Search found 1496 matches

by birdog
Mon Mar 18, 2024 2:34 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 58
Views: 5690

Re: New insights on safe and perpetual withdrawal rates

Really good info here. It was nice to play around with the calculator, inputting different numbers and seeing the results. One thing I learned that I found interesting is that going from U.S.- only to including international equities actually lowers the SWR. I wasn't aware of that. That’s what generally happens when you know in hindsight what has performed best. But it speaks to the limitation of the data available. If we look at any single country’s SWR, globally investing materially improves SWR on average compared to any given domestic market If global investing improves SWR over any single country's SWR then why does the calculator show that adding Int'l to a US-only equity portfolio lowers SWR? Because the US is not the only country i...
by birdog
Mon Mar 18, 2024 2:22 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 58
Views: 5690

Re: New insights on safe and perpetual withdrawal rates

Nathan Drake wrote: Mon Mar 18, 2024 2:02 pm
birdog wrote: Mon Mar 18, 2024 1:06 pm Really good info here. It was nice to play around with the calculator, inputting different numbers and seeing the results. One thing I learned that I found interesting is that going from U.S.- only to including international equities actually lowers the SWR. I wasn't aware of that.
That’s what generally happens when you know in hindsight what has performed best. But it speaks to the limitation of the data available.

If we look at any single country’s SWR, globally investing materially improves SWR on average compared to any given domestic market
If global investing improves SWR over any single country's SWR then why does the calculator show that adding Int'l to a US-only equity portfolio lowers SWR?
by birdog
Mon Mar 18, 2024 1:06 pm
Forum: Investing - Theory, News & General
Topic: New insights on safe and perpetual withdrawal rates
Replies: 58
Views: 5690

Re: New insights on safe and perpetual withdrawal rates

Really good info here. It was nice to play around with the calculator, inputting different numbers and seeing the results. One thing I learned that I found interesting is that going from U.S.- only to including international equities actually lowers the SWR. I wasn't aware of that.
by birdog
Mon Mar 18, 2024 12:31 pm
Forum: Investing - Theory, News & General
Topic: Awesome Portfolio: 20% Stocks..20% Bonds..20% Cash..20%Real Estate, 20%Gold
Replies: 38
Views: 3838

Re: Awesome Portfolio: 20% Stocks..20% Bonds..20% Cash..20%Real Estate, 20%Gold

veggivet wrote: Sun Mar 17, 2024 2:32 pm Yes, awesome indeed, as long as you eliminate gold and real estate, increase stocks to 80% and hold only what you need for a year or so in cash.
This is about where I am on the proposed portfolio as well. When I saw as much in gold as in equities I thought it was a joke.
by birdog
Sun Mar 17, 2024 2:17 pm
Forum: Personal Investments
Topic: Undoing non-deductible IRA
Replies: 17
Views: 1067

Re: Undoing non-deductible IRA

toddthebod wrote: Sun Mar 17, 2024 12:40 pm
birdog wrote: Sun Mar 17, 2024 11:48 am Here's the only way, besides converting the entire amount of tIRAs in her name, to clean up basis from non-deductible IRA contributions. (10 min video)

https://www.youtube.com/watch?v=8G2GHkTen4k
You don't need a 10 minute video to tell you to rollover the pre-tax dollars into a workplace plan.
Actually, I did. It was news to me and I had never heard of it until I watched the video a few days ago.
by birdog
Sun Mar 17, 2024 11:48 am
Forum: Personal Investments
Topic: Undoing non-deductible IRA
Replies: 17
Views: 1067

Re: Undoing non-deductible IRA

Here's the only way, besides converting the entire amount of tIRAs in her name, to clean up basis from non-deductible IRA contributions. (10 min video)

https://www.youtube.com/watch?v=8G2GHkTen4k
by birdog
Sat Mar 16, 2024 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: Using 529 Funds for Private School vs College
Replies: 6
Views: 673

Re: Using 529 Funds for Private School vs College

I'm not a fan of 529s because of their restrictive nature and without a state tax incentive I personally wouldn't have any interest in them. The fees are higher in these accounts and the investment options can be a bit limited. The argument of passing on unused funds to my extended family doesn't help me either. What if I don't want to pay for my niece's college?! I see no problem simplifying and spending from that account now for private school if you like. And if you continued to fund a 529 for college then I would make sure I didn't over-fund it.
by birdog
Wed Mar 13, 2024 8:52 am
Forum: Personal Finance (Not Investing)
Topic: Schedule D -- Turbotax Premier
Replies: 21
Views: 1702

