Search found 1337 matches

by rai
Mon Feb 20, 2023 4:40 pm
Forum: Personal Finance (Not Investing)
Topic: Buy vs. Rent
Replies: 951
Views: 58046

Re: Buy vs. Rent

This is super interesting topic, I live near Orlando so the insurance might be different but my $2M home costs $1500 a month insurance so I’d go with $2K maybe in Miami if these is a flood zone. Maintenance is a wild card for sure. There’s just routine things like lawn care and pool care whatnot but then you could face major repairs like need a new pool heater or HVAC units or major landscaping, roofing. I’d say just ballpark it wouldn’t be a surprise to pay $1-2k a month on upkeep. I mean sometimes nothing but other times $8k here $5k there it adds up. We just did a mini version of buy vs rent because my daughter is moving to Tampa and rent is very high so we are buying a condo to rent to her at a discount. So she is not being killed by re...
by rai
Wed Jan 18, 2023 7:29 am
Forum: Investing - Theory, News & General
Topic: Thoughts on the current housing bubble
Replies: 21
Views: 2299

Re: Thoughts on the current housing bubble

Without looking at the subprime leaning, no doc loans, foreclosure stats, home equity etc. it’s hard to compare today to the 2008 time period. Mortgage rates are higher slowing sales but most people are locked into low rate mortgages so they are still as affordable as when they were issued. https://www.cdwealth.com/article/heres-why-todays-housing-market-is-different-from-2008/ “The amount of leverage — how much debt the homeowner has against the home’s value — has fallen dramatically. Total mortgage debt is less than 43% of total home values, the lowest on record. Negative equity is basically non-existent. (In 2011, one in four borrowers were underwater.) Today, mortgage payments as a percentage of consumer’s disposable income are just 3.8...
by rai
Sun Jan 15, 2023 4:09 pm
Forum: Personal Investments
Topic: Advice, should my wife contribute to her Solo 401K?
Replies: 10
Views: 1141

Re: Advice, should my wife contribute to her Solo 401K?

livesoft wrote: Sun Jan 15, 2023 3:29 pm One can give away shares held long-term to their Donor-Advised Fund and get a tax break. While you may rather pay the taxes instead, I think you should seriously consider this. After all, the IRS is not most peoples' idea of a charity.
Are you saying donate the shares to get a tax break? How would that help my situation, *I am living off the proceeds of these shares* these are not extra shares that I don't want anymore. If I donate $100K and get a tax credit of $32K (32% tax bracket) then I am looking at a proceeds of $32K for a donation of $100K? How would that be better than paying 23.8% LT capital gains tax?
by rai
Sun Jan 15, 2023 2:44 pm
Forum: Personal Investments
Topic: Advice, should my wife contribute to her Solo 401K?
Replies: 10
Views: 1141

Re: Advice, should my wife contribute to her Solo 401K?

The more important question is: why are you generating so many long term capital gains in the taxable account in the first place? The principles of Boglehead investing is to choose only index funds, which you would buy and never sell unless there is definitely a need to. There is a lot of churn in your taxable account, and I don't think it is advantageous to you. Consider simplifying This is something like asking to close the barn door after the horses have escaped. The point is I had bought a lot of Stocks like Apple and Google and they have gone up 10X or 20X since I bought them and they are in my brokerage account unfortunately. SO I had bought Apple when it was $6/share and now it's $130/share. I bought Google when it was $9/share and ...
by rai
Sun Jan 15, 2023 2:38 pm
Forum: Personal Investments
Topic: Advice, should my wife contribute to her Solo 401K?
Replies: 10
Views: 1141

Re: Advice, should my wife contribute to her Solo 401K?

