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Re: TIPS Ladder Spreadsheets in General & Two in Particular

^ Erwin, When you consider building a TIPS ladder for retirement, you are assuming that you will spend the bond at the maturity date. You would not be expected to live off of the coupons. The cash flow each year is made up of the maturing bond and the coupons generated from the longer bonds as well....
by Artsdoctor
Sun Jul 27, 2014 8:13 am
 
Forum: Investing - Theory, News & General
Topic: TIPS Ladder Spreadsheets in General & Two in Particular
Replies: 36
Views: 4390

Re: How to w/d from taxable until SS/RMD time gets here?

^ I am guilty of being presumptuous. For some reason, most likely because of your moniker, I thought you were less than 64 years old and were contemplating taking social security "early," at 62. Then you do indeed have options ahead for you. Dividends will clearly be helpful, as Grabiner p...
by Artsdoctor
Wed Jul 09, 2014 5:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to w/d from taxable until SS/RMD time gets here?
Replies: 29
Views: 2064

Re: How to w/d from taxable until SS/RMD time gets here?

Taking Social Security early will reduce your payout by quite a bit and you will be left with that reduced payout for the rest of your life. If it applies to your family, spousal benefits will be reduced forever as well. There's no point in putting everything in cash because that's not necessary. If...
by Artsdoctor
Wed Jul 09, 2014 3:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to w/d from taxable until SS/RMD time gets here?
Replies: 29
Views: 2064

Re: How to w/d from taxable until SS/RMD time gets here?

If you're going to rely on your taxable account to support your lifestyle, the taxable account should provide a predictable stream of income. You mention that the account is about $400,000 now and you'd like to spend it over 7 years. If the Total Stock Market fund drops 20%, how will that affect yo...
by Artsdoctor
Wed Jul 09, 2014 11:39 am
 
Forum: Investing - Help with Personal Investments
Topic: How to w/d from taxable until SS/RMD time gets here?
Replies: 29
Views: 2064

Re: How to w/d from taxable until SS/RMD time gets here?

If you're going to rely on your taxable account to support your lifestyle, the taxable account should provide a predictable stream of income. You mention that the account is about $400,000 now and you'd like to spend it over 7 years. If the Total Stock Market fund drops 20%, how will that affect you...
by Artsdoctor
Tue Jul 08, 2014 7:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to w/d from taxable until SS/RMD time gets here?
Replies: 29
Views: 2064

Re: Inflation adjustment of one's "number" and TIPS

Sam, Whether or not you actually choose to use individual TIPS in your retirement plan is a complicated question. But the one thing that you have do is always acknowledge the effect inflation can have on your retirement plan. Whenever you think or talk about return, always think in terms of "re...
by Artsdoctor
Tue Jul 08, 2014 6:17 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation adjustment of one's "number" and TIPS
Replies: 4
Views: 641

Re: Alternative to taxable account ( for physician)

AM, Although you don't know the details, I suspect that the vast majority of any award will be paid by the institution and not the physician ("deep pockets"). In California, we have a cap on punitive damages (for now) although you can certainly run into trouble with extreme high-income pat...
by Artsdoctor
Sat Jul 05, 2014 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Alternative to taxable account ( for physician)
Replies: 4
Views: 579

Re: Hitting "The Number" too early

I could be wrong, but I suspect your Number needs to be recalculated. While there are some people who really live way, way, way below their means. You're awfully young to be able to provide a super-secure retirement income for up to 50 years while providing for your kids as well. I could be wrong, o...
by Artsdoctor
Tue Jul 01, 2014 6:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Hitting "The Number" too early
Replies: 49
Views: 5392

Re: do you lie about your finances to friends

There is virtually nothing good that can come out of discussing personal finances with friends, so no: even the closest friends and family members don't know our net worth. Several friends have shown me their "portfolios" and have asked for guidance. I respect their candor and it has inevi...
by Artsdoctor
Tue Jul 01, 2014 6:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: do you lie about your finances to friends
Replies: 103
Views: 8964

Re: How should I build a TIPS income ladder?

Superb work, #cruncher.

Those years without maturing bonds are very difficult to work around, especially the 7-year stretch.

