Search found 3533 matches

by FiveK
Fri Jan 19, 2018 5:12 pm
Forum: Investing - Theory, News & General
Topic: Tax Law Sunset 2025 - Roth vs Traditional
Replies: 88
Views: 7226

Re: Tax Law Sunset 2025 - Roth vs Traditional

I'm not sure I follow the logic for your first point though. During any early retirement, I figured I'd simply convert up to the bracket line regardless of what withdrawal rate that was, and use a combination of taxable/Roth to live on during that period. At a 6.5% effective growth rate (after infl...
by FiveK
Fri Jan 19, 2018 4:29 pm
Forum: Investing - Theory, News & General
Topic: Tax Law Sunset 2025 - Roth vs Traditional
Replies: 88
Views: 7226

Re: Tax Law Sunset 2025 - Roth vs Traditional

I see many opinions here, but my strategy has been: If traditional tax-deferred contributions can reduce AGI to below savers credit threshold, do that. If AGI cannot be reduced to savers credit threshold, contribute everything to Roth until I hit the 12/22% (formerly 15/25%) bracket line, then cont...
by FiveK
Fri Jan 19, 2018 4:11 pm
Forum: Investing - Help with Personal Investments
Topic: Already have a Roth, Now also Need to Open a Traditional IRA (how?)
Replies: 7
Views: 445

Re: Already have a Roth, Now also Need to Open a Traditional IRA (how?)

adamsapple19 wrote:
Fri Jan 19, 2018 4:02 pm
I have no clue what other kind of IRA is non-deductible other than a Roth.
That would be a traditional IRA when one is over the MAGI limit for deductibility. See IRA Deduction Limits | Internal Revenue Service and Backdoor Roth IRA - Bogleheads if interested.
by FiveK
Fri Jan 19, 2018 4:08 pm
Forum: Investing - Help with Personal Investments
Topic: Income tax on 401k vs roth 401k, please help
Replies: 5
Views: 321

Re: Income tax on 401k vs roth 401k, please help

So in our case, is roth 401k a better choice for tax purpose if we don't have to rely on 401k as retirement saving? It boils down to the amount of money available after withdrawals, and that depends on your marginal tax saving rate now, vs. the marginal tax rate when withdrawn - either by you or, i...
by FiveK
Fri Jan 19, 2018 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Already have a Roth, Now also Need to Open a Traditional IRA (how?)
Replies: 7
Views: 445

Re: Already have a Roth, Now also Need to Open a Traditional IRA (how?)

" If you recharacterized a non-deductible IRA to a Roth IRA or vice versa, your tax owed will not change, but you still need to amend the return to correct your IRS Form 8606, Nondeductible IRAs " Within the link is the above quote. Note the highlighted word: this is not what you propose doing. You...
by FiveK
Fri Jan 19, 2018 1:03 pm
Forum: Personal Finance (Not Investing)
Topic: Standard Deduction in 2018
Replies: 16
Views: 2550

Re: Standard Deduction in 2018

Fixed, thanks. Tried to save people a few clicks, but apparently one has to start where the link now points, then click through a few pages to reach
Image
by FiveK
Fri Jan 19, 2018 12:01 pm
Forum: Personal Finance (Not Investing)
Topic: Standard Deduction in 2018
Replies: 16
Views: 2550

Re: Standard Deduction in 2018

HueyLD wrote:
Fri Jan 19, 2018 11:39 am
The only reason I am not 100% certain....
Seems reasonable. Presumably the IRS will add 2018 to the IRS Standard Deduction Interactive Tax Assistant at some point, and then we can reach 100%.
by FiveK
Fri Jan 19, 2018 10:26 am
Forum: Investing - Theory, News & General
Topic: Tax Law Sunset 2025 - Roth vs Traditional
Replies: 88
Views: 7226

Re: Tax Law Sunset 2025 - Roth vs Traditional

Example: If you are currently in the X% tax bracket, you will be in the Y% bracket under the new law and maxing a 401K/Traditional IRA would tend to be the better first choice. Example: If you are currently in the X% tax bracket, you will be in the Y% bracket under the new law and maxing a Roth IRA...
by FiveK
Thu Jan 18, 2018 11:59 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Contribution Question
Replies: 2
Views: 190

Re: Roth IRA Contribution Question

1. Yes 2a. Yes 2b. It is allowed 2c. No See Retirement Topics IRA Contribution Limits | Internal Revenue Service to verify: You can’t make regular contributions to a traditional IRA in the year you reach 70½ and older. However, you can still contribute to a Roth IRA and make rollover contributions t...
by FiveK
Thu Jan 18, 2018 9:20 pm
Forum: Investing - Help with Personal Investments
Topic: Which tax year does a Roth conversion fall under?
Replies: 6
Views: 412

Re: Which tax year does a Roth conversion fall under?

