Search found 8402 matches

by marcopolo
Sun Mar 24, 2024 1:45 pm
Forum: Investing - Theory, News & General
Topic: Understanding TIP nearing maturity
Replies: 3
Views: 380

Re: Understanding TIP nearing maturity

chickadee wrote: Sun Mar 24, 2024 12:18 pm Great, thank you!
You will get a little less now.
But, whether that is good or bad depends on the alternative.

For example, if you are rolling it over to a longer duration maturity TIP, then you would do better selling now at an ask price above 100.00 and re-investing in the longer duration TIP now relative to waiting till maturity.

See this thread for the gory details:

https://www.bogleheads.org/forum/viewt ... ?t=424374
by marcopolo
Sat Mar 23, 2024 12:07 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

You continue to cite 1966, but those years are built in the chance value. The value is 96% because of 1966. After that, it is just simple algebra to show that if time goes by and your capital goes up, you can recalculate the 4% amount and probability of failure can only be smaller. That IF there is no correlation between good and bad years. In case there is, one should factor in market performance before retiring to see if 4% still yields 96% of success. More hand waving. Please actually look at the data for yourself. Yes, 1966 failure is part of the 96%. But, 1964 is NOT, because 1964 did NOT fail under 4% rule. However, following ratchet up rule, 1964 becomes a failed starting year. As do a few other years, driving the success rate of th...
by marcopolo
Sat Mar 23, 2024 3:34 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5351
Views: 903994

Re: International (Non-US) versus US Equities (The "Arguments")

Was there a reason you were 12% allocated to EM to begin with? If so, have those reasons changed? My reason was that I wanted a market cap weighted portfolio (VT as my reference). Back then Emerging Markets made up roughly 11%, so I was pretty close to that. Now after being 5 years on Bogleheads I got convinced that the US stock market is superior to others. I don't strive for a perfect replication of VT anymore as I started to overweight the US market (aiming for 70% allocation by end of this year). There are good theoretical arguments why one should hold a globally diversified portfolio including EM. But I don't want to wait decades to get proven right. What will you do when EM inevitably has a stretch where it outperforms US markets?
by marcopolo
Sat Mar 23, 2024 2:56 am
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5351
Views: 903994

Re: International (Non-US) versus US Equities (The "Arguments")

I started investing 5 years ago with a ~12% allocation to Emerging Markets. I always believed in global diversification but now I‘m slowly starting to get sick of EM. My EM allocation is down to 8% due to its poor performance. I‘m wondering: What‘s the point of holding those 8%? If EM start to outperform the US or developed world in general, would it even have a significant impact on my portfolio and net worth? And is that upside even worth my current annoyance with it? I‘m split. I want to get rid of it but I also don‘t want to sell low. Also I‘m worrying if selling might put me on a dangerous path in the future. Not being able to hold an asset class or region which underperforms only for half a decade (from my perspective, the actual und...
by marcopolo
Sat Mar 23, 2024 2:33 am
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

The entire 4% rule concept is built upon looking at specific realizations. There is no real attempt to define the stochastic process. I disagree. We say that there is a 96% probability of success, based on all the past results: those that were successful and those that were not. When I start a 30-year withdrawal period, my chance of success is 96%. It doesn’t matter if my period starts now, or 5 years from now. If I start now and 5 years go by and my portfolio value has increased, the probability of success is obviously higher than when I started (that is the probability of having money left in 2054). If I increase the withdrawal amount to match the larger capital, the probability of success decreases a bit, but it will still be higher tha...
by marcopolo
Sat Mar 23, 2024 1:19 am
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

Thesaints wrote: Sat Mar 23, 2024 12:31 am
marcopolo wrote: Fri Mar 22, 2024 10:39 pm The 1966 retiree ran out of money 23 years into their retirement.
The 1964 retiree …
I see. You are confusing a stochastic process with one of its particular realizations.
The entire 4% rule concept is built upon looking at specific realizations. There is no real attempt to define the stochastic process.

If you buy into how the 96% success rate is established for the "rule", then the same methodology says the ratcheting technique will have higher risk of failure.

