Search found 4575 matches

by Peter Foley
Sun Nov 18, 2018 10:25 am
Forum: Investing - Theory, News & General
Topic: Ed Slott & Roth Conversions
Replies: 36
Views: 2347

Re: Ed Slott & Roth Conversions

Backtracking a bit to the OP's concern . . . There are many variables to consider as well as life's unknowns which sometimes get in the way of "best laid plans." IMHO the "best" solution can only be seen in hindsight. It is likely that converting to the top of the 12% bracket - if delaying SS benefi...
by Peter Foley
Sat Nov 17, 2018 4:57 pm
Forum: Investing - Theory, News & General
Topic: Question about Roth conversion
Replies: 33
Views: 1788

Re: Question about Roth conversion

One point not often mentioned when it comes to Roth conversions. It may be best not to convert everything. Leaving a $200,000 balance in tax deferred won't require high tax RMD's. The average RMD would be about $8K/year over the first 5 years. Having a reserve in tax deferred may be to one's advanta...
by Peter Foley
Sat Nov 17, 2018 4:43 pm
Forum: Investing - Theory, News & General
Topic: Financial Engines recommends spending Roth money first
Replies: 24
Views: 2084

Re: Financial Engines recommends spending Roth money first

Not necessarily the OP's situation, but there could be a few situations where spending from a Roth first makes sense. 1. Retirement before age 59.5 and withdrawing contributions from a Roth to avoid withdrawal penalties from a tax deferred account. 2. It may be the right approach if one has low livi...
by Peter Foley
Sat Nov 17, 2018 4:27 pm
Forum: Investing - Theory, News & General
Topic: Ed Slott & Roth Conversions
Replies: 36
Views: 2347

Re: Ed Slott & Roth Conversions

Lots of good answers and input here already. The OP's scenario is one that applies to many of us boomers. Agreed, current and future tax rates are important as are the details that Celia iterates nicely. Growthseeker pointed out another interesting fact regarding conversions and decreased portfolio ...
by Peter Foley
Fri Nov 16, 2018 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: 2 Questions
Replies: 8
Views: 731

Re: 2 Questions

Tal wrote: The alternative to applying your target asset allocation equally across all accounts is to instead focus on your total asset allocation. For example, if you wanted to be 60/40, and you had your money split even between a taxable an an IRA account, you may want to make your taxable account...
by Peter Foley
Tue Nov 13, 2018 4:02 pm
Forum: Investing - Help with Personal Investments
Topic: 2 Questions
Replies: 8
Views: 731

Re: 2 Questions

Not a lot of details here but for question number 1, pulling from taxable would probably not be horrible. Your premise is that the market is down and so is your income because of loss of job. Probably/Likely pay no tax on long term capital gains. Second choice here for those under the age of 59.5 wo...
by Peter Foley
Mon Nov 12, 2018 11:46 pm
Forum: Investing - Help with Personal Investments
Topic: Managing RMDs
Replies: 10
Views: 1050

Re: Managing RMDs

While it may not apply to your situation because you are currently receiving SS benefits, many couples with substantial tax deferred savings and RMD's that would push them into the 22% tax bracket find Roth conversion to the top of the 12% bracket to be beneficial. You really need to run the numbers...
by Peter Foley
Mon Nov 12, 2018 5:51 pm
Forum: Personal Finance (Not Investing)
Topic: 457 vs 403b
Replies: 29
Views: 1965

Re: 457 vs 403b

I would not be put off by a governmental 457b plan that offered annuities and mutual funds if some of the mutual funds offered low cost index funds. You really only need a couple good low cost options in a plan as you can fill out your desired asset allocation elsewhere (possibly Roth or taxable).
by Peter Foley
Mon Nov 12, 2018 5:44 pm
Forum: Personal Finance (Not Investing)
Topic: [Financial] Habits of the Rich
Replies: 172
Views: 21611