Let me see if I understand you correctly thanks for the reply! Let me just say that our joint income (less wife's Solo 401k contribution and our deductions) we are just at the income of the 32% ($340K) limit. our capital gains and dividends don't factor into that 32% cutoff isn't that correct? Let me also say that to firm up what I'm talking about, my taxable accounts is 80% profits. for me to take out $60K from the brokerage to put into the Solo IRA I'd pay tax on 80 of that or $48K LT gains. so paying 23.8% on the gains ( almost 20% tax to put into the Solo 401K). But this is what I am questioning as you point out the money will be taxed when it's taken out of the 401K at let's say 24% (in the future when I'm 72 and older). So to me it l...
by rai
Sat Jan 14, 2023 7:21 pm
Forum: Personal Investments
Topic: Advice, should my wife contribute to her Solo 401K?
Replies: 10
Views: 1141

Re: Need advice, should my wife contribute to her Solo IRA?

livesoft wrote: Sat Jan 14, 2023 7:18 pm Do you mean solo 401(k) also known as individual 401(k)?

I have not heard of a solo IRA with the high contribution limits that you mentioned. As all IRAs are individual as far as I know, so they are all "solo."
Yes, correct I should have said Solo 401K (not IRA).
by rai
Sat Jan 14, 2023 6:57 pm
Forum: Personal Investments
Topic: Advice, should my wife contribute to her Solo 401K?
Replies: 10
Views: 1141

Advice, should my wife contribute to her Solo 401K?

I have a math problem, not sure if I'm saving anything by contributing to my wife's Solo 401K. Here is my situation. Me 57 Wife 55 Married filing jointly: Me making $290K W2 income(contribute to my 401K max $40K/year) Wife makes $170K 1099 income, she is eligible to contribute to Solo 401K almost to $60K Dividend income $40K Sales from brokerage variable but say it's $80-120K LT Capital gains (as we use this to fund the Solo 401K because we can not bankroll it with income). Our combined income puts us near to the 32% tax bracket. We might be some income in the 32% but not much, (I believe) if wife contributes to her Solo 401K we would be saving all from the 32% bracket. Additionally we are in the net investment income tax (3.8%) as well as ...
by rai
Fri Mar 04, 2022 5:56 am
Forum: Personal Consumer Issues
Topic: Disaster! Need New Car / Telluride? Mine may be totaled :-(
Replies: 78
Views: 9498

Re: Disaster! Need New Car / Telluride? Mine may be totaled :-(

I just got a 2022 Telluride what a great SUV! Great features. I can’t be more happy.

My recommendation it makes sure to get the AWD option on the Kia. I had a Hyundai Palisade and was only able to locate FWD in my area at the time and was so unhappy with it I traded it on the Telluride. My issue was how bad wheel spin was in the rain. It’s got fat tires and the traction let go too easily on the FWD.
by rai
Wed Mar 02, 2022 12:40 pm
Forum: Personal Consumer Issues
Topic: Loosening the purse strings: Tesla Model Y vs Lexus ES/RX?
Replies: 127
Views: 11793

Re: Loosening the purse strings on a luxury car at age 50?

I’m a bit older than OP but can relate in that I drive 2 hours round trip to work. I just bought a 2022 Kia Telluride which replaced a 6-7 year old Hyundai Santa Fe. It’s so much nicer driving the new car. It’s so much more comfortable and fun. I will say that when I was younger that I bought a luxury car that I did regret. It was a BMW M3 great car but the maintenance was insane and to top it off I bought it right before the Great Recession that now looking back I wish I could have bought stocks with that money. Apple up 20x for example. I did buy Apple and such but if I had bought a lesser car like half price I would have been happier. However it depends on your current savings and if you are comfortable with how much you have saved and c...
by rai
Sat Jan 01, 2022 2:54 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

A couple of questions. First what is the eventual estate plan? Second are their any losers in the portfolio that can be sold as the same time as some of the Apple to cancel capital gains with those capital losses. Capital loss is not a problem, I already sell the loss when possible. I am long on Apple and Google from 2008-09 they have gone up 20-30x it's not like I deliberately wanted to be overweight on these stocks (had I known I would have put them in the tax shelter from the beginning). But I do also have some positions that I can sell that are not 90% gains but maybe like 30% gains, but was looking to sell some AAPL and Google anyway just lessen their over weight in my portfolio. I would sell five percent of the Apple &Google and ...
by rai
Sat Jan 01, 2022 1:12 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

