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Re: portfolio suggestions for the truly aged.

I would look at this from the point of view that she might need cash in the near future if she loses her independence. Also, funds needed within 5 years should not be in the market. I would be inclined to keep not more than 25% in mutual funds in the IRA. Knowing her taxable holdings would potential...
by Peter Foley
Fri Nov 21, 2014 11:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: portfolio suggestions for the truly aged.
Replies: 11
Views: 994

Re: TGH question - Gift to family [Tax Gain Harvesting]

We have been doing the TGH gift to family for the past couple of years. My daughters are both in the 15% tax bracket and they each have one child. We gift appreciated shares of a mutual fund to them (our cost basis and consequently theirs, is about 50%), have them sell the shares and fund a 529 plan...
by Peter Foley
Thu Nov 20, 2014 5:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax Gain Harvesting - Charity / Gift to family
Replies: 16
Views: 1207

Re: Updated IRS Rollover Chart

Alan Is there more to this? My question is that while the IRS may permit this, do all plans and plan providers permit this? For example: I'm retired and doing Roth conversions and have both pretax and post tax dollars in my traditional IRA. I also have a governmental 457 plan. Can I roll most of my ...
by Peter Foley
Wed Nov 19, 2014 8:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Updated IRS Rollover Chart
Replies: 7
Views: 1187

Re: Portfolio review and help request.

A couple of general observations. You should aim for some simplification. Positions of less than 5% in a mutual fund don't add much diversification nor are they big enough to increase your overall return in a meaningful way. Most of this simplification could be done in your IRAs. In future years som...
by Peter Foley
Wed Nov 19, 2014 6:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio review and help request.
Replies: 2
Views: 351

Re: Selecting Charities for Donation

We contribute to very few larger charities. Local charities where there is a lot of bang for the buck (low overhead) are our top choices. Food shelves, FB4K (Free bikes for kids), Habitat, and study abroad scholarships are a few.
by Peter Foley
Wed Nov 19, 2014 5:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Selecting Charities for Donation
Replies: 53
Views: 2796

Re: Portfolio Review/Advice

I think your AA is fine as is your fund placement. There is nothing wrong with what you are currently doing in terms of investing. With that in mind, I would do things slightly differently. You have access to very low cost Vanguard stock funds in your 403b, 457. I would use those and try not to dupl...
by Peter Foley
Tue Nov 18, 2014 6:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review/Advice
Replies: 4
Views: 767

Re: Vacation in France

To help keep costs down consider the following: 1. VRBO - vacation rental by owner. 2. Rick Steves' book on France. 3. Museum Pass 4. A metro pass or a carnet (10 tickets) 5. There are a lot of relatively inexpensive small cafes and cafeterias off the main streets. (It is also easy to buy bread and ...
by Peter Foley
Tue Nov 18, 2014 5:40 pm
 
Forum: Personal Consumer Issues
Topic: Vacation in France
Replies: 85
Views: 4126

Re: Investment Critique, unclear long term goals

I am a former state of MN employee (retired 2.5 years ago) and still hold the majority of my retirement funds in the state's 457b plan. It is a good plan with low cost options available. You can use a combination of the Vanguard Inst. Index and Vanguard mid cap to approximate total stock market. I w...
by Peter Foley
Mon Nov 17, 2014 6:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: Investment Critique, unclear long term goals
Replies: 4
Views: 562

Re: When do your account returns dwarf your contributions?

You might think of this in terms of the rule of 72 . . . how long it takes money to double at a given interest rate. Since "dwarf" is an inexact term, maybe looking at the time it takes money to quadruple would be the answer.
by Peter Foley
Mon Nov 17, 2014 5:54 pm
 
Forum: Investing - Theory, News & General
Topic: When do your account returns dwarf your contributions?
Replies: 51
Views: 5686

Re: TurboTax '14 Deluxe (Desktop) Excludes Schedule D

Since I use schedules C and E it looks like my only choice is home and business this year. While I might weigh the additional cost versus the effort of doing data entry for 3 returns, I will probably go with the extra cost. :(
by Peter Foley
Sun Nov 16, 2014 6:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax '14 Deluxe (Desktop) Excludes Schedule D
Replies: 66
Views: 7130

