Search found 399 matches

by Bill M
Mon Jun 29, 2015 9:39 am
Forum: Personal Finance (Not Investing)
Topic: Lucent offering pension buyout to retirees: what to do?
Replies: 46
Views: 3632

Re: Lucent offering pension buyout to retirees: what to do?

The devil is in the details.

But in general, the biggest risk is living a long time. The annuity is a clear winner, but you have to balance that against the risk of insurance company going bust.
by Bill M
Mon Jun 29, 2015 9:33 am
Forum: Personal Finance (Not Investing)
Topic: What's your net worth break down? What's ideal?
Replies: 36
Views: 5311

Re: What's your net worth break down? What's ideal?

Breakdown depends a lot on employer benefit provisions (like whether after-tax 401a contributions are allowed). That qualification being added, my breakdown is: 47% pre-tax retirement accounts (401k, 403b, tIRA) 17% Roth retirement accounts (Roth-401k, Roth-IRA) 36% taxable investments (Home equity ...
by Bill M
Sun Jun 28, 2015 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Drawing from Retirement Savings to Delay SS
Replies: 41
Views: 3587

Re: Drawing from Retirement Savings to Delay SS

1. planning to deplete about 15% covering 8 years (but that includes the additional taxes due to Roth conversions)
2. currently delaying
3. portfolio performance will not impact the plan
4. pre-70 portion is isolated in TIPS, CDs, and a StableValue fund
by Bill M
Thu Jun 25, 2015 6:31 am
Forum: Investing - Theory, News & General
Topic: What ratio are you stocks/bonds and how old are you?
Replies: 230
Views: 13908

Re: What ratio are you stocks/bonds and how old are you?

We're both 63. We have a bond ladder that will provide 40 years of income. The remainder is 75% stocks. So overall we're 28% stocks.
by Bill M
Wed Jun 24, 2015 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: What credit should you get? (Ask me anything)
Replies: 48
Views: 5231

Re: What credit should you get? (Ask me anything)

I've been rotating through several cards for the past few years; all the cards are free for the first year and charge an annual fee for second and later years, so I close them after 9-10 months and open a new one. Main point of this game is the bonus airline miles with the new card. Is the ease of d...
by Bill M
Fri Jun 12, 2015 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: Metrics for choosing when to claim Social Security benefits
Replies: 10
Views: 1743

Re: Metrics for choosing when to claim Social Security benefits

I certainly agree that picking the right metric is the most critical part of the decision. If you pick a metric like "most SocSec benefits over my lifetime", there are numerous products and organizations that would love to have your business and tell you the answer. If you do a more detail...
by Bill M
Thu Jun 11, 2015 6:53 am
Forum: Personal Finance (Not Investing)
Topic: Individual bonds in IRA of deceased
Replies: 4
Views: 409

Re: Individual bonds in IRA of deceased

Its certainly not a problem for the beneficiaries; they just inherit an IRA with something in it, and the custodian figures out the annual RMD. But it is a (slight) problem for the executor. He/she has to place a value on the individual bonds (based on market value on date of death, unfortunately no...
by Bill M
Thu Jun 11, 2015 6:34 am
Forum: Personal Finance (Not Investing)
Topic: Inflation indexed SPIA providers
Replies: 15
Views: 1646

Re: Inflation indexed SPIA providers

If I've done the math correctly (for a 48 year old male), an inflation indexed SPIA from AIG initially has 65% of the payout of a non-inflation indexed SPIA. I would think a better way to compare them .... Another way to do the comparison (my preference) is to calculate the inflation rate that, whe...
by Bill M
Wed Jun 10, 2015 10:30 am
Forum: Personal Finance (Not Investing)
Topic: HSA reimbursements - to take now or wait?
Replies: 13
Views: 1227

Re: HSA reimbursements - to take now or wait?

we always wait, regardless of the amount. All the HSA-eligible expenses are in a spreadsheet, so easy to maintain and track how far over/under the HSA balance we are. But we consider the HSA to be a "super-Roth", and would empty the regular Roth first.
by Bill M
Wed Jun 10, 2015 7:17 am
Forum: Personal Finance (Not Investing)
Topic: What Percent Of Your Annual Expenses Are Property Taxes?
Replies: 101
Views: 6080

Re: What Percent Of Your Annual Expenses Are Property Taxes?

20-25% of annual expenses are property taxes. One home in NJ.

