Search found 440 matches

by Bill M
Tue Feb 15, 2022 2:08 pm
Forum: Personal Finance (Not Investing)
Topic: Free-file-fillable-forms and 8888 and I-Bonds
Replies: 2
Views: 637

Re: Free-file-fillable-forms and 8888 and I-Bonds

an update --- FFFF has acknowledged there is a problem, and claims a fix will be installed by 25 Feb 2022

second update 2/16 --- it is fixed.
by Bill M
Sun Feb 13, 2022 2:36 pm
Forum: Personal Finance (Not Investing)
Topic: Free-file-fillable-forms and 8888 and I-Bonds
Replies: 2
Views: 637

Free-file-fillable-forms and 8888 and I-Bonds

I've used free-file-fillable-forms for years, and arranged a $5K refund each year paid in I-Bonds (form 8888 tells the IRS to pay part of the refund with I-Bonds). I normally file in mid-Feb, soon after all the 1099s are issued. But this year, with the new provider behind FFFF, the tax form 8888 is not being included when I print the completed tax return. Does that mean it isn't being included when the form is sent to IRS? Wish I knew. I've asked this question several times through the FFFF trouble reporting site (https://www.irs.gov/filing/free-file-fillable-forms/free-file-fillable-forms-support-2), but never seen it listed as an open problem, nor have I received a response from them. Anyone have any experience with FFFF and 8888 and I-Bo...
by Bill M
Wed Feb 19, 2020 3:13 pm
Forum: Personal Finance (Not Investing)
Topic: FreeFillable Forms Missing Form 8889
Replies: 17
Views: 3582

Re: FreeFillable Forms Missing Form 8889

Because of the threat of identity theft and someone filing a bogus return, I have always filed early. But this year there are several forms (8889 and others) that free-file-fillable-forms can't handle yet, though printed copies are easily available. With the "identity-protection-PIN" from IRS (both my wife and I have IPPINs) its not clear that filing early is as important as it was.

So how to others see this tradeoff -- file early on paper, or wait until (maybe) mid-March to file online?

Update 2/21: 8889 is now available, as is 8960. Now just waiting for 8995A (and wondering if those 199A dividends from Vanguard's Total market Index Fund are worth waiting for the form to get the 20% deduction).
by Bill M
Sun Mar 26, 2017 10:24 pm
Forum: Personal Finance (Not Investing)
Topic: How did you do your income taxes?
Replies: 96
Views: 9405

Re: How did you do your income taxes?

freefilefillableforms.com, at least to fill in the forms and check the calculations. But filing them---I kept getting a set of Business Rule errors (IND-193, IND-194, IND-199, IND-200, IND-201). The IND-201 was supposedly a software error, but the applied fix didn't. So I printed the forms (20-some pages) and mailed them in. The 10-day processing turned into 30, but finally approved.
by Bill M
Sat Jan 14, 2017 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: post-65 contributions to HSA
Replies: 2
Views: 533

post-65 contributions to HSA

Continuing to work past 65, being covered by employer-provided high-deductible insurance, and we'd like to continue contributing to our HSA. But there are some strange wrinkles. I'm wondering if anyone has had experience with this. The HDHP enables us to delay enrollment in Medicare. It turns out the deductible for the HDHP plan through work is less than the deductible for Part A, so there seems little or no benefit to taking Medicare Part A even though it is free. And delaying Medicare Part A enables contributions to the HSA. Retiring (or layoff) triggers a "Special Enrollment Period"; we can then enroll in Medicare. COBRA coverage doesn't extend/change the dates. But I think we can use COBRA to cover the paperwork gap in case of...
by Bill M
Wed Jun 08, 2016 7:07 am
Forum: Personal Finance (Not Investing)
Topic: Self-insure LTC?
Replies: 31
Views: 4421

Re: Self-insure LTC?

spammagnet wrote:estimating 3 years of ALF and 2 years of SNF
You don't buy insurance for a stubbed toe.

