Search found 3866 matches

by Peter Foley
Thu Jun 22, 2017 11:46 am
Forum: Investing - Help with Personal Investments
Topic: Roth 401k or Not
Replies: 7
Views: 414

Re: Roth 401k or Not

welderwannabe wrote:
I will switch to non-roth 401k contributions. I will then invest the tax savings (33% of the contributions) in a taxable account and try to do a backdoor roth conversion from that every year. That should get me the best of both worlds.


This is a good solid plan.
by Peter Foley
Wed Jun 21, 2017 7:52 pm
Forum: Investing - Help with Personal Investments
Topic: Tax on Mutual Index Fund
Replies: 18
Views: 622

Re: Tax on Mutual Index Fund

You need to have a basic understanding of how taxes work. Regular interest and short term capital gains are taxed at the same rate as your regular earnings from employment. Dividends and long term capital gains are taxed at a lower rate, or if you are in the 15% tax bracket or lower, not taxed at al...
by Peter Foley
Wed Jun 21, 2017 7:41 pm
Forum: Personal Finance (Not Investing)
Topic: Windfall inheritance and new home
Replies: 20
Views: 1516

Re: Windfall inheritance and new home

Years ago I read a book about downsizing and simplifying. One of the ideas that stuck with me was to do a mental inventory of what rooms in your current house you use. This would help provide a basis for what kind of future house you might own. A major factor in selecting out current house was our a...
by Peter Foley
Wed Jun 21, 2017 7:35 pm
Forum: Investing - Help with Personal Investments
Topic: Roth 401k or Not
Replies: 7
Views: 414

Re: Roth 401k or Not

Are you allowed to do a combination of the two? I would maximize the amount in tax deferred and then switch to Roth if that were possible. This assumes you will be in a lower tax bracket for at least a few years when you retire.
by Peter Foley
Sun Jun 18, 2017 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: Suggestions for my mother's annuities
Replies: 5
Views: 623

Re: Suggestions for my mother's annuities

Based on the fact that some but not all of your mother's SS benefits are being taxed, any withdrawal will be at a relatively high tax rate until all her SS benefits are taxed. One way to simplify this a bit IF your mother regularly gives to charity. 1. Have your mother donate a portion of her RMDs t...
by Peter Foley
Sun Jun 18, 2017 8:27 pm
Forum: Personal Finance (Not Investing)
Topic: When should wife take SS?
Replies: 9
Views: 1193

Re: When should wife take SS?

If the Op's spouse does not file and claim SS at age 62, can the OP still file a restricted application at FRA 66 and collect spousal benefits?
by Peter Foley
Sat Jun 17, 2017 8:32 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation and Fund Recommendations for 403(b) Accounts
Replies: 12
Views: 598

Re: Asset Allocation and Fund Recommendations for 403(b) Accounts

I think I'm quoting Taylor when I say that the enemy of a good plan is the perfect plan. You have laid out a good plan. Congrats.
by Peter Foley
Sat Jun 17, 2017 8:28 pm
Forum: Investing - Help with Personal Investments
Topic: 3-4 fund portfolio vs Lifestrategy in taxable acct
Replies: 12
Views: 1490

Re: 3-4 fund portfolio vs Lifestrategy in taxable acct

I would be inclined to use mutual funds at Schwab, but only because I am more familiar with them. You have three lost cost Schwab mutual funds that can be used to tax loss harvest if need be. Schwab Total Stock market, Schwab 1000 and the Schwab S&P 500 equivalent. While it is not quite as tax e...
by Peter Foley
Fri Jun 16, 2017 7:59 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation and Fund Recommendations for 403(b) Accounts
Replies: 12
Views: 598

