Most people buy and sell at inopportune times, because they listen to the noise. Anything that encourages them to become less active traders is overall good for them.
Now that brokerages track and report basis, it wouldnât be too awfully hard for them to also do that, @notrichenough
Iâm still in the grumpy category that wants to see carried interest taxed at more rational (higher) rates.
@notrichenough, that doesnât add any complexity. 
Which inflation index are we going to use?
Letâs say you own rental housing.
Housing is 40 percent of an inflation index.
Just to make things easy letâs say Housing prices increased 100 percent in 10 years. Everything else has seen no price increases. So inflation is up 40 percent over 10 years.
You sell your place after 10 years.
You donât want to pay taxes on 40 percent of your gains while the investment you own was where the inflation was? The price increases in housing is why you made the capital gains in the first place. Housing was part of the inflation. In this example, all of the inflation.
âMiamiDap, I donât know anyone who is retired and who spends their days 'not doing anything at allâ. Why would you think that would be the case? Do you have no other interests? No hobbies? No community organizations with whom you volunteer or would like to? No friends or family with whom youâd like to spend more time? "
- I have hobbies, 3 time consuming hobbies. But how much time do they take? I will be able to be involved with only 2 of them on my retirement. I cannot see filling the 8 hour / day with these 2. I am not big on spending many hours every day with the crowd of people. I will see few, but very few as we are going to spend most of the year at the location outside of the USA. And we are also planning to move our primary residence within the USA. My kids and grandkids are very busy and live far away. Even when we move closer to one of them (this is the plan for now), she does not have much time at all. To volunteer, I will have to know Spanish really well. I am trying, but as much as I love learning it, the age and my current surroundings do not promote learning Spanish at all. One thing that I could think about that maybe my younger will have kids (not likely in 3 years though, she is a resident working crazy schedule), so we can help her with kids. They can even ship them to us abroad. The older set will be in college very soon, they are in HS.
That is why I want to have a âtrialâ retirement - taking long vacation and see how it feels. My H. approves of this plan, but he has no problem âdoing nothingâ, I am the one who is a busy bee, but do not like any ânormalâ activity like others, like travel, TV, reading, cooking, cleaning, gardening, shopping, being with others for extensive period of time, parties. Not a big fan of any of these. Only my work, exercise and hobbies have been keeping me busy
That just sounds to me like the nanny government telling people what is good for them, plus trying to get more taxes from people (but of course, not the ultra wealthy). Letâs just complicate taxes even more, because people wonât understand it, so the little guy will get caught in the tax hit. What else is new? We certainly donât want to aggravate our donors.
Sometimes a stock is not a good one, six years later. Six years is not a magic number. If they want to be honest, just tax all cap gains as ordinary income, no exceptions. No ways to slide around it, no special tax breaks put in the tax code, no lobbies, no payoffs. Iâm sure Warren Buffett already has his tax attorneys on the proposal, trying to find the best way to avoid those additional taxes that the little people would have to pay.
Taxes are not spent correctly anyway, so they should be abolished, period. All of themâŠand government needs to be at 10% size wise or smaller of the current one. And what happen to the idea of being âservantsâ, they have to be earning their income somewhere else, not receiving salaries from the tax money⊠And why they have special health care system if ACA is so wonderful, just one example of the waste that is going on in addition to the study of shrimp being under stress and many others.
MiamiDap, then donât move and donât quit working,
My grandfather and uncle worked until they were 80. My dad 75.
@dstark sorry I donât have a whole lot to say about annuities. I do remember a few years ago thinking an immediate annuity might be a reasonable part of my retirement portfolio at some point, but now that role will be filled by social security. My wife and I (currently eligible!!! counting foregone benefits month by month!!!) plan to wait until age 70 to collect social security for the exact reason one might purchase an annuity. I want to maximize our inflation adjusted AAA source of monthly income that will last as long as we do, ie insurance against the risk that I live forever. As for bonds, I really donât have a clue, other than owning a chunk of zeros in my IRA so I can claim to not care about rates because I can hold them to maturity (2023). Also, I would suggest that it is not a given that long bond rates will rise as the Fed raises rates. If they go slowly, it is possible that a point five pct fed funds rate wonât hurt bonds, and if they go too fast (letâs say a funds rate of 2%) and slow the economy bonds could actually rally. Wouldnât that be counterintuitive? Now I have an update for the colonoscopy thread!
@NJres, thanks.
I think I will pass on the colonoscopy thread.
Bus, I think at least Hilary is consistent with her party. Tax and spend.
Looks like we are on pace for a closed thread
No. We are not.
DrGoogle, they are all tax and spend. Itâs just a matter of whom they want to tax, and what they want to spend it on.
Haha, yep. But I donât know anyone who doesnât use a tax program these days.
Is there a common data format for reporting dates and basis and sale that all of the financial institutions will use, that can be imported by any tax program? That would make things easier.
I always though it was unfair to get taxed on gains whose value has been eroded by inflation.
Iâll change the subject from taxes to death.
I was following a thread on BHâs forum about a Schwab IRA. It caught my eye because my Hâs group holds its 401k at Schwab. The issue concerned whether a spouse can rollover the 401k account into an INHERITED IRA.
