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by retiredjg
Tue Jan 15, 2019 10:29 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

Wow Justin. :( Not sure why my comments would elicit snark. I don't think the question is all that simple. I don't think my points are irrelevant or vague. I just don't think the poster is asking the right question - the poster's question is based on an incorrect assumption. Wrong assumption = wrong...
by retiredjg
Tue Jan 15, 2019 9:57 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

"Contributions" in your Roth can be accessed before age 60, after a five year seasoning period. A lot of people think this, but it is incorrect. A direct contribution to Roth IRA can be accessed at any time. There is no 5 year seasoning period required. OP is asking if mega backdoor Roths are consi...
by retiredjg
Tue Jan 15, 2019 9:01 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

I think I know the answer to this but I'd like confirmation: Are Mega Back Door Roth IRA contributions considered "contributions" in the traditional sense? The reason I ask is because Roth IRA contributions can be withdrawn at any time without penalty, and doing so may be a way to gain access to a ...
by retiredjg
Tue Jan 15, 2019 8:43 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

Ok. I guess I had heard about the necessity of having an empty tIRA. An empty tIRA at the end of the year is critical for an ordinary back door contribution to Roth unless you want to deal with pro-rating. The same is not true for the mega back door Roth because it can skip going through tIRA.
by retiredjg
Tue Jan 15, 2019 8:30 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

Just to state again Mega back door Roth 1. Starts with an after tax contribution to Traditional 401k. 2. Execution of a rollover of the post tax contribution to an empty traditional IRA. 3. Immediate conversion the traditional Ira to Roth IRA. There should be 0 or very little gain if done immediate...
by retiredjg
Tue Jan 15, 2019 8:17 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

That’s not what he asked. I suspect the term Mega he refers to means his after tax contribution is still with 401k, It’s possible to withdraw money while it’s in 401k before you transfer to Roth IRA, that’s what I did. "Mega back door" can refer to either thing - an in-service Roth Rollover (to Rot...
by retiredjg
Tue Jan 15, 2019 8:07 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

DrGoogle2017 wrote:
Tue Jan 15, 2019 7:44 pm
This is not Roth IRA, this is 401k contribution, that’s what Mega Backdoor refers to.
Once money gets into Roth IRA, via the mega back door or any other route, Roth IRA distribution rules apply. :happy
by retiredjg
Tue Jan 15, 2019 7:41 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

Lots of confusion here. Let's assume you have nothing in Roth IRA. If you use the mega back door and send both your after-tax contributions and their earnings to Roth IRA, that starts a 5 tax year clock on the earnings part. The contributions are after-tax and have no clock. The earnings are a conv...
by retiredjg
Tue Jan 15, 2019 7:13 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 46
Views: 1176

Re: Are mega back door Roth contributions considered contributions?

Lots of confusion here. Let's assume you have nothing in Roth IRA. If you use the mega back door and send both your after-tax contributions and their earnings to Roth IRA, that starts a 5 tax year clock on the earnings part. The contributions are after-tax and have no clock. The earnings are a conve...
by retiredjg
Tue Jan 15, 2019 6:32 pm
Forum: Personal Consumer Issues
Topic: School staff threatened to call social worker
Replies: 54
Views: 2380

Re: School staff threatened to call social worker

What is this "call the social worker" thing about? When I first read your post, it seemed to me that the school does not have the authority to approve all the days you are asking for, but maybe the social worker could give you an exception that the school cannot give. If that is the case, I'd go wit...
by retiredjg
Tue Jan 15, 2019 6:21 pm
Forum: Investing - Help with Personal Investments
Topic: Should I Contribute to After Tax 401k?
Replies: 11
Views: 687

Re: Should I Contribute to After Tax 401k?

P.S. If things are really like you think they are, it might be worthwhile to do the contributions for 2 years and then do a rollover - then you will only miss part of your match every other year. Or every 3rd year or whatever. Whether all this is worth it for you may be dependent on the bigger pictu...
by retiredjg
Tue Jan 15, 2019 6:17 pm
Forum: Investing - Help with Personal Investments
Topic: Should I Contribute to After Tax 401k?
Replies: 11
Views: 687

Re: Should I Contribute to After Tax 401k?

I would also miss out on the employer match for those 90 days. Before making a decision, I think you need to verify two things. 1) Be sure that your employer actually does the match that way you think it is done. Some require a contribution from every paycheck to get the full match. Some require th...
by retiredjg
Tue Jan 15, 2019 11:01 am
Forum: Investing - Help with Personal Investments
Topic: Oops Over Roth IRA Income Limit - Maybe...
Replies: 10
Views: 483

Re: Oops Over Roth IRA Income Limit - Maybe...