So I am assuming that one would have to calculate the amount of taxable income they are withdrawing from their other retirement accounts towards the end of the year to estimate how much they can convert in order avoid the higher tax brackets? Yes. In case one's marginal rate step changes don't coin...
by FiveK
Thu Jan 18, 2018 6:45 pm
Forum: Investing - Help with Personal Investments
Topic: 403b regulations question
Replies: 6
Views: 285

Re: 403b regulations question

I will ask her if she can direct me to that. I'll see if that site can be of help. Thanks. The mention of that site was somewhat tongue-in-cheek (it covers pretty much all tax law), although asking for an actual regulation is a good way to determine if the president understands, or if Rupert's perc...
by FiveK
Thu Jan 18, 2018 6:07 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

I think I understand, should we still lower the 401k contributions to start and fund a IRA for each of use or just get closer to maxing out the HSA and current 401's If both the 401k and IRA money is intended for long term investments, favor the one with the lower fees for your desired asset alloca...
by FiveK
Thu Jan 18, 2018 4:18 pm
Forum: Investing - Help with Personal Investments
Topic: 403b regulations question
Replies: 6
Views: 285

Re: 403b regulations question

Perhaps you could ask the union president to show you the federal regulation in question. Perhaps one of 26 U.S. Code Chapter 1 - NORMAL TAXES AND SURTAXES | US Law | LII / Legal Information Institute ? Based on what you describe, it will be surprising if one can be found. Unless that is how your 40...
by FiveK
Thu Jan 18, 2018 4:01 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

Option 1, leaving the money in the 401k, and using the institutional funds with lower fees than you can get in an IRA, seems best. Should be no problem having both traditional and Roth sub-accounts within the 401k.
by FiveK
Thu Jan 18, 2018 12:17 pm
Forum: Investing - Help with Personal Investments
Topic: Back Door Roth
Replies: 7
Views: 593

Re: Back Door Roth

Epsilon Delta wrote:
Thu Jan 18, 2018 2:11 am
the dollar values for Roth income limits are all in 408A.
Indeed they are. Could've sworn they weren't there last night. ;) Thanks!
by FiveK
Thu Jan 18, 2018 1:31 am
Forum: Investing - Help with Personal Investments
Topic: Back Door Roth
Replies: 7
Views: 593

Re: Back Door Roth

Epsilon Delta wrote:
Thu Jan 18, 2018 1:13 am
Surely you mean 26 U.S. Code § 408A - Roth IRAs
Specifically 408A(c)(3) and 408A(d)(3)
Those do indeed play a part. Namely, that limits based on MAGI exist. It's in § 219 that the dollar value of the limits are defined. :sharebeer
by FiveK
Wed Jan 17, 2018 8:46 pm
Forum: Investing - Theory, News & General
Topic: Tax Law Sunset 2025 - Roth vs Traditional
Replies: 88
Views: 7226

Re: Tax Law Sunset 2025 - Roth vs Traditional

I'm(30) most interested in landing the most tax credits by low income (84k MFJ with our first kid due Feb). We will Max 401k(18.5k), Tira(11k), and HSA(6.2k). Does this sound like an optimal tax situation for 2018? Should we be contributing to Roth IRAs instead?? Thank you for any response. :beer E...
by FiveK
Wed Jan 17, 2018 8:17 pm
Forum: Investing - Help with Personal Investments
Topic: Back Door Roth
Replies: 7
Views: 593

Re: Back Door Roth

Don't blame the IRs - they are merely following the law.

You could contact your congressional reps regarding subparagraphs (B) and (C) of US Code section 219(g)(2), and 219(g)(3)(B)(iii). See 26 U.S. Code § 219 - Retirement savings.
by FiveK
Wed Jan 17, 2018 6:38 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement Planning in Mid-20's
Replies: 8
Views: 1084

Re: Retirement Planning in Mid-20's

I'm just over 25 years old and ... haven't completely figured out where my income will come from in the ages of 54.... Just a thought: if you continue to save as much or more over the next ~30 years as you are now, and make reasonable investment choices, it is likely you will have no difficulty fig...
by FiveK
Wed Jan 17, 2018 6:29 pm
Forum: Investing - Help with Personal Investments
Topic: New Tax Brackets...Trad 401, Roth 401, or a mix?
Replies: 6
Views: 353

Re: New Tax Brackets...Trad 401, Roth 401, or a mix?

