Thanks for the thoughtful replies. After running the numbers different ways, the best I can get is a slight after-tax advantage for the VA after 10 years. After factoring in the possible penalty for early redemption and (minimal) insurance company counter-party risk, the VA does not make a lot of sense.
My focus is now on the tax efficiency of my portfolio. I am probably going to begin exiting higher yielding funds in favor of VTI. I would reduce my equity exposure and but more CA munis, but there seems to be a very realistic chance that muni income will be taxed above the 28% bracket.
Search found 269 matches
- Mon Jan 07, 2013 11:20 am
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
- Sun Jan 06, 2013 1:23 pm
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
Re: Need some help re: analyzing substantial portfolio chang
LTCG get a stepped up basis upon your demise, so all gains are tax-free. In a variable annuity, there is no stepped up basis and heirs pay taxes. True. Still may be better off avoiding the current taxes on dividends and taking the distributions when I can avoid the 13.3% CA taxes. Of course federal taxes could also be higher in the future. Here's my very simple attempt at analyzing: Assume a $100 equity portfolio that yields 3% and is 85% QDI and 15% non-QDI. Over 10 years, I will pay about $12 in taxes on the dividends. If the portfolio appreciates by 3% a year (excluding dividends), I'll have about $155 of capital after 10 years. The same portfolio in an annuity would grow to about $180 after ten years. If I am not a CA resident and fed ...
- Sun Jan 06, 2013 1:01 pm
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
Re: Need some help re: analyzing substantial portfolio chang
I have talked to tax lawyers and, while they know the tax issues, they are not very good at working through the math. I believe the heir issue is basically the income re-haricterisation issue--what would have been LTCG becomes ordinary income when the annuities distribute.livesoft wrote:Then seek professional help. I would not move $6 million or more to a variable annuity myself. There are consequence to heirs as well.
- Sun Jan 06, 2013 12:43 pm
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
Re: Need some help re: analyzing substantial portfolio chang
OK, you first tell me you are not going to pay LTCG tax and then you tell me you are going to pay 37% LTCG tax. I am saving my carryover losses for the future when I can live off of taxable investments tax-free and do Roth conversions at the 0% tax rate. If you cash in now, I think you would be wasting an enormous opportunity to save big-time on taxes later. Let's assume you have no realized capital gains in the next 10 years (after all, why would you sell winners?), but you would have mostly qualified dividends. Are we talking $100,000 a year right now in dividends or $50,000? or what? I just don't see it as a big enough deal to get variable annuity. I did say I has cap losses and wouldn't be paying taxes on the gains. If my portfolio is ...
- Sun Jan 06, 2013 12:34 pm
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
Re: Need some help re: analyzing substantial portfolio chang
You avoid LT cap gains taxes by not realizing any gains. So wait until you leave CA to do that. I suppose you are thinking that for qualified dividends you will pay 20% + 3.9% + CA state income tax to get to 33%? We get a lot of dividends from our taxable investments that were taxed at 15%, but even doubling that tax would not be enough to make me buy a variable annuity. We offset the taxes with the Foreign Tax Credit. I just don't see how the annuity is going to help you at all. Thanks for the feedback. As I mentioned, I will avoid cap gains upon the sale of much of my existing portfolio b/c I have loss carry-forwards. So, other than not having the losses for future gains, the gain recognition related to the switch is a non-issue. I inadv...
- Sun Jan 06, 2013 12:19 pm
- Forum: Personal Investments
- Topic: Need some help re: analyzing substantial portfolio changes
- Replies: 11
- Views: 945
Need some help re: analyzing substantial portfolio changes
I am thinking of making material changes to my portfolio and am a bit overwhelmed by the complexity of the decision. I am in the highest federal and CA income tax brackets and therefore pay an effective rate of about 33% (after considering the effect of the phase-out of itemized deductions) on dividend and LT capital gains. I am strongly considering selling many of my taxable positions and buying VG variable annuities to replicate the exposure in a tax-deferred manner (I fortunately have enough cap loss carry-forwards to avoid paying taxes on the gains). I am 50 years old and my objective is to avoid CA income taxes until I can relocate from the state. I will not need the capital before turning 59.5. The issues I am wrestling with are: How ...
- Fri Jun 01, 2012 5:23 pm
- Forum: Investing - Theory, News & General
- Topic: Encouraging words of the day
- Replies: 41
- Views: 3170
Re: Encouraging words of the day
The usual TV market prognosticators sound ready to slit their wrists. That encourages me that a rally is in the making.
