Search found 35628 matches

by retiredjg
Sat Apr 20, 2019 3:10 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

Sorry for the confusion - Yes almost all "qualified". Looking at 2018 tax returns 3a Qualified dividends $297K 3b Ordinary dividends $305K I believe you have misinterpreted line 3 on your tax form. You have $297k that is taxed as qualified dividends (at long term cap gains rates) and an additional ...
by retiredjg
Sat Apr 20, 2019 2:27 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

Sorry for the confusion - Yes almost all "qualified". Looking at 2018 tax returns 3a Qualified dividends $297K 3b Ordinary dividends $305K I believe you have misinterpreted line 3 on your tax form. You have $297k that is taxed as qualified dividends (at long term cap gains rates) and an additional ...
by retiredjg
Sat Apr 20, 2019 1:54 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

(Is the thought process on the $160,724 because it is the $200,000 NIIT threshold - the $39,374 threshold where QDiv start being taxed at 15%?) No, it is because $160,725 is where the next tax bracket (32%) starts. I had not noticed the other relationship. Seems unlikely to be a coincidence, doesn'...
by retiredjg
Sat Apr 20, 2019 12:49 pm
Forum: Personal Investments
Topic: International fund in trad IRA
Replies: 6
Views: 243

Re: International fund in trad IRA

International index funds can be held in any type of account including a traditional IRA.

It's not possible to answer your second question with so little information. It would depend on the whole picture and what you are trying to accomplish.
by retiredjg
Sat Apr 20, 2019 12:44 pm
Forum: Personal Investments
Topic: Roth > 457? And investing at Chase?
Replies: 4
Views: 312

Re: Roth > 457? And investing at Chase?

1. I am a firefighter here in Arizona, and have a pension in addition to a 457 Deferred Compensation plan. I just reached 10 years, and am fully vested in the pension. To this point, I have been putting $250 per check into the 457 plan. The more I am reading in "The Bogleheads' Guide to Investing,"...
by retiredjg
Sat Apr 20, 2019 12:33 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

cas, your "shadow" bracket point has caused me to think about another approach. Just thinking out loud here. What if Shaneman contributes $160,724 to charity in 2019 (which would be fully deductible) and Shaneman also converts $160,724 to Roth IRA? There would be $0 income subject to ordinary income...
by retiredjg
Sat Apr 20, 2019 12:08 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

With that big chunk of (assuming qualified?) dividends, the 3.8% NIIT gets added on every time a Roth conversion dollar is added, so the 22% and 24% nominal brackets become 25.8% and 27.8%. I was speaking of them separately in my post, but I agree. Your way is easier to understand. It also points t...
by retiredjg
Sat Apr 20, 2019 10:30 am
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

Why would I want a plan that requires limiting my return. I can think of a few reasons. However, only Shaneman's goals matter here and we have no idea what they are. I would rather get the funds into ROTH ASAP so they can be in stocks getting 5.5% return. You would pay a lot more to get there, but ...
by retiredjg
Sat Apr 20, 2019 9:47 am
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

I have to admit I have not fully figured this out. Some thoughts about your comments. So basically you have about 15 years to ROTH convert $4.46 million. With no growth, that would require about $297K conversion per year. With growth, you would have to convert more than that. I don't think there is ...
by retiredjg
Sat Apr 20, 2019 9:06 am
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

It appears you have about $4.5 million (rounded for simplicity) in tax-deferred accounts. I'm guessing you have about $1.5 million in a taxable account to generate the $300k in dividends. I don't think this changes your analysis, but $1.5 million x approx 2% dividend yield generates $30,000 in divi...
by retiredjg
Sat Apr 20, 2019 8:27 am
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

Ok. Thanks for the update. It appears you have about $4.5 million (rounded for simplicity) in tax-deferred accounts. I'm guessing you have about $15 million (?) in a taxable account to generate the $300k in dividends. Please clarify about the dividends - you have called them "ordinary" in a couple o...
by retiredjg
Fri Apr 19, 2019 4:11 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

retiredjg - How much of your traditional IRA is composed of non-deductible contributions? Everything from 457, tIRA, SEP, DBP, Solo401(k), PSP are deductible contributions. I never made any non-deductible contributions and never could do a Roth since my income was always too high I find it hard to ...
by retiredjg
Fri Apr 19, 2019 3:44 pm
Forum: Personal Investments
Topic: Limit on Roth Conversions per year with a Backdoor?
Replies: 15
Views: 648

Re: Limit on Roth Conversions per year with a Backdoor?

