Search found 10924 matches

by The Wizard
Mon Dec 11, 2017 3:54 pm
Forum: Investing - Theory, News & General
Topic: How are 401k withdrawals taxed when you retire?
Replies: 10
Views: 937

Re: How are 401k withdrawals taxed when you retire?

Whatever you take out of your 401k will be taxed at your ordinary tax rate. Your ordinary tax rate is likely to be less in retirement than while working... First sentence is basically correct, but unlike employment income, the 7.65% for FICA is not deducted. So your net income is higher. Second sen...
by The Wizard
Mon Dec 11, 2017 8:46 am
Forum: Investing - Theory, News & General
Topic: How should I look at SS and pensions when developing my post-FRA AA?
Replies: 30
Views: 835

Re: How should I look at SS and pensions when developing my post-FRA AA?

You look at the gap between what you expect in expenses and what you anticipate in income and combine that with the size of your portfolio and use that combined information to assess your need, ability, and willingness to take risk... This is correct. If you get to the point where those income stre...
by The Wizard
Mon Dec 11, 2017 8:16 am
Forum: Investing - Theory, News & General
Topic: So... how do I need to "further" my investing knowledge?
Replies: 12
Views: 931

WeRe: So... how do I need to "further" my investing knowledge?

Couple of points: 1) Your aim is long term Growth, not long term "compound interest". 2) And you want to be knowledgeable about your long term Savings Rate, at least 10% of gross income to start, going up to 25-30% of gross as the years go on. That tax-loss harvesting thing is an advanced topic, mea...
by The Wizard
Sun Dec 10, 2017 2:51 pm
Forum: Investing - Theory, News & General
Topic: How are 401k withdrawals taxed when you retire?
Replies: 10
Views: 937

Re: How are 401k withdrawals taxed when you retire?

Whatever you take out of your 401k will be taxed at your ordinary tax rate. Your ordinary tax rate is likely to be less in retirement than while working... First sentence is basically correct, but unlike employment income, the 7.65% for FICA is not deducted. So your net income is higher. Second sen...
by The Wizard
Sat Dec 09, 2017 1:04 pm
Forum: Personal Finance (Not Investing)
Topic: What did you do with your first RMD withdrawal money?
Replies: 54
Views: 3419

Re: What did you do with your first RMD withdrawal money?

After being fully retired for several years I decided to take a part time job with a food catering company to keep myself occupied. That qualifies me for a Roth IRA so part of my RMD pays state and federal taxes, part into a Roth and the rest into Vanguard personal account . Not your situation but ...
by The Wizard
Sat Dec 09, 2017 12:45 pm
Forum: Investing - Theory, News & General
Topic: Trying to nail down asset allocation for second bucket
Replies: 43
Views: 1399

Re: Trying to nail down asset allocation for second bucket

A 50/50 AA for your remaining portfolio is hard to disagree with. I prefer to focus on cash flow streams in retirement, not just withdrawals from portfolio. So when I retired seven years prior to start of SS, I did something both similar to and different from the OP. I partitioned my portfolio into ...
by The Wizard
Fri Dec 08, 2017 10:16 am
Forum: Personal Finance (Not Investing)
Topic: Question about IRMAA and first couple years of retirement
Replies: 17
Views: 1614

Re: Question about IRMAA and first couple years of retirement

Anybody have an idea how/if this works if you're self-employed? Thanks. Very similar. You start with your AGI at the bottom of front page of form 1040 and then add any tax exempt interest to it to get your MAGI. Then see where you are on the IRMAA table... Thanks, I understand the MAGI part. My que...
by The Wizard
Thu Dec 07, 2017 12:18 pm
Forum: Personal Consumer Issues
Topic: Okay come clean....How man people share passwords for streaming services?
Replies: 41
Views: 1538

Re: Okay come clean....How man people share passwords for streaming services?

