Search found 53958 matches

by retiredjg
Wed Mar 27, 2024 11:23 am
Forum: Personal Finance (Not Investing)
Topic: Suggestions on handling disallowed Spousal Roth IRA contributions?
Replies: 3
Views: 261

Re: Suggestions on handling disallowed Spousal Roth IRA contributions?

Just received an email from our CPA as they work on our 2023 returns. For years we've done max Roth IRA contributions in January of each year. I've done 'backdoor' contributions via an otherwise empty tIRA after rolling my older tIRA into my employer 401k. For my non-working spouse we've just made straight Roth IRA contributions each year. But per the CPA note our 2023 AGI exceeds the income limits for eligibility for contribution to a Roth IRA via the spousal route. (For some reason I had it in my head that the AGI limit didn't apply to spousal account contributions) There are different limits for some things, but not this. Both of you are subject to the same limit Roth contributions. If you could not contribute directly to Roth IRA, then...
by retiredjg
Wed Mar 27, 2024 11:00 am
Forum: Personal Investments
Topic: Muni break-even tax rate
Replies: 14
Views: 1566

Re: Muni break-even tax rate

gerntz wrote: Wed Mar 27, 2024 10:40 am Besides break-even tax rate, munis keep your MAGI down. This is important if you're on Medicare as its rates have MAGI break points for higher premiums.
Munis might keep your MAGI for certain things down. Unfortunately, the MAGI for IRMAA is not one of them.

There are many different modified AGIs and each one is different.

https://www.bogleheads.org/wiki/Modifie ... oss_Income
by retiredjg
Wed Mar 27, 2024 10:57 am
Forum: Personal Investments
Topic: [Wait for new Dept. of Labor Financial Advisor Protections?]
Replies: 13
Views: 878

Re: [Wait for new Dept. of Labor Financial Avisor Protections?]

Frankly, I don't have a lot of hope that new regs will improve things. We've seen this before and while the intent of the protections was noble, the results were very disappointing. In short, a little while back, the "new fiduciary requirements" went into effect for a little while and companies just figured out a new way to charge people outrageous fees. The example that remains in my mind was for SIMPLE IRAs offered by a well known advisor company. Since they could no longer make commissions for funds sold in IRAs, they switched to having a 1.3% AUM model instead and very tight rules about what could be bought and not bought in the IRA. The customers did not benefit from the new regs at all. The result is that the fees didn't go ...
by retiredjg
Wed Mar 27, 2024 8:53 am
Forum: Personal Investments
Topic: TIAA 457b vs. Brokerage
Replies: 17
Views: 835

Re: TIAA 457b vs. Brokerage

tashnewbie wrote: Wed Mar 27, 2024 8:45 am
retiredjg wrote: Tue Mar 26, 2024 6:03 pm If you feel your estimate is reliable, I'd switch the TSP to Roth and stop using the 457 at all...at least to the point that you stay in the current 22% bracket. And re-evaluate every few years.
Would it be better for them to use Roth 457 instead of taxable? The tax drag would probably be at least 0.3% (15% LTCG and 2% estimated qualified dividends) which combined with the expense ratio comes close to the cost of the 457. I'm just trying to learn, not disagreeing with your advice.
Roth 457 would be great. For reasons I don't know, I was just assuming that was not available.
by retiredjg
Wed Mar 27, 2024 8:22 am
Forum: Personal Investments
Topic: First Taxable Account Investment - VTI or VTSAX?
Replies: 8
Views: 553

Re: First Taxable Account Investment - VTI or VTSAX?

Personal preference. They are the same stuff in different packages and the mechanism for buying and sell is somewhat different.

At Vanguard, you can hold either one but if you want to move your account to another brokerage, you would likely need to exchange the mutual fund form into the ETF form to avoid fees at the new brokerage. That is easily done when/if you want to do that.