But how about long stays? For someone in their 60s, 10 years of SNF is about the 90-th percentile. That's something to insure and not self-insure.
by Bill M
Sat May 14, 2016 9:28 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions, I-Bonds, and 2210
Replies: 5
Views: 1178

Re: Roth Conversions, I-Bonds, and 2210

Just file an extension with a $5k overpayment before tax deadline. That way you don't have to overpay throughout the year and you can fully do your taxes and know exactly what you owe. As mentioned, wait a few weeks before officially filling after the extension. There's a section here halfway down covering it: http://thefinancebuff.com/backdoor-to-paper-savings-bonds.html That is exactly the procedure I've followed. And it has always worked great. Until the second Roth Conversion was large and late in the year. It seems that a math error on form 2210 isn't a "math error" but is rather a "refund offset," though I don't understand why. If I turn it into a deliberate math error (like adding extra interest due on the 2210) ...
by Bill M
Fri May 13, 2016 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions, I-Bonds, and 2210
Replies: 5
Views: 1178

Roth Conversions, I-Bonds, and 2210

I do a Roth Conversion each year to fill the lower tax brackets. And I deliberately overpay (with 4868) by $5K to get I-Bonds as the refund. This didn't work too well in 2015. Problem is the AMT, and I couldn't know until November that it would apply. So the original estimate of Roth Conversion was too small (significantly), and I did an additional Roth Conversion in December (and paid the estimated taxes on the conversion amount). All seemed good except for the form 2210. I've never been able to match the IRS figuring for the estimated tax penalty. Even with the CP30 notice, my numbers still come out wrong. It never mattered until I started using the tax refund to buy I-Bonds. For 2015 I calculated $300-350 for estimated tax penalty (put 3...
by Bill M
Mon Apr 18, 2016 6:30 am
Forum: Personal Finance (Not Investing)
Topic: How Did You File Your Income Taxes for 2015?
Replies: 101
Views: 12324

Re: How Did You File Your Income Taxes for 2015?

I've always done taxes myself. I wrote an excel spreadsheet that does all the calculations; I update it every year as forms are released. It handles A, B, D, E, 8582, 4797, 6781, 8949s, 6251, 1116, 8606s, 8889, 8959, 8960, and misc others. Used to be just pencil and paper, then fillable pdf files. Now I transfer the numbers into FreeFileFillableForms, print myself a copy, and file electronically. The package currently comes to 21-25 pages.
by Bill M
Thu Apr 14, 2016 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Filed my Form 4868 this week (extension to file tax return)
Replies: 31
Views: 2760

Re: Filed my Form 4868 this week (extension to file tax return)

JW-Retired wrote:Does the proverbial late 1099 really happen? JW
I received a corrected 1099 for 2014 on 10/23/2015. Just past the 10/15 deadline for the extension. Oh well!!

The correction was to reduce the amount of foreign taxes paid; so that increased the US taxes due by the same amount. 1040X. And so for 2015, I filed a 4868 so that the 1040X(2014) can be completely processed before 1040(2015) hits the system. I don't want the $5K refund in I-Bonds to get cancelled because of a $39 amount due for previous year.
by Bill M
Mon Mar 28, 2016 11:00 pm
Forum: Investing - Theory, News & General
Topic: 3% annuity costs a little more than a CPI-U adjusted one
Replies: 17
Views: 4155

Re: 3% annuity costs a little more than a CPI-U adjusted one

I'd certainly go for CPI-U.
Further, I'd guess that anyone who has been investing since the 1970s would also go for CPI-U, while anyone who started investing in the 1990s wouldn't. Since about 1992 annual inflation has stayed around 3%, while in the late 1970s it hit 14%/yr. That 14% still scares me (even the possibility of it), and is worth some "insurance".
by Bill M
Tue Mar 22, 2016 6:25 am
Forum: Investing - Theory, News & General
Topic: Negative yields for 29% of Developed Market Sovereign Debt
Replies: 13
Views: 2119

Re: Negative yields for 29% of Developed Market Sovereign Debt

What matters is not the nominal yield (negative, as OP says), but the real (after inflation) yield. The real yield on short term bonds has almost always been negative, and the real yield on longer (usually 2+) bonds has been positive. If inflation were to increase significantly, and bond yields stayed low or negative, that would be a big impact on retirement savings. As it is now, low inflation keeps down the spending increases, and low returns keep us in sync. Low inflation (or even deflation) actually helps non-COLA pensions and annuities.
by Bill M
Tue Mar 08, 2016 4:19 pm
Forum: Personal Finance (Not Investing)
Topic: Is a CS PhD financial suicide for my profile?
Replies: 57
Views: 9903

Re: Is a CS PhD financial suicide for my profile?

