Search found 5520 matches

by Peter Foley
Mon Oct 24, 2016 10:43 pm
Forum: Personal Finance (Not Investing)
Topic: Finding lost assets
Replies: 21
Views: 2924

Finding lost assets

My sister-in-law’s father (age about 90) died recently. He suffered from dementia for about the last decade. He was fairly paranoid during his last few years and his wife of 4 years (65 years old and his caregiver – red flag!) said that he shredded all his documents and kept no records. My sister-in-law has the original death certificates. State of residence was Arizona. My sister-in-law has a copy of his will (she is the executor) and his trust (she is named as the survivor trustee). She has been able to locate his bank account where his SS check was deposited but has been unable to find the investments he put in the trust. The lawyer who set up the trust in 2007 has since retired and the firm said they do not have any information. How do ...
by Peter Foley
Mon Oct 24, 2016 7:36 pm
Forum: US Chapters
Topic: Minnesota Bogleheads Meet Nov. 12, 2016
Replies: 45
Views: 10974

Re: Minnesota Bogleheads Meet Nov. 12, 2016

There are both East and West subgroups that I am aware of. Both meet on Saturday mornings at coffee shops.

West side at Dunn Bros. (in Eden Prairie)
East side at Caribou (near Maplewood Mall)
by Peter Foley
Sun Oct 23, 2016 8:59 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 6486

Re: Roth Conversion Target - Time to Break Even

BigJohn wrote:
I've evaluated using the Roth horse race conversion game and concluded not to go down that path. My current investment strategy is to be conservative and play defense.
As noted earlier there are a number of ways to do the "horse race." A fairly simple, conservative approach is to convert and hold stocks into one Roth and convert and hold bonds into another. Recharacterize whichever does worse.
by Peter Foley
Sun Oct 23, 2016 8:08 pm
Forum: Personal Investments
Topic: Rollover old 401k to new 401k or IRA?
Replies: 5
Views: 1004

Re: Rollover old 401k to new 401k or IRA?

There are a fair number of reason to roll over the 401k. It may be better protected from creditors. The new 401k might offer an attractive stable value fund. You may wish to do a back door Roth in the future. A 401k will not be part of the mix for Roth conversion taxes. The 401k may have lower fees for some funds in which you are interested. An IRA may be better. You will have a broader array of investment options . . . not always a good thing :wink: You are investing for your heirs and you want to set up primary and contingent beneficiaries. May not be allowed in some 401ks The 401k may have limitations regarding how heirs can inherit (e.g., no stretch IRA potential, no combining with spouses IRA). You can donate IRA RMD's to a charity. If...
by Peter Foley
Sun Oct 23, 2016 11:23 am
Forum: Investing - Theory, News & General
Topic: Who disagrees with Jack. . .
Replies: 73
Views: 11537

Re: Who disagrees with Jack. . .

I think Taylor's first post is spot on. All investors are different. I don't have Jack Bogle's portfolio nor risk tolerance, let alone his experience.

I follow the basic principles which seem to apply to all regardless of our financial and psychological differences. I disagree with Mr. Bogle in a number of areas which are more on the margins. I think SS as a bond muddies the water. You need to have a safe portion of your portfolio and you need to be aware of your fixed expenses and discretionary expenses. Having at least some international is prudent in light of the experience of Japanese investors. Rebalancing makes sense from a psychological perspective as well as a safety perspective. . . . . I could go on . .
by Peter Foley
Sat Oct 22, 2016 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Jonathan Clements Article- Don't Be Yourself
Replies: 1
Views: 999

Re: Jonathan Clements Article- Don't Be Yourself

Quoting Jonathan:
Countless financial planners have told me that the clients who are best at accumulating money for the future are often the worst at making the retirement transition from saver to spender. If you can’t bring yourself to use a healthy portion of your wealth for your own enjoyment and that of others, your great savings habits seem less like a virtue—and more like an obsession.
I admit that this is a constant struggle. I find it easier to give money away to a worthy cause than to spend it. The plus side is that solicitations are a real turn off for me. I have only a few causes that I am willing to support. (Perhaps another thread . . . .)
by Peter Foley
Sat Oct 22, 2016 2:22 pm
Forum: Personal Investments
Topic: Revisiting my portfolio and asset allocation
Replies: 11
Views: 2117

Re: Revisiting my portfolio and asset allocation

At this level I really wouldn't worry about the difference in expense ratios.

