Search found 21218 matches

by grabiner
Wed Feb 21, 2018 11:42 pm
Forum: Investing - Help with Personal Investments
Topic: For munis: state specific or non-state specific funds best?
Replies: 14
Views: 1117

Re: For munis: state specific or non-state specific funds best?

Whenever I've run the numbers on state-specific versus federal muni funds (adjusting for taxes), they have come out around even (and that's being in CA, a high-state-tax state). When comparing muni funds, it's better to compare the taxes assuming the same yield; any yield difference is compensation...
by grabiner
Wed Feb 21, 2018 11:36 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Equity Income vs S&P 500
Replies: 10
Views: 683

Re: Vanguard Equity Income vs S&P 500

Thanks for the input. I admit that I am fairly new to investing. My first exposure to the investing world was a few years ago when I was first exposed to the JL Collins stock series & Go Curry Cracker (only after did I discover the Bogleheads forum). A lot of what I read initially made a lot of sen...
by grabiner
Wed Feb 21, 2018 10:59 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Equity Income vs S&P 500
Replies: 10
Views: 683

Re: Vanguard Equity Income vs S&P 500

Thanks Grabiner, First, let me say that I am ok with 100% equities as I still have another 30 years minimum of investing. I am looking to be 80% US stocks & 20% international across both of our 401k accounts. Here are the best options in both plans: Her 401k: Nationwide S&P 500 (.57 ER) Nationwide ...
by grabiner
Wed Feb 21, 2018 10:53 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Penalty on Roth IRA
Replies: 16
Views: 1314

Re: Tax Penalty on Roth IRA

So two questions now... I have already amended once for another issue. So it's ok to amend again? I don't want them wondering why I keep sending in amendments but also don't want to keep paying that 6%. You can amend returns as often as you have things to update. It's common to receive a new or cha...
by grabiner
Wed Feb 21, 2018 10:12 pm
Forum: Personal Finance (Not Investing)
Topic: Pay cash or get mortgage for 2nd home?
Replies: 8
Views: 526

Re: Pay cash or get mortgage for 2nd home?

Few people would advocate getting a mortgage on their paid off retirement home just to invest the money. That is just about the same questions that you are asking about getting a mortgage on your second home. With one exception: what is the cost of getting the cash? When I bought my home four years...
by grabiner
Wed Feb 21, 2018 9:45 pm
Forum: Investing - Help with Personal Investments
Topic: For munis: state specific or non-state specific funds best?
Replies: 14
Views: 1117

Re: For munis: state specific or non-state specific funds best?

It also depends on the credit rating of your state. I live in New Jersey, which has slid from a AA rating in 2010 to a A- rating in 2017. I am willing to pay extra state income tax to avoid the potential financial abyss NJ appears to be headed towards. Look at the rating of the bonds held by the fu...
by grabiner
Wed Feb 21, 2018 9:40 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited tIRA all in HAINX
Replies: 9
Views: 711

Re: Inherited tIRA all in HAINX

It doesn't matter what the IRA is currently invested in. The IRA is $80,000, and you should choose the best way to invest the $80,000, consistent with the rest of your investments. You will have to take distributions from the IRA, but this doesn't really affect the investments; if you don't spend th...
by grabiner
Wed Feb 21, 2018 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Took early Roth Redistribution after 5 years, opinions?
Replies: 6
Views: 392

Re: Took early Roth Redistribution after 5 years, opinions?

