Search found 395 matches

by JimInIllinois
Sun Aug 20, 2023 9:47 am
Forum: Personal Investments
Topic: It's not market timing if it's in your IPS
Replies: 51
Views: 9891

Re: It's not market timing if it's in your IPS

I think it means that you can add to TREA beyond the account limit if you rollover your pre-tax account to TIAA. So "TIAA" means the company and not TIAA Traditional Annuity which would already be held at the company anyways? Does it also mean that once you bought TREA since it is an annuity that one could only sell TREA and move to another annuity within the company? Or could one take it out of the company and move it externally to say a Vanguard IRA or a Schwab IRA? My interpretation is that if you transfer/roll-over funds from a 401(a), 403(b), IRA, etc. managed by TIAA to another provider (e.g., Fidelity), if you then move it back to TREA it is not considered an " internal funding vehicle transfer" and is therefore ...
by JimInIllinois
Sat Aug 19, 2023 8:45 pm
Forum: Personal Investments
Topic: It's not market timing if it's in your IPS
Replies: 51
Views: 9891

Re: It's not market timing if it's in your IPS

Relevant blog post: https://www.pim4you.com/blog/strategy-f ... eal-estate

In particular they note that "Assets can be transferred out of TIAA and then back into the TIAA Real Estate account in any amount." Has anyone tried that?
by JimInIllinois
Thu Jun 30, 2022 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Dad passed away with I-bonds - how to proceed with TreasuryDirect
Replies: 10
Views: 2512

Re: Dad passed away with I-bonds - how to proceed with TreasuryDirect

My only piece of advice is to rub some ink over the seal on the death certificate so it is more visible before you mail it in. Apparently the original documents all get scanned and shredded before anyone looks at them. Could you please expand a bit on this technique? I assume you don't mean to cover the seal with ink so it's unreadable, but having trouble picturing what is intended and how it helps? I was thinking of the letter appointing the personal representative rather than the death certificate, but the situation is that the seal was pressed/embossed on the otherwise plain letterhead from the court and it could only be seen when the light was at just the right angle. Tracing over it with ink or a pencil made it legible even in a fax/s...
by JimInIllinois
Mon Jun 27, 2022 9:04 pm
Forum: Personal Finance (Not Investing)
Topic: Dad passed away with I-bonds - how to proceed with TreasuryDirect
Replies: 10
Views: 2512

Re: Dad passed away with I-bonds - how to proceed with TreasuryDirect

Just go ahead and call them. Don't do anything as if he was still alive.

Yes, you can include interest through date of death on his final return, although I'm not sure how the trust or penalty works. Just don't forget you did when they mature. The taxes on six months of interest may not be worth the trouble depending on how you value your time or feel about the government.

My only piece of advice is to rub some ink over the seal on the death certificate so it is more visible before you mail it in. Apparently the original documents all get scanned and shredded before anyone looks at them.
by JimInIllinois
Sat Jun 11, 2022 11:16 am
Forum: Personal Investments
Topic: How much is tax advantaged space worth?
Replies: 23
Views: 2027

Re: How much is tax advantaged space worth?

I'm facing a similar issue trying to compare a private sector job with a 401(k) to a public sector job with a 401(a), 403(b), and government 457 plan (and the ability to max out all simultaneously). I know this depends on my current and retirement ages and marginal tax rates, plus the expected withdrawal pattern and the distribution of expected returns. Has anyone done this calculation or have a rule of thumb for how much less salary I should accept in exchange for $40,000 of additional tax advantaged space?
by JimInIllinois
Fri Sep 10, 2021 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Was not converting to Roth a good idea?
Replies: 188
Views: 16275

Re: Was not converting to Roth a good idea?

