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Re: Why I will fund retirement with TIPs ladder no matter wh

we now have a reduced cost to taxes as deflation occurs. Isn't deflation about the worst thing ever that can happen to government debt and pension funding? Seems to me taxes might rise in an deflationary environment to cover obligations. Or am I missing something. If that happens then there would n...
by dbr
Sat Nov 22, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: Why I will fund retirement with TIPs ladder no matter what
Replies: 42
Views: 1987

Re: Why I will fund retirement with TIPs ladder no matter wh

TIPS do not lose their real value during deflation any more than they do during inflation. If the argument is that one sort of bond may outperform another sort of bond under different conditions, then that should be analyzed, but I do not believe that it is true that TIPS fail to do what the invest...
by dbr
Sat Nov 22, 2014 11:36 am
 
Forum: Investing - Theory, News & General
Topic: Why I will fund retirement with TIPs ladder no matter what
Replies: 42
Views: 1987

Re: Why I will fund retirement with TIPs ladder no matter wh

TIPS do not lose their real value during deflation any more than they do during inflation. If the argument is that one sort of bond may outperform another sort of bond under different conditions, then that should be analyzed, but I do not believe that it is true that TIPS fail to do what the invest...
by dbr
Sat Nov 22, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Why I will fund retirement with TIPs ladder no matter what
Replies: 42
Views: 1987

Re: Why I will fund retirement with TIPs ladder no matter wh

TIPS do not lose their real value during deflation any more than they do during inflation. If the argument is that one sort of bond may outperform another sort of bond under different conditions, then that should be analyzed, but I do not believe that it is true that TIPS fail to do what the investo...
by dbr
Sat Nov 22, 2014 10:28 am
 
Forum: Investing - Theory, News & General
Topic: Why I will fund retirement with TIPs ladder no matter what
Replies: 42
Views: 1987

Re: How should wife counter salary offer within current co.?

I would also consider the path that has led to the offer. In particular if this is the company response to discussion of the employee's desires for advancement and higher pay, then the context could be that the negotiation has already happened in effect and this is the outcome. An employee might not...
by dbr
Sat Nov 22, 2014 10:12 am
 
Forum: Personal Finance (Not Investing)
Topic: How should wife counter salary offer within current co.?
Replies: 28
Views: 1999

Re: Asset Allocation Across Accounts with varying Tax Situat

There are various suggestions regarding how the contingent liability for taxes should be taken into account when doing asset allocation. See here for example: http://www.bogleheads.org/wiki/Tax-adjusted_asset_allocation My suggestion is that going down that path requires being very clear what purpos...
by dbr
Sat Nov 22, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Across Accounts with varying Tax Situations
Replies: 3
Views: 238

Re: Home equity loan as an asset?

$77k with a paid off house sounds like some pretty darn high expenses. How about starting there? This depends on whether the $77k is gross income or after tax. Also depends on whether it covers just the basics or includes a bunch of discretionary expenditures. But yes, it's not too safe to try to a...
by dbr
Sat Nov 22, 2014 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: Home equity loan as an asset?
Replies: 26
Views: 1299

Re: Moving current 401k funds into brokerage link?

I forgot that with fidelity the expense ratio of vanguard funds is higher than from vanguard itself.. :oops: and from all of your suggestions I wont' use brokerage account. So my next question is, should I leave in HP 1990 fund, or move it over to a mix of these 4 funds? and If I move it to these 4...
by dbr
Sat Nov 22, 2014 9:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Moving current 401k funds into brokerage link?
Replies: 16
Views: 554

Re: Moving current 401k funds into brokerage link?

A BrokerageLink can be useful if (a) transactions are large, (b) infrequent and (c) give you a large advantage in expenses. Otherwise fees for use of the BrokerageLink can eat up the expense ratio advantage you try to get. This is correct. It is all about total costs in the end. Changing funds beca...
by dbr
Sat Nov 22, 2014 9:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Moving current 401k funds into brokerage link?
Replies: 16
Views: 554

Re: Diversification among Bonds?

