Bogleheads.org

I prefer the simplicity of ETF, especially in taxable account.

I think you are fine. Only concern is your are going to want to do a good amount of Roth conversions because you have a lot of your portfolio in traditional IRA's. That is going to add some taxes to your budget.

If your budget includes debt servicing, paying off some of the debt will help.

What about college funds for the kids?

I would assume when things settle down you will be able to earn some income, somehow, to give yourself a bit more flexibility.

Most here advise to put your bond allocation in tax deferred first, then fill out the rest of your portfolio with stocks. That would be my approach with the Inherited IRA. Thanks. But isn't one of the advantages of an IRA that the growth is not taxed? We expect equities to grow more than bonds. That's why I had it set to 100% equities in the past. Unlike my other accounts, where I only contribute, this is a portfolio where I'm forced to withdraw every year. Is that a consideration or am I barking up the wrong tree? I expect my annual tax liability to go down when I retire. The growth is taxed, just on withdrawal. It is actually taxed higher than capital gains since it is taxed at income tax rates, whereas capital gains can be taxed at 0%. ...

Hi, I have an inherited IRA from which I have to take RMDs every year (about 2% --- it's grandfathered under the old rules). My overall AA is 95/5 because I am still youngish. I am wondering if there are any special considerations for the AA within the inherited IRA given that I have to make withdrawals from it. Historically I've had it at 100% equities, but would some bonds help prevent SORR depleting the IRA during down years? Thanks. Most here advise to put your bond allocation in tax deferred first, then fill out the rest of your portfolio with stocks. That would be my approach with the Inherited IRA. The question is how much in bonds overall. Your overall allocation depends on your risk tolerance and need for returns. 95-100 equities ...

According to the information I can see on the Primecap website as well as third party sources like Fidelity and Morningstar, POAGX has had zero dividend distributions since 2018. When it has paid dividends, they have been tiny ($.02 in 2018, $.0026 in 2015, etc). However, they have paid relatively enormous capital gain distributions. Can anyone explain how they have paid such low dividends when at least some of the stocks in the fund are dividend payers? Are they doing something like selling stocks before their dividend dates and then rebuying them? Dividend History Dividend History Additional Information Date Per Share Amount Reinvestment Price 12/17/18 $0.02583 $38.81 12/16/15 $0.00257 $32.35 12/16/14 $0.05742 $31.09 Capital Gains History...

Use whatever is most tax efficient, then rebalance to your target allocation using your retirement accounts. You haven't provided enough info for us to advise.

tlveik wrote: ↑Mon Mar 20, 2023 7:44 pm I was adding beneficiaries to my Vanguard account and decided to add a couple charities as beneficiary. Should I notify them now that I did that? Or just have my executor notify them when I die?

Couldn't hurt to do both.

Yes, definitely do some Roth conversions. Back of napkin, I think I'd do up to the top of the 12% bracket at least.

What's wrong with the 350k house? Certainly you can afford the upgrade but seems like you might be stretching your cashflow and might not be able to max your tax advantages accounts comfortably. Wouldn't be worth it to me without a good reason. We do actually like our current house. Mostly wants not needs involved in this move. Big one is current home is 3 bedrooms. We live ~2 hours from our family who visit often and we want them specifically to stay with us for time with kids, etc. DW also works full time from home and the new house has a great office (currently working from kitchen table) . Also neighborhood. We love a lot of our current neighbors but there are increasing rentals and Airbnb in our small neighborhood. Street is congested...

What's wrong with the 350k house? Certainly you can afford the upgrade but seems like you might be stretching your cashflow and might not be able to max your tax advantages accounts comfortably. Wouldn't be worth it to me without a good reason.

What about older TIPS with zero or negative fixed rate?

How about some type of annuity?

Both of my teenagers have Fidelity Youth Accounts. This is their individually owned brokerage and banking account that comes with a no fee ATM card. As parent I can see their balances and activity but they do all the transactions themselves. They mostly use it for banking but they can also buy mutual funds and ETF's through it. As far as taxes go, the income is taxable to the child (same would be the case for UTMA under your custodial control). They need to file a return with over $1,100 investment income, but you can do it for them. The OP here apparently wants the tax reporting to go to the parent's SSN. With a bank account, this is (or was for me, pre-Patriot Act) possible--where the account is jointly owned and the secondary owner is a...