Imagine a world where no one had done the 4% rule analysis, and jumped right to doing an analysis of the ratchet method. What would they have reported? They would have concluded that starting at 4% and then ratcheting up had a 93% success rate.
by marcopolo
Fri Mar 22, 2024 11:56 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5351
Views: 903994

Re: International (Non-US) versus US Equities (The "Arguments")

I largely agree with you on this. It's odd that you can hold this belief, and belief in factors (I see you have a heavy dose of SCV) simultaneously in your head. It must get confusing making diametrically opposed arguments in favor of such. There's nothing diametrically opposed with believing in factors and also believing in a dynamic, chaotic system. It's just an extension of efficient markets. Not all bonds are the same. The market prices in riskier bonds with a higher yield. Not all stocks are the same, the market prices riskier stocks with a higher discount rate. Sometimes the market pricing doesn't play out the way investors want it to over certain durations - that's part of the risk, but the market will naturally adjust to re-price a...
by marcopolo
Fri Mar 22, 2024 11:03 pm
Forum: Investing - Theory, News & General
Topic: International (Non-US) versus US Equities (The "Arguments")
Replies: 5351
Views: 903994

Re: International (Non-US) versus US Equities (The "Arguments")

I don't dispute any of this, but politely observe, that the same analysis would have been just as topical and just as accurate in 2014. So here we are, 10 years later, with much the same narrative. Is it irrational to suppose, that in another 10 years, again little will have changed? 1900-1950... not to nitpick dates, but yes, roughly the first half of the 20th century - was an awful time for stocks. This is especially bizarre, because it was a wonderful and heady time for innovation, technological development, rise of mass-affluence and so on. The majority of Americans went from horse-drawn buggies and outhouses, to privately owned cars, indoor plumbing and so on.... a truly radical transformation in material quality of life. And yet, the...
by marcopolo
Fri Mar 22, 2024 10:39 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

You can use that same exact data and run the ratchet-up simulation. In that scenario, the number of failures over the same 121 cycles increases to 9. Again, this is just what has been observed in the past. That can only be correct if a new 30year period is started after the withdrawal amount is recalculated, or if future return is somehow dependent on recent past returns. In the first case, the probability is miscalculated (we can only wish recalculating amounts were sufficient to guarantee another 30 years of life !) In the second case, the 4% rule is useless. One should look back at the recent past before retirement and calculate which SWR is to be applied. I don’t put half salt and half sugar in my food together because it is the averag...
by marcopolo
Fri Mar 22, 2024 8:04 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

But, soon as you introduce the possibility of failure, say like 95% probability of success e.g., start year 1966 fails), then ratcheting up increases probability of failure. I'm afraid that is not correct. I retired 4 years ago on a million capital. Dutifully checked and accepted a 5% possibility that my 60/40 portfolio may not last 30 years with a 4% withdrawal rate (i.e. 40k/yr). Market returns were generous and now I have a 1.1M capital. Would starting to withdraw 4% of that amount (Ii.e. 44k/yr.) increase my chances of failure ? Not at all. My friend Bob is retiring this year and, as it turns out, he has a 1.1M capital. He read the very same posts I did in 2020 and concluded that the chance of his capital not lasting 30 years with 44k/...
by marcopolo
Fri Mar 22, 2024 7:54 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

There are plenty of other studies that show 4% WR having about 95% success rate, with a few failures for start years in the 1960s. Those other studies used different portfolios than Bengen. An important difference is the type of bonds. An obvious conclusion to draw is, for a withdrawal portfolio, intermediate-term government bonds that Begen used have been a better choice than the type of bonds used by other studies. A post in the "30/70 or 60/40: Does it make a difference to the 4% rule" topic has a graph of the initial withdrawal rate that has been supported at least 30 years of annual inflation-adjusted withdrawals for different types of bonds, using return data from a Stocks, Bonds, Bills, and Inflation yearbook. So, do you b...
by marcopolo
Fri Mar 22, 2024 5:43 pm
Forum: Personal Finance (Not Investing)
Topic: Do you assume legislative cuts in Social Security and other federal benefits?
Replies: 49
Views: 2123

Re: Do you assume legislative cuts in Social Security and other federal benefits?

