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Will any cap gains taxes result from the sale of the home (is her cost basis less than $400K)? If so, I would hesitate to incur additional cap gains on the sale of taxable investments in the same year the house is sold, and I would spend some money toward preparing the house for resale (clean, paint).

I would keep the Roth IRA in 100% equities -- can be transferred to another brokerage without creating a taxable event -- spend this last -- can be left for legacy if not needed. I would keep at most 30% of the remaining investment portfolio in equities.

"Age-appropriate": I am 75 and retired, so will comment as if I were in your mother's situation and turning over POA to my son. Your mother's declining health is more of a factor than her chronological age -- so forget about looking for "age-appropriate" investments. RMDs: For the annuity payment to quality as an RMD, it must be invested within the tIRA, which suggests that some portion of the tIRA must stay invested "as is." I know nothing about annuities, so will leave it to others to comment on how and whether your mother's tIRA may be moved to Vanguard funds while the annuity is still paying out. LTC policy: Some policies have a 90-day (or longer) waiting period before they go into effect, even after it is ...

Update: The structural engineer confirmed that the City will allow us to replace the existing retaining wall with a new wall that also sits on the property line, so unless the next-door neighbors object, I'll keep it that way.

The engineer explained that (if we had to move the wall to one property or the other), placing the wall on the higher elevation would require a steeper foundation/footer (underground) to support the wall than if it were placed on the lower elevation side.

I am still waiting for the engineer's report before we can move forward with getting estimates on repairs.

I just went through an annoying experience with homeowner's insurance (for which I am beating myself up). I made the mistake of calling my homeowner's insurance company (Farmer's) to find out if repairs for minor damage to my property ("hit and run") would be covered under my policy. Farmer's reminded me that I have a $2500 deductible, which I knew was likely more than the cost of repairs. They advised me to get an estimate on my own for repairs but they wanted more detail, and I agreed to send photos of the damage. Before I was able to get my own estimate (I was isolating with Covid), Farmer's filed a claim, based on the photos, and came back with a report telling me they would pay $0 on it because their estimate ($700) was less ...

Edit: duplicated deleted

I invested in PONAX in 2017 in my rollover Fido IRA, at the suggestion of my Fido advisor. I continue to hold it and have no plans to exit. OTOH, a few months ago, I exited TRowe's actively-managed New Income (PRCIX) and Total Return (PTTFX) bond funds in my rollover TRowe IRA in favor of QM US Bond Index fund (PBDIX). Here is a comparison of the weighted average duration of the above funds, showing that PONAX holds, on the average, bonds with shorter duration than the typical core intermediate bond fund: PONAX -- 3.22 years PRCIX -- 6.13 years PTTFX -- 5.86 years PBDIX -- 6.28 years Just for fun, I adjusted my investments in PONAX and PBDIX to have equal value a few months ago. Current values: PBDIX = $26,622 PONAX = $26,941 That is, PONAX...

Can you just face the old wall with a new wall that would then "thicken" the existing retaining wall which would keep it on both property lines? There is no issue with entering into a binding maintenance agreement regardless of where it is located I would think. Alternatively, you could split the cost evenly for the full construction then put the higher expense retaining wall on your property and the higher maintenance fence on the neighbors property? Then it would divvy up the ownership/maintenance and installation costs for future owners? Creative! But not practical. I appreciate all the suggestions I am getting, as it is helping me think through more possibilities. There are already two footer walls on my side of the property ...

I suppose it comes down to which conversation you'd rather have in 30 years: "Hi Neighbor, there is a problem with your wall , but I'm willing to pay half for the repairs." Or, "Hi Neighbor, there is a problem with my wall , and I want you to pay half for the repairs." Also, on some suburban plots, 2' is a fair portion of the yard to give up. The current failing retaining wall was likely installed 60-70 years ago (with one-inch mortar joints and without reinforced steel or weep holes). No maintenance has been done on the wall in the past 35 years (when the footer wall was added). No drainage is provided in the neighbor's yard, so that water runoff intrudes through the wall and into my yard (as evidenced by efflorescence...