Thank you for the replies so far. For some reason, I was under the impression I’d only be on the tax hook for any gains (cost basis) during the conversion - so the entire account balance of $60k would appear as normal income during tax time? I think your confusion may be here. When talking about an...
by retiredjg
Fri Apr 19, 2019 3:30 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

About what ball park will your living expenses be? Any dependents?
by retiredjg
Fri Apr 19, 2019 3:27 pm
Forum: Personal Investments
Topic: Should I start doing Roth Conversions and if so
Replies: 43
Views: 2036

Re: Should I start doing Roth Conversions and if so

How much of your traditional IRA is composed of non-deductible contributions?
by retiredjg
Thu Apr 18, 2019 4:15 pm
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

Anabel, as I understand it, you and your husband currently make too much money to contribute directly to Roth IRA. You do not have any other IRAs (except Roth) so it is OK for you to use the back door as long as you can figure out the paperwork. Your husband does have an IRA although I don't think w...
by retiredjg
Thu Apr 18, 2019 3:44 pm
Forum: Personal Investments
Topic: next dollar of savings
Replies: 33
Views: 2565

Re: next dollar of savings

Like Spirit Rider mentioned, there is no indication yet that you are eligible for the after-tax contributions that everybody is talking about. You need to find that out before making plans. :D
by retiredjg
Thu Apr 18, 2019 8:01 am
Forum: Personal Investments
Topic: Roth IRA Withdrawal - Penalized or Not??
Replies: 7
Views: 508

Re: Roth IRA Withdrawal - Penalized or Not??

1) Is the statement above accurate? Yes. 2) If the answer to question #1 is yes, how can I determine the amount contributed to the Roth IRA? Your own records or best guess....until she is 59.5. After that, it does not matter. 3) What IRS form/schedule could inform me on the required information to ...
by retiredjg
Tue Apr 16, 2019 9:30 pm
Forum: Personal Investments
Topic: Help with best Merrill Edge bond fund or low risk qualified dividends
Replies: 6
Views: 400

Re: Help with tax on interest vs qualified dividends and best Merrill Edge bond fund

I don't believe that dividends from bond funds can be qualified. Dividends from bond funds are taxed like interest income.

Qualified dividends come from stocks/stock funds.
by retiredjg
Tue Apr 16, 2019 3:06 pm
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

Hi, Thank you. One more question. My husband has a TIRA (He did take the tax deductible when he put money into it in the past.) and has no idea of the basis (He didn't keep track.) so he is going to leave it alone and pay tax when he has to take the distribution several years later. If he wants to ...
by retiredjg
Sun Apr 14, 2019 7:17 am
Forum: Personal Investments
Topic: whereto put investments -IRA, Roth, brokerage account, 401K?
Replies: 4
Views: 513

Re: whereto put investments -IRA, Roth, brokerage account, 401K?

Financial Engines recently advised to turn over investments in my Roth IRA (which contains about 10% of my portfolio's value) to mostly bonds and I'm not sure the advise is correct? Any thoughts? It seems an odd suggestion to me unless Financial Engines was really just suggesting that you increase ...
by retiredjg
Sun Apr 14, 2019 7:01 am
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

annabel wrote:
Sat Apr 13, 2019 11:21 am
So if I let the new $7000 sit too long in TIRA before I move it to Roth IRA and end up with some earnings then I will need to pay tax on the earnings. Correct? Therefore I should not let it stay in TIRA too long.
Correct.
by retiredjg
Sat Apr 13, 2019 9:05 am
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

annabel wrote:
Fri Apr 12, 2019 10:50 am
Because it is not deductible?
Yes. Your income is too high to deduct it from your taxable income, so it has already been taxed. No need to tax it again.
by retiredjg
Sat Apr 13, 2019 9:02 am
Forum: Personal Investments
Topic: Investing across multiple accounts
Replies: 3
Views: 468

Re: Investing across multiple accounts

It is quite common for new investors to strive for precision. It is simply not necessary at all. Add money. Have a reasonable stock to bond ratio. The rest is detail.

