Search found 98 matches
- Mon Mar 25, 2024 1:27 pm
- Forum: Personal Investments
- Topic: 2026 Tax tables impact on Roth conversions! Act now?
- Replies: 10
- Views: 1537
Re: 2026 Tax tables impact on Roth conversions! Act now?
OK so no hard and firm numbers from IRS yet but it seems like the 2026 Tax table might look approximately like (per the guess at eFile page): 2026 MFJ 15% $20,226 - $83,550 25% $83,551 - $168,625 28% $168,626 - $256,950 (Sorry if your brackets not included, the idea works across all filings and incomes, I think) versus 2024 MFJ 12% $23,201 - $94,300 22% $94,301 - $201,050 24% $201,051 - $383,900 So assuming this is about where we end up you can see that the Roth conversions after 2025 are going cost not only 3%-4% more but that the hit will start at lower amounts. A long term conversion plan will be impacted, and the higher the rate the more disproportionate the tax impact will be. So... My questions are 1) Should I "bite the bullet&q...
- Sat Mar 23, 2024 11:43 pm
- Forum: Personal Investments
- Topic: HSA Tax efficiency in CA
- Replies: 21
- Views: 1654
Re: HSA Tax efficiency in CA
If you use treasuries, keep in mind that capital gains and losses on treasuries are taxable. Additionally, treasury funds don't all quality for being state tax free. Since contributing through payroll has additional tax benefits, I contribute through payroll until I have enough for it to be worthwhile to transfer to Fidelity. I then buy FDLXX (treasury only money market) and individual treasuries at auction.
- Sun Jul 09, 2023 1:29 pm
- Forum: Personal Investments
- Topic: Maturing CD Grace Period - Transferring to Brokerage
- Replies: 5
- Views: 484
Re: Maturing CD Grace Period - Transferring to Brokerage
Appreciate the replies. I'll ask to have the balance transferred to a money market or IRA savings account then initiate the brokerage transfer.
- Sun Jul 09, 2023 1:20 pm
- Forum: Personal Investments
- Topic: Maturing CD Grace Period - Transferring to Brokerage
- Replies: 5
- Views: 484
Maturing CD Grace Period - Transferring to Brokerage
I have an IRA CD maturing soon at a Credit Union that has a 5-day grace period. I'd like to move the money to my IRA Brokerage account at Vanguard or Fidelity. I'd prefer to do a direct custodian to custodian transfer. I was searching for info and found https://www.bogleheads.org/forum/viewtopic.php?t=346255 . "The correct approach would have been to submit the IRA transfer request to Vanguard. They then would have sent the IRA transfer form to the bank, and the bank would have sent Vanguard a check as a trustee to trustee transfer." Can I rely on Vanguard or Fidelity to initiate the transfer within the 5-day grace period? Would I want to reach out to Vanguard or Fidelity prior to the renewal date to set things up? Would I be safe...
- Tue Nov 01, 2022 12:54 pm
- Forum: Investing - Theory, News & General
- Topic: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
- Replies: 52
- Views: 12542
Re: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
My point is that buyers shouldn't have viewed October IBonds as being that much of a long term inflation protection instrument which makes comparing them to November IBonds or TIPS not too useful. I'd have viewed it primarily as a 15-month nominal 6.49% bond with some small addition value from the option to extend. The spread between TIPS yields and the IBond rate should have made it obvious they weren't a great long term play in October.TheCaptain67 wrote: ↑Tue Nov 01, 2022 12:35 pmBy my calculations, the breakeven point is 3.5 years. Hold short than that, Oct was the better choice. Hold longer and Nov was the better choice.
- Tue Nov 01, 2022 12:31 pm
- Forum: Investing - Theory, News & General
- Topic: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
- Replies: 52
- Views: 12542
Re: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
Oops, I should have known that. 6.49% 15 month bond with an option to extend. I still would rather have October than November.patrick wrote: ↑Tue Nov 01, 2022 12:23 pmNot quite. The rates are listed as annualized values even though they only last 6 months, so you get half roughly that amount of interest. Still a fairly good deal though.cjg wrote: ↑Tue Nov 01, 2022 12:20 pm I Bonds bought in October were a short term play and hopefully people buying them understand that. You can think of them as a 12.88% 15 month bond exempt from state tax with an option to extend further (first 12 months of interest are known to be 16.63% then 3 months 0% for the early withdrawal penalty). I think this is a better deal and would much rather have an I-Bond bought in October than November.