I continue to think the answer is more complicated than "taxes now vs taxes later". Money now is worth more than money later, sure, to a point. But if investment gains outstrip inflation, then I'd argue a completely tax-free option (Roth) - particularly for the 60ish years the OP would be holding i...
by FiveK
Wed Jan 17, 2018 4:46 pm
Forum: Investing - Theory, News & General
Topic: 70% chance of correction in 2018 according to Vanguard - Highest in 15 years
Replies: 81
Views: 7443

Re: 70% chance of correction in 2018 according to Vanguard - Highest in 15 years

See Vanguard economic and market outlook for 2018: Risking risks to the status quo - ISGVEMO.pdf if interested in more detailed tea leaf reading. Some of the charts are interesting. But no surprise on the summary: In our view, the solution to this challenge is not shiny new objects or aggressive tac...
by FiveK
Wed Jan 17, 2018 4:16 pm
Forum: Personal Finance (Not Investing)
Topic: Got raise. Taxes taking 41% of it?
Replies: 30
Views: 3838

Re: Got raise. Taxes taking 41% of it?

That spreadsheet is amazing! All those numbers in your screenshot look right. If I'm reading this correctly, I'm currently paying $179.76 per paycheck into federal income tax when I should only be paying $63 per paycheck? I've got my stuff set up so far off that I'm paying triple what I should? The...
by FiveK
Wed Jan 17, 2018 10:08 am
Forum: Investing - Help with Personal Investments
Topic: Which to Max First: 401k or HSA?
Replies: 13
Views: 786

Re: Which to Max First: 401k or HSA?

From Investment Order : 1. Contribute to your 401k up to any company match 2. Pay off any debts with interest rates ~5% or more above the 10-year Treasury note yield. 3. Max HSA 4. Max Traditional IRA or Roth (or backdoor Roth) based on income level 5. Max 401k (if 401k fees are lower than available...
by FiveK
Wed Jan 17, 2018 8:34 am
Forum: Personal Finance (Not Investing)
Topic: Roth 401(k) vs Traditional 401(k) contributions in 2018
Replies: 8
Views: 537

Re: Roth 401(k) vs Traditional 401(k) contributions in 2018

If all your investments were all in traditional accounts, and using a 4% withdrawal ratio, it would take a balance of ~$4.7 million before you would reach the 24% bracket on those withdrawals alone. Due to pension, "unavoidable" dividends from taxable accounts, etc., you won't need to reach $4.7 mil...
by FiveK
Wed Jan 17, 2018 1:45 am
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

I submitted a correction to the tax rate. FiveK, I am not sure how you came up with 189K, I wish it was but it is not close. Ok, being in the 22% bracket makes more sense. $165,000 is the divide between the 22% and 24% brackets for MFJ. Add $24,000 standard deduction and one gets $189,000. Just thi...
by FiveK
Wed Jan 17, 2018 12:45 am
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

We also plan on increasing HSA contribution to max by decreasing his 401(k) contribution. ... We will also decrease her 401(k) contributions to the company match amount.... Based on "Tax Rate: Fed 24%" in the OP, gross income must be at least $189,000/yr. If so, living expenses must be very high if...
by FiveK
Wed Jan 17, 2018 12:25 am
Forum: Investing - Help with Personal Investments
Topic: Sanity Check on Asset Allocation
Replies: 8
Views: 880

Re: Sanity Check on Asset Allocation

Being that I'm roughly 25 years from being able to access the IRAs.... 60guy, welcome to the forum. Your asset allocation is defensible. Without hindsight glasses, that's as good as one can do. A simpler one would also be defensible. Really up to you on the rental property vs. index fund investment...
by FiveK
Wed Jan 17, 2018 12:12 am
Forum: Personal Finance (Not Investing)
Topic: Got raise. Taxes taking 41% of it?
Replies: 30
Views: 3838

Re: Got raise. Taxes taking 41% of it?

