Search found 4361 matches

by Peter Foley
Mon Jul 16, 2018 2:51 pm
Forum: Investing - Theory, News & General
Topic: A different take on retirement income: time segmentation
Replies: 73
Views: 3965

Re: A different take on retirement income: time segmentation

The Wizard hit on something that occurred to me while I was reading the thread. We are really talking about an investment approach for a select cross section of retirees here. Snowjob followed up with an insightful anecdote about how different retirees spend their time in retirement. Both hit on the...
by Peter Foley
Thu Jul 12, 2018 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: What rate of return are you using for retirement projections?
Replies: 99
Views: 8648

Re: What rate of return are you using for retirement projections?

My retirement planning spreadsheet has two tabs. One tab is 4% real and the other is 7% real. I've used the same spreadsheet for a dozen years. I've never put much stock in the 7% tab. I chose to retire based on the projections from the 4% tab. That was in 2012 and I've been fortunate to have a good...
by Peter Foley
Thu Jul 12, 2018 2:07 pm
Forum: Personal Finance (Not Investing)
Topic: Question for pre-ACA Early Retirees and pre-ACA solo folks
Replies: 33
Views: 1838

Re: Question for pre-ACA Early Retirees

Both my wife and I retired a couple years before the ACA took affect. We both had options to continue with employer plans and, although a bit expensive we did so. The plan I am on also offered supplemental plans once one reached Medicare eligibility. I continued with that plan. It is not the cheapes...
by Peter Foley
Thu Jul 12, 2018 10:00 am
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA slowly funneled into Roth IRA
Replies: 9
Views: 786

Re: Inherited IRA slowly funneled into Roth IRA

I agree that the full funding of two Roth IRAs from the inherited IRA is a good plan if you are able to stay in the 12% bracket. A potential bonus might be that one usually invests a Roth more aggressively than a traditional IRA. I would have the IRA invested in bonds as part of my bond allocation a...
by Peter Foley
Thu Jul 12, 2018 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 2945

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

MrBeaver You are correct in that some conversions are better in the long term. Sometimes, however, it takes many years. The retirement calculator that uses excel, Retiree Portfolio Model, has a output table that shows the break even point for Roth conversions in given scenarios. For me it is one of ...
by Peter Foley
Wed Jul 11, 2018 4:58 pm
Forum: Investing - Help with Personal Investments
Topic: Effect of Social Security when Retiring before Benefits Begin
Replies: 5
Views: 1121

Re: Effect of Social Security when Retiring before Benefits Begin

#Cruncher My terminology is probably imprecise. By tax discounted savings I meant to take one's tax deferred savings and discount it by one's combined federal and state tax rate. Because there is a bit of guesswork here one could use either the tax rate as calculated by tax software or one's margina...
by Peter Foley
Wed Jul 11, 2018 2:22 pm
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 2945

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

walkingdue: The Roth conversion amounts are somewhat arbitrary. They are intended to keep a couple well within the old 15% (new 12%) tax bracket. They are partially driven by a plan to delay SS benefits and convert sufficient assets so as not to jump into a much higher tax bracket and a higher level...
by Peter Foley
Wed Jul 11, 2018 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 2945

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

I think you have done a good job. Here is a generic template that I created based on the "withdrawal strategy" plan I created. It has not been fully updated based on the new tax law. 2017: Assumption – Husband, age 65 retired with pension, wife age 60 part time work. Husband delay SS benefits. Adjus...
by Peter Foley
Wed Jul 11, 2018 12:59 pm
Forum: Investing - Help with Personal Investments
Topic: Effect of Social Security when Retiring before Benefits Begin
Replies: 5
Views: 1121

Re: Effect of Social Security when Retiring before Benefits Begin

Interesting work. I appreciate your efforts with this spreadsheet and number crunching you have done. One weakness to the approach you propose is that not all withdrawals from "savings needed" are equal. Assuming retirement at age 60 and a need for a couple of $100,000 per year. (I'm cherry pricking...
by Peter Foley
Tue Jul 10, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring soon.....401K vs rollover to IRA?
Replies: 27
Views: 2593

Re: Retiring soon.....401K vs rollover to IRA?

inbox788 wrote: If you hold half in each, where do you draw RMDs? half and half or predominantly from one account or the other? Do you have to worry about turning off automatic RMDs in any accounts? Or making sure the tax agencies know you're taking out from one account and counting RMD on another? ...
by Peter Foley
Tue Jul 10, 2018 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Should I rollover 401 and 457? Newbie
Replies: 11
Views: 681