Re: [Financial] Habits of the Rich

I'm not sure my wife and I are qualified by definition to answer, but we are comfortable in retirement and retired a little on the early side. 1. Live below your means (LBYM). 2. Avoid debt on depreciating assets. 3. Automate savings. Transferring periodic raises to 401ks for retirement contributes ...
by Peter Foley
Sat Nov 10, 2018 11:45 pm
Forum: Investing - Help with Personal Investments
Topic: Roth Conversion/Tax Withheld Then Deposited
Replies: 7
Views: 612

Re: Roth Conversion/Tax Withheld Then Deposited

It is hard for me to decipher exactly what you did to try to correct the tax withholding. It sounds like you contributed $200 in after tax money to an IRA with only pre-tax contributions. If this is true it will make future Roth conversions a little more complicated.
by Peter Foley
Fri Nov 09, 2018 6:18 pm
Forum: Investing - Help with Personal Investments
Topic: Early Retirement and Asset Allocation
Replies: 20
Views: 1966

Re: Early Retirement and Asset Allocation

I would suggest you read about the concept of a rising equity glide path (Wade Pfau). It argues for being a little more conservative around the time you retire to protect against a bad sequence of returns. A little more conservative might be in the neighborhood of 40% to 50% equities, certainly not ...
by Peter Foley
Fri Nov 09, 2018 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Retirement Asset allocation
Replies: 3
Views: 587

Re: Vanguard Retirement Asset allocation

It goes without saying that you will only know if the Vanguard recommendation is good in hindsight. I offer this as an alternative to consider realizing that the opinion of one investor, no matter how well read, does not have the research behind it that Vanguard offers. Asset allocation - I like the...
by Peter Foley
Fri Nov 09, 2018 12:11 am
Forum: Investing - Help with Personal Investments
Topic: Retirement withdrawal plan Fall 2019, ACA vs Roth conversions
Replies: 10
Views: 903

Re: Retirement withdrawal plan Fall 2019, ACA vs Roth conversions

My advice would be along the lines of that of mhalley - you should be looking at Roth conversions based on the ratio of your assets in taxable, tax deferred and Roth. Because of the increase in Medicare B premiums based on income at at 63, I would look to do a couple substantial conversions before t...
by Peter Foley
Tue Nov 06, 2018 4:56 pm
Forum: Investing - Help with Personal Investments
Topic: Is this an OK asset re-allocation
Replies: 3
Views: 361

Re: Is this an OK asset re-allocation

The effect of your proposal would be to put assets with a better opportunity for return in your Roth. All the funds you own are low cost so I wouldn't worry about any minor changes in fees. As to timing, they are all tax deferred so it would not matter too much. I would be tempted to note when divid...
by Peter Foley
Tue Nov 06, 2018 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: How much money are you leaving your kids after you die?
Replies: 234
Views: 14585

Re: How much money are you leaving your kids after you die?

Most of our accounts are set up with beneficiaries and contingent beneficiaries (we have two children, each with two children). Everyone is well versed on "disclaiming." We are really more interested in sharing while we are alive. Funding grandchildren's education is very important to us. Money can ...
by Peter Foley
Mon Nov 05, 2018 9:13 pm
Forum: Investing - Help with Personal Investments
Topic: Roth IRA as tax bracket buffer
Replies: 12
Views: 1286

Re: Roth IRA as tax bracket buffer

I use it more as an emergency fund. I have a multi-year plan to pay relatively level taxes now (retired, pre SS benefits) through the early years of RMDs. If I need additional funds for something I can tap a Roth rather than a tax deferred account. One goal is to stay below the Medicare B premium th...
by Peter Foley
Mon Nov 05, 2018 9:05 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Documents
Replies: 32
Views: 2632

Re: estate Documents

In addition to the books recommended by gretah, you may want to take a look at a few of the checklists provided by Ed Slott in his book Your Complete Retirement Planning Road Map . The checklists are good starting points for a number of aspects of retirement planning. It starts with an inventory of ...
by Peter Foley
Mon Nov 05, 2018 8:50 pm
Forum: Personal Finance (Not Investing)
Topic: Income in retirement?
Replies: 14
Views: 1933

Re: Income in retirement?