Annual expenses vary from year to year; property taxes are relatively fixed. So the percentage changes.
by Bill M
Wed Jun 10, 2015 7:11 am
Forum: Personal Finance (Not Investing)
Topic: Inflation indexed SPIA providers
Replies: 15
Views: 1646

Re: Inflation indexed SPIA providers

I have quotes for an inflation-indexed SPIA from MetLife back in 2010, but nothing recent. Lincoln Financial Group offered their SmartIncome annuity with CPI-adjustments, but they've gone quiet and updates stopped in 6/2014. Both PFG and AIG offer quotes through Vanguard (chasing the web links to Hu...
by Bill M
Tue May 19, 2015 6:56 am
Forum: Personal Finance (Not Investing)
Topic: How do Bogleheads (in general) plan to finance their healthcare for later life?
Replies: 34
Views: 3842

Re: How do Bogleheads (in general) plan to finance their healthcare for later life?

Getting the HSA over $300K before 65 is tough. At $7K/yr, it just doesn't accumulate fast enough, and once you're 65 you can't add any more to it. So I figure the HSA is one small part of funding healthcare, with sizable balances in other accounts dedicated for healthcare too.
by Bill M
Mon May 18, 2015 8:31 am
Forum: Personal Finance (Not Investing)
Topic: How much does social security factor into your retirement income?
Replies: 169
Views: 12429

Re: How much does social security factor into your retirement income?

Retired two years ago, but delaying SocSec for another ~8 years. No doubt the amount will be a significant percentage of our total income, but there are so many assumptions built into the exact amount of that calculation... For planning purposes, I assume (1) cut 10% off the initial benefit that Soc...
by Bill M
Wed Apr 15, 2015 10:30 pm
Forum: Personal Finance (Not Investing)
Topic: Poll: Effective average Adjusted Livesoft tax rate?
Replies: 67
Views: 5515

Re: Poll: Effective average Adjusted Livesoft tax rate?

I understand what you are trying to calculate with the ALI; my in-plan Roth conversion in my 401k distorts the values, since 16a and 16b report the gross and taxable amount of the conversion (neither was spendable income). So I adjusted the ALI before responding. It made the effective tax rate 26.7%...
by Bill M
Wed Apr 15, 2015 12:32 pm
Forum: Personal Finance (Not Investing)
Topic: How Many Credit Cards Do You Have Open?
Replies: 25
Views: 4194

Re: How Many Credit Cards Do You Have Open?

One for everyday use. One backup for the times that one gets hacked/stolen/etc. One separate one for everything on the web, which frequently gets hacked/stolen/etc (usually once/year, typically through PayPal). And one just to collect the airline miles signup bonus (charged their min amount to get t...
by Bill M
Wed Apr 15, 2015 8:00 am
Forum: Personal Finance (Not Investing)
Topic: Can nursing homes evict Medicaid patients?
Replies: 19
Views: 2622

Re: Can nursing homes evict Medicaid patients?

Some experience with this with my grandmother in the 1980s and 1990s. When she first entered the nursing home, there was a financial qualification test she needed to pass, i.e. sufficient assets to pay for some number of years of care. And there were restrictions on wealth transfer (no surprise). Ni...
by Bill M
Wed Apr 15, 2015 7:39 am
Forum: Personal Finance (Not Investing)
Topic: How do you value a pension?
Replies: 18
Views: 1731

Re: How do you valuate a pension?

The value certainly depends on the reason you are determining the value. For job comparison, I'd ignore the pension until it becomes a "golden handcuff" (I'd place this somewhere around 25 years of service to a company). Recognize that the pension formula is inherently non-linear; negligib...
by Bill M
Mon Apr 13, 2015 10:24 am
Forum: Investing - Theory, News & General
Topic: Record keeping with Excel
Replies: 19
Views: 1658

Re: Record keeping with Excel

Excel is a very powerful tool. Start by creating a workbook with investment account values; but you can do so much more. Add summary pages (aka net worth) with the quarterly (or monthly) figures, and add a graph of them over time. For taxable accounts, also record purchase dates and basis values; yo...
by Bill M
Thu Apr 09, 2015 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: 401k failed non-discrimination test - already rolled over
Replies: 5
Views: 795

Re: 401k failed non-discrimination test - already rolled ove

Its their problem, not yours. But if they send you a refund check, I'd sit on it for a while before cashing it, expecting them to demand its return.
by Bill M
Thu Apr 09, 2015 1:25 pm
Forum: Personal Finance (Not Investing)
Topic: Named Beneficiary for IRA and other property vs. will/trust
Replies: 6
Views: 689

