Search found 20626 matches

by grabiner
Fri Dec 15, 2017 10:29 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds-Is the "coupon" what we should expect for return??
Replies: 10
Views: 371

Re: Bonds-Is the "coupon" what we should expect for return??

No, you should expect the return to be on average closer to the yield (to maturity, or in some cases yield to worst). I think (but am not sure) that this is only true for Treasuries. At least, I've never seen any other bond used in the usual "yield predict return" charts. Plus, no one really thinks...
by grabiner
Fri Dec 15, 2017 10:22 pm
Forum: Investing - Help with Personal Investments
Topic: Buying funds in December
Replies: 1
Views: 115

Re: Buying funds in December

Welcome to the forum! If you buy a fund before it makes a distribution, you will owe tax on the distribution. However, with the type of investments you are likely to make, the tax will be trivial, so I wouldn't bother waiting. For example, Total Stock Market Admiral Shares have a 1.76% yield, and pa...
by grabiner
Fri Dec 15, 2017 10:15 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds-Is the "coupon" what we should expect for return??
Replies: 10
Views: 371

Re: Bonds-Is the "coupon" what we should expect for return??

The coupon is only what you expect in return if you buy the bond at its par value. If you buy at a premium or discount to par, or if you buy a fund which holds bonds at a premium or discount, your return will not match the coupon. For example, suppose that a bond with a par value of $1000 pays $20 e...
by grabiner
Fri Dec 15, 2017 10:09 pm
Forum: Investing - Help with Personal Investments
Topic: Use HSA money now for high medical expenses?
Replies: 8
Views: 769

Re: Use HSA money now for high medical expenses?

In response to terran: I'm not understanding your first paragraph about reimbursing myself from the HSA and using that money to fund my retirement account. What I think you are saying is just to use the HSA money for the expenses now and the money I would save by using HSA funds instead of out of m...
by grabiner
Fri Dec 15, 2017 10:02 pm
Forum: Investing - Help with Personal Investments
Topic: Changing companies and what to do w pretax retirement funds
Replies: 9
Views: 344

Re: Changing companies and what to do w pretax retirement funds

I completely missed that! You're right. I'll just push everything into my new employer's 401k. Thank you for stating the obvious! Makes me think that a financial advisor could be worth it so that I don't make a mistake like this. :oops: This is not at all obvious. If your new employer's 401(k) has ...
by grabiner
Fri Dec 15, 2017 9:29 pm
Forum: Investing - Help with Personal Investments
Topic: Is there still time to open a backdoor Roth this year?
Replies: 7
Views: 460

Re: Is there still time to open a backdoor Roth this year?

I did this today. Opened a Tira and Roth ira with vanguard. They said the 5500 has to sit in my Tira for 7 days before being transferred. I had not heard this mentioned before, but I guess that is what I will do since the service person said that was their policy. This was because you made the cont...
by grabiner
Fri Dec 15, 2017 9:27 pm
Forum: Investing - Theory, News & General
Topic: Do ETFs have the same issue as mutual funds at year end (distributions)?
Replies: 10
Views: 1376

Re: Do ETFs have the same issue as mutual funds at year end (distributions)?

So in the usual ETF structure, the cap gains will be depressed compared to the equivalent mutual fund. With VG's structure the equivalent mutual fund cap gains are also depressed like the ETF. Further, with VG's structure the ETF and equivalent mutual fund shares can be exchanged without a taxable ...
by grabiner
Thu Dec 14, 2017 10:01 pm
Forum: Investing - Help with Personal Investments
Topic: Tax planning: Convert Roth or zero tax due?
Replies: 18
Views: 1007

Re: Tax planning: Convert Roth or zero tax due?

I was aiming to do Roth conversions for the first 4 years of retirement before I hit RMD age. I was only going to be converting to the top of the 15% bracket, $35k a year, and the CPA I consulted noted that it would not make a significant impact on the size of my RMDs, but I went ahead with the pla...
by grabiner
Thu Dec 14, 2017 9:38 pm
Forum: Investing - Help with Personal Investments
Topic: Tax planning: Convert Roth or zero tax due?
Replies: 18
Views: 1007

Re: Tax planning: Convert Roth or zero tax due?

