Search found 9283 matches

by David Jay
Sat Oct 10, 2020 10:10 pm
Forum: Investing - Theory, News & General
Topic: 401k, Roth 401k and Backdoor Roth IRA theory
Replies: 9
Views: 679

Re: 401k, Roth 401k and Backdoor Roth IRA theory

The one thing to consider (in the context of all your other retirement accounts) is that you can - effectively - get better results from $19,500 in a Roth than $19,500 in a regular 401K because you are paying the tax before the $19,500. If you put $19,500 in a traditional 401K the government has a c...
by David Jay
Sat Oct 10, 2020 8:43 pm
Forum: Personal Finance (Not Investing)
Topic: Investing in real estate - what is your opinion?
Replies: 53
Views: 4225

Re: Investing in real estate - what is your opinion?

With no landlord experience, buying your very first rental out-of-state is a recipe for disaster.
by David Jay
Sat Oct 10, 2020 8:29 pm
Forum: Personal Investments
Topic: Funds v ETF - frequent purchases
Replies: 13
Views: 665

Re: Funds v ETF - frequent purchases

stay with the mutual funds for now. you can always convert to etf later if you need to move out of vanguard. converting to etf from the same mutual fund is not a taxable event at vanguard. This! Because Vanguard ETFs are just a share class of the Mutual Fund, you can convert “instantly” with no tax...
by David Jay
Sat Oct 10, 2020 7:59 pm
Forum: Personal Investments
Topic: Early Retirement Plan - Seeking guidance again
Replies: 8
Views: 1228

Re: Early Retirement Plan - Seeking guidance again

mgp wrote: Sat Oct 10, 2020 7:54 pmThe bonds your refer to are in taxable correct ? What short term bonds you use ? Corporate or treasury ?
No, I hold them in a tIRA. So your situation is a bit more complicated than mine.

I use Vanguard Short Term Bond Fund (mix of corporate and treasury).
by David Jay
Sat Oct 10, 2020 7:39 pm
Forum: Investing - Theory, News & General
Topic: 401k, Roth 401k and Backdoor Roth IRA theory
Replies: 9
Views: 679

Re: 401k, Roth 401k and Backdoor Roth IRA theory

We need to get our terms correct. Is your company offering an "After-tax 401K" or a "Roth 401K"? I suspect your employer is offering an "After Tax 401K" if they are saying that the new plan provides for additional contribution space, with a "Roth 401K" the $19,500 limit (total) applies to the combin...
by David Jay
Sat Oct 10, 2020 6:01 pm
Forum: Personal Investments
Topic: Early Retirement Plan - Seeking guidance again
Replies: 8
Views: 1228

Re: Early Retirement Plan - Seeking guidance again

We are in a very similar stage of life - retired, age 63, anticipate delaying SS to age 69 or 70, something between 50K and 60K living expenses. The big difference is that I have a portfolio less than half your size, so I see no red flags with your plan. I retired with an AA of 45/55 and I am spendi...
by David Jay
Sat Oct 10, 2020 5:47 pm
Forum: Personal Investments
Topic: Mirror Accounts or Allocate For Tax Efficiency?
Replies: 7
Views: 619

Re: Mirror Accounts or Allocate For Tax Efficiency?

Welcome to the forum! The most common advice here on BH is to treat your entire portfolio as one account, not trying to replicate your asset allocation in every account. Then select the most tax-efficient location for each type of fund. Here is the Wiki on tax efficient fund placement: https://www.b...
by David Jay
Sat Oct 10, 2020 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: Life Insurance and Living Trust
Replies: 4
Views: 262

Re: Life Insurance and Living Trust

Life insurance payouts are normally tax free (federal). What taxes did he think he would avoid?
by David Jay
Sat Oct 10, 2020 3:19 pm
Forum: Investing - Theory, News & General
Topic: NFCU Certificate Rates Drop Again
Replies: 13
Views: 1483

Re: NFCU Certificate Rates Drop Again

And we are not done with the trend...
by David Jay
Sat Oct 10, 2020 3:15 pm
Forum: Investing - Theory, News & General
Topic: "Bonds as a way to generate cash if the stock market is in the toilet"
Replies: 93
Views: 5260

Re: Wretchedly low return on bonds--game over

You must be able to stay the course with your 85+ percent stock allocation when the market drops 50%, which it could well do another time or two in your lifetime. Do you have the intestinal fortitude to do that? First and foremost, you need to set an Asset Allocation that you can hold through thick ...
by David Jay
Sat Oct 10, 2020 1:12 pm
Forum: Personal Investments
Topic: Limited income and Roth IRA and Roth 401k
Replies: 5
Views: 422

