Search found 22727 matches

by grabiner
Mon Dec 17, 2018 10:02 am
Forum: Investing - Help with Personal Investments
Topic: Any year-end limitations to tax-loss harvesting?
Replies: 4
Views: 411

Re: Any year-end limitations to tax-loss harvesting?

If you buy your replacement fund before it distributes a qualified dividend, you must hold the fund for 61 days or the dividend will become non-qualified. This is applicable for every dividend date, but it is most important in December, as many funds pay distributions only in December, or pay larger...
by grabiner
Mon Dec 17, 2018 9:53 am
Forum: Investing - Help with Personal Investments
Topic: How to decrease stock AA when it's in taxable
Replies: 22
Views: 1069

Re: How to decrease stock AA when it's in taxable

My main "wiggle room" is my 403b, which due to its 1% fees only gets the minimum to stay within the 12%/0 CG bracket. Since you are close to retirement, you should max this out. When you retire, you can get rid of the 1% fees by rolling the 403(b) into in IRA, and the tax savings will be much more ...
by grabiner
Sun Dec 16, 2018 10:28 pm
Forum: Personal Finance (Not Investing)
Topic: Is this a good time to start paying extra on the mortgage?
Replies: 32
Views: 1955

Re: Is this a good time to start paying extra on the mortgage?

It doesn't seem like anyone is painting a rosy picture of the economy/stocks/bonds/CDs anytime in the near future. If you are about five years out from retirement, would this be a good time to start paying extra on the mortgage? I missed out on a 4% CD that I was going to use to pay off the mortgag...
by grabiner
Sun Dec 16, 2018 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-paying mortgage only in early years
Replies: 39
Views: 2320

Re: Pre-paying mortgage only in early years

The benefit doesn't depend on how much of the current payment is principal or interest; it depends on what happens to future payments. If you have a 3.75% mortgage, and you make an extra $10,000 payment, your balance next year will be $10,375 less, with $375 in saved interest (and $375 more taxable ...
by grabiner
Sun Dec 16, 2018 10:00 pm
Forum: Investing - Theory, News & General
Topic: Does this TLH strategy make sense?
Replies: 3
Views: 400

Re: Does this TLH strategy make sense?

No. This would clearly violate the wash sale rule as clearly stated in the IRS instructions. Of course, that's not strictly true. You could sell A for B. Then 31 days later your spouse could sell B for A. That assumes no reinvestment of any dividends nor additional purchases in the intervening 31 d...
by grabiner
Sun Dec 16, 2018 9:58 pm
Forum: Investing - Theory, News & General
Topic: Allan Roth: 3 Correlation Myths In Portfolio Construction
Replies: 91
Views: 5073

Re: Allan Roth: 3 Correlation Myths In Portfolio Construction

PortfolioVisualizer is showing this: Portfolio 1: 100% Total Stock Portfolio 2: 50/50 Total Stock, Total Bond Portfolio 3: 100% Total Bond Source https://imgur.com/8Hbkb8R.png Now, if Total Stock and Total Bond had 100% correlation, then a 50/50 mix would give us numbers halfway between those of th...
by grabiner
Sun Dec 16, 2018 9:28 pm
Forum: Investing - Theory, News & General
Topic: What Happened to you during the Financial crisis of 2007–2008
Replies: 230
Views: 17376

Re: What Happened to you during the Financial crisis of 2007–2008

The forum posts are all archived. If you would like to see how posters actually reacted to the crisis, go back to September 2008-March 2009. You will see lots of posts about "capitulation", but also many about "staying the course", and also many others about how to tax loss harvest from investors w...
by grabiner
Sun Dec 16, 2018 8:17 pm
Forum: Investing - Help with Personal Investments
Topic: Windfall - Stick with Current Investments or Shift to Lazy 3
Replies: 7
Views: 883

Re: Windfall - Stick with Current Investments or Shift to Lazy 3

Had not really thought about the Target fund approach, but see that Schwab has both ETF and MF options available, with the ETF option fees about half of the MF - any reason (aside from fees) to favor one over the other (ETF vs. MF). Could not get much simpler and appears to automatically re-balance...
by grabiner
Sun Dec 16, 2018 5:38 pm
Forum: Personal Finance (Not Investing)
Topic: Should I sell my last rental property in major west coast city?
Replies: 10
Views: 901

Re: Should I sell my last rental property in major west coast city?