This MIGHT be an illegal activity.
If so, it's inappropriate for this forum...
by The Wizard
Thu Dec 07, 2017 12:16 pm
Forum: Personal Finance (Not Investing)
Topic: Question about IRMAA and first couple years of retirement
Replies: 17
Views: 1614

Re: Question about IRMAA and first couple years of retirement

walkindude wrote:
Thu Dec 07, 2017 8:32 am
Anybody have an idea how/if this works if you're self-employed? Thanks.
Very similar. You start with your AGI at the bottom of front page of form 1040 and then add any tax exempt interest to it to get your MAGI.
Then see where you are on the IRMAA table...
by The Wizard
Thu Dec 07, 2017 11:44 am
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI? [Financially Independent]

I am wondering what people here are meaning by expenses. Are we talking about basic living expenses or anticipated retirement expenses which would include the extras like travel and eating out frequently... Hard to say, since retirement aspirations and pre-retirement income levels vary widely. But ...
by The Wizard
Thu Dec 07, 2017 10:59 am
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI?

Example: my 12- year old chainsaw just bit the dust and I bought a new one for $450. Where does that appears on my Retirement Expenses Spreadsheet? Picture of chainsaw, please. (I forest manage and am a Husqvarna user) $450 should not be a significant part of your living expenses. If it is, you're ...
by The Wizard
Thu Dec 07, 2017 10:39 am
Forum: Personal Finance (Not Investing)
Topic: What did you do with your first RMD withdrawal money?
Replies: 54
Views: 3419

Re: What did you do with your first RMD withdrawal money?

All RMD's become part of the taxable account as does any distribution from retirement accounts. Withdrawals from a portfolio for spending don't "come from" any particular assets or accounts in the portfolio... Right. I've been taking monthly Distributions from my tax deferred account for 4-1/2 year...
by The Wizard
Thu Dec 07, 2017 9:55 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 25830

Re: Why not take Social Security at 62

He who dies with the most toys does not always win. He who dies happily and in peace does. Thus the saying ignorance is bliss. In the past someone could easily be born in a small town or rural area, live there their whole life and have died blissfully ignorant of all the possibilities/opportunities...
by The Wizard
Thu Dec 07, 2017 9:43 am
Forum: Investing - Help with Personal Investments
Topic: LMP until Social Security at 70
Replies: 10
Views: 885

Re: LMP until Social Security at 70

I'm 2/3 of the way from retirement at age 63 to age 70. I annuitized a large chunk at age 63 for lifetime monthly income and then supplement that with monthly withdrawals from remaining portfolio approximately equal to my age 70 SS. These monthly withdrawals were about 4.5% of portfolio to start wit...
by The Wizard
Thu Dec 07, 2017 3:22 am
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI? [Financially Independent]

You are absolutely right. Which is the optimal (i.e. minimum capital) portfolio that provides that person with $72,350 per year for the rest of his life, compensating for inflation ? Depends on age at retirement. Let's say 66 which is FRA this year. So around $2400/month ($28,000/year) in SS leavin...
by The Wizard
Thu Dec 07, 2017 2:49 am
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI?

That is why we have three levels of financial independence: Basic level, comfortable level, and luxury level. Good rule for long term forecasts of that sort is to use "comfortable", if not "luxury". Doing so, if your projections are off you are left with "basic" at least. If we retire at 75, maybe ...
by The Wizard
Wed Dec 06, 2017 11:17 pm
Forum: Personal Consumer Issues
Topic: I received a speeding ticket via mail from IA - should I pay it?
Replies: 72
Views: 4791

Re: I received a speeding ticket via mail from IA - should I pay it?

DireWolf wrote:
Wed Dec 06, 2017 11:10 pm
I got several of them in Missouri when they had cameras. Threw them all in the trash. Never heard from them again. That was 8 years ago.
So I guess they weren't too serious about it then.
Odd...
by The Wizard
Wed Dec 06, 2017 9:41 pm
Forum: Personal Consumer Issues
Topic: I received a speeding ticket via mail from IA - should I pay it?
Replies: 72
Views: 4791

Re: I received a speeding ticket via mail from IA - should I pay it?

Worst case if you don't pay it they send it to collections. No idea if they'd take it as far as reporting to credit agencies. No that's not how it works, they issue a bench warrant for your arrest in that state and flag the DMV to not allow you to renew your license in any state in the union. Once ...
by The Wizard
Wed Dec 06, 2017 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI?

