Search found 3253 matches

by Peter Foley
Tue Jul 26, 2016 9:22 pm
Forum: Investing - Help with Personal Investments
Topic: New retiree seeking ideas for keeping portfolio proportions while minding taxes
Replies: 8
Views: 587

Re: New retiree seeking ideas for keeping portfolio proportions while minding taxes

The solution might be to convert 40K to Roth and withdraw 40k. When using I-ORP did you check the option to enable Roth conversions?
by Peter Foley
Tue Jul 26, 2016 9:13 pm
Forum: Investing - Theory, News & General
Topic: Declining or Rising equity allocation in retirement?
Replies: 108
Views: 6314

Re: Declining or Rising equity allocation in retirement?

talemak wrote: can't understand why you would have rising equity in retirement? IMHO it is a strategy whose basis is in part a reaction to age in bonds. Age in bonds, of course, is an ever declining equity allocation. Once one is assured they have their basic needs met and are investing for "ni...
by Peter Foley
Mon Jul 25, 2016 7:37 pm
Forum: Investing - Theory, News & General
Topic: How much of a role does asset allocation play?
Replies: 7
Views: 668

Re: How much of a role does asset allocation play?

I think it is very important. It does not act alone however, it needs to be in concert with your risk tolerance. You will find a wide range of opinions, but there seem to be some consensus that there has to be enough in equities to boost one's returns over inflation over the long haul of retirement ...
by Peter Foley
Sun Jul 24, 2016 10:36 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement for Women(?)
Replies: 34
Views: 3145

Re: Retirement for Women(?)

Life expectancy is an issue, as is the fact that it is more expensive to be single and living in your own home. Generally speaking, men's wages are higher than women's and their access to 401ks historically may be greater than women's. A single surviving spouse living off social security and a 401k ...
by Peter Foley
Sun Jul 24, 2016 10:24 pm
Forum: Investing - Help with Personal Investments
Topic: Is This a Good Investing Plan?
Replies: 22
Views: 1624

Re: Is This a Good Investing Plan?

William wrote: Another smart Minnesotan! Most of the "battle" is to use low-cost index funds, and you've done that. You seem to have a decent international/domestic ratio, and a decent stock/bond allocation. It looks great to me. If you live in the Twin Cities area, there are some regular ...
by Peter Foley
Sun Jul 24, 2016 7:12 pm
Forum: Investing - Theory, News & General
Topic: Declining or Rising equity allocation in retirement?
Replies: 108
Views: 6314

Re: Declining or Rising equity allocation in retirement?

Larry Swedroe wrote: This idea of buckets approach IMO simply doesn't work, it's a way to fool yourself into thinking it will allow you to stay the course. Larry - would you care to expound on this comment? Perhaps in a different thread if not apropos here. Whether we view them in that way or nor, m...
by Peter Foley
Sat Jul 23, 2016 10:43 am
Forum: Personal Finance (Not Investing)
Topic: IRA beneficiaries question
Replies: 15
Views: 1075

Re: IRA beneficiaries question

I don't know where your mother-in-law is in this process, but it would be good to know her overall financial status. Before rolling over an inherited IRA or just changing beneficiaries, it would be best to assess her needs. Note: this is the last year your MIL can file married filing jointly. Perhap...
by Peter Foley
Fri Jul 22, 2016 10:09 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Advice
Replies: 4
Views: 376

Re: Portfolio Advice

Duckie already mentioned my primary piece of advice - use the G fund for non equities to the extent possible. This will allow you to simplify holdings elsewhere.
by Peter Foley
Fri Jul 22, 2016 3:08 pm
Forum: Investing - Theory, News & General
Topic: Declining or Rising equity allocation in retirement?
Replies: 108
Views: 6314

Re: Declining or Rising equity allocation in retirement?

Good article Larry - without using the exact words you introduce behavioral finance into the planning and decision making process. That is realistic and insightful. An abbreviated quote from your conclusion: The most prudent approach is to adapt a strategy to actual market returns and valuations. In...
by Peter Foley
Thu Jul 21, 2016 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: How many folks choose to give inheritance to their children in unequal portions?
Replies: 172
Views: 12804

Re: How many folks choose to give inheritance to their children in unequal portions?

