Bogleheads.org

bslice wrote: ↑Sat Mar 25, 2023 4:34 pm So, for those using the non-deductible option, are you just calculating the max of your 401k and adding the delta to the non-deductible option?

I think this would depend on the mechanics allowed by your plan. Our plan administrator immediately and automatically rolls our non-deductible contributions into a Roth 401k. So, we just set both deductible and non-deductible contributions to run concurrently, so they distribute more or less evenly across the year. If we had to make a phone call to affect each rollover, we'd probably front-load non-deductible contributions to get them over with as quickly as possible.

Hello - I am 60 and three years into retirement. My retirement withdrawal strategy is to calculate four different withdrawal strategies (VDSM, 4% rule, Guyton Klinger, % of portfolio) and pick the lowest number returned for a given yr. I also WD less than the minimum amt calculated by the four strategies to be conservative for a long life expectancy. I will probably be criticized for this approach vs. sticking with a single WD strategy and happy to hear why, but that's not my question. Question is and sorry if I didn't see this before: As time goes on and I withdraw less than calculated WD$’s from my portfolio, can I change my WD% mid way through retirement or do I have to stick with a % at the start of retirement and leave it to attain th...

Hi All,

I would like to understand the rules, if any, that govern the inheritance and subsequent distribution of a 529 plan.

Let's say grandma opens a 529 plan for their granddaughter, and names their daughter as the successor owner. The plan is valued at 50k with a basis of 10k when grandma dies. Does the plan simply pass to their daughter, maintaining the same beneficiary, value, and basis? And are they any tax consequences to this for any party?

Thank you.

NazgulSentient wrote: ↑Fri Mar 24, 2023 5:44 pm Is there any advantage into moving a currently losing fund into a fund that is currently losing less, or does it make sense just to ride it out until it recovers and then move it? What say you?

A better question: is there any reason to hold onto a fund you don't want, and can currently sell without negative tax consequences?

I believe the answer to that question is no. And I suggest selling the small position you have in FSMAX and being done with it.

I'm progressively simplifying our Vanguard portfolios and at same time looking to maximize income. I will appreciate feedback on some changes. Background: we are both 69, I'm retired, husband is mostly retired. Own our home, no mortgage. We are drawing SS, no pensions, husband's expected income around $40K this year, fully retiring next year. Our SS covers about half of our living expenses and we have sufficient liquidity for next three years to cover the rest without going into our tax-deferred retirement funds. Except for $200K in bank, all of our resources are in Vanguard: $260K in a taxed brokerage account and $2.25M in our IRAs. Looking ahead to 2027 when we have to begin RMDs, we want to build up cash in our respective IRA MM account...

kchico wrote: ↑Tue Mar 21, 2023 7:27 pm

rob wrote: ↑Tue Mar 21, 2023 7:16 pm I don't see any way this works to be honest....

So Bogleheads don't use the 4% SWR?

I wouldn't advise doing so with two kids, 7 and 4, and a possible 60 year retirement.

Welcome to the forum. Wow, this is WAY too exhaustive to analyze even if you did list the names next to the ticker symbols. I can't begin to imagine why they did what they did and would love to know if it's a recognized company but you obviously didn't want to get involved. That said, what made you change your mind? Be sure you know what you're doing moving forward but man you need to simplify ASAP. Yes - it is a well-recognized company with Headquarters in Overland Park, KS. I came to the conclusion that if I keep this portfolio as is and do nothing I will keep the 1.1% I am paying FA ( that is a lot of money) I think I can do better but needs some education :happy Welcome to the forum. The 1.1% is a great reason to leave. You can achieve...

Mld3 wrote: ↑Wed Mar 15, 2023 1:00 pm I have more to ask later but I feel like I don't understand things enough.

I'm sorry about this but there is no problem with not understanding enough. The more important issue, I think, is whether you can or will slow down a post the information here, in the necessary format, so people can help you work through this.

You can edit your first post using the pencil icon in the top right corner. I suggest you do that, and post your situation in the formate outlined here: viewtopic.php?t=6212 in the asking portfolio questions section.

Then people can help you work through your questions.

