Bogleheads.org

alexander

I have a relative who's been working in the income tax field for 20+ years and the following is what I understand the general situation to be. If you truly want good tax advice and only have credentials to go by, then a CFP or an EA may not have as much emphasis, experience, or training as a CPA who...

alexander

Ask Fidelity, as a courtesy to a customer, to credit your account for the $75 transfer fee, which they'll often do. Win-win either way!

alexander

You may also want to consider whether buying a $22,000 car makes sense for your financial condition. How many months do you have to work to make $22k? Can your current car last you longer?

alexander

Except that ESBCX Evergreen Core Bond Fund - Class C has an expense ratio of 1.38%! With that kind of expense, you're better off with munis in a taxable account. Is that his or her 401k? What about the other one of you -- any better options in the other 401k?

alexander

Sharebuilder.com seems to be as cheap as they come. They let you automatically buy on a regular basis via a set-it-and-forget-it scheme, in dollar denominations (so you can get fractional shares). Note that Costco members get a discount/rebate of (I'm pulling from memory here) 5 to 20% or so on fees...

alexander

Alexander, where are you finding the distribution info for the FTSE all world? It's so new that Vanguard has no dividend distribution info that I could find. I'm also curious why the FTSE would have a higher percentage of qualified dividends ... if the FTSE holds nominally the same stocks as the Eu...

alexander

If the plan only lasts 10 years, it'll depend on whether you're no longer working then. If so, it may be worthwhile as you can convert 40% tax rates to much lower rates in the future. However, if you are working still and expect to be in a similar tax bracket due to income (thus the plan assets will...

alexander

The once-per-year rollover limit is per account, as far as I understand it. You currently have 4 IRA accounts (his fidelity/citi, her fidelity/citi), so you could move each of those accounts to Vanguard right now if you so desired. One point I didn't see mentioned: you don't list options for his 401...

alexander

Depending on the structure of your business and how much it generates each year, you could open a 401k or SIMPLE or SEP IRA that would at least allow you to defer 15k a year (up to 45k for SEP), and the cost with a provider like Vanguard or Fidelity would be relatively low. You may also have to make...

alexander

dave.d wrote:Contra Mel, I actually like the split between Europe and Pacific, which adds a rebalancing bonus (per Rick Ferri).

But unfortunately those two funds cost 0.07 to 0.12 more a year in taxes for those in the 25%-33% brackets due to only ~70% of their dividends counting as QDI.

alexander

Ken Schwartz wrote:Do you mean the $22,000 fee applicable to authorized participants? From the VEU prospectus, available here

Indeed! Thanks for the link.

alexander

You have enough in cash to fill the rest of your portfolio, thus VG growth is < 50% of your total assets (potentially much less). Gains are 22% of VG growth, or no more than 11% of total assets. At the 15% long-term rate, you'd pay 11% * 0.15 = 1.16% of total holdings in taxes. Unless you have hundr...

alexander

There is an indirect purchase charge for VEU: when an authorized participant exchanges stock shares for ETF shares, there's a fee of (if I remember correctly) approximately 0.15% to 0.2% paid to the fund. That's one reason VEU sells at a premium to NAV.

alexander

If your current bank charges ~$10 or so, you could transfer money every few months and pay $50 a year in transfer fees. The hassle of opening a new account, as well as any interest lost due to lower rates or minimum fees at other places, may make the search for something else less worthwhile. Someth...

alexander

http://efmoody.com/investments/diversification.html

Adrian's link is broken; it's .html not .htm.

alexander

A fund of funds does not receive FTC, so total intl index is out, as is developed markets. FTSE gets it, as do Tax-managed Intl and the 3 euro/pacific/emerging funds. Note also that FTSE and tax-managed intl have a higher percentage of qualified dividends that are eligible for 15% taxation (93% and ...

alexander

For me, it's a tax issue. Hold foreign bonds in a taxable account and you take a significant tax hit each year, but at least you get credit for the taxes those bonds paid to other countries. Hold them in tax-deferred and you lose the tax credit, but get long-term deferral. Thus, I stick to domestic ...