Re: Schedule D -- Turbotax Premier

You could always use Freetaxusa.com and file for free. It's set up in a question and answer format much the same as TT is.
by birdog
Tue Mar 12, 2024 7:15 pm
Forum: Investing - Theory, News & General
Topic: SPIVA 2023
Replies: 15
Views: 1648

Re: SPIVA 2023

mikejuss wrote: Tue Mar 12, 2024 7:06 pm Curious: does this include hedge funds/private equity/alternative investments--and, if so, how was that data collected?
I don't have the answer to your question but, regarding hedge funds, here's a great story if you haven't heard it before. Vanguard's S&P 500 index fund vs 5 hedge funds over 10 years for a million dollar bet.

https://finance.yahoo.com/news/warren-b ... 00485.html
by birdog
Tue Mar 12, 2024 7:00 pm
Forum: Investing - Theory, News & General
Topic: SPIVA 2023
Replies: 15
Views: 1648

Re: SPIVA 2023

AlwaysLearningMore wrote: Tue Mar 12, 2024 6:47 pm Thank you, Mr. Bogle (RIP), for bringing index funds to the masses, and changing the investing landscape so that average folks have access to these products. You were a titan.
+1
by birdog
Tue Mar 12, 2024 11:04 am
Forum: Investing - Theory, News & General
Topic: SPIVA 2023
Replies: 15
Views: 1648

Re: SPIVA 2023

How has VTSAX done compare to the SP 500? Just curious. I know they are drastically different. Just looked vanguards sp 500 fund has beaten vtsax by about .5% for the last 10 period. Vtsax has beaten it by about .3% since year 2000. Pretty close. Yep, pretty close. They may be different in terms of number of holdings and the fact that total market includes small caps but they are pretty similar in terms of results. They correlate at about 99%. Choosing VTI over VOO or vice versa makes little difference in the performance results. What makes a huge difference, however, is sticking to your strategy and to do that I recommend building an IPS (Investment Policy Statement) that incorporates either VTI or VOO (or similar). Thanks for the link to...
by birdog
Thu Mar 07, 2024 7:27 am
Forum: Personal Finance (Not Investing)
Topic: some turbo tax questions and paper filing
Replies: 30
Views: 2466

Re: some turbo tax questions and paper filing

JerryB wrote: Wed Mar 06, 2024 10:39 pm My taxable 1099’s are pretty simple, so I enter them manually.
Are you saying you enter them manually when in the Forms view in Turbo Tax?
by birdog
Sat Mar 02, 2024 1:00 pm
Forum: Personal Investments
Topic: HSA question
Replies: 11
Views: 1598

Re: HSA question

The HSA is my favorite account. It is better than a ROTH IRA or a traditional IRA in that it is the only account that is triple tax-free. If I had enough income to contribute to an HSA and pay for medical expenses with other dollars in order to allow the HSA to grow, then I would definitely choose the HSA over the FSA.
by birdog
Fri Mar 01, 2024 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: Heatpump tax credit - qualifying equipment?
Replies: 11
Views: 1734

Re: Heatpump tax credit - qualifying equipment?

I am looking at York YZT48 4 ton 17.45 SEER 2 stage heat pump and York AE60C air handler. While expense it comes with 10 years of part AND labor warranty and lifetime on the compressor (and is more quiet which is critical for us due to its location). How expensive is it? Almost $16000 installed with thermostat. That sounds high to me. Approx a year ago I had a Lennox 5 ton 16 SEER heat pump installed along with a new thermostat that is basically a small iPad on my wall (Lennox iComfort E30). I got quotes from 5 different HVAC companies and told each one that I was getting multiple quotes. Quotes ranged from $9K to $13K installed. Then one of the companies called me and said they were slow at the time and that they'd do it for $7K all in. I...
by birdog
Thu Feb 29, 2024 1:40 pm
Forum: Personal Investments
Topic: Going all in on VYM/SCHD?
Replies: 57
Views: 7507

Re: Going all in on VYM/SCHD?

