AUTHOR: Randy Dobkin on 7/18/2024 FIRST: baldscreen on 7/18/2024 | RECENT: Mark Eckman on 7/20/2024
Comments
I also have shares in IBM but from an ESPP. I remember buying lots of shares after the 1987 crash. Also used dividend reinvestment to get more. From time to time I sold off most of my shares, providing a good seed for our taxable brokerage account (invested in index funds) which we're using today to fund my wife's mega backdoor Roth and pay taxes on Roth conversions. Our only individual stock holdings today are IBM and its spinoff, Kyndryl, and my wife's company stock obtained through RSUs. IBM stock languished for quite a while, but I continued to hold some shares since the dividend was good. I'm kind of afraid to sell since my number for cost basis differs from Vanguard's. Maybe I will hold onto IBM & KD and let my heirs get the step-up in basis.
But, Andrew, from what I've seen, brokerages report gains and losses on the shares you own, not considering the dividends paid. Each reinvestment increases the cost basis. Dividends are where you make money in bond funds over the long term.
I believe the pro-rata rule applies only to IRAs. Roth conversions in high brackets are not advisable. My wife maxes out pre-tax contributions and then uses MBDR up to the plan's limit of 50% of salary. We take withdrawals from our taxable account if we need cash. So we basically fund her Roth 401(k) from our taxable account.
Comments
I also have shares in IBM but from an ESPP. I remember buying lots of shares after the 1987 crash. Also used dividend reinvestment to get more. From time to time I sold off most of my shares, providing a good seed for our taxable brokerage account (invested in index funds) which we're using today to fund my wife's mega backdoor Roth and pay taxes on Roth conversions. Our only individual stock holdings today are IBM and its spinoff, Kyndryl, and my wife's company stock obtained through RSUs. IBM stock languished for quite a while, but I continued to hold some shares since the dividend was good. I'm kind of afraid to sell since my number for cost basis differs from Vanguard's. Maybe I will hold onto IBM & KD and let my heirs get the step-up in basis.
Post: Independence Day
Link to comment from June 29, 2026
I rebalance among asset classes, not individual stocks.
Post: When to Leave Your Portfolio Alone
Link to comment from June 28, 2026
I rebalance to the target; otherwise you can find yourself out of balance too often if the position drifts slightly away from target again.
Post: When to Leave Your Portfolio Alone
Link to comment from June 28, 2026
We have the opposite problem here in Florida, three weeks a year when we don't use the AC.
Post: The Price of a Cool Pillow
Link to comment from June 25, 2026
I used to have a REIT fund but now that money is in my total market index fund as it includes REITs.
Post: What’s in your portfolio ?
Link to comment from June 24, 2026
I would add some inflation protection with TIPS and/or I Bonds.
Post: TSP G Fund as the only Fixed Income Investment
Link to comment from June 21, 2026
VGUS, Vanguard Ultra Short (0-6 Mo) Treasury is another good one.
Post: Beyond Bank Accounts
Link to comment from June 14, 2026
But, Andrew, from what I've seen, brokerages report gains and losses on the shares you own, not considering the dividends paid. Each reinvestment increases the cost basis. Dividends are where you make money in bond funds over the long term.
Post: Beyond Bank Accounts
Link to comment from June 13, 2026
Grant noted that tax free interest counts toward IRMAA.
Post: Beyond Bank Accounts
Link to comment from June 13, 2026
I believe the pro-rata rule applies only to IRAs. Roth conversions in high brackets are not advisable. My wife maxes out pre-tax contributions and then uses MBDR up to the plan's limit of 50% of salary. We take withdrawals from our taxable account if we need cash. So we basically fund her Roth 401(k) from our taxable account.
Post: Mega Backdoor Roth
Link to comment from June 6, 2026