This reminds me of one of the cases described in Beyond the Grave by Jeffery Condon. If I remember correctly, after dividing things unequally the children never spoke to each other again. If one were not going to divide equally, at least there should be a conversation in advance to gauge the reactio...
by Peter Foley
Thu Jul 21, 2016 1:36 pm
Forum: Personal Consumer Issues
Topic: What really happens to people who run out of their money in retirement
Replies: 57
Views: 7402

Re: What really happens to people who run out of their money in retirement

countofmc wrote: Not being flippant, but they are probably dead. Average life expectancy is still a tad under 80, so you might not see a lot of homeless people in their 80s since there aren't THAT many people in their 80s to begin with. I would imagine folks of limited means that may be in a situati...
by Peter Foley
Thu Jul 21, 2016 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: Maximizing retirement spending power - Basic case study.
Replies: 23
Views: 3629

Re: Maximizing retirement spending power - Basic case study.

gilgamesh wrote: First of all. I want to get these out of the way: If you are selling 2,000 shares @20/share and cost basis is $11/share, wouldn't capital gains be $18k and not $9k? I also don't know how you got the spendable income of $25k + $10k + $10k + $20k, shouldn't that last number be $40k? W...
by Peter Foley
Wed Jul 20, 2016 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: Maximizing retirement spending power - Basic case study.
Replies: 23
Views: 3629

Re: Maximizing retirement spending power - Basic case study.

Additional reply: The following is a withdrawal template that I have shared with others. The income needs are not far off from the scenarios you presented. It represents 3 years of a 5 year plan prior to husband taking SS benefits, 2015: Assumption – Husband’s (age 65) pension, wife retired (62) no ...
by Peter Foley
Wed Jul 20, 2016 5:43 pm
Forum: Personal Finance (Not Investing)
Topic: Maximizing retirement spending power - Basic case study.
Replies: 23
Views: 3629

Re: Maximizing retirement spending power - Basic case study.

I did not include Roth conversions because you did not mention it. A combination of IRA withdrawals and Roths conversion is preferable because one continues to allow some assets to compound tax free. That is the crux of the Kitces article I cited. You wrote: Scenario 1: I assume the $15k CG is LTCG....
by Peter Foley
Tue Jul 19, 2016 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: Maximizing retirement spending power - Basic case study.
Replies: 23
Views: 3629

Re: Maximizing retirement spending power - Basic case study.

While you can plug this into I-orp, you may be surprised at their recommendations - I certainly was. Let's backtrack to your original premise: I understand, that after tax investing would have incurred capital gains and dividend taxes prior to retirement and thus impeding the growth. So, in reality ...
by Peter Foley
Tue Jul 19, 2016 3:14 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Questions - Need advice
Replies: 18
Views: 1334

Re: Asset Allocation Questions - Need advice

Not that my way is the only way . . . but I diversify using only Total Stock Market and Total International for equities. (I have some S&P 500 in a 403b account because total stock is not offered.) For Bonds I have older I-bonds, Total Bond Fund, TIPs and a stable value fund in a 403b. The stabl...
by Peter Foley
Mon Jul 18, 2016 11:44 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation Questions - Need advice
Replies: 18
Views: 1334

Re: Asset Allocation Questions - Need advice

Head of Household is a slightly more advantageous tax filing status than single. Good advice already from two well respected posters. I would be tempted to delay any cashing in of funds with substantial gains (those which might not transfer) in your taxable account. You may want to spread out the ta...
by Peter Foley
Mon Jul 18, 2016 9:05 pm
Forum: Personal Finance (Not Investing)
Topic: Early retirees, at what age did you "retire"? Is it working out?
Replies: 57
Views: 7847

Re: Early retirees, at what age did you "retire"? Is it working out?

I was 61.5 and my wife was 56 when we retired. Financially, no problems. We were helped by timing as we retired in May of 2012 and the market has done well since then. Since our retirement we have been blessed by 4 grandchildren (each daughter had two). :D So some of "why things are working out...
by Peter Foley
Mon Jul 18, 2016 8:59 pm
Forum: Personal Finance (Not Investing)
Topic: determine how much of taxable income you can take each year in the lowest bracket
Replies: 12
Views: 1411

Re: determine how much of taxable income you can take each year in teh lowest bracket

GOGO If you use Turbo Tax, one of the forms you can print out is a Two-Year Comparison. I have taken that comparison and created a worksheet so I can model upcoming year's taxes. In the version I created I altered the order of the income components and moved long term capital gains and dividends to ...
by Peter Foley
Mon Jul 18, 2016 7:41 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding I-orp Logic
Replies: 3
Views: 368

Re: Understanding I-orp Logic

The scholarly paper explaining the results starts with some assumptions (taxable, Roth, and tax deferred accounts are all available for retirement spending) and some motivations for IRA to Roth conversions. Those motivations are as follows, with only 1 through 3 considered: Motivations for making IR...
by Peter Foley
Mon Jul 18, 2016 3:10 pm
Forum: Personal Finance (Not Investing)
Topic: Understanding I-orp Logic
Replies: 3
Views: 368

