Search found 9569 matches

by lakpr
Wed Mar 22, 2023 5:06 pm
Forum: Personal Investments
Topic: Short term: Where to park money, for some profit?
Replies: 19
Views: 2014

Re: Short term: Where to park money, for some profit?

dips wrote: Wed Mar 22, 2023 4:55 pm FYI - Schwab is give over 5% p.a., even on short term starting from one month. In case, someone is looking for high yield CD for short term :-)
https://www.schwab.com/fixed-income/cer ... es-deposit
Schwab is one of the banks that is under stress, suffering from the same malady as SVB and FRC (or so the news articles I read said). You should still be good since you are staying below the FDIC limit
by lakpr
Wed Mar 22, 2023 4:24 pm
Forum: Personal Investments
Topic: Can I backdoor Roth after recharacterizing an incorrect roth ira contribution?
Replies: 12
Views: 550

Re: Can I backdoor Roth after recharacterizing an incorrect roth ira contribution?

muddgirl wrote: Wed Mar 22, 2023 4:20 pm In 2023 you will convert the balance in your IRA, say it's still $1700. All of that will be converted tax-free (because you already paid tax in 2022) and you will have a remaining basis of $500.
I am not so sure about the bolded part. If the balance in the Traditional IRA is $0 as of December 31st, as it should be if you are doing the Backdoor Roth correctly, I do not think the unused $500 basis carries over.

Best to not convert to Roth if the value of the IRA does not exceed the basis.
by lakpr
Wed Mar 22, 2023 4:18 pm
Forum: Personal Investments
Topic: Maturing IRA CD - Bond Allocation - Reinvestment Recommendations?
Replies: 7
Views: 483

Re: Maturing IRA CD - Bond Allocation - Reinvestment Recommendations?

Do you have the equivalent amount of this CD, in a taxable account?

There is an auction tomorrow for 10-year TIPS. Last time 10-year TIPS were auctioned in Jan-2023, the yield was 1.17% real. No reason not to expect at least that much with tomorrow's auction.

Getting 1.17% above inflation seems a good deal to me, except that this auction can only be in taxable accounts. Hence the question of whether you have the equivalent of this IRA CD money in taxable.

If you do, simply buy TIPS at the auction tomorrow, and invest this maturity IRA CD into 100% stocks. Will result in exact same risk as before.
by lakpr
Wed Mar 22, 2023 3:49 pm
Forum: Personal Finance (Not Investing)
Topic: Bigger house - should we buy?
Replies: 10
Views: 858

Re: Bigger house - should we buy?

All of the alternatives are affordable to you, given your high salary and projection of "reasonably stable" jobs going forward. Of the three though, spending the $300k and building an extension on your current property seems to be the cheapest alternative, although possibly taking the longest time to complete. In your shoes, I'd opt for that.

Edit: I'd rule out renting the current house. You would lose the primary home capital gains exclusion if you rent it out more than 2 years out without selling.
by lakpr
Wed Mar 22, 2023 12:43 pm
Forum: Personal Finance (Not Investing)
Topic: TSP to ROTH IRA
Replies: 6
Views: 671

Re: TSP to ROTH IRA

Even in 24% tax bracket, with $1 million already in Traditional TSP / 401(k) assets, I would suggest Roth TSP contributions. With 30 years to RMD age, even with not a single dime added to the Traditional pot, this $1 million will grow to be $8 million (doubles thrice, once every 10 years), and that's assuming a modest 7% real return (meaning 7% + inflation over the long term, which seems plausible to me). A 4% withdrawal from $8 million = $320k, which puts the couple in the same 24% tax bracket (if it survives) or 28% tax bracket (if the current tax bracket does not survive the scheduled expiry date of 12/31/2025, and revert to 2017 tax code). So Roth TSP contributions now would at WORST be the same as making Traditional TSP contributions, ...
by lakpr
Wed Mar 22, 2023 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: Would you buy a house for 615k if you were us?
Replies: 87
Views: 7075

Re: Would you buy a house for 615k if you were us?