- Tue Nov 01, 2022 12:20 pm
- Forum: Investing - Theory, News & General
- Topic: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
- Replies: 52
- Views: 12542
Re: Did Treasury Direct frustrate your effort to lock in ibonds at 9.62%? Count your blessings.
I Bonds bought in October were a short term play and hopefully people buying them understand that. You can think of them as a 12.88% 15 month bond exempt from state tax with an option to extend further (first 12 months of interest are known to be 16.63% then 3 months 0% for the early withdrawal penalty). I think this is a better deal and would much rather have an I-Bond bought in October than November.
- Sat Oct 29, 2022 5:08 pm
- Forum: Personal Investments
- Topic: Is favoring buybacks over Dividends an example of "Tail wagging the dog" ?
- Replies: 15
- Views: 1977
Re: Is favoring buybacks over Dividends an example of "Tail wagging the dog" ?
I’ve posted on this topic previously and share your concern. Companies have a strong tendency to increase buybacks when share prices are at or near all-time highs, and to reduce them when share prices are low. A classic example of buying high instead of low. Sure the company is buying high but who is on the other side of the trade selling high with a buyback: the owners of the company. Seems great to me. If a company announces that they're buying back 1% of their shares, all owners can choose to sell 1% of their holding or some can choose to sell less and others sell more. This gives the owners great control over whether they want to take a taxable gain or reinvest in a tax deferred manner - way nicer than a dividend where if you reinvest ...
- Sat Oct 29, 2022 4:11 pm
- Forum: Personal Investments
- Topic: Is favoring buybacks over Dividends an example of "Tail wagging the dog" ?
- Replies: 15
- Views: 1977
Re: Is favoring buybacks over Dividends an example of "Tail wagging the dog" ?
Shareholders have the choice between reinvesting (holding shares) or selling shares proportional to the buyback. I don't see it being all that different.flyingcows wrote: ↑Sat Oct 29, 2022 3:07 pm It's too bad they didn't just payout dividends instead and give the shareholders the option on how best to reinvest that money.
Index funds would have sold proportional to the buyback.
- Fri Oct 28, 2022 1:57 pm
- Forum: Investing - Theory, News & General
- Topic: Renaissance's Medallion Fund
- Replies: 60
- Views: 7325
Re: Renaissance's Medallion Fund
I think a good way to look at it is that the market doesn't become efficient for free. The market is efficient because there's so many funds like Renaissance taking advantage of small inefficiencies. Even after all that, the market isn't 100% efficient but becomes close to it. From an individual non-professional investor working a regular job's perspective, its probably best to treat the market as if it were efficient. Are there managers that can consistent beat the market? Absolutely! The thing is those managers know the value they're bringing and set their fees accordingly. Prior to closing the fund to outside investors, Renaissance was charging 5% of AUM and 44% of gains (well above the industry average for hedge funds which is typically...
- Thu Oct 27, 2022 11:44 pm
- Forum: Investing - Theory, News & General
- Topic: Renaissance's Medallion Fund
- Replies: 60
- Views: 7325
Re: Renaissance's Medallion Fund
Author William Bernstein has correctly mentioned that no fund manager has outperformed the market over the long term (decades). And I think Bogle has said about 2% of managers outperform (slightly) over the long run. Is Renaissance Technologies Medallion fund the only exception to this rule? While no where near as impressive, what about Fidelity Contrafund (FCNTX)? Beats the S&P by about 2 1/2% over the length reported by Portfolio Visualizer (since 1984), higher Sharpe and Sortino ratios, and better rolling averages. I wouldn't say that Bernstein is correct, as a single exception disproves the "no fund manager" claim. Pretty much all that outperformance is historical. It has only outperformed Vanguard's S&P 500 ETF by an...