Salary: $2,645.83 Federal Income Tax: $179.76 SS: $163.85 Medicare: $38.32 UT State Income Tax: $110.84 Pre-tax 401k: $150 Pre-tax Health Insurance: $3.00 You can reduce the federal withholding by a large amount, assuming the information below is correct. See the personal finance toolbox spreadshee...
by FiveK
Tue Jan 16, 2018 11:44 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

Withdrawing at 4%/yr is ~$80K/yr in today's dollars. This ignores any taxable investments, taking SS at some point, etc. May not work out, but "not unrealistic" seems more apt than "over ambitious". YMMV. 4% withdrawal inflation adjusted starting at 55? Don't sign me up for that. If that's too much...
by FiveK
Tue Jan 16, 2018 11:13 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

Withdrawing at 4%/yr is ~$80K/yr in today's dollars. This ignores any taxable investments, taking SS at some point, etc. May not work out, but "not unrealistic" seems more apt than "over ambitious". YMMV. 4% withdrawal inflation adjusted starting at 55? Don't sign me up for that. If that's too much...
by FiveK
Tue Jan 16, 2018 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA & 401k, fairly new to investing
Replies: 6
Views: 473

Re: Roth IRA & 401k, fairly new to investing

ramair02 wrote:
Tue Jan 16, 2018 9:18 pm
Are there too many funds overall?
Probably. Consider Approximating total stock market as an example of how much overlap there may be in the listed choices.

Also calculate the cost difference to you between holding VTTSX (or similar) vs. a weighted average of the one fund's underlying funds.
by FiveK
Tue Jan 16, 2018 10:26 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to pay off mortgage (considering investment returns)
Replies: 9
Views: 1576

Re: Best way to pay off mortgage (considering investment returns)

2% does not seem like a lot of equity risk premium. The answer would be obvious with a 0% mortgage or a 20% stock market return, but obviously as these two numbers come closer together, it starts getting more difficult. Indeed it does, and thus the discussions recur, because the equity risk premium...
by FiveK
Tue Jan 16, 2018 10:08 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

Starting at 30 and planning on retiring by 55 is probably over ambitious. Well, $37K/yr into 401ks and $11K/yr into Roth IRAs for 25 years at 4% real return per year gives $1541K in traditional accounts and $458K in Roth accounts. Withdrawing at 4%/yr is ~$80K/yr in today's dollars. This ignores an...
by FiveK
Tue Jan 16, 2018 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: 2018 Withholding Tables

It's been posted before, but it appears to be updated for 2018: https://www.taxformcalculator.com/ The calculation matches my personal results. I'm getting different numbers with this calculator: https://www.calcxml.com/calculators/trump-tax-reform-calculator What inputs (filing status, dependents'...
by FiveK
Tue Jan 16, 2018 3:04 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: 2018 Withholding Tables

nolesrule wrote:
Tue Jan 16, 2018 2:48 pm
I figured the forecasting was a given. :happy
For those populating this board, that may be true. :wink:
...it's easier just to adjust withholding later in the year to compensate if necessary.
Seems a fine plan.
by FiveK
Tue Jan 16, 2018 12:48 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: 2018 Withholding Tables

Is there a best practice for setting W-4 withholding for two earners? Currently we do M0 on both with all of the additional withholding coming out of mine. But due to our differing pay cycles, there's actually an even 50 paychecks per year between the two of us. The math is pretty easy to have the ...
by FiveK
Tue Jan 16, 2018 12:25 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA & 401k, fairly new to investing
Replies: 6
Views: 473

Re: Roth IRA & 401k, fairly new to investing

Thanks for the Roth IRA advice. Would you recommend I sell the stocks I have and invest everything in VTTSX? Up to you. If you think your stockpicking skills exceed Wall Street's, you could stick with what you have. If you accept the "average returns will be better than average" theory behind index...
by FiveK
Tue Jan 16, 2018 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: IRS announces new withholding tables for 2018

JerLon wrote:
Tue Jan 16, 2018 5:40 am
Am I missing anything here? This would create a withholding need of $56.08 per pay over 24 pay periods. This is about 1/6 of my current withholding.
Assuming the taxable income given, that is the result. A W-4 for "Married w/ 11 allowances" would work.
by FiveK
Tue Jan 16, 2018 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Critique for my Father
Replies: 16
Views: 1925

Re: Retirement Critique for my Father

ChickenSoupwithRice wrote:
Tue Jan 16, 2018 9:51 am
FiveK, What I meant was that $114k is total income and it all came from pension.
In that case, no contribution to any IRA is allowed because a pension is not Compensation for Purposes of an IRA.

