Search found 19 matches

by hp12see
Fri Aug 23, 2019 1:14 pm
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

You may also want to keep these type of conversions separate from direct Roth IRA contributions, if there is a risk of withdrawal before age 59.5. If there's a risk of withdrawal before age 59.5 or within the next five years? My understanding is that you can withdraw either without penalty after fi...
by hp12see
Thu Aug 22, 2019 5:24 pm
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

Is there any confusion tax wise if the regular Roth IRA is all post-tax money? It seems like in that case both the regular and backdoor Roths would be post-tax and there wouldn't be any additional tax complexity? hp12see, I can't figure out what this question means. If you don't get an answer, mayb...
by hp12see
Thu Aug 22, 2019 4:16 pm
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

We plan to start contributing to a Roth IRA next year and it's unclear whether we'll fall above or below the income limits for contributions (or in that messy prorated middle). Are there any downsides to just bypassing the whole "will we won't we?" question and using a backdoor Roth approach? Is th...
by hp12see
Thu Aug 22, 2019 10:19 am
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

Thanks for this @lakpr, you've identified my question directly. I was not aware of the different treatments for withdrawal before 59.5. We don't intend to pull anything early (does anyone?) but for the sake of simplicity I think we'll just start with a backdoor Roth and keep the funds all the same '...
by hp12see
Thu Aug 22, 2019 10:07 am
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

The backdoor Roth is open to everyone, so yes you can do that if you're not sure about normal eligibility for Roth contributions. Keep in mind the pro-rata rule (https://www.bogleheads.org/wiki/Backdoor_Roth) The other possibility is to wait until your taxes are done next year, as you can contribut...
by hp12see
Thu Aug 22, 2019 9:55 am
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

Re: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

The backdoor Roth is open to everyone, so yes you can do that if you're not sure about normal eligibility for Roth contributions. Keep in mind the pro-rata rule (https://www.bogleheads.org/wiki/Backdoor_Roth) The other possibility is to wait until your taxes are done next year, as you can contribut...
by hp12see
Thu Aug 22, 2019 9:30 am
Forum: Personal Investments
Topic: We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?
Replies: 33
Views: 1761

We're on the bubble with regards to IRA income limits, can we just play it safe and use the backdoor Roth approach?

We plan to start contributing to a Roth IRA next year and it's unclear whether we'll fall above or below the income limits for contributions (or in that messy prorated middle). Are there any downsides to just bypassing the whole "will we won't we?" question and using a backdoor Roth approach? Is the...
by hp12see
Wed Aug 21, 2019 2:59 pm
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

This would be a good post in most of the threads on this forum. That guy with the Toyota is my kind of guy. Following routine rules for wealth accumulation is much more likely to be successful than trying something unusual to achieve the unusual. I'm not wealthy so I'm certainly not the proverbial ...
by hp12see
Thu Aug 15, 2019 10:20 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

100% equities provides nothing with which to rebalance in case of a market correction. 90/10% can over time provide a better return than 100%. I came here to say the same thing. The ability to re-balance/ hold "dry powder" from bonds/fixed income can prove very useful. I say be aggressive, but 100%...
by hp12see
Wed Aug 14, 2019 9:10 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

can the high probability of a large inheritance be valid justification for investing in a riskier (i.e. 100% stock index funds) portfolio? Risk is not an either or. You are (at least) talking about increasing volatility risk, increasing duration risk, and decreasing returns risk. Other posts have h...
by hp12see
Tue Aug 13, 2019 11:45 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

I know anything can happen and I hope my parents both live for a very long time to come, but I'd peg the odds of this inheritance coming through (i.e. not being squandered, spent down, or given away to the circus) at 99% . Umm, about that... after my parents divorced, my dad married a woman 30 year...
by hp12see
Tue Aug 13, 2019 11:44 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

Welcome to the forum and you've stated your case well. I think it would help if we knew at least approximately the size of the anticipated inheritance, but that's your call. Whether you can go 100% stocks (as you say you would like) based on the possibility/probability of a future inheritance, is s...
by hp12see
Tue Aug 13, 2019 11:02 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

Here’s a chart that shows returns and volatility for various allocations: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations Thanks for that - I hadn't seen those graphs before. Interesting that the 20/80 stocks/bonds has fewer down years than the 100% bonds appr...
by hp12see
Tue Aug 13, 2019 9:55 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

We all make bets on the future...when I was in my 20s, I "knew" that I'd be successful and make a high salary in my 30s/40s, so I didn't feel the need to save anything. If I "knew" I was going to get a large inheritance, my strategy would be to spend all the money I make, and not save anything. So ...
by hp12see
Tue Aug 13, 2019 8:28 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

I think that's different than thinking you can go live beyond your means with day to day consumption expecting to be bailed out which I am assuming is more toward what your post referenced? I'm not directing this at you specifically (or you alone) but either people aren't reading my post or, perhap...
by hp12see
Tue Aug 13, 2019 7:50 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

I'd peg the odds of this inheritance coming through (i.e. not being squandered, spent down, or given away to the circus) at 99%. Yeah, I've got a couple of kids like that, too. (Not as much money though.) Boy, are they going to be surprised. Are they going to be surprised because you intend to spen...
by hp12see
Tue Aug 13, 2019 7:33 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

Welcome to the Board! I agree that 100% equities makes a lot of sense for you at your age. It's what I did, and it's what I'm advising my children (who are about your age) to do. Personally, I'd begin to taper back somewhere in the age 45-50 timeframe; that may be more aggressive than many. OP, I d...
by hp12see
Tue Aug 13, 2019 7:02 am
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Re: Can having wealthy parents be a justification for a more aggressive investment strategy?

I have much less of a problem with you being 100% equity, especially at your age, than I do your reasoning for it. You sound as if you might not be 100% equity if you weren’t convinced you were getting a large inheritance. That’s what concerns me. As others have stated, there is no guarantee you’re...
by hp12see
Mon Aug 12, 2019 9:12 pm
Forum: Personal Investments
Topic: Can having wealthy parents be a justification for a more aggressive investment strategy?
Replies: 97
Views: 7243

Can having wealthy parents be a justification for a more aggressive investment strategy?

Hi Bogleheads, I've been lurking here for a bit but this is my first post on the forum. I'm in my early 30s and increasingly interested in personal finance and planning for the future. About a year ago I began having detailed discussions with my parents about their finances and it turns out they a) ...