If you made an excess contribution, you will be given the opportunity to fix that before a penalty occurs.
by retiredjg
Tue Jan 15, 2019 11:00 am
Forum: Investing - Help with Personal Investments
Topic: Oops Over Roth IRA Income Limit - Maybe...
Replies: 10
Views: 483

Re: Oops Over Roth IRA Income Limit - Maybe...

You will have to fiddle with your pay stubs to see if your traditional 401k contributions are in that $200k number or not. Same with contributions to HSA/FSA and I think with health insurance you pay for through your employer (I'm not clear on that). It is possible you'll have to look at last year's...
by retiredjg
Tue Jan 15, 2019 9:42 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 14
Views: 1665

Re: help with financial planning

What is the advantage and disadvantage of using target fund vs. individual funds. If I use individual funds, do I have to rebalance them often? Target funds are easy. All you do is add money. Individual funds may (or may not) lower the portfolio cost a small amount. Rebalancing is variable but once...
by retiredjg
Tue Jan 15, 2019 8:11 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

The FA was suppose to be selecting tax efficient investments due to our high tax bracket but based on the feedback from the Bogleheads the FA didn't do very well in tax efficiency or ERs. Maybe, maybe not. It is common for advisors to select tax-exempt bonds over taxable bonds for people in a high ...
by retiredjg
Mon Jan 14, 2019 4:49 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

It would be nice to see all the data in one place. Since this is an early retirement and since you need the 457b money to live on in the first several years, I'm coming around to thinking that filling 3 accounts (including two 457bs) with traditional contributions is reasonable for your situation . ...
by retiredjg
Mon Jan 14, 2019 4:33 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

Current ages (45 &47). Possible early retirement ages (50 & 52). Pension (68k/yr till both die, will cover living expenses). Your problem is going to be that $68k will not be worth much 40 years after you retire and each of you could live that long. Any possibility of a COLA on the pension(s)? Savi...
by retiredjg
Mon Jan 14, 2019 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

fortfun wrote:
Mon Jan 14, 2019 4:13 pm
DW must have been mistaken. It appears you can withdraw roth 457 at separation. You agree?
https://www.copera.org/sites/default/fi ... /14-71.pdf
Yes, that is what it says to me.
by retiredjg
Mon Jan 14, 2019 4:12 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

Pension (68k/yr till both die, will cover living expenses). Does this start at 50/52? However, we should each have about 60k in Roth IRAs and we should each have about 100k in 457s. Are you the couple who has 2 401ks, 2 403bs, and 2 457bs? If yes, are you telling me that none of those 6 accounts ha...
by retiredjg
Mon Jan 14, 2019 4:07 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

1. Her employer's website says if she uses the roth version of the 457, the money cannot be withdrawn until 59.5. We will need it before then. That's pretty much unexpected and makes no sense at all, at least not to me. Spirit Rider, are you around? I can confirm that I have seen that before. A rel...
by retiredjg
Mon Jan 14, 2019 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

1. Her employer's website says if she uses the roth version of the 457, the money cannot be withdrawn until 59.5. We will need it before then. That's pretty much unexpected and makes no sense at all, at least not to me. Spirit Rider, are you around? 2. I'm not sure if the regular 457 alone will get...
by retiredjg
Mon Jan 14, 2019 3:05 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

fortfun wrote:
Mon Jan 14, 2019 2:50 pm
The only roth is my wife's 457 which she can already access when she separates from her employer at age 52.
Why does that make a difference?
by retiredjg
Mon Jan 14, 2019 2:32 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

Why not put it in Roth? Doesn't that achieve the same thing? Surely one of those 3 plans has a Roth option?
by retiredjg
Mon Jan 14, 2019 2:23 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

I was not actually recommending anything because there was not much information to go on. It seemed you were in a higher bracket than you are. How much head space do you have in the 12% bracket to convert at 12%? Does it make sense to you to put $54k into tax deferral and then turn around and conver...
by retiredjg
Mon Jan 14, 2019 1:20 pm
Forum: Investing - Help with Personal Investments
Topic: After tax contribution OR roth conversion?
Replies: 31
Views: 809

Re: After tax contribution OR roth conversion?

