Search found 5066 matches

by Peter Foley
Thu Sep 24, 2020 5:34 pm
Forum: Personal Finance (Not Investing)
Topic: Advice for young people
Replies: 15
Views: 1804

Re: Advice for young people

Live below your means.
Set up a retirement account and contribute to it regularly.
As others have said, develop your human capital - more important than investing at you age.
by Peter Foley
Wed Sep 23, 2020 11:07 pm
Forum: Personal Investments
Topic: Roth conversions in this market
Replies: 8
Views: 1023

Re: Roth conversions in this narket

Just a reminder to pay attention to the Medicare Part B premium in addition to your marginal tax rate. The top of the 22% bracket for MFJ in 2020 is $171,050 in taxable income. The Medicare Part B Premium increases from $144/mo to $202/mo at $174,000 in Modified Adjusted Gross Income. That is $58/pe...
by Peter Foley
Sun Sep 20, 2020 7:49 pm
Forum: Personal Investments
Topic: Rebalancing to 50/50
Replies: 55
Views: 5158

Re: Rebalancing to 50/50

Dollar cost averaging reply: If I were going to increase my stock allocation by about 12% (in the ballpark of what you are suggesting) I would do 2% per month over a 6 month period. If there were a 10% correction, I would throw an additional 2% in at that time. If a 20% downturn, I would throw in th...
by Peter Foley
Sun Sep 20, 2020 2:06 pm
Forum: Personal Finance (Not Investing)
Topic: Answering Survey Questions Regarding Income
Replies: 16
Views: 1157

Re: Answering Survey Questions Regarding Income

The question is hypothetical. Yes, many choose not to answer.

If you were to answer with the goal of being most helpful to those sponsoring the survey to understand the results, what would include and why?
by Peter Foley
Sun Sep 20, 2020 12:25 pm
Forum: Personal Finance (Not Investing)
Topic: Answering Survey Questions Regarding Income
Replies: 16
Views: 1157

Answering Survey Questions Regarding Income

Many of us respond to survey inquiries and answer the questions related to a specific topic and a few questions regarding demographics. One of these questions is typically denoting a range of household income. These answers are almost always characterized as being anonymous. So, just what income to ...
by Peter Foley
Fri Sep 18, 2020 7:54 pm
Forum: Personal Investments
Topic: Rebalancing to 50/50
Replies: 55
Views: 5158

Re: Rebalancing to 50/50

I too think a sleep well range is prudent. 25% stocks is on the low end of what is usually suggested. Something in the 30% to 40% range is as conservative as I would want to be. However, that does not mean that that approach is right for you. Different people have different risk tolerances and if be...
by Peter Foley
Thu Sep 17, 2020 3:26 pm
Forum: Investing - Theory, News & General
Topic: Wondering why Value funds have done so poorly?
Replies: 28
Views: 3416

Re: Wondering why Value funds have done so poorly?

I think the question is "relative".

Value funds have done poorly when compared to growth funds and the S&P 500 in general because the latter two are so dominated by a handful of high tech companies that have done well.
by Peter Foley
Tue Sep 15, 2020 7:48 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA - withdraw from it to pay expenses first?
Replies: 24
Views: 1464

Re: Inherited IRA - withdraw from it to pay expenses first?

Initially your would restrict withdrawals to the inherited IRA. Over the long term a mix of your own IRA's with taxable or Roth might be more tax efficient. Part of this depends on when you might start social security, capital gains in a taxable account, etc. There are a number of moving parts which...
by Peter Foley
Sun Sep 13, 2020 7:34 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting Money to Daughter from Grandma's Inheritance (income tax/capital gains tax question)
Replies: 19
Views: 1374

Re: Gifting Money to Daughter from Grandma's Inheritance (income tax/capital gains tax question)

I too was thinking of the possibility of disclaiming, especially if an IRA account was involved. Gifting assets with a stepped up basis in taxable would also be tax efficient. Keep in mind the annual gift tax exclusion is $15,000 from person A to person B. So, MIL could gift 15K to daughter, 15K to ...
by Peter Foley
Wed Sep 09, 2020 7:43 pm
Forum: Personal Investments
Topic: Age vs retirement year
Replies: 27
Views: 4666

Re: Age vs retirement year

As hnd indicated, Target Retirement Funds have glide paths. Those paths differ from company to company so a Fidelity 2030 might be more aggressive than a Vanguard 2030. You need to select a fund with a glide path you are comfortable with. If your investment policy statement says that you want to hav...
by Peter Foley
Tue Sep 08, 2020 10:53 pm
Forum: Investing - Theory, News & General
Topic: Jane Bryant Quinn, stock allocation before / after retirement
Replies: 40
Views: 6415