- Tue Jan 03, 2012 7:43 pm
- Forum: Investing - Theory, News & General
- Topic: 1/3 updated values
- Replies: 8
- Views: 987
Re: 1/3 updated values
what's odd is that the VG funds that I hold at a different custodian have been priced.Groundhog wrote:My google doc was updated after 6pm but I noticed later that some of the bond funds had different values for Jan 3. Still waiting for my TSP prices to report in. A busy first trading day of the year I guess.
- Tue Jan 03, 2012 7:26 pm
- Forum: Investing - Theory, News & General
- Topic: 1/3 updated values
- Replies: 8
- Views: 987
1/3 updated values
For some reason my mutual funds haven't been revalued for Jan 3. It's about 8:30pm ET. Anyone else having this issue?
- Mon Dec 05, 2011 12:19 pm
- Forum: Investing - Theory, News & General
- Topic: CA muni bond fund options
- Replies: 2
- Views: 631
CA muni bond fund options
I would like to find a CA state tax-exempt replacement for my VMLUX and VWSUX positions and haven't found anything suitable. I suppose I can manufacture the avg duration I want through a combination of the VG CA money fund and VCADX if necessary. Alternatively, I suppose I can buy individual short and limited-term CA munis. Does anyone have recommendations?
- Fri Oct 21, 2011 12:16 pm
- Forum: Investing - Theory, News & General
- Topic: U.S. stocks in free fall
- Replies: 36221
- Views: 4651308
Re: U.S. stocks in freefall
Where are the US Stocks are in uncontrolled ascent threads?
- Sat Oct 15, 2011 8:01 am
- Forum: Personal Finance (Not Investing)
- Topic: Bill Gross ,"Im just having a bad year"
- Replies: 38
- Views: 4636
I think this is exactly the point. These people collect enormous fees (remember the Gross is a billionaire thanks to the generosity of his fund investors) because they are perceived as being able to predict the behavior of markets. When they are wrong, rather than return the fees they provide a mea culpa. It is an unbelievable racket.letsgobobby wrote:
Bond bear markets take 30 years to unfold. To gloat over a 6 month winning streak is really missing the point.
- Thu Oct 06, 2011 3:01 pm
- Forum: Investing - Theory, News & General
- Topic: I'm Bullish this October
- Replies: 217
- Views: 28043
- Thu Oct 06, 2011 3:00 pm
- Forum: Investing - Theory, News & General
- Topic: U.S. stocks in free fall
- Replies: 36221
- Views: 4651308
- Thu Oct 06, 2011 2:03 pm
- Forum: Investing - Theory, News & General
- Topic: Ten Stock-Market Myths That Just Won't Die
- Replies: 24
- Views: 5608
- Wed Oct 05, 2011 8:56 am
- Forum: Investing - Theory, News & General
- Topic: I'm Bullish this October
- Replies: 217
- Views: 28043
Bear markets are traditionally measured based on closing prices. The S&P is still holding on to a bull, barely.grayfox wrote:So yesterday the official -20% threshold for a bear market was crossed. That means that the bear market started 158 days before, at the previous peak of 1363.61 on 29-Apr-2011. We have been in a bear market since then.
The intraday low was 1074.77, which was -21.18% below the peak.
But then the market bounced up +4.58% and closed at 1123.95. It is possible that 1074.77 was the bottom and the new bull market started yesterday. The new bull market threshold (+20% from trough) is 1289.72. So Rick may be vindicated.
- Tue Oct 04, 2011 2:07 pm
- Forum: Personal Investments
- Topic: Let me know when you throw in the towel
- Replies: 43
- Views: 5931
- Tue Oct 04, 2011 1:58 pm
- Forum: Investing - Theory, News & General
- Topic: Pessimism
- Replies: 1
- Views: 762
Pessimism
How negative is the sentiment regarding the world economy? Well, last week a self proclaimed independent trader named Allesio Rastani was interviewed on the BBC and made some rather dire predictions about the global economy. Among other things Mr. Rastani averred that the “market is toast”, “the stock market is finished”, the European “bailouts won’t work”, investors should “get prepared” for a crash and oh by the way, “Goldman Sachs rules the world”. He added that as a trader, he “goes to bed every night dreaming of a new recession” because he knows he can make money from the coming crash. The video went viral on the internet via Twitter, blogs and You Tube (well over 1,000,000 views). Google “BBC trader” and you get over 30 million hits. ...
