Search found 63 matches

by Tyr0ne
Tue Jul 05, 2016 6:38 pm
Forum: Personal Finance (Not Investing)
Topic: Deleted
Replies: 28
Views: 3077

Re: gift and estate tax and marriage considerations

Dad would leave the Washington State exempt amount (presently $2,079,000) in a credit shelter trust for Mom, the difference between the Washington State exempt amount and the Federal exclusion amount in a gap trust for which you would elect QTIP (marital deduction) for state but not Federal estate tax purposes, and the excess above the Federal exclusion amount to Mom either outright or in a trust for which you would elect QTIP for both Federal and state estate tax purposes. That way, in your example, only $3,921,000 will be Mom's for Washington estate tax purposes. Unlike the income tax, the estate tax is based on domicile. Domicile is based on all of the facts and circumstances. FYI, for a visualization and more detail on this setup, I ha...
by Tyr0ne
Fri Jan 08, 2016 11:48 am
Forum: Investing - Theory, News & General
Topic: Is BNDX (total international bond) and its utilization in target date funds terrible?
Replies: 85
Views: 12254

Re: Is BNDX (total international bond) and its utilization in target date funds terrible?

Paul Krugman wrote an interesting post last year that has stuck with me a little. It seems to imply that international yields are lower from an inherent expectation of a declining dollar over the next decade. Taken one step further, if Krugman is right, it seems to me that in a hedged international bond fund, you are sticking yourself with the low yields without the upside of the appreciating foreign currencies.
by Tyr0ne
Thu Jan 07, 2016 7:20 pm
Forum: Personal Finance (Not Investing)
Topic: should I save in a health savings account (HSA)?
Replies: 6
Views: 1718

Re: should I save in a health savings account (HSA)?

As you know, unlike FSAs, HSA balances can be carried over indefinitely. HSAs are a bit underrated in my opinion. Remember that with an HSA, you are foregoing tax on those dollars entirely. With a 401k, you are merely deferring tax (which could actually hurt you if tax rates in this country shoot up). I read an article recently advocating for maxing out your HSA first , although I think the costs can be an important factor. The HSA maximum contribution limits are modest, and medical expenses can add up incredibly fast. Plus, in the end, if you really think you oversaved in the HSA, I believe you can just withdrawal from it at age 65 penalty-free, and pay income tax as if it were just an IRA. Edit: in practice, the investment options in HSAs...
by Tyr0ne
Tue Dec 29, 2015 1:32 pm
Forum: Personal Investments
Topic: Understanding bond ETFs in a betterment mix
Replies: 4
Views: 664

Re: Understanding bond ETFs in a betterment mix

Where are you getting your performance numbers from? Maybe I'm missing something. According to Morningstar, BND and LQD have performed much better than you reported. http://i65.tinypic.com/iqlmk8.jpg In any case, the inverse relationship between bonds and stocks isn't always a perfect one. You can't look at what happened this year or even the past few years in isolation and extrapolate how you expect bonds and stocks to perform over the long haul. While there is nothing necessarily wrong with holding cash in such a low interest rate world, bonds will give you interest along the way while you wait for the next market downturn, and (hopefully) increase in value as people flee from equities into fixed income, giving you even more ammo to rebal...
by Tyr0ne
Thu Dec 17, 2015 5:33 pm
Forum: Personal Consumer Issues
Topic: Economic or Investment book recommendation
Replies: 7
Views: 789

Re: Economic or Investment book recommendation

Any of William Bernstein's books are always my default recommendation. The Four Pillars Of Investing really opened my eyes. The Investor's Manifesto is a bit of an easier read than Four Pillars.
by Tyr0ne
Thu Dec 17, 2015 5:24 pm
Forum: Investing - Theory, News & General
Topic: Fortune article on robo advisors
Replies: 5
Views: 1043

