Search found 8368 matches

by marcopolo
Mon Mar 18, 2024 8:43 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 59
Views: 5993

Re: New insights on safe and perpetual withdrawal rates

Curious what your plans are for the growing pile of money after you are gone? Or is the goal to simpIy see an ever expanding portfolio for its own sake? Not to derail this thread, and with attempt to speak in generalities rather than in the narrowly personal, I'd opine that much of what's fraught or contentious about SWR isn't the math or the data-set or even socio-political expectations about future vs. past, but individual fear, a shaking of the knees and a gnashing of the teeth. This can affect a person who barely scrapes together the now-infamous $400 for a sudden expense, which supposedly something like half of the country can't do... or a deca-millionaire (or more) with no expenses and reductively parsimonious lifestyle. Fear is rela...
by marcopolo
Mon Mar 18, 2024 6:08 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 59
Views: 5993

Re: New insights on safe and perpetual withdrawal rates

3.4% pretty much matches BigERN's analysis too for long retirements: https://earlyretirementnow.com/safe-withdrawal-rate-series/ Nobody needs <3% unless they're aiming to leave a large legacy or fully believe we'll have worse than the worst ever worst markets. Someone on another thread just suggested that 71x isn’t sufficient for a long retirement, which I believe might be a new board record I thought so as well - but there are folks on this board well below 1%. In my own "can I retire early?" thread, someone suggested 300X was insufficient to ever retire. You really do need to mentally filter those posters out, it colors every response. Some of us are obsessed with having our net-worth rise, as monotonically as possible, regardl...
by marcopolo
Sun Mar 17, 2024 4:05 pm
Forum: Personal Investments
Topic: Newbie - Front Load End and ER
Replies: 11
Views: 678

Re: Newbie - Front Load End and ER

@dbr Thank you very much. I will check with the FA/Brokerage company. For illustration purposes, this is what I am seeing in the account. Initial cash for investment: $1,000.00 MF price: $10 Front Load : 5% my account shows 100 shares and a current value of $1,000.00. It does not show 95 shares nor a value of $950. The above line is what triggered my question(s). While there are some financial advisors that will charge BOTH a percentage of your Assets Under Management (AUM fee) AND also charge you loads to buy funds, many advisors get paid with one OR the other, but NOT both. You are probably paying your advisor through an AUM agreement. They are getting some percentage (typically around 1%) of ALL your investments they are managing, EVERY...
by marcopolo
Sat Mar 16, 2024 2:03 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 59
Views: 5993

Re: How to Harness the Flowing Nature of Withdrawal Rate Math

Tyler9000 wrote: Sat Mar 16, 2024 1:56 pm Thanks Siamond. That's high praise coming from you!
ObiQuiet wrote: Fri Mar 15, 2024 10:04 pm Next step would be to run scenarios over all the combinations and see which mix of classes produces a maximum...
That's actually what I'm working on now. I just needed to clean up my withdrawal rate calculations first.
Thanks for the detailed analysis work.
Curious why you only include data post 1970?

That seems to miss the period that produces the lowest SWR in the standard analysis. I believe 1966 produced the worst outcomes historically. Excluding those years probably inflates the SWR in your analysis.
by marcopolo
Fri Mar 15, 2024 7:25 pm
Forum: Investing - Theory, News & General
Topic: Model and spreadsheet for asset location
Replies: 24
Views: 2981

Re: Model and spreadsheet for asset location

I think you are right on that. For everything that receives step-up basis, the capital gains tax goes to zero. So it would seem that it would be almost always the best to follow the following order: 1) Fill your tax-deferred with bonds 2) Fill your Roth with bonds 3) Fill your taxable with bonds (if in a high tax bracket (32%+) use munis, otherwise treasuries/TIPS) How would you think about using 529 accounts in this prioritization sequence? Assuming you haven't 'over-funded' the 529s (i.e. will use all the funds toward education someday), they are tax-free like a Roth, but allow a much higher annual contribution (before gift tax limits are hit). This makes me think a modified proposal might be: Tax-deferred --> 529 --> Roth --> Taxable. T...
by marcopolo
Fri Mar 15, 2024 6:56 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15192

Re: 5M, probably enough to retire to a frugal lifestyle

I think an added solution is to stop allowing foreign nationals to own property in the US. Plenty of countries do this. This would free up a nice chunk of housing in NYC and the valley. Yeah, xenophobia has historically worked out so well in the US :oops: This isn’t a fear. They can rent all they want. Where did you get xenophobia from that statement? Singling out foreign nationals for restrictive policies is pretty much the definition of xenophobia. Kind of you to let "them" rent! But, wouldn't the competition for rental units drive up rent as well? Strange that you didn't mention banning large corporation from buying up tens of thousands of rental units, which almost certainly has a bigger impact on rents, as well as housing pr...
by marcopolo
Fri Mar 15, 2024 4:32 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15192

