Search found 7959 matches

by lakpr
Thu Jul 29, 2021 11:00 am
Forum: Personal Investments
Topic: Question about creating brokerage account through my 401k
Replies: 6
Views: 268

Re: Question about creating brokerage account through my 401k

I've never heard of this, and wonder what the downsides are to a self directed brokerage. Seems like so many more options with the same tax advantage. :confused Your plan has to first offer it. If offered, apart from the fees that are charged for the SDBO, you are correct, same tax advantage. My pl...
by lakpr
Thu Jul 29, 2021 10:32 am
Forum: Personal Investments
Topic: New Member, portfolio review
Replies: 29
Views: 1769

Re: New Member, portfolio review

I'm definitely going to start converting my rollover IRA to my Roth IRA. Everything I keep reading suggests doing it at the end of the year but if I'm keeping up with everything, you see anything wrong with starting to convert now? Just as long as I don't convert too much to put myself in the next ...
by lakpr
Thu Jul 29, 2021 10:25 am
Forum: Personal Investments
Topic: New Member, portfolio review
Replies: 29
Views: 1769

Re: New Member, portfolio review

Excellent points retiredjg ! That's what I was thinking. This is probably the lowest tax rate I will ever have. I don't think I qualify for those tax credits but I will check again. You know of a good source to check on that? Earned income tax credit income limits (this is the AGI, not taxable inco...
by lakpr
Thu Jul 29, 2021 6:16 am
Forum: Personal Finance (Not Investing)
Topic: How to keep pre-marital assets separate, while still contributing?
Replies: 68
Views: 4365

Re: How to keep pre-marital assets separate, while still contributing?

Will your Employer allow a one time in service distribution? You could roll that out to the TIRA and keep it separate that way. ? IRS rules prohibit in service distributions of 401k employee contributions. That is not something left to the discretion of the individual plan. Employer matching contri...
by lakpr
Thu Jul 29, 2021 4:57 am
Forum: Personal Investments
Topic: Portfolio Review / Questions
Replies: 4
Views: 474

Re: Portfolio Review / Questions

Random thoughts as I read your post: 1. With $120k salary, and 8.5% of it mandatory pension contribution, you are contributing $10k every year to pension fund, to what you describe to be a bond heavy allocation. Generally pension funds invest in a 60:40 ratio, or $4k per year of your money is being ...
by lakpr
Wed Jul 28, 2021 12:52 pm
Forum: Personal Investments
Topic: "Recharacterize" 403(b) contribution as 457(b)?
Replies: 15
Views: 543

Re: "Recharacterize" 403(b) contribution as 457(b)?

Why not roll-over the the 403(b) to a roll-over IRA or if your current employer accepts incoming roll-overs, you can transfer the 403(b) account balance to the 401(k)? To me, this is what I would do. I think you misunderstood the question. I do not have the numbers, but the situation is like this: ...
by lakpr
Wed Jul 28, 2021 12:50 pm
Forum: Personal Investments
Topic: "Recharacterize" 403(b) contribution as 457(b)?
Replies: 15
Views: 543

Re: "Recharacterize" 403(b) contribution as 457(b)?

Hi BH! Earlier this year I worked for a large university system. They offered a 403(b) and a 457(b), and I arbitrarily elected to contribute to the former but not the latter. Fast forward three months (but still the same tax year) and I'm now working at a company that only offers a 401(k). Since 40...
by lakpr
Wed Jul 28, 2021 2:43 am
Forum: Personal Investments
Topic: does anyone buy ibonds under kids' names?
Replies: 22
Views: 2469

Re: does anyone buy ibonds under kids' names?

thanks everyone for the insights. Yes the ibonds will be a gift for the kids although I will manage it until they are 18yr. College tuition is exactly what I had in mind. Now from what I read tax is deferred until the ibond is sold. So does this mean to stay under standard deduction (assume kid has...
by lakpr
Tue Jul 27, 2021 1:59 pm
Forum: Personal Investments
Topic: New Member, portfolio review
Replies: 29
Views: 1769

