Search found 29324 matches

by grabiner
Sat Jun 12, 2021 6:49 pm
Forum: Personal Finance (Not Investing)
Topic: Is it worth Refinancing to Shoter term/lower rate or just pay additional princ/each month?
Replies: 2
Views: 354

Re: Is it worth Refinancing to Shoter term/lower rate or just pay additional princ/each month?

Even if you refinance to the same term, you have the option of paying extra principal so that you pay the loan off on the original date. Effectively, this would be refinancing to what you plan to treat as a 25-year mortgage, despite the 30-year stated term. But if you have enough cash flow to refina...
by grabiner
Sat Jun 12, 2021 5:57 pm
Forum: Personal Investments
Topic: Place which fund into which account?
Replies: 3
Views: 422

Re: Place which fund into which account?

You need to consider your own tax situation. The Treasury fund is exempt from state tax, but the dividends are all non-qualified. The international stock index fund is subject to both federal and state tax, but the dividends are mostly qualified and are reduced by the foreign tax credit. If you are ...
by grabiner
Fri Jun 11, 2021 2:00 pm
Forum: Personal Investments
Topic: Actions needed for tax filing status change
Replies: 16
Views: 1242

Re: Actions needed for tax filing status change

Beach Mom. Without knowing what your SS will be, one cannot precisely find what your Tax Rate will be at various incomes. I suspect you will be in the 22% (reverting to 24%) forever. I suggest you get familiar with the SS Tax charts in the BH wiki. At this level, the charts are likely not necessary...
by grabiner
Thu Jun 10, 2021 9:54 pm
Forum: Investing - Theory, News & General
Topic: One Bogleheads idea I have a hard time understanding...
Replies: 98
Views: 12216

Re: One Bogleheads idea I have a hard time understanding...

But that’s not what sophisticated active fund investors do. It’s a total straw man. In fact it’s been proven that active managers with strong track records tend to sustain their outperformance: https://www.wsj.com/articles/the-morningstar-mirage-1508946687 https://i.ibb.co/F08s9f9/PNG-image.png The...
by grabiner
Thu Jun 10, 2021 9:27 pm
Forum: Investing - Theory, News & General
Topic: Stock BuyBacks Effectiveness
Replies: 20
Views: 1622

Re: Stock BuyBacks Effectiveness

If one has $100 in a company’s stock that pays 2% dividend, that investor’s total would grow to $102. But if the company did a share buyback instead, what would happen to that investor’s total? The first premise is wrong. When a stock pays a dividend, the share price will decrease by the dividend a...
by grabiner
Thu Jun 10, 2021 6:26 pm
Forum: Personal Investments
Topic: I bonds are only worth it with maxed retirement accounts right?
Replies: 32
Views: 3548

Re: I bonds are only worth it with maxed retirement accounts right?

TIPS in a Roth IRA will likely outperform I-Bonds in a taxable account over a long term. I-Bonds yield zero, while TIPS yields are negative, but the gains in a Roth IRA will be tax-free, while the gains on the I-Bonds are subject to federal tax. But this requires a long term. The 10-year TIPS yields...
by grabiner
Thu Jun 10, 2021 6:06 pm
Forum: Personal Investments
Topic: Dividends and Capital Gains
Replies: 9
Views: 1229

Re: Dividends and Capital Gains

A caveat is that balanced funds should usually be avoided in taxable accounts as they can be costly to undo after they have accrued large unrealized gains. A fund that would almost never be a mistake in taxable investing would be a total stock market fund. And this applies even to Tax-Managed Balan...
by grabiner
Wed Jun 09, 2021 10:25 pm
Forum: Investing - Theory, News & General
Topic: What is your age and asset allocation ?
Replies: 689
Views: 61597

Re: What is your asset allocation and age, are you retired?

