Search found 34672 matches

by retiredjg
Sat Jan 19, 2019 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 28
Views: 972

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

Spirit Rider wrote:
Sat Jan 19, 2019 2:36 pm
I was specifically referring to the additional Roth conversions possibly pushing them into the 32% tax bracket,
I know. But he said this...."As for the Roth, even with the added $150k, since I am married, we will come in under the $321,450 limit for 24% tax bracket (sadly)."
by retiredjg
Sat Jan 19, 2019 1:42 pm
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 28
Views: 972

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

I had the same thought, but I think the premise is they can do all this and come in in the 24% bracket, not the 32% bracket which of course would be nuts . I think they are in the 22% bracket and with all the conversions and Rothness will move into the 24% bracket which is not a lot higher than 22% ...
by retiredjg
Sat Jan 19, 2019 9:49 am
Forum: Investing - Help with Personal Investments
Topic: Portfolio Critique/Allocation Advice
Replies: 6
Views: 398

Re: Portfolio Critique/Allocation Advice

How many dollars will go into each of those accounts each year?
by retiredjg
Sat Jan 19, 2019 9:17 am
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 28
Views: 972

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

... but I'll wait to see if the IRS whines before I worry about this... I doubt there will be a whine. I saw an article yesterday that said the underpayment rules are being softened considerably for 2018. I think it had something to do with withholding tables being out of whack for the new tax laws.
by retiredjg
Sat Jan 19, 2019 9:15 am
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 28
Views: 972

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

Does anyone know if I would need to withhold taxes for this? Like if I opt not to withhold taxes on the Roth conversion of my pre-tax rollover TIRA, would I need to pay estimated taxes to the government or since this is not a wage / salary / work income I can just pay my total tax at the end of the...
by retiredjg
Sat Jan 19, 2019 9:08 am
Forum: Personal Finance (Not Investing)
Topic: TIRA Roth Conversion and Backdoor Roth IRA in the same year possible?
Replies: 28
Views: 972

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

I believe if you have any pre-tax TIRA when when you do the backdoor Roth, it does a pro-rata calculation so you get taxed on a % basis. This is incorrect. The IRS does not know what you have in tIRA on the day you do the conversion step of the back door. Therefore they could not determine if peopl...
by retiredjg
Sat Jan 19, 2019 8:28 am
Forum: Investing - Theory, News & General
Topic: Tax-managed LifeStrategy fund
Replies: 6
Views: 660

Re: Tax-managed LifeStrategy fund

People have wondered in the past why there are no tax-managed target funds. An answer I've seen more than once is there is some kind of legal requirement - a tax managed balanced fund can't be more than 50% stocks if I recall correctly. So it would be awkward to try to do a tax managed LS series....
by retiredjg
Fri Jan 18, 2019 8:07 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Critique/Allocation Advice
Replies: 6
Views: 398

Re: Portfolio Critique/Allocation Advice

You will get more responses if you include fund names in your post. Many people do not speak ticker and will not bother to look them up. :happy
by retiredjg
Fri Jan 18, 2019 7:27 pm
Forum: Investing - Help with Personal Investments
Topic: Mega Backdoor ROTH Clarification
Replies: 7
Views: 688

Re: Mega Backdoor ROTH Clarification

OK I tried to roll the excess from the after tax contribution into my ROTH but the plan administrator said that I cannot just pull from the after tax portion alone. She said that if I make a request it will pull from all of my accounts. I thought this seemed odd but I looked through my Summary plan...
by retiredjg
Fri Jan 18, 2019 7:14 pm
Forum: Investing - Help with Personal Investments
Topic: etf vs index funds . tax efficiency
Replies: 16
Views: 590

Re: etf vs index funds . tax efficiency

Hi, Are etf's more tax efficient than an index fund with similar er ratio in a taxable account if strategy is just to buy and hold? Thanks Part of this depends on which company's product you are looking at. At Vanguard, the mutual fund and ETF are different versions of the same stuff - tax-efficien...
by retiredjg
Fri Jan 18, 2019 6:36 pm
Forum: Investing - Help with Personal Investments
Topic: Going from 100-0 to 90-10 with bonds in taxable account
Replies: 15
Views: 963