Didn't read all the responses, but chiming in here that we did exactly what the OP is proposing to do, 14 years ago. At that time we had been living in a 3bed 2ba 1400 sq. ft. townhome, $200k odd in value. We then moved to a $600k single family home, 0.8 acres, 4 bedroom 2.5 bath, 2800 sq ft (and 3300 sq ft if we include finished basement space) for both (a) better reputed school district, and (b) additional room for parents when they visit. Our combined salary was also about $200k ($140k for me, $60k for my wife) about then. Mortgage rates were similar too, 5% odd, and $3,400 PITI sounds just about right what we paid on our first mortgage (refinanced multiple times since then, paid off in 2019). Yes we did have to buy all those riding lawn...
by lakpr
Wed Mar 22, 2023 10:31 am
Forum: Personal Investments
Topic: Portfolio Review
Replies: 9
Views: 864

Re: Portfolio Review

3. I would stop ESPP since the discount is minimal. Redirect money to child (UTMA, 529) or to wife for Roth IRA Disagree here. It is 5% discount every quarter, so equivalent to 20% cashback on whatever the amount the OP decides to invest in ESPP. Of course, the standard advice is to sell immediately after the shares are vested, and given that these will be short term sales, taxes are due at ordinary income tax rates. So that 20% cashback is more like 14% cash back, still a GREAT deal. Something like, let's say the average stock price of the employee stock over the first quarter is $100. @GamerDad gets it for $95, and immediately sells for $100, pocketing the $5. Repeats the cycle every quarter, so $20 in total for the year. The outlay from...
by lakpr
Tue Mar 21, 2023 2:17 am
Forum: Personal Investments
Topic: 40 Yr Old Asking Advice for Portfolio (retirement and non-retirement)
Replies: 16
Views: 2245

Re: 40 Yr Old Asking Advice for Portfolio (retirement and non-retirement)

NewDawnGlory wrote: Mon Mar 20, 2023 9:05 pm If I understand you correctly, your suggestion for our "house upgrade" savings is to just pay down our existing mortgage, rather than a CD (or some other safe, short-term investment) or the Vanguard Conservative Growth Fund.
Bingo, yes you understood the point I was trying to make, exactly.
by lakpr
Mon Mar 20, 2023 7:33 pm
Forum: Personal Finance (Not Investing)
Topic: citi credit card fraud
Replies: 6
Views: 680

Re: citi credit card fraud

I believe you must dispute the charge in writing rather than over the phone, to preserve your rights...
by lakpr
Mon Mar 20, 2023 1:33 pm
Forum: Personal Finance (Not Investing)
Topic: When to drop full coverage insurance
Replies: 25
Views: 2381

Re: When to drop full coverage insurance

AnEngineer wrote: Mon Mar 20, 2023 12:49 pm
lakpr wrote: Mon Feb 06, 2023 8:00 pm I disagree with not carrying the comprehensive and collision coverage; I found it, in practical experience, to be penny wise and pound foolish. At one time, I thought of saving $340 per year in insurance premiums by increasing my auto deductible to $5,000 instead of the normal $1,000. Guess what ... after about two years, I was involved in an at-fault collision, and the repairs to my car came to about $5,600 (fortunately a minor fender bender, but the front of the car needed some body work). I did pay it out of pocket, but it stung. I went back to paying $340 extra per year but carrying lower deductible.
But how much would you save by dropping it completely?
Not even interested in finding out, sorry !
by lakpr
Mon Mar 20, 2023 11:58 am
Forum: Personal Finance (Not Investing)
Topic: Front Loading 401K
Replies: 5
Views: 582

Re: Front Loading 401K

For the Mega Backdoor Roth, my employer allows a certain percentage of the paycheck to be designated as Pretax 401(k), a certain percentage as Roth 401(k), and a certain percentage as after tax 401(k) for every paycheck. The only constraint is the the percentages cumulatively cannot exceed 75%.

Is it not the case at your employer? Must you max out either Traditional or Roth 401(k) before you are allowed to contribute to After Tax 401(k)?

If what my employer allows is also allowed at your employer, simply divide the $22,500 (or $30,000 if older than 50) by 24 and set that up as the pretax percentage and remainder as after tax contribution.
by lakpr
Mon Mar 20, 2023 9:04 am
Forum: Personal Investments
Topic: 40 Yr Old Asking Advice for Portfolio (retirement and non-retirement)
Replies: 16
Views: 2245

Re: 40 Yr Old Asking Advice for Portfolio (retirement and non-retirement)

You say are in Maryland, and you listed your tax brackets as 22% Federal and 5% state. I am aware that in Maryland, most localities impose their own local taxes. Silver Springs, Baltimore, etc. What's your locality tax rate? With a $330k mortgage and 3.125% interest rate, you are paying a mortgage interest annually of $10,125. Assuming the max SALT deduction for Married Filing Jointly, the itemized deductions come to only $20,125, less than the standard deduction of $27,500 for 2023. So you will be taking the standard deduction on your Federal tax return. In other words, you are paying an after-tax interest of 3.125% on your mortgage. If I assume a modest 2% local tax rate (and I am aware that in some cities it's as high as 3.5%), your effe...
by lakpr
Sun Mar 19, 2023 9:51 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 15
Views: 1013