My preference is mutual fund, but many people like ETFs better.
by retiredjg
Tue Mar 26, 2024 6:03 pm
Forum: Personal Investments
Topic: TIAA 457b vs. Brokerage
Replies: 17
Views: 835

Re: TIAA 457b vs. Brokerage

It looks like there are going to be two pensions and at least one SS income stream. I'm not sure you need to defer money into the 457 at this point. The retirement income could (not necessarily will) put you into a tax bracket similar to where you are now. So you could be deferring at 22% now and end up paying 25% later on after tax rates revert to 2017 levels. That would not make a lot of sense. What's your best guess on your tax bracket in retirement? Use today's numbers rather than guess about future numbers. Will your income likely go up much before retiring? Good point all around. At full retirement age (57 for me and 54 for her) we're estimating $170k or so in pensions with a COLA for life. So RMDs could definitely be brutal when we'...
by retiredjg
Tue Mar 26, 2024 5:53 pm
Forum: Investing - Theory, News & General
Topic: Never selling shares
Replies: 57
Views: 4369

Re: Never selling shares

I agree that dividends are not free money. They are more like a forced sale. But in that case, since it is forced, why not used that stream of money to finance retirement and not sell any shares? Nothing wrong with this at all. If one lives off the "total return" from a portfolio, that would mean using both dividends and capital gains (selling shares) for living expenses. If someone gets all they need from dividends, there is no need to sell shares. Again, it simply means having more money than needed. It is the same as being able to live on a low withdrawal rate. Well. it could mean something else and this is something Vanguard has warned us about. A person could set up a portfolio so slanted toward maximum dividend production t...
by retiredjg
Tue Mar 26, 2024 5:44 pm
Forum: Personal Investments
Topic: Rolling over 401k
Replies: 8
Views: 456

Re: Rolling over 401k

Welcome to the forum. :happy You have not told us much, but there is nothing in your post that indicates that you need a Deferred Fixed Annuity. A possible exception might be a MYGA which is a kind of deferred fixed annuity (also known as a CD annuity) that you could use in place of a bond fund. We don't know what type of annuity this advisor is suggesting, but you need to wary of the fact that advisors will sometimes sell people annuities that they do not need. The advisor gets a commission. That's one way they make a living. Why are you considering a change from what you have now? What problem are you trying to solve? Lacking further information, I don't see what an annuity would do for you that your Stable Value fund is not doing already.
by retiredjg
Tue Mar 26, 2024 5:27 pm
Forum: Personal Investments
Topic: Rolling into the TSP after military service?
Replies: 11
Views: 866

Re: Rolling into the TSP after military service?

Many plans do not accept rollovers after leaving employment. The TSP is an exception - they do accept rollovers of pre-tax money - even after separation from employment.
by retiredjg
Tue Mar 26, 2024 5:23 pm
Forum: Investing - Theory, News & General
Topic: Never selling shares
Replies: 57
Views: 4369

Re: Never selling shares

adave wrote: Tue Mar 26, 2024 5:00 pm Most people use the 4% rule and sell shares in retirement. But if one can build a stock portfolio that throws off enough money without hurting growth that much and you never have to sell shares, wouldn’t that be ideal?
You seem to think that the thrown off money is sort of free money...when in fact, it is a withdrawal...part of the 4%.

When people are living off their dividends, they are just able to live on a smaller withdrawal rate - maybe 2%ish - than other people who might need a 4% withdrawal rate.

What is "ideal" is not that they don't have to sell shares. It's that they have more money than they need.
by retiredjg
Tue Mar 26, 2024 4:52 pm
Forum: Personal Investments
Topic: TIAA 457b vs. Brokerage
Replies: 17
Views: 835

Re: TIAA 457b vs. Brokerage

It looks like there are going to be two pensions and at least one SS income stream. I'm not sure you need to defer money into the 457 at this point.

The retirement income could (not necessarily will) put you into a tax bracket similar to where you are now. So you could be deferring at 22% now and end up paying 25% later on after tax rates revert to 2017 levels. That would not make a lot of sense.

What's your best guess on your tax bracket in retirement? Use today's numbers rather than guess about future numbers.

