Search found 22130 matches

by grabiner
Sat Sep 22, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Which Funds to Take RMD From
Replies: 27
Views: 3477

Re: Which Funds to Take RMD From

Thanks David! So even if one invests in a vanguard total bond index fund they would have to pay taxes on dividends even before they sell their holdings? Yes, but that isn't quite the argument for holding stocks in a taxable account. You pay taxes on dividends from either bond or stock funds. But bo...
by grabiner
Sat Sep 22, 2018 12:53 pm
Forum: Investing - Theory, News & General
Topic: Which Funds to Take RMD From
Replies: 27
Views: 3477

Re: Which Funds to Take RMD From

If you aren't going to spend the RMD, take it from one of the stock funds, and reinvest in the same stock fund in your taxable account. Stock funds will grow nearly tax-free in your taxable account if you never need to spend them, as your heirs will inherit them with a stepped-up basis. If you are ...
by grabiner
Fri Sep 21, 2018 11:15 pm
Forum: Personal Finance (Not Investing)
Topic: Delaying Social Security Until 70
Replies: 108
Views: 7769

Re: Delaying Social Security Until 70

There was a very recent thread on this, and many concluded it was best to file early. I don't agree, but there are other reasons it makes sense. 1) The day after your retire the market plunges 30%, and you have some large early retirement expenses. Best to file rather than tap your accounts. The wa...
by grabiner
Fri Sep 21, 2018 10:53 pm
Forum: Investing - Theory, News & General
Topic: Allocating 1/3 of Investable Assets to Roth Accounts
Replies: 22
Views: 1435

Re: Allocating 1/3 of Investable Assets to Roth Accounts

I think investing in traditional accounts is akin to giving up on your dreams. I never understood the "I will be in a lower tax bracket in retirement". What!! You should want to be WEALTHIER the older you get, not poorer. You should strive to have more income with every passing year. For example, I...
by grabiner
Fri Sep 21, 2018 10:23 pm
Forum: Investing - Help with Personal Investments
Topic: Still haven't made sense of this 50-50 AA situation
Replies: 9
Views: 1244

Re: Still haven't made sense of this 50-50 AA situation

I have been trying to make sense of my situation with RMD bearing down on us. We have the unusual situation of having all of fixed income (bonds) in tax deferred IRAs and all of our equity in our Roths in a 50-50 portfolio. Great efficiency with great placement I think. And that creates a bit of a ...
by grabiner
Fri Sep 21, 2018 10:21 pm
Forum: Investing - Help with Personal Investments
Topic: Stable Value Similat to What Bond Fund
Replies: 9
Views: 677

Re: Stable Value Similat to What Bond Fund

A stable value fund has zero interest-rate risk, so it can be treated as cash for that purpose. The yield may be higher or lower than cash, depending on the terms. (If the yield is higher than the yield on cash, it makes sense to hold the fund even if you wouldn't normally hold cash.) In addition, t...
by grabiner
Fri Sep 21, 2018 7:33 pm
Forum: Investing - Theory, News & General
Topic: Do vanguard tsm and 500 funds distribute capital gain?
Replies: 11
Views: 1230

Re: Do vanguard tsm and 500 funds distribute capital gain?

Can you explain why you feel the addition of ETFs makes those Vanguard mutual funds much less likely to ever have CGDs? I understand the general idea that a large cap index fund, whether it holds smaller cap stocks or not, will never have to divest itself of a stock that doubles in value, almost by...
by grabiner
Fri Sep 21, 2018 7:23 pm
Forum: Personal Finance (Not Investing)
Topic: Another mortgage repayment thread..
Replies: 30
Views: 2110

Re: Another mortgage repayment thread..

Are the investments in your current asset allocation returning more than 2.75% ? If so, then stay invested. If not, then sell and pay off the mortgage. Your current asset allocation incorporates your chosen level of risk. However, risk is not properly measured as a percentage of your investments; i...
by grabiner
Thu Sep 20, 2018 11:35 pm
Forum: Personal Finance (Not Investing)
Topic: Should we temporarily reduce our retirement contributions in order to pay off our $400k mortgage in 7 years?
Replies: 77
Views: 5984

Re: Should we temporarily reduce our retirement contributions in order to pay off our $400k mortgage in 7 years?

