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Re: Advice for My Parents at Retirement

This is a good point. However, their specific situation may reduce what would otherwise be a pretty obvious beneft, assuming they qualify for full deductions of tIRA contributions. Since my folks are 67 and 70, they will have to begin taking required minimum distributions (RMDs) in just a couple ye...
by JW Nearly Retired
Wed Apr 01, 2015 5:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice for My Parents at Retirement
Replies: 10
Views: 1402

Re: Minimizing income taxes in retirement

I believe that the $170,000 yearly income would still be in the 25% bracket, so the answer to my original question would be that we will never be able to lower our income below the 25% bracket. It's worth mentioning that right around $170k is an extremely hazardous income number. If your AGI exceed...
by JW Nearly Retired
Wed Apr 01, 2015 8:38 am
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing income taxes in retirement
Replies: 44
Views: 3262

Re: Minimizing income taxes in retirement

I use the Fidelity Retirement Income Planner (free if you have any Fidelity account) and it includes the taxes on withdrawals from my IRAs. ......... Thanks for the heads up on the Fidelity Retirement Income Planner. We have been customers of Fidelity for 20+ years and never heard of it. We probabl...
by JW Nearly Retired
Wed Apr 01, 2015 7:53 am
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing income taxes in retirement
Replies: 44
Views: 3262

Re: Is this a bad 401K?

No one else in my company sees it that way though. Am I making the right decision not to go along? Other reasons I think it's bad: + No cash investment options for when the market takes a dive + Higher fees than the $10 trades at my online broker - I typically go long, high dividend stocks + Cannot...
by JW Nearly Retired
Tue Mar 31, 2015 8:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is this a bad 401K?
Replies: 22
Views: 1341

Re: Minimizing income taxes in retirement

The retirement and the part time job are enough to fund our expenses and a decent life style. Neither is collecting SS, she doesn't have enough quarters, so she will start collecting spousal benefits at full retirement age of 66 in June 2017. June 2014 estimate for spousal SS benefits in 2017 is $1...
by JW Nearly Retired
Tue Mar 31, 2015 8:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing income taxes in retirement
Replies: 44
Views: 3262

Re: To convert to Roth IRA from 401(k)

I must have overlooked something. I figured income of $206k. I don't see how that could get to a taxable income as low as you did. Point is the same though - at least some would be converted at 28%. Not a good plan in my opinion. The $206k is with him converting the $53.6k. If he doesn't convert he...
by JW Nearly Retired
Mon Mar 30, 2015 7:35 pm
 
Forum: Personal Finance (Not Investing)
Topic: To convert to Roth IRA from 401(k)
Replies: 8
Views: 689

Re: To convert to Roth IRA from 401(k)

Salary through April $21,666 new Salary through end of year $ 70,666 wife salary $60,000 401k convert $53,600 Total: $205,932 Given these income facts, agree with others that converting $53.6k to Roth with some in the 28% bracket appears to make no sense. Looks like your new salary + wife salary wi...
by JW Nearly Retired
Mon Mar 30, 2015 5:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: To convert to Roth IRA from 401(k)
Replies: 8
Views: 689

Re: Deferring SS & IRA distributions until 70 & future taxes

At 70 and older, you'll need to calculate the RMD amount from the age tables, and you'll also have to figure what portion of SS will be taxable . If you want to be conservative, you can assume 85% of your benefit will be taxed, or you can calculate it here: You don't really need to get into the SS ...
by JW Nearly Retired
Mon Mar 30, 2015 1:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deferring SS & IRA distributions until 70 & future taxes?
Replies: 9
Views: 576

Re: Deferring SS & IRA distributions until 70 & future taxes

Obviously there will be some limitations using something like TaxCaster since it's using current tax rates. But inaccuracies notwithstanding, what did you use to get an idea of your tax bracket at 70 and older. I did defer both SS & IRA distributions until 70/70.5 since I worked until age 69. I...
by JW Nearly Retired
Mon Mar 30, 2015 11:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Deferring SS & IRA distributions until 70 & future taxes?
Replies: 9
Views: 576

Re: Advice for My Parents at Retirement

Do you have an estimate of how much income they will have in retirement...... how much is pension, SS, AirBnB....? What will their tax bracket be? I'm wondering if saving in a Roth is best. Is this a teachers pension? Has your mother been into paying into social security too, or are there going to ...
by JW Nearly Retired
Mon Mar 30, 2015 10:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice for My Parents at Retirement
Replies: 10
Views: 1402

Re: Advice for My Parents at Retirement

Pension & SS will most likely cover expenses near term, but inflation is a concern and there isn't much cushion for illness, injury, emergencies. If rates climb to 4-5% they will obviously need to pay off the HELOC ASAP. Do you have an estimate of how much income they will have in retirement......
by JW Nearly Retired
Mon Mar 30, 2015 8:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Advice for My Parents at Retirement
Replies: 10
Views: 1402

Re: All lazy portfolios impossible at Vanguard?