Plug in the same number into a compound interest calculator with two slightly different interest rates. You will see little different at 10 years, noticeable but not a lot at 20 years, and significant at 30 years.
by Peter Foley
Sat Oct 22, 2016 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 6486

Re: Roth Conversion Target - Time to Break Even

Miriam 2

Wow. Thanks for the heads up. Since it is over the week end it will be more than 15 minutes of fame - all in honor of my great grandfather in whose name I post.

Just a guess by the way - playing on the number 42.
by Peter Foley
Fri Oct 21, 2016 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: How would you determine what you will need?
Replies: 4
Views: 900

Re: How would you determine what you will need?

About 25 times [annual expenses less SS benefits and pension]. Or about 30 years of a 4% withdrawal rate.
by Peter Foley
Thu Oct 20, 2016 10:53 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 6486

Re: Roth Conversion Target - Time to Break Even

JDCarpenter wrote:
My thoughts are that at some point DW will be doing RMDs after my death. The 28% single bracket tops out quite a bit lower than the MFJ bracket, which will likely be a major factor in my analysis.
I agree. We have tried to work our way around this in part by designating children as primary beneficiaries on some IRAs and secondary beneficiaries on others. DW would then have the option to disclaim selected accounts based on the financial picture at that time.
by Peter Foley
Thu Oct 20, 2016 8:07 pm
Forum: Personal Investments
Topic: Help for Grandparent
Replies: 9
Views: 1615

Re: Help for Grandparent

AA comment: Certainly no higher than 50/50. As suggested by pkcrafter, 40/60 is a bit more prudent as it protects against a potential large downturn in the market.
by Peter Foley
Thu Oct 20, 2016 7:59 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 6486

Re: Roth Conversion Target - Time to Break Even

My dilemma too. There have been a number of threads on this topic. Personal opinion - converting to the top of the 15% bracket makes sense if your RMD's will push you well into the 25% bracket.

However, does one convert into the mid to high 25% tax bracket now to avoid hitting the 28% bracket in 10 years? In other words, does the loss of compounding in tax deferred over the next few years outweigh the loss of an extra 3% in taxes much later? I wish I knew the answer.
by Peter Foley
Thu Oct 20, 2016 5:04 pm
Forum: Personal Investments
Topic: Retirement Income Floor
Replies: 10
Views: 2439

Re: Retirement Income Floor

If you have a fair amount of your savings in tax deferred accounts, I suggest you take a look a Bigfoot's Retire Portfolio Model.
by Peter Foley
Thu Oct 20, 2016 4:57 pm
Forum: Personal Investments
Topic: Revisiting my portfolio and asset allocation
Replies: 11
Views: 2117

Re: Revisiting my portfolio and asset allocation

I like Duckie's suggestion. If you feel it is too much of a makeover you could just redirect future contributions into the V institutional index and small cap index to dilute some of the international exposure. It would complicate rebalancing, however.
by Peter Foley
Wed Oct 19, 2016 9:22 pm
Forum: Personal Investments
Topic: Help with fund choices after plan change
Replies: 4
Views: 598

Re: Help with fund choices after plan change

I do not disagree with retiredjg's recommendation.

Given your age and an excellent choice of low cost funds, I would be temped to add a small cap or mid cap value fund to dilute a bit of the Total World.

Note: I'm okay with international, just not a believer in as much international as is usually recommended here. My preference is about 20% of stocks, 30% maximum.
by Peter Foley
Tue Oct 18, 2016 8:17 pm
Forum: Personal Investments
Topic: Close to Retirement - Now What?
Replies: 15
Views: 4257

Re: Close to Retirement - Now What?