I am not following the donations strategy, If I gave away $100K of a stock the most I'd save in taxes would be like 20-30% so that's like giving away 70% of the money this is not just extra money, it's money I need for retirement, I am not in a position that I have so much extra that I am looking at in the giving it away.
by rai
Sat Jan 01, 2022 1:01 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

vtsnowdin wrote: Sat Jan 01, 2022 12:46 pm A couple of questions. First what is the eventual estate plan? Second are their any losers in the portfolio that can be sold as the same time as some of the Apple to cancel capital gains with those capital losses.
Capital loss is not a problem, I already sell the loss when possible.

I am long on Apple and Google from 2008-09 they have gone up 20-30x it's not like I deliberately wanted to be overweight on these stocks (had I known I would have put them in the tax shelter from the beginning).

But I do also have some positions that I can sell that are not 90% gains but maybe like 30% gains, but was looking to sell some AAPL and Google anyway just lessen their over weight in my portfolio.
by rai
Sat Jan 01, 2022 12:55 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

grabiner wrote: Sat Jan 01, 2022 12:33 pm
A further benefit is that you may be taking too much risk in a single stock or sectore, since you have a lot of AAPL (and, I would guess, other tech stocks). Reducing your exposure to AAPL, and buying a diversified stock fund in the 401(k), reduces your risk while you keep the same stock-market exposure.
Thanks, this is a side benefit as I want to sell my overweight on Apple but don't want to do it all at once and pay mid six-figure capital gains tax all at once. So I was looking to sell a few hundred shares a year to lower the position.
by rai
Fri Dec 31, 2021 11:18 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

As if the math wasn't complicated enough already....this week when I was looking at running a special payroll with the intent of routing more pretax money into 401k accounts, I took a closer look at the numbers and noticed that "pretax" meant that the employee and employer still pay FICA. Maybe I'm missing something but from an owner perspective that seems to really reduce the advantage of elective contributions vs. taking a distribution. I wasn’t aware of that but you are correct. But withdraw doesn’t pay FICA tax. “ Keep in mind that while you do not have to pay income taxes on money you contribute to a 401(k), you still pay FICA taxes, which go toward Social Security and Medicare. That means that the FICA taxes are still calcu...
by rai
Fri Dec 31, 2021 10:45 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

We actually are semi retired meaning we both work part time and if need be will supplement our take home pay with withdraws from my taxable brokerage account. .... We have a large taxable account I assume that you already have, but just in case you did not think of it have you already changed the mutual funds in your taxable account to not automatically reinvest any dividends or capital gains distributions? If not then those could be used to help cover your living expenses. You might also look at doing something like paying off a mortgage to lower your expenses so that in future years your expenses would be lower. Yes to both We are not reinvesting dividends that's just rolled into my monthly take home. (actually much of my pay also goes t...
by rai
Fri Dec 31, 2021 10:39 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Re: Help me deciding if it makes sense to pay taxes to save in tax shelters?

sailaway wrote: Fri Dec 31, 2021 10:32 pm Since she is 55, she can put the deferral limit, plus the catch up limit, plus 25% of profits in the solo 401k, but perhaps she has a SEP IRA with different limits? There is no solo IRA, as the I stands for individual.

A big part of your calculations need to be guesses at your future rates. Do you have large tax deferred accounts? Any pensions lined up? It sounds like you always plan to spend into the 32% bracket, and if so, then what you are proposing may still make sense, since tax rates are scheduled to increase in a few years. If you think RMDs will push you into an even higher bracket, then what you are proposing does make a lot of sense.
Sorry, meant to say Solo 401K
by rai
Fri Dec 31, 2021 10:18 pm
Forum: Personal Investments
Topic: Help me deciding if it makes sense to pay taxes to save in tax shelters?
Replies: 18
Views: 1690

Help me deciding if it makes sense to pay taxes to save in tax shelters?

