Search found 20988 matches

by grabiner
Tue Jan 23, 2018 12:40 am
Forum: Personal Finance (Not Investing)
Topic: How does Tax Reform affect Refi with Cash out?
Replies: 10
Views: 519

Re: How does Tax Reform affect Refi with Cash out?

(a) tIRAs: - I would lose out on the potential growth of my tIRA, which is likely higher than the cost of mortgage interest This is the usual decision whether to pay down a loan or invest. The return on low-risk investments in the IRA is less than the interest you pay on your loans. However, you lo...
by grabiner
Mon Jan 22, 2018 2:45 pm
Forum: Investing - Help with Personal Investments
Topic: Couple questions for taxable account
Replies: 14
Views: 1089

Re: Couple questions for taxable account

Can I use dividends from taxable to buy funds in the tax-deferred account and vice versa? I assume that dividends will settle in Money market if not re-invested, but each account has it own money market fund. You can only do this subject to the normal rules on moving money. If you haven't made your...
by grabiner
Mon Jan 22, 2018 2:34 pm
Forum: Investing - Help with Personal Investments
Topic: Couple questions for taxable account
Replies: 14
Views: 1089

Re: Couple questions for taxable account

The ways to get around this are to do rebalancing in a tax-deferred account (where there are no taxes on capital gains), and with dividends from your taxable investment. If you have too much in stock, you can use the dividends from your stock fund to buy bond funds without any capital-gains tax. Do...
by grabiner
Mon Jan 22, 2018 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: Help to vet thinking on mortgage pay down/off scenario
Replies: 3
Views: 488

Re: Help to vet thinking on mortgage pay down/off scenario

So, a twist: our credit union has a secured loan feature which allows us to borrow against the deposit. It currently pays 1% for deposit and charges 2.5% for the secured loan, so the effective borrowing rate is 1.5%. This is not comparable to an interest rate, because it ties up your money. If you ...
by grabiner
Mon Jan 22, 2018 2:12 pm
Forum: Personal Finance (Not Investing)
Topic: Hold harmless rule ?
Replies: 2
Views: 431

Re: Hold harmless rule ?

The hold-harmless benefit isn't that great. What happens is that your net of SS, after paying Medicare, can't go down. Thus, if your monthly SS is $1000, and inflation the next year is 1%, your payment the next year would be $1010. If Medicare goes up by $20 per month, your take-home would decrease ...
by grabiner
Mon Jan 22, 2018 1:54 pm
Forum: Investing - Help with Personal Investments
Topic: What is the best way to change current investments to tilt to SCV
Replies: 7
Views: 510

Re: What is the best way to change current investments to tilt to SCV

You could buy IJS in your taxable account, say with the $59,320 you mentioned, but maybe paying off debt is a better idea for the $59,320. Is VIOV not more tax efficient tracking the same thing? VIOV and IJS should be equally tax-efficient; neither Vanguard nor iShares stock index ETFs are likely t...
by grabiner
Mon Jan 22, 2018 12:42 pm
Forum: Investing - Help with Personal Investments
Topic: Couple questions for taxable account
Replies: 14
Views: 1089

Re: Couple questions for taxable account

I know it is a stupid question, but ... Here is the example. If I have a stock fund A and a bond fund B. Fund A earned a good amount of money, but now I want to re-balance it into fund B or even into the Money market fund. Will I trigger capital gains on fund A? I would assume I would and I would a...
by grabiner
Mon Jan 22, 2018 12:22 pm
Forum: Investing - Help with Personal Investments
Topic: Ready to give up on bond fund, Lost 2.25% past 6 months
Replies: 57
Views: 5938

Re: Ready to give up on bond fund, Lost 2.25% past 6 months

Novice here. I have small part of my retirement portfolio in the bond fund of SWAGX, an intermediate bond fund from Schwab. It’s been losing money ever since I bought it 6 months ago. I want to just give up and invest in a 2% cd at synchrony instead. I thought bonds were supposed to be the stablizi...
by grabiner
Mon Jan 22, 2018 11:44 am
Forum: Forum Issues and Administration
Topic: How to delete a post / topic
Replies: 3
Views: 316