Re: Going from 100-0 to 90-10 with bonds in taxable account

Sorry meant second to highest tax bracket. No other income. Maybe not. I'd just drop it, but this is a number you need to have right - important decisions are made using this number. If you are single and make $220k and put $19k into a 401k and have a standard deduction of $12,200, you will not eve...
by retiredjg
Fri Jan 18, 2019 5:55 pm
Forum: Investing - Help with Personal Investments
Topic: Going from 100-0 to 90-10 with bonds in taxable account
Replies: 15
Views: 963

Re: Going from 100-0 to 90-10 with bonds in taxable account

Just how bad are your choices in the 401k? I'd probably just shift $20k in the 401k from stocks to bonds.

$220k income will not get you anywhere near the highest federal tax bracket. Perhaps there is other income not mentioned?
by retiredjg
Fri Jan 18, 2019 5:36 pm
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: help with financial planning

mirandablue wrote:
Fri Jan 18, 2019 4:24 pm
Thank you! I will contact wealthfront. I had some more specific questions about the taxable asset allocation. Is it possible to private message you?
Yes. Just click on the little icon next to "contact" under my user name.
by retiredjg
Fri Jan 18, 2019 10:49 am
Forum: Investing - Help with Personal Investments
Topic: Setting Up my 3-Fund Portfolio Help
Replies: 4
Views: 489

Re: Setting Up my 3-Fund Portfolio Help

There is a thing called the "back door" through which people with high incomes can get money into Roth IRA. Chances are, someone will suggest you do that. Don't do it . Your SEP IRA will interfere. For you Roth IRA is off the table, at least for now. Your SEP IRA does not interfere with your wife us...
by retiredjg
Fri Jan 18, 2019 8:53 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: help with financial planning

I contributed $5500 towards ROTH IRA for 2018 early in the year. With the job change, my gross income (before taxes) for 2018 comes out to around 175k. So, likely exceed the income limit for qualifying? What can be done? Thanks again! It appears you are over the limit. The MAGI for head of househol...
by retiredjg
Fri Jan 18, 2019 7:47 am
Forum: Personal Finance (Not Investing)
Topic: Whoops, thought wife's tIRA was Roth...help!
Replies: 30
Views: 2306

Re: Whoops, thought wife's tIRA was Roth...help!

Wow. I'm amazed it actually got fixed this fast!
by retiredjg
Thu Jan 17, 2019 7:49 pm
Forum: Investing - Help with Personal Investments
Topic: Best 401k options before rollover???
Replies: 6
Views: 303

Re: Best 401k options before rollover???

We don't know what you asked and we don't know they told you and we don't know whether what they said is the same or different from what you understood. But...here are the regs from the IRS. https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distribut...
by retiredjg
Thu Jan 17, 2019 6:07 pm
Forum: Investing - Help with Personal Investments
Topic: Setting Up my 3-Fund Portfolio Help
Replies: 4
Views: 489

Re: Setting Up my 3-Fund Portfolio Help

I think you would need to roll your current SEP money to an IRA at the custodian of your choice. It would appear you prefer Vanguard. And yes, you could set things up as you planned. But you should probably coordinate that with your other retirement accounts. If you don't have any other retirement a...
by retiredjg
Thu Jan 17, 2019 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Best 401k options before rollover???
Replies: 6
Views: 303

Re: Best 401k options before rollover

ThriftyisFun wrote:
Thu Jan 17, 2019 5:25 pm
I understand I can only do one rollover per rolling 365 period, so I need to plan this right. 
This rule does not apply to 401k to IRA distributions. :happy
by retiredjg
Thu Jan 17, 2019 5:09 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Here's one last thing to consider. We agree that the $1,000 that was earnings in the after-tax account gets taxed as it goes into Roth 401k. You think that money then joins up with earnings in the Roth 401k. I suppose it would have to be passed on as earnings into the Roth IRA. If what you think is ...
by retiredjg
Thu Jan 17, 2019 11:55 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

