Search found 29207 matches

by grabiner
Tue May 18, 2021 8:04 am
Forum: Personal Investments
Topic: Parents Late 80s Advice on Alternative to Bonds
Replies: 42
Views: 3403

Re: Parents Late 80s Advice on Alternative to Bonds

He said there is no front load or cost to sell either of the funds suggested. The Franklin Georgia Tax-Free Income Fund has an expense ratio of .25%. The equity fund has an expense ratio of 1%. So, nothing that terrible is going on here. No, that isn't what he said, and you can see this in the pros...
by grabiner
Tue May 18, 2021 7:51 am
Forum: Investing - Theory, News & General
Topic: Bond Fund questions
Replies: 3
Views: 494

Re: Bond Fund questions

There is a rule of thumb that price change equals the modified duration times the size of a yield change. This is only approximately true as the rule of thumb would estimate -9.14% and -7.90%. But the rule of thumb is much better for smaller yield changes. For example, if it only rose 0.1% points, ...
by grabiner
Mon May 17, 2021 11:09 pm
Forum: Investing - Theory, News & General
Topic: What decides if a fund has capital gain distributions?
Replies: 10
Views: 1115

Re: What decides if a fund has capital gain distributions?

Speaking of outflows, can the mutual fund pass through their capital gains for the year to the people selling at a capital gain. Or is that only possible with dual [mutual fund / ETF] like VTI/VTSAX ? [edits in brackets. Yes, only possible for mutual fund / ETF. See https://www.bloomberg.com/graphi...
by grabiner
Mon May 17, 2021 9:22 pm
Forum: Personal Finance (Not Investing)
Topic: MEDICARE & Health Savings Accounts
Replies: 2
Views: 398

Re: MEDICARE & Health Savings Accounts

If you work for a large company, your health insurance coverage should protect you from penalties for not signing up for Medicare. In fact, if you are on a high-deductible plan you should not sign up for any part of Medicare. Enrolling even in the "free" Part A will disqualify you from ma...
by grabiner
Mon May 17, 2021 9:12 pm
Forum: Investing - Theory, News & General
Topic: What decides if a fund has capital gain distributions?
Replies: 10
Views: 1115

Re: What decides if a fund has capital gain distributions?

Why do some funds like VTSAX only seem to distribute dividends every few months, but a fund like VFORX has short term and long term capital gains at the end of the year? If a fund has a capital gain at the end of the year it has to distribute it. It looks like VFORX had a capital gain from the bond...
by grabiner
Mon May 17, 2021 9:08 pm
Forum: Investing - Theory, News & General
Topic: Long Bonds in retirement - curiosity...
Replies: 61
Views: 4291

Re: Long Bonds in retirement - curiosity...

If you are going to buy long-term bonds in retirement, it makes more sense to buy I-Bonds and long-term TIPS. If you buy a 30-year Treasury bond, you will get a guaranteed number of dollars in 2051, but you have no idea what those dollars will be worth; inflation 2.3% higher than expected over 30 y...
by grabiner
Mon May 17, 2021 9:03 pm
Forum: Investing - Theory, News & General
Topic: Question about life cycle fund bond allocation
Replies: 9
Views: 694

Re: Question about life cycle fund bond allocation

The TSP L Funds are currently in the process of transitioning to a more aggressive glidepath: https://www.fedsmith.com/2020/03/25/changes-tsps-l-funds/ With the belief that younger investors will benefit from a higher allocation in stock funds, there is an initial equity allocation of 99% until an ...
by grabiner
Mon May 17, 2021 9:00 pm
Forum: Personal Finance (Not Investing)
Topic: Refinance my mortgage
Replies: 6
Views: 748

Re: Refinance my mortgage

With all else equal, it is good to have a duration as long as possible, because you have the option of paying off the loan early or continuing to borrow at the lower rate. But all else is not equal, and the bank realizes this. That is why the bank charges a higher rate for a 15-year mortgage (effect...
by grabiner
Mon May 17, 2021 8:55 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund questions
Replies: 3
Views: 494

Re: Bond Fund questions

Bogleheads I am trying to better understand bond funds. Here are a few questions I have: 1. What is the difference between average duration and average maturity? And which one is more important to focus on in terms of assessing interest rate risk? Duration is the number that matters. Maturity is th...
by grabiner
Mon May 17, 2021 8:47 pm
Forum: Investing - Theory, News & General
Topic: Long Bonds in retirement - curiosity...
Replies: 61
Views: 4291

Re: Long Bonds in retirement - curiosity...