Another CS PhD here (retired). If you are interested in going the management route (a step or two beyond that described in original message), it isn't clear that a PhD would be helpful; but if you stay in a technical/research position, it is certainly worthwhile. I think the key question you need to ask yourself is how much job mobility you currently have. That salary sounds like a golden handcuff, and maybe you're happy to stay in place. With a PhD, that salary would be easily obtainable at other labs.
by Bill M
Mon Feb 29, 2016 6:58 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Brokerage Corrected 1099-DIV
Replies: 20
Views: 3334

Re: Vanguard Brokerage Corrected 1099-DIV

livesoft wrote:Oh, don't file an amended return right away. You actually might get a corrected 1099 for the corrected 1099.
This point raises two questions:
1. Is there something like the "de minimis" rule about changes that are so small that the IRS doesn't want to hear about it?
2. Is there some rule about how soon the amended return should/must be filed? Is six months too quick or too slow?
by Bill M
Tue Feb 09, 2016 10:39 pm
Forum: Investing - Theory, News & General
Topic: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb
Replies: 32
Views: 5446

Re: [Vanguard Brokerage Services] 1099Bs Issued at the End of Feb

I can understand 1099-DIV needing profit information from the company, in order to determine whether the dividends were qualified or non-qualified.

But 1099-B??? Can anyone explain what is needed from the company in order for the broker to match up sales and purchases and calculate gain/loss?
by Bill M
Tue Feb 09, 2016 10:24 pm
Forum: Personal Investments
Topic: Schwab vs Vanguard
Replies: 71
Views: 26496

Re: Schwab vs Vanguard

We have all three (Vanguard, Schwab, and Fidelity), and a few others (MetLife, TransAmerica, Computershare, ...). Definitely like Vanguard most, and plan to consolidate all accounts there.
by Bill M
Thu Feb 04, 2016 3:18 pm
Forum: Personal Finance (Not Investing)
Topic: My Megacorp offered a pension lump sum option today...
Replies: 87
Views: 14562

Re: My Megacorp offered a pension buyout today...

As I recall the 417E stuff is based on monthly pension payments starting at age 65, which it then converts to a lump sum value at age 65, and then discounts for those years between not and your age 65. So if you were 65, the difference between the lump sum amount and the immediateannuity.com SPIA premium would be small. But it sounds like you are comparing a pension payment starting at age 55 with a lump sum equivalent for a payment starting at age 65. MegaCo may be giving you a big gift with the pension payment at age 55 (maybe like calculating the benefit for >30 years service independent of age).
by Bill M
Mon Jan 25, 2016 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: Logistics of puchasing TIPS ladder at auction for a retirement income floor
Replies: 32
Views: 4276

Re: Logistics of puchasing TIPS ladder at auction for a retirement income floor

RefCPI is probably explained in the TIPS book, but I haven't seen the book. In case it isn't in the book.... The par value of a TIPS bond increases with inflation, as measured by the Consumer Price Index (CPI-U). Values of CPI-U are published monthly by the Bureau of Labor Statistics, and available online (see http://www.bls.gov/data/home.htm). So if the CPI value published for 1/15/2026 happens to be 391.345, you take that value divided by the CPI value for 1/15/2016 (in the auction notice as "Ref-CPI") of 237.61129, and find that $10K of TIPS is worth $10K*391.345/237.61129 = $16469.97. There is a three month lag between the value of a TIPS and the published CPI. So the CPI published on 1/20/2016 was for December 2015 (actually ...
by Bill M
Mon Jan 25, 2016 9:57 am
Forum: Personal Finance (Not Investing)
Topic: Logistics of puchasing TIPS ladder at auction for a retirement income floor
Replies: 32
Views: 4276