CletusCaddy wrote: ↑Wed Mar 15, 2023 10:54 am For someone in their 30s like me and a small but growing bond allocation I am thinking about the following:

1. 50% I bonds (and TIPS if I bond space runs out)
2. 50% long term treasuries

Triple punch of inflation protection, principal protection, and negative correlation during crises (like today!)

Thoughts?

I bonds, sure. I'd rather be in equities for 20 or 30 years than long term treasuries, which are each yielding less than 4% right now. And I think two of your three bottom lines are wrong. LTT will expose you to significant inflation risk, and are not negatively correlated with stocks. Sorry.

A few thoughts, mostly seconding thoughts already posted: 1. Backdoor and mega-backdoor Roth contributions are different things. I suggest you look them up until you understand what they are, how they are different, and perhaps more importantly whether or not you have access to a mega-backdoor Roth through work. This could save you a lot of money in the long term. 2. Second getting out of fidelity zero funds in your taxable account while that account is still small. I hold one fund in my taxable account, Vanguard's total market stock index (VTSAX). The benefit of getting away from the zero funds are that they aren't portable. You can't move a zero fund from fidelity to another brokerage; which would force you to sell if you want to do that....

retired@50 wrote: ↑Sun Mar 12, 2023 10:45 am

Markus003 wrote: ↑Sun Mar 12, 2023 10:30 am
I do like the Annuity option because of the income stream, but being single, my children could not benefit from that option.
Are there any suggestions where I could take the Lump Sum and create my own income stream? Would not need to be a lot, just something.

You can see what sort of annuity your lump sum would purchase by using blueprintincome.com or immediateannuities.com.

This is often how people compare these sorts of possibilities.

Also, see the wiki: https://www.bogleheads.org/wiki/Lump_sum_vs_pension

Regards,

I believe this answers your question.

What would I look for to decide between the tax-deferred or Roth TSP contributions? The employer match always goes into the tax-deferred side of the house, so contributions do continue there. I suggest posting your current portfolio in the prescribed format. You can find that format here: https://www.bogleheads.org/forum/viewtopic.php?t=6212 The reasons for this are several fold. It forces you to figure out things like your tax rate, where all of your money is invested, and at what cost. It also gives people on the board a full-view of your portfolio so they can give better advice and explain to you the basis for that advice. Your question/comment above is a good example of a situation where you haven't provided full information about your...

Interesting modeling. Inflation seems to be the biggest risk with claiming early.

I'm curious though; you mention inflation is a problem in the country you're considering living in; is inflation really a problem for you though, because your assets are valued and presumable invested in USD.

Am I worrying too much about when I claim and FIRE status? I would certainly be worrying plenty if I were planning to retire on a sub 7 figure nest egg. It doesn't take too many unexpected expenses for that to not be enoguh. Understood, but claiming SS early would bring my draw rate to the 3% range (except for a year or 2 i’m not eligible) and keep it fairly low especially when exUSA cost reduce later; while deferring would bump that up potentially past 7% until I claim. Claiming at 62, I see about 1.8% yearly average draw (based on median portfolio value under MC sim) in the last 1/2 of the plan, BUT even less if I defer (negative!). I believe it's generally better to take the portfolio hit early in order to maximize the amount of your in...

I don't see your social security projection in there; difficult to comment on the safety of your withdrawals without knowing your net withdrawal needs.

May or may not be applicable in your situation, but you might consider rolling your 401k in an IRA, then purchasing umbrella insurance to cover you should you end up being sued for harming someone in a car accident, etc.

Emergency funds: 6 months Debt: Auto Loan: 24k @ 2% House Loan <100k @3.875% Tax Filing Status: Single Tax Rate: 24% Federal, 6.37% State State of Residence: NJ Age: 33 Salary: ~100k Asset allocation: roughly 90%stocks 10%bonds. I’m more conservative in my 401k, less in roth. International allocation: 20% of stocks I originally posted on these boards over 10 years ago asking for advice on setting up my retirement portfolios after getting my first job. Original Post: https://www.bogleheads.org/forum/viewtopic.php?p=1495230#p1495230 8 Month Check-up: https://www.bogleheads.org/forum/viewtopic.php?p=1699229#p1699229 I was reflecting recently that it would be interesting to post a 10 year follow-up showing how it has shaken out over the past d...

