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Re: To be truly rich, take stock of your life before investi

Meg77 wrote: Linking your financial goals to your values helps you stay motivated to reach them. It can also encourage you to spend in line with things that really matter to you. That vacation could be just an expense, or it could be the achievement of a small financial goal which embodies your valu...
by Peter Foley
Sat Aug 23, 2014 12:15 am
 
Forum: Investing - Theory, News & General
Topic: To be truly rich, take stock of your life before investing
Replies: 25
Views: 3608

Re: using the 15% tax bracket

Rusty

I think your basic premise, use the 15% tax bracket to your advantage is sound. How one can best use it will vary based on where assets are held, from where it makes sense to draw funds to live on, and the potential for stepped up basis for heirs.
by Peter Foley
Fri Aug 22, 2014 8:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: using the 15% tax bracket
Replies: 16
Views: 1370

Re: just out of the gate, thanks for your help

While you are in the 25% tax bracket I would prefer to see you defer income rather than fund a Roth. If you can reduce your income to the 15% bracket, then I would pay off some of the student loans. Consider the student loan payoffs a bit like a bond investment. Why would you invest in bonds at thei...
by Peter Foley
Fri Aug 22, 2014 12:23 am
 
Forum: Investing - Help with Personal Investments
Topic: just out of the gate, thanks for your help
Replies: 7
Views: 586

Re: Motorcycle for short commute?

toto

Just a thought. Before you invest in a scooter, why don't you see if you can rent it for a week? That would give you an appreciation for how safe you feel and if you can arrive at work comfortably in spite of the summer heat.
by Peter Foley
Thu Aug 21, 2014 3:43 pm
 
Forum: Personal Consumer Issues
Topic: Motorcycle for short commute?
Replies: 52
Views: 3102

Re: So am I a terrible father? [inheritance question]

dickenjb wrote Ideally you do not leave money to your heirs in an TIRA at all. (my emphasis) In order of preference: 1) Roth IRA - earns tax free for life of heir 2) Appreciated assets in taxable account - basis gets stepped up at death 3) TIRA - withdrawals are taxed This is my philosophy as well. ...
by Peter Foley
Thu Aug 21, 2014 3:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: So am I a terrible father? [inheritance question]
Replies: 31
Views: 4387

Re: Why only stocks in a taxable account at retirement?

While I, like many others, also mix some bonds in taxable, I think the real premise that needs to be challenged is withdrawals from taxable, tax deferred and Roth in that order. dh states: The rigid strategy of taxable, followed by IRA, followed by Roth seems to not use those lower tax brackets very...
by Peter Foley
Wed Aug 20, 2014 4:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why only stocks in a taxable account at retirement?
Replies: 26
Views: 1777

Re: Retiree Poll: Do you do any volunteer work?

It is hard to define "a lot". I regularly volunteer 3-4 days a week for 2-4 hours a day. Last fall, in addition to my regular volunteer stint I volunteered for 4/hours per day for 20 days over a two month period. I checked "a lot".
by Peter Foley
Wed Aug 20, 2014 1:01 pm
 
Forum: Personal Consumer Issues
Topic: Retiree Poll: Do you do any volunteer work?
Replies: 26
Views: 1798

Re: Roth IRA Question

At your age I would put it all in the LifeStrategy Growth Fund. See how you handle things during a market correction and then decide if you have made an accurate assessment of your risk tolerance.
by Peter Foley
Tue Aug 19, 2014 11:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth IRA Question
Replies: 7
Views: 437

Re: Vanguard allocation Question

I would prefer to go with the second option that DSInvestor suggests. Take a look at the Callan Table and you will see that investment returns vary a lot for market segments. I think it is best to hold the whole market.
by Peter Foley
Tue Aug 19, 2014 11:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard allocation Question
Replies: 3
Views: 432

Re: Rebalancing After a Correction

Go back and read the Trinity Study and some of the other studies/papers on withdrawal rates. Based on these analyses I think the sweet spot is somewhere between 40% and 60% equities. You are getting a little on the low side for my taste. With an already low withdrawal rate, is there a need to be so ...
by Peter Foley
Tue Aug 19, 2014 11:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing After a Correction
Replies: 13
Views: 1295

