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Re: Wiki comments requested: The importance of asset allocat

Just below the link to the SEC is a section titled Asset Allocation 101.
by Peter Foley
Sun Feb 01, 2015 12:21 am
 
Forum: Investing - Theory, News & General
Topic: Wiki comments requested: The importance of asset allocation
Replies: 91
Views: 3008

Re: Wiki comments requested: The importance of asset allocat

I would start with the SEC definition instead of the one currently used: Asset allocation involves dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash. The process of determining which mix of assets to hold in your portfolio is a very personal one. The ...
by Peter Foley
Sat Jan 31, 2015 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: Wiki comments requested: The importance of asset allocation
Replies: 91
Views: 3008

Re: POLL: How Will You Complete Your 2014 Taxes?

Francis wrote: Reluctantly Turbo Tax, due to the changes in pricing. Have used TT in previous years. I planned to check out the other popular software but it's important that previous years returns are recognized. Just easier to use TT again. I'm in the same boat. I'm tired of the up-selling as well...
by Peter Foley
Sat Jan 31, 2015 5:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: How Will You Complete Your 2014 Taxes?
Replies: 32
Views: 1556

Re: Minnesota mtg | Feb-7 @ 9:30am | Library in Minnetonka

Here is the Agenda (unformatted) BH Agenda 2-7-2015 9:30a WELCOME & Opening Remarks - Diann & Sandra 9:35 Update on splinter groups , East and West 9:40 Topic of the Day: "Asking Portfolio Questions: 3 (hypothetical) Portfolio Reviews 9:45 Main Topic - Full Group, Interactive We'll cove...
by Peter Foley
Thu Jan 29, 2015 6:33 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota mtg | Feb-7 @ 9:30am | Library in Minnetonka
Replies: 2
Views: 325

Re: Minnesota mtg | Feb-7 @ 9:30am | Library in Minnetonka

One of the breakout sessions will be about risk. We will take a risk survey, compare notes and talk about AA implications. We did this at a 2008 meeting after the market had fallen - there were some interesting results.
by Peter Foley
Wed Jan 28, 2015 9:02 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota mtg | Feb-7 @ 9:30am | Library in Minnetonka
Replies: 2
Views: 325

Re: Pros & Cons of Proposed Investment Plan--too complicated

I agree with foregoing the REITs if you already have investment property. (This is my approach.) With the age differential between you and your husband, I would be tempted to do a regular IRA and skip the Roth conversion. Your husband's RMD's will continue to grow and you are already in the 28% brac...
by Peter Foley
Tue Jan 27, 2015 5:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Pros & Cons of Proposed Investment Plan--too complicated?
Replies: 9
Views: 967

Re: 40 years of IRA and 401k Contributions

Occasionally in threads about RMDs there are a few comments about how only a small percentage of the population has rare large sums of money in deferred accounts. While this might be true with respect to the percentage of the overall population, the baby boomers came of age and started saving about ...
by Peter Foley
Mon Jan 26, 2015 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: 40 years of IRA and 401k Contributions
Replies: 18
Views: 2254

Re: Poll: Locating deceased person's assets

I was the executor for my mother's estate. She had slowly progressing dementia over a period of about 15 years. As I had taken over the management of her finances and done her taxes for years I knew where almost everything was. Her financials were very organized when she was younger. She was a profe...
by Peter Foley
Sun Jan 25, 2015 11:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Locating deceased person's assets
Replies: 33
Views: 2269

Re: 401k to Roth conversion for a retiree

repete wrote: As a follow up question, could you please go over the arithmetic? The difference between gross income of 95K and taxable income of 74.9K is 20.1K. 15% of 95 K is not 20.1K. So, I'm again a little confused about these numbers. Also, if 4% of 1Mil is 40K, why is it 36.5, 38, and 39 RMD, ...
by Peter Foley
Sat Jan 24, 2015 6:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k to Roth conversion for a retiree
Replies: 15
Views: 1228

Re: Half off TurboTax thru Monday

Answers to a couple questions. I do taxes for my two daughters families as well so I like to have the CD in case I have to go back and file an amended return. My PC is getting a little old so having the CD is insurance. I had to pay $3.95 to have the CD shipped. This answers the question, "Do I...
by Peter Foley
Sat Jan 24, 2015 5:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Half off TurboTax thru Monday
Replies: 37
Views: 4293

