Search found 5966 matches

by FiveK
Mon Jan 21, 2019 3:59 pm
Forum: Investing - Theory, News & General
Topic: Order in Which Accounts Types and Funds Types Get Roth "Converted"
Replies: 9
Views: 484

Re: Order in Which Accounts Types and Funds Types Get Roth "Converted"

Don't IRMAA tiers only affect those with very high income? I'm going to keep our MAGI low enough to receive lowest subsidy for ACA, at least that is the plan for now. You won't have to worry about IRMAA tiers for ~8 years, or two years before you start paying for Medicare. For anyone who is paying ...
by FiveK
Mon Jan 21, 2019 3:38 pm
Forum: Investing - Theory, News & General
Topic: Order in Which Accounts Types and Funds Types Get Roth "Converted"
Replies: 9
Views: 484

Re: Order in Which Accounts Types and Funds Types Get Roth "Converted"

I-ORP will (usually) solve when using the "no Roth conversions" option. I don't know why it won't solve when one limits Roth conversions to some X% tax bracket ceiling. As the I-ORP documentation notes, "Pick a ceiling that is too low for your income situation and ORP will cough back an infeasible ...
by FiveK
Mon Jan 21, 2019 2:52 pm
Forum: Investing - Help with Personal Investments
Topic: 401K and Roth Question
Replies: 9
Views: 776

Re: 401K and Roth Question

This is a Company 401k plan that allows both traditional and Roth contributions. The 401k contribution limit in 2019 for someone age 50+ is $19,000 + $6,000 = $25,000. This limit applies to the total contributions to traditional and Roth. One may contribute $25K to traditional and $0 to Roth, or $2...
by FiveK
Mon Jan 21, 2019 1:36 pm
Forum: Investing - Help with Personal Investments
Topic: 401K and Roth Question
Replies: 9
Views: 776

Re: 401K and Roth Question

I work for a company that has matching funds for 401 and Roth. Is there a limit i can put into the Roth? People 50 and over can contribute an additional $1,000 (the catch-up contribution did not change) for a total of $7,000. This is from fidelity net benefits, The Internal Revenue Service (IRS) li...
by FiveK
Mon Jan 21, 2019 1:19 pm
Forum: Investing - Theory, News & General
Topic: Order in Which Accounts Types and Funds Types Get Roth "Converted"
Replies: 9
Views: 484

Re: Order in Which Accounts Types and Funds Types Get Roth "Converted"

I-ORP will (usually) solve when using the "no Roth conversions" option. I don't know why it won't solve when one limits Roth conversions to some X% tax bracket ceiling. As the I-ORP documentation notes, "Pick a ceiling that is too low for your income situation and ORP will cough back an infeasible m...
by FiveK
Mon Jan 21, 2019 10:41 am
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1210

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

azianbob wrote:
Mon Jan 21, 2019 3:38 am
...plus planned interest rates rose to 2.45% from 2% so my AGI will now probably be around $205k.
There will be a 27.8% marginal rate on the amount of interest, dividends, and capital gains to the extent the tIRA withdrawal pushes the AGI above $250K.
by FiveK
Sun Jan 20, 2019 6:43 pm
Forum: Personal Finance (Not Investing)
Topic: Tax basis in TIRA after backdoor Roth conversion
Replies: 8
Views: 384

Re: Tax basis in TIRA after backdoor Roth conversion

Does that hold true even if I've been inaccurately entering my basis for several years? No. But I would think if you had inaccurately entered your basis for several years, all your back doors would be messes up and you would have noticed it right away. That's where that spreadsheet is useful: to se...
by FiveK
Sun Jan 20, 2019 6:40 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity Rewards Visa Card
Replies: 68
Views: 9310

Re: Fidelity Rewards Visa Card

Can someone explain further how to get the 2% rebate out of Fidelity? The specific steps. Right now it goes to my wife's Roth IRA which is only complicating our portfolio management, that's the only reason that account is at Fidelity. Thanks! One way: under Manage Money & Payments > Credit Cards, n...
by FiveK
Sun Jan 20, 2019 3:49 pm
Forum: Investing - Help with Personal Investments
Topic: IRA or ROTH IRA
Replies: 1
Views: 152

Re: IRA or ROTH IRA

If you have no pre-tax IRA balances, using the Backdoor Roth process is probably best.
by FiveK
Sun Jan 20, 2019 2:54 pm
Forum: Investing - Help with Personal Investments
Topic: Rolling over Trad IRA with basis into both 401k and Roth IRA
Replies: 1
Views: 83