You should make the Roth conversion to fill up the 15% bracket. You are going to pay tax on the IRA money at some time, so it's better to pay 15% (19% including state tax) now to avoid losing 25% (31% including state tax) later. A further benefit is that converting will reduce your RMDs. If you don'...
by grabiner
Thu Dec 14, 2017 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth IRA worth it?
Replies: 20
Views: 1330

Re: Backdoor Roth IRA worth it?

Often some 401k have one fund whose ERs aren’t horrible. Does yours? Perhaps a Stable Value Fund? We would need to know more about your tax situation to figure out how much converting your tIRA to a rIRA would cost. I have a sizable Rollover tIRA and no 401k, so I gave up on backdoor. Good question...
by grabiner
Thu Dec 14, 2017 9:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is there still time to open a backdoor Roth this year?
Replies: 7
Views: 460

Re: Is there still time to open a backdoor Roth this year?

You can open a 2017 IRA (whether for a backdoor Roth or not) through April 15, 2018, and you can convert it to a Roth IRA at any time. The only difference is that if you make the Roth conversion of your 2017 contribution in 2018, you will pay 2018 tax on any gains. But the backdoor Roth process shou...
by grabiner
Thu Dec 14, 2017 8:55 pm
Forum: Investing - Theory, News & General
Topic: Do ETFs have the same issue as mutual funds at year end (distributions)?
Replies: 10
Views: 1376

Re: Do ETFs have the same issue as mutual funds at year end (distributions)?

Stock ETFs will rarely pay capital-gains distributions, except just after getting started. For example, Vanguard FTSE All-World Ex-US Small-Cap started near the 2009 market bottom. In 2009 and 2010, it had to sell shares to handle index changes, and everything was way up, so it distributed some cap...
by grabiner
Wed Dec 13, 2017 10:13 pm
Forum: Personal Finance (Not Investing)
Topic: States with tax-friendly policies for dividends/LTCG
Replies: 13
Views: 1455

Re: States with tax-friendly policies for dividends/LTCG

GA has a huge income exclusion for retirees, $35K per person age 62-64, and $65 per person age 65+, against investments as well as retirement income, and up to $4000 of earned income. Therefore, most retirees in GA pay no state tax. NJ also has a huge exclusion; as long as you have less than $3000 i...
by grabiner
Wed Dec 13, 2017 10:00 pm
Forum: Personal Finance (Not Investing)
Topic: pay down mortgage or invest in taxable
Replies: 15
Views: 1487

Re: pay down mortgage or invest in taxable

I'm trying to decide whether I should pay down a 30 year fixed mortgage at 3.875 with about 550K left on a 1M home that I plan on living in forever; or invest in my taxable account? If you want to make extra payments on the mortgage (which isn't unreasonable), you might want to refinance it to 15 y...
by grabiner
Wed Dec 13, 2017 9:46 pm
Forum: Investing - Theory, News & General
Topic: Do ETFs have the same issue as mutual funds at year end (distributions)?
Replies: 10
Views: 1376

Re: Do ETFs have the same issue as mutual funds at year end (distributions)?

Stock ETFs will rarely pay capital-gains distributions, except just after getting started. For example, Vanguard FTSE All-World Ex-US Small-Cap started near the 2009 market bottom. In 2009 and 2010, it had to sell shares to handle index changes, and everything was way up, so it distributed some capi...
by grabiner
Wed Dec 13, 2017 9:39 pm
Forum: Investing - Theory, News & General
Topic: Best High Risk/Growth Options for Taxable Account
Replies: 3
Views: 596

Re: Best High Risk/Growth Options for Taxable Account

Your taxable account is for things you want to hold forever, because it will be more costly if you sell. Therefore, if you want to take more risk, it still makes sense to use an index fund of higher-risk stocks. My own taxable account contains Vanguard Emerging Markets Index and Vanguard FTSE All-Wo...
by grabiner
Wed Dec 13, 2017 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: Tax-Efficient Fund Placement
Replies: 6
Views: 595

Re: Tax-Efficient Fund Placement

Having a large portion of your TSP in bonds is not a problem. In general, it is better to have bonds in TSP as compared to taxable. This is particularly the case for TSP investors, because the G fund in the TSP is better than anything you can hold in a retail account. It has the returns of an inter...
by grabiner
Wed Dec 13, 2017 9:19 pm
Forum: Investing - Help with Personal Investments
Topic: Minimize Expense Ratios or Bonds in 401(k)?
Replies: 10
Views: 654

Re: Minimize Expense Ratios or Bonds in 401(k)?

