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by SGM
Fri May 29, 2015 8:26 am
Forum: Investing - Theory, News & General
Topic: "Are You Devoting Too Much Time (and Money) to Niche Asset Classes?"
Replies: 41
Views: 3079

Re: "Are You Devoting Too Much Time (and Money) to Niche Asset Classes?"

The inside of article doesn't come down either way on cap weighted indices or not. She is just making you aware that small cap, emerging market and high yield bonds make up a small part of the market. If you tilt into these funds you are tilting into a smaller amount of the total market. I can't say...
by SGM
Thu May 28, 2015 4:06 am
Forum: Investing - Help with Personal Investments
Topic: After you pay off your house...then what?
Replies: 26
Views: 3237

Re: After you pay off your house...then what?

Increase your taxable account. Once our house was paid off we dollar cost averaged into drips every month. With so many low expense index funds offered by Vanguard I would dollar cost average into those Vanguard funds if I had it to do over again. My choices today would be to put the majority of ext...
by SGM
Wed May 27, 2015 3:41 pm
Forum: Personal Consumer Issues
Topic: New or Used Honda Odyssey
Replies: 46
Views: 3799

Re: New or Used Honda Odyssey

We have had lots of luck with Honda Odysseys. Our first was a smaller 1994 model and kept it for almost 300,000 miles. We found a used one for farm use and if the employee had changed the oil as we expected he would the van would be still running. He was in charge of maintenance of farm vehicles. I ...
by SGM
Wed May 27, 2015 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: How much does social security factor into your retirement income?
Replies: 169
Views: 11228

Re: How much does social security factor into your retirement income?

I purchased Kotlikoff's book recently. I got tired of waiting to get it out of the library and wanted to support my favorite independent bookstore with a purchase. The book had no effect on my SS strategy other than confirming it. However, it will help clarify issues for a widow and a widowed, divo...
by SGM
Wed May 27, 2015 4:23 am
Forum: Personal Finance (Not Investing)
Topic: How much does social security factor into your retirement income?
Replies: 169
Views: 11228

Re: How much does social security factor into your retirement income?

Delaying SS until 70 and I retired last year. DW will get a spousal at her FRA and then her own at 70. She will consider the spousal fun money. No RMDs for us as we have converted all tax deferred accounts. SS is basically another safety net and delaying increases the size of the safety net. There i...
by SGM
Mon May 25, 2015 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Question about Taxes on Social Security
Replies: 28
Views: 2363

Re: Question about Taxes on Social Security

I would like to get some additional feedback on my view of the Social Security "Break Even" concept. As stated above, when I suspend SS payments until 70 years of age, I am effectively leaving $100K uncollected. This would give me an extra $700 per month at age 70. But I have to collect t...
by SGM
Mon May 25, 2015 8:59 am
Forum: Investing - Theory, News & General
Topic: Stemikger "Volatility is far from synonymous with risk."
Replies: 100
Views: 5280

Re: Stemikger "Volatility is far from synonymous with risk."

I have never equated volatility with risk. High volatility can cut into returns but that is not the same as risk. I am more concerned with the risk of inflation and losing purchasing power and being out of the market. Stock market fluctuations are a problem if you have to sell at a low point, but I ...
by SGM
Sat May 23, 2015 8:15 pm
Forum: Investing - Help with Personal Investments
Topic: Move DRIP holdings to Vanguard brokerage?
Replies: 6
Views: 552

Re: Move DRIP holdings to Vanguard brokerage?

I moved all DRIP holdings to a brokerage account years ago. I never found it difficult to keep track of my basis. Each years final statement should be kept as it has all purchases and reinvested dividends listed for the prior year. You simply add up all dividends and purchases over the years. It is ...
by SGM
Fri May 22, 2015 4:48 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 16
Views: 1912

Re: Vanguard Managed Payout Fund

I meant taking out 3.4% annual rate taken out on a monthly basis. :oops: That comes to something like .28% per month.
by SGM
Fri May 22, 2015 5:46 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Managed Payout Fund
Replies: 16
Views: 1912

Re: Vanguard Managed Payout Fund

The goals of this fund are similar to my own. I want a monthly payout of about 4% and I want the fund to keep up with inflation. The ER went up to 0.42 without the fanfare that lowering of ERs get on Vanguard's website. I have a small amount of money in the fund since last year. It is the only relat...
by SGM
Mon May 18, 2015 7:45 am
Forum: Investing - Help with Personal Investments
Topic: Retirement and wealth management fees
Replies: 28
Views: 2601

Re: Retirement and wealth management fees

I would suggest something like the 3 fund portfolio. If you want a REIT it should be in tax deferred as dividends are not qualified. A Vanguard muni fund or MUB would be appropriate in taxable. I think Vanguard is going to introduce a muni ETF with lower expense ratios than MUB. I don't think manage...
by SGM
Sat May 16, 2015 6:35 pm
Forum: Personal Finance (Not Investing)
Topic: How much does social security factor into your retirement income?
Replies: 169
Views: 11228

Re: How much does social security factor into your retirement income?

