Search found 727 matches

by Rainmaker41
Thu Jun 25, 2020 11:29 am
Forum: Personal Investments
Topic: Investment Plan Review - Roth or Traditional + Taxable? (sorry for another one of these)
Replies: 20
Views: 1011

Investment Plan Review - Roth or Traditional + Taxable? (sorry for another one of these)

Please forgive me for yet another “Roth or Traditional” question. :) Situation Emergency funds: 6 months’ expenses Debt: none Tax Filing Status: Married Filing Jointly Marginal Tax Rates: 12% Federal, 6% State Age: 29 Desired Asset allocation: 80% stock / 20% bond Desired International allocation: 40% of stock (Vanguard LifeStrategy Growth model) Current Retirement Assets Low six figures. Roth accounts are about 30% of our retirement portfolio. All accounts are either Vanguard LifeStrategy Growth or approximations of that at 80/20 allocation. We are satisfied with our allocation and fund choices. His 403(b) Vanguard Total Stock Market Index Fund Admiral Shares (0.05% ER) Vanguard Total International Stock Market Index Fund Admiral Shares (0...
by Rainmaker41
Wed Jun 24, 2020 7:47 pm
Forum: Personal Finance (Not Investing)
Topic: [CARES Act Above the Line Charitable Deductions]
Replies: 138
Views: 10052

$300 deduction for charitable donations - how much if married filing joint?

[Thread merged into here, see below. --admin LadyGeek]

Does the CARES Act allow those with married filing joint tax returns to deduct $600 in charitable donations if not itemizing?

Some sources say the individual amount is doubled to $600, some say the $300 applies per tax return, and some say the law is unclear with IRS guidance and/or Congressional clarification needed, for example:

https://www.philanthropy.com/article/Ho ... 300/248523

I read the text of the applicable section of the law itself and could not work it out. Any ideas?

This is a trivial matter, but still an interesting puzzle I guess.
by Rainmaker41
Tue Jun 23, 2020 11:51 am
Forum: Personal Finance (Not Investing)
Topic: Credit Card Limit
Replies: 17
Views: 1864

Re: Credit Card Limit

I called Chase, and once I get connected to a card services person, they were able to cancel the credit limit reduction on the basis of my request. The impression I got is that no justification is needed, only a request.
by Rainmaker41
Mon Jun 22, 2020 8:36 am
Forum: Personal Finance (Not Investing)
Topic: Credit Card Limit
Replies: 17
Views: 1864

Re: Credit Card Limit

My Chase card limit got cut in half also. It seems to be an effort for them to reduce risk across the board, never mind that some of those impacted have good credit scores and are low risk.
by Rainmaker41
Fri Jun 19, 2020 10:53 am
Forum: Personal Investments
Topic: How often to contribute to Roth?
Replies: 38
Views: 2590

Re: How often to contribute to Roth?

It can be better to lump sum at the start of the year statistically, and we have done that some years.

However, as a behavioral matter we have set up semimonthly contributions whose amount automatically adjusts as needed to reach the yearly maximum, continuing indefinitely. This prevents us from ever having to make a decision about when we should or should not contribute, just as with a 401(k) type plan.
by Rainmaker41
Fri Jun 19, 2020 10:34 am
Forum: Personal Finance (Not Investing)
Topic: Capital One is at it again
Replies: 389
Views: 89651

Re: Capital One is at it again

+1... I've been long time customer of both Ally and Capital One(ING) and I am sick of the way Capital One tries to pull a fast one on its loyal customers. I recall for the longest time I only had a performance savings account and reluctantly opened the MM account since they kept lowering the rate of the performance savings account.... now they pulling the same trick in making the MM account uncompetitive with other savings account and you have to open the "enhanced savings account" to get a competitive rate compared to other online banks. This sounds like the stuff Wells Fargo did in claiming that they been having a bunch of "new accounts". Since Capital One likes to play games... I've decided I will be closing all my a...
by Rainmaker41
Thu Jun 18, 2020 6:46 pm
Forum: Personal Finance (Not Investing)
Topic: [Government stimulus payments]
Replies: 361
Views: 36743