I agree with the maxing out your retirement account strategies. This will help put you in a position where you can cash out a good portion of your taxable prior to age 59.5 without being subject to capital gains. Given the size of your 401K + IRA relative to your other assets, I think doing some Roth conversions makes sense. Staying within the 15% tax bracket is a good strategy. Especially during the first 10 years of retirement I would look to fill that tax bracket every year (Roth conversions and potentially some tax gain harvesting might come into play). Also, I would look at your withdrawal strategy as having 4 different phases: 1. Withdrawals prior to age 59.5. 2. Withdrawals between age 59.5 and when you take SS benefits. 3. Withdrawa...
by Peter Foley
Tue Oct 18, 2016 5:25 pm
Forum: Personal Investments
Topic: Keep or roll a 403b from previous employer?
Replies: 23
Views: 3669

Re: Keep or roll a 403b from previous employer?

While it is a little off topic, I was not impressed by "thestreet" story about stable value funds. 401k, 403b and 457b accounts may all have stable value funds. My experience with 403b and 457b non profit and governmental stable value funds has been that the "annual yield after expenses" has been readily available (in all quarterly statements as a matter of fact). Yes the underlying investments are a little esoteric. A long history of interest payments may be indicative of the quality of the fund. Stable value funds often have some withdrawal limitations. You can't just take all of your money out and invest it in something else as if it were a money market fund. This restriction provides some stability for those investin...
by Peter Foley
Tue Oct 18, 2016 5:09 pm
Forum: US Chapters
Topic: Minnesota Bogleheads Meet Nov. 12, 2016
Replies: 45
Views: 10974

Re: Minnesota Bogleheads Meet Nov. 12, 2016

If you are on the e-mail list and reading this as well, please print out a copy of the handouts if you want one. It helps keep the costs down for those who develop the content and facilitate the small group discussions.
by Peter Foley
Mon Oct 17, 2016 10:44 pm
Forum: Personal Investments
Topic: Proper TSP allocation - I am 62
Replies: 18
Views: 2714

Re: Proper TSP allocation - I am 62

An approach not mentioned if you retired very recently. Stop collecting SS and pay the money back. I believe that this is still allowed if you have been collecting for less than 6 months.

Why? Because if you delay for two or three years you will get an 8% increase in benefits for each year you delay. That would help deal with the concern about your very conservative asset allocation not keeping up with inflation. Yes, you would withdraw more money now, but much less when you start to take SS benefits and your higher benefit amount comes with a COLA.

A reason not to do this would be relatively poor health and a shorter life expectancy. If that is the case a 5% withdrawal rate is fine.
by Peter Foley
Mon Oct 17, 2016 8:01 pm
Forum: Personal Investments
Topic: Keep or roll a 403b from previous employer?
Replies: 23
Views: 3669

Re: Keep or roll a 403b from previous employer?

If you had thoughts of doing a back door Roth with post tax dollars in the future you would leave it in the 403b rather than rolling it into a traditional IRA.

If you roll it into a traditional IRA and then convert it to a Roth, that is okay too.

I understood the warning to be not to commingle pretax and post tax dollars in IRAs if you are going to do Roth conversions at some point in time. (By the way, I did commingle pretax and post tax dollars, but it all got converted over a two year period so it was no big deal taxwise - just a little extra paperwork.)
by Peter Foley
Mon Oct 17, 2016 7:18 pm
Forum: Personal Investments
Topic: Keep or roll a 403b from previous employer?
Replies: 23
Views: 3669

Re: Keep or roll a 403b from previous employer?

Your 403b is pretax. Some higher income people do post tax (non tax deductible) contributions to an IRA and then immediately convert that IRA to a Roth. They use this method because they earn too much to be able to contribute directly to a Roth. When doing a Roth conversion the IRS looks at all one's IRA assets. It basically creates a ratio of pretax and post tax IRA assets. If you have and convert only post tax IRA dollars to a Roth you owe no taxes. If you have and convert only pretax dollars you must pay a tax on the conversion. If you have both pretax and post tax IRA contributions you pay tax on the pretax portion. Example: You have $5000 in a pretax IRA that you transferred from a 403b. You contribute $5000 to a post tax IRA with the ...
by Peter Foley
Mon Oct 17, 2016 4:39 pm
Forum: Personal Investments
Topic: Keep or roll a 403b from previous employer?
Replies: 23
Views: 3669

Re: Keep or roll a 403b from previous employer?

