Search found 3789 matches

by Peter Foley
Wed Apr 19, 2017 11:13 pm
Forum: Personal Finance (Not Investing)
Topic: Retiree Portfolio Model
Replies: 305
Views: 111414

Re: Retiree Portfolio Model

jacksprat I had to run at least a half dozen scenarios to gain comfort with the output. I ran similar scenarios in the RPM and i-orp. While the two calculators are different and have different purposes, RPM is definitely superior when it comes to larger scale Roth conversions. By larger scale I mean...
by Peter Foley
Wed Apr 19, 2017 7:44 pm
Forum: Investing - Help with Personal Investments
Topic: 457B Funds Selection Assistance
Replies: 3
Views: 335

Re: 457B Funds Selection Assistance

I'm about 90% in agreement with retiredjg. I would take a look at the stable value fund's return over the past couple years. If it is greater than the rate of inflation (over 2%) put 10% there and 10% in the Total Bond Market fund. This approach would offer a little bond fund inflation protection. I...
by Peter Foley
Tue Apr 18, 2017 11:06 pm
Forum: Investing - Help with Personal Investments
Topic: help with portfolio and asset location
Replies: 6
Views: 652

Re: help with portfolio and asset location

I don't have a suggestion for a TIPS fund. I have used the only one available in the 403b my wife has. "Stable value" is a term used to cover a variety of income funds often found in 401k and 403b plans. They provide a fixed rate of interest with (supposedly) little chance of losing value....
by Peter Foley
Sat Apr 15, 2017 10:57 pm
Forum: Investing - Help with Personal Investments
Topic: help with portfolio and asset location
Replies: 6
Views: 652

Re: help with portfolio and asset location

For the 401k and the 457 plan I would use a combination of the Vanguard S&P 500 and the Extended Market index. The two together in the right proportion are the equivalent of total stock market. I would suggest a short term TIPS fund, or possible a stable value fund if one is available and pays a...
by Peter Foley
Sat Apr 15, 2017 10:47 pm
Forum: Investing - Help with Personal Investments
Topic: Savings & Investments in order of priority
Replies: 7
Views: 726

Re: Savings & Investments in order of priority

If you are talking about basic financial management priority, I would put the emergency fund first. Your list is pretty all-inclusive and I can't offhand think of anything you are missing.

One can forward fund 529 Plans, but I would put saving for a house at a higher priority.
by Peter Foley
Sat Apr 15, 2017 4:30 pm
Forum: Investing - Help with Personal Investments
Topic: Advice for a young couple starting investing and financial plan?
Replies: 14
Views: 1720

Re: Advice for a young couple starting investing and financial plan?

Here is another alternative: Definitely the S&P 500 fund in your 403b. That is the only good option you have. While not great, you could put your bond allocation in your wife's 401k. Expense ratios are a drag over long period of time, kinda the reverse of compound interest. A few years with an e...
by Peter Foley
Thu Apr 13, 2017 1:01 pm
Forum: Investing - Help with Personal Investments
Topic: 401k advice for new investor
Replies: 6
Views: 391

Re: 401k advice for new investor

Nate79 wrote: I find it very strange and highly unlikely your plan doesn't offer a bond option. Are you sure you don't need to look in a separate section for bond options? Perhaps a fund called stable value? I would be calling the plan administrator just to check because that is truly awful if no bo...
by Peter Foley
Thu Apr 13, 2017 9:57 am
Forum: Personal Finance (Not Investing)
Topic: Will - what is complicated?
Replies: 72
Views: 3812

Re: Will - what is complicated?

I am a committed do-it-yourselfer. However, when we had minor children the stakes were just too high to get it wrong and we went to a lawyer to draw up our wills. Naming an executor and naming a guardian for minors are two important decisions. I've personally redone our wills a few times over the pa...
by Peter Foley
Wed Apr 12, 2017 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: 401k advice for new investor
Replies: 6
Views: 391

Re: 401k advice for new investor

I think you have made good choices. The decision to pay down debt is almost like a bond allocation, so I wouldn't worry about being primarily (or exclusively) in stocks for now. I personally would be tempted to use the extended market index to compliment in the index 500 fund. Your current choice is...
by Peter Foley
Wed Apr 12, 2017 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: How to calculate portfolio withdrawal for retirement?
Replies: 12
Views: 1295

Re: How to calculate portfolio withdrawal for retirement?