- Tue Oct 25, 2022 11:20 am
- Forum: Personal Finance (Not Investing)
- Topic: bogle.tools/financial-variables - (github repository for well known values that change over time)
- Replies: 41
- Views: 5666
Re: github repository of Financial-Figures (well known values that change over time)
I personally use CPI-U and metrics around market weights in my spreadsheet (how much SP500 vs Extended Market to get total stock, US vs Ex-US to get total world). I just update these manually but having something easy to reference with a formula would be convenient. I've added CPI-U to my new list of proposed values to collect and share and I've added a mention of the market weights below that list. Where do you get those market weights? How often? Also, what type of spreadsheet are you using Microsoft Excel or Google Sheets or other? I'm unsure whether there's better sources but for US vs Ex-US, I typically visit https://investor.vanguard.com/investment-products/etfs/profile/vt#portfolio-composition and go to "Weighted exposures"...
- Tue Oct 25, 2022 11:07 am
- Forum: Investing - Theory, News & General
- Topic: Will treasury yields rise if the Federal Funds rate is raised?
- Replies: 29
- Views: 3294
Re: Will treasury yields rise if the Federal Funds rate is raised?
It feels like the early 70s all over again… For someone who was born in the 80s, can you say what this means? High Inflation, timid FED, people exuberantly buying long bonds when they hit “high” rates in the mid single digits. Let’s hope we don’t repeat the whole decade, or people will be losing their shirts on those 4% 10Y treasuries. I’m sure many will pop in and say how different things are now. But the most significant difference I see is that the government can’t afford to raise rates into the double digits due to the high national debt. So we better hope that a FED funds rate at 5-6% is enough to tame inflation. The also have the tool of unwinding the Federal Reserve balance sheet this time in addition to raising interest rates.
- Sun Oct 23, 2022 4:26 pm
- Forum: Personal Finance (Not Investing)
- Topic: bogle.tools/financial-variables - (github repository for well known values that change over time)
- Replies: 41
- Views: 5666
Re: github repository of Financial-Figures (well known values that change over time)
I personally use CPI-U and metrics around market weights in my spreadsheet (how much SP500 vs Extended Market to get total stock, US vs Ex-US to get total world). I just update these manually but having something easy to reference with a formula would be convenient.
- Sun Oct 23, 2022 11:44 am
- Forum: Personal Investments
- Topic: Andrews FCU Raise your rate CD 3.55% APY. Allows you to request a rate reset if the rates go up
- Replies: 8
- Views: 1004
Re: Andrews FCU Raise your rate CD 3.55% APY. Allows you to request a rate reset if the rates go up
It seems like if they sold a lot of these, they might just make their rates slightly less competitive in the future. I'd pay much more attention to how large early withdrawal penalties are which are than features like this.
Though I'd note that early withdrawal penalties aren't guaranteed either.
https://www.depositaccounts.com/blog/20 ... g-cds.html
Though I'd note that early withdrawal penalties aren't guaranteed either.
https://www.depositaccounts.com/blog/20 ... g-cds.html
- Wed Oct 19, 2022 10:16 am
- Forum: Investing - Theory, News & General
- Topic: Understanding Individual TIPs Numbers
- Replies: 3
- Views: 595
Understanding Individual TIPs Numbers
I'm new to individual bonds. I'm looking at CUSIP 912810RW0, 02/15/2047 TIPS 0.875% bonds on Fidelity. The numbers shown are Ask Price: 77.968000 Ask Yield: 2.027000 Ask Quantity(min) 1000(50) Inflation Factor: 1.2271 Third Party Price: 78.822 This $1,000 face value bond would pay 1.2271 * 0.875% = 1.074% or $10.74 per year right now increasing with inflation over time. The overall real yield is expected to be 2.005% over the life of the bond - more than the 1.074% interest payments because I'm buying at a discount. My understanding is that the ask price is price per $100 face value and bonds are per $1,000 face value. So someone is willing to sell a bond that originally had $1,000 face value for $779.68. If I try to buy 100 bonds with a li...
- Tue Oct 04, 2022 6:18 pm
- Forum: Personal Investments
- Topic: Fidelity CDs
- Replies: 17
- Views: 3837
Re: Fidelity CDs
The main thing I saw to watch out for when researching them a few weeks ago was Call Protection. You can get a higher rate without call protection, but then, if rates drop, the issuing bank can call the CD back and return your principle to you early. On Fidelity, you'll see CP in the list of acronyms to the right if it has call protection. Interesting. Do they give you the interest you should've earned at that point or do you get no interest? Unlike retail bank CDs which compound within the CD, brokered CDs pay out interest as cash on a schedule. So if a 5 year CD pays interest every 6 months and is called after 2 years, you'll have your four interest payments from the first two years (potential already reinvested elsewhere since you were ...