Re: Asset Allocation and Fund Recommendations for 403(b) Accounts

I think 70/30 is fine until you are 5 to 10 years from retirement. While others might nitpick, I think you have done of good job of fund selection and the placement of funds in the correct type of account. As to your questions, it appears to me that you have some international. That is good. I perso...
by Peter Foley
Fri Jun 16, 2017 4:47 pm
Forum: Investing - Help with Personal Investments
Topic: 3-4 fund portfolio vs Lifestrategy in taxable acct
Replies: 12
Views: 1490

Re: 3-4 fund portfolio vs Lifestrategy in taxable acct

Rebalancing aside, you can probably do a 3-4 fund portfolio at about the same expense ratio of Lifestrategy fund. I would not be inclined to take a Lifestrategy approach in a taxable account. I would be inclined to hold mostly, if not all, stock mutual funds in a taxable account. This approach would...
by Peter Foley
Thu Jun 15, 2017 10:37 pm
Forum: Investing - Theory, News & General
Topic: [Wiki] - Percentage Gain and Loss (for new investors)
Replies: 115
Views: 5736

Re: [Wiki] - Percentage Gain and Loss (for new investors)

As the Wizard stated (paraphrasing) how do you make this understandable to the general public. I would only add, understandable without injecting too much emotion into the topic. I would keep it very simple and just provide a table. Use $1000 as your initial investment so many of us can do some of t...
by Peter Foley
Thu Jun 15, 2017 9:33 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement portfolio help
Replies: 15
Views: 1219

Re: Retirement portfolio help

You want to hold your bonds primarily in a tax deferred account and your stock mutual funds primarily in your Roth. The thinking behind this is that historically over long periods of time stock total returns have exceeded bond returns. You want to have those assets with the potential for more growth...
by Peter Foley
Thu Jun 15, 2017 1:38 pm
Forum: Personal Finance (Not Investing)
Topic: Please throw darts at my estate plan (probate avoidance)
Replies: 11
Views: 1111

Re: Please throw darts at my estate plan (probate avoidance)

Gensuki wrote: What I didn’t explain properly was that I want DH’s siblings to inherit his assets after my own death. So if DH dies first and his assets equal mine at that time, then I want to bequeath his siblings 50% of my remaining assets after I go. That is why I wanted to draw up a new will aft...
by Peter Foley
Thu Jun 15, 2017 1:29 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement portfolio help
Replies: 15
Views: 1219

Re: Retirement portfolio help

I like the conservative Life Strategy fund suggestions a lot. If you decide not to go that route the following is the minimum that I would do: FUSVX Fidelity 500 Index OK VIMAX Vanguard Midcap Index OK VBR Vanguard REIT index OK OAKIX Oakmark International Sell - expense ratio is too high and you on...
by Peter Foley
Wed Jun 14, 2017 8:53 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement portfolio help
Replies: 15
Views: 1219

Re: Retirement portfolio help

Hi Park, welcome. Almost no one knows the symbols for all the mutual funds. If you edit your post and add the names of the funds you will get more responses. A couple observations: Some experts believe that you should never have less than 25% equities while others set the low threshold for equities ...
by Peter Foley
Wed Jun 14, 2017 8:07 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Stocks, Bonds, & Risk
Replies: 61
Views: 4887

Re: Larry Swedroe: Stocks, Bonds, & Risk

Garland

If you made it through the last recession without selling while stocks were down, I think your AA is just fine!
by Peter Foley
Wed Jun 14, 2017 8:03 pm
Forum: Investing - Help with Personal Investments
Topic: Drawdown during retirement
Replies: 15
Views: 1993

Re: Drawdown during retirement

While we do not have enough information to respond more conclusively, David Jay captures the advice of many who post here very succinctly. Part of the answer is your spending needs and the tax bracket you would be in to cover those needs. Another part of the answer is the extent of your holdings in ...
by Peter Foley
Wed Jun 14, 2017 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: Is there a calculator that solves for optimal Roth conversion
Replies: 54
Views: 4044

