Bogleheads.org

Your parents are paying federal income taxes at the 37% marginal rate on ordinary income? Obviously, that’s possible but not likely. And marginal tax rates are critical to this analysis. Yes, they are paying taxes at 37% marginal rate. If your parents have current income of $693,750 as a married couple filing jointly, so that they are in the 37% tax bracket, they should promptly engage qualified estate planning counsel. One of the many discussions can be about whether Roth converting makes any sense (it might reduce Federal estate tax because it reduces assets by “prepaying” taxes especially where the heirs are likely to be in a similar tax bracket). This was really helpful to know, thank you! I don't think my sibling or I (the heirs) woul...

My parents and I live in Illinois (I'm in my 30's single and childless). My parents don't agree on how to manage money, so it is kind of a split household. My mom has a CFP who manages her money, and because she states that she has conservative risk level, the financial advisor primarily places it in bond funds. My dad manages his retirement accounts on his own. He does not attend meetings with the financial advisor. He dislikes financial advisors in general. I'm not sure whether I trust the financial advisor or not, not because of the person himself, but just because I feel there's a conflict of interest at times between financial advisors and their clients (and hence why I am here). One recommendation my mom's financial advisor made the ...

My parents and I live in Illinois (I'm in my 30's single and childless). My parents don't agree on how to manage money, so it is kind of a split household. My mom has a CFP who manages her money, and because she states that she has conservative risk level, the financial advisor primarily places it in bond funds. My dad manages his retirement accounts on his own. He does not attend meetings with the financial advisor. He dislikes financial advisors in general. I'm not sure whether I trust the financial advisor or not, not because of the person himself, but just because I feel there's a conflict of interest at times between financial advisors and their clients (and hence why I am here). One recommendation my mom's financial advisor made the ...

My parents and I live in Illinois (I'm in my 30's single and childless). My parents don't agree on how to manage money, so it is kind of a split household. My mom has a CFP who manages her money, and because she states that she has conservative risk level, the financial advisor primarily places it in bond funds. My dad manages his retirement accounts on his own. He does not attend meetings with the financial advisor. He dislikes financial advisors in general. I'm not sure whether I trust the financial advisor or not, not because of the person himself, but just because I feel there's a conflict of interest at times between financial advisors and their clients (and hence why I am here). One recommendation my mom's financial advisor made the ...

IMO the Japan scenario is perhaps the most compelling story arguing for international diversification.

At 3.25% I’d probably hold it but I think you can make a case either way, depending on the specifics.

Spouse 1 is retiring and eligible for a pension. Their Option 1 is to take $418 per month with no survivor benefit for spouse 2. Option 2 is to take $373 per month with survivor benefit. Both are 65 years old and in good health for their age. They have saving and social security on top of this and this is not part of the original retirement plan (it’s essentially gravy). How would you advise them on this decision? Is this an inflation adjusted pension? Just looking at the raw numbers: Let’s just say a round 20 years. The difference in payments is $45. Times 12 months, times 20 years is $10,800. $10,800 20 year differerence, divided by $373 for survivor, would be 28 months. So just looking at raw numbers, ignoring time value of money, if th...

Take someone near retirement with a $2 million, debt free home Liquid assets of $5M Total NW = $7M 4% withdrawal rate = $200k per year Now take the same person and give them a $1.6M mortgage at 2% interest only Liquid assets: $6.6M Total NW: $7M 4% withdrawal rate = $264k less $32k of added interest from mortgage = $232k per year I get that debt is psychological for most people but I don’t understand the need/desire for many to pay off their house later in life if rates are low. The math always argues for taking debt (within reason) so long as the interest rate is below the SWR. Thoughts? Note: this is not meant to be a discussion on if 4% is the right SWR or not. The point holds regardless of your view on what an appropriate SWR is. One n...

If we take this logic further, we can conclude that infinite leverage leads to infinitely high safe withdrawals in retirement. There must be something wrong with that logic. That something is the SWR methodology being assumed. - If you go beyond the pass/fail grading used in the SWR methodology, failures in a leveraged strategy will be harder (i.e. you will run out of money sooner) - If you go beyond the fixed spending assumed in SWR methodology and allow variable spending, more stocks will make spending more uncertain and volatile. See amortization based withdrawal (ABW) . Using a more realistic withdrawal strategy than SWR will show more clearly why leveraging (and more stocks in general even when not leveraged) increases risk to spendin...