One thing that you may have overlooked, the things you quoted talk about a "qualified rollover from a designated Roth account". That word "qualified" is critical. https://www.irs.gov/retirement-plans/designated-roth-accounts-distributions "A qualified distribution from a designated Roth account is e...
by retiredjg
Thu Jan 17, 2019 11:47 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

My position is that when the Roth 401k to Roth IRA rollover occurs (before five year clock has run out), the result is: $1,000 basis $2,000 earnings Based on the sources in my previous post (primarily the bolded portion of the first quote), I don't think it's possible for a Roth 401k to rollover Ro...
by retiredjg
Thu Jan 17, 2019 9:59 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: Help with financial planning and saving for retirement- reposting with details

Here is what you currently have. Total portfolio = $299k Taxable $200k 66.9% cash Current 401k $9k 3% target fund at 90/10 ROTH IRA with wealthfront: $10k 3.3% mixed portfolio at 90/10 Old 403(b) $80k 26.8% target at 90/10 and some money market Roll the old 403b into your current 401k if allowed. In...
by retiredjg
Thu Jan 17, 2019 9:26 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: help with financial planning

But first, you need to determine if you were/are eligible to contribute to Roth IRA for 2018. If not, if you have already contributed, that will need to be fixed.

Have you already contributed? How about an estimate of your total income for 2018?
by retiredjg
Thu Jan 17, 2019 9:24 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: Help with financial planning and saving for retirement- reposting with details

1. I want to invest the cash in hand ($200k) for retirement, and contribute a fixed amount on a monthly basis for retirement. Where should I invest and what asset allocations? Should I keep the current target dated fund or use individual funds. What are the advantages of each?. If individual funds,...
by retiredjg
Thu Jan 17, 2019 9:09 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Lyrrad, my brain is not nimble enough to follow what you are doing. I'm not even sure what your question is since it is not clear what part of your post you are referring to when you ask "Does this seem correct?" Here is how I think this works. Probably only Alan S. will know if it is correct or not...
by retiredjg
Wed Jan 16, 2019 8:07 pm
Forum: Investing - Theory, News & General
Topic: John Bogle has died at age 89
Replies: 833
Views: 41955

Re: John Bogle is dead at 89

Thanks Jack!

You made a difference, a really big difference, to a whole lot of people. :wink:
by retiredjg
Wed Jan 16, 2019 6:22 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Justin, pay attention. I'm referring to the "earnings" before the conversion/rollover. Yes you are. Those earnings get taxed when the rollover/conversion happen. If you're rolling a Roth 401k to a Roth IRA, the pre-conversion earnings can't be withdrawn early penalty free at all. That is because, un...
by retiredjg
Wed Jan 16, 2019 6:02 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

It's interesting that: Trad IRA -> Roth IRA all eligible for early withdrawal - this is true for the part you converted; not true for the earnings that occur after the conversion (inside the Roth container). After-tax 401k -> Roth IRA all eligible for early withdrawal this is true for the part you ...
by retiredjg
Wed Jan 16, 2019 5:39 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Any part of the $100k rollover that was a conversion would have a 5 tax year clock on it. I think. Pretty sure. The five year clock stops once you are over 59.5 and it has been 5 years or more since the first Roth IRA was established (via contribution or conversion). I agree the 5 tax year conversi...
by retiredjg
Wed Jan 16, 2019 5:06 pm
Forum: Investing - Help with Personal Investments
Topic: Preparing for modest early retirement in 5yrs. Questions & Feedback.
Replies: 36
Views: 2405

Re: Preparing for modest early retirement in 5yrs. Questions & Feedback.

