Bogleheads.org

12 days for state. 18 days for federal. Usually my federal comes first, so it felt longer this year.

JenniferW wrote: ↑Thu Mar 02, 2023 12:05 pm

HenryG wrote: ↑Thu Mar 02, 2023 11:00 am This is my approach as well. I have phased out of bond funds in favor of treasuries purchased at auction and held to maturity.

What are the duration of the treasuries you purchase at auction? 52 weeks or less (bills) or notes/bonds?

Currently 5 years or less. I have bonds maturing approximately every 6 months over the next 5 years. I expect my W-2 income to decrease during this period, so the bonds create fixed income cash flow. When each bond matures, I will determine what I need for spending and the remainder will be reinvested based on my specific financial situation at the time.

I would use VTI in your situation.
Avoid target date funds in taxable as periodic rebalancing within the fund might create unexpected taxable events.

munemaker wrote: ↑Sat Dec 24, 2022 9:01 pm Personally, I don't like to lose principal on bonds. I want bonds to serve as a ballast to stabilize my portfolio and take the risk of principal on the equity side. My approach is to hold treasuries to maturity. Right now, I like the shorter term treasuries.

This is my approach as well. I have phased out of bond funds in favor of treasuries purchased at auction and held to maturity.

The other day I met a millionaire- happily driving a 2014.5 Toyota Camry Hybrid. That person could easily afford any/most expensive sub $1 million car that’s out there (with cash). But, happy to own/drive that Toyota. What he said was priceless: I’ve never been to dealerships to fix/repair anything on his vehicle — and said: he never finds Money or Honey at those service centers; even more importantly - his time is “lot” more valuable - than making frequent trips (wasting time) to dealership service centers. Hence, he is happy to save “time” (yes, monies too — but to him, it’s secondary..) His monies are invested in market (highly liquid) and in his business (somewhat illiquid) Just curious what did you use to determine he was a millionaire?

Yes, we slowed new retirement savings once our 401ks seemed to be on a well-funded trajectory. We primarily prioritized taxable savings (more readily accessible before standard retirement age). Our objective is wise use of funds across our lifetime, not highest retirement account balance.

Well, Karsten and Fritz have been at it again. From where I sit, Karsten/ERN is correct, and the bucket strategy is pretty much useless and overly complex and doesn’t live up to its promises of shielding from SORR. I recommend actually reading the arguments before responding, it’s pretty well laid out. What do you think? https://earlyretirementnow.com/2023/01/25/discussing-retirement-bucket-strategies-with-fritz-gilbert-swr-series-part-55/ We all use buckets. I think it's stupid to say "60/40" is not a bucket but "equities & 10 years expenses in safe assets" is. Right, my whole portfolio is my emergency fund, my spending account, slush fund, etc. It’s all one bucket, we all just have different allocations and types ...

Not a early retirement story, but what I've noticed is many regret retiring.. One example was my boss who was let go long before he planned due to me raising a safety red flag. Coworkers saw him sitting in his truck watching a new addition to the facility he managed being built. He was seen watching people go in and out of Walmart. Clearly, work was his life, and after being let go he was bored and had few friends and died less than a year after leaving. RIP. Some of us who live in farming communities have noticed groups of retired farmers hanging out together in McDonald's. Or how about the retired guy who comes back to work just to talk or rides the bus around? What this tells me is, that by the time you're at retirement age, many of you...

Following this thread. Good insights.

Fallacy: you should treat your investments as one big pile.
Reality: you have different money 'warehouses' with different contribution/maintenance/withdrawal rules.

OP, I'm interested in what you decided to do, if you're willing to share. The only additional thing I could think of is trying to pack income into specific tax years if you have controllable income sources. Maybe you can create a higher income tax year, and then maintain multiple years of lower income.

I think several of these, especially the work longer regret, are actually examples of desires without any thoughts or consideration of the repercussions or tradeoffs since they won’t be faced. It would seem like a common behavior to say “I wish I had….” with regards of something that would benefit you today given you don’t pay the opportunity cost. As a thought experiment, I wonder what percentage would still say they wish they had worked longer if they could use a time machine and make the choice again knowing the choice would result in having to actually go to work Thought-provoking response, thanks. I wonder about the specific regrets underlying the 'working longer' regret...if it's as simple as wishing one had more financial security N...

