Bogleheads.org

Is it clear that the fixed, relatively short term annuity is better than just making systematic withdrawals? Once you do the annuity, it is not part of your assets any more, it is an income stream. == Typical living expenses w/o travel = $4,500/mo. 625,000 / 8 = $6,510 per month. plus (currently) 5.25% interest on the remainder. I don't know if you'd want to hedge your bets on a change in SS plans for your wife, a potential inheritance (?), or some other change. I know you understand, but it's perhaps "misleading" to talk about a Fixed-Period Annuity using just the single word "annuity", as a shorthand. It creates more of a feeling of stability than it actually provides in the course of a lifetime of retirement! Right. ...

KlangFool wrote: ↑Tue Mar 28, 2023 6:34 pm OP,

A) I had faced starvation. I do not think someone in our country should starve. So, I donate money to our local food bank.

B) This has nothing to do whether it is satisfying to me. It is just an obligation to me to contribute to the community whenever I am employed.

C) Since I am not starving, I should contribute to the local food bank and stop others from starving.

KlangFool

That is admirable and a great take on this question. I agree!

Of course this means I'd miss out on possible market gains by making it a fixed rather than variable annuity ( or making systematic withdrawals ). But it eliminates the downside as I can lock in an amount which is sufficient to build a bridge to Social Security for my wife and I. Seems like the move TIAA Traditional is a deal to me, given it eliminates risk and starts with a higher payment. What am I missing? Is it clear that the fixed, relatively short term annuity is better than just making systematic withdrawals? Once you do the annuity, it is not part of your assets any more, it is an income stream. I don't know what you are missing. But I wonder if you'd have greater flexibility on being able to withdraw from various investments, and ...

I have the general impression that a hybrid with two systems (ICE and EV) in one car has less advantages than just going to a full EV. I thought one of the significant advantages of an EV is much less maintenance. But seems like with a hybrid you would have the maintenance disadvantages of both ICE and EV vehicles (just look at all the discussion of battery replacement here, which, btw, does not seem like a big issue to me from what I've read). I am not (yet) fully educated on the EV world, but as I begin to look at it my bias is against a hybrid because it is a half-way thing - that is, assuming you have two cars and one is ICE. I also wonder how much the EV advantages will improve over the next couple of years. If you can delay the purcha...

In a somewhat similar situation, a bit later in the long-term care (older person), as the steward of their finances I have decided the asset allocation should be closer to 30/70 (mine is currently close to yours). So, I will be drawing from the equity side for expenses. I think that is one of the important things to focus on. Also, keep in mind that the care expense might be deductible (you would need to check, look at the specifics), and if that is the case you could avoid paying tax, and it makes the decision on what to sell easier. And I did move some intermediate bond fund holdings into a short term bond fund (not all, but a significant chunk), in a taxable account but no tax impact. Last thing, I am trying to simplify everything as muc...

Thanks everyone for the feedback. I'll check further with insurance companies,

From what I can tell, and my experience, Vanguard has less flexibility to set up TOD beneficiaries with per stirpes instructions, certainly as compared to Fidelity and I think Schwab as well. That can make using TOD beneficiaries on investment accounts where there is more than one primary beneficiary a less optimal solution in the event one of the primary beneficiaries predeceases the account owner, depending on your goals. Just something I recently became aware of, might not be important to most in considering this decision.

If it's abandoned and you'd like someone to burn it down to be able to cheaply remove ashes and minimal burned wooden beams, then sure. Leave it uninsured. Just understand that if the arsonist trips on his way out and is injured, they're going to sue you and win the property, making your entire investment in it become zero. I had a great answer. But this one is so much better. Great answer. Just insure your dang home. I guess another con is that the money you will likely save, is probably completely inconsequential to you. It won’t change your life one bit. Your last sentence could be applied to many (most?) of the discussions on this forum, especially in the personal consumer area! I see the money saved and not given to an insurance compa...

Jack FFR1846 wrote: ↑Tue Mar 28, 2023 7:44 am If it's abandoned and you'd like someone to burn it down to be able to cheaply remove ashes and minimal burned wooden beams, then sure. Leave it uninsured. Just understand that if the arsonist trips on his way out and is injured, they're going to sue you and win the property, making your entire investment in it become zero.

