Can the offset be avoided, if not selling all shares? By using specified shares, average cost or FIFO in which older shares are sold?
Lar
Search found 372 matches
- Tue Sep 03, 2013 9:48 pm
- Forum: Personal Investments
- Topic: Help with TLH a Muni Bond Fund?
- Replies: 10
- Views: 1152
- Mon Sep 02, 2013 12:42 pm
- Forum: Personal Investments
- Topic: TIPS might soon be worth buying again
- Replies: 9
- Views: 1885
Re: TIPS might soon be worth buying again
Bloomberg shows the 10 year TIPS (real) yield at 0.68%. So we still need quite a yield increase/price drop to get to 2%. We may, however, be getting close to having a non-zero fixed rate for I-bonds. Historically, the I-bond ran about 1% below the 10 yr TIPS real yield until the I-bond yield hit 0%.
Lar
Lar
- Mon Sep 02, 2013 12:29 pm
- Forum: Personal Investments
- Topic: Pay down mortgage or invest?
- Replies: 15
- Views: 2688
Re: Pay down mortgage or invest?
If your itemized deductions, excluding mortgage interest, are less than your standard deduction ($11,900 for married 2012), then you are not getting the full benefit of the mortgage interest deduction. So there may be a small income tax benefit from paying off the mortgage.
Peace of mind of not having the expense is a non-monetary benefit of paying off a home mortgage.
Lar
Peace of mind of not having the expense is a non-monetary benefit of paying off a home mortgage.
Lar
- Fri Aug 30, 2013 6:35 pm
- Forum: Personal Investments
- Topic: Ever have Vanguard misclassify cost basis?
- Replies: 7
- Views: 1059
Re: Ever have Vanguard misclassify cost basis?
Did you enter as one transaction (as one sell order exchanging one fund for two funds) or as two separate exchanges? From experience, I know VG confirmation show two transactions when exchanging one fund for two.
Lar
Lar
- Fri Aug 30, 2013 6:29 pm
- Forum: Personal Investments
- Topic: Why not a TR fund with munis?
- Replies: 6
- Views: 645
Re: Why not a TR fund with munis?
Probably because Target Retirement funds are designed and marketed for retirement accounts.
Lar
Lar
- Sat Aug 24, 2013 9:05 pm
- Forum: Personal Investments
- Topic: What to do with Vanguard Wellesley in this environment?
- Replies: 35
- Views: 5683
Re: What to do with Vanguard Wellesley in this environment?
The OP seems to be mostly uncomfortable with his bond risk. The bond duration in Wellington and Wellesley are a little on the long side. One way to reduce duration modestly would be to exchange Wellesley for Wellington and a ST Bond fund (I use ST Investment Grade) or even CDs in a ratio that keeps fixed income the same.
I do not agree that Equity Income is equivalent to the equity portion of Wellesley and Wellington. A chunk of Equity Income is handled by the VG Quant group. One of my mistakes a few years ago was using Windsor II and IT Bonds for tax efficiency. Wellington equity out performed Windsor II very noticeably as Windsor II got a little caught up in some of the blowup in financial stocks.
Lar
I do not agree that Equity Income is equivalent to the equity portion of Wellesley and Wellington. A chunk of Equity Income is handled by the VG Quant group. One of my mistakes a few years ago was using Windsor II and IT Bonds for tax efficiency. Wellington equity out performed Windsor II very noticeably as Windsor II got a little caught up in some of the blowup in financial stocks.
Lar
- Tue Aug 20, 2013 10:35 pm
- Forum: Personal Investments
- Topic: TSP advice needed!
- Replies: 21
- Views: 6184
Re: TSP advice needed!
The dated L funds have a fairly steep ramp up in FI the 5 years prior to conversion to L Income. Plotting the FI component (G plus F fund allocation) of the L funds and a few combinations provided a visual of the glide slopes and helped with my decision. So I combined of Income, 2020 and 2030 for the my L funds.
Caveats: TSP L funds are roughly 12% of overall investment portfolio and I am 5 yrs older than my wife. The L funds FI allocation to F and G funds may not make the best use of the G fund, especially if one has other substantial FI investments.
Lar
Caveats: TSP L funds are roughly 12% of overall investment portfolio and I am 5 yrs older than my wife. The L funds FI allocation to F and G funds may not make the best use of the G fund, especially if one has other substantial FI investments.