Re: Logistics of puchasing TIPS ladder at auction for a retirement income floor

The only troublesome part I see is the SPIA purchase in 2049. You know the "real" income desired, but not the cost of the SPIA. The income generated will depend on interest rates in 2049, which are hard to predict. You might look into buying the SPIA now, with CPI-based inflation adjustments, and recalculate the TIPS to be the additional income above the SPIA. Given that the OP will have been retired for 20 years by 2049, I'm assuming they'll be older when they purchase the SPIA, perhaps 80 or 85. If that's true, the level of interest rates at the time of the SPIA purchase won't matter much. SPIA payouts for older annuitants are dominated by mortality credits and interest rates barely have any impact. IMO, using TIPS in to fund s...
by Bill M
Sun Jan 24, 2016 12:30 pm
Forum: Personal Finance (Not Investing)
Topic: Logistics of puchasing TIPS ladder at auction for a retirement income floor
Replies: 32
Views: 4276

Re: Logistics of puchasing TIPS ladder at auction for a retirement income floor

Buying the TIPS at auction, and holding them until maturity (matching the year you need the floor) is a good plan. One part that might simplify the calculating is to use a multiple of the current CPI figure for the par amount to buy. So if the ref-CPI for the TIPS auction is 237.61129 (like for the 1/15/2026 TIPS just auctioned), using a multiplier of 336 would have you submit a bid for 79,837 (rounded to $80K). This keeps the "real" figures correct. The only troublesome part I see is the SPIA purchase in 2049. You know the "real" income desired, but not the cost of the SPIA. The income generated will depend on interest rates in 2049, which are hard to predict. You might look into buying the SPIA now, with CPI-based infl...
by Bill M
Wed Jan 06, 2016 9:41 am
Forum: Personal Finance (Not Investing)
Topic: Incorporating your home into networth calculation
Replies: 108
Views: 12063

Re: Incorporating your home into networth calculation

My question is do people incorporate their home into their net worth in anyway?....and if so how? It is clear that your home is an asset. And it is clear that net worth is assets less liabilities. So it should be. But...some of those assets can easily be valued, and some can't. Things that can be easily valued, like bank accounts, mutual funds, stocks, bonds, etc, you just look at the latest statement (or latest quote from an exchange) and use that figure. Things that can't be easily valued need something special. A statement I've always referred to in my employer's annual report, part of the explanation for "Level 3" assets in the company's pension plan, sums this up: Alternative investments, including investments in private equ...
by Bill M
Tue Dec 22, 2015 8:30 am
Forum: Personal Finance (Not Investing)
Topic: 2015 Tax Prelim Planning: Comments??
Replies: 18
Views: 2031

Re: 2015 Tax Prelim Planning: Comments??

I think the "preliminary" tax calculations are essential. In my case, I want to fill the xx% marginal tax bracket with Roth conversions, and that means essentially filling in (draft) 2015 forms this month and calculating exact amount of tax due. It also means deciding early whether to accelerate deductions and delay income, or reverse of that. The big trouble, of course, is that a lot of the income figures are not yet known. I can make a good guess for CD interest to be paid 12/31, and with the CPI report of 11/15 I can figure out the 1099-OID for TIPS. But the Vanguard dividend payments (to come on 12/24) are still just estimates. And other figures, like imputed income for cost of group life insurance, I won't know until I get th...
by Bill M
Mon Dec 07, 2015 6:36 am
Forum: Personal Finance (Not Investing)
Topic: Delaying Social Security: What's the goal?
Replies: 47
Views: 5686

Re: Delaying Social Security: What's the goal?

If the goal is to maximize Social Security benefits received, you get one optimal strategy. (This is usually the only answer given by the various online calculators). If the goal is maximize the estate (net worth at end of life) you get a different answer. If the goal is to minimize income taxes paid, you get yet another different answer. I did a rather complete projection calculation for year-by-year income, expenses, and taxes. And I found that the "optimal" strategy depended on exactly the definition of the goal. And I also found that the optimal decision also depended on (1) the strategy of Roth conversions, (2) the starting date for (non-COLA) pension, and (3) starting date and purchase date and amount for deferred income ann...
by Bill M
Wed Nov 18, 2015 11:36 am
Forum: Investing - Theory, News & General
Topic: Most important financial metric/calculation?
Replies: 39
Views: 5941

Re: Most important financial metric/calculation?