Will your income likely go up much before retiring?
by retiredjg
Tue Mar 26, 2024 9:48 am
Forum: Personal Investments
Topic: Switch to Roth vs Traditional 403B
Replies: 8
Views: 403

Re: Switch to Roth vs Traditional 403B

If you are expecting a pension, Roth becomes more attractive, even at 24%.
by retiredjg
Tue Mar 26, 2024 9:05 am
Forum: Personal Investments
Topic: Backdoor Roth Ended up Taxable
Replies: 22
Views: 2547

Re: Backdoor Roth Ended up Taxable

Yes, that loss before the re-characterization is what caused those numbers. When a contribution is re-characterized, the associated gains or losses go along with the contribution into the new account.

This leaves each of you with some basis ("credit" for already taxed dollars) in the empty IRAs. If you would like to get rid of that, when you make your contributions this year, let the contributions grow before conversion to Roth. You get some "free growth" to make up for the losses you had earlier.

Glad it worked out for you. :happy
by retiredjg
Tue Mar 26, 2024 8:53 am
Forum: Personal Investments
Topic: Muni break-even tax rate
Replies: 14
Views: 1566

Re: Muni break-even tax rate

This is a question probably best answered by David Grabiner. But I believe his usual reply is the breakeven point for him is about 25% federal marginal rate.

The 45% mentioned in the article represents federal, state, local, and NIIT....but it still seems high to me. Very few people would need munis if that is correct.

Since you now need bonds in taxable, have you considered I Bonds? They are tax efficient but the amount you can buy each year is limited so it may not help much. Other than that, I guess I'd be thinking a short term treasury fund.
by retiredjg
Tue Mar 26, 2024 8:42 am
Forum: Personal Investments
Topic: Switch to Roth vs Traditional 403B
Replies: 8
Views: 403

Re: Switch to Roth vs Traditional 403B

I'm not sure I'd use Roth 403b in the 24% tax bracket. But if you are going to do this at some point, now is probably better than later when your tax rate is even higher than now.

The best of both worlds would be to continue with traditional now and retire earlier, giving you more years to convert traditional to Roth at lower rates. However, not everyone is interested in early retirement.
by retiredjg
Tue Mar 26, 2024 8:36 am
Forum: Personal Investments
Topic: Backdoor Roth IRA and pro-rata rule exposure fixing?
Replies: 1
Views: 170

Re: Backdoor Roth IRA and pro-rata rule exposure fixing?

It sounds like you have not used backdoor Roth in the past - this is the first year. If that is correct, there will be no pro-rating if the rollover IRA has been rolled into her 401k before the end of the year.

You could even send the $5k in pre-tax gains to the 401k if you want...but that involves 2 rollovers instead of just 1 and might not be worth the trouble.
by retiredjg
Tue Mar 26, 2024 8:21 am
Forum: Personal Investments
Topic: Backdoor Roth Ended up Taxable
Replies: 22
Views: 2547

Re: Backdoor Roth Ended up Taxable

I'd be interested in hearing how it works out. So I went through this weekend and followed the steps in the link you posted. The glaring difference was that I had it set to "I rolled over all this money to another traditional IRA or other retirement account" instead of setting it all converted to the Roth IRA. This fixed lines 16-18 on Form 8606. Thanks. Nice to know which question was the problem. Some of them are not as intuitive as one would hope. As a sanity check, as my numbers are slightly different than what you posted, could you please take a look at these? Sorry, I got off the rails by using $12,000 instead of $12,500. :( This is for my spouse's 8606, but it's the same with mine with the only difference being mine is $11...
by retiredjg
Mon Mar 25, 2024 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Turbo Tax - Cant enter Form 8606 for Backdoor Roth IRA
Replies: 13
Views: 731

Re: Turbo Tax - Cant enter Form 8606 for Backdoor Roth IRA

Do I just need to come up with my "own" 1099-R and report it in the income section of TT for 2023 contributions/covertions ? No. The contribution is reported on your TY2023 return, but the conversion isn't reported until your TY2024 return. Form 8606 is used for both years, just with different entries. I'm confused. we did both the contribution and conversion for 2023TY on March, 2024. No, you didn't. You did a contribution for 2023 but you did the conversion in 2024. There is no such thing as a conversion for a previous year. Then what do I need to report for 2023TY ? The 2023 contribution. or, Do I report both 2023 (6500) and 2024 contributions (7000) and coverstions in 2024 return ? You report the 2023 (6500) contribution in 2...
by retiredjg
Mon Mar 25, 2024 2:05 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

Correct.