For many retirees turning off dividend reinvestment and capital gains reinvestment in taxable accounts are ways to provide some income in retirement. One's approach depends greatly on how much one holds in taxable accounts relative to tax deferred accounts. It takes a substantial taxable account to ...
by Peter Foley
Sun Nov 04, 2018 8:05 pm
Forum: Personal Finance (Not Investing)
Topic: Attorney vs Willmaker for simple estate planning
Replies: 6
Views: 720

Re: Attorney vs Willmaker for simple estate planning

After we had children we went to an attorney to have a will drawn up. I think having something in place to provide for offspring who are young is worth the expense. We wanted someone who had experience with the issues of guardianships and managing money for minors to advise us.
by Peter Foley
Sun Nov 04, 2018 7:54 pm
Forum: Investing - Help with Personal Investments
Topic: RMDs and taxes
Replies: 28
Views: 2735

Re: RMDs and taxes

Offhand I cannot think of any books I would recommend that are dedicated to this topic. It is a topic covered in chapters of some books on retirement saving and spending including the Bogleheads' Guide to Retirement Planning. I would recommend researching the writings of the following authors/blogge...
by Peter Foley
Sun Nov 04, 2018 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Do I need more than Original Medicare?
Replies: 110
Views: 6131

Re: Do I need more than Original Medicare?

Yes. There are Medicare advantage plans that are very low cost with relatively high deductibles. Why would you take a chance? While your health may be fine you cannot predict when an accident might happen. As pointed out, Medicare D is a must because of the penalty provisions. Personal note - I use ...
by Peter Foley
Sat Nov 03, 2018 10:55 pm
Forum: Investing - Help with Personal Investments
Topic: Recalibrating retirement portfolio for 2019
Replies: 4
Views: 995

Re: Recalibrating retirement portfolio for 2019

I think dwickenh is on target. The only thing I would add would be to hold your bond allocation in your SEP. With your desired AA your Roth should be all equities.
by Peter Foley
Sat Nov 03, 2018 10:32 pm
Forum: Local Chapters and Bogleheads Community
Topic: Sacramento, CA Area Chapter - Master Thread
Replies: 114
Views: 30012

Re: Sacramento, CA Area Chapter - Master Thread

Hi Greg. I'm on the steering committee of the MN Bogleheads group. I have communicated with someone from your group in the past. We would be happy to share information with you if you are interested. A few things we are curious about: You meet monthly. About how many people attend? Do you have set t...
by Peter Foley
Fri Nov 02, 2018 3:21 pm
Forum: Investing - Theory, News & General
Topic: Roth conversion strategy
Replies: 19
Views: 2107

Re: Roth conversion strategy

2cents2 You mentioned that you use Turbo tax. There is a form you can print out (or view) called the 2 year comparison. It is very helpful for future tax planning including Roth conversions. In your case, if your income fluctuates I would be tempted to do at least a couple conversions during the yea...
by Peter Foley
Fri Nov 02, 2018 2:37 pm
Forum: Investing - Theory, News & General
Topic: What is an "advanced" investor?
Replies: 34
Views: 2575

Re: What is an "advanced" investor?

