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Re: 401K's after Retirement

For all practical purposes I'm functionaly retired.. Question is should I continue re-investing dividends into my regular 401K account or start moving into just a mutual fund. I want to simplify my holdings but I dont want to get killed for taxes and Capital gains. We don't really need the money to...
by dbr
Tue Sep 02, 2014 10:22 am
 
Forum: Investing - Help with Personal Investments
Topic: 401K's after Retirement
Replies: 3
Views: 223

Re: No advantage of Slice and Dice vs 3Fund?

I don't even understand why people use the term "tracking error" because to me that's when a fund is supposed to compare to an index and doesn't match well but a slice and dice portfolio isn't supposed to track a three fund and in fact that's kind of the point so it seems like the term is...
by dbr
Mon Sep 01, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: No advantage of Slice and Dice vs 3Fund?
Replies: 41
Views: 2532

Re: No advantage of Slice and Dice vs 3Fund?

It's possible that this tracking error regret with small value tilting may be a concern with the length of time things can be worse rather than better. However, just in stocks and bonds there can be multi-decade secular trends that should be called tracking error regret. Also the reverse can happen....
by dbr
Mon Sep 01, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: No advantage of Slice and Dice vs 3Fund?
Replies: 41
Views: 2532

Re: 2 Piece Retirement Portfolio

In short what you want to do is change your asset allocation from a little more conservative one early in retirement to a little more aggressive one by the time you begin Social Security. This is a good point. To the OP, is this an unintended consequence or was this your objective from the start? I...
by dbr
Mon Sep 01, 2014 10:35 am
 
Forum: Investing - Help with Personal Investments
Topic: 2 Piece Retirement Portfolio
Replies: 18
Views: 1055

Re: table suggests total bond not best as diversifier

What is considered a high stock portfolio? Would that be an absolute percentage, or would it depend on one's age? When doing MPT math it has nothing to do with age. When considering numbers, results are usually a continuous function of those numbers and there is no particular cutoff. When Larry Swe...
by dbr
Mon Sep 01, 2014 10:32 am
 
Forum: Investing - Theory, News & General
Topic: table suggests total bond not best as diversifier
Replies: 20
Views: 1856

Re: 2 Piece Retirement Portfolio

In short what you want to do is change your asset allocation from a little more conservative one early in retirement to a little more aggressive one by the time you begin Social Security. This will be accomplished by spending down more from bonds than from stocks for awhile. At the point where you a...
by dbr
Mon Sep 01, 2014 9:49 am
 
Forum: Investing - Help with Personal Investments
Topic: 2 Piece Retirement Portfolio
Replies: 18
Views: 1055

Re: LED recessed lighting question

A good place to ask questions about things like this is here:

http://ths.gardenweb.com/forums/wiring/
by dbr
Mon Sep 01, 2014 9:23 am
 
Forum: Personal Consumer Issues
Topic: LED recessed lighting question
Replies: 13
Views: 1031

Re: table suggests total bond not best as diversifier

The best diversifier for an investment would be another investment of high expected return, high volatility, and least correlation with the original investment. Given that zero correlation is about as good as you can get among choices of stocks and bonds, then zero is the lowest possible. Given that...
by dbr
Mon Sep 01, 2014 9:18 am
 
Forum: Investing - Theory, News & General
Topic: table suggests total bond not best as diversifier
Replies: 20
Views: 1856

Re: Investments for Kids

It seems to me that all these parents who are worried their kids are going to spend their UTMA on "hookers and blow" (modern version) or "wine women and song" (old school version) have bigger issues to worry about than the $20 or $30K that their kid is potentially going to waste...
by dbr
Sun Aug 31, 2014 11:51 am
 
Forum: Investing - Help with Personal Investments
Topic: Investments for Kids
Replies: 15
Views: 966

Re: My husband's " WILL", $ left for me to live on....

I am not so sure the mentality displayed in this case is all that unusual. People do become multimillionaires and still don't really understand why anyone would need to live on more than $60,000 a year. A wife is expected to be a partner in that. The money is a symbol of accomplishment and not relat...
by dbr
Sun Aug 31, 2014 10:02 am
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 16935

Re: My husband's " WILL", $ left for me to live on....