If you have room, you might be able to use a series of non-permit required walls. Something to discuss with the engineer. Re: who should own it? The neighbor would be my choice. I think I would prefer that the neighbor own the wall. I see no advantage to avoiding a permit. I want licensed contractors to do the work. Not enough space for parallel walls; the sides of our houses are less than eight feet apart. This section of the wall extends from the sidewalk to about five feet past the side of my house. Here's what I read about "tiered walls": Use of tiered walls is a special condition where two or more short walls, horizontally offset from one another, are used in lieu of a single tall retaining wall. When tiered walls are not pr...

Update after talking to the City and having the wall inspected: Regarding utility easements, the CIty told me that before digging any trenches to repair the retaining wall, I would need to contact utility companies to ensure that no utility lines would be at risk (even if no easements were shown on the title insurance). The next-door neighbors agreed to sharing the cost of hiring a structural engineer to inspect the structural integrity of the retaining wall that sits on our boundary line. The engineer is recommending that the oldest section of the cinder-block retaining wall / privacy fence (25 linear feet) needs to be completely demolished and replaced. He did not red-tape the wall but recommends it get done this year. The engineer told ...

I withhold excess taxes from tIRA withdrawals (used to satisfy my RMD) to pay taxes on Roth conversions planned for later in the year. This would not apply until you reach RMD-age.

As an alternative, I can re-invest the RMDs in a taxable account and then use the taxable account to pay the conversion taxes. The effect is the same, except that I can avoid paying quarterly estimated taxes.

Thanks for the responses. I thought maybe I was missing an update for 2023 .. but I guess that's it.

My son works at a tutoring center (mostly high-school and middle-school students) and will likely need to miss at least one day of work due to isolation for Covid. This is a part-time job for which he receives no benefits other than hourly pay (no sick leave, vacation pay, health insurance). Following local rules (LA County), he needs to isolate for at least five days (counting onset of symptoms as Day 0 and counting his positive test date as Day 1).

I am wondering if he can request "exclusion pay" from his employer -- his exposure was outside of work
https://www.dir.ca.gov/dlse/COVID19Reso ... y-ETS.html

I share your dilemma in deciding whether to withdraw from intermediate vs short-term bond funds. On one hand, the advice has been to withdraw from the best performing fund, which would likely now exceed your desired allocation. For me, there was an 8% drop for intermediate-term bond funds, but only 3% drop for short-term bond funds. That implies withdrawing from ST bonds. OTOH, the advice has been to steadily increase the ratio of short-term bond funds with respect to the overall bond fund holding. That is, put the short-term bond funds on an increasing glide path after reaching retirement, even if your overall AA of equities to fixed income remains constant. For example, in a 60/40 portfolio, start with 25% of bonds in short-term and gradu...

1) How complicated is your current financial situation? You may be adding complexity (and costs) where none is needed. Maybe consider just simplifying what you have. 2) Do you feel a need to control from "beyond the grave"? Would you be horrified if (you passed first) and your wife used her inheritance to live a more extravagant life style? Would you be disappointed if she gifted most of it to one offspring but not the other? I will share my parents' experience: My Dad was a day-trader well into his late 80's. In 2000, he held about $2M in a portfolio of over 100 different investments (individual stocks, munis, mutual funds). My Mom, two years younger, had no interest in investing. They owned two homes (no debt) and lived comforta...

I see no reason for Roth conversions. The IRAs total about $144K, of which about $13K will need to be taken as an RMD in 2023 (depending on balances at the close of 2022). The withdrawal rate for RMDs in future years (percentage increases each year) is likely to exceed the growth rate of the IRAs.

jarjarM wrote: ↑Mon Feb 06, 2023 9:16 pm

andypanda wrote: ↑Fri Feb 03, 2023 7:50 am My buddy says to beware Valentine Day scams. He ordered his wife some jewelry and they sent him a new fishing rod.

I'm ashamed to say that I only understood what happened on 2nd read

Can you explain it to me -- I still don't get it. Is it a play on the word "fishing"?

