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by retiredjg
Sun May 31, 2020 10:41 am
Forum: Personal Investments
Topic: Forget ACA subsidies and Max out Roth conversions early?
Replies: 43
Views: 1768

Re: Forget ACA subsidies and Max out Roth conversions early?

Johnsson wrote:
Sun May 31, 2020 9:54 am
2. Ignore any income limits AND plan to spend an extra $20k each year for insurance (in addition to what ACA costs would be) until Medicare, and do unlimited conversions.
Unlimited conversions starting at age 65 could bring both IRMAA and NIIT into play. Do you know if I-ORP considers that?
by retiredjg
Sun May 31, 2020 9:46 am
Forum: Personal Investments
Topic: Leaving Employer; convert 401k balance to new 401k or roth IRA?
Replies: 11
Views: 617

Re: Leaving Employer; convert 401k balance to new 401k or roth IRA?

conlaw, just so you know, if you add information to your original post, notifications do not go out to people following your thread so the new information may get overlooked. If you want to do that to keep information together (a very nice thing. :happy ) add another new post at the bottom saying th...
by retiredjg
Sun May 31, 2020 8:11 am
Forum: Personal Investments
Topic: Forget ACA subsidies and Max out Roth conversions early?
Replies: 43
Views: 1768

Re: Forget ACA subsidies and Max out Roth conversions early?

Delaying conversions (according to I-Orp) will COST about $115,000 in extra taxes paid, before the age of 75. How much you pay in taxes is not the right thing to look at. How much money is left in your pocket is what to look at. Here's an example. Let's say you have $10k to invest into Roth IRA or ...
by retiredjg
Sun May 31, 2020 6:29 am
Forum: Personal Investments
Topic: advice, please: target date fund to index switch / traditional v roth allocations
Replies: 27
Views: 1128

Re: advice, please: target date fund to index switch / traditional v roth allocations

To answer your question, my current 401k holdings are 35% in Traditional and 5% in Roth, respectively. Careful here. Your 401k is a combination of traditional and Roth, but they must add up to 100% of the 401k. I think you mean you put 35% of your salary into traditional and 5% of your salary into ...
by retiredjg
Sat May 30, 2020 4:04 pm
Forum: Personal Consumer Issues
Topic: [What TV Show Have You Recently Watched?]
Replies: 1923
Views: 208085

Re: [What TV Show Have You Recently Watched?]

I really do not think it is up to us to judge what others post about. I do think it is up to us to be aware if someone is just here to try to sell something. That seems unlikely to me in this case, but let's assume that is correct....the way to handle that is to bring it to the attention of a modera...
by retiredjg
Sat May 30, 2020 1:07 pm
Forum: Personal Investments
Topic: Forget ACA subsidies and Max out Roth conversions early?
Replies: 43
Views: 1768

Re: Forget ACA subsidies and Max out Roth conversions early?

Things that will get in way include -taxes going up in 2026 as they are currently scheduled to do -the NITT if you convert too much in a year -IRMAA costs starting with your income at age 63 (not 65) and realizing that IRMAA for two can cost several thousand dollars a year if your income is high en...
by retiredjg
Sat May 30, 2020 12:51 pm
Forum: Personal Investments
Topic: Mega Backdoor Roth IRA - Minimizing Tax
Replies: 8
Views: 673

Re: Mega Backdoor Roth IRA - Minimizing Tax

As far as I can see, there is no reason to use a different allocation for the few minutes/hours the money is in the pre-tax account.
by retiredjg
Sat May 30, 2020 12:40 pm
Forum: Personal Investments
Topic: Leaving Employer; convert 401k balance to new 401k or roth IRA?
Replies: 11
Views: 617

Re: Leaving Employer; convert 401k balance to new 401k or roth IRA?

If your income is high enough to need the back door in order to contribute to Roth IRA, it should probably be left in a tax-deferred account unless there is something special about your situation. "Something special" might include a low income year or seeing that your tax bracket will go up a few no...
by retiredjg
Sat May 30, 2020 11:37 am
Forum: Personal Investments
Topic: Forget ACA subsidies and Max out Roth conversions early?
Replies: 43
Views: 1768

Re: Forget ACA subsidies and Max out Roth conversions early?