Re: Rolling over Trad IRA with basis into both 401k and Roth IRA

PassiveChoices, welcome to the forum. You have a good plan. See below for slight modifications. To your questions: 1. No, not a problem. 2. Not correct. Rollovers and conversions have no impact on your contribution limit, so you should convert the full $6500 in step 3 of your "should do" list. 3. Pu...
by FiveK
Sun Jan 20, 2019 2:44 pm
Forum: Investing - Theory, News & General
Topic: Order in Which Accounts Types and Funds Types Get Roth "Converted"
Replies: 9
Views: 484

Re: Order in Which Accounts Types and Funds Types Get Roth "Converted"

Your allocations are reasonable. Probably not the best - but neither you nor anyone else will know what was "best" until after the fact, so "reasonable" should suffice. Might be worth putting your numbers into Optimal Retirement Planner - Extended Parameter Form to see what it suggests regarding con...
by FiveK
Sun Jan 20, 2019 1:58 pm
Forum: Personal Finance (Not Investing)
Topic: Ally FATCA Certification Seems Wrong
Replies: 3
Views: 613

Re: Ally FATCA Certification Seems Wrong

Now, when most people open an account, there simply is no code on the paper--which means that they are not exempt. Depends on how one defines the word "exempt". Taking the dictionary definition , "free or released from some liability or requirement to which others are subject," equating "not applyi...
by FiveK
Sun Jan 20, 2019 2:28 am
Forum: Personal Finance (Not Investing)
Topic: Ally FATCA Certification Seems Wrong
Replies: 3
Views: 613

Re: Ally FATCA Certification Seems Wrong

...they ask that I certify that "I am exempt from Foreign Account Tax Compliance Act reporting." Now, based on my understanding of FATCA, very few U.S. citizens are exempt from FATCA. From Summary of FATCA Reporting for U.S. Taxpayers | Internal Revenue Service : Reporting thresholds vary based on ...
by FiveK
Sat Jan 19, 2019 2:58 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1210

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

FiveK wrote:
Sat Jan 19, 2019 2:02 pm
Perhaps azianbob will provide the results of the marginal rate analysis mentioned several posts ago.
Spirit Rider wrote:
Sat Jan 19, 2019 2:36 pm
I was specifically referring to the additional Roth conversions possibly pushing them into the 32% tax bracket,
I believe we are saying pretty much the same thing. :happy
by FiveK
Sat Jan 19, 2019 2:09 pm
Forum: Personal Finance (Not Investing)
Topic: Tax basis in TIRA after backdoor Roth conversion
Replies: 8
Views: 384

Re: Tax basis in TIRA after backdoor Roth conversion

Hi all, First post after several years of osmosis on this site. I have an annual battle with Turbotax to account properly for my backdoor Roth IRA. Assuming that I contribute a nondeductible $5,500 to a TIRA in 2018 and convert it to a Roth in the same year after a gain of $100 (so $5,600 converted...
by FiveK
Sat Jan 19, 2019 2:02 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1210

Re: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?

Am I the only one who finds it hard to wrap their heads around the OP's basic premises:... I had the same thought, but I think the premise is they can do all this and come in in the 24% bracket, not the 32% bracket which of course would be nuts . Perhaps azianbob will provide the results of the mar...
by FiveK
Sat Jan 19, 2019 1:34 am
Forum: Investing - Help with Personal Investments
Topic: Savers Credit dilemma
Replies: 18
Views: 1375

Re: Savers Credit dilemma

A couple of things: 1. Doesn't matter whether a spouse has earned income or not: as long as the MFJ income fits within IRS boundaries, both spouses may make IRA contributions. 2. You might check the marginal tax rate you save on the entire contribution amount needed to reach the 20% credit, either b...
by FiveK
Sat Jan 19, 2019 12:43 am
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth & Pro-rata conversion rule - Strategy question
Replies: 3
Views: 362

Re: Backdoor Roth & Pro-rata conversion rule - Strategy question

Is this correct? I might as well use the annual capacity in non-deductible IRA as I wait for my lending club portfolio to run off, right? Am I missing anything here with my thought process? Yes. Yes. No. Well planned! BTW, assume I am in highest federal bracket for the next 20 years. 2nd question -...
by FiveK
Thu Jan 17, 2019 11:26 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion
Replies: 36
Views: 2933