Re: 5M, probably enough to retire to a frugal lifestyle

This strikes me as true and fascinating. Of course it's not just coastal California; it seems to be true of many cities around the world now. I wonder how this ends, and if anything like this has happened before in history. I suppose that if property wealth just passes down to subsequent generations, maybe it doesn't end? Among the coastal California natives that I've met so far, inheriting their parents' property seems to be a key part of the plan. I assume it ends with more housing being built, which lowering inflation-adjusted housing prices in areas with high demand. There's been some legislative and executive action to force California cities/counties to allow more housing to be built. California has dropped in population in recent ye...
by marcopolo
Fri Mar 15, 2024 3:37 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15192

Re: 5M, probably enough to retire to a frugal lifestyle

You may be underestimating just how expensive coastal California is. One will definitely need a strict budget to raise a family on $150-170k pre-tax there. Agree with this, including health care insurance premium estimated from covered CA and removing mortgage, we'll need ~$150k pre-tax here in bay area. While we don't live frugally, we're not extravagant neither. - House bought more than 10 years ago so low property tax basis - All yard work and house work is done by ourselves w/o any outsourcing - Most oil changes, auto maintenance and minor repairs were done by me - No expensive after school care for the kid since we have a SAHM - DW cooks most meals so we only dine out 1-2 time every week - Only economy class on travels Minimum wage fo...
by marcopolo
Fri Mar 15, 2024 3:20 pm
Forum: Investing - Theory, News & General
Topic: 5M, probably enough to retire to a frugal lifestyle
Replies: 180
Views: 15192

Re: 5M, probably enough to retire to a frugal lifestyle

This strikes me as true and fascinating. Of course it's not just coastal California; it seems to be true of many cities around the world now. I wonder how this ends, and if anything like this has happened before in history. I suppose that if property wealth just passes down to subsequent generations, maybe it doesn't end? Among the coastal California natives that I've met so far, inheriting their parents' property seems to be a key part of the plan. I assume it ends with more housing being built, which lowering inflation-adjusted housing prices in areas with high demand. There's been some legislative and executive action to force California cities/counties to allow more housing to be built. California has dropped in population in recent ye...
by marcopolo
Fri Mar 15, 2024 1:59 am
Forum: Personal Finance (Not Investing)
Topic: Estate Plan in Colorado - Will v Trust?
Replies: 13
Views: 1138

Re: Estate Plan in Colorado - Will v Trust?

There are many more important issues to consider in your estate planning. If you're considering revocable trusts, since (as you pointed out) Colorado is not a commuity property state, unless your assets are community property (for example, if you moved to Colorado from a community property state), you would have separate revocable trusts. Will the lawyer give you two revocable trusts for the same fee as no revocable trusts? If not, since Colorado is a Uniform Probate Code state (which means simplified procedures), is there some particular reason for revocable trusts in your case? About 30 years ago, the late Paul Fletcher, a lawyer in Oregon, wrote a few articles suggesting that a joint revocable trust in a common law state would allow you...
by marcopolo
Thu Mar 14, 2024 2:54 pm
Forum: Personal Finance (Not Investing)
Topic: Question about Language about Will
Replies: 10
Views: 798

Re: Question about Language about Will

Hopefully simple question. We're trying to determine if my MIL's will provides the ability for my wife and I to disclaim so that our part goes to our kids. The will reads" A. I give the rest, residue and remainder of my property of every kind and nature and wherever situated, whether real of personal, to in equal shares to my daughter Alice and my daughter Beth if they all survive me. B. If my daughter Alice, fails to survive me, then I give her equal share of my residuary estate to Alice's husband, my son-in-law, Carl, if he survives me. If both Alice and Dennis fail to survive me, then I give this equal share of my residuary estate to their surviving issue, per stirpes. C. If my daughter Beth, fails to survive me, then I give her eq...
by marcopolo
Thu Mar 14, 2024 3:02 am
Forum: Personal Finance (Not Investing)
Topic: When is the right time to set up a trust?
Replies: 31
Views: 3137

Re: When is the right time to set up a trust?

... another reason for avoiding probate is privacy and speed of access to your funds. Your successor trustee can access your funds without any public scrutiny if held in a revocable or other trust at time of death, instead of a trust created in your will. Many people don't care about privacy and maybe a good attorney could get your heirs fast enough access in probate, but I do care about those things. I don't mind paying an attorney for probating my will, but I want to make sure the majority of my estate is not involved in that process. ... Most people's Wills are of no interest to their neighbors or the media. They usually provide for their spouse and children, and have many pages of administrative provisions. In many years, I've only had...
by marcopolo
Wed Mar 13, 2024 1:10 pm
Forum: Personal Finance (Not Investing)
Topic: When is the right time to set up a trust?
Replies: 31
Views: 3137

Re: When is the right time to set up a trust?