Estimate your expenses in retirement based on your current expenses. If you have 25X of that, then you can declare you are FI. However, achieving FI does not mean you can retire and do what you want to do. For example, my normal expenses in retirement is estimated to be about $80k per year. But if ...
by The Wizard
Wed Dec 06, 2017 9:19 pm
Forum: Personal Consumer Issues
Topic: I received a speeding ticket via mail from IA - should I pay it?
Replies: 72
Views: 4791

Re: I received a speeding ticket via mail from IA - should I pay it?

Interesting question, not sure what I would do.
Let's see what the pros have to say...
by The Wizard
Wed Dec 06, 2017 8:13 pm
Forum: Investing - Theory, News & General
Topic: "Financial Shock" wealth
Replies: 33
Views: 6048

Re: "Financial Shock" wealth

Seems like a long article with nothing much to say.
I've been keeping up to $10,000 in my checking account lately to buffer irregular expenses, whether travel expenses, property taxes, season ticket bills or all of the above in the same month.
So I'm good, which isn't so surprising...
by The Wizard
Wed Dec 06, 2017 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Fidelity charges to close accounts!
Replies: 54
Views: 19731

Re: Fidelity charges to close accounts!

This is a four year old thread.
Some details may have changed...
by The Wizard
Wed Dec 06, 2017 5:39 pm
Forum: Personal Consumer Issues
Topic: Recommended places to live
Replies: 54
Views: 5126

Re: Recommended places to live

Southern Arizona is another option...
by The Wizard
Wed Dec 06, 2017 4:42 pm
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate from SPIA???
Replies: 41
Views: 2412

Re: Safe Withdrawal Rate from SPIA???

Just ladder your immediate annuities if you need to. I got a bit over 6.5% payout at age 63 from TIAA. Then a 7.0% payout this year for a small increment at age 67. My TIAA immediate annuities are both fixed (Trad) and variable (TREA and CREF Stock). I'm sorry that TIAA is not available to the gener...
by The Wizard
Wed Dec 06, 2017 4:03 pm
Forum: Personal Finance (Not Investing)
Topic: How do you know you are FI? [Financially Independent]
Replies: 48
Views: 3767

Re: How do you know you are FI?

I'm FI because my net income, what hits my checking account, is higher in retirement than my latter working years.
My "expenses" don't really matter in this case...
by The Wizard
Wed Dec 06, 2017 6:45 am
Forum: Investing - Help with Personal Investments
Topic: question about opening Traditional IRA
Replies: 8
Views: 502

Re: question about opening Traditional IRA

cis_love wrote:
Tue Dec 05, 2017 10:24 pm
ok, thanks for those answers. can you all help me think of any other ways to boost our retirement funds?
You could also spend money to convert those tIRAs to Roth IRAs, which are tax-free henceforth.
But you need to analyze and project your finances to see if this makes sense...
by The Wizard
Wed Dec 06, 2017 2:19 am
Forum: Personal Finance (Not Investing)
Topic: Question about IRMAA and first couple years of retirement
Replies: 17
Views: 1614

Re: Question about IRMAA and first couple years of retirement

DrGoogle2017 wrote:
Wed Dec 06, 2017 12:54 am
Can you contribute to 401k to reduce the income to be less than $85k?
Yes...
by The Wizard
Tue Dec 05, 2017 8:56 pm
Forum: Personal Finance (Not Investing)
Topic: IRMAA and High Income & Taxes
Replies: 3
Views: 664

Re: IRMAA and High Income & Taxes

So do you have a question here?
by The Wizard
Tue Dec 05, 2017 4:24 pm
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2177

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

So it is necessary to have aft-tax account to cover the expense while doing the Roth conversion. From this point of view, pre-pay mortgage will reduce the aft-tax asset. Let say someone choose to take SS at 70.5. Let say he will 80k need for living expense. He is now X years old. So he would need (...
by The Wizard
Tue Dec 05, 2017 3:52 pm
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2177

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

The correct reason that i-ORP does this is to free up space to do Roth conversions early in retirement. Say you have $400k in your taxable account and want $60k per year. Then take $60k from taxable for 6 or 7 years and do Roth conversions of at least $60k each year to get that money totally shelter...
by The Wizard
Tue Dec 05, 2017 3:31 pm
Forum: Investing - Help with Personal Investments
Topic: Medicare and retirement for high earner
Replies: 49
Views: 2297

