Search found 7 matches

by highcap
Sat May 19, 2012 8:35 am
Forum: Personal Investments
Topic: How to account for different tax advantaged account type
Replies: 51
Views: 3255

Re: How to account for different tax advantaged account type

gneeby wrote:i-orp.com includes a Monte Carlo option; at the bottom of the input parameter form.
Fair enough, but no option for different asset allocation strategies by account type which was related to the original post on this thread. I haven't completed my model yet, but I think there are some advantages to allocating various asset types by account (IRA, Roth and taxable) while still maintaining an overall AA strategy.
by highcap
Thu May 17, 2012 1:45 pm
Forum: Personal Investments
Topic: How to account for different tax advantaged account type
Replies: 51
Views: 3255

Re: How to account for different tax advantaged account type

livesoft wrote:
highcap wrote:... and try to maximize withdrawals given a certain minimum success rate. Hard to fully explain in a post, but does this sound interesting and of value to anyone. Are there any products that already do this?
Have you looked at http://www.i-orp.com ? It figured prominently in the ZERO taxes thread that I linked.
The link looks interesting - thanks! The only gap I see in this approach vs the one I proposed it that it does not include Asset Allocation (by account type) as an optimization parameter/variable, and it doesn't look like it performs a Monte Carlo analysis to give a range of possible outcomes. I know they have a link talking about the disadvantages of monte carlo, but I think it is a valuable tool to look at risk...
by highcap
Thu May 17, 2012 7:13 am
Forum: Personal Investments
Topic: How to account for different tax advantaged account type
Replies: 51
Views: 3255

Re: How to account for different tax advantaged account type

I have been working on an excel model that would allow you to simulate many of the issues being discussed in this thread. It essentially would allow you to input your assets in a taxable account, multiple 401k/IRAs and multiple Roths. You can also input penion(s), annuity payments or other income if applicable. Then you can choose up to 10 asset classes and decide on an initial allocation scheme for each account. After selecting a withdrawal rate (indexed to inflation), the spreadsheet creates a Monte Carlo analysis (incorporating the covariance among asset classes and inflation) that shows success/failure rates over whatever period of time you specify. I am working now on the solver portion of the model that will optimize your withdrawal s...
by highcap
Wed May 16, 2012 5:42 pm
Forum: Personal Investments
Topic: How to account for different tax advantaged account type
Replies: 51
Views: 3255

Re: How to account for different tax advantaged account type

I don't tax adjust by account type. I suppose it all depends on what other types of income you may have in retirement. I don't have a pension or other types of income that consume my lowest (0%) tax bracket so this allows much of my withdrawals/conversions from Traditional accounts at the 0% tax rate. Example 1: For 2011 a married couple age 65 taking standard deduction and 2 exemptions who have no income other than 21K withdrawal from Traditional IRA/401k will pay ZERO Federal Tax. If the couple takes out 40K from IRA with no other income, the Fed Tax is $1,959 (average tax rate is under 5%). Example 2: If the couple has a pension that pays 40K, the base tax is $1,959. If the couple withdraws 20K from TradIRA on top of the pension, the Fe...
by highcap
Fri May 11, 2012 1:14 pm
Forum: Investing - Theory, News & General
Topic: NY Times: It’s Not Easy Making Do With a Measly Million
Replies: 39
Views: 4779

Re: NY Times: It’s Not Easy Making Do With a Measly Million

But then came the "Greatest Generation" who probably had the "Greatest Retirement", with full unlimited Medicare, still solvent Social Security, strong stock, bond and sell-your-house-into Real Estate market. This is a very good point. The 20th century transformed almost everything, in particular household economics. I think the Greatest Generation did indeed enjoy excellent timing. I might generalize a bit, but they benefited from an expanding economy, US-dominance post World War II, lack of international competition, pensions, and generous Social Security and Medicare, and a robust workforce of baby boomers whose wages paid for their social security and medicare (i.e. favorable generational demographics). And they gre...
by highcap
Tue May 08, 2012 7:41 am
Forum: Investing - Theory, News & General
Topic: Are there any Ex-Bogleheads?
Replies: 110
Views: 12309

Re: Are there any Ex-Bogleheads?

One significant difference I would have with your typical Boglehead approach would be around market timing. And even this is subtle for me as I do tend to look at the overall market P/E (and PE5 / PE10) to slightly adjust my equity/bond allocation. I still use broad market index funds (and ETFs!) for my investments - with a small portion (~5%) set aside for individual speculative pics - but I do tend to up my equity allocation when the PE10 is below historical averages and decrease when it is well above. Call it risk aversion, indecision or whatever you like, but it helps me sleep better at night! Oh, and I do believe in tax-advantaged debt - I have a mortgage on my home at 3.5% and two car loans at 1.9%. I know, no tax advantages on the au...
by highcap
Fri May 04, 2012 9:12 am
Forum: Personal Finance (Not Investing)
Topic: Opt-out of employer healthcare?
Replies: 68
Views: 6299

Re: Opt-out of employer healthcare?

New poster here! I think Kramer has it mostly right, and many other posts on risks are correct also. The main benefit for High-deductible plans and HSA accounts for me is the fact that this is your only real option if you plan on retiring early - before you can "keep" your employer-sponsored plan - typically 55 or 60 years of age in most companies. I hope to retire before 50, and so I have opted out of my employer plan (at 40) and signed up for my own individual plan. The reason I did this so early is (per Kramer's point) so I could get into the plan/pool while I and my family are healthy. If any of us were to be diagnosed with a serious ailment, we would no longer be eligible for the lowest rate plans. Now that we are in I could ...