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Re: Help with Investments and Deductibles

I took a quick look at my tax return. How the program defines "interest" income could impact the numbers greatly. Some may include short term capital gains realized by a mutual fund held by the taxpayer. My interest number is much higher than the average you stated, but our bank interest i...
by Peter Foley
Tue Mar 31, 2015 11:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with Investments and Deductibles
Replies: 3
Views: 184

Re: [living in] Minneapolis-St. Paul

It is a very broad question and anecdotal answers, while interesting, are just that. There is an active Minnesota Bogleheads group. I'm a member of the steering committee. I think most people would find the 6 of us very welcoming. We would certainly like to have more active members! I've lived in Mi...
by Peter Foley
Tue Mar 31, 2015 11:39 pm
 
Forum: Personal Consumer Issues
Topic: [living in] Minneapolis-St. Paul
Replies: 48
Views: 2158

Re: Did you learn anything from 2008?

Yes I did. But I actually learned more from the 2000 recession. My oldest daughter graduated from high school that year and my youngest daughter graduated in 2002. I had custodial accounts set up for their college education. Both daughter's total assets were about 75% indexed mutual funds and 25% US...
by Peter Foley
Tue Mar 31, 2015 9:49 am
 
Forum: Investing - Theory, News & General
Topic: Did you learn anything from 2008?
Replies: 66
Views: 3996

Re: Schwab / Vanguard Fund & Allocation Advice

You asked: 1. Please provide any feedback on the target allocations. Are allocations too conservative / aggressive for a 35 year old with the above parameters. Should I consider more heavily weighting the portfolio towards US Stocks. Your proposed AA is fine - well within accepted parameters. 2. The...
by Peter Foley
Mon Mar 30, 2015 7:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Schwab / Vanguard Fund & Allocation Advice
Replies: 18
Views: 1894

Re: How long do sofas really last

We bought our current couch in 1992. It is beginning to show a little wear, but still looks nice. It is in a room where it does not get daily use. I think we paid about $800 for it - I'm sure I still have the sales ship in my files. Quality is an issue - ours was a good quality couch. We have never ...
by Peter Foley
Sun Mar 29, 2015 11:12 pm
 
Forum: Personal Consumer Issues
Topic: How long do sofas really last
Replies: 43
Views: 3525

Re: Newbie planner with windfall and no real portfolio: help

Dale hit the nail on the head. Why pay 5% when you can only get 2%-3% max on ultra safe investments. I always considered my mortgage to be like a negative bond. When my mortgage rate was higher than what I could receive in a relatively short term CD, I made extra mortgage payments. Skip a good porti...
by Peter Foley
Sun Mar 29, 2015 11:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie planner with windfall and no real portfolio: help!
Replies: 35
Views: 2202

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

As mentioned, there are a couple of on line apps that can perhaps help with the analysis. I personally would be inclined to delay at least your (high earner) SS until full retirement age. Drawing down a bit more now from tax deferred and a bit less later is a good strategy for those in a lower tax b...
by Peter Foley
Sat Mar 28, 2015 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Two Legged Stool [Figuring out when to take Social Security]
Replies: 26
Views: 3016

Re: Collective wisdom for a portfolio design?

Welcome to the forum. With your non retirement funds you certainly have enough to retire at a very young age. As you mention, you do need to keep some of it in equities. If you are not familiar with the Trinity Study you should read about it on the Wiki. For very long period of time it seems to supp...
by Peter Foley
Sat Mar 28, 2015 10:30 am
 
Forum: Investing - Help with Personal Investments
Topic: Collective wisdom for a portfolio design?
Replies: 7
Views: 440

Re: 457 or 403(b)

I know this is a long way off, but if you were considering retiring before age 59.5 (many school teachers do), the 457 is a slight better option because funds can be withdrawn w/o penalty upon separation. There are some provisions for early withdrawal from a 403b, but I believe certain criteria must...
by Peter Foley
Fri Mar 27, 2015 2:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: 457 or 403(b)
Replies: 6
Views: 481

Re: Can you really know your AA until you've hit a bear mark

I may have the figures slightly off (I didn't look them up) - the MN Bogleheads group took a risk tolerance quiz in the late fall of 2008. We then polled the individuals who had previously taken an assessment. Of those who had, about 8 in 11 had test results that showed a lower risk tolerance (from ...
by Peter Foley
Fri Mar 27, 2015 12:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Can you really know your AA until you've hit a bear market?
Replies: 74
Views: 5179

Re: 457(b) Question

I personally believe in diversification in non equities as well. While total bond is fine, you might have a stable value fund that offers a reasonable return with almost no risk. If one of the fixed rate options offered something int he 3% range I would put 50% of my "bond" allocation there.
by Peter Foley
Wed Mar 25, 2015 3:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: 457(b) Question
Replies: 8
Views: 536

Re: Employer offering first 401k--lemonade out of lemons?