Re: Retirement Planning

I think when you are in the 25% tax bracket or higher it generally makes sense to max out your deferred space. At very high income levels ($300,000 AGI) you start to lose deductions (ATRA phaseout) and may have additional taxes relative to the Affordable Care Act. I can imagine two physicians gettin...
by Peter Foley
Tue Aug 19, 2014 11:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement Planning
Replies: 14
Views: 1489

Re: Bad(?) advice given about Target Date Retirement funds

While I have a slight preference for Life Strategy Funds over Target Retirement Funds, it is not always possible to use the LS funds. If you review the portfolios posted by individuals seeking advice it is very common to see an array of TR funds in the individual's 401k or 403b. LS funds do not seem...
by Peter Foley
Mon Aug 18, 2014 8:58 pm
 
Forum: Investing - Theory, News & General
Topic: Bad(?) advice given about Target Date Retirement funds
Replies: 74
Views: 4816

Re: So am I a terrible father? [inheritance question]

There are a number of books about wealth and happiness. The research suggests that after reaching a certain level of income, additional income does not equate with a concomitant increase in happiness. I would do what I could to help relieve my daughter of her most basic money worries so that she cou...
by Peter Foley
Mon Aug 18, 2014 8:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: So am I a terrible father? [inheritance question]
Replies: 31
Views: 4387

Re: Retirement Planning

Your clarifying statement regarding your professions was helpful. Given your tax bracket I would suggest that you contribute the $10,000 to your 403b. While not great, you have S&P 500, Mid Cap and Small Cap options that are not horrible. For the time being I would invest there. You might consid...
by Peter Foley
Sun Aug 17, 2014 10:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Retirement Planning
Replies: 14
Views: 1489

Re: Point of clarification - ETFs in Roth

Aside from the tax issues, there may be a greater cost to purchase ETF funds on a periodic basis than buying shares of an equivalent mutual fund. Even though transaction fees for stock and ETF purchases have come down considerable at some brokerages, I would not want to pay those charges every two w...
by Peter Foley
Sat Aug 16, 2014 10:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Point of clarification - ETFs in Roth
Replies: 12
Views: 566

Re: When did you downsize?

We "rightsized" 4 years after our youngest daughter finished graduate school. The two are unrelated as she really did not live at home when she was in grad school. We "rightsized" one year prior to our retirement. I use the term rightsize because our finished square footage did n...
by Peter Foley
Sat Aug 16, 2014 10:42 pm
 
Forum: Personal Consumer Issues
Topic: When did you downsize?
Replies: 35
Views: 3239

Re: Is the goal in sight? Should I relax?

betterinvestor2012 asked" To your point, I do wonder if people's savings increase closer to retirement. I am interested if most people find that to be true. In our case it did, and I would hazard a guess that is the case for many dual income couples. During our last 5 years of employment we bot...
by Peter Foley
Fri Aug 15, 2014 9:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Is the goal in sight? Should I relax?
Replies: 19
Views: 2305

Re: What Allocation Makes Sense

For someone who has their basic needs met and may not need their IRA funds in retirement, a very broad range of asset allocation percentages are acceptable. Mainstream advice would probably be somewhere between 40% and 60% stocks. If you didn't panic and sell during the last recession, the roughly 6...
by Peter Foley
Thu Aug 14, 2014 11:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: What Allocation Makes Sense
Replies: 9
Views: 1051

Re: Selling stocks and minimizing taxes

lmg Welcome to the forum. A few thoughts regarding how to minimize taxes. First, have you ever heard of a donor advised fund? If you give regularly to some charities, you could gift appreciated shares of stock rather than cash. A donor advised fund is an easy way to do so. You donate the stock to th...
by Peter Foley
Tue Aug 12, 2014 5:59 pm
 
Forum: Investing - Help with Personal Investments
Topic: Selling stocks and minimizing taxes
Replies: 16
Views: 784

Re: Motorcycle for short commute?

