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If you are trying to time the market, it just depends whether you think inflation will be higher or lower than expectations. I would assume the market has the same information I do so it is impossible to say in advance which will outperform.

No need for an advisor. Sell it all, reinvest in your target allocation. No tax consequence. Easy.

From an asset allocation standpoint you are not changing anything. You are exchanging from one bucket of equities I to a less risky bucket of equities

Sounds like you already have PAS and they are giving you good advice. Take it.

In addition to what others have said, I would just add that whether you need a car should be irrelevant. If it is a good strategy to earn income then you should do it. What you do with the income is a separate question. If you are pursuing this strategy because you are stressed about a big purchased that's not a good reason.

Yes to all your questions about Schwab. I think I would still do Fidelity CMA though. They have everything Schwab does plus better interest on the core account, option to earn even better interest using MMFs, plus the ability to link to brokerage account for overdraft.

Kenkat wrote: ↑Fri Mar 24, 2023 11:25 am Thanks HeavyChevy for running these numbers.

I will give the typical horrible anecdotal example of 2022, my first year of retirement. My 50/50 portfolio returned around -10%, which while not great, was better than any of the three fund portfolio components in 2022. This was primarily due to contributions from my large value and small value funds, as well as a chunk of bond money I moved into a stable value fund and a small allocation to the always hated commodities.

While one year does not a retirement make, it sure helped at a minimum from a psychological basis.

How did they do in 2020? I am guessing not well.

Anyone using the free app. from Empower? I'm having a hard time dealing with giving them all my personal financial info. (bank and brokerage account numbers with routing numbers) in order that they can create your "Dashboard". I'd avoid this. "Free" just means you're the product, just like face book. Sharing passwords of financial sites is most likely a violation of the user agreement, so if something bad happens, data leak, hacking incident, etc. you'll be in a lousy position because you willingly shared your password. Regards, Don't the financial institutions have to cooperate with Personal Capital at some level to share the data, even after you provide your password? I would have thought that would constitute a form ...

Thank you all for your comments. To provide more context, the policies are 500k respectively for my spouse and I, for a total of 1 million. We are speaking with a lawyer to create an estate plan, however, I must admit I am generally uncomfortable in client relationship in an area I have limited knowledge. I sometimes find myself maybe too skeptical and stubborn, especially having had poor experiences in the financial and insurance world. So, to that extent, I am trying to trust but confirm, to ensure I'm not getting taken to the cleaners for setting things up we really do not need. Additionally, I thought the UTMA route was intriguing (and one our lawyer was not familiar with) and did not know if anyone else has gone that route. We are in ...

If you have a minor child I think you need a comprehensive estate plan that includes planning for your term life insurance. You need to appoint a guardian for your minor in your will, and can also appoint a different financial guardian if desired (maybe this is state-dependent) who is custodian of their assets including life insurance until they reach age of maturity. This is all assets left in their name. If you don't do this then the court will have to choose a guardian and perhaps a financial guardian as well. Both our life insurance agent and estate lawyer agreed that in our state our minor child should be the beneficiary on our life insurance, not our living trust. I think it is easier for their custodian to claim the life insurance o...

OnTrack2020 wrote: ↑Mon Mar 27, 2023 9:27 am Find an adult you trust; the insurance company is not going to pay out to a minor child.

Yes, they will. The problem is that minor children are not legally allowed to receive the funds. The funds will either sit, or a court will appoint a guardian to handle the funds for the benefit of the child. The insurance company will pay out a check in the child's name if that is the beneficiary.

I would talk to an attorney. You don't want to leave it directly to the kid, but you also want the guardian to be able to use it without restrictions of UTMA. I think a trust managed by whomever you plan to be the guardian would be the best solution.

I don't think there is such a thing as too conservative. Really just depends on your risk tolerance and need for growth, but with no legacy interest you really don't need much growth.

I think to keep things simple I would take the funds from the bond allocation. Moving forward I would maintain an overall allocation at the same 53/47 level you have (calculated including your TIPS ladder). You will just want to rebalance to maintain your allocation every time you cash in a maturing tranche of TIPS. This way your desired "guaranteed" funds are set aside and earmarked but your overall risk profile is held steady.