Re: Medicare and retirement for high earner

I also suggest to make lemonade out of lemon, convert your IRA to Roth IRA for the top of the income band. The reason is you already pay the penalty, ie the high premium, but let’s say your income for 2018 is $121k then you still have about $40k before you hit the next band. Next IRMAA tier starts ...
by The Wizard
Tue Dec 05, 2017 2:17 pm
Forum: Investing - Help with Personal Investments
Topic: Medicare and retirement for high earner
Replies: 49
Views: 2297

Re: Medicare and retirement for high earner

Once you SS, RMD and pension set, you can't reverse IRMAA process. better do Roth conversion or even contribute maga aft-tax 401k and do a Roth conversion to reduce the future RMD. There's nothing wrong with being in a higher IRMAA tier on a steady basis. It's not like a terminal illness. The IRMAA...
by The Wizard
Tue Dec 05, 2017 10:26 am
Forum: Investing - Help with Personal Investments
Topic: Medicare and retirement for high earner
Replies: 49
Views: 2297

Re: Medicare and retirement for high earner

We need to put things in perspective.
If I could magically choose to double my AGI for all my remaining years, thus putting me in the highest IRMAA tier, I would choose to do that immediately...
by The Wizard
Tue Dec 05, 2017 8:06 am
Forum: Investing - Help with Personal Investments
Topic: Medicare and retirement for high earner
Replies: 49
Views: 2297

Re: Medicare and retirement for high earner

Sounds like you were unaware of IRMAA (not IRMMA). Lots of over 65 Bogleheads have MAGI over $85,000 per person and therefore pay additional for Medicare. Nothing here to be annoyed about. Nonetheless, it's best if you are not Just Over an IRMAA tier threshold by a few hundred dollars. So it's good ...
by The Wizard
Mon Dec 04, 2017 7:24 pm
Forum: Personal Finance (Not Investing)
Topic: FIRE [financial independence/retire early]
Replies: 132
Views: 11648

Re: FIRE [financial independence/retire early]

The state owns a liquor store? Which state is this? I bet it's Pennsylvania or Utah, where liquor stores are owned by the state. In North Carolina, they're owned by local ABC boards. In some other states, their operators are contracted by the state. https://en.wikipedia.org/wiki/Alcoholic_beverage_...
by The Wizard
Mon Dec 04, 2017 7:19 pm
Forum: Personal Finance (Not Investing)
Topic: Why should I donate to my alma mater?
Replies: 133
Views: 9301

Re: Why should I donate to my alma matter?

dodecahedron wrote:
Wed Nov 29, 2017 12:36 pm
By the way, college admissions officers pay big fees to consultants who use econometric methods to predict which applicants will be most likely to donate generously after college graduation.
Legacies, yes...
by The Wizard
Mon Dec 04, 2017 8:26 am
Forum: Personal Consumer Issues
Topic: How to convince DW that high miles used car is OK
Replies: 106
Views: 6554

Re: How to convince DW that high miles used car is OK

No stupid giant console dividing the front seats, making it hard to slide things across into and from the passenger's seat. Not to go too far off track, but 1000% agree. This is the number one thing I hate about newer cars. It's very useful to be able to slide across the seats, either when switchin...
by The Wizard
Sat Dec 02, 2017 5:07 pm
Forum: Personal Consumer Issues
Topic: How to convince DW that high miles used car is OK
Replies: 106
Views: 6554

Re: How to convince DW that high miles used car is OK

Buy newer cars?
My last few failed around 140,000 miles...
by The Wizard
Sat Dec 02, 2017 2:09 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for a good financial planning math reference
Replies: 8
Views: 415

Re: Looking for a good financial planning math reference

Well, the math part is rather simple.
It's the ASSUMPTIONS part that's a big problem.

When these type of threads happen, my usual advice is to focus on increasing your Retirement Savings Percentage and eventually tracking where you are in terms of projected retirement income...
by The Wizard
Sat Dec 02, 2017 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 25830

Re: Why not take Social Security at 62

Why the limited hours on a website? Is this much maintenance time really needed? This service is not available at this time. Please try again during our regular service hours (Eastern Time): Day Service Hours Monday-Friday 5:00 a.m. - 1:00 a.m. Saturday 5:00 a.m. - 11:00 p.m. Sunday 8:00 a.m. - 11:...
by The Wizard
Sat Dec 02, 2017 11:56 am
Forum: Personal Consumer Issues
Topic: Any other Granada (Caribbean) Lovers Here?
Replies: 5
Views: 436

Re: Any other Granada (Caribbean) Lovers Here?

