Search found 21190 matches

by grabiner
Sun Feb 18, 2018 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: Why pay off the mortgage with life insurance?
Replies: 6
Views: 444

Re: Why pay off the mortgage with life insurance?

Whether you pay off the mortgage or not, you will need to have money to pay the mortgage. If you make an investment and expect it to make the mortgage payments with little risk (since you have lost the salary which was paying them), you would need about the same amount of money as the mortgage balan...
by grabiner
Sun Feb 18, 2018 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff Mortgage Early?
Replies: 7
Views: 735

Re: Payoff Mortgage Early?

Welcome to the forum! Looking for input. Current situation is Mortgage Balance about $20K at 3.5%. Liquid Assets ~1.2M. Payoff mortgage with recent market gains or hold the course? Assuming that you wont have a taxable capital gain, paying off this mortgage is probably worthwhile. It gives you a ris...
by grabiner
Sun Feb 18, 2018 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: Ok, so I paid off my car...now what about auto insurance?
Replies: 3
Views: 343

Re: Ok, so I paid off my car...now what about auto insurance?

Raise the deductible on your collision and comprehensive. The bank probably required a $500 limit to protect its interest in your car, but you will likely save money by raising it to $1500 or $2500. Besides simplifying the handling of claims, this reduces the number of small claims which will raise ...
by grabiner
Sun Feb 18, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Old 401k Statements
Replies: 8
Views: 395

Re: Old 401k Statements

I don't think it matters for 401(k)s, but there is one specific case in which you might need old retirement plan records: if you roll the retirement plan to an IRA, and then withdraw from the IRA in New Jersey. The reason is that NJ does not allow a deduction for contributions to any retirement plan...
by grabiner
Sun Feb 18, 2018 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: personal investment software + mortgage
Replies: 1
Views: 135

Re: personal investment software + mortgage

Welcome to the forum! You could handle this issue by treating your mortgage as a negative bond investment. If you pay $20K per year for the next 15 years on your mortgage, and also have a bond portfolio which will pay $20K in bond coupons and maturity bonds each year, then you are in the same situat...
by grabiner
Sun Feb 18, 2018 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: Why not tax-exempt bonds?
Replies: 13
Views: 1250

Re: Why not tax-exempt bonds?

Are you currently taking SS, or is that coming? Depending upon your current tax bracket, a portion could be taxed. Note that munis don't help with this; muni income is considered income for purposes of SS taxation. If you are in the 12% tax bracket and in the upper SS phase-in, every $1 of either m...
by grabiner
Sun Feb 18, 2018 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Foreign Tax Credit on Iowa State Income Tax
Replies: 7
Views: 459

Re: Foreign Tax Credit on Iowa State Income Tax

According to Individual Income Tax Provisions in the States , from the Wisconsin Legislative Fiscal Bureau, there is a state foreign tax credit in AL, AZ, HI, IA, MT, NC, and a limited credit in LA. If you live in one of these states (except LA, whether the credit is capped at a low level), this ma...
by grabiner
Sun Feb 18, 2018 6:05 pm
Forum: Personal Finance (Not Investing)
Topic: Question about changes to personal mortgage deductions.
Replies: 11
Views: 754

Re: Question about changes to personal mortgage deductions.

How is a HELOC used for home acquisition? Isn't this one of those piggyback loans that was common during the 2008-9 crisis? I thought those were not used any longer. I was thinking HELOCs are normally taken while you own the house, and the interest is not deductible regardless of how it's used, for...
by grabiner
Sun Feb 18, 2018 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: Pre- vs post-tax saving: Am I thinking it wrong?
Replies: 24
Views: 1413

Re: Pre- vs post-tax saving: Am I thinking it wrong?