What should we invest in with the 457s? Bonds, since we will need them sooner? I doubt that I'd fill the 457s with bonds, at least no this far out. But it does seem reasonable for that money to be invested more conservatively than the 401k/403b accounts. Also, when she hits 50, we could do the 6k+ ...
by retiredjg
Wed Jan 16, 2019 4:47 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

After you rollover a Roth 401k to a Roth IRA (say a total of $100k in funds), all $100k is immediately withdrawable penalty free, regardless of age. Correct? That is not correct. The part of the $100k rollover that is the result of earnings inside the Roth 401k is not available without tax and pena...
by retiredjg
Wed Jan 16, 2019 4:40 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

So based on this information, 100% of the funds from a Roth 401k -> Roth IRA conversion would be immediately available for early withdrawal penalty free (no need to wait 5 years). JustinR, this discussion was never about Roth 401k rolling out to Roth IRA. This discussion was about an after-tax acco...
by retiredjg
Wed Jan 16, 2019 3:19 pm
Forum: Investing - Help with Personal Investments
Topic: Preparing for modest early retirement in 5yrs. Questions & Feedback.
Replies: 36
Views: 2405

Re: Preparing for modest early retirement in 5yrs. Questions & Feedback.

As usual, thanks for the wonderful advice retiredjg! I think my wife will probably drop down to half-time until she hits 55. This could have an additional benefit. The law allows 401k/403b plans to allow penalty free withdrawals to people who retire in or after the year they reach 55. If she does w...
by retiredjg
Wed Jan 16, 2019 2:28 pm
Forum: Investing - Help with Personal Investments
Topic: Preparing for modest early retirement in 5yrs. Questions & Feedback.
Replies: 36
Views: 2405

Re: Preparing for modest early retirement in 5yrs. Questions & Feedback.

How to fund retirement from 52 to 59.5? Two 457s with 100k and two roth IRAs with 60k? The retirement expenses are already covered by the pension. There will be about $200k available from the two 457 accounts. I think you need to make that $200k last till 59.5 if you can. That would be in the neigh...
by retiredjg
Wed Jan 16, 2019 11:00 am
Forum: Investing - Help with Personal Investments
Topic: Taxable diversification question and portfolio review request
Replies: 9
Views: 622

Re: Taxable diversification question and portfolio review request

1. We would like some bond diversification in taxable, but understand it gets expensive, fast given our tax bracket. We don't want to hold all of our bonds in tax advantaged. If we must start using our investments to cover expenses earlier than retirement, we need some hedge against volatility for ...
by retiredjg
Wed Jan 16, 2019 9:25 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Celia, thank you for bringing in the correct terminology to this discussion. :happy I think what investor997 is missing is that each "conversion contribution" or "rollover contribution" can have both a taxable and a non-taxable component. These are treated differently when it comes to the 5 tax year...
by retiredjg
Wed Jan 16, 2019 8:53 am
Forum: Investing - Help with Personal Investments
Topic: help with financial planning
Replies: 31
Views: 2990

Re: help with financial planning

What is the ER for the target funds?
by retiredjg
Wed Jan 16, 2019 8:30 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

Let's look at your scenario. In Year One, Joe Investor's income was under the IRS limit for Roth IRA contributions. He opened a new Roth IRA account and contributed $5,500 to it. In Year Two, Joe Investor got a big raise and was no longer able to contribute to a Roth IRA. Instead, he opened a Tradit...
by retiredjg
Wed Jan 16, 2019 8:17 am
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Re: Are mega back door Roth contributions considered contributions?

You are getting close to the answer, but are not quite there yet. There are two ways to add money to a Roth IRA: Contributions (ie, what you deposit directly if you're under the income limits), or Conversions (Back Door and Mega Back Door). There are at least 4 ways - direct contributions, Roth conv...
by retiredjg
Tue Jan 15, 2019 10:29 pm
Forum: Investing - Theory, News & General
Topic: Are mega back door Roth contributions considered contributions?
Replies: 87
Views: 2916

Split from: 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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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: 87
Views: 2916

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...