Your description doesn't make sense to me. You say you want to buy a house in an area that you "would otherwise not be able to afford." And you also say that you "want to pay a fair price for the house." How do those two things go together? Are your parents planning to give you a significant discount off the market price of their house, so you can afford it? Or is your definition of "fair" something other than market price? In either case, I think I'd rather purchase the house and cash flow improvements if and as you are able. Then you get exactly what you want, and your parents don't have to pay for it. I tried to be concise but should have provided more detail: the house is small and on a small lot (which is...

Your description doesn't make sense to me. You say you want to buy a house in an area that you "would otherwise not be able to afford." And you also say that you "want to pay a fair price for the house." How do those two things go together?

Are your parents planning to give you a significant discount off the market price of their house, so you can afford it? Or is your definition of "fair" something other than market price?

In either case, I think I'd rather purchase the house and cash flow improvements if and as you are able. Then you get exactly what you want, and your parents don't have to pay for it.

benevo wrote: ↑Mon Feb 20, 2023 9:44 am This seems like bad advice, semi timing of the market, and counter to anything I've heard before, but just wanted to see if anyone else thinks this DCA approach makes sense when money market rates are indeed pretty high?

Many here including several posters on this thread are dogmatic about lump sum investing. I don't find the difference between investing your lump sum tomorrow and investing your lump sum over the next six months anything more than semantics. And, in my opinion, I think you could do either with very little difference in the long-term outcome of your investments.

All that to say do whichever you want without feeling like one way is definitely better than the other.

placeholder wrote: ↑Mon Feb 20, 2023 8:59 pm

bogglek3sh4v wrote: ↑Mon Feb 20, 2023 8:49 pm It looks fairly straightforward on paper. 66000 - (match + 6500 +22500 + 3750) which would turn out to approx $28k.

Again the correct equation is 66000 - match - 22500.

To clarify this for the OP.

You and your employer may only contribute a total of 66,000 to your 401k this year. You may contribute 22500 to your regular (tax deferred) 401k. Your employer may match part of that. You may fill up the remainder with after-tax contributions that may then be rolled into your Roth 401k. Your Roth IRA and HSA have nothing to do with that number.

Thereby, the total amount you can contribute through the MBD Roth 401k process is 66,000 - match - 22500.

It make sense to use savings in a Taxable account or bonus money to fund living expenses if your net pay check becomes too low due to increasing payroll withholdings for a mega backdoor Roth. It allows you to shift your savings from Taxable to Roth. Roth accounts grow tax free. I already DCA into my Roth but I think I can do more with the mega back door Roth. Do I need a financial advisor so I don’t do something stupid? It looks fairly straightforward on paper. 66000 - (match + 6500 +22500 + 3750) which would turn out to approx $28k. The bonus would act as a cushion for my expenses while I try to maximize contributions as much as I can. Is it really this simple? I wonder why this doesn’t get talked about more often. I understand it’s not e...

So I just learned about mega Roth and the fact that my employer provides after tax spillover and in service distributions after working years for that company. I want to take serious advantage of it. My income is in the low six figures and I’m expecting a good sum in bonus next month. I’m afraid to contribute all my bonus into my 401k as I would miss out on the company match, but here is what I have on mind. I plan to take a cash payment of the bonus minus the withholding and go super aggressive on my 401k. I’ll keep the bonus for my expenses while trying to maximize towards total allowed contributions of $66000 minus (401k plus match plus IRA plus HSA). Then towards the end of the year, I plan to do an in service rollover of my after tax ...

A different but related question: How do people think about the money they set aside for retirement, (if not in % of gross income terms)?

E.g., we pick a target amount (not percentage) each year, automate it, and then spend from what's left. Our savings are then distributed among 401ks, Roth IRAs, 529 plans, and our taxable account (in roughly that order).

I'm curious how many people do something like that instead of thinking in percentage terms. The debate regarding the definitions of income, some including dividends in retirement accounts, etc., makes me think that nobody really thinks about setting aside money for retirement as some specific % of their gross income. I could be wrong.