Re: [Government stimulus payments]

On further reflection - I am very offended by this lackadaisical approach. All the family members who have lost loved ones recently now get physical reminders of their loss and then are told it is their responsibility to use their time and money to return a cheque or direct deposit. If they fail to do so (not me, I’ll do it), presumably the IRS will use its heavy-handed collection techniques to harass people and garnish it back. This is incredibly unproductive and wasteful, not to mention emotionally upsetting after all the effort expended to settle estates and file tax returns. And it could have been fixed with a few lines of code to screen for the word “deceased” on the payment list. Apparently the IRS was able to screen out high income ...
by Rainmaker41
Fri May 22, 2020 11:58 am
Forum: Personal Investments
Topic: A very simple situation but help is needed [How should I invest my 150k?]
Replies: 19
Views: 1959

Re: A very simple situation but help is needed [How should I invest my 150k?]

On the question of pre-tax or Roth 401(k), I will point out that you probably will want to have some taxable income in retirement. Assume for simplicity of illustration that tax laws do not change. You defer taxes at a federal marginal rate of, say, 12-22%. In retirement, your taxable distributions from the pre-tax 401(k) can fill up the standard deduction (0% bracket), 12% bracket, etc. If you only have Roth assets, the only taxable income would be Social Security, and even that maybe not much. So, you would have paid 22% tax to get the money after tax in order to contribute it to the Roth 401(k), but in retirement maybe all of your withdrawals combined don’t get you to that bracket even if they were all pre-tax. I’m not explaining well, b...
by Rainmaker41
Thu May 14, 2020 6:02 pm
Forum: Personal Investments
Topic: Advice for 22 year old on investing for home downpayment?
Replies: 29
Views: 2280

Re: Advice for 22 year old on investing for home downpayment?

Welcome.

If I were in your shoes planning to buy a home in 15 years, I would not save up the down payment yet, but would contribute as much as possible (after emergency cash reserves are funded) to retirement accounts. This lets you invest as much as possible as early as possible, and structures your wealth tax-efficiently in the long run.

If you can already max out your retirement accounts and are asking about the excess beyond that, I would still say to invest given the 15 year time horizon. As your income grows and you zero in on your home plans, you will both have more cashflow to allocate to a down payment and a better idea of what your plan is.
by Rainmaker41
Wed May 06, 2020 4:00 pm
Forum: Personal Consumer Issues
Topic: 2020 travel plans
Replies: 95
Views: 6047

Re: 2020 travel plans

We cancelled our April trip.

We were originally planning to travel in Q4 this year, but are holding off on booking anything.

1. Neither feasibility nor advisability of travel in 2020 is clear.
2. If we booked something, the ability to be refunded later on is not clear.
by Rainmaker41
Sat Apr 11, 2020 11:48 am
Forum: Personal Finance (Not Investing)
Topic: [Government stimulus payments]
Replies: 361
Views: 36743

Re: just got my $1200 stimulus payment

Ours will go straight to a food bank.
by Rainmaker41
Fri Apr 03, 2020 7:37 am
Forum: Personal Finance (Not Investing)
Topic: Are your personal expenses down during stay home and shelter?
Replies: 180
Views: 15999

Re: Are your personal expenses down during stay home and shelter?

We do not have much in the way of nonessential spending apart from traveling. Our upcoming trip is lost with the prospect of an airline refund unclear, but hopefully we will make that up later in the year.