If you were to buy this property today, what is the price and what rent could you get realistically? If it is like most West Coast markets (I assume California, due the very low property tax assessment), then the cap rates are probably so low that it wouldn't make a very good investment. " Things a...
by grabiner
Sun Dec 16, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: Which asset class is down the most for you?
Replies: 24
Views: 1933

Re: Which asset class is down the most for you?

I don't know and I don't care. Should I? I care for rebalancing. Since international stock is down more than US stock, my new investments go into international stock, and I will probably sell some US stock to buy international stock in my employer plan in my January rebalance. If international stoc...
by grabiner
Sun Dec 16, 2018 4:49 pm
Forum: Investing - Theory, News & General
Topic: What Happened to you during the Financial crisis of 2007–2008
Replies: 230
Views: 17376

Re: What Happened to you during the Financial crisis of 2007–2008

2008 was one of the best years on this forum. The only person who knows how one is highly probable to react in challenging times is the image in the mirror. I have seen this so many times in events I do with my dogs when handlers are confronted with negative outcomes early in trials and they fold. ...
by grabiner
Sun Dec 16, 2018 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Tax and Logistics Question
Replies: 13
Views: 701

Re: Wash Sale Tax and Logistics Question

Also, why would this be a test case if the wash sale is definitely mitigated since I don't own the replacement shares when I sell the taxable. The wash sale is not mitigated; it either does happen or does not. Logically, you should not have a wash sale in the following situation: On July 1, you buy...
by grabiner
Sun Dec 16, 2018 1:08 pm
Forum: Investing - Help with Personal Investments
Topic: Curious on how total market funds are constructed
Replies: 8
Views: 671

Re: Curious on how total market funds are constructed

I think i need a better understanding of how total stock market index funds work. I was just curious since apple no longer has largest market cap , how do funds like vti, schb, Itot, etc determine percentage of holdings in their funds. Shouldn’t Microsoft and amazon have higher percentage of holdin...
by grabiner
Sun Dec 16, 2018 1:02 pm
Forum: Investing - Help with Personal Investments
Topic: Roth or Trad 401k - 24% bracket
Replies: 35
Views: 1385

Re: Roth or Trad 401k - 24% bracket

OP can switch to Roth 401K when the tax-deferred account is at 1 million or larger. He does not have to stay at Trad 401K over 36 years. Going with Trad 401K in the early part of his life let him build up his portfolio quickly. It is very useful if life happened. It's usually better to do this in t...
by grabiner
Sun Dec 16, 2018 12:49 pm
Forum: Investing - Help with Personal Investments
Topic: Windfall - Stick with Current Investments or Shift to Lazy 3
Replies: 7
Views: 883

Re: Windfall - Stick with Current Investments or Shift to Lazy 3

The 3 funds portfolio require rebalancing. If OP's goal is the minimum effort, a fund like a target retirement fund, life strategy fund, and/or Wellington/Wellesley fund might be more appropriate. For a taxable account, you should use the target retirement fund. Wellington/Wellesley are tax-ineffic...
by grabiner
Sun Dec 16, 2018 12:47 pm
Forum: Investing - Help with Personal Investments
Topic: Roth or Trad 401k - 24% bracket
Replies: 35
Views: 1385

Re: Roth or Trad 401k - 24% bracket

OP can switch to Roth 401K when the tax-deferred account is at 1 million or larger. He does not have to stay at Trad 401K over 36 years. Going with Trad 401K in the early part of his life let him build up his portfolio quickly. It is very useful if life happened. It's usually better to do this in t...
by grabiner
Sun Dec 16, 2018 12:44 pm
Forum: Investing - Help with Personal Investments
Topic: Roth or Trad 401k - 24% bracket
Replies: 35
Views: 1385

Re: Roth or Trad 401k - 24% bracket

My employer offers both traditional and Roth 401k options. I’ve been maxing out traditional contributions. I guess I’d be considered a “high earner” with most of my income in the 24% bracket, and some in the 32-35%. Im early in my career, not yet 30, so I have at least 20-30 years to retirement. Th...
by grabiner
Sun Dec 16, 2018 12:24 pm
Forum: Investing - Help with Personal Investments
Topic: Why I use Roth for bond instead of stock. Please correct me...
Replies: 54
Views: 4263

Re: Why I use Roth for bond instead of stock. Please correct me...