Re: New Member, portfolio review

I made a mistake and said I was in 22% bracket and I'm actually in 12% bracket. Same recommendations here? I snipped most of your post but: - OK, let your son keep making the car loan payment, training wheels for "adulting" :) - In the 12% bracket, actually I would prefer Roth 401k myself...
by lakpr
Tue Jul 27, 2021 11:03 am
Forum: Personal Investments
Topic: Bonds in Portfolio or Pay Down Mortgage
Replies: 10
Views: 1110

Re: Bonds in Portfolio or Pay Down Mortgage

If we pay off the mortgage, that improves cashflow by around $3800/mo but all the models I've worked, even if I put all that money into taxable, it is significantly less 20 years from now v.s. having the amount invested now and paying remaining mortgage off in 20 years. Right, that's why I said I a...
by lakpr
Tue Jul 27, 2021 9:07 am
Forum: Personal Investments
Topic: Best Cash Accounts
Replies: 5
Views: 934

Re: Best Cash Accounts

Would Toyota Income Driver Notes be a candidate for at least part of the money? https://www.bogleheads.org/forum/viewtopic.php?f=1&t=340088 Income Driver Notes are like the I bonds and EE bonds, except that instead of US government as the obligor, Toyota Motor Credit Corporation is your obligor....
by lakpr
Tue Jul 27, 2021 8:51 am
Forum: Personal Investments
Topic: New Member, portfolio review
Replies: 29
Views: 1769

Re: New Member, portfolio review

Nate78, Welcome to the forum. The first thing I would do is knock out the car loan. Car loans and credit card debts are not tax-deductible, so that 2.9% rate you are paying on your car note, is really equivalent to 2.9% / (1 - 22% - 5.75%) = 4%. If a bank were to offer you 4% CD, with the caveat tha...
by lakpr
Tue Jul 27, 2021 8:22 am
Forum: Personal Investments
Topic: Bonds in Portfolio or Pay Down Mortgage
Replies: 10
Views: 1110

Re: Bonds in Portfolio or Pay Down Mortgage

Interest paid on the mortgage principal above $750k is not tax deductible. If you are not hurting for liquidity (and sounds like you are not, with that $840k incoming cash), I would reduce the principal balance at least by $250k, then ask the lender to recast the mortgage. I am in the camp of "...
by lakpr
Mon Jul 26, 2021 12:38 pm
Forum: Personal Investments
Topic: 35% cash, nearly 40
Replies: 19
Views: 2542

Re: 35% cash, nearly 40

(I wish I knew how to insert images here, but alas I don't; I wanted to cut and paste in the chart of results from portfoliovisualizer.) After running your analysis, you can click the "Link" button that appears next to "Portfolio Analysis Results", which would update the URL in ...
by lakpr
Mon Jul 26, 2021 11:00 am
Forum: Personal Investments
Topic: Should I Rebalence
Replies: 8
Views: 917

Re: Should I Rebalence

Your mortgage principal balance of $188k, with a 2.375% interest rate, is essentially $4465 in interest paid per year. Coupled with maximum SALT deduction of $10k, your itemized deductions total only $14,465. Standard deduction is $25,100 -- so you need to contribute to charity more than $10k per y...
by lakpr
Mon Jul 26, 2021 10:55 am
Forum: Personal Investments
Topic: Advice on possible elder abuse?
Replies: 19
Views: 1615

Re: Advice on possible elder abuse?