I certainly support you in ignoring the advice and pressure from family. That is generally a terrible dynamic. However, in this case, the problem is they have a point. You are looking at the mortgage as an expense, but a portion of every payment goes to build equity. So it is not exactly an apples to apples comparison between renting/no maintenance and mortgage/with maintenance. In exchange for the maintenance cost, you are building equity over time. Eventually the mortgage will be paid off whereas with renting you will always have that cost. Finally, the mortgage is locked in, while rent is subject to inflation. In real dollars, your mortgage cost is going to go down over time. Up to you how you value the equity, but I think it is simplist...

OldSport wrote: ↑Mon Mar 20, 2023 1:53 pm Isn't somewhere between 70/30 and 65/35 statistically the best AA for long term portfolio success?

Not exactly. The longer your retirement and higher the withdrawal rate, the higher percentage you generally need in stocks. 100% stocks generally has the highest success rates when you get over 30 years. There are only a few combinations where 75% has higher success rate. Once you get under 30 years I would guess that the higher bond allocation comes into play. https://earlyretirementnow.com/2016/12/ ... t-1-intro/

Is it possible to open a joint investment account with a minor (secondary name) who is 16+ ? i.e. I want the minor to have none of the tax responsibilities. I am in California. I don't want it to be a custodial account in name or treatment. What are the restrictions in the type of deposits, and withdrawals, if any, and what type of consent from the minor (!?) would be required to operate the account? Any restriction on any other type of activity, such as adding additional joint account holders, or deleting joint account holders (including the minor) at a later date? Does it just transition to a regular joint account when the Minor attains the age of majority? Thanks Both of my teenagers have Fidelity Youth Accounts. This is their individua...

Here is how I look at it. After buying house, portfolio is $1.8M.

Starting at age 67, you have $39,000 income from SS.
From now until 67, you have $14,000. If you set aside 9 X $25,000, that means you will have $39k taken care of for life.

That leaves you with $1.575M. A conservative 3% withdrawal rate would yield $47,250. $47,250 + $39,000 = total income of $86,250.

That almost exactly hits your goal of $86,000. I think you are good to retire, but there's not much room for error. You still probably want somewhere around 20-30% stocks to stay ahead of inflation.
https://earlyretirementnow.com/2016/12/ ... t-1-intro/

Look at your tax lots and see if you can start by selling any that are down.

I am also a bit confused on the points brought up by the previous two posters. I am also confused about <1% bond and the 90% fixed income. In any case, I think the standard rule of thumb is 4% of the portfolio (with inflation adjustment in subsequent years). However, this assumes retiring at 65 (30 years retirement) and a 50/50 portfolio. https://www.forbes.com/advisor/retirement/four-percent-rule-retirement/ Personally, I prefer a more conservative 3%. Assuming my understanding is correct, you have $2.3M investable assets and you would like $72k a year in today's dollars. Using my preferred 3%, it is close enough. However you portfolio is 10/90 and you are only 58. Personally I would not do it at this time with a 10/90 portfolio. They are...

Biggest concern for me is your asset allocation. With only 10% stocks, your biggest risk is inflation. This portfolio should have a very low expected return, perhaps earning just barely more than inflation over time. If you are OK with slowly spending down your funds that is fine. I do not think this portfolio is a safe bet to produce $72k on its own but since you will be claiming SS you should be OK. As it is you have 25 years expenses (4% withdrawal rate) which is typically regarded as safe but that is assuming at least 50% in equities.

With such a bond centric approach consider at least some allocation to TIPS for inflation protection.

How did the timing work out for you?

Assuming you are getting the market rate, that shouldn't in principle affect your decision. With interest rates in general, you should have higher expected nominal return, whereas you should have had lower expected nominal return with lower interest rates. Should be more about risk tolerance and need, willingness, and ability to see extra return. If that hasn't changed, let it ride.

Can you not consolidate them into one account?

The benefit is higher reward, the downside is higher risk. Does your increased ability to take risk outweigh your reduced need for returns?

Do not kid yourself about diversification. The addition of *more* investments does not make a portfolio diversified if they are high risk and concentrated positions.