Re: Half off TurboTax thru Monday

Thanks for posting. I got Home and Small business for a little less than I paid last year for Premier.
by Peter Foley
Fri Jan 23, 2015 11:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Half off TurboTax thru Monday
Replies: 37
Views: 4293

Re: Grandfather wanting to transfer portfolio to kids. Ques

HomerJ » I'm 80, and I have all my money in a simple 3-fund Vanguard portfolio... I want to give my money to my kid now, and I tried to explain why the 3-fund portfolio was simple, easy to manage, generates a decent return, and is less volatile. My daughter (and her son-in-law) told me that they ha...
by Peter Foley
Fri Jan 23, 2015 11:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Grandfather wanting to transfer portfolio to kids. Question
Replies: 67
Views: 3079

Re: 401k to Roth conversion for a retiree

bena If you have good low cost options in your 401k, I would recommend starting with your IRA and convert enough each year up to the top of the 15% bracket ($74,900 in taxable income - about $95,000 in gross income). Do this at least until you start taking SS. Then reassess your tax bracket and the ...
by Peter Foley
Fri Jan 23, 2015 11:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k to Roth conversion for a retiree
Replies: 15
Views: 1228

Re: 401k to Roth conversion for a retiree

ripete With $98,000 of other Modified Adjusted Gross income your SS benefits are "85%" taxable. So for each dollar of SS that you collect, you add another $.085 to your taxable income. So $36,000 X .85 = $30,600. Married filing jointly you will have 12,400 as a standard deduction and 7,900...
by Peter Foley
Fri Jan 23, 2015 11:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k to Roth conversion for a retiree
Replies: 15
Views: 1228

Re: Downsize, Reduce, Simplify.

Simplifying our financial lives is a high priority. I'm trying to do it without incurring high taxes. (To me, 15% is low, a lot in the 25% bracket is high.) We downsized in terms of "stuff" about 4 years when we moved. As mentioned, you have to keep at it as it creeps up on you over time. ...
by Peter Foley
Fri Jan 23, 2015 3:31 pm
 
Forum: Personal Consumer Issues
Topic: Downsize, Reduce, Simplify.
Replies: 65
Views: 7201

Re: TIPs, what do they really add

tludwig23 wrote: Yes, if inflation goes as predicted they serve no point. If there is significant unexpected inflation they are most useful. They are basically insurance against unexpected inflation. The cost of this insurance is small. This is my understanding as well. I also agree that the cost of...
by Peter Foley
Fri Jan 23, 2015 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: TIPs, what do they really add
Replies: 33
Views: 2842

Re: I'm thinking about making very large 529 contributions A

No for a number of reasons. 529 plan contributions must be cash (you cannot transfer other assets). To make a large contribution in a single year would have undesirable tax consequences. I have thought about, but not explored in detail, the idea of setting up an educational trust for grandchildren.
by Peter Foley
Fri Jan 23, 2015 12:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: I'm thinking about making very large 529 contributions ASAP
Replies: 71
Views: 5295

Re: Surviving the Tax Bite of RMD Withdrawals in Retirement

Miriam2 wrote: Peter Foley wrote: When one first begins RMDs they average very roughly $4000/year per $100,000 for the each of the first 10 years of retirement. If you had space in the 15% tax bracket in the early years you might just fill up the bracket. If a married couple were to take only the mi...
by Peter Foley
Thu Jan 22, 2015 6:36 pm
 
Forum: Investing - Theory, News & General
Topic: Surviving the Tax Bite of RMD Withdrawals in Retirement
Replies: 75
Views: 6163

Re: Surviving the Tax Bite of RMD Withdrawals in Retirement

Miriam2 When one first begins RMDs they average very roughly $4000/year per $100,000 for the each of the first 10 years of retirement. If you had space in the 15% tax bracket in the early years you might just fill up the bracket. If a married couple were to take only the minimum for a number of year...
by Peter Foley
Thu Jan 22, 2015 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Surviving the Tax Bite of RMD Withdrawals in Retirement
Replies: 75
Views: 6163