- Tue Oct 04, 2022 1:25 pm
- Forum: Personal Investments
- Topic: [Q] Does it make sense to buy brokerage CDs in different brokerage?
- Replies: 4
- Views: 398
Re: [Q] Does it make sense to buy brokerage CDs in different brokerage?
I would strongly recommend a brokerage over Treasury Direct for treasuries. They're a huge pain to deal with - hard to get customer service and a terrible website.
- Tue Oct 04, 2022 11:36 am
- Forum: Personal Investments
- Topic: [Q] Does it make sense to buy brokerage CDs in different brokerage?
- Replies: 4
- Views: 398
Re: [Q] Does it make sense to buy brokerage CDs in different brokerage?
You'll want to buy an amount that would result in less than $0.25m when the CD matures. Otherwise, you risk loss of any earned interest.
The general consensus is that brokerage risk exists but is pretty minimal for large reputable brokerages.
The general consensus is that brokerage risk exists but is pretty minimal for large reputable brokerages.
- Fri Sep 30, 2022 2:41 pm
- Forum: Personal Investments
- Topic: Vanguard 3 month Treasury bill
- Replies: 11
- Views: 2878
Re: Vanguard 3 month Treasury bill
The holding could lose value due to rising interest rates but will have the fixed value after 3 months. This is backed by the US government and is considered on of the least risky investments since they control the money printer.
SIPC insurance covers you in case Vanguard doesn't actually have the security or takes it and intermixes it with company funds and goes bankrupt.
SIPC insurance covers you in case Vanguard doesn't actually have the security or takes it and intermixes it with company funds and goes bankrupt.
- Mon Sep 26, 2022 12:46 pm
- Forum: Personal Investments
- Topic: Stopping BND bleed by temporary move to Tbills.
- Replies: 114
- Views: 15895
Re: Stopping BND bleed by temporary move to Tbills.
I just rebalanced into bonds.
I don't know for sure but I wouldn't be surprised if this is the peak for 5-10 year rates. (Wouldn't be surprised if it isn't either.) We'll probably see another federal funds rate hike but that's likely priced in. Inflation seems to be cooling with almost no inflation in July and August though two months of data points isn't really enough to indicate a longer trend.
I don't know for sure but I wouldn't be surprised if this is the peak for 5-10 year rates. (Wouldn't be surprised if it isn't either.) We'll probably see another federal funds rate hike but that's likely priced in. Inflation seems to be cooling with almost no inflation in July and August though two months of data points isn't really enough to indicate a longer trend.
- Tue Sep 20, 2022 3:48 pm
- Forum: Personal Investments
- Topic: VTI vs VDC (I really dislike tech companies)
- Replies: 21
- Views: 2266
Re: VTI vs VDC (I really dislike tech companies)
Have you considered a total world fund? Well diversified and much less tech concentration than total stock. I'd choose total international over consumer staples if I had to pick between the two.
- Sat Jul 09, 2022 11:29 am
- Forum: Investing - Theory, News & General
- Topic: Charles Schwab Paying $186 Million in Regulatory Settlement Over Robo-Adviser Business
- Replies: 41
- Views: 5965
Re: Charles Schwab Paying $186 Million in Regulatory Settlement Over Robo-Adviser Business
Bogleheads. I am always surprised in the race to the bottom the level of service BH's demand for free. I chuckle when someone says: "oh and Fidelity had an attorney review my estate plan for free." Someone is paying for these services. The BH may be the winner because they understand the game better, but the other person that ended up hiring the attorney paid for that, and the AUM or high fee fund person at Fidelity or Schwab pays for the better customer service experience for us overall. There's plenty of services out there offered as loss leaders or handouts to try to get your business. I certainly don't demand it but if I get $500 for opening a credit card, I'm going to take advantage of it. You just need to be wary and unders...