Re: Fortune article on robo advisors

I think as millenials' age and assets grow, they will realize that their necessity for help is less about asset accumulation/return maximization and more about risk management, much of which is behavioral. And the monthly newsletters and blog posts from places like Betterment and Wealthfront can only go so far with the financially uneducated. Financial literacy is still too low. And until we see a significant rise in financial planners that serve the average joe by hourly fees or retainer models, the brick and mortars will always find the wanderers looking for advice. But I agree with you, and searching out a brick and mortar is fortunately becoming less and less the default move.
by Tyr0ne
Fri Oct 30, 2015 5:01 pm
Forum: Investing - Theory, News & General
Topic: TIPS yields - why similar at different maturities?
Replies: 20
Views: 2217

TIPS yields - why similar at different maturities?

I recently noticed the convergence of TIPS yields at different maturities. I am not sure how long it has been this way, but I am having a hard time reconciling what it all means.

Vanguard Short-Term Inflation-Protected Securities Index Fund Admiral Shares -- 30-Day SEC Yield: .36%
Vanguard Inflation-Protected Securities Fund Admiral Shares -- 30-Day SEC Yield: .39%
PIMCO 15+ Year U.S. TIPS Index Exchange-Traded Fund -- 30-Day SEC Yield: -.45%

(Are 30 Day SEC Yields even relevant in TIPS funds?)

What does this tell us about inflation expectations, yield curve expectations, term premiums, etc.? Why would I want to own a 10-year TIPS yielding the same as a TIPS bond maturing in 2 years?

Any input appreciated!

Cheers
by Tyr0ne
Wed Apr 09, 2014 6:56 pm
Forum: Personal Investments
Topic: How to read currency breakdown of a global bond fund
Replies: 2
Views: 983

How to read currency breakdown of a global bond fund

The global bond fund available in my 401k is TGBAX . It's track record is pretty impressive over the past decade, although I couldn't speak to how they achieved those returns. Morningstar seems to love the fund . This fund appears to be extra active, which I don't particularly like, but their track record is good and this is my best option for getting a significant global bond allocation in a tax-sheltered account. I'm hoping someone can shed some light on how to interpret currency exposure. If you look at the prospectus of fund fact sheet you'll see negative exposures to the Euro and the Yen. Is it safe to assume that this means the fund is short those currencies? Looking at the fund holdings didn't really give me any more insight. Here is...
by Tyr0ne
Wed Mar 26, 2014 11:06 am
Forum: Personal Investments
Topic: Muni Bond fund with baffling duration/yield
Replies: 5
Views: 876

Re: Muni Bond fund with baffling duration/yield

ogd wrote:Tyr0ne: coupon and yield can be very different. Most likely, those are older bonds close to maturity.
I never thought about time to maturity. This makes sense. Although, M* states it has an average maturity of 4.26 and an average duration of 3.37. The duration doesn't quite match up with the yield, at least intuitively.
Greatness wrote:I see a yield of around 1.7% according to Yahoo. More importantly, why would you be in a loaded fund?
http://finance.yahoo.com/q/pr?s=LTCAX+Profile
According to M*, 1.7% is the trailing twelve month yield, and the 30-day SEC yield is .64%.
by Tyr0ne
Tue Mar 25, 2014 7:05 pm
Forum: Personal Investments
Topic: Muni Bond fund with baffling duration/yield
Replies: 5
Views: 876

Muni Bond fund with baffling duration/yield

Trying to get a good friend into a Boglehead-style portfolio, and doing some research on his current holdings-

The fund in question: Thornburg CA Limited-Term Muni A (LTCAX)

Ignoring the fact that its 94 bps/year, the SEC yield is a still just a measly .64%. If you look at the portfolio holdings, however, it says that 76% of its bond holdings are in the 4-6% coupon range. Granted, cash is 20% of the fund, but that's clearly not enough to pull the yield down to .64%

Any ideas on whats going on? I've never seen an instance where Morningstar is miles off. If all the info is correct however, this fund is as bad as it gets.
by Tyr0ne
Fri Mar 21, 2014 12:44 pm
Forum: Personal Investments
Topic: What is the best way to invest in California municipal bonds
Replies: 7
Views: 1353