Re: Limited income and Roth IRA and Roth 401k

Thus, I think you can contribute to your Roth IRA up to the lesser of $6K (or $7K if age 50 by 12/31) or your compensation found in Box 1 of any W-2 that you get. Box 1 will probably have your insurance payments subtracted from your pay, but not your FICA and medicare taxes. This is a great point. ...
by David Jay
Sat Oct 10, 2020 10:55 am
Forum: Personal Investments
Topic: Limited income and Roth IRA and Roth 401k
Replies: 5
Views: 422

Re: Limited income and Roth IRA and Roth 401k

livesoft wrote: Sat Oct 10, 2020 10:50 am
David Jay wrote: Sat Oct 10, 2020 10:45 amSo any pre-tax contributions reduce your “taxable income”. Looks like $3000 is all you can contribute.
Yeah, I re-read “Roth 401K” after posting, but I didn’t get it edited fast enough.
by David Jay
Sat Oct 10, 2020 10:45 am
Forum: Personal Investments
Topic: Limited income and Roth IRA and Roth 401k
Replies: 5
Views: 422

Re: Limited income and Roth IRA and Roth 401k

That is a great question. Here is the definitive language from IRS Publication 590-A: Roth IRAs only. If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of: - $6,000 ($7,000 if you are age 50 or older), or - Your taxable compensation. Any pre-tax contributio...
by David Jay
Sat Oct 10, 2020 8:38 am
Forum: Personal Finance (Not Investing)
Topic: Spousal SS benefits
Replies: 7
Views: 1349

Re: Spousal SS benefits

Click on this link: https://www.ssa.gov/benefits/forms/

The second item on the list is “Retirement or Spouse’s Benefits”. Click on that item. Follow the instructions.
by David Jay
Thu Oct 08, 2020 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: Age 50++ - When to "self-insure", i.e., cancel Disability and Term Life Insurance policies
Replies: 18
Views: 2328

Re: Age 50++ - When to "self-insure", i.e., cancel Disability and Term Life Insurance policies

I dropped my term life insurance (before the term expired) at age 58 as there was no longer a need for the policy. My wife was fully provided for from our portfolio at that point.
by David Jay
Thu Oct 08, 2020 3:17 pm
Forum: Investing - Theory, News & General
Topic: Is this the worse time to FIRE?
Replies: 20
Views: 1771

Re: Is this the worse time to FIRE?

tomtoms wrote: Thu Oct 08, 2020 2:59 pmIt seems like the stock market has peaked.
The market spends most (something like 60%) of its time at-or-near all time highs. The SP500 is about 5% below it’s all time high, which makes the current market conditions very normal.
by David Jay
Thu Oct 08, 2020 3:03 pm
Forum: Personal Investments
Topic: Feedback on Aggressive Portfolio (Late 20s)
Replies: 27
Views: 1710

Re: Feedback on Aggressive Portfolio (Late 20s)

Six different brokers? You can do an “in-kind” transfer and get all of your taxable in one account without any tax implications (this is just for simplification). 5. It was very tiresome typing all of this, and has made me realize how many investments I have spread out across so many accounts . Shou...
by David Jay
Wed Oct 07, 2020 2:44 pm
Forum: Personal Investments
Topic: PONAX - help me understand it
Replies: 9
Views: 895

Re: PONAX - help me understand it

This is a bond fund (Pimco Income A), it holds bonds with a relatively short duration. Interest rates have dropped, so income from this fund will drop. With an adjusted expense ratio of .89, income is likely to remain low for some period of time (at least a couple of years). The problem is there rea...
by David Jay
Wed Oct 07, 2020 2:27 pm
Forum: Personal Investments
Topic: Buying Order: Allocation Strategy or Pricing Strategy
Replies: 11
Views: 635

Re: Buying Order: Allocation Strategy or Pricing Strategy

Definitely #1. And interestingly enough, once you achieve your target AA, you will be accomplishing #2 indirectly as you continue to direct your contributions to maintain your AA as follows: If, say, US Stocks make a big gain, you will be underweight International and REIT. Conversely if, say, Inter...
by David Jay
Tue Oct 06, 2020 5:05 pm
Forum: Personal Investments
Topic: Muni Bonds/Funds
Replies: 11
Views: 1885

Re: Muni Bonds/Funds

What is your marginal tax rate? If you are in the 22% tax bracket (~$195,000 after standard deduction) then Muni’s likely don’t make sense.