Re: Is there a calculator that solves for optimal Roth conversion

Woodspinner and Patrick13 Getting back to the OP's question. My situation is not unlike the one you describe. Using the Retiree Portfolio Model calculator I found it was much more efficient in terms of ending net worth to convert more sooner. I ran scenarios converting up to the 25% bracket, convert...
by Peter Foley
Tue Jun 13, 2017 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Please throw darts at my estate plan (probate avoidance)
Replies: 11
Views: 1111

Re: Please throw darts at my estate plan (probate avoidance)

Just a comment regarding number 5. You do not need a new will to do this. Have the will state that these item pass to you as beneficiary and list your husbands siblings as contingent beneficiaries. If you husband predeceases you, you can disclaim all or part of any inheritance and let it pass to con...
by Peter Foley
Mon Jun 12, 2017 10:23 pm
Forum: Personal Finance (Not Investing)
Topic: Is there a calculator that solves for optimal Roth conversion
Replies: 54
Views: 4044

Re: Is there a calculator that solves for optimal Roth conversion

Firechief: It is way off the original topic of calculators.
by Peter Foley
Sun Jun 11, 2017 9:38 pm
Forum: Investing - Theory, News & General
Topic: Poll: Do Bogleheads own Stocks?
Replies: 76
Views: 6139

Re: Poll: Stock Ownership

I do not own any individual stocks and have not held any since before the last recession. The last stocks I purchased and held were in a utility company and I was holding them primarily for a 3% dividend. In addition to the dividend, over a 2 year period the stock appreciated about 10% if I remember...
by Peter Foley
Sat Jun 10, 2017 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Is there a calculator that solves for optimal Roth conversion
Replies: 54
Views: 4044

Re: Is there a calculator that solves for optimal Roth conversion

Patrick013 wrote: I don't think some Roth conversions are even necessary. If your heirs take your traditional account and their tax bracket is equal or less than yours I don't think the estate is losing money by them taking RMD's for many years at a reasonable tax rate, especially if they can use th...
by Peter Foley
Sat Jun 10, 2017 11:56 am
Forum: Investing - Help with Personal Investments
Topic: Converting a Windfall to Tax Advantaged Accounts
Replies: 25
Views: 1836

Re: Converting a Windfall to Tax Advantaged Accounts

Another recommendation to keep the 457b plan. It gives the account holder a good option should he/she decide to retire early. When your wife finishes her residence and her income goes up you are unlikely to qualify for a Roth, except for a back door Roth. You will want to keep that in mind if you ar...
by Peter Foley
Sat Jun 10, 2017 8:53 am
Forum: Personal Finance (Not Investing)
Topic: Is there a calculator that solves for optimal Roth conversion
Replies: 54
Views: 4044

Re: Is there a calculator that solves for optimal Roth conversion

This has been debated in a couple other threads. I'm not sure there is an "optimal", but they can offer guidance. Alan S. accurately points out some of the shortcomings. I have run various scenarios using i-orp and the Retiree Portfolio Model calculators. Most of the scenarios I've run ref...
by Peter Foley
Fri Jun 09, 2017 9:43 pm
Forum: Investing - Help with Personal Investments
Topic: How to divide investments for early retirement
Replies: 16
Views: 1979

Re: How to divide investments for early retirement

Phineas wrote: Not traditional IRAs. I only know of that possibility for employer-sponsored accounts like 401(k)s if you separate from service in the year you turn 55 or later. Furthermore, the employer may have restrictions on how much one can take out and when, like for example, all of it in one y...
by Peter Foley
Fri Jun 09, 2017 9:36 pm
Forum: Personal Finance (Not Investing)
Topic: Three years into retirement… Need a good read
Replies: 12
Views: 1922

Re: Three years into retirement… Need a good read

If your resources are tight, Jane Bryant Quinn's book is a good guide. It is true to its title. If you are looking more for asset allocation, SS benefits, taxes, Roth conversions etc. the Bogleheads' Guide to Retirement Planning is better. Based on the topics you listed, if I had to choose one to st...
by Peter Foley
Fri Jun 09, 2017 4:52 pm
Forum: Investing - Help with Personal Investments
Topic: Help With Taxable Account
Replies: 3
Views: 654