Even if SS contributes small amounts compared to withdrawals, I think it can make a big difference in whether you will run out of money at age 100. Say you withdraw $150K per year and you had $15K from SS that would cut your withdrawals to $135K. Or you could supplement it with an SPIA or cut back s...
by SGM
Thu May 14, 2015 6:49 pm
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth questions.....
Replies: 25
Views: 1426

Re: IRA to Roth questions.....

I would still convert early in case the market crashed after the conversion up until October 15, 2016. You could recharacterize the Roth if it suddenly becomes worth say 25K before October 15 2016. SGM, if you have until October the following year to recharcterize, why would you want to do this ear...
by SGM
Wed May 13, 2015 9:39 pm
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth questions.....
Replies: 25
Views: 1426

Re: IRA to Roth questions.....

Waiting until the end of the year to convert doesn't save you any taxes necessarily unless the market goes down at time of conversion. You just make the estimated tax payment later in the year. If the market goes up towards the end of the year you would pay more in taxes. Thanks for the reply..... ...
by SGM
Wed May 13, 2015 7:43 pm
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth questions.....
Replies: 25
Views: 1426

Re: IRA to Roth questions.....

Waiting until the end of the year to convert doesn't save you any taxes necessarily unless the market goes down at time of conversion. You just make the estimated tax payment later in the year. If the market goes up towards the end of the year you would pay more in taxes. Thanks for the reply..... ...
by SGM
Wed May 13, 2015 7:24 pm
Forum: Personal Finance (Not Investing)
Topic: Is this a dumb thing to do? [Pied-a-terre to share with daughter]
Replies: 41
Views: 4892

Re: Is this a dumb thing to do? [Pied-a-terre to share with daughter]

We considered a pied-a-terre in a nearby city. Our children are not working real close to where we would buy. For a while we had one child living in our vacation house. It sounds as if you and daughter are simpatico. I think it is an excellent idea.
by SGM
Wed May 13, 2015 7:04 pm
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth questions.....
Replies: 25
Views: 1426

Re: IRA to Roth questions.....

I am going to move some money from T.IRA to Roth this year. Do I have to move it all art once, or can I do it in 'batches'.? If I want to reduce estimated tax payments, could I do this transfer in December of this year and pay estimated taxes then? Is this how people usually do this? Anything else ...
by SGM
Wed May 13, 2015 4:51 am
Forum: Investing - Theory, News & General
Topic: "Why Would an Experienced Investor Buy a Target-Date Fund?"
Replies: 38
Views: 4656

Re: "Why Would an Experienced Investor Buy a Target-Date Fund?"

Why wouldn't I want to buy a Target-Date Fund? 1. I know my personal situation better than anyone else. 2. I only own Admiral shares when available and the ERs are lower. 3. I don't necessarily want to change my AA to more bonds as I age. 4. I am concerned that rebalancing frequently may be less tax...
by SGM
Tue May 12, 2015 4:55 am
Forum: Investing - Help with Personal Investments
Topic: Annuitized so much already ... doubting value of delaying S.S.
Replies: 19
Views: 1813

Re: Annuitized so much already ... doubting value of delaying S.S.

Yes it is possible to annuitize too much, but I don't think it is true in your situation. I would spend some of the 1.3MM to cover the shortfall in income caused by delaying SS. I would not compare percentages. I would look at the amounts SS would deliver at specific ages, recalling that your wife c...
by SGM
Sun May 10, 2015 5:19 pm
Forum: Personal Finance (Not Investing)
Topic: Jack Bogle hates ETFs?
Replies: 22
Views: 2335

Re: Jack Bogle hates ETFs?