First of all I live in Minnesota, so perhaps not a valid comparison. I commuted on a motorcycle April thru October for over 20 years. The distance was about 5-6 miles one way. Going into work was never a problem, even on a hot, humid summer day. It was about 15 minutes on local streets. If I were do...
by Peter Foley
Tue Aug 12, 2014 3:10 pm
 
Forum: Personal Consumer Issues
Topic: Motorcycle for short commute?
Replies: 52
Views: 3102

Re: Newly Minted Boglehead - Several Questions.

I think you have made some good selections and there is no significant need to change anything. You did not list what the expense ratios were for the funds in the 401k. If the Vanguard bond fund is low cost, I would increase my bond allocation there while at the same time decreasing my bond allocati...
by Peter Foley
Mon Aug 11, 2014 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newly Minted Boglehead - Several Questions.
Replies: 8
Views: 1078

Re: Where do you buy clothes?

I've been retired for a little over 2 years. The only clothing I've bought is underwear. By next spring I may need some athletic socks - probably Target. (I don't think I will ever need dress socks again.)

I buy running shoes from a local running store. I buy one pair a year.
by Peter Foley
Mon Aug 11, 2014 8:57 pm
 
Forum: Personal Consumer Issues
Topic: Where do you buy clothes?
Replies: 105
Views: 8910

Re: What's an acceptable stable value fund rate?

My personal opinion is that a stable value is not worth it if you are losing buying power. The 1.6% return is a guaranteed loss when we have been seeing inflation in the 2% range. I feel very fortunate to have sable value that ranges from 3.5 to 4.5 (depending on when the funds were deposited). Were...
by Peter Foley
Mon Aug 11, 2014 6:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: What's an acceptable stable value fund rate?
Replies: 18
Views: 1360

Re: Beginner, needing some pointers on finding info

Maybe I am missing something. I simply looked up Novartis in Yahoo Finance. I clicked on Novartis AG and the summary page showed an EPS of 3.92. The profile page indicates that it is a Swiss firm.

Did you want more recent data? Did you want to calculate it yourself?
by Peter Foley
Sat Aug 09, 2014 11:50 pm
 
Forum: Investing - Theory, News & General
Topic: Beginner, needing some pointers on finding info
Replies: 11
Views: 679

Re: Insulation Question

I've done blown in cellulose in two house I've owned and fiberglass bats in two others. I rented the machine to do the cellulose - a horribly messy job. Much worse for a do it your self project than unfaced fiberglass. Given the length of time you are going to be in the house I would use one of thos...
by Peter Foley
Sat Aug 09, 2014 11:35 pm
 
Forum: Personal Consumer Issues
Topic: Insulation Question
Replies: 25
Views: 2002

Re: Beginner, needing some pointers on finding info

Yahoo Finance is a good source. Type in the stock symbol and it will bring up a summary with EPS as one of the entries.
by Peter Foley
Sat Aug 09, 2014 1:55 pm
 
Forum: Investing - Theory, News & General
Topic: Beginner, needing some pointers on finding info
Replies: 11
Views: 679

Re: Any suggestions/feedback is appreciated

I agree with Duckie's answers, however . . . Do you and you wife both have income deferral possibilities through your employer? You = 401k?, Wife = 403b? If you do and taking advantage of these options gets you into the 15% bracket it is probably to your advantage to do so. Depending on what investm...
by Peter Foley
Fri Aug 08, 2014 8:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Any suggestions/feedback is appreciated
Replies: 19
Views: 1073

Re: Asset allocations help

I would agree. You have access to the Spartan extended market and international funds for much lower cost than you are currently incurring with your small cap and international choices.
by Peter Foley
Fri Aug 08, 2014 5:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset allocations help
Replies: 2
Views: 193

Re: Energy & precious metal location within portfolio

I think one way to do this would be to own a broad commodities index that contained both energy (oil and gas) and some metals. If I were going to go this route I would expect some volatility and would therefore hold it in taxable for potential tax loss harvesting purposes.
by Peter Foley
Fri Aug 08, 2014 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Energy & precious metal location within portfolio
Replies: 8
Views: 607