Age 53, 86% stock but overweighting riskier stock for the risk of about 100% stock. (I lost even more than the market in the March 2020 crash because I overweight value stock.) I am not yet retired.
by grabiner
Wed Jun 09, 2021 10:13 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 1227
Views: 145698

Re: anyone regret paying off mortgage early

Does anyone regret buying bonds? (Wait, don't answer that.) Bonds have lower expected return in exchange for lower risk. Paying down debt is no different than buying bonds. You are exchanging higher expected return with market risk for lower return that is guaranteed. Generally paying down mortgage...
by grabiner
Wed Jun 09, 2021 10:08 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 1227
Views: 145698

Re: anyone regret paying off mortgage early

I agree that at current rates and providing one is not saving for a specific purpose/purchase in a taxable account that pre-payment is better MATHEMATICALLY than buying lower rate bonds. But I thought the point of paying off the mortgage was the guaranteed return. I take the standard deduction and ...
by grabiner
Wed Jun 09, 2021 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: HSA money, use it or save it for later
Replies: 92
Views: 8284

Re: HSA money, use it or save it for later

Here might be another option for you to consider. Take the IRS Medical Tax Exemption. Put it on your tax return and you might also get a higher tax saving rate. The disadvantage is that you cannot reimburse yourself from the HSA for any of the expenses that year, including the 7.5% excluded amount....
by grabiner
Wed Jun 09, 2021 5:10 pm
Forum: Personal Finance (Not Investing)
Topic: Traditional versus Roth wiki update
Replies: 181
Views: 14175

Re: Traditional versus Roth wiki update

Edit: Two other pages went live in parallel with this update: https://www.bogleheads.org/wiki/Retirement_plan_analysis https://www.bogleheads.org/wiki/Tax_analysis They don't add any new content, but rather collect analysis and formula derivations from this page and also elsewhere on the wiki, the ...
by grabiner
Wed Jun 09, 2021 5:07 pm
Forum: Investing - Theory, News & General
Topic: roth vs pre-tax and tax efficency
Replies: 13
Views: 1534

Re: roth vs pre-tax and tax efficency

Thanks everyone for the responses. I understand that 2x leveraged ETF are daily reset so it will not work as desired. Let us take one specific example for LEAP to analyze. Assume pre-tax is all bonds. SPY current price is 422 and Dec 2023 LEAP, strike price $210, premium is $212. If you buy this ca...
by grabiner
Tue Jun 08, 2021 7:20 pm
Forum: Investing - Theory, News & General
Topic: roth vs pre-tax and tax efficency
Replies: 13
Views: 1534

Re: roth vs pre-tax and tax efficency

If you are going to retire in a 25% tax bracket, you can view the traditional account as being 25% owned by the IRS, and 75% owned by you tax-free. The only problem I have with this statement is it would only seem accurate if you already have an income stream pushing you right up to the beginning o...
by grabiner
Tue Jun 08, 2021 10:44 am
Forum: Personal Investments
Topic: TIPS (VAIPX) versus total bond (VBTLX) versus tax-exempt (VWIUX /VWALX) place for 30 years?
Replies: 9
Views: 1452

Re: TIPS (VAIPX) versus total bond (VBTLX) versus tax-exempt (VWIUX /VWALX) place for 30 years?

Should talk on inflation be a consideration for VAIPX over VBTLX No, because expected inflation is already priced in. Investors who buy nominal bonds know about the prospect of inflation, so they will only buy at yields which compensate for that prospect. If inflation expectations increase, the spr...
by grabiner
Tue Jun 08, 2021 9:43 am
Forum: Personal Investments
Topic: Pay off mortgage vs bonds in taxable (after maxing out other retirement)
Replies: 27
Views: 2471

Re: Pay off mortgage vs bonds in taxable (after maxing out other retirement)

To me, the main point is when you can take advantage of available margin at an early age, you will be better off in the long run. The key to this, however, is knowing how much time one has in the market. In your case, being in the 50's, the general recommendation is to pay off the mortgage. If you ...
by grabiner
Tue Jun 08, 2021 8:52 am
Forum: Investing - Theory, News & General
Topic: roth vs pre-tax and tax efficency
Replies: 13
Views: 1534

Re: roth vs pre-tax and tax efficency

Have also been wondering about this Though what grabiner says makes sense. If your net exposure to stocks over all accounts is zero, that doesn't help much Maybe one can use an S&P 2x fund in tax-free and only bonds in pre-tax to achieve the desired exposure? There may be issues with that (leve...
by grabiner
Tue Jun 08, 2021 8:45 am
Forum: Personal Investments
Topic: Pay off mortgage vs bonds in taxable (after maxing out other retirement)
Replies: 27
Views: 2471