I more of a Bonaire lover (8 times), but I'm not inclined to buy a place there.
Next trip there in early May if I get working on it...
by The Wizard
Sat Dec 02, 2017 11:51 am
Forum: Investing - Theory, News & General
Topic: AA based on recent market performance and pre-determined target
Replies: 29
Views: 1634

Re: AA based on recent market performance and pre-determined target

...Yes! But this is not sticking to that pre-planned AA that gets more conservative as one gets closer to retirement. The whole concept is the ability to reduce risk even lower than that pre-planned AA which also reduces risk as one gets closer to retirement, if markets perform better than your tar...
by The Wizard
Sat Dec 02, 2017 11:03 am
Forum: Investing - Theory, News & General
Topic: Is 60/40 mix the sleep mix or 80/20 mix
Replies: 38
Views: 3476

Re: Is 60/40 mix the sleep mix or 80/20 mix

80/20 is a young person allocation 60/40 is the traditional endowment ratio for universities and middle age allocation 40/60 is a retirement allocation 30/70 is a senior retiree allocation 20/80 is a elder senior retiree allocation j :D That just depends. Traditional glide slope logic assumes a goo...
by The Wizard
Sat Dec 02, 2017 9:10 am
Forum: Investing - Theory, News & General
Topic: AA based on recent market performance and pre-determined target
Replies: 29
Views: 1634

Re: AA based on recent market performance and pre-determined target

...I am surprised there's not much interest in this topic. To me, this is one of the significant concept, of a very few, that will shape my investement phase and retirement phase. The concept of 'spending' recent market gains to lower risk, shorten working years is rarely discussed, and not much in...
by The Wizard
Sat Dec 02, 2017 4:52 am
Forum: Investing - Theory, News & General
Topic: AA based on recent market performance and pre-determined target
Replies: 29
Views: 1634

Re: AA based on recent market performance and pre-determined target

...Is this a good plan? It seems like a good plan. You probably want to start thinking about income streams in retirement as well. I'm retired close to five years now and did not have a firm Accumulation Number that I targeted back in 2012. But I wanted about the same net income in retirement as I ...
by The Wizard
Fri Dec 01, 2017 9:59 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 25830

Re: Why not take Social Security at 62

If you started at age 62 with $1,000 a month you would have received $96,000 by age 70. That's a loss of $96,000 if you wait until age 70 to start collecting. How long would it take with the "higher" benefits at age 70 to make up the $96,000 loss? And there's a "health depreciation" factor that nee...
by The Wizard
Thu Nov 30, 2017 11:37 am
Forum: Personal Finance (Not Investing)
Topic: I Can "Afford" This Right? (New Car)
Replies: 60
Views: 4567

Re: I Can "Afford" This Right? (New Car)

Sounds good. I like the orange color, Molten Pearl.
What are you driving now?
by The Wizard
Thu Nov 30, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: if IRA 100% invested..where is cash for buying opporunities?
Replies: 13
Views: 784

Re: if IRA 100% invested..where is cash for buying opporunities?

Use those bonds to rebalance into stocks to get back to 40/60...
by The Wizard
Thu Nov 30, 2017 9:23 am
Forum: Personal Finance (Not Investing)
Topic: Taxes in Retirement [ways to forecast]
Replies: 26
Views: 2216

Re: Taxes in Retirement [ways to forecast]

First year of retirement is tricky since everything is changing, from W-2 income to 1099R income typically. Subsequently it gets easier since you're dealing with incremental changes to base retirement income. I just maintain a spreadsheet to forecast my AGI year by year. I'm beyond the SS hump situa...
by The Wizard
Tue Nov 28, 2017 5:38 pm
Forum: Personal Finance (Not Investing)
Topic: Earned income reducing social security
Replies: 5
Views: 618

Re: Earned income reducing social security

It's not a really great idea to take SS benefits prior to FRA if you are still working significantly.
So don't do that...