Lar
- Tue Aug 06, 2013 7:20 pm
- Forum: Personal Investments
- Topic: VG Convertibles - % Equity Characteristics
- Replies: 2
- Views: 316
Re: VG Convertibles - % Equity Characteristics
Thanks, Paul. Charting isn't very definitive, but it clearly shows VCVSX is more equity like than I suspected - in line with Morningstar's estimate of VCVSX's equity upside and downside capture. So I'm taking minimal position and will add only when/if the markets misprice, like when convertibles were being dumped during the financial crisis. I missed that opportunity because I wasn't comfortable putting in the $10K minimum in effect at the time.
Lar
Lar
- Mon Aug 05, 2013 9:32 pm
- Forum: Personal Investments
- Topic: VG Convertibles - % Equity Characteristics
- Replies: 2
- Views: 316
VG Convertibles - % Equity Characteristics
I'm looking at VG Convertible Securities (VCVSX) for a small portion of investment portfolio in an IRA. For asset allocation, holding would be considered part equity/part bond, but how much of each is am important question. The average maturity of VCVSX is 6.2 years. Recommendations, ideas and/or references will be appreciated.
Lar
Lar
- Sun Jul 21, 2013 1:25 am
- Forum: Personal Investments
- Topic: If BF nav drops, will i get money back if held to avg dur?
- Replies: 16
- Views: 1813
Re: If BF nav drops, will i get money back if held to avg du
ogd,
Take VG ST Investment Grade as an example, with a duration of 2.4 yrs and YTM minus ER of 1.4%. So if rates increase 3%, fund goes down 7.2%, and you're saying after 2.4 yrs you're back to even. It actually takes a bit over 5 years.
For individual bonds, it is correct that value returns to face value over the life of the bond. The same is not true of bond funds, since funds do not hold to maturity. Funds generally replace bonds as they become older, so an implicit assumption is that duration remains the same for the fund. Constant duration may not be a correct assumption, but its better than guessing how the duration might change.
Lar
Take VG ST Investment Grade as an example, with a duration of 2.4 yrs and YTM minus ER of 1.4%. So if rates increase 3%, fund goes down 7.2%, and you're saying after 2.4 yrs you're back to even. It actually takes a bit over 5 years.
For individual bonds, it is correct that value returns to face value over the life of the bond. The same is not true of bond funds, since funds do not hold to maturity. Funds generally replace bonds as they become older, so an implicit assumption is that duration remains the same for the fund. Constant duration may not be a correct assumption, but its better than guessing how the duration might change.
Lar
- Fri Jul 19, 2013 6:51 pm
- Forum: Personal Investments
- Topic: If BF nav drops, will i get money back if held to avg dur?
- Replies: 16
- Views: 1813
Re: If BF nav drops, will i get money back if held to avg du
It depends on the yield and how much the rate increases. My understanding of duration is multiplying the duration times the change in rates gives the drop in the bond or bond fund value. So take change in rates times duration, then dividing by the yield gives an estimate of how long it will take to get back to break even. Of course interest rates over that period will vary, both up and down.
Lar
Lar
- Thu Jul 18, 2013 9:13 pm
- Forum: Personal Investments
- Topic: Roth IRA conversion - Avoid 10% early withdrawal?
- Replies: 9
- Views: 1413
Re: Roth IRA conversion - Avoid 10% early withdrawal?
The 5 years starts with the first contribution (or conversion?). So you can string conversions out over several years without delaying ability to withdraw contributions/conversion amounts tax-free. If you will convert to multiple funds, make sure the Roth account numbers are the same. Some fund companies use a different account number for each fund.
When I converted all of a VG fund from a TIRA to Roth a few years ago, VG kept the old TIRA account number. A quick call and VG changed the account number to match my other Roth funds.
Lar
When I converted all of a VG fund from a TIRA to Roth a few years ago, VG kept the old TIRA account number. A quick call and VG changed the account number to match my other Roth funds.
Lar
- Tue Jun 25, 2013 10:23 pm
- Forum: Personal Investments
- Topic: Admiral Shares for Target Retirement and Life Strategy Funds
- Replies: 17
- Views: 5266
Re: Admiral Shares for Target Retirement and Life Strategy F
I would also like to see equivalent to admiral shares of TR funds. The TR funds ERs are just not competitive with admiral shares of the underlying funds or TSP L funds. Since the TR are invested in index funds, minimum should be in range of $25K to 50K.