Re: How to delete a post / topic

Anyone know how to delete an old post or topic? I go under my posts but dont see anywhere where i can delete posts or topics. Thnks I think you can only delete a topic by contacting one of the moderators. As far as a post goes, there is a limited period that the delete button is available. I don't ...
by grabiner
Sun Jan 21, 2018 6:11 pm
Forum: Investing - Theory, News & General
Topic: Does a Wider rebalancing band not make more sense?
Replies: 19
Views: 1433

Re: Does a Wider rebalancing band not make more sense?

I am retired and hold a 30% stock allocation. My rebalancing strategy is to rebalance when my allocation of stocks jumps above 35% or drops under 25%. Although the strategy keeps my risk under control, I wonder if an asymmetric band would not be more profitable. What I mean is that stocks drop 10%+...
by grabiner
Sun Jan 21, 2018 6:02 pm
Forum: Investing - Help with Personal Investments
Topic: 2018 Mortgage Interest Schedule A
Replies: 8
Views: 779

Re: 2018 Mortgage Interest Schedule A

If you pay down your mortgage, the interest savings comes entirely out of the deductible interest; therefore, you should reduce your interest rate by the full 37% for deciding whether to pay it down. Your after-tax return on a mortgage prepayment would be only 2.11%. If you pay off your mortgage, yo...
by grabiner
Sun Jan 21, 2018 5:54 pm
Forum: Investing - Help with Personal Investments
Topic: Walmart HSA Investment Options Advice?
Replies: 2
Views: 325

Re: Walmart HSA Investment Options Advice?

Your HSA, like your IRA and 401(k), is being invested for expenses in retirement. Therefore, it makes sense to have a single allocation over all three. If you use target-date funds in your IRA and 401(k), you can use them in the HSA. If you manage your own allocation, treat the HSA as part of the IR...
by grabiner
Sun Jan 21, 2018 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: How does Tax Reform affect Refi with Cash out?
Replies: 10
Views: 519

Re: How does Tax Reform affect Refi with Cash out?

Home acquisition debt is deductible; this is debt taken out to buy, build, or improve your home, or refinancing of this debt. If you take a cash-out refinance of a loan you used to buy your home, the amount of the old mortgage is home acquisition debt; any balance added to the loan is only deductibl...
by grabiner
Sat Jan 20, 2018 1:32 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1834

Re: Reconciling thoughts on Investing Vs Paying down mortgage

compounding interest :oops: It makes your savings prosper, but costs you dearly when you are the debtor. Prepay a 30 year mortgage so that it will amortize over 15 instead of 30 years, and your ROI will be over 25% without having to do the math for your specific situation. And this return is tax fr...
by grabiner
Sat Jan 20, 2018 12:21 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Portfolio Watch Evaluation -- Help Needed.
Replies: 14
Views: 788

Re: Vanguard Portfolio Watch Evaluation -- Help Needed.

Portfolio Watch is most useful for identifying the characteristics of your portfolio. If you overweight real estate, or underweight international stock, or hold taxable bonds in your taxable account, or hold mostly short-term bonds, Portfolio Watch will tell you that your portfolio deviates from a s...
by grabiner
Sat Jan 20, 2018 12:10 pm
Forum: Investing - Help with Personal Investments
Topic: Best International Small Cap Option
Replies: 5
Views: 568

Re: Best International Small Cap Option

The commission for something like VSS (Vanguard's international small-cap ETF) is a trivial cost. If you buy 100 shares at the current market price of $124.30, an $8 commission to buy, and another $8 when you sell, is an extra 0.13% expense. And that's a one-time expense; if you hold the fund for 13...
by grabiner
Sat Jan 20, 2018 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: Military TSP Question
Replies: 8
Views: 806