Re: Portfolio Advice

Copy that on the rollover. If I am feeding my Traditional IRA with taxed money, call it lump sum out of my savings account, don't I get a pass on being taxed? I will not be contributing to my Traditional IRA with pre-tax money. Disregard my previous post, although I am not going to edit it again. I misinterpreted your first post where you said "I have since rolled it over to my Fidelity account", I assumed it was to a Rollover IRA. Later @dvvader pointed out that you rolled it over into your *Fidelity 401(k)* account!! If all the Traditional money is in 401(k), then pro-rata rule does not apply. The little $6,000 that you do have in the Traditional IRA, you would want to convert to Roth IRA in entirety, so the pro-rata rule does ...
by lakpr
Sun Mar 19, 2023 9:16 pm
Forum: Personal Investments
Topic: Help with 401k options
Replies: 5
Views: 456

Re: Help with 401k options

Sounds like a panic reaction to the news ... I would have not exited the 25% S&P 500 stocks. One of the first principles of Bogleheadism is to be "Time in the market, not Timing the market". If tomorrow the S&P 500 posts a gain, you would be kicking yourself for missing out on all that gain. Being in late 40's, you have at least 15 years to go before you retire (unless you are aiming for an early retirement) and/or needing this money to sustain your lifestyle. Over that period, stocks are likely to be better choice than either bonds or TIPS. You’re right - it was a panic reaction. I’m aiming for retirement at 60… so 12-13 years from now. 25% stocks is still the right choice for 12-13 years of investment horizon. My advice...
by lakpr
Sun Mar 19, 2023 9:08 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 15
Views: 1013

Re: Portfolio Advice

During my military career, I contributed to Traditional and Roth TSP and yes, I recently rolled that into my current civilian employer's Fidelity 401k. It was about $110k worth. I am still in the military, but a reservist and only participate part-time. Then, when you do a Backdoor Roth, are you aware that every Roth conversion will be pro-rated against both the deductible and non-deductible balances in your Traditional IRA? So if you have $110k worth of Traditional IRA, and you contribute $6,500 (say), then you convert $6,500 to Roth ... * you may be expecting to not make incur any additional taxes. BUT * IRS disagrees, it would see that $6,500 as a conversion of $6,500 * ( $6,500 / $116,500 ) = $362 of non-deductible contribution convert...
by lakpr
Sun Mar 19, 2023 8:59 pm
Forum: Personal Investments
Topic: Help with 401k options
Replies: 5
Views: 456

Re: Help with 401k options

Sounds like a panic reaction to the news ... I would have not exited the 25% S&P 500 stocks. One of the first principles of Bogleheadism is to be "Time in the market, not Timing the market".

If tomorrow the S&P 500 posts a gain, you would be kicking yourself for missing out on all that gain.

Being in late 40's, you have at least 15 years to go before you retire (unless you are aiming for an early retirement) and/or needing this money to sustain your lifestyle. Over that period, stocks are likely to be better choice than either bonds or TIPS.
by lakpr
Sun Mar 19, 2023 8:43 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 15
Views: 1013

Re: Portfolio Advice

I had another 401k (TSP) that I've since rolled over into my Fidelity account. I have also just opened a Roth IRA with a lump sum of $6,500. I estimate I am just under the Roth IRA MAGI requirements this year. Next year, my wife plans to go back to work, so I may need to do the "Backdoor Roth" method to continue to feed this account. If that is the case, I will open up a traditional IRA in order to do that. Is your TSP account still open? I would roll the Traditional IRA back into the TSP, or at least into the current 401(k) plan, to take it out of the "pro-rata" calculations if you choose to do Backdoor Roth. No. TSP not open anymore. The only IRA's I have are a Traditional with $6000 in it. My wife and I were above th...
by lakpr
Sun Mar 19, 2023 8:40 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 15
Views: 1013