Given that some BH folks are big savers, it is possible that their tax rate during post retirement be higher than the tax rate pre retirement. Let's say that you are in the marginal tax rate of 25% if you put $1,000 into the Trad. 401K account, you save 25% tax. Let's assume that you are in 25% mar...
by grabiner
Sun Feb 18, 2018 11:20 am
Forum: Personal Finance (Not Investing)
Topic: Evaluate my pension as investment
Replies: 1
Views: 345

Re: Evaluate my pension as investment

It makes sense to view this as a fixed income investment, because it behaves the way you expect a fixed-income investment to behave. It grows at fixed rates linked to market rates, and will be converted to cash which you can continue to invest. When you do cash this in, you probably intend to roll i...
by grabiner
Sun Feb 18, 2018 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Pre- vs post-tax saving: Am I thinking it wrong?
Replies: 24
Views: 1413

Re: Pre- vs post-tax saving: Am I thinking it wrong?

One factor that often gets overlooked is that by deferring tax liability until later, you have more money today. Since you are a rational investor, you will save that additional money also, and you'll do it in the most tax efficient way available. That money also goes to work for you. It wears glov...
by grabiner
Sun Feb 18, 2018 10:59 am
Forum: Personal Finance (Not Investing)
Topic: Help me Eyeball my Taxes on this sale
Replies: 1
Views: 222

Re: Help me Eyeball my Taxes on this sale

Are all the long-term capital gains taxed at 20%? That is only the rate if the overall income would be in the top tax bracket, which might be the case for you.

In addition, you will pay the 3.8% Net Investment Income tax on all or almost all of the capital gain.
by grabiner
Sun Feb 18, 2018 10:55 am
Forum: Personal Finance (Not Investing)
Topic: Question about changes to personal mortgage deductions.
Replies: 11
Views: 754

Re: Question about changes to personal mortgage deductions.

No, HELOC interest is not deductible period as I have read things, no matter what you spend it for. (If it's an investment property, I guess the cost can offset the rent, but that's all.) Home-equity loans used to improve the property are deductible as home acquisition debt, just as they were befor...
by grabiner
Fri Feb 16, 2018 11:21 pm
Forum: Personal Finance (Not Investing)
Topic: How much would paying a lump sum toward my loan save me?
Replies: 12
Views: 796

Re: How much would paying a lump sum toward my loan save me?

See Paying down loans versus investing on the wiki. Making an extra payment on a 3.5% loan is equivalent to buying a risk-free 3.5% bond; the term of that bond is the time to the eliminated payment. Since you will pay off your loan in a little over three years rather than five, this is as good an in...
by grabiner
Fri Feb 16, 2018 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: what is marginal tax rate?
Replies: 18
Views: 1265

Re: what is marginal tax rate?

The wiki discusses Marginal Tax Rate in some detail. The definition is "the tax rate that will apply to the next marginal – or incremental – amount of income (or deductions). It is calculated by dividing the amount of additional taxes that will be due (or reduced) by the amount of income involved." ...
by grabiner
Fri Feb 16, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Which should I use short term corporate or longterm bond index money for roth IRA contribution
Replies: 7
Views: 522

Re: Which should I use short term corporate or longterm bond index money for roth IRA contribution

Hi folks, here is my dilemma. This may be our last Roth IRA contribution for retirement accounts. I have put my emergency money in short term corporate bond index which it lost around $300, while I also have total bond market index which it lost $800 in my brokerage accounts. Which of these I shoul...
by grabiner
Fri Feb 16, 2018 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: Sell individual ETFs and buy Vanguard diversified ETF?
Replies: 2
Views: 372

Re: Sell individual ETFs and buy Vanguard diversified ETF?

B) Put everything in a Vanguard diversified ETF (ASX:VDGR 30% bonds/70% stocks) I'm reluctant to go with B immediately as IEM is up 27%, IOO 17% & SSO 18% (STW is up 7% and SLF .16%) in the last 12 months/since I bought. Unless there is a tax consequence (I don't know how Australia taxes capital ga...
by grabiner
Fri Feb 16, 2018 10:53 pm
Forum: Investing - Help with Personal Investments
Topic: Does the absence of need for a legacy affect your AA or SWR?
Replies: 24
Views: 1605

Re: Does the absence of need for a legacy affect your AA or SWR?