Audioarc wrote: ↑Mon Mar 27, 2023 8:21 am So that car will be around 18 years old by then?

I prefer to think of it as 18 years young.

If it starts and drives, I would lean toward keeping it. Only question would be if there is a safety issue but nothing in the description indicates that.

I used to use Personal Capital. I had enough problems with it communicating with my various accounts that I decided it wasn't useful enough to be worth handing over my account info. Never had a security issue with them but I also didn't get much out of it aside from the eye candy factor. Now I just use my own self-updating spreadsheet.

I mailed my state taxes to save the $25. I agree it is tacky to charge that when they advertise state as being included so I did paper out of principle. That said, why don't you e-file for Federal? Yes, if you file paper you should include one of your W2s labeled for federal filing. I did e-file Federal. Ah, got it. Yes, TT should tell you everything you need to send on the printout that comes with the state return. I will say, I am quite sure that I have forgotten to attach W2's with paper filings and have never been given any consequence. By the way, another option sometimes is to file your state taxes online, basically transposing numbers from your TT printout to the state system. That saves you the cost of a stamp and let's you pay by ...

I mailed my state taxes to save the $25. I agree it is tacky to charge that when they advertise state as being included so I did paper out of principle.

That said, why don't you e-file for Federal? Yes, if you file paper you should include one of your W2s labeled for federal filing.

I stopped keeping a checkbook perhaps 15 years ago. Never even occurred to me to "reconcile" investment accounts. These days transactions happen within a day or two and you can see ones that are pending. If I want to know how much cash is in my accounts I just log in and check. I have never bounced a check or overdrawn my accounts.

I think I’ve convinced her to try and save 15k this year. She’s aware the situation isn’t great. I’m not familiar with annuities. I will look into them. Thanks Before trying annuities check out the piece on annuity fraud on the front page of today’s Wall Street Journal. I don't have a subscription so I can't speak to the article. Generally speaking, yes, annuities are a large and complex category and many of them are to be avoided. I think most here generally approve of Single Premium Immediate Annuity (SPIA) which is a fancy way of saying that you pay up front in exchange for a guaranteed fixed monthly payment for the rest of your life. They are easy to understand, and it is easy to get quotes so you can get apples-to-apples comparisons e...

delamer wrote: ↑Sun Mar 26, 2023 1:48 pm

Andy12345 wrote: ↑Sun Mar 26, 2023 1:40 pm

delamer wrote: ↑Sun Mar 26, 2023 1:30 pm If my mother only had $135,000 in liquid assets, I wouldn’t have any allocation to stocks.

Or bonds, other than individual government issued.

Too risky?

Exactly, in terms of principal loss.

If there’s a 20% overall decline in stocks, she’d lose over $8,000 (assuming her bonds stay stable).

Is the money with the best friend’s SIL in an IRA?

I would give strong consideration to an annuity. Her safe withdrawal rate from a 100% bond portfolio would be pretty low. Best way to maximize income is with annuity. Unfortunately, annuity is not good for heirs but I don't think she has that luxury.

66, single, annual salary of $80,000, after taxes $60,000 Projected SS benefit at 70 is $2600 ~ $50,000 in investments below. These are with her best friends son in law. He doesn’t charge her any fees. I’m sure he could put money into whatever funds she wants. Does she live in a high tax state? Federal tax on that salary should be about $13k. What is her spending? What is her monthly saving? Anything on top of the $600 going into cash? What is the $60k in profit sharing? That isn't in company stock, is it? If she is saving $7200 (and nothing else), and your tax numbers are accurate, her spending should be about $52,800, or $4400 monthly. She definitely has some ground to make up with her SS projected $2600. If she takes $100k and buys an a...

I would prioritize your Roth IRAs over 529. The 529 already has a great head start.