So am I basically limited to the Target Retirement and STAR funds? A TR fund is a really good choice for the next few years. I would use that and not change it until there is enough invested to have admiral funds in the separate pieces of your lazy portfolio. Successful investing requires patience....
by JW Nearly Retired
Mon Mar 30, 2015 8:06 am
 
Forum: Investing - Help with Personal Investments
Topic: All lazy portfolios impossible at Vanguard?
Replies: 23
Views: 2670

Re: Two Legged Stool [Figuring out when to take Social Secur

Apenodytes, Firecalc was interesting in that taking at 62 or 66 makes very little difference in final accumulation average, but it does tighten up the scatter. 97 percent success for 62 and 100 percent at 66. I couldn't get any advantage from firecalc waiting till 70 over 66. Certainly you can see ...
by JW Nearly Retired
Sun Mar 29, 2015 9:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Two Legged Stool [Figuring out when to take Social Security]
Replies: 26
Views: 3018

Re: Helping my recently widowed mother

This is a poll of Boglehead AA's. Not many of us your mothers age are much above 60% stocks.
http://www.bogleheads.org/forum/viewtop ... 2#p1224012
JW
by JW Nearly Retired
Sun Mar 29, 2015 8:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Helping my recently widowed mother
Replies: 18
Views: 1480

Re: Helping my recently widowed mother

80/20 is pretty high. Wife and I are older than your Mom, and in a similar situation to what she will be in with the annuity.... i.e. not much need for the portfolio income. We are planning to keep the AA to 60/40 forever but not higher than that.
JW
by JW Nearly Retired
Sun Mar 29, 2015 8:07 am
 
Forum: Investing - Help with Personal Investments
Topic: Helping my recently widowed mother
Replies: 18
Views: 1480

Re: How to understand tax return

457 deferrals should be one of your W-2 box 12 entries. Read the "Instructions for Employee" on the back of the W-2 to see which entry is which.
JW
by JW Nearly Retired
Sat Mar 28, 2015 7:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Do 457 and extra pension contribs appear on tax return?]
Replies: 5
Views: 570

Re: Two Legged Stool [Figuring out when to take Social Secur

We are not from a long lived family (parents passed in late 70's early 80's) and my wife has more health issues than I. I'm really not asking when to take SS, I'm asking how is the best way to figure out when to take it! First of all understand what the different options are & mean. Maximum del...
by JW Nearly Retired
Sat Mar 28, 2015 11:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Two Legged Stool [Figuring out when to take Social Security]
Replies: 26
Views: 3018

Re: Traditional IRA into Roth; when Income too High?

OP here, I don't think the individual can re-characterize to a Roth directly due to bumping up on income limitations for the Roth. The individual only has a few years left of employment, perhaps it's just best to file the Form 8606 and let it go? Last year was an off year in terms of expected incom...
by JW Nearly Retired
Fri Mar 27, 2015 8:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Traditional IRA into Roth; when Income too High?
Replies: 8
Views: 448

Re: Capital preservation in retirement

Earthquake insurance here is very expensive. A $50k deductible policy would cost me in the order of $25k per year. At this point in life, if my home gets severely damaged, I'll probably just rent for the rest of my life. My parents ended up renting during their retired years (for other reasons). To...
by JW Nearly Retired
Thu Mar 26, 2015 7:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Capital preservation in retirement
Replies: 23
Views: 2625

Re: Is my income tax too high?