Re: Jane Bryant Quinn, stock allocation before / after retirement

This approach is sometimes called a "rising equity glide path." Wade Pfau and Michael Kitces have both researched this approach and written about it. It was the approach I took just because I wanted a larger safety margin. I retired a couple years after the great recession and was worried about a do...
by Peter Foley
Mon Sep 07, 2020 5:18 pm
Forum: Investing - Theory, News & General
Topic: The Four (not Three) Fund Portfolio
Replies: 27
Views: 3389

Re: The Four (not Three) Fund Portfolio

Four Fund was always my basic approach. Total Stock, Total International, Total Bond, and stable value.

My addition of stable value was because it had a guaranteed rate that was not tied to inflation.
by Peter Foley
Mon Sep 07, 2020 5:14 pm
Forum: Personal Consumer Issues
Topic: Babysitter tax/payment question
Replies: 2
Views: 409

Re: Babysitter tax/payment question

It is a bit more complicated than you are suggesting. Based on your state, income above a certain level will require payment of Unemployment taxes. Social Security tax might also be required - I don't know about those levels. A potential work around is if this person provides care to others and you ...
by Peter Foley
Mon Sep 07, 2020 5:00 pm
Forum: Investing - Theory, News & General
Topic: use constant dollars or infation adjusted dollars for retirement projections
Replies: 8
Views: 691

Re: use constant dollars or infation adjusted dollars for retirement projections

I've always used today's dollars for the same reasons expressed by jebmke.

However, for tax planning over a 5 year rolling period, I do use inflation adjustments to income where those adjustments are constant.
by Peter Foley
Sat Sep 05, 2020 4:24 pm
Forum: Personal Investments
Topic: Gifting Shares -- which ones?
Replies: 10
Views: 605

Re: Gifting Shares -- which ones?

I took the approach of gifting those with the great gain to my grandchildren's accounts. Then they changed the kiddie tax. My grand-kids would pay more in taxes if they sold the shares than I would. If you are gifting to children and there is any chance they might use this in the next few years to c...
by Peter Foley
Fri Sep 04, 2020 10:47 pm
Forum: Personal Investments
Topic: Rebalancing Question
Replies: 23
Views: 1369

Re: Rebalancing Question

From a simplification standpoint, I see no real issue in redirecting contributions when you hit your 5% band. If you already have substantial savings it would seem prudent to include a once a year rebalance of accounts. The once a year rebalance would also offer one the opportunity to rebalance acro...
by Peter Foley
Thu Aug 27, 2020 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Do I need to fund a revocable trust while I am alive?
Replies: 9
Views: 833

Re: Do I need to fund a revocable trust while I am alive?

bsteiner Please note that I said nothing about revocable trusts. The OP stated that he and his spouse were working with an attorney "to draft a will and a trust." I asked a question regarding why a trust was being considered. Knowing more about the couple's circumstances would likely provide better ...
by Peter Foley
Thu Aug 27, 2020 7:58 pm
Forum: Investing - Theory, News & General
Topic: I survived the 'sequence of returns risk'
Replies: 42
Views: 3829

Re: I survived the 'sequence of returns risk'

redmaw quoted: Think of your retirement as in the movie “Groundhog Day”: every day is your first day in retirement again. And since this is your new imaginary first day in retirement again, you face a renewed Sequence of Return Risk again over the next roughly 10 years! Sorry: Sequence. Risk. Will. ...
by Peter Foley
Thu Aug 27, 2020 7:43 pm
Forum: Personal Finance (Not Investing)
Topic: Do I need to fund a revocable trust while I am alive?
Replies: 9
Views: 833

Re: Do I need to fund a revocable trust while I am alive?

Not everyone needs a trust. There are some very good reasons, however, to have a trust. Why are you considering using a trust? Some common reasons are: large taxable estate, merged families with children from multiple marriages, heirs with special needs or who might not be able to handle an inherita...
by Peter Foley
Tue Aug 25, 2020 8:05 pm
Forum: Personal Investments
Topic: Roth IRA contributions/conversions when on unemployment/ACA?
Replies: 11
Views: 790

Re: Roth IRA contributions/conversions when on unemployment/ACA?