Re: Timing cap gains & losses fun

I would be inclined to do as you are suggesting. You are probably in the 25% tax bracket (or higher) so you will have a loss in 2014 that is worth 25% in tax savings and a gain in 2015 that will likely cost you 15% in additional taxes. In addition, it might allow you to do a regular Roth in 2014. Th...
by Peter Foley
Fri Aug 08, 2014 11:11 am
 
Forum: Investing - Theory, News & General
Topic: Timing cap gains & losses fun
Replies: 8
Views: 476

Re: Questions from a novice

I too tend to lean toward tax deferred investing now if one is in the 25% tax bracket. I think if one is in the 15% bracket it is more of a toss up. My reasoning is that many people like to retire early or delay SS when they retire. These two groups of individuals often have a few low tax years wher...
by Peter Foley
Thu Aug 07, 2014 6:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions from a novice
Replies: 17
Views: 956

Re: Dilbert Creator: If everyone indexed...

Neil wrote: To be fair though, some investment advisers do recommend index funds, and some provide worthwhile financial planning services such as helping an investor look her financial picture as a whole, helping her determine her willingness and ability to take equity risk, and helping her maintain...
by Peter Foley
Thu Aug 07, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: Dilbert Creator: If everyone indexed...
Replies: 28
Views: 3243

Re: An 'Inversion' Deal Could Raise Your Taxes

As you imply, if you hold a broad enough index fund this is not likely to be an issue. Some investors do like to invest in health care sector index funds. Some of these funds may see more capital gains distributions as companies are liquidated. Health care companies are not the only ones involved in...
by Peter Foley
Wed Aug 06, 2014 3:22 pm
 
Forum: Investing - Theory, News & General
Topic: An 'Inversion' Deal Could Raise Your Taxes
Replies: 14
Views: 1113

Re: Start all over at 63 years of age?

I would second dratkison's advice with one modification. I would be tempted to hold only 3 years in cash - enough to carry you to full retirement age.

You don't indicate where you are invested now. If all cash, I would certainly put some in the market today and then dollar cost average.
by Peter Foley
Wed Aug 06, 2014 3:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Start all over at 63 years of age?
Replies: 23
Views: 4132

Re: Inheritance & AA Checkup

Just an observation from a fellow Minnesotan before I answer the questions you asked: You indicate than your income is a little less than $100,000 and your marginal tax rate is 25%. If $100,000 is your gross income and you max out your 401k, you will be at about $83,000. With deductions and exemptio...
by Peter Foley
Wed Aug 06, 2014 3:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Inheritance & AA Checkup
Replies: 6
Views: 668

Re: Intro and a question

ticker - welcome to the forum. You haven't provided enough detail for anyone to advise you regarding what you should invest in (which mutual funds). As to How should you invest? I think you are the right track. Max out your tax deferred accounts. Perhaps consider a back door Roth IRA for each of you...
by Peter Foley
Tue Aug 05, 2014 11:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Intro and a question
Replies: 6
Views: 773

Re: New Investor Taking Control of Finances

TripleGinger Welcome to the forum. Most individuals who post here believe in an index mutual fund approach to investing. We do not try to pick winners and losers, and typically do not invest in market segments. Other than the cash, there is not a single stock or mutual fund listed that I personally ...
by Peter Foley
Tue Aug 05, 2014 11:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: New Investor Taking Control of Finances
Replies: 8
Views: 925

Re: Help me make sense of this article.

The article provides good insight into the expanded universe of index funds - not all of which are worth owning. It goes on to point out a couple index funds that are not as popular as the basic S&P 500 index but are worth consideration. Overall it is a well thought out piece and one with argume...
by Peter Foley
Tue Aug 05, 2014 11:16 pm
 
Forum: Investing - Theory, News & General
Topic: Help me make sense of this article.
Replies: 3
Views: 412

Re: Scott Burns Blog, Is inflation Coming Back?

Since I don't like links in threads that provide little insight into articles, I'll add a brief summary. Inflation is up with respect to the cost of housing over the past few months. Housing is the largest component of the Consumer Price Index. The change in this component alone may raise inflation ...
by Peter Foley
Tue Aug 05, 2014 2:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: Scott Burns Blog, Is inflation Coming Back?
Replies: 7
Views: 916

Re: Help Parents w/ Mutual Funds in Taxable. Sell?