JSPECO9 wrote: Thu Feb 29, 2024 11:40 am The most important thing is that once you find a strategy you "like" that you stick with it. I don't like that you want to switch from VT simply because of performance. I personally prefer to ignore performance once you pick a great strategy because there's always going to be a strategy better than yours. It's detrimental to always be performance chasing.
Agree, regardless of strategy it's likely the OP could improve their performance the most by crafting an IPS and then following it.
by birdog
Wed Feb 28, 2024 8:24 pm
Forum: Personal Investments
Topic: Going all in on VYM/SCHD?
Replies: 57
Views: 7507

Re: Going all in on VYM/SCHD?

protovack wrote: Wed Oct 04, 2023 2:44 pm But IMO VT is not going to perform well over the next 10 years so I sold out of my green lots over a year old. VT still pays a 2% dividend and im not going to sell my remaining portion until it is well in the green,
Interesting, I would have done the opposite and sold the red and kept the green. Selling green lots nets you X amount of cash from VT which you will be taxed on. Selling red lots nets you X amount of cash from VT and creates a tax loss which could offset capital gains and up to $3K of income.
by birdog
Mon Dec 11, 2023 3:51 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing into stocks when they fall is unrealistic
Replies: 176
Views: 20590

Re: Rebalancing into stocks when they fall is unrealistic

carminered2019 wrote: Tue Sep 19, 2023 9:36 am 2020 was the best year I ever gained in one year, went from 60/40 to 100%+ stock . I gained 14x by November 2020 by going all-in on the the stock side and even sold my brand new Porsch for 154k at 18% loss to throw into the market.
Epic.
by birdog
Wed Aug 23, 2023 11:07 am
Forum: Personal Finance (Not Investing)
Topic: Buying a Home: Mortgage or Cash?
Replies: 17
Views: 2033

Re: Buying a Home: Mortgage or Cash?

At a 7 plus percent mortgage, I'd lean heavily towards paying cash.
by birdog
Thu Aug 17, 2023 1:44 pm
Forum: Investing - Theory, News & General
Topic: How much gold should you hold in your portfolio?
Replies: 195
Views: 17936

Re: How much gold should you hold in your portfolio?

happyisland wrote: Wed Aug 16, 2023 6:11 pm
birdog wrote: Wed Aug 16, 2023 6:09 pm
Fpdesignco wrote: Wed Aug 16, 2023 5:54 pm Buy ammo
Agree. I would much rather have ammo than gold.
What are you going to do with ammo? Kill, or threaten to kill, other people? Hunt? What exact zombie apocalypse are you guys planning for?
Take physical gold as an example. If we actually get to a place in this world where whether or not you have physical gold matters, then we are likely in a pretty bad place.
by birdog
Wed Aug 16, 2023 6:09 pm
Forum: Investing - Theory, News & General
Topic: How much gold should you hold in your portfolio?
Replies: 195
Views: 17936

Re: How much gold should you hold in your portfolio?

Fpdesignco wrote: Wed Aug 16, 2023 5:54 pm Buy ammo
Agree. I would much rather have ammo than gold.
by birdog
Wed Aug 16, 2023 12:10 pm
Forum: Investing - Theory, News & General
Topic: How much gold should you hold in your portfolio?
Replies: 195
Views: 17936

Re: How much gold should you hold in your portfolio?

seajay wrote: Wed Aug 16, 2023 2:02 am
birdog wrote: Tue Aug 15, 2023 7:27 pm My gold allocation has always been zero. It seems that Warren Buffett and Jack Bogle were not fans either.
Buffett purchased almost 3,500 tons of silver in 1997
Oh, are we talking about silver now? I don't own that either. It's no secret that both Buffett and Bogle were not fans of owning gold.
by birdog
Tue Aug 15, 2023 7:27 pm
Forum: Investing - Theory, News & General
Topic: How much gold should you hold in your portfolio?
Replies: 195
Views: 17936

Re: How much gold should you hold in your portfolio?

My gold allocation has always been zero. It seems that Warren Buffett and Jack Bogle were not fans either.
by birdog
Wed Jul 26, 2023 8:48 am
Forum: Personal Investments
Topic: Should I move Vanguard mutual funds or ETFs to Fidelity?
Replies: 24
Views: 2049

Re: Should I move Vanguard mutual funds or ETFs to Fidelity?