You have been fortunate to have a very good sequence of returns.

A middle ground you might consider would be to use a 3% withdrawal based on your 2017 portfolio balance. That is fairly conservative.
by Peter Foley
Tue Apr 11, 2017 2:47 pm
Forum: Investing - Help with Personal Investments
Topic: Investing for single aging parent
Replies: 13
Views: 1111

Re: Investing for single aging parent

This is just a guess, but if her AGI is a little under $100K, I would bet that her marginal tax rate is 25% and her SS benefits are 85% taxable. Investing in a low cost index mutual fund like Vanguard's Total Stock Market would be a reasonable, relatively tax efficient addition to her current CD hol...
by Peter Foley
Mon Apr 10, 2017 7:16 pm
Forum: Investing - Help with Personal Investments
Topic: Investing for single aging parent
Replies: 13
Views: 1111

Re: Investing for single aging parent

Like Paul, I think a little more detail would be good.

A 50/50 portfolio is not out of line based on the information you have provided so far.
by Peter Foley
Mon Apr 10, 2017 2:40 pm
Forum: Investing - Help with Personal Investments
Topic: Asset allocation [for 4% withdrawal rate]
Replies: 6
Views: 482

Re: Asset allocation [for 4% withdrawal rate]

I understood the question differently. The OP does not want to "draw down" more than 10% of his retirement portfolio. This would require a fairly high allocation to equities - certainly not a conservative approach. I don't think a withdrawal rate of 4% is sustainable through good times and...
by Peter Foley
Sun Apr 09, 2017 11:12 pm
Forum: Investing - Help with Personal Investments
Topic: Handling the Details of a Large Inheritance
Replies: 54
Views: 4444

Re: Handling the Details of a Large Inheritance

Just a note on tax brackets: $37,950 in taxable income is the top of the 15% tax bracket. That is an adjusted gross income of about $48,000+. $91,900 in taxable income is the top of the 25% tax bracket. That is an adjusted gross income of about $102,000+. In this tax bracket you pay 15% on long term...
by Peter Foley
Sun Apr 09, 2017 9:01 pm
Forum: Personal Finance (Not Investing)
Topic: The Stages of Retirement Saving
Replies: 55
Views: 10199

Re: The Stages of Retirement Saving

Pre-Boglehead (2008) I always had an age and a number. The more I read here, which coincided with the great recession, I came to have two numbers. The first was a total dollar amount, the second number I developed was a portfolio of bonds that would provide a basic mid class lifestyle. That required...
by Peter Foley
Sun Apr 09, 2017 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Should I make changes to my portfolio ?
Replies: 30
Views: 3204

Re: Should I make changes to my portfolio ?

Based on the additional information you provided I think a stretch IRA would be a good approach. If you took the RMD's from the IRA and in turn were able to increase your own tax deferred savings for retirement, you could make this an income tax neutral transaction until you retire. In my "deat...
by Peter Foley
Sat Apr 08, 2017 11:06 pm
Forum: Investing - Help with Personal Investments
Topic: Should I make changes to my portfolio ?
Replies: 30
Views: 3204

Re: Should I make changes to my portfolio ?