Re: Portfolio Advice

1) Its unclear how much you are making each year and saving, but if you are in the 24% federal tax rate, you will likely be taxed less in retirement. I would suggest a regular 401k to avoid taxes on the income today Disagree on this point. OP is in 24% tax bracket, suggesting at least $230k in gross income annually. OP also stated 16% of the income is contributed to the 401(k) plan as employer match, that's $37k per year anyway going into Traditional 401(k). Given that the OP is only 46, assuming even a modest 6% + inflation rate returns over the next two decades, by age 66 he would have $1.4 million in 2043 money, and that's not including whatever he put into TSP (rolled to Traditional IRA). It's very likely that Roth 401(k) now is quite ...
by lakpr
Sun Mar 19, 2023 8:22 pm
Forum: Personal Investments
Topic: Portfolio Advice
Replies: 15
Views: 1013

Re: Portfolio Advice

Frequentflyer77 wrote: Sun Mar 19, 2023 6:12 pm I had another 401k (TSP) that I've since rolled over into my Fidelity account. I have also just opened a Roth IRA with a lump sum of $6,500. I estimate I am just under the Roth IRA MAGI requirements this year. Next year, my wife plans to go back to work, so I may need to do the "Backdoor Roth" method to continue to feed this account. If that is the case, I will open up a traditional IRA in order to do that.
Is your TSP account still open? I would roll the Traditional IRA back into the TSP, or at least into the current 401(k) plan, to take it out of the "pro-rata" calculations if you choose to do Backdoor Roth.
by lakpr
Sun Mar 19, 2023 7:10 pm
Forum: Personal Consumer Issues
Topic: What Car To Get?
Replies: 27
Views: 3072

Re: What Car To Get?

If you can find it, a Toyota RAV4, even if it is a gasoline only version. Even models as old as 2014 vintage will give you trouble free service at least another 5 years.

For safety reasons, I don't recommend going older than 2014 model years. That's about when Toyota added safety features like rear camera as standard on RAV4

Current owner of a 2021 RAV4 Hybrid.
by lakpr
Sun Mar 19, 2023 4:13 pm
Forum: Personal Consumer Issues
Topic: Choosing colleges
Replies: 133
Views: 6655

Re: Choosing colleges

Of the three, my vote would be for UMn. Higher ranked CS program.
by lakpr
Sat Mar 18, 2023 9:46 pm
Forum: Personal Finance (Not Investing)
Topic: Credit Card Rewards
Replies: 9
Views: 1156

Re: Credit Card Rewards

Even if there is an annual fee, it is most likely to be imposed in the first billing cycle itself, and one would have paid for it for the entire first year anyway ... there is no further cost to hold the card for 12 months.
by lakpr
Fri Mar 17, 2023 6:52 pm
Forum: Personal Finance (Not Investing)
Topic: Paydown mortage to deduction limit
Replies: 8
Views: 763

Re: Paydown mortage to deduction limit

It MAY make sense. With a $750k mortgage, the first year you will pay a mortgage interest of $750,000 * 4.75% = $35,625. Assuming max SALT deduction = $10,000 Total Itemizable deductions = $35,625 + $10,000 = $45,625 Standard Deduction = $27,500 (assuming Married Filing Jointly; correct me if that's not the case) Tax benefit = 24% Federal Tax rate + 5% Massachussets tax rate assumed = 29% on the difference of ($45,625 - $27,500 = $18,125) = $5,256. So you are paying $35,625 - $5,256 = $30,369 (there are some cents involved, but I rounded to the nearest dollar). So effective after-tax interest you pay = $30,369 / $750,000 = 4.05% Now, to earn an after-tax interest of 4.05% at 29% combined tax rate + 3.8% NIIT, you should be investing your mo...
by lakpr
Fri Mar 17, 2023 2:03 pm
Forum: Personal Investments
Topic: Bonus count as income for Roth contribution
Replies: 18
Views: 1674

Re: Bonus count as income for Roth contribution

Promise me to answer my questions when I get the tax 2022 from my tax man. Some how my tax man doesn’t like me to ask question. Honestly, this sentence makes me think that you should get a new tax preparer. What exactly are you paying for if not to go over the tax return with you first before filing? This is NOT to say that we (Bogleheads) will not be willing to help you ... We are, but it just sounds like you aren't getting the value for your money I don’t think there’s anything wrong with the tax preparer and OP likely doesn’t need a more expensive CPA. The tax preparer probably doesn’t have problems answering questions about the tax return. But if the questions are about future tax planing, that should cost extra. Asking why they didn’t...
by lakpr
Fri Mar 17, 2023 10:13 am
Forum: Personal Investments
Topic: Fourth Check-In [Portfolio Review]
Replies: 15
Views: 1933

Re: Fourth Check-In [Portfolio Review]