Re: Roth conversion

Not necessarily. Even though you exceed MAGI the year you turn 63 (or 64), it’s easy to file a successful IRMAA appeal if you expect your income will drop below MAGI the year you will turn 65 due to retirement or another SS life changing event. Look at SSA-44. Correct. Although, "stopped doing Roth...
by FiveK
Thu Jan 17, 2019 7:42 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion
Replies: 36
Views: 2933

Re: Roth conversion

So if I am understanding correctly, for health insurance, if I retire early (before 65), I should try to keep my AGI under $65,000 until I am 65 so I can still get the ACA credit, and then once I turn 65, keep my AGI under $170,000 so I pay the lowest Medicare premium possible? The spreadsheet you ...
by FiveK
Thu Jan 17, 2019 12:50 am
Forum: Investing - Theory, News & General
Topic: Single Income Family Max All Tax-Advantaged Space
Replies: 13
Views: 997

Re: Single Income Family Max All Tax-Advantaged Space

We most likely will do the 19k 401k, some variation of 12k IRAs, and max HSA this year. Didn’t use to max HSA but employer switched providers and now have investment options instead of a crappy 0.5% interest rate. Decision for us is on IRAs - we jump into the 12% bracket with 401k and standard dedu...
by FiveK
Thu Jan 17, 2019 12:41 am
Forum: Personal Finance (Not Investing)
Topic: Parents never paid non-resident state tax for rental property
Replies: 15
Views: 1932

Re: Parents never paid non-resident state tax for rental property

See Illinois Filing Requirements.

If they owe, they owe, and shouldn't "hope nobody notices." If the rental income is only $2K/yr, the taxes - if any - won't be huge.
by FiveK
Thu Jan 17, 2019 12:15 am
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth and Pro-Rata Rule
Replies: 7
Views: 485

Re: Backdoor Roth and Pro-Rata Rule

...which may be possible but it seems an aggressive default assumption Well said. I'm dealing with a similar issue. If I want to do backdoor Roth, I'll have to move several Rollover IRAs with not immaterial amounts into existing active 401k's. The fewer mouse clicks required for the IRA->401k, the ...
by FiveK
Wed Jan 16, 2019 11:14 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth and Pro-Rata Rule
Replies: 7
Views: 485

Re: Backdoor Roth and Pro-Rata Rule

azianbob wrote:
Wed Jan 16, 2019 9:25 pm
Yes technically if nothing else changes, there is no difference between traditional and Roth.
Unless you are maxing out your retirement accounts. See that section, and the entire wiki article, for details.
by FiveK
Wed Jan 16, 2019 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 31
Views: 1210

Re: Mega Roth Conversion and Backdoor Roth IRA in the same year possible?

As for the Roth, even with the added $150k, since I am married, we will come in under the $321,450 limit for 24% tax bracket (sadly). I think paying 24% one time.... Your marginal rate may be significantly higher than 24%. NIIT, additional Medicare, etc. may affect you. Consider putting your non-co...
by FiveK
Wed Jan 16, 2019 8:30 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor Roth and Pro-Rata Rule
Replies: 7
Views: 485

Re: Backdoor Roth and Pro-Rata Rule

https://www.physicianonfire.com/value-of-backdoor-roth/ He basically states it is worth about 50 bucks a year. That might lead one to believe that over ~20 years it would make ~$1K difference. But if one puts $6K/yr into Roth, earning 7%/yr, after 20 years one would have ~$246K spendable. That same...
by FiveK
Wed Jan 16, 2019 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: 37% marginal tax rate --> does Roth 401k make sense?
Replies: 33
Views: 2176

Re: 37% marginal tax rate --> does Roth 401k make sense?

Note that we're thinking about effective rate here, and not the future marginal rate, because that's the rate we'd be saving by going the tax-deferred route. The effective rate (i.e., total tax divided by total income) should play no part in your decision. As KlangFool indicated, it's marginal now ...
by FiveK
Wed Jan 16, 2019 3:43 pm
Forum: Personal Finance (Not Investing)
Topic: Tax prep software with direct input to forms rather than hand holding?
Replies: 12
Views: 966

Re: Tax prep software with direct input to forms rather than hand holding?

Thanks for the clarification. Entering W2 data directly into a return would be data entry, not calculated, right? Depends on the software and what is meant by "directly". E.g., the software might want W-2 info entered on a "W-2 screen" from which the software will add "all" W-2 box 1 entries for fo...
by FiveK
Wed Jan 16, 2019 3:31 am
Forum: Personal Finance (Not Investing)
Topic: Tax prep software with direct input to forms rather than hand holding?
Replies: 12
Views: 966

Re: Tax prep software with direct input to forms rather than hand holding?