Re: What is the best way to invest in California municipal b

If you are worried more about duration than you are about saving on your California taxes, Vanguard also has a Limited-Term Tax-Exempt Fund (duration ~2.4 years). It is noteworthy that current SEC yield is nothing to right home about when compared to a regular old savings at say, Ally Bank, or comparable short term CD's.
by Tyr0ne
Mon Mar 10, 2014 7:37 pm
Forum: Investing - Theory, News & General
Topic: How to Predict the Next Decade's Bond Returns
Replies: 2
Views: 1051

How to Predict the Next Decade's Bond Returns

Great article in the WSJ today.

I am a bit confused though. Does this principle apply differently when applied to individual treasury bonds vs a treasury bond fund? Is seems it would, as the article states:
the entry yield on the 10 year Treasury explains 92% of the annualized return an investor would have earned over the subsequent decade had he or she held the bond to maturity and reinvested the coupon payments at prevailing rates.


Since holding individual treasuries is impractical for many of us, I wonder how the results change when applied to bond funds.

I also wonder how this principal would hold up when applied to much shorter or much longer maturities.
by Tyr0ne
Fri Feb 07, 2014 7:39 pm
Forum: Personal Investments
Topic: Can whole life ever beat regular [conservative] investing?
Replies: 12
Views: 1280

Can whole life ever beat regular [conservative] investing?

I must preface this question by admitting that my gut tells me this may a very dumb question. However, my life insurance knowledge is severely lacking. My parents are both retired and getting to the age where they are sharing their finances with me (my brother and I are both grown adults now). My Dad bought a whole life policy from Northwestern Mutual about 30 years ago, and will take it to his grave that this policy is pure gold. He is a very stubborn man, so my questions about the policy have been very subtle, and the conversations short-lived. He SWEARS that it is making very good money, and that the cash value is actually growing faster than his other investments (which makes me think his wealth manager has him with a very conservative ...
by Tyr0ne
Mon Dec 30, 2013 2:21 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 160
Views: 26541

Re: Bogleheads 2014 Hedge fund contest

Eat Your PEs

Long
- AMZN (Amazon)
- SNE (Sony)
Short
- BBY (Best Buy)
- YHOO (Yahoo!)
by Tyr0ne
Thu Dec 05, 2013 5:17 pm
Forum: Personal Finance (Not Investing)
Topic: New credit card - use same or different issuer?
Replies: 12
Views: 1596

Re: New credit card - use same or different issuer?

All great advice - thank you! I think I will look into one of the Amex cards.
by Tyr0ne
Thu Dec 05, 2013 12:40 am
Forum: Investing - Theory, News & General
Topic: Marijuana index funds
Replies: 29
Views: 6860

Re: Marijuana index funds

InvestorNewb,
You may want to check out Motif Investing, an interesting start up broker that tries to bundle stocks based on hot trends or industries/corners of the market that people like to speculate about. If they don't have a basket now, I'm sure they will soon.
by Tyr0ne
Thu Dec 05, 2013 12:30 am
Forum: Personal Finance (Not Investing)
Topic: New credit card - use same or different issuer?
Replies: 12
Views: 1596

New credit card - use same or different issuer?

I am just over the hump of my mid 20's and feeling a little weak with my credit history, although my financial and career situations are fairly strong. I had a college student credit card with Bank of America for about 5 or 6 years and eventually closed it when I left BofA altogether at the end of college. I subsequently opened an Amazon credit card (issued by Chase), and have had it open for a few years. I only have $3,700 of credit available, and after inheriting about 200k a year ago, I am feeling like I need to beef up my available credit a little bit. I have zero debt and am fairly frugal, so an additional card is purely for credit building purposes. So on to my actual question: If I were to get a new credit card, does it matter which ...
by Tyr0ne
Wed Nov 20, 2013 11:37 am
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1367
Views: 821240