Hello, married 56/55 yo couple. We are well off and high earning 2 physician couple now in a Florida (no state income tax) however we are paying the 3.8% net income surtax on capital gains.. We are also into the 32% income tax bracket.. We actually are semi retired meaning we both work part time and if need be will supplement our take home pay with withdraws from my taxable brokerage account. My wife is a 1099 income so she can contribute a lot to her solo 401K (maybe as much as 1/3 of her income) so this is saving from the 32% tax bracket. We are well into the 32% tax bracket but not any into the 35% or higher bracket. IOW all of her Solo 401K come out of the 32% bracket, if we didn't contribute that $40-50K it would be taxed a 32% We have...
by rai
Tue Dec 21, 2021 8:23 am
Forum: Personal Consumer Issues
Topic: Any Free Lunches Out There?
Replies: 130
Views: 14425

Re: Any Free Lunches Out There?

While you can get bonus money for transfers to a new brokerage. You might also be able to get the bonus to stick around with your current broker. I’ve done this a few times at Etrade, ask them if they’ll match the bonus to keep me.
by rai
Tue Dec 14, 2021 11:30 am
Forum: Personal Investments
Topic: Selling Apple (AAPL) stock
Replies: 60
Views: 6278

Re: Selling Apple (AAPL) stock

I'm in the same situation. AAPL is getting close to 20% for me. Taking a big tax hit in the name of diversification seems questionable to me. I'm following the discussion closely. I’m at 25% yikes. I’m selling a bit but not wholesale selling. Not trying to get from 25% to 10% overnight more like over the next decade. My selling is booking an automatic 23.8% loss. I’m at 95% capital gains so really like 22.6% loss every time I sell. I understand that Apple can drop more than 22.6% but it’s not as sure as me selling and locking in the loss (tax). I’m going to be living off some of the sale of stock so I’ll have to pay tax at some point so I’m just trimming a bit at a time. I don’t agree with donating the shares. This is money I’m counting on...
by rai
Tue Dec 14, 2021 11:23 am
Forum: Personal Investments
Topic: Selling Apple (AAPL) stock
Replies: 60
Views: 6278

Re: Selling Apple (AAPL) stock

firedup wrote: Mon Dec 13, 2021 10:57 am Why do you need to sell it? Do you have something else you need to do with the money?

If so, sell some, pay the 15% tax and rejoice in the fact you bought a winner years ago. The stock is up big recently. :sharebeer

Not sure of your tax situation but if you're MFJ and your income is under 81K with deductions you could pay 0% tax on part or all of the sale.

Good "problem" to have.
I’m in a similar situation but it’s not 0% (nobody is asking this question if they’re in the zero tax bracket). My tax is 23.8% on the gain. (LT tax plus net investment income tax 3.8%).
by rai
Fri Dec 03, 2021 3:36 pm
Forum: Investing - Theory, News & General
Topic: The risk of DEATH ---- under-discussed on this forum?
Replies: 258
Views: 22750

Re: The risk of DEATH ---- under-discussed on this forum?

My concern is the 18% chance of being alive between 91 and 110. Yeah, and that's for a 62 year old male. For a 68 year old female, the chance goes up to 31%! Playing around with that spreadsheet is very interesting... I am trying to see if that claim is reasonable. Is it true that if that were the case, there should *lots* of 91+ age women population. In your daily life, you will come across many 91+ year old women. I don't think that is my experience. The data I saw said ~ 2M people in US are 90 or older. That means around one out of every 170 people alive in the USA are 90 or older. I see 90+ people all the time in the medical field as patients. But I’d imagine most are socked away in old age homes and in elderly retirement places and so...
by rai
Fri Dec 03, 2021 1:06 pm
Forum: Investing - Theory, News & General
Topic: The risk of DEATH ---- under-discussed on this forum?
Replies: 258
Views: 22750

Re: The risk of DEATH ---- under-discussed on this forum?