Before I meet with an estate planning attorney, I wanted to gather some wisdom from this group. DW and I have a will set up with our 2 children (16, 13) as the only beneficiaries. We have complete trust in the executor (who is very comfortable in her own right from a financial standpoint, if that matters). Our "net worth" is approaching 8 figures with about 85% of that in our investments and 15% in our primary home. I am certain that at some point we will want to set up a trust to and ensure our children/grandchildren are taken care of - but NOW seems too early since we will definitely need to make changes to it depending on our kids individual situations. No disabilities, valuables, no businesses or real estate other than our pr...
by marcopolo
Tue Mar 12, 2024 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: How much Roth Conversion should I plan on?
Replies: 18
Views: 2500

Re: How much Roth Conversion should I plan on?

I often hear when you are set people just don't worry about taxes or IRMAA. I worked backwards on expected income. Pension + SS + expected Div/Int + RMD in the 70's= N (expected income). If your expected income puts you near the top of the 22% bracket, and you can convert now at a lower bracket, I see that as a win. And if you are married and one unexpectedly passes, leaving the surviving spouse filing as single, tax bracket would likely go up beyond the 22%. If your tIRA has zero growth, wouldn't that provide an RMD starting out about 70k? SS estimates if you stop working vs if you continue partial income. Good idea. I'll get to that sometime soon,. BTW--I don't feel "set" when I look at Bogleheads on this site. When I look at t...
by marcopolo
Tue Mar 12, 2024 8:42 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion in the state of Pennsylvania [state income tax]
Replies: 16
Views: 2824

Re: Roth Conversion in the state of Pennsylvania [state income tax]

PA does not tax rollovers if the entire amount is rolled over within the 60 days and does not tax direct transfers, including Roth Conversions. However, you need to follow the rules in the PA-40 instructions if you don't get the entire amount timely moved to the subsequent IRA. PA does tax withdrawals from IRAs, 401Ks etc if they are early distributions. In PA you must be (in most if not all cases) old enough to retire (over age 59 1/2) and actually retired to avoid being taxed on IRA etc distributions that are not entirely timely rolled over to another IRA, etc. At least through tax year 2019 PA required you to file a form PA40-w2s to report all 1099R income, whether or not it was taxable and whether or not any PA tax was withheld. And th...
by marcopolo
Mon Mar 11, 2024 3:57 pm
Forum: Personal Investments
Topic: Sharing why we went with Vanguard PAS
Replies: 69
Views: 6696

Re: Sharing why we went with Vanguard PAS

OP here: One commenter said: “This is really no different than what a firm like Edward Jones does.” Respectfully, Vanguard’s PAS service is totally different than high fee heaven Edward Jones. My wife and I moved my elderly father’s $2.6 million portfolio from high fee Edward Jones based on commissions to ZERO fee Schwab so I know the myriad rip-off fees EJ charges such as no ability to make a trade without a charge. The EJ commission broker churned my father-in-law into 30 plus stocks with small positions and the highest stock trade fee. Vanguard PAS with my salaried CFP is NOTHING like rip-off commission based Edward Jones. Edward Jones also has AUM based model, without commissions. Admittedly, their AUM is higher, and I am certainly NOT...
by marcopolo
Mon Mar 11, 2024 3:01 pm
Forum: Personal Investments
Topic: Sharing why we went with Vanguard PAS
Replies: 69
Views: 6696

Re: Sharing why we went with Vanguard PAS

... This is really no different than what a firm like Edward Jones does. Create a more complex portfolio than necessary, that accomplishes nothing, other than giving the impression of adding some value. The portfolio they created for me is not complex. It is pretty close to my original portfolio: Minor change 1 : Instead of changing my S&P500 to Total Stock, a completion fund was added. This is he sane way to do it. Minor change 2 : Added a "spending" money market fund. It has a purpose in giving me a way to add or subtract dollars from their management. Minor change 3 : Added international bonds. It's not something I would do on my own, but I see their point of view. Well, for better or worse, it appears you are not getting ...
by marcopolo
Mon Mar 11, 2024 2:09 pm
Forum: Personal Investments
Topic: Sharing why we went with Vanguard PAS
Replies: 69
Views: 6696

Re: Sharing why we went with Vanguard PAS

hand wrote: Mon Mar 11, 2024 2:00 pm
nedsaid wrote: Sat Mar 09, 2024 11:02 pm I went to investor.com to get a review of Vanguard Personal Advisor Service and found that the average client balance there is $377,050. So the original poster's account balance of about $4 million is more than 10X the average account size at VPAS, so their account will get a lot of attention from Vanguard. Altogether, Vanguard PAS manages $299.2 Billion and that is more assets than some mutual fund companies!
Not sure how much attention $4M in assets really gets in a pool of $299B, especially when only worth 4M * 0.3% = $1k / yr.
Would the attention be more if it was $12k/yr rather than $1k/yr?!? Probably not.
by marcopolo
Mon Mar 11, 2024 2:07 pm
Forum: Personal Investments
Topic: Sharing why we went with Vanguard PAS
Replies: 69
Views: 6696