If you are going to buy long-term bonds in retirement, it makes more sense to buy I-Bonds and long-term TIPS. If you buy a 30-year Treasury bond, you will get a guaranteed number of dollars in 2051, but you have no idea what those dollars will be worth; inflation 2.3% higher than expected over 30 ye...
by grabiner
Mon May 17, 2021 8:40 pm
Forum: Personal Investments
Topic: Tax Loss Harvesting and Cryptocurrency
Replies: 3
Views: 528

Re: Tax Loss Harvesting and Cryptocurrency

Sending crypto to another address is not a taxable event. You are retaining possession of your crypto, and it's the same "property". It's like moving stocks in kind from one brokerage to another. It is only a taxable event if you convert your crypto to another type, or you sell it. Staked...
by grabiner
Mon May 17, 2021 8:32 pm
Forum: Personal Investments
Topic: Investment Tax Question
Replies: 10
Views: 834

Re: Investment Tax Question

The initial deposit was $500, it has grown to $12,500. Our combined gross income is $120K. Based on a 2021 Capital Gains Tax Calculator online, we would pay $2,330 in capital gains (15% capital gains plus 4.41% for state) PLUS 5.75% for selling the shares equates to $718.75 payable to the current b...
by grabiner
Mon May 17, 2021 8:26 pm
Forum: Personal Investments
Topic: Parents Late 80s Advice on Alternative to Bonds
Replies: 42
Views: 3403

Re: Parents Late 80s Advice on Alternative to Bonds

They have bonds coming to maturity starting soon that need reinvesting and roughly $250,000 of those bonds will mature in the next 3 years. So, they want to invest all that bond money but not go back into bonds because it isn't profitable now. So, they use a Merrill Lynch broker for most everything...
by grabiner
Mon May 17, 2021 8:12 pm
Forum: Personal Investments
Topic: How do you plan to invest your child credit monthly cash starting July.
Replies: 9
Views: 1286

Re: How do you plan to invest your child credit monthly cash starting July.

The source of the cash doesn't matter; it makes sense to invest your tax reduction the same way you would invest a raise. If you are maxing out your retirement accounts, and don't need to save for a short-term need such as a new car or home down payment, then investing in a 529 plan is a natural cho...
by grabiner
Mon May 17, 2021 8:05 pm
Forum: Personal Finance (Not Investing)
Topic: HSA/HDHP choice - Lose now to gain later?
Replies: 10
Views: 1117

Re: HSA/HDHP choice - Lose now to gain later?

I pay all medical expenses out of pocket and never touch the HSA amounts. But keep you receipts in a file in case you ever need to get to that money down the road. I look at the HSA as the very best of tax - advantaged vehicles in existence. Assuming you have decent investment options through your ...
by grabiner
Sat May 15, 2021 7:30 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage refinance advice
Replies: 7
Views: 837

Re: Mortgage refinance advice

Thank you, that's helpful. We had been paying accounts down to <30% right before the statement for the month ended, and then paying in full prior to the due date. We had read that you want to have some utilization but less than <30% (as in it wasn't good to have zero dollars balance on the credit c...
by grabiner
Sat May 15, 2021 6:23 pm
Forum: Personal Investments
Topic: VHGEX vs VTWAX
Replies: 11
Views: 894

Re: VHGEX vs VTWAX

Yes, VHGEX is much higher than VTWAX in turnover rate. However, when I calculate the ratio of Returns after taxes on distributions again Return Before Tax, they are more or the less than same, especially 10 year ratio. Do I miss anything? VHGEX VT 1 Year 98.23% 98.72% 3 Years 89.60% 94.84% 5 Years ...
by grabiner
Sat May 15, 2021 6:11 pm
Forum: Personal Investments
Topic: Percent Asset Allocation, or Dollar Asset Allocation??
Replies: 12
Views: 815

Re: Percent Asset Allocation, or Dollar Asset Allocation??