Re: TurboTax '14 Deluxe (Desktop) Excludes Schedule D

I do three tax returns every year, mine and my two daughters. I've been using Turbo Tax for about 20 years. How easy is it to get Tax Act to read your Turbo tax file so that you do not have to do all the data entry from scratch?
by Peter Foley
Sat Nov 15, 2014 5:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax '14 Deluxe (Desktop) Excludes Schedule D
Replies: 66
Views: 7130

Re: Deciding When to Retire

For my wife and me it was a matter of being financially secure and wanting to reduce the boredom of the routine (me) and the stress (her). I set a date about six months in advance and she followed suit. As long as your husband is okay with continuing to work for income while you do not, I'd say go f...
by Peter Foley
Sat Nov 15, 2014 5:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Deciding When to Retire
Replies: 47
Views: 4953

Re: Transition from Saving to Spending

I certainly agree with the "floor" concept. But I view it in terms of liquid assets from which income can be derived, not income. My "floor" is basically my bond allocation and I feel that spending from assets other than floor assets is fine. We gifted a lot last year because the...
by Peter Foley
Sat Nov 15, 2014 4:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Transition from Saving to Spending
Replies: 37
Views: 3874

Re: Retirement-Order of sale of investments

Guitar Player: The piece that follows is part of a longer essay I wrote about marginal tax rates. You should note that the top of the 15% tax bracket is $73,800 in taxable income for married filing jointly in 2014. (This is about $94,000 in adjusted gross income.) It would be helpful to know if you ...
by Peter Foley
Sat Nov 15, 2014 11:20 am
 
Forum: Investing - Help with Personal Investments
Topic: Retirement-Order of sale of investments
Replies: 11
Views: 1535

Re: Help with parent's assets

If your mother gives regularly to charities I would look into setting up a donor advised fund. Through such a fund she can donate appreciated securities rather than cash. That might help a bit. Note: If she itemizes deductions she might be able to bundle deductions into a single year and then take a...
by Peter Foley
Sat Nov 15, 2014 10:09 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with parent's assets
Replies: 13
Views: 1327

Re: Converting taxable stocks to retirement account index fu

It would be better to have a little more clarification regarding income. The 40k to 80k range is pretty broad. Are we talking about gross income here or taxable income? If gross income is this before your 401k deduction or after? It would be nice to know if you have any space in the 15% bracket (0% ...
by Peter Foley
Fri Nov 14, 2014 6:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Converting taxable stocks to retirement account index funds
Replies: 12
Views: 740

Re: A reminder that non-investing general comment threads ar

A question for administrators . . Is the topic of ethical investing off limits? I would guess that it would be. I raise this issue because of a recent post by an individual who was seeking advice regarding keeping his/her income very low. IMHO what he/she was looking for was not particularly ethical...
by Peter Foley
Fri Nov 14, 2014 2:58 pm
 
Forum: Forum Issues and Administration
Topic: A reminder that non-investing general comment threads are OT
Replies: 24
Views: 8805

Re: Converting taxable stocks to retirement account index fu

If tax efficiency is the goal you would have to do this over a number of years. Year 1 1. Sell all the losers. Invest proceeds in a Roth up to the maximum 2. Maximize your 401k. Year 2 Is there a tax loss carry forward? 1. If no, maximize your 401k and sell some stock maybe to the middle of the 25% ...
by Peter Foley
Fri Nov 14, 2014 2:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Converting taxable stocks to retirement account index funds
Replies: 12
Views: 740

Re: Tulum, Mexico

Visit Tulum early in the morning before the tour buses arrive - you will also avoid the heat of the day which is significant in this humid area. Playa del Carmen was worth a visit. If you want something more extensive, Chichen Itsa and Isla Mujeres were great. There is a days worth of travel time in...
by Peter Foley
Fri Nov 14, 2014 2:04 pm
 
Forum: Personal Consumer Issues
Topic: Tulum, Mexico
Replies: 11
Views: 1382

Re: Donating appreciated securities

Probably not relevant in your case but Vanguard does have a donor advised fund (DAF). Its minimum initial contribution is $25,000, far larger than the minimums for Fidelity and Schwab. One potential advantage of a donor advised fund approach is that it likely uses first in first out accounting. This...
by Peter Foley
Fri Nov 14, 2014 1:52 pm
 
Forum: Personal Finance (Not Investing)
Topic: Donating appreciated securities
Replies: 6
Views: 592

Re: What to do w/space under 15% Fed bracket limit?