We spend about 95% of our time here discussing the (mostly unimportant) details. :D Always keep that in mind.
by retiredjg
Fri Apr 12, 2019 5:59 am
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

Hi, I just used TurboTax for the IRA section. (I guess I forgot about the 2018 re-characterization when I was working on the tax last month. So I just skipped that whole IRA section.) I hope I did it right today. Right now the form 8606 shows line 1 = 1625 (round up from 1,624.98) line 2 = 6500 lin...
by retiredjg
Thu Apr 11, 2019 6:04 pm
Forum: Investing - Theory, News & General
Topic: Thrift Savings Plan expenses rising
Replies: 50
Views: 4014

Re: Thrift Savings Plan expenses rising

It's unfortunate, but I'm looking forward to having flexible withdrawal options. :happy
by retiredjg
Thu Apr 11, 2019 3:43 pm
Forum: Personal Investments
Topic: Help me make the most of a bad 401K!
Replies: 17
Views: 1124

Re: Help me make the most of a bad 401K!

Roth IRA eligibility - We are both eligible for 2018. Our accountant confirmed that today. Great catch to everyone who mentioned that. We're making a contribution for my wife today. If you are mailing a check, but sure it actually gets received and applied to 2018 instead of 2019. Possibility of ch...
by retiredjg
Thu Apr 11, 2019 7:27 am
Forum: Personal Finance (Not Investing)
Topic: What counts against the $56000 defined contribution limit?
Replies: 14
Views: 1642

Re: What counts against the $56000 defined contribution limit?

Contributing to the after-tax account and then having it called back due to HCE issues is a not anybody's favorite, but it is a straightforward fix. However, since Roth conversions can no longer be re-characterized (or "un-done"), the automatic daily Roth conversion could get messy. I feel sure your...
by retiredjg
Thu Apr 11, 2019 7:11 am
Forum: Personal Finance (Not Investing)
Topic: [Do I owe tax on Traditional to Roth IRA conversion?]
Replies: 12
Views: 1237

Re: [Do I owe tax on Traditional to Roth IRA conversion?]

there shouldnt be any ambiguity in what was originally stated but i know confusion happens even when things are stated in simple terms. To me, the ambiguity in what was originally stated has to do with saying you "transferred $5,500 to a new traditional IRA". It is ambiguous because we don't know w...
by retiredjg
Thu Apr 11, 2019 6:47 am
Forum: Personal Investments
Topic: SIMPLE IRA, what to do
Replies: 6
Views: 413

Re: SIMPLE IRA, what to do

Yes. That sounds right.
by retiredjg
Wed Apr 10, 2019 8:34 pm
Forum: Personal Finance (Not Investing)
Topic: TurboTax not handling after tax 401K conversion?
Replies: 2
Views: 245

Re: TurboTax not handling after tax 401K conversion?

Glad to hear it worked out. I was thinking of suggesting the "override" approach. You know the money is taxable....unless there is something going on you have not noticed yet.
by retiredjg
Wed Apr 10, 2019 8:29 pm
Forum: Personal Investments
Topic: slime's portfolio: review + advice request
Replies: 14
Views: 981

Re: slime's portfolio: review + advice request

slime_but_slime wrote:
Wed Apr 10, 2019 7:06 pm
I'm no longer eligible to contribute to the TSP anymore as I don't work for the government. If I do become a government worker again, I'll be sure to look at this as an option!
You can roll things into the TSP even after you have separated from federal employment.
by retiredjg
Wed Apr 10, 2019 6:26 pm
Forum: Personal Investments
Topic: With reduced contributions due to MAGI, would Roth or Traditional be better in our case?
Replies: 2
Views: 179

Re: With reduced contributions due to MAGI, would Roth or Traditional be better in our case?

