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grabiner

The challenge with holding equities in the 401k is that I'm running out of space for fixed income. I hold equities in Roth, but Roth size is relatively small. I also hold Total International (VXUS), but it has a high dividend yield (and a somewhat high percentage of that is nonqualified), so I've p...

grabiner

If you completely depleted your emergency fund in order to pay off a 3.75% loan then I think you made a mistake. On the other hand, if you have sufficient emergency funds remaining and are so risk-averse that any volatility keeps you up at night, and if the entirety of your portfolio will let you m...

grabiner

The Wizard wrote: ↑
Sat Jul 07, 2018 8:03 am
Only the taxable part of SS is included in your MAGI for that purpose.
This will vary from 0% to 85% of your total SS benefits depending on the amount of other income...

And it should be 85% for almost everyone affected by IRMAA.

grabiner

I am on a pay as you earn student loan plan. My monthly student loan is calculated based on my income. When I first started working my income was low and I was not married at the time so my monthly student loan payment was based off my low income. As my income increased so did the amount I owed eac...

grabiner

This one surprised me: Finally, Vanguard could do more to encourage its managers, active as well as passive, to invest alongside fundholders. According to Morningstar data, the percentage of Vanguard’s U.S. assets in which at least one manager has more than $1 million invested stands at 12%. Even c...

grabiner

If you can't roll the traditional IRA into an employer plan, it is probably worth converting. If you don't convert it now, you will have to convert it when you need a backdoor Roth, and you'll probably be in a higher tax bracket then. And if you never need a backdoor Roth, you still simplify your po...

grabiner

If you completely depleted your emergency fund in order to pay off a 3.75% loan then I think you made a mistake. On the other hand, if you have sufficient emergency funds remaining and are so risk-averse that any volatility keeps you up at night, and if the entirety of your portfolio will let you m...

grabiner

As I said, I did not really pick those funds as they are pre-existing. Large amounts of dividends seems like a good thing, I understand they are taxed as income and the same bracket, but what do you mean by non-qualified in this instance or this fund? Qualified dividends, from most stocks, are taxe...

grabiner

My dear Bogleheads friends, my wife and I would be very interested in your advice. We owe mortgage of $960 per month on $103,300 at 4.0% for the next 17 yrs We owe car payment of $414 per month on $23,326 at 2.59% for the next 5 yrs See Paying down loans versus investing on the wiki. You have enoug...

grabiner

I'm thinking in the same direction. As my cash position increases we may well make some payments on the principle from time to time, but probably not pay it all down at once. Mortgage balance is $180,000 at 2.75%, and income is in the $275,000 range. At 4.6%, prepaying part of the mortgage can make...

grabiner

Welcome to the forum! If you are over the IRA contribution limit, consider a Backdoor Roth IRA . If you have a qualifying high-deductible health plan, you can invest in a Health savings account , and leave the money there to save for medical costs in retirement. If you have children, you can save fo...

grabiner

I'm a straight indexer. T R Price Blue Chip Growth (TRBCX) was brought to my attention. I ran it through Portfoliovisualizer and it's linked here https://tinyurl.com/y8q9yq85. My once good college statistics are long gone. With a t-stat of 2.3, would the conclusion be significant? Not given the sam...

grabiner

—Have about 34k left on a 30year fixed mortgage, 3.375% —I regularly max out my Roth IRA but don’t make enough to max out a 401k. At that low a rate, it's better to contribute more to the 401(k) than to pay down the mortgage, assuming you have a decent 401(k). You can earn 3.12% on Total Bond Marke...

grabiner

Hi, VXF has a massive 11% turnover ratio!!! Is that alarming and is that detrimental to the fund performance? VXF tracks an index, and has to sell stocks when they leave the index. Small-cap and mid-cap indexes thus have more turnover than large-cap indexes. However, this is not detrimental to inve...

grabiner

I would normally assume the market is efficient. If 10-year-bond yields and 5-year-bond yields are the same, this means that whoever is buying the 10-year bond must expect lower yields over the second 5 years. (If rates were expected to be stable, the 10-year bond would have a higher yield because i...

grabiner

Just for this year put $5500 into a Roth IRA account for both you and your wife. Next year invest max in your 401k and the Roth for for you and your wife if you can. If you are not "covered" by your employer plan (check the rules), you can contribute to a traditional IRA and deduct the contribution...