Couple of comments and questions: 1) Noticed $0 in the budget for Roth IRAs for 2023, but $6,500 max each for Traditional IRAs. Your post doesn't explicitly say this, but I assume you ARE doing the Backdoor Roth, and not presumably leaving the $6,500 in tIRA itself? If so, it may be more helpful to add the $6,500 figure for each against the Roth IRA contribution itself but amend the description to "Roth IRA (Backdoor)" 2) Very curious: Any reason why $0 in 529 contributions to Child-1, but $12,000 to Child-2? Why not reduce your Individual Brokerage contribution and add to 529 plan for Child-1 also instead? Never mind - read the later reply that there is $100k in Child-1 account already. But I do feel $100k may not be sufficient f...
by lakpr
Thu Mar 16, 2023 9:15 pm
Forum: Personal Investments
Topic: Bonus count as income for Roth contribution
Replies: 18
Views: 1674

Re: Bonus count as income for Roth contribution

Retirednurse wrote: Thu Mar 16, 2023 12:23 am Promise me to answer my questions when I get the tax 2022 from my tax man. Some how my tax man doesn’t like me to ask question.
Honestly, this sentence makes me think that you should get a new tax preparer. What exactly are you paying for if not to go over the tax return with you first before filing?

This is NOT to say that we (Bogleheads) will not be willing to help you ... We are, but it just sounds like you aren't getting the value for your money
by lakpr
Wed Mar 15, 2023 11:14 am
Forum: Personal Investments
Topic: Bank not allowing US Treasury ibonds
Replies: 27
Views: 1846

Re: Bank not allowing US Treasury ibonds

May be they interpreted your question to mean whether you can buy (or cash out) the I-bonds through them. You can go ahead and link your bank account on the Treasury Direct website. You can try transferring something like $100 from the bank account to the Treasury Direct's Zero Cost of Interest account; this should be pretty much the same as an ACH transfer. Then you can use the ZCOI account at TD to fund your purchases of I-bonds (or T-bills, as I am doing right now).
by lakpr
Wed Mar 15, 2023 9:46 am
Forum: Personal Investments
Topic: Employer match from ex-employer?
Replies: 12
Views: 710

Re: Employer match from ex-employer?

I forgot to ask but I am assuming this is considered a 2023 contribution (and not a contribution for the 2022 tax year) since I already did my taxes. It should be a 2022 contribution. This complicates things a bit... This year I am doing the max mega backdoor Roth. Since employer match affects limits how would this affect it? 1) Yes it will be a 2023 contribution, employer match amount does not affect how much you can defer (or contribute to Roth 401k), and therefore it does not affect taxes either. No need to amend your 2022 tax return. Why would you think this is a 2022 contribution? It is *based* on the 2022 compensation but the actual contribution is made in 2023. Why would it matter in any case? 2) It should not affect MBDR, since the...
by lakpr
Wed Mar 15, 2023 8:20 am
Forum: Personal Investments
Topic: Employer match from ex-employer?
Replies: 12
Views: 710

Re: Employer match from ex-employer?

At my MegaCorp, if you are laid off by the organization, or retire, then you will receive the True-Up contribution the next year. If you resign instead, you will have lost the employer match earned for the entire year (as our MegaCorp only adds the true-up contribution on Jan-31st paycheck the next year).

To be fair, folks older than 55 are assumed to be "retired" even when they resign and go on to take other jobs, the true-up match is assured.

Could that be the case here? You did say you "quit", but just pressing the point on whether you quit voluntarily or involuntarily.
by lakpr
Tue Mar 14, 2023 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Accidentally rolled over after-tax money into 401K.
Replies: 4
Views: 687

Re: Accidentally rolled over after-tax money into 401K.

Given that this is only $500, I too vote on the side of "do nothing". Your only penalty if you choose this option, as @Duckie said above, is double taxation. Assuming you would be in the 25% marginal tax bracket when you retire, this would cost you $125 extra (in future dollars, less valuable than today's dollars due to inflation) than what it should. Not a big deal, just let it go.
by lakpr
Tue Mar 14, 2023 9:16 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA Contributions - Help
Replies: 19
Views: 846

Re: Excess Roth IRA Contributions - Help

Do you have any Traditional IRA, at any custodian, anywhere? If you do not, then you can simply recharacterize both the 2022 contribution to Roth IRA and 2023 contribution to Roth IRA that you made. The deadline for them hasn't passed yet (though the 2022 deadline for recharacterization would be coming up in exactly 1 month). Regarding the 2021 contribution, since the deadline for recharacterization had already passed (April 15, 2022), the only course of action is to remove the contribution and earnings. I do believe you have to pay the 6% penalty for 2022 and 2023, two calendar years you left the excess contribution in the account (so total 12% * $6000 = $720 penalty). If there are any earnings on that contribution you owe ordinary income...
by lakpr
Tue Mar 14, 2023 9:05 pm
Forum: Personal Finance (Not Investing)
Topic: Excess Roth IRA Contributions - Help
Replies: 19
Views: 846