Welcome to the forum. For 2018, I'd choose Option 1 - the reduced contribution. This will not require an amendment of your 2018 taxes. If you have more money to save, put it in a taxable account. Then start learning about "back door Roth IRA contributions" for next year. A lot of people mess this up...
by retiredjg
Wed Apr 10, 2019 5:58 pm
Forum: Personal Investments
Topic: TSP and IRA questions.
Replies: 8
Views: 601

Re: TSP and IRA questions.

Is it correct to understand that you have no Forms 8606 from the earlier years when you did non-deductible contributions? Another way to ask....when you pro-rated these conversions in the last couple of years, is it correct to think you started with no basis in the IRA from previous non-deductible c...
by retiredjg
Wed Apr 10, 2019 5:50 pm
Forum: Personal Investments
Topic: TSP and IRA questions.
Replies: 8
Views: 601

Re: TSP and IRA questions.

I've only performed the Traditional to Roth IRA conversions in the last couple of years, and I did report them on my tax returns for those years. So yes, I did pay taxes on these Roth conversions. That is a major reason why I'm trying to get "rid" of my traditional IRA by either combining it with m...
by retiredjg
Wed Apr 10, 2019 5:47 pm
Forum: Personal Investments
Topic: SIMPLE IRA, what to do
Replies: 6
Views: 413

Re: SIMPLE IRA, what to do

A SIMPLE IRA can be rolled into a 403b but only after it has been open for 2 years. If the 2 years has not passed, you have to wait. Same with Roth IRA. If the SIMPLE will continue to exist, she should NOT use the back door unless she wants it to be pro-rated. Her SIMPLE does not affect you, only her.
by retiredjg
Wed Apr 10, 2019 4:43 pm
Forum: Personal Investments
Topic: Investing across multiple accounts
Replies: 3
Views: 468

Re: Investing across multiple accounts

Question A: When rebalancing this year I noticed that a large portion of our ROTH's had International funds(i would allocate these to taxable accounts except we don't hold any). I then thought perhaps this was not the wisest decision and maybe I should have a more balanced look to our ROTH's since ...
by retiredjg
Wed Apr 10, 2019 3:33 pm
Forum: Personal Investments
Topic: Help me make the most of a bad 401K!
Replies: 17
Views: 1124

Re: Help me make the most of a bad 401K!

Thanks to everyone so far! My wife hasn't been eligible for a Roth IRA for the past couple of years, but it's possible she is again now that we are married and filing jointly. We just had our taxes done a few days ago and I confirmed with the accountant that it wouldn't affect my ability to contrib...
by retiredjg
Wed Apr 10, 2019 3:08 pm
Forum: Personal Investments
Topic: Help me make the most of a bad 401K!
Replies: 17
Views: 1124

Re: Help me make the most of a bad 401K!

It looks like the best fund available there. I'd use it, especially with a match. Since you are married filing jointly, it does not makes sense that you can contribute to Roth IRA and She cannot contribute to Roth IRA. What's going on with that? You have a mix of target funds and individual funds. T...
by retiredjg
Wed Apr 10, 2019 1:44 pm
Forum: Personal Investments
Topic: TSP and IRA questions.
Replies: 8
Views: 601

Re: TSP and IRA questions.

