Search found 1647 matches

by FinancialDave
Mon Jan 13, 2020 3:03 pm
Forum: Investing - Theory, News & General
Topic: 2020 Hedge Fund contest
Replies: 173
Views: 9760

Re: 2020 Hedge Fund contest

Third Time Charmer

Long: TDOC
by FinancialDave
Thu Jan 09, 2020 1:48 am
Forum: Personal Investments
Topic: Last year of inherited RMD
Replies: 6
Views: 1016

Re: Last year of inherited RMD

If you are a non-spouse beneficiary. You can not make any contributions to an inherited retirement account and you can not do any Roth conversions from an inherited traditional IRA, but you can do a direct rollover from a traditional 401k, 403b or 457b account to a Roth IRA. And you can certainly t...
by FinancialDave
Fri Jan 03, 2020 2:29 pm
Forum: Investing - Theory, News & General
Topic: 2019 Hedge Fund Contest
Replies: 250
Views: 24744

Re: 2019 Hedge Fund Contest

LadyGeek wrote:
Wed Jan 01, 2020 1:54 pm
I was hoping to keep the same rules, as my single long pick would have been #1 for most of the year (if it was frozen when it first peaked). Except for ccieemeritus going with AAPL. :)
I am good with not changing the rules - unless the rules are the winner is the one who loses the most!

:D
by FinancialDave
Thu Jan 02, 2020 8:41 pm
Forum: Investing - Theory, News & General
Topic: Why not stick with majority aggressive mutual funds as I approach retirement and throughout retirement?
Replies: 17
Views: 2103

Re: Why not stick with majority aggressive mutual funds as I approach retirement and throughout retirement?

Why is the standard advice to move a larger portion of my retirement investments to bonds as I approach retirement (like all target retirement funds seem to do)? Why not leave them in mostly aggressive mutual funds? Also, if I'm planning on retirement to last 30+ years, same thing for retirement--w...
by FinancialDave
Thu Jan 02, 2020 8:22 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Tax Deferred
Replies: 14
Views: 1314

Re: Taxable vs Tax Deferred

Some additional information: Spouse Income is $15,000 to $20,000 (Part time job) No pension for spouse Yes, we both will qualify for Social Security 529's are separate. We should be just fine in terms of covering costs as I told them each how much I would cover so they can make school decisions Lon...
by FinancialDave
Fri Dec 13, 2019 1:44 pm
Forum: Personal Investments
Topic: New Tool For Bogleheads?
Replies: 13
Views: 2162

Re: New Tool For Bogleheads?

simple tool Sorry but it ain't simple. For example: for a young investor should you put bonds in taxable or use that money to fund the additional taxes you'll owe if you do non-deductible Roth 401K contributions? I've become more convinced over time that a young investor with high income and spare ...
by FinancialDave
Fri Dec 13, 2019 2:21 am
Forum: Personal Investments
Topic: New Tool For Bogleheads?
Replies: 13
Views: 2162

Re: New Tool For Bogleheads?

You’re telling me there is no fathomable situation where equity in tax-advantaged beats equity in taxable (with bonds in the opposing one)? If you can predict the future growth rates and tax rates then yes there are certainly situations where bonds in the taxable account make sense, mainly because ...
by FinancialDave
Thu Dec 12, 2019 9:20 pm
Forum: Personal Investments
Topic: New Tool For Bogleheads?
Replies: 13
Views: 2162

Re: New Tool For Bogleheads?

There are many simple sceneries where equity is better in tax-advantaged. $1 of income, 25% income tax, 15% cap gains. Taxable gets 25% off the top, then gains are taxed 15%. Tax-advantaged gets a single 25% off the top, after gains. $1 in taxable is worth more than $1 in pre-tax. Of course it is, ...
by FinancialDave
Thu Dec 12, 2019 8:28 pm
Forum: Personal Investments
Topic: New Tool For Bogleheads?
Replies: 13
Views: 2162

Re: New Tool For Bogleheads?