Re: Should I rollover 401 and 457? Newbie

My wife and I both have governmental 457b accounts. There are a host of issues here and I fear you are getting some advice that is imperfect (I'm being kind here) because of a lack of knowledge of 457 plans and their advantages. 1. It is your 457 plan, not your wife's. At your current age you can wi...
by Peter Foley
Mon Jul 09, 2018 5:18 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring soon.....401K vs rollover to IRA?
Replies: 27
Views: 2593

Re: Retiring soon.....401K vs rollover to IRA?

Perhaps a few years after you retire.

When you get to Required Minimum Distributions, Qualified Charitable Distributions in lieu of some or all of an RMD can be made from an IRA but not from a 401k. At some point it may be a good idea to hold some retirement funds in both types of accounts.
by Peter Foley
Sun Jul 08, 2018 10:47 am
Forum: Investing - Theory, News & General
Topic: Why 3-funds and not 4-funds or even 2-funds?
Replies: 56
Views: 4343

Re: Why 3-funds and not 4-funds or even 2-funds?

I'm not a believer in the 3 fund approach. The 3 fund approach offers ample diversification in stocks, but not in bonds. I am a believer in simplicity. Those with access to a good stable value fund can use that as a fourth. Others can round out/diversify their bond allocation by adding inflation pro...
by Peter Foley
Sat Jul 07, 2018 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Ratings of free online retirement income calculators
Replies: 8
Views: 969

Re: Ratings of free online retirement income calculators

Thanks for the link Bob. Darrow Kirkpatrick's list is much more complete. As Kirkpatrick points out there are calculators with different levels of "fidelity". The MN Bogleheads did a review of calculators at a meeting about a year ago. ESPlanner Basic made the cut. Firecalc was another better rated ...
by Peter Foley
Fri Jul 06, 2018 11:44 am
Forum: Investing - Help with Personal Investments
Topic: Pension, Income needs, and Asset Allocation Question
Replies: 32
Views: 4786

Re: Pension, Income needs, and Asset Allocation Question

While I don't disagree with JW's approach, I'm close to a Case 4 scenario and set my AA to 45/55 shortly before retirement with the understanding that I would let it drift up if I had reasonable returns in the early years. I retired in 2012 and have had a good sequence of returns. I'm in the ballpar...
by Peter Foley
Wed Jul 04, 2018 8:05 pm
Forum: Investing - Help with Personal Investments
Topic: When is ok to change your IPS?
Replies: 21
Views: 1226

Re: When is ok to change your IPS?

Your list of reasons to make a change are sound. Making a change just in reaction to the market is not particularly advisable. I built changes into my first IPS to cover the period when I approached retirement.
by Peter Foley
Wed Jul 04, 2018 8:01 pm
Forum: Investing - Help with Personal Investments
Topic: General portfolio check up and question about 457 distribution
Replies: 2
Views: 294

Re: General portfolio check up and question about 457 distribution

I would hold the old 457b plan for now. A plan with a public university should be safe. I have a 457b as does my wife. The stable value funds offered are very good (my wife's a bit better than mine). For me the reason to hold the 457b account is that if you decide to retire early the funds can be wi...
by Peter Foley
Wed Jul 04, 2018 7:51 pm
Forum: Personal Consumer Issues
Topic: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?
Replies: 62
Views: 4848

Re: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?

What are your hobbies? Biking was mentioned in an earlier post. I've biked a fair amount in both cities and the Minneapolis/St. Paul trails are extensive, while Madison are good but a bit more limited. More theater, arts, concerts in a larger city with more venues. I live in St. Paul near the Minnea...
by Peter Foley
Mon Jul 02, 2018 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Does It Make Sense to Wait to Claim SocSec?
Replies: 62
Views: 6727

Re: Does It Make Sense to Wait to Claim SocSec?

Munemaker, JW, Wizard, et. al. I have mentioned this in other threads and will repeat it here. A round about way of "reducing RMD's" is to make qualified contributions to charities. This can be planned in advance so that it is relatively simple: I will have a IRA funded at a specific amount in advan...
by Peter Foley
Sat Jun 30, 2018 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: Is it ok to invest in bonds?
Replies: 39
Views: 4746

Re: Is it ok to invest in bonds?