Hello all, ... 1) Can I pull off a move to SLO? (combined family income will be around 300k/year and we have some good savings in taxable, 250k in house equity, 400k+ in taxable and 1M+ in retirement accounts). I love California in general in spite of people moving away etc. I would love to retire there too if I can unless I feel it is mistake in the overall picture. ... Yes, and making the move now will be easier than making the move anytime later in your career. I live in the SF bay area and, in my opinion, west coast weather, no bugs, extensive trails, and relatively quick access to the sierras trumps every other combination of regional attributes you can find in the United States. Your money will not go as far here as it will in other ...

Ok, thank you.I really like the VG nest egg calculator. I didn't now that existed! About 20% of her portfolio is in a IRA and pension fund. It looks like the rest is taxable. There were about 9K in RMD's last year, according to her statement. Her parents lived into their early and mid 80s. I would think she could be pretty comfortable on 75K per year with (SSN draws are about 18K, so she would need to take around 55K per year from investment accounts) I will definitely take a longer look at the VPW spreadsheet if she decides she wants me to manager her money (somewhat doubtful at this point). She is with Edward Jones, but I am hoping that I can move her to Fidelity where she can still have in person advice. An SPIA would be too confusing t...

This is a personal investment account. Since I have other 401k and Rollover accounts geared toward my retirement, this account can be a bit more aggressive. Here is the current allocation and percent of account. It obviously wasn't the best time to buy as only the first 2 stocks (in green) are in the positive. The rest are in the red. Applied Materials INC(AMAT)________29% Fidelity Zero Total Market (FZROX) ________20% Advanced Micro Devices (AMD)________ 2% Fidelity Blue Chip Growth (FBGRX) ________17% Fidelity Select Technology (FSPTX) ________16% Alphabet INC (GOOG) ________8% Taiwan Semiconductor (TSM)________ 8% The account is down about 25% and want to get this growing back. Stick with these Stock? Or Switch to Index Funds? Or Any ot...

brocker wrote: ↑Sat Feb 18, 2023 2:05 pm My mother is retiring at 80 with about a 1M portfolio, a small social security draw, and a paid for house that she can stay in for at least a couple more years. She is in "fair" health I would say. She does have a long term care insurance policy. What would be a reasonable rate to withdraw?

Thank you!

5% would be reasonable. I also agree that a SPIA would also be a reasonable investment for some of her money, particularly if she's concerned with running out.

Anyways, I just thought I'd share what I spent my evening playing around with. I'm sure I reinvented someone else's wheel, but I hope there's some value for someone in all that. Have a good night. I've found your original post very helpful. Thank you. If I may ask a favor, could you make a few graphics showing the outcome sensitivity to withdrawal rates in a given (bad) year? Use 1973, for example, and plot the 30 year returns on inflation adjusted withdrawals at say 3.7%, 3.85%, and 4.0% of the initial portfolio value. This is a different way of looking at OMY syndrome. Instead of saving enough for 4% (inflation adjusted withdrawals) and then working OMY. What does the outcome look like when you save enough for 3.85% withdrawals instead o...

I suggest you edit your original post to include expense ratios. They could be a deciding factor between one investment and another. You can do this by pushing the pencil icon in the top right corner of your original post.

Beyond that, though, I suggest you post a total portfolio review. Asking for advice in one account or another, in isolation, is a recipe for poor advice.

I understand the OP doesn't have the option, but I'd consider moving from stable value to a short term bond index if they did.

I've been surfing the treasury yield curve in my taxable account, and have recently shifted from purchasing (only) 26-week t-bills to purchasing (both) 26-week and 52-week t-bills.

saycanyouc wrote: ↑Sat Feb 18, 2023 1:21 pm Great comment.

[...] Or, as stated, something that can appreciate, you can use in real time and is an inflation hedge like real estate?

I can imagine buying a second home of some sort. But I would only do this if our financial life was in good order. And I wouldn't try to convince myself or my spouse that it was an investment of any sort. That seems like a path to self-deception.

saycanyouc wrote: ↑Sat Feb 18, 2023 11:43 am What would you do with or invest in with any excess?

I have and will continue to invest in the same types of assets through my life, primarily low-cost index funds. Our asset allocation may become more conservative as we approach and then surpass financial independence, but I don't see any reason to change a winning strategy.