Re: JonoJono1: Improve, Revise, Update, Debug Simba's Backte

blorman wrote:Hello,

I have a problem with the "Portfolio" tab and "Compare_Portfolios" tab disagreeing on returns. If I enter a 100% VTSMX portfolio in each tab I see:

Code: Select all

Portfolio:          nominal: $468,803 CAGR: 9.84 StdDev: 18.18
Compare_Portfolios: nominal: $401,791 CAGR: 9.43 StdDev: 18.18
Time range: 1972-2012
Version: JonoJono1 Portfolio Backtester ver 1.0
Software: LibreOffice 4.1.3.2
I am using the spreadsheet from here and am seeing identical CAGR's and Std Dev's (9.84, 18.18) on both tabs. Maybe double check you have the start and end year set to the same range?
by Tyr0ne
Tue Aug 13, 2013 2:55 pm
Forum: Investing - Theory, News & General
Topic: Anyone else watch these vids?
Replies: 4
Views: 731

Re: Anyone else watch these vids?

The world needs more people like Salman Khan. There is also a great TED Talk he did a couple years ago about Khan Academy and the future of education.
by Tyr0ne
Tue Aug 13, 2013 10:53 am
Forum: Investing - Theory, News & General
Topic: Are markets really efficient?
Replies: 34
Views: 3258

Re: Are markets really efficient?

it is my understanding that whether or not we assume markets are efficient or not, current market prices and recent price moves don't tell us anything about what the market has in store for the short, mid or long term. Those moves depend on what new information comes to light, which by definition, is unknown, and arguably "random"
by Tyr0ne
Tue Aug 13, 2013 10:31 am
Forum: Personal Consumer Issues
Topic: POLL: How much do you like your job?
Replies: 41
Views: 4620

Re: POLL: How much do you like your job?

I love it! I work on the operations side of wealth management, so I'm lucky enough to be able to justify lurking the forum randomly throughout the day
by Tyr0ne
Sat Jun 15, 2013 9:28 pm
Forum: Personal Investments
Topic: Help with selecting/understanding TIPS fund
Replies: 5
Views: 1184

Re: Help with selecting/understanding TIPS fund

This Vanguard paper on TIPS helped me understand TIPS a little better and helped me choose what type of TIPS fund I ultimately bought.
by Tyr0ne
Tue May 07, 2013 11:42 am
Forum: Investing - Theory, News & General
Topic: Is Capital Loss Harvesting Overvalued?
Replies: 2
Views: 637

Is Capital Loss Harvesting Overvalued?

http://www.kitces.com/blog/archives/509-Is-Capital-Loss-Harvesting-Overvalued.html An interesting article for some of the more beginner investors on this forum (including myself) about tax loss harvesting. The benefits of tax loss harvesting may not be worth the hassle if your investment isn't large enough or the unrealized loss isn't big enough, although the exercise of doing so can't hurt. What had me thinking was this statement: Thus, the true value of harvesting the capital loss is the opportunity to invest the near-term tax savings for growth From a cash flow standpoint, TLH'ing is excellent for reducing your bill come tax time. But from an investment standpoint, one must actually re-invest the savings from your tax bill to truly capt...
by Tyr0ne
Mon Apr 22, 2013 1:07 am
Forum: Investing - Theory, News & General
Topic: How do you measure and compare risk?
Replies: 3
Views: 568

How do you measure and compare risk?

One of my best friends just went from making no money at all to close to a triple digit salary at a management consulting firm, and I am trying my best to share with him everything I've learned. His understanding of personal finance is very slim, and he has his heart set on putting his investment money into a handful of individual stocks using TD Ameritrade's buy/hold/sell ratings. Long story short, I ended up a little tongue tied when asked about the difference between different types of risk. How would you compare, say, the risk of owning several large cap individual stocks versus the risk of owning a REIT, emerging markets, or small cap ETF? Both are inherently risky, is it wrong to say that holding one of the previously mentioned ETF's ...
by Tyr0ne
Tue Mar 26, 2013 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: Investment advisor/tax advisor/preparer hybrid?
Replies: 7
Views: 1126

Re: Investment advisor/tax advisor hybrid?