- Thu May 12, 2022 4:22 pm
- Forum: Personal Finance (Not Investing)
- Topic: Renting out a House with Sizable Capital Gains
- Replies: 8
- Views: 788
Re: Renting out a House with Sizable Capital Gains
Agree. If you want to have a rental it's likely better financially to sell this house and buy the one next door than keep this one. Yeah, seems like it. My understanding of the tax law is correct then? I noticed that I wrote "That works out to 5% of the value of the home per year. " but it should be "5% of the capital gains (2.5% of the value of the home assuming we sell at exactly double what we bought it for) ". I don't think this part is correct, or maybe I'm misunderstanding what you're saying. Are you trying to factor in depreciation recapture on the rental? I'm trying to understand how much capital gains taxes we'd pay. I was thinking that each year that we rented it, we'd lose 1/5th the capital gains primary resi...
- Thu May 12, 2022 3:35 pm
- Forum: Personal Finance (Not Investing)
- Topic: Renting out a House with Sizable Capital Gains
- Replies: 8
- Views: 788
Re: Renting out a House with Sizable Capital Gains
Yeah, seems like it. My understanding of the tax law is correct then?
I noticed that I wrote "That works out to 5% of the value of the home per year." but it should be "5% of the capital gains (2.5% of the value of the home assuming we sell at exactly double what we bought it for)".
- Thu May 12, 2022 2:50 pm
- Forum: Personal Finance (Not Investing)
- Topic: Renting out a House with Sizable Capital Gains
- Replies: 8
- Views: 788
Renting out a House with Sizable Capital Gains
We're moving from a LCOL to HCOL area. We're considering renting out our house in the LCOL area in case of a recession/layoff or personal issue causes us to lose a job and need to move back to a lower cost of living area. We have substantial savings but not enough to be financially independent or for us to want to stay in a HCOL area without high paying jobs. I think the biggest thing hindering this plan is that the house has appreciated to about twice what we bought it at. My understanding is that if we sold our entire capital gains would be exempt from taxes since we lived there 5 years. If we rented out the unit for 1-5 years then sold it, we'd lose 20% of the capital gains exemption each year for the first 5 years at a capital gains rat...
- Sun Sep 20, 2020 1:16 pm
- Forum: Investing - Theory, News & General
- Topic: EE Bonds and Sequence of Returns Risk
- Replies: 64
- Views: 8116
Re: EE Bonds and Sequence of Returns Risk
While I am a big fan of EE bonds, I currently do not own any because I have room in my tax deferred accounts. I also have not reached the point where I have need of a taxable account. from what I've read here, these should be funded first. Do you agree? In effect, savings bonds ARE tax deferred accounts. So no need to giving up some tax-differed space in an IRA or 401k to purchase EE bonds, just as long as you don't put yourself in a position of HAVING to redeem them while you're still employed if you can avoid it. Starting at age 40 or 42 seems a safe strategy to me. If you maintain the same tax-rate for your entire life, a Traditional IRA is the equivalent of all gains being tax-free. For EE-Bonds, it is the equivalent of interest on int...
- Sat Sep 19, 2020 8:29 pm
- Forum: Investing - Theory, News & General
- Topic: Rebalancing with EE Bonds
- Replies: 24
- Views: 2027
Re: Rebalancing with EE Bonds
I searched for "valuing EE Bonds" and found a few threads on the topic and was surprised that I haven't seen any proposals that use STRIPS with a similar duration as a starting point (I wouldn't be surprised if it is discussed somewhere but I didn't find it). Using that approach may feel weird because you're saying that a brand new bond purchased for $10k is worth significantly more than that when it comes to your asset allocation. From an economists perspective though, what you paid for the asset is irrelevant to its value. In a similar way, I also value money that I put in a Roth IRA as immediately being worth more than my money in taxable accounts. We consider other pros/cons against zero coupons rather than just using that rat...
- Sat Sep 19, 2020 11:36 am
- Forum: Investing - Theory, News & General
- Topic: Lars Kroijer: If you are not in Total World (VT or VTWAX) you are market timing!
- Replies: 50
- Views: 7073
Re: Lars Kroijer: If you are not in Total World (VT or VTWAX) you are market timing!
Why stop there? Should you also hold bonds, commodities, and other assets based on global market sizes?