Take someone near retirement with a $2 million, debt free home Liquid assets of $5M Total NW = $7M 4% withdrawal rate = $200k per year Now take the same person and give them a $1.6M mortgage at 2% interest only Liquid assets: $6.6M Total NW: $7M 4% withdrawal rate = $264k less $32k of added interest from mortgage = $232k per year I get that debt is psychological for most people but I don’t understand the need/desire for many to pay off their house later in life if rates are low. The math always argues for taking debt (within reason) so long as the interest rate is below the SWR. Thoughts? Note: this is not meant to be a discussion on if 4% is the right SWR or not. The point holds regardless of your view on what an appropriate SWR is. The p...

The math always argues for taking debt (within reason) so long as the interest rate is below the SWR. If we take this logic further, we can conclude that infinite leverage leads to infinitely high safe withdrawals in retirement. There must be something wrong with that logic. That something is the SWR methodology being assumed. - If you go beyond the pass/fail grading used in the SWR methodology, failures in a leveraged strategy will be harder (i.e. you will run out of money sooner) - If you go beyond the fixed spending assumed in SWR methodology and allow variable spending, more stocks will make spending more uncertain and volatile. See amortization based withdrawal (ABW) . Using a more realistic withdrawal strategy than SWR will show more...

So your pension will be $66k, and your expenses will be $66k. Seems like you are already covered.

Only wildcard is if your variable mort rates goes up and your payment goes up, or else you have to liquidate savings to pay it off.

Jack FFR1846 wrote: ↑Mon Mar 27, 2023 8:53 pm Third party verifier? Hahahaha. LexisNexis. Buncha clowns. Wouldn't verify me because I would not acknowledge my mortgaged house address in 1960. I was 3 years old.

I can never get approved for a US bank account, best I can tell due to LexisNexis. You have to call them to unfreeze, and still doesn’t seem to work. I finally quite trying.

Hi All - after all this hubbub with the banks, I'm inspired to pay off my home mortgage as quickly as possible. I had been doing a combination of paying down the mortgage and buying VOO/SPY/etc. in a taxable account. Given the below, what do you think is the most optimal way to pay off my mortgage quickly? Should I liquidate my taxable account to pay down the mortgage? Or liquidate it in a few years? Or avoid selling altogether (capital gains tax!)? 30 year fixed mortgage at 3.3%, paid down balance from $925,000 to $742,000 over the last four years. Monthly payment is $4047. I can make $60,000-$120,000 per year in extra principal payments, depending on bonuses, overtime, etc. I have a taxable account that holds mostly SPY and VOO held for ...

Quicken. Is this just a convenient way to view all of your assets and total net worth in one place? Or does it also help you to verify that the contribution and withdrawal amounts are what you expect them to be? Eliminating the word "just," yes and yes. Opinions may (and, as you can see in this thread, do) vary. I too use Quicken - for investment accounts it allows me to see transaction activity, and it also compares the online share balance to what’s in quicken. Quicken also downloads all of my bank and credit card activity. Given we have quite a few accounts, between investment accounts, bank accounts and credit cards, it is a way to consolidate it all into one source. It isn’t the most sexy software and functionally seems date...

I don’t know enough to have a detailed opinion on the applicability of WL to your specific situation. But in the terms you have spelled out, #1 could easily be handled with a 10 year term policy. Sure it is more expensive, but $3500 a year is fairly nominal considered what it is buying you. It is less than 0.1% of your current net worth. Yes, thank you. Good thought. The simple A/B comparison, I think, is between (A) the WL policy scenario I posed here as a possibility, with borrowing possible via an iBLOC (or not, if held in ILIT), or (B) a 10 year term plus the balance invested in munis or the like, with borrowing possible within a brokerage against the bonds. The $3,500 per year is not so much but the premiums on the term policies seem ...

