares (VBIAX)

Is Vanguard Balanced Index Fund Admiral Shares (VBIAX) a horrible choice for a taxable account? Yes. Compared to holding Total Stock and Total Bond separately, VBIAX is materially worse. The reason it is worse is the lack of flexibility of withdrawals. If you have separate bond and stock funds, and...
by grabiner
Sun Jun 17, 2018 9:52 pm
Forum: Investing - Help with Personal Investments
Topic: Best Index Fund for HSA
Replies: 4
Views: 565

Re: Best Index Fund for HSA

The limit for 2018 was raised back to $6900. There is nothing wrong with having just one fund in your HSA. Since your HSA, IRA, and 401(k) are all being invested for expenses in retirement, what matters is the overall allocation across all three. Since you have a low-cost investment available which ...
by grabiner
Sun Jun 17, 2018 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: maximzing HSA contributions when changing jobs
Replies: 8
Views: 520

Re: maximzing HSA contributions when changing jobs

You can contribute the full amount to an HSA even if you switch to a HDHP mid-year, as long as you remain covered by a HDHP through the end of next year.

See the "last-month rule" in IRS Publication 969 for details.
by grabiner
Sun Jun 17, 2018 7:11 pm
Forum: Investing - Help with Personal Investments
Topic: New to VG. Tax hit on trsfr of proprietary fund?
Replies: 9
Views: 547

Re: New to VG. Tax hit on trsfr of proprietary fund?

Welcome to the forum! You owe tax when you sell a mutual fund, but this is a tax you are going to owe anyway, as the fund will be sold at some time. Getting out of a high-cost mutual fund quickly is worthwhile, as the longer you hold it, the more you lose to the high costs, which may be more than an...
by grabiner
Sat Jun 16, 2018 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 445
Views: 99091

Re: Anyone regret paying off mortgage early?

I regret pay off 4.5% mortgage. I should have invested in Total Stock Index to get the 11% return . BTW, the 4.5% effective rate for me is 4% after the mortgage tax deduction. Even during the 2008 crisis with every equity 40% off, if you stay in course for 2 more years, you will still ahead of payi...
by grabiner
Sat Jun 16, 2018 8:37 pm
Forum: Investing - Theory, News & General
Topic: Which boglehead rule do you break--and are ok with
Replies: 150
Views: 10418

Re: Which boglehead rule do you break--and are ok with

Horror of horrors, I purchased a fixed annuity approx 35 years ago and over the past few years I have added enough money to it so it now comprises approx 15% of my portfolio. Note that what you purchased is a traditional fixed annuity, which pays a guaranteed rate without complicating features; thi...
by grabiner
Sat Jun 16, 2018 8:34 pm
Forum: Investing - Theory, News & General
Topic: Rate hikes vs - Muni, Corp, Total Bond funds
Replies: 14
Views: 1773

Re: Rate hikes vs - Muni, Corp, Total Bond funds

Thank you for your good point and explanation. What would you recommend is the best way to look at a bond fund like VWIUX (Intermediate Muni) over time in light of the changing Federal Funds Rate? Look at the SEC yield of the fund, and at the yield on Treasuries of similar duration to see the relev...
by grabiner
Fri Jun 15, 2018 10:39 pm
Forum: Investing - Theory, News & General
Topic: Gundlach sees 10 yr yields hitting 6%
Replies: 18
Views: 3151

Re: Gundlach sees 10 yr yields hitting 6%

The way to see that he is all alone here is that the current bond market doesn't reflect this difference. If 10-year yields are going to be much higher five years from now, then 15-year yields now should be much higher than 5-year years, since you could buy a 5-year bond now and reinvest it at the n...
by grabiner
Fri Jun 15, 2018 10:36 pm
Forum: Investing - Theory, News & General
Topic: Rate hikes vs - Muni, Corp, Total Bond funds
Replies: 14
Views: 1773

Re: Rate hikes vs - Muni, Corp, Total Bond funds

My own observations (so far) are that while the Federal Funds Rate has more than tripled in the last year and a half it has only gone up about 1.15 points to 1.70%. So while it is up it is a long way from the 5.25% level that it was in 2006. As for the impact on VWIUX Distribution Yield and Price, ...
by grabiner
Fri Jun 15, 2018 10:27 pm
Forum: Investing - Theory, News & General
Topic: Which boglehead rule do you break--and are ok with
Replies: 150
Views: 10418

