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Re: 401k limits

There's going to be earnings on the excess contribution, and that portion will be taxable whenever you receive it. So there will be a 1099-R in either case. But it's not much of a "tax mess" -- I regularly overcontributed to my MegaCo 401k (since the ERs in that plan were lower than I get ...
by Bill M
Tue Nov 25, 2014 11:02 am
 
Forum: Personal Finance (Not Investing)
Topic: 401k limits
Replies: 1
Views: 466

Re: Is investing more risky today today than before the inte

Actual value is still driven by earnings; the internet didn't change anything beyond creating new markets and earning potential. The noise (fluctuations around actual value) is still driven by fear and greed. I don't think the internet has had any impact on the greed side, but I think it is likely t...
by Bill M
Tue Nov 18, 2014 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: Is investing more risky today today than before the internet
Replies: 30
Views: 2809

Re: Tax Planning for 2015 Roth conversion

I have to wonder how sure you are about the 2015 income figures. I do a similar sort of projection of income, and plan for a Roth conversion, but delay the conversion until December when I am more sure of the income figures. The full year's amount of interest and dividends and capital gains is hard ...
by Bill M
Tue Nov 18, 2014 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Planning for 2015 Roth conversion
Replies: 11
Views: 1385

Re: What to calculate withdrawals on?

A regular withdrawal percentage, such as 4%, would only start when you are both retired, and both are collecting pensions (if any) and Social Security. Prior to that time, withdrawals are likely to be significantly different than the long term rate. I think it is best to think of two phases: (1) pre...
by Bill M
Tue Nov 18, 2014 3:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: What to calculate withdrawals on?
Replies: 11
Views: 921

Re: Contribution to ROTH in 401K

So I am looking for advice on whether I should do the company's option of contribution to a ROTH or just continue on with the max pre tax for 2015 ? There are certainly calculators that evaluate the tradeoffs between pre-tax 401k and Roth-401k contributions, and I ran them and ignored the results. ...
by Bill M
Thu Nov 13, 2014 8:08 am
 
Forum: Personal Finance (Not Investing)
Topic: Contribution to ROTH in 401K
Replies: 13
Views: 1053

Re: Transition from Saving to Spending

I'd call it auto-withdrawal. It then makes you contemplate how to spend it, it is just sitting there in your checking account. Actually, it just gives you an assurance that spending is OK. I constantly have to tell my wife, we've earned it, do what you want. Somehow, if it's a balance in our checki...
by Bill M
Thu Nov 13, 2014 6:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Transition from Saving to Spending
Replies: 37
Views: 4010

Re: How do you track the value of your illiquid assets ?

S&P calculates an index of real estate prices, the Case-Shiller Index, and publishes it monthly. Latest values available at http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us---- Take your purchase price, divide by the index value for ...
by Bill M
Thu Nov 13, 2014 6:28 am
 
Forum: Personal Finance (Not Investing)
Topic: How do you track the value of your illiquid assets ?
Replies: 50
Views: 2530

Re: Pay for Release from Escrow

When I did this years ago there was no fee. But I had enough equity in the house that the mortgage company wasn't worried about recovering the outstanding balance even if I never paid any of the taxes. It sounds like your mortgage company is worried, rightly or wrongly. I suspect if you wait a few y...
by Bill M
Sun Nov 09, 2014 11:14 am
 
Forum: Personal Finance (Not Investing)
Topic: Pay for Release from Escrow
Replies: 5
Views: 642

Re: Home ownership/refinance paperwork - keep or shred?

I'm generally in favor of scanning everything and discarding the paper. But, ... There are two categories here - (1) stuff that might be interesting to you sometime later, and (2) stuff that might be essential in future real estate transactions. (1) interesting later - this is stuff that I'd scan an...
by Bill M
Sun Nov 09, 2014 11:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Home ownership/refinance paperwork - keep or shred?
Replies: 7
Views: 1108

Re: After Tax 401k question

Its certainly reasonable; my 401k with MegaCo allowed this, and I did it several times. You need to check the plan documents carefully for withdrawal types: does the plan allow a withdrawal of just the after-tax subaccount? Or is it a withdrawal of all employee contributions? Either way, part of the...
by Bill M
Tue Nov 04, 2014 8:11 am
 
Forum: Personal Finance (Not Investing)
Topic: After Tax 401k question
Replies: 7
Views: 762

Re: Early SS or Higher IRA Withdrawal??