If you don't need to leave a legacy, you can increase your sustainable withdrawal rate by converting most of your assets to an annuity (preferably inflation-adjusted).
by grabiner
Fri Feb 16, 2018 10:50 pm
Forum: Investing - Help with Personal Investments
Topic: Transition AA 100% equities to 70/30
Replies: 4
Views: 513

Re: Transition AA 100% equities to 70/30

Also consider creating a written IPS (Investment Policy Statement) as soon as you can. This will be your guarantee not to mess around with your account every time there is an idea passing in front of you https://www.bogleheads.org/wiki/Investment_policy_statement For example, here is the last parag...
by grabiner
Fri Feb 16, 2018 10:47 pm
Forum: Investing - Help with Personal Investments
Topic: Classification for Global Real Estate ETF (Vanguard)
Replies: 3
Views: 229

Re: Classification for Global Real Estate ETF (Vanguard)

I count it as real estate in my major asset class allocation (US, foreign, real estate, fixed income), and then split my real estate allocation between US and foreign in my subclass allocation. I hold 10% of my portfolio in real estate, so I hold 5% each in Vanguard's US and foreign real estate funds.
by grabiner
Fri Feb 16, 2018 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: Foreign Tax Credit on Iowa State Income Tax
Replies: 7
Views: 459

Re: Foreign Tax Credit on Iowa State Income Tax

According to Individual Income Tax Provisions in the States , from the Wisconsin Legislative Fiscal Bureau, there is a state foreign tax credit in AL, AZ, HI, IA, MT, NC, and a limited credit in LA. If you live in one of these states (except LA, whether the credit is capped at a low level), this mak...
by grabiner
Fri Feb 16, 2018 10:31 pm
Forum: Investing - Help with Personal Investments
Topic: Investing vs paying off debt
Replies: 28
Views: 1598

Re: Investing vs paying off debt

Once you have maxed out your retirement accounts, I would put additional money against the car loan. The reason to pay off the car loan rather than the mortgage is that the car loan is a short-term loan. If there are four years left on the loan and you pay it off in two, then paying off the loan ear...
by grabiner
Fri Feb 16, 2018 8:12 pm
Forum: Investing - Theory, News & General
Topic: New reduced rate on REIT Dividends
Replies: 16
Views: 2262

Re: New reduced rate on REIT Dividends

According to Vanguard, the difference in annualized returns for VNQ for pre-tax and post-tax returns is 1.28% (7.65% vs. 6.37%). That's a difference of 18.0%, slightly worse than the mutual fund. So REITs are not as tax efficient as stock indexes but much more tax efficient than bonds. Computed tax...
by grabiner
Thu Feb 15, 2018 9:16 pm
Forum: Investing - Theory, News & General
Topic: New reduced rate on REIT Dividends
Replies: 16
Views: 2262

Re: New reduced rate on REIT Dividends

Another PM from Larry: People miss the lack of migration leading to low turnover and especially when yields are low, it's not very tax inefficient With the development of ETFs, turnover does not have much effect on tax efficiency. (However, REIT ETF is the only Vanguard stock ETF that distributed c...
by grabiner
Thu Feb 15, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: Is Tax-Managed Small Cap (VTMSX) an underrated fund?
Replies: 5
Views: 633

Re: Is Tax-Managed Small Cap (VTMSX) an underrated fund?

Before the development of ETFs, it was hard to have tax-efficient small-cap investment. Now, the fund isn't necessary, but if you want to invest in the S&P 600, it is still less expensive than any ETF tracking that index. And given its 100% qualified dividends, it is more tax-efficient than Vanguard...
by grabiner
Thu Feb 15, 2018 9:08 pm
Forum: Investing - Help with Personal Investments
Topic: Is VTI really "total stock market" with only 1478 holdings?
Replies: 12
Views: 1715

Re: Is VTI really "total stock market" with only 1478 holdings?