I don't think any math will make it preferable to put bonds in taxable vs tax-advantaged accounts as the first dollar you generate in taxable causes that option to lose out to a tax-advantaged account given equal tax rates. There certainly could be reasons to put bonds in a taxable account, I just c...
by FinancialDave
Wed Jul 31, 2019 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

Just to close the loop on this. Annually, we have a representative from the Comptrollers office assist with training of tax preparers. This topic came up in one session and the representative confirmed that non-periodic withdrawals qualified for the exclusion. To further clarify this, I sent an ema...
by FinancialDave
Mon Jul 29, 2019 6:45 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

Is there some regulation requiring a "pension" to be periodic payments? What do you call a lump sum pension? Is that not a "pension? If the exemption does not apply to 401k withdrawals, why would it specifically call out 401k, 403B, etc.? Those plans don't pay period payments. I could explain why a...
by FinancialDave
Mon Jul 29, 2019 6:21 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

Is there some regulation requiring a "pension" to be periodic payments? What do you call a lump sum pension? Is that not a "pension? If the exemption does not apply to 401k withdrawals, why would it specifically call out 401k, 403B, etc.? Those plans don't pay period payments. I could explain why a...
by FinancialDave
Mon Jul 29, 2019 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

However, once money gets into the 401(k), distributions from the 401(k) would qualify for the exclusion. Annuitizing is not required . As long as you meet the age requirement, the amount in Box 2a would qualify for the exclusion, subject to the calculation and the ~ 30K limitation. I do not agree w...
by FinancialDave
Mon Jul 29, 2019 5:36 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

You included on your federal return income received as a pension, annuity or endowment from an "employee retirement system." Please note that these include qualified defined benefit and defined contribution pension plans, 401(a) plans, 401(k) plans, 403(b) plans, and 457(b) plans. Is it your opinio...
by FinancialDave
Mon Jul 29, 2019 5:16 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

However, once money gets into the 401(k), distributions from the 401(k) would qualify for the exclusion. Annuitizing is not required . As long as you meet the age requirement, the amount in Box 2a would qualify for the exclusion, subject to the calculation and the ~ 30K limitation. I do not agree w...
by FinancialDave
Mon Jul 29, 2019 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

However, once money gets into the 401(k), distributions from the 401(k) would qualify for the exclusion. Annuitizing is not required . As long as you meet the age requirement, the amount in Box 2a would qualify for the exclusion, subject to the calculation and the ~ 30K limitation. I do not agree w...
by FinancialDave
Mon Jul 29, 2019 2:39 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

If you roll a qualified plan (e.g.401(k)) to a traditional IRA, you lose the pension exclusion. Depending on your cost in the plan and future tax rate, that might not be a bad decision. But I have done many tax returns in Maryland where someone rolled an entire 401(k) and was shocked to learn they ...
by FinancialDave
Mon Jul 29, 2019 2:21 pm
Forum: Personal Finance (Not Investing)
Topic: Key Thresholds for Tax Implications as Income Increases
Replies: 7
Views: 1174

Re: Key Thresholds for Tax Implications as Income Increases

Another problem that occurs if you have a taxable brokerage account is the addition of a "marginal" 27% bracket that can happen if you have LTCG and/or qualified dividends, "some" of which are being taxed at the zero % rate.

If you don't have a brokerage account then it's not relevant.

Dave
by FinancialDave
Mon Jul 29, 2019 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Maryland, is a Roth conversion tax exempted
Replies: 35
Views: 1705

Re: Maryland, is a Roth conversion tax exempted

You are right. I re-read the instructions. It is the 401K distributions that are qualified, NOT the IRA distributions. I know I was wishing too much. :D Thank you! So does the federal Thrift Savings Plan not qualify? Do you not feel that the quote she provided in the original post would not include...
by FinancialDave
Sat Jun 08, 2019 12:32 pm
Forum: Investing - Theory, News & General
Topic: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?
Replies: 39
Views: 2276

Re: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?