It is important to strive for simplicity Why? There are pros and cons if simplicity is the central focus. If simplicity is important to you then it is important. For many people having more than 1 fixed income product isn't that much of a burden -and offers some benefit. The mantra that you only ne...
by dbr
Sat Nov 22, 2014 9:04 am
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 32
Views: 2640

Re: Home equity loan as an asset?

Issues about assets and liabilities aside, borrowing money and thinking one now has more assets, and assets that are more conservatively invested, meaning bonds, does not work. A person could sell the house and the proceeds would now be an asset. In that case there would have to be a modification ma...
by dbr
Sat Nov 22, 2014 8:50 am
 
Forum: Investing - Help with Personal Investments
Topic: Home equity loan as an asset?
Replies: 26
Views: 1299

Re: How should wife counter salary offer within current co.?

I think there needs to be some reading of corporate culture here. If the system is what a couple of us have mentioned where initial steps may be to the bottom of the range and a lot of what is going on is policy driven, then negotiating will not be well received and is not advised. Future raises wil...
by dbr
Fri Nov 21, 2014 10:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: How should wife counter salary offer within current co.?
Replies: 28
Views: 1999

Re: Home equity loan as an asset?

I'm 81, my wife 80. Happy in our beautiful small home, (current market value $500,000) plenty of friends, volunteer work, kids nearby, life is good. No debt. Annual living expense: $77,000 all in. Social Security income $35,000, so we need $42,000 from our $600,000 portfolio (50/50 stocks/bonds in ...
by dbr
Fri Nov 21, 2014 6:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Home equity loan as an asset?
Replies: 26
Views: 1299

Re: How should wife counter salary offer within current co.?

Any way to find out what people in comparable positions in the company are making? No, she said that is not possible. That story was interesting at megacorp as well. For years HR dug in their heels over publishing the salary scales. This was not an issue of revealing individual salaries but of show...
by dbr
Fri Nov 21, 2014 5:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: How should wife counter salary offer within current co.?
Replies: 28
Views: 1999

Re: How should wife counter salary offer within current co.?

At megacorp a pretty standard trick when "promoting" people was to low ball them into a lower decile on the salary scale for the new position. The effect of this is to increase the relative size of future salary increases as time goes on, at least with positive performance appraisals. I re...
by dbr
Fri Nov 21, 2014 5:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: How should wife counter salary offer within current co.?
Replies: 28
Views: 1999

Re: Transferring S&P 500 index fund in kind

I find it interesting that people are always so freaked out about being out of the market. It should be the case on average that being out of the market is harmful only to the extent of losing expected return multiplied by the length of exposure. That turns out to be a trivial amount for short time...
by dbr
Fri Nov 21, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transferring S&P 500 index fund in kind
Replies: 13
Views: 1172

Re: Does investing in a 401k actually save any money?

To address only one aspect (and assumption) about the long term benefit of 401k (or any other similar) tax deferred savings/investment - The tax free (actually deferred) compounding of a 401k (or other similar) tax deferred savings/investment can actually be beneficial even if the marginal tax rate...
by dbr
Fri Nov 21, 2014 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 44
Views: 3139

Re: 401k questions

Yet how can we be sure how (TIPS) will respond to rampant inflation seeing as how we haven't experienced that in over 30 yeas? In addition to the fact that (TIPS) has only around for what, maybe 10 years? The question is what happens to real interest rates in the presence of rampant inflation. I do...
by dbr
Fri Nov 21, 2014 2:00 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401k questions
Replies: 10
Views: 1128

Re: My grown up Christmas wish-A Warm House

I will say the best feature to be found in an old house may be old fashioned cast iron radiators for heat. Forced air I would not wish on anyone.
by dbr
Fri Nov 21, 2014 1:32 pm
 
Forum: Personal Consumer Issues
Topic: My grown up Christmas wish-A Warm House
Replies: 11
Views: 1060

Re: My grown up Christmas wish-A Warm House

We also had an energy audit done some years ago. While there were many possible improvements suggested, some obvious and some not, not any single one of them had a reasonable payback that would justify the effort, expense, and complexity of implementation. Living in an old house is pretty much an ex...
by dbr
Fri Nov 21, 2014 1:16 pm
 
Forum: Personal Consumer Issues
Topic: My grown up Christmas wish-A Warm House
Replies: 11
Views: 1060