And right now, buying the ladder would be mighty expensive. But to phase in, your spreadsheet is indispensable.
by Artsdoctor
Mon Jun 30, 2014 10:16 pm
 
Forum: Investing - Theory, News & General
Topic: How should I build a TIPS income ladder?
Replies: 31
Views: 4671

Re: Muni Bond Analysis: YTM vs price from par

Bill, Several issues here. First, you need to learn more about the municipal bond market (and individual bond market as a whole). Your initial questions signify that you are early in your investing life and nowhere near ending the accumulation stage of investing. If you purchase individual munis now...
by Artsdoctor
Sun Jun 29, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Muni Bond Analysis: YTM vs price from par
Replies: 13
Views: 819

Re: Poll: Do you receive compensation for financial advice?

^ Oh all right. I took it away and voted with the majority . . .
by Artsdoctor
Tue Jun 17, 2014 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Do you receive compensation for financial advice?
Replies: 29
Views: 2085

Re: Poll: Do you receive compensation for financial advice?

OK, you're off the hook. Actually, I will not count "food" or similar "favors" as compensation for the purposes of this poll. Thanks! Too late. I already checked other. I look over a few friends' IPS'es and statements every year, and it's done over a very, very nice dinner. I'm ...
by Artsdoctor
Tue Jun 17, 2014 7:32 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Do you receive compensation for financial advice?
Replies: 29
Views: 2085

Re: Made the $5 million club, but...

Scylla, Congratulations on your achievements! Welcome to the world of "The High Net Worth Investor." (Note that this is a different category than the "Ultra High Net Worth Investor," a different world altogether!) The value of your portfolio in itself doesn't really answer any qu...
by Artsdoctor
Mon Jun 16, 2014 9:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Made the $5 million club, but...
Replies: 43
Views: 7000

Re: HSAs in California

^ It's just that when you withdraw from your HSA, you have presumably sold your investment asset for cash. This will more than likely have resulted in a capital gain, and that capital gain is taxable as regular income in CA. Of course, you're always free to move out of state and then when you begin ...
by Artsdoctor
Sun Jun 15, 2014 2:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: HSAs in California
Replies: 32
Views: 4205

Re: POLL: If you were building a TIPS ladder...

You can build your LMP quickly or slowly. If you're 50, there's no right or wrong to do it, as far as I understand it. It's not just the bid-ask spread when you're buying TIPS, it's the premium you pay as well. When you're building your LMP, the assumption is that you'll be holding the bonds until m...
by Artsdoctor
Sun Jun 15, 2014 2:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: POLL: If you were building a TIPS ladder...
Replies: 9
Views: 1044

Re: POLL: If you were building a TIPS ladder...

^ This is a judgment call. Some people will maintain their investment strategies indefinitely and simply decrease the equity exposure and increase the bond exposure. The 3-Fund Portfolio can be maintained all the way through life. Other people want a floor. The floor, or LMP, is something that you b...
by Artsdoctor
Sat Jun 14, 2014 9:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: POLL: If you were building a TIPS ladder...
Replies: 9
Views: 1044

Re: As Bogelheads, a comforting thought for everyone....

Well said! I manage my parents' finances and actually had to sit them down last year and tell them that they had to pick up the pace of their spending. Instead of two weeks in Florida, I encouraged them to take four. When they flew out to see us, I encouraged them to splurge on Business Class ticket...
by Artsdoctor
Wed Jun 11, 2014 7:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: As Bogleheads, a comforting thought for everyone....
Replies: 46
Views: 4803

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

Schuyler, There's a matter of degree here. Some might say that this is close to "dancing on the head of a pin." The most important predictor of returns is your stock:bond allocation. The way you decide on that allocation depends on your risk tolerance, your need to take that risk, and your...
by Artsdoctor
Wed Jun 11, 2014 7:00 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17185

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

Tactical asset allocation is not unknown to Vanguard: http://www.bogleheads.org/wiki/Tactical_asset_allocation I just completed Bill's book and it is meticulously footnoted and laden with a lot of information. It is something to be referred to back to on many occasions. In reading the four pages of ...
by Artsdoctor
Wed Jun 11, 2014 4:43 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17185