Our commuting expenses have crashed, which we have more than offset with food bank donations. So, technically, our overall spending has gone up.
by Rainmaker41
Fri Apr 03, 2020 6:42 am
Forum: Personal Finance (Not Investing)
Topic: Can I un-file my 2019 taxes in order to get a bigger stimulus check based on my 2018?
Replies: 30
Views: 3829

Re: Can I un-file my 2019 taxes in order to get a bigger stimulus check based on my 2018?

mega317 wrote: Fri Apr 03, 2020 1:01 am It's not a penalty to not get a tax credit intended for people with lower income than you.
Yes it is, under certain circumstances. If two families have the same incomes as each other in 2018, 2019, and 2020, and the only difference is that one files their 2019 tax return in February 2020 while the other in July 2020, why should they be treated differently from each other?

The inequity comes from the fact that the advance on the 2020 credit is not clawed back if you do not quality based on 2020 income.
by Rainmaker41
Thu Apr 02, 2020 4:04 pm
Forum: Personal Finance (Not Investing)
Topic: COVID-19 Stimulus Payment Issue
Replies: 86
Views: 9068

Re: COVID-19 Stimulus Payment Issue

I would have voted for this. It's a humanitarian issue, not a stimulus issue, in my mind. We are donating our economic impact payment to a food bank anyway.
DaftInvestor wrote: Thu Apr 02, 2020 3:30 pm The only way to have resolved this fairly would have been to not have done a stimulus check at all and instead, simply provide a bigger boost to unemployment benefits so those loosing their jobs would get all the needed benefits.
by Rainmaker41
Sun Mar 22, 2020 9:45 am
Forum: Personal Investments
Topic: F.I.R.E. is over
Replies: 14
Views: 1735

Re: F.I.R.E. is over

We are nearly 30, and were never going to retire at 35-40, because our income does not support “enough” savings even with frugality.

We were aiming for 50 before and still are now. Whether or not we can retire early and regardless of what that looks like, there is still resiliency value in having a strong financial position. As KlangFool often points out, there is no guarantee of continuous employment, and it does not make sense to assume the ability to work until 62-70, etc.
by Rainmaker41
Sun Mar 22, 2020 6:05 am
Forum: Personal Finance (Not Investing)
Topic: Ally Bank CD rate & timing of funding
Replies: 8
Views: 994

Re: Ally Bank CD rate & timing of funding

I encountered the same problem with CDs opened on Sunday, which was the opposite of my expectation. The CD I funded with a check deposit through Ally’s app on opening day got the published rate. The CD I funded on Wednesday after funds arrived from another institution by push received the “wrong” rate of that day rather than the rate of the day I opened the CD.

Upon noticing this. I sent Ally a secure message asking them to correct this. I have not heard back yet.

I thought the 10 day guarantee worked differently, so I am sorry if my post on that was wrong.
by Rainmaker41
Sat Mar 21, 2020 5:18 am
Forum: Personal Consumer Issues
Topic: Generosity in the time of Coronavirus
Replies: 9
Views: 1012

Re: Generosity in the time of Coronavirus

We are not commuting, and are giving that cost savings to a food bank.
by Rainmaker41
Thu Mar 19, 2020 8:03 am
Forum: Personal Investments
Topic: Thank you Bogleheads
Replies: 2
Views: 264

Re: Thank you Bogleheads

Call_Me_Op wrote: Thu Mar 19, 2020 7:57 am How can you rebalance the Lifestrategy fund? All investments are in a single fund.
We approximate the Lifestrategy growth fund in our employer retirement plans using component asset classes. We hold the actual Lifestrategy growth funds in our Roth IRAs.
by Rainmaker41
Thu Mar 19, 2020 7:53 am
Forum: Personal Investments
Topic: Thank you Bogleheads
Replies: 2
Views: 264

Thank you Bogleheads

In more “normal” times, we wrote down a brief investment policy statement. It says that we keep making retirement contributions with all surplus income, have an asset allocation approximating the Vanguard LifeStrategy Growth fund (80/20) and: “Account balances will be reviewed quarterly. Investments will be rebalanced annually, or upon a 5% allocation error discovered at quarterly review, regardless of market conditions.” When things started going downhill, we reasserted to ourselves that we would follow the written plan, not capitulate, and technically not make any investment decisions. This mindset is entirely thanks to the Bogleheads community. When I checked my retirement account this morning, I saw that my stocks are at 74% and bonds a...
by Rainmaker41
Wed Mar 18, 2020 8:43 pm
Forum: Personal Investments
Topic: VUSXX vs FDIC Bank Accounts
Replies: 29
Views: 4260

Re: VUSXX vs FDIC Bank Accounts

What kind of safety do you mean?