Consider HDHP/HSA if the family is healthy and the plan is reasonable. Otherwise you are in the "boring middle" where there is nothing to do but grind.

snowday2022 wrote: ↑Sat Mar 25, 2023 9:13 pm

aristotelian wrote: ↑Sat Mar 25, 2023 2:42 pm Beneficiaries can be changed at any time so it really doesn't matter who the beneficiaries are as long as the successor is correct. I don't believe there would be any tax consequence as long as you are under the estate tax exemptions.

What do you mean by no tax consequences? Does the basis reset a la taxable investments? If it does not, then income tax plus penalty would still be owed on any non qualified withdrawals.

529 isn't taxable.

Youngblood wrote: ↑Sat Mar 25, 2023 3:32 pm

aristotelian wrote: ↑Sat Mar 25, 2023 2:48 pm With rates over 5% and a big premium of Treasuries I just bought a 10 year CD in my HSA. I will probably live to regret it but it's a great deal compared to my 10 year CD earning 1.45% which looked like a good deal last year. Hopefully rates don't go to 8% a year from now but you never know.

It's callable, right?

Woops, forgot to check that. Lesson learned!

If the improvements would add to the equity of the house and they are upgrades the sibling wants I would count it as inheritance. If the work is being done just to accommodate the parents and don't add to the value of the house I would consider it the parent's responsibility. If it's a mix, work out something reasonable.

With rates over 5% and a big premium of Treasuries I just bought a 10 year CD in my HSA. I will probably live to regret it but it's a great deal compared to my 10 year CD earning 1.45% which looked like a good deal last year. Hopefully rates don't go to 8% a year from now but you never know.

Beneficiaries can be changed at any time so it really doesn't matter who the beneficiaries are as long as the successor is correct. I don't believe there would be any tax consequence as long as you are under the estate tax exemptions.

I have both. I think you will be happy with either one. I really like Schwab's platform and customer service. I think Fidelity is the best overall due to providing HSA's and paying superior interest on cash. I can't think of any way that Schwab is superior except I do like the feel of the platform better. I haven't left Schwab yet but if I were to pick one it would be Fidelity. If you aren't using the ATM card I would recommend the brokerage account over the CMA due to being able to select a money market fund as core account.

Yes, there is a pretty big gap at the moment between CDs and Treasuries. Just call it a bond ladder and proceed as usual.

I agree, sounds high relative to the likely benefit.

I find it bizarre that financial institutions still use paper checks for anything these days. Anyway, the problem with making direct contributions is you lose any employer matches and have to pay FICA tax. (Some believe the ROI on FICA taxes is good enough that this is not really a problem). IMO the best solution is for your payroll to direct deposit contributions straight to Fidelity. It can be difficult to get HR/payroll people to cooperate but it can be done. A lot of employees as well as HR people mistakenly treat HSA's like employer plans and assume the employers are locked in, but HSA's are individual accounts more like IRA's. Good advice. I'll ask my employer for sure. But since I am dealing with a mega-corp - it is probably unlikel...

I also do a yearly partial transfer from Optum HSA to Fidelity HSA using Fidelity to do the transfer. Optum has never charged me for this even though their fees list shows a fee for any transfers. So it might be worth testing to see if Payflex actually charges the fee. In my case - I may stop having my work deposit payroll HSA contributions to Optum. Someone just posted a thread here where Optum messed up on the transfer and sent the check to another bank. It appears that Optum is very difficult to work with in those cases. I may just contribute to my HSA directly with Fidelity to avoid that issue and to avoid Optum fee policy changes with transfers I find it bizarre that financial institutions still use paper checks for anything these day...

I have payflex and Fidelity HSA. I do a pull from Fidelity (account transfer), leaving some money (I leave $500) in the payflex account so that it doesn't close. Doing it this way there are no fees. It can take about 3 weeks or so for the transfer. This is very helpful as I’m also interested in avoiding fees. Is there a limit to how many times I can do this in a year and still avoid fees? I’m expecting I’d do this about 3 to 4 times per year if it’s free. I don’t mind the three week delay, I’ll just time when the market is about to drop before I initiate the transfer :mrgreen: How do you pull from fidelity, must I call them or is there a way to do this online? I am seeing several Payflex plan documents indicating $25.00 fee for custodian-t...

