Bogleheads.org

b) Vanguard lets you set up automatic withdrawals at almost any desired interval--monthly, semimonthly, biweekly, etc.--the puzzle of course is to figure out how big to make them. It would probably be better to decide that for oneself on some thoughtful basis rather than letting whatever formula is...

The proper way to establish this connection is for the mother to execute a power of attorney giving rights to the son and daughter and filing that power of attorney at the bank with requests from the mother to link the accounts. If the mother does not want the son and daughter to have access to her ...

I think damjam is giving good advice. The good news is that even if you increase your withdrawal rate from 1.6% to 2.6% by paying the adviser 1% it is still safe. For some people paying the advisor is not something they can afford. Also, when you read about SPIA's don't forget you already own $70K i...

An interest free loan may come at some other cost (built into a price, for example) compared to alternative ways of doing the same thing.

TR Income is 30% stocks and 70% bonds, so the total asset allocation would become 12% stocks, 28% bonds, and 60% cash. This is still a very conservative portfolio. If you are saying she needs to withdraw and spend the RMD only, then her overall withdrawal rate at age 80 is 40% of 5.5% which is 2.2%,...

And to throw another sticky wrench into the mix, we also need to know the difference between uncertainty and risk. Paul You do that by creating a list of all the things that someone might want to consider to be risk and look at when and to what degree one simply has either consequences of uncertain...

It is noted that only these are all stock funds except the third which holds 20% in cash (for now). It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky. Thanks. As bonds are unavailable to me, I'm trying to figure out a fixed-i...

...Wouldn't it be more straightforward to plan for income needs thirty years from now assuming the possibility of certain pensions and deciding what to do to make up whatever difference might be required? Why convert an income stream to a funny money asset in order to determine what assets will be ...

The fate of a portfolio is determined by the return (in sequence) and the withdrawals (in sequence). Taking and spending a dividend is a withdrawal. A portfolio which pays dividends outpaces a portfolio that does not, both paying the same withdrawals, only if the return is greater. I think it has al...

It is noted that only these are all stock funds except the third which holds 20% in cash (for now).

It would be a good idea to think about the stock/fixed income distribution and what to do if almost 100% stock is too risky.

I would have thought that if one wants to capitalize income steams one would do so only once the income actually exists. These folks have about thirty years to go before that income materializes, if it does at all. So the question would be, how should one invest at age 30 thinking that at age 60 the...

You have to add the inflation increment. That would mean estimating inflation for the time you hold the bonds.

I think the formulas for this are on the Treasury Direct web pages.

It seems to me this must be true, that the stock price drops by the amount of the dividend. Otherwise, buy before the dividend, and sell after. http://www.investopedia.com/articles/02/110802.asp Keith Thanks for the link. Do we actually see this in the real world? Does the stock price decrease a co...

But I haven't see any boglehead topics about when you should or shouldn't allocate across an entire portfolio. Can anyone help point out why you should always allocate across an entire portfolio even if most of your assets are held in a single account? Your question is more fundamental than this. A...

Dividends are the only thing that gives stocks a value at all. Then how is it that the biggest single annual return I ever got from a stock (when I had some) was when the company went private and the new holders bought everybody out? The point is that someone can actually remove stock from the mark...

Larry Swedroe's The Only Guide to a Winning Investment Strategy You'll Ever Need is designed to be just that. While other books go into greater detail, I feel that by reading this book, I learned 90% of what I need to be a solid Boglehead investor. His book with a similar title on Bonds is the best...

In fact TIPS explicitly protect against all inflation, expected and unexpected, as that is exactly what the contract to increment the principal by CPI means. The point people are making is about what degree of protection one has anyway in nominal bonds. Nominal bonds have an expectation of inflation...

Depending on how much one wants to know a search and reading on the topic of "diversifiable risk" would be the place to start.

Brian I do not understand this logic. You are uncomfortable sending sensitive documents via email yet you have no problem sending a fax, which is potentially received on a physical fax machine located in some mailroom where several people (including mail clerks) have access to the machine? So we ha...

Bogle's recent interview on Morningstar discusses the problems with 401ks & talks about how people tend to treat them like "thrifts" rather than retirement accounts. What is a "thrift"? I've seen reference to this quote a few times in the last day, I googled it but the only ...

Actually, there is one little gotcha: if you have the same funds in a taxable account and you want to harvest a tax loss (or otherwise sell at a loss), this may interact with the dividend reinvesting purchases in the tax-advantaged account. I'm told this situation is a tax accounting nightmare, tho...

It seems to me folks are just picking a point on the risk/return curve for bonds that, for whatever reason, they're comfortable with. For example, you are taking risk in the Total Bond Market fund: credit risk, interest-rate risk, inflation risk, and prepayment risk (in the MBS). I'm just not comfo...

Technically, the number of shares is also irrelevant. The key is not to "accumulate more shares", but "accumulate more money in shares". Great point, Frengo. Other than that, you are totally right. Do you mean the part about the critics showing up? If so, very true, and guilty. ...

Frengo wrote:Duration is approximately the amount of time after which it doesn't matter whether interest rates have changed or not.
Any earlier, you wish they hadn't risen. Any later you wish they had. For rate drops it is the opposite.

I like this.

I wonder if any long-term studies exist that take into account brokerage fees when reinvesting dividends. Suppose with each dividend reinvestment, a $10 commission was charged by the broker. What would the final amounts result to? Many brokers offer free dividend reinvesting. Personally I don't do ...

If the capital gain had not been reinvested the return would have been 4.3% compounded resulting in a final value of $302,711, hence capital gain accounted for 99% of the return :shock: That's exactly my point! By the logic used in the article, isn't it just a matter of which one you apply first? S...