Can you give me an example of how you would answer the OP's question without taking into account any opportunity costs comparison? So you don't want to think about expected/variable returns in the 401k - OK - how would you make the decision then? I answered the Op's question of how I would make the...
by FinancialDave
Thu Jun 06, 2019 2:00 pm
Forum: Investing - Theory, News & General
Topic: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?
Replies: 39
Views: 2276

Re: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?

You should pay back the 401k loan if your expected return from the investments inside the 401k is more than the tax-adjusted rate on your HELOC. That sounds great, but are you aware of the variability of the market over 1-5 years? How can you expect to base a decision off of that? Last year the TSM...
by FinancialDave
Thu May 30, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?
Replies: 39
Views: 2276

Re: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?

R2D2, Why do you say the bond fund gives a guaranteed rate? Don't see why it would over the life of the loan. Also, the rate of most HELOCs will change as interest rates go up and down. I do come to the same conclusion, once the loan has been taken from the 401k, not much is going to be gained by ta...
by FinancialDave
Wed May 29, 2019 2:41 pm
Forum: Investing - Theory, News & General
Topic: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?
Replies: 39
Views: 2276

Re: Paying back loan to 401(k): Let it happen from payroll deductions or use a HELOC to pay it back now?

Let's be real by looking at what is known and what is not known. 1. Much conversation about the fact that "money is out of the market" -- this has unknown consequence, as NOBODY knows the future. 2. Interest rate differences 401k vs HELOC - HELOC loan, interest is lost to the bank, 401k loan, you es...
by FinancialDave
Mon Apr 29, 2019 12:02 pm
Forum: Investing - Theory, News & General
Topic: REGISTRATION FOR 2019 BOGLEHEAD CONTEST [Entry deadline has passed]
Replies: 701
Views: 20723

Re: REGISTRATION FOR 2019 BOGLEHEAD CONTEST [Entry deadline has passed]

This contest is designed to show the futility of forecasting the stock market year in and year out. Period. Actually, the odds of winning are much better than buying a lottery ticket, because somebody always wins. It's a fun game people -- not a life lesson. It got me a book signed by Jack Bogle, s...
by FinancialDave
Mon Apr 29, 2019 11:52 am
Forum: Investing - Theory, News & General
Topic: REGISTRATION FOR 2019 BOGLEHEAD CONTEST [Entry deadline has passed]
Replies: 701
Views: 20723

Re: REGISTRATION FOR 2019 BOGLEHEAD CONTEST [Entry deadline has passed]

Even your statement "It is about optimizing your chances of getting the prize" speaks to that much like winning a lottery. I am not sure you understand the issue I am trying to raise. Let me try to explain more clearly. Quoting from the OP of this thread, one of the rules is: Forecast (below) the c...
by FinancialDave
Fri Apr 05, 2019 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

I expect to retire after 59 1/2. I expect to spend more than $75K/yr. 2019 MFj The question is how much more. At present, you don't leave the 12% tax bracket until $103,350 of ordinary income. If some of it is dividends & LTCG then you need to get out your tax software or spreadsheet to see exactly...
by FinancialDave
Fri Apr 05, 2019 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

I expect to retire after 59 1/2. I expect to spend more than $75K/yr. 2019 MFj The question is how much more. At present, you don't leave the 12% tax bracket until $103,350 of ordinary income. If some of it is dividends & LTCG then you need to get out your tax software or spreadsheet to see exactly...
by FinancialDave
Fri Apr 05, 2019 8:54 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

Sure the taxable pays more in taxes. Who cares? You end up with the same amount of money. 100k of money. 25% tax bracket a) Taxable: 100k pay 25k in taxes. Account doubles. Pay 0k in LTGC:150k' b) Tax deferred: 100k doubles to 200k: Pay 50k intaxes = 150k You need a change in the rate being paid fo...
by FinancialDave
Fri Apr 05, 2019 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

The LAST money you want to spend is the Roth money, not the first. If you had a traditional employer plan then you can usually spend that down starting at age 55 as many do. Taxable money should be spent before Roth and would bridge you to age 59.5. If you were planning ahead you would just have an...
by FinancialDave
Fri Apr 05, 2019 1:26 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