Re: Named Beneficiary for IRA and other property vs. will/tr

If the beneficiary is a named person, there is no need for probate. If the beneficiary is "the person I am married to at the time of my death" then the executor of the estate will have to tell Vanguard who that person is. So someone will still need to file the will with the Probate Court, ...
by Bill M
Tue Apr 07, 2015 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Spousal Benefit Question
Replies: 4
Views: 608

Re: Social Security Spousal Benefit Question

My wife and I are in same situation, and I plan to do the file&suspend so she can get the spousal benefit. I have one of those nit-picking detail questions that I can't seem to find an answer: Do I start the file&suspend paperwork a few months prior to my 66th birthday (and hope that they do...
by Bill M
Tue Apr 07, 2015 1:39 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion and Taxes
Replies: 6
Views: 674

Re: Roth Conversion and Taxes

You made two non-deductible contributions in 2014, each $5500, one for 2013 and one for 2014; total basis is $11,000. Of that, $5500 was converted to Roth in 2014, and $5500 was left in tIRA. So on form 8606, Line 1: 11000 Line 2: 0 Line 3: 11000 Line 5: 11000 Line 6: 5500 Line 8: 5500 Line 9: 11000...
by Bill M
Tue Apr 07, 2015 10:16 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion and Taxes
Replies: 10
Views: 698

Re: Roth Conversion and Taxes

At $80.8K you're nearly at the top of the 15% marginal tax bracket; the Roth conversion put you well into the 25% marginal bracket. Plugging your numbers into my tax program (assuming MFJ, 2 exemptions) I figure the first $1,200 of Roth conversion topped off the 15% bracket. Is a Roth conversion at ...
by Bill M
Tue Apr 07, 2015 9:08 am
Forum: Personal Finance (Not Investing)
Topic: Lump sum pension vs future annuity
Replies: 7
Views: 1095

Re: Lump sum pension vs future annuity

What is the present value, at age 31, of an annual annuity of $1 starting at age 65? My actuarial spreadsheet says $5.047, based on the 2008 GAAT mortality table and 3% interest rate. So for your $1112/mo that comes to $67,355. Alternatively, what would an insurance company charge to provide such a ...
by Bill M
Mon Apr 06, 2015 7:16 am
Forum: Investing - Theory, News & General
Topic: Bored -- wondering about day trading for fun
Replies: 61
Views: 6236

Re: Bored -- wondering about day trading for fun

Day trading of stocks will also seem boring. For excitement, go with low-priced index options -- +500% to -100% in 30 minutes isn't uncommon. Taxes are relatively simple: they are "Section 1256 contracts" and you don't itemize the individual trades, just report a total net gain/loss figure...
by Bill M
Mon Apr 06, 2015 7:01 am
Forum: Personal Finance (Not Investing)
Topic: When to start taking pension payments?
Replies: 11
Views: 1123

Re: When to start taking pension payments?

The best strategy depends on lots of tiny details of your pension plan, and how it calculates your monthly benefit. I've seen two basic approaches: (1) based on employment history, calculate a lump sum amount and then convert it to a monthly annuity, and (2) based on employment history, calculate a ...
by Bill M
Sat Apr 04, 2015 9:25 am
Forum: Investing - Theory, News & General
Topic: Do CPI-Indexed Single-Premium Deferred Annuities exist?
Replies: 27
Views: 2334

Re: Do CPI-Indexed Single-Premium Deferred Annuities exist?

Sure wish they did. If anyone has pointers, I'd love to hear about it too. Closest I've found, and bought, is one that quotes the nominal payment for first year, and then does CPI-adjustments for subsequent years. I worked backwards to figure the amount, assuming 3.5% inflation between now and start...
by Bill M
Sat Apr 04, 2015 7:11 am
Forum: Personal Finance (Not Investing)
Topic: Occasional big expenses after retirement
Replies: 32
Views: 2856

Re: Occasional big expenses after retirement

OP here. Thanks to all for the interesting responses. As several have pointed out, the planning process has to include these big occasionals to make sure enough is saved. But I never appreciated how much it throws off the withdrawal planning. It seems every one of the methods I had considered is bei...
by Bill M
Fri Apr 03, 2015 3:53 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpected Car Expenses
Replies: 21
Views: 2660

Re: Unexpected Car Expenses

We have two cars; the younger one (13 years) has over 200K miles, and the older one (15 years) has only 135K. We budget $2400/yr for car repairs. Your repair bill sounds typical.