With current tax law, we would be only need to pay ~$190k in 25% taxes on the conversions (the rest at 15% or below) if we start early and ~$700k in 22 & 25% taxes if we convert starting at 65. Quite a difference, allowing us to recoup several years worth of the extra healthcare cost we'd incur by ...
by retiredjg
Sat May 30, 2020 10:46 am
Forum: Personal Consumer Issues
Topic: [What TV Show Have You Recently Watched?]
Replies: 1923
Views: 208085

Re: [What TV Show Have You Recently Watched?]

stoptothink wrote:
Sat May 30, 2020 9:50 am
Think it's pretty clear that "Heartland" isn't the cup of tea of many on here.
I think it is pretty clear that every show mentioned in this thread isn't the cup of tea of many on here. But most do suit many others just fine. Your comments are less than kind so why make them?
by retiredjg
Fri May 29, 2020 6:41 pm
Forum: Forum Issues and Administration
Topic: Political posts
Replies: 9
Views: 924

Re: Political posts

I don't recall any problems discussing taxes or tax policy. The posts that are moderated are usually about proposed tax changes. Discussion of proposed law (including taxes) is off limits.
by retiredjg
Fri May 29, 2020 4:20 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Overcontribution Questions
Replies: 8
Views: 340

Re: Roth IRA Overcontribution Questions

Thanks again guys this has been very informative. So if I understand it right, when I fill out the 8606 for my 2019 taxes, I would fill it out answering No for the fork to line 4 and jump to line 14 to declare the $6000 conversion. Then for 2020's taxes and form 8606, I would use 6000 as my basis f...
by retiredjg
Fri May 29, 2020 3:07 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA Overcontribution Questions
Replies: 8
Views: 340

Re: Roth IRA Overcontribution Questions

You cannot undo a conversion any more. So you have to stay with what you have.

It's not a problem - the shares (we hope) will go back up in value and it won't matter much in the end.
by retiredjg
Fri May 29, 2020 3:02 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

No, no, stop....wrong advice - I did not notice you were the original poster for this thread. You can ask anything you want. So sorry.
by retiredjg
Fri May 29, 2020 2:22 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

The link below states the following: “A third way to make a backdoor Roth contribution is by making an after-tax contribution to a 401(k) plan and then roll it over to a Roth IRA” Per my conversation with a Fidelity advisor today, the following apply: - My 401 plan allows after-tax contributions up...
by retiredjg
Fri May 29, 2020 1:40 pm
Forum: Personal Investments
Topic: Sell When Down to Avoid Taxes?
Replies: 10
Views: 1257

Re: Sell When Down to Avoid Taxes?

https://www.bogleheads.org/forum/viewtopic.php?p=5281187#p5277056 Here is a post from another thread that made me think of your situation. FoolMeOnce says "...Instead of waiting for those to rebound, I got the rebound in the total market fund I switched into". It made me wonder if those words might ...
by retiredjg
Fri May 29, 2020 1:13 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

I think Vanguard's Digital Advisor is very new. I'm not sure we have even seen an example of their portfolio(s). I'd be surprised if it is very different from how PAS invests people's money though. We'll see.
by retiredjg
Fri May 29, 2020 9:37 am
Forum: Personal Investments
Topic: Favorite initial investor Vanguard mutual index fund; VTSAX
Replies: 33
Views: 2130

Re: Favorite initial investor Vanguard mutual index fund; VTSAX

VTSAX - Vanguard Total Stock Index - is one of a number of very good choices. I like Vanguard products so it is one I would choose first if given choice. Lots of time there is no choice though - most often in a 403k/403b/SEP/SIMPLE IRA....you should use these plans first, even if there is no VTSAX a...
by retiredjg
Fri May 29, 2020 9:19 am
Forum: Personal Investments
Topic: Overpay for the home we love?
Replies: 62
Views: 4619

Re: Overpay for the home we love?

The landlord is willing to sell for 475 but isn’t willing to budge on the price. Point out that the landlord is saving a 6%ish real estate commission by selling directly to you? Have you decided to buy regardless of whether you can get this home? If yes, moving is easily worth $10k unless you plan ...
by retiredjg
Fri May 29, 2020 8:03 am
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

I don't use PAS but have read enough threads on the forum to observe that it's a good fit for the following situations: *Transitioning from a managed account (Ed Jones, Raymond James, etc) to low cost broker (Vanguard) *Providing guidance for widowed spouse with little interest in investing *Taking...
by retiredjg
Fri May 29, 2020 8:00 am
Forum: Personal Investments
Topic: [Is an Investment Policy Statement needed? How do I write one?]
Replies: 50
Views: 1779

Re: [Is an Investment Policy Statement needed? How do I write one?]