Re: Sharing why we went with Vanguard PAS

Yep. Extra slices but more to the point about Vanguard’s extensive market research is tilting the allocations and sectors over the years depending on their research outcomes. Sounds like active investing (market timing) rather than passive investing. It would be interesting to know whether the PAS portfolios beat Vaguard LifeStrategy or TargetDate funds over the years with similar AAs. (With PAS starting at a ~0.3% disadvatage). A very good question (although past performance ...). My impression from following PAS over the years is that they just about always go for the multiple fund approach rather than aggregating into a few broader funds (simplicity is not a virtue for them) . Also, they have a standard template and try to stick to it. ...
by marcopolo
Sun Mar 10, 2024 1:54 am
Forum: Personal Finance (Not Investing)
Topic: Realizing Capital Gains in a Trust
Replies: 22
Views: 1802

Re: Realizing Capital Gains in a Trust

Income is stacked for the purposes of determining your bracket. So for example, if the trust received $14,650 in bond interest (or other ordinary income including short term capital gains and non-qualified dividends) but did not distribute it, then the next $1 in LT capital gains (or qualified dividends) would be at the 20% rate. If that same trust received $14,650 in bond interest but distributed it to the beneficiary (who gets taxed instead), then the next $1 in LT capital gains (or qualified dividends) would be in the 0% rate until $3000. So to answer your question, no the amount of capital gains does not affect the tax bracket of ordinary income (interest, short term capital gains, non-qualified dividends etc). However, the amount of o...
by marcopolo
Sat Mar 09, 2024 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: [Impacted by] pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it?
Replies: 50
Views: 4235

Re: Fidelity misinformed me about pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it

The first Fidelity rep that handled the Backdoor Roth should have known that the rollover IRA was a problem, just like the second rep did. But mistakes happen and taxpayers are ultimately responsible for their transactions. Your choices are to roll the rollover back into a 401k, forego Backdoor Roths in the future, or pay tax on future Backdoor Roths. You get your tax advice from front line Fidelity customer service reps?!? I don’t, because I don’t call my brokerage. But any CSR who talks about helping with a Backdoor Roth is implicitly giving tax advice and should know what the common pitfalls are. Fidelity should train their reps better. Most people calling their brokerage for help aren’t tax experts. You think Fidelity should train thei...
by marcopolo
Sat Mar 09, 2024 3:55 pm
Forum: Personal Finance (Not Investing)
Topic: [Impacted by] pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it?
Replies: 50
Views: 4235

Re: Fidelity misinformed me about pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it

rkhusky wrote: Sat Mar 09, 2024 8:04 am The first Fidelity rep that handled the Backdoor Roth should have known that the rollover IRA was a problem, just like the second rep did. But mistakes happen and taxpayers are ultimately responsible for their transactions.

Your choices are to roll the rollover back into a 401k, forego Backdoor Roths in the future, or pay tax on future Backdoor Roths.
You get your tax advice from front line Fidelity customer service reps?!?
by marcopolo
Sat Mar 09, 2024 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Genworth Long Term Care
Replies: 61
Views: 7637

Re: Genworth Long Term Care

Our NGL policy is a partnership as WoW2012 describes. In our state it allows you to apply for Medicaid retaining up to $300,000 above the normal State Medicaid limit. https://www.partnershipforlongtermcare.com/newjersey-partnership/index.html Most LTCi policies have a cap on benefits. You are pre-paying for services. There is no protection against going broke if you incur catastrophic scenario. Seems the opposite of insurance. Long-term care partnership policies protect assets if the policyholder incurs a catastrophic scenario. Affordable long-term care partnership policies are available for sale in 41 states. I am no expert, but that sounds pretty typical. So, if one has a couple decade long tail event, they could still be spending millio...
by marcopolo
Sat Mar 09, 2024 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: [Impacted by] pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it?
Replies: 50
Views: 4235

Re: Fidelity misinformed me about pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it

Come on people. Paying income tax on $6500 of wages earned and then paying income tax on a $6300 conversion sure feels like a "double tax" for that tax year, doesn't it? Otherwise, there wouldn't be warnings about the pro-rata rule everywhere. Sure, it is technically "pre-paying tax" rather than a "double tax". But how many people with a large tIRA balance go ahead and do the whole non-deductible contribution to new IRA and conversion to Roth thing with the intention of reducing taxes on future tIRA distributions (by ~3% in OP's case) by paying more tax now? You might want to do a search for all the Roth Conversion threads around here. :oops: Isn't the whole premise of that to pre-pay taxes now to reduce taxes...
by marcopolo
Sat Mar 09, 2024 2:52 pm
Forum: Investing - Theory, News & General
Topic: "When" do you sell equities during Retirement?
Replies: 29
Views: 4404

Re: "When" do you sell equities during Retirement?