My wife and I are reviewing our estate plan, and due to Vanguard Transfer on Death (TOD) limitations (specifically, Vanguard does not allow TOD beneficiaries to joint accounts), we are considering alternatives to our existing taxable Joint Tenant With Right of Survivorship (JTWROS) account structure at Vanguard. For those with joint accounts at Vanguard, are you comfortable with no TOD option? I assume the final surviving owner could adjust account types and beneficiaries once the account is no longer jointly-owned. Is an alternative (non-joint) account structure preferred for married households? In preliminary estate planning discussions, our attorney has recommended naming a trust as beneficiary to our accounts which doesn't seem possible...

You're in really good shape based on what you posted.
#1 - No, there's only so much you can do with W-2 income. You could explore switching your state residence to a lower income state if you have that flexibility.
#2 - No. Some folks prefer VTI over VTSAX in taxable, but I don't see a problem either way.
#3 - Plan ahead for large purchases, anything you can't cash flow out of income, to avoid tapping into your taxable account unexpectedly. You may want to introduce some fixed income down the road, but 100% stocks seems reasonable at your age and income levels.

I file as soon as possible. Usually late Feb or early Mar once all forms are received and reviewed.

BradJ wrote: ↑Sat Feb 12, 2022 8:43 am how does one mentally accept “good enough” on savings?

"...change your autopilot focus from earning and saving and maximizing your wealth to living the best life you possibly can." -Bill Perkins "Die with Zero" book. It's easy to say, can be tough to do in practice.

You've received the predictable "saving is a state of mind" posts from everyone but obviously it's a lot easier to have money left over on a $100,000 salary than a $30,000 salary all else being equal. To answer your specific question, except in large coastal cities (NYC, SF, Seattle etc) you should be able to structure your home/auto/everyday life such that you live reasonably well and also put a decent amount of money away on $50,000 a year.' The habits you establish then will carry you further as your income rises, making it even easier to save, and a virtuous cycle is created. Yes, this sounds about right. If you're around $50k individually - or anywhere around $60-70k US median household income - and you play the long game, y...

If the goal is to live on what you need and leave the rest to heirs, then it makes sense to keep the inheritance at a more aggressive allocation. An 80/20 allocation on the whole portfolio may actually be something like 30/70 on retirement funds and 100/0 on the inheritance funds. The two funds help explain this, thanks for the example. And the more total $ you can afford to have in the aggressive (inheritance funds) part of the portfolio, the higher likelihood the overall portfolio tilts to a more aggressive AA over time. Which sort of aligns with the AA example the OP mentioned: start with 35% equities at 65 years old, then *increase* to 100% equities at 95 years old. The OP didn't say, but if someone constructed their portfolio this way...

Ben Mathew wrote: ↑Sun Oct 24, 2021 1:59 pm A 10% drop in stocks at age 65 affects future consumption by the same amount as a 10% drop in stocks at age 85 would do.

I think the affect would be different, because annual spending expectations and potential drawdown periods (life expectancy) are likely to differ at those ages. Portfolio size would matter as well.

In general, we should avoid strategies that only pay off if one-sided events occur. Running out of money is more damaging than having excess money IMO. Issues with the bond tent approach have been discussed at length in other threads, such as this one , this one , this one , and this one . There is support for a bond tent strategy in the threads you posted. The arguments against seem to be 1) just adjust your withdrawal percentage down, or 2) just go back to work. I agree, those can be pursued when any investment strategy begins to fail. I don't see why maintaining a steady AA throughout retirement doesn't sound practical. It actually sounds much more practical than increasing one's allocation to stocks as one ages. Why maintain a steady A...

willthrill81 wrote: ↑Sun Oct 24, 2021 1:16 pm If stocks do well when you're mostly allocated toward bonds but then do poorly when you're mostly allocated toward stocks, you will have a worse outcome than having had a fixed asset allocation all along.