Using mortgage interest rates as a proxy . . . 1981 16% + then a long term downward trend to 3.6% in 2017. That is the past environment for interest rates in general. Falling interest rates are favorable for bonds. A 35 + year trend has essentially leveled off over the past 5 years or so. Something ...
by Peter Foley
Sat Jun 30, 2018 10:58 am
Forum: Investing - Help with Personal Investments
Topic: Is it ok to invest in bonds?
Replies: 39
Views: 4746

Re: Is it ok to invest in bonds?

Jester wrote: I would like to contribute a little more money to my bond index fund on a two year horizon to earn a little more than what I earn in my money market account (1.6%) but I worry about how an increase in interest rates may affect the fund. A two year time horizon is too short. You would b...
by Peter Foley
Fri Jun 29, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: Roth calculator?
Replies: 6
Views: 631

Re: Roth calculator?

The Retiree Portfolio Model is another excellent tool. It is a downloadable excel file. I find it a little more comprehensive than I-orp and does a better job for those who have a higher percentage of their total assets in tax deferred accounts. I've run a number of different scenarios to be able to...
by Peter Foley
Fri Jun 29, 2018 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Another Social Security Strategy Question
Replies: 11
Views: 1127

Re: Another Social Security Strategy Question

For him to claim restricted spousal benefits, does his wife have to file for hers?
by Peter Foley
Fri Jun 29, 2018 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: Wellesley and Wellington performance on Simba's Backtest Spreadsheet
Replies: 6
Views: 673

Re: Wellesley and Wellington performance on Simba's Backtest Spreadsheet

I think any decision should take into account the fact that we have had falling interest rates for almost 30 years.
by Peter Foley
Fri Jun 29, 2018 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Does It Make Sense to Wait to Claim SocSec?
Replies: 62
Views: 6727

Re: Does It Make Sense to Wait to Claim SocSec?

A lot of good information has already been posted in response to the OP's question. I would summarize some considerations as follows: Health concern - does the early retiree have a normal life expectancy? Spouse - does the spouse have higher SS benefits? If yes, can the couple afford to delay benefi...
by Peter Foley
Tue Jun 26, 2018 3:09 pm
Forum: Investing - Help with Personal Investments
Topic: Help creating portfolio/selecting funds – beginner
Replies: 21
Views: 1597

Re: Help creating portfolio/selecting funds – beginner

You are planning a very early retirement age. I would suggest not overdoing your tax deferred savings. You will need an ample taxable account and Roth contributions to retire young. Maximizing now to take advantage of long term growth is okay if you back off as you approach retirement.
by Peter Foley
Sun Jun 24, 2018 10:43 pm
Forum: Investing - Help with Personal Investments
Topic: Caps Gains Tax Strategy
Replies: 12
Views: 1096

Re: Caps Gains Tax Strategy

Could you explain with a little detail what you are trying to do? I get the impression that you want to use options to protect a gain that is significant and short term. The options would protect that gain and allow you to hold the investment with less risk until the gains are long term capital gain...
by Peter Foley
Thu Jun 21, 2018 10:58 pm
Forum: Personal Finance (Not Investing)
Topic: Trustee for mom's estate: large reserve recommended
Replies: 21
Views: 1648

Re: Trustee for mom's estate: large reserve recommended

It would be helpful to know a bit more about the annuity. Was it a "qualified annuity" (pre-tax/IRA), or was it an after tax annuity?

Are there multiple recipients?
by Peter Foley
Wed Jun 20, 2018 7:58 pm
Forum: Investing - Help with Personal Investments
Topic: Helping mom with inheritance. Help!
Replies: 13
Views: 1517

Re: Helping mom with inheritance. Help!

Given her situation I would be hesitant to have her manage the money. A SPIA is the best option.
by Peter Foley
Sat Jun 16, 2018 10:42 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone regret paying off mortgage early?
Replies: 456
Views: 102118

Re: Anyone regret paying off mortgage early?

No regrets. At the time we paid off the mortgage CD rates were in the 4% to 5% range and our mortgage was about 8%. Our long term plan was to pay off the mortgage before our youngest (2nd) daughter entered college. We were a year or so ahead of that schedule.
by Peter Foley
Sat Jun 16, 2018 10:35 pm
Forum: Personal Consumer Issues
Topic: What are your hobbies?
Replies: 59
Views: 5382

Re: What are your hobbies?