Now that you have that part figured out...if you want, you can make a 2024 contribution any time you want and convert it to Roth in 2024 as well. All of that will be handled on next year's Form 8606.
by retiredjg
Mon Mar 25, 2024 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

Yes.

See if this tutorial helps you. It should be the right one even though you did not recharacterize.

https://thefinancebuff.com/backdoor-rot ... -year.html
by retiredjg
Mon Mar 25, 2024 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

Schwab does not provide a Form 8606. That is a tax form that you fill out when you do your taxes.

Now that we know the contribution was for 2023, you need to be sure to include this contribution (not the conversion) on your 2023 taxes. On Form 8606 lines 1,3 and 14.

How do you do your taxes?
by retiredjg
Mon Mar 25, 2024 1:07 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

schachte wrote: Mon Mar 25, 2024 12:59 pm So I guess some of the terminology is confusing me. I'm unable to contribute to a Roth IRA directly due to the income limit.
Yes, we understand that part.

The only thing I've done is put $6,500 into tIRA account...
You MUST know if this contribution was assigned to year 2023 or 2024. Look at your account online to see. If necessary, call them and ask.

If the contribution was for 2023, it is documented on your 2023 Form 8606. If the contribution was for 2024, you will document both the contribution and the conversion on your 2024 taxes a year from now on form 8606.
by retiredjg
Mon Mar 25, 2024 12:55 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

Some information that might help you understand. An IRA contribution is made for a certain year and it is documented on that tax year's tax return. If you make an IRA contribution between January 1 and tax day in April, it could be for the previous year (2023 in this case) or the current year (2024). Generally, you are asked which year the contribution is for. So the first thing you need to do is learn what year your contribution is attributed to. If it was for year 2023, you need to document that on your 2023 taxes (Form 8606, lines 1, 3, and 14). If you do a Roth conversion, that is attached to the year in which it is done . There is no "year for" like a contribution. So the conversion you did this year will be documented on you...
by retiredjg
Mon Mar 25, 2024 12:44 pm
Forum: Personal Finance (Not Investing)
Topic: Backdoor roth in 2024 for year 2023?
Replies: 17
Views: 566

Re: Backdoor roth in 2024 for year 2023?

A rollover? From where?
by retiredjg
Mon Mar 25, 2024 12:40 pm
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3317

Re: Bond choices in 401k

So it’s basically a very safe (very low risk) guaranteed return of roughly 3-4% now…would that be a fair characterization? Let's get back to this question. Bonds are safer than stocks, but that does not mean a bond fund cannot and will not lose money under certain conditions. As year 2022 demonstrated quite well, when interest rates go up, bond prices go down. People who did not know to expect this were shocked and pretty unhappy to see their bond funds losing value. And no, there is no guaranteed return for a bond fund. I'd call this bond fund about "medium safe". It is one of two bond funds that I use and I'm several years past retirement. Vanguard rates all of its mutual funds on a scale of 1 - 5 (most risky). Bond funds are a...
by retiredjg
Mon Mar 25, 2024 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Back Door Roth 401K AND Back Door Roth IRA
Replies: 13
Views: 789

Re: Mega Back Door Roth 401K AND Back Door Roth IRA

It can be done. A word of warning though. Trying to learn backdoor Roth from someone else is fraught with potential problems...even when the someone else is very familiar with the process (which you don't seem to be). There are numerous ways to mess this up. Secondly, this backdoor Roth maneuver would take two years to complete (contribution for 2023 taxes and conversion on 2024 taxes) so it is already a confusing task for a person's first time around. If your young family member wants to dive into this, s/he needs to get in there this week and start learning what it is all about and get it down without any assistance. If you try to tell family member how to do this I'd say there is at least a 95% chance it will get messed up in one way or ...
by retiredjg
Mon Mar 25, 2024 7:54 am
Forum: Personal Investments
Topic: Correctly Representing 2 Years of Roth Backdoor Conversions That Were Done At The Same Time in Form 8606
Replies: 7
Views: 426