Re: Gifting Exisiting Government Bonds

This may be of some help concerning EE bonds: http://finance.zacks.com/transferring-large-amounts-ee-savings-bonds-new-owner-5673.html The article appears to say that there is a tax consequence to the original owner which would appear to be what you want to avoid, and if that 1099 is income that aff...
by dbr
Fri Nov 21, 2014 1:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Gifting Exisiting Government Bonds
Replies: 2
Views: 262

Re: TSM vs S&P500

I know Total Stock Market vs S&P 500 has been discussed in great depth in this forum already. It seems like every single post I've read here said either 1) TSM is slightly better because it's more diversified or 2) who cares the returns are so close it doesn't matter. Just curious if anyone has...
by dbr
Fri Nov 21, 2014 12:58 pm
 
Forum: Investing - Theory, News & General
Topic: TSM vs S&P500
Replies: 19
Views: 1866

Re: Proposed Lifetime Retirement Investment Approach

I'll chime in that asset allocation can and should change for many of us over time. When the account is small and the investor young, taking more risk by being 100% in equities is appropriate IMHO. As we approach the withdrawal period (retirement in this case) we may want to dial down the volatilit...
by dbr
Fri Nov 21, 2014 12:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Proposed Lifetime Retirement Investment Approach
Replies: 24
Views: 1731

Re: Should we tip the caregiver

Recognizing that a caregiver may be out of a job when a person dies, I have written contracts that provided severance in that event. This did not involve people hired through an agency but did involve the full scale exercise of hiring and managing employees, an experience I would not necessarily rec...
by dbr
Fri Nov 21, 2014 12:54 pm
 
Forum: Personal Consumer Issues
Topic: Should we tip the caregiver
Replies: 26
Views: 1827

Re: Social Security 62 vs 66

It is easy to try and game Social Security but asking "what if" questions of 62 vs 66 vs 70. But, to me, the issue isn't trying to maximize how much I get from Social Security. It is making sure I have enough money if I live a long time. Clearly, the best way to do that is to maximize my ...
by dbr
Fri Nov 21, 2014 12:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Social Security 62 vs 66
Replies: 35
Views: 2629

Re: "Are your bonds doing what they're supposed to do?"

Thanks for the post, it's on the money. Funny that there are over 400 views and no comments. We know by the number of posts on bond selection that many investors are either using riskier bonds to get yield or just flat out going to equities. Paul I would have said that the predominant flow on this ...
by dbr
Fri Nov 21, 2014 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: "Are your bonds doing what they're supposed to do?"
Replies: 5
Views: 1089

Re: Transferring S&P 500 index fund in kind

I find it interesting that people are always so freaked out about being out of the market. It should be the case on average that being out of the market is harmful only to the extent of losing expected return multiplied by the length of exposure. That turns out to be a trivial amount for short times...
by dbr
Fri Nov 21, 2014 12:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Transferring S&P 500 index fund in kind
Replies: 13
Views: 1172

Re: Proposed Lifetime Retirement Investment Approach

Beginning around age 40, they can begin to invest new money into low expense bond index funds. By retirement, they may have substantial bond holdings but can maintain their original US and international equities index fund investments for another two to four+ decades. I would not set the asset allo...
by dbr
Fri Nov 21, 2014 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: Proposed Lifetime Retirement Investment Approach
Replies: 24
Views: 1731

Re: Standard questions on found stock certificate

Disney stock split in 1986, 1992, and 1998. So if he never sold the original shares, you have much more than 48 shares. 1986 split 4 for 1. 1992 split 4 for 1 1998 split 3 for 1. Today's share price is $89.10. But if he still owned them, he should have been receiving dividends. If he doesn't own th...
by dbr
Fri Nov 21, 2014 12:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Standard questions on found stock certificate
Replies: 10
Views: 440

Re: Does investing in a 401k actually save any money?