The number of holdings isn't particularly relevant. If there are ten small stocks in a particular industry which combine to make 0.1% of the portfolio, your return won't be affected much if the fund chooses to hold 0.1% in only one of those ten, rather than 0.01% in each of them as a true index woul...
by grabiner
Thu Feb 15, 2018 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: I think I filed my back door roth incorrectly in Turbo tax
Replies: 8
Views: 637

Re: I think I filed my back door roth incorrectly in Turbo tax

I noticed that even after you get the federal entered correctly, you then need to go to state and tell TurboTax the basis again Which state? This is necessary in some states because federal and state basis may be different. (NJ, for example, doesn't allow deductions for contributions to a tradition...
by grabiner
Thu Feb 15, 2018 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: Tax efficiency of VFMF US Multifactor ETF?
Replies: 5
Views: 388

Re: Tax efficiency of VFMF US Multifactor ETF?

None of Vanguard's diversified stock ETFs have distributed capital gains other than just after getting started. Therefore, I would expect VFMF to be tax-efficient after its first year. (If it starts in a rising market, it won't be able to avoid capital gains in the first year, this is what happened ...
by grabiner
Thu Feb 15, 2018 8:53 pm
Forum: Investing - Help with Personal Investments
Topic: Equity Dividend Fund / ETF at Schwab?
Replies: 20
Views: 2236

Re: Equity Dividend Fund / ETF at Schwab?

why do people assume that taxes will be lower in the future than now? I would think its going to be the opposite Paying taxes later rather than now is a good deal even if tax rates go up, because the money you don't pay in taxes tends to grow. If you hold a fund which distributes a $10K capital gai...
by grabiner
Thu Feb 15, 2018 8:47 pm
Forum: Investing - Help with Personal Investments
Topic: [Which ETF for my HSA account?]
Replies: 1
Views: 157

Re: [Which ETF for my HSA account?]

If an ETF isn't commission-free but you buy $5000 at a time, that is a one-time cost of $10 to buy and $10 to sell, which is 0.40%. If you hold for 20 years, that is equivalent to an extra 0.02% in expenses. Therefore, the commission isn't particularly important, so it makes more sense to choose the...
by grabiner
Thu Feb 15, 2018 8:39 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage because of new tax deductions?
Replies: 10
Views: 1820

Re: Pay off mortgage because of new tax deductions?

So r u recommending to payoff the mortgage? Sorry it was not clear for me from your explanation.. Yes. Since you can get higher returns from paying off the mortgage than from investing with the same risk level, you should pay it off. You can then decide whether you want the potential of higher retu...
by grabiner
Thu Feb 15, 2018 8:37 pm
Forum: Investing - Theory, News & General
Topic: What is the most the stock market has ever been down in 5 year period?
Replies: 19
Views: 2862

Re: What is the most the stock market has ever been down in 5 year period?

https://alphaarchitect.com/wp-content/uploads/2014/06/emp_normal1.jpg Actually we know what stock returns look like (see above for monthly returns). They have a positive skew (most months have more gain than expected from the average return) and a fat lower tail with many outliers (far more crashes...
by grabiner
Wed Feb 14, 2018 11:15 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage because of new tax deductions?
Replies: 10
Views: 1820

Re: Pay off mortgage because of new tax deductions?

See Paying down loans versus investing on the wiki. You can pay off a 9-year mortgage, which would be equivalent to buying a bond portfolio yielding 3% per year with a duration of 4.5 years. Bonds with a duration of 4.5 years don't yield 3%, even in an IRA. Therefore, if you sell bonds like this fro...
by grabiner
Wed Feb 14, 2018 10:56 pm
Forum: Investing - Theory, News & General
Topic: What is the most the stock market has ever been down in 5 year period?
Replies: 19
Views: 2862

Re: What is the most the stock market has ever been down in 5 year period?

