Did you reinvest your distribution cash yet?

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livesoft
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Did you reinvest your distribution cash yet?

Post by livesoft » Wed Jan 15, 2014 9:02 pm

For those of you who have taxable accounts and do not automatically re-invest distributions, have you manually taken care of those year-end distributions yet? Or are they sitting in cash right now?

I ask because I just got all my bits and pieces taken care of today and am now back to my normal cash-free portfolio, but in past years sometimes I let the cash languish too long.
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Sidney
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Re: Did you reinvest your distribution cash yet?

Post by Sidney » Wed Jan 15, 2014 9:13 pm

I reinvested in consumption and estimated taxes.
I always wanted to be a procrastinator.

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mhc
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Re: Did you reinvest your distribution cash yet?

Post by mhc » Wed Jan 15, 2014 9:28 pm

I used my December distributions to fund our IRA's for 2014. This got me back to my 1% cash goal. I can't quite make the leap to 0% cash.

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Toons
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Re: Did you reinvest your distribution cash yet?

Post by Toons » Wed Jan 15, 2014 9:32 pm

I reinvested some of mine and used some to buy a nice gift for my wife and myself :happy
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Duckie
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Re: Did you reinvest your distribution cash yet?

Post by Duckie » Thu Jan 16, 2014 12:14 am

livesoft wrote:For those of you who have taxable accounts and do not automatically re-invest distributions, have you manually taken care of those year-end distributions yet?
They were reinvested manually right after Christmas.

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NightOwl
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Re: Did you reinvest your distribution cash yet?

Post by NightOwl » Thu Jan 16, 2014 12:23 am

They became part of my backdoor Roth contribution for 2014.

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youngindexer
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Re: Did you reinvest your distribution cash yet?

Post by youngindexer » Thu Jan 16, 2014 12:39 am

Just out of curiosity why do you not automatically reinvest in taxable accounts?

ab80
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Re: Did you reinvest your distribution cash yet?

Post by ab80 » Thu Jan 16, 2014 12:48 am

Makes rebalancing less costly, and possibly other tax reasons.

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Duckie
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Re: Did you reinvest your distribution cash yet?

Post by Duckie » Thu Jan 16, 2014 1:17 am

youngindexer wrote:Just out of curiosity why do you not automatically reinvest in taxable accounts?
The Wiki has an article on this: Reinvesting dividends in a taxable account

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BHCadet
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Re: Did you reinvest your distribution cash yet?

Post by BHCadet » Thu Jan 16, 2014 2:32 am

Not Yet...
The cash will be reinvested before the end of the month.

stlutz
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Re: Did you reinvest your distribution cash yet?

Post by stlutz » Thu Jan 16, 2014 2:54 am

Yes, I invested mine in Treasury bonds before the run up in bond prices this week.

Bacchus01
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Re: Did you reinvest your distribution cash yet?

Post by Bacchus01 » Thu Jan 16, 2014 9:14 am

Manually reinvested on Jan 2nd.

feh
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Re: Did you reinvest your distribution cash yet?

Post by feh » Thu Jan 16, 2014 1:27 pm

Yup, used the proceeds to buy a penfed CD.

placeholder
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Re: Did you reinvest your distribution cash yet?

Post by placeholder » Thu Jan 16, 2014 2:32 pm

Some but my fixed-income in general is somewhat underrunning equities so I need to finalize some plans on that.

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kingsnake
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Re: Did you reinvest your distribution cash yet?

Post by kingsnake » Thu Jan 16, 2014 2:51 pm

No, that and my year end bonus that I sent to Vanguard are sitting in tax exempt money market. Ohhh, market timing I guess for a bad/badish day? :beer

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tetractys
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Re: Did you reinvest your distribution cash yet?

Post by tetractys » Thu Jan 16, 2014 4:03 pm

Languishing. -- Tet

traveler90
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Re: Did you reinvest your distribution cash yet?

Post by traveler90 » Thu Jan 16, 2014 4:15 pm

Duckie wrote:
youngindexer wrote:Just out of curiosity why do you not automatically reinvest in taxable accounts?
The Wiki has an article on this: Reinvesting dividends in a taxable account

I read the wiki, but none of it seems to apply to me. I'm young (23) and my taxable is very small right now, so I can't tell if it matters that I reinvest automatically.

Is it really that big of a tax headache?

dbr
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Re: Did you reinvest your distribution cash yet?

Post by dbr » Thu Jan 16, 2014 4:16 pm

Yes, I reinvested the money, some of it in cash.

ajcp
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Re: Did you reinvest your distribution cash yet?

Post by ajcp » Thu Jan 16, 2014 4:28 pm

traveler90 wrote:
Duckie wrote:
youngindexer wrote:Just out of curiosity why do you not automatically reinvest in taxable accounts?
The Wiki has an article on this: Reinvesting dividends in a taxable account

I read the wiki, but none of it seems to apply to me. I'm young (23) and my taxable is very small right now, so I can't tell if it matters that I reinvest automatically.

Is it really that big of a tax headache?
I don't think so, but maybe others will. I just adjust as needed. It's up to you too try it and see if you think it's a hassle.

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Ged
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Re: Did you reinvest your distribution cash yet?

Post by Ged » Thu Jan 16, 2014 4:34 pm

I retired in October 2013 so I think my reinvestment of dividends in taxable accounts is over.

When I was younger I used the cash to adjust my asset allocation. Never did like automatic reinvestment in my taxable account.

jbk
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Re: Did you reinvest your distribution cash yet?