Of course, but wouldn't you do better on the inverse? You're more protected if stocks do poorly early, and you can tolerate a higher stock allocation later because you've made it through a high period of risk (i.e., early retirement years). That's one of the benefits I see in the tent strategy; maintaining a higher bond allocation when it matters most. It sounds like you're recommending a fixed AA throughout life which doesn't sound practical to me (maybe I'm misinterpreting).

willthrill81 wrote: ↑Sat Oct 23, 2021 1:05 pm

HenryG wrote: ↑Sat Oct 23, 2021 11:17 am This reminds me of a bond tent strategy, which makes sense to manage sequence of return risks in early retirement years:

Actually, it doesn't. There have been several threads debunking the 'bond tent' approach.

It's actually pretty simple to see how the strategy could lead to a worse outcome. If stocks do well when you're initially tilted toward bonds but then stocks do poorly when you're later on tilted toward them, you'll come out behind a fixed AA.

I don't understand what you're saying about tilting initially and later. Can you elaborate?

I remember enjoying the jerky from Kramarczuk's in Minneapolis, when it's in stock:
https://shop.kramarczuks.com/products/b ... 8b57&_ss=r

A big part of the MBA value IMO is the job placement available through the school. Most reputable MBA programs route graduates directly into roles via recurring company recruiting relationships, career services, etc. Look at placement statistics for any program you consider, research companies/roles that are desirable and see where they get their talent, etc.
I did an executive style MBA program in the late 2000s (~5 semesters, some intensive weeks on campus, alternate weekends in person, etc.); happy to answer questions about that if helpful.
I worry about the ROI of online-only MBA programs, but I may just not be up to date on the latest MBA trends.

...Option 2...give up a good income just to relax and do nothing... I would choose any other option over this one. Yes I know, I cherry-picked the quote, but this reads like you haven't really thought through potential retirement lifestyle options. I suggest you think deeply about what your life could look like post-full-time work, and how additional savings would influence that. If your job has gotten more bearable with work from home, etc., it may be easier to stay, but that's an easy excuse to maintain status quo. It looks like you're in great financial shape, so I'm trying to challenge your thinking a bit as too many people don't do things out of inertia IMO. My practical suggestion is to take things a year at a time: you don't have to...

This reminds me of a bond tent strategy, which makes sense to manage sequence of return risks in early retirement years:
https://www.kitces.com/blog/managing-po ... -red-zone/

That is generally how I'm approaching bond holdings, which means I currently look at bond holdings more as a dollar amount relative to my spending, income security, and retirement date; and less about my age and/or top-down asset allocation.

Thanks all for the insights. I completed this switch in our taxable accounts: Sold VBTLX and with the proceeds purchased a combination of MUB and VTI, as we are comfortable lowering our overall bond holdings. MUB is now the only bond holding in our taxable accounts, which better matches our anticipated near-term tax situation. The taxable accounts feel cleaner/simpler as a result, and I'm looking forward to applying the losses from the sale to 2021+ taxes. Much appreciated!

goingup wrote: ↑Sun Oct 10, 2021 12:40 pm Regarding holding all bonds in tax-deferred. I'm glad we didn't follow that advice. Having a big pool of bonds in taxable (muni and other) has allowed us to tax loss harvest bond funds over the years. Bonds in taxable also now provide monthly cash flow in our retirement. Most beneficially, using cash/bonds to fund expenses in early retirement has allowed us to qualify for significant ACA health care subsidies.

This is along the lines I'm thinking with bond holdings, having greater access/flexibility and cash along the way.

wetgear wrote: ↑Tue Oct 12, 2021 8:08 am

sycamore wrote: ↑Mon Oct 11, 2021 6:52 pm For one thing, it's very unlikely he'd buy tax-free muni bonds in a Roth account

That was exactly why I was trying to clarify

Yes, it is a taxable account.