I agree it is a close call. Do you think you might have another federal low tax year in the future? If you were to retire and have a couple of low tax years before collecting SS, you could delay your Roth conversion until then. I think your retirement plans including when to take SS could tip the de...
by Peter Foley
Fri Nov 14, 2014 1:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to do w/space under 15% Fed bracket limit?
Replies: 21
Views: 2432

Re: Rebalancing

I rebalance when my AA is off by about 5%. Since I have a bit more in bonds than in stocks it takes a lot of market movement to trigger rebalancing. If this year continues the upward trend we have had over the past couple of years I will have to rebalance in January. I won't check my AA until I get ...
by Peter Foley
Thu Nov 13, 2014 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing
Replies: 7
Views: 551

Re: What to do w/space under 15% Fed bracket limit?

Unless you need some of the cash from the stock sale to live on, I too would consider the Roth conversion first. State taxes might be an issue if you are in a higher tax state now and expect to be in a lower tax state when retired.
by Peter Foley
Thu Nov 13, 2014 5:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to do w/space under 15% Fed bracket limit?
Replies: 21
Views: 2432

Re: Retirement regrets: too much in 401k

So let me get this straight. You have over $650 k in deferred savings + another year's worth of cash. And you want to find strategies that will let you continue to qualify for medicaid. You don't want to supplement her income too much because you will be near the top of the 10% bracket. I am well aw...
by Peter Foley
Thu Nov 13, 2014 5:23 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retirement regrets: too much in 401k
Replies: 19
Views: 3631

Re: Will the baby boomer selling effect come to fruition?

IMHO wealth in the US, as well as in much of the rest of the world, is so concentrated that there will be little need to liquidate much of it in retirement. The richest few percent of the world's population will likely pass on their wealth to heirs or charities. I doubt that sales by average boomers...
by Peter Foley
Wed Nov 12, 2014 11:19 pm
 
Forum: Investing - Theory, News & General
Topic: Will the baby boomer selling effect come to fruition?
Replies: 14
Views: 1991

Re: Transition from Saving to Spending

TooLateSmart I did not include this in my earlier response because I thought it's value would be limited to states with low inheritance tax thresholds (like Minnesota). Once retired and assured that we had enough, we each designated a single retirement account and changed the beneficiary from the sp...
by Peter Foley
Wed Nov 12, 2014 8:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: Transition from Saving to Spending
Replies: 37
Views: 3874

Re: Your favorite classic toys for kids

Bill Ding. My brother and I had a used set when we were children. I would guess our set is from one of the earliest editions. My daughters played with them when they were little and now both of my grandchildren are playing with them. If you don't know what they are, they are stack-able wooden figure...
by Peter Foley
Wed Nov 12, 2014 5:04 pm
 
Forum: Personal Consumer Issues
Topic: Your favorite classic toys for kids
Replies: 89
Views: 3822

Re: Transition from Saving to Spending

For me, a person who retired when he wanted to, the transition began about a year before retirement (items 1-4 below). I realized that we had achieved our "number" by a far margin. I retired in May of 2012, so it was the overall rising tide of the market during the economic recovery that l...
by Peter Foley
Wed Nov 12, 2014 4:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: Transition from Saving to Spending
Replies: 37
Views: 3874

Re: Puerto Rico

My wife and I were there for 5 full days last year at this time (plus 2 days travel to and fro). We found a reasonable place to stay using VRBO (Santurce/Condado area - just off a street with a good bus line. It was near Ave. Loiza/Wilson, walking distance to the beach. Old San Juan is worth a coupl...
by Peter Foley
Mon Nov 10, 2014 6:01 pm
 
Forum: Personal Consumer Issues
Topic: Puerto Rico
Replies: 16
Views: 1484

Re: tax loss harvesting

If you sell both winners and losers [based on their cost basis] they will first offset each other with the remainder being added to or subtracted from your income for the year based on your tax bracket. If you are seeking to tax loss harvest to lower your income, sell the losers in one year and the ...
by Peter Foley
Wed Nov 05, 2014 12:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: tax loss harvesting
Replies: 10
Views: 773