I think you are doing the right thing. I will share with you a tale of caution. My sister was 24 years old when she married her husband (10 years her senior), who was starting a surgical residency. There were years when he made an extraordinary amount of money as a cardiovascular surgeon in a VHCOL area. They spent every penny and saved nothing for retirement. They considered the stock market "too risky" and put money into an expensive home. Instead of paying off their home, they used it as a "debit card" for luxury vehicles, private schools for their children, expensive vacations. My BIL was forced to retire at age 80 due to a diagnosis of Parkinson's Disease. My sister is now a widow in her early 80's, living on social...

aj76er wrote: ↑Sun Jan 29, 2023 1:10 pm We had a 2013 MacPro, and we recently updated. Figured 10yrs is a good run for a computer, and I wanted TT support for the download version.

The setup and migration was seamless and the new computer (M1) is super fast.

+1

When faced with a similar situation, I chose to draw on a HELOC rather than withdraw funds from my rollover IRAs. This was a few years ago when the interest rate on my HELOC was about 4%, and I was expecting a "windfall" on the pending sale of undeveloped farmland. I was hesitant to draw from my retirement funds as I was already retired and would not be able to "replace" my withdrawal.

In retrospect, a better choice would have been to find a new lawyer at that point.

According to Intuit (Turbotax), it needs to be reported as taxable income on federal, but not on state. I received the 1099-MISC this week as well.

... He suggested increasing gifting as much as we can or want. Also, we have a LTC policy and he suggested to not deplete the Trad IRA completely as this could be a source to pay for future LTC expenses not covered by the policy. Many balls to juggle! ... - have him/her check on secure act 2 section #334 - it allows for LTCi payments from trad IRA without penalty (2026 fwd). Smitcat: Can you clarify what you meant? Secure Act 2 Section #334 says that payments for premiums for an LTCi policy (in future years) can be made without penalty from a tIRA. The OP was talking about paying for future LTC expenses from their tIRA (not the premiums). Either way, there would be no penalty for withdrawals from a tIRA after age 59-1/2. What am I missing?

crefwatch wrote: ↑Tue Jan 24, 2023 2:46 pm Michael, you don't make it clear whether you would have to change financial services providers to switch from a TRP fund to a Vanguard Fund. I doubt you can get Vanguard at a TRP branded IRA account.

Vanguard mutual funds (and ETFs) are available at TRowe with no transaction fees, but must be held in a brokerage account and not in a mutual-fund account.

Based on the information you gave about your finances, I agree that you can retire now. I had planned to retire at age 62 and met with a financial advisor to run the numbers for me. I paid him a one-time fee (I think it was $1200) and shared with him all my financial info. He had many clients at the company where I worked (he was frequently invited to give retirement planning seminars at my company), so I expected him to be familiar with my company's pension plan, which has a complicated formula for adjusting the pension payout over time. After running the numbers, he provided me with a multi-page report and concluded that I could retire from my job but would need to take at least a part-time job to make up for the gap, which he projected w...

Call 800-240-0223 if you have problems with the debit card. I just called to check my balance.There is an option on the phone to report lost or stolen cards.

I had no problems with my card. I used it the way I would use any debit card. I used it to pay for groceries at point-of-sale and to pay my annual gym membership fee in-person (gym has started charging a fee for using a credit card).

Of the funds listed, the only one in which I have invested is the Fidelity floating rate bond fund (FFRHX). I hold it in my rollover IRA. It represents about 14% of my holdings in bond funds at Fidelity. It is highly correlated to equity (market risk) but has very low sensitivity to interest-rate risk. In other words. it tanked with the market drop in early-mid 2020 but was immune to interest rate increases in 2022.

