Search found 25 matches

by LthanP
Thu Aug 20, 2020 8:42 am
Forum: Personal Investments
Topic: Please review my de-risking/cash-out plan
Replies: 133
Views: 9466

Re: Please review my de-risking/cash-out plan

KlangFool,
This seems to be a short term cash out plan for specific returns in the market. If not short term, how many years would you want to do this? Your 60/40 portfolio with 1.5 million at a 3.8 percent withdrawal rate is 57K and close to your yearly expenses with no other sources of incomce. I get what you are doing. You have worked hard for the $$ and see some reasonable reason to get cash out of the market when the going is good. You have done well and will continue to do well.

At some point, will you just withdraw 60K from the portfolio once a year and be done with it. And let your fixed income portion of the 60/40 do its job while you enjoy whatever you have planned for the year - working or retired :happy

LP
by LthanP
Mon Mar 16, 2020 12:28 pm
Forum: Personal Investments
Topic: Who is staying course and how are you dealing with net worth going down?
Replies: 359
Views: 33489

Re: Who is staying course and how are you dealing with net worth going down?

I already posted earlier in the thread what I was doing. Updated today: I am buying $1,000 dollars worth of stock (mutual fund so adding to position) . Not because it will make a difference one way or another in my net worth, but it makes me feel good and I want to be able to tell my kids I believe in the country and the future. It just a small thing I am doing.
by LthanP
Sat Mar 14, 2020 10:42 am
Forum: Personal Investments
Topic: Who is staying course and how are you dealing with net worth going down?
Replies: 359
Views: 33489

Re: Who is staying course and how are you dealing with net worth going down?

Investor for 31 years. I have worked 34 years but my first job had no 401K only a pension with a 7 year vest period. Ahh I should have stayed at my first job! I have made no change to our 40 Stock 60 Bond which is considered conservative at my age but my wife and I made a decision to move to this to avoid sequence of returns risk last year. I learn from many people my age on this site, and equally important, I learn from people here that offer experiences and have been investing for 40 to 50 years. So I can say I am a young investor compared to some. 2008 was my moment (as it was for many): Turns out 100%stocks 0% Bonds was not my tolerance but did help me achieve success up to that time. It is really hard to know your risk tolerance until ...
by LthanP
Sat Dec 28, 2019 8:25 am
Forum: Personal Investments
Topic: retirement income - dividends and interest vs total return
Replies: 12
Views: 1686

Re: retirement income - dividends and interest vs total return

Just an example from an older person that wants income: I manage (authorized trader) the income portfolio for my Uncle who is 84. It produces varied income every month. The key for me is I ask him "Do you need this money?" The answer is always no! For you , if I read correctly, the answer for you is no but you are looking for ways to generate more income. He has social security and cash and CD's in his bank account. He just wants more income than his bank and CD's and the overall portfolio generates about 4.35% per month. I find it more complex than it needs to be but he is happy getting a check every month. I do not agree with the appriach but it is his money, his decision. At tax time, he does not like being taxed on the income....
by LthanP
Fri May 31, 2019 5:49 pm
Forum: Investing - Theory, News & General
Topic: Do you have an allocation more conservative than 50/50 ?? What is it? Why? How Bogleheads are getting it done.
Replies: 166
Views: 24100

Re: Do you have an allocation more conservative than 50/50 ?? What is it? Why?

Allocation 40/60 Why? Desire reduced volatility when it matters most to me, just before retirement. Wade Pfau's book recommended by several on this board (How much can I spend in retirement) influenced me and especially chapter 3 Spending from Volatile Investments and Sequence of Returns Risk. Our IPS goal is 50/50 while accumulating, but my wife and I talked and agreed 40/60 is right for us now. Age? 57 not retired. I have a goal on when I want to retire, but life happens and who really knows if I will retire on my own terms. Sounds Great! I also was influenced by Wade Pfau's thoughts on "Sequence of Returns Risk. However, I'm not so sure about the use of a "Reverse Mortgage" as a buffer to selling portfolio assets at a wro...
by LthanP
Wed May 29, 2019 2:32 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

OP here.
I ended up opening a HELOC for any emergencies in the short term. It took about 15 business days start to closing and I completed the app and closing all online.
Thanks for your inputs. I am now working on $$ outside of the retirement accounts.
by LthanP
Wed May 29, 2019 1:59 pm
Forum: Investing - Theory, News & General
Topic: Do you have an allocation more conservative than 50/50 ?? What is it? Why? How Bogleheads are getting it done.
Replies: 166
Views: 24100

Re: Do you have an allocation more conservative than 50/50 ?? What is it? Why?