Fidelity Cash Management Account and brokerage account. Yes, That's exactly what i'm talkin bout -and- Not what we want... Most are requiring(2 Accts) like a 1.CaskMgmtAcct -AND- 2.BrokerageAcct (*TwoAccts*) Thats TwoAccts!, with movements,Balances, reports,transfers, RequestsForWithDrawal,CHARGES! & etc... Actually Fidelity would work perfectly. Either CMA or brokerage would be fine. Both allow check writing and brokerage services without a separate account. You can also use them together if you want the brokerage account to be strictly segregated, but it sounds like you don't want that. The differences between the two: -CMA comes with ATM rebates but forces you to use FDIC insured sweep account yielding 2.2% for the core account (mea...

Fidelity Cash Management Account and brokerage account.

Yes, your list is correct. Instead of viewing capital gains as comparable to dividends, think of dividends as forced capital gains.

My safe withdrawal rate is determined by whatever dividends my portfolio pays. A dividend is a withdrawal from a company's NAV. I believe, even if imperfect, the dividend payers are better at determining what is safe than I am. If I had to spend more than the available dividends, I think it would be difficult to come up with a SWR, but I would subtract out the dividends from whatever I needed to cover expenses. That might make the calculation easier in that there was less at stake. The amount of your dividends has nothing to do with Safe Withdrawal Rate. SWR is the constant dollar number you can safely withdraw inflation adjusted based on historical data. If you are withdrawing dividends, you are using a variable method which may be safer ...

Is TDA the same as traditional IRA? Intuitively I would wait on SS as long as possible to allow you to do bigger Roth conversions now.

The IRS has guidelines for self employment. I do not believe actually turning a profit is necessary to having a business as long as you meet enough other criteria. It appears you can claim the expenses as long as you intend them for a business. You are taking some risk you will need to back up your intent in an audit. Also check regulations on claiming deductions for equipment that is used bor both business and personal purposes. https://www.irs.gov/newsroom/earning-si ... a-business

Loandapper wrote: ↑Sun Mar 19, 2023 12:24 pm

aristotelian wrote: ↑Sun Mar 19, 2023 11:06 am Two were locals, one was a major national insurance company. They advised me to use providers that offer eBills. Coincidentally I have tried to set it up to pay my BofA credit card, and it says e-bill eligible but fails when I click to enroll. I have pretty much given up!

I’ve never experienced a delay and I send paper checks thru Fidelity’s bill pay system every month.

Fair enough, this is just my experience. What kind of bills do you pay? I think it would work when you know the amount and a schedule it well in advance, like a rent check.

burritoLover wrote: ↑Sun Mar 19, 2023 10:54 am

aristotelian wrote: ↑Sun Mar 19, 2023 10:49 am I don't know how it compares from BofA, but the couple times I used Fidelity bill pay the turnaround time was unacceptably long, at least 3-4 weeks until check was cashed. I would do paper checks or ebills only with Fidelity.

Were these small local companies or something?

Two were locals, one was a major national insurance company. They advised me to use providers that offer eBills. Coincidentally I have tried to set it up to pay my BofA credit card, and it says e-bill eligible but fails when I click to enroll. I have pretty much given up!

With that much in cash I would definitely try to earn some return on it, whether that is fixed income options at Merrill Edge or transferring to Fidelity.

If you are not using the ATM card, Fidelity brokerage account may be better than CMA because you can select a money market fund as your core account and earn higher yield without having to go through any hoops (currently 4.5% vs 2.2% for the FDIC insured core account).

I don't know how it compares from BofA, but the couple times I used Fidelity bill pay the turnaround time was unacceptably long, at least 3-4 weeks until check was cashed. I would do paper checks or ebills only with Fidelity.

It is likely whatever they would have been invested in would have performed worse. Assuming you informed them of the risks they were taking I think you gave them fine advice.

I would go with Schwab over Vanguard to be honest. The only downside to Schwab is their settlement account does not give good interest. Everything else.is as good or better than Vanguard, especially their customer service.

If I had to pick one though it would be Fidelity.

erp wrote: ↑Sat Mar 18, 2023 6:13 pm It's a good question though if selling now turns the 6k of interest into capital gains and thus state income taxable. I haven't tried this before so I don't know how it gets reported by the broker.

This is they key question and a major reason why I do not buy brokered bonds in taxable accounts.

No. No real reason not to. The platform is fine and service has been good. However, the rewards program is the only reason I opened an account there and the only reason I am staying.

Seems like more of a sideways spiral

Sometimes they will refuse to close the account but they can't force you to use the card so you can always just let it sit with a zero balance. As far as getting the bonus, you will need to read the fine print, each one is different.