Welcome! This is utter nonsense. I understand where this nonsense is coming from, behavioral and cognitive errors. People hate to sell when things are done. They feel like losers and don’t want to face the emotional pain. And obviously all they have to do is wait for the market to go up again and then they can dodge that pain. Unless the market dips again. Or people think that the market will mean revert. If the market goes down then it must go back up, right? Unless the market dips. This is kind of my day job. The quants with their PhDs tell me the markets don’t mean revert. I can’t come up with a rational model to justify this. Sell or rebalance to get back to your optimal AA. I understand, and largely agree with, what you are saying. Bu...
by marcopolo
Sat Mar 09, 2024 2:33 pm
Forum: Personal Finance (Not Investing)
Topic: Genworth Long Term Care
Replies: 61
Views: 7637

Re: Genworth Long Term Care

Such as.... All of them. I buy medical and casualty insurance these days, and that is all. A few thoughts... - you do not really buy health 'insurance' these days . - not all older LTCi policies were 'poor' - you likely still have other real insurance products like auto, home. liability, etc Curious what you mean by that. To me it seems what you typically don't buy is LTC "insurance". My HDHP health insurance covers catastrophic expenses, without a max cap. I pay for most routine stuff, but am protected against going broke. That is exactly what insurance is for. Most LTCi policies have a cap on benefits. You are pre-paying for services. There is no protection against going broke if you incur catastrophic scenario. Seems the oppos...
by marcopolo
Sat Mar 09, 2024 1:31 pm
Forum: Investing - Theory, News & General
Topic: "When" do you sell equities during Retirement?
Replies: 29
Views: 4404

Re: "When" do you sell equities during Retirement?

Welcome! This is utter nonsense. I understand where this nonsense is coming from, behavioral and cognitive errors. People hate to sell when things are done. They feel like losers and don’t want to face the emotional pain. And obviously all they have to do is wait for the market to go up again and then they can dodge that pain. Unless the market dips again. Or people think that the market will mean revert. If the market goes down then it must go back up, right? Unless the market dips. This is kind of my day job. The quants with their PhDs tell me the markets don’t mean revert. I can’t come up with a rational model to justify this. Sell or rebalance to get back to your optimal AA. I understand, and largely agree with, what you are saying. Bu...
by marcopolo
Sat Mar 09, 2024 11:59 am
Forum: Personal Finance (Not Investing)
Topic: Genworth Long Term Care
Replies: 61
Views: 7637

Re: Genworth Long Term Care

Most LTCi policies have a cap on benefits. You are pre-paying for services. There is no protection against going broke if you incur catastrophic scenario. Seems the opposite of insurance. Long-term care partnership policies protect assets if the policyholder incurs a catastrophic scenario. Affordable long-term care partnership policies are available for sale in 41 states. Only up to the amount of the policy. You could still be spending millions on your catastrophic care. But, you are right, it can keep you from going completely broke, if you happen to live in one of those states, which we don't. Still quite different than health insurance which protects tail risk --Don't need to spend millions in catastrophic case. My curiosity remains as ...
by marcopolo
Sat Mar 09, 2024 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Genworth Long Term Care
Replies: 61
Views: 7637

Re: Genworth Long Term Care

A lot of things have improved over the last 30 years, even long-term care insurance. The policies for sale today are the best policies ever sold. You might want to learn more about them before you make a decision based on decades old information. I retired from the industry just 2 years ago. I am very comfortable staying away from insurance sales pitches. Such as.... All of them. I buy medical and casualty insurance these days, and that is all. A few thoughts... - you do not really buy health 'insurance' these days . - not all older LTCi policies were 'poor' - you likely still have other real insurance products like auto, home. liability, etc Curious what you mean by that. To me it seems what you typically don't buy is LTC "insurance&...
by marcopolo
Sat Mar 09, 2024 2:58 am
Forum: Personal Finance (Not Investing)
Topic: [Impacted by] pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it?
Replies: 50
Views: 4235

Re: Fidelity misinformed me about pro-rata rule when doing backdoor-Roth a few months ago, any possibility to reverse it

I have been doing backdoor-Roth contributions of 6k per year for a few years. About 12 months ago in Feb-2023 Fidelity rolled over around 200k from a 401k from another former employer at Empower into a "Rollover IRA". For 2023 I did the backdoor-Roth contribution of 6.5k in Sep-2023 by transferring 6.5k into a "Traditional IRA" (that had almost 0 dollars) and then transferring those 6.5k to a Roth-IRA, just as Fidelity had told me to do it when I contacted them over phone just before doing the transaction. The rep never mentioned the tax-issue related to pro-rata rule considering I already had 200k in rollover-IRA. I today called Fidelity for an unrelated matter related to doing backdoor-roth for 2024, and the rep on th...
by marcopolo
Fri Mar 08, 2024 3:49 pm
Forum: Personal Finance (Not Investing)
Topic: What would you have done differently if you could go back and restart your financial journey?
Replies: 68
Views: 5597

Re: What would you have done differently if you could go back and restart your financial journey?