Allocation 40/60

Why? Desire reduced volatility when it matters most to me, just before retirement. Wade Pfau's book recommended by several on this board (How much can I spend in retirement) influenced me and especially chapter 3 Spending from Volatile Investments and Sequence of Returns Risk.

Our IPS goal is 50/50 while accumulating, but my wife and I talked and agreed 40/60 is right for us now.

Age? 57 not retired. I have a goal on when I want to retire, but life happens and who really knows if I will retire on my own terms.
by LthanP
Wed Feb 13, 2019 7:35 pm
Forum: Investing - Theory, News & General
Topic: What Is Your Favorite Bogle Quote?
Replies: 48
Views: 4083

Re: What Is Your Favorite Bogle Quote?

“The Songs I Sang Will Still Be Sung."

+1 Stay the Course
by LthanP
Wed Feb 13, 2019 6:45 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 11037
Views: 2066806

Re: What Movie Have You Recently Watched?

Enjoyed Eighth Grade, Would I watch it with an 8th grade daughter, likely not. Watched with my college age daughter. We enjoyed it and found it funny and positive message getting through that time period. Bo Burnham first film as writer and director.
by LthanP
Wed Feb 06, 2019 4:29 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Yes my company 401K plan notes that if I use the Separation from Service 72(t)(2)(A)(v) exemption from 10% penalty, I have to take my full amount out , not just what I need for living expenses for 1-2 years and or emergency. I will find out if I can withdraw the whole amount as two different items. I do believe I can do as you described and thanks for input. And thanks for reminder about losing the exemption once a rolled into IRA I think what Retired2013 is saying is you could combine the full withdrawal with an indirect rollover. You would withdraw the full amount, and that's all your 401k plan knows or cares about. But then you only keep what you need for living expenses (with no penalty because of the age 55 rule) and roll over the rem...
by LthanP
Wed Feb 06, 2019 4:22 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

And thank-you all for your help. It really has brought clarity to my situation and I have plan of action.
by LthanP
Wed Feb 06, 2019 4:20 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Updated original post for clarity on need money for living expenses and not just emergency and specifics on using Separation from Service 72(t)(2)(A)(v) , not series of substantially equal payments 72(t)(2)(A)(iv)
by LthanP
Wed Feb 06, 2019 4:18 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

You seem to be really focused in an emergency fund in the event of losing your job, If you have to leave your company, then you can rollover your 401(k) to an IRA. You will be able to withdraw from your cash balance based on the 72(t) rule. You will pay ordinary income taxes on the withdrawals. But rather than just as an emergency fund, would you need to use the IRA money to cover your living expenses (in the event of a layoff)? If so, is your question really how much of your 401(k) you should hold in cash in case you need to tap that money if you lose your job? It does sound like you should follow the earlier suggestion of setting up a HELOC to cover any current emergency, since your non-retirement savings are so low. delamer, Yes , I do ...
by LthanP
Wed Feb 06, 2019 4:08 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

OP, you only have another two years or so before you can draw on 401k without penalty. If an emergency comes up in the meantime that involves separation from your employer, your best bet is to first draw on the HSA (assuming you have unreimbursed receipts) and Roth IRA contributions. Many people think of those as secondary emergency funds. A good reason to max out those accounts - and definitely prioritize those ahead of funding your kids' weddings. If that's not enough to cover expenses, you can roll over the 401k balance to an IRA (since you'll have separated from the employer). The 10% early withdrawal penalty only applies before age 59.5, and only to the amount you actually withdraw, not to what you roll over to a traditional IRA. If y...
by LthanP
Wed Feb 06, 2019 3:59 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

As I understand, if you leave your employer after age 55 / in the year you turn 55, you can withdraw from *that* 401k without the usual 10% penalty this is much friendlier than the 72T situation. See here: https://www.thebalance.com/what-is-the-rule-of-55-2894280 He is already 57 so he's beyond the 55 age for the 10% penalty. What I believe he is saying is that the company requires him to take the whole amount. He can't just take any amount he wants, even though he is past the age of 55. If you need it as an emergency, then I would see if you can take what you need for the emergency and rollover the balance to an IRA. However, just remember that once any rollover balance goes to an IRA, then you will need to be 59.5 to avoid the penalty. C...
by LthanP
Wed Feb 06, 2019 3:46 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