It depends upon the outcome of 2024 election. I don't think so, I think it will be later. As in last minute We have got a good 30 years before things get bad. Gen Z is also known as the baby bust generation. As such, it is a relatively small cohort of retirees. Crunch time will be when Gen Y starts retiring. Isn't that what everyone said about the Baby Boomers retiring? Not only bankrupting Social Security, but dire consequences for the stock market as they all sold their equities to fund retirement, right? Women entering the labor force in a more equitable fashion. That won’t happen again. We had a amazing burst of wage growth in the 90s due to specific technological changes with boasted the average wage earners productivity. The networke...
by marcopolo
Fri Mar 22, 2024 5:34 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

That depends on if you believe 4% is 100% safe. See my more detailed post aabove. Calculation done by Bengen around 1993 showed that an initial withdrawal rate of 4%, with later withdrawals amounts adjusted for inflation, would not have depleted portfolios sooner than 30 years for any starting year back to 1926, with the 50:50 and 75:25 stock:bond portfolios that he used. He used returns from a Stock, Bonds, and Bills (SBBI) yearbook. Doing the same type of calculations including more recent returns from a later SBBI yearbook, show that an initial withdrawal rate of 4% has continued to be safe for moderate and aggressive allocations to stocks and intermediate-term government bonds. It is not a matter of belief. It is result of calculations...
by marcopolo
Fri Mar 22, 2024 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Do you assume legislative cuts in Social Security and other federal benefits?
Replies: 49
Views: 2123

Re: Do you assume legislative cuts in Social Security and other federal benefits?

It depends upon the outcome of 2024 election. I don't think so, I think it will be later. As in last minute We have got a good 30 years before things get bad. Gen Z is also known as the baby bust generation. As such, it is a relatively small cohort of retirees. Crunch time will be when Gen Y starts retiring. Isn't that what everyone said about the Baby Boomers retiring? Not only bankrupting Social Security, but dire consequences for the stock market as they all sold their equities to fund retirement, right? It seems there is always something one can worry about. Whatever changes do come, they will almost certainly be phased in gradually in ways that are not catastrophic to most retirees, especially Bogleheads who are better prepared than m...
by marcopolo
Fri Mar 22, 2024 3:33 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

The 1964 retiree might disagree with you. They would have made it if they stuck with their original 4% (inflation adjusted). But, re-starting in 1966 resulted in failure. That depends on whether supporting at least 30 years of withdrawals would be considered to have been a failure and what the portfolio was. Using historical data, William Bengen determined that at least 30 years of inflation-adjusted withdrawals would have been made when the initial withdrawal rate of 4%, with a 50:50 portfolio of stocks and intermediate-term government bonds. Including more recent data that Bengen did not have, the portfolio would have supported 44 years of inflation-adjusted withdrawals for 1964 as the starting year with an initial withdrawal rate of 4%....
by marcopolo
Fri Mar 22, 2024 2:04 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

The 1964 retiree might disagree with you. They would have made it if they stuck with their original 4% (inflation adjusted). But, re-starting in 1966 resulted in failure. How so? Assuming you're restarting anew with 4% in 1966 with the allocation as in the Trinity Study then it should hold as that was what that study determined. It should be irrelevant what happened prior to that. I'm referring to restarting at 4% of current not anything else, not sure if OP has a different scenario I am missing.. What you are saying is only true if the chosen WR is 100% safe. The reality is that there is no such thing as 100% safe. The "4% rule" has various success rates depending on the data set that is used. See my post at the top of this page...
by marcopolo
Fri Mar 22, 2024 1:14 pm
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

stocknoob4111 wrote: Fri Mar 22, 2024 7:03 am
Leesbro63 wrote: Fri Mar 22, 2024 5:39 am So what would be the starting SWR if the plan, without increasing risk, was to re-retire after every good year, but also take an inflation increase after a bad year. 3%? 2%?
The probabilities of 4% SWR should hold at any starting point, it's not like if the market goes higher it's lower, the 4% is based on the worst historical outcome and if we assume we don't get anything worse than the worst in history, which is a reasonable assumption, then it's still 4%.

