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by Thesaints
Fri Nov 08, 2019 8:31 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

That's false on two levels. First, 30 year returns have not been predictive at all of the SWR of that 30 year period. We all know that: volatility works against you during withdrawal. So, if you have a constant x% return, you can certainly safely withdraw x% and even more, if you accept to deplete ...
by Thesaints
Fri Nov 08, 2019 7:34 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Average market returns mean absolutely nothing for the purpose of calculating historic safe withdrawal rates. Nothing . For instance, returns from 2017 do not enter into the calculation of the SWR for the 1966-1995 period. So you need to purge that idea from your thinking. Maybe you skipped where I...
by Thesaints
Fri Nov 08, 2019 7:25 pm
Forum: Investing - Theory, News & General
Topic: Calls and Cash: talk me out of it
Replies: 6
Views: 1102

Re: Calls and Cash: talk me out of it

CheepSkate wrote:
Thu Nov 07, 2019 11:12 pm
Another choice with a similar risk profile would be to sell all 2000 shares ...
Don't you have to pay taxes on that ?
by Thesaints
Fri Nov 08, 2019 6:39 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

There is no evidence that this will happen. It is simple math. Well, maybe not "simple" as in "everyone understands it easily", but more like "everyone with a solid grasp of statistics will have no problem agreeing". Past data is only useful if one understands the conditions that generated it. Othe...
by Thesaints
Fri Nov 08, 2019 6:32 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

We pick 4% withdrawal rates PRECISELY because we know those kind of returns are never guaranteed. Instead we pick the worst case (so far!) historical cases, and we see that 4% worked. So if we do get low returns, like those worst-case (so far!) 30-year periods in the past, we will still be financia...
by Thesaints
Fri Nov 08, 2019 6:27 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

I really don't think you understand what others are saying. It appears that you continue to throw out 10% stocks and 7% bonds yet noone else does. When you use a 30-year period historical return to say "Don't you see ? My portfolio was not depleted" you are using an average return of about 10% for ...
by Thesaints
Fri Nov 08, 2019 4:04 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Table at the bottom contains all inflation-adjusted numbers

https://fourpillarfreedom.com/heres-how ... ince-1928/

The lowest (of all!) 30-year period is 4.3%. Japanese last 30-year return ? Less than zero.
by Thesaints
Fri Nov 08, 2019 3:46 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

You might find this link interesting and useful: https://portfoliocharts.com/portfolio/withdrawal-rates/ Not only does it explain (albeit briefly) the back-testing methodologies employed in previous studies, it has a fantastic calculator that allows you to see both the safe withdrawal rate (which m...
by Thesaints
Thu Nov 07, 2019 9:04 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

"the entire period being referenced is not used to arrive at 3% or 4% withdrawal rates, only the very worst such periods" I'm not even sure of what that means, since the study conclusion is that 4% was sustainable in 95% (? iirc) of cases. If they used the very worst period, either it fails, or it i...
by Thesaints
Thu Nov 07, 2019 8:49 pm
Forum: Personal Investments
Topic: Help with investment strategy - newly retired
Replies: 4
Views: 570

Re: Help with investment strategy - newly retired

The "year worth of expenses in cash" applies to working people. The rationale being that if they lose their job, there is no need to withdraw from a retirement account to survive until they get a new one. For a retired person it is kind of meaningless. It would be better to estimate actual possible ...
by Thesaints
Thu Nov 07, 2019 8:29 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Throughout the period used for backtesting stocks return was 10% and bond returns 7%: History is not a good guide for the future anymore. That's clearly false because the entire period being referenced is not used to arrive at 3% or 4% withdrawal rates, only the very worst such periods. So in order...
by Thesaints
Thu Nov 07, 2019 8:23 pm
Forum: Personal Consumer Issues
Topic: "Beer Money" Methods
Replies: 50
Views: 5879

Re: "Beer Money" Methods

30 searches x 360 days = 10,800 in a year. They are paying you less than 1¢/search. This ^^^ To use Bing just to do 30 searches, earning less than 30 cents a day, is crazy. Not volunteering to do the math, but maybe $ per hour it's not too bad? The second you are given a dime, your instantaneous in...
by Thesaints
Thu Nov 07, 2019 8:19 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

" If history is any guide for the future , then withdrawal rates of 3% and 4% are extremely unlikely to exhaust any portfolio of stocks and bonds during any of the payout periods shown in Table 1. In those cases, portfolio success seems close to being assured." Throughout the period used for backtes...
by Thesaints
Thu Nov 07, 2019 8:09 pm
Forum: Personal Investments
Topic: taxation when rebalancing??
Replies: 14
Views: 913

Re: taxation when rebalancing??