You seem to be really focused in an emergency fund in the event of losing your job, If you have to leave your company, then you can rollover your 401(k) to an IRA. You will be able to withdraw from your cash balance based on the 72(t) rule. You will pay ordinary income taxes on the withdrawals. But rather than just as an emergency fund, would you need to use the IRA money to cover your living expenses (in the event of a layoff)? If so, is your question really how much of your 401(k) you should hold in cash in case you need to tap that money if you lose your job? It does sound like you should follow the earlier suggestion of setting up a HELOC to cover any current emergency, since your non-retirement savings are so low. delamer, Yes , I do ...
by LthanP
Wed Feb 06, 2019 3:26 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Epsilon Delta wrote: Wed Feb 06, 2019 1:01 pm I believe the OP is talking about the separation of service after age 55 exemption 72(t)(2)(A)(v) not the SEPP exemption 72(t)(2)(A)(iv)

While we are being terminologically correct: calling SEPP "72t" is unbelievably sloppy. Every exemption to the 10% early withdrawal penalty, including being over age 59.5, is 72t


https://www.law.cornell.edu/uscode/text/26/72
Epsilon Delta,
Thanks for the link and clarifying the exemption to 10% penalty early withdrawal penalty is all under 72t. Yes I am posting in particular about using the Separation from Service 72(t)(2)(A)(v), not a series of substantially equal payments 72(t)(2)(A)(iv)
-LTP
by LthanP
Wed Feb 06, 2019 10:24 am
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Anybody else rely on the 72t rule? As an emergency tool? So in a nutshell , I am thinking an emergency fund for someone in the 40's age range maybe much different than in late 50's with retirement in the horizon. I hope this make sense. -LTP Good advice from other posters on your questions. Regarding emergency funds... An emergency fund probably does look very different for “someone in their 40s” (you) versus someone closer to a (appropriately-funded, well-planned) retirement on the horizon. I think you are saying the former might not need any or as large an emergency fund as the latter. IMO the opposite is true. You, in your 40s, are not close to FI, don’t have liquidity/emergency funds and are cash flowing living expenses as well as educ...
by LthanP
Wed Feb 06, 2019 9:35 am
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

aristotelian , Thank-you your reply and helping me with clarity of my situation. I appreciate it. 1) Your idea of taking out student loans to pay for daughter's senior year would free up 26K (tuition) in cash flow for us this year. We could increase emergency fund to 35K by end of 2019 doing this for Roth and Cash. We would pay her rent out of cash flow. And good point on waiting till 59.5 when real access to 401K could happen if needed. 2) My son is taking out loans for medical school rent and tuition, Its not something we can come close to covering. I receive a small pension of 320 per month that I send him to cover gas/food small items. We cover his travel home as he is out of state. I hate the idea of a loan for food. But you have me th...
by LthanP
Wed Feb 06, 2019 6:57 am
Forum: Investing - Theory, News & General
Topic: If you are old, why bother with rebalancing!!?
Replies: 115
Views: 11464

Re: If you are old, why bother with rebalancing!!?

I would love to get to that point, I have not updated my word doc that has our Investment Policy Statement since 10-8-2017.
But adding these lines would make it easier than what I have now :sharebeer

"If one has any portfolio of equities:bonds in an asset allocation of between 30:70 and 70:30 and one is over age 62 (especially if one is collecting SS benefits), then there is no point is worrying about rebalancing, no point in looking at one's asset allocation, and no actual point in rebalancing. "
by LthanP
Tue Feb 05, 2019 9:15 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Re: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Nate79, I don't want to envision anything hitting my family, but know that's not realistic. I do feel a job loss is a major event for an emergency fund. Illness is another. And the idea of an emergency fund is to tap it so you don't have to go into debt and can pay for the emergency event. I do have current LTD insurance and medical of course through my job. And I have the usual Life/Home/Auto/Umbrella. Maybe its my age showing in that a job loss could mean forced retirement and at that point the withdrawal rate rules of 3.5 to 4 percent would come into play which in theory would last a life time. So in a nutshell , I am thinking an emergency fund for someone in the 40's age range maybe much different than in late 50's with retirement in th...
by LthanP
Tue Feb 05, 2019 6:57 pm
Forum: Personal Investments
Topic: Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund
Replies: 30
Views: 2033

Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund

Greetings and question on your thoughts on using 72t 401K separation rule as emergency fund and pay for living expenses. An Introduction as my first post: Ages Me 57 and wife 55 at end of 2019 Screen Name - LthanP Avatar - A picture I took in Berkeley CA Reason for Screen Name; LP Vinyl - I love music, many forms. LP Long Play - I would like to think I am in stocks, sorry low cost funds, for the long play.. Less than Perfect - Describes my investing road to Bogleheads Shortened -LTP Hands on IT manager. I do the work and manage a few people. Worked for 5 Megacorps. Consolidated older 401k(s) to Vanguard. 18 years at present Corp. Retirement Eminent, 55-60+. I would like to work 4 more years. I am eligible for distributions from 401k without...