alexander

I too had a plan done and they suggested Diversified Equity. I specifically asked about why they were including it rather than index funds and, after some back-and-forth, the CFA said they were now recommending some amount of "diversification" into active funds. Of course, those active fun...

alexander

VG Prime money market yields 4.97% APR (5.09% APY) and VG short-term investment grade is 5.12% APR (5.28% APY), so ST bonds are actually yielding more these days. If you have $100k, increase the ST fund by 0.11% to a 5.39% APY. Sure, ST bonds have some price volatility, but higher long-term expected...

alexander

With a 2-5 year time horizon, you may also want to think about Vanguard's Short-term Investment Grade bond fund instead of Prime Money Market. It has a higher yield, higher price volatility in the short term, but a has a duration that more closely matches your anticipated liabilities.

alexander

Given that your profit sharing fund has a stated expense ratio of 0.01% but invests in underlying funds, I'm going to guess that the cost of those funds is not reflected in the stated expense ratio. Rather, the 0.01% is likely on top of those expenses. Unfortunately, the SEC only requires some costs...

alexander

I think gifting the stock may be a mistake -- hold it for the rest of your life is likely better. My rational for giving the stock now rather than via my estate was : a. minimize the dividends to me, ( ordinary Income) What tax bracket are you in? What bracket are your children in? From what you've ...

alexander

I'm not familiar with estates and ongoing taxation, but Vanguard's Prime Money Market would make sense to me -- it has one of the highest money market yields, yet the investments it holds are quite safe. If for tax reasons your CPA advises a tax-free fund, admiral treasury (state tax free) or your s...

alexander

One thing you note is that in a year in which you sell a significant number of shares, you lose Roth/etc eligibility. I'd suggest you ask yourself how long you want to hold each of those individual stocks. If the answer is less than 5 years, might as well sell them all this year (or 2008 if you pref...

alexander

Another benefit to VEA is that it has 100% qualified dividends compared to ~70% of VPL/VGK.

Your best options in a taxable account are VEA (possibly combined with VWO) or just use VEU (Vg. FTSE all-world ex-US).

alexander

Quicken Willmaker 2008 is computer software that asks you a bunch of questions and lets you create various types of trusts, wills, etc. Also explains via help blurbs what the ramifications are. If you have a complex situation, it may not be for you, but it has info on each state's laws. Think of it ...

alexander

If you're still a newbie, stick to mutual funds and avoid buying individual stocks until you've learned a lot more about investing. Vanguard's corporate structure is better than others, which is why many posters here prefer them -- they also have very low expenses and fees.

alexander

If you're a USAA member, they have a great Asset Management Account that pays interest competitive with Vg. Prime MM. Nice features like depositing checks by scanning them in, too. ATM refunds, etc. Otherwise, Fidelity has mySmartCash. Although they show a 3.5% interest rate, you can buy a fidelity ...

alexander

Do you have any joint accounts with your partner? I seem to recall a previous thread mentioned someone using that approach to qualify.

alexander

As others have said, you should treat your entire portfolio as a whole unit. That said, you will almost certainly find your best option is to put all of your 457 money into the Vanguard Inst. Index. Then, within your Roth IRA, you can hold the bonds/international in addition to the target retirement...

alexander

Just a note that your daughter also likely has access to the New York State Deferred Compensation Plan (www.nysdcp.com), to which she could contribute an extra 15.5k a year to if she ever maxes out the 403b.

alexander

My understanding is that there's a single limit of 20500 for the total of 401 and 403 contributions.

A 457 plan has a separate limit of 15500/20500.

alexander

If you're talking about equity subject to capital gains, then no, it almost certainly doesn't make sense to contribute to a non-deductible IRA. However, if you consider bonds, whose interest income would be subject to ordinary rates anyway, non-deductible IRAs give you the same benefits as a variabl...

alexander

With all deference to the author of All About Index funds, I don't think you'll get much out of it given your prior reading list.