If you are relatively new to this I would start by simplifying the taxable inheritance . You really only need 3 funds, total stock market, total international and total bond. I personally like to mix in a short term TIPS fund just for a little interest rate/inflation protection. An alternative is to...
by Peter Foley
Fri Apr 07, 2017 10:00 pm
Forum: Personal Finance (Not Investing)
Topic: Will vs Living Trust
Replies: 44
Views: 2979

Re: Will vs Living Trust

I too live in MN and struggle a bit with the will versus trust issue. In Minnesota the estate you describe will pass to the wife without any estate tax nor probate if you have everything titled corrected and have beneficiaries payable on death or transfer on death on all accounts. I have been told b...
by Peter Foley
Thu Apr 06, 2017 8:34 pm
Forum: Personal Finance (Not Investing)
Topic: Schwab backdoor Roth: Can I just transfer from IRA into Roth
Replies: 16
Views: 1048

Re: Schwab backdoor Roth: Can I just transfer from IRA into Roth

gilgamesh wrote: You are doing this in retirement correct? You do this, just in case you have to recharecterize it back right? I am doing backdoor Roth. My question is, they are both technical,y Roth conversions, right? Or are they different? Yes I am doing this in retirement and my approach is to s...
by Peter Foley
Thu Apr 06, 2017 10:30 am
Forum: Personal Finance (Not Investing)
Topic: Schwab backdoor Roth: Can I just transfer from IRA into Roth
Replies: 16
Views: 1048

Re: Schwab backdoor Roth: Can I just transfer from IRA into Roth

I've done a few partial Roth conversions through Schwab. These have always been done into a zero balance Roth that I maintain for that purpose. If I recall correctly, I've done everything on line.
by Peter Foley
Tue Apr 04, 2017 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: Advice Needed: Enough to Retire, but the Tax Bill is a shock
Replies: 58
Views: 7761

Re: Advice Needed: Enough to Retire, but the Tax Bill is a shock

The Wizard wrote: Try modeling your AGI or Taxable Income from now through age 75 or more. Do what you can to keep it level or increasing up to 5% a year. Avoid the shock of a big jump in AGI and taxes at age 70. Use Roth conversions to increase your AGI now if needed. This approach tends to keep yo...
by Peter Foley
Tue Apr 04, 2017 10:50 pm
Forum: Investing - Theory, News & General
Topic: Early retirees - how did you inform your loved ones and friends?
Replies: 54
Views: 5495

Re: Early retirees - how did you inform your loved ones and friends?

My wife and I retired a couple months apart. We told immediate family but did not broadcast the news to our friends. I was age 61.5 and don't recall anyone being surprised that I was retiring "a bit" early. Members of my wife's family, especially her parents, were surprised that she retire...
by Peter Foley
Tue Apr 04, 2017 10:41 pm
Forum: Investing - Help with Personal Investments
Topic: Withdraw from taxable to fund tax advantaged?
Replies: 5
Views: 574

Re: Withdraw from taxable to fund tax advantaged?

It sounds as if you are a long way from retirement. I think of a couple caveats when I read the title of the thread: 1) Do you plan on retiring fairly early so that you would withdraw from taxable for a few years prior to withdrawing from tax deferred? You might ant a substantial taxable account. 2)...
by Peter Foley
Mon Apr 03, 2017 2:04 pm
Forum: Investing - Help with Personal Investments
Topic: What are some ways that I can maximize this portfolio, staying true to the Bogle philosophy?
Replies: 4
Views: 312

Re: What are some ways that I can maximize this portfolio, staying true to the Bogle philosophy?

There are many who recommend small cap value over the long term. I've never owned it myself. I think your AA is fine for your age and your plan to make it a bit more conservative in a few years is on target with the approach I would take. (Not that this is right, mind you, just two persons' opinions...
by Peter Foley
Sun Apr 02, 2017 10:46 am
Forum: Personal Consumer Issues
Topic: Advice on Long-term Health Care Insurance
Replies: 15
Views: 1431

Re: Advice on Long-term Health Care Insurance

If you go this route make sure you have someone who can advocate for you if you ever need to make a claim. My wife has been dealing with her 96 year old mother's long term care insurance provider since October and her mother has yet to receive a payment. There have been countless hours on the phone ...
by Peter Foley
Sat Apr 01, 2017 9:54 pm
Forum: Personal Finance (Not Investing)
Topic: Taxable SS Benefits
Replies: 28
Views: 2571