Thanks for the responses. Some more info: 1) Married with kids. Kids college all set. 2) Retirement money is mostly in my 401K and his/her Roth IRAs. My wife's 401K has no match and is lousy. I have usually maxed out my 401K and Roth IRAs, but not every year. 3) I'd say by the time I retire I will ...
by FinancialDave
Fri Apr 05, 2019 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

Thanks for the responses. Some more info: 1) Married with kids. Kids college all set. 2) Retirement money is mostly in my 401K and his/her Roth IRAs. My wife's 401K has no match and is lousy. I have usually maxed out my 401K and Roth IRAs, but not every year. 3) I'd say by the time I retire I will ...
by FinancialDave
Fri Apr 05, 2019 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

...In taxable accounts you pay taxes twice. Once when you earn it and then again on earnings... This is not necessarily true (or as bad as it sounds) to the extent of the 0% tax bracket for qualified dividends and LTCG's. Now, if one is working with enough income to fill tax deferred investment veh...
by FinancialDave
Fri Apr 05, 2019 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Is it bad to have nothing in taxable when you retire?
Replies: 62
Views: 7210

Re: Is it bad to have nothing in taxable when you retire?

A couple of other threads got me thinking about a situation I have. I am 53 years old. I have been saving diligently in my retirement accounts (not maxing everything out every year, but enough that I think I will have enough to retire just using my retirement accounts). In the process, I find mysel...
by FinancialDave
Thu Mar 07, 2019 2:05 am
Forum: Investing - Theory, News & General
Topic: Dividend / no dividend index funds?
Replies: 32
Views: 5888

Re: Dividend / no dividend index funds?

I'm not sure if we are in disagreement or not, but thought I'd take one more run at it. I may well be the one using terminology that isn't right & look to be corrected as that occurs. Likewise. I'm wondering if we need someone with better communication skills and understanding than me to come clear...
by FinancialDave
Mon Feb 04, 2019 5:04 pm
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 953
Views: 323752

Re: Variable Percentage Withdrawal (VPW)

I think when you ask the question "Do I understand VPW", it should be understood (I think) that the reference is just to this ONE VPW spreadsheet referenced in post #1 of this thread. For me the use of the term VPW covers a whole host of methods that are way beyond just this one spreadsheet. So it i...
by FinancialDave
Fri Jan 25, 2019 6:27 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

The assumption that was being talked about was converting to a Roth in a 12% bracket. So if you spend that money later to avoid 12% tax it is a break even transaction. If you spend it to avoid anywhere from about 14% to 22% marginal on the SS curve as you show it (like the graph by the way) it's a b...
by FinancialDave
Fri Jan 25, 2019 5:24 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

I agree with your math, just not your method. Mainly because future tax rates are unknown over a 30 year retirement so I just don't favor spending Roth money to avoid 10% tax, when I could use the money to avoid 12% or more later. What you should be doing is spending down the tIRA early in retiremen...
by FinancialDave
Fri Jan 25, 2019 4:37 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

Given our modest spending (right now 65K per year) and no reason to expect higher in retirement (more likely lower), it is hard to see us exceeding the 12% tax bracket in retirement, so the small amount of Roth we have now is probably good enough "insurance", assuming no drastic change in future ta...
by FinancialDave
Fri Jan 25, 2019 3:46 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

Given our modest spending (right now 65K per year) and no reason to expect higher in retirement (more likely lower), it is hard to see us exceeding the 12% tax bracket in retirement, so the small amount of Roth we have now is probably good enough "insurance", assuming no drastic change in future ta...
by FinancialDave
Fri Jan 25, 2019 1:56 pm
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

I think this is "Yes" with a qualifier. One of the questions deals with "do you need more Roth?" Ponder the following: 1. Say your tax bracket drops from 24% to 12% -- but the question is how much of the 12% bracket do you have "free" to do the conversions? As it turns out it is very possible that ...
by FinancialDave
Fri Jan 25, 2019 12:41 am
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