I was not trying to suggest that bonds should go in taxable (I think the title of the article is poor...), but rather to highlight that stock goes in Roth! I personally believe bonds should go in tax-deferred accounts. I think you're reading too far into the article as well. Read it, sit back, and ...
by grabiner
Sun Dec 16, 2018 12:10 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security options for 2 equal-history spouses.
Replies: 20
Views: 1439

Re: Social Security options for 2 equal-history spouses.

I don't know if this is a wrinkle or not, but what if one of the 2 equal-history spouses goes back to work or keeps working so that they are no longer equal history spouses? I understand that SS benefits are reduced for workers who have too much earned income. This only happens if the worker claims...
by grabiner
Sun Dec 16, 2018 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: Wash Sale Tax and Logistics Question
Replies: 13
Views: 701

Re: Wash Sale Tax and Logistics Question

Also, why would this be a test case if the wash sale is definitely mitigated since I don't own the replacement shares when I sell the taxable. The wash sale is not mitigated; it either does happen or does not. Logically, you should not have a wash sale in the following situation: On July 1, you buy...
by grabiner
Sun Dec 16, 2018 11:52 am
Forum: Personal Finance (Not Investing)
Topic: Significant Change in Salary - What to Change
Replies: 24
Views: 3288

Re: Significant Change in Salary - What to Change

3. If my significant other doesn't have a IRA account, am I able to contribute to one? Am I able to do a Roth IRA for SO due to no income, or will I be subject to income restrictions? Trying to maximize the best approach in creating an IRA account for her. Both spouses can contribute to an IRA even...
by grabiner
Sun Dec 16, 2018 10:48 am
Forum: Personal Finance (Not Investing)
Topic: Avoiding underpayment penalty
Replies: 22
Views: 1956

Re: Avoiding underpayment penalty

It seems kind of odd that you could "backload" your withholdings (i.e. withhold nothing for the first half of the year, then withhold double for the second half of the year) but quarterly payments are subject to so much scrutiny (eg form 2210). This is an accounting issue, and a convenience issue a...
by grabiner
Sun Dec 16, 2018 10:31 am
Forum: Investing - Help with Personal Investments
Topic: Why I use Roth for bond instead of stock. Please correct me...
Replies: 54
Views: 4263

Re: Why I use Roth for bond instead of stock. Please correct me...

From what I have seen it is more or less a wash with foreign tax-credit. I forgot about paying taxes to foreign countries when owning foreign stocks in any IRA. I have 10% foreign in the IRA's I'm the agent for. I may have to rethink that and go 100% VTI. If the dividends were otherwise equal, US s...
by grabiner
Fri Dec 14, 2018 11:05 pm
Forum: Investing - Theory, News & General
Topic: Investing in bonds while you still have a mortgage
Replies: 12
Views: 1218

Re: Investing in bonds while you still have a mortgage

I used to think it was simple; no bonds while holding a negative bond. But a low fixed rate mortgage will not shift. Bond fund yields will. The two are actually not comparable and that makes a mortgage unique in the debt world. Bond returns don't shift either, if you match durations. If I bought a ...
by grabiner
Fri Dec 14, 2018 10:56 pm
Forum: Investing - Theory, News & General
Topic: Which asset class is down the most for you?
Replies: 24
Views: 1933

Re: Which asset class is down the most for you?