I know of a person who was in a situation very similar to this, amazingly so, in fact. The husband has since died and his children have walked off with millions of dollars while the person of I know has ended up in the half million or so range, pretty much like here, and at this point little likelih...
by dbr
Sat Aug 30, 2014 3:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 16935

Re: Safe floor and Safe Withdrawal Rate

Leeraar wrote:It's a question of cash flow. That's the way to look at it.

What do you need to live on? Make a spreadsheet with a line for every year from now until you are age 75. Yearly expenses go in 3 columns: Must Have, Nice to Have, and Luxuries.



Muuust . . have . . luxuries (drool) . .
by dbr
Sat Aug 30, 2014 2:50 pm
 
Forum: Investing - Theory, News & General
Topic: Safe floor and Safe Withdrawal Rate
Replies: 19
Views: 1378

Re: Why is my 401k and taxable considered "One Portfolio"?

Money is fungible. If you were going to two stores and were going to spend $10 at each store, would you put $10 in one pocket and $10 in another pocket or would you just put $20 in your wallet and be able to mentally keep them separated? While I generally agree, to continue with this example, you c...
by dbr
Sat Aug 30, 2014 1:51 pm
 
Forum: Investing - Theory, News & General
Topic: Why is my 401k and taxable considered "One Portfolio"?
Replies: 13
Views: 1038

Re: Does anyone have 'Lazy Portfolios'?

One thing that I find particularly telling is that the usual S&D'er is quite respectful of a 3-fund portfolio and realize that it is a completely sane option. Rarely do I see the same thinking coming from the other direction. I am not exactly a 3-fund investor but very close to it, and I totall...
by dbr
Sat Aug 30, 2014 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: Does anyone have 'Lazy Portfolios'?
Replies: 71
Views: 4114

Re: Help me compare 2 bond funds

Question 1: Should I focus on 'yield to worst' or 30 day SEC yield? (and what to do w/o this "worst" stat on the VG fund?) Others can focus on the nuances of specific bond portfolios in this case, but what you should focus on in the data provided is the duration and the credit quality. Th...
by dbr
Sat Aug 30, 2014 1:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help me compare 2 bond funds
Replies: 4
Views: 441

Re: Why is my 401k and taxable considered "One Portfolio"?

Theoretical question: Each account has different investment goals (retirement vs. 15yr wealth accumulation).... Shouldn't they thus have different AA's? Practical question: My 401k and taxable has equal balances ($200k each). If I truly follow Boglehead principles, and want 30% international exposu...
by dbr
Sat Aug 30, 2014 1:33 pm
 
Forum: Investing - Theory, News & General
Topic: Why is my 401k and taxable considered "One Portfolio"?
Replies: 13
Views: 1038

Re: Portfolio Loss Calculator

Is the problem how to do the arithmetic or how to know what numbers to use to represent a dip?

Usually a calculator just does arithmetic and does not analyze what a dip means.
by dbr
Sat Aug 30, 2014 12:15 pm
 
Forum: Investing - Theory, News & General
Topic: Portfolio Loss Calculator
Replies: 3
Views: 352

Re: Safe floor and Safe Withdrawal Rate

That said, similarly Dr. William Bernstein has posted that one should have a "large hoard of cash or short-intermediate high quality bonds" -- IN retirement, it should cover 20 years of basic living expenses. http://www.bogleheads.org/forum/viewtopic.php?f=10&t=120512&p=1761836&am...
by dbr
Sat Aug 30, 2014 10:53 am
 
Forum: Investing - Theory, News & General
Topic: Safe floor and Safe Withdrawal Rate
Replies: 19
Views: 1378

Re: Father died. How to handle his company stock?