My argument for avoiding Roth conversion beyond the 15% bracket is that you are locking in today's marginal tax rate, which is an advantage only if the unknown future turns out well. In the cases where you actually need all of the money you have saved you are likely in a low tax bracket, either because investment returns were low or because you have large but deductible medical and long-term care expenses. For the cases where you (and your spouse) die early or rich you can either leave your pre-tax accounts to tax-exempt charities or not worry about minimizing taxes for your now wealthy heirs. My one argument in favor is that if you have maxed out tax-deferred contributions and you use assets in taxable accounts to pay the conversion taxes ...
by JimInIllinois
Mon Aug 16, 2021 11:27 pm
Forum: Personal Consumer Issues
Topic: Rye whiskey
Replies: 63
Views: 6911

Re: Rye whiskey

For something with a stronger flavor, Far North Roknar is 80% rye.
https://farnorthspirits.com/roknar-mn-rye-whiskey/
by JimInIllinois
Sat May 08, 2021 8:48 pm
Forum: Personal Finance (Not Investing)
Topic: Please Weigh In, Can't Ask Anyone Else - Burial Planning
Replies: 52
Views: 5574

Re: Please Weigh In, Can't Ask Anyone Else - Burial Planning

I assume there is no urgency after cremation, right? You can keep the urn at home until you decide so why waste precious time planning now? That's how I would feel, but as I got to know in-laws and their friends/neighbors I realized there are still parts of the US where funerals and burials are very, very important culturally. At my FIL's funeral in 2019 people he'd known since high school (now very elderly as he was 94), throughout his working career, golf buddies, doctors, church members, bank tellers all showed up to pay their respects. Some he had not seen in decades. It surprised me a little, but as I saw it playing out I realized how important it was in their community to all plus my spouse did enjoy meeting people he'd only heard ab...
by JimInIllinois
Sat May 08, 2021 8:26 pm
Forum: Personal Finance (Not Investing)
Topic: Please Weigh In, Can't Ask Anyone Else - Burial Planning
Replies: 52
Views: 5574

Re: Please Weigh In, Can't Ask Anyone Else - Burial Planning

I assume there is no urgency after cremation, right? You can keep the urn at home until you decide so why waste precious time planning now?
by JimInIllinois
Fri Apr 30, 2021 8:30 pm
Forum: Personal Investments
Topic: Bond Portfolio ideas
Replies: 62
Views: 6112

Re: Bond Portfolio ideas

I can't see any reason to hold cash when you have access to a stable value fund. Stable value has a much higher return (for good funds, today) with no volatility, so basically a free lunch even without FDIC insurance.

See also https://www.bogleheads.org/wiki/Placing ... ed_account
by JimInIllinois
Fri Apr 23, 2021 8:42 pm
Forum: Personal Investments
Topic: Legacy Strategy: Reducing One's Estate
Replies: 36
Views: 4338

Re: Legacy Strategy: Reducing One's Estate

Rajsx wrote: Fri Apr 23, 2021 7:42 pm
FIREchief wrote: Fri Apr 23, 2021 4:02 pm
MrLoco wrote: Fri Apr 23, 2021 11:59 am About 1.8 M in a Trad IRA
Do you have LTC insurance? If not, you may wish to keep at least $1M in that tIRA to cover nursing home costs in the future. Under current law, most of those could be withdrawn from a tIRA without paying taxes.
I learnt something new today, thanks. So no taxes are due if TIRA funds are going to pay Nursing Home costs, good to know
I assume this is just referring to using the medical expense deduction against taxable IRA withdrawals.
by JimInIllinois
Mon Apr 19, 2021 8:45 pm
Forum: Personal Consumer Issues
Topic: Air filter @ Furnace/AC or only @ Intake Air Vent?
Replies: 13
Views: 2049

Re: Air filter @ Furnace/AC or only @ Intake Air Vent?

I've never seen a furnace in an attic, but if it's that hard to get to then there is probably not a second filter up there.
by JimInIllinois
Mon Apr 19, 2021 8:30 pm
Forum: Personal Consumer Issues
Topic: Air filter @ Furnace/AC or only @ Intake Air Vent?
Replies: 13
Views: 2049

Re: Air filter @ Furnace/AC or only @ Intake Air Vent?