I didn't say "uninsured". I said underinsured. Not too worried about your concerns, can't see this playing out like that. Although reality is stranger than fiction.

Call_Me_Op wrote: ↑Tue Mar 28, 2023 7:46 am

CloseEnough wrote: ↑Tue Mar 28, 2023 7:36 am If you have no plans to rebuild in the event of total loss, and there is substantially more value in the lot (land) than in the home structure, would it make sense to underinsure the dwelling coverage to reduce premiums? Especially given the relatively low likelihood of a total loss? Thoughts? Thanks.

One issue I see is liability. Typically, home insurance serves as the underlying insurance for umbrella coverage. If you do not have umbrella and under-insure on your homeowner's policy, your biggest risk is a lawsuit if you injure someone with your vehicle(s) or someone is injured on your property.

I would maintain umbrella insurance.

8000m wrote: ↑Tue Mar 28, 2023 7:43 am couple questions come to mind:
-Is there a mortgage or is the home collateral on a credit facility of any type?
-Is there significant & valuable personal property stored inside?

Based on the tone of your post, it sounds like the answer to both of those questions is 'no'. Useful to confirm though.

Correct, the answer is "no".

If you have no plans to rebuild in the event of total loss, and there is substantially more value in the lot (land) than in the home structure, would it make sense to underinsure the dwelling coverage to reduce premiums? Especially given the relatively low likelihood of a total loss? Thoughts? Thanks.

Charcoal grill gives it the best flavor. Gas might be easier, but not the same. 4.5 to 5 minutes a side for medium rare, at medium to high heat. We use local farm share, don't eat a lot of burger but when we do it is awesome. No cheese, no lettuce, no tomato, no toppings.

I appended to my last post to clarify my goals for learning from the discussion in this thread. I found the thread interesting. Thanks. Curious, one question (sorry if I missed it), what is the goal or purpose of the 36% high yield bonds in your portfolio? And, to be clear, how have you defined "high yield bonds"?. The purpose is investment success since I am willing to hold through downturns without flinching. HY bonds tend to have low duration that helps in a rising interest rate environment (one risk I have been wary of) and have outperformed investment grade bonds for all but relatively short holding periods. (But not really pertinent to this thread) Since you asked, my own holdings are nearly half and half VWEAX and FAGIX, b...

I appended to my last post to clarify my goals for learning from the discussion in this thread. I found the thread interesting. Thanks. Curious, one question (sorry if I missed it), what is the goal or purpose of the 36% high yield bonds in your portfolio? And, to be clear, how have you defined "high yield bonds"?. The purpose is investment success since I am willing to hold through downturns without flinching. HY bonds tend to have low duration that helps in a rising interest rate environment (one risk I have been wary of) and have outperformed investment grade bonds for all but relatively short holding periods. (But not really pertinent to this thread) Since you asked, my own holdings are nearly half and half VWEAX and FAGIX, b...

HeavyChevy wrote: ↑Sun Mar 26, 2023 6:11 am I appended to my last post to clarify my goals for learning from the discussion in this thread.

I found the thread interesting. Thanks.

Curious, one question (sorry if I missed it), what is the goal or purpose of the 36% high yield bonds in your portfolio? And, to be clear, how have you defined "high yield bonds"?.

Thanks to all for the discussion. It's interesting how so many of these discussions evolve toward maximizing diversification, as if that is the only holy grail. Here I am seeking a discussion around the value (pun intended) of a value dominated stock portfolio in retirement, i.e. no incoming investments. Not adding 15%. Going all value like Wellington taditionally did (not so much recently). Better, drop the bond, TIPS, REIT, etc. discussion and go all value in equities. This is so ridiculous to some BH that it seems hard for them to fathom. Most think 100% total market equities in retirement is too risky, but the merits are discussed dispassionately. Here, an admittedly limited data set seems to support the idea that value holds up better...

If you don't itemize, a DAF can be useful if you have an anomalous high income year and are able to fund it with appreciated stocks with high tax gain, if the DAF contribution, together with other itemized deductions, allows you to go significantly above the standard deduction. Depending on your specific circumstances and tax position, it can be a very efficient way to make charitable donations.

Beensabu wrote: ↑Fri Mar 24, 2023 3:21 pm

Maybe some of both, plus a 5-year TIPS ladder that kicks in at retirement, plus a variable percentage withdrawal strategy has the best chance of accomplishing what you wish to accomplish?