Re: Military TSP Question

bovineplane wrote:
Sat Jan 20, 2018 3:53 am
Just confirming they do cut it off. Makes for a nice December check when nothing is taken out.
Don't let that happen if you are getting a match (under the new Blended Retirement System, or as a civilian under FERS); if you don't contribute in the last pay period, you won't get the match.
by grabiner
Sat Jan 20, 2018 12:03 pm
Forum: Investing - Help with Personal Investments
Topic: Advice for in-kind transfers in the midst of the Gov't shutdown
Replies: 8
Views: 477

Re: Advice for in-kind transfers in the midst of the Gov't shutdown

The usual principle for reacting to the news is to do nothing unless you know something other investors don't. Everyone knows that the government is shut down. But if you work for a government contractor, and you are now on furlough without pay, your personal financial situation has changed, and you...
by grabiner
Sat Jan 20, 2018 11:57 am
Forum: Investing - Help with Personal Investments
Topic: Advice for in-kind transfers in the midst of the Gov't shutdown
Replies: 8
Views: 477

Re: Advice for in-kind transfers in the midst of the Gov't shutdown

If you stay in the same asset class, you don't care about market movements. If you sell one stock fund Monday to buy another stock fund, and the market rises or falls Tuesday, it will take both funds up or down by the same amount. But even if you have to be out of the market for a few days (because ...
by grabiner
Sat Jan 20, 2018 11:38 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1779

Re: Why hold bond funds in tax advantaged accounts?

While I don't have any new comments on fund placement -- bonds have seen arguments on both sides -- I am a bit sad to see the capital losses on my bond funds in my traditional IRA (which is all bonds) and Roth (has some bonds) which I can't harvest for tax purposes. If bond yields continue to rise,...
by grabiner
Sat Jan 20, 2018 12:34 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1779

Re: Why hold bond funds in tax advantaged accounts?

And taxes affect the long-term value of the portfolio. If Fund A costs an extra 1% per year in taxes compared with Fund B, then holding Fund A in taxable and Fund B in an IRA will give you 26% less in your taxable account 30 years compared to holding Fund B in taxable and Fund A in an IRA. Your two...
by grabiner
Fri Jan 19, 2018 7:19 pm
Forum: Personal Finance (Not Investing)
Topic: Qualified Dividends Chevron
Replies: 8
Views: 435

Re: Qualified Dividends Chevron

In previous years put full amount on line 9a Form 1040 from 1099 form 1a (Total Ordinary Dividends) and left line 9b Form 1040 blank even though 1099 box 1b (Qualified Dividends) shows same amount as box 1099 1a. Like many am always learning which is what I appreciate about the BH community.. Did I...
by grabiner
Fri Jan 19, 2018 7:03 pm
Forum: Personal Finance (Not Investing)
Topic: Qualified Dividends Chevron
Replies: 8
Views: 435

Re: Qualified Dividends Chevron

You are the victim of what I consider to be very poor naming by IRS.........I think box 1 should be called Total Dividends to avoid the trap you fell into. Why they had to add that "ordinary" term escapes me. Some payments which look like dividends are not dividends at all, and thus are taxed diffe...
by grabiner
Fri Jan 19, 2018 6:13 pm
Forum: Investing - Help with Personal Investments
Topic: Why even have Bonds in a 401k?
Replies: 30
Views: 2897

Re: Why even have Bonds in a 401k?

Related question - I see VBTLX has 64% allocation in US Treasuries, isn't this tax exempt at the state level? So in my situation (I live in California) can I deduct 64% off the interest dividends from this fund on my state taxes? If so, it reduces tax liability quite a bit as CA taxes are 9.3%. 64%...
by grabiner
Fri Jan 19, 2018 6:01 pm
Forum: Investing - Help with Personal Investments
Topic: MEC's instead of Bonds?
Replies: 18
Views: 736

Re: MEC's instead of Bonds?