If you had the repair done at Midas, its the last Cat your car will need. They guarantee them.
by Bill M
Fri Apr 03, 2015 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: Occasional big expenses after retirement
Replies: 32
Views: 2856

Occasional big expenses after retirement

For all the usual expenses it is rather easy to estimate some kind of annual spending amount, and deal with the retirement "budget". Granted lots are unknown, like amount of travel and entertainment, but we can make guesses for annual amounts. But there are some occasional big expenses tha...
by Bill M
Fri Apr 03, 2015 8:11 am
Forum: Investing - Theory, News & General
Topic: How to find the true value of a stock
Replies: 17
Views: 1694

Re: How to find the true value of a stock

John Cochrane recently ran a MOOC on this subject, http://coursera.org/course/assetpricing. His stochastic calculus formula, P=E(mx), depends on (1) your personal utility function, (2) your personal discount rate, etc. So everyone's "true value" is different. But the best indication of &qu...
by Bill M
Wed Apr 01, 2015 10:53 am
Forum: Personal Finance (Not Investing)
Topic: Corporate Finance vs Personal Finance
Replies: 9
Views: 925

Re: Corporate Finance vs Personal Finance

Depreciation is the one big one that comes to mind. Personal finance tends to value the home at market value, not at a depreciated purchase price. But there are aspects of personal finance that don't seem to apply to corporate finance. How would a corporation value a pension benefit (that it is rece...
by Bill M
Mon Mar 30, 2015 6:59 am
Forum: Investing - Theory, News & General
Topic: Should a BH investor never use futures/options?
Replies: 70
Views: 5162

Re: Should a BH investor never use futures/options?

Writing covered calls is a simple process and limited downside risk. But what is the upside gain? My experience says very little. (FWIW, I'm approved at Level 5) A simple comparison --- If you go to the racetrack, and for each race bet on the favored horse to "show" - out of 10 races you'l...
by Bill M
Fri Mar 27, 2015 3:06 pm
Forum: Investing - Theory, News & General
Topic: My evil plan backfired
Replies: 53
Views: 7392

Re: My evil plan backfired

One percent?!!!??? On behalf of husbands everywhere, please let your husband have some fun. Leave him alone. +1 It seems to me that you've set the table stakes, and he has won the first hand. The game is still young. If the amount you've staked him is less than the cost of a college education, he'l...
by Bill M
Fri Mar 27, 2015 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Two Legged Stool [Figuring out when to take Social Security]
Replies: 26
Views: 3261

Re: Two Legged Stool

Excel is a good tool for quick comparisons of strategies. If you delay SocSec until 66, you'll be pulling more from savings for the first four years, then pulling less from then onward. Likewise if you delay until 70 (doing the file&suspend at 66). Excel can give you a quick estimate of when the...
by Bill M
Thu Mar 19, 2015 2:25 pm
Forum: Personal Finance (Not Investing)
Topic: Exceeding the $53k contribution limit. Options?
Replies: 18
Views: 3286

Re: Exceeding the $53k contribution limit. Options?

My experience with this limit; just FYI, as it may or not apply in your case. Every year I exceeded the 415(c) limit, somewhat intentionally due extremely low expense ratios within the 401k plan. As I approached the limit, I watched for payroll dept to turn off the contributions. When they did, I tu...
by Bill M
Thu Mar 19, 2015 9:34 am
Forum: Personal Finance (Not Investing)
Topic: Market-timing an SPIA purchase
Replies: 18
Views: 1735

Re: Market-timing an SPIA purchase

.... up with increasing starting age, where is that factor included in this equation? If the 3.6% includes the effects of both mortality credits and return of principal, it cannot be a constant. It goes up with increasing starting age. The chart that started this thread (see first posting for link)...
by Bill M
Wed Mar 18, 2015 9:22 pm
Forum: Investing - Theory, News & General
Topic: Questions about options
Replies: 5
Views: 416

Re: Questions about options

Deep in the money options don't trade frequently. You're probably looking at the last trade information; that says nothing about the current bid/ask spread. I can guarantee that you'll never buy at the "ask" price, exercise the option, sell the stock, and come out ahead.
by Bill M
Wed Mar 18, 2015 9:13 pm
Forum: Personal Finance (Not Investing)
Topic: Really confused about Roths
Replies: 16
Views: 2622