Yes, you might incur in taxes and those taxes may very well overweight the benefits of rebalancing. The way to do it is of course to rebalance minimizing additional taxes. For instance redirecting new contributions and dividend reinvestments. That may make the rebalancing process slower, but general...
by Thesaints
Thu Nov 07, 2019 8:01 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone track their actual pension benefit start date?
Replies: 51
Views: 2877

Re: Anyone track their actual pension benefit start date?

Can you suggest a way to do the calculation you describe in 2)? I would guess that the value of the insurance depends on the stability of the pension plan, the ability of the plan to make the payments. We've seen some major corporations reneg on their pension obligations over the years, even some l...
by Thesaints
Thu Nov 07, 2019 2:44 am
Forum: Personal Consumer Issues
Topic: Airbnb - Guide a beginner
Replies: 64
Views: 6230

Re: Airbnb - Guide a beginner

I've stayed in plenty of airbnb whole apartment places. At least when I look, airbnb whole apartment is just as high as middle-range hotel rates. In my experience, I've stayed at Airbnb places for less than $300/night, where an equivalent hotel accommodation would have costed maybe ten times as muc...
by Thesaints
Thu Nov 07, 2019 2:37 am
Forum: Personal Finance (Not Investing)
Topic: Anyone track their actual pension benefit start date?
Replies: 51
Views: 2877

Re: Anyone track their actual pension benefit start date?

1) No. I suppose I could have done that but it would have been much more complicated since there were many contributions over a long period of time. However, the pension plan made an annual interest payment on the total account balance at the end of every year, so that would adjusted the value of t...
by Thesaints
Thu Nov 07, 2019 2:31 am
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

This is incorrect, and indicates you don't understand the subject. SAFE WITHDRAWALS are based on the past WORST times, not the average times. Not really. They were calculated using sequences of past market returns. By definition those sequences, on average, have an aveage market return. Average tim...
by Thesaints
Thu Nov 07, 2019 2:16 am
Forum: Personal Consumer Issues
Topic: "Beer Money" Methods
Replies: 50
Views: 5879

Re: "Beer Money" Methods

30 searches x 360 days = 10,800 in a year. They are paying you less than 1¢/search.
by Thesaints
Wed Nov 06, 2019 7:41 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Really? Even 3% is debatable now? What's next, 2.5% is too aggressive? The historical average returns, on which past SWR determinations are based, are 10% for stocks and 7% for bonds. Good luck trying to get anything close to that now. That said, mostly the issue is for the "FIRE crowd" i.e. relati...
by Thesaints
Wed Nov 06, 2019 6:36 pm
Forum: Investing - Theory, News & General
Topic: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?
Replies: 63
Views: 5423

Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

A 40-year mortgage allows you to take on a larger debt for the same monthly payment.
Naturally, you will pay a much larger total amount of interests, at least on a nominal basis.
by Thesaints
Wed Nov 06, 2019 6:10 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Not if you count inflation.
by Thesaints
Wed Nov 06, 2019 2:01 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

So one should prepare for a 60-year retirement in your 50s, and make sure one can survive 35 years of low stock and low bond returns, followed by TWO 50% crashes two years in a row, and then another 25 years of retirement? No, the first 35 years are at the new normal, which will persist until money...
by Thesaints
Wed Nov 06, 2019 1:59 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Interest rates are at their historical low.
by Thesaints
Wed Nov 06, 2019 12:43 pm
Forum: Personal Investments
Topic: Help me negotiate a lump sum payout.
Replies: 11
Views: 1300

Re: Help me negotiate a lump sum payout.

Based on #Crunchers numbers, I wouldn’t even take 90% if the annuity issuer is safe.
The only scenario where the lump sum becomes acceptable is the one in which one needs the lump sum
by Thesaints
Wed Nov 06, 2019 12:40 pm
Forum: Personal Investments
Topic: Will we be OK at 3% WR?
Replies: 261
Views: 16650

Re: Will we be OK at 3% WR?