Re: Taxable SS Benefits

The BH Wiki provides good insight into the taxation of SS benefits.

https://www.bogleheads.org/wiki/Taxation_of_Social_Security_benefits
by Peter Foley
Fri Mar 31, 2017 2:15 pm
Forum: Investing - Theory, News & General
Topic: advice on where to put money at age 55 to secure savings in the event of market crash
Replies: 35
Views: 3666

Re: advice on where to put money at age 55 to secure savings in the event of market crash

There are any number of "safe" strategies you could deploy. One of my concerns is that you do not seem to have a lot of tolerance for risk. The implication being that if you have too much risk and the market starts to decline, or crashes, that you will sell. Two possibilities come to mind....
by Peter Foley
Fri Mar 31, 2017 11:23 am
Forum: Investing - Help with Personal Investments
Topic: Account Withdrawal Order in Retirement
Replies: 7
Views: 841

Re: Account Withdrawal Order in Retirement

DG99999 Thanks for the link. I'm one who appreciates Kitces's insights. In the summary he wrote: However, the optimal approach is actually to preserve the tax-preferenced value of retirement accounts and to fill the tax brackets early on, by funding retirement spending from taxable investment accoun...
by Peter Foley
Thu Mar 30, 2017 8:06 pm
Forum: Personal Finance (Not Investing)
Topic: Should I do a conversion from IRA to Roth IRA
Replies: 10
Views: 612

Re: Should I do a conversion from IRA to Roth IRA

Your update was helpful. As stated by others, you are well within the 15% tax bracket and it makes sense to convert to the top of that bracket for at least two to three years. At that point re-estimate your RMDs and convert more if it results in tax savings. It is not a bad idea to leave some cushio...
by Peter Foley
Thu Mar 30, 2017 2:23 pm
Forum: Personal Finance (Not Investing)
Topic: Should I do a conversion from IRA to Roth IRA
Replies: 10
Views: 612

Re: Should I do a conversion from IRA to Roth IRA

A little more information is needed.

Are you single or married?

When do you plan to take SS benefits and how will that impact your annual income?
by Peter Foley
Thu Mar 30, 2017 2:20 pm
Forum: Investing - Theory, News & General
Topic: Does your asset allocation derate tax-deferred holdings to account for future tax liability?
Replies: 163
Views: 6917

Re: Does your asset allocation derate tax-deferred holdings to account for future tax liability?

Doc replied to my post: Good. You made the comp one time and it didn't make enough difference to matter for your situation. I would suggest that you check again in a few years or if the tax law changes dramatically. I agree. I think it is certainly worth the modest effort to do the comparison every ...
by Peter Foley
Thu Mar 30, 2017 2:10 pm
Forum: Investing - Help with Personal Investments
Topic: Account Withdrawal Order in Retirement
Replies: 7
Views: 841

Re: Account Withdrawal Order in Retirement

Mike This topic comes up from time to time. The taxable, tax deferred, Roth rule of thumb is the correct approach for only a subset of retirees. The best approach is one that looks at all three pools of money and determines to most tax efficient approach over a period of years. For many individuals ...
by Peter Foley
Thu Mar 30, 2017 11:43 am
Forum: Investing - Theory, News & General
Topic: Does your asset allocation derate tax-deferred holdings to account for future tax liability?
Replies: 163
Views: 6917

Re: Does your asset allocation derate tax-deferred holdings to account for future tax liability?