Re: Which boglehead rule do you break--and are ok with

1 Develop a workable plan 2 Invest early and often 3 Never bear too much or too little risk 4 Diversify 5 Never try to time the market 6 Use index funds when possible 7 Keep costs low 8 Minimize taxes 9 Invest with simplicity 10 Stay the course #9 is the one I violate; I am a slice-and-dicer, overw...
by grabiner
Fri Jun 15, 2018 10:10 pm
Forum: Investing - Help with Personal Investments
Topic: Help with buying municipal bonds please
Replies: 4
Views: 789

Re: Help with buying municipal bonds please

Sometime your tax-exempt income can trigger the dreaded AMT . While some munis are subject to AMT, the only Vanguard muni funds which hold them are High-Yield Tax-Exempt and the money-market funds. Also, the AMT is much less likely to affect investors under the new tax laws. One of the main causes ...
by grabiner
Fri Jun 15, 2018 10:04 pm
Forum: Investing - Help with Personal Investments
Topic: Converting real estate to stocks/bonds: pay off mortgages in the meantime or invest?
Replies: 2
Views: 226

Re: Converting real estate to stocks/bonds: pay off mortgages in the meantime or invest?

Paying down the mortgage on a 5% loan which you will liquidate in one year is equivalent to buying a one-year CD with a 5% yield. Therefore, you should do this instead of bond investments, as long as it doesn't cause liquidity problems. Note that you are not increasing your weight in real estate by ...
by grabiner
Fri Jun 15, 2018 9:57 pm
Forum: Investing - Help with Personal Investments
Topic: Pay down interest only mortgage or invest?
Replies: 5
Views: 612

Re: Pay down interest only mortgage or invest?

See Paying down loans versus investing on the wiki. If the mortgage rate is fixed for five years, then paying down the mortgage would give you a risk-free, tax-free 2.5% return over five years. This is the same return you could get on five-year municipal bonds, with comparable risk; Admiral shares o...
by grabiner
Fri Jun 15, 2018 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Taking $1M+ Long Term Capital Gains
Replies: 68
Views: 6263

Re: Taking $1M+ Long Term Capital Gains

Thanks for the figure of $479K. This would constitute wages + short term gains, correct ? I have to manage my short term gains correctly. Most of it is from expired covered call options. Assume I go beyond $479K, would ALL my LT CG be taxed at 20%; that does not make sense , as I would be better of...
by grabiner
Fri Jun 15, 2018 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: If going Roth, do conversion or 403b?
Replies: 7
Views: 429

Re: If going Roth, do conversion or 403b?

These are equivalent from a tax perspective. If you convert $10,000 of a traditional IRA to a Roth IRA, you will pay tax on $10,000. If you contribute $10,000 to a Roth 403(b) instead of a traditional 403(b), you will increase your taxable salary by $10,000. And either way, you will have $10,000 mor...
by grabiner
Fri Jun 15, 2018 9:26 pm
Forum: Investing - Help with Personal Investments
Topic: Using Wellesley Fund as a bond alternative
Replies: 18
Views: 2198

Re: Using Wellesley Fund as a bond alternative

The Wellesley fund is 65% bonds. Therefore, you can use it for your bond holdings, as long as the amount you want to hold in bonds is 65% of the fund balance. However, I don't like the fund in a taxable account. The stock turnover is fairly high, leading to large capital gains. And both the stocks a...
by grabiner
Thu Jun 14, 2018 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: "Bad" 401K or Taxable Account
Replies: 11
Views: 1073

Re: "Bad" 401K or Taxable Account

The calculation on which is better depends on your tax rates now and when you retire. If your future tax rate will be comparable to today then it's better to put it in taxable. If your future rate is lower, which is likely for most people, then it gets a little harder to decide. Based on some assum...
by grabiner
Wed Jun 13, 2018 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off mortgage early
Replies: 43
Views: 3441

Re: Paying off mortgage early

First, a mortgage is a negative bond. Second, what is the best use of your cash? Invest it in a 3.8% bond - that is 3.8% risk free. Or do you invest it something else - some higher return higher risk investment? If it were me, I would invest it in equities over a mortgage. I am confident that I wou...
by grabiner
Wed Jun 13, 2018 10:03 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off mortgage early
Replies: 43
Views: 3441

