Search found 727 matches
- 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...
- 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.
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.
- 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.
- 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.
- 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.
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.
- 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...
- 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 ...
- 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...
- 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.
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.
- 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.
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.
- 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.
- 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.
Our commuting expenses have crashed, which we have more than offset with food bank donations. So, technically, our overall spending has gone up.
- 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?
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.
- 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.
- 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.
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.
- 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.
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.
- 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.
- Thu Mar 19, 2020 8:03 am
- Forum: Personal Investments
- Topic: Thank you Bogleheads
- Replies: 2
- Views: 264
Re: Thank you Bogleheads
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.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.
- 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...
- 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.
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.
- 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.
- 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.
- 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.
- 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 ...
- 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.
- 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.
- 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...
- 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...
- 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?
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.
- 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
Net income including retirement matches less taxes: $95k
Spending: $33k
Savings: $62k / 65.1% net savings rate
- 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 ...
- 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
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?Seasonal wrote: ↑Sat Dec 21, 2019 5:02 amIf 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.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”?
- 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”?
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”?
- 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 ...
- Wed Nov 06, 2019 8:59 pm
- Forum: Personal Investments
- Topic: Backdoor Roth left a few dollars in traditional IRA does this cause pro rata??
- Replies: 15
- Views: 1813
Re: Backdoor Roth left a few dollars in traditional IRA does this cause pro rata??
Conversions do not count toward contribution limits.
- 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.
- 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...
- 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.
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.
- 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...
- 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...
- 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...
- 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...
- 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:
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
- 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."
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."
- 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.
- 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.
So, the same dollar is taxed twice as you put it.
- 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.
- 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.
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.
- 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 ...
- 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...