If you project income (including salary, Social Security, pensions, annuities, interest/dividends, and capital gains) and expenses (including medical expenses and taxes) forward, starting with current account balances and adding income each year and subtracting expenses each year, ... And then pick an arbitrary point in the future (I chose age 105 for us) and see what the remaining account balances will be. It better be positive, and better have stayed positive. And the minimum amount by which it is/was positive is the "safety margin" -- the most important financial metric.

Its not simple to calculate. But important things rarely are.
by Bill M
Wed Nov 18, 2015 11:18 am
Forum: Personal Finance (Not Investing)
Topic: per stirpes--IRA beneficiaries
Replies: 15
Views: 3793

Re: per stirpes--IRA beneficiaries

I suggest avoiding per stirpes. Put in real names for the beneficiaries, and keep it updated (check it at least yearly). Its not hard. Most Bogleheads are DIY'ers, and are concerned about costs. The "per stirpes" means the IRA can't be handled in the estate without a lawyer and probate court involved (custodian of the IRA needs to be told who the descendants are, and they want that from the executor, and the executor needs the probate court documents to prove they are executor, and getting the probate court documents requires a lawyer to sign the forms). And the probate court I recently had to deal with also required a surety bond since I was out of state, and that added extra $$$ and absolutely required the lawyer to represent th...
by Bill M
Tue Oct 27, 2015 10:47 am
Forum: Personal Finance (Not Investing)
Topic: Consolidated 2016 Medicare Part B Increase thread
Replies: 111
Views: 7927

Re: Medicare increase fixed?

It looks like it also did away with "file&suspend" and with "restricted application".
We'll have to wait and see what really happens.
by Bill M
Thu Oct 08, 2015 11:23 am
Forum: Personal Finance (Not Investing)
Topic: Joint Finances as a newlywed couple?
Replies: 29
Views: 3417

Re: Joint Finances as a newlywed couple?

We started out with separate accounts (~40 years ago, so memory is somewhat fuzzy), and did careful accounting of utilities (split 50/50), mortgage (split 50/50), credit card bills (split based on who bought what, and food etc 50/50), gas/fuel charges (split based on who drove and how much), etc. It was far more trouble than it was worth.

So we just put everything into a common joint account; everything paid straight from that account. Any personal items, beyond some threshold ($50 back then) we talked about first.
by Bill M
Fri Oct 02, 2015 7:16 am
Forum: Personal Finance (Not Investing)
Topic: Document retention: what are bare minimums?
Replies: 9
Views: 1797

Re: Document retention: what are bare minimums?

For the bare minimum, retention for tax forms is 3 years from the time you filed the return. Lots of special cases for longer, but you said to ignore the less likely scenarios. See http://www.irs.gov/taxtopics/tc305.html
For medical history, I tend to keep medical bills longer.
by Bill M
Mon Sep 21, 2015 12:40 pm
Forum: Investing - Theory, News & General
Topic: LMP (Liability Matching Portfolio) and TIPS/Strips/CD's
Replies: 4
Views: 874

Re: LMP (Liability Matching Portfolio) and TIPS/Strips/CD's

I have my LMP in 10-yr TIPS, split into 20 more-or-less equal portions in each of the 20 separate issues of 10-yr TIPS. So I'll have something maturing every 6 months to cover any unexpected expenses (life roof repairs, new A/C, etc). TIPS vs something else??? If I wanted to worry about the LMP keeping up with inflation, I'd go for something else. With TIPS I don't have to worry. So I go with TIPS. The more interesting problem I find is that (following the asset location rules) the TIPS are in my Roth IRA (bonds in qualified accounts, and so the imputed interest income is tax-free), but the first source for spending money (following the liquidation ordering rules) is the taxable accounts. So I find I'm regularly redeeming a portion of the m...
by Bill M
Thu Sep 10, 2015 11:42 am
Forum: Personal Finance (Not Investing)
Topic: How much do kids pay for their own activities...
Replies: 21
Views: 3014

Re: How much do kids pay for their own activities...