That, plus having more than enough to start with, and I think you're there!

Withdrawal rate has a huge effect on SOR risk. From my 2020/2021 discussion of SOR (posted here on BH), using historical volatility it is almost impossible for SOR risk to overcome a portfolio over a 30 year period if one is withdrawing something around 3% of current (not initial) portfolio value. It becomes a serious risk (shown in the graphic above with 5%) at withdrawal rates over 4% of initial portfolio. My understanding is that SOR risk is the risk of poor market returns at the beginning of a long retirement period will potentially put the portfolio at risk of not lasting through the period as compared to poor market returns later in the period. My question is at what point does the SOR risk reduce to the point that you wouldn't try t...

Nice job! I currently have most of my cash in FZDXX in my CMA acct. MY 2 Roth IRA's I set the sweep to FDRXX. Been wondering if I should change these to Treasury only MM's. Not sure which Fidelity options I would have to do this. Your sheet doesn't seem to clarify which are treasury only... or I don't know enough to decipher. FDLXX is the treasury only option at Fidelity. I just moved from FZDXX-->FDLXX myself. Thanks! I see 7 day yield is 4.16%. Not too much lower than the 4.46 on FZDXX or 4.28 on FDRXX. and no minimum. I might be switching some, but not really all that sure i should be concerned. FDLXX 7 day yield is 4.27. https://institutional.fidelity.com/app/funds-and-products/415/fidelity-treasury-only-money-market-fund-fdlxx.html FZ...

Just shows how a few wrong turns are all it takes to land there. I think it shows this: "Many Americans dream of saving $1 million for retirement. Most fall far short of that." Doesn't necessarily have anything to do with wrong turns. Well, one fellow stopped investing in 2008 and went into stable value. One couple lived by the shore in a Hurricane zone. One couple is living in a home far too big for their needs (although I get that). These things are all very relatable mistakes. One fellow possibly retired too early from something rather than to something. I think it illustrates that not everyone is a financial genius and most are just normal people trying to manage. Very sympathetic human interest but also highlights the vulner...

AnnetteLouisan wrote: ↑Fri Mar 24, 2023 7:02 am Just shows how a few wrong turns are all it takes to land there.

I think it shows this: "Many Americans dream of saving $1 million for retirement. Most fall far short of that."

Doesn't necessarily have anything to do with wrong turns.

Only poor people take [Medicare] Advantage. You may get some pushback on that statement. I agree with the pushback. OP, I am not a fully knowledgeable person about all the intricacies of this issue, but seems to me you have and are analyzing it correctly (if that is even possible). As I understand it, as a healthy person (now) with low use of medical you are making a decision to go with a much lower cost alternative (MA) with the idea that you will switch to OM and supplement (with all the advantages, but higher cost) before an intervening health issue makes the switch difficult. So, for example, if you stay healthy until 70 (that a roll of the dice, but seems like a good bet), maybe you switch over then. The risk is that some unknown heal...

smitcat wrote: ↑Thu Mar 23, 2023 7:47 am

"I am also a fan of analyzing the potential of any decision as best you can."
We agree - but you have provided none.

I disagree. I have analyzed the issue, and my thoughts on it are provided above, including agreement with the analysis that MikeG62 posted. That is still analysis, although you clearly do not agree with that approach. That's ok. Just because it is not detailed modeling going out 30-40 years does not mean it is not analyzing the issue. I am signing off on this discussion. Thanks for your thoughts.

"Sounds like you have done your due diligence, strong analysis and reached a good decision" How do these work in this situation.... "Consider, as well, the pool of dollars one might accumulate to pay for one's possible LTC costs by investing the premiums that would be paid under a LTCi policy." The question comes up in where you reserve those dollars? If you reserve a decent amount in low-risk accounts, have they been or will they be eroded over time. "In addition, one should also consider the tax benefit that would likely arise (current tax rules) from paying for LTC costs out of pocket (perhaps shielding a large portion of one's RMD's and SS and passive income from any income tax)." And another question that...

