Bogleheads.org

Dandy

Here he is talking not about market timing, which is trying to predict the market, but about the need for "nervous" investors to stay within their risk tolerance levels by reducing equities. I'm ok with nervous investors dialing back their equities to stay within their risk tolerance -- that is als...

Dandy

Also known as market timing. Market timing is a term that is thrown around on so many things that it can lose its real value. Some have applied it to rebalancing. I have dealt with the most abusive market timers who had list of clients and they would call in often several times a week just before t...

Dandy

I understand that in general lump sum outperforms DCA perhaps 2/3'rds of the time. I do think there might be a reduction in that advantage for those start their DCA when the market is near or at it's all time high, or some other objective measure of high valuation. I usually do and advise a combinat...

Dandy

Loss of FDIC insurance isn't the only difference. My understanding is that Prime and other institutional type money markets have options to charge fees, or restrict withdrawals in certain situations related to economic hardships that may cause a run on the fund for example. That isn't the case with ...

Dandy

a lot depends on your age and purpose of your fixed income and what percent overall are you allocating to fixed income. Usually, the bond choices in employer sponsored plans are terrible either poor performance or high fees or likely both. I like the guaranteed income especially if the purpose is fo...

Dandy

I don't worry too much about the market timing label -- many times it is abused. When there are significant changes it is wise to consider responding to them. When money markets were paying almost nothing it was a reasonable response to move assets to something that had a bit more risk and a bit mor...

Dandy

College expenses used to be reasonable at least for state schools. I used to work the summers and could at least pay for the tuition. My parents picked up the books etc. and provided a small weekly allowance to cover gas/lunch - I commuted (but bought a 6 year old used car.) Those days are long gone...

Dandy

Here is how I look at it: 1. A broad based passive/index fund with low ER e.g. Vanguard's Total Stock Market (US) at 4 bps is a pretty good measure of the US market. 2. Most, but not all, data on individual stocks is known pretty quickly to the market so the market is generally up to date. 3. An Act...

Dandy

The basic math works assuming reasonable assumptions. The longer the time period the greater the risk that reasonable assumptions may not be so reasonable. e.g. war, tax changes, inflation, negative interest rates, flu pandemic, climate change, ??, etc. Also, personal issues related to your own heal...

Dandy

Equities outperform fixed income over time -- by a lot. They are also subject to rather sudden and sometimes scary declines of 50% or more. You will probably experience one of those scary events once every 15 or 20 years (guess work not researched). So, younger accumulators who are not very risk ave...

Dandy

Every all in one or balanced fund usually requires some compromise in your ideal allocation. Maybe it is too aggressive, or has too little international equities, etc. TD funds from vanguard have made some significant changes in overall allocations to equities and what investments the funds contain....

Dandy

Then when you reach 59 1/2 years old you make sure your withdrawals are at or less than $72K/year You can determine the amount to withdraw up until the year you reach 701/2 then the minimum is determined by Uncle Sam. If you save in a TIRA or 401k aggressively and have at least a moderately aggress...

Dandy

1. start with a small allowance - I think I got 25 cents a week (I'm 70). You could tie it to a simple chore depending on age but the idea is his/her understanding of income/earnings. That helps them understand parents have income (so they don't have unlimited money). 2. Have them use a piggy bank o...

Dandy

Usually, at this point the dividends should be almost equal to the premiums if not more and the premiums will stop at age 65. They will likely, but are not guaranteed, to increase. At this point the bad decision you made decades ago is history and now you might have several attractive options. Do no...

Dandy

Seems like a reasonable bridge to Medicare - you might consider a bridge for the higher earner to age 70 Social Security. I did that and recently took SS at age 70 - nice :happy To help with this process I used distributions from our taxable account to help fund the bridge. I also had a moderate pen...

Dandy

It is our first experience with rising interest rates in quite a long time. Not used to seeing "safe" bond funds have even a modest negative return even though we knew that was what happens when interest rates rise. I see no problem with using a short term CD ladder in place for some of your fixed i...

Dandy

A lot depends. Not helpful I know. I would look into the cost and benefits of refinancing your existing mortgage to either shorten the term or the monthly payout. But, if you are already maxing out tax deferred investing and have money left over to invest or pay down the existing mortgage then it ma...

