s*********0
发帖数: 2045 | 1 今天有个帖子里面很多人和我看法不一，不如单开贴来调查一下。Emergency fund的数
量以前有过讨论，这里不问了。是3个月，6个月，8个月还是一年工资看各人了，不外
乎几万到10万吧。
来探讨一下这笔钱你都是怎么存的，或者说你是从那个层次觉得自己存到位了的：
A. 只有Checking/Savings account里存着, 等同于cash的才算数。
B. 另外还加上买了的CD ladder和treasury bond。
C. 除了B，另一部分在brokerage帐户里比如像Vanguard, Fidelity，长短线投资。反
正要变现也很快。流动性仅次于checking/savings。
D. 不光A&B，还把Roth IRA的contribution也算进去，真emergency的时候拿出来用。
E. 不光上面，手里信用卡好几张，未用的credit line有好几万，真emergency的时候
透支用。
你是哪一类？ | X****r
发帖数: 3557 | 2 cash+HELOC
【在 s*********0 的大作中提到】
: 今天有个帖子里面很多人和我看法不一，不如单开贴来调查一下。Emergency fund的数
: 量以前有过讨论，这里不问了。是3个月，6个月，8个月还是一年工资看各人了，不外
: 乎几万到10万吧。
: 来探讨一下这笔钱你都是怎么存的，或者说你是从那个层次觉得自己存到位了的：
: A. 只有Checking/Savings account里存着, 等同于cash的才算数。
: B. 另外还加上买了的CD ladder和treasury bond。
: C. 除了B，另一部分在brokerage帐户里比如像Vanguard, Fidelity，长短线投资。反
: 正要变现也很快。流动性仅次于checking/savings。
: D. 不光A&B，还把Roth IRA的contribution也算进去，真emergency的时候拿出来用。
: E. 不光上面，手里信用卡好几张，未用的credit line有好几万，真emergency的时候
| c*****e
发帖数: 1106 | 3 Also, one can usually borrow a significant amount from their 401K plan. | d*****r
发帖数: 273 | 4 A, B(CD ladder). Though E is applicable, I do not want to pay the interest,
unless I have no other choice.
【在 s*********0 的大作中提到】
: 今天有个帖子里面很多人和我看法不一，不如单开贴来调查一下。Emergency fund的数
: 量以前有过讨论，这里不问了。是3个月，6个月，8个月还是一年工资看各人了，不外
: 乎几万到10万吧。
: 来探讨一下这笔钱你都是怎么存的，或者说你是从那个层次觉得自己存到位了的：
: A. 只有Checking/Savings account里存着, 等同于cash的才算数。
: B. 另外还加上买了的CD ladder和treasury bond。
: C. 除了B，另一部分在brokerage帐户里比如像Vanguard, Fidelity，长短线投资。反
: 正要变现也很快。流动性仅次于checking/savings。
: D. 不光A&B，还把Roth IRA的contribution也算进去，真emergency的时候拿出来用。
: E. 不光上面，手里信用卡好几张，未用的credit line有好几万，真emergency的时候
| d*****r
发帖数: 273 | 5 Then you have to pay back immediately if you change your job. Otherwise it
will count as income, plus 10% penalty, if you are younger than 59.5.
【在 c*****e 的大作中提到】
: Also, one can usually borrow a significant amount from their 401K plan.
| X****r
发帖数: 3557 | 6 Plus, the most likely situation that one needs emergency fund is when he is
out of job, in which case he can't borrow from the 401k.
【在 d*****r 的大作中提到】
: Then you have to pay back immediately if you change your job. Otherwise it
: will count as income, plus 10% penalty, if you are younger than 59.5.
| j****y
发帖数: 1714 | 7 This has been studied by others mostly,
just read: http://www.bogleheads.org/wiki/Emergency_fund
a multi-tiered emergency fund could consist of:
1. Three months of expenses in cash (bank account or money market fund)
2. The next three months of expenses in CDs with the option to cash them in
for three months of interest
3. The next three months of expenses in a short-term Treasury bond fund.
Selling these would risk incurring some loss of principal due to interest
rate changes, but since the odds of needing to rely on your emergency fund
for more than six months are slim, some would consider this an acceptable
compromise.
Or even put International stock as emergency funds:
http://www.bogleheads.org/wiki/Placing_Cash_Needs_in_a_Tax-Adva
How it works
Suppose you have $15,000 in your portfolio with additional $5,000 as
emergency fund. Then you could have:
Taxable
$10,000 tax-efficient stock index funds
Tax-advantaged account, such as 401(k)
$5,000 money market fund <- emergency fund
$5,000 bond fund
Let's say you need $5,000 in emergency. Then you sell $5,000 from the stock
index funds in your taxable account and exchange the money market fund for
similar stock funds in the money market fund in your tax-advantaged account.