See Tax-adjusted asset allocation on the wiki. Once you tax-adjust, there is no special advantage for holding stocks rather than bonds in your 401(k). If you have $4000 of stock in the 401(k), $3000 of bonds in the Roth IRA, and retire in a 25% tax bracket, you will have the same returns as if you d...
by grabiner
Wed Dec 13, 2017 9:13 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Variable Annuities / REITs
Replies: 11
Views: 746

Re: Vanguard Variable Annuities / REITs

Vanguard Variable Annuities are actually not that bad relatively. They are essentially the only VAs to consider I believe. What you are mainly paying for is insurance that, if the portfolio value goes down, your heirs will have the original value of the portfolio as I understand it. You have to pay...
by grabiner
Wed Dec 13, 2017 9:03 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Variable Annuities / REITs
Replies: 11
Views: 746

Re: Vanguard Variable Annuities / REITs

For someone who does not have the room for REITs in tax advantaged accounts and wants to tilt in that direction, is the Vanguard REIT index variable annuity a good option? It seems like the expenses are not too bad - just a 0.56% expense ratio. Am I missing something? No, you aren't missing anythin...
by grabiner
Wed Dec 13, 2017 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Gain Harvesting
Replies: 20
Views: 890

Re: Tax Gain Harvesting

Ah, this subject can get tangled easy enough (wash sale rule) for different types of sales. Interesting to know the avg movement of daily market. I'm only going to sell approx 30/40K total of a couple of mutual funds and reinvest back into similar fund for 30 days then back into original fund. My o...
by grabiner
Wed Dec 13, 2017 8:49 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable vs. Tax Deferred - not much difference?
Replies: 25
Views: 969

Re: Taxable vs. Tax Deferred - not much difference?

Here's how I would look at it, one year at a time. Say you invest $18,000 in a Roth 401(k) for 30 years, in a a stock fund which grows by 8% annually. In 30 years, you will have $181,128. Say you invest $18,000 in a taxable account, in a stock index fund which has a 2% qualified dividend yield taxed...
by grabiner
Wed Dec 13, 2017 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: ROTH IRA Holders: How Many Of You Max Your Contribution On January 1st?
Replies: 41
Views: 2673

Re: ROTH IRA Holders: How Many Of You Max Your Contribution On January 1st?

I accumulate the December dividends in my money-market fund, rather than reinvesting them immediately. This usually gives me enough money to make my IRA contribution directly on January 2 (and then backdoor it into a Roth); if not, I do a bank transfer. For me, it isn't an issue of dollar-cost avera...
by grabiner
Wed Dec 13, 2017 5:33 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 FEHB HDHP Recommendations
Replies: 49
Views: 4031

Re: 2018 FEHB HDHP Recommendations

What you miss here is that you get the value of the HSA contribution whether you use it this year or not. You have this $3574, but you also have the tax savings on an additional $3900, which is another $1143, so your net cost is $2433. That $1143 is a gain even though it isn't used this year. You h...
by grabiner
Tue Dec 12, 2017 10:37 pm
Forum: Investing - Help with Personal Investments
Topic: Tax questions about moving taxable to lower ER options
Replies: 8
Views: 656

Re: Tax questions about moving taxable to lower ER options

grabiner - Thanks for that link; I had not seen it. "If the annual difference in taxes and costs is more than 10% of the tax you would pay, you should almost always switch." Yeah - definitely need to go through the worksheet to see where we stand. I am thinking this will affect my taxes. I think ou...
by grabiner
Tue Dec 12, 2017 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 FEHB HDHP Recommendations
Replies: 49
Views: 4031