My wife and I are both retired and could move funds anywhere. The fact that she has access to stable value funds that pay a high rate of interest (I think it is between 3.5% and 4.25% depending on when the funds were deposited) has us staying put.

traveltoomuch made a good point about avoiding having pretax and post tax IRA funds when doing a Roth conversion. So certainly avoid the convert to IRA option.

Many 403b's allow loans at favorable rates - while generally not advisable, it is a nice option to have available.
by Peter Foley
Sun Oct 16, 2016 11:05 pm
Forum: Personal Investments
Topic: Investment Buckets?
Replies: 12
Views: 2249

Re: Investment Buckets?

I would agree that it is more relevant near and in retirement. As stated, it is partly a mental segregation of a portfolio into safe investments, less volatile investments, and higher risk investments. The idea is to protect oneself from having to sell stocks (riskier investments) when the market is down. In this light it can be seen as an asset allocation methodology to support withdrawals from a portfolio in retirement. It can be a fairly involved approach whereby one replenishes the safe bucket (CD like investments) from the less volatile (bonds) and then replenishes the less volatile from the riskier (stocks). Ray Lucia is known as one of the early promoters of this methodology. It is an approach recommended by many other financial advi...
by Peter Foley
Thu Oct 13, 2016 8:04 pm
Forum: US Chapters
Topic: Minnesota Bogleheads Meet Nov. 12, 2016
Replies: 45
Views: 10974

Re: Minnesota Bogleheads Meet Nov. 12, 2016

Estate Planning for Everyone was inspired by a course offered through the University of Minnesota's Osher Lifelong Learning Institute. Two members of the BH steering committee took the course this past spring. Course title was "Estate and Gift Planning Strategies".

Jeffry Condon's "Beyond the Grave" was another key resource. Lots of stories/lessons here about how not to do it!
by Peter Foley
Thu Oct 13, 2016 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: How do we shift from investing to spending in retirement?
Replies: 7
Views: 2409

Re: How do we shift from investing to spending in retirement?

You might find the following "withdrawal strategies outline/template to be helpful. You would have to modify it to include husband's SS benefits and then enter your own data. The idea is to document your assumptions and then play with withdrawals from different sources and Roth conversions so that your strategy covers your expenses while keeping taxes reasonable. For example, many people try to stay within the 15% federal tax bracket. Retirement Plan and Withdrawals Template 2015: Assumption – Husband’s pension 12 months, wife retired no pension Adjusted Gross Income = $20,000 pension + $5,000 dividends = $25,000 Cash in savings bond with $10,000 interest. 2015 Tax rate brackets schedule 15% >74,900 = 25% < 148,850 Convert TIRA to Roth...
by Peter Foley
Thu Oct 13, 2016 7:29 pm
Forum: Personal Investments
Topic: Self Employment - Retirement Planning
Replies: 2
Views: 434

Re: Self Employment - Retirement Planning

I think you avoid some potential state government audit pitfalls if your wife is an employee. An auditor would not question your characterization of your wife as an employee, but may question her independent contractor status - especially if she only receives income from you. I'm not saying you would not prevail in an audit of her as an IC, I'm just saying you could lose.

Note: I was in charge of the unemployment insurance audit function for a few years and we closely coordinated with the state revenue department's withholding staff. Some independent contractor relationships get a lot of scrutiny because there is abuse of that status to avoid employer taxes.
by Peter Foley
Wed Oct 12, 2016 10:59 pm
Forum: Investing - Theory, News & General
Topic: Market Timing in a Unique Situation
Replies: 11
Views: 2530

Re: Market Timing in a Unique Situation

An alternative to celia's suggestion is to do two conversions now into two new Roths. Make one conversion an equity index conversion and the other a cash (money market conversion). You can then wait until tax time next year to recharacterize the one that has increased less in value.