I would not try to replicate the three fund portfolio in the 401k. Use the lower cost Index 500 and mid cap. Hold your international in taxable and your bonds elsewhere. With interest rates as low as they are you are just about guaranteed to lose buying power with the PIMCO Total Return fund. 2/3 in...
by Peter Foley
Wed Mar 25, 2015 3:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Employer offering first 401k--lemonade out of lemons?
Replies: 21
Views: 1942

Re: Pre-retirement question

Unless the lump sum were directed to a health care savings account, the additional vacation and sick leave accrual you mention would be bonuses for taking your vacation rather than cashing it out. You may also get a couple extra months of employer paid health insurance. Our vacation leave went into ...
by Peter Foley
Tue Mar 24, 2015 11:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pre-retirement question [Take vacation time or pay?]
Replies: 23
Views: 2626

Re: CNBC - "401(k) plans have fallen short"

My limited experience was that the personnel department (human resources) leadership made some of the "retirement benefit" choices. Having know some of them personally, I could attest that they did not have much knowledge about personal finance. Their specialties were legal issues as relat...
by Peter Foley
Tue Mar 24, 2015 11:15 pm
 
Forum: Investing - Theory, News & General
Topic: CNBC - "401(k) plans have fallen short"
Replies: 4
Views: 840

Re: 403b Question

You are likely in the Federal 25% tax bracket and New Jersey appears to have about a 2.5% ??? income tax rate for married filing jointly. (I looked at the tax tables for $100K). Grabiner can correct me if I am wrong as I trust his tax research and I believe he has been a NJ resident. At that rate of...
by Peter Foley
Tue Mar 24, 2015 3:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: 403b Question
Replies: 26
Views: 1878

Re: The one area I disagree with Jack

There are so many factors to consider when setting one's AA for retirement planning purposes, that I think considering SS as equivalent to a bond allocation is poor framing of the issue. The real issue is the gap between known reliable sources of income (let's call these A) and the fixed costs of re...
by Peter Foley
Mon Mar 23, 2015 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 7328

Re: FA needs investment advice

If my income were tied to market returns (S&P 500 for example) my inclination would be for my investments to be more conservative; maybe 50/50 AA, certainly not 80/20.
by Peter Foley
Sun Mar 22, 2015 11:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: FA needs investment advice
Replies: 25
Views: 2321

Re: Roth IRA MAGI and Taxes

texasdmd

Just a note - if your wife is self employed her health insurance is also deductible. Line 29 of your 1040. That deduction reduces your Adjusted Gross Income (line 37). The line item for SEP contributions is line 28, also reducing your AGI.
by Peter Foley
Fri Mar 20, 2015 11:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA MAGI and Taxes
Replies: 27
Views: 1537

Re: IRA owner's health declined. Should beneficiaries change

Tanelorn et. al. Going back to the original post, the OP was thinking that the IRA would not be used except for RMD's. While in one's 70's, RMDs are approximately $4000/$100,000. So with an income of $48,000/year RMDs plus SS of $30,000 + $18,000 (which is 85% taxable so about $41K taxable) there is...
by Peter Foley
Fri Mar 20, 2015 1:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA owner's health declined. Should beneficiaries change?
Replies: 27
Views: 1379

Re: Trust Advice

Have you thought about something like an educational trust? My great uncle, a single person, was a reasonably astute investor. He died in the mid 1950's and left an educational trust to be shared by his 13 great nieces and nephews. That trust allowed about 10 of us to earn a college degree and gradu...
by Peter Foley
Fri Mar 20, 2015 10:07 am
 
Forum: Personal Finance (Not Investing)
Topic: Trust Advice
Replies: 6
Views: 650

Re: IRA owner's health declined. Should beneficiaries change

Steelersfan wrote:

your mother will have the option to disclaim any part of or all of the IRA when that time comes
[my bold]