Re: Calling all TIPsters- 5 W's and 1 H of LMP

^ This is very reasonable. I also am building my TIPS ladder and anticipate holding them until maturity. I buy at auction when other investments mature (for example, other nominal bonds and CDs). You can buy your TIPS on the secondary market and I did this in 2008-2009 when the real yield was pushin...
by Artsdoctor
Tue Jun 10, 2014 8:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calling all TIPsters- 5 W's and 1 H of LMP
Replies: 9
Views: 1061

Re: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40

Even Vanguard has been trying to inform its investors that returns going forward will be meager so this is not really a surprise. I think the numbers here are awfully disappointing but the take-home message should be to save more and expect less. I'm not sure how you can argue with that although it ...
by Artsdoctor
Mon Jun 09, 2014 7:38 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17185

Re: Inheriting an inherited IRA

This is unfortunate. We should all remember that the IRS allows a spouse to rollover the deceased's IRA into his/her own IRA. There is a big difference between inheriting a spousal IRA and a non-spousal IRA. Here, I'm afraid the OP must deplete the inherited IRA over a shorter time period than if hi...
by Artsdoctor
Mon Jun 09, 2014 6:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Inheriting an inherited IRA
Replies: 19
Views: 1401

Re: Bernstein: A Decade of Super-Low Returns

Yes. I am making my investment decisions approximating an average real return of 2.5% per year and I have been for at least the past couple of years. Last year was a very nice surprise, but with a 50/50 portfolio, I really have relatively low expectations. For me, this is fine because I have what I ...
by Artsdoctor
Mon Jun 09, 2014 3:35 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein: A Decade of Super-Low Returns [1.4% for 60/40]
Replies: 207
Views: 17185

Re: Liability Matching Portfoloio

As I do with every such thread, I must point out that for large taxable portfolios, which many of us have, even an all TIPS LMP is a leap of taxflation faith. I'm not convinced that a 50/50 portfolio isn't less risky. I agree with this. I do like the idea very much of using TIPS to fund a Liability...
by Artsdoctor
Wed Jun 04, 2014 10:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Liability Matching Portfoloio
Replies: 18
Views: 1536

Re: Schwab: interesting failure that can cost clients $

I think your point is very "actionable" and is beneficial to us all.

My algorithm might be: (1) check the Wiki here, (2) call the representative if you have further questions, and (3) re-read the Wiki after you talk to the rep to make sure things make sense.

:D
by Artsdoctor
Tue Jun 03, 2014 7:00 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab: interesting failure that can cost clients $
Replies: 19
Views: 3234

Re: Social Security at 66 vs. 70: A Bird in the Hand?

^ Agree with above. AND, it will not only benefit you but potentially your spouse.
by Artsdoctor
Tue Jun 03, 2014 6:53 pm
 
Forum: Investing - Theory, News & General
Topic: Social Security at 66 vs. 70: A Bird in the Hand?
Replies: 54
Views: 4048

Re: "Retire Secure for Same-Sex Couples" -- A Gem

^ Good point. I think one of the best things about the book was the cogent way he looks at social security. He gets the reader out of the mindset of viewing social security as a benefit just for the recipient and tries to convey the importance of viewing it as a HOUSEHOLD benefit. There was also a b...
by Artsdoctor
Tue Jun 03, 2014 6:51 pm
 
Forum: Investing - Theory, News & General
Topic: "Retire Secure for Same-Sex Couples" -- A Gem
Replies: 8
Views: 1214

Re: Schwab: interesting failure that can cost clients $

I have to say that I'm not surprised. I once had a Schwab representative tell me that it was Schwab's policy to NOT allow specific lot ID designations! This was many years ago when I was learning about how to spend from a taxable account. I asked to speak to her supervisor for clarification then, bu...
by Artsdoctor
Tue Jun 03, 2014 6:24 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab: interesting failure that can cost clients $
Replies: 19
Views: 3234

Re: "Retire Secure for Same-Sex Couples" -- A Gem

Taylor, Jonathan Clements mentioned this book in his column a week ago and a friend purchased it. I've gone over it in detail with my friend and it is a superb book. It was incredibly interesting to me that my friend--who is extremely savvy financially and recently married in his early 60s to his lo...
by Artsdoctor
Tue Jun 03, 2014 6:09 pm
 
Forum: Investing - Theory, News & General
Topic: "Retire Secure for Same-Sex Couples" -- A Gem
Replies: 8
Views: 1214

Re: buying home with life partner, need advice!