Presumably both will provide return of principle, but swift access to the cash may favor a bank account. As others have observed, markets could get shut down, the financial networks might have challenges, etc.

In my view a money market fund is useful if you have more than FDIC limits, want a higher interest rate on the savings, or see the MMF as providing simplicity or some other subjective benefit. In our case, since treasury bill rates are going to zero and we have less than the FDIC limits, the MMF is no longer attractive.
by Rainmaker41
Wed Mar 18, 2020 8:32 pm
Forum: Personal Investments
Topic: VUSXX vs FDIC Bank Accounts
Replies: 29
Views: 4260

Re: VUSXX vs FDIC Bank Accounts

I am moving cash out of Vanguard's money market funds and into an online savings account. I'm leaving some cash at Vanguard just to have it available at multiple institutions, but this is primarily motivated by APY.
by Rainmaker41
Wed Mar 18, 2020 6:35 pm
Forum: Personal Investments
Topic: VUSXX vs FDIC insurance
Replies: 22
Views: 4103

Re: VUSXX vs FDIC insurance

I may move cash from the money market fund to an online savings account at some point, but that is motivated by APY.
by Rainmaker41
Wed Mar 18, 2020 5:35 pm
Forum: Personal Consumer Issues
Topic: How much cash to have during coronavirus panic?
Replies: 146
Views: 14009

Re: How much cash to have during coronavirus panic?

We keep a couple hundred on hand normally. I got some more out of the ATM this week. If we need more than that I figure money is no longer the problem.
by Rainmaker41
Sun Mar 15, 2020 8:28 pm
Forum: Personal Investments
Topic: If under FDIC limit, move all intermediate bonds to No-Penalty CD?
Replies: 24
Views: 1479

Re: If under FDIC limit, move all intermediate bonds to No-Penalty CD?

Open the CD tonight at today’s interest rate and fund it during the week. I’ve never set up a CD and chosen to fund later with Ally (I’ve always just funded directly from my Ally checking account). I just tried it, and after setting up the CD I don’t see an option to fund it. Are you familiar with Ally and how this works? Can I still fund it from my Ally checking account after I transfer funds from Vanguard? Yes. After opening the CD, you select the option to fund later or click to go back to the home/overview screen of your accounts. Then, at a later time (within 10 days I think), you select the CD in question and select “deposit checks” or “transfers”. I think the CD maturity date may be set when you open it, and interest doesn’t accrue ...
by Rainmaker41
Sun Mar 15, 2020 7:20 pm
Forum: Personal Investments
Topic: If under FDIC limit, move all intermediate bonds to No-Penalty CD?
Replies: 24
Views: 1479

Re: If under FDIC limit, move all intermediate bonds to No-Penalty CD?

Open the CD tonight at today’s interest rate and fund it during the week.
by Rainmaker41
Fri Mar 13, 2020 6:26 pm
Forum: Personal Finance (Not Investing)
Topic: Ally 1% bonus, up to $250, sign up by 3/23
Replies: 252
Views: 27785

Re: Ally 1% bonus, up to $250

My reading of the wording is that you cannot transfer money to an Ally Checking account, then move money from the checking account to the Savings or CD account. So, I guess either transfer money directly to the Savings or CD account or deposit a check directly to it.
by Rainmaker41
Thu Mar 12, 2020 11:17 am
Forum: Personal Investments
Topic: Who is staying course and how are you dealing with net worth going down?
Replies: 359
Views: 33843

Re: Who is staying course and how are you dealing with net worth going down?