Re: 2018 FEHB HDHP Recommendations

I am giving a presentation to the DC Bogleheads on a related topic, so I redid my comparisons for FEHB HDHPs versus conventional, and the HDHP is almost a guaranteed winner (as long as you won't be deterred from seeking necessary care due to the potential bills). I use GEHA in this comparison, as i...
by grabiner
Mon Dec 11, 2017 11:35 pm
Forum: Investing - Theory, News & General
Topic: Concerns about investing abroad
Replies: 26
Views: 1968

Re: Concerns about investing abroad

I definitely prefer investing through the US intead of my local country (France) for two reasons: - I do not believe in the sustainablity of the EUR over the long term Whether you invest in funds in the US or France is irrelevant for this effect. If you buy a fund in France which holds US stocks, a...
by grabiner
Mon Dec 11, 2017 11:21 pm
Forum: Personal Consumer Issues
Topic: My Costco/TrueCar auto shopping experience
Replies: 44
Views: 11409

Re: My Costco/TrueCar auto shopping experience

We live in the DC metropolitan area, so there are a lot of dealerships. All the chosen sellers were no where near my home despite the availability of nearby dealerships. The furthest was 45 miles away and the closest was 25 miles away. This is a matter of which dealers participate in the area. I am...
by grabiner
Sun Dec 10, 2017 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: Help Choosing a Fidelity Bond Index Fund
Replies: 19
Views: 990

Re: Help Choosing a Fidelity Bond Index Fund

Good catch! Mmmm...maybe I should switch to the index fund, except that I like that the returns of FTBFX have been greater over the past 10 years. I do see though, like Mr. Larimore pointed out, that FSITX faired better around 2009. And that's what you would expect. FTBFX (Fidelity Total Bond) hold...
by grabiner
Sun Dec 10, 2017 9:49 am
Forum: Investing - Theory, News & General
Topic: Current Research On Dividend Studies
Replies: 11
Views: 1165

Re: Current Research On Dividend Studies

Sorting based on dividends produced a 9.57% return premium from 1st quintile to 5th quintile, with 5.27% less volatility as measured by standard deviation!?! Forgive me if I don't believe that. Unfortunately, I can't quite spot what is wrong, but there is simply no way that is the whole story. http...
by grabiner
Sun Dec 10, 2017 9:39 am
Forum: Investing - Theory, News & General
Topic: investing in taxable accounts
Replies: 10
Views: 1515

Re: investing in taxable accounts

If you have an RMD you don't need to spend, then it makes sense to keep the same asset allocation. Since stock index funds are particularly good for investments you expect to leave to your heirs (no capital-gains tax will ever be due), you can take your RMD from a stock fund in the IRA, and buy Tota...
by grabiner
Sun Dec 10, 2017 9:31 am
Forum: Investing - Theory, News & General
Topic: Concerns about investing abroad
Replies: 26
Views: 1968

Re: Concerns about investing abroad

I definitely prefer investing through the US intead of my local country (France) for two reasons: - I do not believe in the sustainablity of the EUR over the long term Whether you invest in funds in the US or France is irrelevant for this effect. If you buy a fund in France which holds US stocks, a...
by grabiner
Sun Dec 10, 2017 9:21 am
Forum: Investing - Theory, News & General
Topic: How bonds would have been better in 2008 crash
Replies: 5
Views: 664

Re: How bonds would have been better in 2008 crash

I have the following in my 401K (Portfolio#1) VPMAX 35% Vanguard PRIMECAP Fund Admiral Shares VWENX 30% Vanguard Wellington Fund Admiral Shares (60% stocks /40% bonds) VWILX 15% Vanguard International Growth Fund Admiral Shares VITPX 8% Vanguard Instl Total Stock Market Index Fund Instl Plus VIVIX ...
by grabiner
Sun Dec 10, 2017 9:02 am
Forum: Investing - Help with Personal Investments
Topic: Help Choosing a Fidelity Bond Index Fund
Replies: 19
Views: 990

Re: Help Choosing a Fidelity Bond Index Fund

I *believe* the stars from morningstar are indicative of the recent performance, compared to comparable funds. A passive, "total bond" type of fund would usually be at 3 stars. (Passive in bonds doesn't provide a lot of returns; just a lot of stability). --> although I guess you could go out on the...
by grabiner
Sat Dec 09, 2017 11:45 pm
Forum: Investing - Theory, News & General
Topic: TSM vs High Dividend Yield if I never choose to sell?
Replies: 36
Views: 2292

Re: TSM vs High Dividend Yield if I never choose to sell?