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=169488&p=2553472#p2553472
Hereâs Schwabâs Inherited IRA Application:
https://www.schwab.com/public/file/P-3719019/APP13599-20.pdf
As noted by the BH member, Page 2 of the Application reads as follows:
The result: If a spouse cannot open an Inherited IRA, this means that s/he can only roll over the QRP balance into her/his own IRA. This is the added benefit of being a spousal beneficiary of an IRA. Normally, this is a good result, because, among other things, (1) s/he can avoid having to continue RMDs if s/he is younger than 70.5 and (2) s/he can name her/his own beneficiary(ies) who can stretch the IRA for their respective lifetimes.
The problem: If the surviving spouse is age <59.5, then s/he can only withdraw from the IRA with a 10% penalty if she needs to spend the funds.
The real problem: Apparently Schwab (along with potentially other custodians?) is failing to properly interpret IRS PLR 2004-50057 because of a discrepancy between the PLR and the applicable section of the Tax Code in this type of situation. (BTW, this is my quoting the knowledgeable BH member, not my having done any reading on this topic).
Thatâs a lovely little nugget buried in the Schwab application of which I was unaware, because I was relying on my reading of Publication 590-B et al. to understand how IRA inheritance works in our simple family structure.
In our case, I was almost certainly going to have H roll over his Schwab account into a rollover IRA at Vanguard when he retires so as to consolidate accounts.
However, for spouses who are younger than 59.5 (as we both still are), this can be a nasty surprise, especially if the surviving spouse has no choice but to spend QRP funds as a source of income.
Generally, inheritance of QRP accounts is more restricted because they are subject to employer plan terms and constraints. However, it would appear that it goes further than that because of the custodianâs misapplied restrictions.
I would say no to a common data format.
There would be a lot of problems if brokerage firms had to adjust the basis or cost of a stock. I am sure it can be done at a cost.
Schwab doesnât know what my cost basis is in Biogen. I canât remember how Schwab words my cost. I think the word is unknown. And this is without any inflation adjusting.
What Clinton is advocating has some similarities to adjusting costs for inflation. She is cutting the tax rate over time with a minimum tax rate.
I donât think taxing cap gains at ordinary rates and adjusting for inflation is ever going to fly. That is too big a tax increase for many wealthy people.
You buy a stock at 10. It goes to 40 in ten years. Inflation is 25 percent in ten years. So the cost basis is 12.5 but the tax rate is 39.5 percent instead of 20 percent on the gains. Look at the math. I donât think so.
What I hear some investors want is the lower cap gains tax rate and gains adjusted for inflation. Or cap gains not taxed at all. Some investors just want a tax cut.
Has anybody bought market linked investments? If so? What was the deal?
https://www08.wellsfargomedia.com/downloads/pdf/com/securities/Market-Linked-Securities.pdf
I have been thinking and planning to roll over my 457 to a tIRA. Been dragging my feel because I am intimated by the whole idea. Iâd rather wasting the entire day doing nothing than think about this subject, I did so some reading on it though.
My 457 plan does not offer any Fidelity and Vanguard funds. It has a General Account with interest rate of 4%, which is very good. My portfolio includes the standard of big cap, small cap, small portion in international stocks and the General Account.
If I were to roll it over to a tIRA, will likely be with Fidelity or Vanguard. I currently have a small mutual fund account with Fidelity, they have an investor center 20 minutes away from us. I plan to stop by after the summer.
Should I roll the entire amount over and park in cash first, then slowly convert into various investment options over time, or select the lazy 3 fund portfolio or whatever fund options (in Fidelity or Vanguard) and roll the 457 balance into them?
I know there is no right or wrong way, it depends on risk tolerance. Just want to know what you all think. Thanks.
@Hopeful820, Hello! 
I canât speak as to your definitive choice of investments but you seem to know you want the âcouch potatoâ (better than âlazyâ) 3-fund portfolio that the BHs advocate. Tax-efficient, low-cost investing in Total Stock Market, Total Bond Market and Total International Index in whatever may be the appropriate asset allocation for your age and risk tolerance.
Anyway, if you want to roll over your balances, Iâm sure you have read here and elsewhere to let the recipient custodian do the work for you through their Concierge departments. Either Fidelity or Vanguard can do this easily for you and you will avoid having to have the money cross your hands.
Double check in each case by reading through the form to see if it matches your needs, but hereâs Fidelityâs form:
And hereâs Vanguardâs form:
http://www.vanguard.com/pdf/vdrf.pdf?2210019642
IIWY, Iâd be inclined to do a DCA automatic-investment program in equal monthly amounts over the next 6-12 months just so that I would not go crazy if the market a big short-term move downward right after you make your investments.
I hope others like @IxnayBob will chime in soon. Good luck!
Hello Hopeful820, this question is tricky, and thereâs no right answer.
Since markets generally go up, the solution most likely to have the largest gain in to put it all in as early as possible.
But, since regret over a loss feels twice as bad as the joy over a gain, dollar cost averaging reduces the odds of a major regret (although, whatâs not to say that the day after your final contribution is the day the markets go down).
So, itâs a matter of what you feel more comfortable with.
If itâs any reassurance, over a long enough period, it generally doesnât make much difference, as long as you donât sell when prices go down. So, do whatever it takes not to panic. If you are frightened of a loss, to an extent that you might sell in a panic, it means your asset allocation is to heavily weighted towards equities.