Search found 1260 matches

by Chadnudj
Thu Mar 14, 2024 11:21 am
Forum: Personal Finance (Not Investing)
Topic: Divorce and co mingling asset question
Replies: 42
Views: 5683

Re: Divorce and co mingling asset question

The brokerage account may have only been in your name, but how were taxes on dividends/capital gains paid on that account? If you filed married filing jointly, that might be a strong rationale to say it's marital property.
by Chadnudj
Mon Mar 11, 2024 6:38 am
Forum: Personal Investments
Topic: Best way to set up fund to pay off mortgage
Replies: 11
Views: 1364

Re: Best way to set up fund to pay off mortgage

this should meet the mental/emotional concerns and be easy to manage 1 ) open a new account https://investor.vanguard.com/accounts-plans/vanguard-cash-plus-account it earns 4.7% interest by default or you can choose one of the money market funds in the 5% range 2) set up electronic autodraft of your mortgage bill 3) show your spouse the mortgage has been handled, nothing left to worry about thanks - I don't know anything about money market funds so I will look into that. Do the interest rates go up and down or would I have a locked-in rate for some amount of time? The VMFXX rate would/does move around, but basically does so similarly to/in tandem with the Fed rates. Given where your mortgage is (2.5%) and where VMFXX rates are (5.3%), you'...
by Chadnudj
Sun Mar 10, 2024 1:43 pm
Forum: Personal Investments
Topic: Best way to set up fund to pay off mortgage
Replies: 11
Views: 1364

Re: Best way to set up fund to pay off mortgage

I think my research here has convinced me to not pay off our mortgage immediately, so I'm wondering about the best way to set up a fund to pay it down. Pertinent facts: Me - 59.5 retiring this year Spouse - 57 plans to continue to work until 62 or perhaps beyond Mortgage: 91,000 balance - payoff approximately 6 years 3 months at current regular payoff. 2.5% Debt: No other debt than mortgage Assets: 70/30 allocation in 401k/403b/457 Spouse will get small pension and take SS at 62 I will take SS at 67 or later Tax bracket: 24% Fed, 5% state for 2024 (both working) 12% Fed, 5% state for 2025 and going forward (me retired) We recently received 100,000 (after tax) funds that we don't have allocated, and that we don't "need" to make ou...
by Chadnudj
Sun Mar 10, 2024 12:19 pm
Forum: Personal Investments
Topic: Checkup: I'm way behind. Hope for late bloomers?
Replies: 42
Views: 5384

Re: Checkup: I'm way behind. Hope for late bloomers?

Frankly, I think you're doing extremely well. Don't let Bogleheads' crazy standards warp your perspective. You have zero student loan debt. Zero consumer debt. Your mortgage interest rate is insanely low and you have nearly 50% equity in your home already. You have a sizeable emergency fund, two paid off cars (that I presume are in good working order), and are contributing enough to get the match in your work 401k, do an HSA, and throw some more at Roths for you and your (currently non-working, more on this later) spouse -- roughly $45k per year, but minimum $30k. You have four kids at home (meaning you're doing this all during some of your most expense-laden years), and your income has risen, may rise further, and regardless is enough to c...
by Chadnudj
Tue Mar 05, 2024 4:45 pm
Forum: Personal Finance (Not Investing)
Topic: Payoff mortgage or maintain liquidity?
Replies: 52
Views: 3602

Re: Payoff mortgage or maintain liquidity?

All else being equal, I want the liquidity.

Say you have $100k, and your mortgage balance is $100k, and the interest on both is equal, and you have 100 months of payments left -- $1k a month. And let's assume all your other expenses are $1k a month.

You pay that off now, and lose all other sources of income? Well, you're in some trouble finding that $1k a month to feed yourself, etc.

But you have 50 months -- over 4 years! -- of runway to cover the mortgage and food/expenses if you lost your job and kept that $100k liquid.

That's the power of liquidity.
by Chadnudj
Fri Mar 01, 2024 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Feels impossible to take the foot off the pedal of saving, but saving at the boglehead pace is stressful.
Replies: 88
Views: 13586

Re: Feels impossible to take the foot off the pedal of saving, but saving at the boglehead pace is stressful.