Re: Excess Roth IRA Contributions - Help

Do you have any Traditional IRA, at any custodian, anywhere? If you do not, then you can simply recharacterize both the 2022 contribution to Roth IRA and 2023 contribution to Roth IRA that you made. The deadline for them hasn't passed yet (though the 2022 deadline for recharacterization would be coming up in exactly 1 month). Regarding the 2021 contribution, since the deadline for recharacterization had already passed (April 15, 2022), the only course of action is to remove the contribution and earnings. I do believe you have to pay the 6% penalty for 2022 and 2023, two calendar years you left the excess contribution in the account (so total 12% * $6000 = $720 penalty). If there are any earnings on that contribution you owe ordinary income ...
by lakpr
Mon Mar 13, 2023 12:23 pm
Forum: Personal Investments
Topic: Emergency Fund--What would you do?
Replies: 18
Views: 2546

Re: Emergency Fund--What would you do?

I suggest maxing out the I-bonds for both self and spouse, for 2023, at the very least. Then depending on your appetite, you can buy T-bills at either Treasury Direct or in the secondary market, and set them to auto-roll.
by lakpr
Mon Mar 13, 2023 12:20 pm
Forum: Personal Investments
Topic: Roth IRA limits after marriage
Replies: 13
Views: 1529

Re: Roth IRA limits after marriage

FireToBiz wrote: Mon Mar 13, 2023 12:02 pm She has not contributed to TradIRA before, never. This year, she contributed 2k each to Roth IRA, for the year of 2022 and 2023. From what I understand, the 2022 contribution is ok. But 2023 contribution needs to do backdoor. I had my tax filing with H&R Block and tax accountant suggested doing re-characterization of 2k contribution of 2023 to TradIRA and then convert to Roth IRA, over the phone with Vanguard.
Why? You can ask your future wife to re-allocate the $2k contribution of 2023, to tax year 2022 instead. But hurry, you have only until April 15th. While at it, she can add an additional $2k, as the limit for Roth contributions is $6k for 2022.

For 2023, you can do the Backdoor Roth maneuver after you get married.
by lakpr
Mon Mar 13, 2023 7:30 am
Forum: Personal Investments
Topic: 30k for ten years
Replies: 11
Views: 1564

Re: 30k for ten years

If this liability is in nominal dollars, buy EE bonds, over 3 years (there is a $10k limit per year per person). I would probably suggest to invest the remaining (after buying the $10k complement for this year) money in 52 week T bills for the higher yield, and when they mature, decide if you want to roll forward again or invest in EE bonds again. EE bonds will never lose value, and the interest can be tax deferred up to 30 years or when you sell, whichever occurs earlier. You can also buy 10 year TIPS. But you will pay taxes on the interest annually even if you haven't sold the TIPS bond. Why EE bonds over I Bonds? No reason, except that the OP may want to keep the I bonds forever (my bias showing, I think), whereas EE bonds can be redeem...
by lakpr
Sun Mar 12, 2023 10:54 pm
Forum: Personal Investments
Topic: 30k for ten years
Replies: 11
Views: 1564

Re: 30k for ten years

If this liability is in nominal dollars, buy EE bonds, over 3 years (there is a $10k limit per year per person). I would probably suggest to invest the remaining (after buying the $10k complement for this year) money in 52 week T bills for the higher yield, and when they mature, decide if you want to roll forward again or invest in EE bonds again.

EE bonds will never lose value, and the interest can be tax deferred up to 30 years or when you sell, whichever occurs earlier.

You can also buy 10 year TIPS. But you will pay taxes on the interest annually even if you haven't sold the TIPS bond.
by lakpr
Sun Mar 12, 2023 10:41 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity Holiday Offer - $150 for $50 deposit
Replies: 391
Views: 47605

Re: Fidelity Holiday Offer - $150 for $50 deposit

Gash wrote: Sun Mar 12, 2023 11:48 am How long did we need to keep the funds in this account for this promo? I think it was 90 days.