According to Portfolio Visualizer, $14k left in Target 2020 fund in 2015 would have grown to $22.5k https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=2015&firstMonth=1&endYear=2021&lastMonth=12&calendarAligned=true&includeYTD=false&init...
by lakpr
Mon Jul 26, 2021 9:44 am
Forum: Personal Investments
Topic: Should I Rebalence
Replies: 8
Views: 917

Re: Should I Rebalence

Never mind, see below ...
by lakpr
Mon Jul 26, 2021 7:05 am
Forum: Personal Investments
Topic: 35% cash, nearly 40
Replies: 19
Views: 2542

Re: 35% cash, nearly 40

With a fully paid off home, I do think you can go up to 75:25 ratio than 60:40. I am a big believer in Age-20 allocation to bonds, which suggests a 80:20 actually but if you are a bit shy 70:30 or 75:25 would be better.
by lakpr
Sun Jul 25, 2021 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: What's Your Credit Card Rewards Strategy?
Replies: 5430
Views: 1020510

Re: What's Your Credit Card Rewards Strategy?

I have a 5.25% Cash Rewards card for that. What Rewards card is that? Bank of America Cash Rewards, coupled with at least $100k in Bank of America assets (Merrill Edge IRA /Roth IRAs count). You can choose your own 3% rewards category, and sounds like @tj chose Dining as one of those category. With...
by lakpr
Sun Jul 25, 2021 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: What's Your Credit Card Rewards Strategy?
Replies: 5430
Views: 1020510

Re: What's Your Credit Card Rewards Strategy?

I have a 5.25% Cash Rewards card for that. What Rewards card is that? Bank of America Cash Rewards, coupled with at least $100k in Bank of America assets (Merrill Edge IRA /Roth IRAs count). You can choose your own 3% rewards category, and sounds like @tj chose Dining as one of those category. With...
by lakpr
Sun Jul 25, 2021 5:52 pm
Forum: Personal Investments
Topic: Help select best 401k bond fund
Replies: 28
Views: 2505

Re: Help select best 401k bond fund

Since the current yield of Stable Value Fund is higher than Total Bond Market index, for now I would prefer SVF until such time as when the TBM yield catches up to SVF. Which looks to be at least an year away.
by lakpr
Sun Jul 25, 2021 5:44 pm
Forum: Personal Investments
Topic: Starting Over
Replies: 21
Views: 2532

Re: Starting Over

MeginVA wrote: Sun Jul 25, 2021 5:37 pm I don’t know what DCA is
Dollar Cost Averaging. Putting in a fixed dollar amount into the market at a selected frequency, once a week or once every two weeks, regardless of what the market is doing at that moment, up or down. Just like how you contribute to a 401k.
by lakpr
Sun Jul 25, 2021 2:40 pm
Forum: Personal Finance (Not Investing)
Topic: Exceeded limit on tax deferred contributions?
Replies: 15
Views: 1212

Re: Exceeded limit on tax deferred contributions?

Our current household income is high. Combined with spouse and after all the qualified deductions we are still taxed on 380 - 400k, so deferring taxes seems prudent at this time. Our thought is to hit a specific number in tax deferred accounts and reevaluate strategy if incomes still remains high a...
by lakpr
Sun Jul 25, 2021 12:48 pm
Forum: Personal Finance (Not Investing)
Topic: Exceeded limit on tax deferred contributions?
Replies: 15
Views: 1212

Re: Exceeded limit on tax deferred contributions?

Thank you all for your comments. I made an error when listing my contributions because I have a 401a, not a 401k. I will correct my original post. As @mervinj7 and others commented if 457 and Individual IRA do not count towards the 58000 limit, then I should not have a problem. I wonder if 401a cou...
by lakpr
Sun Jul 25, 2021 11:39 am
Forum: Personal Investments
Topic: Help select best 401k bond fund
Replies: 28
Views: 2505

Re: Help select best 401k bond fund

Very good information and thanks for taking the time to respond. I am expecting a tax refund for 2020, I haven't filed yet. My Federal refund amount is in the neighborhood of $8,000. Since I file MFJ can I request any amount of that $8,000 be refunded in the form of an I bond? Additionally my 401k ...
by lakpr
Sun Jul 25, 2021 11:27 am
Forum: Personal Investments
Topic: Starting Over
Replies: 21
Views: 2532