But what about "he went back to work for part of this past year"?
by FiveK
Mon Jan 15, 2018 11:03 pm
Forum: Investing - Theory, News & General
Topic: Roth 401K vs. Traditional 401K
Replies: 3
Views: 383

Re: Roth 401K vs. Traditional 401K

Thank you! That makes a lot of sense - I didn't take into account 1) investing tax savings from traditional in taxable and 2) income vs. cap gains tax rates in the two scenarios. Much appreciated! You're welcome. Also, everyone here didn't know what they do now - until they learned it. So keep expl...
by FiveK
Mon Jan 15, 2018 9:28 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA & 401k, fairly new to investing
Replies: 6
Views: 473

Re: Roth IRA & 401k, fairly new to investing

- Can you recommend a portfolio to diversify my Roth IRA investments? Should I continue investing through TD Ameritrade, or would I be better off moving the account to Vanguard? Ramair02, welcome to the forum. You could do much worse than putting it all into VTTSX, Vanguard's 2060 fund, currently 9...
by FiveK
Mon Jan 15, 2018 9:22 pm
Forum: Investing - Theory, News & General
Topic: Roth 401K vs. Traditional 401K
Replies: 3
Views: 383

Re: Roth 401K vs. Traditional 401K

Sfeng, welcome to the forum. It makes some sense, but you are missing parts of the analysis. See Traditional versus Roth - Bogleheads , particularly Maxing out your retirement accounts . Especially if you are considering a move to a lower tax state in retirement, but even if you stay in CA, given th...
by FiveK
Mon Jan 15, 2018 8:44 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: IRS announces new withholding tables for 2018

cherijoh wrote:
Mon Jan 15, 2018 8:04 pm
The draft version in your link says the draft is as of August 2017 so I don't think it takes new tax law into account.
Yes, not to mention the Roman numeral part of this thread. :wink:
by FiveK
Mon Jan 15, 2018 6:19 pm
Forum: Investing - Help with Personal Investments
Topic: New to investing, am I on the right track?
Replies: 25
Views: 1716

Re: New to investing, am I on the right track?

...I would like to stick to vanguard funds as they are easy to keep track of and have lowest ER's. I was also planning on moving my taxable account from its current home that hasn't been helping and has limited funds to a vanguard account. Invested31, welcome to the forum. It seems you have determi...
by FiveK
Mon Jan 15, 2018 6:14 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Critique for my Father
Replies: 16
Views: 1925

Re: Retirement Critique for my Father

1. Regarding SS: ... It seems that the money will always fall in the 22% tax bracket regardless when it is withdrawn. 2. Regarding RMD: .... it seems like it will be taxed at 22% regardless of when it is taken. Am I missing anything? 3. Forgetting about taxes for a minute, is there any other things...
by FiveK
Mon Jan 15, 2018 5:28 pm
Forum: Investing - Help with Personal Investments
Topic: Changing Vanguard 3 Fund Portfolio to 2 fund portfolio?
Replies: 9
Views: 1228

Re: Changing Vanguard 3 Fund Portfolio to 2 fund portfolio?

It appears you have a defensible plan. Other asset allocations would also be defensible.

The more certain your pension amounts become, the more it may be favorable to use Roth for your 403bs if available.

Good luck!
by FiveK
Mon Jan 15, 2018 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: 2018 Withholding Tables
Replies: 88
Views: 10822

Re: IRS announces new withholding tables for 2018

Married filing joining and I make $180k, while my spouse makes $100k. We have 2 kids and should be eligible for the full child credit. We also plan to take the $24k standard deduction. What should we put in the W4? Seems if you each have "Single with 4 allowances" it works out about right. You coul...
by FiveK
Mon Jan 15, 2018 4:50 pm
Forum: Personal Finance (Not Investing)
Topic: [Should I do a Roth conversion?]
Replies: 9
Views: 916

Re: [Should I do a Roth conversion?]

What is the maximum I can (or should) convert into a ROTH yearly? I would have about 10 yrs before taking social security benefits; retirement age 60, get SS at age 70. Do I convert it all? And spread it out, for example, divide a my tIRAs and 401(k) by 10 and convert 10% yearly? I've also seen som...
by FiveK
Mon Jan 15, 2018 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security “Hump” and the new tax rates???
Replies: 10
Views: 2416

Re: Social Security “Hump” and the new tax rates???

Watty wrote:
Mon Jan 15, 2018 8:41 am
I tried it in Google sheets then Libreoffice and it was not showing any lines on the graph.
Thanks, the difference in programs probably explains it.