The right answer depends on what he intends to do with the money. If he will use the money to increase his own standard of living (traveling more, moving to a more expensive home), he should probably keep the same percentage allocation. If he expects to leave the money for his heirs, the money he do...
by grabiner
Sat May 15, 2021 5:13 pm
Forum: Personal Finance (Not Investing)
Topic: Doing tax returns for two states
Replies: 37
Views: 2304

Re: Doing tax returns for two states

Now, if you want to talk about double taxation, consider this... If you work part of a day in two states (not counting your home state) both states could claim you owe taxes on that income "for the day" spent there (even if it was less than a full work day). In that case, I'd argue it's d...
by grabiner
Sat May 15, 2021 8:11 am
Forum: Investing - Theory, News & General
Topic: Tax loss harvesting - need to completely exit stock?
Replies: 12
Views: 1465

Re: Tax loss harvesting - need to completely exit stock?

If I don’t need to completely exit out a stick to harvest losses, why do people recommend keeping a specific MF or ETF (ie, VTI or VOO) only in one account and another specific fund in another account exclusively? It sounds I can still harvest losses if say VTI is both in my personal and Roth or 40...
by grabiner
Fri May 14, 2021 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Foreign tax credit and foreign capital gains
Replies: 7
Views: 637

Re: Foreign tax credit and foreign capital gains

Assuming you aren't a tax resident outside the US, the capital gain on selling a US mutual fund or ETF is not foreign income, because it is not taxed by any foreign country, and is considered to have a source at your home. Thus, if you have a capital gain, you report this as US source income on Form...
by grabiner
Fri May 14, 2021 10:57 pm
Forum: Personal Finance (Not Investing)
Topic: HSA/HDHP choice - Lose now to gain later?
Replies: 10
Views: 1117

Re: HSA/HDHP choice - Lose now to gain later?

Do you have an FSA covering her for this year? If you do, then you can't contribute to the HSA for 2021. If you don't, then you can max out the HSA for 2021, as long as she remains covered by an HSA for all of 2022; this is the IRS last-month rule. My usual estimate of the benefit for an HSA contrib...
by grabiner
Fri May 14, 2021 10:53 pm
Forum: Personal Finance (Not Investing)
Topic: HDHP HSA vs PPO
Replies: 16
Views: 1116

Re: HDHP HSA vs PPO

And then you have the HSA you can use, although CA taxes it as if it were a taxable account. If Treasury bonds (including TIPS) are appropriate for your investment needs, you can avoid most of the state tax by investing the HSA in them. (CA still taxes capital gains on Treasury bonds, but those sho...
by grabiner
Fri May 14, 2021 10:49 pm
Forum: Personal Finance (Not Investing)
Topic: The Biggest Mistakes People Make With Social Security
Replies: 169
Views: 15201

Re: The Biggest Mistakes People Make With Social Security

Even so, only about 6% of Americans claiming Social Security in 2017 were age 70, according to the Center for Retirement Research This is the one I don't understand. I make almost the median income exactly per year and at 70 Social Security would cover 100% of my current spending. It's a no brainer...
by grabiner
Fri May 14, 2021 10:08 pm
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk and Target Date Funds
Replies: 21
Views: 1853

Re: Sequence of Returns Risk and Target Date Funds

A rising equity path basically gives you a bond tent. You start at 25/75 and go to 50/50 instead of just staying at 40/60 throughout retirement by spending those bonds. The implementation details differ but the idea of having a ton of bonds early and less later is the same. The reality is that they...
by grabiner
Fri May 14, 2021 9:54 pm
Forum: Personal Investments
Topic: A recent VWUAX investment concerning me
Replies: 4
Views: 929