I also have a traditional IRA with Vanguard that has both deductible and non-deductible contributions (all in 1 account). Unfortunately, I did not know about filing an IRS form 8606 over the years for the contributions, so the traditional IRA account is a mix of both types of contributions that I c...
by retiredjg
Wed Apr 10, 2019 1:20 pm
Forum: Personal Investments
Topic: Clean up of 100+ stocks in taxable
Replies: 32
Views: 2627

Re: Clean up of 100+ stocks in taxable

My question is: do I sell it all now and suck it up realizing the short term gains, or wait till they become LTG (in October)? Thanks! If you sell the short term gains now, you will pay at least 33% + 3.8% NIIT on them. Waiting will mean you only pay 15% + 3.8% NIIT on them unless you get pushed in...
by retiredjg
Wed Apr 10, 2019 10:17 am
Forum: Personal Investments
Topic: Back door Roth - Spousal Traditional IRA treated deductible?
Replies: 16
Views: 785

Re: Back door Roth - Spousal Traditional IRA treated deductible?

You are no longer allowed to re-characterize a Roth conversion.
by retiredjg
Wed Apr 10, 2019 8:10 am
Forum: Personal Investments
Topic: slime's portfolio: review + advice request
Replies: 14
Views: 981

Re: slime's portfolio: review + advice request

1. What are the recommendations for the liquid cash I currently have? Should this just go into my brokerage account or could it be utilized better? That depends on what it is for. If this is a house downpayment or your next car, put it in high yield savings or short term bonds or CD. If it is for r...
by retiredjg
Wed Apr 10, 2019 7:55 am
Forum: Personal Finance (Not Investing)
Topic: What counts against the $56000 defined contribution limit?
Replies: 14
Views: 1642

Re: What counts against the $56000 defined contribution limit?

So far, I know that it includes: (A) my pre-tax contributions (I will max at $19000 this year) (B) my employer's contributions ($5000 this year) (C) my after-tax contributions, which I haven't been making so far, but I'd now like to maximize (D) Forfeitures - in some plans, when people leave too soo...
by retiredjg
Tue Apr 09, 2019 6:12 pm
Forum: Investing - Theory, News & General
Topic: Fidelity rep confirms Zero funds are loss leaders (Jane Bryant Quinn)
Replies: 32
Views: 2986

Re: Fidelity rep confirms Zero funds are loss leaders (Jane Bryant Quinn)

How could it have been otherwise? As for making judgements, "loss leaders" are not bad in and of themselves. It's just a marketing maneuver. What is bad is that customers may be naive enough not to recognize a loss leader when they see it. For-profit companies do not offer free stuff without expecti...
by retiredjg
Tue Apr 09, 2019 5:55 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-tax and Post Tax Money in an IRA
Replies: 12
Views: 690

Re: Pre-tax and Post Tax Money in an IRA

Spirit Rider wrote:
Tue Apr 09, 2019 5:45 pm
The bond market is not very transparent. The spreads are quite high.
I guess you must mean individual bonds. Have not done that, only mutual funds, so I don't know what it means.

But if that is the problem, maybe the solution for this is to shift to mutual funds over time and then "fix this".
by retiredjg
Tue Apr 09, 2019 3:44 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-tax and Post Tax Money in an IRA
Replies: 12
Views: 690

Re: Pre-tax and Post Tax Money in an IRA

The money will then be moved to a 401K where it will stay for a few months till after I am finished with the conversion. Then I will let it sit there until after December 31 so that it will not be prorated with my Roth conversion (line 6 of Form 8606). In January of the next calendar year. ....I'll...
by retiredjg
Tue Apr 09, 2019 3:24 pm
Forum: Personal Investments
Topic: A separate traditional IRA acccount?
Replies: 45
Views: 2501

Re: A separate traditional IRA acccount?

You need to fill out some other lines as well. See if you can figure it out. Read the form carefully (and read the Form instructions for line 2). If you need help after reading it carefully, just ask.
by retiredjg
Tue Apr 09, 2019 7:39 am
Forum: Personal Investments
Topic: Back door Roth - Spousal Traditional IRA treated deductible?
Replies: 16
Views: 785

Re: Back door Roth - Spousal Traditional IRA treated deductible?

No better way. You either have to wait until you know or just do the back door whether you need it or not.

And there is really nothing to fix about her IRA being deducted and then converted. It all comes out the same.