Re: Pay off mortgage vs bonds in taxable (after maxing out other retirement)

It may be easier to understand the comparison by considering pairs of options of the same risk. Rather than comparing A versus D, you can compare A versus B, and C versus D. A. Leave everything unchanged. B. Sell a bond fund to pay down the mortgage. Since your mortgage rate is much higher than you...
by grabiner
Mon Jun 07, 2021 11:39 pm
Forum: Investing - Theory, News & General
Topic: roth vs pre-tax and tax efficency
Replies: 13
Views: 1534

Re: roth vs pre-tax and tax efficency

The problem with going long in the Roth and short in the traditional account is that it isn't market-neutral. If you are going to retire in a 25% tax bracket, you can view the traditional account as being 25% owned by the IRS, and 75% owned by you tax-free. $4000 in the traditional account and $3000...
by grabiner
Mon Jun 07, 2021 11:33 pm
Forum: Investing - Theory, News & General
Topic: Does solely buying Options drive the price up of a stock?
Replies: 7
Views: 557

Re: Does solely buying Options drive the price up of a stock?

For every buyer, of a stock or an option, there is a seller. Thus the act of buying or selling does not affect the price. What does affect the price is supply and demand. If a stock is trading at $40, this means that supply and demand balance at that price; there are just as many investors who want ...
by grabiner
Mon Jun 07, 2021 11:18 pm
Forum: Personal Investments
Topic: Total bond index is better than MUNI in taxable?
Replies: 7
Views: 1301

Re: Total bond index is better than MUNI in taxable?

I have 20K to invest in taxable for bond according to my IPS. Since I may need it in 6 years, I do not want to follow the approach discussed in https://www.bogleheads.org/wiki/Placing_cash_needs_in_a_tax-advantaged_account Previous I typically bought "Vanguard Intermediate-Term Tax-Exempt Fund...
by grabiner
Mon Jun 07, 2021 11:13 pm
Forum: Personal Investments
Topic: TIPS (VAIPX) versus total bond (VBTLX) versus tax-exempt (VWIUX /VWALX) place for 30 years?
Replies: 9
Views: 1452

Re: TIPS (VAIPX) versus total bond (VBTLX) versus tax-exempt (VWIUX /VWALX) place for 30 years?

Since you are in a very high tax bracket, you pay higher tax on stocks than most investors do (23.8% federal), but no more tax on munis (only state tax, unless Vanguard has a fund for your state). Therefore, it makes sense to hold munis in your taxable account, rather than stocks in your taxable acc...
by grabiner
Mon Jun 07, 2021 11:07 pm
Forum: Personal Investments
Topic: What to invest HSA funds in?
Replies: 18
Views: 1710

Re: What to invest HSA funds in?

Since your HSA and Roth IRA are both invested tax-free for retirement expenses, you should invest the HSA as if it were part of the Roth IRA. The same funds are appropriate for both.
by grabiner
Mon Jun 07, 2021 11:01 pm
Forum: Personal Investments
Topic: Pay off mortgage vs bonds in taxable (after maxing out other retirement)
Replies: 27
Views: 2471

Re: Pay off mortgage vs bonds in taxable (after maxing out other retirement)

The way I understand it, at a high level, it means if your taxable investment balance is going to grow slower than the mortgage rate, then you're better off taking the 3.5% guaranteed "return" on the mortgage cash . And even if it isn't, you have to consider the trade-off of risk versus r...
by grabiner
Mon Jun 07, 2021 10:56 pm
Forum: Personal Investments
Topic: Pay off mortgage vs bonds in taxable (after maxing out other retirement)
Replies: 27
Views: 2471

Re: Pay off mortgage vs bonds in taxable (after maxing out other retirement)

It may be easier to understand the comparison by considering pairs of options of the same risk. A. Leave everything unchanged. B. Sell a bond fund to pay down the mortgage. C. Keep the mortgage unchanged, and move money from your current allocation to a bond fund. D. Sell your current allocation to ...
by grabiner
Mon Jun 07, 2021 10:46 pm
Forum: Personal Investments
Topic: Help me understand taxes on brokerage accounts
Replies: 23
Views: 2524