I am pretty sure when you receive a return of contribution you report it in the year you received it. If you corrected it after Dec 31 but before April 14, I am guessing you will report the 1099-SA with next year's taxes.

If you leave your W2 as is for now, what options does Tax Act give you? I agree, you should not manually correct the W2 because it sounds like you got a return of contribution from your custodian.

Any three stocks you pick would have the same expected return as the market but much higher risk. Not sure why you would want that. Seems like an excellent way to lose $100,000.

FYI there is only one Safe Withdrawal Rate which has worked with a given allocation over a given timeframe. The question of "which" SWR has worked is nonsensical because it's not something subject to choice.

There are an infinite number of withdrawal rates and systems that individuals may be using successfully.

For such discounts with auto-pay you give your service providers your routing number and account number and they pull the money from your account. That way they have all the information they need to bill you and without credit card fees and so forth. Bill pay is a push -- you have Fidelity or your other bank send (push) money to your service provider. They are not the same. Thanks. Yes I understand the difference but the Fidelity rep did not which is why I posted. Cash mgmt sounds like a good deal so I will open the account.My HSA is there so it should be easy. You will set up the autopay through T Mobile. Just give them your routing information and you should be good. You won't use bill pay or anything on Fidelity's side In some ways brok...

I would also recommend M1 Finance for this use case. Just be aware of a few things:

No support for Spec ID. They use an algorithm to sell shares with losses first. To control your losses/gains you need a separate account at Apex Clearing to view your cost basis data and then hope you sell the right amount.

They encourage you to use email for support and it can take a while.

$75 transfer out fee.

The expected cost to the government is the same as with nominal bonds, just as the expected return to the consumer is the same. They each protect against different risks and are exposed to different risks. I would say the benefit to both is the ability to finance debt as well as debt-diversification in case inflation is higher or lower than expectations.

My first guess would be exposure to financial sector during the SVB crisis.

Tax loss harvesting is nice but it's a marginal benefit. Optimizing tax loss harvesting seems like a marginal optimization of the marginal. The maximum benefit to anyone is $3,000 deduction per year. Anyone who has enough money for direct indexing to make a difference is going to have big enough losses to max out the deduction through tax loss harvesting with ordinary index funds. Just seems like a solution in need of a problem.

My point is almost all interest rates are rising. The FED official rate. Rates paid by myriads of banks (including my Am Ex HYS), rates charged by myriads of banks on credit cards, car loans, mortgages, etc. On ALL this stuff, EXCEPT iBonds. That just sounds too fishy to me. As if it's a conspiracy that the govt is saying, this is too good for people, so we have to finagle some way to pay much less. I guess,when I decided to get the iBonds, I knew it could go down in the rate, I get that. But I thought I didn't have to worry about it going down significantly until when/if, the FED started dropping rates like hot potatoes, like they did in the many years prior to 2022. And I did not think that was an unreasonable assumption. Why would you a...

I'd be happy to cash those checks for you.

Sounds similar to TIAA Traditional Annuity which requires 9 years to liquidate. You're getting off easy! Unfortunately these things happen when you get your retirement plan from an insurance provider instead of investment brokerage.

nalor511 wrote: ↑Thu Mar 16, 2023 3:56 pm

aristotelian wrote: ↑Thu Mar 16, 2023 3:41 pm Apologies, yes it is $250. I believe they charge $75 for any ACATS transfer. If the market goes up I will probably cash in the shares and withdraw cash. I have some gains rolling over so it shouldn't cost me anything.

Is there a button to close your account online for Axos? Or live chat? I hate calling these places, and I'm not going to do a $75 acat-out for a $2k account. Thanks for any info

I don't think so. Like I said, my plan was to withdraw cash to zero and let them close the account. The charge is annoying but you're still coming out ahead $175 even with an ACAT.

If anyone is interested in a quick and easy one, it is hard to beat $200 for $2,000 at Axos Invest. I just went for this one. https://www.axos.com/invest/Pages/Bonus-Offer First purchase was weird. I bought 1 share of an ETF and received confirmation. I logged back in and it was showing as 2 shares. The rep said it was showing as 1 share on the back end but for some reason was showing as 2 shares on my end. They fixed it over the weekend but so far they aren't off to a good start. It's now $250 bonus for $2,000. Self-Directed Trading account requires 2 trades. Application must be submitted by 3/31/2023 to qualify. Trying to find information on account closure fees, and so far this is all I've found (https://www.axos.com/invest/support): Ar...