Re: 39.6% Tax Bracket :(

I would pay the mortgage off on your principal residence, but would not be in a hurry to pay off the mortgages on the rental properties. I also agree with the advice to use a donor advised fund and make a larger contribution on an irregular basis to give yourself some lower tax bracket years. if you...
by Peter Foley
Fri Oct 31, 2014 10:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: 39.6% Tax Bracket :(
Replies: 28
Views: 6037

Re: Minnesota mtg | sat Nov-1 | 10:00am | agenda attached

For those who are interested I will have the current estimates for 2015 federal tax rates, 2015 exemptions, and 2015 standard deductions.
by Peter Foley
Fri Oct 31, 2014 10:18 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota mtg | sat Nov-1 | 10:00am | agenda attached
Replies: 7
Views: 937

Re: Please review my strategy (new at investing)

I don't see anything obviously wrong, but ,more details as suggested would be nice. I'm intrigued by your question # 3 as I don't believe I've seen that "AA before tax/after tax question" posted in quite this way. (There are a lot of threads regarding portfolios and whether you should weig...
by Peter Foley
Thu Oct 30, 2014 5:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Please review my strategy (new at investing)
Replies: 13
Views: 1415

Re: Early SS or Higher IRA Withdrawal??

Something to consider when the time is near . . . What is the economic situation at the time? [I was thinking of retiring in summer or fall of 2010. We were still in the middle of a recession and our portfolio had taken a bit of a hit. As I didn't mind the work I was doing, I delayed retirement unti...
by Peter Foley
Thu Oct 30, 2014 1:53 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early SS or Higher IRA Withdrawal??
Replies: 19
Views: 1582

Re: Wisconsin - Madison Meetings - Master Thread

I was happy to attend the last meeting but it is unlikely the timing will be such so that I attend then next (St. Paul to Madison is a long commute). I did not think of it until I returned, but the MN Boglerheads has two splinter groups - one east aide and one west side. These two groups meet a few ...
by Peter Foley
Thu Oct 30, 2014 11:32 am
 
Forum: Local Chapters and Bogleheads Community
Topic: Wisconsin - Madison Meetings - Master Thread
Replies: 41
Views: 3162

Re: 1099 vs. W2 income

There are state and federal laws concerning what constitutes independent contractor status (1099) or employee (W-2). You don't get to choose. Much of law is based on interpretations of "direction and control". Another key factor is the independent contractor's ability to sell their service...
by Peter Foley
Thu Oct 30, 2014 10:23 am
 
Forum: Personal Finance (Not Investing)
Topic: 1099 vs. W2 income
Replies: 5
Views: 461

Re: "Schwab Intelligent Portfolios"

Jack FFR1846 wrote: I've considered opening a taxable acct at Schwab because I can buy an schb etf for no fee. I don't talk with any brokerage houses for advice. It has been more than 20 years since I asked a brokerage house for advice regarding what to buy or sell. They do offer some other services...
by Peter Foley
Thu Oct 30, 2014 10:10 am
 
Forum: Investing - Theory, News & General
Topic: "Schwab Intelligent Portfolios"
Replies: 56
Views: 5916

Re: Early SS or Higher IRA Withdrawal??

Are both you and your wife eligible for SS? Will her benefits be reduced because of her federal pension?
by Peter Foley
Wed Oct 29, 2014 9:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Early SS or Higher IRA Withdrawal??
Replies: 19
Views: 1582

Re: Your Thoughts on my Portfolio

I have used Schwab for many years. You no doubt have someone assigned to you. I have far less in assets and have an account rep. She produced a good Roth conversion plan and overall financial plan. It was good to have someone else take a second look. With your assets and annual expenses you can hard...
by Peter Foley
Mon Oct 27, 2014 10:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Your Thoughts on my Portfolio
Replies: 16
Views: 1346

Re: Portfolio review

An AA between 40/60 and 60/40 would be considered mainstream for your ages. I found that going to 45/55 just before I retired resulted in my taking less interest in daily market moves. This is good!