Re: Correctly Representing 2 Years of Roth Backdoor Conversions That Were Done At The Same Time in Form 8060

Agree with terran. Your 2023 non-deductible contribution has not been entered. It would show up on line 1 and make the rest of the form like you expected.

The problem is not with year 2022. It is showing up correctly.
by retiredjg
Sun Mar 24, 2024 7:16 pm
Forum: Personal Investments
Topic: Portfolio Review in Retirement
Replies: 30
Views: 2729

Re: Portfolio Review in Retirement

Well, you are now. :happy

Not sure if Roth conversions are a good choice for you or not, but something to give some thought to.
by retiredjg
Sun Mar 24, 2024 4:19 pm
Forum: Personal Investments
Topic: Portfolio Review in Retirement
Replies: 30
Views: 2729

Re: Portfolio Review in Retirement

GedDivaway wrote: Sun Mar 24, 2024 4:06 pm I thought you had to have earned after tax dollars for a ROTH, such as a salary. All I have are funds in my IRA and taxable account.
You have to have earned income to contribute to Roth IRA. You do not need income to convert dollars in tIRA to Roth IRA. You just have to pay the tax.
by retiredjg
Sun Mar 24, 2024 2:16 pm
Forum: Personal Investments
Topic: three fund portfolio and tax efficiency
Replies: 8
Views: 935

Re: three fund portfolio and tax efficiency

Welcome to the forum. :happy Tax-efficiency is a good thing, but it does not apply equally to all situations. Without any tax-deferred accounts, you have to place your bonds in either Roth IRA or in a taxable account. There is absolutely no reason to put retirement money into taxable if you can put that same money into Roth. Conclusion = the best place for your bonds right now is Roth IRA (unless you are interested in opening a separate account at Treasury Direct and holding some I Bond there). If you are single, a $70k income would probably put you into the 22% marginal tax bracket. If you are single and have no retirement plan at work at any time during the year, you can put your IRA contribution into a traditional IRA instead of a Roth I...
by retiredjg
Sun Mar 24, 2024 1:33 pm
Forum: Personal Investments
Topic: Incorrect 1099-R from Vanguard
Replies: 25
Views: 2138

Re: Incorrect 1099-R from Vanguard

If you did your conversion on the 29th during business hours, the price at the time you did the conversion was the closing price on 12/28. Why do you think they should use the closing price from 12/29? If this was an ETF or specific stock, would you expect the conversion to be done at the market price when make the conversion or at some later price? That is not how Vanguard does it. I don't know what other custodians do. Mutual funds (at least at Vanguard) are traded after the end of the day. If the conversion or sale is done during the day, the new NAV computed after hours that day is the one used for the sale or conversion. If you do an oline transaction after close of business, it happens after close of business the following day. If yo...
by retiredjg
Sun Mar 24, 2024 1:00 pm
Forum: Personal Investments
Topic: Backdoor roth conversion and IRA basis
Replies: 11
Views: 476

Re: Backdoor roth conversion and IRA basis

maester wrote: Sun Mar 24, 2024 12:24 pm
Carl53 wrote: Sun Mar 24, 2024 11:08 am Sounds like you were in the phase out level for 2022 for deductible contributions.
Yes.
You might have been in the phase out for deductible contributions, but that has nothing to do with having basis left over.

You have basis left over because your basis was more than you converted.
by retiredjg
Sun Mar 24, 2024 12:41 pm
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3317

Re: Bond choices in 401k

Ah. I see now what the question meant.