Understanding I-orp Logic

I ran the Optional Retirement Planner a few years ago and took another stab at it today with updated numbers. I found the result to be counter intuitive. I then read the FAQ's just to make sure I was understanding the reports. The scenario proposed for my wife and me had us doing substantial IRA wit...
by Peter Foley
Sat Jul 16, 2016 1:26 pm
Forum: Investing - Help with Personal Investments
Topic: Have questions about RMD
Replies: 13
Views: 969

Re: Have questions about RMD

The Electrician wrote: Roth conversions up to bracket limits prior to RMDs, if manageable, still make sense to me. Does this make sense to anyone else or am I overthinking it? While it is a little more complex than this, this does make sense. I understand your "if manageable" to mean stayi...
by Peter Foley
Sat Jul 16, 2016 1:15 pm
Forum: Personal Consumer Issues
Topic: Need printer recommendations
Replies: 36
Views: 1649

Re: Need printer recommendations

I would purchase a multi-function machine, a printer scanner. I find I use the scanning function a lot. If you are getting a machine that prints in color as well a b&w, buyer beware! Some machines will not let you print at all if one of the color cartridges is out of ink. I print very, very litt...
by Peter Foley
Sat Jul 16, 2016 1:05 pm
Forum: Investing - Help with Personal Investments
Topic: Meeting w/ Mom's F.A. and prep for her retirement - Please help!
Replies: 23
Views: 2039

Re: Meeting w/ Mom's F.A. and prep for her retirement - Please help!

There are two type of annuities relative to funding, pre-tax and post-tax. Pre-tax are often called qualified as they are funded with IRA dollars. All proceeds from a qualified annuity are considered to be taxable income. If this is what you mother has, it may be best tax wise to liquidate it over a...
by Peter Foley
Fri Jul 15, 2016 10:35 pm
Forum: Investing - Theory, News & General
Topic: Options trading
Replies: 33
Views: 1900

Re: Options trading

If I were going to trade options again - I haven't for about 25 years or so - I would take the relatively low risk approach of selling covered call options. IMHO most other options strategies are akin to gambling.
by Peter Foley
Fri Jul 15, 2016 10:26 pm
Forum: Investing - Help with Personal Investments
Topic: Moving More Money into Cash as Retirement Gets Closer
Replies: 18
Views: 1899

Re: Moving More Money into Cash as Retirement Gets Closer

I had two years of expenses in cash when I retired. I was delaying SS and had a number of years of Roth conversions in front of me so I wanted a fairly large cash position so as to better limit/control my taxable income. In year 3 of retirement I did a combination of Roth conversions and IRA withdra...
by Peter Foley
Fri Jul 15, 2016 3:11 pm
Forum: Investing - Help with Personal Investments
Topic: Immediate annuities and my retirement plan
Replies: 48
Views: 4072

Re: Immediate annuities and my retirement plan

dabblingeconomist wrote: Delaying Social Security is tantamount to buying an (very high-quality!) annuity: you get a higher guaranteed, inflation-indexed payout for life. I could not have said it better. If you were to delay until 66.5 and buy an immediate annuity then you would have built in at lea...
by Peter Foley
Wed Jul 13, 2016 9:56 pm
Forum: Investing - Help with Personal Investments
Topic: Personal Glide Path
Replies: 7
Views: 847

Re: Personal Glide Path

Just me, but I would do it slightly differently. Age 35 60 25 15 100% Age 40 60 25 15 100% Age 45 60 20 20 100% Age 50 55 15 30 100% Age 55 50 15 35 100% Age 60 35 10 55 100% Age 65 35 10 55 100% Age 70 40 10 50 100% Age 75 35 10 55 100% (stay same as age 70) Age 80 30 10 60 100% (stay same as age 7...
by Peter Foley
Wed Jul 13, 2016 4:14 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 5889

Re: Strategy for conversion of $1.8 million IRA

WildBill wrote: Scenario - Equity asset market downturn of % X. (Think 2008-2009, when you were looking at a 50% off sale). During this period very aggressively convert fixed income assets in an IRA to equity assets in Roth. This is essentially waiting for a "sale" in equity assets to aggr...
by Peter Foley
Tue Jul 12, 2016 10:49 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable vs Tax-Deferred for withdrawal?
Replies: 3
Views: 381

Re: Taxable vs Tax-Deferred for withdrawal?