- Tue Oct 04, 2011 1:20 pm
- Forum: Investing - Theory, News & General
- Topic: I'm Bullish this October
- Replies: 217
- Views: 28043
- Tue Oct 04, 2011 9:33 am
- Forum: Investing - Theory, News & General
- Topic: Uncomfortable coincidence
- Replies: 5
- Views: 1555
Uncomfortable coincidence
On 10/3/08 the S&P 500 index closed at 1099.23. On 10/3/11 the S&P 500 closed at 1099.23.
From 10/3/08 to 10/10/08, the S&P 500 declined to 899.22.
From 10/3/08 to 10/10/08, the S&P 500 declined to 899.22.
- Sat Oct 01, 2011 10:37 am
- Forum: Investing - Theory, News & General
- Topic: Is Bank of America going to survive?
- Replies: 159
- Views: 37838
- Fri Sep 30, 2011 5:30 pm
- Forum: Investing - Theory, News & General
- Topic: And now for a really bearish prediction...
- Replies: 15
- Views: 3687
And now for a really bearish prediction...
Yikes.
Albert Edwards, a global strategist at Societe Generale, has been underweight stocks since 1996 and despite being met, he says, with "utter derision," believes a fall by the S&P to 400 is "almost inevitable."
http://www.cnbc.com/id/44713888
Albert Edwards, a global strategist at Societe Generale, has been underweight stocks since 1996 and despite being met, he says, with "utter derision," believes a fall by the S&P to 400 is "almost inevitable."
http://www.cnbc.com/id/44713888
- Sat Sep 24, 2011 10:19 am
- Forum: Personal Finance (Not Investing)
- Topic: I've lost so much money...
- Replies: 23
- Views: 6546
- Mon Sep 05, 2011 11:06 am
- Forum: Investing - Theory, News & General
- Topic: Americans Turn to Gold Over Stocks
- Replies: 57
- Views: 6817
Americans Turn to Gold Over Stocks
This is a good sign for equities.
According to a new Gallup poll, “Thirty-four percent of Americans say gold is the best long-term investment, more than say so about four other types of investments.
http://247wallst.com/2011/08/26/america ... er-stocks/
According to a new Gallup poll, “Thirty-four percent of Americans say gold is the best long-term investment, more than say so about four other types of investments.
http://247wallst.com/2011/08/26/america ... er-stocks/
- Fri Aug 26, 2011 8:48 am
- Forum: Investing - Theory, News & General
- Topic: In a World Without Qualified Dividends ... ?
- Replies: 25
- Views: 3787
Isn't it the case that, because VG ETFs are structured as separate share classes of VG funds, they will have the cap gains distributions as the funds themselves?VennData wrote:Don't forget the tax benefit of ETFs not passing along capital gains. They will become more valuable if taxes on capital gains rise. Less so if the moves to not tax mutual fund gains pass.
- Sun Aug 21, 2011 11:19 am
- Forum: Investing - Theory, News & General
- Topic: The Case for Equities
- Replies: 61
- Views: 6345
- Sun Aug 14, 2011 11:21 am
- Forum: Investing - Theory, News & General
- Topic: A reason to be bullish
- Replies: 36
- Views: 3902
Who said anything about capitulation?? I am just suggesting that investors tend to sell at the wrong time.nisiprius wrote:He said "capitulation!" He said "capitulation!"
You're out of the woods, you're out of the dark you're out of the night! Step into the sun, step into the light! Keep straight ahead for the most glorious place on the face of the earth or the sky! Hold onto your breath, hold onto your heart, hold onto your hope; march up to the gate and bid it open!
Well, of course... he just said "a feeling of capitulation." Keeping his fingers crossed.
- Sun Aug 14, 2011 11:19 am
- Forum: Investing - Theory, News & General
- Topic: A reason to be bullish
- Replies: 36
- Views: 3902
I heard the same arguments in 2009. Also, the economy does not necessarily have to improve for equities to move higher. I do encourage your pessimism though.SVariance1 wrote:Perhaps but rather superficial. What is more important is current valuations, where the economy goes from here and how to factor in this new world where the Fed can't help much and the government does not have the will to act. If the economy improves, jobs are created, and earnings increase, equities might move higher. If the opposite occurs, the downside could be very bad. The bottom line: we don't know what will happen but the risks are high, IMO
- Sun Aug 14, 2011 11:18 am
- Forum: Investing - Theory, News & General
- Topic: A reason to be bullish
- Replies: 36
- Views: 3902
The implication is that I have seen this movie many, many times before. Panic selling on selloffs and buying at market peaks. It is almost a law of nature.JDInvestor wrote:What's the line of reasoning here? That because things appear to be stabilizing (and baring a larger meltdown in Europe) at some point everyone will realize it's safe to get back in the pool, as it were?