Thanks for the responses. It still makes me wonder however, why a large investment bank like Goldman or broker like Fidelity doesn't have their own tax department, merge with one, or simply buy one out. I work at a tax form for high net worth individuals (some ridiculously high) and the margins aren't low from my understanding. It kills me slowly to see how messy the investment management is for some of these people, and while I don't expect everyone to adopt a boglehead type philosophy, I sure think investing/taxes would be a lot more seamless if they were done in one place, and would save these bigger clients tens of thousands of dollars.
by Tyr0ne
Tue Mar 26, 2013 2:47 am
Forum: Personal Finance (Not Investing)
Topic: Investment advisor/tax advisor/preparer hybrid?
Replies: 7
Views: 1126

Investment advisor/tax advisor/preparer hybrid?

This may be a silly question but how come I never hear about advisors (whether private practice, investment banks, brokerage houses, etc.) who act as both investment advisors and tax practitioners? I'm assuming this is against the law, as it would be a surefire way to attract clients, both big and small. So perhaps my question is why is this not allowed? I don't see why any sort of conflict of interest has to exist, as long as the advisor/practitioner is bound to act as a fiduciary and holds the proper licenses/CPA. Is this something that may be in our future? Thank you to anyone who can shed some light on this!
by Tyr0ne
Tue Mar 12, 2013 8:29 pm
Forum: Forum Issues and Administration
Topic: Why not add a "like" button to Boglehead posts?
Replies: 371
Views: 72371

Re: What the forum is missing...

Bogleheads, by contrast, has fantastic moderators, strict principles, and subject matter that attracts a potentially more respectful user base. Many of the stackexchange forums share these bogleheads qualities, yet employ excellent and phenomenally useful ratings mechanisms -- evidence that civilized discussion and upvotes can co-exist. +1. As long as this holds true, the mechanisms this forum utilizes should not dictate the civility or quality of content. And while I do also think this forum is perfectly fine the way it is, its frustrating to know that I miss a lot of good quality content because I have no way of knowing which thread or which page of which thread has such "hidden gems," and time never permits reading each and ev...
by Tyr0ne
Wed Feb 06, 2013 7:40 pm
Forum: Investing - Theory, News & General
Topic: Finding yield spreads and other historical financial data
Replies: 3
Views: 463

Finding yield spreads and other historical financial data

I am proud/ashamed to admit that other than Rick's and Mike's finance blogs, Bogleheads, Vanguard, and Morningstar, I don't use many other sources for finding data or reading articles (/"noise). I am trying to broaden my horizons. It seems like people on this forum, especially the veterans, are always referencing historical points, whether it's bond yield spreads (e.g. US bonds vs. high-yield), PE or PB ratio patterns and trends, performance of particular sectors, or particular parts of the style box (i.e., large cap value, SCV, etc.). My intentions are pure, at least for now. My asset allocation is locked in. I would just love to be able to look these kinds of things up. I checked out the Data Tools and Data section in the Wiki and Re...
by Tyr0ne
Wed Feb 06, 2013 1:16 pm
Forum: Investing - Theory, News & General
Topic: Finally arrived: The Vanguard Total International Bond Fund
Replies: 187
Views: 40144

Re: Finally arrived: The Vanguard Total International Bond F

Vanguard got this fund right -- you don't want currency exposure in your bond portfolio under traditional approach to investing. Stocks are growth assets with high expected returns and high relative risk. Adding non-US stocks to a US portfolio provides a diversification benefit (different companies, different locations, etc.) and part of that is that they are held in different currencies. Over time, the net expected return on currency exposure is 0, and currency movements relative to stock price movements is pretty small. Put another way, the difference in risk between a hedged and unhedged equity portfolio is very small, and not worth worrying about hedging (lets ignore that interest rate parity doesn't hold in the short run and does have...
by Tyr0ne
Wed Jan 30, 2013 2:09 pm
Forum: Investing - Theory, News & General
Topic: Is it possible the size & price factor premiums could grow?
Replies: 11
Views: 1445

Is it possible the size & price factor premiums could grow?