Just addressing the topic of how to fund the Roth if you decide to do so. I would sell appreciated shares if they have long term capital gains and your taxable income (MFJ) is less than $80,000. No federal tax on long term capital gains below that amount. You may be in a position to sell up to that ...
by Peter Foley
Tue Aug 25, 2020 7:57 pm
Forum: Investing - Theory, News & General
Topic: Are Money Market Accounts Part of Your Calculated Yearly Withdrawal in Retirement
Replies: 5
Views: 630

Re: Are Money Market Accounts Part of Your Calculated Yearly Withdrawal in Retirement

The simple answer is yes. MM funds are part of your net worth. On the other hand, if they are your emergency funds and not substantial, I could understand an argument for not including them. I would regardless, but I'd respect other opinions.
by Peter Foley
Fri Aug 21, 2020 2:51 pm
Forum: Investing - Theory, News & General
Topic: Question about Boglehead’s Guide to Drawdown Strategy
Replies: 11
Views: 1117

Re: Question about Boglehead’s Guide to Drawdown Strategy

The Fidelity article is a easy read and its basic approach is okay. Its premise is that income is steady over the years of retirement. It does not consider delaying SS benefits and filling in the gap with a mix of taxable and tax deferred savings. It also does not consider the effect of RMD's. Boome...
by Peter Foley
Wed Aug 19, 2020 7:43 pm
Forum: Investing - Theory, News & General
Topic: Question about Boglehead’s Guide to Drawdown Strategy
Replies: 11
Views: 1117

Re: Question about Boglehead’s Guide to Drawdown Strategy

There have been a number of threads on this topic. Search on the term "withdrawal strategies" and you should find quite a few. I-orp is a good calculator related to withdrawal strategies, the Retiree Portfolio Model is a bit more robust and has more detailed year by year tax consequences of particul...
by Peter Foley
Thu Aug 13, 2020 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: Unemployment Insurance Enhanced Benefit EO
Replies: 4
Views: 405

Re: Unemployment Insurance Enhanced Benefit EO

A bit of an update. I don't disagree with mbasherp regarding the start date. Whether it will start at all is an open question. Guidance to states has been issued in the form of a Unemployment Insurance Program Letter (this is standard procedure - UIPLs are the official means of communication). See: ...
by Peter Foley
Wed Aug 12, 2020 1:16 pm
Forum: Personal Finance (Not Investing)
Topic: Unemployment Insurance Enhanced Benefit EO
Replies: 4
Views: 405

Re: Unemployment Insurance Enhanced Benefit EO

I do not know what the possibilities are. I'm a former Unemployment Insurance Tax Director. State law must conform to federal law when it comes to administering the program. To the best of my knowledge there is no state law that allows for the additional $100 that states must contribute. States woul...
by Peter Foley
Wed Aug 12, 2020 1:06 pm
Forum: Personal Finance (Not Investing)
Topic: CFP - One-Time Consultation (to Generate Plan), Worth It?
Replies: 22
Views: 1048

Re: CFP - One-Time Consultation (to Generate Plan), Worth It?

I think under certain circumstances an independent, professional review is worth it. My wife and I did this about two years prior to retirement. I was a Boglehead at the time and had managed our family's investing for many years. My wife wanted independent reassurance that we could retire as planned...
by Peter Foley
Fri Aug 07, 2020 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: Access to e-bills in joint checking: separate logins
Replies: 24
Views: 1231

Re: Access to e-bills in joint checking: separate logins

My wife and I have a joint checking account and have had the same experience as well.
by Peter Foley
Sun Jul 19, 2020 1:24 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA - withdraw from it to pay expenses first?
Replies: 24
Views: 1464

Re: Inherited IRA - withdraw from it to pay expenses first?

fyre4ce wrote: In general, the best strategy is to blend traditional, Roth, and taxable withdrawals so that you keep your marginal tax rate roughly the same throughout your retirement. Constraints include the start of social security, RMDs (of both your own and inherited accounts), and perhaps some ...
by Peter Foley
Mon Jul 13, 2020 7:28 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawals at retirement from 50/50 portfolio
Replies: 17
Views: 1762

Re: Withdrawals at retirement from 50/50 portfolio

I wrote a 5 year withdrawal plan that details sources of income, withdrawals from specific accounts (his, hers, IRA, taxable, bonds maturing etc.) Roth conversions, and marginal tax rates. It is written long hand paragraph style so that my wife could execute it easily should something happen to me. ...
by Peter Foley
Sun Jul 12, 2020 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Withdrawals at retirement from 50/50 portfolio
Replies: 17
Views: 1762

Re: Withdrawals at retirement from 50/50 portfolio

OP does not mention if there is a taxable account. If there is, his basic premise "take it out and keep the AA close to plan" does not change, but the account from which they take funds to live on may.
by Peter Foley
Tue Jun 30, 2020 3:15 pm
Forum: Personal Finance (Not Investing)
Topic: IRA Beneficiary - Individuals or Trust
Replies: 13
Views: 756

