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Re: Asset allocation strategies at very large sums

Regardless of the amount of money, if you had 20 times more than you needed, a valid approach would be to set aside the amount that you need in "safe" investments and put the rest in equities. One might characterize this as a two bucket approach. Imagine you had a pension that was inflatio...
by Peter Foley
Sat Apr 18, 2015 11:13 pm
 
Forum: Investing - Theory, News & General
Topic: Asset allocation strategies at very large sums
Replies: 13
Views: 1432

Re: Still having a hard time on retiring

Another thought. If you set your AA so that you can live off the bonds only, that should allow you to invest the rest in stocks for your heir(s). That was part of the reasoning behind my 45/55 AA upon retirement. You can build some inflation into the calculation by delaying SS. This works especially...
by Peter Foley
Sat Apr 18, 2015 2:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Still having a hard time on retiring
Replies: 36
Views: 4673

Re: Still having a hard time on retiring

Although I am a confirmed do-it-yourself-er, my wife and I have talked to a couple financial planners overs the years. We were very clear about our interest in investing only in low cost mutual funds. With those parameters we actually got a lot out of the meetings. Some of what we got was a confirma...
by Peter Foley
Fri Apr 17, 2015 7:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Still having a hard time on retiring
Replies: 36
Views: 4673

Re: Just retired, help with allocation

You have a good plan and have saved and invested well based on your assets. Congratulations. Financially you should be fine. Other things to think about would be simplification and charitable giving and "gifting'. You seems to have given some thought to those areas as well. One last considerati...
by Peter Foley
Wed Apr 15, 2015 11:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Just retired, help with allocation
Replies: 7
Views: 1194

Re: Saving for retirement to supplement a pension

With 401k, 403b and 457 plans and a pension, this sounds like a public university. I would advise that he use one the supplemental plans. If he is in the 25% bracket, he should use one of the deferred options not the Roth. If he is in the 15% bracket I would go with the Roth. The 457 account has adv...
by Peter Foley
Wed Apr 08, 2015 8:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Saving for retirement to supplement a pension
Replies: 16
Views: 1699

Re: Help with personal retirement planning

I too would suggest that you keep your old 401k. However, I would also advise that you be a bit more conservative there because your best option in your new 401k is the S&P 500 fund. For the time being use only that account in your new 401k. As you will be contributing to this account on an ongo...
by Peter Foley
Tue Apr 07, 2015 2:58 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help with personal retirement planning
Replies: 20
Views: 1757

Re: When to give adult children their inheritance?

Our approach has been to gift some it now to help our adult children with the expenses of owning their first homes and paying for some our grandchildren's childcare expense. These "early" gifts can really help to reduce stress in young families - it helps them to enjoy their own children (...
by Peter Foley
Mon Apr 06, 2015 11:22 pm
 
Forum: Personal Finance (Not Investing)
Topic: When to give adult children their inheritance?
Replies: 57
Views: 6441

Re: life expectancy and taxable versus tax deferred account

Possibly your friend is coming from the point of view that for those who die younger, their taxable assets get a set up basis. As is usually the case, a one size fits all solution is not the best answer for everyone. I would think that the size of the estate would matter. If the holdings are exclusi...
by Peter Foley
Mon Apr 06, 2015 2:51 pm
 
Forum: Investing - Theory, News & General
Topic: life expectancy and taxable versus tax deferred accounts
Replies: 17
Views: 1377

Re: Newbie Boglehead-portfolio Help

A second opinion . . . ruralavalon wrote: His 401k (have 7% of pay going to fund; company match- 100% up to 3%, .50% up to 5%) 40%, Vanguard 500 Index Adm - VFIAX, ER 0.05% 10%, Vanguard Extended Market Index Adm - VEXAX, ER 0.10% 20%, American Beacon International Equity Index Institutional - AIIIX...
by Peter Foley
Mon Apr 06, 2015 2:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie Boglehead-portfolio Help
Replies: 8
Views: 772

Re: (When) should I stop contributing to my 401k?