Why are you buying the policy exactly? It's not clear to me. First of all, thank you--it's an honor to have responses here from White Coat Investor in addition to Stinky and other luminaries of this board. I appreciate your weighing in. Two scenarios for "why buy life insurance at all?" are are on my mind. Scenario 1 : I am concerned about what would happen if I were to pass away in the near term. In a simple-minded way, I suppose this is the classic reason for wanting life insurance for one's family. If I were to pass between, say, age 50 and age 60, then I would be leaving DW in a tricky spot. I work for outside compensation; DW does not. If I were to be hit by the proverbial bus this weekend, DW would have to make liquidation ...

I’ve never been eligible for a mega back door Roth so not an expert. But overall I agree with the broad strokes of your plan. Any form of Roth IRA is probably superior to a 529. It seems like you will have multiple ways to access funds before 59.5 if you need them. At a minimum you’ll be able to access Roth contributions.

If you get a state income tax break for the 529, it probably makes sense to at least contribute enough to take advantage of that break.

I agree with everyone else, definitely do the match, that’s a no brainer.

Beyond that, it depends on the specifics of your situation as to whether additional tax deferred is helpful or not (or Roth if an option). If you are only going to be there a short time don’t worry about the fund choices because you can roll it into an IRA or another 401k when you leave.

I have filed for SSI for my young adult ASD son. After 9 months finally got to see a person who evaluates such things - a contracted 3rd party. If this fails I will retain an attorney for an in person appeal. I have already talked to a couple, they typically charge something like 1/3 of back pay only if you win. My understanding the odds on appeal are significantly better than initial application.

I’m hoping this great community can help me find an answer to this vexing question! My wife has a small business; it’s a sole proprietorship – she is the only person. We set up a solo 401(k) with Vanguard. My understanding was that my wife can make two retirement account contributions each year – one as the “employee” and one as the “employer.” Accordingly, we made a 2022 employee-side contribution. What I am trying to do is find authority (an IRS bulletin?) that says that this was okay. The problem is that the IRS bulletins I’m aware of talk about employee-side contributions from “salary deferrals” and “wages.” But my wife doesn’t have any "wages" (e.g., she doesn’t get a W2) or a “salary” per se. She takes in her business’s rev...

Does a 22% effective tax rate for a home food making business set off any alarm bells? My wife has a sole proprietorship. For 2022, the effective tax rate (tax burden/gross income) is 22%. That's including social security, medicare, and income tax. 22% feels rather high. I suspect I might be missing business deductions, but on the other hand, the business just does not have a large number of costs and the profit margins are decent. We are married filing jointly. Federal tax bracket is 22%. I have a salary position with health insurance and a smallish pension, wife has sole proprietorship that adds about 8% to our overall gross income. Though of course the IRS does not tax the business separately, I do now track its expenses (including taxe...

whodidntante wrote: ↑Mon Mar 20, 2023 9:13 pm I like to keep my emergency fund in emerging markets value stocks.

Any fool knows it should be in Bitcoin. Preferably at FTX.

This article has an inflation adjusted FDIC history, and how the level of protection that backstopped the Great Depression bank failures was around half the $250k we have now (possibly unlimited, if the FDIC/Fed liked your bank). Comments also below on the moral hazard issues of insuring large depositors for the safety of the banking system. https://rationalwalk.substack.com/p/the-role-of-deposit-insurance The absence of any market discipline from depositors to police the activities of banks will require the government to step up regulatory oversight of all banks in order to limit exposure of the government to losses. In the absence of market discipline from depositors and sufficient regulatory oversight, only the shareholders of banks wil...

I tend to view it as liquidity. Maybe 9 months expenses in bank cash and another couple of years worth in ibonds. I don’t view it as irrational to have a fixed stack of cash or cash equivalents. Some will say “mental accounting”, but that presumes an individuals risk aversion curve will always dictate the same asset allocation whether one has $100,000 or $1 million. By setting a hard minimum, via a fixed emergency/liquidity fund when the value of your portfolio goes down, your stock allocation will decrease if looking at entire net worth. That isn’t optimal for long term growth but it does provide a safety cushion. It is very plausible for a 60 year old to have a risk aversion based optimal asset allocation of 0/100 at $100k, 50/50 at 1 mil...