I am less than entirely amused by the downturn. I checked the portfolio last night and from my rough glance we seem to have lost all gains from the last 3 years. The main psychological advantage I feel we have is that "only" our retirement accounts are invested, and the losses there, however heavy, do not matter until retirement in 20-30 years from a certain point of view. I understand that losses are forever, because had we magically sold at the peak we'd have more capital to use in the recovery, but that is not actionable. We make sure we contribute to our retirement accounts automatically, but after that they are not really a factor in our lives or any decisions we make. I am also using the psychological ploy of pretending we d...
by Rainmaker41
Tue Jan 07, 2020 1:35 pm
Forum: Personal Finance (Not Investing)
Topic: H&R Block online - How to enter USG part of Vanguard Federal Money Market Fund dividends (not state taxable)?
Replies: 1
Views: 315

H&R Block online - How to enter USG part of Vanguard Federal Money Market Fund dividends (not state taxable)?

I've begun a dry run for 2019 tax filing using H&R Block's online tax software with the data I know. I can enter all sources of income, but I have a small problem with entering the portion of a 1099-DIV which should be excluded from state taxable income. My income from Vanguard's Federal Money Market fund for 2019 will be composed in part by US Government income (approximately 77%; to be determined) which is not taxable at the state level in my state. However, H&R Block free online version does not have a field or checkbox for this when entering 1099-DIV information, only 1099-INT. Options: 1. I can get the Federal return to be completed correctly (with dividend income shown on Form 1040 line 3b), but I can't get the state return to...
by Rainmaker41
Fri Jan 03, 2020 6:57 am
Forum: Personal Finance (Not Investing)
Topic: How much were you able to save this year?
Replies: 142
Views: 13692

Re: How much were you able to save this year?

DameTime wrote: Tue Dec 31, 2019 9:37 am Do people include matched contributions into their gross salary?

Makes sense to me to include it but it makes my savings percentage drop 4% lower. Not exactly a problem but just curious to see how people account for it.
I include employer contributions in both income (part of compensation) and savings (not spent or gone to taxes). Among other things, this helps when comparing jobs with different compensation structures.
by Rainmaker41
Fri Jan 03, 2020 6:39 am
Forum: Personal Finance (Not Investing)
Topic: How much were you able to save this year?
Replies: 142
Views: 13692

Re: How much were you able to save this year?

Married, late 20s. No kids or house.

Net income including retirement matches less taxes: $95k

Spending: $33k

Savings: $62k / 65.1% net savings rate
by Rainmaker41
Wed Jan 01, 2020 8:53 pm
Forum: Personal Finance (Not Investing)
Topic: Low-earners- What is your profession?
Replies: 371
Views: 62518

Re: Low-earners- What is your profession?

Gross income: $11k in 2014, $22k in 2015, and $34k in 2016... in a high cost of living city. Things picked up partway through 2016 when I started making about $40k annualized as a Finance Associate for a 501(c)(3) nonprofit. Before that I worked through a temp agency. Whenever I feel like I wish I was more accomplished, I try to remember how things were for me a couple years ago; the trend is upward after all. My struggles out of college have definitely shaped how I approach spending decisions. I still only spend around $800 a month. Thus, I maxed 2015, 2016, on schedule for 2017 Roth IRA so far and have about $9k in my pre-tax 403b; call it 30% gross savings rate of my cumulative income. While the “what if’s” are inevitable, you’re doing ...
by Rainmaker41
Sat Dec 21, 2019 9:59 am
Forum: Personal Finance (Not Investing)
Topic: Changes to 401(k) and IRAs, SECURE Act - It's signed
Replies: 292
Views: 27953

Re: Changes to 401(k) and IRAs, SECURE Act - It's signed

Seasonal wrote: Sat Dec 21, 2019 5:02 am
Rainmaker41 wrote: Sat Dec 21, 2019 4:38 am The RMD age is raised to 72.

