Search found 1496 matches
- 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...
- 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
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?Nathan Drake wrote: ↑Mon Mar 18, 2024 2:02 pmThat’s what generally happens when you know in hindsight what has performed best. But it speaks to the limitation of the data available.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.
If we look at any single country’s SWR, globally investing materially improves SWR on average compared to any given domestic market
- 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.
- 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
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.
- Sun Mar 17, 2024 2:17 pm
- Forum: Personal Investments
- Topic: Undoing non-deductible IRA
- Replies: 17
- Views: 1067
Re: Undoing non-deductible IRA
Actually, I did. It was news to me and I had never heard of it until I watched the video a few days ago.toddthebod wrote: ↑Sun Mar 17, 2024 12:40 pmYou don't need a 10 minute video to tell you to rollover the pre-tax dollars into a workplace plan.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
- 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
https://www.youtube.com/watch?v=8G2GHkTen4k
- 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.
- Sat Mar 16, 2024 12:03 pm
- Forum: Personal Finance (Not Investing)
- Topic: The best game-changing financial advice you ever received (or "discovered")
- Replies: 120
- Views: 11063
- 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.
- Tue Mar 12, 2024 7:15 pm
- Forum: Investing - Theory, News & General
- Topic: SPIVA 2023
- Replies: 15
- Views: 1648
Re: SPIVA 2023
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
- Tue Mar 12, 2024 7:00 pm
- Forum: Investing - Theory, News & General
- Topic: SPIVA 2023
- Replies: 15
- Views: 1648
Re: SPIVA 2023
+1AlwaysLearningMore 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.
- 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...
- Thu Mar 07, 2024 7:27 am
- Forum: Personal Finance (Not Investing)
- Topic: some turbo tax questions and paper filing
- Replies: 30
- Views: 2466
- 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.
- 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...
- 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?
Agree, regardless of strategy it's likely the OP could improve their performance the most by crafting an IPS and then following it.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.
- 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?
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.
- 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
Epic.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.
- 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.
- 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?
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.happyisland wrote: ↑Wed Aug 16, 2023 6:11 pmWhat are you going to do with ammo? Kill, or threaten to kill, other people? Hunt? What exact zombie apocalypse are you guys planning for?
- 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?
Agree. I would much rather have ammo than gold.
- 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?
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.
- 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.
- 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.
- 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.
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.
- Mon Jul 24, 2023 8:03 pm
- Forum: Personal Investments
- Topic: Two fund portfolio?
- Replies: 16
- Views: 2564
Re: Two fund portfolio?
Nope.
- 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...
- 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...
- 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?
- 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...
- 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
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.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.
TaylorJack 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.”
- 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.
- 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...
- 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]
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.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.
- 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]
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.)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.
- 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)
I'll check it out. Thanks for sending.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/
- 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)
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.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.
- 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.
- 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)
I agree.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.
- 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...
- 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...
- 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)
That's a good suggestion. That's where I seem to be ending up at here on my own as well.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.
- 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...
- 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...
- 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 ...
- 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...
- 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).
- Wed Oct 26, 2022 8:53 am
- Forum: Investing - Theory, News & General
- Topic: Sneaky Bull market?
- Replies: 51
- Views: 8118
Re: Sneaky Bull market?
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.
- 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...
- 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...