The high dividend funds and the dividend appreciation/growth funds are two different beasts. High dividend funds to be value oriented funds. Dividend growth funds tend to have high quality stocks that have a consistent history or dividend growth, and the actual dividend yield as a percent is not particularly high. If your goal is to get dividend income for dividends sake, dividend growth/appreciation is not the way to do it. Again I like the growth appreciation funds in that they tend be be quality companies and somewhat lower volatility. One reason/narrative for dividend stocks, especially ones that are consistent or increase, is that if management has to commit to a dividend, they are less likely to reinvest it in higher risk bad investme...

As a final check on any investments I intend to make, I look and see how much money is invested in a fund to understand how other hopefully rational investors have decided. Any VG fund that has a significant amount invested ($50B?) passes this final test. Regarding one of the forum’s favorite topics, dividend irrelevance, after reading about every thread I could find here, I thought I would see how investors were voting with their feet. Just by reading the product summaries, there are at least seven (probably more) VG funds that have a dividend focus: High Dividend (VHYAX/VYM), Dividend Appreciation (VDADX/VIG), Dividend Growth (VDIGX), Equity Income (VEIRX), Wellesley Income (VWIAX), International High Dividend (VIHAX/VYMI), and Internati...

We’ve been with T-Mobile for a couple years and have been satisfied. Was with ATT many years before. T-Mobile is cheaper for family plan. Also has some nice streaming perks - free Apple TV, discounted Netflix and free paramount plus. I’d say coverage is marginally worse than ATT but not by much. We live in a major metro area, but coverage is still generally good when going through rural areas.

The author speculates that the coming fixed rate may not be as high as originally anticipated due to recent banking events. I bought a decent chunk of ibonds over the last couple of years between me, spouse, RLT and sole prop business and gift box. With variable rates and inflation trending down, and cash rates going up I probably won’t be adding to the positions, but what I may do is sell some of the zero percent fixed rates I’ve accumulated over the years and buy some at the higher fix rate. I’ll probably wait until later in the year to do that in case fixed rates rises, and also to cash out any purchases within 5 years to lose only 3 months at the new combined May lower rate. I assume you didn't hit the $10K limit this year from either ...

stoptothink wrote: ↑Tue Mar 14, 2023 6:33 am

judge1905 wrote: ↑Mon Mar 13, 2023 8:42 pm

Barkingsparrow wrote: ↑Sat Jan 28, 2023 1:14 pm Working through Counterpart on Prime. Starring the wondrous JK Simmons in dual roles in a convoluted and tense espionage drama with sci-fi overtones. Definitely not for the "wholesome" crowd. Really enjoying this series, it got a 100% rating on Rottentomatoes.com.

One of my favorite series, and definitely deserved more attention.

Really good series that almost nobody has heard about.

Great show too bad only 2 seasons.

The author speculates that the coming fixed rate may not be as high as originally anticipated due to recent banking events.

I bought a decent chunk of ibonds over the last couple of years between me, spouse, RLT and sole prop business and gift box. With variable rates and inflation trending down, and cash rates going up I probably won’t be adding to the positions, but what I may do is sell some of the zero percent fixed rates I’ve accumulated over the years and buy some at the higher fix rate. I’ll probably wait until later in the year to do that in case fixed rates rises, and also to cash out any purchases within 5 years to lose only 3 months at the new combined May lower rate.

The past several years I have done a few of these. Usually focusing on the larger bonuses, but never putting more than $20k in there. I’ve done chase personal and chase business and that is always fairly easy. I tend to do more credit card bonuses, I find the bank bonuses a bit more of a hassle due to tying up funds.

Recently I’ve done less, party due to tying up more liquidity in ibonds. They just don’t seem as attractive to me given your can earn 3-4% just sticking into a high yield account of treasuries.

I’ve always used Dr of Credit for both banks and cards.

I suspect odds are 5% would work, but the probability of failure is too high for my tastes. Even if it does work over many decades there will probably ups and downs and times where you are hoping and praying that markets recover to get you back on track. Assuming it does recover, as it usually does, mathematically that would be considered a success. But for me, I don’t want to live that way. I don’t don’t want to be white knuckling the downturns.

Also, it seems like you are locking in choices at a young age and assuming nothing materially bad happens along the way.