If the capital gain had not been reinvested the return would have been 4.3% compounded resulting in a final value of $302,711, hence capital gain accounted for 99% of the return

as I said before not sure about my risk tolerance but looking through the retirement funds it doesnt appear that the risks are that different for each fund. target 2045 fund 90/10 (stock/bond) target 2040 fund 90/10 target 2035 fund 86/14 target 2030 fund 78/22 Is it just me or does it seem that al...

Did we just pass the "dark cloud" that was alluded to in W. Bernstein's post about REITs? i.e. There was about a 10% drop in the last month or so. I'm debating about making a new contribution in my tax-deferred account to buy more shares of VNQ. Wouldn't it make more sense to set an asset...

Nasrudin, One of the reasons to diversify is to hold assets that do NOT behave the same at the same time. If Bonds and stocks rose and fell at the same time, why hold both? Having one go down while the other goes up is a good thing because it provides a more stable ride. Bonds are chosen because th...

JW, Personally, I found the shortest path to be spending the $40 it costs to have http://www.maximizemysocialsecurity.com figure it out. You can download your actual earnings histories, and it will maximize the result for you and give you an overly long report for printing. I used that site as well...

People have different ideas for what an investment is, or should be, or do. What is your definition of an investment? While the topic can be interesting in general, definitions are usually only interesting when they are part of some purpose to be served in answering a question. I'm curious if you h...

I wouldn't tilt that heavily to REITs based on having to ask other people if it is a good idea. I would have suggested that if one want's to tilt to supposed asset classes that the small cap value concept would be a first choice with REITs and commodities more debatable approaches. This is, however,...

My stock funds are all showing capital gains, but my tax exempt bond funds are showing losses. Time to TLH the tax exempt bond funds? Are there are special issues that arise (I've only done TLH for stock funds before)? Right now, my bond funds are set to automatically reinvest dividends. I guess I ...

Well, I don't necessarily agree. The problem is in defining the minimum probability of maintaining a certain level of capital after N years. The part in bold is the correct definition of the rule objective, as you point out. But if we calculate an average of the possible outcomes I think we will ge...

I'm trying to apply the "4% rule". I retired last year with a 1M$ capital and according to the rule I should expect to be able to spend 40k annually, inflation adjusted, for the foreseeable future, while keeping my 1M capital, also inflation adjusted. After the first year I spent my 40k, ...

The purpose of any type of insurance is risk management. I agree with that, but IME COBRA is not cheap and I am willing to self-insure against the risk that *if* something happens I will not be able to fill out the paperwork in a timely fashion. When this came up for me, I estimated that the chance...

4) So I don't know what motivates the poster to want to bail on total bond, but if it was concerns that the market might go south due to interest rates increasing - which causes every bond fund to lose value by the amount of it's duration, then you ought to be telling us you put the money into a sh...

If you waive coverage, then you technically have a gap between June 30 and August 1 where you were not covered. How does that impact pre-existing condition etc. etc.? Every time I separated from an employer I received a formal letter from the medical insurance provider stating when my coverage ende...

If you waive coverage, then you technically have a gap between June 30 and August 1 where you were not covered. How does that impact pre-existing condition etc. etc.? Every time I separated from an employer I received a formal letter from the medical insurance provider stating when my coverage ende...

Again, I get a bit befuddled about this, but if the higher interest rates lead to higher yields, then it would cushion, if not offset, the decrease in the value. If that's true, then it shouldn't matter if rates continue to go up or not. If they continue to go up, the yield would presumably go up a...

Ten years ago VG recommended 8%. Five years ago 4%. Two years ago 2%. If what you say is really true then Vanguard is engaging in pernicious and irresponsible behavior. I would avoid their advice like the plague. Does Vanguard even have the wherewithal to arrive at advice like this at all, and if t...

Vanguard Wellesley has been a highly disciplined and well run fund since its inception in 1970, and along with its sister Wellington also highly liked by many Bogleheads. I would not be surprised if there are more than a few Bogleheads tha own it. I would not throw it away so fast! Yes, that was th...

If you think it would bother you a lot if the possible fluctuations in an IT fund would be down at just the time you needed the money for an emergency, then you should invest in a shorter term fund; otherwise you might decide on an IT fund.

It worked well for me when the discount was 15%, the stock was issued the day before the end of the month, and the stock could be sold at no commission the following day. When they put a one-year vesting period on the sale, meaning holding 15% of one's annual salary at risk for a year, I bailed from...

SnapShots wrote:Five years ago VG recommended the three fund portfolio and two years ago, during a financial check up, recommended a 2% SWR over the 4%. Gulp!

I would sure be interested to know what explanation you got for this.

Well, of course, putting 2% into anything is pretty meaningless. I think it might actually be helpful as you get the experience of a "hands on" view of how long TIPS might behave. Other than than that what you are seeing is what comes with the territory in long bonds. If one had justified ...

Tax exempt bonds, beyond the individual tax position, should not be a free lunch on the risk/return spectrum. Your move is to a different risk/return proposition which is fine or not depending on what you want. If someone who has real insight into the relative dynamics of munis in today's market wou...

DBR, As duration shortens, I have to invest less aggressively. It is important that I maintain at least the net principal value. So everyone owns the same asset allocation in each person's proper fraction of the trust. Income is distributed in proportional payments per beneficiary but NOT in equal ...

Fair enough The idea of the Wall Street Casino is that trying to "beat the house" is a fool's game. There is nothing wrong as such with stocks and bonds. What you want to do , one way or another is to own the house. I am a firm believer in stock index funds and have about 60% of the pot i...