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Re: Family member as Financial Advisor

IMO, it's best to leave the present $10k of IRA money where it is and put all future money into a Vanguard account. When Dad notices you are not investing with him any more say very sorry you felt the need to handle this yourself like a grownup, and ask for his forgiveness. That should come out bett...
by JW Nearly Retired
Fri Jul 11, 2014 9:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Family member as Financial Advisor
Replies: 29
Views: 2351

Re: How I look at $ in the real world vs my retirement accou

Anyways, since it's the first month that the money went into my 403b that meant that today, when I opened up Mint and saw that my balance is now ~$496 I had a realization that I lost $4 already. Of course, in the long run I will end up with much more than that. But it made me think about how differ...
by JW Nearly Retired
Fri Jul 11, 2014 12:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: How I look at $ in the real world vs my retirement accounts
Replies: 45
Views: 5635

Re: What to do with 401K and 457 from old employer

In terms of my need to preserve back door Roth option or not, I want to make sure the $17,500 I am putting into my 401K pre-tax does not count toward my MAGI for Roth purposes. I've seen varied answers to that question and want to make sure. If that deferral amount is excluded from my income for Ro...
by JW Nearly Retired
Fri Jul 11, 2014 11:19 am
 
Forum: Investing - Help with Personal Investments
Topic: What to do with 401K and 457 from old employer
Replies: 12
Views: 831

Re: Delaying SS while working past age 70

This thread has covered the early/late SS issue exceptionally well. IMO, the only omission is the (large) effect of income taxes. I don't see any analysis of taxes impact here or in the Shoven & Slavov papers. I didn't read every word so please let me know if I've missed something. I'm married a...
by JW Nearly Retired
Wed Jul 09, 2014 10:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 9411

Re: Worried about my parents' financial health

Appears unlikely there is anything that will convince him to invest sensibly. Will they have any other sort of income in retirement? Can't think of anything concrete you should do except do not for any reason entangle any of your own finances with theirs. Seems OK to send him a Bogle book or two but...
by JW Nearly Retired
Sat Jul 05, 2014 10:11 am
 
Forum: Investing - Help with Personal Investments
Topic: Worried about my parents' financial health
Replies: 10
Views: 1082

Re: Delaying SS while working past age 70

+1
Excellent comprehensive refs Bobcat!
JW
by JW Nearly Retired
Sat Jul 05, 2014 9:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 9411

Re: Just retired...any reason to move 401K to IRA?

What about costs? Do you know absolutely for sure what your expenses for hold those funds in your 401(k) are, compared to in a rollover IRA? This is a very good point that everyone should take seriously. Perhaps it's easier to check now, but some years ago I went to the point of zeroing out my cont...
by JW Nearly Retired
Fri Jul 04, 2014 10:35 pm
 
Forum: Investing - Theory, News & General
Topic: Just retired...any reason to move 401K to IRA?
Replies: 50
Views: 4829

Re: Delaying SS while working past age 70

You didn't mention taxes on SS. These will be large if you continue to work until age 70 and to be fair you can only invest the after tax portion of the payments. Sounded like you invested the whole thing? Also, did you look at the common strategy that lower earner collects at 66 and higher earner t...
by JW Nearly Retired
Fri Jul 04, 2014 6:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 9411

Re: [Poll] Which do you include in Asset Allocation?

Are those who include real estate/pensions/mortgages and other odd assets mentioned here really throwing all this into the AA = "Stock"%/"Bond"% you would report to us? More particularly do the "what is your AA" poll results include a lot of this stuff? I had no idea th...
by JW Nearly Retired
Fri Jul 04, 2014 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Which do you include in Asset Allocation?
Replies: 41
Views: 2630

Re: Just retired...any reason to move 401K to IRA?

This is self serving advice because for the same account size Fidelity makes twice as much money on IRAs than on 401ks. (Source: Rollovers article July 2014 Money page 46.) Interesting. Can you add detail without trespassing on copyright? It's in the sub-section "Why you're a Catch" in th...
by JW Nearly Retired
Fri Jul 04, 2014 11:52 am
 
Forum: Investing - Theory, News & General
Topic: Just retired...any reason to move 401K to IRA?
Replies: 50
Views: 4829

Re: Just retired...any reason to move 401K to IRA?