Jack has written that most ETFs are held by institutions and hedge funds. These institutions are not necessarily in it for the long haul. They trade frequently. Jack thinks that low cost Vanguard Index ETFs should be held for the long term. He has written about this extensively in The Clash of Cultu...
by SGM
Sun May 10, 2015 5:21 am
Forum: Investing - Theory, News & General
Topic: Stop contributions to retirement accts due to future RMDs
Replies: 77
Views: 5434

Re: Stop contributions to retirement accts due to future RMDs

Another reason to convert tIRAs to a Roth is to avoid the 3.8% net investment income tax in the future. Over the long haul Roth investments aren't included in your MAGI. During the year of conversion it could trigger the 3.8% NIIT. You are exposed to the 3.8% NIIT only if your modified adjusted gros...
by SGM
Sat May 09, 2015 9:55 pm
Forum: Investing - Help with Personal Investments
Topic: Non traded REITs and indexed annuities
Replies: 49
Views: 2203

Re: Non traded REITs and indexed annuities

I would never buy either a non traded REIT or an indexed annuity. They are neither good nor bad, simply ugly. Ray Lucia is a nice guy who made some errors and was a big fan of non-traded REITs. I liked listening to his radio show, but I wouldn't let him manage any investments for me. I hung up on a ...
by SGM
Sat May 09, 2015 8:53 am
Forum: Investing - Theory, News & General
Topic: Stop contributions to retirement accts due to future RMDs
Replies: 77
Views: 5434

Re: Stop contributions to retirement accts due to future RMDs

I have thought about it for a long time, but could not do anything about the future "tax bomb" until 2010 when conversions were allowed for any income. I always maxed the amount in tIRAs and 401ks for me and my spouse including non-deductible IRAs. Roths were never available for me until ...
by SGM
Sat May 09, 2015 5:05 am
Forum: Investing - Theory, News & General
Topic: Stop contributions to retirement accts due to future RMDs
Replies: 77
Views: 5434

Re: Stop contributions to retirement accts due to future RMDs

I have thought about it for a long time, but could not do anything about the future "tax bomb" until 2010 when conversions were allowed for any income. I always maxed the amount in tIRAs and 401ks for me and my spouse including non-deductible IRAs. Roths were never available for me until c...
by SGM
Thu May 07, 2015 4:57 am
Forum: Investing - Theory, News & General
Topic: The Case FOR the Roth 401k
Replies: 46
Views: 4259

Re: The Case FOR the Roth 401k

When comparing a Roth to a traditional IRA I always look at the buying power. In the 25% tax bracket a $100K tIRA has the same buying power as a $75K Roth. RMDs are significant if you have a large amount in tax deferred space. If you start saving early and if at some point you have a 401k you may be...
by SGM
Wed May 06, 2015 7:44 pm
Forum: Investing - Theory, News & General
Topic: McNabb op ed - possible 8% cash requirement
Replies: 33
Views: 3000

McNabb op ed - possible 8% cash requirement

Thursday's WSJ has an op-ed by McNabb that large mutual funds may be required by regulators to have 8% cash on hand. That would be 8% out of the market.
See http://www.wsj.com/articles/the-tax-thr ... 1430951829. Google the title of the article if you do not have a subscription.
by SGM
Wed May 06, 2015 12:32 pm
Forum: Investing - Theory, News & General
Topic: The Case FOR the Roth 401k
Replies: 46
Views: 4259

Re: The Case FOR the Roth 401k

I would certainly advise putting at least some money in a Roth 401k if available to you. You don't know that your investing in yourself and in your various accounts may pay off far more than you expect. :beer
by SGM
Wed May 06, 2015 3:33 am
Forum: Personal Finance (Not Investing)
Topic: retirement funding options? self-employed, age 67
Replies: 2
Views: 466

Re: retirement funding options? self-employed, age 67

I think he could do both or either option. The solo 401k may be easier. There are slightly different limits for an S corp vs. a sole proprietor. What will his tax situation be in retirement? Has he been doing back door Roths? He can do $6500 a year at his age and double that if he has a spouse. He w...
by SGM
Tue May 05, 2015 4:48 am
Forum: Investing - Help with Personal Investments
Topic: First Time Poster - Planning to Open Vanguard Account - Please Critique/Advise! Thanks!
Replies: 9
Views: 1119

Re: First Time Poster - Planning to Open Vanguard Account - Please Critique/Advise! Thanks!

In your tax bracket I would look at municipal bond funds in your taxable account. I would have been putting money into a backdoor Roth in addition to a 401k. You could put in $5500 into a non-deductible IRA this year and pay no or very little additional taxes for the conversion to a Roth. You would ...
by SGM
Mon May 04, 2015 8:45 pm
Forum: Investing - Help with Personal Investments
Topic: Keep or sell high ER fund? [What to do with 200k cash?]
Replies: 9
Views: 760

Re: Keep or sell high ER fund?