Re: Starting Over

All of my cash is with Vanguard so that could work. What does PAS mean, please? Thank you! personal advisory services. They charge you 0.3% of the assets under management as annual fees, I believe levied quarterly. https://investor.vanguard.com/advice/financial-advisor/personal-advisor-services I w...
by lakpr
Sun Jul 25, 2021 11:16 am
Forum: Personal Investments
Topic: Starting Over
Replies: 21
Views: 2532

Re: Starting Over

Hi Everyone, New poster, although I have read and reread Bogle advice for years. We panicked and moved most of our investments into cash a while ago. I know, I know. We need to rectify this. Our situation: Emergency fund and kid college funds well-stocked House, 400k remaining on mortgage, house wo...
by lakpr
Sun Jul 25, 2021 11:04 am
Forum: Personal Investments
Topic: Help select best 401k bond fund
Replies: 28
Views: 2505

Re: Help select best 401k bond fund

Thank you, I am going to look into I bonds, so it seems the I bonds can serve also as an emergency fund? Are they very liquid if I needed them to buy a new A/C system within 1-3 years? Yes, I bonds are perfect for emergency funds. The only caveat here is that, come what may, you CANNOT redeem the I...
by lakpr
Sun Jul 25, 2021 8:59 am
Forum: Personal Investments
Topic: Guaranteed Interest Account
Replies: 1
Views: 339

Re: Guaranteed Interest Account

3% is an excellent deal, but I would not go lower than 50:50 throughout retirement. Since you mention other assets, can you switch those assets to stocks, then switch stocks to the guaranteed interest account in this 457 plan, yet keep your overall portfolio to 50:50?
by lakpr
Sun Jul 25, 2021 8:52 am
Forum: Personal Investments
Topic: 401k International Allocation Advice
Replies: 15
Views: 786

Re: 401k International Allocation Advice

lakpr, Thanks for the insight. My 401k does not have any target date fund options unfortunately. It does have an auto rebalance function that I already have set. What are the expense ratios for funds that are purely US equities? Are they in the 0.05% neighborhood, or 0.4% neighborhood? If they are ...
by lakpr
Sun Jul 25, 2021 8:35 am
Forum: Personal Finance (Not Investing)
Topic: First Roth conversion to 22%?
Replies: 21
Views: 2158

Re: First Roth conversion to 22%?

Plan to retire at 58. Taxable and current Roth will cover two years (probably 4). Cover expenses? If yes then what is the point of spending down Roth while doing the Roth conversion at the same time? Wouldn't you need to have expenses including taxes covered from the taxable account? I think the po...
by lakpr
Sun Jul 25, 2021 8:20 am
Forum: Personal Investments
Topic: 401k International Allocation Advice
Replies: 15
Views: 786

Re: 401k International Allocation Advice

Do you have any target retirement date funds in your 401k plan, and if you do what are their respective expense ratios? In my 401k plan, for example, I have Vanguard Target Retirement series of funds for 0.10% each. We also know that these funds invest in a 60:40 ratio between US and international s...
by lakpr
Sun Jul 25, 2021 8:03 am
Forum: Personal Investments
Topic: Buying I Bonds for Children
Replies: 2
Views: 367

Re: Buying I Bonds for Children

As had been pointed out in another thread, if you are buying I bonds in the names of your children, you are essentially buying them investments that are guaranteed to lose to inflation (after taxes are paid)? With children so young, if you DO intend to make gifts to them $10k each, put them in a UTM...
by lakpr
Sun Jul 25, 2021 7:45 am
Forum: Personal Finance (Not Investing)
Topic: Exceeded limit on tax deferred contributions?
Replies: 15
Views: 1212

Re: Exceeded limit on tax deferred contributions?