International small-cap is my biggest loser (and Vanguard's, according to YTD returns). I need to harvest a loss on all my 2017-2018 purchases of VSS (FTSE All-World Ex-US Small-Cap) next week, including shares I bought recently after a previous harvest.
by grabiner
Fri Dec 14, 2018 10:51 pm
Forum: Investing - Theory, News & General
Topic: Did VMFXX break the buck? [Vanguard Federal Money Market Fund]
Replies: 12
Views: 1402

Re: Did VMFXX break the buck?

One of the post-crisis reforms is for money market funds to report, not necessarily charge or redeem at, but to report the true net asset value. The idea is people, just like OP, will get nervous enough to stop making unwarranted assumptions about their equivalence to FDIC-insured bank accounts, wh...
by grabiner
Fri Dec 14, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: High Load and ERs
Replies: 7
Views: 668

Re: High Load and ERs

It seemed like you can't rebalance or use a glide path to lower risk (like age in bonds) without playing more loads. This seems just another way for the advisor fund the boat payments. You can exchange within the same fund family without paying a new load. (Advisors who churn customer funds may mov...
by grabiner
Fri Dec 14, 2018 10:37 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Municipal Money Market VMSXX 1.39%
Replies: 257
Views: 35917

Re: Vanguard Municipal Money Market VMSXX 1.39%

I thought some might be interested to see history since SEC yield was first published by Vanguard on 1/4/1993. Here I show Prime MM and Muni MM SEC yield, along with Muni MM taxable-equivalent yield at a federal marginal rate of 25%. I used 25% because this was the pre-2018 grabiner rule of thumb r...
by grabiner
Fri Dec 14, 2018 10:32 pm
Forum: Investing - Help with Personal Investments
Topic: Tax Loss Harvesting - VTIAX ->VFWAX Timing
Replies: 8
Views: 500

Re: Tax Loss Harvesting - VTIAX ->VFWAX Timing

First time tax loss harvester here. Not a humble brag. Just too ignorant to know I needed to do it before. Through some research I've convinced myself that I need to sell my loss in VTIAX and then buy VFWAX and then will probably buy VTIAX back after 30 days. I was all set to execute on this strate...
by grabiner
Fri Dec 14, 2018 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding underpayment penalty
Replies: 22
Views: 1956

Re: Avoiding underpayment penalty

What is the penalty if one doesn't meet any of the safe harbors? I think I will have at least paid 90% of what is due, but I"m not positive. The tax law change may throw me off this year. The IRS hasn't published this year's Form 2210, but last year, it was 4% annual interest, prorated by the numbe...
by grabiner
Thu Dec 13, 2018 10:14 pm
Forum: Personal Finance (Not Investing)
Topic: Tax-loss harvest/capital gains
Replies: 3
Views: 338

Re: Tax-loss harvest/capital gains

The issue with a harvest and gains in the same year is that it may reduce the tax benefit. However, if you need to take gains anyway, you should take them. For example, suppose that you are in a 24% tax bracket, and you harvested a $3000 capital loss this year. If you take a $3000 long-term gain, th...
by grabiner
Thu Dec 13, 2018 9:59 pm
Forum: Personal Finance (Not Investing)
Topic: Avoiding underpayment penalty
Replies: 22
Views: 1956

Re: Avoiding underpayment penalty

As long as you withhold and/or pay estimated taxes (in equal installments) such that you've: > Paid 90% of your tax liability > Or Owe less than $1000 > Or Paid 100% of the previous years tax liability (110% if you made over $150k the previous year) Then you won't owe a penalty. I believe there is ...
by grabiner
Thu Dec 13, 2018 9:51 pm
Forum: Investing - Theory, News & General
Topic: Why some larger stocks are classified as mid-cap?
Replies: 4
Views: 468

Re: Why some larger stocks are classified as mid-cap?

Another issue is that the indexes take time to reconstitute, and CRSP uses buffer zones to minimize turnover. A mid-cap stock which rises just over the large/mid boundary will stay in the mid-cap index, and even if it rises enough that it is definitely large-cap, the mid-cap index will not drop it u...
by grabiner
Thu Dec 13, 2018 9:44 pm
Forum: Investing - Theory, News & General
Topic: Which Vanguard California Muni fund?
Replies: 5
Views: 520

Re: Which Vanguard California Muni fund?