But to your point, the vast majority of time, the parent just forgets to make the change. Curious, is your assertion that the "vast majority of time" the parent just forgets to make the change based on a study or data? Or just the cases you see in your practice? I think it's a pretty bold statement to make. And if it is just based on what you see, I'd suggest that what you don't see may completely gut your assertion. That is, if the vast majority of time the parent doesn't forget, and makes the change, how would you know? I would think those cases you would not see in your practice, they just are resolved without a problem. In fact, AAA is correct, a parent can change the designation in a case where a child predeceases the parent...

"Sounds like you have done your due diligence, strong analysis and reached a good decision" How do these work in this situation.... "Consider, as well, the pool of dollars one might accumulate to pay for one's possible LTC costs by investing the premiums that would be paid under a LTCi policy." The question comes up in where you reserve those dollars? If you reserve a decent amount in low-risk accounts, have they been or will they be eroded over time. "In addition, one should also consider the tax benefit that would likely arise (current tax rules) from paying for LTC costs out of pocket (perhaps shielding a large portion of one's RMD's and SS and passive income from any income tax)." And another question that...

"Sounds like you have done your due diligence, strong analysis and reached a good decision" How do these work in this situation.... "Consider, as well, the pool of dollars one might accumulate to pay for one's possible LTC costs by investing the premiums that would be paid under a LTCi policy." The question comes up in where you reserve those dollars? If you reserve a decent amount in low-risk accounts, have they been or will they be eroded over time. "In addition, one should also consider the tax benefit that would likely arise (current tax rules) from paying for LTC costs out of pocket (perhaps shielding a large portion of one's RMD's and SS and passive income from any income tax)." And another question that...

Consider, as well, the pool of dollars one might accumulate to pay for one's possible LTC costs by investing the premiums that would be paid under a LTCi policy. In addition, one should also consider the tax benefit that would likely arise (current tax rules) from paying for LTC costs out of pocket (perhaps shielding a large portion of one's RMD's and SS and passive income from any income tax). It's for these reasons that, after being approved for a LTC policy this month, I choose not to move forward with the policy. Lastly, I would add that we are in the fortunate position of being able to self-fund any LTC we might reasonably need and that factored into our decision as well. Sounds like you have done your due diligence, strong analysis a...

I'm considering a life focused on generosity and am thinking through the potential risks with it. What do you think? I don't find this question coming from a financial planner odd at all. What I find interesting is your basic premise of having a life focus on generosity. I don't recall that as a fundamental BH principle, where many are focused on financial gains for themselves and their kids. I have a few thoughts, and first would just say that it is admirable that someone as young, and in the stage of life you describe, would consider "a life focused on generosity". That said, I wonder what that means? Are you saying that the savings that you would put aside for retirement, your family etc, will instead be donated as you earn it...

In analysis of this type, there are so many variables and assumptions that need to be made which in effect make the decisions around this essentially your best guess. Not that I wouldn't try to make your best guess. But, it would lead me to lean toward certain savings now rather than speculative savings later, so that I would prioritize substantial ACA subsidies if there are any, for example, over conversions. At least until ACA subsidies are no longer in the picture.

smitcat wrote: ↑Mon Mar 20, 2023 9:35 am
All in all it is a tough situation, tough conversation, and tough decisions for all involved for those that have been through any of this.

Of all things said on this forum, this is one that can not be disagreed with.

The fact is that there may be some diversification benefit from making investments that are only available to accredited investors (do you really think that the ultra-wealthy and financial institutions just invest in the three fund portfolio, or that they always lose money when they make other investments?). These type of investments would typically be higher risk, potentially higher return, and, for diversification would ideally move in ways not correlated to the stock and bond markets. As pointed out by others, this may be private equity or real estate, or perhaps some other speculative investments. The rationale for the accredited investor threshold is that those investors have the sophistication and resources to allow investment in, an...

Stuff deleted My bad. Correction: For those who need care for 2 years or more, 38% of them need care for over 5 years, 62% of them need care for 2 to 5 years. On an individual basis, though, it's 0% or 100%. There's no way of knowing which cohort any one person will be in. Here's the source: https://www.aarp.org/caregiving/financial-legal/info-2018/long-term-care-insurance-fd.html I'm glad TN_Boy asked for clarification. When an expert states "It's also true that most of those who need care for more than a year end up needing care for more than 5 years." but it turns out that only 13% of the 65-year olds who need care require care longer than five years, it strains the credibility of the expert. I agree, had the same observations.