My Fidelity guy says most people make the move from 401K to an IRA at retirement, maInly for a wider selection of options for investment. This may be an unusual fact, but my company's 401(k) plan offers exactly the type of index funds I am interested in. Am I missing a point? My former employer is ...
by JW Nearly Retired
Fri Jul 04, 2014 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Just retired...any reason to move 401K to IRA?
Replies: 50
Views: 4829

Re: POLL: Are You Re-Balancing?

Not recently. Once last fall for the first time in years. I only high stocks side rebalance and a 60/40 changes slowly.
JW
by JW Nearly Retired
Fri Jul 04, 2014 10:21 am
 
Forum: Investing - Help with Personal Investments
Topic: POLL: Are You Re-Balancing?
Replies: 70
Views: 4947

Re: Having Doubts About My 60/40 Allocation

My view is that 80/20 would be better but 90/10 is OK when you are just getting started and don't have a ton of money at risk. Also, to keep from nourishing your market timing/performance chasing demons, don't set a bad precedent by making this change all at once. Do it slowly with new contribution ...
by JW Nearly Retired
Fri Jul 04, 2014 9:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Having Doubts About My 60/40 Allocation
Replies: 43
Views: 3073

Re: Buyout Offer and Debt

I don't think they have much in savings, and they are living within their means now. They both have jobs (she full time, brother part time) but they have this debt. I know they must pay the minimum in income tax. I will ask him about his IRA's, as I know they are taking RMDs, or savings Was thinkin...
by JW Nearly Retired
Thu Jul 03, 2014 2:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buyout Offer and Debt
Replies: 16
Views: 1179

Re: 401k: If parents dont need the $, do an aggressive AA

Both my parents are retired. They have a combined mid 6-figure 401k. Their pensions pay for all their expenses, and then some. Plus they also get social security, which is icing on the cake. The 401k will be mine when they both pass (which hopefully wont be for decades). I have no idea what their A...
by JW Nearly Retired
Thu Jul 03, 2014 10:29 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k: If parents dont need the $, do an aggressive AA
Replies: 16
Views: 1083

Re: WSJ article on ROTH 401K's vs Traditional

If you are receiving SS, pension, dividends, interest, cap gains, rental income, part time work, i.e., whatever sort of taxable income you can imagine, then starting RMDs on top of this will make the RMD taxed at the marginal rate you had previously, and maybe the next higher one too. My RMD is all...
by JW Nearly Retired
Wed Jul 02, 2014 9:16 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4423

Re: WSJ article on ROTH 401K's vs Traditional

livesoft wrote:Actually, I think if other income is LT cap gains and qualified dividends, I think some of RMDs would not be taxed at marginal rates.

Once again, one needs to "run the numbers".

Yes, those income categories could create exceptions to my too broad statement. I crossed them out.
JW
by JW Nearly Retired
Wed Jul 02, 2014 8:21 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4423

Re: WSJ article on ROTH 401K's vs Traditional

If you are receiving SS, pension, dividends , interest, cap gains , rental income, part time work, i.e., usual taxable income in retirement, then starting RMDs on top of this will make the RMD taxed at the marginal rate you had previously, and maybe the next higher one too. My RMD is all being taxed...
by JW Nearly Retired
Wed Jul 02, 2014 7:48 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4423

Re: Bad Advice from Schwab re "Mega Backdoor Roth IRA?"

Michael, here is the opinion of Kaye Thomas who is a tax-attorney if I'm not mistaken. Now, if you are Michael Kitces, you have probably read this stuff already and just have a different opinion. :D http://fairmark.com/retirement/roth-accounts/roth-conversions/isolating-basis-for-roth-conversion/ba...
by JW Nearly Retired
Wed Jul 02, 2014 4:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bad Advice from Schwab re "Mega Backdoor Roth IRA?"
Replies: 48
Views: 4328

Re: 401(k) In-Plan Roth Conversion of After-Tax Money

Question for sub-account doubters............. have you ever looked at your 401k/403b statement? Doesn't it have a section with a table listing your three sub-account contributions and balances that looks like: ...................Year-to-date Contributions..............Total Market Value Before-Tax....
by JW Nearly Retired
Wed Jul 02, 2014 10:48 am
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) In-Plan Roth Conversion of After-Tax Money
Replies: 65
Views: 4069

Re: [Poll] Which do you include in Asset Allocation?

Stocks and real bonds only included in my 60/40 AA.