I'm trying to decide whether to use VCLAX ("Long-Term California tax exempt") or VCADX ("Intermediate-Term California tax exempt"). I see they have the following properties: VCLAX: Average maturity 17.1 years, average duration 7.3 years VCADX: Average maturity 9.1 years, average duration 5.5 years ...
by grabiner
Thu Dec 13, 2018 9:35 pm
Forum: Investing - Theory, News & General
Topic: What Happened to you during the Financial crisis of 2007–2008
Replies: 230
Views: 17376

Re: What Happened to you during the Financial crisis of 2007–2008

I already had a good idea of my risk tolerance, as I had held 80% stock in 2000-2002, kept that allocation while losing a quarter of my portfolio, and changed to a more aggressive allocation in 2002. I also had a secure job. In 2008, I had 90% of my portfolio in stock. And since I overweight small-c...
by grabiner
Thu Dec 13, 2018 9:14 pm
Forum: Investing - Help with Personal Investments
Topic: IRA Withdrawals at age 70
Replies: 24
Views: 1449

Re: IRA Withdrawals at age 70

If you don't need to withdraw any money for spending purposes, you might want to convert part of the IRA to a Roth IRA, up to the top of your current tax bracket. This will slightly reduce your future RMDs, and the Roth IRA can keep growing tax-free for the rest of your life.
by grabiner
Thu Dec 13, 2018 9:11 pm
Forum: Investing - Help with Personal Investments
Topic: Total Stock Market Fund that pays ~3% Dividend
Replies: 12
Views: 2449

Re: Total Stock Market Fund that pays ~3% Dividend

We have a GRAT that we are required to distribute an annual cash dividend for 10 years. The amount comes to about 3% of the total value of the GRAT. We are looking for TLH pairs of Total US Market that distribute ~3%. This would allow us to TLH and not have to sell any stock at a short-term gain. I...
by grabiner
Thu Dec 13, 2018 9:06 pm
Forum: Investing - Help with Personal Investments
Topic: Allocation when cost of living expenses covered
Replies: 23
Views: 1225

Re: Allocation when cost of living expenses covered

What do you intend to do with the money? This will determine how it should be invested. If you won't spend it during your lives, the money is mostly for your children's retirement, and your grandchildren's and not-yet-born great-grandchildren's college education. Therefore, it can be invested heavil...
by grabiner
Thu Dec 13, 2018 9:03 pm
Forum: Investing - Help with Personal Investments
Topic: Might sell VTSMX (Total Stock) under $10k...need advice
Replies: 6
Views: 805

Re: Might sell VTSMX (Total Stock) under $10k...need advice

I live in California. My income for 2018 will be in the low $40k, but definitely more than $38,600. With a $12,000 standard deduction, you can have $50,600 of income before you pay any federal tax on long-term capital gains If I was to sell the Total Stock index fund that's sitting in the taxable a...
by grabiner
Thu Dec 13, 2018 8:55 pm
Forum: Investing - Help with Personal Investments
Topic: In this case, should I be 100% stocks?
Replies: 13
Views: 1815

Re: In this case, should I be 100% stocks?

And this is the test. If you had a stock-heavy portfolio in 2008-2009, you know how you react to a bear market, and could reasonably be 100% stock. If you didn't, then I would recommend no more than 80% stock until you do know how you react to a bear market. I had a portfolio as risky as 100% stock...
by grabiner
Wed Dec 12, 2018 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: Non-taxable investment income in order to qualify for ACA subsidies?
Replies: 12
Views: 711

Re: Non-taxable investment income in order to qualify for ACA subsidies?

Another option is a small cap/growth oriented stock fund that pays low dividends a (hopefully) has small capital gains distributions. The down side to that is capital gains distributions are usually out of your control. Use a small-cap ETF, Vanguard index fund with an ETF class, or Vanguard Tax-Man...
by grabiner
Wed Dec 12, 2018 10:36 pm
Forum: Personal Finance (Not Investing)
Topic: Non-taxable investment income in order to qualify for ACA subsidies?
Replies: 12
Views: 711

Re: Non-taxable investment income in order to qualify for ACA subsidies?