While there are a number of good solid answers here, I would add a +1 to Taylor's post. I would add, however, that an advanced investor understands why these principles are important.
by Peter Foley
Fri Nov 02, 2018 2:27 pm
Forum: Personal Finance (Not Investing)
Topic: estimating Roth conversion amount
Replies: 5
Views: 573

Re: estimating Roth conversion amount

If you use Turbo tax there is a form you can print out called 2 year comparison. I used the output of that form to create an excel spreadsheet which I use to project future year adjusted gross income, taxable income, and estimated tax liability. That spreadsheet had been useful in planning Roth conv...
by Peter Foley
Wed Oct 31, 2018 8:02 pm
Forum: Investing - Theory, News & General
Topic: Large cap value, small cap, mid cap, etc. index funds
Replies: 15
Views: 991

Re: Large cap value, small cap, mid cap, etc. index funds

There are a variety of opinions to say the least. Check out the Lazy Portfolios on the BH Wiki. https://www.bogleheads.org/wiki/Lazy_portfolios
by Peter Foley
Wed Oct 31, 2018 7:58 pm
Forum: Investing - Theory, News & General
Topic: How faithful must index funds be?
Replies: 9
Views: 784

Re: How faithful must index funds be?

There are some index funds that do not hold all the stocks in their index. They hold a subset of the stocks which will very closely correlate to the performance of the index. This type of fund may have more flexibility. Some index funds are managed to be tax efficient. They too might have more flexi...
by Peter Foley
Tue Oct 30, 2018 8:16 pm
Forum: Investing - Help with Personal Investments
Topic: inherited IRA
Replies: 14
Views: 1337

Re: inherited IRA

Gatamelata wrote: Peter, out of curiosity, why would you accelerate the transfer? I think the conventional wisdom is to leave funds in tax deferred accounts as long as possible, especially since the OP appears from the Vanguard asset allocation to be quite young. Is it to avoid the impact of RMDs on...
by Peter Foley
Tue Oct 30, 2018 3:58 pm
Forum: Investing - Help with Personal Investments
Topic: inherited IRA
Replies: 14
Views: 1337

Re: inherited IRA

Grabiner wrote: Welcome to the forum! n00bieecho wrote: ↑Mon Oct 29, 2018 2:58 pm Friendly neighborhood Bogleheads, I inherited my aunts IRA to the tune of $112k, which I am very grateful to have. I enrolled in Vanguard Personal Advisor, which they put me in 84.9% in stocks and 6.3 % in bonds. VTSAX...
by Peter Foley
Tue Oct 30, 2018 3:21 pm
Forum: Personal Finance (Not Investing)
Topic: Moving to Minnesota
Replies: 28
Views: 2834

Re: Moving to Minnesota

Another welcome. I've lived in the Twin cities area for close to 45 years, the last 40 in St. Paul within easy running distance to the Mississippi. I have friends in Vadnais Heights, Shoreview, Forest Lake, and Stillwater. I have biked in all these areas as well. I think the NE suburbs of St. Paul a...
by Peter Foley
Tue Oct 30, 2018 2:22 pm
Forum: Investing - Theory, News & General
Topic: madsinger monthly report (September 2018)
Replies: 5
Views: 806

Re: madsinger monthly report (September 2018)

Thanks for producing this regularly. I'm planning on doing a BH presentation on a number of commonly recommended portfolios. Having a place to go to see the return of many of them at once is great.
by Peter Foley
Sun Oct 28, 2018 10:38 pm
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota BH Fall Main Meeting 10/27/18
Replies: 20
Views: 2163

Re: Minnesota BH Fall Main Meeting 10/27/18

A brief update for those who are following this thread and attended the meeting. The headcount of attendees was 110, the largest meeting ever and the first one to break the century mark. If you are on the MN Bogleheads e-mail list you should be receiving copies of handouts/moderator notes from the b...
by Peter Foley
Sun Oct 28, 2018 7:07 pm
Forum: Investing - Help with Personal Investments
Topic: Asset Allocation - Roth IRA and Rollover IRA
Replies: 7
Views: 645

Re: Asset Allocation - Roth IRA and Rollover IRA

I agree - no problem holding a mix of target date funds. How much to save . . . the opinion varies but here are a few examples I saved from past articles: Age based savings goals* Age 30: Savings = 0.6 x Income Age 40: Savings = 2.4 x Income Age 50: Savings = 5.2 x Income Age 60: Savings = 9.4 x Inc...
by Peter Foley
Sun Oct 28, 2018 11:30 am
Forum: Personal Finance (Not Investing)
Topic: Beginner Tax-Loss Harvesting Situation
Replies: 8
Views: 723

Re: Beginner Tax-Loss Harvesting Situation

Just sell, then buy something that is similar but not the exact equivalent.