I guess it is the nature of this forum. But, I find it a bit depressing that so many of the posts here talk about spending less, saving more, when they were younger. Most posters here are quite well off. I suspect some saying they wished they had saved more, currently have more money than they will ever need. Did you guys not enjoy what you were spending your money on in your youth? What are you going to do with extra money now that will provide more joy than whatever you spent it on in your youth? I had a fairly lucrative job as an engineer in my 20s. Despite that, I did not save a penny until my early 30s. In my youth, I had lots of youthful indiscretions. Most of them were a lot of fun. I would not go back and give them up for a little m...
by marcopolo
Fri Mar 08, 2024 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: Can I splurge on a family vacation to Hawaii?
Replies: 56
Views: 4799

Re: Can I splurge on a family vacation to Hawaii?

If you can swing the trip, then by all means. But, you don't need to be in Hawaii to make epic memories with the family if it is a huge financial burden. The important part is being together, not where it is. Agree. This is on our bucket list, so want to do it now vs. later. And I want to do it right. Helicopter rides, private boat charter, 2 weeks, house with an infinity pool overlooking the ocean. Maybe even a private chef. I priced it out at $80k if we go this year. That is certainly a lot to spend on one vacation. But, recalling you post history, it seems you can easily afford it. So, if everyone in your family is on board, go for it. Our family had done several similar family trips to Hawaii (not quite that expensive, but close adjust...
by marcopolo
Thu Mar 07, 2024 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

It's the difference between, "disburse $X at age Y," versus, "allow distribution of up to $X at age Y." If your kids don't need the money, you don't want to force them to take it out of the trust, as you lose all sorts of protections, and it becomes part of their estate. Ahhh. OK. Now I see what you're saying. That makes sense. So we could set "limits" on what they could withdrawal? And how exactly would that be accomplished with a will..? . The will creates and funds the trusts. Sounds reasonable. Why not just create the trust now? I get that probate might not be as big a deal as it's made out to be. But, what the downside to avoiding it? Even absent that, as afan pointed out above. the trust males it easier ...
by marcopolo
Thu Mar 07, 2024 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

It's the difference between, "disburse $X at age Y," versus, "allow distribution of up to $X at age Y." If your kids don't need the money, you don't want to force them to take it out of the trust, as you lose all sorts of protections, and it becomes part of their estate. Ahhh. OK. Now I see what you're saying. That makes sense. So we could set "limits" on what they could withdrawal? And how exactly would that be accomplished with a will..? . The will creates and funds the trusts. Sounds reasonable. Why not just create the trust now? I get that probate might not be as big a deal as it's made out to be. But, what the downside to avoiding it? Even absent that, as afan pointed out above. the trust males it easier ...
by marcopolo
Thu Mar 07, 2024 8:40 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

The assets remain in the trust until they need to spend the money. The same trust can then continue to make distributions to your grandchildren as needed before or after you pass with no gift/estate tax consequences. Perhaps I'm just not understanding the mechanisms involved here... While either my wife and I are still alive, we don't plan to give them our money (aside from some gifting). When both of us pass on, we want them to receive our money immediately to start using it and enjoying it. We just don't want them to get it all at once. We want someone other than them to administer disbursements. What would be the best way to accomplish that..? . It's the difference between, "disburse $X at age Y," versus, "allow distribut...
by marcopolo
Thu Mar 07, 2024 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

I still think words like "inevitably" are too strong. If I quote Murphy's Law in the future, I will be sure to properly qualify it. "Anything that can go wrong, will very probably go wrong." ;-) If probabte is as simple as people make it out to be, why do so many states with "simple" probate, also offer a streamlined small estate process? Someone, presumably not simply interested in selling you trust documents, thought it was onerous enough warrant providing a "simpler" process for small estates. To borrow another poster's phrase, I think you're ascribing too much logic and practical common sense to our laws. Some small estate statutes exist for historical reasons, from a time before probate reform w...
by marcopolo
Thu Mar 07, 2024 3:05 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

What is the downside to avoiding probate? You keep saying there is very little additional work involved with probate. OK. Let's accept that as a premise. But, i think you would agree it is not zero, right? What benefit does going through probate provide that justifies the (small) additional effort? I'm not the person you're replying to here, but will offer my two cents for what they're worth: Attempting to avoid probate often increases the total cost, if you consider both lifetime and post-mortem expenses. Y ou spend more up front to create, fund, and maintain a revocable trust, and then may still pay for probate if (as is usually the case) something is left out. In my state, at least, probating a will to deal with the one asset you left o...
by marcopolo
Thu Mar 07, 2024 3:04 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