Dandy

Not intentionally. TIRA is large and mostly fixed income about 20/80 and taxable is pretty much the opposite. Both about equal. So TIRA RMDs will tend to deplete fixed income and since equities outperform fixed income over the long run I will likely experience increasing equity allocation overall. D...

Dandy

...but isn't the whole idea simplicity). Simplicity isn't the "whole" idea but a worthy goal up to a point. Just like avoiding taxes is a worthy goal but not everyone should by muni bond funds. There is usually a trade off between the allocation you want and the allocation you accept if you go very...

Dandy

I am glad others have weighed in. I was only addressing RMDs for IRAs not 401k. I didn't see the 401k mentioned specifically so I glossed over the fact that not everything was an IRA.

Dandy

the government doesn't care if you take the RMD owed to them out of all your IRAs or just one - as long as the total RMD amount paid to them is based on the sum of all IRAs owned values at the end of the prior year. So you could take the total amount of RMD owed out of a single IRA. You might want t...

Dandy

I used to fret about that but less now. I have an interest checking account and a savings account at the same Credit Union and authorize them to cover any overdraft with my savings account (for a minor charge). I don't believe I've ever bounced a check in my life but sure lost a lot of interest keep...

Dandy

Money Markets and FDIC saving products will do nicely in a gradual rising interest rate environment especially if inflation stays tamed. Bond funds will face a mild head wind so the difference between a mildly negative return on intermediate bond funds and a 1.5 to 2% return on Money Markets or FDIC...

Dandy

Just turned 70 and have a 43/57 allocation. I am fortunate to have a high income floor in retirement and ample (I hope) assets. I never was an aggressive investor - tops I was 55/45. After 2008-9 drop I decided that even that was unnecessarily high given that I was just retired and wanted to collect...

Dandy

Questions: 1. Should I roll over my old 401(k) into my new one or to an IRA? 2. Should I keep socking away cash or should I pay off debt? I am confused about what to do when my car lease is up. Should I try to find a safe car for under $15K? Should I pay down some of our student loans (we make too ...

Dandy

I think you are focused too much catching up and that might be leading you to be more aggressive than you need to be. Also, being relatively new to investing you might not have a good handle on your risk tolerance. Risk tolerance is very hard to determine especially if you have been investing during...

Dandy

That reminds me of a recent B of A "bonus" plan. Something like put say $50k in their savings account and leave it there for 6 months and earn a $200 bonus. If all terms are met B of A will attempt to credit your account within 90 days. First they pay almost nothing on savings accounts - I think it ...

Dandy

This is why, IMO, one should understand their funded ratio (viewtopic.php?t=219878) and where they stand in Otar's zones (viewtopic.php?t=144663#p2152834) when approaching and planning for retirement. Interesting way to determine whether your finances are on track to support your retirement income ...

Dandy

1. In the lion's share of historic cases, implementation of the '4% rule' would not leave a retiree penniless at the 30 year mark. Further, I've not met anyone who has ever strictly implemented the '4% rule'; when the market nosedives, everyone I've ever spoken with or heard rumor of reduces their ...

Dandy

That requires double the portfolio size that the '4% rule' suggests. For most investors, that's around another decade of saving and working. If you like what you do for money and are otherwise able to do so, fine. But I doubt that most would be willing to make the trade-off of a guaranteed decade o...

Dandy

I sure don't see anything special about that to which we could apply alarmist statements like "stop playing the game." Not sure you understand Dr. Bernstein's idea fully. Stop playing the game seems to alarm you. It is an analogy suggesting those who have enough may have a different strategy. Proof...

Dandy

Dr. Bernstein is a serious investment person and well respected. He wrote a catchy title about stop playing the game if you have enough. Let's assume, given who we are talking about, that he feels investing isn't really a game. I believe he meant that you need to stop participating in the traditiona...

Dandy

Bernstein's idea was having 20 to 25 years of residual expenses i.e. the amount needed to supplement your retirement income in LMP and invest the rest anyway you want. It did not address early retirement as I recall, more normal retirement e.g. say 65 so 20 years would take you to 85 (near normal li...