Grandchildren Guitar Bike repair (regular volunteer for a couple organizations) Biking and running Romance Languages (Spanish, Portuguese, Italian and French) Boglehead's Steering Committee (Minnesota) Genealogy Fishing (We have a lake cabin and I admit I do more handyman maintenance work than fishi...
by Peter Foley
Sat Jun 16, 2018 9:52 pm
Forum: Investing - Help with Personal Investments
Topic: Wanting to learn: seeking approval or criticism on my portfolio
Replies: 12
Views: 1210

Re: Wanting to learn: seeking approval or criticism on my portfolio

Some people consider a pension as a bond equivalent. This means you have more ability to take risk and can have a more aggressive AA. I have a pension and took that approach early on. Upon reflection, I don't think it was a good approach.
by Peter Foley
Sat Jun 16, 2018 6:40 pm
Forum: Investing - Theory, News & General
Topic: Mean Reversion in Long-Term Stock Returns?
Replies: 25
Views: 2106

Re: Mean Reversion in Long-Term Stock Returns?

SimpleGift Thanks for posting the charts. They are helpful. My concern regarding the use of long time spans for comparison purposes is that we have experienced a fair amount of technological advancement and globalization over the past 50 years. I don't mean to say that "this time is different" in th...
by Peter Foley
Sat Jun 16, 2018 10:59 am
Forum: Investing - Theory, News & General
Topic: Mean Reversion in Long-Term Stock Returns?
Replies: 25
Views: 2106

Re: Mean Reversion in Long-Term Stock Returns?

Personal opinion with no data to back this up. Returns of stock markets prior to electricity and phones being widespread is probably irrelevant. I would suggest as well that returns prior to the creation of mutual funds and broad based stock holdings by the general populace are also not very indicat...
by Peter Foley
Fri Jun 15, 2018 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: portfolio checkup - move more money to Roth?
Replies: 13
Views: 1351

Re: portfolio checkup - move more money to Roth?

Just a couple comments. If your wife is planning on returning to work outside the home I would consider moving money to a Roth now. On the other hand, if you both intend to retire early and have a few low income years, you should delay until then. With regard to your asset allocation and investments...
by Peter Foley
Thu Jun 14, 2018 11:06 pm
Forum: Personal Consumer Issues
Topic: Trade-up my $89 Walmart bike
Replies: 44
Views: 2706

Re: Trade-up my $89 Walmart bike

I work as a volunteer bike mechanic in a shop and for an organization that fixes bikes to give to kids (FB4Kz). I work on 400 to 500 adult bikes per year. The quality and the ride that you get with a Trek, Specialized, Diamondback, Giant or Novara (REI) are all worth the extra money. The components ...
by Peter Foley
Wed Jun 13, 2018 1:32 pm
Forum: Investing - Help with Personal Investments
Topic: converting some traditional IRA to Roth
Replies: 45
Views: 2466

Re: converting some traditional IRA to Roth

retiredjg wrote: First, I'll just say that I'm all for tax-deferral. However, I've come to believe there can be too much unless one has a plan to handle it. A very large tax-deferred account will start coming home to roost at age 70.5 when RMDs start. The larger the account, the higher the RMDs. Thi...
by Peter Foley
Tue Jun 12, 2018 10:45 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning- Trusts
Replies: 4
Views: 673

Re: Estate Planning- Trusts

I wish I understood this better as it is a question we Minnesotan's ask as well. We too have a spousal exemption, an estate tax exclusion that is significantly lower than the federal (headed to 3M in 2020 if memory serves me correctly) and no state portability. For those couples with assets only sli...
by Peter Foley
Mon Jun 11, 2018 10:40 pm
Forum: Investing - Help with Personal Investments
Topic: Large inheritance -- looking for advice
Replies: 56
Views: 6712

Re: Large inheritance -- looking for advice

My condolences.