You are saving $15k in taxable. Let that be more flexible and see how it goes. Take some time to really think about what things would make your life better. The fact that you use the term starter home sounds like you are easily influenced by what other people have. It is just a home. If you can be safe and comfortable there, not upgrading just because will save you so much in upkeep, taxes, etc and relieve a lot of the financial stress you are feeling right now. What experiences can you share with your children so that you don't feel like you are waiting to start living? Just going to the park every weekend can change that perspective. This is a great comment, and being in remarkably similar shoes as you, let me tell you what we did: We bo...
by Chadnudj
Sun Feb 18, 2024 11:58 am
Forum: Personal Consumer Issues
Topic: Happy Valentine’s Day! What’s your love song?
Replies: 88
Views: 4452

Re: Happy Valentine’s Day! What’s your love song?

"These Arms of Mine" by Otis Redding. First dance at our wedding, and a classic.
by Chadnudj
Sun Feb 18, 2024 11:22 am
Forum: Personal Finance (Not Investing)
Topic: Share your net worth progression
Replies: 4273
Views: 1072073

Re: Share your net worth progression

First time posting in this thread - I'm looking forward to checking in each year as I make continued progress. I spent most of my 20's and early 30's steadily employed working dependable, but relatively low paying jobs. I've always contributed enough to get the company 401(k) match, which wasn't much (50% match of the first 4% of my contributions), but have not saved or invested much in addition to that. After coming across the Bogleheads forum/wiki, I have spent the last year eliminating some credit card debt I was carrying, and got out of a few regrettable stock positions I got myself into chasing dividend payouts and meme stocks in my taxable account. I'm now working on rebalancing my portfolio into the classic 3-fund mix, and have doub...
by Chadnudj
Wed Feb 14, 2024 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Ready to sell 3M LTCG
Replies: 24
Views: 2130

Re: Ready to sell 3M LTCG

Part of me feels given the total uncertainty of how this stock performs going forward that you have $3M in long term capital gains on that you should just bite the bullet and pay all the tax at once.

The top LTCG rate is 20% for taxable income over ~$583k for MFJ ($518k for single filers). So once you get to paying that 20% LTCG rate, you might as well sell the rest and pay the same on it.

Your risk right now isn't the taxes (you'll have to pay them eventually, and 15% as the lower LTCG vs. 20% is a $150k hit -- not exactly chump change), it's that your non-diversified $3M gain turns into something way less than that before you can roll it into your preferred, diversified AA (plenty of stocks go down by way more than 5% in a year).
by Chadnudj
Wed Feb 14, 2024 8:42 am
Forum: Personal Consumer Issues
Topic: Pay cleaning lady for snow day?
Replies: 119
Views: 10090

Re: Pay cleaning lady for snow day?

We have a cleaning lady we like (her own business not a service). Every once in a while, we have a snowstorm or some other event that prevents her from coming. Should we pay her when this happens. I think no but wanted to check. Being she is booked up there is no makeup day. We don't see her till the next scheduled cleaning. Yes. You absolutely pay them. Just as businesses pay employees for snow days. Why wouldn't you? Don't you want to retain this cleaning lady long term? Won't she be putting in some extra time/effort the next time she cleans to get everything into top shape after having (through no fault of her own) missed the prior cleaning? You can afford to pay her/retain her loyalty, and it ensures you continue to get excellent servi...
by Chadnudj
Wed Feb 07, 2024 10:04 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for advice to save for home addition/renovation
Replies: 29
Views: 2296

Re: Looking for advice to save for home addition/renovation

I'm not sure if this discussion makes a lot of sense. I make a bit less than $300k and I didn't need to get equity out of my house or a 9% loan to get my car . And I drive a somewhat decent Porsche. :mrgreen: So I stand my ground - with $300k income you don't need a loan/home equity to get a car. Unless you get a Rolls Royse of course. I have lots of friends who do that thought. 9% car loan with $300k income is not a wise move anyway you put it. $500k renovation is the symptom of the same disease: chronic over extension. He. Didn't. Get. Equity. Out. Of. His. House. To. Get. A. Car. OP put a sizeable down payment on a new home, depleting some (but likely not all -- he presumably has an emergency fund) of his cash savings, while he was in t...
by Chadnudj
Wed Feb 07, 2024 5:10 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for advice to save for home addition/renovation
Replies: 29
Views: 2296