Re: Real 3% (CPI plus 3% guaranteed)

saltycaper wrote: If I understood the investment and was comfortable that it was actually going to perform as advertised, CPI + 3, I would probably allocate half my bond portfolio to it. Fantastic inflation protection. However, as rare as deflation has been, comparatively speaking over the past 50 y...
by Peter Foley
Thu Jan 22, 2015 2:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Real 3% (CPI plus 3% guaranteed)
Replies: 21
Views: 1815

Re: Surviving the Tax Bite of RMD Withdrawals in Retirement

Interesting article - thanks for doing the work and publishing the results. Two things come to mind, the first of which you mention. For persons who have large deferred income accounts relative to other retirement assets, Roth conversions in the years prior to RMDs can help smooth out the tax obliga...
by Peter Foley
Thu Jan 22, 2015 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: Surviving the Tax Bite of RMD Withdrawals in Retirement
Replies: 75
Views: 6163

Re: Getting Organized and Planning for the Future

You only need a half dozen funds at most. When a plan becomes very complex it almost begs for paid adviser assistance. Simplify and you will find that this is not at all necessary. The three fund portfolio is a good start. There are a number of suggested portfolios on the Wiki that come highly recom...
by Peter Foley
Wed Jan 21, 2015 4:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Getting Organized and Planning for the Future
Replies: 13
Views: 1361

Re: What age did you pay off your "forever" home

Needs change as one ages, kids grow up and leave, etc

I was about 50 when we paid off the home our kids grew up in. We stayed for another 11 years and then paid cash for our current house. This house is one story and lower maintenance. We hope to be here for another 15 to 20 years.
by Peter Foley
Wed Jan 21, 2015 4:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: What age did you pay off your "forever" home
Replies: 52
Views: 4061

Re: Should I enroll in this 457 plan?

It appears you are in the 39.6% tax bracket. I would think that not paying that rate of federal tax on $17,500 would be worth it even if the expenses were fairly high. There may be state tax savings as well.
by Peter Foley
Tue Jan 20, 2015 6:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I enroll in this 457 plan?
Replies: 15
Views: 927

Re: Help - unwinding windfall assets

So . . . if there is a delay in settling the estate, any gains in value between the date of death and the date of distribution would be long term capital gains. Correct?

If this is correct, the OP has no reason to delay selling the individual stocks.
by Peter Foley
Tue Jan 20, 2015 6:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help - unwinding windfall assets
Replies: 20
Views: 1858

Re: Help - unwinding windfall assets

Grabiner wrote: Gains on inherited assets are always long-term; the basis is reset at death, but the holding period is not. The only possible short-term gains would be on dividends and capital gains which had been reinvested by the estate after the death, and these would be small. I agree that the b...
by Peter Foley
Tue Jan 20, 2015 12:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Help - unwinding windfall assets
Replies: 20
Views: 1858

Re: Help - unwinding windfall assets

Grabiner wrote: Peter Foley wrote: To clarify - you have recently acquired 777k in assets, of which 100k is capital gains. Long term gains or short term? If the assets are inherited, any capital gains are long-term (except gains on shares purchased with reinvested distributions). This applies even i...
by Peter Foley
Mon Jan 19, 2015 8:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help - unwinding windfall assets
Replies: 20
Views: 1858

Re: Help - unwinding windfall assets

If you can stay within the 15% tax bracket while selling the individual stocks, there is little reason to delay. Some gains will offset some losses and you will lose the opportunity to subtract up to $3000 from your ordinary income. $450 in lost tax savings/year is likely not worth stringing this ef...
by Peter Foley
Sun Jan 18, 2015 10:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help - unwinding windfall assets
Replies: 20
Views: 1858

Re: Would Appreciate Review and Advice on Personal Investing

Welcome to the forum. In your situation I would look to concentrating my bond portfolio in the 401k/403b if there are low cost options. This would allow you to use low cost index equity funds in your taxable account. Something like a total US stock market and a total international stock market combi...
by Peter Foley
Sun Jan 18, 2015 9:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Would Appreciate Review and Advice on Personal Investing Pla
Replies: 3
Views: 404

Re: Personal Finance 2015 Checkup

finanplan wrote: 80% equities, 20% bonds for our AA, all in ETFs or mutual funds with low expense ratios. Just to confirm an earlier comment - you seem to know what you are doing and are on track. The only question you raise is the new house. Does the delay allow you to get out of the contract? The ...
by Peter Foley
Sun Jan 18, 2015 9:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: Personal Finance 2015 Checkup
Replies: 6
Views: 1383

Re: Help - unwinding windfall assets

You pay an adviser to add value. If you believe you know what to do there is no need to have an adviser. If you don't know what to do and can't get the information that adds value from your current adviser, you need to change advisers. To clarify - you have recently acquired 777k in assets, of which...
by Peter Foley
Sun Jan 18, 2015 9:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help - unwinding windfall assets
Replies: 20
Views: 1858

Re: Figuring out my parent's retirement

Additional information that would be helpful in terms of advising would be how much of their portfolio is in taxable, tax deferred, and Roth.