I do consider pension/SS as pseudo-bonds in applying a formula that suggests my 60/40 target number, but that's something else. :P
JW
by JW Nearly Retired
Tue Jul 01, 2014 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Which do you include in Asset Allocation?
Replies: 41
Views: 2630

Re: Old Stock Certificate Question

An inheritance is not a gift. The inheritor gets a step-up in cost basis ........ to the value on the date the former owner died. Or in some cases 6-months later.
JW
by JW Nearly Retired
Tue Jul 01, 2014 3:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Old Stock Certificate Question
Replies: 11
Views: 731

Re: After TAX 403b contributions should I do it?

No issues with backdoor roth, contribute to that, but didn't take advantage for first 2 years either, but now comfortable with it but it is only 5500 not 20000 like with mega roth It doesn't have to be $20000. You contribute up to your pre-tax maximum of $17,500 and then any contributions beyond th...
by JW Nearly Retired
Tue Jul 01, 2014 12:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: After TAX 403b contributions should I do it?
Replies: 59
Views: 1837

Re: POLL: Mortgage as a negative bond

Clearly not a negative bond. Correct me if I'm mistaken, but I think Bogleheads usually count real estate holdings (REITS) as equities. So if you want to count house equity it should be a stock.............. i.e., the appraised value is a positive stock and the mortgage balance is a negative stock. JW
by JW Nearly Retired
Tue Jul 01, 2014 9:52 am
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Mortgage as a negative bond
Replies: 89
Views: 2901

Re: Advice on redesigning my parents' retirement portfolio

JW Nearly Retired, Yes, their real estate could be sold or rented. I agree, it is by far their greatest asset. They live there and don't wish to sell or rent it, so I'm not sure how to include it when determining their asset allocation, other than a "if something bad happens, we could sell or ...
by JW Nearly Retired
Mon Jun 30, 2014 9:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on redesigning my parents' retirement portfolio
Replies: 16
Views: 1082

Re: Advice on redesigning my parents' retirement portfolio

They also have some real estate that is worth over a million. But since they don't want to sell or rent it, it basically acts as an expense from having to pay property taxes. So I'm not including that in the calculation. They pay the taxes out of their salary income. This million dwarfs their other...
by JW Nearly Retired
Mon Jun 30, 2014 9:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on redesigning my parents' retirement portfolio
Replies: 16
Views: 1082

Re: After TAX 403b contributions should I do it?

I am not aggravated with you at all. In fact this is the only place to discuss these strategies. Yes, technically speaking I am allowed to take money out to traditional ira and roll it over to my roth, I don't have traditional ira only roth so no basis would incur, I still choose not to take that r...
by JW Nearly Retired
Mon Jun 30, 2014 5:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: After TAX 403b contributions should I do it?
Replies: 59
Views: 1837

Re: Advice on redesigning my parents' retirement portfolio

My parents are 64 and 65, and are both still working. They are looking to retire in 2 or 3 years. They are married, live in California, and file taxes jointly. Their combined unadjusted salary is $83,000. That puts them in 25% federal tax bracket, and 9.30% plus $2,191.48 California tax bracket. Ha...
by JW Nearly Retired
Mon Jun 30, 2014 2:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice on redesigning my parents' retirement portfolio
Replies: 16
Views: 1082

Re: Optimal Strategy for IRA/non-IRA accounts (facing RMDs)

Many people in a lower bracket from 60 to 70 have followed the practice of converting a portion of their tIRA to a Roth every year, and paying the tax owed out of taxable savings. This keeps the same amount of money in retirement accounts but the Roth portion has no RMDs and is never taxed. JW ps: t...
by JW Nearly Retired
Mon Jun 30, 2014 12:20 pm
 
Forum: Investing - Theory, News & General
Topic: Optimal Strategy for IRA/non-IRA accounts (facing RMDs)
Replies: 4
Views: 386

Re: Best use of inheritance for retirement saving?

Thank you JW, that is an interesting suggestion I had not considered. I do consider myself fairly risk-tolerant, though I admit that putting so much away at once does concern me a bit. I have so far adhered to a dollar-cost averaging strategy, and maxing out the 401K seems to be in opposition to th...
by JW Nearly Retired
Mon Jun 30, 2014 8:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Best use of inheritance for retirement saving?
Replies: 18
Views: 2325

Re: After TAX 403b contributions should I do it?