I was not aware that one could disclaim "part" of an inheritance. I don't want to hijack the thread, but can you verify this?
by Peter Foley
Fri Mar 20, 2015 9:42 am
 
Forum: Personal Finance (Not Investing)
Topic: IRA owner's health declined. Should beneficiaries change?
Replies: 27
Views: 1379

Re: Taxable investing "schedule"

I would be inclined to invest in just one of the two until you reach Admiral shares level ($10K) in that fund. Then do the same with the other fund. Once you are the Admiral shares level in both you could split the monthly investment between the two - possibly rebalancing the two through periodic in...
by Peter Foley
Fri Mar 20, 2015 9:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Taxable investing "schedule"
Replies: 12
Views: 694

Re: Help me optimize my portfolio allocation

I lean a little more heavily toward US. I would go at least 60/40 US versus International. My personal portfolio is more like 80/20. If you go total stock market and total international there will be some capital gains and some dividends. If you are just getting started with taxable investments, the...
by Peter Foley
Thu Mar 19, 2015 10:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me optimize my portfolio allocation
Replies: 5
Views: 588

Re: IRA owner's health declined. Should beneficiaries change

You may not like my answer either . . . Some details are lacking to be able to make a more precise recommendation: First - What is your mother's state of residence, and does it have an estate tax with a low threshold? Is SS taxable in their state of residence? Second - How much money do your parents...
by Peter Foley
Thu Mar 19, 2015 2:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: IRA owner's health declined. Should beneficiaries change?
Replies: 27
Views: 1379

Re: Homeowners Insurance Issues

Carefreeap

I would love to reduce the personal property amount if it would lower my premium. It does not. Even with our two vehicles we have far less than $100K in personal property.

I get the feeling that this is an rigged game.
by Peter Foley
Mon Mar 16, 2015 9:42 pm
 
Forum: Personal Consumer Issues
Topic: Homeowners Insurance Issues
Replies: 9
Views: 1263

Re: Should I change Asset Allocation to a more conservative

Dandy wrote: You can't be afraid of making relatively minor moves, on rare occasions, especially ones that result in less risk, as being a MARKET TIMER. Stay the course is a great guideline but shouldn't be thought of as a commandment. You are not a Market timing sinner if you make an occasional cha...
by Peter Foley
Mon Mar 16, 2015 9:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I change Asset Allocation to a more conservative mix
Replies: 20
Views: 1950

Homeowners Insurance Issues

Our homeowners insurance is up for renewal. Like many consumers we have bundled our coverage to get discounts on car insurance, homeowners, umbrella, etc. I’m beginning to think this is not a good approach as it does not allow us to seek out equivalent coverage OR specially tailored coverage at a re...
by Peter Foley
Mon Mar 16, 2015 7:29 pm
 
Forum: Personal Consumer Issues
Topic: Homeowners Insurance Issues
Replies: 9
Views: 1263

Re: Help moving AA to 50/50 with tax deferred and new taxabl

dwickenh wrote: I can see my retirement accounts going to 10/90 over the next 3-4 years. Maybe I am misinterpreting what you are saying as your subject title is a 50/50 allocation. An AA of 10/90 is too conservative early in retirement. I would recommend the 50/50 approach in your subject line. 25/7...
by Peter Foley
Fri Mar 13, 2015 9:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Help moving AA to 50/50 with tax deferred and new taxable
Replies: 16
Views: 1289

Re: Which 529 plan are you using?

My grandson's plan is NY, based on my advice to my daughter. MN has relatively poor plans and there is no tax deduction. New York, Nevada and Utah all looked good to me. I preferred the investment options in the NY plan.
by Peter Foley
Fri Mar 13, 2015 9:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Which 529 plan are you using?
Replies: 49
Views: 2876

Re: [Poll] How long did you hold primary residence mortgage?

On our previous home we had a 15 year mortgage and refinanced once after a couple of years. We paid that second mortgage off in about 10 years, just in time for my eldest daughter to start college. [That was our plan.] So 12 total.
by Peter Foley
Thu Mar 12, 2015 11:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: [Poll] How long did you hold primary residence mortgage?
Replies: 34
Views: 2708

Re: Time to buy up EUR?