The higher withdrawal rate is not a problem by itself, especially since it would be significantly reduced once SS starts. You obviously have projected figures for spending and investment returns, since you gave calculations for withdrawal rates for each year. Spending goes up by some inflation facto...
by Bill M
Wed Oct 29, 2014 10:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early SS or Higher IRA Withdrawal??
Replies: 19
Views: 1587

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 10:31 am
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 22
Views: 1722

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 7:47 am
 
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 159
Views: 12902

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 7:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 159
Views: 12902

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 7:11 am
 
Forum: Personal Finance (Not Investing)
Topic: PhD in Computer Engineering?
Replies: 33
Views: 3400

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 6:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Spiking HSA Contribution limits
Replies: 10
Views: 1113

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 10:57 am
 
Forum: Personal Finance (Not Investing)
Topic: 529 or not
Replies: 38
Views: 4119

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 9:36 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3228

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 9:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Personal Financial Inventory (From Vanguard's Site)
Replies: 2
Views: 482

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 9:08 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 212
Views: 16104

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 6:02 am
 
Forum: Personal Finance (Not Investing)
Topic: What Happens To Mortgage When Borrower Dies?
Replies: 12
Views: 1978

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 5:59 am
 
Forum: Personal Finance (Not Investing)
Topic: What Happens To Mortgage When Borrower Dies?
Replies: 12
Views: 1978

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 7:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Reminder: estimated taxes due Monday
Replies: 17
Views: 1207

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 7:31 am
 
Forum: Personal Finance (Not Investing)
Topic: chip credit cards
Replies: 25
Views: 1643

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 6:29 am
 
Forum: Investing - Theory, News & General
Topic: Online Savings Accounts
Replies: 26
Views: 2924

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 5:55 am
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to see my credit report?
Replies: 37
Views: 2226

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
Mon Sep 01, 2014 11:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do my in-laws need a will?
Replies: 26
Views: 1957

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 8:24 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes on Roth conversion at retirement
Replies: 15
Views: 712

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 4:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Choosing and paying an executor
Replies: 10
Views: 901

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 11:44 am
 
Forum: Personal Finance (Not Investing)
Topic: Choosing and paying an executor
Replies: 10
Views: 901

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 10:53 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation-indexed SPIAs: A Good Deal?
Replies: 22
Views: 3127

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
Thu Aug 14, 2014 11:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth questions from an MD
Replies: 32
Views: 3173

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 6:35 am
 
Forum: Personal Finance (Not Investing)
Topic: CPI table
Replies: 25
Views: 1528

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 5:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do you store your important documents?
Replies: 38
Views: 3366

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 4:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Where do you store your important documents?
Replies: 38
Views: 3366

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 6:53 am
 
Forum: Personal Finance (Not Investing)
Topic: Pension floor drops from 4% to 2.5% -- Time to bail?
Replies: 17
Views: 2829

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 10:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Funding retirement with post tax $...or pre tax $
Replies: 6
Views: 1122

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 1:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your opinion of mint.com
Replies: 38
Views: 3332

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 6:55 am
 
Forum: Investing - Theory, News & General
Topic: What to tell friends who think "it's all a scam"
Replies: 64
Views: 5899

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 10:22 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider your Roth as part of your EF?
Replies: 30
Views: 1914

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 6:41 am
 
Forum: Personal Finance (Not Investing)
Topic: How to keep family informed
Replies: 35
Views: 3413

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 6:32 am
 
Forum: Investing - Theory, News & General
Topic: looking ahead to the next 10-yr TIPS auction
Replies: 4
Views: 541

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 10:40 pm
 
Forum: Investing - Theory, News & General
Topic: looking ahead to the next 10-yr TIPS auction
Replies: 4
Views: 541

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 9:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Wills vs. Living Trusts
Replies: 35
Views: 3429

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 7:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Pension Lump Sum vs Immediate Annuity
Replies: 4
Views: 652

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 7:19 am
 
Forum: Personal Finance (Not Investing)
Topic: So how long will I live? How long do I plan for?
Replies: 55
Views: 4511

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 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: New 10-Year TIPS Auction July 24 2014
Replies: 17
Views: 1721

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 7:03 am
 
Forum: Personal Finance (Not Investing)
Topic: Beneficiaries
Replies: 23
Views: 1405

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 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Hw many credit cards to own?
Replies: 123
Views: 76335
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