Search found 22107 matches

by grabiner
Sun Sep 16, 2018 8:00 pm
Forum: Investing - Theory, News & General
Topic: 2017 Relative Tax Efficiency
Replies: 94
Views: 15289

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: 705

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: 1627

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: 343

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: 1810

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: 739

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: 604

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: 418

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: 716

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: 2437

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: 1455

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: 514

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: 2437

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: 2437

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: 514

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: 3049

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: 24
Views: 1582

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: 2790

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: 570

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: 524

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: 771

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: 432

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: 976

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: 1736

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: 24
Views: 1582

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: 406

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: 1699

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% ...
by grabiner
Wed Sep 12, 2018 9:51 pm
Forum: Investing - Theory, News & General
Topic: Argument for taking social security before 70. Comments?
Replies: 111
Views: 7187

Re: Argument for taking social security before 70. Comments?

Here's how I estimate the break-even. It's easiest to do one year at a time. My calculations are only for singles, though. For married couples, the effect on spousal and widow/er's benefits is important. If your spouse is likely to collect widow/er's benefits on your record, that is a strong incent...
by grabiner
Wed Sep 12, 2018 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Mr.No - another should I pay off my mortgage, post
Replies: 31
Views: 2557

Re: Mr.No - another should I pay off my mortgage, post

• Mortgage - $392K – interest rate 3.375% Tax Rate: 33% Federal, 10% State. This year my earnings are really good, usually I am in lower tax bracket. See Paying down loans versus investing on the wiki. Can you still deduct the interest? This depends on how much you donate to charity, since you can ...
by grabiner
Wed Sep 12, 2018 9:24 pm
Forum: Investing - Theory, News & General
Topic: Short Term Market Uncertainty - "Buy" Insurance?
Replies: 33
Views: 1995

Re: Short Term Market Uncertainty - "Buy" Insurance?

Watching the news recently has caused me to be concerned that the probability of a stock market correction or bear market is currently higher than normal. Without starting a discussion of the news itself the areas of concern are upcoming elections, trade wars and yield curve inversion. Does it make...
by grabiner
Wed Sep 12, 2018 8:58 pm
Forum: Investing - Theory, News & General
Topic: Short-term Treasury vs. Limited-Term Tax-Exempt
Replies: 10
Views: 1221

Re: Short-term Treasury vs. Limited-Term Tax-Exempt

I've mostly been buying individual Treasuries, CDs and munis with new cash for the last year or so, but I did buy some Vanguard Limited-Term Tax-Exempt Admiral shares, VMLUX, in January 2018. Lately Treasuries have been offering higher taxable-equivalent yield (TEY) than AA/AAA munis for me (margin...
by grabiner
Wed Sep 12, 2018 8:54 pm
Forum: Investing - Theory, News & General
Topic: Investing in taxable account or pay more for rental mortgage
Replies: 13
Views: 841

Re: Investing in taxable account or pay more for rental mortgage

See Paying down loans versus investing on the wiki. At your 29.5% marginal tax rate, you would earn a risk-free 3.53% by paying down the rental mortgage. You can't earn 3.53% risk-free in your taxable account; the current yield on low-risk long-term munis is 2.95% (Vanguard Long-Term Tax-Exempt), an...
by grabiner
Wed Sep 12, 2018 8:43 pm
Forum: Investing - Theory, News & General
Topic: Argument for taking social security before 70. Comments?
Replies: 111
Views: 7187

Re: Argument for taking social security before 70. Comments?

Here's how I estimate the break-even. It's easiest to do one year at a time. Suppose that you have enough money to cover this year's Social Security. You can spend the money this year and delay Social Security to next year, or take Social Security now and buy a TIPS ladder which will cover the futur...
by grabiner
Wed Sep 12, 2018 8:07 pm
Forum: Investing - Help with Personal Investments
Topic: How to Evaluate a Bond Repurchase Offer?
Replies: 5
Views: 393

Re: How to Evaluate a Bond Repurchase Offer?