We did something similar (paid off a 30 year in 17 years), but this was when we were in the 15% tax bracket. So I would say yes if you are in the now 12% bracket. I don't think I would have done it had I been in the 25% tax bracket, so if you are in the 22% or higher bracket, then I would not. For ...
by grabiner
Thu Sep 20, 2018 10:02 pm
Forum: Personal Finance (Not Investing)
Topic: New car - 0% loan or $500 rebate
Replies: 26
Views: 1897

Re: New car - 0% loan or $500 rebate

I am buying a new car and the dealer is offering 0% interest on a 48 month loan or $500 rebate off the price of the car. The amount that would be financed is $21,700. If I figure the average amount of extra money I will have to invest over the 4 years as 21,700/2=10,850 and then multiply 10,850 by ...
by grabiner
Thu Sep 20, 2018 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Pay-off or keep mortgage with 2018 interest deduction changes?
Replies: 17
Views: 1576

Re: Pay-off or keep mortgage with 2018 interest deduction changes?

Options include: 1. Paying off the mortgage but assets would come from retirement accounts, triggering substantial tax increases; 2. Continue with the current loan balance and payments with the expectation that return on investments would exceed 3.5% plus taxes on gains; 3. Increase charitable dedu...
by grabiner
Thu Sep 20, 2018 9:35 pm
Forum: Personal Finance (Not Investing)
Topic: Which mortgage would you prepay?
Replies: 12
Views: 1027

Re: Which mortgage would you prepay?

Does it make sense to prepay a mortgage on a rental property? I am not au fait with the US tax system. However I would have thought the goal is to minimize taxable income - i.e. to maintain the mortgage for as long as possible? Given the interest is offset against rental income. The goal is to opti...
by grabiner
Thu Sep 20, 2018 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: Delaying SS? How Long It Will Take for It to Pay Off?
Replies: 49
Views: 4131

Re: Delaying SS? How Long It Will Take for It to Pay Off?

https://www.fool.com/amp/retirement/2018/09/16/delaying-social-security-benefits-heres-how-long-i.aspx This article seems to contradict most of the break-even calculators I have seen before including those discussed on this forum. For instance, the article states that for those with FRA of 67, dela...
by grabiner
Thu Sep 20, 2018 9:09 pm
Forum: Personal Finance (Not Investing)
Topic: Another mortgage repayment thread..
Replies: 30
Views: 2110

Re: Another mortgage repayment thread..

Wiki reference: Paying down loans versus investing 15yr mortgage. 275K remaining, at 2.75%. Home bought at550K in 2008, now worth around 900K. So you have only five years left on the mortgage. This means that you would get a risk-free 2.75% return, with a duration of 2.5 years, if you pay it off, or...
by grabiner
Thu Sep 20, 2018 8:58 pm
Forum: Personal Finance (Not Investing)
Topic: Should we temporarily reduce our retirement contributions in order to pay off our $400k mortgage in 7 years?
Replies: 77
Views: 5984

Re: Should we temporarily reduce our retirement contributions in order to pay off our $400k mortgage in 7 years?

If you want to pay off your mortgage faster, then you should refinance to 15 years at a lower rate. You will then pay less in interest while paying off the mortgage, whether you pay it off in 15 years or 7. And if you do this, I wouldn't recommend reducing retirement contributions to make extra paym...
by grabiner
Thu Sep 20, 2018 8:45 pm
Forum: Investing - Theory, News & General
Topic: Do vanguard tsm and 500 funds distribute capital gain?
Replies: 11
Views: 1230

Re: Do vanguard tsm and 500 funds distribute capital gain?