Correct, no dividends that get reinvested. The value per share just changes.
by retiredjg
Sun Mar 24, 2024 12:37 pm
Forum: Personal Investments
Topic: Newbie Question [Roth conversions]
Replies: 5
Views: 379

Re: Newbie Question

1.I opened a Roth many years ago, I understand the 5 year rule. But does it start when the Roth was opened (with no conversion) or when you make the first conversion? There is more than one 5 year clock. The Roth IRA itself has a 5 year clock. Each conversion has a 5 year clock. There is more to it than that, but that's where to start. 2. I assume you can withdraw the principal at any time as you paid tax during the conversion and not the earnings. Or would it be subject to 10% penalty (I am 57). The taxable portion of a Roth conversion has a 5 year clock. Taking that money out of Roth before the clock has finished triggers the 10% penalty until you are 59.5 years old. After 59.5, there is no penalty. 3. Is there a penalty of any sort (or ...
by retiredjg
Sun Mar 24, 2024 12:29 pm
Forum: Personal Investments
Topic: Incorrect 1099-R from Vanguard
Replies: 25
Views: 2138

Re: Incorrect 1099-R from Vanguard

If you did your conversion on the 29th during business hours, the price at the time you did the conversion was the closing price on 12/28. Why do you think they should use the closing price from 12/29? If this was an ETF or specific stock, would you expect the conversion to be done at the market price when make the conversion or at some later price? That is not how Vanguard does it. I don't know what other custodians do. Mutual funds (at least at Vanguard) are traded after the end of the day. If the conversion or sale is done during the day, the new NAV computed after hours that day is the one used for the sale or conversion. If you do an oline transaction after close of business, it happens after close of business the following day. If yo...
by retiredjg
Sun Mar 24, 2024 11:41 am
Forum: Personal Investments
Topic: 401k (with mega roth) rollover to Vanguard IRA
Replies: 13
Views: 737

Re: 401k (with mega roth) rollover to Vanguard IRA

Minervablue, you say your plan has the option for mega-backdoor Roth. Yet you think your money is not in Roth 401k and you apparently have not rolled it out to Roth IRA either. The only thing to conclude from this is that you made some after-tax contributions and did not do the second step that would complete the mega-backdoor Roth process. If that is the case, the pre-tax money in your 401k should roll to tIRA and the after-tax money in the 401k should roll into Roth IRA. That is how it is done - two checks. Not all into one IRA. It is possible that they will not issue two checks to two IRAs - one to tIRA and one to Roth IRA. It is possible they will issue a check to tIRA and a check to you which you must roll into your Roth IRA yourself w...
by retiredjg
Sun Mar 24, 2024 11:27 am
Forum: Personal Investments
Topic: Tax efficiency question
Replies: 9
Views: 1090

Re: Tax efficiency question

From what I can tell, SS and dividends more than cover expenses. I don't see a need for an income stream from a SPIA myself.
by retiredjg
Sun Mar 24, 2024 10:07 am
Forum: Personal Investments
Topic: Consolidating ROTHs'
Replies: 7
Views: 1229

Re: Consolidating ROTHs'

See Alan S comments in this thread. viewtopic.php?p=7453770#p7453770
by retiredjg
Sun Mar 24, 2024 10:02 am
Forum: Personal Investments
Topic: Consolidating ROTHs'
Replies: 7
Views: 1229

Re: Consolidating ROTHs'

RetireGood, I'm sorry for the delay. I did not get a notification that you had posted. Interestingly, the rollover from after-tax 401k to Roth 401k (mega-backdoor) will come out of your Roth IRA first even though the ordinary backdoor Roth contributions happened first. Is it because of the ordering rules listed below at the very end? I didn't try to interpret the rules you posted below, but yes. It is because of the ordering rules. Contributions come out first. When you roll Roth 401k into Roth IRA, the contributions become part of the Roth IRA contributions. This is the opposite of what would be expected in your case (because of the conversions) but that is what the instructions for form 8606 tell us. There is only one "qualification ...
by retiredjg
Sun Mar 24, 2024 9:30 am
Forum: Personal Investments
Topic: Tax efficiency question
Replies: 9
Views: 1090