We paid completely for everything we thought was worthwhile. The kids paid for everything they thought was worthwhile that we didn't think was worthwhile.
Then there was a third category....I can only think of two items: video games and (upgrade to professional grade) musical instruments. If it passed our test, the kids paid for 1/3 of the total cost and we paid 2/3.
by Bill M
Tue Sep 08, 2015 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: Post your current employer retirement plan! (if any)
Replies: 94
Views: 13985

Re: Post your current employer retirement plan! (if any)

At MegaCo where I worked until two years ago, there were two plans: Pension plan: in its simplest form, work for the company 30 years and retire at 50% of final pay. There were lots of complexities for working less than 30 years (or more than 30), and collecting payments prior to age 65, but the simple form gives the rough numbers. Savings plan (401k): They match 2/3 of first 6% of your salary; you could contribute up to 50% of salary, pre-tax up to IRS limit and then after-tax. Various funds available, few with ticker symbols. Expense ratios very low, e.g. Total US Market Index 0.02%, Total International Index 0.04%, company shares 0.02%, various target date funds 0.31%. Also various 10-yr salary deferral plans, with returns based on Moody...
by Bill M
Sun Aug 30, 2015 7:03 am
Forum: Personal Finance (Not Investing)
Topic: Budgeting infrequent expenses (refrigerator, new tires, paint house, etc)
Replies: 27
Views: 4200

Re: Budgeting infrequent expenses (refrigerator, new tires, paint house, etc)

I started a thread on this subject a few months ago; it generated a lot of interesting discussion. http://www.bogleheads.org/forum/viewtopic.php?f=2&t=162736 The planning process has to include the big occasional spending items to make sure enough is saved. But I never appreciated how much it throws off the withdrawal planning. My current approach is keeping 2-3 years of normal spending in a savings account, covering big expenses as needed from that savings account, and letting the normal replenishment each year fix things. In addition, we also have a list of pending major purchases (RV camper, new piano, etc), timing TBD, and a savings account already funded for them. I do wonder if the distinction there is rather arbitrary and justifi...
by Bill M
Wed Aug 05, 2015 4:32 pm
Forum: Personal Finance (Not Investing)
Topic: strategy to convert traditional ira to roth
Replies: 6
Views: 812

Re: strategy to convert traditional ira to roth

Once you are 70 (collecting SocSec) and the RMDs start, what will be your tax rate? If the RMD will be taxed at 15%, then there is no advantage to converting earlier to Roth. But if the RMD will be taxed at 25%, that amount could be converted to Roth pre-70 and still pay the same 25% in taxes. This gives you a way to decide whether (or how much) of the traditional IRA should be converted to Roth at the higher tax rate.
by Bill M
Tue Jul 28, 2015 6:51 am
Forum: Personal Finance (Not Investing)
Topic: Do I need Umbrella Insurance if my Assets < Liability Limits?
Replies: 14
Views: 2271

Re: Do I need Umbrella Insurance if my Assets < Liability Limits?

State laws differ as to whether future earnings can be included in a lawsuit settlement. Something to check....
by Bill M
Tue Jul 28, 2015 6:44 am
Forum: Personal Finance (Not Investing)
Topic: Geico Auto Insurance
Replies: 63
Views: 8266

Re: Geico Auto Insurance

We got hit recently by a driver insured by Geico; 100% his fault. So we had a choice of getting the claim processed by Geico or by Allstate. Geico required us to get the car to one of their repair facilities for an estimate. Closest was about 10 miles; car was totaled and could limp maybe one mile or be towed. Geico never offered to pay the tow cost. Allstate adjuster came to us next day. Left us with a very bad taste of Geico.
by Bill M
Sun Jul 26, 2015 4:42 pm
Forum: Personal Finance (Not Investing)
Topic: How much does Property Tax factor in home purchase?
Replies: 36
Views: 4902

Re: How much does Property Tax factor in home purchase?