I would convert the Vanguard mutual funds to Vanguard ETFs, transfer them to Fidelity and then continue to invest in Vanguard ETFs at Fidelity.
by birdog
Tue Jul 25, 2023 10:03 am
Forum: Personal Investments
Topic: Ally Savings Account v Money Market
Replies: 17
Views: 2540

Re: Ally Savings Account v Money Market

4.3% is a touch low for a money market compared to a money market mutual fund at Fido, Vanguard, etc. Based on the amount on deposit you referenced, however, the difference is probably not enough to matter much and I'd lean towards whichever route is easier/simpler/more consolidated.

I don't see anything you're missing, though. I'd choose the MM over the savings as long as no restrictions were present that you couldn't live with.
by birdog
Mon Jul 24, 2023 8:03 pm
Forum: Personal Investments
Topic: Two fund portfolio?
Replies: 16
Views: 2564

Re: Two fund portfolio?

Nope.
by birdog
Sun Jul 23, 2023 4:33 pm
Forum: Personal Investments
Topic: 100% Stocks Early Retirement
Replies: 361
Views: 31143

Re: 100% Stocks Early Retirement

Once every quarter I make sure our checking account has 3 months of our allowable budget plus $5k (just in case) into our checking account. At the end of the quarter we usually have more than $5k and sometimes we have less. I jot down the difference in a rolling 1 year spread sheet and then replenish for another quarter. I keep the checking account outside of our asset allocation. I do something similar except I use a HYSA vs a checking account and then pay my monthly credit card bills via EFT from the HYSA. The quarterly replenishment of the HYSA works nicely with the quarterly dividends that VTI pays. A simple EFT from Fidelity to Marcus recharges the HYSA. As for the OP, I understand the bond aversion as I feel likewise. I only hold eno...
by birdog
Sun Jul 23, 2023 6:35 am
Forum: Personal Investments
Topic: 100% Stocks Early Retirement
Replies: 361
Views: 31143

Re: 100% Stocks Early Retirement

Once every quarter I make sure our checking account has 3 months of our allowable budget plus $5k (just in case) into our checking account. At the end of the quarter we usually have more than $5k and sometimes we have less. I jot down the difference in a rolling 1 year spread sheet and then replenish for another quarter. I keep the checking account outside of our asset allocation. I do something similar except I use a HYSA vs a checking account and then pay my monthly credit card bills via EFT from the HYSA. The quarterly replenishment of the HYSA works nicely with the quarterly dividends that VTI pays. A simple EFT from Fidelity to Marcus recharges the HYSA. As for the OP, I understand the bond aversion as I feel likewise. I only hold eno...
by birdog
Fri Jul 14, 2023 8:57 am
Forum: Investing - Theory, News & General
Topic: The new safe withdrawal rate
Replies: 292
Views: 29490

Re: The new safe withdrawal rate

The article was published in Oct 2013 and called for future stock market returns of 4 to 5%. I went to portfolio visualizer and plugged in VTI from Sept 2013 to present and got a CAGR of 12.4%. Could the argument that 3% was the new 4% be countered with an argument that a 30 CAPE10 is the new 20 CAPE10?
by birdog
Thu Jul 13, 2023 10:36 am
Forum: Personal Consumer Issues
Topic: 20 year old central a/c and furnace - should i proactively replace after summer or wait ?
Replies: 29
Views: 3177

Re: 20 year old central a/c and furnace - should i proactively replace after summer or wait ?

I had a heat pump that was wearing out. I contacted Costco and they contacted a local well-known HVAC company that they were partnered with who sent a rep out to give me a quote. I found out that the quote was higher than if I'd just contacted the local company directly. I was told that Costco has to get their cut and that's why going thru Costco was the most expensive option out of the 4 or 5 quotes that I got (all for the exact same Trane heat pump). Interested to hear what you find out if you go this route. My recommendations are to get multiple quotes now (you will learn so much thru this process) and then wait until the unit is on it's last leg to replace it. My heat pump made it 28 years until I proactively replaced it. Also, this guy...
by birdog
Sun Jul 09, 2023 11:31 am
Forum: Personal Investments
Topic: Looking at VYM in place of Bonds in Taxable
Replies: 21
Views: 2925

Re: Looking at VYM in place of Bonds in Taxable

Taylor Larimore wrote: Sat Jul 08, 2023 6:04 pm Bogleheads:

In 2021 Vanguard wrote an excellent article titled:

"Total-Return Investing: A Superior Approach For Income Investors"