I received the bonus on 12/25. Therefore, I should be able to transfer the funds on 03/25 - is this correct?
February has only 28 days, so the 90 days expire on 03/25 (6 days in Dec + 31 days in Jan + 28 days in Feb + 25 days in March = 90 days). If you pull the money out on the 25th itself your bonus may be subject to claw back. If you pull it out on the 26th instead, you are likely safe.
by lakpr
Sun Mar 12, 2023 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: 12% vs 22% tax bracket
Replies: 36
Views: 4339

Re: 12% vs 22% tax bracket

Given that you are 33, and at least 30 more years of career ahead of you (and may God bless you with no interruptions in your career), I would do Roth 401(k) contributions for now. The 22% tax bracket will disappear at the end of 2025, so you have only 3 more years in (2023, 2024 and 2025) to essentially get a discount of 3% on all your contributions to the Roth 401(k). Would you like a 3% cash back on your purchases, sir? Now Congress may decide to change the tax rules between now and end of 2025, but as the law stands now , the Tax Cuts and Jobs Act expires at the end of 2025, and with it the current tax brackets. Then 2017 tax brackets kick in, with its 15%, 25%, 28% etc. tax brackets ... That's why the recommendation about to take advan...
by lakpr
Sun Mar 12, 2023 7:31 pm
Forum: Personal Investments
Topic: Unexpected Trust influx... but with some bad funds
Replies: 5
Views: 627

Re: Unexpected Trust influx... but with some bad funds

I would suggest turning the dividend reinvestment off on QQQ. It's not a bad fund, but less diversified than the S&P 500 and is tech heavy (Nasdaq-100 companies). Yes of course, sell the remaining three funds and invest in a broad stock index fund.

I will also advise to keep this trust money separate from your marital finances, it's a trust for HER benefit and I do not recommend commingling trust assets with marital assets.
by lakpr
Sat Mar 11, 2023 8:47 pm
Forum: Personal Investments
Topic: Counterparty Risk?
Replies: 11
Views: 1100

Re: Counterparty Risk?

bltkmt wrote: Sat Mar 11, 2023 3:33 pm For instance, most (>90%) of my investment holdings are with Raymond James.
My condolences!!
by lakpr
Sat Mar 11, 2023 1:21 pm
Forum: Personal Consumer Issues
Topic: Downsizing to One Car
Replies: 21
Views: 1971

Re: Downsizing to One Car

I have a Camry LE 2014 model too (pushing 106k miles on ours), and it is as reliable as ever. We have only replaced the tires and brake pads, the engine has been rock solid.

Our car does have backup camera, I thought it was a standard issue?

Sell the Elantra and keep the Camry.
by lakpr
Sat Mar 11, 2023 8:18 am
Forum: Personal Finance (Not Investing)
Topic: Cash or Mortgage
Replies: 26
Views: 2124

Re: Cash or Mortgage

If you are not going to itemize as per your first post, that 6.9% interest rate is all after tax. At a 24% Federal tax bracket, that is equivalent of earning 9% on your investment, before taxes. Note that I did not even take any state taxes into consideration here... That is way too high a rate than I am comfortable with. I suggest paying off the house in cash. It is one thing not having enough cash on hand and having to apply for a mortgage, it is entirely another thing in intentionally seeking out a mortgage at a high interest while you have cash to pay it off If interest rates do go down in the future if as everyone who is arguing on the side of keeping the mortgage, you can always do cash out refinance. Cash out refinances are not item...
by lakpr
Fri Mar 10, 2023 9:48 pm
Forum: Personal Finance (Not Investing)
Topic: Quitting without 2 weeks notice or a new job
Replies: 116
Views: 11358

Re: Quitting without 2 weeks notice or a new job

oldlongbeard wrote: Fri Mar 10, 2023 9:11 pm Don't forget to spend 100% of your flex health dollars for the year before you give notice! 💪😂
:thumbsup :thumbsup
by lakpr
Fri Mar 10, 2023 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Cash or Mortgage
Replies: 26
Views: 2124

Re: Cash or Mortgage

If you are not going to itemize as per your first post, that 6.9% interest rate is all after tax. At a 24% Federal tax bracket, that is equivalent of earning 9% on your investment, before taxes. Note that I did not even take any state taxes into consideration here... That is way too high a rate than I am comfortable with. I suggest paying off the house in cash. It is one thing not having enough cash on hand and having to apply for a mortgage, it is entirely another thing in intentionally seeking out a mortgage at a high interest while you have cash to pay it off If interest rates do go down in the future if as everyone who is arguing on the side of keeping the mortgage, you can always do cash out refinance. Cash out refinances are not itemi...
by lakpr
Fri Mar 10, 2023 5:30 pm
Forum: Personal Investments
Topic: How safe is VMFXX now?
Replies: 104
Views: 13930