I think all of the usual packages have a "form view" mode in which one can input numbers more or less directly. E.g., you might have to enter W-2 numbers into a W-2 form, from which the software carries W-2 box 1 to the 1040.
by FiveK
Tue Jan 15, 2019 10:44 pm
Forum: Investing - Help with Personal Investments
Topic: When to use Roth 401k
Replies: 22
Views: 1669

Re: When to use Roth 401k

...when it makes sense to put some or all of one's 401(k) deferrals into the Roth side of the account. When you expect your traditional accounts will have grown to the point that a 4%/yr (or other number of your choice) withdrawal rate in retirement, combined with other "unavoidable" (e.g., pension...
by FiveK
Tue Jan 15, 2019 10:06 pm
Forum: Investing - Help with Personal Investments
Topic: Roth v. Trad for retiring USAF colonel w/30 years active duty
Replies: 11
Views: 1027

Re: Roth v. Trad for retiring USAF colonel w/30 years active duty

Note that the effective rate, either now or in retirement, is irrelevant. What matters is the marginal tax rate you can save using traditional now, vs. the marginal rate you pay for withdrawals based on those contributions. What is your current marginal tax saving rate on traditional contributions? ...
by FiveK
Mon Jan 14, 2019 8:53 am
Forum: Investing - Help with Personal Investments
Topic: VTSMX in taxable and wanting to to Backdoor Roth?
Replies: 10
Views: 479

Re: VTSMX in taxable and wanting to to Backdoor Roth?

livesoft wrote:
Mon Jan 14, 2019 8:44 am
FiveK wrote:
Mon Jan 14, 2019 8:33 am
What one holds in a taxable account has no impact whatsoever on the Backdoor Roth process.
But what one sells for a loss in a taxable account might have an impact on the Backdoor Roth process.
Yes, both those statements are true.
by FiveK
Mon Jan 14, 2019 8:33 am
Forum: Investing - Help with Personal Investments
Topic: VTSMX in taxable and wanting to to Backdoor Roth?
Replies: 10
Views: 479

Re: VTSMX in taxable and wanting to to Backdoor Roth?

What one holds in a taxable account has no impact whatsoever on the Backdoor Roth process.
by FiveK
Mon Jan 14, 2019 8:30 am
Forum: Local Chapters and Bogleheads Community
Topic: Suggestions for the Wiki
Replies: 428
Views: 251443

Re: Roth IRA for kids.

CollegePrudens wrote:
Mon Jan 14, 2019 8:06 am
dratkinson, FiveK - any action on creating a "Roth IRA for Kids" page? If not (and I don't see one), I am willing to put one together from the links and threads linked to above. Let me know!
Have at it - thanks!
by FiveK
Mon Jan 14, 2019 3:54 am
Forum: Personal Finance (Not Investing)
Topic: variable tax-deferred contributions
Replies: 2
Views: 271

Re: variable tax-deferred contributions

1. Money in the taxable account is more flexible and useful when we are young. If you are planning to use some money in the short term (e.g., within a few years), that money should be "saved" and not "invested" - does that make sense? Otherwise, consider Investment Order for how you might prioritiz...
by FiveK
Mon Jan 14, 2019 3:49 am
Forum: Investing - Help with Personal Investments
Topic: Question on taxable accounts
Replies: 2
Views: 461

Re: Question on taxable accounts

Consider how Investment Order might apply to you.
by FiveK
Sat Jan 12, 2019 8:28 pm
Forum: Personal Finance (Not Investing)
Topic: 2017 State Tax Refunds Federally Taxable in 2018!!!
Replies: 16
Views: 2134

Re: 2017 State Tax Refunds Federally Taxable in 2018!!!

In the past, it was AMT all the way, so the net effect was that my state taxes paid were not deductible, but my refund was effectively not taxed (since that is excluded for AMT). And that remains true - it is last year's treatment of your state tax deduction for AMT purposes that determines this ye...
by FiveK
Sat Jan 12, 2019 7:12 pm
Forum: Personal Finance (Not Investing)
Topic: 2017 State Tax Refunds Federally Taxable in 2018!!!
Replies: 16
Views: 2134

Re: 2017 State Tax Refunds Federally Taxable in 2018!!!