That would make sense, but I'm new so I might be missing the implication.
- Sun Aug 14, 2011 9:56 am
- Forum: Investing - Theory, News & General
- Topic: A reason to be bullish
- Replies: 36
- Views: 3902
A reason to be bullish
Investors pulled the most money from global stock funds since 2008 in the past week as the Standard & Poor’s downgrade of Treasuries and the deepening European debt crisis prompted a flight into cash and gold. Funds that buy global equities suffered $3.5 billion in net withdrawals in the week ended Aug. 10, the most since the second week of October 2008, according to Cameron Brandt, director of research at Cambridge, Massachusetts-based EPFR Global. Investors removed $11.7 billion from funds that invest in U.S. equities, the most since May 2010 when investors pulled money following a one-day market crash that briefly erased $862 billion. http://www.bloomberg.com/news/2011-08-12/global-stock-funds-post-biggest-withdrawals-since-2008-on-u...
- Wed Aug 10, 2011 5:00 pm
- Forum: Investing - Theory, News & General
- Topic: Market Timing Correctly But Not
- Replies: 8
- Views: 2091
Re: Market Timing Correctly But Not
This is interesting. Bill Gross was right but still unable to make the right move to profit from being right. Also of note is KEN FISHER, who has been discussed here...apparently he's been betting equities will go up. Not a good bet so far and would have been a 20% better bet made today instead of 3 weeks ago. http://www.bloomberg.com/news/2011-08-10/pimco-s-gross-proves-summers-wrong-as-selloff-shows-new-normal-is-real.html Had my own market timing failure. I was tax harvesting out of a mutual fund and into an ETF and though, for once, I would try to time the market (rather than buy at the close to match the timing of the exchange out of the mutual fund). I was lucky enough to buy late in the morning when the DOW was down 425 points and w...
- Wed Aug 10, 2011 3:03 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard brokerage acct. missing link to update prices.
- Replies: 2
- Views: 614
- Tue Aug 09, 2011 1:43 pm
- Forum: Personal Consumer Issues
- Topic: Party is over - Stocks are up
- Replies: 54
- Views: 8204
- Tue Aug 09, 2011 12:31 pm
- Forum: Investing - Theory, News & General
- Topic: Senate Launches Investigation Into S&P
- Replies: 11
- Views: 2348
- Mon Aug 08, 2011 10:55 pm
- Forum: Investing - Theory, News & General
- Topic: Hedge fund redemptions causing market crash?
- Replies: 33
- Views: 4615
- Mon Aug 08, 2011 10:20 pm
- Forum: Investing - Theory, News & General
- Topic: Bear market starting tomorrow?
- Replies: 26
- Views: 4418
- Mon Aug 08, 2011 10:17 pm
- Forum: Investing - Theory, News & General
- Topic: Hedge fund redemptions causing market crash?
- Replies: 33
- Views: 4615
How in the world do you know exactly what today was about?BigSwingingD wrote:That already happened and has nothing to do with today. Today wasn't all about our debt downgrade, it is about the coming global financial meltdown. 2008 was the start with the banks - who had the gov't to prop them up. Now it is the governments of the world in trouble - who will prop them up?Mel Lindauer wrote:I just read that Geoge Soros is closing his hedge fund and returning investors' money.
- Mon Aug 08, 2011 9:32 pm
- Forum: Investing - Theory, News & General
- Topic: Hedge fund redemptions causing market crash?
- Replies: 33
- Views: 4615
- Mon Aug 08, 2011 9:25 pm
- Forum: Investing - Theory, News & General
- Topic: Bear market starting tomorrow?
- Replies: 26
- Views: 4418
Re: Bear market starting tomorrow?
True, but not how bull/bear markets are measured. The S&P500 was in a bull from the low in May 2009 to April 2011 and, if it closes 20% below the April high, it will be a bear.jeffyscott wrote:The market high (S&P 500) was ~1560 in October 2007, we have yet to recover and reach a new high.newport1 wrote:Huh? It is the standard way a bear is measured--20% decline from the high (based on closing prices). BTW, the Russell 2000 and oil are in bear markets as of today.
Update--based on futures, the S&P 500 is about in a new bear market. We will see what tomorrow brings.
- Mon Aug 08, 2011 9:05 pm
- Forum: Investing - Theory, News & General
- Topic: Bear market starting tomorrow?
