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Re: Vanguard, TIPs, Accrued Interest & RMDs

I think I found the answer to my question in Pub 550 The following paragraph covers the treatment of TIPs in a taxable account, but I think it is reasonable to apply it to when interest is constructively received for valuing a retirement account. "Inflation-Indexed Debt Instruments If you hold...
by Bill M
Sat Oct 25, 2014 11:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 13
Views: 871

Re: Gross Yearly Income needed in Retirement (Speculation)

Then the "extras". Pure speculation. How many European/African/Asian vacations per year?? How much other stuff?? To get a handle on the amount, I assumed one big trip per month -- and since that is a gross overestimate of what we actually have done, we can feel good about saving the exces...
by Bill M
Thu Oct 23, 2014 8:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 110
Views: 7421

Re: Gross Yearly Income needed in Retirement (Speculation)

The "rules of thumb" all seem to be a percentage of pre-retirement income. I found that ridiculous, since (like most Bogleheads) we saved a LOT. So instead, I kept track of actual expenses for several years. Everything went through our joint checking account, so it was simple to get a CSV ...
by Bill M
Wed Oct 22, 2014 8:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 110
Views: 7421

Re: PhD in Computer Engineering?

Its not the admission that you should care about. Just about any PhD program will grant admission if you are paying full price. Its the assistantship/fellowship application that matters, so that you are paid to go to school. If you apply for and get an outside fellowship, you can basically have your...
by Bill M
Wed Oct 15, 2014 8:11 am
 
Forum: Personal Finance (Not Investing)
Topic: PhD in Computer Engineering?
Replies: 33
Views: 3345

Re: Spiking HSA Contribution limits

I gave up years ago with funding my HSA from payroll deductions. I just do an online transfer in early January each year. The HSA provider, Optum Bank, is more than willing to take my deposits any time I want to send them in. There is no requirement that you have only a single HSA account, though yo...
by Bill M
Wed Oct 08, 2014 7:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Spiking HSA Contribution limits
Replies: 10
Views: 1033

Re: 529 or not

Whether the parents or the students pay for college is an individual family matter. I think it's part of a parent's responsibility, but I recognize that others have different opinions. CEEB (same organization that does the SAT exams) used to put out an annual survey of college costs (and maybe they ...
by Bill M
Tue Oct 07, 2014 11:57 am
 
Forum: Personal Finance (Not Investing)
Topic: 529 or not
Replies: 34
Views: 3246

Re: Inflation Bonds - Staying the Course?

Inflation has certainly been low for the past few years. The target inflation rate is clearly a political decision, between those wanting low inflation (lenders) and those wanting high inflation (borrowers). And the target rate needs to be high enough to give the Taylor Rule some leeway to handle ex...
by Bill M
Wed Sep 17, 2014 10:36 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3196

Re: Personal Financial Inventory (From Vanguard's Site)

The idea is great, and the form is a good start at the data to record. The file on Vanguard's site is a fillable-forms PDF file. I tried filling this in a few years ago, but got really frustrated with it. It had space for six of each type of account, but no way to enter information for the seventh a...
by Bill M
Wed Sep 17, 2014 10:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Personal Financial Inventory (From Vanguard's Site)
Replies: 2
Views: 478

Re: What evidence would prove the Boglehead mentality wrong?

Getting back to OP's question, Stay the course. This one, in the place of honor, is based on nothing more than empirical observation. This is the key piece of the "Boglehead mentality." And it is based purely on past performance predicting future results. We're constantly told that isn't s...
by Bill M
Wed Sep 17, 2014 10:08 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 212
Views: 15522

Re: What Happens To Mortgage When Borrower Dies?

I used to hear that if one person on a joint checking account died, the account would be frozen when the bank found out about the death. So I used to remind DH that the first thing to do after I die (if he wants to continue eating) is to remove as much money as he could from joint accounts and open...
by Bill M
Mon Sep 15, 2014 7:02 am
 
Forum: Personal Finance (Not Investing)
Topic: What Happens To Mortgage When Borrower Dies?
Replies: 12
Views: 1954

Re: What Happens To Mortgage When Borrower Dies?