Some that are saying that it should be lowered as the market trends higher makes no sense to me.
The 1964 retiree might disagree with you.
They would have made it if they stuck with their original 4% (inflation adjusted). But, re-starting in 1966 resulted in failure.
by marcopolo
Fri Mar 22, 2024 4:11 am
Forum: Investing - Theory, News & General
Topic: Reset 4% withdrawal floor if portfolio increases in value?
Replies: 93
Views: 8017

Re: Reset 4% withdrawal floor if portfolio increases in value?

Let's say that a 4% withdrawal rate gives you a 90% chance of lasting at least 30 years. After 5 years of withdrawals your capital has actually increased 10% after adjusting for inflation. Some here say that increasing your withdrawals by 10% you increase your chance of failure, because "lean years follow fat ones". 1) It is not really true that worse than average years have to follow a few better than average years. 2) The historical return of a 60/40 portfolio is around 8.5%. 4% + average inflation withdrawals mean your portfolio is actually expected to increase a couple of %/yr. It is the return volatility that kills you, not the average return vs withdrawal rate. 3) After 5 years, your portfolio only has to last 25 years. You...
by marcopolo
Thu Mar 21, 2024 11:31 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

“ Yes, OP would like to shelter assets from the medical industrial complex and pay LESS. You seem to have been offended?” The assets are not being “sheltered” from the medical industrial complex . The medical industrial complex gets paid when it renders a service. It does not work for free. The assets are being “sheltered” from fellow taxpayers/neighbors, who will be paying the medical industrial complex to care for you/your family member. Teachers, retirees, fast food workers, will all be paying to care for you/your family member, instead of you/your family member using your own assets to do so. Money is fungible. Your neighbors and the teachers and fast food workers are also subsidizing things like wealthy people's mortgages, 401k tax sh...
by marcopolo
Thu Mar 21, 2024 9:42 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

“ Yes, OP would like to shelter assets from the medical industrial complex and pay LESS. You seem to have been offended?” The assets are not being “sheltered” from the medical industrial complex . The medical industrial complex gets paid when it renders a service. It does not work for free. The assets are being “sheltered” from fellow taxpayers/neighbors, who will be paying the medical industrial complex to care for you/your family member. Teachers, retirees, fast food workers, will all be paying to care for you/your family member, instead of you/your family member using your own assets to do so. Money is fungible. Your neighbors and the teachers and fast food workers are also subsidizing things like wealthy people's mortgages, 401k tax sh...
by marcopolo
Thu Mar 21, 2024 4:43 pm
Forum: Personal Finance (Not Investing)
Topic: Failed to take RMD for Inherited IRA in 2023- what next?
Replies: 7
Views: 589

Re: Failed to take RMD for Inherited IRA in 2023- what next?

nalor511 wrote: Thu Mar 21, 2024 4:36 pm You can take them any time you want before 10yrs are up, and you owe taxes the year you take the withdrawal. You need to take it to $0 by year 10
I thought that if the deceased had started RMDs (as is the case here), then the heir(s) had to take them as well in years 1-9.
by marcopolo
Thu Mar 21, 2024 1:29 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

tibbitts wrote: Thu Mar 21, 2024 12:52 pm
marcopolo wrote: Thu Mar 21, 2024 12:22 pm Then substitute any other tax optimization strategy that you do employ. Backdoor Roth, Roth conversions etc.

Money is fungible. Any legal action you take that means the government has less money to fund its activities than would have occured otherwise has the same effect of spreading that burden to other tax payers.
You're somehow missing the point that I'm essentially agreeing with you, but saying that I haven't thought a lot about the Medicaid or estate tax planning aspect because it doesn't seem to be applicable in any way to me.
My mistake. I misunderstood your point.
by marcopolo
Thu Mar 21, 2024 12:22 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

Could be partly semantics with the highlighted language triggering a raw nerve for some people about using what they might call "welfare benefits" rather than spending down all of their own assets first. My plan, as of now, for the record is like yours, to pay for any LTC cost, and whatever left goes to charity or heirs (hopefully many years from now). Perhaps that will change and I will engage in Medicaid spend down planning, at some later point in life, although I don't currently anticipate it. I would point out that a good percentage of people intentionally DO plan to shelter their assets, from income taxes and estate taxes, creditors etc. What I wonder though is why people see a difference in these two scenarios: 1. A high ne...
by marcopolo
Thu Mar 21, 2024 12:12 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