If you are in the 32% or 35% bracket then Munis may well make sense.
by David Jay
Tue Oct 06, 2020 4:51 pm
Forum: Investing - Theory, News & General
Topic: Do you think it's worth to slice & dice for lower ER
Replies: 11
Views: 1028

Re: Do you think it's worth to slice & dice for lower ER

rkhusky wrote: Tue Oct 06, 2020 3:18 pmOr add more stocks.
This! A 10% shift (to equity) of your total portfolio will almost certainly do more for your return than any tweaking of the “fixed income” portIon.
by David Jay
Tue Oct 06, 2020 2:07 pm
Forum: Investing - Theory, News & General
Topic: Dying Broke (On Purpose) Article
Replies: 138
Views: 10858

Re: Dying Broke (On Purpose) Article

I was moved to change my plans when I read Taylor say that they purchased annuities (SPIA :happy) to meet all their needs so they could give to their kids while they were still alive. Most of us can't forecast "all [our] needs" or how much they'll cost - that's the problem. Obviously there's a poin...
by David Jay
Tue Oct 06, 2020 9:35 am
Forum: Investing - Theory, News & General
Topic: Do you think it's worth to slice & dice for lower ER
Replies: 11
Views: 1028

Re: Do you think it's worth to slice & dice for lower ER

In my opinion, you are working way too hard to gain a one digit basis point yield improvement. 4.2 basis points is an additional $4.20 for every $10,000 invested.

There is no fixed income yield at this time. We just have live with that.
by David Jay
Tue Oct 06, 2020 8:12 am
Forum: Personal Investments
Topic: Life Strategy Fund Tax Implications
Replies: 31
Views: 2408

Re: Life Strategy Fund Tax Implications

If you have tax-advantaged space (IRA, 401K, 403B, etc.) available, the common recommendation is to hold bonds in tax advantaged and equity funds in taxable. This would involve using the 3-fund portfolio (or similar) instead of a single LifeStrategy. The LifeStrategy family is a "fund-of-funds" prod...
by David Jay
Mon Oct 05, 2020 9:22 pm
Forum: Personal Investments
Topic: Beginner question... VTSAX vs. the field?
Replies: 12
Views: 1288

Re: Beginner question... VTSAX vs. the field?

There are, literally, thousands of other US stock funds. But VTSAX holds the entire US Market in the same proportion as the stock market. So you hold everything in this fund, you are fully diversified in the US stock market. If you start adding other stock funds, you don’t diversify , you concentrat...
by David Jay
Mon Oct 05, 2020 6:37 pm
Forum: Personal Finance (Not Investing)
Topic: Should I sell bonds to eliminate PMI?
Replies: 10
Views: 658

Re: Should I sell bonds to eliminate PMI?

Welcome to the forum! I think I would sell the bonds (I presume they are in a taxable account). You are paying taxes on the bond income - such as it is these days. There should be a relatively small amount capital gains, in comparison to a stock fund, because bond funds pay out the interest every mo...
by David Jay
Mon Oct 05, 2020 6:30 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Zero funds vs Vanguard performance
Replies: 59
Views: 7308

Re: Fidelity Zero funds vs Vanguard performance

First, in theory, the people running the index should be completely separate from the portfolio manager. The index return is posted daily and is maintained by a 3rd party, S&P. The FZROX index is proprietary and is not (to my knowledge) accessible by the investor. If you can point me to a place whe...
by David Jay
Mon Oct 05, 2020 4:42 pm
Forum: Personal Investments
Topic: Let Dad's Deferred Annuity Annuitize?
Replies: 7
Views: 623

Re: Let Dad's Deferred Annuity Annuitize?

Whoever convinced your folks to put IRA money into deferred annuities should be placed in stocks for 24 hours (minimum) in the public square and be pelted with rotten tomatoes by the crowd as they jeer the criminal. That being said, if they have no need of an additional income stream then the annuit...
by David Jay
Mon Oct 05, 2020 4:31 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Zero funds vs Vanguard performance
Replies: 59
Views: 7308

Re: Fidelity Zero funds vs Vanguard performance

First, in theory, the people running the index should be completely separate from the portfolio manager. The index return is posted daily and is maintained by a 3rd party, S&P. The FZROX index is proprietary and is not (to my knowledge) accessible by the investor. If you can point me to a place whe...
by David Jay
Mon Oct 05, 2020 4:26 pm
Forum: Personal Investments
Topic: Feedback on plans to organize my finances
Replies: 8
Views: 569