My guess is that most BHers are going to be in pretty good shape retirement-wise, if they aren't already, and that they don't have to worry about age 80 or 85 or 90. I haven't seen anyone propose working like a dog until 70 because they need the five extra years of work if they want to make it to 90. True, but there are TONS of people on this forum who could easily have retired at 55-58 but worked until 63-65 for no other reason than their risk aversion. Maybe they loved their jobs, but most people do not. Myself and wife have split the difference. We’re both highly compensated physicians who have worked 25 years mostly too much work, but we started taking 8 weeks vacation a while back and just last year we cut back to 20-30 hours a week e...
by rai
Fri Dec 03, 2021 7:36 am
Forum: Investing - Theory, News & General
Topic: The risk of DEATH ---- under-discussed on this forum?
Replies: 258
Views: 22750

Re: The risk of DEATH ---- under-discussed on this forum?

I watch this guy on YouTube who’s like the Everyman for financial planning. He’s more for the not Bogleheads who don’t save 25x their spending. For people who want to live off SS mostly and not really save a ton extra. He says it’s no big deal, you only need 10x or whatever number you might have. Because he reasons most of you will be dead by 75-80. So just spend while you are alive don’t worry about the chance you may live longer. That’s *not* my opinion, because there are almost 2 million Americans that are 90+ and the number of 90+ is going to skyrocket in the future. I’m a physician and see 90 year olds so often it’s not even that remarkable to me. My dad is 92, my mother in law is 82 and still works full time. Anyway I’d rather save ex...
by rai
Wed Dec 01, 2021 1:11 pm
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting and Wash Sale Rules
Replies: 21
Views: 1850

Re: Tax Loss Harvesting and Wash Sale Rules

I have a question, if I had an E*TRADE and a Vanguard account, and sold/bought within the wash rule period but one was in a retirement account. How would it be possible for the IRS to determine? Surely they are not looking at every transaction across multiple platforms.

Is it just the honor system?
by rai
Wed Dec 01, 2021 12:00 pm
Forum: Investing - Theory, News & General
Topic: Does market-cap have TOO much US?
Replies: 54
Views: 4896

Re: Does market-cap have TOO much US?

Apple makes 67% of its earnings outside of US. I’ll wager Microsoft, Amazon, Google does likewise.
by rai
Thu Oct 28, 2021 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Break even year
Replies: 15
Views: 2529

Re: Break even year

I wasn’t aware you could collect spousal benefits while waiting to collect. I thought this had been eliminated?

Edit: just saw if you are born before 1954 you can do that.
by rai
Tue Oct 05, 2021 3:22 pm
Forum: Personal Consumer Issues
Topic: The "Ultimate" Family Road Trip Vehicle?
Replies: 95
Views: 9722

Re: The "Ultimate" Family Road Trip Vehicle?

I have a 2021 Hyundai Palisade and also a 2017 Santa Fe that’s 3 row. Both had the max tech and safety and luxury for its time. Santa Fe has 77k reliable miles.

The Palisade is far and away better in every single way. I got the fwd Palisade because of covid was hard to find any AWD I’m in Florida so it’s not essential. But anyway I’m getting between 26-27 mpg which is not too bad.

You mentioned luxury this is what the Palisade is great at, I’ll go over the same speed bumps at same speed and the Santa Fe is a lot more jarring.

The Palisade is roomy it replaced a Honda Odyssey so it’s down on cargo room but the passenger room is not bad for 7.
by rai
Fri Oct 01, 2021 10:42 am
Forum: Personal Investments
Topic: Sell short or long term lot?
Replies: 6
Views: 818

Re: Sell short or long term lot?

your taxes are 24% or 15%

Not sure if state taxes will apply to you but that’s another thing that would tip me towards taking the lesser gain.

Either way it’s not really a big deal is it?

Looks to me like $1500 on LT sale or $480 on ST sale.

Of course the the possibility of keeping the short term holding in case there is a pull back you can tax loss harvest.

I’m undecided, maybe some others will provide better advice.

It seems like the answer is to sell the LT gains for both lesser tax rate plus chance of TLH if there is a big downturn.

If undecided can always go half and half.
by rai
Fri Oct 01, 2021 7:48 am
Forum: Personal Investments
Topic: Sell short or long term lot?
Replies: 6
Views: 818

Re: Sell short or long term lot?