My rudimentary math skills suggest that, if I were to accept the first offer as to the entirety of my holdings, I'd get around $4,752.68 (being 4 times $1,187.17), which is higher than the bonds' current value. But if I were to hold the bonds to maturity, I'd get $1,450 in interest ($290 times the ...
by grabiner
Wed Sep 12, 2018 7:59 pm
Forum: Investing - Help with Personal Investments
Topic: Asset allocation after paying off mortgage
Replies: 22
Views: 1781

Re: Asset allocation after paying off mortgage

I still have the same asset allocation within a simple 3 fund portfolio after paying off the mortgage. I'm wondering if I should now allocate a bit more to equities and less to bonds. I use age -13 for an allocation to bonds. Maybe age -15 or 20 since the mortgage could be considered a bond like al...
by grabiner
Wed Sep 12, 2018 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: Asset allocation after paying off mortgage
Replies: 22
Views: 1781

Re: Asset allocation after paying off mortgage

Hello all. Thank you in advance to all the fantastic people on this board. Recently I paid off my mortgage. ( I know, that's a whole other discussion). I feel blessed that I could pay it off while in my early 50s and have a good deal remaining for retirement, which could be 5 years away, in some fo...
by grabiner
Wed Sep 12, 2018 7:49 pm
Forum: Investing - Help with Personal Investments
Topic: Roth conversions when we will be in 22% bracket for indefinite future
Replies: 16
Views: 1785

Re: Roth conversions when we will be in 22% bracket for indefinite future

Can you pay the taxes with money that would be in your taxable account otherwise (either money that is already there, or RMDs you don't need to spend)? If so, then a conversion is a net gain even if you stay in the same bracket; you trade $10,000 in a traditional account (worth $7000 tax-free) and $...
by grabiner
Wed Sep 12, 2018 7:44 pm
Forum: Investing - Help with Personal Investments
Topic: sector etfs
Replies: 4
Views: 406

Re: sector etfs

Welcome to the forum! A total market ETF will return exactly the same as the average of all sector ETFs, since it holds all sectors. Therefore, it is significantly less risky. It should have about the same average return; there is no particular reason to expect one sector to outperform the market as...
by grabiner
Wed Sep 12, 2018 7:41 pm
Forum: Investing - Help with Personal Investments
Topic: Can I contribute to HSA this year?
Replies: 9
Views: 789

Re: Can I contribute to HSA this year?

I'm no expert, but maybe evaluating which is a better option for your married situation is the real question: keep her FSA with 2018 contribution limit of $2650? Or drop the FSA and pursue the HSA which has a 2018 contribution limit of $6900. You cannot normally terminate an FSA during the year. Yo...
by grabiner
Wed Sep 12, 2018 7:36 pm
Forum: Investing - Help with Personal Investments
Topic: Switch bond funds later?
Replies: 2
Views: 327

Re: Switch bond funds later?

Yes, you would pay tax on any capital gains if you switch bond funds. However, bond funds don't tend to have much in capital gains, so any tax cost for switching should be very low.
by grabiner
Wed Sep 12, 2018 7:35 pm
Forum: Investing - Help with Personal Investments
Topic: Unwinding long term investments
Replies: 6
Views: 863

Re: Unwinding long term investments

Thanks for the input. I calculated the loss / gain in moving to passive index funds (if the active ones continue to perform at the same level). Can some one validate these numbers? Start: Assume 40% cost basis (i.e., 60% is profit) Scenario A: sell @ 15% LTCG and then reinvest immediately in VTI. A...
by grabiner
Wed Sep 12, 2018 7:19 pm
Forum: Investing - Help with Personal Investments
Topic: FERS why it is so low.
Replies: 12
Views: 1745

Re: FERS why it is so low.

Hi. I just started a federal job. It has FERS. I went through the FERS calculator and it says that when I retire I will get a whopping 5k a year in retirement income. I don't get it. Is this for real? What is so great about government benefits if the pension pays 5k a year when you retire? It seems...
by grabiner
Wed Sep 12, 2018 7:12 pm
Forum: Investing - Help with Personal Investments
Topic: What do I do with my investments during a downturn/recession?
Replies: 24
Views: 2723

Re: What do I do with my investments during a downturn/recession?