I’m afraid I’m really extremely math challenged...I still don’t understand. Is it possible to explain the 25% relative band in a different way? If a 50/50 AA ends up at 62.5/ 37.5 wouldn’t the absolute 5% band already have been hit ...what’s the point of having a relative 25% band? Good question. Y...
by retiredjg
Thu May 28, 2020 3:02 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

I'd like to post a caution about Vanguard's Personal Advisor Service. I used it last year for a portion of my money to see how it worked, just to see how it worked. This year I decided to transfer my cash out of VPAS. I was unable to do so without incurring a ~1% fee. (I sold over the phone because...
by retiredjg
Thu May 28, 2020 9:52 am
Forum: Personal Investments
Topic: Help rebalancing
Replies: 42
Views: 2103

Re: Help rebalancing

Uh, people suggested not to make any drastic moves before. Yes, someone did say something like that, but that was before you said it would take 5 years to get where you want to be. And I'm not the one who said that - my suggestion was to fix it. My suggestion still is fix it (or at least take a big...
by retiredjg
Thu May 28, 2020 8:58 am
Forum: Personal Investments
Topic: advice, please: target date fund to index switch / traditional v roth allocations
Replies: 27
Views: 1128

Re: advice, please: target date fund to index switch / traditional v roth allocations

TDF v Index Switching 100% of current 401k holdings: From: FID Freedom 2050 (.65%) To: large cap (FXAIX: .015%), int'l (FSPSX: .035%), bond (VBTLX: .05%) This is a good decision. Equity/bond ratio in current market climate , with anticipated downturn: 80/20, 90/10, something else? I suggest 80/20. ...
by retiredjg
Thu May 28, 2020 7:55 am
Forum: Personal Investments
Topic: If husband can do T-IRA, but acct says Roth, then...
Replies: 28
Views: 1295

Re: If husband can do T-IRA, but acct says Roth, then...

From reading through everything, this is how it seems to me. 1. You are not in the 24% tax bracket. You are in the 22% tax bracket. 2. Based on an annual income of about $187k, you are each eligible to make a $6k contribution to Roth IRA. You do not need the "back door" to make contributions to Roth...
by retiredjg
Thu May 28, 2020 7:36 am
Forum: Personal Investments
Topic: If husband can do T-IRA, but acct says Roth, then...
Replies: 28
Views: 1295

Re: If husband can do T-IRA, but acct says Roth, then...

Barrie, I just read through all of your old posts. :happy Over the past few months, you have asked a bunch of individual questions but each time you have not really given enough information for people to help you. When people don't have the big picture, the answers they give you are not very reliabl...
by retiredjg
Thu May 28, 2020 6:41 am
Forum: Personal Investments
Topic: Help rebalancing
Replies: 42
Views: 2103

Re: Help rebalancing

Either you portfolio is what you want or it is way out of whack. You have already said it is not what you want. If it is not what you want, you should fix it. The fact that the mid and small caps are recovering faster makes your problem worse instead of better. If your portfolio is not what you want...
by retiredjg
Thu May 28, 2020 5:49 am
Forum: Personal Investments
Topic: Tax-Exempt Bonds for Lower Tax Brackets
Replies: 21
Views: 1665

Re: Tax-Exempt Bonds for Lower Tax Brackets

My understanding is that the taxable bond will return more than a tax-exempt bond more than half of the time for a person in the 22% tax bracket. The only reason to switch to the tax exempt bond now is to take advantage of a temporary reversal. When things go back to how they are most of the time, y...
by retiredjg
Wed May 27, 2020 6:45 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

It is also possible the salesman believes everything he is telling you. It is what he was trained to think.