I've never seen filters at an intake vent, only at the furnace, but it doesn't matter. There needs to be a filter somewhere, and whatever filters there are need to be changed regularly.
by JimInIllinois
Sat Apr 17, 2021 8:50 pm
Forum: Personal Consumer Issues
Topic: Non-Pilling Bed Sheets
Replies: 5
Views: 720

Re: Non-Pilling Bed Sheets

Percale weave is more durable than sateen weave. There is no value in going above a 300 thread count. Long-staple cotton is much more important.
by JimInIllinois
Thu Jan 07, 2021 8:14 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited Series EE Bonds - what to do when unsure if estate paid tax on interest?
Replies: 33
Views: 2313

Re: Inherited Series EE Bonds - what to do when unsure if estate paid tax on interest?

Does anyone know if there is a formal election that I'll need to file along with my 2020 return to indicate that I'm electing to pay the interest annually? It seems like that is what I would formally be doing, and that there are some consequences to such election (i.e. that all other bonds that I hold now or in the future -- which are none and plan to be none for the immediate future -- will also require me to accrue interest annually for tax purposes, unless I file a similar election to revert back to the default non-annual treatment). Does that seem right? If so, does anyone know how I go about making that election? Or is it as simple as just accruing the interest on a 1040? I typically file with a TurboTax or H&R Block - I'm not sur...
by JimInIllinois
Sat Jan 02, 2021 2:38 pm
Forum: Personal Consumer Issues
Topic: Tips for Frugal Living
Replies: 284
Views: 33278

Re: Tips for Frugal Living

oldfort wrote: Sat Jan 02, 2021 2:15 pm Most people who drink don't do so in moderation. Moderate drinking, as defined by the dietary guidelines, is consuming a maximum of one drink in a 24 hour period for women or two for men.
According to https://arg.org/news/drinking-norms-in-the-us/ 28% of American men abstain from alcohol and 89% have 14 or fewer drinks per week. For women, 33% abstain and 90% have seven or fewer drinks per week. So roughly 85% of drinkers do so in moderation, unless there are a lot of people who drink heavily some days and abstain the rest.
by JimInIllinois
Fri Jan 01, 2021 8:34 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited Series EE Bonds - what to do when unsure if estate paid tax on interest?
Replies: 33
Views: 2313

Re: Inherited Series EE Bonds - what to do when unsure if estate paid tax on interest?

quenchgum wrote: Thu Dec 31, 2020 1:39 pmobviously mature
I'm not sure what you mean by "obviously" but final extended maturity is 30 years from the issue date.
by JimInIllinois
Wed Dec 30, 2020 7:59 am
Forum: Non-US Investing
Topic: I will soon start to withdraw $$ from my portfolio, is it safe? [Hong Kong]
Replies: 16
Views: 1811

Re: I will soon start to withdraw $$ from my portfolio, is it safe?

Your high initial withdrawals will exacerbate sequence of return risk. You need to either make your expenditures contingent on the performance of your portfolio or keep the high-paying job longer. You don't say why you want to switch to low-paid, part-time work, but you may find your current job more enjoyable if you adopt a more relaxed attitude. If anyone notices, say the changes are necessary to "avoid burnout" and "safeguard your health".
by JimInIllinois
Tue Oct 20, 2020 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: Administration of Testamentary Trusts
Replies: 34
Views: 3586

Re: Administration of Testamentary Trusts

They will need to file annual income tax returns for the trusts. Free if they do it themselves, otherwise it's an expense.
by JimInIllinois
Sat Sep 05, 2020 10:41 am
Forum: Personal Investments
Topic: Do I really own anything if everything can require a Medallion signature which I can never get?
Replies: 71
Views: 9780

Re: Do I really own anything if everything can require a Medallion signature which I can never get?