OP asked: Are there any thoughts from those who are in retirement and have encountered situations where one wishes they contributed more to a particular "bucket"? Yes - I had a Roth 457 account available about the last 3 years before retirement. I should have used it all three years instea...
by Peter Foley
Sun Apr 05, 2015 5:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: (When) should I stop contributing to my 401k?
Replies: 21
Views: 2814

Re: (When) should I stop contributing to my 401k?

sambb wrote: There is no way in the world that we can know what tax rates will be in 10 or 20 years. Therefore, there is no way to know for sure whether a roth or traditional tax deferred account is better. It is flawed to base assumptions on current tax rates. How can anyone predict income tax rate...
by Peter Foley
Sat Apr 04, 2015 11:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: (When) should I stop contributing to my 401k?
Replies: 21
Views: 2814

Re: Sell "stable" stocks for index?

I too would suggest that you diversify more (either total market or S&P 500). However, you don't have to do this all at once. I would start by reducing my holdings in the more volatile, more cyclical companies. Johnson and Johnson and Proctor and Gamble are probably more stable than the others. ...
by Peter Foley
Sat Apr 04, 2015 7:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Sell "stable" stocks for index?
Replies: 31
Views: 2069

Re: (When) should I stop contributing to my 401k?

Welcome to the forum. Interesting question, not one I have seen posed in exactly this manner. I'll start with the ideal final result for many entering the withdrawal stage - some in tax deferred, some in Roth and some in taxable. This combination allows one to pick and choose their income source to ...
by Peter Foley
Sat Apr 04, 2015 6:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: (When) should I stop contributing to my 401k?
Replies: 21
Views: 2814

Re: TurboTax Deluxe: $25 Refund [for those forced to upgrad

Before filing 2014 I got an e-mail from Turbo Tax saying basically - "we messed up and we are willing to refund $25 if we forced you to upgrade from TT Duluxe 2013." I saved the e-mail, filed my 2014 return, then followed in instructions in the e-mail and requested a $25 refund. I got the ...
by Peter Foley
Fri Apr 03, 2015 7:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: TurboTax Deluxe: $25 Refund [for those forced to upgrade]
Replies: 4
Views: 872

Re: Glide path design

The opinions I have seen on this are mixed. I think if you have only a narrow margin for error (market correction) then the glide path approach seems prudent. That being said, a lot of folks here are of the opinion that holding close to 50/50 throughout retirement is the way to go. I'm in agreement ...
by Peter Foley
Fri Apr 03, 2015 7:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Glide path design
Replies: 23
Views: 1492

Re: Difference between holding fixed income in bondETFs or b

I'm sorry - I just can't decipher the acronyms. . . . The topic looks interesting however.
by Peter Foley
Thu Apr 02, 2015 9:20 pm
 
Forum: Investing - Theory, News & General
Topic: Difference between holding fixed income in bondETFs or banks
Replies: 6
Views: 515

Re: Minimizing income taxes in retirement

You indicate that you are in the 25% bracket now. The range for the 25% bracket in taxable income is 74,901 to $151,200 in 2015. The standard deduction is $12,600 for married filing jointly, and personal exemptions are $4000/person. So $151,200 in taxable income is close to $171,800 in AGI. So you a...
by Peter Foley
Wed Apr 01, 2015 8:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Minimizing income taxes in retirement
Replies: 54
Views: 5123

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: 6
Views: 545

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: 55
Views: 3199

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: 105
Views: 8430

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: 2056

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: 46
Views: 4350

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: 2606

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: 3069

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: 455

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: 501

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: 5430

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: 549

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: 2008

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: 2715

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: 860

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: 1926

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: 7431

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: 2361

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: 1578

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: 1420

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: 661

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: 1420

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: 722

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: 591

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: 1420

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: 1287

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: 1993

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: 1287

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: 1372

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: 3075

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: 2845

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: 2478

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: 1845

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: 1658
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