One Modified Endowment Contract (MEC) that I am looking at is a completely liquid instrument that can grow a maximum of 9% in a year if the S&P gains 10.5% or more and can only lose 1% if the S&P falls or is flat. What is missing here is that the S&P value is the numerical value of the index; if yo...
by grabiner
Fri Jan 19, 2018 4:14 pm
Forum: Investing - Help with Personal Investments
Topic: Income tax on 401k vs roth 401k, please help
Replies: 5
Views: 346

Re: Income tax on 401k vs roth 401k, please help

Traditional 401(k) withdrawals will be taxed at your ordinary tax rate (or your heirs' ordinary tax rate if they inherit it), but contributions are deductible at your tax rate when you contribute. Therefore, if you are in a higher tax bracket now than you expect to be in at retirement, the tradition...
by grabiner
Fri Jan 19, 2018 12:26 am
Forum: Investing - Help with Personal Investments
Topic: 457 worth it with these fees?
Replies: 47
Views: 1416

Re: Formula to determine if Pre-tax is worth Higher Fees

My rule of thumb is that you should only consider taxable investing if the extra cost, multiplied by the number of years you will be in the plan, exceeds twice your tax rate on qualified dividends (15% for most taxpayers, plus state tax). Thus even 1.5% is worth paying unless you expect to spend mor...
by grabiner
Fri Jan 19, 2018 12:18 am
Forum: Investing - Help with Personal Investments
Topic: VCADX vs VBTLX
Replies: 4
Views: 459

Re: VCADX vs VBTLX

As a California resident which is preferable to have in a taxable account? VCADX or VBTLX? VCADX is completely tax exempt from state and federal taxes but the current yield is 2.05% vs 2.62% for VBTLX. What is the differece in risk profile? What is your tax bracket? My rule of thumb is that munis h...
by grabiner
Fri Jan 19, 2018 12:11 am
Forum: Investing - Help with Personal Investments
Topic: Why hold bond funds in tax advantaged accounts?
Replies: 16
Views: 1779

Re: Why hold bond funds in tax advantaged accounts?

I hold bonds (VGIT and VGSH) and REITs (VNQ) in my taxable account. I do this for two reasons: 1) I believe that it will be easier for me to pay more taxes now than later. My small business provides me with a fairly substantial income right now. But I think it is highly unlikely that I will have th...
by grabiner
Fri Jan 19, 2018 12:00 am
Forum: Investing - Help with Personal Investments
Topic: VBINX or separate equity and bond funds?
Replies: 2
Views: 295

Re: VBINX or separate equity and bond funds?

In a tax-deferred account, it doesn't matter. You can reallocate as needed; if you want to sell stocks, you can sell a balanced fund, and then move some money from a balanced fund into a bond fund or a more conservative balanced fund (Wellington to Wellesley).
by grabiner
Thu Jan 18, 2018 11:43 pm
Forum: Personal Finance (Not Investing)
Topic: cash vs in investments percentage
Replies: 3
Views: 402

Re: cash vs in investments percentage

It shouldn't be a percentage; rather, it should be based on need. Your emergency fund should be in cash, as should any money for a specific expense you expect in the next year (for example, a new car, or a tax bill you will need to pay in April). Money that is being saved for expenses more than a ye...
by grabiner
Thu Jan 18, 2018 9:17 pm
Forum: Investing - Help with Personal Investments
Topic: Domestic SCV? [Small Cap Value]
Replies: 38
Views: 4536

Re: Domestic SCV? [Small Cap Value]

About RZV, I think it's a reasonable choice for a tax advantaged account. But when it comes to net assets, it's not that high, and not that far off asset numbers where ETFs get shut down. In a taxable account, I'd be worried that if RZV became unpopular, you'd end up paying some taxes that you woul...
by grabiner
Wed Jan 17, 2018 9:51 pm
Forum: Investing - Theory, News & General
Topic: Automatic rebalancing and bond maturity
Replies: 6
Views: 459

Re: Automatic rebalancing and bond maturity

The principle you are thinking of is that you should not hold a bond fund if your time horizon is shorter than its duration. If you hold a bond fund with a 5-year duration for 5 years, you will make up any losses from rate increases with the higher yields. For this purpose, your time horizon is the ...
by grabiner
Wed Jan 17, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Which to Max First: 401k or HSA?
Replies: 13
Views: 819

Re: Which to Max First: 401k or HSA?