I would advise against it given your statement that implies you have a taxable account. That money should have been taken out of your taxable account. In particular, you have a bond fund in your taxable account, so that you can spend taxable money with little or no tax cost. (If you wanted to sell ...
by grabiner
Wed Feb 21, 2018 9:26 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Penalty on Roth IRA
Replies: 16
Views: 1314

Re: Tax Penalty on Roth IRA

I already did my 2017 taxes earlier this month foolishly thinking I only had to pay 6% and be done with it and received the refund. Is my next option calling up Vanguard and tell them I want to convert that $5500 into a tIRA? or something else since I already did the taxes? Once you have done your ...
by grabiner
Wed Feb 21, 2018 9:23 pm
Forum: Investing - Help with Personal Investments
Topic: Tiny Windfall But Big Help
Replies: 9
Views: 937

Re: Tiny Windfall But Big Help

Mathematically not the best option but I would knock out the car loan. Mathematically, this is the best option, because investing is a trade-off between return and risk. It is a risk-free 4.15% return, and that is the best you can do without taking extra risk. You probably have some bonds in your R...
by grabiner
Wed Feb 21, 2018 9:16 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Equity Income vs S&P 500
Replies: 10
Views: 683

Re: Vanguard Equity Income vs S&P 500

Welcome to the forum! Equity Income is a fine fund for a 401(k). While it is actively managed, it holds a consistent style, choosing high-dividend stocks, so you don't need to worry about the fund changing its allocation in a way you don't like. If you don't want the value bias, you can balance this...
by grabiner
Wed Feb 21, 2018 6:50 pm
Forum: Investing - Help with Personal Investments
Topic: Three Fund Portfolio Excluding TSP?
Replies: 28
Views: 2478

Re: Three Fund Portfolio Excluding TSP?

Lets say you have $75 in a Roth and $100 in the TSP and a 25% tax bracket. Suppose you had $100 in Roth and $100 in the TSP? In that case, 57% of the after-tax value of your portfolio is in the Roth, so if you put the Roth in stock, and the TSP in bonds, you have both higher expected return and hig...
by grabiner
Wed Feb 21, 2018 6:47 pm
Forum: Investing - Help with Personal Investments
Topic: Bond fund in a ROTH
Replies: 32
Views: 3510

Re: Bond fund in a ROTH

I would like some clarification on a point made in an earlier post/reply. A paragraph from that post is below. ' View everything as one portfolio. You rebalance so that your portfolio risk level matches your risk tolerance. But if the market crashes, it only matters how much you lose after tax. It ...
by grabiner
Tue Feb 20, 2018 11:46 pm
Forum: Investing - Help with Personal Investments
Topic: Three Fund Portfolio Excluding TSP?
Replies: 28
Views: 2478

Re: Three Fund Portfolio Excluding TSP?

I'm not a math wiz but I tested this in an investment return calculator, assuming you are taxed at 25% either way. Roth I invest $75 at 4% rate of return for 10 years. I get 111 after tax. TSP I invest $100 at 1% rate of return for 10 years. I get 110. After tax I get 82.5. Total after tax return, ...
by grabiner
Tue Feb 20, 2018 11:07 pm
Forum: Personal Finance (Not Investing)
Topic: Capital Gains for two states
Replies: 3
Views: 268

Re: Capital Gains for two states

As a part-year resident, you would normally report only income earned while you were a resident of the state. If you sold stock while in UT, or received a dividend while in UT, you would owe UT tax on it. One caution: if you have a foreign stock fund, you will have to prorate the foreign tax as well...
by grabiner
Tue Feb 20, 2018 11:00 pm
Forum: Personal Finance (Not Investing)
Topic: Investing vs student debt
Replies: 13
Views: 605

Re: Investing vs student debt

I will not be itemizing in 2018. 32K at 4.29% and 29K with a weighted avg rate of 4.8%. You don't to itemize to deduct student loan interest; it is an adjustment to income. For a short period of time, (if you follow Dave's plan), you would stop HSA, 401k, Roth contributions and put all effort to th...
by grabiner
Tue Feb 20, 2018 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: Three Fund Portfolio Excluding TSP?
Replies: 28
Views: 2478

Re: Three Fund Portfolio Excluding TSP?