Looks good to me. If your tax deferred account exceeds your target bond allocation it wouldnt hurt to fill remaining space with equities. Desired overall allocation is most important, then you figure out the most tax efficient way to optimize.

One way is sell stocks in taxable and exchange bonds for stocks in tax-advantaged. This part has never been quite clear to me... If the OP is trying to survive a hypothetical market drop (50%?), they'd need double the taxable stock investment in order to cover the drop and still be able to transition after the drop. And the transition would result in a hefty stock allocation outside of taxable, somewhere. This is a single shot....and then one has to reset it, maybe? How? FD: I use the peanut butter AA across all accounts, for several reasons, but partly because I'm not sure the single shot solution leaves one in a better or worse AA per account type stance. Anyone have a good insight on why this is suggested often, besides the obvious &quo...

One possibility might be to rent in the better school district. If you have any uncertainty I would caution against buying. It's too big of a purchase. You don't want to be constantly stretched thin or end up with a house you hate. If you rent out the townhouse for now you could eventually move back.

ebeb wrote: ↑Fri Mar 24, 2023 9:37 am I am about to put $50k short term money into the below TIPS. Am I better off keeping in a moneymkt fund or is this better if inflation remains 6%

US Treasury TIP 912828VM9 coupon=0.375% maturity=07/15/2023 Ask=100.47235 YTM= -1.173%

CPI is a lagging indicator based on past 12 months. Based on the last six months inflation is around 3%. What matter is future inflation, which isn't knowable but you would think the gap between nominal Treasuries and TIPS would be the best approximation you have. Your purchase should be determined by the risk you are trying to protect against instead of what you expect inflation to be.

Could you sell one more more of the properties in the trust to build up some cash and also reduce the amount of maintenance cost?

In the case of bonds, diversification doesn't necessarily reduce risk. An extreme example would be adding junk bonds to your portfolio. If you view US Treasuries as the safest, adding international would arguably be a less extreme version where you are getting more countries but that doesn't necessarily mean lower risk.

I'm surprised every modern bank hasn't figured this out by now. I am also surprised the FDIC allows it. I am not sure how much this differs from say CDARS. The more surprising thing to me is the FDIC requires people too jump through hoops for this insurance. Seriously, banking needs to be safe and secure for the system to work, the idea that people with deposits over a certain amount need to constantly try to crawl through their regulated bank's balance sheet to determine if their deposits are safe is ridiculous. If it is this easy to spread your funds around and get 10x insurance, they should just require every bank to do it and then insure everyone up to $2M. That would reduce risk to any particular bank but would it create systemic risk...

I'm surprised every modern bank hasn't figured this out by now. I am also surprised the FDIC allows it. I am not sure how much this differs from say CDARS. The more surprising thing to me is the FDIC requires people too jump through hoops for this insurance. Seriously, banking needs to be safe and secure for the system to work, the idea that people with deposits over a certain amount need to constantly try to crawl through their regulated bank's balance sheet to determine if their deposits are safe is ridiculous. If it is this easy to spread your funds around and get 10x insurance, they should just require every bank to do it and then insure everyone up to $2M. That would reduce risk to any particular bank but would it create systemic risk?

I'm surprised every modern bank hasn't figured this out by now. I am also surprised the FDIC allows it.

Lemonaid56 wrote: ↑Thu Mar 23, 2023 2:03 pm Yes , we have been called many times over the years. Chose not to take the risk as I did reseearch and they seem to use this "investment" money to fund the losses from their "dry wells " and R&D.
Family member worked for them when they first got out of college and their job was cold calling people to get them to invest and then hand them off to the "sharks" to close the deal.
I didn't find it guaranteed enough for me and we don't have that kind of cash to risk.
I just tell them that when they call now.

I was going to say this sounds like being on the other end of a sales pitch in Glengarry Glen Ross.