"Raising your tax bracket" is not a relevant consideration. Realizing a gain might move you from the 0% bracket to the 10% bracket, but the long term gain could all be taxed at 0%. Realizing a gain might move you from the 10% bracket to the 15% bracket, but the long term gain could all be...
by dbr
Sat Aug 30, 2014 10:04 am
 
Forum: Personal Finance (Not Investing)
Topic: Father died. How to handle his company stock?
Replies: 27
Views: 2087

Re: Safe floor and Safe Withdrawal Rate

A safe floor is a guaranteed, inflation indexed income stream that covers whatever your idea is of the income you absolutely have to/want to have. To be an income stream that pretty much needs to be an annuity. A TIPS ladder can work except that a ladder of bonds by definition has a fixed term at wh...
by dbr
Sat Aug 30, 2014 10:03 am
 
Forum: Investing - Theory, News & General
Topic: Safe floor and Safe Withdrawal Rate
Replies: 19
Views: 1378

Re: Investments for Kids

You can read a lot on the subject of custodial accounts for kids that turns up here in threads from time to time and also here: http://fairmark.com/forum/list.php?1 There tends to be some negativity about starting custodial accounts for the following reasons: 1. Such an account is a realized gift to...
by dbr
Sat Aug 30, 2014 9:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Investments for Kids
Replies: 15
Views: 966

Re: Resetting Equity Target -a.k.a Portfolio Allocation

As others are pointing out you are not expecting to depend on your assets for enough income to be concerned about your asset allocation. It is true that at a higher rate of withdrawal it can be dangerous to have an insufficient allocation to stocks. Also, you plan to have 70% of your income from an ...
by dbr
Sat Aug 30, 2014 9:19 am
 
Forum: Investing - Help with Personal Investments
Topic: Resetting Equity Target -a.k.a Portfolio Allocation
Replies: 19
Views: 1134

Re: Father died. How to handle his company stock?

I'm dealing with a similar situation, in terms of helping my parents straighten out their finances, and 20% of their stock holdings are in one company, IBM. Thank God mom invested in IBM 20 years ago - it grew about 15x over the past 20 years. But, I'm concerned that 20% of their portfolio is in on...
by dbr
Sat Aug 30, 2014 9:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Father died. How to handle his company stock?
Replies: 27
Views: 2087

Re: should I buy a 5 yr annuity to get me to 70

The annuity makes no sense. Just withdraw the 500-600 from your assets and get over the trauma.
by dbr
Fri Aug 29, 2014 5:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: should I buy a 5 yr annuity to get me to 70
Replies: 8
Views: 712

Re: Withdrawl from Target Retirement or Life Strategy Fund

Thanks What about the statement to have 5 years in cash if you are in retirement so you don't touch your portfolio in a down market? Paul Where are you going to get the cash? In my book the cash is part of the portfolio, so if you spend it you have touched the portfolio. If you have cash and you do...
by dbr
Fri Aug 29, 2014 12:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 47
Views: 3602

Re: Father died. How to handle his company stock?

Yes, unless there is something unusual there is a step-up in basis and the wife should sell the stock immediately except . . .

. . . given the asking of the question I think the wife should see a tax accountant about this and other tax questions immediately and before doing anything.
by dbr
Fri Aug 29, 2014 10:36 am
 
Forum: Personal Finance (Not Investing)
Topic: Father died. How to handle his company stock?
Replies: 27
Views: 2087

Re: Inflation Protected Securities

There is absolutely nothing that any investor "needs" to do or "should" except one thing and that is learn enough about investing to decide for oneself how to invest. The good news is that there are enough books to read (see the Wiki Library) and discussions to follow on this for...
by dbr
Fri Aug 29, 2014 10:08 am
 
Forum: Investing - Help with Personal Investments
Topic: Inflation Protected Securities
Replies: 14
Views: 1584

Re: Withdrawl from Target Retirement or Life Strategy Fund

bertilak Any other examples or ideas on liability-matched (or safe floor) portfolio besides annuities and bond ladders? Currently I have 3 years of cash (safe floor) and the rest of my retirement money in LifeStratery conservative growth. Not happy with my safe floor. Thanks You shouldn't be happy....
by dbr
Fri Aug 29, 2014 9:55 am
 
Forum: Investing - Help with Personal Investments
Topic: Withdrawl from Target Retirement or Life Strategy Fund
Replies: 47
Views: 3602

Re: Protecting one's bank account from PayPal

I don't use PayPal and any business that insists on it doesn't exist as far as I an concerned. I haven't missed anything I wanted to buy or do as a consequence.
by dbr
Fri Aug 29, 2014 9:38 am
 