Do you really think the 403b administrator will keep everything straight? You have pre-tax contributions, pre-tax gains, after-tax contributions, after-tax gains, etc. Are there separate accounts for pre-tax vs after-tax? What about all the paperwork when you do roll everything over to an IRA or an...
by JW Nearly Retired
Sun Jun 29, 2014 9:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: After TAX 403b contributions should I do it?
Replies: 59
Views: 1837

Re: Help for my sister

Here's a brief overview. My sister, 62 & single would like to retire. She has $330,000 in liquid assets. No additional assets or liabilities. Her SS will be $800.00/month. She's lived with her BF for over a decade & they have a solid & sustainable relationship. Her total expenses, in th...
by JW Nearly Retired
Sun Jun 29, 2014 6:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help for my sister
Replies: 21
Views: 1903

Re: Best use of inheritance for retirement saving?

I would pay off the two highest student loans. Secondly, increase your contribution to the 401k to the maximum of $17,500 per year. You probably could not afford maxing it previously but now you can. Spend whatever amount you need from the inheritance account to make up for the reduction of your tak...
by JW Nearly Retired
Sun Jun 29, 2014 6:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Best use of inheritance for retirement saving?
Replies: 18
Views: 2325

Re: Who do you talk with about your financial goals?

Besides your spouse who do you talk to about your financial goals, even in the abstract? When you achieve a goal and something good happens do you have anyone you feel you can share that with? Only with spouse (and here). I've found nobody else I know likes to talk seriously about personal finances...
by JW Nearly Retired
Sun Jun 29, 2014 12:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Who do you talk with about your financial goals?
Replies: 158
Views: 9059

Re: SS Gap Until 70?

I don't see a spreadsheet there. Sure, you can run any of the retirement planners such as FireCalc, I think the Fidelity planner, Otar's planner, iORP, etc., which have the feature of specifying a start date for any income. Those planners also allow start dates for additional or lesser expense, add...
by JW Nearly Retired
Sat Jun 28, 2014 9:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS Gap Until 70?
Replies: 29
Views: 2425

Re: SS Gap Until 70?

Sure, you can run any of the retirement planners such as FireCalc, I think the Fidelity planner, Otar's planner, iORP, etc., which have the feature of specifying a start date for any income. Those planners also allow start dates for additional or lesser expense, additions to or withdrawals from por...
by JW Nearly Retired
Sat Jun 28, 2014 3:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS Gap Until 70?
Replies: 29
Views: 2425

Re: WSJ article on ROTH 401K's vs Traditional

The reporter makes it clear that Roth is for folks who will not be in a lower tax bracket in retirement. That is consistent with all advice on the forum. To be in the 28% bracket a married taxpayer needs about 227k in taxable income which puts them into the top 2% of all taxpayers. As noted by Live...
by JW Nearly Retired
Sat Jun 28, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4423

Re: SS Strategy - Will this work?

If, in step 2, I waited until my wife is FRA before I file and suspend my SS, then would she receive half of my PIA? No. She wouldn't get a reduction for starting early as a wife, but she would still lose the $XX for starting early (at 62) as herself. That reduction doesn't go away until you die. A...
by JW Nearly Retired
Sat Jun 28, 2014 12:21 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS Strategy - Will this work?
Replies: 10
Views: 739

Re: Article: bonds pensions SS

Just my two centimos, on our side of the house we have four checks (pension X 2, social security X 2), not counted in any way as part of our investment portfolio. Those four checks are nice to have (awesome income) but are not part of our allocation. Now, we do count our equity mutual funds, bond m...
by JW Nearly Retired
Sat Jun 28, 2014 10:25 am
 
Forum: Investing - Theory, News & General
Topic: Article: bonds pensions SS
Replies: 49
Views: 3211

Re: To Tax or Not to Tax - That is the Question

Simple answer.... it won't work. Any money removed from an IRA is taxed as ordinary income. Holding muni bonds in an IRA is useless.
JW
by JW Nearly Retired
Sat Jun 28, 2014 9:12 am
 
Forum: Investing - Help with Personal Investments
Topic: To Tax or Not to Tax - That is the Question
Replies: 5
Views: 391

Re: My investments are a disaster

If you feel bad because you missed the boat over the past 30 years, don't think you can just change now and magically get better returns Point well taken!! I think when I initially posted that was my motivation. You are all helping me see that it is misguided and unrealistic. That being said, the p...
by JW Nearly Retired
Fri Jun 27, 2014 10:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: My investments are a disaster
Replies: 55
Views: 6296