Re: Paying off mortgage early

Wiki link: Paying down loans versus investing Since you have four years left before your ARM resets, paying down your mortgage is equivalent to buying a risk-free four-year bond. (After four years, you will still owe money on the mortgage, but you will owe it at the market rate.) 3.8% is a high retu...
by grabiner
Wed Jun 13, 2018 9:55 pm
Forum: Investing - Theory, News & General
Topic: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed
Replies: 27
Views: 2415

Re: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed

I have a similar rule, but it has one important exception. From my Investment Policy Statement: This statement will be reviewed whenever there is a substantial change in my financial situation, and annually when I rebalance. If there is no substantial change in my financial situation, I will wait at...
by grabiner
Wed Jun 13, 2018 9:48 pm
Forum: Investing - Help with Personal Investments
Topic: "Bad" 401K or Taxable Account
Replies: 11
Views: 1073

Re: "Bad" 401K or Taxable Account

How long do you expect to stay with this employer? An extra 1.5% expenses is enough that you might come out ahead in a taxable account if you stay with this employer for more than 20 years. But if you leave before the 20 years are up, you can roll your high-cost 401(k) into a low-cost IRA, keeping t...
by grabiner
Wed Jun 13, 2018 9:44 pm
Forum: Investing - Help with Personal Investments
Topic: VMATX Maturity/Duration Question
Replies: 5
Views: 402

Re: VMATX Maturity/Duration Question

Keep in mind that for such a fund, the behavior is not symmetrical and linear with respect to rate changes. If rates go up significantly, the duration may increase (as fewer issuers will want to call early) and you may lose more than implied by the average duration measure now. In particular, this ...
by grabiner
Tue Jun 12, 2018 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 445
Views: 99091

Re: Anyone regret paying off mortgage early?

Even if I didn't have the mortgage, I would still itemize, because I have over $12K in other deductions. State and local taxes are limited to $10K, so a single taxpayer needs at least $2K of other deductions such as charity to reach $12K. Since I do this, every additional dollar of itemized deducti...
by grabiner
Tue Jun 12, 2018 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: Explanation of free credit scores
Replies: 16
Views: 1664

Re: Explanation of free credit scores

As many others, I have been using some of the credit score reporting tools offered by credit cards, banks, Credit Karma, etc. While I appreciate using the tools I don't understand the fluctuations I see in the reports. I am retired with frozen credit and consistent spending habits but the scores se...
by grabiner
Tue Jun 12, 2018 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage or keep cd
Replies: 7
Views: 738

Re: Pay off mortgage or keep cd

Maybe a no brainer, though wanted to get opinions... we owe just over 100k on home mortgage at ~3% fixed rate. We have that much in no penalty cd that is earning 2%. Any reason to keep cd vs paying off mortgage, esp now considering we will not be itemizing mortgage interest deduction any longer... ...
by grabiner
Tue Jun 12, 2018 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: Shifting money for house from stock funds
Replies: 12
Views: 885

Re: Shifting money for house from stock funds

If your taxable account is much larger than you need for your down payment, you can do the switching in your employer plan. If you need a $200K down payment, you can have $200K in an intermediate-term bond fund (now) and a short-term bond fund (within 3 years), leaving the taxable account all stock....
by grabiner
Tue Jun 12, 2018 7:45 pm
Forum: Investing - Theory, News & General
Topic: can a mutual fund manager tax loss harvest?
Replies: 7
Views: 459

Re: can a mutual fund manager tax loss harvest?

Thanks, all. So, I guess "tax-managed" funds would do it. I wonder how common it is among funds that do not declare themselves as tax-aware. If a fund isn't tax-managed, the transaction cost of tax loss harvesting hurts the reported returns, and the actual returns for fundholders who hold it in 401...
by grabiner
Tue Jun 12, 2018 7:42 pm
Forum: Investing - Theory, News & General
Topic: Withdraw from TIRA or Roth, it doesn't matter?
Replies: 14
Views: 1133

Re: Withdraw from TIRA or Roth, it doesn't matter?

I have always read that it's best leave the Roth as long as possible and withdraw from TIRA first (at least as long as the withdrawals will not push you into a higher tax bracket). However, if I plan do conversions to the top of the 12% bracket each year, it seems that it does not actually matter w...
by grabiner
Tue Jun 12, 2018 7:26 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3416

Re: Larry Swedroe: What Makes Factors Endure

One thought: it's not clear to me that that investability should be required in order for something to be a factor. Imagine a factor-like entity that is not investable. Actually, I think any valid factor pretty much has to be investable by definition. Investability doesn't mean that it is possible ...