No offense to anyone, but I really think we should avoid stating that there is a general preference for withdrawing from taxable first. This is just not the case in many circumstances. It is highly dependent on income needed to meet basic expenses which drives tax rates, other taxable income, the re...
by Peter Foley
Mon Jul 11, 2016 8:00 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy for conversion of $1.8 million IRA
Replies: 63
Views: 5889

Re: Strategy for conversion of $1.8 million IRA

I would consider biting the bullet and doing Roth conversions well into the 25% tax bracket until you reach age 65. Then reassess to consider impact of Medicare surtax. I'm thinking that it would be nice to leave a tax free account to heirs in addition to some taxable accounts that would receive a s...
by Peter Foley
Mon Jul 11, 2016 7:40 pm
Forum: Investing - Help with Personal Investments
Topic: Critique my IPS [Investment policy statement]
Replies: 7
Views: 802

Re: Critique my IPS [Investment policy statement]

Your IPS is okay. I would add some specificity to the strategy. Are you going to use a 401k (TSP?), a traditional IRA, or a Roth? If your tax bracket changes, will you switch strategies? IMHO it is ideal to have some funds in taxable, some in IRA, and some in Roth when one approaches retirement - es...
by Peter Foley
Mon Jul 11, 2016 7:25 pm
Forum: Investing - Help with Personal Investments
Topic: Taxes and Retirement Option Confusion
Replies: 6
Views: 366

Re: Taxes and Retirement Option Confusion

Schwab has a number of low cost index funds. The Schwab 1000, Schwab Total Stock Market and Schwab S&P 500 are 3 options for US stocks.

Are none of these available at low cost? Be mindful that your could balance the "family's" AA with the selection of mutual funds in your IRA.
by Peter Foley
Mon Jul 11, 2016 7:20 pm
Forum: Investing - Help with Personal Investments
Topic: Help with retirement investment plan
Replies: 25
Views: 1987

Re: Help with retirement investment plan

I think your AA proposal and your plan is fine. You could also consider a Vanguard Target Retirement Fund that would roughly mirror your planned allocation.
by Peter Foley
Sun Jul 03, 2016 9:31 am
Forum: Investing - Help with Personal Investments
Topic: Withdrawal strategies for non-rebalancers?
Replies: 20
Views: 1491

Re: Withdrawal strategies for non-rebalancers?

I suggest you read the following: Six Retirement Withdrawal Strategies Evaluated Darrow Kirkpatrick His conclusion is that the following strategy has historically been superior: CAPE Median Strategy — If the CAPE is greater than its long-term median (a kind of average), then we assume that stocks ar...
by Peter Foley
Sat Jul 02, 2016 10:36 am
Forum: Investing - Theory, News & General
Topic: teacher 403b - last couple of years
Replies: 22
Views: 2917

Re: teacher 403b - last couple of years

If you are planning on doing Roth conversions you should not roll over the 403b. When doing a Roth conversion the pre tax and post tax contributions of all IRAs are considered in the calculation. It would likely be more tax efficient to do IRA to Roth conversions before moving the 403b. (The post ta...
by Peter Foley
Fri Jul 01, 2016 10:04 pm
Forum: Investing - Theory, News & General
Topic: "Age in bonds" or "110 minus age = equities"?
Replies: 28
Views: 2996

Re: "Age in bonds" or "110 minus age = equities"?

The Trinity study would incline one to select the higher equities allocation. On the other hand, recent work by Wade Pfau suggests that a "rising equity glide path" may be preferable in retirement. If one does not have a lot of room for error, I think Dr. Pfau's approach makes sense. Keep ...
by Peter Foley
Fri Jul 01, 2016 12:59 pm
Forum: Investing - Help with Personal Investments
Topic: Newbie here: Help with my 401k and my Potential Roth IRA.
Replies: 16
Views: 1240

Re: Newbie here: Help with my 401k and my Potential Roth IRA.

ChuChu wrote: My prudential 401k (just changed the allocation) Vang Total Market 60% Vang Total International 20% Vang Total Bond 20% Good plan. I would also encourage both of you to Start Roths. Get something going while your income is low and you don't have to use the backdoor option. Roths have a...
by Peter Foley
Thu Jun 30, 2016 11:26 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion 5 year rule
Replies: 9
Views: 1051

Re: Roth Conversion 5 year rule

PapaGeek For a married couple filing jointly (you do refer to "us" in one of your posts) the 46.25% marginal tax bracket is a very, very, narrow window. It exists, of course because of the way SS benefits are taxed. There used to be a line on the Wiki to show the income level for married f...
by Peter Foley
Thu Jun 30, 2016 4:37 pm
Forum: Investing - Help with Personal Investments
Topic: Getting rid of international funds
Replies: 83
Views: 6568

Re: Getting rid of international funds

I have a fairly small International allocation and have watched it under perform other market segments for many years. I've asked myself the same question. The approach I decided on a few years ago after reading an article about rebalancing was to only rebalance stocks and bonds and to just let the ...
by Peter Foley
Wed Jun 29, 2016 7:47 pm
Forum: Personal Finance (Not Investing)
Topic: Trust nightmare, help needed!!!
Replies: 26
Views: 4042

Re: Trust nightmare, help needed!!!