Can someone help me decide if it is crazy to own a $5k watch at a net worth level of $500k, or income of $100k etc. should my watch collection never exceed 1% of my net worth or some metric like that? How do I keep this purchase within reason to my income and net worth age etc? For one-time discretionary purchases, I find the following net worth thresholds helpful to sanity-check a purchase: .01% of net worth, don't worry about it .1% of net worth, put some thought into it 1% of net worth, really think about it Personally, I would tie a purchase like this to income rather than net worth and perhaps a meaningful milestone. I've made a few luxury purchases, around 5% of a performance bonus as an example, to treat myself and 'memorialize' an ...

birdog wrote: ↑Mon Sep 27, 2021 4:14 am Your plan sounds reasonable to me. Just curious, is your tax-advantaged space already filled with bonds?

No, my tax-advantaged space is not 100% bonds. It is mostly stock as I'm 15+ years away from official retirement age.

We currently hold ~$500k of VBTLX/Total Bond Market Index Fund in an after-tax account at Vanguard. This has been built up over the years as our primary bond holding. It generates ~$700-800/month in dividends, and has an unrealized capital loss of ~$10k. We are finding ourselves in the 32/35/37% tax brackets recently, and anticipate being in that range for at least the next few years. It seems like a no brainer to tax loss harvest the full amount, and purchase MUB/iShares National Muni Bond ETF to optimize the tax burden and maintain the flexibility/transferability of an ETF holding. Is this a fairly obvious thing to do? What am I missing?

The American Institute of CPAs has official guidance on preparing personal financial statements, which includes the calculation of net worth. If I remember correctly, one needs to include certain future tax liabilities in the calculation of net worth. Also, any expense you may incur in realizing an asset should be included in the calculation. For example, suppose your house is worth $1million, you have a mortgage of $200K on the house, and you expect to spend $80K in selling expenses, then the net worth portion of the house is $720K (I remember studying this in 1989 when I took the exam, my memory is dated). One way to look at net worth is, if you sell everything and convert into cash and pay off all your liabilities how much will you be l...

It sounds less like a frugality issue than a transition from a longtime mindset to a new one based largely on adjustment to the new money. Frugality is basically a good thing, a careful handling of money that you would probably want to continue. With time, I think you will ease into a new attitude toward money, one that allows you to spend more, but spend wisely, i.e., frugally. :happy This makes a lot of sense. OP, it sounds like your upbringing programmed you to live a certain way, and your financial situation now does not require you to live by that programming. Book recommendations: Emotional Agility: Get Unstuck, Embrace Change, and Thrive in Work and Life by Susan David Die with Zero: Getting All You Can from Your Money and Your Life...

Yes, I've had similar feelings. I bookmarked and occasionally re-read Mr. Money Mustache's post "What it Feels Like to Become Rich":

https://www.mrmoneymustache.com/2012/08 ... come-rich/

"...your financial boredom will probably continue. Keep up the good work..."

Life is in the Transitions: Mastering Change at Any Age
by Bruce Feiler

Feiler describes how to navigate life's biggest transitions with meaning, purpose, and skill...using them as opportunities for positive adjustment, creativity, and rebirth.

iluvlucy wrote: ↑Sat Jul 17, 2021 12:30 pm could we do better?

Yes, you could do better, but define what better means to you. Which dimension of your lives are important to optimize...and are your jobs aligned to that? Being happier, healthier and stronger? Or having bigger title, more money, etc.? Ask yourself why/why/why with your answers. How would your past/future selves likely answer these questions? If you were starting from a blank slate, what decisions would you make? Momentum and inertia are common factors.

Lots of good comments above as well.

Lots of good advice above. The only thing I would (re)emphasize is also working the internal relationships to set yourself up for good financial years (i.e., influencing target setting, territory/account assignments, etc.).

Another vote for Warby Parker (more fashion than sport). I visited a store with a friend earlier this month - he ordered up some prescription glasses, and I found a pair of sunglasses I really like.

I've also seen Kent Wang sunglasses recommended: https://www.kentwang.com/misc/sunglasses

I would ask for quotes for bundled options. Perhaps you can save some of the $600, while maintaining the simplicity of one provider.

JBTX wrote: ↑Wed Jun 02, 2021 6:45 pm

StevieG72 wrote: ↑Wed Jun 02, 2021 6:42 pm Assets - liabilities = net worth.

Correct. And future tax liability is a liability, albeit perhaps not easy to quantify.

+1 to these. It's a liability on the balance sheet.