Let’s assume your allocation is 50/50 stocks/bonds, for simplicity. Bonds these days return on average around the inflation rate. +1% over inflation is probably an overestimate. That means half of your portfolio returns zero inflation-adjusted. That also means the other half of your portfolio has to...
by Thesaints
Tue Nov 05, 2019 7:15 pm
Forum: Non-US Investing
Topic: UK : unable to open Marcus Savings account due to US link
Replies: 16
Views: 1271

Re: UK : unable to open Marcus Savings account due to US link

Have you checked the US-UK tax treaty ?
by Thesaints
Tue Nov 05, 2019 7:02 pm
Forum: Investing - Theory, News & General
Topic: Saudi Aramco, a microcosm of International Equities issues.
Replies: 26
Views: 1442

Re: Saudi Aramco, a microcosm of International Equities issues.

How does the market *accurately* price in that their extraction, processing or distribution facilities might (as happened in the last six weeks) or might not be militarily attacked? Intellectually honest people know that the answer to the above is “It can’t.” If accurate price discovery isn’t a con...
by Thesaints
Tue Nov 05, 2019 7:01 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to ensure USPS mailed tax return makes it to IRS
Replies: 63
Views: 5066

Re: Best way to ensure USPS mailed tax return makes it to IRS

For the first few years I mailed my returns with delivering confirmation. I have been mailing standard first class since. The post office receipt still shows the ZIP codes I mailed to, which can be evidence if needed, and I mail ahead of time, so that I always know it was received well before April...
by Thesaints
Tue Nov 05, 2019 6:55 pm
Forum: Personal Investments
Topic: Help me negotiate a lump sum payout.
Replies: 11
Views: 1300

Re: Help me negotiate a lump sum payout.

You can simply calculate the present value of payments spread over the next eight years applying an assumed return rate. Check what return rate corresponds to The Hartford's offer. You shouldn't forget about taxes, if those come into play, and the advantage of having a lump sum immediately available...
by Thesaints
Tue Nov 05, 2019 6:52 pm
Forum: Investing - Theory, News & General
Topic: Saudi Aramco, a microcosm of International Equities issues.
Replies: 26
Views: 1442

Re: Saudi Aramco, a microcosm of International Equities issues.

Whoever holds an international index fund "will participate". So what ?
It seems like you know something others don't and Aramco's actual value is in fact a lot lower than what the market estimates presently.
by Thesaints
Tue Nov 05, 2019 6:49 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone track their actual pension benefit start date?
Replies: 51
Views: 2877

Re: Anyone track their actual pension benefit start date?

Two considerations:

1) Is the money contributed calculated on an inflation-adjusted basis ?

2) Is the insurance value of the pension plan accounted for ? In other words, the fact that the pension will pay no matter how long one ends up living.
by Thesaints
Tue Nov 05, 2019 4:23 pm
Forum: Investing - Theory, News & General
Topic: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?
Replies: 63
Views: 5423

Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

I would say I’m still frugal but just less frugal than before. Mmmh... if you are frugal that's a big risk. If things go south for whatever reason (think of 1929 all over again, with a 1981 inflation on top) the next step down from frugal is "destitute". It would be a lot better if your finances we...
by Thesaints
Tue Nov 05, 2019 4:16 pm
Forum: Personal Finance (Not Investing)
Topic: Best way to ensure USPS mailed tax return makes it to IRS
Replies: 63
Views: 5066

Re: Best way to ensure USPS mailed tax return makes it to IRS

For the first few years I mailed my returns with delivering confirmation. I have been mailing standard first class since. The post office receipt still shows the ZIP codes I mailed to, which can be evidence if needed, and I mail ahead of time, so that I always know it was received well before April ...
by Thesaints
Tue Nov 05, 2019 4:12 pm
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

Many thanks again! I feel better. :happy
by Thesaints
Tue Nov 05, 2019 4:11 pm
Forum: Personal Consumer Issues
Topic: Airbnb - Guide a beginner
Replies: 64
Views: 6230

Re: Airbnb - Guide a beginner

We have been using Airbnb domestically and overseas with great satisfaction. I can't remember a single bad experience. Its greatest value, in my opinion, resides in the availability of rather luxurious accommodations at the price of a good hotel room. On the other hand, I would stick to hotels when ...
by Thesaints
Tue Nov 05, 2019 1:32 pm
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

It depends on HOW you withdraw the 1400. If you have it returned with attributable earnings (as you did), that opens up room to replace the 1400 regular contribution to the IRA of your choice ( TIRA in this case). However, if you had simply asked for a dollar amount distribution of 1000 without men...
by Thesaints
Tue Nov 05, 2019 1:07 pm
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