The slight advantage to this approach is that you can hold both for a little longer before making a recharacterization decision. Obviously this is not a market timing decision . . . you are not betting on future returns, you are taking advantage of past returns.
by Peter Foley
Wed Oct 12, 2016 2:44 pm
Forum: Personal Consumer Issues
Topic: Super cheap mens bike (< $150)
Replies: 23
Views: 3465

Re: Super cheap mens bike (< $150)

David Jay wrote: GT Terra $90 Giant Rincon $100 Trek 850 $125 Specialized Rock-Hopper $175 While I am not familiar with the GT Terra, the rest are all good choices that will hold their value. As to style of bike, I would recommend a hybrid or a mountain bike for the casual rider. I work in a bike shop restoring older bikes. I own three Treks, two "multitracks" (hybrids) and one Mountain Trek 850. I also own a couple Giant mountain bikes. For city use I run one of the mountain bikes with 26 X 1.75 tires with a smoother tread design. I've owned a Rockhopper and it was a great bike - just a little too short for me. Smaller local bike shops typically have used tires that cost very little. We sell used tires in good shape from $2.00 to...
by Peter Foley
Wed Oct 12, 2016 2:22 pm
Forum: Personal Consumer Issues
Topic: Vacation in Peru/Ecuador in December
Replies: 10
Views: 1678

Re: Vacation in Peru/Ecuador in December

We hired a local guide with a car in Cuzco. With that flexibility we were able to see multiple key sights near Cuzco in two days. It was not expensive and we got a lot of insight into local culture. Ollantaytambo, Pisac, and Tipon were recommended to us and were all worth it.
by Peter Foley
Mon Oct 10, 2016 10:46 pm
Forum: Personal Investments
Topic: Asset allocation (net of capital gains tax?)
Replies: 9
Views: 1478

Re: Asset allocation (net of capital gains tax?)

I did the same calculation a few years ago. I assigned different tax rates to different accounts (taxable, Roth, and tax deferred) and then to different assets within taxable. If memory serves me correctly, the difference was about what you came up with . . . it moved my AA by less than 5%. I decided that was close enough and made no changes. I should probably repeat the process at the end of this year. We have been spending from taxable and doing Roth conversions so the ratios may have changed enough so that my AA move is more substantial. We have spent much more in taxable than we have converted. I've been trying to convert TIRA to Roth just into the 25% bracket. There have been a few thread on this topic over the years. There is a Wiki p...
by Peter Foley
Mon Oct 10, 2016 8:42 pm
Forum: Personal Investments
Topic: Help with My Mom's Portfolio
Replies: 12
Views: 1816

Re: Help with My Mom's Portfolio

Your mother is currently well invested and diversified. Could it be a bit better? Certainly in terms of cost, less certain in terms of the balance between the need to take risk and the ability to take risk. My inclination - a bit on the conservative side - would be the same as yours - move some of the money to the DFA short term and reduce cost and risk somewhat. Maybe aim for a 50/50 AA. At some point your mother will be eligible for spousal benefits. I don't have any clue as to what would be the ideal age for her to start. It might give her a decent income boost for a few years that would help her increase in savings. She also might be able to postpone her own SS benefits til age 70 to maximize those benefits. This is hard to predict with...
by Peter Foley
Mon Oct 10, 2016 6:02 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents using our Roth to fund grandchild's college education
Replies: 17
Views: 3240

Re: Grandparents using our Roth to fund grandchild's college education

Celia wrote: Peter Foley wrote: I was keying in on the OP's phasing of a grandparent using a Roth to fund. Are you implying something special (taxwise) about the "grandparent-student" relationship? More properly stated, "withdrawals from a Roth can be gifted to anyone." Once you withdraw from a Roth, it is just regular (taxable) money. You can spend it, gamble with it, pay debts, invest it (in taxable accounts), or just give it away. The grandparents' "Roth contribution toward... A "Roth contribution" is ONLY a Roth contribution if it goes into a Roth. If you do anything else with it, it is not a Roth contribution! ...a grandchild's college education" could go directly to the grandchild or to the pare...
by Peter Foley
Sun Oct 09, 2016 7:40 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents using our Roth to fund grandchild's college education
Replies: 17
Views: 3240