If you had Vanguard's total market admiral fund you would save 1.36% per year in expense ratio. That is about $2700 per year less in expenses. I would sell the fund and you will make up for the tax loss over time. I don't like paying taxes but I would rather pay taxes than overpay for an investment....
by SGM
Sun May 03, 2015 4:44 am
Forum: Personal Finance (Not Investing)
Topic: Too late for career change/worth it?
Replies: 44
Views: 5880

Re: Too late for career change/worth it?

Another yes vote here. I first went back to school at your age. For me it was well worth it.
by SGM
Sat May 02, 2015 9:19 am
Forum: Investing - Theory, News & General
Topic: Vanguard governance and investor rights
Replies: 66
Views: 3429

Re: Vanguard governance and investor rights

There are Vanguard employees and retired officers who attend the annual conferences, often one or more is on a panel or gives a presentation. Also the conference comes to Vanguard on one night and there are opportunities to mingle with Vanguard employees and to visit various booths set up at Vanguar...
by SGM
Sat May 02, 2015 4:53 am
Forum: Investing - Theory, News & General
Topic: Vanguard governance and investor rights
Replies: 66
Views: 3429

Re: Vanguard governance and investor rights

One rationale for non disclosure of compensation information is to avoid losing key personnel to competitors. I think Jack or others have addressed the question at a recent Phillie annual BH meeting. I don't lose any sleep over the compensation of key Vanguard officers.
by SGM
Wed Apr 29, 2015 7:27 pm
Forum: Personal Finance (Not Investing)
Topic: Wait for Social Security or not?
Replies: 13
Views: 1175

Re: Wait for Social Security or not?

I would delay SS as long as possible. Whatever she takes out to cover $1500 a month from an IRA/401K and with only $10K in taxable she would be in the 15% marginal tax category. A part time job would be helpful. Any higher amount of SS would be indexed to inflation. As a female she generally has a h...
by SGM
Mon Apr 27, 2015 4:03 pm
Forum: Personal Finance (Not Investing)
Topic: Many Seniors Face Higher Medicare Surcharges
Replies: 5
Views: 1120

Re: Many Seniors Face Higher Medicare Surcharges

Thanks for your comments Alan. I summarized a relevant point from the Kiplinger Tax Letter of April 24, 2015 referencing a particular effect of last weeks law on this middle tax bracket Modified AGI of $133,500 to $214,000 for singles and double that for couples. I think it is actionable for those s...
by SGM
Mon Apr 27, 2015 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Many Seniors Face Higher Medicare Surcharges
Replies: 5
Views: 1120

Many Seniors Face Higher Medicare Surcharges

The law signed last week by President Obama for the doctor fix will create an issue when planning 2015 and 2016 for taxes for some seniors. The extra cost for singles making between 133.5K and 214K and couples with incomes between 267K and 428K might need to consider capital gains and Roth conversio...
by SGM
Sat Apr 25, 2015 4:20 pm
Forum: Personal Consumer Issues
Topic: Adequate alternatives to TurboTax?
Replies: 28
Views: 1932

Re: Adequate alternatives to TurboTax?

I switched to HR Block Taxcut about 8 years ago. One year TurboTax required some personal information and I refused to use the program after that. I did personal and s corp taxes with the premium program. I have had no significant problems with Taxcut. I can get TurboTax for free but decline to use ...
by SGM
Sat Apr 25, 2015 4:43 am
Forum: Investing - Help with Personal Investments
Topic: Roth IRA options when you can't contribute to it anymore
Replies: 12
Views: 1281

Re: Roth IRA options when you can't contribute to it anymore

I continued to contribute to a non-deductible traditional IRA before 2010 when I first became eligible to convert to a Roth. If you are expecting to be in a lower tax bracket, equal tax bracket or only slightly higher tax bracket you may be better off converting some of your IRAs to a Roth despite h...
by SGM
Fri Apr 24, 2015 9:45 am
Forum: Investing - Theory, News & General
Topic: Is tax loss harvesting that powerful ?
Replies: 44
Views: 3248

Re: Is tax loss harvesting that powerful ?

I think there would be no question of a wash sale if you sold the total stock market and reinvested it in the S&P 500 immediately. A relative had been advised against buying one company's version of the S&P 500 and reinvesting in Vanguard's much lower cost version of the S&P 500 as viola...
by SGM
Fri Apr 24, 2015 9:25 am
Forum: Investing - Theory, News & General
Topic: Is tax loss harvesting that powerful ?
Replies: 44
Views: 3248

Re: Is tax loss harvesting that powerful ?