The mortgage is still due. If there is a mortgage cancellation policy, part of the work as executor will be to get the insurance company and bank together on it. If there are a few months that the payments are not made, it will affect your grandmother's credit score. That should not be an issue. Onc...
by Bill M
Mon Sep 15, 2014 6:59 am
 
Forum: Personal Finance (Not Investing)
Topic: What Happens To Mortgage When Borrower Dies?
Replies: 12
Views: 1954

Re: Reminder: estimated taxes due Monday

I have an EFTPS account, and used it for this quarter's estimated tax payment. But I received a notice a few days ago about "Direct Pay," which sounds like an alternative method. Any users of this? Any reason to switch?
by Bill M
Sat Sep 13, 2014 8:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reminder: estimated taxes due Monday
Replies: 17
Views: 1195

Re: chip credit cards

Chip cards (also known as EMV cards) contain a secret cryptographic key used in the data exchange with the terminal. The technology is the same as used in cellphone SIM cards. Where a simple magnetic strip card can be duplicated by simply reading and reproducing the magnetic stripe information, dupl...
by Bill M
Thu Sep 04, 2014 8:31 am
 
Forum: Personal Finance (Not Investing)
Topic: chip credit cards
Replies: 25
Views: 1590

Re: Online Savings Accounts

If you are interested in the behind-the-scenes action at banks, there is a MOOC offered by coursera, Economics of Money and Banking, taught by Perry Mehrling of Bernard College Columbia University. He goes into detail of how banks lend long-term and borrow short-term, manage the clearing operations,...
by Bill M
Wed Sep 03, 2014 7:29 am
 
Forum: Investing - Theory, News & General
Topic: Online Savings Accounts
Replies: 26
Views: 2827

Re: Do I need to see my credit report?

Yes, you need to see your credit report. The credit score you are seeing is only one part of the information in your credit report. There is a another whole section, Personal Information, that you need to also verify for accuracy. annualcreditreport.com gives you a free copy each year; take advantag...
by Bill M
Tue Sep 02, 2014 6:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to see my credit report?
Replies: 37
Views: 2103

Re: Do my in-laws need a will?

Save yourself a lot of grief-- convince them to make wills. I was executor of my Mom's estate earlier this year, and it was an eye-opener. For two bank accounts the bank lost the POD beneficiary information. Fortunately there was a will (which we all initially thought was unneeded), so I was declare...
by Bill M
Tue Sep 02, 2014 12:59 am
 
Forum: Personal Finance (Not Investing)
Topic: Do my in-laws need a will?
Replies: 26
Views: 1900

Re: Taxes on Roth conversion at retirement

...if you convert a $3 million 401k to a Roth... If your 401k has $3M when you turn 70, the first RMD is going to be about $113K. That is going to likely put you in the 25% tax bracket. During the years with no/low income, it might be worthwhile converting more than what is tax-free - possibly fill...
by Bill M
Tue Aug 26, 2014 9:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes on Roth conversion at retirement
Replies: 15
Views: 701

Re: Choosing and paying an executor

sunnyday wrote:For the secondary, my child is just a toddler.

For the secondary...your bigger issue is picking the person to appoint as guardian of your toddler. Making that person the executor also would only be a minor addition to the work&responsibility.
by Bill M
Mon Aug 18, 2014 5:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Choosing and paying an executor
Replies: 10
Views: 888

Re: Choosing and paying an executor

Spouse is great first choice, and, for normal situations and where there is a surviving spouse, the work is likely minimal. Problem is the secondary one. I suggest naming one of the heirs as contingent executor. They will have the incentive to keep the fees low (and remind them that any fee they cha...
by Bill M
Mon Aug 18, 2014 12:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Choosing and paying an executor
Replies: 10
Views: 888

Re: Inflation-indexed SPIAs: A Good Deal?

There are three separate variables: mortality table, interest rates, and inflation rates. Not enough data points are available to determine all of them. A few years ago AIG gave online quotes, without the 10-second delay now imposed by Hueler. It made it much easier to probe their calculations. I fo...
by Bill M
Sun Aug 17, 2014 11:53 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation-indexed SPIAs: A Good Deal?
Replies: 22
Views: 3073

Re: Roth questions from an MD

Would investing into a Roth 401K (instead of the “regular” 401K) be a better idea at these tax rates? Assume you are in a 50% tax bracket (Fed+State), and have $10K of income to invest (at age 41). Two choices are: (a) $5K into a pre-tax 401k account, $2.5K into taxable account and $2.5K for taxes ...
by Bill M
Fri Aug 15, 2014 12:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Roth questions from an MD
Replies: 32
Views: 3114

Re: CPI table

Until sometime this year, there was a nice table at the Bureau of Labor Statistics website (http://www.bls.gov) that gave the CPI-U for every month of every year. Each month the table was updated. I found it extremely helpful for a spreadsheet I maintain that computes the proper coupon payments for...
by Bill M
Wed Aug 13, 2014 7:35 am
 
Forum: Personal Finance (Not Investing)
Topic: CPI table
Replies: 25
Views: 1421

Re: Where do you store your important documents?