Re: Feedback on plans to organize my finances

What's the interest rate on the mortgage? 2.875% What are the fund options in your 401k, with ticker symbols and expense ratios? PIMCO LOW DURATION INSTL - PTLDX - 0.87% PIMCO TOTAL RETURN - PTTRX - 0.70% PIMCO FOREIGN BOND INSTL - PFUIX - 0.63% VANGUARD/WELLINGTON ADMIRAL - VWENX - 0.17% DFA U.S. ...
by David Jay
Mon Oct 05, 2020 3:00 pm
Forum: Personal Investments
Topic: Feedback on plans to organize my finances
Replies: 8
Views: 569

Re: Feedback on plans to organize my finances

Welcome to the forum! Everything looks good to me except for the Roth contributions. You are solidly in the 22% tax bracket so I would recommend increasing your 401K contribution by 6K instead of contributing to the Roth. The variable in this recommendation is your 401K expense. If all your funds ha...
by David Jay
Mon Oct 05, 2020 2:54 pm
Forum: Investing - Theory, News & General
Topic: Fidelity Zero funds vs Vanguard performance
Replies: 59
Views: 7308

Re: Fidelity Zero funds vs Vanguard performance

I'm still waiting to see evidence that Fidelity loses money on these funds. Don't worry, you won't. Your statement is irrefutable. That is an advantage of a proprietary index. How does one tease-out the different sources of the minute differences in performance when you can't assign the "index" por...
by David Jay
Mon Oct 05, 2020 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: CPA/Tax Strategist in Ohio
Replies: 4
Views: 298

Re: CPA/Tax Strategist in Ohio

It isn't rocket surgery, I figured it out. :wink:

(retired last year at age 62)
by David Jay
Mon Oct 05, 2020 1:28 pm
Forum: Personal Finance (Not Investing)
Topic: CPA/Tax Strategist in Ohio
Replies: 4
Views: 298

Re: CPA/Tax Strategist in Ohio

I would recommend a "fee only" financial planner. A CPA may-or-may-not be competent to help with retirement planning, depending on his area of practice. A "tax expert" likely has too narrow an expertise to make a lifelong retirement plan. (or he could come here, we get these kinds of questions all t...
by David Jay
Mon Oct 05, 2020 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: 401k loan for finance and refinance
Replies: 6
Views: 328

Re: 401k loan for finance and refinance

Be aware that a 401K loan can be "called" (i.e. they can demand you pay it off) if you leave employment with this company. If you cannot repay (essentially immediately) they will take the money from your 401K as a "distribution" in which case you will owe the early withdrawal penalty plus paying tax...
by David Jay
Mon Oct 05, 2020 11:19 am
Forum: Personal Investments
Topic: Having a hard time committing to 3 fund portfolio
Replies: 23
Views: 3439

Re: Having a hard time committing to 3 fund portfolio

Was your target date fund an index fund (such as Fidelity Freedom INDEX Fund or a Vanguard target date fund) with a low ER (Expense Ratio)? No it was a Vanguard institutional target retirement 2055. Go back to the Target Date fund. Keep throwing money into it for the next 10 years. Then evaluate (a...
by David Jay
Mon Oct 05, 2020 10:19 am
Forum: Personal Investments
Topic: Having a hard time committing to 3 fund portfolio
Replies: 23
Views: 3439

Re: Having a hard time committing to 3 fund portfolio

Was your target date fund an index fund (such as Fidelity Freedom INDEX Fund or a Vanguard target date fund) with a low ER (Expense Ratio)? No it was a Vanguard institutional target retirement 2055. Go back to the Target Date fund. Keep throwing money into it for the next 10 years. Then evaluate (a...
by David Jay
Sun Oct 04, 2020 3:27 pm
Forum: Personal Investments
Topic: How to handle large inheritance
Replies: 13
Views: 1756

Re: How to handle large inheritance

Before any specific actions, a word of advice: Don’t tell anybody. No friends. No co-workers. Especially no extended family. If you want a peaceful life, it is essential that you don’t let folks know about the inheritance.
by David Jay
Sat Oct 03, 2020 9:18 pm
Forum: Investing - Theory, News & General
Topic: Dying Broke (On Purpose) Article
Replies: 138
Views: 10858

Re: Dying Broke (On Purpose) Article

I was moved to change my plans when I read Taylor say that they purchased annuities (SPIA :happy) to meet all their needs so they could give to their kids while they were still alive. In my case, a large part of that “giving” can be shared travel and experiences but also 529 plans and such. My goal,...
by David Jay
Sat Oct 03, 2020 9:12 pm
Forum: Personal Investments
Topic: Retired 5 years, asking for portfolio feedback
Replies: 5
Views: 1329