If you assume a 5% real return and a 20% standard deviation, then the standard deviation of 5-year annualized returns would be 9%. This means that 1/6 of all 5-year periods would lose more than 4% annualized (18% cumulative), and 1/40 would lose more than 13% annualized (50% cumulative). These are r...
by grabiner
Wed Feb 14, 2018 10:50 pm
Forum: Investing - Theory, News & General
Topic: Best Treasury Bond Fund/ETF for Taxable Accounts
Replies: 17
Views: 1929

Re: Best Treasury Bond Fund/ETF for Taxable Accounts

This being a bond fund, I believe capital gains would either be the same (if short term) or less (if long term) than the taxes on the ordinary income. So couldn't long term capital gains actually be a better way to generate total return than with income? Long-term gains are taxed at a lower rate. S...
by grabiner
Wed Feb 14, 2018 10:41 pm
Forum: Investing - Help with Personal Investments
Topic: Buy or Rent under new Tax Law
Replies: 20
Views: 1692

Re: Buy or Rent under new Tax Law

Under the new tax law, if you take out a $600K mortgage at 4.5%, your interest will be $27K. With $10K in state and local taxes, and some charitable contributions, you will be be able to deduct more than half the interest. Since you are in the 24% tax bracket, the after-tax mortgage rate would be ab...
by grabiner
Wed Feb 14, 2018 10:36 pm
Forum: Investing - Help with Personal Investments
Topic: 1099-DIV does not equal income dividends?
Replies: 8
Views: 1129

Re: 1099-DIV does not equal income dividends?

and all cases involving less than $300/$600 in foreign tax (Single/MFJ) Except to the extent that there is no tax liability. FTC is a non-refundable credit. Is there not also a possible situation, where portfolio income is the main source, and foreign income amounts to a certain percentage of total...
by grabiner
Wed Feb 14, 2018 10:28 pm
Forum: Investing - Help with Personal Investments
Topic: Three Fund Portfolio Excluding TSP?
Replies: 12
Views: 1073

Re: Three Fund Portfolio Excluding TSP?

If most or all of bonds are in the TSP, would you suggest a 50:50 of F:G? I’ve seen that in other threads. I prefer 100% G. For most investments, there is a trade-off between risk and return; higher-yielding bonds lose more money if interest rates rise or if bonds default. The G fund is an exceptio...
by grabiner
Wed Feb 14, 2018 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: When to pay off debt instead of invest?
Replies: 27
Views: 1205

Re: When to pay off debt instead of invest?

not enough info on current assets, etc. the argument about borrowing 80k at 4% is flawed (IMO) since it is a mortgage. you can get a 12 month CD at 2% right now, I think Why is this flawed? FWIW, we will not get a tax benefit from that mortgage (because we already exceed the limit on our primary ho...
by grabiner
Tue Feb 13, 2018 10:35 pm
Forum: Personal Finance (Not Investing)
Topic: Obligation to use car insurance proceeds?
Replies: 22
Views: 1555

Re: Obligation to use car insurance proceeds?

Is the car financed? If so, the bank might demand that you repair the car, to protect its own interest. (If your loan balance is $20K and the accident decreased your car value from $22K to $18K, the bank no longer has full collateral for the loan.)
by grabiner
Tue Feb 13, 2018 10:23 pm
Forum: Investing - Help with Personal Investments
Topic: G Fund in Wife's TSP
Replies: 4
Views: 552

Re: G Fund in Wife's TSP

Even under the current options, you can change the withdrawal amount every year, as long as it is at least the RMD. You need some money outside the TSP in case your expenses change during the year, but a small IRA could handle that.
by grabiner
Tue Feb 13, 2018 10:20 pm
Forum: Investing - Help with Personal Investments
Topic: Tax loss harvesting MUB
Replies: 11
Views: 905

