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Is Bank A Citibank?

I bit today on Hells Fart Go bank offer for $325 bonus for opening a new checking account and add direct deposit.

$500 opening amount to avoid monthly fees
$1000 direct deposits required within first 90 days, I am opting to do this within 30 days via $500 per paycheck
Leave the money for 90 days to get the bonus then drain down the balance to $500 for additional 90 days to serve out the clawback period

$325 return on an outlay of $1500 for 6 months equals 43% rate of return. After taxes it is more like 28% return.

Intend to close after 6 months. Will be eligible again only in 2027.

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

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.

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.

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.

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, ...

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...

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...

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.

I believe you must dispute the charge in writing rather than over the phone, to preserve your rights...

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 !

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.

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...

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 ...

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...

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...

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.

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...

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 ...

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.

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.

Of the three, my vote would be for UMn. Higher ranked CS program.

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.

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...

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...

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...

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

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).

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...

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.

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.

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...

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 ...

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.

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.

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...

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.

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.

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...

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.

bltkmt wrote: ↑Sat Mar 11, 2023 3:33 pm For instance, most (>90%) of my investment holdings are with Raymond James.

My condolences!!

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.

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...

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!

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...

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.

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.

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...

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...