I don't think one needs to worry about "some massive capital gain distribution" that would put you into "a massive capital gain tax situation." But I think these funds will distribute some minor capital gains from time to time. There is absolutely NO guarantee of no capital gains distributions. Yea...
by grabiner
Thu Sep 20, 2018 6:23 pm
Forum: Investing - Theory, News & General
Topic: How likely is it for a corporate bond rated BAA3/BBB to fail?
Replies: 16
Views: 1322

Re: How likely is it for a corporate bond rated BAA3/BBB to fail?

Risks that can be diversified away are not generally compensated for by the market. It may be profitable to invest in this bond on average. However you don’t get the average if you buy just this bond. You either get your money plus 4.5% or nothing. That is a gigantic variance in outcome (variance =...
by grabiner
Thu Sep 20, 2018 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: treating all of investments as one asset allocation pool
Replies: 14
Views: 1347

Re: treating all of investments as one asset allocation pool

I would appreciate inputs on three more questions. 1. If bonds addition is needed to satisfy asset allocation and 401k is already 100% bonds, is ROTH IRA or taxable account a better place for adding bonds for rebalancing to satisfy asset allocation? Usually Roth IRA. 2. does the below order of with...
by grabiner
Thu Sep 20, 2018 5:50 pm
Forum: Investing - Help with Personal Investments
Topic: HSA investment plan
Replies: 10
Views: 731

Re: HSA investment plan

(~50k invested, working on paying off my wife's student loans while also maxing out my 401k, which is in a target retirement fund). I will have an opportunity to fine tune the asset allocation across other accounts shortly, so I don't mind putting all of this into a bond fund. Since you are paying ...
by grabiner
Thu Sep 20, 2018 5:42 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional TSP and Roth TSP
Replies: 16
Views: 1357

Re: Traditional TSP and Roth TSP

Given your other posts, I believe you work in Florida. This makes the Roth TSP more attractive, as Florida does not tax your salary, and if you retire in a state which does have an income tax, you will pay state tax on traditional but not Roth TSP withdrawals. Note that contributing 5% to the Roth T...
by grabiner
Thu Sep 20, 2018 5:36 pm
Forum: Investing - Help with Personal Investments
Topic: Dollar cost average funds being transferred to new retirement account?
Replies: 24
Views: 1459

Re: Dollar cost average funds being transferred to new retirement account?

Threads several times a week on this. Often quoted studies show that DCA loses to lump sum investing roughly 2/3 of the time. That is correct but I believe those studies relate to a different scenario (a lump sum of money not already in the market). That doesn't matter for the purpose of the study....
by grabiner
Thu Sep 20, 2018 5:26 pm
Forum: Investing - Help with Personal Investments
Topic: Using Capital Losses to Free Up Headspace for Roth Conversions in 12% Tax Bracket
Replies: 2
Views: 344

Re: Using Capital Losses to Free Up Headspace for Roth Conversions in 12% Tax Bracket

This strategy will work. If you convert up to the point where your total taxable income is $38,600 single, $77,200 married, you will pay no tax on your capital gains. For example, if you are single and take the $12,000 standard deduction, you can have income (including conversion) of $50,600. If you...
by grabiner
Thu Sep 20, 2018 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Would Stop Orders with ETFs protect against a downturn?
Replies: 21
Views: 1222

Re: Would Stop Orders with ETFs protect against a downturn?

So Stops don’t sound all that helpful anymore. Puts seem to be beyond anything I’m wanting to get into. So that leaves me with: - Stock ETFs or Index Funds and just ride out the market. - Managed funds that might be able to provide some protection against a downturn? - a few “well picked” stocks (i...
by grabiner
Sun Sep 16, 2018 8:00 pm
Forum: Investing - Theory, News & General
Topic: 2017 Relative Tax Efficiency
Replies: 94
Views: 15386

Re: 2017 Relative Tax Efficiency

The "tax efficiency" calculation here is different from M*. Perhaps, it can be called tax drag ratio :-) The reason is that M* assumes the highest federal tax rate but no state tax. The spreadsheet allows you to choose your own tax rates on ordinary income and qualified dividends. In addition, M* d...
by grabiner
Sun Sep 16, 2018 10:47 am
Forum: Investing - Theory, News & General
Topic: total bond return vs muni bond
Replies: 6
Views: 723