For example, selling total stock market and replacing it immediately with an S&P 500 index is easy. The two are highly correlated so just reverse course after a month or two.
by Peter Foley
Sun Oct 28, 2018 11:23 am
Forum: Investing - Theory, News & General
Topic: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?
Replies: 25
Views: 1387

Re: Roth 401/403/457 withdrawals pre 59.5. Tax/penalty? What if rolled over to Roth IRA?

jeffyscott provided a link to a thread that has a table that I have found most helpful. Here is the table: Re: Roth IRA Rules - Table Approach Posted by: KAWill (IP Logged) Date: October 14, 2010 11:57PM Roth IRA Distribution Table UNDER AGE 59.5 FIVE YEAR CONVERSION HOLDING PERIOD NOT MET Contribut...
by Peter Foley
Fri Oct 26, 2018 2:24 pm
Forum: Investing - Help with Personal Investments
Topic: Deferred Compensation (457) Portfolio
Replies: 11
Views: 1253

Re: Deferred Compensation (457) Portfolio

krow36 I assumed an 80/20 stock/bond asset allocation, and 20% of stocks in international. That works out to about: 64% Vanguard Institutional Index Fund (0.12 ER) Covers about 80% of the US stock market covering large and mid caps (S&P 500 Index). 16% Dodge & Cox International Stock Fund (0.63 ER)...
by Peter Foley
Fri Oct 26, 2018 2:12 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion math - taxes paid from IRA
Replies: 7
Views: 703

Re: Roth Conversion math - taxes paid from IRA

Sorry to add more variables to your calculation. Have you considered the fact that you can pay part of your 2018 tax bill next year? For example, you could have half of the conversion tax withheld when you convert this year and then do a withdrawal from your IRA early in 2019 when you know exactly w...
by Peter Foley
Thu Oct 25, 2018 8:02 pm
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota BH Fall Main Meeting 10/27/18
Replies: 20
Views: 2163

Re: Minnesota BH Fall Main Meeting 10/27/18

Breakout update: Tax Reform preparing your 2018 tax return. Patrick,a tax preparer and volunteer with Prepare and Propser, will be doing the breakout instead of Chip. Roth IRA breakout: With the hope that the discussion will get beyond the basics of a Roth and center more on Roth conversions issues,...
by Peter Foley
Tue Oct 23, 2018 11:21 pm
Forum: Personal Finance (Not Investing)
Topic: Tax planning- Pensions, delaying SS, converting?
Replies: 16
Views: 1034

Re: Tax planning- Pensions, delaying SS, converting?

If I understand the numbers you presented correctly, this is their situation relative to Roth conversions. 2018 Adjusted gross income is 45K + 50K + dividends. (This may not be true if they worked this year. The 24% tax rate implied they did.) If they did not and if both are age 65, standard deducti...
by Peter Foley
Tue Oct 23, 2018 8:50 pm
Forum: Investing - Help with Personal Investments
Topic: Choosing the right index fund mix
Replies: 9
Views: 1072

Re: Choosing the right index fund mix

Again welcome.