How does this impact someone who had their first RMD already, but will not turn 72 until a later year? Is the rule “if age 72 or greater on Dec 31 of tax year, then an RMD is required in that tax year”?
If you're already 70-1/2, this does not impact you. It only affects those who are not 70-1/2 by the end of 2019.
Does anyone have a source confirming persons already 70 1/2 have to take the RMD in the year they are 71 but not yet 72?
by Rainmaker41
Sat Dec 21, 2019 4:38 am
Forum: Personal Finance (Not Investing)
Topic: Changes to 401(k) and IRAs, SECURE Act - It's signed
Replies: 292
Views: 27953

Re: Changes to 401(k) and IRAs, SECURE Act - It's signed

The RMD age is raised to 72.

How does this impact someone who had their first RMD already, but will not turn 72 until a later year? Is the rule “if age 72 or greater on Dec 31 of tax year, then an RMD is required in that tax year”?
by Rainmaker41
Thu Nov 07, 2019 7:12 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone want to share their monthly budget? Here's ours
Replies: 157
Views: 41171

Re: Anyone want to share their monthly budget? Here's ours

We are 2 married adults in a high cost of living area with no kids. All figures are derived from 2020 calendar year annual projections divided by 12 and then rounded to nearest whole number. This means that our rent and Internet service is actually lower now than the amount shown, but we project it to be higher partway through the year; these figures are 2020 annualized averages. Points to note: - our employers pay the full cost of our health insurance plans (premiums not counted here in any way) - we have neither a mortgage nor a car - our low tax amount (net of credits) is due to a chunk of the income shown being in the form of employer retirement contributions - we rent a cheap apartment - I walk to work 2/3 of the year and take transit ...
by Rainmaker41
Wed Nov 06, 2019 12:02 pm
Forum: Personal Investments
Topic: IRA contribution limit is per person?
Replies: 13
Views: 740

Re: IRA contribution limit is per person?

Yes, the limit is per person, but you can contribute for both of the two spouses even if only one spouse has income.
by Rainmaker41
Wed Nov 06, 2019 11:14 am
Forum: Investing - Theory, News & General
Topic: 2020 IRS Limits Announced for 401(k)'s etc.
Replies: 28
Views: 5590

IRS announces 2020 retirement plan contribution limit increases

[Topic merged here -- mod oldcomputerguy] The IRS has announced retirement plan contribution limit increases for 2020. 401(k)/403(b)/TSP/457 plans: Employee contribution limit is increasing from $19,000 to $19,500. Catch-up contribution limit for persons 50 and older is increasing from $6,000 to $6,500. [Combined employee, after-tax, and employer contributions limit] is increasing from $56,000 to $57,000. SIMPLE plans: Contribution limit is increasing from $13,000 to $13,500. IRAs: Contribution limit is unchanged at $6,000. Catch-up contribution limit for persons 50 and older is unchanged at $1,000. Saver's Credit: AGI limit is increasing from $64,000 to $65,000 for MFJ; $48,000 to $48,750 for Head of Household; $32,000 to $32,500 for Sing...
by Rainmaker41
Tue Sep 24, 2019 8:03 pm
Forum: Personal Finance (Not Investing)
Topic: transfer between capital one 360 and fidelity
Replies: 10
Views: 4527

Re: transfer between capital one 360 and fidelity

Speaking of Capital One 360 ACH transfers initiated as a pull from a brokerage at a 3rd party, what transfer amounts have people here been able to use?