I hold based on global market caps but don't think anyone choosing otherwise is necessarily making a mistake.
I hold based on global market caps but don't think anyone choosing otherwise is necessarily making a mistake.
- Sat Aug 15, 2020 6:33 pm
- Forum: Personal Investments
- Topic: Anyone using crypto exchanges to earn higher interest on their cash?
- Replies: 90
- Views: 12237
Re: Anyone using crypto exchanges to earn higher interest on their cash?
Claims that very risky loans are "guaranteed" and "can't default" to me is purely disinformation. You are just repeating the claims by industry insiders that really are designed to funnel more money into crypto without consideration for actual risk. I didn’t say “guaranteed”. I said 100%+ collateralized with an auto-liquidate trigger. I don’t know enough about how that works in practice, but that’s my understanding of how it’s set up. Do you have any knowledge about how such a trigger could fail, leaving the lender holding the bag? I don’t- big part of why I’m asking. MakerDAO good example of this. Collateral dropped in price and got auctioned. Due to network congestion, only one bid for the collateral made it through a...
- Tue Aug 04, 2020 8:53 pm
- Forum: Personal Investments
- Topic: Bond fund vs Stable Value in 401k??
- Replies: 17
- Views: 1703
Re: Bond fund vs Stable Value in 401k??
Stable Value Funds don't have an explicit expense ratio since you don't own the underlying investments just a contract to be paid out interest on. Works similar to how your bank account doesn't have an expense ratio.
- Thu Jul 23, 2020 11:10 am
- Forum: Personal Investments
- Topic: Bonds worth it?
- Replies: 137
- Views: 11566
Re: Bonds worth it?
I've been going for FDIC insured CDs, I-Bonds, and EE-Bonds for the majority of my fixed income holding. I have a small amount of marketable bonds for rebalancing. All offer yield premiums over marketable bonds with little risk. Unless you have institutional level money, this seems to be the way to go.
I do believe that traditional bonds provide a valuable safety net to a portfolio even at near zero yields and I would be holding them if the options above didn't exist.
I do believe that traditional bonds provide a valuable safety net to a portfolio even at near zero yields and I would be holding them if the options above didn't exist.
- Sat Jun 06, 2020 1:46 pm
- Forum: Personal Investments
- Topic: Work-around for high-fee 401k and Backdoor Pro-Rata Rule?
- Replies: 19
- Views: 802
Re: Work-around for high-fee 401k and Backdoor Pro-Rata Rule?
Would it work to move the traditional IRA balance into the 401k in December then move it back into an IRA at the start of January? You'd then only pay the AUM fees for a short time. Just need to make sure to initiate it early enough that it makes it into the 401k before the end of the year.
- Fri Jan 25, 2019 9:45 pm
- Forum: Personal Consumer Issues
- Topic: Flying from Atlanta to Pune India
- Replies: 12
- Views: 1218
Re: Flying from Atlanta to Pune India
You could consider flying into Mumbai and taking a taxi to Pune. Sometimes this leads to better travel times since you don't have to take a connection.
- Sat Dec 15, 2018 8:12 am
- Forum: Investing - Theory, News & General
- Topic: NPR On Point: Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over
- Replies: 26
- Views: 4977
Re: NPR On Point: Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over
I don't think that would change index funds in general holding a ton of voting power in companies. People will just buy from competing index funds if that's what they're looking for.
- Thu Nov 01, 2018 12:30 pm
- Forum: Investing - Theory, News & General
- Topic: I Bond fixed rate = 0.5%
- Replies: 90
- Views: 11587
Re: I Bond fixed rate = 0.5%
For comparison, 5-10 year TIPS have a around a 1.1% yield. A 0.5% rate isn't bad due to the flexibility I-Bonds have with terms but I don't think it's enough to get me to want to deal with treasury direct either.
https://www.treasury.gov/resource-cente ... =realyield
https://www.treasury.gov/resource-cente ... =realyield
- Tue Jun 05, 2018 8:45 am
- Forum: Investing - Theory, News & General
- Topic: [WSJ] What Really Matters for an Index fund: Tax Skill
- Replies: 17
- Views: 3586
Re: [WSJ] What Really Matters for an Index fund: Tax Skill
I also can't read due to the paywall but my guess is that all the large SP500 index ETFs are pretty similar taxwise. I haven't heard of any larger ETF making a capital gains distribution. I'd avoid smaller ETFs and non-Vanguard mutual funds (until their patent expires) in a taxable account.