Re: Tax efficiency question

bt365, I went back to some of your old posts to try to understand your current questions. From what I've read -your expenses are low ($25k to $30k a year plus a modest amount of tax) -you have something in the neighborhood of $1.3 million dollars saved, almost all in a taxable account -your expenses are covered by SS (recently started) and dividends from your taxable accounts -you are currently in the 12% federal tax bracket and it appears that your state taxes are very low (Georgia is kind to seniors) -you are nowhere near triggering IRMAA -your current asset allocation is about 61% stocks and 31% bonds and you do not express discomfort with this balance Your current question(s) seem to revolve around whether to sell the VBTLX (total bond ...
by retiredjg
Sat Mar 23, 2024 2:58 pm
Forum: Personal Finance (Not Investing)
Topic: Form 8606 and Stray Dollars
Replies: 7
Views: 398

Re: Form 8606 and Stray Dollars

Yes, because of the rounding on line 10, you pay $0 tax this year but will pay tax on $2 next year. If it didn't round to 1, you would pay tax on the extra $2 this year and no extra tax next year. I'd send it in (efile) as is...even if it seems whacky. It all comes out in the wash. That is what I was thinking, but wanted to try and be sure. Since I made my 2024 contribution already, I filled out a theoretical 2024 8606 and my $2 becomes due (assuming you don't round .99985 up again). Next year, line 9 will be $6500 divided by line 5 $6,500 so that line 10 will be 1.0 meaning $6500 is not taxable. So, slightly different from what I said above....line 16 will be 6,500 and line 17 could be 6500 or 6498 (depending on whether it pulls over line...
by retiredjg
Sat Mar 23, 2024 2:29 pm
Forum: Personal Finance (Not Investing)
Topic: Form 8606 and Stray Dollars
Replies: 7
Views: 398

Re: Form 8606 and Stray Dollars

Yes, because of the rounding on line 10, you pay $0 tax this year but will pay tax on $2 next year.

If it didn't round to 1, you would pay tax on the extra $2 this year and no extra tax next year.

I'd send it in (efile) as is...even if it seems whacky. It all comes out in the wash.
by retiredjg
Sat Mar 23, 2024 2:10 pm
Forum: Personal Investments
Topic: Moving AIVSX from SIMPLE IRA to Vanguard Roth IRA
Replies: 6
Views: 472

Re: Moving AIVSX from SIMPLE IRA to Vanguard Roth IRA

DisgustinglyFrugal wrote: Sat Mar 23, 2024 1:33 pm It's already >$7000 so I wouldn't be able to put it all in the Roth IRA, assuming it doesn't decline in value. Please, let me know if I'm thinking about any of this incorrectly.
lYou are thinking of this incorrectly. There is no limit on how much you can convert to Roth IRA. And you can still contribute to Roth IRA as well (if you have the money).

You are correct that it is the continued high ER of the fund that makes it unattractive.
by retiredjg
Sat Mar 23, 2024 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: Where do advisory fees show up?
Replies: 11
Views: 619

Re: Where do advisory fees show up?

For $100k to disappear from her account each year, something would have to show up on the quarterly and annual statements.

I do not know about the brokerage you mention, but I do know that both Fidelity and Schwab have advisors available, and even assigned to accounts to help people perform certain functions. These advisors are not performing in an AUM advisory or management function. It sounds like this could be what has been happening with MIL.
by retiredjg
Sat Mar 23, 2024 11:53 am
Forum: Investing - Theory, News & General
Topic: Looking for advice on unhappy experience in VG short term bond fund
Replies: 67
Views: 5742

Re: Looking for advice on unhappy experience in VG short term bond fund

Johnnie wrote: Sat Mar 23, 2024 10:56 am So I'm tempted to put the whole fixed income allocation in a MMF and live with the up-and-down in rates but steady value in principle.
Remember that money market funds will start having lower interest rates as the FED lowers interest rates (which they have indicated they intend to do a few times this year).

MM funds are doing quite nicely now, but will not keep up with inflation in the long run. So moving from bond funds to MM at this point could be a poor choice.