Lar
Lar
- Tue Jun 25, 2013 10:04 pm
- Forum: Personal Investments
- Topic: Feedback on Vanguard Recommendation
- Replies: 8
- Views: 1446
Re: Feedback on Vanguard Recommendation
Vanguard currently shows the Wellington and Wellesley bonds as intermediate term. The durations are longer than Total Bond Market and quality is mid. I don't remember the bond durations for either of these funds ever being in the 10+ years range of long term bond funds.
Lar
Lar
- Wed Jun 05, 2013 9:08 pm
- Forum: Personal Investments
- Topic: Bond Fund Question
- Replies: 30
- Views: 4601
Re: Bond Fund Question
Put simply, it is a fairly big trade-off between interest rate risk (rates up, bond prices down) and credit risk for a some extra yield.
Lar
Lar
- Wed Jun 05, 2013 8:58 pm
- Forum: Personal Investments
- Topic: TSP G fund as only bond fund
- Replies: 74
- Views: 10192
Re: TSP G fund as only bond fund
I recall the case for intermediate term bonds being partly based on bonds frequently (not always) going up while stocks are going down and vice versa. The behavior was rooted in economic cycles with alternating expansion and recession. TSP G with a effective duration of zero, does not and can not perform in the manner. Many on this forum, including myself, have shifted away from intermediate term bonds (and TIPS) towards TSP G. The shift is based on an assumption that Treasury yields can't go much lower, e.g. negative yields and negative yields on TIPS are a bad value. So far, we have been wrong and the shift hasn't paid off. However, the world and US economies have not fully recovered from the Great Recession. QE and flight to safety still...
- Sun Jun 02, 2013 5:20 pm
- Forum: Personal Investments
- Topic: Why don't Vanguard fund-of-funds use admiral shares?
- Replies: 19
- Views: 3491
Re: Why don't Vanguard fund-of-funds use admiral shares?
I really would like to use more of VG Target Retirement Funds (currently < 2%). Without an Admiral class, the ERs are too much higher than the TSP L funds and Admiral classes of the same funds. So I use TSP L funds and get EM exposure elsewhere.
If VG set up share classes as separate funds, I suspect income taxes on exchanges wouldn't be much of an issue since Target Retirement Funds are designed and marketed for mainly for retirement accounts.
Lar
If VG set up share classes as separate funds, I suspect income taxes on exchanges wouldn't be much of an issue since Target Retirement Funds are designed and marketed for mainly for retirement accounts.
Lar
- Sat Jun 01, 2013 9:30 pm
- Forum: Personal Investments
- Topic: Monthly Yield for TSP G
- Replies: 6
- Views: 1007
Re: Monthly Yield for TSP G
Thanks, Brian. I'm guessing 1.75% after seeing Friday's closing Treasuries yields.
Lar
Lar
- Fri May 31, 2013 5:13 pm
- Forum: Personal Investments
- Topic: Monthly Yield for TSP G
- Replies: 6
- Views: 1007
Monthly Yield for TSP G
The yield for TSP G is based on weighted treasury yields at end of the previous month for treasuries maturing in 4+ years. May end of month yields will be known soon. I'd prefer to know the yield now. Is there a website or other source where the new yield is posted?
larmewar
larmewar
- Sun May 26, 2013 7:23 pm
- Forum: Investing - Theory, News & General
- Topic: Emerging markets bonds: what happened in 1998?
- Replies: 24
- Views: 2840
Re: Emerging markets bonds: what happened in 1998?
Before the contagion, many EM countries had unoffiically pegged their currencies to the US$; that even though not officially pegged to the US$ manipulated their currency to maintain rate that were not free-market.
On EM stocks dropping less than EM bonds, I wonder how much of the difference in losses may have been due to differences in currency hedging?
Lar
On EM stocks dropping less than EM bonds, I wonder how much of the difference in losses may have been due to differences in currency hedging?
Lar
- Fri May 24, 2013 9:28 pm
- Forum: Personal Investments
- Topic: Tiered Emergency Fund
- Replies: 16
- Views: 2802
Re: Tiered Emergency Fund
Many posters on this board, myself included, use I-bonds for all or part of EF.