The glide path on target date funds is different from the glide path on 529 age-based funds, and neither glide path would mimic an LTC policy. Generally, target date funds assume that the investor saves regularly until retirement at age 65 and enjoys at least 20-30 years of retirement. Many target date funds currently glide from 60/40 or 50/50 at retirement to 30/70 within the first 15-20 years of retirement. They assume a SWR (4%) annually and keep at least 30% invested in equity to keep up with inflation. Target enrollment (age-based) 529 funds typically assume that no withdrawals will be made until the beneficiary enrolls in college (turns 18) and that the funds will be depleted within 4 or 5 years of starting withdrawals. For example, t...

I looked up the RJ Bank Deposit Program (OP's MIL has $29K invested). This is RJ's sweep account. It currently pays 0.25% in interest for accounts with less than $100K invested; 0.50% interest for accounts between $100K and $250K. This investment would need to be liquidated on transfer to another brokerage and deposited into the new brokerage's sweep / MM account.

Fidelity offers a high-interest money market fund, FZDXX, that requires a minimum investment of $100K. I don't know what other brokerages offer. But this would be one fund to consider for the most conservative portion of the portfolio.

If you decide to transfer some of the stocks "in-kind" (without liquidating them) and want to hold on to them for at least a year (to avoid a large capital gains tax all in one year), consider both the potential cap gain and which ones are paying dividends.

Transferring all funds at RJ "in-kind" to Fidelity (or Schwab or Vanguard) may incur transaction fees. For example, CIBCX and PINDX are both listed as transaction fee / load-funds at Fidelity. That is, there may be a "front-end" fee for investing in the funds and/or a "back end" fee for withdrawing the funds. OP's MIL may have paid a front-end fee for the initial investment at RJ and/or may pay a back-end fee to close out the funds at RJ. There would be a transaction fee for purchasing additional shares of CIBCX and PINDX at Fidelity after the initial transfer. If you decide to move all funds from RJ to another brokerage, it may make sense to liquidate the load mutual funds at the time of the transfer, even tho...

This thread reminds me of one of my favorite childhood books -- "The Saturdays" https://www.amazon.com/Saturdays-Melendy-Quartet-Elizabeth-Enright/dp/0312375980 In summary, the children pool their weekly allowance and take turns on spending the pot. I recall starting my son on a weekly allowance ($6) when he was 6 years old. The Tooth Fairy also handed out cash. I don't think the money gifts had much impact on teaching my son anything about handling money. He simply stuffed the cash into a jar and ignored it. When my son reached high school, I had him open a checking account with a debit card, to which I continue to contribute monthly. He is now 26 years old and has been working at his first W2 job for a year. When he started his ...

I divorced my ex-husband at age 27 after 5 years of marriage. We had no kids and no assets other than a two-year old car that I had purchased with money I had earned, saved, and invested in the stock market prior to the marriage. I let my ex keep my car as it stank from the cigarettes he smoked. I had been the primary breadwinner for all but the first year of our marriage. Our combined income went into one checking account and we had no savings. I had paid off and cancelled all the credit cards before leaving the marriage. At my parent's suggestion, I stayed with my husband an extra six months, worked overtime at my computer programming job, and sent my overtime pay to my parents to payoff a loan we had taken from them. Later, my parents re...

I am also single, in CA, age 74 ... Your 59/41 AA is close to the Vanguard Target 2025 retirement fund, which allocates the following: Total Bond Market 28% Total Int'l Bond 13% Short-Term Inflation Protected 3% Stock: 56% OTOH, your age matches more closely to the Vanguard Target Income fund, which allocates the following: Total Bond Market 37% Total Int'l Bond 16% Short-Term Inflation Protected 16.5% Stock: 30.5% I suspect that Vanguard is advising that you keep a higher %age in short-term bonds based on your age instead of basing it on your desired AA. That is, there is an assumption that you will need to withdraw more from your portfolio within the next three years than an investor who is a couple years away from retirement. I am also w...

The references given by NoRegret widen the momentum strategy beyond sectors -- for example, to U.S. vs non-US, growth vs value, and large-cap vs mid-cap. I think the OP was referring to a strategy that adjusts equity weighting based on the expected return (sector rotation) or past return (momentum investing) of the respective 11 stock sectors (e.g., IT, health care, consumer discretionary, consumer staples, ...).