- Wed May 23, 2018 3:14 pm
- Forum: Investing - Theory, News & General
- Topic: New Trend: Bonds in Roth IRA
- Replies: 16
- Views: 4410
Re: New Trend: Bonds in Roth IRA
IMHO you don't need to hold bonds anywhere, at least if you're over a decade away from retirement. As far as risk goes, extra stocks in a tax-deferred account makes tax planning more difficult. The goal is to flatten out your tax rate through trying to realize approximately equal amounts of income every year while staying under particular thresholds for RMDs, ACA subsidies, long-term capital gains income tax thresholds, taxes on social security benefits, etc. If your tax-deferred account ends up having significantly more money than expected, the result of this is having a pile of money that you can't access without severe penalties (sometimes over 100% depending on AGI). If your tax-deferred account ends up having significantly less money ...
- Tue May 22, 2018 4:02 pm
- Forum: Investing - Theory, News & General
- Topic: New Trend: Bonds in Roth IRA
- Replies: 16
- Views: 4410
Re: New Trend: Bonds in Roth IRA
Aren't there risk advantages to doing this even after you adjust the balance for your expected tax rate in retirement?
If stocks do really well, you end up with a higher tax rate than expected in retirement - no big deal, you have plenty of money. If they do poorly, you end up with a lower tax rate than expected - great because your safe withdrawal rate is lower as well.
If stocks do really well, you end up with a higher tax rate than expected in retirement - no big deal, you have plenty of money. If they do poorly, you end up with a lower tax rate than expected - great because your safe withdrawal rate is lower as well.
- Wed May 09, 2018 12:48 pm
- Forum: Personal Investments
- Topic: purchasing cd's
- Replies: 18
- Views: 2875
Re: purchasing cd's
I'd look at them but would be cautious about early withdrawal penalties since the NCUA has ruled that they can be changed.protagonist wrote: ↑Wed May 09, 2018 12:13 pm Find the best available bank CD rates at depositaccounts.com
Pay careful attention to early withdrawal penalties. If they are generous enough, you can have the same flexibility with a long term CD as with a short term while getting better yields.
https://www.depositaccounts.com/blog/20 ... g-cds.html
- Sat Apr 07, 2018 8:42 pm
- Forum: Personal Investments
- Topic: Traditional IRA and Roth together
- Replies: 2
- Views: 506
Re: Traditional IRA and Roth together
You have until April 15th to remove the excess contribution to avoid penalties.
https://investor.vanguard.com/ira/excess-contribution
https://investor.vanguard.com/ira/excess-contribution
- Tue Mar 13, 2018 11:47 am
- Forum: Personal Investments
- Topic: Dave Ramsey on Bonds
- Replies: 107
- Views: 13050
Re: Dave Ramsey on Bonds
Rising interest rates seems like a bad reason to not own bonds. It is slightly less obvious but stocks have the exact same problem - valuations can and do move up or down. Stock valuations are a high right now. Should we all go 100% bonds to avoid potential lowering valuations?
- Mon Mar 12, 2018 9:46 pm
- Forum: Personal Investments
- Topic: Should I wait to do Backdoor Roth until after 4/15?
- Replies: 9
- Views: 1550
Re: Should I wait to do Backdoor Roth until after 4/15?
Not 100% certain but I think the conversation will go on your 2018 return no matter what since that's the year the conversation took place. You can also make your 2018 contribution today if you wanted - you don't have to wait till after 4/15. So you could put in $11,000 today. $5500 for 2017 and $5500 for 2018. You could then convert it all to Roth which would all go on your 2018 return.
- Mon Mar 12, 2018 9:32 pm
- Forum: Personal Investments
- Topic: CD Ladder Discipline
- Replies: 17
- Views: 3750
Re: CD Ladder Discipline
Look at treasury yields on the market.