Capital One says there is a daily limit of $10k and a monthly limit of $25k, but does that apply to ACH transfers initiated from the other institution? I’m interested in what experiences others have had with this.
by Rainmaker41
Sat Sep 21, 2019 1:25 pm
Forum: Personal Investments
Topic: Savings vs investment ratio
Replies: 4
Views: 743

Re: Savings vs investment ratio

A rule of thumb is to have an emergency fund of 3-6 months of expenses before you invest (more if your situation is less secure, less if your situation is more secure). That can be kept in a high yield online savings account or CDs, a money market fund, etc. While building that up, you should make sure you take advantage of any employer match on your 401(k)/403(b)/TSP type retirement plan, as you don't want to miss out on part of your compensation package. If you have high-interest debt (very roughly, higher interest than you might get on a mortgage), pay that off before investing more than what is needed to get the full employer match. Once your portfolio grows large enough, you may decide you do not need a dedicated emergency fund anymore...
by Rainmaker41
Sat Sep 21, 2019 1:16 pm
Forum: Personal Finance (Not Investing)
Topic: State Taxation of Federal Money Market Funds?
Replies: 7
Views: 817

State Taxation of Federal Money Market Funds?

Hello interested Bogleheads, It is my understanding that: 1. Treasury interest is exempt from state income tax. 2. The Vanguard Federal Money Market Fund derives about 77% of its income from Treasury interest. 3. So, 77% (or whatever the proportion is that year for the particular fund) of Federal Money Market dividends may be excluded from income subject to state income tax in most states. Is the generally correct? Is there a list of states that do or do not allow counting a portion of money market fund income as treasury income? How do I determine the percentage of the fund's income derived from treasury income for a given tax year? How is this reported when filing taxes? In 2018, my consolidated 1099 from Vanguard categorized all income f...
by Rainmaker41
Wed Aug 28, 2019 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: Cash - Throw it all on the table!!!
Replies: 282
Views: 58463

Re: Cash - Throw it all on the table!!!

We keep 6 months of budgeted spending in cash: 1 month is kept in a combination of our joint online checking account, linked online savings account, and a bit of paper cash in our wallets. We pretty much cash-flow expenses through credit cards and this without issue. We don't have any significant lump sum expenses during the year, since we rent, don't own cars to repair and have good health insurance, so the rest of our cash doesn't get touched. 1 month is kept in a combination of a brick and mortar savings account + a multi-year CD I opened a couple years ago. This is mainly just for peace of mind to know we'd have in-person access. 4 months are kept in 1-year online CDs, with 1 maturing each quarter. This is intended to limit inflation lo...
by Rainmaker41
Sun Aug 25, 2019 6:39 am
Forum: Personal Finance (Not Investing)
Topic: Do you sacrifice to save?
Replies: 97
Views: 10660

Re: Do you sacrifice to save?

For example, I'm 28, and up until about 9 months ago, I almost always prioritized sacrificing in order to exceed savings goals. The way I see it, my wife and I are young and healthy, and currently renting in a VHCOL area where I doubt we'll ever buy a house, so we should take advantage of our earning potential to save for the future. If it didn't hurt a little from time to time, I felt like we weren't being aggressive enough in our efforts to save. +1 We are in a similar boat. When we got an apartment together a couple years ago, we selected one that we could afford on one of our incomes alone while still maintaining some retirement contributions, because the other was going to look for a job. After we got two incomes, our savings rate sky...
by Rainmaker41
Tue May 07, 2019 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: What’s in your pocket?
Replies: 22
Views: 2971

Re: What’s in your pocket?

Keys
Phone
Wallet with:
  • 2 credit cards
  • 1 debit card for ATMs
  • $40 cash
  • ID
  • health insurance card
  • public transportation stored value card
  • grocery store membership discount card
  • library card
I used to not carry a debit card in case I was robbed, but I decided that I'd rather have it in case our apartment burned down.
by Rainmaker41
Sat Mar 02, 2019 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: Can severance pay count as earned income for IRA eligability?
Replies: 3
Views: 644

Re: Can severance pay count as earned income for IRA eligability?