If you make enough money to even consider the after-tax contribution, you are likely in a higher tax bracket. A Roth conversion is going to tax some untaxed money and there is no need to pay a high tax rate on tax-deferred money at this point. There is a good likelihood you can do conversions later ...
by retiredjg
Mon Jan 14, 2019 1:09 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

Obviously, people have different opinions. Here's a suggestion that supports my opinion that this may be more trouble for you than it is worth. If you use the google box in the upper right corner, you can search for previous threads on any subject. Search for things like backdoor messed up or help w...
by retiredjg
Mon Jan 14, 2019 12:52 pm
Forum: Investing - Theory, News & General
Topic: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs
Replies: 249
Views: 40743

Re: Michael Kitces said in 2016 that IRS auditors disapproved of backdoor Roth IRAs

I'd like to suggest that this thread has run it's course and should be locked. Michael Kitces had an opinion back in 2016. Few people here agreed with it then, but at least it was a legitimate discussion point at the time. Some people, even one I respect greatly, chose to follow Kitces' advice. It n...
by retiredjg
Mon Jan 14, 2019 12:40 pm
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 14
Views: 1665

Re: help with financial planning

Mirandablue, thank you for the update. It is helpful to learn to see your portfolio as a whole, rather than by accounts. To do this, you need to list your holdings as a percent of the portfolio, not as a percentage of each account. Your current retirement assets only add up to $99k. Even adding in t...
by retiredjg
Mon Jan 14, 2019 11:28 am
Forum: Investing - Help with Personal Investments
Topic: Mega-backdoor Roth has a loss
Replies: 13
Views: 1230

Re: Mega-backdoor Roth has a loss

Would someone explain why a loss is handled with no tax consequences. I'm not sure it has been established that your loss will be handled with no tax consequences. Yet. However, the fact that your box 1 and box 5 are the same makes me wonder. I think you'll have to wait until you see what happens w...
by retiredjg
Sun Jan 13, 2019 9:13 pm
Forum: Investing - Help with Personal Investments
Topic: Mega-backdoor Roth has a loss
Replies: 13
Views: 1230

Re: Mega-backdoor Roth has a loss

A few people have reported that their 401k plans kept up with the unused basis and applied it against future gains. I do not know if that is common.

If that does not happen, I would not worry about a "loss". You will still have gotten money into Roth IRA.
by retiredjg
Sun Jan 13, 2019 8:38 pm
Forum: Investing - Help with Personal Investments
Topic: RE: What to do with previous solo 401k?
Replies: 7
Views: 462

Re: RE: What to do with previous solo 401k?

If you plan to use the back door to contribute to Roth IRA, you should just leave the previous solo 401k where it is. If you roll it to IRA, that will cause your "back door" contributions to be pro-rated which makes them not worth doing.
by retiredjg
Sun Jan 13, 2019 8:35 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

Just to be clear....my list of "dump these" did not mean you have to get rid of them this week. They are funds that you should not want in your portfolio long term, particularly in your taxable account. Why not? Either the expense ratio is higher than you should pay or the fund is not "tax-efficient...
by retiredjg
Sun Jan 13, 2019 4:09 pm
Forum: Investing - Help with Personal Investments
Topic: Profit sharing fund from my previous job
Replies: 1
Views: 136

Re: Profit sharing fund from my previous job

You should be able to roll your profit sharing plan into a traditional IRA or another qualified plan such as a 401k or 403b. If you do that, there should be no penalties. If you roll to IRA, you can invest any way you want.
by retiredjg
Sun Jan 13, 2019 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Roth IRA exclusion limit
Replies: 1
Views: 149

Re: Roth IRA exclusion limit

Yes. But do not move the money yourself. You must have the custodian re-characterize the Roth contribution to a traditional contribution. That can then be converted to Roth IRA. I believe you have to insert a comment on your tax return about the re-characterization. However, be sure you actually und...
by retiredjg
Sun Jan 13, 2019 3:26 pm
Forum: Investing - Help with Personal Investments
Topic: PLEASE help me chose between two horrible 403 b employer options
Replies: 7
Views: 332

Re: PLEASE help me chose between two horrible 403 b employer options

You need to find out about more than one kind of fee. Each mutual fund has costs that are baked into the fund - called an "expense ratio". You need the expense ratios of every fund they offer and you need to be sure you get the expense ratios that are specific to the plan you are asking about. Don't...
by retiredjg
Sun Jan 13, 2019 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: RE: What to do with previous solo 401k?
Replies: 7
Views: 462

Re: RE: What to do with previous solo 401k?

Question: What rollover options are there to rollover that previous TD ameritrade account? Can I roll it over to my IRAs sitting at Vanguard? I don't see why not. Or is the only option to rollover to my Vanguard solo 401k account? Vanguard's Solo 401k is reported not to accept rollovers, even from ...
by retiredjg
Sun Jan 13, 2019 12:39 pm
Forum: Investing - Help with Personal Investments
Topic: I know market timing is a fool's game but...
Replies: 59
Views: 4524

Re: I know market timing is a fool's game but...