I too would be inclined to only hold two funds in taxable. If you are holding one of your current funds at a loss (International?), I would be inclined to sell that fund and aim toward the recommendation made by ExitStageLeft.
by Peter Foley
Mon Oct 22, 2018 11:02 pm
Forum: Personal Finance (Not Investing)
Topic: Federal taxes in retirement
Replies: 25
Views: 2468

Re: Federal taxes in retirement

You might find this helpful. It is one column of a spreadsheet I use to estimate taxes in future years. The basis for the column is the two year comparison sheet generated by Turbo tax. Estimated Taxes Income Wages, Salaries Regular Interest & short term gains State Tax Refund Business/Self Employme...
by Peter Foley
Mon Oct 22, 2018 8:10 pm
Forum: Investing - Help with Personal Investments
Topic: Inheritance help
Replies: 7
Views: 672

Re: Inheritence help

Welcome to the forum. Sorry for your loss. You are currently in a very low tax bracket which leads me to suggest that you take the money out of the IRA a little faster than you propose. For example, if you took out $5000/year you would exhaust that account in 6 to 7 years. Putting $10,000 per year i...
by Peter Foley
Mon Oct 22, 2018 7:51 pm
Forum: Personal Finance (Not Investing)
Topic: IRS - Anyone deal with you owe us more tax letter?
Replies: 13
Views: 1837

Re: IRS - Anyone deal with you owe us more tax letter?

I have dealt with a few of them over the years. Sometimes I have received a response fairly quickly, sometime with a few months delay. The last time I received a letter it was regarding a savings bond owned by my mother with me as beneficiary. Upon the death of my mother I paid accrued interest from...
by Peter Foley
Mon Oct 22, 2018 3:52 pm
Forum: Investing - Help with Personal Investments
Topic: Incur short term losses for more Roth Conversion availability?
Replies: 11
Views: 825

Re: Incur short term losses for more Roth Conversion availability?

I would incur the tax loss harvesting even if it does not allow you to execute the plan you described. I agree with retiredjg - his statements reflect how I understand current law as well. I am of the belief that one should not try to convert everything to a Roth. Leaving at least a couple hundred t...
by Peter Foley
Sat Oct 20, 2018 7:17 pm
Forum: Investing - Help with Personal Investments
Topic: Taxable Account investing help - portfolio included
Replies: 11
Views: 1377

Re: Taxable Account investing help - portfolio included

You have a good mix of broad based low cost funds. I think your choices for taxable are fine. As you hint at the end of your post, a bit of simplification might be in order. You have a lot of overlapping funds. A couple easy things w/o tax consequences. You both hold small cap funds in 401ks and als...
by Peter Foley
Sat Oct 20, 2018 5:25 pm
Forum: Local Chapters and Bogleheads Community
Topic: Minnesota BH Fall Main Meeting 10/27/18
Replies: 20
Views: 2163

Re: Minnesota BH Fall Main Meeting 10/27/18

Additional details regarding two of the breakout sessions: Lee Title: A Healthy Way to be Overweight: The Rationale for Favoring the Health Care Sector in your Non-Core Holdings. Description: Participants in this breakout session will be given the back story on why one might favor the healthcare sec...
by Peter Foley
Sat Oct 20, 2018 10:44 am
Forum: Investing - Help with Personal Investments
Topic: Heavy Loss in Stable Value Fund of 401k investments
Replies: 32
Views: 4227

Re: Heavy Loss in Stable Value Fund of 401k investments

Interesting thread. We have the majority of our non equities in stable value funds so the reported incident will inspire me to take a look under the hood. Hindsight is 20/20 of course but I would not have parked short term money in a stable value fund. Both my wife and I have access to government st...
by Peter Foley
Fri Oct 19, 2018 8:42 pm
Forum: Investing - Help with Personal Investments
Topic: Learning about all this financial stuff
Replies: 12
Views: 1231

Re: Learning about all this financial stuff

For books a good starting point is "The Only Investment Guide You Will Ever Need" Andrew Tobias

There are a few thread about good first books to read.
by Peter Foley
Wed Oct 17, 2018 10:44 pm
Forum: Personal Finance (Not Investing)
Topic: Did you retire because you hit your number?
Replies: 71
Views: 6601

Re: Did you retire because you hit your number?

Hitting my number was only one of many factors. I retired a year and a half after qualifying for an unreduced pension and that was about two years after hitting my number. The biggest factor for me was not financial, rather personal and emotional. My father died at age 70.5 six months after he retir...