Re: total bond return vs muni bond

Credit risk premium? Particularly over the time indicated. The current ten-year period started in September 2008, when Treasury yields were unusually low compared to other bond yields because of the financial crisis. MUB lost 12% of its value in one month, while Total Bond Market, which holds a lot...
by grabiner
Sun Sep 16, 2018 10:38 am
Forum: Personal Finance (Not Investing)
Topic: When to Tap Into SS
Replies: 14
Views: 1653

Re: When to Tap Into SS

--my investment portfolio is right around $1.5MM You can afford to use this portfolio to cover your living expenses before you take Social Security. Effectively, you are buying an annuity; you spend money at 65 rather than taking SS, and your benefit at 66 is higher. (And then you can do the same t...
by grabiner
Sun Sep 16, 2018 10:27 am
Forum: Personal Finance (Not Investing)
Topic: How much to request on increase credit line & Large loan approval
Replies: 7
Views: 354

Re: How much to request on increase credit line & Large loan approval

Reason for this is because I'm looking to make a large auto purchase (around $150K) in the coming 6 months. Current toy car can sell for $60-$65K. If I want to finance the purchase, should I put the entire $60-$65K towards the car for down payment or put as little down to invest the rest? Going to ...
by grabiner
Sun Sep 16, 2018 9:38 am
Forum: Investing - Help with Personal Investments
Topic: Opinions on American Funds
Replies: 28
Views: 1860

Re: Opinions on American Funds

You may be in the rare situation in which C shares make sense. C shares are guaranteed to underperform A shares if held for at least eight years, and they are usually intended for investments which you should keep at least that long. But if your SIMPLE IRA allows you to roll out money after two year...
by grabiner
Sun Sep 16, 2018 9:29 am
Forum: Investing - Help with Personal Investments
Topic: Need help in choosing small cap value fund
Replies: 12
Views: 773

Re: Need help in choosing small cap value fund

I agree, use VIOV or IJS in taxable. Vanguard fund is not only less tax efficient but is also a much larger median cap. No reason you can’t only hold SCV in tax-advantaged though if easier. The tax difference between VIOV (S&P 600 Value) and VBR (FTSE Small-Cap value) is almost enough to cancel out...
by grabiner
Sun Sep 16, 2018 9:22 am
Forum: Investing - Help with Personal Investments
Topic: Large, Mid, Small Cap Recommendations for Roth IRA
Replies: 10
Views: 628

Re: Large, Mid, Small Cap Recommendations for Roth IRA

If you have $80K in an S&P 500 fund, holding $20K in Extended Market Index (as a fund or the ETF VXF) allows you to match the total market index. Therefore, if that is your goal, you have a fund designed for that purpose. If the IRA needs more US stock than is needed to match the total market index,...
by grabiner
Sat Sep 15, 2018 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Account tax liability mix for retirement
Replies: 4
Views: 432

Re: Account tax liability mix for retirement

The HSA is the best place to contribute money once you have any employer match on the 401(k). HSA contributions are tax-deductible, and withdrawals are tax-free if used for medical expenses; this is better than a Roth. If your salary is $70K and you are filing as head of household, you are currently...
by grabiner
Sat Sep 15, 2018 10:55 pm
Forum: Personal Finance (Not Investing)
Topic: Considering an HSA with a baby on the way - good idea or bad?
Replies: 9
Views: 743

Re: Considering an HSA with a baby on the way - good idea or bad?