For those of you in a similar circumstance, how do you plan on sheltering your assets from the ravages of LTC and ensure they're passed on to your heirs where they rightfully belong? Any thoughts and advice would be appreciated. Why do your assets "rightfully belong" to your heirs? Aren't your assets there to support your and your wife's needs? Do you also get food at food banks to avoid spending your assets, that "rightfully belong to your heirs", on groceries? By all means make plans and provision for possible LTC for yourself and your wife, but use your own assets. Look at LTC insurance or increase your retirement assets to cover possible costs. You asked for any thoughts.... I agree it was unproductive for the OP to...
by marcopolo
Wed Mar 20, 2024 5:01 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

It seems a bit odd that you take exception to the idea of sheltering assets so that the tax payer picks up the tab, then immediately follow that up with instruction on how exactly to do that! Who do you think picks up the tab after five years when money that could have been used to pay for ongoing care is put into a trust or given away? OP stated that they were already aware of that 5 year look-back. Their mother was already doing that. I did not say I approved of that strategy (my opinion is irrelevant anyway). And we (DH and I) will *not* be doing that. We'll only be using Medicaid if we have truly run out, including the sale of our house. I was simply discussing OP's situation while commenting on their post. We are planning to be at a f...
by marcopolo
Wed Mar 20, 2024 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

It seems a lot people love government largesse when they benefit from it, but hate it when others do.

As long as all applicable laws are followed, how is this any different than all sorts of other strategies (often discussed and championed here) that can yield more dollars to leave to heirs at the cost of a larger burden to the rest of society?
by marcopolo
Wed Mar 20, 2024 2:49 pm
Forum: Personal Finance (Not Investing)
Topic: Long-Term Care/Protecting Assests
Replies: 89
Views: 4978

Re: Long-Term Care/Protecting Assests

Very sorry... I was with you, and had an answer ready... until I got to this section of what you wrote: For those of you in a similar circumstance, how do you plan on sheltering your assets from the ravages of LTC and ensure they're passed on to your heirs where they rightfully belong? OUR plan is to find a good LTC facility that will keep us if we run out of money, transferring to Medicaid reimbursement. OUR money is for OUR care. YOUR money is for YOUR care. You want us, the taxpayers, to pay for your LTC so that you can leave your money to your heirs? Any money LEFT OVER will indeed be for your heirs. ... as will be any money you manage to get into the 5-year lookback. If you are able to get some money into a trust or something 5 years ...
by marcopolo
Wed Mar 20, 2024 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Step-up Cost Basis in Revocable LT Upon 1st's death
Replies: 33
Views: 1597

Re: Step-up Cost Basis in Revocable LT Upon 1st's death

The basis depends on whether it's community property. You can have separate property in a community property state, and you can have community property in a common law state. Assuming it's available for community property in a particular state, you might or might not want it to be with right of survivorship. That's more common now that the estate tax exclusion amount is much higher than it had been and portability is permanent, but you might not want it if you want to use both spouses' GST exemptions. ... Evidently, there are only a handful of "good" attorneys in the world (I exaggerate) because there are numerous threads here where people used well regarded T&E attorney to develop their plan, and according to the experts her...
by marcopolo
Wed Mar 20, 2024 2:13 pm
Forum: Personal Finance (Not Investing)
Topic: Step-up Cost Basis in Revocable LT Upon 1st's death
Replies: 33
Views: 1597

Re: Step-up Cost Basis in Revocable LT Upon 1st's death

This is the exact type of issue that gets overlooked when taking a DIY approach. If you have a good T&E lawyer he/she should advise you that the best practice in this situation is a 2-step deed process. Deed 1 from JT to CPWROS. Deed 2 CPWROS to the trust. The deeds can be filed together with instructions that Deed 1 should be recorded first. What makes you think this was a diy scenario? What makes you think having a T&E lawyer develop the plan isn't going to cause similar issues? Evidently, there are only a handful of "good" attorneys in the world (I exaggerate) because there are numerous threads here where people used well regarded T&E attorney to develop their plan, and according to the experts here, the results ha...
by marcopolo
Wed Mar 20, 2024 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: Step-up Cost Basis in Revocable LT Upon 1st's death
Replies: 33
Views: 1597