Put enough into the 401(k) to get the employer match, but then max out the HSA in preference to anything else. The reason is that these are the two investments with a big immediate bonus. With a 50% employer match, you get an immediate 50% return on money put into the 401(k). And with a tax deductio...
by grabiner
Wed Jan 17, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds in Taxable: State-Specific Muni Fund?
Replies: 10
Views: 958

Re: Bonds in Taxable: State-Specific Muni Fund?

I'm now in the exact situation as the OP - I also live in MA. If I went with VMATX in taxable and then moved to another state, would I then be required to sell VMATX for another state muni fund or a VWITX, for example? I don't think you would be required to sell, but there wouldn't be any point in ...
by grabiner
Wed Jan 17, 2018 9:37 pm
Forum: Investing - Help with Personal Investments
Topic: Withdrawals from Index Funds and Taxes
Replies: 3
Views: 422

Re: Withdrawals from Index Funds and Taxes

Welcome to the forum! You can reduce the tax cost by setting your sales to specific identification. For example, if you bought 100 shares for $20, and 100 shares for $25, and you now need to sell 100 shares at $30, you can specify which shares you sell. You can choose to sell the shares bought at $2...
by grabiner
Wed Jan 17, 2018 9:32 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA vs Taxable account international funds
Replies: 2
Views: 196

Re: Roth IRA vs Taxable account international funds

If you can hold everything in your 401(k) and Roth IRA, that is better than holding anything in a taxable account. You do lose the foreign tax credit on international stock funds, but you avoid the tax on dividends and capital gains, which is a larger effect. If you must hold a taxable account, US a...
by grabiner
Wed Jan 17, 2018 9:27 pm
Forum: Investing - Help with Personal Investments
Topic: Is a Stable Value fund just a Variable Annuity?
Replies: 25
Views: 1577

Re: Is a Stable Value fund just a Variable Annuity?

I would say that a variable annuity is a wrapper. Inside a variable annuity, you can hold different types of investments, such as stock funds, bond funds, real-estate funds, and stable-value funds. TIAA offers all four of these in its annuities.
by grabiner
Wed Jan 17, 2018 8:24 pm
Forum: Personal Finance (Not Investing)
Topic: Confusing employer treatment of multi-state W-2
Replies: 5
Views: 422

Re: Confusing employer treatment of multi-state W-2

Since you are new to the forum, I should also warn you that nothing on this forum should be considered tax advice; check with your state tax advisor or the state tax bureau to see how to report your income.
by grabiner
Wed Jan 17, 2018 8:23 pm
Forum: Investing - Help with Personal Investments
Topic: Help with tax efficient asset allocation for taxable account
Replies: 16
Views: 1343

Re: Help with tax efficient asset allocation for taxable account

Total Bond Market 2.6% Limited-Term Tax-Exempt 1.80% / (1 - 0.22) = 2.3% Intermediate-Term Tax-Exempt 2.14% / (1 - 0.22) = 2.74% New York Long-Term Tax-Exempt 2.26% / (1 - 0.22 - 0.0645) = 3.15% Average yield for Limited-Term Tax-Exempt and New York Long-Term Tax-Exempt (2.3% + 3.15%) / 2 = 2.72% I...
by grabiner
Wed Jan 17, 2018 8:18 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1834

Re: Reconciling thoughts on Investing Vs Paying down mortgage

So it is a question of how do I deploy excess cash flows that come in on a monthly basis. Option 1: Investing in taxable account with expected return of 7% and S.D of say 10% Option 2: Pay back mortgage that costs 2.75% (from 2018 none of which will be deductible) Option 3: Invest in fixed instrume...
by grabiner
Tue Jan 16, 2018 10:09 pm
Forum: Investing - Theory, News & General
Topic: Why Buy Bonds If You Have A Mortgage?
Replies: 187
Views: 17421

Re: Why Buy Bonds If You Have A Mortgage?