Re: A recent VWUAX investment concerning me

Welcome to the forum! My goal is to remain invested for another minimum 20 years, but i am wondering should I just move VWUAX (when I reach a stage where VWUAX in the money) to probably VIGAX or even just put in VTSAX) Honestly I was looking for a growth index fund and I missed VIGAX when I initiall...
by grabiner
Fri May 14, 2021 9:43 pm
Forum: Personal Investments
Topic: Bonds vs dividend funds
Replies: 32
Views: 3366

Re: Bonds vs dividend funds

Here are Vanguard's 10 year forecast for fixed income: Fixed income U.S. bonds 2.0%–3.0% U.S. Treasury bonds 1.5%–2.5% This one is certain. A 10-year Treasury currently yields 1.63%, and a 10-year zero yields 1.71%, so you can be guaranteed to earn exactly that amount for a 10-year holding period. ...
by grabiner
Fri May 14, 2021 11:24 am
Forum: Personal Investments
Topic: Taxable Account - VTSAX vs. VTI
Replies: 46
Views: 7765

Re: Taxable Account - VTSAX vs. VTI

Think about it though: if you are going to TLH VTSAX in your taxable account and switch to VFIAX for example, you're going to sell all of it, right? No sense in just harvesting the loss on some of your VTSAX shares. Unless you buy shares all at once, you are likely to harvest a loss on only part of...
by grabiner
Thu May 13, 2021 10:14 pm
Forum: Personal Finance (Not Investing)
Topic: Best/tax-efficient sources for getting down payment together for a first-time house purchase
Replies: 16
Views: 1220

Re: Best/tax-efficient sources for getting down payment together for a first-time house purchase

A lower downpayment, if possible. Did you run the PMI #s? It is almost always better to pay capital-gains tax than to pay PMI. The PMI is likely to exceed the tax on the capital gain, and the tax on the capital gain is only deferred, not eliminated, if you don't sell now. Is it? Always? Every scena...
by grabiner
Thu May 13, 2021 10:05 pm
Forum: Personal Investments
Topic: Treasury Fund in Taxable? Any better options?
Replies: 19
Views: 2623

Re: Treasury Fund in Taxable? Any better options?

The one special rule I know is not related to index versus active. MD exempts individual Treasuries from capital-gains tax, but capital gains on Treasury funds are fully taxable in the state. (NJ exempts both individual Treasuries and a prorated share of the capital gains on "qualified investm...
by grabiner
Wed May 12, 2021 11:08 pm
Forum: Personal Finance (Not Investing)
Topic: Best/tax-efficient sources for getting down payment together for a first-time house purchase
Replies: 16
Views: 1220

Re: Best/tax-efficient sources for getting down payment together for a first-time house purchase

dziuniek wrote: Wed May 12, 2021 8:08 pm A lower downpayment, if possible.

Did you run the PMI #s?
It is almost always better to pay capital-gains tax than to pay PMI. The PMI is likely to exceed the tax on the capital gain, and the tax on the capital gain is only deferred, not eliminated, if you don't sell now.
by grabiner
Wed May 12, 2021 8:00 pm
Forum: Personal Finance (Not Investing)
Topic: Best/tax-efficient sources for getting down payment together for a first-time house purchase
Replies: 16
Views: 1220

Re: Best/tax-efficient sources for getting down payment together for a first-time house purchase

I was in a similar situation in 2013, although my taxable account was large enough for the full down payment. I chose to withdraw part of my taxable account for a substantial capital gain (also offset by carryovers). Withdrawing from my Roth IRA and HSA would have cost me in long-term tax deferral, ...
by grabiner
Wed May 12, 2021 7:50 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing Bonus
Replies: 34
Views: 2640

Re: Rebalancing Bonus

Rebalancing improves the risk/return profile. If you hold asset A with an expected return of W and a standard deviation of X, and Asset with an expected return of Y and a standard deviation of Z and they are not perfectly correlated, a 50/50 portfolio of the two, rebalanced regularly, will have an e...
by grabiner
Wed May 12, 2021 7:39 pm
Forum: Personal Investments
Topic: Extreme Roth IRA contribution penalty
Replies: 20
Views: 2055