Re: Step-up Cost Basis in Revocable LT Upon 1st's death

This is the exact type of issue that gets overlooked when taking a DIY approach. If you have a good T&E lawyer he/she should advise you that the best practice in this situation is a 2-step deed process. Deed 1 from JT to CPWROS. Deed 2 CPWROS to the trust. The deeds can be filed together with instructions that Deed 1 should be recorded first. What makes you think this was a diy scenario? What makes you think having a T&E lawyer develop the plan isn't going to cause similar issues? Evidently, there are only a handful of "good" attorneys in the world (I exaggerate) because there are numerous threads here where people used well regarded T&E attorney to develop their plan, and according to the experts here, the results ha...
by marcopolo
Wed Mar 20, 2024 11:36 am
Forum: Personal Finance (Not Investing)
Topic: Which typie of Fidelity account?
Replies: 26
Views: 1858

Re: Which typie of Fidelity account?

csage wrote: Wed Mar 20, 2024 10:11 am From what I could tell, CMA vs brokerage is the same thing with different defaults set. I was able to change the CMA account to a money market core holding and also add checks to the brokerage account.
How did you do that?
by marcopolo
Wed Mar 20, 2024 1:02 am
Forum: Personal Finance (Not Investing)
Topic: Paying for grandparents to babysit, medical insurance implications
Replies: 43
Views: 4728

Re: Paying for grandparents to babysit, medical insurance implications

“It seems that the only remaining question is what kind of taxes do we have to pay if I end up paying them some symbolic salary for taking care of my baby.“ A symbolic salary to scheme extra benefits could considered fraud in many jurisdictions. Be sure your CPA signs off on that. This is exactly what I'm curious for - I don't want to do it if it is illegal in any way. Do you know which jurisdictions? Or do you have any document that would explain illegality of it? Or do you have some personal experience/professional knowledge about it? I am asking because I wouldn't be surprised if it were illegal, but would be equally unsurprised if it were 100% legal, in which case I should definitely do it, right? After all, I do backdoor Roth and mega...
by marcopolo
Tue Mar 19, 2024 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Paying for grandparents to babysit, medical insurance implications
Replies: 43
Views: 4728

Re: Paying for grandparents to babysit, medical insurance implications

“It seems that the only remaining question is what kind of taxes do we have to pay if I end up paying them some symbolic salary for taking care of my baby.“ A symbolic salary to scheme extra benefits could considered fraud in many jurisdictions. Be sure your CPA signs off on that. This is exactly what I'm curious for - I don't want to do it if it is illegal in any way. Do you know which jurisdictions? Or do you have any document that would explain illegality of it? Or do you have some personal experience/professional knowledge about it? I am asking because I wouldn't be surprised if it were illegal, but would be equally unsurprised if it were 100% legal, in which case I should definitely do it, right? After all, I do backdoor Roth and mega...
by marcopolo
Tue Mar 19, 2024 9:14 pm
Forum: Personal Finance (Not Investing)
Topic: Where can I learn about income tax brackets in Iowa?
Replies: 16
Views: 1526

Re: Where can I learn about income tax brackets in Iowa?

sailaway wrote: Tue Mar 19, 2024 9:03 pm FIFO is not blatantly wrong and can in fact provide tax smoothing so that you aren't minimize taxes some years and then left with only lots with high capital gains. It may or may not be ideal for your situation, but neither is it "down right wrong."

As for state taxes, the second link clearly shows the 2024 brackets. The first link is showing marginal tax rates based on those brackets.
The first link is outdated.
It shows 2023 info, and has many brackets.

The second link is for 2024, and is reduced to just 3 brackets.
It appears the state is in transition towards a single tax rate.
by marcopolo
Mon Mar 18, 2024 8:43 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 61
Views: 7459

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: 61
Views: 7459

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: 718

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: 61
Views: 7459

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: 3114

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: 15693

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: 15693

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: 15693

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: 15693

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: 15
Views: 1356

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: 837

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: 3332

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: 3332

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: 2571

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: 2921

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: 6944

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...