Not enough information regarding your tax bracket and the amount of money you are talking about. Are you talking about a few hundred or a few thousand or tens of thousands of dollars of gains?

Are you at the net income investment tax level? That adds 3.8% tax on all investment gains and dividends. What would be your LT or ST gains?

https://www.irs.gov/individuals/net-inv ... income-tax
by rai
Sun Mar 07, 2021 6:49 pm
Forum: Personal Finance (Not Investing)
Topic: Coast to retirement jobs late 40s medicine
Replies: 37
Views: 5076

Re: Coast to retirement jobs late 40s medicine

I was in similar situations with my practice since we sold out to a megacorp. Fortunately my specialty is super high demand and I was able to relocate to Florida where we wanted to retire anyway. I’m now working 3 days a week no call or weekends. I’m almost able to support my lifestyle but will dip into my taxable savings around 1% but at the same time be saving around the same in our retirement account so net zero savings but we are just about 25x spending. I’m 55 so close to retirement age just good to delay full retirement while getting full benefits health insurance, 401k match etc. Also figured we save so much for retirement that it’s ok to dip in and spend some before retirement and this extends out our full retirement x more years.
by rai
Tue Mar 02, 2021 6:31 am
Forum: Personal Finance (Not Investing)
Topic: Relocation to Florida for retirement
Replies: 55
Views: 8018

Re: Relocation to Florida for retirement

Check out Lakeland, about half way between Orlando and Tampa, Nice quaint town with classic square, excellent healthcare, a small residential college (Florida Southern), so lots of small venue activities. If interested, look at the Christina subdivision south of town. Priced below either cities and immediate suburbs but easy access to both airports and of course the theme parks. We just moved from Maryland to Windermere and I work in Lakeland. Windermere is great and lots of top tourists attractions with Disney and Universal. Windermere is definitely more expensive houses can cost 2x what other areas go for but it’s the prime location for us. We go to Disney all the time and our kids and future grandchildren will be visiting often. Side no...
by rai
Fri Feb 26, 2021 1:17 pm
Forum: Personal Consumer Issues
Topic: Car suggestion for 70+ year-old mom
Replies: 160
Views: 11612

Re: Car suggestion for 70+ year-old mom

My daughters Outback she drives a lot interstate to college and we drove it 1000 miles to Michigan with three occupants and full trunk it’s only a 4 cylinder but it still moves ok. We were getting around 400 miles on a tank of gas.

I won’t say there is only one great choice, I’m sure there is a lot of great choices we looked at Mazda felt smaller inside than the Outback. We looked at Forester too but that was more upright and SUVey than the Outback more tall car.
by rai
Fri Feb 26, 2021 1:05 pm
Forum: Personal Consumer Issues
Topic: Car suggestion for 70+ year-old mom
Replies: 160
Views: 11612

Re: Car suggestion for 70+ year-old mom

I got my daughter an Outback that’s a wagon/SUV but drives like a tall car. Anyway it’s not too small and not too big and gets some decent gas mileage and good safety equipment and rating.

Most Subaru’s are built in the US.
by rai
Wed Feb 17, 2021 8:51 am
Forum: Investing - Theory, News & General
Topic: Low interest rate / bond fund question?
Replies: 31
Views: 3274

Re: Low interest rate / bond fund question?

I’m just going to add this point, I’m not retired yet and anyway plan to be holding bonds (example Total Bond Market Fund) for the next 30-40 years hopefully. So does it matter to me if there is fluctuations in the principal value if I’m holding the funds for a long time and every month adding to them via interest reinvestment.