You need to work out the math. Babies do frequently come with large medical costs, particularly from the birth (which might be a single hospital co-pay on a conventional plan). However, depending on how an employer subsidizes the plans, and on your tax bracket, it sometimes happens that an HDHP come...
by grabiner
Sat Sep 15, 2018 12:01 am
Forum: Personal Finance (Not Investing)
Topic: Paying down mortgage vs investing
Replies: 30
Views: 2479

Re: Paying down mortgage vs investing

Investing grows by compound interest, while the mortgage payment is simple interest. The mortgage payment also compounds. If you make an extra mortgage payment, you pay the same amount in the next month, but less of that payment is interest and more is principal. For a simple example, suppose you h...
by grabiner
Fri Sep 14, 2018 8:48 pm
Forum: Investing - Help with Personal Investments
Topic: VTSAX and VTMSX in taxable
Replies: 12
Views: 1493

Re: VTSAX and VTMSX in taxable

Small-caps will necessarily be a little less tax efficient. Not for Tax-Managed Small-Cap, which has 100% qualified dividends. This is my preferred fund if you choose to overweight small-cap blend in taxable. (I don't hold the fund myself because my US small-caps are all in tax-deferred accounts.) ...
by grabiner
Fri Sep 14, 2018 8:44 pm
Forum: Personal Finance (Not Investing)
Topic: Default of 403b loan?
Replies: 10
Views: 522

Re: Default of 403b loan?

He won’t actually default on the loan; after all, it is his own money. What will happen is that the unpaid balance becomes a distribution and he’ll have to pay income taxes. So it will be treated as if he withdrew the money from the account, and then put it right back in to pay off the loan at once...
by grabiner
Fri Sep 14, 2018 8:37 pm
Forum: Personal Finance (Not Investing)
Topic: Paying down mortgage vs investing
Replies: 30
Views: 2479

Re: Paying down mortgage vs investing

When I hear one advantage of not paying off early is due to liquidity, does that mean that the money would be invested in safer investments like ibonds, money market, or CDs? Doing so would be safer but would not beat 3.6% mortgage rate. And that is the fair comparison, but taxes can make it worthw...
by grabiner
Fri Sep 14, 2018 8:32 pm
Forum: Personal Finance (Not Investing)
Topic: Paying down mortgage vs investing
Replies: 30
Views: 2479

Re: Paying down mortgage vs investing

Investing grows by compound interest, while the mortgage payment is simple interest. The mortgage payment also compounds. If you make an extra mortgage payment, you pay the same amount in the next month, but less of that payment is interest and more is principal. For a simple example, suppose you h...
by grabiner
Fri Sep 14, 2018 8:26 pm
Forum: Personal Finance (Not Investing)
Topic: Default of 403b loan?
Replies: 10
Views: 522

Re: Default of 403b loan?

He won’t actually default on the loan; after all, it is his own money. What will happen is that the unpaid balance becomes a distribution and he’ll have to pay income taxes. So it will be treated as if he withdrew the money from the account, and then put it right back in to pay off the loan at once...
by grabiner
Fri Sep 14, 2018 7:19 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off 3.125% 152k mortgage early?
Replies: 37
Views: 3108

Re: Pay off 3.125% 152k mortgage early?

We could easily be in a situation soon where a money market or CD pay >3%, so you could generate a risk-free net gain on your mortgage. This would be the case only if the mortgage is deductible, which it likely isn't for the OP. A 4% taxable return would be only 3.04% after tax in the 24% tax brack...
by grabiner
Fri Sep 14, 2018 7:06 pm
Forum: Investing - Help with Personal Investments
Topic: Small cap tilt
Replies: 40
Views: 2846

Re: Small cap tilt

I have some tilt to small cap, both domestically and internationally (VB and VSS, as well as VBR). I have overweighted small cap, value, and emerging markets for years. Grabiner, how much do you overweight EM and with what justification? I overweight EM too actually but was curious about your % and...
by grabiner
Thu Sep 13, 2018 8:33 pm
Forum: Personal Consumer Issues
Topic: Travel credit cards
Replies: 28
Views: 2823

Re: Travel credit cards

The chase "trifecta" signs intriguing...but are travel rewards as good as or equal to straight cash back for someone who travels infrequently? https://www.nerdwallet.com/blog/credit-cards/cash-back-vs-travel-rewards-credit-cards-study/ It really depends on the type of rewards. Rewards that can be u...
by grabiner
Thu Sep 13, 2018 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: Another mortgage pay off question
Replies: 2
Views: 577