RJC, Congratulations on making the decision to purchase the house together! There are a couple of things you might want to consider about how to do it properly. At the very least, I'd ask your accountant to sit down with both you and your partner in order to understand the tax implications. While it...
by Artsdoctor
Tue Jun 03, 2014 5:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: buying home with life partner, need advice!
Replies: 17
Views: 1259

Re: Sell stocks now to buy house in 2 years?

Reno, There can be no answer that would be helpful because you've given no significant details. Does she want to buy a house for over $1M or $100,000? What are "substantial" gains? Are we talking $500,000 in long-term capital gains, or half in short-term capital gains, or is "substant...
by Artsdoctor
Mon Jun 02, 2014 9:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Sell stocks now to buy house in 2 years?
Replies: 10
Views: 944

Re: Social Security at 66 vs. 70: A Bird in the Hand?

oyo, You leave several important points out of your calculations. Are you married? What is the age of your spouse? Do you have kids that would be eligible for benefits? What's your health? Your SS benefits are more than just monthly payments. There are also benefits that can help your household as a...
by Artsdoctor
Mon Jun 02, 2014 8:43 pm
 
Forum: Investing - Theory, News & General
Topic: Social Security at 66 vs. 70: A Bird in the Hand?
Replies: 54
Views: 4048

Re: Would you work without pay?

Of course I'd work without pay. Volunteerism is one of the best things out there. As long as you'd actually enjoy doing what you'd be doing and your other needs are met, why not? If it stimulates you and gives you a sense of "giving back," go ahead and enjoy it.
by Artsdoctor
Thu May 29, 2014 7:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Would you work without pay?
Replies: 63
Views: 4016

Re: Share your networth progression

Because of educational expenses, I could not really start saving with any significant amount until I was in my early 30s. However, from late 30s until early 50s, we saved about 1/3 of our combined pre-tax income. However, the savings amount was not the only thing that helped; this forum is responsib...
by Artsdoctor
Sun May 18, 2014 1:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Share your networth progression
Replies: 97
Views: 13525

Re: Why Avoid Long-Term Bonds?

"In my opinion, ANY low-cost, good quality, short- or intermediate-term bond fund will do the job of providing safety and income in a portfolio." Unless it's in a 401k plan which charges 1.5% for that same bond fund! :twisted: (Edit: Sorry, Taylor, I see you already stipulated "low-co...
by Artsdoctor
Sun May 18, 2014 12:29 pm
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6392

Re: Why Avoid Long-Term Bonds?

If interested in subject can read Only Guide You'll Ever Need for Right Financial Plan or The Only Guide You'll Ever Need for Bonds But short answer The right answer is that it depends. And btw not relative for TIPS, just nominals because of risks of unexpected inflation (not relevant to TIPS) Thos...
by Artsdoctor
Sun May 18, 2014 11:54 am
 
Forum: Investing - Theory, News & General
Topic: Why Avoid Long-Term Bonds?
Replies: 67
Views: 6392

Re: Do individual bonds lose value if held to maturity?

you can buy Annette Thau's "The Bond Book." It's extremely well written and you can refer back to it many times. But it will take a relatively long time for you to truly understand the ins and outs of bonds, and during that educational time, your money should be making money in a bond fun...
by Artsdoctor
Sun May 18, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Do individual bonds lose value if held to maturity?
Replies: 41
Views: 2670

Re: Do individual bonds lose value if held to maturity?

I am understanding that a boglehead supports Bond Funds over Individual Bonds. I am to understand that a main reason for this favoritism is because of diversification. Another reason some may favor a fund is because of the ability to balance the overall value as rates move up and down rather than b...
by Artsdoctor
Mon May 12, 2014 10:51 am
 
Forum: Investing - Theory, News & General
Topic: Do individual bonds lose value if held to maturity?
Replies: 41
Views: 2670

Re: Behavioral Impacts of the Sequence of Returns

Victoria, I think your questions in your example are terrific and I've thought a great deal about your hypothetical retiree. I'm not entering retirement right now, but it will be soon. However, as a physician, I have been privy to two scenarios which might answer your first question. Lawsuits can be...
by Artsdoctor
Sat May 10, 2014 7:40 pm
 
Forum: Investing - Theory, News & General
Topic: Behavioral Impacts of the Sequence of Returns
Replies: 53
Views: 2449

Re: Is it risky to drawdown bond fund principal?