The extra tax cost of a high-dividend fund is greater if you never sell than if you do sell. In funds which pay high dividends, the share price grows more slowly because more of the return is paid to you in a dividend. If you sell, you will pay tax on the return either way; receiving it as a divide...
by grabiner
Sat Dec 09, 2017 11:06 pm
Forum: Investing - Theory, News & General
Topic: TSM vs High Dividend Yield if I never choose to sell?
Replies: 36
Views: 2292

Re: TSM vs High Dividend Yield if I never choose to sell?

The extra tax cost of a high-dividend fund is greater if you never sell than if you do sell. In funds which pay high dividends, the share price grows more slowly because more of the return is paid to you in a dividend. If you sell, you will pay tax on the return either way; receiving it as a divide...
by grabiner
Sat Dec 09, 2017 8:53 pm
Forum: Personal Finance (Not Investing)
Topic: Best FEDVIP dental insurance for braces/orthodontics
Replies: 7
Views: 473

Re: Best FEDVIP dental insurance for braces/orthodontics

Isn't this a type of risk many on the board would suggest self funding with money from savings? It's an inconvenient expense but not in the catastrophic category. Even with losses that can be life changing many people want to save the fixed insurance cost to save for longer term objectives. How doe...
by grabiner
Sat Dec 09, 2017 8:46 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's International Growth / Value / Explorer funds
Replies: 4
Views: 634

Re: Vanguard's International Growth / Value / Explorer funds

These are all fine funds if you hold them in an IRA. International Growth and Value aren't that strongly growth- or value-oriented; if you want a strong value bias, you will need to use a non-Vanguard ETF. International Explorer is a small-cap fund, which you could use as a non-index alternative to ...
by grabiner
Sat Dec 09, 2017 8:38 pm
Forum: Investing - Theory, News & General
Topic: Traditional vs Roth IRA at high tax brackets?
Replies: 6
Views: 735

Re: Traditional vs Roth IRA at high tax brackets?

In the 35% tax bracket, you can presumably afford to max out the Roth 401(k). Therefore, your choice is between investing $18,000 in a Roth 401(k), or $18,000 in a traditional 401(k) and the $6300 tax savings in a taxable account. If you retire in a 25% tax bracket, then $18,000 in a traditional 401...
by grabiner
Sat Dec 09, 2017 8:30 pm
Forum: Investing - Theory, News & General
Topic: TSM vs High Dividend Yield if I never choose to sell?
Replies: 36
Views: 2292

Re: TSM vs High Dividend Yield if I never choose to sell?

The extra tax cost of a high-dividend fund is greater if you never sell than if you do sell. In funds which pay high dividends, the share price grows more slowly because more of the return is paid to you in a dividend. If you sell, you will pay tax on the return either way; receiving it as a dividen...
by grabiner
Sat Dec 09, 2017 8:25 pm
Forum: Investing - Theory, News & General
Topic: 2000-09 worst decade for large cap stocks in 109 years
Replies: 44
Views: 3072

Re: 2000-09 worst decade for large cap stocks in 109 years

I gave it a quick run with the Simba spreadsheet , where we can easily assemble rolling returns charts in real or nominal terms, for a given portfolio. Click (once or twice) to see a larger version of the charts. https://i.imgur.com/KEWQ2h6l.jpg So 1965-1974 was the worst ten-year period. The DFA d...
by grabiner
Sat Dec 09, 2017 7:43 pm
Forum: Investing - Help with Personal Investments
Topic: Question about Roth TSP for active duty military
Replies: 9
Views: 654