That does not make this a good product for you. But it does not make him a liar either. There is a middle ground.
by retiredjg
Wed May 27, 2020 4:01 pm
Forum: Investing - Theory, News & General
Topic: 40m Unemployment Claims - I Don’t Understand Why Markets Seem To Not Care
Replies: 86
Views: 9568

Re: 40m Unemployment Claims - I Don’t Understand Why Markets Seem To Not Care

Everyone says stock markets are forward looking, I understand. But with 40 million unemployment claims over 2 months, why would the markets shrug that off. No economy in history has replaced 40m jobs even in a year’s time. What am I missing?! You are looking for logic. It's human nature. You want t...
by retiredjg
Wed May 27, 2020 12:26 pm
Forum: Personal Investments
Topic: If husband can do T-IRA, but acct says Roth, then...
Replies: 28
Views: 1295

Re: If husband can do T-IRA, but acct says Roth, then...

There may be some misunderstandings going on here. Why do you think he can contribute to Roth IRA and you cannot?
by retiredjg
Wed May 27, 2020 12:18 pm
Forum: Personal Investments
Topic: Tax exempt munis vs Treasury or both in Taxable
Replies: 8
Views: 856

Re: Tax exempt munis vs Treasury or both in Taxable

I think your best choice is to replace the target funds with bonds so that you can hold a smaller allocation of bonds in the taxable account. It appears you are aware of this model and would prefer not to do that. In a high tax bracket, tax-exempt bonds are the obvious choice in taxable. And I Bonds...
by retiredjg
Wed May 27, 2020 11:30 am
Forum: Personal Investments
Topic: Timing 401k Rollover from ADP to Vanguard
Replies: 7
Views: 264

Re: Timing 401k Rollover from ADP to Vanguard

Maybe this is not the best time to do a rollover. Can it wait?
by retiredjg
Wed May 27, 2020 7:29 am
Forum: Investing - Theory, News & General
Topic: 40m Unemployment Claims - I Don’t Understand Why Markets Seem To Not Care
Replies: 86
Views: 9568

Re: 40m Unemployment Claims - I Don’t Understand Why Markets Seem To Not Care

Everyone says stock markets are forward looking, I understand. But with 40 million unemployment claims over 2 months, why would the markets shrug that off. No economy in history has replaced 40m jobs even in a year’s time. What am I missing?! You are looking for logic. It's human nature. You want t...
by retiredjg
Wed May 27, 2020 7:04 am
Forum: Personal Investments
Topic: Tax-Exempt Bonds for Lower Tax Brackets
Replies: 21
Views: 1665

Re: Tax-Exempt Bonds for Lower Tax Brackets

If you intend to switch back and forth between the total bond and a tax-exempt bond depending on the yields, remember that selling a bond fund can result in capital gains taxes which might wipe out the small benefit you have gotten.
by retiredjg
Tue May 26, 2020 4:36 pm
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

I can’t find an option to attach the spreadsheet I downloaded from LPL... The format is awful when copying and pasting the content from the site... Just use the edit button on the post that has all your info and add that information to each fund. You will need to send out a new post letting people ...
by retiredjg
Tue May 26, 2020 4:18 pm
Forum: Personal Investments
Topic: One Fidelity Fund Only - Possible?
Replies: 24
Views: 2175

Re: One Fidelity Fund Only - Possible?

My plan is to rollover the $350K TSP into a Traditional IRA at Vanguard or Fidelity and then transfer portions to a Roth IRA - along with paying the required income taxes. Good. Better than what I thought you meant from the other post. Any of the funds you are considering are fine in traditional IR...
by retiredjg
Tue May 26, 2020 4:04 pm
Forum: Investing - Theory, News & General
Topic: Examples of why NOT to hold individual stocks
Replies: 93
Views: 7363

Re: Examples of why NOT to hold individual stocks

Original poster here. CyclingDuo, you are bringing up a very good point. Thank you for that. :happy People who actually study individual stocks might have/would have/should have known to not buy or that they should sell their Hertz stock. I don't disagree. But that is not actually the audience I had...
by retiredjg
Tue May 26, 2020 10:48 am
Forum: Personal Investments
Topic: [Is an Investment Policy Statement needed? How do I write one?]
Replies: 50
Views: 1779

Re: [Is an Investment Policy Statement needed? How do I write one?]

Write the IPS that you need. There are people who need the detail that is shown in the Wiki. There are people who need much less. Mine is a few sentences. For people who are prone to tinkering, more detail is probably a good thing. When the urge to tinker comes along, the IPS can be used to bring yo...
by retiredjg
Tue May 26, 2020 10:43 am
Forum: Personal Investments
Topic: One Fidelity Fund Only - Possible?
Replies: 24
Views: 2175

Re: One Fidelity Fund Only - Possible?