I admit I did not read the entire thread. Getting back to the original question. I do not derate tax deferred holding in my asset allocation. My AA is 50/50. I went through the process of calculating my after tax AA three years ago. I estimated long term capital gains in taxable to be taxed at 15% a...
by Peter Foley
Wed Mar 29, 2017 3:55 pm
Forum: Investing - Help with Personal Investments
Topic: Help understanding index purchase and allocation
Replies: 5
Views: 372

Re: Help understanding index purchase and allocation

Welcome to the forum. You will get a mix of opinions no doubt. There is nothing wrong with the approach you propose. You can just use 60% of your money to buy one fund (or ETF) and 40% to buy the other. Alternative approach: For the first few years of investing your contributions are going to substa...
by Peter Foley
Tue Mar 28, 2017 8:21 pm
Forum: Investing - Theory, News & General
Topic: Personal experience over time? [How far from retirement, time spent investing]
Replies: 31
Views: 3016

Re: Personal experience over time? [How far from retirement, time spent investing]

I learned about the BH philosophy late in 2008 and retired in 2012. I was already into indexing (with Schwab by the way) so was part way there. Schwab's Total Stock Market, total international and total bond market are the only things I'm currently holding in my various Schwab accounts. (I have held...
by Peter Foley
Mon Mar 27, 2017 10:58 am
Forum: Investing - Help with Personal Investments
Topic: 403 and 457
Replies: 7
Views: 673

Re: 403 and 457

If it is government 457 there is a slight advantage there over the 403b. One can withdraw from a 457 account when you separate from your employer. The 403b requires that you be 59.5 years of age with a number of notable exceptions. Regardless, for very early retirees the 457 offers some advantage. I...
by Peter Foley
Sun Mar 26, 2017 4:44 pm
Forum: Investing - Theory, News & General
Topic: Christine Benz's Three Bucket System
Replies: 77
Views: 7471

Re: Christine Benz's Three Bucket System

My take at first glance: While I don't disagree with her bucket approach, she holds too many funds for my taste. I share her preference for 2 years of cash. I don't know her rationale for holding a balanced fund in bucket 2 nor a bond fund in bucket 3. Bucket 2 could be total bond + TIPS. Bucket 3 c...
by Peter Foley
Sat Mar 25, 2017 1:33 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Tax Liabilities
Replies: 8
Views: 730

Re: Estate Tax Liabilities

staythecourse: Many states have estate taxes with some having different thresholds than the Feds. Minnesota, for example, is at $1.8 M this year and set to go to $2.0 M next year. Also, about a half dozen states have inheritance taxes. There is a list on the Wiki: https://www.bogleheads.org/wiki/Est...
by Peter Foley
Sat Mar 25, 2017 12:38 pm
Forum: Investing - Theory, News & General
Topic: "Designing Your "Glide Path"
Replies: 25
Views: 3097

Re: "Designing Your "Glide Path"

As to the White Coat Investor's article. . . IMHO, very well done. Dr. Dahle lays out the options and explains the rationale. He even considered debt reduction as part of the formula, a nice addition to this oft debated topic. He provides a short, but relatively thorough analysis. Well worth clickin...
by Peter Foley
Sat Mar 25, 2017 12:22 pm
Forum: Investing - Theory, News & General
Topic: "Designing Your "Glide Path"
Replies: 25
Views: 3097

Re: "Designing Your "Glide Path"

Taylor wrote: Consider an appropriate target fund -- then forget about it This is certainly a valid approach for some individuals. I would caution however, that different mutual fund companies handle their glide paths differently. I would suggest comparing Vanguard to Fidelity to get a feel for the ...
by Peter Foley
Sat Mar 25, 2017 11:58 am
Forum: Personal Finance (Not Investing)
Topic: Estate Tax Liabilities
Replies: 8
Views: 730

Re: Estate Tax Liabilities

You are probably dealing with the wrong lawyer. You want one who specializes in estates. From the information you have provided us: Trust index funds = $500,000 Variable annuity = $155,000 (possibly part of the inheritance, but maybe it terminates upon his death) IRA = $90,000 Life insurance? Real e...
by Peter Foley
Fri Mar 24, 2017 10:29 am
Forum: Personal Finance (Not Investing)
Topic: Follow up: What is RMD for wife (61) after death of husband (72)
Replies: 7
Views: 994