Your state rules may be different, but in New Jersey the biggest portion of property taxes goes to the schools. High property taxes go along with good schools. If you want good schools, they you also want high property taxes.
by Bill M
Fri Jul 17, 2015 9:30 pm
Forum: Investing - Theory, News & General
Topic: Pros and cons of adding Roth Option to 401K Plan
Replies: 103
Views: 10325

Re: Pros and cons of adding Roth Option to 401K Plan

I don't know if it is advantageous to the plan to keep retired employees.... But if it is, a Roth option is definitely worthwhile. Otherwise us retired folk are forced to rollover the 401k money into an IRA before converting to Roth, and that means reducing the amount invested in the company-sponsored funds. If keeping retired account holders is a pure cost and not a benefit to the plan, then skip the Roth option. Can you define retired employee? As owner I hope to work within this company for a long time. I may gradually cut back but do not anticipate not working in my field at all. Perhaps "retired employee" is a bad term, since I'm obviously not both retired and an employee at the same time. As an employee at MegaCo, my 401k b...
by Bill M
Fri Jul 17, 2015 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: 60K Car Maintenance Service = $600. Is this Reasonable?
Replies: 62
Views: 58006

Re: 60K Car Maintenance Service = $600. Is this Reasonable?

I look at the list of services done as part of the 60K checkup ($600), and compare it to the list of items done by my local Midas shop with every oil change ($30). Looks like Midas + change spark plugs (~$100) (and there is some doubt whether plugs need to be changed prior to 100K miles).
by Bill M
Fri Jul 17, 2015 3:11 pm
Forum: Investing - Theory, News & General
Topic: Pros and cons of adding Roth Option to 401K Plan
Replies: 103
Views: 10325

Re: Pros and cons of adding Roth Option to 401K Plan

I don't know if it is advantageous to the plan to keep retired employees.... But if it is, a Roth option is definitely worthwhile. Otherwise us retired folk are forced to rollover the 401k money into an IRA before converting to Roth, and that means reducing the amount invested in the company-sponsored funds. If keeping retired account holders is a pure cost and not a benefit to the plan, then skip the Roth option.
by Bill M
Fri Jul 17, 2015 7:13 am
Forum: Personal Finance (Not Investing)
Topic: Convert IRA to Roth While Working to Save on Taxes
Replies: 15
Views: 2202

Re: Convert IRA to Roth While Working to Save on Taxes

Your strategy is sound. There is no substitute for doing the calculations in advance (even if based on assumption that rates won't change).

I encountered a situation a few years ago (due to timing of bonus payments) where I was just over the AMT exemption phaseout point, so had a wide plateau with a fixed 28% tax rate. Much better than the 33% expected in the future. So we did a significant Roth conversion that year.
by Bill M
Fri Jul 17, 2015 7:01 am
Forum: Personal Finance (Not Investing)
Topic: Turning 65, need Medicare, but delaying Social Security
Replies: 20
Views: 2602

Re: Turning 65, need Medicare, but delaying Social Security

I'm still a few years from 65, but have similar plans. The information packet I received when retiring two years ago said to call Medicare (800-633-4227) three months before turning 65. That may not still be right, but it seems a good first step. MegaCo also said to expect some confusion about paying for Medicare directly, since Medicare expects everyone to be collecting SocSec and deducting premiums from that check.
by Bill M
Mon Jun 29, 2015 9:39 am
Forum: Personal Finance (Not Investing)
Topic: Lucent offering pension buyout to retirees: what to do?
Replies: 88
Views: 30039

Re: Lucent offering pension buyout to retirees: what to do?

The devil is in the details.

But in general, the biggest risk is living a long time. The annuity is a clear winner, but you have to balance that against the risk of insurance company going bust.
by Bill M
Mon Jun 29, 2015 9:33 am
Forum: Personal Finance (Not Investing)
Topic: What's your net worth break down? What's ideal?
Replies: 44
Views: 10237

Re: What's your net worth break down? What's ideal?