This is the link:

https://investor.vanguard.com/investor- ... -investors

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “People should invest in total market stock and bond funds for the long term. Total market indexing is the gold standard. Anything else, like sector investing, is a dilution of that standard.”
Well said. It's sometimes tempting to make investing more complicated and nuanced than it needs to be. The results, however, year after year, continue to support Jack Bogle's approach.
by birdog
Sat Jul 08, 2023 12:26 pm
Forum: Personal Investments
Topic: Looking at VYM in place of Bonds in Taxable
Replies: 21
Views: 2925

Re: Looking at VYM in place of Bonds in Taxable

VTI is up about 15% YTD. These bond funds (VWUIX, VBIRX, BND) all have positive YTD returns as well. VYM on the other hand, is down on the year. Aside from that fact, it is still not a suitable replacement for a bond fund. I understand sequence of returns risk and am sometimes tempted myself to substitute a portion of my VTI holdings for a higher yielding fund like VYM or PFF and not having to sell off shares anymore. Until I compare total return and see that the higher yielding funds come at a great price. Also, zoom out on the BND (or BIV) chart to long term results and it suggests to me that now is better time to be adding bonds to a portfolio, not subtracting them.
by birdog
Sun Jan 22, 2023 2:30 pm
Forum: Personal Finance (Not Investing)
Topic: Fidelity as a one stop shop
Replies: 5973
Views: 1007657

Re: Fidelity as a one stop shop

What are folks using as a Total Market ETF at Fidelity. At first this would be in a Roth IRA...but later might need to purchase in a taxable account. ITOT is total US market...but I'd prob want global exposure. Any issues with buying Vanguard VTI at Fidelity I should be aware of? ITOT and VTI are roughly the same (neither is giving you global exposure) You can buy any ETF you want at Fidelity, no fees, no problems. I generally like VG when I can. If you want total world, VT. If you want total US, VTI/ITOT. If you want exus, VXUS/IXUS Thanks..that helps. Any advantage to going with a mutual fund over an etf? I plan on DCA'ing into one of these vehicles over the next 6 months. Advantage ETF in 2023, IMO, especially at Fidelity with fractiona...
by birdog
Mon Dec 05, 2022 11:02 am
Forum: Investing - Theory, News & General
Topic: "Sequence of Return Risk" Side Discussion - I can't believe I am thinking this [Panic and Survival 2008-09]
Replies: 219
Views: 10354

Re: I can't believe I am thinking this [Panic and Survival 2008-09]

Marseille07 wrote: Mon Dec 05, 2022 10:46 am I don't know why a bucket is so controversial. When you use a percentage allocation, that's a bucket where the size is measured in percentage.
True, so to speak. However, it does seem that more decision-making must go into managing a bucket approach than a percentage-based asset allocation approach. (Occam's Razor: It is generally understood in the sense that with competing theories or explanations, the simpler one, for example a model with fewer parameters, is to be preferred.) I'm still kicking all this around and definitely enjoy hearing the differing viewpoints but marcopolo has swayed me back towards the percentage AA approach a bit.
by birdog
Mon Dec 05, 2022 10:32 am
Forum: Investing - Theory, News & General
Topic: "Sequence of Return Risk" Side Discussion - I can't believe I am thinking this [Panic and Survival 2008-09]
Replies: 219
Views: 10354

Re: I can't believe I am thinking this [Panic and Survival 2008-09]

marcopolo wrote: Fri Dec 02, 2022 8:37 pm By having the cash, you don't really avoid selling your investments, you simply pre-sold them to build that cash cushion. Whether that is good thing (in objective, measurable terms) depends on how those investments performed (opportunity cost). Historically, it has been a bad bet.
This opened my eyes a bit. I've been tinkering with a bit of a bucket-style approach but this realization compels me to take another look at a fixed percentage asset allocation. (Underlining and bold font in referenced quote were my additions.)
by birdog
Thu Nov 10, 2022 8:06 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

2pedals wrote: Thu Nov 10, 2022 5:19 pm OP,

Have you read "The Retirement Manifesto" on how to set up a bucket and manage it?

https://www.theretirementmanifesto.com/ ... -paycheck/
https://www.theretirementmanifesto.com/ ... -strategy/
I'll check it out. Thanks for sending.
by birdog
Thu Nov 10, 2022 8:05 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