Folks storing their original will in a bank safe deposit box, aren't you worried that your executor might not get immediate access to your will, delaying execution? My executor and I jointly own "my" safe deposit box. I was assured by the credit union that he would have access to it after...
by Bill M
Tue Aug 12, 2014 6:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do you store your important documents?
Replies: 38
Views: 3320

Re: Where do you store your important documents?

Several categories, depending on how hard the document is to replace. But first, everything is scanned and I have digital copies. Paper copies of things like wills and house deed and mortgage satisfaction document (very very difficult to replace) are in bank safe deposit box. Things like birth certi...
by Bill M
Tue Aug 12, 2014 5:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do you store your important documents?
Replies: 38
Views: 3320

Re: Pension floor drops from 4% to 2.5% -- Time to bail?

From looking at the "At a Glance" document, there is no provision for a rollover of the cash balance to a 401k. Also the balance is still earning "pay credits" of at least 4% of pay (possibly more right now but reducing eventually to 4%). Assuming a 401k rollover option was added...
by Bill M
Tue Aug 12, 2014 7:53 am
 
Forum: Personal Finance (Not Investing)
Topic: Pension floor drops from 4% to 2.5% -- Time to bail?
Replies: 17
Views: 2814

Re: Funding retirement with post tax $...or pre tax $

There's no substitute for "running the numbers", as every situation is different. There have been numerous literature articles on the subject; see for instance ones by Alan Sumutka in Journal of Financial Planning. But in general, often the best strategy is to spend first the taxable accou...
by Bill M
Sun Aug 10, 2014 11:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Funding retirement with post tax $...or pre tax $
Replies: 6
Views: 1114

Re: Your opinion of mint.com

As a (retired) computer security professional, mint.com scares me. There's that famous quote attributed to Willie Sutton, about robbing banks because that's where the money is. Mint.com is an inviting target for anyone wanting to steal id/password combinations, because they store a lot of them. No s...
by Bill M
Wed Aug 06, 2014 2:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your opinion of mint.com
Replies: 38
Views: 3237

Re: What to tell friends who think "it's all a scam"

... One of my friends doesn't invest because he thinks "it's all a scam". Those were his exact words. Recognize that your friend is at least partially correct. See Bill Bernstein's wonderful little book, If You Can : "Hurdle Number Five: The financial services industry wants to make ...
by Bill M
Wed Aug 06, 2014 7:55 am
 
Forum: Investing - Theory, News & General
Topic: What to tell friends who think "it's all a scam"
Replies: 64
Views: 5833

Re: Do you consider your Roth as part of your EF?

If I had to pull some cash from my emergency fund, I'd want to replenish it as soon as the emergency is over. If I pull some cash from my Roth IRA, I'm prohibited from replacing it--forever. I can make new contributions (if I still qualify), but I can never replace the amount I pulled out. So, no--i...
by Bill M
Tue Aug 05, 2014 11:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider your Roth as part of your EF?
Replies: 30
Views: 1897

Re: How to keep family informed

I have a white binder called "The Book of Answers" that I bought 30+ years ago (now available at http://www.answersbook.com/). Its heavy stock paper, and has all the subject headings needed and blank space to fill in account locations and account numbers (all in pencil, erased when they mo...
by Bill M
Wed Jul 30, 2014 7:41 am
 
Forum: Personal Finance (Not Investing)
Topic: How to keep family informed
Replies: 35
Views: 3340

Re: looking ahead to the next 10-yr TIPS auction

trading systems can't handle two different CUSIPs having the same coupon and maturity. That is not true and nothing in the thread you referenced suggested it was true. I was referring in particular to the following comment in the cited thread: But it would no longer be enough for traders to just sa...
by Bill M
Wed Jul 30, 2014 7:32 am
 