I've only ever needed a Medallion guarantee when acting as an executor, to transfer the decedent's accounts to the name of the estate, and even then I don't think Vanguard required it because the transfer was to the estate, not me. Transferring shares directly from the decedent to myself would have required one.
My only advice is to open an account with a local full-service bank that provides this service to its customers (it's never free like notary public often is) and be sure to keep the account active and open so that you will have a history with them if you ever need it.
by JimInIllinois
Thu May 28, 2020 5:09 pm
Forum: Investing - Theory, News & General
Topic: Why math, why? [How do I calculate portfolio gain/loss from asset allocation?]
Replies: 15
Views: 1902

Re: Why math, why?

bryanm wrote: Thu May 28, 2020 4:55 pm
JimInIllinois wrote: Thu May 28, 2020 4:23 pm
jvini wrote: Thu May 28, 2020 12:41 pm I think I read somewhere that a 4% drop in the S&P equalled a 1% drop for a 50/50 portfolio, but that may be wrong too and I'm looking at a 60/40 portfolio.
A 4% drop in stocks equals a 1% change in the allocation ratio of a 50/50 portfolio, turning it into a 49/51 portfolio.
That's an interesting way to look at it! Though, being a pedant, I would argue that this is a 2% change in allocation (0 point spread to 2 point spread). :D
OK, but being argumentative, I would point out that when people have "5% rebalancing bands" that means they plan to rebalance when 50/50 becomes 45/55. It is not intuitive to most people that it takes a 20% change in the stock market to hit a 5% band.
by JimInIllinois
Thu May 28, 2020 4:23 pm
Forum: Investing - Theory, News & General
Topic: Why math, why? [How do I calculate portfolio gain/loss from asset allocation?]
Replies: 15
Views: 1902

Re: Why math, why?

jvini wrote: Thu May 28, 2020 12:41 pm I think I read somewhere that a 4% drop in the S&P equalled a 1% drop for a 50/50 portfolio, but that may be wrong too and I'm looking at a 60/40 portfolio.
A 4% drop in stocks equals a 1% change in the allocation ratio of a 50/50 portfolio, turning it into a 49/51 portfolio.
by JimInIllinois
Sun Mar 22, 2020 11:54 pm
Forum: Investing - Theory, News & General
Topic: It's Not Different This Time
Replies: 379
Views: 48739

Re: It's Not Different This Time

It's the area under the curve that matters, not the height of the spike. Businesses are being forced to shut down either directly by the government or because their customers vanished overnight, and they are laying people off immediately to conserve assets so that they can survive the shutdown. The employees don't even need to look for a job to receive unemployment. When this is over most will be re-hired immediately (at least the productive ones) and the pent-up demand will kick things off like the end of WWII (without the random strangers kissing in the street). It depends! That’s only possible if the business owner can stay solvent in the interim period. Many will be able to last a month, maybe two, without help. Some will go bankrupt. ...
by JimInIllinois
Sun Mar 22, 2020 10:57 pm
Forum: Investing - Theory, News & General
Topic: It's Not Different This Time
Replies: 379
Views: 48739

Re: It's Not Different This Time

https://www.buzzfeednews.com/article/lamvo/coronavirus-update-charts-unemployment-claims-laid-off-jobs https://pbs.twimg.com/media/ETvZvnYXQAI1bJ5?format=png&name=small I don't know. I think it feels like it could be kind of different. It's the area under the curve that matters, not the height of the spike. Businesses are being forced to shut down either directly by the government or because their customers vanished overnight, and they are laying people off immediately to conserve assets so that they can survive the shutdown. The employees don't even need to look for a job to receive unemployment. When this is over most will be re-hired immediately (at least the productive ones) and the pent-up demand will kick things off like the end ...
by JimInIllinois
Sat Mar 21, 2020 11:29 am
Forum: Personal Investments
Topic: House Down Payment - What to do now?
Replies: 11
Views: 968

Re: House Down Payment - What to do now?