One problem with these strategies is that the various components (stock sectors) are not equally weighted by market value. For example, shifting a large %age from IT to materials would have a bigger impact than shifting in the opposite direction, assuming that the portfolio started with a market weight in each sector.

Are you a year older?

As of Jan 2022, RMD tables changed: at age 74 in 2022, the RMD life expectancy factor is 25.5 instead of 23.8 from the “old table." In 2023, the RMD life expectancy factor is 24.6 for age 75.

Perhaps an alternative to this is looking at "momentum ETFs" like MTUM. It rotates sectors for you to an extent while still being pretty diversified and not a terrible expense ratio. Right now, for example, it's overweight energy and healthcare. In the recent past few years, it was overweight tech. Not the worst holding to have but certainly not guaranteed to give outsized returns, but at least simpler than rotating sectors on your own. I've held MTUM in the past but don't right now. The expense ratio is only 0.15% although not as tax efficient as other funds because of turnover but certainly better than changing sector ETFs. I have held a position in MTUM (in a rollover IRA) for several years -- it is one of a few funds I kept a...

Thank your for the responses. I am feeling less anxious about my AA. I plan to rebalance my rollover IRAs this week to an AA of 55/45 (equity / fixed income) and to maintain that going forward (with 5% bands), without considering fluctuations in my overall AA. I am using target date funds to help model my AA plan; however, I am "lighter" overall on international. For example, Vanguard 2025 has 30% of bonds in international, while TRowe 2025 allocates 25% of bonds to international. I need a plan for shortening bond duration over time. Not sure where I am or how much to shorten each year! I suspect that increasing int'l bonds would lengthen duration. As an update, my pension for 2023 is decreasing by 11.8% :shock: while an 8.7% incr...

For two years (2014-2016), I had a rollover IRA that was invested in a managed portfolio using a sector-rotation strategy (ETFs). I was not able to discern any rationale for monthly shifting among sectors. My experience was that the strategy underperformed, but the high expense ratio for the managed account probably contributed to the overall underperformance.

It would be time-consuming to manage a portfolio on your own in this way. For example, how would you decide if this is "the right time" to add more tech, communications, and consumer discretionary? Has energy reached its peak? Will biotech be the next big thing? How often would you re-evaluate and reassign your positions?

Received my debit card today. I owed taxes to CA in 2020 when I filed my return electronically; I'm guessing that's why the refund was not direct deposit.

jebmke wrote: ↑Tue Dec 27, 2022 8:16 am

tibbitts wrote: ↑Tue Dec 27, 2022 8:12 am I guess I'd assumed that both deductions and also exemptions would revert, along with the intermediate inflation adjustments to them that would have happened along the way if they'd remained in place all that time. I'm glad I don't have to do that math.

At the time, TCJA was a wash for us. I'd have to run numbers with new data for post-sunset but not worth the bother right now.

+1

Actually, my effective tax rate increased with TCJA because of SALT, even though my marginal tax rate decreased from 25% to 24%. I'm looking forward to lower taxes after TCJA sunsets, but no way to predict what other changes may come along.

In the years preceding my retirement, I was comfortable with an 80/20 AA. At retirement, I had no Roth accounts but held about $400K in tax-deferred (403b, tIRA, and a rollover IRA) with 78% in equities, 20% in bonds, and 2% in MM. I held about $12K in US EE savings bonds. Since retiring, my overall AA is now closer to 70/30. My portfolio has more than doubled, and I have moved nearly half of tax-deferred into Roth IRAs. I consider my Roth accounts to be "excess wealth" -- this is 95% equity and 5% cash. I plan to leave the Roth for legacy and gifts -- that is, not spent for at least a decade. I have about $450K remaining in tax-deferred (two rollover IRAs). I plan to convert about $50K more to Roth over the next few years. I was ...