Re: Help me understand taxes on brokerage accounts

Both. This was in 2012, so I had a lot of non-covered sales. In addition, I had to adjust on one sale (an ETF which I held for less than six months distributed a long-term gain, causing some of the short-term loss to become a long-term loss). And I don't think the IRS had a rule in 2012 that if all...
by grabiner
Mon Jun 07, 2021 9:08 pm
Forum: Personal Investments
Topic: Help me understand taxes on brokerage accounts
Replies: 23
Views: 2524

Re: Help me understand taxes on brokerage accounts

Make sure to check your imports into tax software. I had one year that only half my transactions imported from Vanguard to TurboTax, so I had to manually enter the other half on Schedule D (now on Form 8949) . If I hadn't caught the error, I would have received an audit notice from the IRS. Was it ...
by grabiner
Sun Jun 06, 2021 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: Taking out a mortgage on a foreign investment property - under what circumstances interest deductible?
Replies: 8
Views: 655

Re: Taking out a mortgage on a foreign investment property - under what circumstances interest deductible?

Your currency risk does not change, as long as the USD investments are actual US securities, and likewise the CAD investments. (If, instead, you sold a USD investment in a fund holding European stock, that would change your currency risk by reducing your exposure to the euro.) As for currency risk, ...
by grabiner
Sun Jun 06, 2021 11:59 am
Forum: Personal Finance (Not Investing)
Topic: Taking out a mortgage on a foreign investment property - under what circumstances interest deductible?
Replies: 8
Views: 655

Re: Taking out a mortgage on a foreign investment property - under what circumstances interest deductible?

-- Interest rates in Canada right now are even lower than they are in the US Independent of the tax situation, this is not necessarily an advantage, because of the currency issues. If investors expect the US dollar to fall 1% annually against the Canadian dollar, and US rates are 1% higher than Can...
by grabiner
Sun Jun 06, 2021 11:43 am
Forum: Investing - Theory, News & General
Topic: So...Can we now start to consider buying bonds again?
Replies: 19
Views: 3662

Re: So...Can we now start to consider buying bonds again?

Welcome to the forum! Jason Zweig says I bonds are super investments. The I stands for inflation. You can only buy $10,000 a year, although you can get more per year by overpaying your estimated taxes and taking your tax refund in the form of I bonds. He says they yield more than 3.5% and they are n...
by grabiner
Sun Jun 06, 2021 8:06 am
Forum: Personal Investments
Topic: Unwinding Relative From Parasite Advisor
Replies: 64
Views: 6305

Re: Unwinding Relative From Parasite Advisor

Others have already said it, but it bears repeating, consider the tax consequences before selling any appreciated positions . Simplifying the portfolio is a great goal, and reducing investment expenses is a an even better one. But too often, the savings and benefits of these is negated by by the ta...
by grabiner
Sat Jun 05, 2021 10:54 pm
Forum: Personal Finance (Not Investing)
Topic: Capital Gain on Auto Sale
Replies: 43
Views: 2733

Re: Capital Gain on Auto Sale

Wait, hold on, you have to pay capital gains on car sales? Can you take tax losses? Why not? You cannot deduct a capital loss on property of any kind for personal use, only on business or investment property. For most people, the only personal-use property on which they will have gains is a home, a...
by grabiner
Sat Jun 05, 2021 3:50 pm
Forum: Personal Consumer Issues
Topic: Dark chocolate addicts: how much do you eat?
Replies: 45
Views: 3488

Re: Dark chocolate addicts: how much do you eat?

I keep my desk stocked with 70% Lindt (usually the bar; the truffles are good but you get too much at once), breaking each square into quarters. This lets me have lots of quick snacks while keeping a bar that lasts three days.
by grabiner
Sat Jun 05, 2021 3:42 pm
Forum: Personal Finance (Not Investing)
Topic: Pay off mortgage or invest ?
Replies: 23
Views: 2370

Re: Pay off mortgage or invest ?