Also consider the continuum between saying No versus saying Yes. A conditional Yes is an option - e.g., Yes, I'm thrilled to consider the role provided we confirm the project administrative support, team budget, scheduling boundaries, current work offload, potential career upside, (or whatever else you need), etc. And it may be possible to engage in a dialog with your manager to come to a mutual decision about the role: 1) I'm flattered you thought of me; 2) I value your+my+company success, and I want to make sure this project meets/exceeds expectations; 3) these are the critical project/role success factors as I understand them; 4) here's what I do well, and here's where I'll need others to step up; 5) are we in agreement that I am (or am ...

Also consider the situation/age of the recipient. The 26-to-35 age range is often recommended as optimal to receive financial gifts – old enough to be trusted with money, yet young enough to fully enjoy its benefits.

There's a great book by Laurence Kotlikoff (economist) and Scott Burns (noted financial columnist) called "Spend 'til the End" which addresses how to increase spending earlier rather than later. Their premise is most people spend too conservatively to finance a long retirement, which most of us won't reach. I do agree, you can spend more sooner while able than the no-fun later years. Perhaps you could split your finances into a "safe floor" section with SS, SPIA or other reliable income to cover baseline expenses, then take the balance and divide it up over 15 years. Might not cover a long miserable existence in long term care... but again, statistically few make it there. Interesting, thanks for sharing. Another good b...

Yes, as long as I was in a reliable Uber/Lyft area. Other considerations would be seasonality, safety, convenience, cost, etc. of biking (designated lanes/trails?), public transit (accessibility?), Vespa (friends have one and love it for in-town errands), walking, short-term rental cars, etc.

Swennerb wrote: ↑Tue May 25, 2021 3:08 pm I want things to be equal.

If things were equal, you would be generating $3500 passive income per month. So what do you actually want? Equal inputs (we both have the same financial situation coming into the relationship); equal process (we both work the same amount of hours during the relationship); or equal outcome (we both contribute the same total dollars over the lifetime of the relationship)? It is very difficult to align these 100%.

I’m surprised that people don’t think this is a good idea. Or perhaps because it’s Fidelity and not Vanguard that it’s a bad idea. Read the fine print, the accounts are only available to those kids who’s parent already has a relationship with Fidelity. Now let’s read between the lines - at some point down the road it’s a good bet to believe that those youngsters who become adults may be in line for an inheritance. Folks who have an existing relationship with a trusted partner will likely bring those monies to where they are most comfortable doing business. There is nothing nefarious about this concept. I completely agree this is a good idea. I don't like the idea of keeping kids in the dark about investing until all of a sudden they are ou...

Buying a used BMW 3 series would not really do anything in the big picture. That was our trigger too. When we were hitting all our financial goals and realized that an extra $10,000 spread over 5 years (plus premium gas and more expensive repairs) wouldn’t adversely impact us. We’ve always bought used (with one exception) and frequently CPO. Since leasing is so common with luxury brands, it’s pretty easy to find low-mileage, well-maintained vehicles that are 2 to 4 years old. (At least in normal inventory times). We were mid-40’s when we bought our first luxury vehicle. No regrets. Similar experience here. Hitting/exceeding financial goals, and I've always bought less than I could afford. Replaced a 12 y/o Volvo with a CPO Audi in 2019.

NYCaviator wrote: ↑Sun May 16, 2021 7:31 am

HenryG wrote: ↑Sat May 15, 2021 12:05 pm Sid Mashburn. Good quality overall, and different options in level of workmanship/price/etc. I like the Kincaid No. 3 style.
Shops are in ATL, HOU, DAL, DC, LA; occasional road shows; and of course online options.

I need to check them out. I went into the store in ATL when I needed a dress shirt in a pinch and was really impressed. I didn't realize they sold suits as well. Do they do alterations in house?

Yes, I've had alterations done in house including surgeon cuffs (working sleeve button holes) at a reasonable cost, which I like as a nice touch.

Sid Mashburn. Good quality overall, and different options in level of workmanship/price/etc. I like the Kincaid No. 3 style.
Shops are in ATL, HOU, DAL, DC, LA; occasional road shows; and of course online options.