Re: Help With Taxable Account

If I'm understanding your current AA correctly you are 95% stocks. At your age I would dial that back to 80% maximum. I like the idea of maxing out your I-bond purchase. You can defer taxes and maintain purchasing power with no risk. I think it is a fine addition to a bond fund as part of your non e...
by Peter Foley
Fri Jun 09, 2017 4:44 pm
Forum: Investing - Help with Personal Investments
Topic: Plan to move from complex brokerage acct to 3 fund portfolio, I'm stuck on a few details
Replies: 11
Views: 1123

Re: Plan to move from complex brokerage acct to 3 fund portfolio, I'm stuck on a few details

A couple options to consider: Reduce the individual stock holdings as much as possible without creating too much of a tax obligation in any given year. This may mean holding on to a few positions for a couple years. You could sell some losers and short term gainers in the same year to offset taxable...
by Peter Foley
Tue Jun 06, 2017 9:04 pm
Forum: Investing - Help with Personal Investments
Topic: Early Retirement Approaches (forced) - review my situation?
Replies: 29
Views: 4881

Re: Early Retirement Approaches (forced) - review my situation?

Golfgal wrote: Does anyone have the approach of beginning to draw from 401k's earlier in order to minimize their tax rate on RMD's when they turn 70 1/2? Yes. Both I-orp and the Retiree Portfolio Model can model the effects for you. I have been doing this since I retired 5 years ago at age 61. This ...
by Peter Foley
Sun Jun 04, 2017 8:42 pm
Forum: Personal Consumer Issues
Topic: Inherited a lot of coins/stamps - what to do with them?
Replies: 33
Views: 5584

Re: Inherited a lot of coins/stamps - what to do with them?

My experience has been that some proof sets are worth more than the face value of the coins. Some proof sets will contain 90% silver versions of coins minted for circulation. Again Coin World or an on line site should have that basic information. Looking at sales on E-Bay might be an indicator as we...
by Peter Foley
Sun Jun 04, 2017 7:14 pm
Forum: Personal Finance (Not Investing)
Topic: What's the difference between a Trust and a Will?
Replies: 24
Views: 1790

Re: What's the difference between a Trust and a Will?

Gill - as I am sure you are aware, many couples have little in assets, own no real estate, and have account designations, beneficiary designations, and a will which allows everything to be passed to the spouse. You post implies that all wills go through probate. That simply isn't true, especially wi...
by Peter Foley
Sun Jun 04, 2017 7:06 pm
Forum: Personal Finance (Not Investing)
Topic: What's the difference between a Trust and a Will?
Replies: 24
Views: 1790

Re: What's the difference between a Trust and a Will?

bsteiner is the expert on estate planning who posts on the forum. If he disagrees with any of the following, take his professional expertise over my "informed amateur" advice. Usually one does not need a trust unless one or more of the following apply: 1. There is a need to control money a...
by Peter Foley
Sat Jun 03, 2017 11:32 pm
Forum: Investing - Help with Personal Investments
Topic: Making sure Mom has strategy for retirement
Replies: 14
Views: 1443

Re: Making sure Mom has strategy for retirement

With this portfolio and the income needs you stated there is no way that 30% is going to taxes. Within the taxable accounts taxable income up to $37,950 is in the 15% bracket. (With standard deduction and exemption that is an adjusted gross income of about $48,000 to $50,000.) Within this bracket th...
by Peter Foley
Sat Jun 03, 2017 8:36 am
Forum: Investing - Help with Personal Investments
Topic: Early Retirement Approaches (forced) - review my situation?
Replies: 29
Views: 4881

Re: Early Retirement Approaches (forced) - review my situation?