Forum: Personal Finance (Not Investing)
Topic: Protecting one's bank account from PayPal
Replies: 26
Views: 2261

Re: Question on ESOPs

Does anyone know the implications of a partial direct rollover from an ESOP to an IRA? I'm reading some of the fine print, "Any eligible amount not directly rolled over will be subject to the 20% federal income tax withholding". I'd like roll some of it to an IRA and leave the balance in ...
by dbr
Thu Aug 28, 2014 4:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question on ESOPs
Replies: 8
Views: 299

Re: When, if ever, should an annuity be used in retirement p

I believe there is a chapter in Jim Otar's book regarding when an SPIA makes the most sense: http://www.retirementoptimizer.com/ If you accept the reasoning of the Liability Matching Portfolio, then an inflation indexed SPIA would be a building block tool for providing income in retirement. Doing th...
by dbr
Thu Aug 28, 2014 2:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2314

Re: TLH vs. TGH

Paying an admission fee to participate in a market timing lottery doesn't make much sense to me.
by dbr
Thu Aug 28, 2014 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: TLH vs. TGH
Replies: 5
Views: 214

Re: TLH vs. TGH

Yes, this part: "If in the future I have a gut feeling the market is starting to turn . . . " But you already know that.
by dbr
Thu Aug 28, 2014 11:47 am
 
Forum: Investing - Help with Personal Investments
Topic: TLH vs. TGH
Replies: 5
Views: 214

Re: How sustainable if the inflation adjusted income of VTSM

I believe the historical rate of dividend payout from stocks has dropped substantially over the decades. This is one article on the subject: http://www.advisorperspectives.com/dshort/updates/History-of-Stock-Dividends.php In any case, as suggested in the response above, planning on stock dividends b...
by dbr
Wed Aug 27, 2014 2:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: How sustainable if the inflation adjusted income of VTSMX?
Replies: 6
Views: 793

Re: How do you calculate your return rate?

The XIRR function in Excel or its equivalents in other spreadsheets does this problem.
by dbr
Wed Aug 27, 2014 2:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: How do you calculate your return rate?
Replies: 5
Views: 387

Re: strategy to get brokerage bonuses

You could get 50,000 ff miles on DL, AA, or UA at Fidelity for a $100K account repeated annually to some unspecified number of repetitions Are you sure this is true? My rep seems to have told me I could only do it once in any existing account. I have a lot of cash, I could just transfer out of Fide...
by dbr
Wed Aug 27, 2014 9:26 am
 
Forum: Personal Finance (Not Investing)
Topic: strategy to get brokerage bonuses
Replies: 50
Views: 3058

Re: Best time to exercise stock options

When they are vested and you are allowed to sell perhaps? You're already invested once.. your DW paycheck and benefits. Holding anything significant beyond that (pumping money in to stock options) doesn't seem like a safe thing to do. No, presumably these are grants of management stock options whic...
by dbr
Tue Aug 26, 2014 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: Best time to exercise stock options
Replies: 10
Views: 869

Re: strategy to get brokerage bonuses

$2500 for $1M transfer seems to be the top end deal. I had received $1,200 from Schwab for transferring $500k in, as a match to a Fidelity offer. Seems .25% is the standard ratio. You could get 50,000 ff miles on DL, AA, or UA at Fidelity for a $100K account repeated annually to some unspecified nu...
by dbr
Tue Aug 26, 2014 3:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: strategy to get brokerage bonuses
Replies: 50
Views: 3058

Re: Do vanguard funds compound monthly?