You should at least keep looking and make a low-ball offer if you find the perfect house, especially if it is vacant. Anyone who "must sell" is going to be scared. Real estate is considered an essential service under the Illinois shelter-in-place order.
by JimInIllinois
Tue Mar 03, 2020 8:52 pm
Forum: Personal Consumer Issues
Topic: Help/Advice with Decluttering
Replies: 37
Views: 3641

Re: Help/Advice with Decluttering

Selling them now to someone who you know wants them will be much easier than donating or recycling them later.
by JimInIllinois
Sun Mar 01, 2020 9:06 pm
Forum: Personal Investments
Topic: My class A UPS shares dropped 24% right before I was about to sell
Replies: 12
Views: 1807

Re: My class A UPS shares dropped 24% right before I was about to sell

Paying off the car is a 4% tax-free guaranteed return, better than any bond. Back up the truck!
by JimInIllinois
Tue Feb 25, 2020 10:09 am
Forum: Personal Finance (Not Investing)
Topic: 1041 Estate - very high tax rate
Replies: 15
Views: 1396

Re: 1041 Estate - very high tax rate

ButterUtterD wrote: Tue Feb 25, 2020 9:55 am There was a ~3000 cremation/burial cost. He just paid it himself out of his checking account though.

Is there a way to claim this as an expense against the estate?
The estate can reimburse him for the burial, but cannot deduct it on the estate's income tax return (form 1041). Funeral/burial expenses can only be deducted against the estate tax (form 706), which this estate is far too small to owe.

From Pub 559: "Funeral expenses paid by the estate aren't deductible in figuring the estate's taxable income on Form 1041. They are deductible only for determining the taxable estate for federal estate tax purposes on Form 706."
by JimInIllinois
Tue Feb 25, 2020 9:41 am
Forum: Personal Finance (Not Investing)
Topic: 1041 Estate - very high tax rate
Replies: 15
Views: 1396

Re: 1041 Estate - very high tax rate

Thanks Mark. In that case it looks like the estate will owe taxes on the undistributed $1,500 (less the exclusion and any expense deductions) and receive a refund to distribute.
by JimInIllinois
Tue Feb 25, 2020 7:51 am
Forum: Personal Finance (Not Investing)
Topic: 1041 Estate - very high tax rate
Replies: 15
Views: 1396

Re: 1041 Estate - very high tax rate

The estate should have a $15,500 income distribution deduction, and the siblings should each receive a form K-1 showing $7,750 in income (on which they will have to pay taxes). There is also likely a way to include the withheld taxes on the K-1 so they can count it towards their liability. From the instructions for form 1041: "Report on Schedule K-1 (Form 1041), box 13, code B, any credit for backup withholding on income distributed to the beneficiary." I think you can treat the entire $17,000 as distributed (i.e., including the withholding credit), so the estate would have no taxable income, but the siblings would owe tax on the full $17,000 but can treat the $1,500 as a payment on their returns. I should have mentioned before t...
by JimInIllinois
Mon Feb 24, 2020 8:47 pm
Forum: Personal Finance (Not Investing)
Topic: 1041 Estate - very high tax rate
Replies: 15
Views: 1396

Re: 1041 Estate - very high tax rate

-The check for $17000 (really 15,500 as 1500$ were withheld for federal taxes) was sent to the executor (my friend and the deceased's son) and cashed. Half was kept by him and the other half was given to a sibling. This was done in Nov 2019. Date of Death was in June The estate should have a $15,500 income distribution deduction, and the siblings should each receive a form K-1 showing $7,750 in income (on which they will have to pay taxes). There is also likely a way to include the withheld taxes on the K-1 so they can count it towards their liability. Any other expenses that the estate can deduct will reduce the remaining $1,500 of income, and can also reduce the siblings liability, although if there were no other assets its not clear how...
by JimInIllinois
Thu Feb 20, 2020 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Why doesn't everyone own a home as a business and rent elsewhere?
Replies: 57
Views: 8465

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Being a renter is starting to sound a little more appealing as I get older and more sick of dealing with maintenance, however, I have never rented in my life, so I'm sure there are drawbacks I'm not thinking of. As a homeowner you can pay people to do the maintenance tasks you are sick of, and if you don't like their work you can hire someone else. As a renter you have to convince the landlord to spend his time and money to maintain and repair things. It might be fine with a good landlord until they sell the place and you have to deal with someone new. There is also the risk of having to move on relatively short notice if for whatever reason your lease isn't renewed. If your home is a condominium the association will take care of the groun...
by JimInIllinois
Wed Feb 19, 2020 7:08 pm
Forum: Personal Finance (Not Investing)
Topic: Why doesn't everyone own a home as a business and rent elsewhere?
Replies: 57
Views: 8465

Re: Why doesn't everyone own a home as a business and rent elsewhere?