This might not be as bad as you think. The mutual fund should have tracked the cost basis of all the purchases and reinvested dividends. Rather than sell it all for a big tax hit, you may be able to sell specific lots that your father has bought for very little tax liability. Remember than some fund...
by Peter Foley
Tue Aug 05, 2014 2:24 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help Parents w/ Mutual Funds in Taxable. Sell?
Replies: 13
Views: 804

Re: Renting a car - what could I have done better?

When renting a couple cars in Hawaii I found that using the airlines link to car rentals gave me a significant lower rate for the same car from the same company, same location. So I now check the link to rentals on the airline's website.
by Peter Foley
Mon Aug 04, 2014 6:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Renting a car - what could I have done better?
Replies: 12
Views: 1104

Re: Roth vs traditional Ira

In terms of withdrawals, which sources of retirement income to access each year depends on your tax bracket in retirement. Many years ago I read that one should withdraw from taxable, then tax deferred, then Roth. The thinking was to let the tax deferred and tax free saving compound untouched for as...
by Peter Foley
Sun Aug 03, 2014 10:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth vs traditional Ira
Replies: 18
Views: 1276

Re: How to invest an Inherited IRA?

ReedMan You are about the same age as my two daughters. We recently had a family meeting (my wife and I, daughters and husbands). I suggested to them that if something should happen to my wife or me, we had listed them a co-beneficiaries of one of our retirement accounts. Since neither of the two fa...
by Peter Foley
Sun Aug 03, 2014 6:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to invest an Inherited IRA?
Replies: 17
Views: 1258

Re: Roth vs traditional Ira

We used Roth when we could qualify to do so (income limits). With access to a 457 and a 403b we had plenty of tax deferred space. One has to keep in mind that retirement account laws changed substantially over the past 20 years: 457 accounts had lower contribution limits than 401ks for a number of y...
by Peter Foley
Sun Aug 03, 2014 6:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth vs traditional Ira
Replies: 18
Views: 1276

Re: Moving money to stable value fund?

I too use a stable value fund for most of my fixed allocation. That is not a bad way to go IMHO.
by Peter Foley
Sat Aug 02, 2014 5:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Moving money to stable value fund?
Replies: 6
Views: 1236

Re: 401(k) Asset Allocation help

dickenjb wrote: Sell the TR2050 in your Roth and use that for your 10% bond allocation. You do not need international stocks given how poor your 401(k) options are outside of domestic stock. No need to pay 85 bps and 120 bps when you can own VBTLX and pay less than 10 bps. Just in case you need anot...
by Peter Foley
Sat Aug 02, 2014 4:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) Asset Allocation help
Replies: 8
Views: 814

Re: Asset Allocation in Retirement and Tax Efficiency

You have some appreciated assets that you will be selling. Keep in mind that you will want to be retired when you sell them. You will not pay long term capital gains tax if your taxable income is below about $75,000. Keep that in mind as you sell assets with long term capital gains and make withdraw...
by Peter Foley
Sat Aug 02, 2014 3:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation in Retirement and Tax Efficiency
Replies: 3
Views: 352

Re: Too many goals - where do I start?

Welcome to the forum. At your (relatively) young age good spending and savings habits are very important. You have started on the right track with regards to your retirement savings. My goal order starts where yours does: emergency fund, pay off personal loan, pay off car loan, contribute to retirem...
by Peter Foley
Sat Aug 02, 2014 12:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Too many goals - where do I start?
Replies: 53
Views: 3867

Re: What is your most memorable 1 week vacation?

We went to France/Alsace for a week in 1999. We met our French cousins for the first time. There was a small family reunion of the three branches of the family in the Alsace. It was the first time members of the three branches had been together since 1832. We have had many get togethers here and abr...
by Peter Foley
Sat Aug 02, 2014 12:40 pm
 
Forum: Personal Consumer Issues
Topic: What is your most memorable 1 week vacation?
Replies: 85
Views: 6561

Re: Realize gains?

I concur with jdilla.
by Peter Foley
Fri Aug 01, 2014 10:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Realize gains?
Replies: 2
Views: 433
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