Re: IRA Beneficiary - Individuals or Trust

If the mother is currently in long term care and as a result in a very low tax bracket (perhaps zero) I would look at withdrawing funds from the IRA or doing a partial (or full) Roth conversion. Why, you might ask? A number of people will be receiving shares of the IRA and will pay taxes on withdraw...
by Peter Foley
Mon Jun 29, 2020 10:46 pm
Forum: Personal Finance (Not Investing)
Topic: Planning for eventual inherited accounts
Replies: 33
Views: 2604

Re: Planning for eventual inherited accounts

Sandwich wrote: Consider converting some (all) of your Mom's IRA into the ROTH IRA ... perhaps up to the top of the 0% bracket to reduce eventual taxes to you and your siblings ... maybe into the 10% or 12% bracket if you and your siblings are in the 22% or higher bracket(s). Good suggestion. If you...
by Peter Foley
Mon Jun 29, 2020 2:13 pm
Forum: Personal Finance (Not Investing)
Topic: Planning for eventual inherited accounts
Replies: 33
Views: 2604

Re: Planning for eventual inherited accounts

While not stated specifically, in addition to beneficiaries, you should check to see how each account is titled. Are any of them joint? IMHO getting the accounts properly titled and the beneficiaries names on account is the critical first step. Poor titling and beneficiary designations could result ...
by Peter Foley
Wed Jun 24, 2020 10:46 pm
Forum: Personal Investments
Topic: Roth 401K vs Traditional
Replies: 70
Views: 3189

Re: Roth 401K vs Traditional

I'm along the same lines as Beehave. A mix of traditional and Roth gives one flexibility in retirement with respect to tax obligation. Additionally, if one is going to retire very early, Roth contributions can be withdrawn without penalty and may help provide a bridge to age 59.5. (Yes I am aware of...
by Peter Foley
Mon Jun 15, 2020 7:50 pm
Forum: Investing - Theory, News & General
Topic: What is and is not included in the standard 4% withdrawal rate?
Replies: 8
Views: 988

Re: What is and is not included in the standard 4% withdrawal rate?

The 4% covers everything. It is not difficult, however, to divide one's spending into fixed costs and discretionary spending. Those two subtotals give insight into how close you are cutting it to retire on a 4% withdrawal rate plan.
by Peter Foley
Tue Jun 09, 2020 7:44 pm
Forum: Personal Investments
Topic: percentage of portfolio in Roth?
Replies: 72
Views: 3611

Re: percentage of portfolio in Roth?

One scenario that has not been mentioned is that of those who intend to retire early (early to mid 50's for example). Maximizing the Roth early on allows one to withdraw contributions without penalty. Having a substantial Roth to augment one's taxable account withdrawals in retirement would be helpf...
by Peter Foley
Tue Jun 02, 2020 7:26 pm
Forum: Personal Investments
Topic: Withdrawal Strategy
Replies: 27
Views: 2951

Re: Withdrawal Strategy

I would look at both the I-ORP and Retiree Portfolio Model calculators to explore the possibility for doing some Roth conversions while in a very low tax bracket. Have you calculated your tax bracket through age 72? Withdrawals from taxable include both basis and capital gains. You could have a few ...
by Peter Foley
Sun May 24, 2020 8:03 pm
Forum: Personal Finance (Not Investing)
Topic: What to do with Mother-In-Law
Replies: 31
Views: 4013

Re: What to do with Mother-In-Law

3000 per month is cheap for assisted living. My MIL pays more than twice that in a major metropolitan area.
by Peter Foley
Sun May 24, 2020 7:58 pm
Forum: Investing - Theory, News & General
Topic: Roth + Time vs Pretax + tax
Replies: 94
Views: 5747

Re: Roth + Time vs Pretax + tax

Overall asset placement obviously plays a role. I personally don't view this as a time issue except in the case of Roth conversions. Only convert money you don't plan to spend in the near future. Important to me is to have a mix of stocks and bonds and to place the asset with the best potential for ...
by Peter Foley
Wed May 20, 2020 10:49 pm
Forum: Personal Consumer Issues
Topic: Frequency of bike overhaul or tune up
Replies: 29
Views: 1845

Re: Frequency of bike overhaul or tune up

I volunteer with a couple organizations that fix bikes to be given away. That amounts to 8 years experience as a bike mechanic working primarily on older bikes. The most basic things are making sure your shifting and braking work smoothly and the chain is kept relatively clean and lubed. If all of t...
by Peter Foley
Sun May 17, 2020 10:50 pm
Forum: Personal Finance (Not Investing)
Topic: self-employed get UI ?
Replies: 9
Views: 635

Re: self-employed get UI ?