Post by jbk » Thu Jan 16, 2014 4:37 pm

Stuck it in the Roths.

dbr
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Re: Did you reinvest your distribution cash yet?

Post by dbr » Thu Jan 16, 2014 4:37 pm

Ged wrote:I retired in October 2013 so I think my reinvestment of dividends in taxable accounts is over.

When I was younger I used the cash to adjust my asset allocation. Never did like automatic reinvestment in my taxable account.
That means that larger distributions such as year end are languishing in cash before the time comes to spend them, which is not Livesoft's no cash policy. Personally I allow some cash to slosh around here and there without worrying about it.

Calm Man
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Re: Did you reinvest your distribution cash yet?

Post by Calm Man » Thu Jan 16, 2014 7:25 pm

I am a sicko. I like large cash balances. Mine just added to it.

Geologist
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Re: Did you reinvest your distribution cash yet?

Post by Geologist » Thu Jan 16, 2014 7:36 pm

No, I haven't reinvested the cash. I have waited because I have investments whose final 2013 values have not been finalized (the distributions occur on Dec. 31, but were not posted online until yesterday or the day before). I need that to finalize my asset mix so I know where to reinvest the cash.

Keeping the cash over short periods of time has a negligible effect on performance.

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youngindexer
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Re: Did you reinvest your distribution cash yet?

Post by youngindexer » Thu Jan 16, 2014 10:18 pm

Duckie wrote: The Wiki has an article on this: Reinvesting dividends in a taxable account
Thanks for the link Duckie :happy

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Ged
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Re: Did you reinvest your distribution cash yet?

Post by Ged » Thu Jan 16, 2014 11:10 pm

dbr wrote:
Ged wrote:I retired in October 2013 so I think my reinvestment of dividends in taxable accounts is over.

When I was younger I used the cash to adjust my asset allocation. Never did like automatic reinvestment in my taxable account.
That means that larger distributions such as year end are languishing in cash before the time comes to spend them, which is not Livesoft's no cash policy. Personally I allow some cash to slosh around here and there without worrying about it.
With total returns on bonds fluctuating around zero I don't see investing it as being useful as I'm going to spend it or use it to pay taxes this year. Maybe a 'high interest' savings account would be worth it.... but that's still really cash.

Texas hold em71
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Re: Did you reinvest your distribution cash yet?

Post by Texas hold em71 » Fri Jan 17, 2014 12:23 am

Reinvested before December 31.

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bertie wooster
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Re: Did you reinvest your distribution cash yet?

Post by bertie wooster » Fri Jan 17, 2014 12:42 am

It's sitting in cash, along with our 2014 Roth contributions. I should reinvest it now, but I've convinced myself that the market is too high - which we all know is folly. What can I say?

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BigFoot48
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Re: Did you reinvest your distribution cash yet?

Post by BigFoot48 » Fri Jan 17, 2014 12:58 am

Our own taxable account is fairly small, but my mother-in-law's is fairly large and I reinvested her December RMD and other proceeds last week when we were visiting her. I decided, a few years tardy I'm afraid, to start moving her from Total Bond to a municipal bond fund (Vanguard Intermediate-Term VWITX) to reduce her tax burden in the coming years. Her distribution and SS benefits will put her a little bit into the 25% bracket for 2012.

Her allocation is fine at 20%/80% and I anticipate no other changes until I sell some bond funds in December to provide cash for her next RMD.
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kingsnake
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Re: Did you reinvest your distribution cash yet?

Post by kingsnake » Thu Jan 23, 2014 3:10 pm

Today given the apporximately 1% loss I bought VTSAX in taxable with all the cash I had sitting the money market, and converted my wife's backdoor roth.

sunnyday
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Re: Did you reinvest your distribution cash yet?

Post by sunnyday » Thu Jan 23, 2014 3:31 pm

livesoft wrote:For those of you who have taxable accounts and do not automatically re-invest distributions, have you manually taken care of those year-end distributions yet? Or are they sitting in cash right now?

I ask because I just got all my bits and pieces taken care of today and am now back to my normal cash-free portfolio, but in past years sometimes I let the cash languish too long.
I'm sure you've answered this before, but what if your car dies and you want to buy a new $30k car? How would you pay for it? Deduct from your taxable and then rebalance accordingly?

livesoft
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Re: Did you reinvest your distribution cash yet?

Post by livesoft » Thu Jan 23, 2014 3:48 pm

Yes, I would sell in taxable to raise the cash to buy the car, then I would make changes in my tax-advantaged accounts to get back to my desired asset allocation. This is the ol' Placing Cash Needs in Tax-advantaged.
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chuck-b
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Re: Did you reinvest your distribution cash yet?

Post by chuck-b » Thu Jan 23, 2014 3:49 pm

I used most of it to fund our Roths for 2013. Also, it allows for redistribution into different asset types as needed.
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sunnyday
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Re: Did you reinvest your distribution cash yet?

Post by sunnyday » Thu Jan 23, 2014 4:00 pm

livesoft wrote:Yes, I would sell in taxable to raise the cash to buy the car, then I would make changes in my tax-advantaged accounts to get back to my desired asset allocation. This is the ol' Placing Cash Needs in Tax-advantaged.
Didn't qualified dividends expire? If so, doesn't that reduce the tax benefit to close to zero?

livesoft
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Re: Did you reinvest your distribution cash yet?

Post by livesoft » Thu Jan 23, 2014 4:02 pm

Qualified dividends did not expire.

But it is true that bond yields are so low that it doesn't seem to matter if bonds are held in taxable anymore.
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