And if the FED does what it currently plans, the bond funds you currently hold will star going back up in value too.

As interest rates go up, bond fund values go down (2022). As interest rates go down, bond fund values will go up (might happen in 2024).
by retiredjg
Sat Mar 23, 2024 11:16 am
Forum: Personal Investments
Topic: Bond choices in 401k
Replies: 35
Views: 3317

Re: Bond choices in 401k

Zekeman wrote: Sat Mar 23, 2024 11:05 am Good morning!

I have this fund in my 401k
State Street U.S. Bond Index Securities Lending Series Fund Class XIV

It has no ticker and information on it is scant. There is no posted yield. How are we compensated for the treasury yield in this instrument?

Thank you.
Welcome to the forum. :happy

This appears to be a total bond index fund. It might be a CIT which would explain why there is no ticker. CITs are fine.

https://www.bogleheads.org/wiki/Collect ... ent_Trusts

Not sure what "How are we compensated for the treasury yield in this instrument?" means.
by retiredjg
Sat Mar 23, 2024 9:12 am
Forum: Personal Investments
Topic: 401k (with mega roth) rollover to Vanguard IRA
Replies: 13
Views: 737

Re: 401k (with mega roth) rollover to Vanguard IRA

terran wrote: Sat Mar 23, 2024 9:00 am
retiringwhen wrote: Sat Mar 23, 2024 7:50 am With those assumptions it is very important that try to convert (back-door) the post-tax 401K balance to Roth 401K BEFORE you do any rollovers.
Is it not possible to roll after-tax 401(k) directly to Roth IRA? I thought that was one of the ways to do a mega backdoor Roth? I've only ever actually done the in-plan conversion kind.
Yes, that is one of the possible ways to do the megaBD.
by retiredjg
Sat Mar 23, 2024 8:47 am
Forum: Personal Investments
Topic: Moving AIVSX from SIMPLE IRA to Vanguard Roth IRA
Replies: 6
Views: 472

Re: Moving AIVSX from SIMPLE IRA to Vanguard Roth IRA

Welcome to the forum. :happy

The American Funds funds are well run funds but they do have relatively high expense ratios. It does not matter now if you paid a front end load or not...what you have is what you have. I would not keep the fund myself.

You cannot roll it into your own IRA until the 2 years is completed. Do you know when you made your first contribution? I'd roll over to traditional IRA the week after the 2 years is up. Wait until November or December to see if your income actually is as low as you expect. If low, convert to Roth then.
by retiredjg
Sat Mar 23, 2024 8:38 am
Forum: Personal Investments
Topic: 401k (with mega roth) rollover to Vanguard IRA
Replies: 13
Views: 737

Re: 401k (with mega roth) rollover to Vanguard IRA

minervablue wrote: Sat Mar 23, 2024 7:23 am I was terminated from my job a few weeks back and now that the final check has cleared I want to rollover my 401k to my Vanguard IRAs. Normally this is a simple process that I am familiar with, but in this case my 401k is a mixture of pre-tax and post-tax (not roth) money due to me having access to "mega backdoor" contributions.
If you have mega backdoor contributions in your 401k, they should now be in Roth 401k. Are you saying that you made after-tax contributions and have not converted them to Roth?
by retiredjg
Sat Mar 23, 2024 8:33 am
Forum: Personal Investments
Topic: How to Determine Retirement AA? [also VCIT or BND?]
Replies: 12
Views: 1038

Re: How to Determine Retirement AA?

OldSport wrote: Sat Mar 23, 2024 8:17 am Retirement is 16 years away for me though.
It's a good idea to plan ahead, but trying to pick an asset allocation for retirement 16 years out seems like a bit much. :happy

As always, your AA should be determined by your need, willingness, and ability to take risk...at that time. You will be a different person and the world may be a very different place.

Keep saving and try to be content with some vague idea of where you want to end up in terms of AA. You'll know when you get there where you need to be.

Remember that your goal now is to make money. Your goal then is to maintain and use the money you have. The AAs you have in mind right now are more consistent with making money than keeping money.