The 401k + 403b contributions do exceed the IRS limit of $19,500. If you filed taxes on your own, your tax software should add $8000 back as Miscellaneous Income. You will be taxed again on this $8000 when you eventually withdraw from 401k or 403b account, if you do nothing. That is about the only ...
by lakpr
Sun Jul 25, 2021 5:55 am
Forum: Personal Investments
Topic: How Do People Manage Tuition Funding?
Replies: 33
Views: 3556

Re: How Do People Manage Tuition Funding?

Actually, I Bonds are backed by the U.S. Gov. and will at least keep up with inflation. Technically, only the interest paid on I bonds is guaranteed to keep pace with inflation, and that interest is taxable when redeemed. If we take the final value of those I bonds after taxes are paid, you are gua...
by lakpr
Sun Jul 25, 2021 5:51 am
Forum: Personal Investments
Topic: Pass IRA to grandchildren to mitigate SECURE Act?
Replies: 9
Views: 1439

Re: Pass IRA to grandchildren to mitigate SECURE Act?

I think, to make changes to IRA or 401k/403b plan beneficiaries, one requires spousal consent, if married. Assuming spouse is onboard with the plans, it is simply a matter of changing beneficiaries in the plan or IRA.
by lakpr
Sun Jul 25, 2021 5:00 am
Forum: Personal Finance (Not Investing)
Topic: Exceeded limit on tax deferred contributions?
Replies: 15
Views: 1212

Re: Exceeded limit on tax deferred contributions?

The 401k + 403b contributions do exceed the IRS limit of $19,500. If you filed taxes on your own, your tax software should add $8000 back as Miscellaneous Income. You will be taxed again on this $8000 when you eventually withdraw from 401k or 403b account, if you do nothing. That is about the only a...
by lakpr
Sat Jul 24, 2021 9:16 pm
Forum: Personal Investments
Topic: Help select best 401k bond fund
Replies: 28
Views: 2505

Re: Help select best 401k bond fund

With that $22k remaining, I think a better option would be to buy the I bonds, $10k each for you and your spouse. You can prepay the remainder $2k to IRS, and get that back as I bonds as part of your tax return (either this year, if you have not yet filed taxes for 2020 yet; or next year if you did ...
by lakpr
Sat Jul 24, 2021 5:24 pm
Forum: Personal Investments
Topic: Help select best 401k bond fund
Replies: 28
Views: 2505

Re: Help select best 401k bond fund

I differ from @ruralavalon, about investing in bonds in Roth IRA. The deal with Roth is that, in exchange for upfront taxes, all future growth is tax free. Why do you want choke off that growth by investing in bonds in the Roth? Yes, purchase the I bonds in taxable to increase your bonds space. If y...
by lakpr
Sat Jul 24, 2021 5:10 pm
Forum: Personal Investments
Topic: ST Fund Allocation for Teen
Replies: 2
Views: 197

Re: ST Fund Allocation for Teen

You can buy I bonds in the names of the kids for $10k per year. Since the time horizon is more than 1 year, if the kid wants to sell those I bonds after receiving them and invest in something else, he will be free to do so. That is really the best deal going around now, nothing else comes close to t...
by lakpr
Sat Jul 24, 2021 5:06 pm
Forum: Personal Investments
Topic: How Do People Manage Tuition Funding?
Replies: 33
Views: 3556

Re: Thanks Found A Part Solution - IBonds

Hi, Thanks as a partial solution I'll buy I-Bonds ($15K a year, $10K electronic, $5K tax return) per kid (I have two). I won't pay state income tax and if I use it for tuition I won't pay federal tax either so that's a no-brainer. That should knock off $200K still not sure what to do with the other...
by lakpr
Sat Jul 24, 2021 5:40 am
Forum: Personal Investments
Topic: How is maximum retirement contribution is calculated if I change jobs?
Replies: 8
Views: 720

Re: How is maximum retirement contribution is calculated if I change jobs?