I got hit hard by taxes this year, in part because my deductibles did not add up to enough to be greater than the standard deductible, so itemization went out the window. This is largely because the amount of mortgage interest I pay has dropped due to Boglehead-like Aggressive Mortgage Paydown. :be...
by JW Nearly Retired
Thu Mar 26, 2015 9:41 am
 
Forum: Personal Finance (Not Investing)
Topic: Is my income tax too high?
Replies: 8
Views: 1245

Re: WSJ Delivery Record - Dismal

Not exactly the same as your trouble, but I once got some action on a home delivered newspaper problem by filing a "harassment" complaint with the Better Business Bureau.
JW
by JW Nearly Retired
Thu Mar 26, 2015 8:44 am
 
Forum: Personal Consumer Issues
Topic: WSJ Delivery Record - Dismal
Replies: 25
Views: 1869

Re: New here: Help with 401k, IRA, first taxable account

Excellent idea to roll IRA into the 401k to clear for your backdoor Roth. I don't see anything much better than VTTHX. What about spouse investments? You should coordinate the entire portfolio. JW My wife stays at home, has no accounts in her name and only works a part time job earning ~$4k/year to...
by JW Nearly Retired
Wed Mar 25, 2015 6:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: New here: Help with 401k, IRA, first taxable account
Replies: 9
Views: 745

Re: New here: Help with 401k, IRA, first taxable account

I've also had a suggestion to roll my IRA _back_ into my 401k. (I wasn't aware this was possible.) It would clear the way for Roth backdoor conversions. A Roth would indeed be my next priority after getting the existing retirement accounts sorted out. So, assuming I'm going to have just a big 401k,...
by JW Nearly Retired
Wed Mar 25, 2015 9:18 am
 
Forum: Investing - Help with Personal Investments
Topic: New here: Help with 401k, IRA, first taxable account
Replies: 9
Views: 745

Re: One single investment in a taxable account

Vanguard LifeStrategy Moderate Growth (VSMGX). 60/40 AA like you want and 30% of stocks are international.
JW
by JW Nearly Retired
Wed Mar 25, 2015 8:37 am
 
Forum: Investing - Help with Personal Investments
Topic: One single investment in a taxable account
Replies: 10
Views: 1195

Re: Bad 401(k) - advice

Are you certain there are not a couple of half decent funds in among all the junk? Many people start out here saying their 401k is horrible, but after we persuade them to list all the options we find there really is something to work with there. Also, read the 401k info carefully for the expenses. Y...
by JW Nearly Retired
Tue Mar 24, 2015 3:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bad 401(k) - advice
Replies: 12
Views: 1104

Re: Suggest a good passive allocation 4 hi-tax-bracket inves

If your friend is in his late 70's, he is not eligible to contribute to tIRA any more. That ends at 70.5 if I remember correctly. I think he can contribute to the 401k if still working. And to Roth IRA if still working, but he'd have to use the back door which might not even be appropriate in his s...
by JW Nearly Retired
Tue Mar 24, 2015 7:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Suggest a good passive allocation 4 hi-tax-bracket investor
Replies: 43
Views: 3740

Re: The one area I disagree with Jack

If Jack actually feels that a person with $500k in total investable assets converts his SS to $500k in fake "bonds" and therefore invests all his actual investable assets in equities and the result is a moderate 50/50 investment allocation - yes he is promoting it. If he is saying that th...
by JW Nearly Retired
Mon Mar 23, 2015 9:51 am
 
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 7338

Re: Somewhat High Income 401k vs traditional IRA

My wife and I combined make around $220k a year in the Midwest. As we stand now we only have about enough disposable income to do the 6% then about another $10,000 in something so I'm looking for advice. ............... My question is this. Are we better off maxing out our 401K with pre-tax dollars...
by JW Nearly Retired
Mon Mar 23, 2015 9:14 am
 
Forum: Investing - Help with Personal Investments
Topic: Somewhat High Income 401k vs traditional IRA
Replies: 9
Views: 777

Re: Newbie - roth IRA question

Newbie question here: I am wanting to contribute the max amount to a Roth IRA (backdoor) for 2014. Unfortunately, I just started investing seriously and have never contributed to or opened a 401k account. Can I still contribute to a Roth IRA (backdoor) for the 2014 tax season? Everything I have rea...
by JW Nearly Retired
Sun Mar 22, 2015 8:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie - roth IRA question
Replies: 3
Views: 370

Re: Should I recharacterize my Roth conversion?