We go to Europe every 3 years or so. I've thought about buying some Euros in advance of our next trip. The issue I have is with the fees associated with buying currency here in the US. Is there any way around those fees? In the past we have used an ATM at the airport upon arriving in Europe - we hav...
by Peter Foley
Thu Mar 12, 2015 2:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time to buy up EUR?
Replies: 30
Views: 2373

Re: Ink Cartridges dry up on seldom used printer, any ideas?

dolphinsaremammals wrote I have an HP inkjet (PhotoSmart 3210) and spares. The ones I don't use a lot, I print a test sheet on from time to time. If there is a problem, running the cleaning routine (you may have to run it several times) fixes it. If you print a test sheet after each run of cleaning,...
by Peter Foley
Thu Mar 12, 2015 2:34 pm
 
Forum: Personal Consumer Issues
Topic: Ink Cartridges dry up on seldom used printer, any ideas?
Replies: 32
Views: 1722

Re: 401k: To Roth or Not to Roth

Boomer001 wrote: The way I see it, if you plan to work beyond 59.5 you can begin drawing out money from the Roth and save the traditional 401K until you retire and have a much lower income. Maybe I'm missing something here. There may be a scenario where the above works. I'm with the Traditional now ...
by Peter Foley
Thu Mar 12, 2015 9:36 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k: To Roth or Not to Roth
Replies: 23
Views: 1584

Re: 1099 Employee for 1+ Year?

A little background . . I was in charge of a unit that audited employers and investigated claims of independent contractor status. There are a number of good posts on this thread about following the IRS (and each state's guidelines). The key point is that neither the employer of the person being hir...
by Peter Foley
Wed Mar 11, 2015 7:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: 1099 Employee for 1+ Year?
Replies: 10
Views: 769

Re: Do you really need 2.5 million to retire well?

My estimate for my wife and me was $1.5 million. The premises were that I would have a small pension that would be somewhat indexed to inflation and my wife would not, and we would continue to live our fairly modest lifestyle. The $1.5M is assets in investment, not net worth. Of course, another crit...
by Peter Foley
Wed Mar 11, 2015 2:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you really need 2.5 million to retire well?
Replies: 121
Views: 12797

Re: What's your definition on Working and Retired?

In my own mind I view the definition similar to that of Johnep. There is a link between services and the receipt of payment for such services. I am retired. I do not, and will not work for money. Working for money creates a exchange of time for some remuneration. My wife is semi-retired. She will do...
by Peter Foley
Tue Mar 10, 2015 11:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: What's your definition on Working and Retired?
Replies: 24
Views: 1700

Re: Retirement Withdrawals

Retirement withdrawals a very tricky. There are a lot of moving parts. What works for one individual or couple may not be the right choice for another. Some of the early steps are a health assessment and a decision about when to draw SS if health issues are part of the equation. Additional steps inc...
by Peter Foley
Sun Mar 08, 2015 5:32 pm
 
Forum: Investing - Theory, News & General
Topic: Retirement Withdrawals
Replies: 16
Views: 2023

Re: Vanguard Total Stock Market Index Fund (VTSAX)

Of course, some individuals also like to use the Vanguard Extended Market Index to compliment the S&P 500. I use the VTSAX just to keep things simple. I am less concerned about my AA and rebalancing within sectors of the US market than I am with my overall stocks/non equities AA. I also do not p...
by Peter Foley
Sun Mar 08, 2015 9:30 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Stock Market Index Fund (VTSAX)
Replies: 11
Views: 2594

Re: Best strategy bridging into retirement

Fishboat - I actually have a cabin and a half (one we own, and in one we have a half interest). In spite of the fishing being above average in Lake Wobegon, we don't use either one nearly enough. I'd love to get rid of one (or even 1/2). Others in the family have more sentimental ties so unfortunate...
by Peter Foley
Sun Mar 08, 2015 12:23 am
 
Forum: Personal Finance (Not Investing)
Topic: Best strategy bridging into retirement
Replies: 37
Views: 3448

Re: Turbo Tax /?estimated taxes payments for 2015 ??