Re: Grandparents using our Roth to fund grandchild's college education

I was keying in on the OP's phasing of a grandparent using a Roth to fund. More properly stated, "withdrawals from a Roth can be gifted to anyone." The grandparents' "Roth contribution toward a grandchild's college education" could go directly to the grandchild or to the parent or to anyone else who is willing to spend the funds on the grandchild's education. (I could give money to my brother and tell him my preference for how he might spend the money. He would be under no obligation to do so, however.) Cody (whom I happen to know) and his wife can each withdraw $14,000 from their respective Roths in a given year and gift that money to their daughter, or to their grandchild. In addition, they could each withdraw more and...
by Peter Foley
Sun Oct 09, 2016 7:09 pm
Forum: Personal Investments
Topic: A Retiree's Conundrum - Can you help?
Replies: 21
Views: 4890

Re: A Retiree's Conundrum - Can you help?

What are your goals? If your goal is not to run out of money I wouldn't change anything. If your goal includes a substantial endowment for your heirs or a charity, you could invest $1M more aggressively. Could does not mean you should.

If a substantial portion of this is in tax deferred accounts, your $4M is worth a lot less because of your tax liability. I would be helpful to know what percentage of your portfolio is in tax deferred.
by Peter Foley
Sun Oct 09, 2016 5:40 pm
Forum: Non-US Investing
Topic: Most reliable/safe/bulletproof way to get cash overseas
Replies: 30
Views: 4893

Re: Most reliable/safe/bulletproof way to get cash overseas

We carry two ATM "cash" cards when we travel. My wife carries one and I carry the other. We try to charge major purchases so as not to carry a lot of cash. One card (I consider it to be our primary) is our Schwab card linked to our checking account, which we have had for about 15 years. The other is our local bank card.
by Peter Foley
Sun Oct 09, 2016 5:33 pm
Forum: Personal Finance (Not Investing)
Topic: Grandparents using our Roth to fund grandchild's college education
Replies: 17
Views: 3240

Re: Grandparents using our Roth to fund grandchild's college education

Please note that the question is about a grandparent using a Roth, not a 529 plan.

A Roth can be gifted to anyone within limits (gift taxes/estate taxes). So the Roth contribution could go to the parent and then to the child.
by Peter Foley
Thu Oct 06, 2016 10:53 pm
Forum: Personal Investments
Topic: Question about Index Funds and Portfolio Analysis
Replies: 8
Views: 947

Re: Question about Index Funds and Portfolio Analysis

I own both and have owned the Schwab 1000 fund almost since inception. When I did tax loss harvesting during the last recession I sold some total stock market and bought Schwab 1000. I later reversed course back to total stock market. That being said, I really don't see much reason to own both. If one is holding these in a taxable account, historically the Schwab 1000 fund has paid little in capital gains while the total stock market fund has some capital gains in some years. This was the case some years ago, but I do not know if it is still true. At present I hold only total stock market in taxable. My small Schwab 1000 position is in an IRA. Given the higher expense ratio of the Schwab 1000, I should probably sell and reinvest in the tota...
by Peter Foley
Thu Oct 06, 2016 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: ss ? [Social Security]
Replies: 16
Views: 3299

Re: ss ? [Social Security]

hulbert wrote:
I'm married
I coach a little x-c,track 10000
pension 10000
IRA 12000
wife 61 loves her part time job-will not quit-30000
So roughly speaking you have $62,000 in adjusted gross income, or about $42,000 in taxable income. You could take an additional $33,000 per year out of your IRA and still be below the 25% tax bracket ($75,300 in taxable income is the top of the 15% tax bracket). To me that is a no brainer for the next few years. There could be good reason to withdraw more from your IRA, but I feel that is optional. If in doubt, start SS at age 66 or 67.