Re: Question about Roth TSP for active duty military

I believe that military service members pay into Social Security, correct me if I'm wrong. If you do, you may want to wait until age 70 when you would get the maximum SS amount so you could use your TSP money up until then. My understanding is that you will get 100% of your SS benefits at full reti...
by grabiner
Sat Dec 09, 2017 7:38 pm
Forum: Investing - Help with Personal Investments
Topic: Pay down loans or invest
Replies: 14
Views: 1111

Re: Pay down loans or invest

Are you single or married? If you are single, you can't deduct your loan interest, so you get a risk-free 3.77% return on any loan prepayment, and that is a very good deal at current rates. I would probably recommend putting enough into the 401(k) to get the employer match; investing in your Roth IR...
by grabiner
Sat Dec 09, 2017 7:31 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Impact of Withdrawal from Non-Qualified VTCLX
Replies: 2
Views: 209

Re: Tax Impact of Withdrawal from Non-Qualified VTCLX

The best way to find this out is to use your tax software. Add $433 of short-term gains and $22,985 of long-term gains, and see what happens to your taxes. The reason to use the software is that there are many phase-ins and phase-outs in the tax code; for example, if you have two or more children an...
by grabiner
Sat Dec 09, 2017 7:26 pm
Forum: Investing - Help with Personal Investments
Topic: Did I make an irrevocable IRA mistake?
Replies: 6
Views: 643

Re: Did I make an irrevocable IRA mistake?

Welcome to the forum! One thing you can do with the traditional IRA is transfer it to your 401(k), if your 401(k) accepts such transfers. This is only worth doing if you have low-cost funds in your 401(k). If you do, then you can simplify your portfolio, and you will be able to use a Backdoor Roth I...
by grabiner
Sat Dec 09, 2017 6:19 pm
Forum: Investing - Theory, News & General
Topic: Vanguard year end distributions - updated estimates
Replies: 50
Views: 5826

Re: Vanguard year end distributions - updated estimates

Why do the institutional total stock market funds have 100% QDI whereas the rest (admiral, investor, etc.) have 94%? Don't they follow the same index? They follow the same index, but they are not share classes of the same fund; each fund computes its own QDI. Dividends can become non-qualified if t...
by grabiner
Fri Dec 08, 2017 11:29 pm
Forum: Personal Finance (Not Investing)
Topic: 840 credit score Million dollar farm.. low income cannot get Heloc?
Replies: 64
Views: 4447

Re: 840 credit score Million dollar farm.. low income cannot get Heloc?

A credit score is based only on your credit report. If you have a good credit score, this means that people with credit reports like yours are likely to repay their loans. But the underwriting decision is based on other factors as well, such as the relationship of the loan to the collateral and to y...
by grabiner
Fri Dec 08, 2017 11:15 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing for a loss??
Replies: 10
Views: 787

Re: Rebalancing for a loss??

I have the majority of my retirement account in the TSP. If I rebalance when stocks are down, doesn't that "lock in" losses? Example: If all of my TSP funds are down 10% and I rebalance my entire account, aren't those 10% losses locked in because TSP will sale my shares in order to rebalance? Rebal...
by grabiner
Fri Dec 08, 2017 11:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard year end distributions - updated estimates
Replies: 50
Views: 5826

Re: Vanguard year end distributions - updated estimates

Total Stock Market includes medium and small caps, S&P500 does not. It is not a matter of efficiency, but of being different funds. QDI have a 61-day holding rule. Could that be the reason why VTSAX only declares 94% as such ? It is true that you can't compare the funds perfectly although the corre...
by grabiner
Fri Dec 08, 2017 11:10 pm
Forum: Investing - Theory, News & General
Topic: Vanguard year end distributions - updated estimates
Replies: 50
Views: 5826

Re: Vanguard year end distributions - updated estimates

Also, we tend to think of the FTSE ex-US fund as being a perfect TLH equivalent fund for the Total International fund but dividends for that fund ar e 72% QDI whereas the latter is only 66%. Last year I thought they were just 1% off. Wonder why Total International is so much less this year. Total I...