Now this dynamic may change some during retirement if I’m selling some bonds or maybe spending the interest instead of reinvestment.
by rai
Tue Feb 16, 2021 12:30 pm
Forum: Investing - Theory, News & General
Topic: Market valuations? Somethings got to give
Replies: 269
Views: 22999

Re: Market valuations? Somethings got to give

All cash for 18 months of some of the best growth ever in stocks and bonds. :oops:

I recall a video of a guy calling Dave Ramsey saying his elderly father doesn’t believe in banks or investments so he has $500K in cash saving at his house. He has nothing except cash. I just was thinking how many millions he might have had if not for his grave fear of investing.
by rai
Tue Feb 16, 2021 12:13 pm
Forum: Investing - Theory, News & General
Topic: Market valuations? Somethings got to give
Replies: 269
Views: 22999

Re: Market valuations? Somethings got to give

My asset allocation has been 100 percent cash for the last 18 months, which is definitely extreme, but I still have to work for about another 20 years so who cares. Image someone that retired in 2020 and missed 2-3 years of stock market gains over the course of working for 40 years. If they missed out on saving 2-3 years that is a whole another story, but missing out on VTI's earnings for 2-3 years whoopee doo. For anyone else reading this go ahead and dive down cherry picker lane you will end up with a similar number. It is like arguing over whether you spending 17 or 18 percent of your income for housing, who cares it is under 30 percent. I take exception to this point. Because after a while additional *savings* is peanuts compared to *g...
by rai
Tue Feb 16, 2021 7:53 am
Forum: Investing - Theory, News & General
Topic: Low interest rate / bond fund question?
Replies: 31
Views: 3274

Re: Low interest rate / bond fund question?

ch4au2 wrote: And, as you can tell, I don't know much about bonds. With my simple two fund portfolio (VTI/BND) I don't spend much time studying these things. But I DO value all the guys who do! So thank you very much for the info! You guys have kept me out of trouble for a long time!

CH
There are a number of books about bonds including Bonds for dummies.

This is a quick and dirty explanation $5.99 Kindle

‘Why bother with Bonds?’

It’s not written during the super low interest rate environment. But it’s still worthwhile to read if you know nothing about bonds.
https://www.amazon.com/gp/aw/d/B00PL7WS ... 8&qid=&sr=
by rai
Tue Feb 16, 2021 7:24 am
Forum: Personal Finance (Not Investing)
Topic: Parents, No Retirement Savings
Replies: 38
Views: 6169

Re: Parents, No Retirement Savings

Why aren’t they waiting to collect SS until they are retired? They could paying tax on a lot of the SS benefits because of their work income.
by rai
Tue Feb 16, 2021 5:52 am
Forum: Investing - Theory, News & General
Topic: Low interest rate / bond fund question?
Replies: 31
Views: 3274

Re: Low interest rate / bond fund question?

Those examples help.

Also thanks the calculators are great too.
by rai
Mon Feb 15, 2021 5:26 pm
Forum: Investing - Theory, News & General
Topic: Low interest rate / bond fund question?
Replies: 31
Views: 3274

Low interest rate / bond fund question?

We all know interest rates are quite low and can go up at some point. The betting man would bet that interest rates would some day raise several percent (to 3-5%). I’m just trying to visualize what my bond funds will do as the rates go up at some point the principal of my bond funds will go down x many percent depending on bond duration and rate change. But the theory would be that the higher interest would make up the loss in x many years (dependent on the bond duration). So in theory if I have $1M bond funds (5-8 year duration) if I keep them bond funds 5-8 years the higher interest should replace the principal lost to rate increase? Is that close to true or way off? IOW should I worry about whatever rate increases or not because the high...
by rai
Mon Feb 15, 2021 3:02 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on investing in non-taxable accounts
Replies: 36
Views: 4035

Re: Thoughts on investing in non-taxable accounts

The tax hit is only on the * gains * As you said you’re out of tax shelter space so the money is already taxed. So you’re only paying taxes on dividends and capital gains (new money). Tax shelter is still taxed when you take it out ( contributions and gains both taxed). You pay taxes on both but once you have taxable account that’s worth more than an equal value of tax shelter (except Roth of course). If you have $1m in taxable and say only 80% is gains your looking at 20% LT cap gains on just $800k so you’d net $840k at withdraw $1M in tax shelter at suppose 25% blended rate your at $750K spending money. Not to mention you can TLH in taxable to lower your current taxes. Also you can live off taxable money after you retire so you’re able to...
by rai
Fri Feb 12, 2021 7:16 am
Forum: Investing - Theory, News & General
Topic: What happens if you retire using the 4% rule and the market crashes 40%+ the next week
Replies: 118
Views: 12809