I think the OPs scenario is constructed in such a way that 401K will definitely come out ahead, especially with the 28% bracket in retirement being below the 33% bracket while working. But what about the following: - 33% while working, but 40% in retirement (either due to over-saving, or due to tax...
by dbr
Fri Nov 21, 2014 11:04 am
 
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 44
Views: 3139

Re: Social Security 62 vs 66

One thing is that you did not index the SS payments for inflation. Alternatively one could do the analysis in real dollars. In that case assuming that Jack can get a risk free real return of 4% is unrealistic. The right number to use would be the rate on five year TIPS which is 0.08% today. A differ...
by dbr
Fri Nov 21, 2014 10:56 am
 
Forum: Investing - Help with Personal Investments
Topic: Social Security 62 vs 66
Replies: 35
Views: 2629

Re: New Investor (23), Switch from Vanguard Target Retiremen

I think the plan is fine.

Personally I think TR funds create a lot of confusion and complexity in preference to a three fund approach. My recommendation is to use a TR fund when there is a specific good reason to do it and otherwise not.
by dbr
Fri Nov 21, 2014 10:49 am
 
Forum: Investing - Help with Personal Investments
Topic: New Investor (23), Switch from Vanguard Target Retirement?
Replies: 6
Views: 850

Re: Does investing in a 401k actually save any money?

If my understanding is correct, he'll make withdrawls from the 401k during retirement and pay ordinary income tax (28% bracket) on all the withdrawls. But had he invested this money in a taxable account the whole time, he'd have paid mostly 15% capital gains and dividends taxes along the way, possi...
by dbr
Fri Nov 21, 2014 10:47 am
 
Forum: Investing - Theory, News & General
Topic: Does investing in a 401k actually save any money?
Replies: 44
Views: 3139

Re: Rick Ferri 60/40 portfolio

Rick, it is truly refreshing to hear from a well regarded adviser and author in the field that people do not need to agonize over all the over-engineering of portfolios that is presented in too many places.
by dbr
Fri Nov 21, 2014 10:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Rick Ferri 60/40 portfolio
Replies: 18
Views: 4097

Re: Can Non-Tax Filers Contribute to IRA?

As a matter of principle isn't it a good idea to have a complete record on file of anything having to do with income going into tax preferred accounts from day one? I would do it.
by dbr
Fri Nov 21, 2014 9:29 am
 
Forum: Investing - Help with Personal Investments
Topic: Can Non-Tax Filers Contribute to IRA?
Replies: 12
Views: 1187

Re: Problem with posting

I have lost posts from time to time by not paying attention to the notice that someone else has replied while I was typing, and you can see I should know that by now.

I personally might prefer not to have that feature.
by dbr
Thu Nov 20, 2014 2:44 pm
 
Forum: Forum Issues and Administration
Topic: Problem with posting
Replies: 9
Views: 462

Re: Suggested retirement reading for 60 year olds

There is also Jim Otar's book on this site:

http://www.retirementoptimizer.com/

It is a long text, very engineering oriented, but one can read the content in the chapter intros and conclusions to glean the important content.
by dbr
Thu Nov 20, 2014 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: Suggested retirement reading for 60 year olds
Replies: 23
Views: 2271

Re: What is the $$ value of delaying retirement a month?

You could probably enter a retirement calculator such as Firecalc with modified values of accumulated assets, new estimate of SS benefits, etc. and reduce the duration of the calculation by one year and see what amount of monthly spending could be supported at the same failure rate. That would be a ...
by dbr
Thu Nov 20, 2014 8:50 am
 
Forum: Investing - Help with Personal Investments
Topic: What is the $$ value of delaying retirement a month?
Replies: 24
Views: 1445

Re: Dividends in my taxable account

I'm reading the Boglehead Wiki page about taxable accounts and I need clarification about this section: Directing the dividends to a money-market fund gives you tax-free money for rebalancing Does this mean if you have the dividends go into the money market account you do not owe taxes on them? Or ...
by dbr
Thu Nov 20, 2014 8:45 am
 
Forum: Investing - Help with Personal Investments
Topic: Dividends in my taxable account
Replies: 8
Views: 1151

Re: Does Fidelity allow Real Estate investments?