One scenario that was talked about in the estate planning class I took was that of a person stepping in and taking over someone else's finances for their own benefit. A couple of the key facts to obtain to undo this were related to the attorneys used. Did your father have a prior relationship with t...
by Peter Foley
Wed Jun 29, 2016 7:33 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion - Taxes / Time of Year
Replies: 11
Views: 837

Re: Roth Conversion - Taxes / Time of Year

I don't try to cut it too close. I have always over converted a few thousand and not worried about the last 2K-5K being in the 25% bracket. But, I am also in a position where either my wife or I will do Roth conversions over a 6-7 year period and still have substantial sums in traditional IRA's when...
by Peter Foley
Wed Jun 29, 2016 5:20 pm
Forum: Investing - Theory, News & General
Topic: Strategies for Refilling Cash Holdings (Bucket 1) Over Time
Replies: 25
Views: 2110

Re: Strategies for Refilling Cash Holdings (Bucket 1) Over Time

There probably isn't an optimal strategy except in hindsight. I agree that taking a look at one's portfolio at the end of the year and deciding how to replenish cash is a logical approach. In that regard I suggest you read the following article by Darrow Kirkpatrick: http://www.caniretireyet.com/new...
by Peter Foley
Tue Jun 28, 2016 5:27 pm
Forum: Investing - Help with Personal Investments
Topic: How to invest $1 million trust account
Replies: 35
Views: 2683

Re: How to invest $1 million trust account

Perhaps this is not an issue, but I understand the tax rates on non distributed trust income to be very high. Might this affect the investment AA and mutual fund choices when there is a 3% distribution?
by Peter Foley
Tue Jun 28, 2016 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Will - Remarried with Troubled Kids
Replies: 37
Views: 4970

Re: Will - Remarried with Troubled Kids

I too think that a trust is in order. I would suggest that you read the book "Beyond the Grave" by Jeffrey Condon. It is an easy read with lots of examples regarding what can go wrong if an estate plan is not well thought out. Edit - one of the books strengths is its emphasis on communicat...
by Peter Foley
Tue Jun 28, 2016 3:17 pm
Forum: Personal Consumer Issues
Topic: bicycle recommendations
Replies: 72
Views: 4395

Re: bicycle recommendations

OP

I looked up the bike you bought. You made a good choice at a good price point. Well done.
by Peter Foley
Tue Jun 28, 2016 3:13 pm
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting
Replies: 5
Views: 412

Re: Tax Loss Harvesting

The advantage comes when you tax loss harvest and offset ordinary income, up to $3000/year. Example #1. If you are in the 25% tax bracket, the saving would be $750. Now 30+ days later you buy back the same stock at the same price you sold it. Two years later you sell for a profit. You are still in t...
by Peter Foley
Mon Jun 27, 2016 11:11 pm
Forum: Investing - Help with Personal Investments
Topic: Newbie here: Help with my 401k and my Potential Roth IRA.
Replies: 16
Views: 1240

Re: Newbie here: Help with my 401k and my Potential Roth IRA.

From your post it is a little difficult to tell where you are currently invested. If you are just starting out you only need 2-3 very broad based funds. A US total market, an international total market and a total bond fund would be sufficient. If you have low cost Vanguard option for these, that wo...
by Peter Foley
Wed Jun 22, 2016 8:44 pm
Forum: Personal Consumer Issues
Topic: bicycle recommendations
Replies: 72
Views: 4395

Re: bicycle recommendations

If riding comfort (harsh ride) is an issue, use 700 X 35 or 700 X 38 tires. The tires that are less than 30 are fine but there is a noticeable difference in ride.
by Peter Foley
Wed Jun 22, 2016 8:32 pm
Forum: Personal Consumer Issues
Topic: Recommendations for ready-to-eat Costco meals?
Replies: 28
Views: 3133

Re: Recommendations for ready-to-eat Costco meals?

Their fajitas are great as are their chicken skewers. Both really easy main courses. I love their apple pie - it is too much to love!

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