Re: Tax loss harvesting MUB

Note that MUB is subject to the 6-month rule. If you sell a share which you bought within the last 6 months for a capital loss, you must reduce the loss by the tax-exempt dividends paid on this share. (This rule doesn't apply to most muni mutual funds, because those funds accrue dividends for each d...
by grabiner
Tue Feb 13, 2018 10:11 pm
Forum: Investing - Help with Personal Investments
Topic: TSP and otherwise for income
Replies: 14
Views: 915

Re: TSP and otherwise for income

I recently retired and will be withdrawing 1800 monthly from my TSP to supplement FERS and SS. Currently my TSP balance is 600k. I have moderate to high risk tolerance. Since monthly withdrawals are taken proportionately from each of my TSP fund allocations, is it advisable to withdrawal a lump sum...
by grabiner
Tue Feb 13, 2018 10:06 pm
Forum: Investing - Help with Personal Investments
Topic: Choosing muni bond funds
Replies: 52
Views: 4397

Re: Choosing muni bond funds

I am in the 10% tax bracket for 2017. I am currently trying to invest some inheritance money and want lower-risk investments. I am also confused about why munis are not good for people in lower tax brackets. I understand why muni funds are recommended for people in higher tax brackets, but not sure...
by grabiner
Tue Feb 13, 2018 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Deciding Between Treasuries and Munis in Taxable
Replies: 15
Views: 1151

Re: Deciding Between Treasuries and Munis in Taxable

Federal tax bracket: 24% State tax bracket: 9% If you can't get a muni fund for your state, and you don't itemize deductions, that's a tax difference of just 16%; that is, munis yielding 84% as much as Treasuries would have the same after-tax yield. (This is calculated as (1-.24)/(1-.09)=.84. With ...
by grabiner
Mon Feb 12, 2018 11:30 pm
Forum: Investing - Theory, News & General
Topic: Correlations among different types of bonds
Replies: 14
Views: 1158

Re: Correlations among different types of bonds

(A fund of half stock and half bonds would have 0.71 correlation with stock and 0.71 correlation with bonds if the stock and bond returns were independent.) My thinking cap is not on right now and I may have missed something, but that seems wrong unless maybe you're also assuming equal volatility o...
by grabiner
Sun Feb 11, 2018 8:56 pm
Forum: Investing - Theory, News & General
Topic: Borrow vs Pay Cash
Replies: 24
Views: 1839

Re: Borrow vs Pay Cash

There are also two extra costs. And having a car loan requires you to carry lower deductibles on collision and comprehensive than you might want. What do you consider a lower deductible- does $1000 fall in that category? When I took my loan in 2001, the credit union required a $500 deductible. I ra...
by grabiner
Sun Feb 11, 2018 8:54 pm
Forum: Investing - Theory, News & General
Topic: Correlations among different types of bonds
Replies: 14
Views: 1158

Correlations among different types of bonds

Morningstar article: Should You Diversify Your Bond Exposure? The article includes a chart of correlations among different segments of the bond market, over the 15-year period from 2/1/03-1/31/18. It doesn't get all the segments: the only corporate-only segments are short-term and high-yield. Still,...
by grabiner
Sun Feb 11, 2018 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: Will Roth income affect FAFSA and EFC?
Replies: 2
Views: 365

Re: Will Roth income affect FAFSA and EFC?

Roth IRA withdrawals are counted as income. There is no specific advantage for using a Roth over a traditional IRA, because income taxes are deducted from the income before computing EFC. For example, if you withdraw $10,000 from a traditional IRA in a 22% bracket, or $7800 from a Roth IRA, either o...
by grabiner
Sun Feb 11, 2018 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: HSA section in Turbotax online version & Form-8889
Replies: 19
Views: 1014

Re: HSA section in Turbotax online version & Form-8889

I was looking at our HSA situation as well. My company makes a direct contribution (not through payroll) every January and then I fully fund my HSA the difference of their contribution via deductions out of every paycheck. My W-2 Boz 12 W only has the contributions I made through these deductions, ...