I have benefited from both long and short term tax loss harvesting. I may not sell stocks with large long term capital gains as they can be inherited at a higher basis. I agree that short term tax loss harvesting is the better of the two. However, I have lots of LT cap gains.
by SGM
Tue Apr 21, 2015 6:12 pm
Forum: Personal Finance (Not Investing)
Topic: [Who is Ameriprise? Got invitation from a financial advisor]
Replies: 32
Views: 2980

Re: [Who is Ameriprise? Got invitation from a financial advi

I had a visit from an acquaintance who tried to sell me an annuity through Ameriprise. The annuities were not appropriate. He was basically trying to sell to everyone he knew. I felt sorry for him, but of course did not buy an annuity. There are better ways to socialize with neighbors than to listen...
by SGM
Tue Apr 21, 2015 4:50 am
Forum: Personal Finance (Not Investing)
Topic: What's your average monthly expense???
Replies: 85
Views: 8337

Re: What's your average monthly expense???

I don't really do a formal budget, but the first expense I paid was to myself for investment accounts.....retirement accounts and then taxable accounts when anything was left over. Monthly debt payments never seem normal to me.
by SGM
Mon Apr 20, 2015 5:57 pm
Forum: Personal Consumer Issues
Topic: Just got contact lenses. Should I buy backup glasses?
Replies: 22
Views: 1103

Re: Just got contact lenses. Should I buy backup glasses?

If you are severely near sighted you probably want a pair of eyeglasses at your bedside.
by SGM
Mon Apr 20, 2015 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: Paying for GFs school - any way to help myself?
Replies: 76
Views: 4857

Re: Paying for GFs school - any way to help myself?

You can pay tuition directly to the school and it has nothing to do with gift tax. Wealthy grandparents sometimes pay tuition directly and avoid any gift tax at all.
by SGM
Mon Apr 20, 2015 1:41 pm
Forum: Investing - Help with Personal Investments
Topic: Solo 401K a no-brainer over company 401k?
Replies: 11
Views: 947

Re: Solo 401K a no-brainer over company 401k?

Although I rarely qualified for a deductible tIRA I always contributed to a non-deductible tIRA. I converted after the 2010 tax law changes. A back door conversion to a Roth comes with little or no taxes due. It has the benefit of never being taxed and lowering the amount in taxable accounts. Having...
by SGM
Mon Apr 20, 2015 5:14 am
Forum: Personal Finance (Not Investing)
Topic: Preparing for the Minimum Required Distribution
Replies: 41
Views: 3208

Re: Preparing for the Minimum Required Distribution

Your Medicare part D and part B supplements help with payments for doctor's visits and medicines, but do not pay for long term care. If you have high expenses due to having to live in a nursing home then the tax on RMDs will be lower and maybe zero. But people generally don't go into long term care ...
by SGM
Sat Apr 18, 2015 8:55 am
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3698

Re: Retirement expenditure concept

LTCI is a very problematic product. Many insurers miscalculated and got out of LTCI business. Those who bought through them were out of luck. Other insurers have raised rates to the point of the insurance becoming unaffordable. One buddy of mine responded by opting out and losing the benefit of his ...
by SGM
Sat Apr 18, 2015 8:23 am
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3698

Re: Retirement expenditure concept

Regarding the reasons for enthusiasm for delaying SS vs. less enthusiasm for annuities are multiple. I am not sure it has as much to do with covering expenses as with the things like safety, payout, etc. Most annuities are sold not bought. I think those on this site that like annuities mostly like S...
by SGM
Thu Apr 16, 2015 8:38 am
Forum: Investing - Theory, News & General
Topic: Retirement expenditure concept
Replies: 46
Views: 3698

Re: How many baskets for your eggs?

Simplicity is good, but do you have to have it for RMDs? Can't you take the full RMD out of one account or provider and calculate it for yourself? If that were not the case then I would combine the IRAs to one provider. I am recently retired and am not anywhere near the simplicity I would like to ha...
by SGM
Wed Apr 15, 2015 4:40 am
Forum: Investing - Help with Personal Investments
Topic: When to sell actively managed funds in taxable acct
Replies: 21
Views: 1801

Re: When to sell actively managed funds in taxable acct

I would sell the ones with the highest ERs first a little each year. I have individual stocks with capital gains that I have been selling slowly over several years, but at least they don't have an ER to pay each year. I am so glad I never had a financial advisor.

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