"Unconventional Success" by David Swensen is my favorite that you don't have.

alexander

In either case, you should bear in mind that the income component when you convert to a Roth is determined relative to the total value of all your traditional IRAs. For example, if you happen to have a traditional IRA with $96,000 of money from a 401k rollover (zero basis) and you make a $4,000 non...

alexander

Most 19" have low resolution, so you might cross them off. 20" and 22" generally have the same resolution (1680x1050 for widescreen). If you want portrait mode, Dell makes a non-widescreen 20" that's 1600x1200 (or 1200x1600 in portrait) -- the FP2007 I think -- that is quite good...

alexander

There are two reasons to hold FTSE instead of total intl index: (1) foreign tax credit (worth about 0.15% a year) and (2) higher percentage of qualified dividends (worth 0.10 to 0.15% a year, depending on tax bracket). Those may not seem like much on 10k, but remember, that's per year. You and your ...

alexander

I seem to remember reading an IRS example in which you could contribute to a Roth/Traditional IRA, a 403b, and a SEP all in the same year. If you only have a small amount of self-employment income, you might be able to use a SIMPLE instead of a SEP to defer more.

alexander

If your mother really has no expectation of using this money and it's all going to you when she passes away, then this money may effectively be part of your own asset allocation. Are you happy with a 60/40 split? If she's in the 5% tax bracket, it doesn't matter so much where you put the bonds, but ...

alexander

Much as I generally prefer Vanguard to Fidelity, Fidelity has a great solo 401k. Unfortunately, it's only available if you have no employees, other than a spouse, so it sounds like it wouldn't work for you. It is different from a traditional 401k in that regard. You could certainly open a traditiona...

alexander

For what it's worth, Costco has "decent" 1080p HDTV sets by Vizio. They're LCD, which is what you want these days. 42" is ~$1200 47" is ~$1500 52" is ~$2200. They're available online and can be shipped if you don't want to go pick them up. I'd stick to a 42 or 47" set -...

alexander

Actually, in that chart most of the difference is due to dividends causing the NAV to change. As an example, look at the chart for the last 100 days instead of the default 200. You'll see that they're identical until vtsm's recent dividend, then there's a step change. For all intents and purposes, t...

alexander

Ah, the romans would be so proud.

alexander

I've posted about this before, but there are 4 international options: (1) Total Intl Index (2) Europe/Pacific/Emerging (3) FTSE all-world (4) Tax-managed intl (+ optionally emerging markets) There are two things to consider: (a) Foreign Tax Credit, worth about 0.15%/year if a fund qualifies. This ef...

alexander

Another option: instead of 1% AUM with the CPA, there are a number of respected financial planners who will manage your assets for 0.2%, many of whom frequent these boards.

alexander

The big difference between Tax-managed Intl and holding europe/pacific individually is that tm intl has 100% qualified distributions, compared to euro/pacific's ~70%. That means you'll pay a bit more in tax each year on distributions; depending on your tax bracket, it's like an increase in expense r...

alexander

"She is a bit stubborn, but you have to realize that she was at over 80% equities prior to my taking over. She is also going through the emotional impact of my taking over as well." Are you really truly sure you want to "take over"? Big potential for problems if she ends up resen...

alexander

You mention it's for your IRA, so I'd suggest investment grade because (a) it doesn't hold MBS, as pointed out before, and (b) it doesn't hold treasuries. The reason (b) is a plus is that treasuries are free of state tax, which depresses their yield compared to fully-taxable bonds. In an IRA, tax co...

alexander

In your case, I think you're unfortunately out of luck. SEP, SIMPLE, and Solo 401k all require self-employment income unless those retirement plans are offered by your employer. Your only other option for tax-deferral aside from an IRA would be a variable annuity, which generally does not make sense...

alexander

Is "rate" vs. "compounded yield" the same as comparing APR vs. APY?

Yes.

Bogleheads.org

Search found 221 matches

Re: Reaching my Portfolio Goal

Re: Remember, the