You are left with:
Taxable
$5,000 tax-efficient stock index funds
Tax-advantaged account, such as 401(k)
$5,000 stock funds
$5,000 bond fund
Notice that you have not changed the asset allocation at all. | S**C
发帖数: 2964 | 8 Bank account plus I-bond.
【在 s*********0 的大作中提到】
: 今天有个帖子里面很多人和我看法不一，不如单开贴来调查一下。Emergency fund的数
: 量以前有过讨论，这里不问了。是3个月，6个月，8个月还是一年工资看各人了，不外
: 乎几万到10万吧。
: 来探讨一下这笔钱你都是怎么存的，或者说你是从那个层次觉得自己存到位了的：
: A. 只有Checking/Savings account里存着, 等同于cash的才算数。
: B. 另外还加上买了的CD ladder和treasury bond。
: C. 除了B，另一部分在brokerage帐户里比如像Vanguard, Fidelity，长短线投资。反
: 正要变现也很快。流动性仅次于checking/savings。
: D. 不光A&B，还把Roth IRA的contribution也算进去，真emergency的时候拿出来用。
: E. 不光上面，手里信用卡好几张，未用的credit line有好几万，真emergency的时候
| X****r
发帖数: 3557 | 9 Issues for putting money market fund inside tax-advantaged account
while putting international stock fund outside:
1. The interest from money market is not necessarily higher than
the dividend plus realized capital gain from international stock.
For example, money market interest is essentially zero in the last
couple of years.
2. Even if we assume money market pays more interest on average,
international stock probably has higher expected return in the long
run, so if you never use your emergency fund, your tax-advantaged
account would likely end up smaller (while your taxable account
bigger). This would cost your more taxes in the end if the tax-
advantaged account is tax-free for gains, e.g. Roth IRA or 529
for qualified expenses.
3. If you do use your emergency fund sometime in the future thus
the swap, you're more likely to have gains than loses on the
international stock in the taxable account, so you pay taxes that
could have been deferred/waived.
4. You're forfeiting the foreign tax credit by putting international
stock in tax-advantaged account.
The general idea isn't a bad one, but you have to be careful on
choosing the right fund to do it.
in
【在 j****y 的大作中提到】
: This has been studied by others mostly,
: just read: http://www.bogleheads.org/wiki/Emergency_fund
: a multi-tiered emergency fund could consist of:
: 1. Three months of expenses in cash (bank account or money market fund)
: 2. The next three months of expenses in CDs with the option to cash them in
: for three months of interest
: 3. The next three months of expenses in a short-term Treasury bond fund.
: Selling these would risk incurring some loss of principal due to interest
: rate changes, but since the odds of needing to rely on your emergency fund
: for more than six months are slim, some would consider this an acceptable
| s*********0
发帖数: 2045 | 10 不够折腾得，这第二个也太复杂了。我觉得emergency指的是急需在短时间内拿出一大
笔cash来，这时候该变现的变现，完事之后你再把那些个stock买回来就好了。
真要是破产边缘入不敷出的那种不能算emergency，要那样的话还谈什么asset
allocation，401k一开始就甭放那么多就完了。
in
【在 j****y 的大作中提到】
: This has been studied by others mostly,
: just read: http://www.bogleheads.org/wiki/Emergency_fund
: a multi-tiered emergency fund could consist of:
: 1. Three months of expenses in cash (bank account or money market fund)
: 2. The next three months of expenses in CDs with the option to cash them in
: for three months of interest
: 3. The next three months of expenses in a short-term Treasury bond fund.
: Selling these would risk incurring some loss of principal due to interest
: rate changes, but since the odds of needing to rely on your emergency fund
: for more than six months are slim, some would consider this an acceptable
| | | s********n
发帖数: 1962 | 11 401k loan, credit cards.
I usually don't keep much cash for emergency. I keep cash because
I don't see good investment.
【在 s*********0 的大作中提到】
: 今天有个帖子里面很多人和我看法不一，不如单开贴来调查一下。Emergency fund的数
: 量以前有过讨论，这里不问了。是3个月，6个月，8个月还是一年工资看各人了，不外
: 乎几万到10万吧。
: 来探讨一下这笔钱你都是怎么存的，或者说你是从那个层次觉得自己存到位了的：
: A. 只有Checking/Savings account里存着, 等同于cash的才算数。
: B. 另外还加上买了的CD ladder和treasury bond。
: C. 除了B，另一部分在brokerage帐户里比如像Vanguard, Fidelity，长短线投资。反
: 正要变现也很快。流动性仅次于checking/savings。
: D. 不光A&B，还把Roth IRA的contribution也算进去，真emergency的时候拿出来用。
: E. 不光上面，手里信用卡好几张，未用的credit line有好几万，真emergency的时候
| j****y
发帖数: 1714 | 12 I guess you miss the point and contradict yourself (emergency fund is
within
taxable account, not tax-advantage account. So foreign tax credit is
not a
problem).