Re: Follow up: What is RMD for wife (61) after death of husband (72)

petesamprs wrote: You bring up a very good point about Health insurance that I completely forgot about. She currently pays almost $700/month for a Platinum insurance plan from ACA marketplace, with no incentives/rebates given their joint income last year. I should look to minimize her income to ensu...
by Peter Foley
Fri Mar 24, 2017 10:12 am
Forum: Investing - Help with Personal Investments
Topic: Help with Retirement Planning
Replies: 5
Views: 643

Re: Help with Retirement Planning

Again welcome. You proposed: Roth IRA - $30k → Fill with Total Stock Market (VTSAX) Roth 401k - $35k → Fill with Total Stock Market (VTSAX) Pre-tax 401k - $320k → Put the entire Bond Index funds allocation ($250k) here. Total Bond Market and Total International Bond Market. (VTABX and VBTLX). Whatev...
by Peter Foley
Fri Mar 24, 2017 10:04 am
Forum: Investing - Theory, News & General
Topic: Vanguard Target Date Funds
Replies: 27
Views: 5089

Re: Vanguard Target Date Funds

I agree as well. I think it takes some of the emotion out of investing.

The only downside is you might have less to talk about at cocktail parties. (Are there still cocktail parties?) :wink:
by Peter Foley
Fri Mar 24, 2017 10:00 am
Forum: Personal Finance (Not Investing)
Topic: Contributions to Simple IRA affecting taxes
Replies: 7
Views: 407

Re: Contributions to Simple IRA affecting taxes

Keep in mind that you can also do a spousal IRA if your wife has not already used her tax deferred space.
by Peter Foley
Fri Mar 24, 2017 9:50 am
Forum: Investing - Theory, News & General
Topic: New Investor mutual Fund Question
Replies: 5
Views: 280

Re: New Investor mutual Fund Question

Just to emphasize Anotherguy's response. ETF's and stocks move up and down when the market is open. Mutual funds consolidate all those pluses and minuses in the stocks (or bonds) they hold and then recalculate the funds value a few hours after the market is closed. Because Target Date funds hold a m...
by Peter Foley
Thu Mar 23, 2017 11:04 pm
Forum: Personal Finance (Not Investing)
Topic: How did you do your income taxes?
Replies: 96
Views: 4239

Re: How did you do your income taxes?

Turbo Tax Deluxe + state for $39.89 + tax at Staples. It was on sale with a coupon. Actual cost was $20 more as I paid for electronic filing of state. In addition to my own taxes I did taxes for my two married daughters using the same software. Additional costs to file state electronically, $20 each.
by Peter Foley
Thu Mar 23, 2017 10:51 pm
Forum: Investing - Theory, News & General
Topic: "Rising Equity Glide Path" ?
Replies: 40
Views: 5959

Re: "Rising Equity Glide Path" ?

Glide paths are an interesting and controversial topic. Major investment firms with their Target Retirement funds do not share the same glide path. I have opined about this in other threads, but Dr. Pfau's "Rising Equity Glide Path," at its most basic, is a reasonable approach for some inv...
by Peter Foley
Tue Mar 21, 2017 12:33 pm
Forum: Investing - Theory, News & General
Topic: What's your strategy for withdrawing funds in Retirement ?
Replies: 57
Views: 6081

Re: What's your strategy for withdrawing funds in Retirement ?

Strategies can be quite varied because individual circumstances vary. Is the bulk of your retirement savings in taxable, tax deferred, or Roth? Do you plan on delaying SS benefits and withdrawing a little more early on and a little less later? There are lots of questions and lots of circumstances. Y...
by Peter Foley
Tue Mar 21, 2017 12:20 pm
Forum: Personal Finance (Not Investing)
Topic: Inlaw Suddenly Wants Financial Security in 60's..
Replies: 31
Views: 5470

Re: Inlaw Suddenly Wants Financial Security in 60's..

To be a bit contrarian, there are people who should use an adviser. Perhaps not a lot, but there are some people who just cannot handle the emotional aspect of investing. In this particular case, I would recommend that the individual visit a local Charles Schwab office and express up front that they...

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