If I retire in my early 50s, our income will go down by around half - so that would be a good time to do the Roth conversion because our tax rate would be lower, right? Yes. I think this is "Yes" with a qualifier. One of the questions deals with "do you need more Roth?" Ponder the following: 1. Say...
by FinancialDave
Fri Jan 25, 2019 12:20 am
Forum: Investing - Theory, News & General
Topic: Taxable vs Nontaxable retirement savings: is there an ideal ratio?
Replies: 36
Views: 4307

Re: Taxable vs Nontaxable retirement savings: is there an ideal ratio?

Put another way, tilting towards tax-deferred savings is insurance against being poorer than you expect in retirement. Tilting towards a Roth (or taxable) savings is insurance that you will be richer than you expect in retirement. Which eventuality is more important to insure against? Thanks for th...
by FinancialDave
Wed Jan 23, 2019 2:17 pm
Forum: Investing - Theory, News & General
Topic: Do you pay commission reinvesting dividends?
Replies: 16
Views: 1652

Re: Do you pay commission reinvesting dividends?

If you set the dividend reinvestment to automatic back into the fund or stock it came from I have never heard of anyone charging for this.

Dave
by FinancialDave
Thu Jan 17, 2019 3:05 pm
Forum: Investing - Theory, News & General
Topic: Tributes to Jack Bogle
Replies: 206
Views: 28441

Re: ode to St. Jack

I also have two treasured notes from Jack on the inside page of two of his books. Both reference his famous quote "Stay the Course!" His impact on the investing world from the Vanguard Index Fund to all his books and thoughts on investing has certainly impacted my life as well as millions of others....
by FinancialDave
Tue Jan 15, 2019 7:50 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Roth Tax Accounts Distribution Code Errors
Replies: 16
Views: 740

Re: Vanguard Roth Tax Accounts Distribution Code Errors

Dave, You're making a mountain out of a molehile. This is not a big deal and it is not the custodian's responsibility to verify everything. They are just using the generic code. So what? Can you imagine a taxpayer's problem who has been sitting in a waiting room for 3 hours to have me do their taxe...
by FinancialDave
Tue Jan 15, 2019 7:06 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Roth Tax Accounts Distribution Code Errors
Replies: 16
Views: 740

Re: Vanguard Roth Tax Accounts Distribution Code Errors

Mark, I agree with you, but this is not about that. It's just alerting people that there are ACTUAL errors in the reporting and don't waste your time trying to get this particular one fixed - Not that one in 50 would ever know they have it. What you are talking about are not errors, they are just ca...
by FinancialDave
Tue Jan 15, 2019 5:22 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Roth Tax Accounts Distribution Code Errors
Replies: 16
Views: 740

Re: Vanguard Roth Tax Accounts Distribution Code Errors

Does Vanguard know your age from some verification process or do they simply know what your told them? I can't recall ever giving any proof of my birth date or any similar information to VG (I don't even know if I told them my birth date when I started with them - it was a long time ago). How would...
by FinancialDave
Tue Jan 15, 2019 5:17 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Roth Tax Accounts Distribution Code Errors
Replies: 16
Views: 740

Re: Vanguard Roth Tax Accounts Distribution Code Errors

Does Vanguard know your age from some verification process or do they simply know what your told them? I can't recall ever giving any proof of my birth date or any similar information to VG (I don't even know if I told them my birth date when I started with them - it was a long time ago). No the gu...
by FinancialDave
Tue Jan 15, 2019 5:12 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Roth Tax Accounts Distribution Code Errors
Replies: 16
Views: 740

Re: Vanguard Roth Tax Accounts Distribution Code Errors

Don’t think this is just a VG issue. I do a lot of volunteer tax returns with AARP and see this routinely (code J or T instead of Q). This year AARP even added some training words on how to handle. Basically it says work through the flow chart with the taxpayer to determine if qualified and then ha...