Re: Retired 5 years, asking for portfolio feedback

Think about it - holding bonds paying 1% or so and cash paying a fraction of 1% while paying, say, 3% or 4% (I don’t know your mortgage APR) every month on your mortgage balance. In the 12% tax bracket the mortgage interest deduction is only worth a tiny portion of the difference between the interes...
by David Jay
Sat Oct 03, 2020 5:04 pm
Forum: Personal Investments
Topic: Retired 5 years, asking for portfolio feedback
Replies: 5
Views: 1329

Re: Retired 5 years, asking for portfolio feedback

In this era of very low interest rates your bond funds are not going to provide much return. Wellesley and Wellington will also have low yields because of the bond component of each fund. Moving more of your assets to stocks will would be expected to increase your long-term growth but at the same ti...
by David Jay
Sat Oct 03, 2020 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Spousal SS benefits
Replies: 7
Views: 1349

Re: Spousal SS benefits

I believe that she will need to apply for a spousal benefit. Give SS a call or you may be able to do it through the website.

Spousal benefits should add to her benefit so that together (her benefit + spousal) equals half of your age 66 (Full retirement age) benefit.
by David Jay
Sat Oct 03, 2020 3:15 pm
Forum: Personal Investments
Topic: Trying to understand logistics of a Backdoor Roth
Replies: 38
Views: 2943

Re: Trying to understand logistics of a Backdoor Roth

Is the maximum amount $6k per year for the Roth conversion. For 20 years, that is about 120k-300k with growth. Is it worth the hassle every year with the Form and being careful with it and keeping the documentation etc. Roth funds can be very valuable at-and-after retirement. There are many means-t...
by David Jay
Sat Oct 03, 2020 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: Self managing my escrow payments
Replies: 9
Views: 972

Re: Self managing my escrow payments

In the simplest form, start in September and put 1/12 of the total tax bill ($2042 this year) into the account each month. You will always have enough at every due date. You need to start in September or pre-fund by the months since September to make it work. The reason for this is that the time bef...
by David Jay
Sat Oct 03, 2020 12:51 pm
Forum: Personal Investments
Topic: Fixing 2018 Roth IRA Over-contribution
Replies: 5
Views: 427

Re: Fixing 2018 Roth IRA Over-contribution

This article may help point you in the right direction:

https://www.financial-planning.com/news ... ional-iras
by David Jay
Sat Oct 03, 2020 12:45 pm
Forum: Personal Investments
Topic: ROTH and Back-Door Roth in Same Year? (Made Less Money Than Thought)
Replies: 4
Views: 301

Re: ROTH and Back-Door Roth in Same Year? (Made Less Money Than Thought)

My question is: Am I fine doing these regular contributions for one ROTH IRA even thought for the other I funded it as a back-door contribution? Or will this create some problem (with taxes, IRS audit probability, etc.). It seems unlikely but just thought I'd check. No issue whatsoever with spouses...
by David Jay
Sat Oct 03, 2020 11:05 am
Forum: Personal Finance (Not Investing)
Topic: Social Security Planning - Age Gap + Younger Spouse Higher Earner
Replies: 16
Views: 1166

Re: Social Security Planning - Age Gap + Younger Spouse Higher Earner

BTW - Oblivious Investor is the author of opensocialsecurity.com, so you are hearing from "the man".
by David Jay
Sat Oct 03, 2020 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Social Security Planning - Age Gap + Younger Spouse Higher Earner
Replies: 16
Views: 1166

Re: Social Security Planning - Age Gap + Younger Spouse Higher Earner

Have you used the advanced features of opensocialsecurity.com ? You can plug in different assumptions and get a wider range of outcomes. Her spousal will be reduced, dollar-for-dollar if she claims a personal benefit before her FRA (age 67 if birth year is 1960 or later). That could be the source of...
by David Jay
Fri Oct 02, 2020 10:38 pm
Forum: Investing - Theory, News & General
Topic: Retirement Income book recommendation?
Replies: 5
Views: 569

Re: Retirement Income book recommendation?

“How to make your money last” By Jane Bryant Quinn.
by David Jay
Fri Oct 02, 2020 6:11 pm
Forum: Personal Investments
Topic: fixed annuity
Replies: 27
Views: 1646

Re: fixed annuity

Oh, and no 59.5 limitation if purchased with unqualified funds... There is a 10% penalty on the gains (i.e. if you take the interest credited) and are under 59.5. I own 2 MYGAs that allow interest withdrawal prior to the surrender date that has 0 fees on taking the interest out (other allow 10% wit...