I finally came across Effective Diversification in a Three-Factor World . Highly recommended for anyone who hasn't read it yet (its short too). Let's assume that same [size & price premium] relationship will continue in the future. (Note that since size and price are risk factors, we do not know that this relationship will continue). It is clear to me that the premiums for small and value stocks could remain constant, shrink to nothing, or reverse entirely, but my question is, is there any likelihood at all that these premiums could actually grow? This seems completely counter intuitive, but its hard to say the market is "too efficient" when such a distinct premium appears to have existed over such a long period. My guess is t...
by Tyr0ne
Wed Jan 16, 2013 3:51 pm
Forum: Personal Investments
Topic: Using REITs in a lazy portfolio
Replies: 24
Views: 4723

Re: Using REITs in a lazy portfolio

Make sure you understand the tax implications of investing in REITs. The legal structure and payout requirements for REITs are certainly something you should be familiar with before investing in them.

The boglehead wiki has a good section on Tax-Efficient Fund Placement that includes info on REITs
by Tyr0ne
Tue Jan 15, 2013 6:41 pm
Forum: Investing - Theory, News & General
Topic: Why don't I hear about currency risk with Int'l equities?
Replies: 8
Views: 1644

Why don't I hear about currency risk with Int'l equities?

Currency risk seems to be a very significant consideration (and actually somewhat of a deterrent from what I gather) when investing in international bonds. I seem to have caught myself blindly accepting that international equity currency risk doesn't exist because I don't hear/read about it, and because it is part of the holy 3-fund portfolio. So why don't I ever hear about it? Currency risk is currency risk, right? Is it because of the relative certainty of the cash flows of bond payments vs. the almost complete uncertainty of the value of any given international security will be in the future?

Thank you for any feedback and/or links to articles/threads.
by Tyr0ne
Mon Jan 14, 2013 4:51 pm
Forum: Personal Investments
Topic: Anybody have any first hand experience with NestWise.com
Replies: 2
Views: 994

Re: Anybody have any first hand experience with NestWise.com

They look very new, and are offering a free membership until 2014, as they start adding more and more services and website features and presumably continue to build their adviser team. They are part of LPL Financial, which I also know nothing about, but according to this article, "NestWise will operate as a registered investment advisory firm and rely on both Veritat's [recently bought out] home-grown technology and that of LPL Financial's platform."

Appropriate for bogleheads: NestWise Fee Schedule

edit: grammar
by Tyr0ne
Fri Jan 11, 2013 6:14 pm
Forum: Investing - Theory, News & General
Topic: 1,812% Gain in the next 219 Days
Replies: 18
Views: 3801

Re: 1,812% Gain in the next 219 Days

Rick Ferri wrote: Here is my question. How many people are going to get suckered into buying this stock or subscribing to this huckster $445 newsletter when he is paid by companies to write glowing recommendations? Unfortunately, probably hundreds if not thousands of people will take the bait.
I'm not buyin' it. I'll take my chances with the $10,000 I sent to that Nigerian prince.

Financial education and empowerment remains a huge gap in secondary and post-secondary schooling, hopefully not for years to come.
by Tyr0ne
Wed Jan 02, 2013 6:49 pm
Forum: Investing - Theory, News & General
Topic: Bogleheads 2013 Hedgefund Contest
Replies: 151
Views: 23831

Re: Bogleheads 2013 Hedgefund Contest

Fund Name: Eat Your PEs

Long:
TJX Companies (TJX)
Take-Two (TTWO)

Short:
Best Buy (BBY)
Barnes & Noble, Inc. (BKS)
by Tyr0ne
Fri Dec 21, 2012 12:46 pm
Forum: Investing - Theory, News & General
Topic: Why not a larger small cap allocation?
Replies: 21
Views: 2998

Why not a larger small cap allocation?