Having said that, I don’t have all the answers, and can’t predict the future. So hopefully it works out for you.

I recently found out that a relative who is almost 65 but still working for at least 1-2 more years has kept 100% of his retirement accounts in stock index funds. I don't know exact fund names, but they are at different brokerages/banks. He only started saving for retirement around age 40, knew enough to buy index funds, and keeps about 10% in cash. He has never held any bonds and casually told me that his retirement accounts are down 10-15%. I would guess his entire net worth is 1 to 1.2 million plus about 500k home equity. I'm afraid that I had an allergic reaction to the news of the 100% stocks at age 65, but my goal now is to help him. He and his wife live extremely frugally (<40k/year) so will not run out of money (I THINK). There is ...

This one does not use modern technology and has a simple, time tested design. The motor will last as long as you do. https://www.amazon.com/Columbus-Washboard-2072-Family-Silver/dp/B0000CBILJ/ref=sr_1_7?dchild=1&keywords=washboard&qid=1602467579&sr=8-7 :annoyed Actually, there are quite a few manual washing machines still on the market that do quite a good job (and are better than just a washboard.) They're usually marketed to long-term camping and off-grid situations. The manual part can be a handle or a foot pedal. I'm not providing links, because that's not what OP actually wants. I'd suggest looking to the basic models with fewer features. The less they tout features that say "automatic," the fewer chips are used....

I’ve had a Roth with contrafund and low price stock for decades and that account has appreciated more than any of my other accounts. I do realize much of that outperformance was probably earlier years. I’m always looking at potentially divesting them but haven’t been compelled to do so yet.

This fidelity page should confirm your questions. For a CMA type account: In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance. Anything in excess is put into money markets: The Money Market Mutual Fund Overflow component ("Money Market Overflow") of the FDIC Insured Deposit Sweep program, was added to ...

Does anybody use Fidelity Cash Management for business? Are you able to increase FDIC over $250k via their sweeping program to multiple banks?

What other solutions are available for small business, other than having multiple accounts and constantly moving money in and out to keep them all within $250k?

There is absolutely zero reason to work in an abusive environment. The environment and the offending people are not going to change and it isn’t going to get better.

I’d get the heck out ASAP. Afterwards a conversation with an employment attorney wouldn’t hurt. At a minimum you may very well be able to get unemployment comp even though you quit, as you could argue you were being forced out and working in an unethical and abusive work environment.

Wife and I are submitting an offer that is likely to be accepted based on conversations with sellers. We max our 401ks already. Would I be better off paying cash or taking a mortgage given the rate is a little under 7% and likely to go down in the future (not interested in opposing perspectives of that assumption)? Cash is currently in my taxable account. Just sold all stock at $18k loss, which I can buy back in should we decide the mortgage option. Offer Price: $500k Downpayment: 20% Rate: 6.9% Annual Real Estate Related Tax: $7,500 Fed Top Marginal: 24% We take the standard deduction and would likely continue to do so Again, we max our 401ks already and that would not change regardless of either option. I am genuinely confused in reading...

Hi all. DW is in a very difficult situation we're trying to navigate. She's mid-career, and part of the senior leadership team of her department (not a department head, or C-level). She's been at her company for a little over 2.5 years. It's been a long, hard journey that in hindsight, was not as advertised and this company was not a good fit. Live and learn, that part is ok. We make wrong turns in our career, and she's been looking for a new job since the end of last year. However, the combination of new executive leadership about 6 months ago (including her department head) and a series of situations over the past few months events have made it debilitating (and I don't use that word lightly) for her to go to work each day. Without getti...

Bought and put in use a small car for business in 2019. Initial cost $44,500. Here are the numbers in past. If they are wrong, I don't plan to amend but just want to calculate correct numbers for next few years. I assume that the vehicle will be fully depreciated on Dec 31, 2024. I am working on 2022 return. Turbo tax says that depreciation for 2022 AND 2023 is $0. Not sure why. Can you please guide me as to what numbers should be in the blanks below? I am using 200DB HY Year Business Use Depreciation deduction on 1120s 2019 69.56 18,100 12,590 (special depreciation) 2020 61.40 3,206 8,743 2021 65.10 8,448 2,087 2022 62.00 ?? ?? 2023 assume 65% ?? ?? 2024 assume 65% ?? ?? why is your 2020 deprecation 3206 and deduction 8743? I would have e...