From what I see from SSA, severance counts as earned income. If it's on the W-2, it's wage income, right? Was there an error in the reporting?

https://www.ssa.gov/OP_Home/handbook/ha ... -2605.html

"Wages - Wages are what an individual receives (before any deductions) for working as someone else's employee. Wages include salaries, commissions, bonuses, severance pay, and any other special payments received because of employment."
by Rainmaker41
Wed Feb 20, 2019 8:29 pm
Forum: Personal Finance (Not Investing)
Topic: How much traditional IRA can my elder parents take out before taxed?
Replies: 12
Views: 1322

Re: How much traditional IRA can my elder parents take out before taxed?

Are you referring to a Traditional IRA or a Roth IRA? Traditional IRA distributions count toward taxable income to the extent that the original contributions were not made with after-tax money. Roth IRA distributions are not taxed.
by Rainmaker41
Wed Feb 20, 2019 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: Why am I paying more taxes than expected?
Replies: 15
Views: 1559

Re: Why am I paying more taxes than expected?

Social Security & Medicare taxes are distinct from income taxes. For employees, the employer share of the payroll tax is paid by the employer. For contractor income, the employer share is paid by the contractor.

So, the same dollar is taxed twice as you put it.
by Rainmaker41
Sat Feb 16, 2019 9:32 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Tax 2018 Forms Now Online
Replies: 65
Views: 6854

Re: Vanguard Tax 2018 Forms Now Online

My taxable brokerage account assets consisted of the federal money market fund and some treasury bills. That seems to count as 'non-Vanguard' assets, since it is February 16 and no 1099-INT and 1099-DIV forms are available yet. I interpreted 'mid-February' as meaning next week.
by Rainmaker41
Sat Feb 16, 2019 7:00 am
Forum: Personal Investments
Topic: Partially recharacterize Roth IRA contribution for 2018
Replies: 14
Views: 1012

Re: Partially recharacterize Roth IRA contribution for 2018

It is as though you had originally contributed to the Traditional IRA, so the earnings are retroactively kept there (not taxed).

The conversion in the next step is different.

In both cases you will get 2019, not 2018, forms. The recharacterization still counts as redoing the 2018 contribution though.

I’m not sure how that tax software works. Sorry. In H&R Block I was asked if the rechacterization was done by Dec 31 or before April 15.
by Rainmaker41
Sat Feb 16, 2019 6:08 am
Forum: Personal Investments
Topic: Partially recharacterize Roth IRA contribution for 2018
Replies: 14
Views: 1012

Re: Partially recharacterize Roth IRA contribution for 2018

Esssentially, yes. Call Vanguard during trading hours and ask them to recharacterize that dollar amount of your 2018 Roth contribution to Traditional. They will calculate the earnings or losses on your Roth IRA between the contribution date and now, and move today’s value of the recharacterized part of the contribution to the Traditional IRA. For tax purposes, it will be as though you had originally contributed the amount to the Traditional IRA. There are no taxable earnings from this itself. Note that you will have to file additional tax forms to show this, including a statement explaining the recharacterization. Tax filing software walks you through this; say that you contributed to a Roth IRA and then say you recharacterized some of the ...
by Rainmaker41
Sun Feb 10, 2019 10:49 am
Forum: Personal Finance (Not Investing)
Topic: Newlyweds and joint accounts for household expenses
Replies: 120
Views: 8503

Re: Newlyweds and joint accounts for household expenses

I think it is important to ask what you are trying to achieve with whatever setup you use. This or that formal financial system is ultimately less important than the underlying household dynamics and communication. I think you should focus on long term plans and shared goals. The detailed mechanics of how to get there matter less in the long run, and may have to be reevaluated anyway. We pooled everything. We started out with his and hers discretionary budgets, but fairly quickly we realized that most of the time discretionary spending ended up being for joint activities anyway, or for things which don't matter much (occasional lunch at work if we forget to bring from home). Now, everything is part of a joint household financial plan. Simpl...