On a different subject, stock funds should really be long term investments. If an unexpected vet bill, caused you to need to sell some stocks, I suggest you should prioritize building up a little emergency fund of a couple thousand dollars. You don't have to come up with $2k today; put a couple of hundred in a high yield savings account whenever you can until you've gotten up to a couple of thousand saved and ready to cushion you against unexpected financial blows. If you can, pay unexpected expenses from a little cash cushion, rather than from long term stock investments. Eh. I've seen the argument for investing one's emergency fund in a total market fund of some sort. The argument being that you're probably better off in the long run pro...

On a different subject, stock funds should really be long term investments. If an unexpected vet bill, caused you to need to sell some stocks, I suggest you should prioritize building up a little emergency fund of a couple thousand dollars. You don't have to come up with $2k today; put a couple of hundred in a high yield savings account whenever you can until you've gotten up to a couple of thousand saved and ready to cushion you against unexpected financial blows. If you can, pay unexpected expenses from a little cash cushion, rather than from long term stock investments. Eh. I've seen the argument for investing one's emergency fund in a total market fund of some sort. The argument being that you're probably better off in the long run pro...

TQQQ.

3. Other than being able to withdraw contributions in an emergency is there any reason to split funding between a roth 401k and Roth ira? I plan to never touch the retirement accounts because I want a safe retirement. I'll have my emergency fund and additional cash for any needs. 4. Yea, maybe I should do that now so i can avoid the 22% tax bracket hit, that would be 4k savings in taxes right there. 5. I was hoping to get one of those employers but after 3.5 months of applying to jobs this is the only company that wanted to hire me. I got my foot in the door now so only green pastures ahead :) Plan to keep my head down at work and do my best. 3. You may have lower investment fees and costs in a Roth IRA. You may also have more investment o...

Emergency funds: 3 months ... Questions: 1. Would a portfolio of 90% VTI Vanguard Total Stock Market Index Fund 0.03% & 10% VGTSX Vanguard Total International Stock Index Fund Investor Shares 0.17% be a bad idea? 2. For my age what would you recommend my current portfolio be? 15% invested annually funds my retirement goals. My thoughts: 1. Start with 100% in a total market fund like VTSAX. And revisit the international question once you have 100k or more in invested assets. 2. See #1. 100% in VTI or VTSAX would be appropriate. I prefer the mutual fund version because I can automate investments through vanguard. 3. I agree with others that you should open and fund a Roth IRA while you're below the income cap. You should not touch that m...

Surprised only one other poster has suggested Yosemite NP. But maybe OP, living in the Bay area, has been there enough already. We've been to Yosemite half a dozen times, sometimes with teenagers. Also have been to Yellowstone without kids. As grandparents, I really question taking the young ones to something like Yellowstone. I think Yellowstone was more of a good idea without much thought behind it. In either case, we've done Yosemite several ways with and without the older kid. It's beautiful but not what we're looking for this trip. Have refocused on finding a cabin somewhere that we can relax for 2+ weeks. My oldest had several camping trips planned for this summer. Those trips are now being cancelled because of my surgery. So, I'm tr...

As imperfect as this may be for current tax reasons, I suggest you consider liquidating the holdings in your current managed account and investing everything in one or two total market stock indexes, some combination of VTSAX and VTWAX, then ignoring the account (but for automated contributions) until you retire and need the money.

You'll probably do better in the long run than you would with your current managed investments. Your employer will be happy. Your new holdings with be relatively tax efficient. You'll be glad for the simplicity when you do choose to retire. And you can keep bonds in your pre-tax accounts, 401ks and the like.

TN_Boy wrote: ↑Mon Feb 13, 2023 9:27 am it seems to me that Yellowstone would be a huge hassle and unlikely place for the family to enjoy

Thank you all for your commentary. I've come to agree with the above statement. Thank you for helping me cross Yellowstone off the list for this year.

Impulsebuyking wrote: ↑Sun Feb 12, 2023 5:26 pm Hi all, a popular amount you always see is 15% of gross income saved for retirement. How much do you guys put away for retirement?