I would be inclined to withdraw some funds from your 401k prior to taking SS benefits. This would allow you to draw out some funds at a very low tax rate. Taking long term capital gains in taxable is also a good approach as those gains are tax free as long as you are in the 15% tax bracket. When I l...
by Peter Foley
Fri Jun 02, 2017 9:32 pm
Forum: Personal Finance (Not Investing)
Topic: Seeking input--retirement plan
Replies: 13
Views: 999

Re: Seeking input--retirement plan

At what age do you plan to take SS benefits? With the salary differential between you and your wife you should delay.
by Peter Foley
Fri Jun 02, 2017 9:25 pm
Forum: Investing - Help with Personal Investments
Topic: Early Retirement Approaches (forced) - review my situation?
Replies: 29
Views: 4881

Re: Early Retirement Approaches (forced) - review my situation?

I agree that you have done well. I would characterize my recommendations as "nice to do" but not "need to do". In the IT world it seems that human capital is pretty fungible. So in that regard your ability to take risk is a bit diminished. I would drop equities AA by 5% to 10% to...
by Peter Foley
Fri Jun 02, 2017 2:28 pm
Forum: Investing - Theory, News & General
Topic: Why do people make 10 year return predictions?
Replies: 23
Views: 1746

Re: Why do people make 10 year return predictions?

Like Random Walker I too think the predictions can be helpful for long term planning. For example, if one were 5-10 years from retirement and CAPE was relatively high, one might decide to save more, adopt a more conservative, AA etc. Conversely, 5-10 years from retirement with a relatively low CAPE ...
by Peter Foley
Thu Jun 01, 2017 9:37 pm
Forum: Investing - Theory, News & General
Topic: RMD on Declining Balance
Replies: 53
Views: 3275

Re: RMD on Declining Balance

I was going to write a response when I read the original premise. My thoughts are along the same lines a Grabiner so I won't repeat his observation. Also, is the OP implying that the only savings available are in tax deferred accounts? I think this would be unusual. If possible, I think the preferre...
by Peter Foley
Thu Jun 01, 2017 9:22 pm
Forum: Personal Finance (Not Investing)
Topic: Inflation and Social Security Adjustments?
Replies: 3
Views: 372

Re: Inflation and Social Security Adjustments?

Just to be on the safe side I project COLA and SS benefit payments at 1% less than the inflation rate. This is all built into a spreadsheet used to monitor annual returns and a thirty year withdrawal at current spending rates.
by Peter Foley
Thu Jun 01, 2017 8:51 am
Forum: Investing - Help with Personal Investments
Topic: Future Retirement Plan
Replies: 46
Views: 3000

Re: Future Retirement Plan

KlangFool wrote: The bottom line is I am down to the wire in term of reaching my goal. 1) I was unemployed for more than 1 years. I am in my current job for more than 1 year. I am safe only for this year. I have no job security. Are you sure you qualify for 401k withdrawals at age 55? From http://ww...
by Peter Foley
Wed May 31, 2017 10:46 pm
Forum: Investing - Help with Personal Investments
Topic: Future Retirement Plan
Replies: 46
Views: 3000

Re: Future Retirement Plan

KlangFool wrote: If I retired from my employer, I could use the 55 years old rule to get the money out of my 401K. Ditto for my wife This makes your plan much more tenable. I would be cautious about spending down your taxable account too much, however. Having ample funds in your taxable account give...
by Peter Foley
Wed May 31, 2017 8:54 pm
Forum: Investing - Help with Personal Investments
Topic: Future Retirement Plan
Replies: 46
Views: 3000

Re: Future Retirement Plan

My only concern would be the percentage of assets you hold in tax deferred. You will have 2+ years where you may not be able to draw from tax deferred because of age. This and your mortgage may rapidly deplete your taxable account. If you are going to delay SS as you stated and withdraw from tax def...
by Peter Foley
Wed May 31, 2017 8:41 pm
Forum: Personal Finance (Not Investing)
Topic: Senility: How do you plan on protecting your money when you lose your mental capacities?
Replies: 72
Views: 5750

Re: Senility and Seductresses: How do you plan on protecting your money when you lose your mental capacities?