Re: Really confused about Roths

Welcome to the forum. One more point to add to the confusion--there is this crazy five-year rule with Roth accounts. One of the requirements for a tax-free distribution from a Roth account is that the account exist for five years prior to the distribution. When you move funds from the 401k (or TSP) ...
by Bill M
Wed Mar 18, 2015 8:53 pm
Forum: Personal Finance (Not Investing)
Topic: Market-timing an SPIA purchase
Replies: 18
Views: 1735

Re: Market-timing an SPIA purchase

The payout from a SPIA increases as you get older. That part is easy to do some market timing (but whether its useful is another matter entirely). SPIA yield (yearly % of original payment) = 0.64*(bond yield in %) + 3.6% For a fixed age, payout rates over time vary with bond yields. So if you can pr...
by Bill M
Mon Mar 16, 2015 7:08 am
Forum: Personal Finance (Not Investing)
Topic: Annuity -SPIA
Replies: 9
Views: 778

Re: Annuity -SPIA

Hersh Stern (immediateannuities.com) does a monthly report of annuity rates. The most recent issue of his "Comparative Annuity Report" is available at: https://www.immediateannuities.com/comparative-annuity-reports/ (look at right margin, at bottom of page for historical issues). The page ...
by Bill M
Mon Mar 16, 2015 6:19 am
Forum: Personal Finance (Not Investing)
Topic: Should I change Asset Allocation to a more conservative mix
Replies: 20
Views: 2129

Re: Should I change Asset Allocation to a more conservative

If it were me, I wouldn't pay capital gains tax to be more conservative, but if I wanted to reduce risk faster, I would start redirecting stock dividends and all my fresh savings to bonds. +1 You didn't mention whether investments are in tax-deferred accounts. That would be another easy way to adju...
by Bill M
Sun Mar 15, 2015 8:36 pm
Forum: Personal Finance (Not Investing)
Topic: Yet Another Roth/Trad 401K Thread
Replies: 15
Views: 1521

Re: Yet Another Roth/Trad 401K Thread

The rational way to decide is to look at your current tax bracket, and guess at future tax bracket. But, I go irrational on this one. With interest/dividends in a taxable account, part of the earnings each year gets withdrawn to pay the taxes. But its not that way with withdrawals from pre-tax quali...
by Bill M
Thu Mar 12, 2015 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 5583

Re: Why not use inflation-adjusted SPIA?

They may not be actuarially fair, and they may not be competitive, and they may be overpriced....but (in my case) they are offering a joint-100% survivor initial payout rate of 3.65%. Without any of the risks that go with the "safe" withdrawal rate, like sequence of return risk, market ri...
by Bill M
Thu Mar 12, 2015 6:58 am
Forum: Personal Finance (Not Investing)
Topic: Why not use inflation-adjusted SPIA?
Replies: 117
Views: 5583

Re: Why not use inflation-adjusted SPIA?

They may not be actuarially fair, and they may not be competitive, and they may be overpriced....but (in my case) they are offering a joint-100% survivor initial payout rate of 3.65%. Without any of the risks that go with the "safe" withdrawal rate, like sequence of return risk, market ris...
by Bill M
Fri Mar 06, 2015 9:11 am
Forum: Personal Finance (Not Investing)
Topic: Social Security statements after age 62
Replies: 0
Views: 216

Social Security statements after age 62

The annual statements produced by Social Security have one line that says "if you continue working until age 62, your benefit will be about..." Once you are past age 62 this doesn't make much sense, especially since they know you have not yet applied for benefits. This line would better be...
by Bill M
Thu Mar 05, 2015 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Spousal Responsibility for Nursing Home Care
Replies: 6
Views: 1045

Re: Spousal Responsibility for Nursing Home Care

In our case, the top reason for long-term-care insurance was to protect enough of our savings from the Nursing Home, so the health spouse can sill live somewhere. What Medicaid lets you keep isn't much....
by Bill M
Thu Mar 05, 2015 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Question about Beneficiaries on IRA's
Replies: 7
Views: 603

Re: Question about Beneficiaries on IRA's

One additional consideration -- while IRAs pass to the beneficiary without going through probate, if your beneficiary is not given as an easily-identified person (such as, instead of a full name, beneficiary is given as some variant on "my spouse", or "descendents per stirpees"),...
by Bill M
Sun Mar 01, 2015 11:59 pm
Forum: Investing - Help with Personal Investments
Topic: retiement calcultor
Replies: 2
Views: 554

Re: retiement calcultor

Darrow Kirkpatrick did a survey of online calculators a little while ago; his blog post is at http://www.caniretireyet.com/the-best-r ... lculators/

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