I'm a former state UI Tax director so here is a little background. Employers report wages quarterly and unemployment claims are based on wages in completed quarters. So states already have the data to determine the weekly benefit amount when someone becomes employed. In almost all states this is an ...
by Peter Foley
Sun May 17, 2020 9:52 pm
Forum: Personal Finance (Not Investing)
Topic: self-employed get UI ?
Replies: 9
Views: 635

Re: self-employed get UI ?

The amount the OP is getting may not be the final amount. Some states are making partial payments quickly because it takes time to determine the actual payments. If you want the official answer you can look it up in a Unemployment Insurance Program Letter (UIPL). This is the official guidance states...
by Peter Foley
Thu May 14, 2020 10:51 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Tax Question
Replies: 6
Views: 674

Re: Estate Tax Question

Just to clarify, in 2020 the Minnesota estate tax exemption increased to $3,000,000 per individual . Minnesota does not have a portability provision in their estate tax law so this makes it appear as if it is $3,000,000 per couple. Those are not quite the same thing. If, for example, the spouse who ...
by Peter Foley
Fri Apr 24, 2020 10:39 pm
Forum: Investing - Theory, News & General
Topic: books on behavioral finance/economics
Replies: 7
Views: 471

Re: books on behavioral finance/economics

The most readable book I've read is "Why Smart People Make Big Money Mistakes" by Belsky and Gilovich.

The chapter on "anchoring" and "confirmation bias" is one that I often refer to in conversations with others interested in the topic of behavioral finance.
by Peter Foley
Sun Apr 19, 2020 2:18 pm
Forum: Personal Investments
Topic: Our Retirement Plan vs Financial Advisor Plan - Thoughts?
Replies: 60
Views: 4377

Re: Our Retirement Plan vs Financial Advisor Plan - Thoughts?

Both portfolios are more complex than need be for adequate diversification. You have many too many small allocations in yours. You don't have to hold international, large cap, and mid cap in both plans, for example. Holding Wellington doesn't make any sense in the adviser's recommendation when you c...
by Peter Foley
Wed Apr 15, 2020 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement Tax planning
Replies: 38
Views: 2554

Re: Retirement Tax planning

The most straightforward thing you can do is to make qualified charitable distributions from your IRA. Note: it must be from an IRA, not a 401k, or 403b, or 457 account and it must go directly to a charity, not to a donor advised fund.
by Peter Foley
Wed Apr 15, 2020 9:57 am
Forum: Personal Consumer Issues
Topic: Learning 2 foreign languages simultaneously: bad idea for 5 year old?
Replies: 28
Views: 1495

Re: Learning 2 foreign languages simultaneously: bad idea for 5 year old?

Regarding the comments about not retaining the new language if not practiced. There was a very interesting Canadian study (McGill University) of children adopted from China. Children who were adopted very, very young, showed their brain mapping processed Chinese as noise. Those adopted at a later ag...
by Peter Foley
Tue Apr 14, 2020 8:12 pm
Forum: Personal Consumer Issues
Topic: Learning 2 foreign languages simultaneously: bad idea for 5 year old?
Replies: 28
Views: 1495

Re: Learning 2 foreign languages simultaneously: bad idea for 5 year old?

There is no doubt a fair amount of academic research about this. What I have heard is that if two languages are spoken children tend to sort them out about the time they enter school. For a child to sort out three languages he/she would need constant exposure to all three. I'm a former Spanish teach...
by Peter Foley
Tue Apr 14, 2020 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: When Does a Trust Become Worth It?
Replies: 71
Views: 6294

Re: When Does a Trust Become Worth It?

Celia and tomato tomahto covered most of my major concerns. One additional concern is when one owns real estate in multiple states. This raises the possibility of multiple probates. Many have mentioned the value of the estate as a factor. I would interested in opinions regarding the types of assets ...
by Peter Foley
Thu Apr 02, 2020 1:55 pm
Forum: Personal Finance (Not Investing)
Topic: Proposed wiki page on Stretch IRA
Replies: 26
Views: 1669

Re: Proposed wiki page on Stretch IRA

Celia, I respectfully disagree. The use of the term is common parlance, not legal. While you and I seem to be in agreement that it was not a good idea to begin with and could distort spendable dollars inherited by some co-beneficiaries, it did exist for some beneficiaries and continues to exist for ...