You said Roth account...you know that will probably require some taxes, right?
by retiredjg
Tue May 26, 2020 10:41 am
Forum: Personal Investments
Topic: One Fidelity Fund Only - Possible?
Replies: 24
Views: 2175

Re: One Fidelity Fund Only - Possible?

Since this money is going into a Roth IRA, you can scratch the Tax Managed Balanced fund - it is designed for a taxable account. Wellington and Wellesley are both actively managed funds with long histories of good management and return. The biggest difference between them is that Wellington is moder...
by retiredjg
Tue May 26, 2020 9:11 am
Forum: Personal Investments
Topic: Sell When Down to Avoid Taxes?
Replies: 10
Views: 1257

Re: Sell When Down to Avoid Taxes?

You want to sell them. You have not sold them because of cap gains tax. You have a way of avoiding the cap gains tax.

Isn't the obvious answer to sell and use your losses to get what you want?

No it is not a losing strategy to sell low when you can turn around and use that money to buy low.
by retiredjg
Tue May 26, 2020 8:47 am
Forum: Investing - Theory, News & General
Topic: How can I do the calculations?
Replies: 11
Views: 564

Re: How can I do the calculations?

How can I figure out the difference between long term and short term? Will American Funds tell me how much of it is short term and how much is long term? Do I need help from a tax pro? Your account should specify if something is a short term or long term gain or loss. Look for "unrealized gains and...
by retiredjg
Tue May 26, 2020 8:46 am
Forum: Investing - Theory, News & General
Topic: How can I do the calculations?
Replies: 11
Views: 564

Re: How can I do the calculations?

I hold the following funds at American Funds. ABALX American Funds American Balanced Fund Class A - exp ratio 0.59%, 12b-1 fee 0.25%, mgt fee 0.22%...etc. I think you may be thinking these separate costs add together, but they do not. The expense ratio is the total cost of the fund. Is it possible ...
by retiredjg
Tue May 26, 2020 7:52 am
Forum: Investing - Theory, News & General
Topic: How can I do the calculations?
Replies: 11
Views: 564

Re: How can I do the calculations?

How can I do the calculations on this decision? :confused I have $72,000 in a taxable account at American Funds and the mutual funds are charging about 1% expense ratio. About ten years ago I made the mistake of investing in these front load mutual funds before I learned about index funds. If I tak...
by retiredjg
Tue May 26, 2020 6:52 am
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

Here is a simple portfolio suggestion just to show you how it could be set up. Taxable Total Stock Index Total International Index His 401k with Fidelity (as of 04/30/2020) Fidelity 500 Index Fund (FXAIX) (0.015%) VANG TOT INTL STK AD (VTIAX) His Rollover IRA 500 index Bond fund (you really need som...
by retiredjg
Tue May 26, 2020 6:43 am
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

There is no particular indication that you "need" the services of Vanguard's PAS. You can likely do this yourself if you want to. However, you might want to use PAS to help you set up the portfolio and show you how to more forward. Then discontinue their service when you feel ready. The only hesitat...
by retiredjg
Tue May 26, 2020 6:14 am
Forum: Personal Investments
Topic: Is Vanguard's Personal Advisor Service Worth It???
Replies: 127
Views: 8749

Re: Is Vanguard's Personal Advisor Service Worth It???

Per my current advisor, his 1.25% fee is primarily for financial advice as opposed to portfolio management... At 45, I’m considering the following options If I decide to do it myself: VTWAX (100%, E/R: 0.1%) VTSAX (80%, E/R: 0.04%), VTIAX (20%, E/R: 0.11%) Now that we've seen what you have, this id...
by retiredjg
Mon May 25, 2020 5:04 pm
Forum: Personal Investments
Topic: Taxable account has higher returns?
Replies: 18
Views: 1516

Re: Taxable account has higher returns?

No, it does not make sense. If you can invest $120k per year, some should go into a tax-deferred account. Some should go into Roth IRA if you are willing and able to use the backdoor. Some should go into HSA if you have one available. The rest should go into a taxable account. You don't get bigger r...