2) In addition, should I contribute more to my Traditional IRA account or to my cash savings account with 2% annual yield? (I max out Roth IRA every year). If you max out a Roth IRA, you cannot also contribute to a traditional IRA (unless your Roth IRA contribution limit is in the phase-out range);...
by grabiner
Tue Sep 11, 2018 8:55 pm
Forum: Investing - Help with Personal Investments
Topic: House: Pay Cash then Mortgage (Delayed Financing) - worth it?
Replies: 25
Views: 3514

Re: House: Pay Cash then Mortgage (Delayed Financing) - worth it?

Anybody aware of TCJA affect on this? Thinking of the following: 1. Use HELOC from current primary residence and savings to purchase new secondary residence. 2. Apply for delayed financing after close to pay off HELOC. Is the mortgage on the the 2nd residence deductible? Is it considered home acqui...
by grabiner
Tue Sep 11, 2018 8:49 pm
Forum: Investing - Help with Personal Investments
Topic: TIPS with Fidelity through HSA
Replies: 6
Views: 953

Re: TIPS with Fidelity through HSA

I know this is an old thread but is there an update on recommended TIPS funds to use in a CA HSA held in Fidelity? I have been using FSIYX this year. However, I was wondering if I should switch to a commission-free short term TIPS ETF like STIP since the yields are very similar but the duration is ...
by grabiner
Sat Sep 08, 2018 7:54 pm
Forum: Investing - Theory, News & General
Topic: Stocks in a 401k is a bad idea, right?
Replies: 43
Views: 5509

Re: Stocks in a 401k is a bad idea, right?

Ok.. I didn't understand this 10% cost for the 401k. I thought you were taking about a fee over the total value of the portfolio, comparable to a fund fee Still, I was referring to a comparison to a taxable account. Even with this 10% upfront tax sheltered account should be better over the long ter...
by grabiner
Fri Sep 07, 2018 10:07 pm
Forum: Investing - Help with Personal Investments
Topic: Millions to Invest at 30 - VTSAX, VTIAX, and VWIUX Lump Sum?
Replies: 9
Views: 2970

Re: Millions to Invest at 30 - VTSAX, VTIAX, and VWIUX Lump Sum?

2. Is VTSAX, VTIAX, and VWIUX a solid three-fund portfolio for my current situation? In NJ, I would recommend putting half the bond money in Vanguard NJ Long-Term Tax-Exempt, and half in Limited-Term Tax-Exempt. This would make more than half your muni interest exempt from NJ state tax, while only ...
by grabiner
Fri Sep 07, 2018 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: hold US or Int'l index fund in taxable account?
Replies: 9
Views: 1577

Re: hold US or Int'l index fund in taxable account?

miket29, Vanguard's site can shed some light on the tax differences for you, since they show average annual total return after tax on distributions, and also after taxes on distributions and sale of fund shares. Tax rate assumptions are provided on their site. Here's what the 10-yr returns look lik...
by grabiner
Fri Sep 07, 2018 9:36 pm
Forum: Investing - Help with Personal Investments
Topic: Wash sale rules
Replies: 9
Views: 550

Re: Wash sale rules

No. The same day is within the range of 30 days before to 30 days after. I am unsure. The lots in IRA and taxable were bought at the same price, before the price declined. Therefore, the security on which tax loss is taken in taxable was not bought at the new lower price in IRA. The wash sale rule ...
by grabiner
Fri Sep 07, 2018 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: How Big of a Mortgage Should We Get?
Replies: 41
Views: 3028

Re: How Big of a Mortgage Should We Get?

On a related note, does vanguard offer a way to estimate capital gains before you sell stock? Yes. Under "My Accounts", select "Cost Basis". This will show the unrealized gains, as long as Vanguard has correct information. (For mutual funds purchased in 2011 or earlier, Vanguard only kept track of ...