1130Super wrote: Wed Feb 19, 2020 6:37 am I have 2 siblings that live in the same Neighborhood 1 is a CPA and they conspired to sell to each other and rent to each-other after the standard deduction doubled. I imagine that this practice is very uncommon but on paper it is genius.
Can you explain how the math works on this? I must be missing something.
by JimInIllinois
Tue Feb 18, 2020 9:47 pm
Forum: Investing - Theory, News & General
Topic: Total Stock Market Index - Section 199A dividends this year
Replies: 172
Views: 29711

Re: Total Stock Market Index - Section 199A dividends this year

Thank you, I was going to call Vanguard about it. It is not just VTSAX, a few other funds we hold have the QBI deduction this year which adds up to a nice sum. Which means we lost out on that last year because ... Vanguard did not report it? I think the law or IRS guidance changed. It appears that Form 8995 is new for 2019 (at least earlier versions do not show up in the IRS's prior year forms page). The Section 199A deduction was enacted as part of the Tax Cuts and Jobs Act of 2017 that was signed by President Trump. I note that there was a QBI deduction in the 2018 form 1040 on Line 9, with an accompanying worksheet in the 1040 instructions that includes qualified REIT dividends on Line 6 of the worksheet. But the instructions don't ment...
by JimInIllinois
Sun Feb 16, 2020 10:08 am
Forum: Personal Finance (Not Investing)
Topic: Why doesn't everyone own a home as a business and rent elsewhere?
Replies: 57
Views: 8465

Re: Why doesn't everyone own a home as a business and rent elsewhere?

Let me try to do the math on this. You and your clone buy identical houses and rent them to each other. Each year you pay each other R in rent, and pay M in mortgage interest, T in property taxes, and E in other expenses. The rent you pay is not deductible, but the net rental income, R - M -T - E, is taxable, so you pay additional income taxes of 30% * (R - M - T - E) on your rental property. If you live in your own home you still pay M + T + E, but the M and T are deductible, you get an owner-occupied discount on T, and avoid parts of E, so you reduce your tax and other costs compared to renting by at least 30% * (M + T - $12K). That makes the total annual loss of renting to your clone vs living in your own house at least 30% * (R - E - $1...
by JimInIllinois
Sat Feb 15, 2020 1:45 pm
Forum: Investing - Theory, News & General
Topic: Total Stock Market Index - Section 199A dividends this year
Replies: 172
Views: 29711

Re: Total Stock Market Index - Section 199A dividends this year

Is there any chance that Vanguard will re-issue 2018 1099-DIV forms to reflect 199A dividends? It seems that the tax law, structure, and composition of the funds is unchanged for 2019 so that 199A dividends could have been reported for 2018 if the regulations had been in place.
by JimInIllinois
Wed Feb 05, 2020 8:52 pm
Forum: Personal Consumer Issues
Topic: Examples of Low Tech Improving Your Life
Replies: 216
Views: 23360

Re: Examples of Low Tech Improving Your Life

5. Newspaper delivered to my home. Only checkout the news once in the morning and reading a physical paper is great. Having a news app on the phone I was checking it far too frequently and was bombarded with constant notifications. I did this until delivery became unreliable. Now I subscribe to the online edition, which also comes out once a day and looks identical to the dead-tree edition, but has definitely improved my life. I don't worry about the paper getting rained on or blown apart and down the street. I don't have go out to check if it's arrived yet, or wonder if it's coming late, is hiding at the end of the driveway, or isn't coming at all. I don't have to complain about missing papers. If I'm awake at 4am it's already available. ...
by JimInIllinois
Sun Jan 26, 2020 9:44 pm
Forum: Personal Finance (Not Investing)
Topic: Depositing a deceased spouse's check into a joint bank account
Replies: 21
Views: 32312