Breakdown depends a lot on employer benefit provisions (like whether after-tax 401a contributions are allowed).
That qualification being added, my breakdown is:
47% pre-tax retirement accounts (401k, 403b, tIRA)
17% Roth retirement accounts (Roth-401k, Roth-IRA)
36% taxable investments
(Home equity I don't track, since its illiquid; 529s and UGTMAs are cashed-out)
by Bill M
Sun Jun 28, 2015 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Drawing from Retirement Savings to Delay SS
Replies: 43
Views: 10393

Re: Drawing from Retirement Savings to Delay SS

1. planning to deplete about 15% covering 8 years (but that includes the additional taxes due to Roth conversions)
2. currently delaying
3. portfolio performance will not impact the plan
4. pre-70 portion is isolated in TIPS, CDs, and a StableValue fund
by Bill M
Thu Jun 25, 2015 6:31 am
Forum: Investing - Theory, News & General
Topic: What ratio are you stocks/bonds and how old are you?
Replies: 449
Views: 96096

Re: What ratio are you stocks/bonds and how old are you?

We're both 63. We have a bond ladder that will provide 40 years of income. The remainder is 75% stocks. So overall we're 28% stocks.
by Bill M
Wed Jun 24, 2015 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: What credit should you get? (Ask me anything)
Replies: 52
Views: 84074

Re: What credit should you get? (Ask me anything)

I've been rotating through several cards for the past few years; all the cards are free for the first year and charge an annual fee for second and later years, so I close them after 9-10 months and open a new one. Main point of this game is the bonus airline miles with the new card.

Is the ease of doing this going to change now that I'm retired? Do banks evaluate retirees differently (worse??) than applicants currently employed? Income will be fluctuating; is fluctuation of annual income a negative signal?
by Bill M
Fri Jun 12, 2015 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: Metrics for choosing when to claim Social Security benefits
Replies: 10
Views: 3077

Re: Metrics for choosing when to claim Social Security benefits

I certainly agree that picking the right metric is the most critical part of the decision. If you pick a metric like "most SocSec benefits over my lifetime", there are numerous products and organizations that would love to have your business and tell you the answer. If you do a more detailed analysis that includes other income sources, other savings, and estimates of expenses, some other metrics are available (all comparisons done by present value): (1) which strategy minimizes my total lifetime income tax? (2) which strategy minimizes the drawdown from my savings? (3) which strategy maximizes the remaining savings balance at age XXX? And, of course, how do actions like Roth conversions impact the answers? They certainly do. My cl...
by Bill M
Thu Jun 11, 2015 6:53 am
Forum: Personal Finance (Not Investing)
Topic: Individual bonds in IRA of deceased
Replies: 4
Views: 903

Re: Individual bonds in IRA of deceased

Its certainly not a problem for the beneficiaries; they just inherit an IRA with something in it, and the custodian figures out the annual RMD. But it is a (slight) problem for the executor. He/she has to place a value on the individual bonds (based on market value on date of death, unfortunately not par value), and split the IRA into as many pieces as required. If there is also some funds in a MMKT or mutual fund, that part would be split unequally so that the total account value comes out the same; if IRA is all bonds then a few bonds ($1K par each) will likely have to be sold to make the division come out right. If the beneficiaries argue about the individual bond quality and who gets which ones, then more bonds will need to be sold to m...
by Bill M
Thu Jun 11, 2015 6:34 am
Forum: Personal Finance (Not Investing)
Topic: Inflation indexed SPIA providers
Replies: 15
Views: 4510

Re: Inflation indexed SPIA providers

555 wrote:
gordoni2 wrote:If I've done the math correctly (for a 48 year old male), an inflation indexed SPIA from AIG initially has 65% of the payout of a non-inflation indexed SPIA.
I would think a better way to compare them ....
Another way to do the comparison (my preference) is to calculate the inflation rate that, when used to increase the SPIA payments, makes the PV of the two annuities equivalent. I then look at this number and decide if I think they are guessing too high or too low.
by Bill M
Wed Jun 10, 2015 10:30 am
Forum: Personal Finance (Not Investing)
Topic: HSA reimbursements - to take now or wait?
Replies: 13
Views: 2554

Re: HSA reimbursements - to take now or wait?

we always wait, regardless of the amount. All the HSA-eligible expenses are in a spreadsheet, so easy to maintain and track how far over/under the HSA balance we are. But we consider the HSA to be a "super-Roth", and would empty the regular Roth first.