It has its charms but it can get touristy and loud and partly tacky. You really kind of have to know what you want specifically to see and do. Don’t go there thinking you will go to a beach. Whatever beach they have there is pretty underwhelming.

A bus ride from Key West to Hollywood might take much of the day.

Article on 10 banks that could face trouble. Includes Boglehead favorite Ally bank

https://www.marketwatch.com/story/the-1 ... =home-page

I’m kind of slowly transitioning to electronic. I don’t keep new paper statements, I turn them off so they aren’t sent and occasionally I go online and download them just to have them. I still have a couple of file cabinets with old tax returns and some old statements. I culled out most of the detail and mainly kept the main forms. I still hold on to them for some unknown reason. Maybe eventually I’ll scan them. Too lazy to at this point. I also have some very old statements. Probably don’t need them but I hold on to them. Pretty much everything else I either toss/shred, or when I get it and I want to hold it for a spell I put it in a large drawer with a bunch of papers. Every year I go through that drawer and toss/shred 95% of what is in it.

I grew up behind a lawnmower, but as I approach 50 I'm beginning to reassess whether I shouldn't just pay somebody to take care of the mowing/edging/trimming etc. We live in a subdivision in Houston on a 8000sf lot with lots of beds. I do enjoy some lawn care, just not the 3-4 hours per week. I travel with my job (3-4 days gone per week) and always feel like I don't have enough time on the days off. I would just like more time to do the things I want to do, especially now that the kids are almost gone. Our income level/hourly wage more than dwarfs the cost of lawn care. I recently hired a pool company to take care of the pool, so maybe its just a trend..... My question is has any other Bogleheads reached this conclusion and do you have any...

Just a different perspective. Take it for what it’s worth. Evaluate if bankruptcy is an option. It may or may not be depending on the state. I’m going to assume her keeping a strong credit rating isn’t a priority. As to credit cards I have a young adult relative who spent a bunch of money there was no way she was able to pay off. Bankruptcy may or may not be in her future. But in a little less than two years they have gone to collections and are now sending settlement offers substantially below the debt face value. You may be able to sit on them and see what happens, or call them and tell them the situation. Often these credit card companies are pretty quick to negotiate and work out very low interest payment plans. Can you declare bankrup...

Many moons ago, I had to file Form 8606 for several years in arrears because the form was new and I did not know that I had to file such a form. Just for entertainment, here is a link to the very first form 8606. It was then a one page very simple and straightforward form. They have since added many sections to that form but did not bother to change the form title. https://www.irs.gov/pub/irs-prior/f8606--1987.pdf Several decades ago I contributed a very small non deductible IRA and failed to do an 8606. Later I figured out I should have, so I sent in an 8606 form with an explanation and apology for the omission. I never heard anything after that. For the first time in many years I did a Roth conversion this year and am trying to figure ou...

Just a different perspective. Take it for what it’s worth.

Evaluate if bankruptcy is an option. It may or may not be depending on the state. I’m going to assume her keeping a strong credit rating isn’t a priority.

As to credit cards I have a young adult relative who spent a bunch of money there was no way she was able to pay off. Bankruptcy may or may not be in her future. But in a little less than two years they have gone to collections and are now sending settlement offers substantially below the debt face value. You may be able to sit on them and see what happens, or call them and tell them the situation. Often these credit card companies are pretty quick to negotiate and work out very low interest payment plans.

jabberwockOG wrote: ↑Sun Feb 26, 2023 6:05 pm Suggest you set your iphone option to require passcode or faceID immediately. Also set Erase Data option - this will erase all data on your phone if passcode guessing attempts exceed 10 incorrect attempts. These options are under FaceID and Passcode setting section.

Not a good idea to have banking and investment apps on your phone.

There is a code and Face ID is set up. But as mentioned if Face ID doesn’t work the code will override it.

It seems like most here don’t think others getting the code is an issue. To me it doesn’t seem that difficult for parties that are truly determined to do it.

Not having banking apps would be a big inconvenience. In my case I see no need for brokerage company apps on phone.