So is there some advantage to holding bond index funds that I am overlooking? Thanks in advance! What you are giving up in my view is some diversification. I have a significant amount of my fixed income allocation in Traditional. I am not able to invest 100% of my fixed income in Traditional, because I have some funds in a non-TIAA account where it is not an option. However, even if I could invest 100% of my fixed income in Traditional, I would likely not do so, because I'd prefer to spread that risk by diversification into some other fixed income funds. The risk in TIAA Traditional, I think, is some kind of catastrophic event that causes TIAA to go belly up. Most here who invest in TIAA Traditional would say there is no risk to that happe...

Probably many Bogleheads can qualify as accredited investors if they wanted. For those who can or who do, is there any benefit in looking into some of those benefits of accredited investments for diversification? We meet all thresholds for this. Don't want to dabble until we understand, but would like to understand better and consider for diversification. Not planning on betting the house or anything like that. We're resisting lifestyle creep and want to know more to consider this as complimentary diversification. It is always interesting to me that the same people on this forum that say "I know nothing" will so definitively answer a question like this "there is no benefit, just follow BH principles". The fact is that t...

Just kinda curious as what some of your decision making processes are when it comes to repairing things yourself vs. hiring someone else. When younger and poorer, I'd do it all. Now I'm older (75) and retired, I'll pick my battles. The dangerous stuff is out. I blow out gutters from the ground; thanks YouTube! I'll pass on extension ladder work and roof work. Vehicle repair: I've mostly given up on vehicle repair. I still do monthly preventative maintenance checks. I think I'll hire out most everything. The battery for my truck weighs 50 lbs. The installation is awkward. I'll let the parts store do the heavy lifting. Plumbing: No more setting toilets. No more working with pipes. I'll still fix faucets, flush water heaters, and repair toile...

I don't hold cash in FDIC insured accounts anyway, but since I hold some significant amounts in MM funds, I do have the same question somewhat reversed. I wonder if the SVB triggered bank crisis puts MM funds at greater risk? Seems like right now banks are higher risk place to hold cash, although with the FDIC insurance for amounts under $250k the risk is covered. As to MM funds, I don't see how the risk has changed with current bank crisis, at least so far. Seems like if this becomes a full blown financial crisis then MM funds could be at higher risk than before. All that said, my thinking is to do nothing in reaction to the current banking crisis. Seems like moving cash into an FDIC insured account now to avoid MM fund risk could be count...

Perhaps it is somewhere in this thread (probably) and I have not read it all, but, a question that could be actionable for BHs: assuming a reasonably vanilla 60/40 portfolio, are there any changes that should be considered in reaction to this bank failure crisis? My thinking is no. Subset of questions: 1. are money market funds (which don't have FDIC insurance anyway) now at a higher level of risk than they were before entering this bank crisis? 2. If you know you will need cash to cover expenses from a portfolio, do you do anything different than you otherwise would have (for example, if your plan was to simply withdraw from the portfolio in proportion to your allocation goals,, do you just continue to do that, or is there some other risk...

Perhaps it is somewhere in this thread (probably) and I have not read it all, but, a question that could be actionable for BHs: assuming a reasonably vanilla 60/40 portfolio, are there any changes that should be considered in reaction to this bank failure crisis? My thinking is no. Subset of questions: 1. are money market funds (which don't have FDIC insurance anyway) now at a higher level of risk than they were before entering this bank crisis? 2. If you know you will need cash to cover expenses from a portfolio, do you do anything different than you otherwise would have (for example, if your plan was to simply withdraw from the portfolio in proportion to your allocation goals,, do you just continue to do that, or is there some other risk ...

Everyone's situation is different. You may want to withdraw in the most tax efficient manner, although there are other considerations as well. My sense is in most cases where there are substantial assets in both tax deferred and taxable and Roth, some type of blended withdrawal is likely to achieve the best results. But finding the balance can be challenging, and is unlikely to be optimal no matter what, because so many assumptions need to be made to come up with a strategy. Offsetting the standard deduction against ordinary income seems to be a good starting place for most, and then go from there.