1 YR - 2.05%
2 YR - 2.27%
3 YR - 2.43%
5 YR - 2.64%
10 YR - 2.87%
20 YR - 3.00%
30 YR - 3.13%
Source
It doesn't seem like there's a lot of premium for reaching for longer rates there either. The markets don't seem to be expecting interest rates to go up to 4% anytime soon (though that doesn't mean they won't). But you also have to consider that there's no guarantee that rates will keep going up either. If there's a recession, rates might go back to near zero again. There's risk on both sides. In order for a 3-year 2.70% CD to beat a 5-year 2.85% CD, you need to have a 3.08% yield for the last 2 years. 2 year rates may be significantly lower at that point.
1 YR - 2.05%
2 YR - 2.27%
3 YR - 2.43%
5 YR - 2.64%
10 YR - 2.87%
20 YR - 3.00%
30 YR - 3.13%
Source
It doesn't seem like there's a lot of premium for reaching for longer rates there either. The markets don't seem to be expecting interest rates to go up to 4% anytime soon (though that doesn't mean they won't). But you also have to consider that there's no guarantee that rates will keep going up either. If there's a recession, rates might go back to near zero again. There's risk on both sides. In order for a 3-year 2.70% CD to beat a 5-year 2.85% CD, you need to have a 3.08% yield for the last 2 years. 2 year rates may be significantly lower at that point.
- Wed Mar 07, 2018 2:49 pm
- Forum: Investing - Theory, News & General
- Topic: Sharonview FCU 64 month CD - 4%
- Replies: 109
- Views: 19796
Re: Sharonview FCU 64 month CD - 4%
I went in branch to open it. I was initially given traditional IRA paperwork even though the account they had opened in their system was Roth. I caught the mistake and they gave me new paperwork to sign. They didn't know how long the rate would last but speculated it might only last a couple weeks. Waiting for the custodian transfer now.
- Fri Mar 02, 2018 3:56 pm
- Forum: Investing - Theory, News & General
- Topic: Sharonview FCU 64 month CD - 4%
- Replies: 109
- Views: 19796
Re: Sharonview FCU 64 month CD - 4%
I applied online and created an account. I then tried to call in and it get a blank line after hitting the key that I want a representative it then repeats the original IVR after a few minutes.
For someone that hasn't jumped on one of these before, if I want to transfer funds from an existing Roth IRA, will I just need the account number at Vanguard? Do I need to move the money to cash first or anything like that?
For someone that hasn't jumped on one of these before, if I want to transfer funds from an existing Roth IRA, will I just need the account number at Vanguard? Do I need to move the money to cash first or anything like that?
- Mon Feb 12, 2018 12:36 pm
- Forum: Investing - Theory, News & General
- Topic: Valuation-dependent Safe Withdrawal Rate?
- Replies: 29
- Views: 2689
Re: Valuation-dependent Safe Withdrawal Rate?
Some analysis here. In my opinion, we don't really have enough data to understand the effect very well.
https://earlyretirementnow.com/2016/12/ ... valuation/
https://earlyretirementnow.com/2016/12/ ... valuation/
- Wed Feb 07, 2018 11:21 am
- Forum: Investing - Theory, News & General
- Topic: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders
- Replies: 46
- Views: 8361
Re: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders
This is true for active funds. Index funds will buy and sell towards the end of the day based on orders to avoid tracking error.
I can't seem to find the article but I recall reading recently that Vanguard places trades near market close but not exactly market close with a human trader.
- Wed Feb 07, 2018 7:44 am
- Forum: Investing - Theory, News & General
- Topic: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders
- Replies: 46
- Views: 8361
Re: Huge afternoon stock drop on 2.5.2018 and stock raise on 2.6.2018 is caused by mutual fund holders
I'm pretty skeptical without any evidence especially given the size of the moves we're talking about but banks sharing information between groups they shouldn't be sharing isn't without precedent. Look at the forex and libor scandals.
https://en.m.wikipedia.org/wiki/Forex_scandal
https://en.m.wikipedia.org/wiki/Libor_scandal
In the Forex Scandal, banks were front running client trades.
- Thu Jan 25, 2018 7:26 pm
- Forum: Personal Investments
- Topic: Invest or wait?
- Replies: 21
- Views: 3259
Re: Invest or wait?
People have been asking the same question since 2011. Look at how much things have gone up since then. I'm sure that we'll have a bear market eventually but the drop from the bear market could still end up being well above today's prices.