Lets say you have $75 in a Roth and $100 in the TSP and a 25% tax bracket. Suppose you had $100 in Roth and $100 in the TSP? In that case, 57% of the after-tax value of your portfolio is in the Roth, so if you put the Roth in stock, and the TSP in bonds, you have both higher expected return and hig...
by grabiner
Mon Feb 19, 2018 11:05 pm
Forum: Personal Finance (Not Investing)
Topic: Should I payoff my Mortgage?
Replies: 25
Views: 1471

Re: Should I payoff my Mortgage?

See Paying down loans versus investing on the wiki. Under the current tax law, I believe you are not itemizing deductions. Therefore, paying the mortgage down or off is a risk-free and tax-free 2.75% return. Is that a good return? If you expect to sell the home in 5 years, paying down the mortgage i...
by grabiner
Mon Feb 19, 2018 10:56 pm
Forum: Personal Finance (Not Investing)
Topic: Which states are similar to NJ in the sense that they do not allow one to deduct contributions to 403b, 457, TSP, etc?
Replies: 4
Views: 581

Re: Which states are similar to NJ in the sense that they do not allow one to deduct contributions to 403b, 457, TSP, et

NJ does not double-tax the same income. If you retire in NJ, you prorate your withdrawals into taxable and non-taxable portions as you do with an IRA. (However, the NJ rules still make Roth TSP better; you won't be taxed on your Roth TSP contributions when you make them, and no state will tax the wi...
by grabiner
Mon Feb 19, 2018 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Help me Eyeball my Taxes on this sale
Replies: 4
Views: 460

Re: Help me Eyeball my Taxes on this sale

I suspect I will be ending up paying 20% Tax when I include this sale proceeds in the income this year. Remember the way tax brackets work. You pay 15% tax on capital gains up to the amount which makes your total taxable income $425,000 single or $479,000 married, and 20% only on gains above that f...
by grabiner
Mon Feb 19, 2018 6:21 pm
Forum: Investing - Theory, News & General
Topic: "The Effects of Social Security Benefits and RMDs on Tax-Efficient Withdrawal Strategies"
Replies: 10
Views: 1990

Re: "The Effects of Social Security Benefits and RMDs on Tax-Efficient Withdrawal Strategies"

While it wasn't the authors' main point, this article illustrates one benefit of delaying SS to age 70. The article estimates the time it would take to exhaust a portfolio while maintaining a given standard of living. Taking SS later increases that time, because the portfolio will only be exhausted ...
by grabiner
Mon Feb 19, 2018 6:06 pm
Forum: Investing - Help with Personal Investments
Topic: High ER funds with large cap gains - what to do ?
Replies: 10
Views: 806

Re: High ER funds with large cap gains - what to do ?

Another way to get rid of funds that you don't want to hold is to donate to charity. You shouldn't do this just for the tax benefit, but if you are donating several thousand dollars to a charity, you might as well do it with those funds.
by grabiner
Mon Feb 19, 2018 6:04 pm
Forum: Investing - Help with Personal Investments
Topic: How to choose tax exempt bonds
Replies: 3
Views: 316

Re: How to choose tax exempt bonds

Most tax-exempt bonds reduce both your regular and AMT income, so they won't have much effect on whether you pay AMT. (If you do pay AMT, check whether a muni fund holds AMT bonds before buying any.) Why are you paying AMT at all? Do you pay very high state tax? If so, then it does make sense for yo...
by grabiner
Mon Feb 19, 2018 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: Best Investment Options with Zero Earned Income
Replies: 16
Views: 980

Re: Best Investment Options with Zero Earned Income

You might convert your traditional IRA to a Roth IRA up to the top of the 12% tax bracket, or even the 22% bracket if you expect that RMDs and Social Security will give you a high marginal tax rate later in retirement. The tax you pay uses up some of your cash, but you effectively get more tax-defer...
by grabiner
Mon Feb 19, 2018 5:49 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Adjusting a Taxable Account
Replies: 18
Views: 848