If you don't want to withdraw and add to taxable savings, you could do a $30,000 Roth conversion.
by Peter Foley
Wed Oct 05, 2016 11:09 pm
Forum: Investing - Theory, News & General
Topic: What are implications of Jack Bogle's Morningstar interview
Replies: 39
Views: 6738

Re: What are implications of Jack Bogle's Morningstar interview

Cody wrote: That was too wordy - but wondering "why adjust at all from 3.3%" as long as I take it from my current say Jan 1 of each year (not from the origninal starting retirement total.) So year one say total is $1000,000 X 3.3% = $33K, second year after market drop $900,000 X 3.3% = $27,000 ($5k less). So yes cut back on $5k of spending. This is an entirely different approach than a safe withdrawal rate adjusted for inflation (Trinity Study et. al.). If the above approach is taken to the extreme you will never run our of money, but you may not have enough money to live on. Say the total after five years of market drops of 100K is 500K (you took no withdrawals) you now have $16,500/year to support your lifestyle. Conversely, if ...
by Peter Foley
Wed Oct 05, 2016 9:02 pm
Forum: Personal Finance (Not Investing)
Topic: ss ? [Social Security]
Replies: 16
Views: 3299

Re: ss ?

With an IRA of $1.9 M today I would hold off on SS and draw down the IRA at least until age 66.

SS benefits can be taxed at a high marginal rate depending on your other income.

When you add together your earned income + SS benefits + RMDs at age 70.5 will you be in a higher tax bracket than you are now?

Figure RMDs at about 3.5% in the first couple years. With a $2 M IRA at age 70.5 that is about $70,000 in RMDs.

It would be helpful to know the current sources of the $60k income you need each year. Earned income, taxable, tax free, and/or tax deferred.
by Peter Foley
Wed Oct 05, 2016 8:47 pm
Forum: Personal Finance (Not Investing)
Topic: Medicare Part B Billing
Replies: 12
Views: 1654

Re: Medicare Part B Billing

I'm 66, not collecting SS benefits yet, and signed up for medicare a year ago. I get quarterly bills. The check is made out to CMS Medicare Insurance.
by Peter Foley
Wed Oct 05, 2016 8:41 pm
Forum: Personal Investments
Topic: Helping my parents with their retirement
Replies: 31
Views: 5913

Re: Helping my parents with their retirement

Adding to joebh's etc, etc.,

Has your father contributed to the Thrift Savings Plan?
Does your mother have her funds in a 401k or 403b?

I find the retirement bonus of $500k + for a nurse to be a little incredulous. How is this paid out?
by Peter Foley
Tue Oct 04, 2016 10:57 pm
Forum: Investing - Theory, News & General
Topic: What are implications of Jack Bogle's Morningstar interview
Replies: 39
Views: 6738

Re: What are implications of Jack Bogle's Morningstar interview

To some extent, obviously, the implications depend on one's overall situation. If a 3.3% withdrawal supports ample discretionary spending ( say 1% of the 3.3% is discretionary) then you are fine as you can adjust if lower returns continue for a number of years. If the 3.3% supports only very minimal discretionary spending, the implications include a possible change in lifestyle, lowering one's expenditures/reduce one's cost of living ( e.g. you could move from MN to a state with no income tax - or even become a cheese head :happy for heaven's sake), or consider purchasing an annuity with a portion of your retirement savings. A few options, and not all of them are bad.
by Peter Foley
Tue Oct 04, 2016 7:54 pm
Forum: Personal Investments
Topic: temporarily cashing out ?
Replies: 55
Views: 8437

Re: temporarily cashing out ?

As nedsaid inferred, an Investment Policy Statement is key to any plan. It should be written so you can refer to it when you consider making changes to your current course of action.