Is there some inflation adjustment with respect to their pensions?
by Peter Foley
Thu Jan 15, 2015 3:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Figuring out my parent's retirement
Replies: 15
Views: 1752

Re: Filling Tax Bracket Graphic?

dratkinson worte: When taxed, believe SS is taxed as ordinary income, so it fills in existing tax brackets. If SS kicks us into a higher bracket, believe chart becomes: Ordinary Income @ 25% (maximum of 85% of SS benefit) (15% QDI/LTCG benefits go away) Ordinary Income @ 15% Ordinary Income @ 10% I ...
by Peter Foley
Thu Jan 15, 2015 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: Filling Tax Bracket Graphic?
Replies: 13
Views: 2512

Re: Time to redeem Ibonds and EE bonds?

The fixed rate on a 2004 I-Bond is 1%. I would be tempted to sell, especially if you can do so tax free.
by Peter Foley
Thu Jan 15, 2015 12:19 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time to redeem Ibonds and EE bonds?
Replies: 11
Views: 1458

Re: help with portfolio for couple in mid to very late 80s

If I were looking at actively managed funds I would go with either Wellington or Wellesley. They both have a long track record so I personally feel no need to look elsewhere. If you are looking for something more passively managed, I agree with retiredjg's recommendations.
by Peter Foley
Wed Jan 14, 2015 10:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: help with portfolio for couple in mid to very late 80s
Replies: 20
Views: 2528

Re: Psychology vs. Fundamentals of investing

I consider the BH principles to be a guide, not a vow. One of the hardest to follow is "stay the course." In the context of not trying to time the market it is certainly spot on. In terms of sticking with my IPS, a little less so. I regularly get new insight from some of the people who pos...
by Peter Foley
Wed Jan 14, 2015 8:51 pm
 
Forum: Investing - Theory, News & General
Topic: Psychology vs. Fundamentals of investing
Replies: 61
Views: 4513

Re: Time to redeem Ibonds and EE bonds?

Grt2bOutdoors wrote: When were the EE bonds purchased? That is crucial in determining if the "double" feature has/is/or will be occurring shortly. Second, how much of the bonds inherited are principal and how much is accrued interest? Third, some of the EE bonds could be paying rates as hi...
by Peter Foley
Tue Jan 13, 2015 4:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time to redeem Ibonds and EE bonds?
Replies: 11
Views: 1458

Re: What was your costliest investment mistake?

Investing in QQQ (NASDAC) in the year 2000 - thinking it was an "index fund".
by Peter Foley
Tue Jan 13, 2015 4:06 pm
 
Forum: Investing - Theory, News & General
Topic: What was your costliest investment mistake?
Replies: 119
Views: 9632

Re: Net Worth Survey, 2015 Edition

boblehead Thanks for doing this. I wish I understood the data better. I took a stats course in college about 45 years go. Would you consider editing your initial post and describing in laypersons terms what the columns in the different tables mean? I'm afraid that if you responded as part of the thr...
by Peter Foley
Mon Jan 12, 2015 9:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Net Worth Survey, 2015 Edition
Replies: 134
Views: 22229

Re: help with portfolio for couple in mid to very late 80s

I think aiming for a simplified low cost portfolio that they might be able to understand is the way to go. Your approach heads in that direction as does the advice to use a couple of Vanguard actively managed funds. Is their health insurance okay? My in-laws were both WW2 vets and Tricare has been a...
by Peter Foley
Mon Jan 12, 2015 3:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: help with portfolio for couple in mid to very late 80s
Replies: 20
Views: 2528