Lar
Lar
- Thu May 23, 2013 6:12 pm
- Forum: Personal Investments
- Topic: Bogle on Soc Sec/Fixed Income and Asset Allocation
- Replies: 28
- Views: 3118
Re: Bogle on Soc Sec/Fixed Income and Asset Allocation
I also count SS and pensions as reducing the costs my investments have to cover, but let's follow the original example through to a conclusion. Example was SS as $300K bond and $150K in equities. Now let's say the target allocation is 50% equities. So that means my $150K for equities needs to be invested with 2X leverage. IMO, that is a strategy designed to create a disaster rather than successful investing.
Lar
Lar
- Sun Apr 21, 2013 12:16 pm
- Forum: Personal Finance (Not Investing)
- Topic: Admiral Conversion in Quicken
- Replies: 9
- Views: 1368
Re: Admiral Conversion in Quicken
With further trials, "mutual fund conversion" works better than "corporate acquisition". For mutual fund conversion entry is number of shares or new fund class so shares come out exact and only converts shares in the account for where the transaction is entered. Transactions still show up as shares removed and added.
Lar
Lar
- Sat Apr 20, 2013 11:21 am
- Forum: Personal Finance (Not Investing)
- Topic: Admiral Conversion in Quicken
- Replies: 9
- Views: 1368
Re: Admiral Conversion in Quicken
Thanks for the responses. Yes, the corporate acquisition works, with additional step of editing one of the shares added to correct round off errors.
Lar
Lar
- Thu Apr 18, 2013 6:56 pm
- Forum: Personal Finance (Not Investing)
- Topic: Admiral Conversion in Quicken
- Replies: 9
- Views: 1368
Admiral Conversion in Quicken
I finally hit admiral level for Primecap and converted Friday. The download from Vanguard removed PrimeCap Inv and added PrimeCap Adml. So Quicken wiped out the basis and share returns. Primecap is in a Roth, so its not terribly critical, still I'd like to have the continuity of returns. Is there a way to enter the conversion that carries over the basis and hence the returns?
Lar
Lar
- Tue Apr 02, 2013 6:31 pm
- Forum: Personal Investments
- Topic: Should having a pension affect our asset allocation?
- Replies: 23
- Views: 3525
Re: Should having a pension affect our asset allocation?
If your wife and the school system she works do not pay into social security, remember her pension will be partly offset by reduced social security.
Lar
Lar
- Sun Mar 31, 2013 1:55 pm
- Forum: Personal Finance (Not Investing)
- Topic: Social Security - Spousal and Survivors Benefits
- Replies: 10
- Views: 1658
Re: Social Security - Spousal and Survivors Benefits
Thanks for the replies. The additional income between FRA and 70 will be welcome, and make it that much easier to wait till 70.
Lar
Lar
- Sat Mar 30, 2013 11:39 am
- Forum: Personal Finance (Not Investing)
- Topic: Social Security - Spousal and Survivors Benefits
- Replies: 10
- Views: 1658
Social Security - Spousal and Survivors Benefits
I have a SS question for which I don't find a clear and consistent answer. Situation will be this:
Wife has no earnings record and is 5 years younger than myself
I plan to delay taking SS until 70
My benefit $2,400 at FRA
I file and suspend and wife files for spousal benefit at 62 (?)
I delay SS to 70 (4 yr past FRA); benefit = $2,400 x 1.32 = $3,168
I die at 70+ y.o. and wife is past her FRA
Only significant retirement risk is wife running out of $$ if she lives too much longer than myself.
What is my wife's survivor's benefit? Will taking spousal benefit reduce her survivor benefit?
Lar
Wife has no earnings record and is 5 years younger than myself
I plan to delay taking SS until 70
My benefit $2,400 at FRA
I file and suspend and wife files for spousal benefit at 62 (?)
I delay SS to 70 (4 yr past FRA); benefit = $2,400 x 1.32 = $3,168
I die at 70+ y.o. and wife is past her FRA
Only significant retirement risk is wife running out of $$ if she lives too much longer than myself.
What is my wife's survivor's benefit? Will taking spousal benefit reduce her survivor benefit?
Lar
- Mon Mar 25, 2013 9:05 pm
- Forum: Personal Investments
- Topic: Contributing enough to TSP to maximize the match.