High Technology wrote:
Sat Jan 12, 2019 8:41 am
This makes no sense whatsoever.
Correct. Probable user error. ;)

Take a second look, as suggested by several.
by FiveK
Sat Jan 12, 2019 7:04 pm
Forum: Personal Finance (Not Investing)
Topic: Estimated tax penalty exceptions [ACA premium underpayment penalty]
Replies: 24
Views: 1262

Re: Estimated tax penalty exceptions

I will forget about the 2017 (they need the money. However, I would like to avoid the penalty for tax year 2018 (if any). The one event that brought me over the PTC threshold was a mandatory stock gain due to a merger in November. I had sent a large check to IRS in December. The way it looks now I ...
by FiveK
Sat Jan 12, 2019 6:57 pm
Forum: Investing - Help with Personal Investments
Topic: American Funds (No Loads) vs Vanguard Index Funds
Replies: 30
Views: 2154

Re: American Funds (No Loads) vs Vanguard Index Funds

jmnbqb wrote:
Thu Jan 10, 2019 10:35 pm
My adviser (who is a fiduciary) ...

Am I missing something here? Thanks.
Bernie Madoff was subject to a fiduciary standard.
by FiveK
Sat Jan 12, 2019 6:49 pm
Forum: Investing - Help with Personal Investments
Topic: Can I Backdoor ROTH older Non Deductable tIRA
Replies: 12
Views: 554

Re: Can I Backdoor ROTH older Non Deductable tIRA

Can’t locate irs rules specific to this but it may be they do not spell this out clearly and the strategy is there for the taking for those who understand the rules. See Notice 2014-54 Allows After-Tax 401k Roth Conversions . Again, I’ve looked for this on the board but still have these questions. ...
by FiveK
Sat Jan 12, 2019 6:39 pm
Forum: Investing - Help with Personal Investments
Topic: Dip into taxable account to fund Roths and medical expenses?
Replies: 5
Views: 522

Re: Dip into taxable account to fund Roths and medical expenses?

1. - Anything wrong with dipping into it and funding both my Roth and Spousal Roth right now? 2. - Good idea to use some of the money in the 30k to pay medical expenses (about 2k needed)? We will keep contributing to our HSA fo tax benefits 3. - After the above is completed, can I think of the rest...
by FiveK
Sat Jan 12, 2019 2:11 pm
Forum: Investing - Help with Personal Investments
Topic: Trying to figure out what my Roth IRA contribution is for 2018
Replies: 8
Views: 737

Re: Trying to figure out what my Roth IRA contribution is for 2018

I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04. Given that, why are you seeking a Roth IRA instead of a traditional IRA? Or just preemptively conduct a backdoor Roth conversion (assuming there are no tax implications...
by FiveK
Sat Jan 12, 2019 3:35 am
Forum: Investing - Help with Personal Investments
Topic: Trying to figure out what my Roth IRA contribution is for 2018
Replies: 8
Views: 737

Re: Trying to figure out what my Roth IRA contribution is for 2018

Macro wrote:
Wed Jan 09, 2019 8:36 am
I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.
Given that, why are you seeking a Roth IRA instead of a traditional IRA?
by FiveK
Sat Jan 12, 2019 3:26 am
Forum: Investing - Theory, News & General
Topic: 403B with Roth Option
Replies: 10
Views: 409

Re: 403B with Roth Option

It isn't "should I pay tax on that $10k contribution today vs. tomorrow". It's also "what if that $10k grows to $30k tomorrow?" Would I rather pay tax today on $10k at my tax rate, or pay tax tomorrow on $30k at whatever rate might exist when I retire? Depends on the tax rates, not the amounts bein...
by FiveK
Sat Jan 12, 2019 3:21 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversion
Replies: 36
Views: 2933

Re: Roth conversion

are you doing "mega" Roth conversions, meaning not at the level of zero taxes or even the lowest tax bracket. Yes, using a spreadsheet with logic copied from the personal finance toolbox spreadsheet. This accounts for the various IRMAA and ACA cliffs noted previously, plus various other marginal ra...
by FiveK
Fri Jan 11, 2019 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: Some Roth 403b better early in career?
Replies: 33
Views: 1402

Re: Some Roth 403b better early in career?

need403bhelp wrote:
Fri Jan 11, 2019 6:00 pm
I realize this is a gamble, but I would like to take advantage of my Roth 403b space and what I believe are lower marginal tax rates under TJCA while they are both available.
Check back in ~20-30 years and let us know how it worked out. ;)

Good luck! :happy