I've also been contributing to and maxing out a Roth 401k as well. Should I be changing this to traditional? Not sure whether my income will go up or down in the future, but I do live in California so my total tax rate is quite high right now. Yes, in a high bracket +CA you should definitely be usi...
by JW Nearly Retired
Sun Mar 22, 2015 1:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I recharacterize my Roth conversion?
Replies: 10
Views: 740

Re: Overcontributed to Roth IRA

see here http://en.wikipedia.org/wiki/Traditional_IRA From that page: "With a Traditional IRA, one always has an option to convert to a Roth IRA; whereas a Roth IRA cannot be converted back into a Traditional IRA." It sounds like what that user did isn't possible, unless I am missing some...
by JW Nearly Retired
Sun Mar 22, 2015 11:25 am
 
Forum: Investing - Help with Personal Investments
Topic: Overcontributed to Roth IRA
Replies: 7
Views: 432

Re: Should I recharacterize my Roth conversion?

I've also been contributing to and maxing out a Roth 401k as well. Should I be changing this to traditional? Not sure whether my income will go up or down in the future, but I do live in California so my total tax rate is quite high right now. Yes, in a high bracket +CA you should definitely be usi...
by JW Nearly Retired
Sun Mar 22, 2015 11:05 am
 
Forum: Personal Finance (Not Investing)
Topic: Should I recharacterize my Roth conversion?
Replies: 10
Views: 740

Re: 401k or Vanguard Star?

here2learn, Where did you get the expenses for these funds? It's unusual for 401k funds to have loads. You can't look at the retail versions of the funds on the internet to get expenses. I would guess your BlackRock stock fund is perhaps the institutional version of the fund (MAFGX) with an ER of 0....
by JW Nearly Retired
Sun Mar 22, 2015 10:39 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k or Vanguard Star?
Replies: 7
Views: 420

Re: The one area I disagree with Jack

My spouse and I will each have a defined benefit, indexed pension, along with Social Security. Together, those streams of income plus a paid-off house will take care of our needs and most of our wants. That leaves me willing to shoulder more risk with equities; we are at roughly 80:20 allocation de...
by JW Nearly Retired
Sun Mar 22, 2015 9:38 am
 
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 7338

Re: How to extricate after-tax money from mixed IRA

Well I went through the 8606 and I guess you are right - it's not as involved as I thought. I was mostly concerned with having a spreadsheet that tracked how much I put in when and what I withrdrew already, etc. I lose track of stuff like that easily and forget how I did it the prior year, etc. I s...
by JW Nearly Retired
Sun Mar 22, 2015 7:51 am
 
Forum: Personal Finance (Not Investing)
Topic: How to extricate after-tax money from mixed IRA
Replies: 4
Views: 500

Re: The one area I disagree with Jack

For whatever it is worth, my take is that being able to count on Social Security might allow a retiree to be somewhat more aggressive. Perhaps 10% more in stocks than what such an investor would normally have. But that is about as far as I would take it. I would not take the present value of my est...
by JW Nearly Retired
Sat Mar 21, 2015 9:55 pm
 
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 7338

Re: IRA advice needed

IMO, it's kind of important to dredge up the real information and not just take a guess. You don't know if you deducted the contribution on your taxes but the IRS does from your tax return. The IRS also gets a yearly 5498 form from the IRA trustee stating how much you contributed in the year (if you...
by JW Nearly Retired
Sat Mar 21, 2015 6:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRA advice needed
Replies: 8
Views: 802

Re: The one area I disagree with Jack

How about this. If I were to follow age in bonds, I would be 30/70. If I were to capitalize SS and annuities to age 90 and follow age in bonds, then I would invest my liquid assets at 70/30. Since I actually invest at 50/50, it appears that I agree and disagree with Mr. Bogle to equal degrees on th...
by JW Nearly Retired
Sat Mar 21, 2015 6:19 pm
 
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 7338

Re: Timing for taking RMDs

We have a fairly aggressive 60/40 retirement portfolio so waiting until year end would be expected to yield lower percentage RMD withdrawals on average. However, I do the RMD at the first of the year anyway for reasons mentioned above. Plus, I see the RMD as a short term commitment so it's better to...
by JW Nearly Retired
Sat Mar 21, 2015 8:56 am
 
Forum: Personal Finance (Not Investing)
Topic: Timing for taking RMDs
Replies: 18
Views: 1695

Re: Somewhat High Income 401k vs traditional IRA

Max out the 401k. Your 401k contributions will be tax deferred, ie. will reduce your taxable income. Any trad IRA contributions you can make will not give you any tax deduction because you make far too much money.
http://www.irs.gov/Retirement-Plans/IRA ... ion-Limits
JW
by JW Nearly Retired
Fri Mar 20, 2015 9:05 pm
 
Forum: Investing - Help with Personal Investments
Topic: Somewhat High Income 401k vs traditional IRA
Replies: 9
Views: 777

Re: Setting up Roth for clueless sibling

I don't know that they will accept money from a checking account with a different name. I did not try that. However, you can mail in a check to Vanguard. So it would be easy for you to write a check to your sister, then have her write a check to Vanguard and mail it in. I wonder if they'll accept a...
by JW Nearly Retired
Fri Mar 20, 2015 12:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Setting up Roth for clueless sibling
Replies: 25
Views: 1179

Re: Does your CPA/Tax Person help with reducing your taxes?