I recently came across this article (note the two charts), and although I completely understand how past performance doesn't predict future returns, the concept of the small cap premium also makes sense to me. My time horizon for retirement is around 45 years. Perhaps I don't understand enough about cap-weighted asset allocations, but with such a long-term horizon, I am tempted to increase my small cap holdings from ~15-20% to ~25-35% (edit: %'s of my equity holdings). Note: this would be strictly for retirement money. My emergency fund and house savings are all CD's and ST bonds. I am assuming this would be a very risky and potentially grave mistake, and and that there is a perfectly good reason NOT to do this. What do I need to consider w...
by Tyr0ne
Tue Dec 18, 2012 3:43 pm
Forum: Personal Investments
Topic: Beginning investor with large windfall
Replies: 25
Views: 3052

Re: Beginning investor with large windfall

Congratulations on your windfall dogpatch09. If you divide your windfall by about 10, our situations are eerily the same. I am just beginning to implement my investment plan now, months after making my first post on this forum about my own windfall. I have come to learn from the vast wisdom and experience on this forum as well as in many of the books on the Boglehead reading list, how incredibly unpredictable, random, stubborn, and efficient markets are, and that stressing over what markets are going to do after you start investing is futile. What has become a thousand times more important to myself is that at the end of the day, I know I deployed an informed investment plan; one I both understood and was comfortable with, no matter how the...
by Tyr0ne
Wed Nov 07, 2012 5:39 pm
Forum: Forum Issues and Administration
Topic: [merged donation threads] Dear Bogleheads - time to pony up
Replies: 277
Views: 25621

Re: Mel's $1000 Challenge - Double Your Donation

$50 in hopes that this site is active for a long, long time! :beer

You're a good man Mel
by Tyr0ne
Mon Oct 22, 2012 5:23 pm
Forum: Personal Investments
Topic: 15% bracket - Considering Roth conversion
Replies: 12
Views: 2043

Re: 15% bracket - Considering Roth conversion

Thank you for the helpful responses.

I do have a sufficient emergency fund with my bank (Ally).

Based on the advice, I will cash out of my tech stocks to max my 401k this year, since cash will be a little tight without some stock sales. Once I receive the inheritance, I will put aside $5.5k for 2013 Roth contributions, and at least $8k cash to compensate for large 401k withholding in 2013. The rest will go towards a fund for a house down payment (I live in/near the Silicon Valley and will need a few more inheritances to eventually afford a decent house in this area :annoyed ). As suggested, I will use a handful of Vanguard's tax-efficient funds (abiding by the Bogleheads wiki of tax-efficient fund placement).

Thanks again. Best Regards.
by Tyr0ne
Fri Oct 19, 2012 11:52 pm
Forum: Personal Investments
Topic: 15% bracket - Considering Roth conversion
Replies: 12
Views: 2043

Re: 15% bracket - Considering Roth conversion

OK, $5k each for 2011 and 2012? but how did you get to $11k?
$1k in growth

Sounds like I will just max out the 401k and call it a day.

Thanks again!
by Tyr0ne
Fri Oct 19, 2012 10:56 pm
Forum: Personal Investments
Topic: 15% bracket - Considering Roth conversion
Replies: 12
Views: 2043

Re: 15% bracket - Considering Roth conversion

Thank you for your time and response Paul. What is this money invested in, and have you held for more than 12 months? My taxable is invested in tech stocks, with minimal gains/losses, all with long-term treatment at this point. How did you get 11k into a Roth IRA in one year? I funded $10k early this year from using my 2011 and 2012 contributions, since you have until April 15th of the following year to make your Roth contribution. When you speak of converting to a Roth, you mean in the 401k? Why not take the money from taxable if you won't be hit by short term capital gains and just switch options to the Roth 401k. Switch even if you can't add a lump sum. Add new money, don't convert. Yes, I mean converting my hypothetical $16k year-end ba...
by Tyr0ne
Fri Oct 19, 2012 10:09 pm
Forum: Personal Investments
Topic: 15% bracket - Considering Roth conversion
Replies: 12
Views: 2043