Forum: Investing - Theory, News & General
Topic: looking ahead to the next 10-yr TIPS auction
Replies: 4
Views: 534

looking ahead to the next 10-yr TIPS auction

USTreasury has been issuing 10-yr TIPS twice every year, auctioned in late January and July, with bonds dated&maturing on 1/15 and 7/15. And the bonds have always been identifiable by just the maturity date, so the TIPS issued this month are shown on quote listings as the 7/15/2024 TIPS. But som...
by Bill M
Tue Jul 29, 2014 11:40 pm
 
Forum: Investing - Theory, News & General
Topic: looking ahead to the next 10-yr TIPS auction
Replies: 4
Views: 534

Re: POLL: Wills vs. Living Trusts

DW's BIL is a lawyer, so FIL had trusts, several of them. Settling his estate was a huge mess (it didn't help that BIL declined as executor, citing conflict of interest), and ended up costing about $250K in fees. Dad had just a will. I was executor, and settled his estate without any fees at all. Mo...
by Bill M
Tue Jul 29, 2014 10:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3231

Re: Pension Lump Sum vs Immediate Annuity

The rules for calculation of lump sum amounts for pension plans are contained in the Pension Protection Act of 2006; they start with the monthly benefit available by the pension plan rules, and use mortality tables and interest rates published by the IRS. Whether the current low interest rates matte...
by Bill M
Mon Jul 28, 2014 8:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Pension Lump Sum vs Immediate Annuity
Replies: 4
Views: 637

Re: So how long will I live? How long do I plan for?

I'm planning for 105-110. It would be terrible to plan for just <x>, and live longer. It doesn't matter what family history suggests, or what liveto100.com tells us. When the sample size is one, statistics are irrelevant. But I think there is a bigger long-term social issue here. There used to be pe...
by Bill M
Wed Jul 23, 2014 8:19 am
 
Forum: Personal Finance (Not Investing)
Topic: So how long will I live? How long do I plan for?
Replies: 55
Views: 4487

Re: New 10-Year TIPS Auction July 24 2014

I am in the process of building a portfolio of 20 issues of 10-year TIPS, with roughly equal par amounts in each. So I buy some in every auction. Some rates are good, some rates are negative. Its just like dollar cost averaging. I find it interesting that bogleheads who (as a group) consistently adv...
by Bill M
Tue Jul 22, 2014 5:33 pm
 
Forum: Investing - Theory, News & General
Topic: New 10-Year TIPS Auction July 24 2014
Replies: 17
Views: 1710

Re: Beneficiaries

I think the most important thing you are missing is the appointment of a guardian for your twins. This will probably be 75% of the text of your will, naming the guardian and setting up the trust accounts until they turn 18 (or 30, or, until the youngest child turns 18) and appointing the trustee for...
by Bill M
Tue Jul 22, 2014 8:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Beneficiaries
Replies: 23
Views: 1404

Re: Hw many credit cards to own?

We own and regularly use three; all offer rewards of some kind and none charge annual fees. (1) Universal Card, because of its $0 liability policy, for all internet transactions (it gets replaced about once every year or so, due to fraudulent transactions), (2) Discover Card, for almost all day-to-d...
by Bill M
Mon Jul 21, 2014 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Hw many credit cards to own?
Replies: 121
Views: 53105

Re: TIPs Inflation Calculation

At the end of 2015 you would get two tax forms, 1099-INT showing $980, and 1099-OID showing -$2,000 interest. Put both on Schedule B, and you get to shelter $1020 of other ordinary income from the IRS. I think this how most of us would do it. I just wish the rules covered the case where the negativ...
by Bill M
Thu Jul 17, 2014 1:07 am
 
Forum: Investing - Theory, News & General
Topic: TIPs Inflation Calculation
Replies: 7
Views: 1158

Re: TIPs Inflation Calculation

to expand on sscritic's response, Suppose you bought $100K of TIPS in 2014, and their coupon rate was 1%. Assume the 2% deflation happened early in the year. During 2015 you would receive payments of 1% of the reduced principle ($98K), so $980. At the end of 2015 you would get two tax forms, 1099-IN...
by Bill M
Wed Jul 16, 2014 8:49 am
 
Forum: Investing - Theory, News & General
Topic: TIPs Inflation Calculation
Replies: 7
Views: 1158

Re: Inherited a promissory note--what to do?