Re: Extreme Roth IRA contribution penalty

I'm not an expert on how all the statutes work in every situation, but my understanding is the IRS can only go back 3 years in most situations (6 years with a gross understatement of income of more than 25%, which doesn't seem to apply here). It seems their window to address it has already passed. ...
by grabiner
Tue May 11, 2021 9:51 pm
Forum: Personal Investments
Topic: Taxable Account - VTSAX vs. VTI
Replies: 46
Views: 7765

Re: Taxable Account - VTSAX vs. VTI

I also wonder about this question. I've been using VTI, but would prefer the VTSAX automatic investment option. I've stuck with VTI due to tax concerns. I was told by someone I trust that VTI was (ever so slightly) more tax-efficient that VTSAX, and the logic seems to make sense. In the case of hig...
by grabiner
Tue May 11, 2021 9:34 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 4557
Views: 357299

Re: Small Cap Value heads Rejoice !!!

Margin calls and friction costs are part of "conventional leverage" which play into the probability density functions and are not included in a mortgage. I am no expert on this and Steve Reading has many posts about this in his Lifecycle Investing post, but the risks of "conventional...
by grabiner
Mon May 10, 2021 9:10 pm
Forum: Personal Finance (Not Investing)
Topic: California state taxes: Do I deduct $3,000 capital loss from income
Replies: 13
Views: 797

Re: California sate taxes: Do I deduct $3,000 capital loss from income

CA follows the federal rules for capital losses (unless you have a different CA gain or loss for some reason, such as a capital gain in an HSA). Many other states do not; check with the state tax instructions for any state in which you file taxes. For example, AL allows all capital losses to be dedu...
by grabiner
Mon May 10, 2021 8:54 pm
Forum: Personal Investments
Topic: Accidentally made a deposit into traditional IRA instead of Roth. What can I do?
Replies: 13
Views: 998

Re: Accidentally made a deposit into traditional IRA instead of Roth. What can I do?

You can always just do a conversion to a Roth ira. But that is a 10% tax right? The 10% penalty doesn't apply to a conversion. If your traditional IRA contribution was deductible, you will pay tax on the conversion at your regular rate, but you deducted the contribution, so that cancels out (And th...
by grabiner
Mon May 10, 2021 8:51 pm
Forum: Personal Investments
Topic: Tax Loss Harvesting with Fund of Funds
Replies: 4
Views: 339

Re: Tax Loss Harvesting with Fund of Funds

An example of the same principle: if you sell a stock that is in the S&P 500 index, and buy an S&P 500 index fund (or vice versa), that is not a wash even though the fund holds some shares of the stock.
by grabiner
Mon May 10, 2021 8:47 pm
Forum: Personal Investments
Topic: Moving Vanguard Mutual Fund to Equivalent ETF - Confirming No Tax Consequence
Replies: 8
Views: 744

Re: Moving Vanguard Mutual Fund to Equivalent ETF - Confirming No Tax Consequence

Before requesting conversion, be sure to take a dump of cost basis for all your lots, and compare after conversion. I vaguely remember I had a problem with some lots and had to ask Vanguard to fix the cost basis. And if you have non-covered shares, you may be allowed to enter your own basis, althou...
by grabiner
Mon May 10, 2021 8:44 pm
Forum: Personal Investments
Topic: Backdoor Roth IRA for 2020
Replies: 6
Views: 482

Re: Backdoor Roth IRA for 2020

You can't do any kind of Roth conversion for 2020. You can contribute to a traditional IRA for 2020, but if you convert it, the conversion will be taxed in 2021. Fortunately, that's exactly what you want. If you haven't already made an IRA contribution for 2020, you have one week to make it; you can...
by grabiner
Sun May 09, 2021 10:21 am
Forum: Personal Finance (Not Investing)
Topic: Monthly bonus - taxed at 25%
Replies: 10
Views: 956

Re: Monthly bonus - taxed at 25%

Welcome to the forum! The purpose of withholding is to ensure that the correct amount of tax is paid. If you have a very simple situation (one income, no tax credits, nothing taxed or withheld at an unusual rate), and you fill out the form W-4 according to its basic instructions, the withholding wil...
by grabiner
Sat May 08, 2021 10:22 pm
Forum: Personal Investments
Topic: Willing to share your Taxable Portfolio?
Replies: 185
Views: 18616

Re: Willing to share your Taxable Portfolio?