If you can refinance, and make some donations to charity, I would recommend not making extra payments against the mortgage, but instead putting the money into a "mortgage payment fund" invested in Vanguard Long-Term Tax-Exempt (or a fund for your state if Vanguard has one). The reason for ...
by grabiner
Sat Jun 05, 2021 3:12 pm
Forum: Personal Investments
Topic: [Federal employee - Thrift Savings plan vs. HSA account contributions]
Replies: 7
Views: 704

Re: [Federal employee - Thrift Savings plan vs. HSA account contributions]

Yes, take the free money, and prioritize the HSA next.. The only wrinkle to this is if you are eligible for the savers credit. (or could be) If you are eligible for the saver's credit, you are probably better off contributing to the Roth TSP until TCJA expires. Unless you are the sole income in a m...
by grabiner
Sat Jun 05, 2021 3:04 pm
Forum: Personal Investments
Topic: Kids money in UTMA versus account under my name
Replies: 10
Views: 1328

Re: Kids money in UTMA versus account under my name

A few follow up questions: 1. On reducing tax burden to child with UTMA. Is the long term capital gain taxed at my rate if I sell and rebuy before the kid is 18? 2. I know you mention resell and buy annually to reset capital gains. Is the reason you suggest annually to reduce paying larger amount a...
by grabiner
Fri Jun 04, 2021 10:14 pm
Forum: US Chapters
Topic: Suggestions for the Wiki
Replies: 515
Views: 417740

Re: Suggestions for the Wiki

dafioram wrote: Thu Jun 03, 2021 6:51 pm 1. On https://www.bogleheads.org/wiki/Highly_ ... d_employee its says a HCE is $139k but the reference given (IRS) says $130k. $139k is the Roth phase out.
Fixed.
by grabiner
Thu Jun 03, 2021 8:11 pm
Forum: Investing - Theory, News & General
Topic: Estimating next dividend payout for a Vanguard fund
Replies: 17
Views: 1430

Re: Estimating next dividend payout for a Vanguard fund

Note that a lot of stocks, especially foreign stocks, cut their dividends in 2020, so 2020 dividends may not be a good estimate. For a US stock fund, the March 2021 dividend would likely be a better estimate than the June 2020 dividend of the March 2021 dividend. For a foreign stock fund, you also h...
by grabiner
Thu Jun 03, 2021 7:59 pm
Forum: Personal Investments
Topic: Unwinding Relative From Parasite Advisor
Replies: 64
Views: 6305

Re: Unwinding Relative From Parasite Advisor

Is it possible he is getting some sort of kickback to be choosing investments like this? If he makes more when the portfolio goes up (1% AUM), and the selections he has made for the portfolio aren't designed to do that (paying more to borrow in interest/expenses on TQQQ), that seems to be the likel...
by grabiner
Wed Jun 02, 2021 9:18 pm
Forum: Personal Finance (Not Investing)
Topic: Peculiar situation with California FTB tax - Need advice
Replies: 7
Views: 837

Re: Peculiar situation with California FTB tax - Need advice

The reason CA may be questioning you is that you filed a full-year return for 2019. Very few people change residence on January 1, so if you were a resident on 1/1/19, you were probably a resident for part of 2018. If you actually moved to CA on 1/7/19, you should have filed a part-year resident for...
by grabiner
Wed Jun 02, 2021 9:04 pm
Forum: Personal Finance (Not Investing)
Topic: how long should I keep my tax records?
Replies: 35
Views: 3292

Re: how long should I keep my tax records?

It's necessary to keep any record that might support a future tax form. As a result, it is likely to be worth keeping the actual form, but not the supporting documents, forever. I needed information from my 1997 W-2 for my 2011 and 2012 NJ state tax forms. (I contributed to a 403(b) in 1997 and seve...
by grabiner
Wed Jun 02, 2021 8:59 pm
Forum: Investing - Theory, News & General
Topic: Where to use Morningstar Style Box
Replies: 6
Views: 488

Re: Where to use Morningstar Style Box

Vanguard had it under portfolio watch until recently when for whatever reason when they did a website redesign they decided we didn't need it :oops: Vanguard's version didn't work well; it put most funds in a single style box, leading to a distorted view of your portfolio. If a fund is 60% mid-cap ...
by grabiner
Wed Jun 02, 2021 8:07 pm
Forum: Personal Investments
Topic: Unwinding Relative From Parasite Advisor
Replies: 64
Views: 6305