We're now in the 150th month without a recession. The record set in the 90's was 120 months. December was the worst month for equities since the Great Depression. Sounds like the Fed is worried enough to pause interest rate hikes. I tell people they shouldn't worry about timing but it's hard not to...
by retiredjg
Sun Jan 13, 2019 12:31 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

shess wrote:
Sun Jan 13, 2019 11:35 am
...whereas under the current tax bill there's a big gap before the effect kicks in. Also, there are various deductibility limitations to consider.
Is there a gap other than the increased standard deduction?
by retiredjg
Sun Jan 13, 2019 10:20 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

If you donate to charity, then you could consider donating appreciated shares of some of the other funds instead of donating cash. Please see the wiki article "Donating Appreciated Securities". This suggestion should re re-emphasized. If you are a charitable donor, instead of sending a check you ca...
by retiredjg
Sun Jan 13, 2019 8:14 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

3. Add a tax-exempt bond as the account grows to maintain our desired allocation (60% stocks and 40% bonds): a. Vanguard Tax-Exempt Intermediate-Term Bond Fund (VWIUX) Question - is this the best tax exempt fund for our situation in our taxable account? Some have suggested municipal bonds. When peo...
by retiredjg
Sat Jan 12, 2019 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: Backdoor Roth question/basics
Replies: 2
Views: 177

Re: Backdoor Roth question/basics

No. The limits for IRA and for work plans like a 401k are separate.
by retiredjg
Sat Jan 12, 2019 4:31 pm
Forum: Investing - Help with Personal Investments
Topic: Rollover - why checks instead of wiring funds?
Replies: 35
Views: 1412

Re: Rollover - why checks instead of wiring funds?

epictetus wrote:
Sat Jan 12, 2019 3:57 pm
Fidelity no longer has the fee to close an IRA.

viewtopic.php?t=255571
Well that's nice to know!
by retiredjg
Sat Jan 12, 2019 3:07 pm
Forum: Investing - Help with Personal Investments
Topic: Employer plan at Ed Jones
Replies: 6
Views: 691

Re: Employer plan at Ed Jones

The answer to your questions will depend on what type of SIMPLE IRA you have. Is it a 5304 or a 5305? This is the first thing you need to know and it will determine what you do from here. Your employer may be clueless and your Edward Jones rep may be clueless as well, but keep hammering away til you...
by retiredjg
Sat Jan 12, 2019 2:58 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio HELP - time to stop the bleeding from AUM fee
Replies: 34
Views: 2338

Re: Portfolio HELP - time to stop the bleeding from AUM fee

Desired Asset Allocation: 60% stocks? / 40% bonds? (would like feedback on this subject) This is a conservative ratio for your age. However, since you have no need for risk (because you are saving so much), it is a very appropriate number if you are comfortable there. You could even have less stock...
by retiredjg
Sat Jan 12, 2019 1:57 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds or stocks to IRA?
Replies: 9
Views: 393

Re: Bonds or stocks to IRA?

Is it possible to hold stock funds in the IRA portion of your portfolio and then transfer those proceeds into bond funds before you take them out in order to avoid the taxes as ordinary income. Well sure, but the earnings will still have come from stocks so that would accomplish nothing. Everything...
by retiredjg
Sat Jan 12, 2019 10:28 am
Forum: Investing - Help with Personal Investments
Topic: New Member: Need Advice
Replies: 7
Views: 358

Re: New Member: Need Advice

I read somewhere I should contribute $192 into a ROTH IRA, $111 into HSA per paycheck, and $711 per month into a 401k plan that my company matches 5%. Is this a sound plan? Whats the benefit of contributing to a HSA? While the advice might suit the person it was intended for it may not suit your si...
by retiredjg
Sat Jan 12, 2019 10:18 am
Forum: Investing - Help with Personal Investments
Topic: Rollover - why checks instead of wiring funds?
Replies: 35
Views: 1412

Re: Rollover - why checks instead of wiring funds?

This is common. They mail the check (made out to the new custodian) to the last known address of the employee . I believe it is an attempt to reduce fraud. Presumably, anybody could open an IRA at any custodian and have someone else's 401k wired to it. By the time the real employee becomes aware, th...
by retiredjg
Sat Jan 12, 2019 9:22 am
Forum: Personal Finance (Not Investing)
Topic: "Borrowing" strategy from IRA
Replies: 19
Views: 914

Re: "Borrowing" strategy from IRA

Regarding IRA vs Roth IRA....I would take the money out of Roth IRA (contributions only, not earnings). If things continue to go sideways, taking money out of Roth IRA will not dig you any deeper into a financial hole than you are now. And maybe you will get the money back in w/in 60 days. If so, al...
by retiredjg
Sat Jan 12, 2019 9:07 am
Forum: Investing - Help with Personal Investments
Topic: Schwab 3 Fund Example in the Wiki Still the Model?
Replies: 12
Views: 537

Re: Schwab 3 Fund Example in the Wiki Still the Model?

I think your idea of trying your hand at managing the individual funds is a good one. But don't bother to compare performance. Differences should be minimal and any short term difference is completely meaningless.