Long term rate is not the way to go now. Rates keep rising and it would make no sense to lock in at 5% and find in 5 years that banks everywhere pay 10%. Redneck just raised their money market rate to 4.55%. I'm sure we'll see Ally raise their 3.6% rate soon and everyone will leap frog up. And if you're thinking I'm just out of my mind citing 10%, I can remember in the late 80's having 6 month CDs at 10% as I was in grad school at the time and they required $10k, which I had available. The Fed just said they are going to stop raising rates. If there is a recession they may pivot back to lower rates. I have no idea what the future will bring but the market appears to be betting on lower rates 5-10 years out. 5-10 year rates have been droppi...

Have you looked at the fixed income options on your brokerage platform?

It looks like there is a big discrepancy right now between 10 year CD's at 5% and Treasuries at 3.5%. CD's across the board have higher yields. Might not be a bad idea to grab one.

Last year I thought it might be a good idea to "lock in" 1.45% for 10 years. Turns out that was a terrible idea.

Make sure you get the basis stepped up for the taxable account. Fortunately the funds that are currently selected are safe and unlikely to have significant gains while you are planning your next move, so you should have minimal tax consequences to worry about.

I would recommend the Wiki on Managing a Windfall, especially the advice to take your time before taking action:
https://www.bogleheads.org/wiki/Managing_a_windfall

Keeping the funds mostly in VMRXX, they are earning about 4.5% which is more than enough income for your needs.

btq96r wrote: ↑Thu Mar 23, 2023 8:48 am I would think they'll raise the expense ratio to keep it profitable before they liquidate a fund with a fund total net assets of $1.2 Trillion. It would be a huge disruption all around if VTSAX fell off the map. I can't even begin to guess how many individual accounts and other Vanguard funds are tied to it at this point.

For sure, VTSAX would be the very last fund they would liquidate. It would take a Vanguard going out of business scenario. But these things do happen.

Given the recent collapse of SVB...which is not the same thing as this, but can someone educate me about this: Is it possible for a single index fund to collapse? Is it safe to put one's entire equity portfolio into VTI/VTSAX? Should one diversify to include index funds from different firms even though they may be tracking the same index? thank you Read this Vanguard is different from other asset management firms. Vanguard is owned by its member funds, which in turn are owned by fund shareholders. With no outside owners to satisfy, Vanguard's focus is squarely on meeting the investment needs of their clients. Vanguard funds are very safe. There is no need to buy the same type of index funds elsewhere. You can slice and dice your portfolio ...

I did call my HSA custodian and talked to two people. Both of them were fairly unhelpful (one of them telling me that since I was under the $7300 limit that there was no problem, and I had to explain that the limit was pro-rata by month). In any case, I have the form for removal of excess contributions filled out. The only part that I'm still confused about is the tax impact of this. I expected that by removing these excess contributions, I would realize more income for 2022 and thus my tax liability would go up. However, unless FreeTaxUSA did something to take this into account from the get-go, it seemed like my tax liability stayed the same even when I answered that I would remove the $696 from my HSA. Should my current tax liability not...

Yes, you do need to create the account at EJ. No worries, you can transfer it almost immediately as soon as it is set up. One good thing about EJ, if I remember correctly I don't think they charge a transfer fee.

mix wrote: ↑Wed Mar 22, 2023 9:29 pm Seems like everyone is recommending a solo 401K. I can google and see what the differences are. But is there one or two things that just make it better in most peoples opinion?

The pro rata rule applies only to IRA's, so rolling your IRA funds into the Solo 401k would allow you to convert your basis to Roth with minimal tax.

Going forward, Solo 401k allows employees contributions up to 22,500 *plus* the same employer contributions as SEP, so it is much better if you don't have a W2 401k.

RyeBourbon wrote: ↑Wed Mar 22, 2023 7:41 pm

aristotelian wrote: ↑Wed Mar 22, 2023 7:39 pm You can always roll the IRA funds together and just forget about the $5500 of basis. You would be getting double taxed on the $5500 but it would be spread out over your withdrawals and conversions on a pro rata basis. It is such a negligible amount it isn't worth worrying about IMO.

No need to forget about the basis. It will reduce the taxable amount of distribution (pro-rata) when the time comes.

Fair enough. Point being they have no obligation to track it as far as I know. Up to them if it is worth it to keep tracking it.