Re: Not named on savings bond from parents

While not your question, depending upon how old this bond is it might make sense for your parents to retain it as long as it is paying a decent interest rate. Interest rates on bonds were much higher than today and were guaranteed for the life of the bond for selected time periods many years ago. (L...
by Peter Foley
Mon Jan 12, 2015 3:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Not named on savings bond from parents
Replies: 6
Views: 481

Re: Questioning the conventional logic on dividend reinvestm

I saw the updated post that references taxable accounts only. I think that is one key distinction. Taxable account - take cash, other accounts reinvest. I would also think that those in the accumulation phase might treat dividends differently than those in retirement. I turned off reinvestment of di...
by Peter Foley
Mon Jan 12, 2015 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: Questioning the conventional logic on dividend reinvestment
Replies: 24
Views: 2209

Re: Filling Tax Bracket Graphic?

dratkinson

I like the version you posted as it is more self explanatory. The only thing missing is the unique taxation of SS Benefits. Perhaps that is better illustrated in a separate chart.
by Peter Foley
Mon Jan 12, 2015 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: Filling Tax Bracket Graphic?
Replies: 13
Views: 2512

Re: Filling Tax Bracket Graphic?

[url] http://i61.tinypic.com/311q2xt.jpg [/url] How is this? Not ideal because qualified Roth and taxable accounts should not be part of a stacked bar chart that attempts to depict income and federal taxation. I'm trying to show gross income, not taxable income. In a chart like this where does one p...
by Peter Foley
Sun Jan 11, 2015 8:55 pm
 
Forum: Investing - Theory, News & General
Topic: Filling Tax Bracket Graphic?
Replies: 13
Views: 2512

Re: Filling Tax Bracket Graphic?

If you want to create a graphic for yourself plug the following numbers into an excel spreadsheet and create a stacked bar graph. The illustration is not exactly precise, but is close. I included some income from Roth withdrawals and from savings account withdrawals to illustrate a potential approac...
by Peter Foley
Thu Jan 08, 2015 5:34 pm
 
Forum: Investing - Theory, News & General
Topic: Filling Tax Bracket Graphic?
Replies: 13
Views: 2512

Re: Filling Tax Bracket Graphic?

The graphic created by tfb in this thread is a good illustration. kaneohe wrote like this? http://www.bogleheads.org/forum/viewtopic.php?f=10&t=86849 see the chart by tfb on 12/11/2011 I think the OP is looking for something more detailed than this. I like the idea of a stacked bracket that incl...
by Peter Foley
Thu Jan 08, 2015 11:48 am
 
Forum: Investing - Theory, News & General
Topic: Filling Tax Bracket Graphic?
Replies: 13
Views: 2512

Re: Michael Kitces on long-term care insurance

I am not a fan of long term care so keep that in mind with regard to potential bias in my comments/story. My father in law died recently at the age of 93. He had been in declining health since age 90 and was living "independently" with my mother in law, also age 93, who was only in slightl...
by Peter Foley
Wed Jan 07, 2015 6:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Michael Kitces on long-term care insurance
Replies: 17
Views: 2039

Re: What is the best product to clean golf clubs?

S C Hoosier wrote:

A clubmaker or Golfsmith can do this for much less than $90 per club, I would think.


We are definitely in different leagues. $90 is about what I paid when I upgraded to a new set of irons about 5 years ago. (Used on E-Bay) :wink:
by Peter Foley
Wed Jan 07, 2015 5:58 pm
 
Forum: Personal Consumer Issues
Topic: What is the best product to clean golf clubs?
Replies: 14
Views: 1044

Re: 50/50 simplicity

After reading the Trinity Study I concluded that anything between 60/40 and 40/60 was okay IF one's need for risk and ability to take risk were in line with that range. At age 60 I chose 45/52/3 equities/bonds/real estate as my retirement goal. A major motivator was to be able to sleep well at night...
by Peter Foley
Wed Jan 07, 2015 5:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: 50/50 simplicity
Replies: 25
Views: 3140

Re: Help my 67 y/o mother retire

With the detail you provided she could sell all her losers and reduce her exposure to Celgene. She could use the proceeds to pay down the mortgage. You could emphasize a couple of things. The importance of having one's mortgage paid off to reduce expenses in retirement and the fact she has too much ...
by Peter Foley
Tue Jan 06, 2015 11:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help my 67 y/o mother retire
Replies: 14
Views: 1903
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