Re: How safe is VMFXX now?

jebmke wrote: Fri Mar 10, 2023 5:29 pm
lakpr wrote: Fri Mar 10, 2023 5:27 pm
jebmke wrote: Fri Mar 10, 2023 5:22 pm I am certainly no expert but I think bonds held at Treasury Direct cannot be sold there. I think they need to be transferred to a broker and then sold. IMO, it is better to buy Treasury securities via a broker.
This is true, but if you are buying 4-week, 8-week, 13-week etc. treasury bills (short duration bills), simply wait for the maturity of the bill and transfer the proceeds to your bank account.
You mean the bank account that OP is trying to avoid?
I just edited my previous response :) There is the ZCOI account at Treasury Direct.
by lakpr
Fri Mar 10, 2023 5:27 pm
Forum: Personal Investments
Topic: How safe is VMFXX now?
Replies: 104
Views: 13930

Re: How safe is VMFXX now?

jebmke wrote: Fri Mar 10, 2023 5:22 pm I am certainly no expert but I think bonds held at Treasury Direct cannot be sold there. I think they need to be transferred to a broker and then sold. IMO, it is better to buy Treasury securities via a broker.
This is true, but if you are buying 4-week, 8-week, 13-week etc. treasury bills (short duration bills), simply wait for the maturity of the bill and transfer the proceeds to your bank account. Or redeem into the ZCOI (Zero cost of interest) account at Treasury itself, if there is fear of your bank account going under.
by lakpr
Fri Mar 10, 2023 5:05 pm
Forum: Personal Investments
Topic: How safe is VMFXX now?
Replies: 104
Views: 13930

Re: How safe is VMFXX now?

I think you are a bit over-reacting. The failure of a single bank does not mean the failure of the entire financial system. That said, if you ever bought I-bonds, you might have your Treasury Direct account login? There is an upcoming auction for 13-week bills on Monday March 13th. On the same date there is also auction for 26-week bills. If you can wait two more days, there are auctions scheduled for 17-week, 4-week and 8-week bills on Wednesday March 15th, and Thursday March 16th. https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf Linking bank account or brokerage account now takes just a couple of minutes on Treasury Direct. Then simply buy treasuries at next week auctions. While buying, simply set the purchases to...
by lakpr
Fri Mar 10, 2023 9:31 am
Forum: Personal Investments
Topic: Rebalancing for an unexpected retirement
Replies: 11
Views: 1038

Re: Rebalancing for an unexpected retirement

One suggestion: think about buying I-bonds at Treasury Direct. It is a tax-deferred option, in taxable. You may not need to convert everything in the 401(k) to total bond market fund. After the bond crash in 2022, I learned the lesson that one should not depend on the bond funds to serve as the ballast for your portfolio; that is, not be down at the same time as the stocks. You should therefore be looking for investments that do not lose value, at least in the short term. I-bonds are an excellent option for that. But since the limit is only $10k per year, additional funds up to 2 years of expenses should be in money market or inflation protected securities -- these spillovers can be in either taxable or 401(k). TBM may not serve the purpose...
by lakpr
Fri Mar 10, 2023 7:30 am
Forum: Personal Investments
Topic: Managing Windfall
Replies: 18
Views: 3000

Re: Managing Windfall

I too vote on the side of paying off the car.

Yes you would earn 1% more by investing in treasuries, but on a $16k principal balance that is only $160 per year. Or less than $15 per month. Not even lunch money …

Paying it off means one less bill to worry about and perhaps having the choice of not having to carry full coverage on the car, which could offset or at least cut down on that $160 differential even more.
by lakpr
Fri Mar 10, 2023 7:18 am
Forum: Personal Investments
Topic: Additional retirement savings in taxable accounts
Replies: 27
Views: 3227

Re: Additional retirement savings in taxable accounts

Just make sure you don’t have exact same investment in both IRA and taxable accounts. Also include your spouse’s IRA and taxable accounts, if you are married. Find very similar but not exactly the same funds or ETFs. Reason for this are the wash sales rules. If you want or need to sell an investment in taxable at a loss, you will want to have the government share part of your pain than suffering alone. But the government refuses to do so if you bought “substantially identical” investment in either the IRA accounts or taxable accounts 30 days prior or 30 days after. Now you may probably be able to restrain yourself from not buying the same investment for future 30 days, but how can you change the past? What happens if you had a dividend rein...