Bogleheads.org

mesaverde

I have an average disposible income of $1,500/month that I've been using to make extra principal payments on my 3.25% fixed rate mortgage. The mortgage has 9 years of regular payments left on it (4 years if I continue devoting the $1,500/month towards the principal). I'm beginning to think that I co...

mesaverde

Hi investingnoob, A new car is going to depreciate well over $1,000 a year... probably closer to $2,000 a year. In other words, you would be spending a whole lot of $$ on a steadily depreciating asset. Many of the repairs you've been doing are routine maintenance... just from using the car. I would ...

mesaverde

Fidelity All World Ex-U.S. index fund (FSGDX) pays dividends annualy in December. Vanguard Total International Index (VTIAX) pays dividends quarterly. Yes, the two funds track different indexes. But the fact that dividends are reinvested more frequently in the Vanguard fund gives the Vanguard fund a...

mesaverde

Hi Q85 I am in a similar situation with ~$1,400 left over each month after maxing out a 457b and required pension contributions. Personally, I've been paying 100% of that towards my mortgage principal. You can consider prepaying your mortgage as a risk free investment. Do you know of any risk free i...

mesaverde

You can "retire" with a mortgage but true "financial independence" can't happen with a mortgage. At least that is my take. That is an excellent way to put it. Sound financial advice. It's a simple and logical goal to have it paid off at (or just before) retirement. mesaverde, Ju...

mesaverde

bloom2708 wrote:
You can "retire" with a mortgage but true "financial independence" can't happen with a mortgage. At least that is my take.

That is an excellent way to put it. Sound financial advice. It's a simple and logical goal to have it paid off at (or just before) retirement.

mesaverde

I'm paying off my 3.25% fixed rate mortgage early for these reasons: 1. diversification (I don't want most of my net worth exclusively in stocks & bonds) 2. there really isn't anything offering a risk free return close to current mortgage rates 3. the sooner this fixed expense is paid off, the ...

mesaverde

I'm paying off my 3.25% fixed rate mortgage early for these reasons: 1. diversification (I don't want most of my net worth exclusively in stocks & bonds) 2. there really isn't anything offering a risk free return close to current mortgage rates 3. the sooner this fixed expense is paid off, the s...

mesaverde

I bought a new Honda Fit and plan to keep it for an absolute minimum of 10 years... probably closer to 15 years. As others have noted, the cost difference between new and used basic, reliable Japanese models (Corolla, Fit, Civic, etc.) is not that much. "Buy and Hold" applies to cars as we...

mesaverde

Hi BanditKing, My girlfriend and I are in an almost identical situation as you and your girlfriend (income/savings difference, both married/divorced once before, not religious, I'm 42 she's 37, don't have/don't plan on having children, love each other and have lived together for some time). We have ...

mesaverde

I have a mortgage on a condo I rent out. Without question, I consider both regular & extra payments towards the principal as savings.
But a rental property is quite different from one's own home. I can sell this rental property and cash out on it if I choose.

mesaverde

Fairmark presents tax brackets in a way that's easy to understand:

http://fairmark.com/general-taxation/re ... schedules/

mesaverde

1. A car is something that most people can save money for and buy without going into debt to do so (as opposed to student loans/mortgages). 2. It does not make sense to go into debt on a continuously depreciating asset (regardless of how often you even use that asset). 3. Numerous studies have shown...

mesaverde

hi DanMacMan, I have access to to the same funds in my 403b/457b with Fideilty. Do you know that small cap, REIT, and Emerging markets are already in the Total US & Global ex-US funds? If you invest in the small cap, REIT, and Emerging markets funds you'd be overweighting those AND adding (unnec...

mesaverde

Seven percent rate of return?! Is that the expected return during retirement? That sounds like a pretty aggressive portfolio when one is living off the portfolio. I think you would be playing with fire that way. Seven percent is an estimate/guess leading up to retirement. After retiring, it will ce...

mesaverde

Thanks for the feedback, Twins Fan. Based on current spending, I could live well with approx. 27k/year between age 47 & 65 without mortgage payments. That includes having to buy health insurance throught the health insurance marketplace. I've studied the quotes. Yes, but can you live on $27K pr...

mesaverde

Thanks for the feedback, Twins Fan.

Based on current spending, I could live well with approx. 27k/year between age 47 & 65 without mortgage payments.