We have a fairly straightforward approach. We hold a diverse but fairly simple portfolio. My wife and children are all versed on what we have and why we have invested the way we do. I have an IPS and both a mid term (5 year) strategy and a "if perchance the inevitable" strategy written out...
by Peter Foley
Thu May 25, 2017 11:32 pm
Forum: Investing - Help with Personal Investments
Topic: Help My Dad Retire
Replies: 21
Views: 2187

Re: Help My Dad Retire

I have a friend whose husband was a welder for many years. He changed jobs in his mid 50's in part, if I remember correctly, because welders had a lower than average life expectancy. If this is true, the 100% survivor benefits would be a good choice. With 2 years cash and some 401k savings, perhaps ...
by Peter Foley
Thu May 25, 2017 11:16 pm
Forum: Investing - Help with Personal Investments
Topic: How would you invest $50k in 529 with 11 years to College?
Replies: 32
Views: 2720

Re: How would you invest $50k in 529 with 11 years to College?

I advised my daughters to use the moderate growth approach when the accounts were opened a couple years ago. The oldest grandchildren are 4.

Perhaps a bit conservative.
by Peter Foley
Tue May 23, 2017 11:48 pm
Forum: Investing - Help with Personal Investments
Topic: Investing FOR Retirement vs Investing IN Retirement
Replies: 25
Views: 2467

Re: Investing FOR Retirement vs Investing IN Retirement

Chip wrote: Peter, Do you plan on discussing investing for (and spending from) total return vs. income? We've seen quite a few discussions here where retirees want high current income from their investments because they don't want to sell anything. I'm not sure where the discussion will go. I person...
by Peter Foley
Mon May 22, 2017 5:29 pm
Forum: Investing - Help with Personal Investments
Topic: My dad is taking Social Security at 62, why would anyone not? (If they already quit working)
Replies: 114
Views: 14923

Re: My dad is taking Social Security at 62, why would anyone not? (If they already quit working)

# Cruncher I agree that the way the marginal tax rates is that an additional dollar of non SS can be highly taxed. However, am I wrong to suggest that a person with a pension at some level would not significantly increase the tax rate on their pension by taking SS benefits. (Perhaps Roth conversion ...
by Peter Foley
Mon May 22, 2017 1:50 pm
Forum: Investing - Help with Personal Investments
Topic: Investing FOR Retirement vs Investing IN Retirement
Replies: 25
Views: 2467

Re: Investing FOR Retirement vs Investing IN Retirement

I appreciate all the replies and leads in terms of discussion possibilities. Based on replies here I'm fairly certain the related topics of reduced risk, liquidity, and income stream will all come up in the investing in retirement session. If not, I will certainly mention them to keep the discussion...
by Peter Foley
Sun May 21, 2017 7:30 pm
Forum: Investing - Help with Personal Investments
Topic: My dad is taking Social Security at 62, why would anyone not? (If they already quit working)
Replies: 114
Views: 14923

Re: My dad is taking Social Security at 62, why would anyone not? (If they already quit working)

# Cruncher The context of my earlier post was "why would anyone not," not the OP's father's situation. The following is from the BH Wiki pages which describe the taxation of SS benefits: The examples below are based on tax numbers for 2017.[note 2] They illustrate how tax brackets and Soci...
by Peter Foley
Sun May 21, 2017 5:21 pm
Forum: Investing - Help with Personal Investments
Topic: Investing FOR Retirement vs Investing IN Retirement
Replies: 25
Views: 2467

Re: Investing FOR Retirement vs Investing IN Retirement

Dottie 57 and dbr I certainly agree with your opinion that there is a pre-retirement category as well. At a quarterly meeting about a year ago we had a panel discussion about the topic - we called it Retirement Red Zone. It was a discussion and Q&A about the time period immediately preceding ret...

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