Re: Depositing a deceased spouse's check into a joint bank account

Gill wrote: Fri Jan 24, 2020 8:44 pm Depositing the checks to a joint account is much easier than going back to the payor and asking for a check issued to the estate.
Having the check reissued to the estate is not necessary in my experience. Checks payable to the decedent can be deposited into an estate account directly by the executor.
by JimInIllinois
Tue Dec 31, 2019 9:08 am
Forum: Personal Investments
Topic: Capital Gains Harvesting - Lots with Largest or Smallest Gains
Replies: 26
Views: 2456

Re: Capital Gains Harvesting - Lots with Largest or Smallest Gains

Since your goal is to move your assets to a 3-fund portfolio, you should sell the lots with the highest basis (i.e., the lowest gains) since this allows you to move the most assets to your preferred portfolio with the least taxes.

As for the low-basis, high-gain shares, consider donating them to charity (in place of your other giving) or just plan to hold them forever and let your heirs enjoy the step-up in basis.
by JimInIllinois
Sat Nov 16, 2019 8:37 pm
Forum: Personal Investments
Topic: Stable Value vs.Money Market
Replies: 3
Views: 663

Re: Stable Value vs.Money Market

Check the liquidity restrictions on the stable value fund. For ours you can't transfer from stable value to money market, but you can transfer to something more risky like a stock fund. They don't want people jumping in and out of the fund if money market rates spike. It's still likely a fine choice.
by JimInIllinois
Wed Nov 06, 2019 9:01 pm
Forum: Personal Finance (Not Investing)
Topic: Transferring Daughter's Funds to Her Efficiently
Replies: 16
Views: 1927

Re: Transferring Daughter's Funds to Her Efficiently

R2 wrote: Wed Nov 06, 2019 7:07 pm Is there any problem with me two give two "gifts" of shares over two years to not exceed the yearly limit?
No problem, but you could also split the gift between you and your wife (the limit is per recipient per giver).
by JimInIllinois
Tue Jun 25, 2019 10:33 pm
Forum: Investing - Theory, News & General
Topic: When the Conventional Wisdom about Taxes in Retirement is Wrong
Replies: 26
Views: 4375

Re: When the Conventional Wisdom about Taxes in Retirement is Wrong

FIREchief wrote: Mon Jun 24, 2019 2:11 pm It's a wash. You can contribute to a pre-tax account while simultaneously Roth converting other pre-tax qualified assets, or you can just change your contributions to Roth. The taxes and benefits are identical.
It depends on your state. Illinois doesn't tax Roth conversions, so better to contribute pre-tax and convert.
by JimInIllinois
Sat May 18, 2019 9:23 am
Forum: Personal Finance (Not Investing)
Topic: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Replies: 493
Views: 32887

Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles

Marginal Tax Rate is the percent increase (decrease) in tax liability due to adding (subtracting) $1 of income, i.e. it is the tax rate on the "next" ("last") dollar of income. It is customary to ignore changes in the marginal rate that are due to rounding, tax tables, and other periodic step functions in the tax code (e.g. child tax credit) and only consider the underlying rate. When you say "the percent increase (decrease) in tax liability due to adding (subtracting) $1 of income" this means that if my tax liability is $1000 and adding $1 of income increases my tax liability by $.30, then the percent increase in my tax liability due to that last $1 is $.30 / $1000 = .0003 = .03%. This is why I was careful to...
by JimInIllinois
Fri May 17, 2019 9:16 pm
Forum: Personal Finance (Not Investing)
Topic: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles
Replies: 493
Views: 32887

Re: Seeking comment on proposed revisions to Marginal Tax Rate and Traditional v. Roth wiki articles