.....you'd have to keep up to date with his situation as he could die, then his estate could be settled quickly. The concern here would be that the debtor's estate may not need to go through probate, either because it is too small (or negative), or that all the assets have payable-on-death clauses ...
by Bill M
Wed Jul 16, 2014 8:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Inherited a promissory note--what to do?
Replies: 22
Views: 2520

Re: Assisted Living Residence and Care Agreement - Questions

My Mom was in a similar facility, in PA, and I got to know the terms of the Residency Agreement rather well. Yours sounds similar in lots of ways. The "Living Unit" can be either (1) a self-contained independent-living apartment or (2) a room in a special assisted-living section, or (3) a ...
by Bill M
Sun Jul 13, 2014 3:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Assisted Living Residence and Care Agreement - Questions
Replies: 30
Views: 3066

Re: When you retire you plan to?

Moving is hard work. Staying put is easy. So while there are many nice places to move to, there needs to be a reason to move. We've not identified any such reason, so are staying.
by Bill M
Mon Jul 07, 2014 11:53 am
 
Forum: Personal Finance (Not Investing)
Topic: When you retire you plan to?
Replies: 44
Views: 3581

Re: Anyone switch to non-branch banking?

It is hard to have a safe deposit box at an internet bank, so a minimal account at a brick&mortar(&vault) nearby is useful. It also makes it easier to deposit paper checks that come in the mail. It also makes it easier to get free notary service and Medallion Signature Guarantees. But for tr...
by Bill M
Wed Jun 25, 2014 8:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Anyone switch to non-branch banking?
Replies: 54
Views: 4545

Re: How common are after-tax in service rollovers?

Vanguard has a report on the defined contribution plans they administer, available at https://pressroom.vanguard.com/nonindexed/2013.06.03_How_America_Saves_2013.pdf From that report--plans offering after-tax contributions has been flat at 19% of all plans. Participants using after-tax contributions...
by Bill M
Tue Jun 24, 2014 12:57 am
 
Forum: Investing - Theory, News & General
Topic: How common are after-tax in service rollovers?
Replies: 17
Views: 1299

Re: Why does Vanguard sit on your money for a week ?

I've certainly noticed the 7-day hold period, but there is only one case where it sort-of matters -- back-door Roths. The web interface forces me to wait before doing the Roth conversion. The phone reps always seem to be able to do things beyond what I can do myself via the web (and especially since...
by Bill M
Fri Jun 20, 2014 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: Why does Vanguard sit on your money for a week ?
Replies: 14
Views: 1531

Re: [Poll] Have you taken any Investments course?

With MOOCs free and widely available, I've taken several: Finance, Financial Engineering (I and II), Mathematical Methods of Finance, Monte Carlo Methods of Finance, Computational Finance, Behavioral Economics, and probably several more. They all came long after the classes that mattered, from that ...
by Bill M
Fri Jun 20, 2014 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Have you taken any Investments course?
Replies: 60
Views: 3032

Re: How much do you contribute to your HSA?

Can you explain what you mean by tracking your medical expenses and reimbursing yourself later? Is this just for mental accounting? I'm somewhat AR about records. I keep all the EOB forms from UnitedHealthCare and the Dental plans (downloaded as pdf files), and also scan the insurance premium state...
by Bill M
Wed Jun 18, 2014 7:43 am
 
Forum: Personal Finance (Not Investing)
Topic: How much do you contribute to your HSA?
Replies: 17
Views: 968

Re: How much do you contribute to your HSA?

Once you incur some out-of-pocket medical expenses, you can reimburse yourself for them from your HSA -- years after the fact. In the meantime, the account grows tax-free. Not tax-deferred -- tax-free. So I contribute the maximum to the HSA every year, and pay the medical bills from the regular chec...
by Bill M
Tue Jun 17, 2014 10:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: How much do you contribute to your HSA?
Replies: 17
Views: 968

IRS tax refund for deceased Mom

Mom passed away in February this year; I filed her 2013 fed 1040 before that date. In April, while still waiting for the refund check, I received a "CP05" notice stating "We've received your 2013 tax return, and are reviewing it to verify (list of six income/withholding bullet items)....
by Bill M
Tue Jun 17, 2014 4:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRS tax refund for deceased Mom
Replies: 2
Views: 337
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