15% bracket - Considering Roth conversion

From Bogleheads wiki on roth conversions: If your current marginal rate is lower than your expected retirement tax rate, you should convert in preference to any investment except a matched contribution to a retirement plan. If the rates are equal, max out your Roth contribution in preference to converting, but convert in preference to maxing out your 401(k). Here is my current situation: - Age 24, slated to make ~$55k in 2012. - Taxable account: $10k (funded entirely in 2011 before I read Bogleheads) - 401(k) w/ no matching: $10k (funded entirely in 2012) - Roth IRA: $11k (funded entirely in 2012) - I am also slated to inherit ~$150k in December, all cash, tax-free. Because of this, I want to fill my 401k as much as possible in 2012, but do...
by Tyr0ne
Wed Oct 17, 2012 12:58 pm
Forum: Investing - Theory, News & General
Topic: Need simple breakdown of TIPS yield & beginners bond book
Replies: 2
Views: 543

Re: Need simple breakdown of TIPS yield & beginners bond boo

Barry Barnitz wrote: Hi tycoryj:

Please not that the index return figures in the table are not yield numbers, but rather total returns (yield plus capital change) returns for each calendar year.

regards,
Thank you for pointing out this blatant point :oops: . That makes much more sense
by Tyr0ne
Wed Oct 17, 2012 12:45 pm
Forum: Investing - Theory, News & General
Topic: Need simple breakdown of TIPS yield & beginners bond book
Replies: 2
Views: 543

Need simple breakdown of TIPS yield & beginners bond book

I apologize for my very limited understanding on the subject, I searched for TIPS on the forum and pretty much all of the discussions are beyond the scope of my understanding. I've read the TIPS section in the wiki, and most of it makes sense, but it doesn't get very detailed. The historical yields for TIPS sure threw me for a loop though. Year Barclays US Treasury Inflation Protected Index 2011 13.56% 2010 6.31% 2009 11.41% 2008 -2.35% 2007 11.63% 2006 0.41% 2005 2.84% 2004 8.46% 2003 2.60% 2002 16.57% 2001 7.89% I have a million questions about TIPS, but I guess if I could ask one question it would be where does all the volatility in TIPS yield come from? Are interest rates and inflation all that factor in to the yield, or is there more? ...
by Tyr0ne
Sun Sep 16, 2012 2:00 pm
Forum: Personal Investments
Topic: Large Inheritance: What's the max I can put into retirement?
Replies: 14
Views: 2470

Re: Large Inheritance: What's the max I can put into retirem

Thanks for all the great responses so far. I believe I will just be inheriting cash only. The estate held a house for an enormous gain which it recently sold for all cash. The rest of the estate was a large sum of cash in a checking account.

It sounds like I should just max out the 401k and Roth, and if I want to split 50/50 between after-tax and pre-tax, I should put 5k in roth ira, 6k in roth 401k (11k total in after-tax), and 11k in tradtitional 401k. I too would like to believe that I won't be in the 25% bracket when I retire in 40 years, but impossible to guess.
by Tyr0ne
Sun Sep 16, 2012 12:43 pm
Forum: Personal Investments
Topic: Large Inheritance: What's the max I can put into retirement?
Replies: 14
Views: 2470

Large Inheritance: What's the max I can put into retirement?

I am 24, and in the 25% tax bracket. For a couple years I have put the max $5k into a Roth, and around ~$10k both years into my company's 401(k), with no company match. I also just discovered that a Roth 401k is also offered at my company. My main question is about maximum contributions. Do the rules for contribution limits for Roth IRA's, TIRA's, Roth 401k's, and traditional 401k's all exist independently of one another (i.e. can I max out all 4 accounts this year with the inheritance I am receiving?). And I'm guessing that since the inheritance isn't taxable, my income for the year for purposes of figuring out my contribution limits will be just my normal wages, correct? Moving forward, I would like to contribute half to pre-tax, and half...