inbox788, The question assumes that the choice is between A) Invest in the bond Versus B) Pre-paying mortgage It is the wrong question. The correct question is between A) Invest in your portfolio aka in my case (60/40) Versus B) Pre-paying mortgage Actually, there are two different choices: Do you ...
by grabiner
Tue Jan 16, 2018 9:50 pm
Forum: Personal Finance (Not Investing)
Topic: Confusing employer treatment of multi-state W-2
Replies: 5
Views: 422

Re: Confusing employer treatment of multi-state W-2

Some states have special rules for working from home: you are considered to be working at your regular work location if you could have worked there but work for home instead. However, it doesn't look like MA does this. Therefore, you would apportion your income on your MA nonresident form; if you wo...
by grabiner
Tue Jan 16, 2018 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Got raise. Taxes taking 41% of it?
Replies: 30
Views: 3888

Re: Got raise. Taxes taking 41% of it?

I know it doesn't feel like at this time but Medicare and SS taxes are "investments/savings/benefits" for your future. Hopefully, they will be there for you like they are and will be for me and my spouse. I am retired and will begin to collect SS at age 70 in March. It is almost equal to my pension...
by grabiner
Tue Jan 16, 2018 9:24 pm
Forum: Investing - Theory, News & General
Topic: Reconciling thoughts on Investing Vs Paying down mortgage
Replies: 15
Views: 1834

Re: Reconciling thoughts on Investing Vs Paying down mortgage

However, as you near retirement, when you look at a portfolio from the point of view to support expenses, it might make sense to pay down the mortgage even if it is at a lower cost. Let us look at an example. Expenses without mortgage: 40,000 Mortgage Expenses : 28,000 Mortgage left: 240,000 Mortga...
by grabiner
Tue Jan 16, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: Taking Profits From Index Funds in a Bull Market
Replies: 4
Views: 1128

Re: Taking Profits From Index Funds in a Bull Market

Selling your investments to buy things which you need is a good decision, regardless of the state of the market. The reason you are investing money is so that you can spend it, so the spending is the purpose of your investments. You may also want to sell stock in a bull market for an unrelated reaso...
by grabiner
Tue Jan 16, 2018 8:59 pm
Forum: Investing - Help with Personal Investments
Topic: 403b am I better off skipping 403b?
Replies: 10
Views: 917

Re: 403b am I better off skipping 403b?

After maxing out a Roth IRA (for 2017 as well if you haven't done it yet), you should use the 403(b). Hold asset classes in your IRA for which your 403(b) has more expensive options; for example, if the international funds cost much more than the US funds in the 403(b), hold an international index i...
by grabiner
Tue Jan 16, 2018 8:52 pm
Forum: Investing - Help with Personal Investments
Topic: In this case, put bonds in taxable?
Replies: 10
Views: 762

Re: In this case, put bonds in taxable?

In the 12% tax bracket, and living in TX (I assume) so that there is no state tax, qualified dividends and long-term gains are tax-free. Therefore, it makes sense to use stocks in your taxable account, as they get no tax benefit from the tax shelter of the IRA. You can take enough capital gains each...
by grabiner
Tue Jan 16, 2018 8:47 pm
Forum: Investing - Help with Personal Investments
Topic: Help with tax efficient asset allocation for taxable account
Replies: 16
Views: 1343

Re: Help with tax efficient asset allocation for taxable account

Just to clarify: isn't having both limited-term and long-term funds redundant? I mean if minimizing risk and federal tax exemption is goal I can go with Intermediate-Term Tax-Exempt Fund, right? The idea is to use Limited-Term Tax-Exempt and NY Long-Term Tax-Exempt, so that you can get an intermedi...
by grabiner
Tue Jan 16, 2018 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: AA mix vs paycheck mix percentages
Replies: 12
Views: 522

Re: AA mix vs paycheck mix percentages

Are all your new investments coming from the paycheck? If not, then you should arrange for your total investments to match your asset allocation, to minimize rebalancing. That's what I have long done. I hold all my bonds in my employer plan, but I also invest in a Roth IRA and a taxable account. Whe...