I am considering switching from tax preparer to doing my own on Turbotax. I have a small business in addition to investment income and wondering if I need Turbotax self-employment version or just the plain vanilla Turbotax? The returns will include reporting small amount of income, expenses on Schedule C and also small self-employment tax, Schedule SE. With whatever version of Turbotax, is this small complication, and also ACA advance premium calculations, relatively easily handled in Turbotax? Any inputs appreciated, thanks!

In the Belitung island of Indonesia, the front of our hotel had this expanse of flat that during a point in tide, there was a thin sheen of water that made it appear like a gigantic reflecting glass. Sunset felt like 2 hours long and unreal. Manifest destiny on steroids? Imperialism? A futuristic view? Just wondering how this became continental US :happy . I guess in true BH spirit, not answering the question asked, but still beautiful shots, especially that last one. More on point, one of the most memorable sunsets I can recall is from the summit of Mt. Washington with the sunset going down while the moon was coming up in the East. Not planned, and I imagine would take some serious planning to repeat, but fun to try. Creating some balance...

I stay 2-3 years behind in model to avoid the $300 per year depreciation. By doing so my phone only depreciates about $100-120 per year. This also avoids higher sales tax as well as reduces the amount risked if you accidentally break it. I just very recently bought a 1.2 year old iPhone 11 for $250 from eBay — 97% battery health. I can sell for $150 in a year and then buy a 1.2 year old iPhone 12 for $250. The reason I can get relatively new phones despite the model being older, is that Apple sells the older models new .. like you can get an iPhone 12 brand new from Apple Store despite the IPhone 14 being out. They don’t do this with pro line of phones though, so I avoid the pro line. An iPhone 12 Pro will be an older phone with a used up ...

vested1 wrote: ↑Thu Mar 02, 2023 7:59 am Maybe it's just my experience but I've never heard anyone say they regretted taking SS when they did, which is human nature in a nutshell.

This is true, and what I was thinking reading this thread as well. And the rest of your post makes a lot of sense and provides a really good list of considerations in making the SS decision.

tibbitts wrote: ↑Wed Mar 01, 2023 8:08 pm So now that we know the rate on new money for (almost)12 mo, anyone care to speculate whether Traditional (let's say in unrestricted GSRA accounts) will over or under-perform the TIAA Real Estate over the period?

No way, obviously, of knowing. I would be thinking about the role and purpose the funds/investment plays overall in a portfolio, rather than the likelihood of comparable performance over a short period. That said, I think Traditional guarantee return of over 5% for a year is pretty good. On a risk adjusted basis, hard to see how real estate can beat it.

Our family spends a lot of time volunteering for a food bank. Combined we drove over 10,000 miles in 2022 doing pickups and deliveries. That turns into an actual cost of roughly $4000/yr for fuel, oil, and tolls alone. However, we don't have enough other deductions to itemize so these expenses never get offset. In addition, at these mileages depreciation is a real thing and our newer large SUV has taken a beating on some of these trips. We like helping this charity and it is rewarding in many ways but it's costing too much. Having a reliable driver with a large vehicle is a benefit to the charity. Is it wrong to ask the charity for direct compensation of expenses including some for vehicle depreciation? Would asking for the business mileag...

seawolf21 wrote: ↑Tue Feb 28, 2023 3:56 pm Even if there are no studs, 6 to 8 TOGGLER SNAPTOGGLE will more than adequately hold up a 80” TV to drywall. Each is rated to pull out and shear valve in excess of 200lbs. 100lb TV over 6 bolts is under 17lbs over each bolt. Of course you need to spread the bolts/load across the drywall itself.

That is good to know. Would you have any opinion on this?:

viewtopic.php?p=7127509#p7127509

Thanks.

So, with the new rates for SRAs published, we can see how valuable the TRAD rate reset a number of us have completed will be for its first full year. The "black hole" vintage's yield for 2020-2021 has been increased from 3.00 to 3.25%. The vintage I, and most of us in this thread, ended up in of 11/22 - 12/22 (inclusive) has its yield increased from 5.50% to 5.85%. Thus the delta has moved from 2.50% (5.50 - 3.00) up to 2.60% (5.85 - 3.25). I never expected the gap to actually widen. For me, I was too greedy and lose out. My prison term expired in December but I was thinking that we were in a rising rate environment, so I moved only 33% of the money back in December, and I moved the rest in January. I can see that the December 20...