Re: Another mortgage pay off question

Current plan: take out 15 or 30 year mortgage (currently renting as we already sold home). Have wife apply for her benefits at 62 for SSI. I will wait until 70 to apply for my benefits so her survivor benefits will be the highest. We don’t really need her SSI but the plan is to use it to pay down t...
by grabiner
Thu Sep 13, 2018 8:09 pm
Forum: Investing - Theory, News & General
Topic: CA Muni Bonds Recommendations
Replies: 5
Views: 533

Re: CA Muni Bonds Recommendations

Is based upon the knowledge that interest rates will be rising, it is still a good idea and time to invest some money in CA Muni Bonds or Muni Funds for diversification purpose or REITs will be better options. Bond traders already know that interest rates will be rising, and they trade bonds at pri...
by grabiner
Thu Sep 13, 2018 8:04 pm
Forum: Investing - Theory, News & General
Topic: etf investing strategy
Replies: 8
Views: 780

Re: etf investing strategy

When i bought VTI it was trading for around $136/share. Now its around $149/share. So was curious if auto investing without considering the current market price was good. Thanks It's still a good investment if it fits your needs. The fact that the stock market has gone up recently doesn't say much ...
by grabiner
Thu Sep 13, 2018 7:57 pm
Forum: Investing - Help with Personal Investments
Topic: Dad's variable annuity after death
Replies: 2
Views: 440

Re: Dad's variable annuity after death

If you don't need the variable annuity, it makes sense to get rid of it and select a lower-cost investment, rather than planning to annuitize it. Check with the annuity provider whether the surrender change is waived upon the death of the holder. If it isn't, you might wait a few months for the char...
by grabiner
Thu Sep 13, 2018 7:53 pm
Forum: Investing - Help with Personal Investments
Topic: Best options for Cash to beat inflation (other than CD) for short term 1-3 years
Replies: 7
Views: 994

Re: Best options for Cash to beat inflation (other than CD) for short term 1-3 years

If your time horizon is that short you really can't "beat inflation" as such. Sure, you can buy TIPS but they are bonds that can go down as well as up. Three-year TIPS are yielding 0.725%; if you hold to maturity, you won't lose principal by the end. (For that matter, CDs also change value as rates...
by grabiner
Thu Sep 13, 2018 7:48 pm
Forum: Investing - Help with Personal Investments
Topic: Determining when to take Social Security if you don’t need the money
Replies: 21
Views: 1768

Re: Determining when to take Social Security if you don’t need the money

If you don't need the money, then you should go by expected value, and that depends on your life expectancy. For singles, the optimal age for a man of average life expectancy is 69, but most men making this decision know that they have above-average life expectancy and are better off waiting until 7...
by grabiner
Thu Sep 13, 2018 7:42 pm
Forum: Investing - Help with Personal Investments
Topic: Small cap tilt
Replies: 40
Views: 2846

Re: Small cap tilt

I have overweighted small cap, value, and emerging markets for years. I prefer to increase the risk of my portfolio by holding riskier stocks (exposure to different risk factors in addition to the market), rather than holding more stock. Thus, in 2007-2009, while my portfolio was 90% stock, it decli...
by grabiner
Wed Sep 12, 2018 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: sector etfs
Replies: 4
Views: 416

Re: sector etfs

Thank You but is not the sectors like the tech sector which usually drives the market . Is having both total market etf and technology sector etf like FTEC a good strategy ? I was just curious if contributing more to tech sector etf would give better returns. I don't know whether the tech sector wi...
by grabiner
Wed Sep 12, 2018 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: paying mortgage
Replies: 12
Views: 1709

Re: paying mortgage

Welcome to the forum! My primary residence mortgage balance is $122K with 4.125% and the rental (investment) balance is $37K at 5.5%. This is simple math (not going with higher rate), which one should I pay $20,000 additional ? Not sure how to factor in rental / taxes etc. Help :) Paying down an X% ...