Basically what Turbo Tax is saying is that you did not withhold enough in 2014 to avoid paying an underpayment penalty (that is what the 90% rule etc. means). If 2015 is IDENTICAL you will need to pay some additional tax in advance to avoid a penalty in 2015. Here are some estimated tax forms to mak...
by Peter Foley
Sun Mar 08, 2015 12:16 am
 
Forum: Personal Finance (Not Investing)
Topic: Turbo Tax /?estimated taxes payments for 2015 ??
Replies: 18
Views: 1374

Re: At age 27, how much should I have saved up for retiremen

mbk734wrote: Age 25 Pay off college debt, focus on advancing in career, start maxing 401k/Roth IRA Age 35 100k Age 45 200k Age 55 500k Age 65 1 million (Retirement Target) Age 75 700k Age 85 400k Age 95 100k (Conservative Life Expectancy) Starting at the age 45 number I would aim a little higher. In...
by Peter Foley
Fri Mar 06, 2015 11:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: At age 27, how much should I have saved up for retirement?
Replies: 30
Views: 3481

Re: TSP account asset allocation?

My 2 cents. Your AA is a bit aggressive for your age. I would recommend 70/30, which is also rather aggressive. If you want to keep your AA in that range I would suggest that you do not take any risk elsewhere in your portfolio. That would argue for your inclination to move your F fund holdings to t...
by Peter Foley
Fri Mar 06, 2015 11:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: TSP account asset allocation?
Replies: 11
Views: 811

Re: Best strategy bridging into retirement

I liked ulrich's take on this as well. You have done well and should have ample assets to enjoy your retirement. I personally have found that "spendable income" and multi-year tax management have become key considerations since I retired a couple years ago at age 61.5. As ulrich states, it...
by Peter Foley
Thu Mar 05, 2015 3:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best strategy bridging into retirement
Replies: 37
Views: 3448

Re: Best strategy bridging into retirement

randomguy wrote: The 25% bracket starts at ~37k. It is going to be very hard/impossible to avoid paying 25% eventually. I agree. In 2015 it will be $37,450. That's up about $500 from 2014. As I understand the OP, 2016 will have a lot of severance and UI benefits. So a reasonable estimate would be ab...
by Peter Foley
Wed Mar 04, 2015 6:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best strategy bridging into retirement
Replies: 37
Views: 3448

Re: Best strategy bridging into retirement

fishboat wrote: Annual expenses (includes everything from buying socks to property taxes to utilities to gas & car repair to all non-medical insurance to limited travel/entertainment..no world cruises included): $30K excluding the mortgage payment, mortgage is an additional $23K/yr Additional ve...
by Peter Foley
Wed Mar 04, 2015 3:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Best strategy bridging into retirement
Replies: 37
Views: 3448

Re: Do you consider mortgage payments as savings?

If the interest rate on the mortgage is higher than the interest rate available on a very safe investment (CD or bond) then yes. One could quibble about the payment including principal and interest on regular payments. I always treated an extra payment, principal reduction, as a bond equivalent.
by Peter Foley
Wed Mar 04, 2015 3:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 20160

Re: PBS NewsHour segment on Social Security

Getting back to the NewsHour segment. The key takeaway was to properly frame the question about when to take SS. The financial risk, against which insurance protects, is not dying early, it is outliving your savings. I will go out on a limb and suggest that many who saw the broadcast to not accept t...
by Peter Foley
Tue Mar 03, 2015 3:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: PBS NewsHour segment on Social Security
Replies: 27
Views: 3784

Re: more TurboTax exasperation--education credit screwups

Drain wrote: I should clarify that I am not suggesting TT tech support is a joy to deal with. It isn't . . . . . If you want to file your state tax return electronically and charge it to your credit card (instead of paying a $30+ fee to Intuit) you need to call. I was on hold for 90 minutes before I...
by Peter Foley
Tue Mar 03, 2015 10:59 am
 
Forum: Personal Finance (Not Investing)
Topic: more TurboTax exasperation--education credit screwups
Replies: 22
Views: 1232

Re: 529 plans

After doing a fair amount of research, I advised my daughter to open up a New York 529 plan. It is a Vanguard plan and we have been very pleased with it. My wife and I are retired and in a higher tax bracket because we are doing Roth conversions. We provided funding for the 529 plan by gifting some ...
by Peter Foley
Tue Mar 03, 2015 10:47 am
 
Forum: Investing - Help with Personal Investments
Topic: 529 plans
Replies: 9
Views: 907

Re: Contacted by Internal Revenue Services

DonCamillo

Sounds like fun. The last call I got I talked to the "fellow" a bit and then asked him how he liked making a living as a scam artist.
by Peter Foley
Mon Mar 02, 2015 9:32 pm
 
Forum: Personal Consumer Issues
Topic: Contacted by Internal Revenue Services [Scam]
Replies: 18
Views: 1329
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