Re: What happens if you retire using the 4% rule and the market crashes 40%+ the next week

The code is more like what you’d call guidelines than actual rules. -Barossa, Pirates of the Caribbean.
by rai
Fri Feb 12, 2021 6:16 am
Forum: Investing - Theory, News & General
Topic: What happens if you retire using the 4% rule and the market crashes 40%+ the next week
Replies: 118
Views: 12809

Re: What happens if you retire using the 4% rule and the market crashes 40%+ the next week

In theory you should be ok as the projected future returns of stocks should be higher and you’re going to be spending bonds as you rebalance.

You should be able to carry on as planned but what I’d do is cut back spending a little.
by rai
Wed Feb 10, 2021 5:26 pm
Forum: Investing - Theory, News & General
Topic: If you are investing in a traditional 401(k) or traditional IRA, do you have a good reason for doing this?
Replies: 156
Views: 11797

Re: If you are investing in a traditional 401(k) or traditional IRA, do you have a good reason for doing this?

I’ve seen quite a few retirement advisers saying tax shelters are no good. Maybe they’re preaching to the low tax people who might pay zero on investment income and aren’t really saving a lot on the tax breaks because they’re not in a high tax bracket. But for real high earners are dying to shelter as much from the taxman for as long as possible. And can still have non tax shelter assets it’s not either or. The YouTube advisor seems to think if you tax shelter income you can’t also have taxable assets. I have both and turned out about 50:50 so I can enjoy lower tax treatment on dividend and capital gains on taxable as well as tax shelter growth. Can TLH in taxable and rebalance in tax shelter without taxable consequences. I love tax shelter...
by rai
Wed Feb 10, 2021 5:01 pm
Forum: Investing - Theory, News & General
Topic: If you are investing in a traditional 401(k) or traditional IRA, do you have a good reason for doing this?
Replies: 156
Views: 11797

Re: If you are investing in a traditional 401(k) or traditional IRA, do you have a good reason for doing this?

Definitely my tax rate will be lower in retirement unless stuff hits the fan.

I was in (top) tax bracket 39% plus state tax 8% was 47% tax on every dollar I shelter.

Retire to no state income tax state and will be lower than top tax bracket for most or all of my withdrawals.
by rai
Mon Feb 01, 2021 4:12 pm
Forum: Personal Finance (Not Investing)
Topic: Can my parents retire?
Replies: 70
Views: 7010

Re: Can my parents retire?

Here’s my point. If a business is just breaking even or at a loss then why even do it? Just get an hourly job and you are better off than working 60 hours a week for zero pay? Am I wrong?

I was going to say that something doesn’t add up they live modest working all hours but don’t have two dimes to rub together.

But I guess this discussion is pointless as the OP is not a decision maker for his parents.
by rai
Mon Feb 01, 2021 3:43 pm
Forum: Personal Consumer Issues
Topic: Honda Accord 2nd key fob no longer working. Do I call the dealership?
Replies: 21
Views: 2946

Re: Honda Accord 2nd key fob no longer working. Do I call the dealership?

I did mobile locksmith for half the cost for my Hyundai. The key fobs look identical.
by rai
Mon Feb 01, 2021 3:20 pm
Forum: Personal Finance (Not Investing)
Topic: Can my parents retire?
Replies: 70
Views: 7010

Re: Can my parents retire?

I hear that they’re burnt out from working 6 days a week no vacation for years etc. The point that should be pointed out to them is that working doesn’t have to be all or none. Lots of people work 2-3 days a week light schedule doing work that’s not requiring higher education or advanced skills. If one or both took part time work at $10-12/hr say combined 30-40 hours a week they’re looking at $1200+ a month and can still take SS or better yet delay one. What is their plan for 100 hours a week of free time when retired? Are they super into hobbies that they need to be 100% not working at to be honest is a young age. My mother in law is still working full time at age 80. My father was doing construction work into his mid 70s. I’m talking cons...