I am so sorry for any confusion here. If you're selling tax-exempt shares (in a taxable account) at a loss AND those shares are less than 6 months, you will be able to take the full loss without considering the tax-exempt dividends you've earned on those shares. Harbinger says it better than me and ...
by Artsdoctor
Thu May 01, 2014 2:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it risky to drawdown bond fund principal?
Replies: 41
Views: 2103

Re: Is it risky to drawdown bond fund principle?

I draw down monthly against bonds in taxable (VWIUX) @ 66 and retired. I reinvest the interest in VMLUX rather than in VWIUX so I don't run afoul of the IRS 30 day wash rule. I take my withdrawal 10 months from IT and 2 months from LT so I can capture every IRS deductible capital loss penny. I plan...
by Artsdoctor
Wed Apr 30, 2014 7:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it risky to drawdown bond fund principal?
Replies: 41
Views: 2103

Re: Go-Go, Slow Go, No Go theory

Starbux, You originally asked, "Do you believe in th Go-Go, Slow Go, No Go theory on retirement spending?" The implication with that theory, I believe, is that one spends more in the Go-Go years than in the No-Go years. While this COULD be the case, and hopefully it will, Nisi's point is t...
by Artsdoctor
Sat Apr 26, 2014 8:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Go-Go, Slow Go, No Go theory
Replies: 14
Views: 2571

Re: Go-Go, Slow Go, No Go theory

^ "Even if it is true on the average, it would be imprudent for me to plan on less money for my older age on the assumption that it is certain that I, me, am going to become frail and settle down in the armchair. "It seems to me that we are caught between a rock and a hard place here. If w...
by Artsdoctor
Fri Apr 25, 2014 8:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Go-Go, Slow Go, No Go theory
Replies: 14
Views: 2571

Re: Go-Go, Slow Go, No Go theory

Yes and no. I do think that spending can actually increase in the Go-Go Years as new retirees do the things they've neglected during working years (traveling more, socializing more, etc.) although everyone has a different scenario. If you're healthy and 65, and you're fully retired, you could very w...
by Artsdoctor
Wed Apr 23, 2014 8:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Go-Go, Slow Go, No Go theory
Replies: 14
Views: 2571

Re: enough to retire?

3, Welcome to the forum! And congratulations on accumulating a nice sum in preparation for retirement. I don't think we can really advise you fully here. Your questions ultimately raise more questions. What are your plans for medical insurance until Medicare kicks in at 65? Do you have long-term car...
by Artsdoctor
Wed Apr 23, 2014 6:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: enough to retire?
Replies: 33
Views: 11008

Re: Please explain a 3% SWR to me

Recency bias. And on the forum a game of seeing who can win the title of most pessimistic. I remember listening to some moms playing a similar game, "who can be the best mom": topic was how old would your child have to be before you would leave them alone in a hotel room while you went do...
by Artsdoctor
Wed Apr 23, 2014 4:44 pm
 
Forum: Investing - Theory, News & General
Topic: Please explain a 3% SWR to me
Replies: 92
Views: 22620

Re: What's your number?

Diva, It's not so much what "my number" is, but how do you approximate YOUR number. You would think that would be an easy thing to calculate but, in my opinion, it isn't--mostly because of your age. You probably won't have a clear picture of what your goal is for another decade or so. I ca...
by Artsdoctor
Wed Apr 23, 2014 4:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: What's your number?
Replies: 147
Views: 31478

Re: California Taxes - Am I Missing Something?

^ I can speak to the above. When significant remodeling is done, you should pull permits and the job is inspected during various stages of work. This will affect your property tax although it is still usually far less than the market value of your house. People do a lot of renovations without permit...
by Artsdoctor
Fri Apr 11, 2014 5:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 10595

Re: Passport, TSA Pre-Check, and Global Entry

^ Sounds like a decent plan to me. The more you travel, the happier you'll be.
by Artsdoctor
Fri Apr 11, 2014 4:35 pm
 
Forum: Personal Consumer Issues
Topic: Passport, TSA Pre-Check, and Global Entry
Replies: 58
Views: 3392
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