I'm not a big fan of international - it is about 15% of my equities, 7% of total portfolio.
by Peter Foley
Mon Oct 27, 2014 11:47 am
 
Forum: Investing - Help with Personal Investments
Topic: Portfolio review
Replies: 4
Views: 619

Re: "8 Year-End Tax Moves to Make Now"

Thanks for posting this Taylor. The advice is very solid and mainstream. To this list I would add. 9. Project your tax bracket before making any of the recommended moves. (This is not intended to mean "have the tax tail wage the dog," just as a precursor to making prudent decisions.) 10. F...
by Peter Foley
Mon Oct 27, 2014 11:40 am
 
Forum: Investing - Theory, News & General
Topic: "8 Year-End Tax Moves to Make Now"
Replies: 9
Views: 1926

Re: New to investment planning

Regarding your wife's 403b. I looked at the pdf and on the last page it notes that expenses range from .35 to 1.25. It looks like you have to get a prospectus to see the expense ratios. Based on your approach elsewhere, I would go with the Vanguard Life Strategy Growth or Moderate Growth funds if th...
by Peter Foley
Mon Oct 27, 2014 11:28 am
 
Forum: Investing - Help with Personal Investments
Topic: New to investment planning
Replies: 8
Views: 790

Re: Minnesota mtg | sat Nov-1 | 10:00am | agenda attached

Thanks for posting this Jeff. I'm hoping the tax presentation is in time to be helpful for this year's filing.
by Peter Foley
Sun Oct 26, 2014 6:58 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota mtg | sat Nov-1 | 10:00am | agenda attached
Replies: 7
Views: 937

Re: First Attempt at Posting my Portfolio for review

You have a lot of overlap with mutual funds in taxable, his deferred, and her deferred all holding some of the same things. High fees are bad, of course, but it is their compounding drag on returns over long periods of time that really make a difference. If you are looking at retiring in a couple ye...
by Peter Foley
Sun Oct 26, 2014 6:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: First Attempt at Posting my Portfolio for review
Replies: 17
Views: 2387

Re: Adding low cost index funds to 457b? What's involved?

I don't know if 4.% is still possible. My wife and I both have stable value funds. The returns on hers are based on the dates of investment and range from 4.25% to 3.25%. My stable value pays about 3.4% and has been at that rate for about 3 years or so. You might be able to negotiate for something i...
by Peter Foley
Sun Oct 26, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: Adding low cost index funds to 457b? What's involved?
Replies: 8
Views: 734

Re: SS Tax, RMD and Roth Conversions

There is one other factor that is often overlooked. For married couples, one should consider the fact that one of them will be single someday. The surviving spouse may be in a different tax bracket.
by Peter Foley
Sun Oct 26, 2014 3:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: SS Tax, RMD and Roth Conversions
Replies: 6
Views: 750

Re: Calculating (IRA) RMD

jimb raises a good point and it is one that should be considered by persons approaching RMD's. For the first five years or so of RMD's, the average withdrawal is ballpark $4000 per $100,000 invested if the portfolio earns relatively little. If your portfolio does well, you will have a higher portfol...
by Peter Foley
Sun Oct 26, 2014 12:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Calculating (IRA) RMD
Replies: 7
Views: 619

Re: tax efficiency

I would say that I-bonds are the most efficient because the tax is deferred. TIPs are probably the least efficient, in part because the yield on total bond is so low. As mentioned, TIPs is a broad category. Are you talking about individual TIPs a TIPS ETF or a TIPs mutual fund?
by Peter Foley
Sat Oct 25, 2014 1:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: tax efficiency
Replies: 5
Views: 886

Re: Help on Turbo Tax Long term cap gains

Cody - just a side note. I personally would not start SS benefits late in the year if they would be subject to taxation. If you were to delay until January you would only miss 2 payments. Your wife would be entitled to a slightly higher benefit and your tax situation for 2014 would be simplified. I ...
by Peter Foley
Sat Oct 25, 2014 11:25 am
 
Forum: Personal Finance (Not Investing)
Topic: Help on Turbo Tax Long term cap gains
Replies: 29
Views: 1693

Re: Strategies of Cash offer on house

We made a cash offer on our current house. Our Realtor was my cousin and is very knowledgeable with respect to real estate, financing, negotiating, housing inspections, etc. Both my cousin and I have owned rental properties. I suggested the cash offer and we discussed it in terms of the property in ...
by Peter Foley
Fri Oct 24, 2014 3:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Strategies of Cash offer on house
Replies: 5
Views: 766
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