That includes having to buy health insurance throught the health insurance marketplace. I've studied the quotes.

mesaverde

I'm 42 and have the goal of retiring in 5 years. There are 10 years of regular payments left on my 3.25% (2.6% after tax) fixed rate mortgage. I'm in a situation in which I have approx. $1,300 of extra cash flow each month. If I use this $1,300/month to pay down the mortgage, it will be paid off in ...

mesaverde

This thread reminds me of the wise saying: "Just because you can take a risk doesn't mean you should."

mesaverde

Many studies have demonstrated that we tend to spend more over time if we use credit cards as opposed to cash. However, it appears that MANY Bogleheads use cash back credit cards or credit cards with other incentives, in some cases for all their spending. Perhaps those with cash back/other incentive...

mesaverde

It's surprising that so many have responded 6+
Perhaps they included inactive credit cards.
I would think that it's probably not necesary to have more than 2, and MAYBE have 3 credit cards at the most.
With two, you can use the 2nd card in case the first is temporarily cancelled or whatnot.

mesaverde

hi DebiT, While you may not be comparing apples to oranges, you are, in effect, comparing granny smith apples to braeburn apples. You may want to consider investing exclusively in the index fund for the following reasons (among others): 1. it's more diversified 2. lower cost 3. it will ALWAYS perfor...

mesaverde

Thanks for the feedback everyone. In my taxable account I'm going to sell VFFVX, VGSIX, and VPADX. That leaves me with VTSAX, VTIAX, and VHCOX. I know that active funds aren't bogleheadish, but I'm still undecided whether I want to keep VHCOX, so I will hold it until I decide. If I take those sold ...

mesaverde

Time and time again I've read that one should prioritize contributing to an IRA before contributing unmatched contributions in a worked-based plan (401k/403b/457b). Perhaps it's time to change the Bogleheads WIKI on prioritizing investments http://www.bogleheads.org/wiki/Prioritizing_investments so ...

mesaverde

It seems to be that contributing to the Roth IRA will increase your taxes now for no particular gain. If your expenses now are such that you remain in the 15% tax bracket, then in early retirement, you will also be in the 15% or less tax bracket with most of your income excluded from taxes. And SS ...

mesaverde

I'm currently maxing out a government 457b with Fidelity in their low cost Spartan index funds and contributing $10,000/year to a Fidelity 403b with the same funds. By contributing this much, I'm just barely in the 15% federal tax bracket (I contribute a little extra just to be sure). I live in Virg...

mesaverde

I bought a new Honda Fit. At the time I had the cash to buy it invested in a Vanguard taxable account. After getting the price right, they offered financing... a 60 month loan at .9%, their best rate at the time. So I decided to keep my money invested with Vanguard. The dividends alone from the inve...

mesaverde

All of the shares were purchased well over 55 days ago. So I should recieve the maximum amount of qualified dividends. The fund is Vanguard Total international index.

mesaverde

hello, I've read the WIKI about tax loss harvesting, but want to confirm something for my particular situation. I'm thinking of selling all shares of my Vanguard index fund (in a taxable account), which currently has a combined short & long term loss of $1,300 . Dividends are distributed on Dece...

mesaverde

hello, I teach personal finance classes & want my students to use a buy vs. rent calculator to determine how much they could potential gain (or lose) by buying or renting a home. In the past, the New York Times buy vs rent calculator was good, but the current version basically only tells how muc...

mesaverde

hi yuti84, I contribute to a Fidelity 403b also... it includes all the funds you've mentioned. I also contribute to a Fidelity 457b. It's important to realize that the total stock index includes ALL of the sector funds you listed, including the real estate (REIT) fund. It includes large, mid & s...

mesaverde

I'm in the 15% federal tax bracket & should remain in it for the rest of my life. I pay zero tax on qualified dividends & long term capital gains. I have a substantial amount of $ in the Vanguard Total International fund in my taxable account... it is the only fund I hold in my taxable accou...

mesaverde

Thank you for the feedback- there are quite a variety of opinions. Perhaps another option would be to refinance the property to another 15 year fixed loan... by doing that I'd lower the current monthly cost of P&I, taxes, and HOA dues from ~$2,100/month to ~$1,700/month.... that would better put...