- Replies: 53
- Views: 6302
Re: Contributing enough to TSP to maximize the match.
There is one difference between regular and catchup TSP contributions. Catchup contributions are not eligible for matching. So maxing regular contributions before the end of the year results in loss of matching contributions, even if catchup contributions are still being made.
Lar
Lar
- Mon Feb 18, 2013 3:00 pm
- Forum: Personal Investments
- Topic: Pay down mortgage?
- Replies: 50
- Views: 5413
Re: Pay down mortgage?
Liquidity risk example:
1) Extra payments are made to pay down principal on a mortgage
2) The the funds are needed for other expenses (job loss, medical, whatever)
3) Not eligible to refinance, probably because of 2 or could be that interest rates have really gone up
4) So now one is stuck with illiquid equity that can't be accessed, liquidity risk. With ARM, at least the payments drop at the next interest adjustment and the payment will be lower than it otherwise would have been. For fixed rate, one is generally stuck with the the same monthly payments.
Lar
1) Extra payments are made to pay down principal on a mortgage
2) The the funds are needed for other expenses (job loss, medical, whatever)
3) Not eligible to refinance, probably because of 2 or could be that interest rates have really gone up
4) So now one is stuck with illiquid equity that can't be accessed, liquidity risk. With ARM, at least the payments drop at the next interest adjustment and the payment will be lower than it otherwise would have been. For fixed rate, one is generally stuck with the the same monthly payments.
Lar
- Sun Feb 17, 2013 10:12 am
- Forum: Personal Investments
- Topic: Pay down mortgage?
- Replies: 50
- Views: 5413
Re: Pay down mortgage?
It doesn't have to be either/or. You can direct the extra income to mortgage principal until safe investments offer > 2.75% retuurn. Also, extra payments to an ARM don't carry as much liquidity risk as paying down a fixed rate mortgage.
Lar
Lar
- Sun Feb 17, 2013 10:03 am
- Forum: Personal Investments
- Topic: Inflation protected, VAIPX vs VTAPX vs VTIP
- Replies: 20
- Views: 12016
Re: Inflation protected, VAIPX vs VTAPX vs VTIP
VTPAX doesn't make a lot of sense to me due to the negative real rates and fund expenses. Estimated yield to maturity, without explicitly stating the projected inflation rate make it hard to understand exactly what one is buying.
5% of FI in individual TIPs held in IRA, because it isn't worth selling small lots. Another 4% in I-bonds. IMO, I-bonds are currently the most attractive FI option and I will be directing proceeds from maturing CDs to I-bonds, up to limits.
Lar
5% of FI in individual TIPs held in IRA, because it isn't worth selling small lots. Another 4% in I-bonds. IMO, I-bonds are currently the most attractive FI option and I will be directing proceeds from maturing CDs to I-bonds, up to limits.
Lar
- Thu Jan 03, 2013 7:59 pm
- Forum: Personal Investments
- Topic: I Bonds - for 2013
- Replies: 24
- Views: 6570
Re: I Bonds - for 2013
Buy in January, unless you will hold in risk free account that earns more than 1.76%. I-bonds fixed rate is normally lower than TIPS fixed rate, so no realistic chance of a non-zero fixed rate.
Lar
Lar
- Thu Jan 03, 2013 7:44 pm
- Forum: Personal Investments
- Topic: Should I pay off mortgage with inheritance
- Replies: 38
- Views: 4272
Re: Should I pay off mortgage with inheritance
If you don't have enough deductions to itemize or your itemized deductions are only a little above the standard deduction, you should payoff the mortgage. Paying off the mortgage also does not have the risk of investing a large sum all at once before downturn.
Lar
Lar
- Tue Jan 01, 2013 8:26 pm
- Forum: Personal Investments
- Topic: Not maxing TSP (401k) but putting some in ROTH IRA?
- Replies: 15
- Views: 6272
Re: Not maxing TSP (401k) but putting some in ROTH IRA?
Perhaps the post concerning Roth TSP not being very good referred to lack of flexibility in withdrawals. Verify in TSP literature, but I understand making an early withdrawal of contributions from Roth TSP carries 10% tax penalty, withdrawals from TSP are made proportionately between traditional and Roth contributions and Roth TSP is subject to RMD.