Re: Dilemma for 401K Rollover

Since you didn't mention anything else I'm guessing this is all of his retirement assets. What was he holding in the 401k? Some (hopefully) lower cost version of that AA might be a starting point. You can probably get that with one TR fund. I see no logic in taking the money out of the market all at...
by JW Nearly Retired
Fri Jun 27, 2014 10:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Dilemma for 401K Rollover
Replies: 5
Views: 218

Re: Article: bonds pensions SS

I think that Mr. Bogle just complicates things by including SS in his calculations. I think that he does that because his "age in bonds" rule of thumb would otherwise get too conservative for older investors/retirees. It is much simpler to consider SS as an income stream and consider the ...
by JW Nearly Retired
Thu Jun 26, 2014 10:16 am
 
Forum: Investing - Theory, News & General
Topic: Article: bonds pensions SS
Replies: 49
Views: 3211

Re: Do I need to prepay my capital gains to the IRS?

I am still confused on the safe harbors, please excuse my slowness here. 3. "or 100% of the tax shown on the return for the prior year" - This seems to be the most likely fit. Doesn't this just mean that That if 2014's federal withholdings are more than $4600, and Michigan's withholdings ...
by JW Nearly Retired
Tue Jun 24, 2014 10:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to prepay my capital gains to the IRS?
Replies: 33
Views: 1820

Re: Found an old deposit receipt for my late wife . . .

The custodian should send a 5498 every year. Form 5498 includes the fair market value on Dec 31. The custodian can never be certain the tax payer and IRS don't need the fair market value. Maybe but accidents happen. It wasn't an IRA account but the custodian introduced a typo into our address when ...
by JW Nearly Retired
Tue Jun 24, 2014 9:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Found an old deposit receipt for my late wife . . .
Replies: 27
Views: 3812

Re: Do I need to prepay my capital gains to the IRS?

Sorry, I think there is some confusion here, which is probably my fault. - My federal tax bracket is 25%, not 15% - My filing status is single Sorry, I was confused. Single filing with std deduction your taxes probably go up by $6000 (15% of $40,000). I think the safe harbor would be 90% of what yo...
by JW Nearly Retired
Tue Jun 24, 2014 9:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to prepay my capital gains to the IRS?
Replies: 33
Views: 1820

Re: Do I need to prepay my capital gains to the IRS?

Just to verify my understanding, your $50,000 AGI number includes the $40,000 LTCG. Yes? No? If no, then your AGI is $50,000 + $40,000 = $90,000. If yes and you are married filing jointly $50,000 AGI puts you in the 15% tax bracket, and your LTCG would be taxed at 0%. So I understand, which is your...
by JW Nearly Retired
Tue Jun 24, 2014 8:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I need to prepay my capital gains to the IRS?
Replies: 33
Views: 1820

Re: My investments are a disaster

Have you considered posting in our favorite format? http://www.bogleheads.org/forum/viewtopic.php?f=1&t=6212 Given you have 90% stable value funds, it appears you and/or husband have most of the savings in 401k & like accounts. We could suggest a better mix of investments in these accounts i...
by JW Nearly Retired
Tue Jun 24, 2014 2:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: My investments are a disaster
Replies: 55
Views: 6296

Re: Are small and mid caps necessary?

I wanted a few opinions on my portfolio. My 401k is fairly new (2+ months) and fairly small (<$2000). I'm 27 and in the early accumulation stages. I'm 92% stocks and 8% bonds. My funds in my Schwab 401k are as follows: 69% SWPPX Schwab S+P 500 index fund, ER 0.09% 23% REREX American Funds EuroPacif...
by JW Nearly Retired
Tue Jun 24, 2014 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Are small and mid caps necessary?
Replies: 35
Views: 2369

Re: Found an old deposit receipt for my late wife . . .

denovo wrote:I would check MA unclaimed funds.....

+2 for this. We have found a couple of ancient unclaimed property accounts in a trivial search of such state records. They were only small ones, unfortunately. :(
JW
by JW Nearly Retired
Tue Jun 24, 2014 10:21 am
 
Forum: Personal Finance (Not Investing)
Topic: Found an old deposit receipt for my late wife . . .
Replies: 27
Views: 3812
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