Re: Tax Adjusting a Taxable Account

Hi everyone, I recently started investing in a taxable account as of last year. While I picked tax efficient funds I realized doing my taxes this year that different asset classes likely make more sense in taxable so I'm now trying to spread my asset allocation across all my accounts. The wiki has ...
by grabiner
Mon Feb 19, 2018 5:38 pm
Forum: Investing - Help with Personal Investments
Topic: Rebalancing in a Bear Market
Replies: 7
Views: 578

Re: Rebalancing in a Bear Market

What are some of the best methods for rebalancing a portfolio in a bear market? In particular, if a bear market has resulted in a decline in both equities and bonds, what’s the best method? Intuitively you don’t really want to be selling equities at all when they’re down. Would it be best to just r...
by grabiner
Mon Feb 19, 2018 11:55 am
Forum: Investing - Help with Personal Investments
Topic: Why not tax-exempt bonds?
Replies: 23
Views: 2315

Re: Why not tax-exempt bonds?

Thanks David! Thanks for simplifying one of the mysterious ways that bonds work! I've bookmarked your explanation. So that's why Vanguard's popular intermediate muni VWIUX's distribution yield of 2.84% is higher than its 2.26% SEC yield? Is there a measure that gives a good estimate of what a bond ...
by grabiner
Mon Feb 19, 2018 10:12 am
Forum: Investing - Help with Personal Investments
Topic: Why not tax-exempt bonds?
Replies: 23
Views: 2315

Re: Why not tax-exempt bonds?

I didn't check your numbers but I'm not disagreeing with them. But this doesn't make intuitive sense. Intermediate tax exempt is not significantly riskier than total bond, so there is no reason it should return more before taxes. What happens when you do the analysis with SEC yield? Low to High 100...
by grabiner
Sun Feb 18, 2018 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: Why pay off the mortgage with life insurance?
Replies: 6
Views: 645

Re: Why pay off the mortgage with life insurance?

Whether you pay off the mortgage or not, you will need to have money to pay the mortgage. If you make an investment and expect it to make the mortgage payments with little risk (since you have lost the salary which was paying them), you would need about the same amount of money as the mortgage balan...
by grabiner
Sun Feb 18, 2018 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff Mortgage Early?
Replies: 8
Views: 1236

Re: Payoff Mortgage Early?

Welcome to the forum! Looking for input. Current situation is Mortgage Balance about $20K at 3.5%. Liquid Assets ~1.2M. Payoff mortgage with recent market gains or hold the course? Assuming that you won't have a taxable capital gain, paying off this mortgage is probably worthwhile. It gives you a ri...
by grabiner
Sun Feb 18, 2018 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: Ok, so I paid off my car...now what about auto insurance?
Replies: 7
Views: 1153

Re: Ok, so I paid off my car...now what about auto insurance?

Raise the deductible on your collision and comprehensive. The bank probably required a $500 limit to protect its interest in your car, but you will likely save money by raising it to $1500 or $2500. Besides simplifying the handling of claims, this reduces the number of small claims which will raise ...
by grabiner
Sun Feb 18, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Old 401k Statements
Replies: 9
Views: 778

Re: Old 401k Statements

I don't think it matters for 401(k)s, but there is one specific case in which you might need old retirement plan records: if you roll the retirement plan to an IRA, and then withdraw from the IRA in New Jersey. The reason is that NJ does not allow a deduction for contributions to any retirement plan...
by grabiner
Sun Feb 18, 2018 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: personal investment software + mortgage
Replies: 1
Views: 195

Re: personal investment software + mortgage

Welcome to the forum! You could handle this issue by treating your mortgage as a negative bond investment. If you pay $20K per year for the next 15 years on your mortgage, and also have a bond portfolio which will pay $20K in bond coupons and maturity bonds each year, then you are in the same situat...
by grabiner
Sun Feb 18, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Why not tax-exempt bonds?
Replies: 23
Views: 2315

Re: Why not tax-exempt bonds?