Due mostly to tax-loss-harvesting issues, I have Total Stock Market, 500 Index, and Extended Market. At various times I've also used a couple of other funds like Tax Managed Cap App and Tax Managed Small Cap. Again the reason for the multiple funds is mostly a result of loss harvesting and then bei...
by grabiner
Sat May 08, 2021 2:12 pm
Forum: Personal Investments
Topic: Dividends on foreign funds, estimating current year
Replies: 8
Views: 701

Re: Dividends on foreign funds, estimating current year

I’m thinking specifically Vanguard’s Total International Stock Fund from a tax and impact on income standpoint. To ballpark it, go to the Distributions tab for the fund. Look at last year's distributions per quarter. Add up 2020's quarterly per share distributions. Find out how many shares you own....
by grabiner
Sat May 08, 2021 2:06 pm
Forum: Personal Investments
Topic: Filing Non-Resident State Taxes for MLP Energy Companies
Replies: 4
Views: 322

Re: Filing Non-Resident State Taxes for MLP Energy Companies

if the amounts reported in a state are $1 to $20, it is not likely you meet the non resident filing thresholds in those states. I have multiple MLP's but have not had to file non resident returns in the other states This varies by state. In many states, you must file a non-resident return if your t...
by grabiner
Sat May 08, 2021 9:57 am
Forum: Personal Investments
Topic: Selling All Lots of Individual Stock In One Go - Tax?
Replies: 23
Views: 2066

Re: Selling All Lots of Individual Stock In One Go - Tax?

Thanks grabiner! Selling them all heals the wound. Will this complicate OP's 1099-B reporting, even if the end result is the same? The individual sales might be reported on a 1099-B, but as long as all the shares are covered and the total is correct, the overall totals can just be copied to Schedul...
by grabiner
Sat May 08, 2021 9:36 am
Forum: Personal Finance (Not Investing)
Topic: Acquiring Foreign Property — FX Question
Replies: 7
Views: 581

Re: Acquiring Foreign Property — FX Question

If you are definitely going to spend euros two years from now, the lowest-risk way to do that is to hedge now; this insulates you from any future exchange-rate risk. Assuming that the foreign exchange market is efficient, you might as well do that. Convert the dollars to euros now, and buy a euro bo...
by grabiner
Sat May 08, 2021 9:34 am
Forum: Personal Finance (Not Investing)
Topic: Federal Direct Unsubsidized Loan
Replies: 1
Views: 181

Re: Federal Direct Unsubsidized Loan

It's probably not worthwhile; see Paying down loans versus investing on the wiki. The key is that you are taking additional risk by borrowing money to invest. A less expensive way to take that risk would be to sell bonds in order to buy more stock, since your bonds are yielding less than the loan ra...
by grabiner
Sat May 08, 2021 9:28 am
Forum: Personal Finance (Not Investing)
Topic: What interest rate on loan would you sell shares of VTI to avoid?
Replies: 8
Views: 796

Re: What interest rate on loan would you sell shares of VTI to avoid?

See Paying down loans versus investing on the wiki. I would normally compare the loan rate to bond yields. By selling stock rather than bonds to avoid a loan, you reduce your expected return, but you get a risk reduction which compensates. (If you have bonds in your 401(k), you can move an equal amo...
by grabiner
Sat May 08, 2021 8:40 am
Forum: Personal Investments
Topic: Selling All Lots of Individual Stock In One Go - Tax?
Replies: 23
Views: 2066

Re: Selling All Lots of Individual Stock In One Go - Tax?

OK, let's say you sold them on 04/29/21 for $37. Since you bought identical shares within the previous thirty days (4/2 an 4/3), your sale of the 4/1 lot was at a $3 per share loss, and is a wash sale. Here's where I throw up my hands and hope someone else can answer. Since you sold it all and don'...