grabiner

VWEAX - 15% VWEAX is a high yield corporate bond fund. Having 15% of the portfolio in bonds is arguably OK, but given that it's a bonus/windfall and the goal is to maximize the value, I would argue for a 100% stock allocation. This is a poor bond fund for a taxable investment. It generates large am...

grabiner

2.5% annual fees are extremely high. However, that is only one part of the cost; how long are you paying those fees? When you leave the employer, you can roll your 403(b) into an IRA, getting the benefit of low fees while keeping the tax deferral. My rule of thumb is to consider taxable investments ...

grabiner

\1) Risk of Vanguard shutting down Vanguard Tax-Managed Small-Cap Admiral fund? This is a fairly small fund for Vanguard ($6B assets) and is offered only as Admiral (no Investor, no ETF). This fund has been around a long time, but what are the odds (your best guess) that Vanguard would shut down th...

grabiner

Another way to look at this is that the student loan payments will have to be made sometime. If you pay $8000 against your student loan this year, and another $8000 next year, you will have $16,000 plus interest in future years that is not going to the student loans, and is instead going to your 401...

grabiner

I'm glad I read this thread! I didn't know bond funds were frowned upon in taxable threads. I have about 12k of BND in my taxable vanguard account. Would like to exchange it for VTEB instead (I'm in the highest tax bracket in California). Is there a smart way to do this to minimize distributions/ta...

grabiner

Just curious, are you guys with significant SCV tilts lowering your equity exposure overall as well? Or are you comfortable with the higher overall volatility? I do view small-cap, and value, and emerging markets, as an additional risk; I prefer to do this while keeping a bond allocation, rather th...

grabiner

The Select Funds aren't the funds Vanguard expects to do best (as the "selected funds" from an industry publication might be). Rather, they are the funds which Vanguard believes are the natural choices to build a diversified portfolio around. This includes indexes in the main asset classes, and a se...

grabiner

Why do most Vanguard funds with investor and admiral shares show higher returns for investor shares vs admiral shares? You may be looking at since-inception returns for different share classes, which is not a fair comparison. Over a single day, Investor shares can outperform because of rounding, If...

grabiner

My US allocation is 1/8 LG, 3/8 LV, 1/8 SG. and 3/8 SV. Thus, if I used the standard Vanguard indexes, this would be 32% Total Stock Market (which is 25% large-cap and 7% small-cap if you don't count mid-caps separately), 18% Small-Cap Index, 25% Value Index, 25% Small-Cap Value Index. I don't quite...

grabiner

Second I tried to invest through the flatex.de online broker, where you need to choose which Risk Class you allow yourself to invest in. I would not consider my plan too risky due to its diversity. However all of these assets are either Risk Class C or D (from A to E, where A is the least risky and...

grabiner

ODVIX tracks index MSCI Emerging Markets Index so I am thinking it's unrelated to VTIAX or VWFAX https://www.oppenheimerfunds.com/advisors/fund/developing-markets-fund?fund_code=00799 The fund doesn't track the MSCI Emerging Markets Index; it is an actively managed fund which uses that index as its...

grabiner

Welcome to the forum! If you are in the top tax bracket, and hold bonds in your taxable investment account, the bonds should be municipal bonds. Vanguard Intermediate-Term Tax-Exempt is similar in risk to Total Bond Market. If you use ETFs, VTEB is a muni index, also with about the same risk level. ...

grabiner

It's reasonable to hold a cash need in a non-cash investment, as long as the investment is large enough compared to the need to compensate for any downturn. Placing cash needs in a tax-advantaged account on the wiki discusses having double your cash needs in stock in a taxable account; if the market...

grabiner

With this large an income, you will probably pay tax on 85% of your Social Security whenever you take it. Taxation of Social Security benefits on the wiki has the formula. A 2.4M brokerage account will generate about $50K of dividends all by itself, and you'll have RMDs from the retirement accounts ...

grabiner

grabiner, when you say she may have to amend tax returns, is that if the bond is sold before maturity? Or should this have been reported every year since 2004? What is the interest on this thing? Zero-coupon bonds are treated for tax purposes as if they paid an interest rate which would cause the v...

grabiner

2) The SEC voted for more disclosures, such as daily updates of portfolio holdings and historical information on bid/ask spreads. These will be useful for investors, who can make fair comparisons. The SEC already has a requirement for how to report standardized yields and returns; reporting a stand...

grabiner

Note that you need to report the income on a zero-coupon bond; it is considered to pay interest every year as its value increases from the purchase price to the face value. The "Unrealized gain/loss" is only relevant if the bond is sold before maturity; if you sell the bond for more than the purchas...