TN_Boy wrote: Thu Nov 10, 2022 3:51 pm OP,

I wanted to make a separate post highlighting this article:

https://www.morningstar.com/articles/84 ... et-it-done

I would personally use "The 'Strict Constructionist Total Return' Approach" were I bucketing; I believe "The Mechanical Approach" is the worst, as it does the least to protect the equities during downturns.
Thanks for the link and your input. I'm still kicking around the details but protecting the equities during downturns is my concern as well. :sharebeer
by birdog
Thu Nov 10, 2022 2:36 pm
Forum: Personal Investments
Topic: Bond Fund Recovery
Replies: 5
Views: 812

Re: Bond Fund Recovery

Assuming the Fed overdoes it with the rate hikes then they'll have to start lowering rates which will cause the share prices of your current bond funds to recover with the intermediate and longer term funds rising at a faster rate than any short term funds. I believe a lot of the current cycle rate hikes are already priced in. Not much to do other than enjoy the higher interest rates while they last for fixed income.
by birdog
Wed Nov 09, 2022 2:48 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

TN_Boy wrote: Wed Nov 09, 2022 10:53 am The subtracting of nonportfolio sources of income from required expenses makes perfect sense and is the way most everybody views portfolio withdrawals needed, using buckets or not!

All she is saying is that if your expenses are say $50/year and you have $20k of social security, then a year of expenses in the bucket is $30k, not $50k. Because you have a non-portfolio stream of income that covers part of your total yearly expenses. That of course is assuming the stream is truly secure.
I agree.
by birdog
Wed Nov 09, 2022 9:56 am
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

This is the famous article by Ms. Benz, definitely worth reading: https://web.archive.org/web/20220527010530/https://www.morningstar.com/articles/714223/article Thanks for the link. This quote from that article tells me she's not counting dividends when filling her buckets. To arrive at the amount of money to hold in bucket 1, start by sketching out spending needs on an annual basis. Subtract from that amount any certain, nonportfolio sources of income such as Social Security or pension payments. The amount left over is the starting point for bucket 1: That's the amount of annual income bucket 1 will need to supply. That's what I'd always assumed, but I was just trying to see if maybe there was another option (spending dividends first, eve...
by birdog
Tue Nov 08, 2022 1:12 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

If you think this is a drag, you should evaluate if you want 10 years in FI in the first place. Maybe you only need 5 years, for example. That's a good suggestion. That's where I seem to be ending up at here on my own as well. Do you still have a link to Ms. Benz' three bucket system? I see this link referenced but no longer valid: https://www.morningstar.com/content/morningstarcom/en_us/model-portfolios.html For things like that, try the Wayback Machine: https://web.archive.org/web/20190120053936/https://www.morningstar.com/content/morningstarcom/en_us/model-portfolios.html Thanks. I actually found that, although also wanted to check if "The Bucket Approach to Retirement Allocation" is what the OP was talking about. I believe Ms...
by birdog
Mon Nov 07, 2022 11:09 am
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

Marseille07 wrote: Mon Nov 07, 2022 10:03 am If you think this is a drag, you should evaluate if you want 10 years in FI in the first place. Maybe you only need 5 years, for example.
That's a good suggestion. That's where I seem to be ending up at here on my own as well.
by birdog
Mon Nov 07, 2022 9:16 am
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

One approach requires twice as much in the cash/bond bucket, which seems like a pretty big difference. For example, $150K per year spend would require $1.5M bucketed in one approach and only $750K bucketed in the other. If your expenses are 150K/year, it's 1.5M for both scenarios unless one scenario starts off their retirement with 10 years in fixed income, the other scenario only 5 years. Dividends covering 50% of expenses doesn't eliminate the need to have accumulated 10 years of FI before walking. Well, this is what my original question was about. Assuming $150K per year in desired retirement spend, one approach (which spends taxable account dividends first) only requires $750K in the cash/bond bucket to get 10 years of spend. ($75K a y...
by birdog
Sun Nov 06, 2022 2:59 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

My basic question is that when people say they have x number of years of expenses in fixed income, are they saying that during a market downturn where they stop selling shares they can spend no dividends and still make it for ten years or do they assume they're spending the dividends first and can make it x years by supplementing those dividends, not with selling equity shares, but with dipping into the cash/bonds? This is a personal choice, but more importantly doesn't make a material difference. One approach requires twice as much in the cash/bond bucket, which seems like a pretty big difference. For example, $150K per year spend would require $1.5M bucketed in one approach and only $750K bucketed in the other. If you start spending down...
by birdog
Sun Nov 06, 2022 9:29 am
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Re: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