Another option is a small cap/growth oriented stock fund that pays low dividends a (hopefully) has small capital gains distributions. The down side to that is capital gains distributions are usually out of your control. Use a small-cap ETF, Vanguard index fund with an ETF class, or Vanguard Tax-Man...
by grabiner
Wed Dec 12, 2018 10:26 pm
Forum: Investing - Theory, News & General
Topic: CAP Gains Wellington
Replies: 12
Views: 1337

Re: CAP Gains Wellington

According to the latest estimates from Vanguard, the Admiral shares of the fund will make distributions of about $0.03 per share in short-term capital gains and $4.14 per share in long-term gains. Thanks Fran! Awesome link. Could be worse, I think the Dodge and Cox stock fund (DODGX) will distribut...
by grabiner
Wed Dec 12, 2018 10:18 pm
Forum: Investing - Theory, News & General
Topic: ETF price when dividend is paid
Replies: 4
Views: 484

Re: ETF price when dividend is paid

The net asset value declines by the dividend amount by definition. If an ETF has a million shares and holds $100M of investments, its net asset value is $100 per share. If it then pays out a $1 per share dividend, it holds $99M of assets, and thus its net asset value drops to $99 per share. ETFs tra...
by grabiner
Wed Dec 12, 2018 10:12 pm
Forum: Investing - Help with Personal Investments
Topic: Wellesley end of year cap. gain distribution
Replies: 4
Views: 709

Re: Wellesley end of year cap. gain distribution

If you do receive the distribution, it will be taxable, but your capital loss will be increased by an equal amount, so it won't matter. It does matter than you sell before the dividend. Your capital loss will be increased by the amount of the dividend, but the dividend is mostly non-qualified, so yo...
by grabiner
Wed Dec 12, 2018 10:09 pm
Forum: Investing - Help with Personal Investments
Topic: Exceeded the Social Security Income Limit
Replies: 9
Views: 1450

Re: Exceeded the Social Security Income Limit

I forgot to mention this pertains to her FERS Annuity Supplement which has a maximum income limit for 2018 of $17,400. For every $2 earned over the limit, her supplement next year will be reduced by $1. And unlike Social Security, this is an actual loss. If you claim Social Security at 62, and lose...
by grabiner
Wed Dec 12, 2018 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: In order to not receive a dividend, what date do I need to SELL a mutual fund on?
Replies: 19
Views: 1547

Re: In order to not receive a dividend, what date do I need to SELL a mutual fund on?

indexonly first, remember that when you receive a dividend in a fund, the price of the fund decreases by the respective amount (i.e., it doesn’t change your value, but it does change your recognition for it). If in taxable account, likely why the OP asked the question, the dividend is recognized as...
by grabiner
Wed Dec 12, 2018 9:46 pm
Forum: Investing - Help with Personal Investments
Topic: Converting portfolio from equities to 3-fund
Replies: 8
Views: 721

Re: Converting portfolio from equities to 3-fund

The question remains: Lump sum sale of all equities to buy into my chosen funds or dollar-cost averaging over time. Or liquidate positions as they appear to not be at their low price ebb... Since you are moving from stock into stock, you should liquidate anything you don't want to hold as soon as p...
by grabiner
Wed Dec 12, 2018 9:44 pm
Forum: Investing - Help with Personal Investments
Topic: Taxed account
Replies: 6
Views: 808

Re: Taxed account

We are a c Corp with 48 employees. If this works out and I do happen to get this money I will no longer be working with the company. Would I have any options to put this money into a tax advantaged account. It depends on the nature of your employment. You have to have some type of employment income...
by grabiner
Wed Dec 12, 2018 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: VASVX Capital Gains Distribution - when to sell
Replies: 4
Views: 530

Re: VASVX Capital Gains Distribution - when to sell

Taking the capital gain won't hurt you. When the fund pays out the capital gain, its net asset value will drop by the same amount. Since you plan to sell the fund, you will have a reduced capital gain on the sale equal to the amount distributed. And since the distributed gain is all long-term, there...