- Replies: 26
- Views: 4418
Re: Bear market starting tomorrow?
Huh? It is the standard way a bear is measured--20% decline from the high (based on closing prices). BTW, the Russell 2000 and oil are in bear markets as of today.JDInvestor wrote:Says who? A statement like that reeks of technical analysis.newport1 wrote:I believe the S&P 500 is only about 30 points from entering a bear market.
Update--based on futures, the S&P 500 is about in a new bear market. We will see what tomorrow brings.
JIA INDEX 10,452.00 -274.00 10,733.00 10,748.00 10,432.00 21:43
S&P 500 1,083.50 -27.80 1,113.70 1,115.50 1,076.10 21:44
NASDAQ 100 1,984.00 -54.00 2,044.00 2,044.00 1,979.75 21:43
- Mon Aug 08, 2011 8:58 pm
- Forum: Investing - Theory, News & General
- Topic: Bear market starting tomorrow?
- Replies: 26
- Views: 4418
- Mon Aug 08, 2011 8:46 pm
- Forum: Investing - Theory, News & General
- Topic: Bear market starting tomorrow?
- Replies: 26
- Views: 4418
Bear market starting tomorrow?
I believe the S&P 500 is only about 30 points from entering a bear market. Futures are already half way there. Could tomorrow be the day?
Stock Futures
Americas
INDEX VALUE CHANGE OPEN HIGH LOW TIME
DJIA INDEX 10,549.00 -177.00 10,733.00 10,748.00 10,535.00 21:28
S&P 500 1,092.70 -18.60 1,113.70 1,115.50 1,091.20 21:29
Stock Futures
Americas
INDEX VALUE CHANGE OPEN HIGH LOW TIME
DJIA INDEX 10,549.00 -177.00 10,733.00 10,748.00 10,535.00 21:28
S&P 500 1,092.70 -18.60 1,113.70 1,115.50 1,091.20 21:29
- Mon Aug 08, 2011 7:21 pm
- Forum: Investing - Theory, News & General
- Topic: Anyone rebalancing into stocks?
- Replies: 2
- Views: 695
Re: Anyone rebalancing into stocks?
I've been DCAing into my targets so I've been buying. Futures are down so probably buying more tomorrow.Jagman wrote:If so, what is your trigger? Set time during year? 1% off your target allocation? 5% off? Suggestions? ...ready to be brave, but scared to be foolish. Thanks.
- Mon Aug 08, 2011 6:35 pm
- Forum: Personal Finance (Not Investing)
- Topic: Welcome to the No-Pain, No-Gain Economy
- Replies: 17
- Views: 2637
In that case a more appropriate chart would be taxes paid by income group.Simplegift wrote:Not distributing income, but distributing pain. That's what the unspoken drift of Rick's thoughtful article was alerting us to — and what the political process will be all about in the decades to come.newport1 wrote:And who do you propose be in charge of "distributing" income?
- Mon Aug 08, 2011 6:20 pm
- Forum: Personal Finance (Not Investing)
- Topic: Welcome to the No-Pain, No-Gain Economy
- Replies: 17
- Views: 2637
And who do you propose be in charge of "distributing" income?Simplegift wrote:Thanks for the thoughtful article, Rick. It's hard to disagree with your conclusion that we will all experience financial pain over the coming decades, on the path to economic progress. But let's just hope this future pain is a bit more fairly distributed throughout our society than it has been in the last few decades:
- Mon Aug 08, 2011 5:30 pm
- Forum: Investing - Theory, News & General
- Topic: Anyone else make money today (Monday August 8th)
- Replies: 21
- Views: 2738
- Mon Aug 08, 2011 2:03 pm
- Forum: Investing - Theory, News & General
- Topic: Anyone else buy equities today?
- Replies: 102
- Views: 13655
- Mon Aug 08, 2011 1:47 pm
- Forum: Investing - Theory, News & General
- Topic: Anyone else buy equities today?
- Replies: 102
- Views: 13655
- Mon Aug 08, 2011 1:47 pm
- Forum: Investing - Theory, News & General
- Topic: U.S. stocks in free fall
- Replies: 36221
- Views: 4651308
- Sun Aug 07, 2011 11:02 am
- Forum: Investing - Theory, News & General
- Topic: Are there any good books on economics out there?
- Replies: 50
- Views: 5445
In addition to Freedman, Hayek, and Von Mises, I highly recommend this:
http://www.google.com/products/catalog? ... ps-sellers
http://www.google.com/products/catalog? ... ps-sellers