mesaverde

It's been rented nearly 100% of the time, and is easy to rent. There is little to no maintenance... all appliances are 5 years old and a new HVAC system was put in 3 years ago. I bought it for $232,000, and it could probably be sold for ~$220,000 (before selling costs) now. It's not likely to deprec...

mesaverde

I'm considering the sale of a rental property. It's a condo I used to live in myself. Years ago I moved out to live with my partner.. we have a stable relationship. I never really wanted to be a landlord, but the condo is only a few miles away & has been fairly easy to rent out. Here are some fa...

mesaverde

If someone had, in fact, put $ in biotech funds in 2012, they would have done quite nicely. A ~60% return in 2013 and ~20% so far this year. Perhaps this is an example of the "momentum effect", which seems to stand out in sector funds. Why pay an active manager to chase the momentum effect...

mesaverde

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1410379200000&chddm=488750&chls=IntervalBasedLine&q=INDEXSP:.INX&ntsp=0&ei=6qsQVNDVPMOw8gblnoHwBQ What observation/conclusion can you make by looking at ...

mesaverde

I'm definitely leaning toward option #3. You're right crefwatch, my employer can remove the health insurance subsidy at any time. So putting much faith into that probably isn't the best idea. And thank you for the suggestion of checking on state income tax... I didn't realize that each state varies ...

mesaverde

Thank you for the feedback... it will be an irrevocable decision, so some careful thought is required. Unless something out of the ordinary happens, I do expect to live a long life. I actively run marathons, go on long bike rides & hikes, and eat healthy foods. As the saying goes, "treat yo...

mesaverde

I'll retire at age 50. At that point I need to decide what to do with my pension. There are three options: 1. begin a reduced pension payment of $848/month starting at age 50. If I begin the pension at this point, 2 added bonuses would be that I can continue subsidized health insurance with Kaiser P...

mesaverde

Thank you all for the specific feedback... it seems that the "cons" definitely outweigh the "pros" on doing a refinance.

mesaverde

Current mortgage balance is $158,193.. Penfed says I can refinance to a 15 year fixed @ 3%, with a 1% origination fee & $2518 in closing costs. By refinancing, my monthly mortgage payments would be ~$365 less, & I'd be able to max out the 403(b). The upfront costs is ~$4100 and 12 months of...

mesaverde

I'm currently contributing to a Fidelity 403(b) with their low cost Spartan index funds, all of which are as cheap as Vanguard Admiral shares. But I'm not quite able to max it out each year. If I were to refinance my mortgage, I'd be able to max the 403(b) out each year. I've plugged numbers into th...

mesaverde

I don't understand why you cannot do both. If you sell $400 a month of your taxable account, you already said you would pay no taxes. So contribute $400 a month more to the 403(b) and if you need $400 a month for expenses, draw down the taxable account. That makes perfectly good sense, to draw down...

mesaverde

I'm currently contributing 12k/year to a Fidelity 403b with their low cost Spartan index funds. Contributing this amount puts me into the 15% federal tax bracket. I live in Virginia & pay 5.75% state income tax. I'm paying $300/month on a car loan at a rate of .9%. The current balance is $13,000...

mesaverde

If you contribute to the 403(b) will it drive your tax bracket down to 15% or lower so that you can do tax-gain harvesting in your taxable account? Yes- my taxable income hovers around $43k, so contributing to the 403(b) would get me into the 15% tax bracket... I believe another benefit would be no...

mesaverde

I'm 41 & currently maxing out a government 457b with Fidelity & have been contributing ~$1,000/month in a Vanguard taxable account. I have a mortgage @ 3.25% fixed (2.29% after tax deduction) with ten years left on it, & my intention is to pay this off with $ from the taxable account whe...

mesaverde

Have you estimated how much you need to cover your monthly costs for that time period between 47 and when you can start tapping your retirement assets? Yes- Approx. 35k/year. Between age 47 & 59.5 I'd be drawing from SEPP withdrawals (regardless of whether I max the 403b out or not) and 457b wi...

mesaverde

I'm 29 and have a goal of retiring in ~six years.

mesaverde

Would the new employer also offer a gov't pension? (I'm assuming yes and your credit would rollover) I'm very jealous of your low ER 457b option. Lowest we get is 0.95. But I'm still maxing it to hopefully retire at 50-55. I also agree that switching wouldn't be a financial benefit. That 457 is gre...

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