First off, thank you to those who have taken the time to respond to my question. I appreciate your input! I'm sorry if my initial post wasn't as clear as it maybe could have been. Here's some additional info to help clarify. The "ten years in cash and bonds and the rest in equities" is an approach touted by Christine Benz from Morningstar on Boglehead's webinars (and elsewhere). It appeals to me because it allows for a higher expected return over a fixed percentage asset allocation. Once your ten years is covered, every other dollar can go to equities. (Granted, I believe this approach might be more for people who have saved beyond 25 years of expenses before retiring.) For example, a 70/30 AA would get me nearly 17 years in cash ...
by birdog
Thu Nov 03, 2022 4:20 pm
Forum: Personal Investments
Topic: Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)
Replies: 74
Views: 6036

Reinstate Dividend Reinvestment During a Market Drop in Retirement? (Bucket Style Approach)

Here are two similar hypothetical early-retirement (late 40's) scenarios. Please compare these two withdrawal strategies. Basic question is that with a bucket style approach, should I keep spending dividends or reinvest them during a market drop? Set up: Instead of a set asset allocation, quasi bucket approaches are being considered. A simple two fund portfolio (US stock and US bond index funds). Ten years in cash and bonds (2 yrs cash, 8 years bonds) and the rest in a stock fund. Dividends from the taxable account cover about 50% of desired annual spend. Total dividends from total portfolio (taxable, tIRA, & ROTH IRA) covers about 70% of annual spend. Option 1: Disable dividend reinvestment (DRIP) in taxable account at retirement and s...
by birdog
Wed Oct 26, 2022 8:10 pm
Forum: Investing - Theory, News & General
Topic: Book recommendation for college student
Replies: 13
Views: 1241

Re: Book recommendation for college student

If You Can (Bernstein) and The Simple Path to Wealth (JL Collins).
by birdog
Wed Oct 26, 2022 8:53 am
Forum: Investing - Theory, News & General
Topic: Sneaky Bull market?
Replies: 51
Views: 8118

Re: Sneaky Bull market?

livesoft wrote: Wed Oct 26, 2022 6:57 am As for "adding more" are you writing to ask about what to do with cash? I would respond: Buy bond funds and equities funds to achiever your desired asset allocation so that you don't have any cash.
Agree. I never have any extra cash just sitting around. I need my soldiers (dollars) working for me to make me money, not taking coffee breaks. Money lost thru cash drag can offset successfully buying the dip.
by birdog
Tue Oct 25, 2022 9:21 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks: Port in a Storm?
Replies: 433
Views: 42529

Re: Dividend Stocks: Port in a Storm?

Excellent interview of Colleen Jaconetti from Vanguard by Jon Luskin in Bogleheads Live Episode 26 can be found here: https://boglecenter.net/bogleheads-live-with-colleen-jaconetti-episode-26/ In addition to the usual total return investing approach vs. income investing topic, Jon asks a question that was submitted by Retired@50 of Colleen: Retired@50: “There seems to be a contingent of people that either cannot or will not accept the total return investing premise in spite of the long and detailed arguments on the Bogleheads® forums. Has Vanguard or Ms. Jaconetti done any studies related to the psychology of why some investors prefer dividends over total return investing?” Colleen Jaconetti: "Vanguard hasn't specifically done any stu...
by birdog
Sun Oct 23, 2022 11:52 am
Forum: Investing - Theory, News & General
Topic: Dividend Stocks: Port in a Storm?
Replies: 433
Views: 42529

Re: Dividend Stocks: Port in a Storm?

Exactly. It is an indisputable, irrefutable fact that in order to profit from non-dividend paying stocks, you must engage in pure speculation. Great! VTI pays dividends. VYM pays more dividends because it focuses on dividend payers and as such it under-performs VTI. Source? I suppose it depends upon when you look. Dividend Growth over time has performed well, it may at certain times either underperform or outperform the broad index. My best guess is that over time, Dividend Growth will match or perhaps exceed market performance a bit, mostly because of the Quality factor. Year to date, Dividend Growth has been outperforming and this will affect comparisons over longer time horizons. Just go to portfoliovisualizer.com, change time period fr...