We save about 50% of our gross income each year, with the goal of financial independence.**

**I just ran the numbers for last year, and our gross income, including 401k match, was "spent" as follows: 50% long-term savings, 17% payroll and income taxes, 10% housing, 12% regular spending (food, clothes, insurance, etc.), and 11% for cars, vacations, and other spending.

Watty wrote: ↑Sun Feb 12, 2023 7:22 pm From the Bay Area an alternative I would look at would be to go through Northern California to see Shasta, Lassen, Redwoods, Crater Lake in Oregon, and the Oregon and northern California coasts(dress warm ). There are lots of various ways that you could do those and they are a lot smaller than Yellowstone so that if you need to stay some place outside the national park you would not have such a long drive. Many of these are close to each other so if you can find some good reservations on different dates you can zig zag around and backtrack if you need to.

This is solid advice. We've done redwoods but were smoked out when we tried crater. Have not tried shasta or lassen. Will look into these.

seawolf21 wrote: ↑Sun Feb 12, 2023 7:09 pm

Marseille07 wrote: ↑Sun Feb 12, 2023 6:32 pm If you can afford it, staying inside the park is the best. Old Faithful Inn and there is another one I can't recall the name of.

We stayed outside of the park and it was 2 hours of driving every day to get to a section of the park and back to the hotel.

+1

But it is time value of money decision. Lodging outside the park is at least 60 minute each way so that's 2 hours per day on commute.

The commute would be a non-starter. Will be looking to relax with DW, kiddo, and 3 month old.

I'm lined up for a medical procedure will likely cancel our summer camping plans. DW and I have started looking at lodge-type stays at national parks, including at Yellowstone, as an alternative. The trip will include the littles aged 5 and 0.

Anyone thoughts and advice from people who have gone to Yellowstone? I'm particularly interested in suggestions regarding where to stay, and why.

I'd also be glad to hear: You would be better going to X than to Yellowstone, and why. I'm not married to Yellowstone in particular. We haven't been there. And it was just the first thing that came to our mind.

As relevant, we will be driving out of the San Francisco Bay area in mid-July, and we're looking to spend 3-4 weeks on the road.

Thank you all.

dbr wrote: ↑Sat Feb 04, 2023 8:15 am Above is correct to compare the two funds.

To find out if you have done better or worse than had you been in the S&P 500 you would have to create a spreadsheet with the dates and amounts of your cash flows and the prices of the S&P 500 on those dates, numbers of shares, etc. and then compute a time weighted average for the hypothetical alternative yourself.

This.

PhinanceMD wrote: ↑Fri Feb 03, 2023 10:18 am Obviously no one knows the future, and none of us should invest based on the false assumption that we know something others don’t.

My question is have markets always been so “glued” to the Fed? Seems like lately that’s all that’s been driving the ups and downs rather than any semblance of true company fundamentals. Thx in advance.

Yours is an interesting question. I don't have an answer. I'm sorry.

Carno wrote: ↑Fri Feb 03, 2023 2:44 pm

MattB wrote: ↑Fri Feb 03, 2023 1:38 pm The assets I transferred were 4 ETFs in a Roth IRA, VTI, VGT, QQQ, and NTSX.

Any reason of all the funds you chose NTSX to invest in?

I wanted to see how NTSX performs against VTI before committing to a more substantial position in my taxable account.

I think they should perform about the same. But NTSX has a lower dividend yield, which I'd prefer for tax efficiency.

I was at Schwab, but last year we transferred everything to ME/Bank of America for custom $4000+ incentive, becoming Diamond reward clients. We had no problems at Schwab, except that its small local office here could do no banking or even notarizations. I wanted my wife to have someone in person to talk to locally if something ever happened to me. I have been comfortable doing everything online and by phone with the help of my Quicken software. After a year with our new BoA checking account, joint ME CMA brokerage account, 2 Roth IRA’s, 2 Rollover IRA’s, and 4 BoA credit cards…. 1. The Merrill Edge incentive bonus, plus bonuses for checking and credit cards….all was super great to receive…nearly $5000 total after the credit card signup awa...

Carno wrote: ↑Fri Feb 03, 2023 2:29 pm Your post answers my question about transferring (rather NOT transferring) vmfxx/vusxx funds from Etrade where their dividends are automatically reinvested.

Glad to be of service.