What is the downside to avoiding probate? You keep saying there is very little additional work involved with probate. OK. Let's accept that as a premise. But, i think you would agree it is not zero, right? What benefit does going through probate provide that justifies the (small) additional effort? I'm not the person you're replying to here, but will offer my two cents for what they're worth: Attempting to avoid probate often increases the total cost, if you consider both lifetime and post-mortem expenses. Y ou spend more up front to create, fund, and maintain a revocable trust, and then may still pay for probate if (as is usually the case) something is left out. In my state, at least, probating a will to deal with the one asset you left o...
by marcopolo
Thu Mar 07, 2024 2:59 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard brokerage account – Any warnings?
Replies: 21
Views: 3166

Re: Vanguard brokerage account – Any warnings?

Thanks for the replies. This helps a lot. Yes, I guess I had convoluted the tax issue in my head. Like if I bought XYZ stock and it gained in value and then I sold it, that would be the taxable event. But I didn't think about the constant $1 price of the Money Mkt funds (MMF), that make sense now. However, since the MMF's do make money (about 5% currently), in your experience how have either or you (or anyone else) seen that income reported on the MMF's by Vanguard? Is it interest or dividends? Did they do a "decent job" of the tax forms? I've read here on the board some ppl have had issues with some Vang tax forms, but I don't remember the details. Perhaps it was a much more complicated transaction for them/etc and it won't pert...
by marcopolo
Thu Mar 07, 2024 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

... Even in the friendliest states, doesn't going through probate (particularly if the estate does not meet criteria for small estate) require some level effort, often requiring filing court documents? Is there any benefit to subjecting executors/heirs to that additional stress, particularly in cases where the executor is a grieving relative? It seems like the "avoid probate" issue is really a trade-off between spending a little more time and money during estate planning vs. spending that time and money after death. In my simplistic view, there seems to be benefit to incurring that cost myself now with cooler heads than leaving it to my heirs/executor to have to deal with it while they may still be grieving. They'll be signing lo...
by marcopolo
Thu Mar 07, 2024 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

... Even in the friendliest states, doesn't going through probate (particularly if the estate does not meet criteria for small estate) require some level effort, often requiring filing court documents? Is there any benefit to subjecting executors/heirs to that additional stress, particularly in cases where the executor is a grieving relative? It seems like the "avoid probate" issue is really a trade-off between spending a little more time and money during estate planning vs. spending that time and money after death. In my simplistic view, there seems to be benefit to incurring that cost myself now with cooler heads than leaving it to my heirs/executor to have to deal with it while they may still be grieving. They'll be signing lo...
by marcopolo
Thu Mar 07, 2024 12:55 pm
Forum: Personal Finance (Not Investing)
Topic: When/Why would you need Trust over Will
Replies: 97
Views: 6415

Re: When/Why would you need Trust over Will

I was talking to a friend and he said I should get a Trust instead of a Will. He also suggested a Financial Advisor which I will not due as I have done well for myself. He said I want to avoid probate. We have 2 children and have been even with the amounts of $$ we have given them . Currently have approx 3M is mutual funds Cash and a house worth 750k. I am 62 wife 61 so there can be some appreciation if we live into late 70's or longer. We can live on SS, pensions and dividends so it should go down much at all unless something catastrophic occurs. Revocable trusts make sense in some cases and in some states. Probating a Will is difficult in some states (notably California) and expensive in some states (notably Delaware where the court fee ...
by marcopolo
Tue Mar 05, 2024 2:36 pm
Forum: Investing - Theory, News & General
Topic: Are Two College Savings Plans Better Than One?
Replies: 46
Views: 9412

Re: Are Two College Savings Plans Better Than One?

White Coat Investor wrote: Tue Mar 05, 2024 1:41 pm
vineviz wrote: Fri Apr 16, 2021 1:38 pm Create two different 529 plans for each child and invest them differently.
Between my kids and nieces and nephews I manage 35 529 accounts, 6 of which are being withdrawn from right now. There's no way I'm going to do 70. Anyone doing two separate 529s for every beneficiary better be getting paid for it or needs a new hobby.
Simplicity is the master key to financial success--Jack Bogle
That's a weird flex, but OK.

If you are comfortable managing 35 accounts, it does not seem that much of a burden for most people to manage 4 or 6 of them for their 2 or 3 kods.
by marcopolo
Mon Mar 04, 2024 10:50 pm
Forum: Investing - Theory, News & General
Topic: Model and spreadsheet for asset location
Replies: 24
Views: 2981

Re: Model and spreadsheet for asset location

This of course assumes that people in the top bracket now (during their working years) will be in the same bracket when they retire. If we assume that they'll be able to realize their capital gains at a more reasonable rate (like 24%) during retirement, then if I change the formula from A5 (I think this is the right way to do it?): =1 - ((1-B2*E2)^F2 - C2/(B2*(1-E2)+C2)*E2) into: =1 - ((1-B2*E2)^F2 - C2/(B2*(1-E2)+C2)*0.24) Then bonds in Roth already look quite reasonable. Hang on. All you did was fix the stock tax at 24% in the stock tax gains calculation. What's your thought process for doing that AND calling it a win? The spreadsheet is wonderful as a thought experiment, but it has a weakness that it assumes that person's tax rate stays...
by marcopolo
Mon Mar 04, 2024 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?