So thanks for your post, as it is prompting me to consider spousal Roth conversions/contributions instead of splitting TSP contributions between traditional and Roth contributions.
Lar
So thanks for your post, as it is prompting me to consider spousal Roth conversions/contributions instead of splitting TSP contributions between traditional and Roth contributions.
Lar
- Sun Dec 30, 2012 6:08 pm
- Forum: Personal Investments
- Topic: Sell or hold two TIPS bonds
- Replies: 15
- Views: 1542
Re: Sell or hold two TIPS bonds
You didn't post values for bonds or whether taxable vs. non-taxable. If the sales expenses aren't too great, you might consider selling up to your I-bond limits.
Lar
Lar
- Sun Dec 30, 2012 5:38 pm
- Forum: Personal Investments
- Topic: Q regarding the I-bonds
- Replies: 10
- Views: 1769
Re: Q regarding the I-bonds
I-bonds are a great alternative to TIPS and TIPS funds for inflation protection, that is unless you expect TIPS real yields (fixed rate) to become even more negative.
Lar
Lar
- Tue Dec 25, 2012 5:18 pm
- Forum: Personal Investments
- Topic: How to put value on military pension?
- Replies: 29
- Views: 6461
Re: How to put value on military pension?
You can put a value using your and your spouse's expected lifetime and discounting the cash flow. Since military pension is inflation indexed, TIPS real return is an appropriate reference. I use a real return of 1-2%, because 1-2% seems more a likely long term return and what I want to purchase TIPS.
Lar
Lar
- Wed Nov 07, 2012 7:04 pm
- Forum: Personal Investments
- Topic: What would it take for I bond fixed rates to climb?
- Replies: 11
- Views: 2210
Re: What would it take for I bond fixed rates to climb?
#Cruncher confirms what I remembered. So when the 10 yr TIPS go above 1 %, I-bonds can be expected to have a fixed rate greater than 0%. Until then, I-bonds are a free lunch. Treasury may want to get rid of I-bonds because due to the extra cost vs TIPS.
Lar
Lar
- Thu Sep 20, 2012 10:56 pm
- Forum: Personal Investments
- Topic: TIPS - do you need if you have a COLA annuity?
- Replies: 7
- Views: 888
Re: TIPS - do you need if you have a COLA annuity?
COLA adjusted annuities reduce or eliminate the need for TIPS. So you can decide based on features, rates/yields, outlook for inflation and nominal interest rates. I do have two biases. The first is against mutual funds because expenses can be avoided by buying directly at auction. Second is towards I-bonds because I-bonds won't go down in value like TIPS when inflation rates are negative.
Lar
Lar
- Thu Sep 20, 2012 10:46 pm
- Forum: Personal Investments
- Topic: [US Agency Employee - Conflict of Interest?]
- Replies: 4
- Views: 753
Re: [US Agency Employee - Conflict of Interest?]
Not an auditor, but I work for DoD and am sometimes involved in technical management of contracts. Mutual funds have to disclosed, but diversified funds funds are OK. There is probably a lawyer that handles/answers ethics questions and conflicts of interest that you may need to go to.
Lar
Lar
- Fri Aug 17, 2012 11:46 pm
- Forum: Personal Investments
- Topic: TSP Loan to Pay Off Rental Mortgage?
- Replies: 8
- Views: 1910
Re: TSP Loan to Pay Off Rental Mortgage?
Seems like the loan may come proportionately from TSP fund, rather than on the G fund. So you may need to complete an interfund transfer to get to the desired asset allocation.
Lar
Lar
- Fri Aug 17, 2012 11:35 pm
- Forum: Personal Finance (Not Investing)
- Topic: Question on using money from Coverdell ESA
- Replies: 3
- Views: 682
Re: Question on using money from Coverdell ESA
Cost may go on worksheets but the distribution is not reported on income taxes if used for qualifying expenses. However, the distribution is reported to the IRS. See a the disconnect? So later the IRS sends a notice stating distribution was not included in income along with a bill for taxes and penalties (happened to me). Disputed tax bill with comment used for qualified education expenses and many months later, received IRS letter no additional taxes owed and matter is closed. Really had to resist temptation to include comment that distribution wasn't reportable because..., so leave me alone. Very poor system, but just a nuisance.