Are you currently taking SS, or is that coming? Depending upon your current tax bracket, a portion could be taxed. Note that munis don't help with this; muni income is considered income for purposes of SS taxation. If you are in the 12% tax bracket and in the upper SS phase-in, every $1 of either m...
by grabiner
Sun Feb 18, 2018 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Foreign Tax Credit on Iowa State Income Tax
Replies: 7
Views: 521

Re: Foreign Tax Credit on Iowa State Income Tax

According to Individual Income Tax Provisions in the States , from the Wisconsin Legislative Fiscal Bureau, there is a state foreign tax credit in AL, AZ, HI, IA, MT, NC, and a limited credit in LA. If you live in one of these states (except LA, whether the credit is capped at a low level), this ma...
by grabiner
Sun Feb 18, 2018 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Question about changes to personal mortgage deductions.
Replies: 11
Views: 821

Re: Question about changes to personal mortgage deductions.

How is a HELOC used for home acquisition? Isn't this one of those piggyback loans that was common during the 2008-9 crisis? I thought those were not used any longer. I was thinking HELOCs are normally taken while you own the house, and the interest is not deductible regardless of how it's used, for...
by grabiner
Sun Feb 18, 2018 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: Pre- vs post-tax saving: Am I thinking it wrong?
Replies: 25
Views: 1669

Re: Pre- vs post-tax saving: Am I thinking it wrong?

Given that some BH folks are big savers, it is possible that their tax rate during post retirement be higher than the tax rate pre retirement. Let's say that you are in the marginal tax rate of 25% if you put $1,000 into the Trad. 401K account, you save 25% tax. Let's assume that you are in 25% mar...
by grabiner
Sun Feb 18, 2018 11:20 am
Forum: Personal Finance (Not Investing)
Topic: Evaluate my pension as investment
Replies: 1
Views: 379

Re: Evaluate my pension as investment

It makes sense to view this as a fixed income investment, because it behaves the way you expect a fixed-income investment to behave. It grows at fixed rates linked to market rates, and will be converted to cash which you can continue to invest. When you do cash this in, you probably intend to roll i...
by grabiner
Sun Feb 18, 2018 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Pre- vs post-tax saving: Am I thinking it wrong?
Replies: 25
Views: 1669

Re: Pre- vs post-tax saving: Am I thinking it wrong?

One factor that often gets overlooked is that by deferring tax liability until later, you have more money today. Since you are a rational investor, you will save that additional money also, and you'll do it in the most tax efficient way available. That money also goes to work for you. It wears glov...
by grabiner
Sun Feb 18, 2018 10:59 am
Forum: Personal Finance (Not Investing)
Topic: Help me Eyeball my Taxes on this sale
Replies: 4
Views: 460

Re: Help me Eyeball my Taxes on this sale

Are all the long-term capital gains taxed at 20%? That is only the rate if the overall income would be in the top tax bracket, which might be the case for you.

In addition, you will pay the 3.8% Net Investment Income tax on all or almost all of the capital gain.
by grabiner
Sun Feb 18, 2018 10:55 am
Forum: Personal Finance (Not Investing)
Topic: Question about changes to personal mortgage deductions.
Replies: 11
Views: 821

Re: Question about changes to personal mortgage deductions.

No, HELOC interest is not deductible period as I have read things, no matter what you spend it for. (If it's an investment property, I guess the cost can offset the rent, but that's all.) Home-equity loans used to improve the property are deductible as home acquisition debt, just as they were befor...
by grabiner
Fri Feb 16, 2018 11:21 pm
Forum: Personal Finance (Not Investing)
Topic: How much would paying a lump sum toward my loan save me?
Replies: 12
Views: 813

Re: How much would paying a lump sum toward my loan save me?