The point i was making is that it DOES come out of your pocket. The employer does not do this out of the goodness of their heart. It is part of your compensation package. People seem to keep complaining about how ACA is so expensive compared to their employer plans. They really are not (maybe a little at the margins). Health insurance is expensive because healthcare is expensive. The fact that your employer takes it out of your compensation and sends it directly to the insurance company does not really change what it costs you. We should also note that employers enjoy group rates. Even in a small company, there will be a benefits package negotiated with a third party provider, such as ADP. ADP will offer a lower rate to the employer, than ...
by marcopolo
Mon Mar 04, 2024 6:06 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?

DW and I, both in our mid-50s, are contemplating an early retirement soon before we hit 60. We have savings of about 30X estimated annual expenses, including budget for healthcare costs (premiums, copays, and deductibles up to the maximum out-of-pocket limit), based on information sourced from the ACA Health Insurance Marketplace available at https://www.healthcare.gov, for a PPO Gold plan with a family total out-of-pocket maximum of $13,000. As we've been planning, I've watched numerous retirement-related YouTube videos, where the comment sections often echo a recurring concern: healthcare stands out as the primary hurdle for those contemplating early retirement before the age of 65. While I currently benefit from comprehensive PPO health...
by marcopolo
Mon Mar 04, 2024 5:42 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?

DW and I, both in our mid-50s, are contemplating an early retirement soon before we hit 60. We have savings of about 30X estimated annual expenses, including budget for healthcare costs (premiums, copays, and deductibles up to the maximum out-of-pocket limit), based on information sourced from the ACA Health Insurance Marketplace available at https://www.healthcare.gov, for a PPO Gold plan with a family total out-of-pocket maximum of $13,000. As we've been planning, I've watched numerous retirement-related YouTube videos, where the comment sections often echo a recurring concern: healthcare stands out as the primary hurdle for those contemplating early retirement before the age of 65. While I currently benefit from comprehensive PPO health...
by marcopolo
Mon Mar 04, 2024 4:52 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Even with a well-planned budget, does healthcare remain a significant concern for retirement before 65?

Since that passage of the ACA and the fact that pre-existing conditions can't disqualify you, I think the main obstacle to retiring before 65 all boils down to money, not healthcare. If you have enough money, health insurance is always an option because of ACA, right? Isn't this a tautology? If lacking health insurance but needing sophisticated care, there will be an exorbitant cost. But... isn't this just a matter of money? If within-network care is shoddy, and one has to seek expertise outside of the network, this will be costly. But again... isn't this just a matter of money? Sure but there is a vast difference between budgeting 30k/year for health care (ACA) and budgeting 2 million (no health care and need to be able to pay for an orga...
by marcopolo
Mon Mar 04, 2024 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Even with a well-planned budget, does healthcare remain a significant concern for retirement before 65?

Since that passage of the ACA and the fact that pre-existing conditions can't disqualify you, I think the main obstacle to retiring before 65 all boils down to money, not healthcare. If you have enough money, health insurance is always an option because of ACA, right? Isn't this a tautology? If lacking health insurance but needing sophisticated care, there will be an exorbitant cost. But... isn't this just a matter of money? If within-network care is shoddy, and one has to seek expertise outside of the network, this will be costly. But again... isn't this just a matter of money? Lest we get too carried away, it should be noted, that frugal people manage to curb their costs in everything from housing to discretionaries to luxuries. The two ...
by marcopolo
Mon Mar 04, 2024 3:25 pm
Forum: Personal Finance (Not Investing)
Topic: Does healthcare remain a significant concern for retirement before 65, even with a well-planned budget?
Replies: 66
Views: 6332

Re: Even with a well-planned budget, does healthcare remain a significant concern for retirement before 65?

Since that passage of the ACA and the fact that pre-existing conditions can't disqualify you, I think the main obstacle to retiring before 65 all boils down to money, not healthcare. If you have enough money, health insurance is always an option because of ACA, right? Isn't this a tautology? If lacking health insurance but needing sophisticated care, there will be an exorbitant cost. But... isn't this just a matter of money? If within-network care is shoddy, and one has to seek expertise outside of the network, this will be costly. But again... isn't this just a matter of money? Lest we get too carried away, it should be noted, that frugal people manage to curb their costs in everything from housing to discretionaries to luxuries. The two ...