Lar
Lar
- Sat Jun 23, 2012 8:35 pm
- Forum: Personal Investments
- Topic: Upcoming Deployment - Entire Paycheck into TSP?
- Replies: 12
- Views: 2156
Re: Upcoming Deployment - Entire Paycheck into TSP?
The Roth TSP is supposed to be available to service members in Oct (already available to Marines). Try to arranee to get as much as possible into Roth. In regular TSP your earnings/gains will be taxed on withdrawal; with Roth TSP earnings won't be taxed.
Lar
Lar
- Mon May 28, 2012 6:34 pm
- Forum: Personal Investments
- Topic: Roth TSP Contributions Question
- Replies: 2
- Views: 452
Roth TSP Contributions Question
I won't be able to contribute to Roth TSP until July, but have a question on contributions. If I split contribution between traditional and Roth options, how do I specify the split? Is it a per centage of my contribution, per cent of income or something else?
Lar
Lar
- Mon May 28, 2012 6:22 pm
- Forum: Personal Investments
- Topic: Emergency fund never feels large enough
- Replies: 33
- Views: 5149
Tiered Funds
I had a little different solution to the same problem. Instead of keeping an oversized emergency fund, I maintain "buckets" of more or less liquid funds that still figured into my investment mix ( in addition to emergency fund). One bucket is I-bonds which I count as equivalent to TIPS in portfolio. Others include muni bond and balanced funds in taxable and part of cash value of a universal life policy.
These "buckets" probably aren't right for you and I've accepted some tax inefficiency. Also, this approach isn't terribly useful if desired asset allocation is 100% equities.
Lar
These "buckets" probably aren't right for you and I've accepted some tax inefficiency. Also, this approach isn't terribly useful if desired asset allocation is 100% equities.
Lar
- Wed May 02, 2012 7:58 pm
- Forum: Personal Investments
- Topic: Roth TSP or Not?
- Replies: 12
- Views: 4675
Re: Roth TSP or Not?
I will make a small contributions to Roth TSP just to get the five year period started, then go back to regular TSP. Need the reduction in income this year to qualify for tax credits. After that, will see how things develop on taxes and otherwise.
Lar
Lar
- Sun Apr 29, 2012 12:20 pm
- Forum: Personal Investments
- Topic: Mixing pre-tax with post-tax accounting
- Replies: 13
- Views: 791
Re: Mixing pre-tax with post-tax accounting
I looked at the Managed Payout Funds after they had been out several months. I do not use them for other reasons; those being the commodities, REIT and Market Neutral Fund holdings and the overall expense ratio. Commodities futures seem like a zero sum (or loosing when cantango is added). I wouldn't consider a market neutral fund as a standalone and have doubts about REITS. I feel I can do just as well using I-bonds and TIPS for inflation protection.
As for the high payouts/return of capital, that can be offset by reinvestment of returned capital. But reinvestment seems like management the funds are designed to do for you.
Caveats - I am still pre-retirement and have inflation adjusted pension.
Lar
As for the high payouts/return of capital, that can be offset by reinvestment of returned capital. But reinvestment seems like management the funds are designed to do for you.
Caveats - I am still pre-retirement and have inflation adjusted pension.
Lar
- Sun Apr 08, 2012 12:49 pm
- Forum: Personal Investments
- Topic: 529 Plan, I Bonds, Which funds to use first?
- Replies: 9
- Views: 1063
Re: 529 Plan, I Bonds, Which funds to use first?
American Opportunity Tax Credit is 1:1 on first $2,000, so you'll want to allocate $2,000 QHEE to the credit if you are eligible. 529 vs. I-bonds depends on current and future marginal tax rates and amount that will be taxable income. If your I-bonds have good fixed rates and significant time to maturity, there is an opportunity cost due because you won't get the same fixed rate if I-bonds are cashed.
Lar
Lar
- Sun Apr 08, 2012 12:32 pm
- Forum: Personal Investments
- Topic: Portfolio management software
- Replies: 9
- Views: 1709
Re: Portfolio management software
Keep track of cost basis and capital gains
Import capital gains into tax software
Shares purchased after 1/1/2012 will have to match what is reported to the IRS.
Lar
Import capital gains into tax software
Shares purchased after 1/1/2012 will have to match what is reported to the IRS.
Lar