Yes, that's what I'm doing. Of course, the first time in my life I need to contact Vanguard they have just taken away the dedicated flagship representative... Can you guys confirm that after maxing out yearly contributions ($5,600 to tIRA and $1,400 to Roth) withdrawing $1,400 from the Roth DOES NOT...
by Thesaints
Tue Nov 05, 2019 12:53 pm
Forum: Investing - Theory, News & General
Topic: confused by yield, expense ratio, and taxes
Replies: 11
Views: 526

Re: confused by yield, expense ratio, and taxes

It matters because by saying that the fund takes its expenses from the yield may induce a non-expert investor to think that it operates like some sort of partnership, where the yield is apportioned part to the investor and part to the fund administrator. This is not correct. Even with zero (or negat...
by Thesaints
Tue Nov 05, 2019 11:42 am
Forum: Investing - Theory, News & General
Topic: confused by yield, expense ratio, and taxes
Replies: 11
Views: 526

Re: confused by yield, expense ratio, and taxes

If you mean that the yield figure quoted may be net of expense ratio, we agree.
Yet, expense ratio is calculated on the etf total assets and subtracted on a daily basis. An etf with zero yield also has a non zero expense ratio.
by Thesaints
Tue Nov 05, 2019 11:16 am
Forum: Investing - Theory, News & General
Topic: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?
Replies: 63
Views: 5423

Re: Is it OK to take less risk and spend more money once you’ve reached your goals even if you are young?

Maybe the OP has simply set his sights too low... Maybe I have. What would determine that? There is no algorithmic way to make such a determination. You have to clearly understand that avoiding risk will also reduce your expected return for the future. The question is whether you need more return, ...
by Thesaints
Tue Nov 05, 2019 11:10 am
Forum: Investing - Theory, News & General
Topic: confused by yield, expense ratio, and taxes
Replies: 11
Views: 526

Re: confused by yield, expense ratio, and taxes

That’s a huge expense ratio, to begin with.

Expense ratio is pulled out of the total ETF capital on a daily basis. It is not subtracted from its dividend yield.
You will be taxed on all the dividends paid to you.
by Thesaints
Tue Nov 05, 2019 11:06 am
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

Thank you for all the advice and clarifications.
The best way to take care of the problem would have been to recharacterize to my traditional IRA, I understand.

I will ask about the discrepancy in inputed income amount, which is quite clear to me, and see where it goes from there.
by Thesaints
Tue Nov 05, 2019 10:02 am
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Re: Excess contribution to Roth

That’s what I was thinking, recharacterized the direct Roth contribution to the IRA and then convert again to the Roth later. The Vanguard rep to whom I explained my mistake in contributing didn’t say what he was going to do explicitly, but it was more “Ah, I understand. Do not worry, there is a sim...
by Thesaints
Tue Nov 05, 2019 3:42 am
Forum: Investing - Theory, News & General
Topic: Dividend investing vs. index investing
Replies: 30
Views: 2167

Re: Dividend investing vs. index investing

Dividend investing is index investing too. There are countless indexes out there.
by Thesaints
Tue Nov 05, 2019 2:31 am
Forum: Investing - Theory, News & General
Topic: Modeling Bitcoin Value with Scarcity
Replies: 13
Views: 1061

Re: Modeling Bitcoin Value with Scarcity

There are countless scarce items that are nonetheless worthless.
by Thesaints
Tue Nov 05, 2019 2:17 am
Forum: Personal Investments
Topic: Excess contribution to Roth
Replies: 12
Views: 672

Excess contribution to Roth

My income is too high to contribute directly to my Roth IRA, but I have been doing backdoor contributions for a while. A few weeks ago I was making my last $1,400 contribution for the year (5 x $1,400 = $7,000), but due to libations and an otherwise non-sound state of mind I directly moved money int...
by Thesaints
Tue Aug 06, 2019 6:36 pm
Forum: Investing - Theory, News & General
Topic: Personal Flagship Representaive Going Away
Replies: 126
Views: 13402

Re: Personal Flagship Representaive Going Away

I think the issue is not whether one has an assigned rep or not, but whether after this move the ratio of reps to flagship customers will go up, or down.
by Thesaints
Thu Jul 18, 2019 3:04 pm
Forum: Personal Consumer Issues
Topic: Box wine- update and recommendations?
Replies: 73
Views: 6023

Re: Box wine- update and recommendations?

So odd that one cannot find any good Brunello, or a Chateneuf in boxed format...