How about this: A taxpayer's marginal tax rate is the amount by which tax liability increases due to a small increase in income, expressed as the percentage of the income increase by which the tax liability increases. For example, if earning an additional $20 per year would increase your tax liability by $5 then your marginal tax rate is 25%. The marginal rate will depend on both the total amount and type of income received, with high-income taxpayers generally paying higher marginal rates, and long-term capital gains and qualified dividends taxed at lower marginal rates than earned income. The loss of credits or deductions with increasing income may result in effective marginal rates that are higher than the payer's "tax bracket"...
by JimInIllinois
Tue May 07, 2019 9:54 pm
Forum: Personal Investments
Topic: I will inherit 2Mil What to do with it?
Replies: 54
Views: 9453

Re: I will inherit 2Mil What to do with it?

hawaii808 wrote: Tue May 07, 2019 9:14 pm I want to retire on on the 2 mIl as I am 70 of age.
You should at least research putting some of it into an immediate fixed annuity.
by JimInIllinois
Sat Apr 27, 2019 3:05 pm
Forum: Personal Investments
Topic: Early Retirement Fixed Annuity?
Replies: 9
Views: 887

Re: Early Retirement Fixed Annuity?

The main reason to buy an annuity is to get paid for taking on mortality risk, i.e., for having your payments stop if you and your spouse die. If this risk is low (five years when you're relatively young) you shouldn't expect to be paid much for it. If you sign up at age 65 for payments starting at 85 the mortality premium should be quite impressive.
by JimInIllinois
Sun Mar 31, 2019 9:54 pm
Forum: Personal Finance (Not Investing)
Topic: Finish backyard before selling?
Replies: 25
Views: 2747

Re: Finish backyard before selling?

Can you post a picture? How bad is this backyard? Its hard to fathom what is really entailed to advise you. For 30k, it sounds like there is no landscaping there at all. Is that true? zero, nada, nothing but dirt n' weeds :) . However, the front yard is really nicely landscaped though per the builder, and I've maintained it impeccably (better than most on the street). I'll try to post a pic, but basically it's a 20'x50' backyard and one corner of it slopes pretty bad, to the point if I had kids I'd be quite worried (thus I'm thinking I'd want to take this off the table). Kill the weeds and get a lawn (seed or sod, depending on time) so that it is "move-in ready" rather than a project waiting to be done. Think of it as providing t...
by JimInIllinois
Tue Feb 19, 2019 8:50 pm
Forum: Personal Investments
Topic: Tilting AA into more stocks
Replies: 20
Views: 1593

Re: Tilting AA into more stocks

fingoals wrote: Sun Feb 17, 2019 11:14 pm It is a good point that capital gains become taxable in case of changing funds, but could you clarify what is meant by changing funds? Selling & buying shares of different index funds?
Yes, if you have capital gains in a taxable account in, for example, a target date fund, and realize you would be better off if you had split your assets with stocks in taxable and bonds in tax-free, then you would pay tax on the full capital gain of the target date fund to make this change, which might not be worth it.
by JimInIllinois
Sun Feb 17, 2019 10:22 pm
Forum: Personal Investments
Topic: Tilting AA into more stocks
Replies: 20
Views: 1593

Re: Tilting AA into more stocks

Based on the same logic, I'm not worried too much about tax efficiency at the present time, since my assets are so small (due to the late start) that it practically makes no difference. Having said that, I thought that I could increase my retirement assets quite a bit by exposing my portfolio to more risk (by tilting the balance into even more stocks), which, in reality, isn't that risky due to its very small size, hence the question. Increasing your stock exposure from 85% to 100% is going to increase your retirement assets by at most 10%, and that is assuming stocks significantly outperform bonds. What will matter much more is your behavior when the value of those stocks drops 50%. If you sell out at the bottom and miss the recovery you ...
by JimInIllinois
Sun Feb 17, 2019 9:41 pm
Forum: Personal Investments
Topic: Tilting AA into more stocks
Replies: 20
Views: 1593

Re: Tilting AA into more stocks

Since you want to do something more complex than a target retirement fund, maybe you should look at using a three-fund portfolio to adjust your asset location for tax efficiency? You may also consider alternatives to a bond fund such as I-bonds or a stable value fund.