In response to the questions asked about my financial risk profile: I have income from SS, pension, interest, and RMDs. My pension is not COLAed; it is similar to a variable annuity in that the income is based partly on the performance of the underlying funds. Historically, it has increased 7 out of every 8 years. I won't know until January whether it will go up or down next year. Pension and SS cover my basic expenses, but high inflation (especially food) is a risk. RMDs are spent on donations and big ticket items, such as home repairs / improvement. I have some big goals remaining for my money in retirement. I remodeled my home but have a bit more left to complete. In a few years, I plan to sell my house and upgrade. My portfolio is inves...

Thank you for your responses. In summary, I am hearing that is reasonable to stay at a steady ratio of equities to bonds over my retirement years, but consider a glide path within the bond portion, such that I increase short-term TIPS versus nominal bonds (intermediate-term core bond funds). I am less clear on the discussion of "equity duration," which seems to suggest a tilt toward value equities.

I will follow up with another post to answer more of the questions I was asked.

sumfishing wrote: ↑Fri Dec 23, 2022 7:26 pm Ok, thank you for that.

If you were to contribute to a 529, where you are the account owner and your young adult son is the beneficiary, would you include those 529 contributions as a part of your total support for the purposes of deducting his medical expenses on your taxes?

I would not include a 529 contribution as part of my support because this is money that has not been spent. There is considerable debate over whether a 529 distribution to pay for qualified educational expenses should count toward support. If I paid tuition directly then it would definitely count toward support.

Not sure if I understand your question, but here is my take on the rules: I am able to deduct medical expenses that I pay this year for my young adult son (if I itemize), although he does not meet the criteria for qualifying dependent or qualifying relative. My son is 26-years old, has lived at home all year, I provide more than half his support (food, housing, transportation). I gifted about $16K to him this year. $6K of the gift "reimburses" his Roth contribution for the year -- I do not count this as support. The other $10K in gifts goes toward what I would consider discretionary spending (new clothing, gym membership) and savings -- I suppose that some portion of this could be considered support as well. I cannot claim my son ...

I retired ten years ago at age 64, but I continually question my AA of equities versus bonds for the remainder of my retirement years. Should I hold steady at my current desired AA or should I gradually shift more to bonds? I have looked at target date funds, which advocate a glide path over a 30-year retirement period. For example, the TRowe Retirement funds start at 55/45 at retirement and shift about 4% every five years until 30 years after retirement where they hold at 30/70 AA. TRowe's newer Target funds start at 42.5/58.5 at retirement and shift more gradually until 30 years after retirement where they hold at 30/70. I find the idea of a "target date" post-retirement emotionally charged or meaningless -- not exactly equivale...

I take my QCDs and RMDs in the first quarter to leave time for Roth conversions during the remainder of the year. I spend my RMDs (mostly on donations and taxes) and refill the MM bucket before the end of the previous year to cover the next year's RMD. I wait until at least early February to complete my RMD. This is because I don't know how much in taxes to withhold until I get my second pension statement on Feb 1. The tax withholding on my monthly pension adjusts after the first payment on Jan 1. Once I have a good picture of my income and withholding for the year, I can calculate my safe harbor amount. I like to avoid having to make estimated quarterly tax payments. In recent years, the market seems to have established a pattern of droppi...

At age 120, the RMD is likely to deplete the portfolio, regardless of return rate and starting balance. Using the example given ($1M at age 72 and a 5% annual growth), at age 120, the balance will be about $1400 and most of this will need to be distributed for an RMD.

LuckyInLife wrote: ↑Mon Dec 12, 2022 4:38 pm

MrCheapo wrote: ↑Mon Dec 12, 2022 3:00 pm Hi All,



a) I can claim the two kids until 24 as dependants which gives me $4K

Once your kids are over age 17, you can only claim them as "Other dependents" for a $500 tax credit each.

If the OP is filing as HoH and not MFJ, then OP will need to file as single taxpayer if neither child can be claimed as a dependent. There's a big difference in the std deduction for HoH versus single taxpayer -- but tax rules may change over time so can't predict too far in advance.

I like the Schwab RMD calculator for projections.https://www.schwab.com/ira/ira-calculators/rmd