Mine helped me weather the 2008-9 downturn. It has been revised at bit as I have aged, learned, and retired. It still sets the course, however.
by Peter Foley
Mon Oct 03, 2016 8:58 pm
Forum: Personal Investments
Topic: Rethinking Roth conversions
Replies: 13
Views: 2160

Re: Rethinking Roth conversions

While it might be a nice idea to have a cushion in one's Roth in case of extraordinary expenses, I can see your point. If you can redirect RMDs to charities and stay in a low tax bracket there is little reason to convert.

You do not state whether you are married or single.
by Peter Foley
Sun Oct 02, 2016 11:03 pm
Forum: Personal Investments
Topic: Suggestions as to allocation/planning?
Replies: 7
Views: 802

Re: Suggestions as to allocation/planning?

Sean - Welcome to the forum.

You are both doing well and are saving well. I would continue with your current plan to max out your tax deferred plans every year as well as contributing to a back door Roth.

At your income level you are unlikely to have your children qualify for any financial aid. With that in mind continue to fund the 529 plans. I don't think I would add more to the UGMA account. If that account were too large it might discourage someone from pursuing post secondary education.

Other than that, I think your needs are probably in the insurance area (you can afford good life insurance) and perhaps some estate planning not too far down the road.
by Peter Foley
Sun Oct 02, 2016 7:35 pm
Forum: Spain
Topic: I need help to start
Replies: 16
Views: 11303

Re: I need help to start

At your age 60% in stocks would be reasonable. Half that could be in the US and half in International. While many here recommend some part of international should be in emerging markets, I do not. Emerging markets are optional diversification not obligatory diversification.

30% Vanguard Total Stock Market and 30% Total International would be a good basic approach. Mutual fund o ETF, me da igual.
by Peter Foley
Sun Oct 02, 2016 7:28 pm
Forum: Personal Investments
Topic: How much cash should I have in my portfolio?
Replies: 27
Views: 5100

Re: How much cash should I have in my portfolio?

I'm probably in the minority here, but I like to maintain about a year's worth of cash needs. I have a pension but neither of us is collecting SS yet. In addition to the pension we spend about $40K per year - more than halfof that is discretionary. We have about $30k cash now (a bit more than normal for this time of year but a 1986 EE bond matured a couple months ago). When we get down to below $20K sometime next year I will replenish our taxable account and bring it up to about $40k. From there it will drift lower until I replenish again in 2018.

I do plan on holding less cash once I apply for SS benefits.

On the date I retired we held about 2 years of cash - my reasoning was similar to 53timr.
by Peter Foley
Sun Oct 02, 2016 7:12 pm
Forum: Personal Investments
Topic: Vanguard advisor gave me these two different bond investment allocations, so I'm now confused...
Replies: 15
Views: 2499

Re: Vanguard advisor gave me these two different bond investment allocations, so I'm now confused...

Okaneplease wrote:
We've been holding Vanguard Total Bond Fund (VBTLX), plus Vanguard Intermediate-Term Tax Exempt Admiral Fund (VWIUX) which I'm ditching as part of the portfolio update since I've learned it's not the wisest choice for my taxable account. (We're in the 15% tax bracket with no state tax in WA).
If your total bond fund is in tax deferred I see nothing wrong with your current approach. I would prefer it over the approach offer by the adviser. As has been mentioned, there is no need to have international bonds if you have some international equities. This look like dabbling with little basis for the additional complication.
by Peter Foley
Sat Oct 01, 2016 1:30 pm
Forum: Spain
Topic: I need help to start
Replies: 16
Views: 11303

Re: I need help to start

Interesting post . . . Does "upside of the bag" mean "top of the market?" If so, yes that is a danger in investing all your money at once. Dollar cost averaging can take two forms: 1. You have cash now and can invest it all at once or over a period of time. Studies have shown that from a financial perspective, it is best to invest it all at once. My preference is to not to do it that way because if the market drops you will be disappointed and may decide to sell. You would need to have good risk tolerance (la habilidad de tolerar el riesgo). 2. You will be contributing to an account on a regular basis and buying shares of a stock or mutual fund when you contribute. This version is also known as periodic investing. You bu...