Two benefits of putting stock index fund into taxable account as
emergency
money:
1) Foreign tax credit and
2) tax loss harvesting.
http://www.bogleheads.org/wiki/Foreign_Tax_Credit
http://www.bogleheads.org/wiki/Tax_Loss_Harvesting
The assumption is if the emergency money fund and international stock
fund allocation is already decided, where to put these two funds,
taxable vs. tax-efficient accounts.
Putting US or international stock index funds into taxable accounts is a
common way to optimize after-tax return:
http://www.bogleheads.org/wiki/Principles_of_Tax-
Efficient_Fund_Placement
【在 X****r 的大作中提到】
: Issues for putting money market fund inside tax-advantaged account
: while putting international stock fund outside:
: 1. The interest from money market is not necessarily higher than
: the dividend plus realized capital gain from international stock.
: For example, money market interest is essentially zero in the last
: couple of years.
: 2. Even if we assume money market pays more interest on average,
: international stock probably has higher expected return in the long
: run, so if you never use your emergency fund, your tax-advantaged
: account would likely end up smaller (while your taxable account
| X****r
发帖数: 3557 | 13 Yes I did make a mistake in the foreign tax credit part, but still,
you need to see the big picture. International stock has big capital
gain potential while money market has none. We don't want that to be
taxed.
Assume the following:
International stock fund: 2% dividend and 3% annual appreciation,
foreign tax rate 5%; in a taxable account, dividend tax rate 15%
Capital gain taxed at 15% when realized
Money market fund: 2% interest
In a taxable account, interest tax rate 35%
Plan A:
$10,000 international stock in taxable account.
$10,000 money market in Roth IRA.
After 20 years,
Taxable account: $30,304, with cost basis of $14,301,
equals after tax value of $27,904
Roth IRA: $14,859
Total: $42,763
Plan B:
$10,000 money market in taxable account.
$10,000 international stock in Roth IRA.
After 20 years,
Taxable account: $12,948
Roth IRA: $31,472
Total: $44,419
You see, the capital gain tax really makes the difference.
【在 j****y 的大作中提到】
: I guess you miss the point and contradict yourself (emergency fund is
: within
: taxable account, not tax-advantage account. So foreign tax credit is
: not a
: problem).
: Two benefits of putting stock index fund into taxable account as
: emergency
: money:
: 1) Foreign tax credit and
: 2) tax loss harvesting.
| j****y
发帖数: 1714 | 14 YOu calculation makes sense under your assumption.
But how will tax loss harvesting (TLH) impact the final result?
TLH is a major reason to put risky investment options into taxable accounts
in the first place.
【在 X****r 的大作中提到】
: Yes I did make a mistake in the foreign tax credit part, but still,
: you need to see the big picture. International stock has big capital
: gain potential while money market has none. We don't want that to be
: taxed.
: Assume the following:
: International stock fund: 2% dividend and 3% annual appreciation,
: foreign tax rate 5%; in a taxable account, dividend tax rate 15%
: Capital gain taxed at 15% when realized
: Money market fund: 2% interest
: In a taxable account, interest tax rate 35%
| j****y
发帖数: 1714 | 15 Another practical issue is the is only limited amount of investment you can
put into tax-deferred accounts.
When you reach that upper limit, putting internal stock index funds into
taxable account is a better choice compared to most other choices(for better
returns).
For any chosen investment option, comparing the choices between putting it
into tax-deferred vs. taxable account is less meaningful: tax-deferred
account wins hands-down. No argument about that at all. And your
calculation just confirms this again.
accounts
【在 j****y 的大作中提到】
: YOu calculation makes sense under your assumption.
: But how will tax loss harvesting (TLH) impact the final result?
: TLH is a major reason to put risky investment options into taxable accounts
: in the first place.
| c****o
发帖数: 32446 | | j****y
发帖数: 1714 | 17 I thought it again. Your comparison may not not fair.
The money put into tax-deferred account cannot avoid tax forever.
You have not considered when you withdraw the money.(distribution)
A fair comparison is to compare the final distributed money (after tax) for
both choices. Again the assumption is the final return: nominal return -
inflation - tax.
How do you think?
【在 X****r 的大作中提到】
: Yes I did make a mistake in the foreign tax credit part, but still,
: you need to see the big picture. International stock has big capital
: gain potential while money market has none. We don't want that to be
: taxed.
: Assume the following:
: International stock fund: 2% dividend and 3% annual appreciation,
: foreign tax rate 5%; in a taxable account, dividend tax rate 15%
: Capital gain taxed at 15% when realized
: Money market fund: 2% interest
: In a taxable account, interest tax rate 35%
|
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