See Paying down loans versus investing on the wiki. Making an extra payment on a 3.5% loan is equivalent to buying a risk-free 3.5% bond; the term of that bond is the time to the eliminated payment. Since you will pay off your loan in a little over three years rather than five, this is as good an in...
by grabiner
Fri Feb 16, 2018 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: what is marginal tax rate?
Replies: 23
Views: 1693

Re: what is marginal tax rate?

The wiki discusses Marginal Tax Rate in some detail. The definition is "the tax rate that will apply to the next marginal – or incremental – amount of income (or deductions). It is calculated by dividing the amount of additional taxes that will be due (or reduced) by the amount of income involved." ...
by grabiner
Fri Feb 16, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Which should I use short term corporate or longterm bond index money for roth IRA contribution
Replies: 7
Views: 533

Re: Which should I use short term corporate or longterm bond index money for roth IRA contribution

Hi folks, here is my dilemma. This may be our last Roth IRA contribution for retirement accounts. I have put my emergency money in short term corporate bond index which it lost around $300, while I also have total bond market index which it lost $800 in my brokerage accounts. Which of these I shoul...
by grabiner
Fri Feb 16, 2018 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: Sell individual ETFs and buy Vanguard diversified ETF?
Replies: 2
Views: 378

Re: Sell individual ETFs and buy Vanguard diversified ETF?

B) Put everything in a Vanguard diversified ETF (ASX:VDGR 30% bonds/70% stocks) I'm reluctant to go with B immediately as IEM is up 27%, IOO 17% & SSO 18% (STW is up 7% and SLF .16%) in the last 12 months/since I bought. Unless there is a tax consequence (I don't know how Australia taxes capital ga...
by grabiner
Fri Feb 16, 2018 10:53 pm
Forum: Investing - Help with Personal Investments
Topic: Does the absence of need for a legacy affect your AA or SWR?
Replies: 24
Views: 1695

Re: Does the absence of need for a legacy affect your AA or SWR?

If you don't need to leave a legacy, you can increase your sustainable withdrawal rate by converting most of your assets to an annuity (preferably inflation-adjusted).
by grabiner
Fri Feb 16, 2018 10:50 pm
Forum: Investing - Help with Personal Investments
Topic: Transition AA 100% equities to 70/30
Replies: 4
Views: 522

Re: Transition AA 100% equities to 70/30

Also consider creating a written IPS (Investment Policy Statement) as soon as you can. This will be your guarantee not to mess around with your account every time there is an idea passing in front of you https://www.bogleheads.org/wiki/Investment_policy_statement For example, here is the last parag...
by grabiner
Fri Feb 16, 2018 10:47 pm
Forum: Investing - Help with Personal Investments
Topic: Classification for Global Real Estate ETF (Vanguard)
Replies: 3
Views: 240

Re: Classification for Global Real Estate ETF (Vanguard)

I count it as real estate in my major asset class allocation (US, foreign, real estate, fixed income), and then split my real estate allocation between US and foreign in my subclass allocation. I hold 10% of my portfolio in real estate, so I hold 5% each in Vanguard's US and foreign real estate funds.
by grabiner
Fri Feb 16, 2018 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: Foreign Tax Credit on Iowa State Income Tax
Replies: 7
Views: 521

Re: Foreign Tax Credit on Iowa State Income Tax

According to Individual Income Tax Provisions in the States , from the Wisconsin Legislative Fiscal Bureau, there is a state foreign tax credit in AL, AZ, HI, IA, MT, NC, and a limited credit in LA. If you live in one of these states (except LA, whether the credit is capped at a low level), this mak...
by grabiner
Fri Feb 16, 2018 10:31 pm
Forum: Investing - Help with Personal Investments
Topic: Investing vs paying off debt
Replies: 28
Views: 1642

Re: Investing vs paying off debt

Once you have maxed out your retirement accounts, I would put additional money against the car loan. The reason to pay off the car loan rather than the mortgage is that the car loan is a short-term loan. If there are four years left on the loan and you pay it off in two, then paying off the loan ear...