Thank you all for the replies. I know I have 401k with my previous employer. I'm not sure about my current government employer. According to the help link, employees can select either 403(b) or 457 (before tax or after tax), if they're eligible. They cannot select both. I don't know whether I'm eli...
by lakpr
Fri Jul 23, 2021 8:46 pm
Forum: Personal Finance (Not Investing)
Topic: Sunken cost and mortgage points
Replies: 9
Views: 686

Re: Sunken cost and mortgage points

Mortgage points are technically interest charges paid upfront. If you refinance, all that money is deductible on your tax return. Technically. If your other itemized deductions and these mortgage points together do not exceed the standard deduction, you would choose the standard deduction, so you wo...
by lakpr
Fri Jul 23, 2021 5:52 pm
Forum: Personal Investments
Topic: How Do People Manage Tuition Funding?
Replies: 33
Views: 3556

Re: How Do People Manage Tuition Funding?

According to risk efficient frontier theory, the least risk happens not at 100% cash or 100% bonds, but a mix of 25% stocks and 75% bonds. A primer on REF theory: https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/efficient-frontier/ Note the hockey stick shaped curve, where...
by lakpr
Thu Jul 22, 2021 12:02 pm
Forum: Personal Investments
Topic: does anyone buy ibonds under kids' names?
Replies: 22
Views: 2469

Re: does anyone buy ibonds under kids' names?

Sounds like you're trying to game the system, like this person did by purchasing ibonds for himself using other people's credentials: https://www.bogleheads.org/forum/viewtopic.php?t=351968 No, it's not gaming the system or even anything questionable. TreasuryDirect has a procedure for opening mino...
by lakpr
Thu Jul 22, 2021 11:48 am
Forum: Personal Investments
Topic: does anyone buy ibonds under kids' names?
Replies: 22
Views: 2469

Re: does anyone buy ibonds under kids' names?

Very interesting! Can they move it to 529 for their benefit tax exempted? The kid will not have much income, so this might still work; if they are not treated as dependents on tax return. But nevertheless, an interesting note. 1. No, you cannot place I bonds inside a 529 plan. You will have to sell...
by lakpr
Thu Jul 22, 2021 10:44 am
Forum: Personal Investments
Topic: Investing advice for a 19 year old
Replies: 28
Views: 2237

Re: Investing advice for a 19 year old

I also suggest that you use that same fund in your Roth IRA at Vanguard. This particular piece I disagree with. It makes tax loss harvesting difficult. Ideally one should have the Roth IRA and taxable accounts invested in different mutual funds or ETFs, there should be no overlap. One may not care ...
by lakpr
Thu Jul 22, 2021 10:32 am
Forum: Personal Investments
Topic: Investing advice for a 19 year old
Replies: 28
Views: 2237

Re: Investing advice for a 19 year old

I also suggest that you use that same fund in your Roth IRA at Vanguard. This particular piece I disagree with. It makes tax loss harvesting difficult. Ideally one should have the Roth IRA and taxable accounts invested in different mutual funds or ETFs, there should be no overlap. One may not care ...
by lakpr
Thu Jul 22, 2021 8:38 am
Forum: Personal Investments
Topic: does anyone buy ibonds under kids' names?
Replies: 22
Views: 2469

Re: does anyone buy ibonds under kids' names?

I guess be aware that you're taking investable assets in your child's name and putting them in a vehicle designed by its very nature to not grow in real dollars. Agree very much with this. Near term college savings are possibly a use here, but I personally don't want my kids owning anything but bro...
by lakpr
Wed Jul 21, 2021 8:31 am
Forum: Personal Investments
Topic: Portfolio review
Replies: 14
Views: 1613

Re: Portfolio review

+1 to the recommendation from retired@50, to pay off the car loan. That car loan interest is deceptive, it is not 3% that you are paying, but 4.4%. The interest paid on car loans is not tax-deductible, so you are paying after-tax interest on those car loans. In your 32% tax bracket, that's equivalen...