What about the VFFVX Vanguard Target Retirement 2055 Fund Investor Shares? I have both dividends and capital gains set to 'reinvest'. Is this a good fund to invest at age 22? If so, when should I start branching out and investing in other vanguard funds? Thanks. As long as the asset allocation in t...
by dbr
Tue Aug 26, 2014 12:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do vanguard funds compound monthly?
Replies: 11
Views: 1246

Re: Bond fund in taxable account (CA resident)

I realize my whole municipal bond allocation is California. My California muni bond allocation is 16% of total bond allocation. Is there an analyst who thinks this is okay?:) I don't know about analyst, but if you want an opinion from a random poster on the Internet, 16% of bonds, which in turn is ...
by dbr
Tue Aug 26, 2014 11:47 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund in taxable account (CA resident)
Replies: 14
Views: 1074

Re: strategy to get brokerage bonuses

It is a bit like the free dinner offered for attending the retirement presentation. A certain percentage that go for just the free dinner end up paying a heavy price. So, anytime there is an attractive bonus you really need to not get ensnared by fine print gotchas or being lured into products or s...
by dbr
Tue Aug 26, 2014 11:09 am
 
Forum: Personal Finance (Not Investing)
Topic: strategy to get brokerage bonuses
Replies: 50
Views: 3058

Re: Fee-Only Advisor Cost?

dbr is confusing the issue as ani686 is referencing the planner his business used to establish and monitor their company's 401(k). There is a substantial amount of work required on the front end and also ongoing maintenance to serve the participants of the plan. An advisor and/or firm that undertak...
by dbr
Tue Aug 26, 2014 11:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Fee-Only Advisor Cost?
Replies: 26
Views: 1470

Re: Fee-Only Advisor Cost?

Anyway - total cost for our business (should be cheaper for an individual) is $300/quarter - our planner uses VG etfs/funds to construct simple tilted or three fund portfolios. Just my experience and hope it helps. This is a typical example of the problem. A financial plan should not need ongoing p...
by dbr
Tue Aug 26, 2014 10:43 am
 
Forum: Personal Finance (Not Investing)
Topic: Fee-Only Advisor Cost?
Replies: 26
Views: 1470

Re: Really dumb question from a newbie. passive investing

That is pretty much the idea. One thing to be added is that rebalancing is recommended. Rebalancing means that as some assets rise or fall in value differently from other assets, stocks vs bonds, for example, the asset allocation drifts away from the intended balance. If that gets too far out of han...
by dbr
Tue Aug 26, 2014 10:00 am
 
Forum: Investing - Theory, News & General
Topic: Really dumb question from a newbie. passive investing
Replies: 6
Views: 774

Re: Do vanguard funds compound monthly?

This is not correct for many (probably most) Vanguard Bond Funds. For example, the GNMA Fund pays dividends at the end of each month. Payment of that end-of-month dividend does NOT affect the Net Asset Value of the GNMA Fund shares. In addition, the monthly dividend on the GNMA fund is calculated o...
by dbr
Tue Aug 26, 2014 9:41 am
 
Forum: Investing - Help with Personal Investments
Topic: Do vanguard funds compound monthly?
Replies: 11
Views: 1246

Re: Do vanguard funds compound monthly?

Well, assuming you're reinvesting dividends, that's the functional equivalent of "compounding," yes? Although I'm gathering here that it's not proper terminology to call reinvesting dividends "compounding." Yes? No? Maybe? No, not exactly because the growth in value of a mutual ...
by dbr
Mon Aug 25, 2014 11:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do vanguard funds compound monthly?
Replies: 11
Views: 1246

Re: Do vanguard funds compound monthly?

What is the length of compounding for vanguard funds? Daily, monthly, semi-annually or annually? I read somewhere that the more frequent the compounding the greater the effect of compounding over many years. Compounding in this sense does not apply to mutual funds. The value of a mutual fund is det...
by dbr
Mon Aug 25, 2014 11:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do vanguard funds compound monthly?
Replies: 11
Views: 1246

Re: Trying to understand the 1040 Tax Table

Effective tax rate, while interesting, is useless for decision making. All decisions to recognize additional income or accelerate deductions are based on the marginal rate. Exactly. Marginal rate is useful for comparing decisions between or among alternatives, all else being equal. Effective rate t...
by dbr
Mon Aug 25, 2014 10:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Trying to understand the 1040 Tax Table
Replies: 36
Views: 2287

Re: Schwab Financial Consultant

Sounds like another name for advisor = salesman = unabashed shill for Schwab products.

You can just ignore his existence. If you have account issues, need documentation, etc., there is certainly a customer service phone number, etc.
by dbr
Mon Aug 25, 2014 4:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Schwab Financial Consultant
Replies: 10
Views: 919
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