Dandy

My own answer is that I would not have the guts to rebalance from bonds to equites after a stock crash. Neither do I. I didn't do it in 2008-09 when I was just retired. I rebalanced a bit early but then said I need to preserve assets for a possible 30 year retirement and want to collect SS at 70. S...

Dandy

The only part I disagree with, and it’s just my opinion, is that I believe 50/50 entails less overall risk than 100% TIPS, in a large taxable account, meant to provide for a 30+ year retirement. If you are talking about Dr. Bernstein's idea you first have to have enough. By that he most likely mean...

Dandy

I am not convinced I need global weighting of equities especially since international have a high correlation with US equities. Some allocation seems appropriate but there is nothing particularly wrong with global weighting. Even less of a case with global weighting of fixed income if the purpose of...

Dandy

I still think the idea is effectively mental accounting that makes a false appeal to certainty and security that is not really there. What is metal accounting about changing a good portion of your fixed income to a TIPS ladder or other "safe" fixed income products based upon your expected drawdown ...

Dandy

I didn't read every post but from what I saw nothing I read suggested American exceptionalism etc. People talked about whether there was sufficient correlation to justify a global weighting or if many firms had a large percent of income from abroad was international investing or global weighting is ...

Dandy

I think Dr. Bernstein means put your living expenses (your spending floor) into a TIPS ladder and you can do what you want with the rest - but he should say that explicitly if that's what he means. I believe Dr. Bernstein suggests the TIPS ladder as a preferred option since it should take most if n...

Dandy

The Retirement Income Fund is a good choice for retirees especially if they are not investment savvy and don't want a lot of equity type risk. Sometimes you just have to pay the taxes. You could look at Tax managed Balanced fund but it has about 50% allocated to equities. You could offset that perce...

Dandy

The problem is that over longer periods, “safe” fixed income has a greater risk of becoming “unsafe” inflated-away fixed income. While “unsafe equity” has a greater chance of providing the horsepower to “safely” mitigate “unsafe” inflation. Hence how I arrived at 50/50 or 40/60. Pick your poison. T...

Dandy

A broader point is if you have enough you probably need to consider securing your retirement funding for double digit years by allocating to "safe" products vs continuing to take the same level of risk. e.g. a tilt toward asset preservation vs growth for growth sake. Because most who have enough hav...

Dandy

It might suggest that the more recent push for global weighting of equities may not be all that critical.

Dandy

I am not going to force either one of them to do something they don't want to do, and will not send them off to school if their heart is really not in it. I get your point. Have seen sons of relatives and neighbors who were unmotivated students but blossomed when they got into a trade that matched ...

Dandy

Been there and it is not a great situation to be in. In my case the job was very stressful and I had a stressful situation in the family and was 52. I found the stress declined when I became resigned to the fact that was going to be terminated. I focused on doing my job, helping my staff and custome...

Dandy

I think backtesting can be a useful tool but it can easily be misused or misunderstood. How far back are you backtesting? Are you including the great depression when there was about a 90% drop in equities? Does going back that far make sense? Are you looking at how a 60/40 allocation has performed o...

Dandy

In my opinion, ANY low-cost, good quality, diversified short- or intermediate-term bond fund (or safe fixed-income security such as CDs or Treasuries) will do the important job of providing safety in a portfolio. +1 I haven't heard many say this but I agree with Taylor Total bond fund is a very goo...

Dandy

These are somewhat tough times for those close to or just retired. Stocks have had a very long bull market and with interest rates rising there is downward pressure on most fixed income holdings. Add to that looking at a drop in earnings, loss of human capital and the prospects of withdrawal instead...

Dandy

I would put the 13k back into the pension and move your high fee IRA to Vanguard. With a nice pension and Social Security you will likely have a nice retirement income floor. An less need to rely on your investments. As a retiree who has both I am glad for that advantage which is becoming increasing...

Dandy

I feel your pain. Don't need much if any of my RMD to support our current lifestyle. But, since your can't take it with your RMDs are a reminder that you have to deal with the enviable position of having more assets/income then you need. After a lifetime of saving, investing, living below your means...

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