With your level of assets Schwab offers very low cost, if not free, investment advice. I'm not talking about them managing your money just providing advice. If you start the conversation with "I want to invest in low cost diversified mutual funds" you should get a reasonable answer.
by Peter Foley
Mon Jun 11, 2018 4:46 pm
Forum: Investing - Help with Personal Investments
Topic: converting some traditional IRA to Roth
Replies: 45
Views: 2466

Re: converting some traditional IRA to Roth

Tenkuky wrote: Peter Foley wrote: ↑Mon Jun 11, 2018 2:21 pm Unrelated to the above: with the risk of high medical expenses some year(s) in retirement, it is not a bad idea to retain some tax deferred funds. Such funds could potentially be withdrawn tax free in a year with high medical expenses. Inco...
by Peter Foley
Mon Jun 11, 2018 2:48 pm
Forum: Investing - Help with Personal Investments
Topic: Advice on asset allocation and strategy
Replies: 5
Views: 471

Re: Advice on asset allocation and strategy

I will offer some personal opinion, not necessarily the guidance/rules of thumb I have read here and elsewhere over time: You are doing well with savings and I agree that 6 months of emergency funds is a good goal. 90/10 is okay, but I would prefer 80/20. I would be more comfortable with a 90/10 if ...
by Peter Foley
Mon Jun 11, 2018 2:32 pm
Forum: Investing - Help with Personal Investments
Topic: Which way to save for my child?
Replies: 32
Views: 1910

Re: Which way to save for my child?

I would be inclined to put at least some money in a 529 plan. My reasoning is that you may have more than 1 child and someone is likely to pursue post secondary education. Also there was a law change this year that allowed for 529 plan money to be used for private school tuition (primary and seconda...
by Peter Foley
Mon Jun 11, 2018 2:21 pm
Forum: Investing - Help with Personal Investments
Topic: converting some traditional IRA to Roth
Replies: 45
Views: 2466

Re: converting some traditional IRA to Roth

I won't challenge any of the math because I really can't tell what you are trying to do. Case #1: You are in the 12% tax bracket and intend to convert up to the 22% bracket. You intend to work until age 67 and then start drawing SS benefits and tax deferred savings. (In other words you are not plann...
by Peter Foley
Sat Jun 09, 2018 7:10 pm
Forum: Investing - Help with Personal Investments
Topic: Wanting to learn: seeking approval or criticism on my portfolio
Replies: 12
Views: 1210

Re: Wanting to learn: seeking approval or criticism on my portfolio

I'm a believer of the advice to never have more than 75% in stocks and never have less than 25% in stocks. While there certainly are circumstances that warrant exceptions, this is a good general guide for accumulators. Accordingly I would reduce the small cap allocation and overlap with extended mar...
by Peter Foley
Fri Jun 08, 2018 8:02 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc
Replies: 96
Views: 8984

Re: "Open Social Security" calculator: feature requests, bug reports, etc

I had not looked at the advanced options. You have it covered. What would be interesting to note relates to the longevity tables, not your calculator. I think you stated that nonsmoker preferred added about 3 years. I could look it up and find out how many years super preferred added. This info coul...
by Peter Foley
Fri Jun 08, 2018 4:47 pm
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc
Replies: 96
Views: 8984

Re: "Open Social Security" calculator: feature requests, bug reports, etc

I did not see the following in your list of enhancements. If you think it would be easier to do than a "when I die" option I would be happy if you just had a "CSO Nonsmoker Preferred Table" option. Using that table would give the user insight as to how greater longevity would affect the when to star...
by Peter Foley
Thu Jun 07, 2018 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: New SS claiming calculator ["Open Social Security" - ObliviousInvestor]
Replies: 65
Views: 5301

Re: New SS claiming calculator

First of all Mike, thanks for doing this. You certainly have a lot on your plate with all of the suggestions. Fact of the matter is, we do not know when we are going to die. A second fact relative to my upcoming comment is that I know nothing about building a calculator so feel free to ignore the fo...
by Peter Foley
Wed Jun 06, 2018 10:35 pm
Forum: Investing - Help with Personal Investments
Topic: Investment Strategy at 55
Replies: 16
Views: 2957

Re: Investment Strategy at 55

Iceberg6328 The difference between the mortgage payoff and the brokerage account is risk. If I were looking at a 10 year strategy I would not put the entire amount at risk in the market. My alternative is about the equivalent of a 50/50 asset allocation. That would not be inappropriate for a 55 year...
by Peter Foley
Wed Jun 06, 2018 7:45 pm
Forum: Investing - Help with Personal Investments
Topic: Investment Strategy at 55
Replies: 16
Views: 2957

Re: Investment Strategy at 55

A goal and an alternative: I think a good goal for many retired people is to have their mortgage paid off when they retire. A paid off mortgage offers a bit of diversification and is not unlike a bond - although it is much less liquid. An alternative, therefore, is to use a portion of her cash to pa...