I used a CPA only one time long ago and it soured me on them forever. It was for an estate tax return and he filed it making one choice about whether to apply the estate income to the estate or heir's tax returns. Then after it was all done he came back in a month and said he had found a way to save...
by JW Nearly Retired
Fri Mar 20, 2015 10:34 am
 
Forum: Personal Finance (Not Investing)
Topic: Does your CPA/Tax Person help with reducing your taxes?
Replies: 58
Views: 4740

Re: Do I have to mail in all my personal info again !!!

I want to add my wife's name to my Vanguard account. Vanguard said I have to submit another Brokerage Account Application. Me: you already have on file my SSN, DOB, bank account info, etc. Why do I have to mail these information to you again and risk someone stealing the mail? Vanguard: Nope, you h...
by JW Nearly Retired
Thu Mar 19, 2015 8:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do I have to mail in all my personal info again !!!
Replies: 12
Views: 1181

Re: Save on capital gain tax

One strategy is don't realize so much yearly gains that it jumps you from the 15% cap gains bracket to 20%. That happens when you get to the 39.6% on ordinary income.
JW
by JW Nearly Retired
Wed Mar 18, 2015 2:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Save on capital gain tax
Replies: 5
Views: 614

Re: Kotlikoff: When Should you Take Social Security?

One important point that Kotlikoff makes is that Social Security apparently will NOT give information to surviving spouses about their late spouses' earnings records. According to Kotlikoff, this can make it hard for the surviving spouse to plan the best filing/claiming strategy. Recalling some of ...
by JW Nearly Retired
Tue Mar 17, 2015 10:58 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19924

Re: Do you still use currency or have you gone all-plastic?

I typically use cash if it's less than $30 or $40. Cash means merchants don't need to pay the cc tariff and I don't have so many obscure entries to scan for fraud on my cc statement. Good for both of us. The minor downside is the big bowl of coins in change accumulated because I dislike carrying any...
by JW Nearly Retired
Tue Mar 17, 2015 9:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Do you still use currency or have you gone all-plastic?
Replies: 47
Views: 3211

Re: Question about IRA for Parents

Can tell us the rough size of your mom's ira? If not too large it might be worthwhile to convert it to a Roth and pay the tax, making her future annual $5500 backdoor Roth contributions all tax free. Also, see if it's possible to roll dad's IRA into his 401k. That would hide it from the pro-rata tax...
by JW Nearly Retired
Tue Mar 17, 2015 8:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Question about IRA for Parents
Replies: 3
Views: 357

Re: Financial Advisor Put Together This Portfolio - Thoughts

1. If one can create a diversified portfolio with three index funds, why don't advisors adopt this strategy? Obviously the brokers that are commissioned would never do that, but what about the advisor, like my family friend, that just charges a fee based on AUM and does not collect trading fees or ...
by JW Nearly Retired
Mon Mar 16, 2015 3:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Financial Advisor Put Together This Portfolio - Thoughts?
Replies: 27
Views: 2188

Re: maximum social security benefit

She's not married. She has worked longer than I have by about 4 years; however, I don't think if she is making around $80K NOW, and that doesn't count what the Firm takes out for health care - I don't THINK it's possible for her to get $3,500 in around 3 years. From what I understood, maximum earni...
by JW Nearly Retired
Mon Mar 16, 2015 2:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: maximum social security benefit
Replies: 17
Views: 1895

Re: Edward Jones - A Detrimental Option for Investors

Is this typical for Edward Jones? I'm seeing this person tomorrow, and will just keep it simple. I'm not well versed in investments, but this is pretty bad. The high fees are very typical. If the client thinks the EJ person is a nice man/woman that would also be typical. The single stock and only 5...
by JW Nearly Retired
Sun Mar 15, 2015 10:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Edward Jones - A Detrimental Option for Investors
Replies: 13
Views: 2457
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