Re: Unwinding Relative From Parasite Advisor

Does the advisor have a fiduciary responsibility? There are some holdings here which make no sense, independent of the advisor's opinions about the market. TQQQ ProShares UltraPro QQQ ER=0.98. 2.42% of portfolio USFR WisdomTree Floating Rate Treasury Fund ER=0.15%. 5.66% of portfolio It makes no se...
by grabiner
Tue Jun 01, 2021 10:39 pm
Forum: Personal Finance (Not Investing)
Topic: How many bank/brokerage/credit card accounts does everyone have?
Replies: 47
Views: 3696

Re: How many bank/brokerage/credit card accounts does everyone have?

One real bank (credit union with savings and checking), plus a bank account linked to my HSA. Three credit cards (two conventional cards, and a JCPenney card). Vanguard brokerage (taxable and Roth IRA), brokerage account in my HSA, current employer plan, former employer plan that I cannot touch unti...
by grabiner
Tue Jun 01, 2021 10:36 pm
Forum: Personal Finance (Not Investing)
Topic: Spend more for a health care plan with an HSA?
Replies: 6
Views: 606

Re: Spend more for a health care plan with an HSA?

If you add the premium differences and estimated out-of-pocket costs, and the HDHP costs $2500 more, you are better off not using the HDHP. If you aren't maxing out your retirement plans (likely since you say that cash flow is important), the math is fairly simple. If you expect to retire in a 25% t...
by grabiner
Tue Jun 01, 2021 10:22 pm
Forum: Personal Investments
Topic: Anyway to Make Recent After-Tax Investments Grow Tax Free or Reduce Taxes?
Replies: 9
Views: 979

Re: Anyway to Make Recent After-Tax Investments Grow Tax Free?

Also, once you hit one year of holding (where all gains would be long term) you should figure out whether to continue to hold these funds long term or not. Also, after one year, you can donate them to charity if appropriate. You will get a deduction equal to the current price of the stocks, and nei...
by grabiner
Tue Jun 01, 2021 10:18 pm
Forum: Personal Investments
Topic: Tax Efficiency VTSAX vs VTMFX [Vangard Total Stock vs. Tax managed Balanced]
Replies: 5
Views: 871

Re: Tax Efficiency VTSAX vs VTMFX [Vangard Total Stock vs. Tax managed Balanced]

The tax cost of munis is hidden. While munis are not taxed, they yield less than taxable bonds of comparable risk. My rule of thumb is that the difference is about 1/3 of the muni yield, or 1/4 of the taxable yields; this would make munis break-even in a taxable account. The munis in Vanguard TM Bal...
by grabiner
Tue Jun 01, 2021 10:09 pm
Forum: Personal Investments
Topic: Wash sale / TLH
Replies: 4
Views: 454

Re: Wash sale / TLH

Can you sell all the stock purchased on 5/17 first ? (Then you would be disposing of the potential replacement stock — see fourth article — so there would be no wash sale when you subsequently sell the losing shares.) Or do the recently purchased shares have too much unrealized gains? Even if you s...
by grabiner
Tue Jun 01, 2021 10:07 pm
Forum: Personal Investments
Topic: Unwinding Relative From Parasite Advisor
Replies: 64
Views: 6305

Re: Unwinding Relative From Parasite Advisor

Does the advisor have a fiduciary responsibility? There are some holdings here which make no sense, independent of the advisor's opinions about the market. TQQQ ProShares UltraPro QQQ ER=0.98. 2.42% of portfolio USFR WisdomTree Floating Rate Treasury Fund ER=0.15%. 5.66% of portfolio It makes no sen...
by grabiner
Tue Jun 01, 2021 9:47 pm
Forum: Personal Investments
Topic: Age 28, Active Duty Military
Replies: 10
Views: 1491

Re: Age 28, Active Duty Military

There are several reasons why Roth TSP might be a good choice here. 1. People with a pension may benefit more from Roth than traditional. https://thefinancebuff.com/most-tsp-participiants-should-switch-to-the-roth-tsp.html However, with no employer match or a spouse who is using traditional 401k or...