grabiner

I am 50% international. I overweight small-cap and emerging markets because those give better diversification.

grabiner

The problem with a balanced fund in a taxable account is that you have to sell stocks and bonds at the same time. If you want to hold fewer bonds, or a different type of bonds, or bonds in another account, you must sell stocks at the same time, and pay a tax cost. However, this is less of an issue f...

grabiner

I have 11 asset classes (US LG/LV/SG/SV, foreign DMLg/EMLg/DMSm/EMSm, REIT US/foreign, and bonds), with 5% my lowest target allocation to any class (both REIT classes, US LG/SG, and EM small). The only target I have ever had below 5% was a full asset class. not a subclass, as I was 0% bonds in 2014 ...

grabiner

Hmmmmmm . . . . just for fun and to play Devil's Advocate/to stoke the active/passive debate: 1. Correct me if I'm wrong but Isn't the best performing international (NOT including global funds) fund at VG over the past 10, 15, 20 years an actively managed one? (See VINEX). You would expect this to ...

grabiner

If you do need a specific number of dollars on a specific date, you can either buy CDs or individual bonds, or shorten your own duration. If you want money in five years, you can start in an intermediate-term bond fund with a five-year duration, then move money to a short-term bond fund and then to...

grabiner

So which one has the higher returns? Usually, you would compare mortgage and bond rates for the same duration. For example, since 7-year municipal bonds yield 2.85% (Admiral shares of Vanguard Long-Term Tax-Exempt), and a 15-year mortgage has about a 7-year duration, it is better to invest than to ...

grabiner

... because the fund buys and sells bonds. If a bond falls in price, the fund might sell that bond, and buy a new bond with a higher coupon rate at par. The new bond will thus pay more dividends, but will not rise back in price unless rates fall. Do bond fund managers know that holding a bond to ma...

grabiner

Does anyone know if the earnings from annuites are LTCG? I think VG told me that if i do a 1035 exchange what i took out would be taxed a my regular rate. Gains from annuities are taxed as ordinary income, which makes it a particularly bad deal to hold stocks in a variable annuity; you tax-defer yo...

grabiner

I need some clarification here: The NAV has dropped with the interest rate hikes, and now the fund is "already paying more", but is that increased yield not based upon the now lower NAV? So are you getting more, is it a wash, or is there still some NAV loss which has to be made up over time, if the...

grabiner

For accounting purposes, it makes sense to accrue market discount on an annualized basis. Say that you buy 1000 two-year bonds for $998 each, with market discount, and with an $18.97 annual coupon; this would give your bonds a 2% yield to maturity. I buy 998 two-year bonds for $1000 each, with no ma...

grabiner

I recently went to a financial advisor who began talking about his investment strategies with me. He stated that he typically uses index funds for the US market, but he selects actively managed funds when it comes to the international funds because they typically outperform international index fund...

grabiner

Consider the cost at the same risk level . Presumably, you have a portfolio containing both stocks and bonds, even if all the bonds are in your 401(k). Thus, you have the following options, if you are considering, say, a $250K house: A: Put $50K down which is currently in cash. B: Pay the full $250K...

grabiner

Rising rates will create a principal loss in the underlying value of the bond portfolio. That is an absolute guarantee. This is true, with one caveat which makes it useless as advice. Rising rates on a specific bond will create a principal loss on that bond. This is a mathematical truth; the presen...

grabiner

I'm 64 and will probably start Social Security at 66, so thought it might be good to do this before collecting it? Yes, it is. If you are in the phase-in for Social Security taxation, then every $1 of capital gain after you start taking Social Security will make 85 cents of Social Security taxable....

grabiner

Thank you both. Can I mail Monday without filing 2210 bad just hope I don’t get a letter requesting the penalty? The payments are fairly small - around $600 feds / $250 State (PA). The penalty won't be due until you file your taxes, because the IRS doesn't know how much you actually owe. When you f...

grabiner

I don't see how contributing to a Roth could be worse than taxable, if your capital gains tax rate is higher than 10% (the penalty for early Roth withdrawals, and only if no exception exists). And if you can only withdraw Roth contributions to meet your needs, a Roth will always be superior to taxa...

grabiner

He can keep the HSA, and continue to use it for medical expenses. However, since he lost HSA coverage during the year, his contribution for this year will be limited. If the plan was discontinued on July 1, then he can only contribute half the IRS maximum. If he has not contributed that amount, he c...

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