Investment companies are not traders in real property any more than a coin dealer sells stocks and bonds or an art dealer vintage wines. As mentioned the vehicle for stock investors would be REIT stocks, but that is a different thing from owning rental real estate as such. People can do very well ow...
by dbr
Wed Nov 19, 2014 8:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Does Fidelity allow Real Estate investments?
Replies: 9
Views: 1130

Re: Need Income - Wellesley Income or Wellington Fund

Initially bond yields go up and bond NAVs go down, but the dividend payment remains constant.
by dbr
Wed Nov 19, 2014 5:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Income - Wellesley Income or Wellington Fund
Replies: 22
Views: 2776

Re: Assets for Liability Matching Portfolio?

A "risk" portfolio in this context can contain any balance of risky and less risky assets that the investor chooses. There are major semantic issues going on when starting a discussion around the liability matching portfolio concept.
by dbr
Wed Nov 19, 2014 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Assets for Liability Matching Portfolio?
Replies: 24
Views: 1850

Re: Another bond fund question do I need short term in my 40

There is no general principal according to which one would "need" some short term bonds or some TIPS in a portfolio. Of course TBM does hold some short term bonds and does not hold any TIPS.
by dbr
Wed Nov 19, 2014 3:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Another bond fund question do I need short term in my 401k?
Replies: 7
Views: 468

Re: Diversification among Bonds?

Would this mindset change on the verge of retirement and starting the distribution phase? How about including a tips ladder and funding the continued rolling of a tips ladder 15 years out? That is not diversification in the intended sense of the word. It is matching a tool to a need. The need in th...
by dbr
Wed Nov 19, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: Diversification among Bonds?
Replies: 32
Views: 2640

Re: VWINX (Wellesley Inc.)

If OP wants to add another fund to his Wellesley, how would he calculate his total asset allocation since Wellesley consists of different asset classes? How does one separate it out and put Wellesley's holdings into the different AA classes? Or does one just keep it in a separate AA "folder&qu...
by dbr
Wed Nov 19, 2014 2:09 pm
 
Forum: Investing - Theory, News & General
Topic: VWINX (Wellesley Inc.)
Replies: 44
Views: 4836

Re: I may not make my retirement goals! What to do?

IMHO the Fidelity calculator is the most detailed and best by far. Again, without knowing the other 73% I would have to float the concept you are too light on equities at this point in retirement. Why don't you retry the Fidelity calculator at 35%, 40%, 45% and 50% and print the results so you can ...
by dbr
Wed Nov 19, 2014 9:54 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3328

Re: I may not make my retirement goals! What to do?

Consider buying an SPIA. Victoria Agreed. The general financial answer to this dilemma is to annuitize. I don't recall your situation regarding current income streams such as pension and SS. What fraction of income is in those sources makes a great deal of difference. The conventional models do ind...
by dbr
Wed Nov 19, 2014 9:43 am
 
Forum: Investing - Help with Personal Investments
Topic: I may not make my retirement goals! What to do?
Replies: 49
Views: 3328

Re: Should you use a 401k if you'll def. be in a higher brac

But isn't it really a no brainer to put away as much as you can into tax sheltered investments, whether or not you plan to be in a higher bracket. Taxes are the biggest drag on on investments. My wife will be in a higher tax bracket when she retires and I have run some numbers, obviously having to ...
by dbr
Wed Nov 19, 2014 9:15 am
 
Forum: Investing - Theory, News & General
Topic: Should you use a 401k if you'll def. be in a higher bracket?
Replies: 18
Views: 2312

Re: What to calculate withdrawals on?

There are a couple of questions here about how to define the question. Firstly the OP speaks of withdrawing from his account. It would probably be better, as suggested in one reply above, to think of withdrawing from the totality of the assets. Secondly the OP is withdrawing but his wife is still co...
by dbr
Tue Nov 18, 2014 2:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: What to calculate withdrawals on?
Replies: 11
Views: 920

Re: Regression Analysis and Asset Allocation

I should probably go further and suggest that the whole objective of factor asset allocation within a stock portfolio is not to get a distribution across a selection of funds but rather to establish the factor loading of the entire portfolio. How to build that from a selection of funds will take som...
by dbr
Tue Nov 18, 2014 9:07 am
 
Forum: Investing - Theory, News & General
Topic: Regression Analysis and Asset Allocation
Replies: 6
Views: 592
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