Re: Looking for advice to save for home addition/renovation

You took out a 9% car loan. This was a bad idea. You need to stop taking on so much high-interest debt. Now you just got a 500k mortgage at 7.5% and want to spend even more than that on a renovation for the house toubjist bought? You are at risk of seriously over extending yourself. They make $295k combined (wife has a likely safe state government job that may have a state pension/good state healthcare), are young (which suggests potential for income growth, at least in OP's job, if not his DW's state job; then again, she might be able to shift to private sector for a raise), are nearly maxing retirement accounts with $390k already saved at a young age, have enough cash to pay off all non-mortgage debt immediately (while still having $100k...
by Chadnudj
Wed Feb 07, 2024 5:04 pm
Forum: Personal Finance (Not Investing)
Topic: Looking for advice to save for home addition/renovation
Replies: 29
Views: 2296

Re: Looking for advice to save for home addition/renovation

You took out a 9% car loan. This was a bad idea. You need to stop taking on so much high-interest debt. Now you just got a 500k mortgage at 7.5% and want to spend even more than that on a renovation for the house toubjist bought? You are at risk of seriously over extending yourself. They make $295k combined (wife has a likely safe state government job that may have a state pension/good state healthcare), are young (which suggests potential for income growth, at least in OP's job, if not his DW's state job; then again, she might be able to shift to private sector for a raise), are nearly maxing retirement accounts with $390k already saved at a young age, have enough cash to pay off all non-mortgage debt immediately (while still having $100k...
by Chadnudj
Wed Feb 07, 2024 8:50 am
Forum: Personal Finance (Not Investing)
Topic: Looking for advice to save for home addition/renovation
Replies: 29
Views: 2296

Re: Looking for advice to save for home addition/renovation

You took out a 9% car loan. This was a bad idea. You need to stop taking on so much high-interest debt. Now you just got a 500k mortgage at 7.5% and want to spend even more than that on a renovation for the house toubjist bought? You are at risk of seriously over extending yourself. They make $295k combined (wife has a likely safe state government job that may have a state pension/good state healthcare), are young (which suggests potential for income growth, at least in OP's job, if not his DW's state job; then again, she might be able to shift to private sector for a raise), are nearly maxing retirement accounts with $390k already saved at a young age, have enough cash to pay off all non-mortgage debt immediately (while still having $100k...
by Chadnudj
Wed Feb 07, 2024 8:39 am
Forum: Personal Finance (Not Investing)
Topic: Looking for advice to save for home addition/renovation
Replies: 29
Views: 2296

Re: Looking for advice to save for home addition/renovation

I get the concern these others are expressing, but it's nowhere near that dire. You're a young (at least I think so), 2 income family making $295k per year, nearly maxing out retirement contributions, with $390k in retirement accounts (and your DW's job is pretty safe as a state employee and might have a pension component?), and enough in cash to pay off all non-mortgage debt basically immediately. You bought a home in the neighborhood you want to be in that might need a little work (and neighboring houses have much higher values), and you have some flexibility on when that work is done, and a mortgage that should be eligible for refinancing when rates get lower (and perhaps multiple refinancing). Anyone saying you've got a problem is not p...
by Chadnudj
Sun Feb 04, 2024 12:09 pm
Forum: Personal Finance (Not Investing)
Topic: DW Laid Off, I'm Panicking
Replies: 166
Views: 20724

Re: DW Laid Off, I'm Panicking

Mortgage Debt of $550K (equity of ~$900K) @ 3% … We've also been making additional payments on our mortgage. Stop doing that. 3% is a great rate that you want to extend, not cut short. But as others have said, you'll be fine. You have a lot saved. Exactly this. Your MM/CDs are getting 5% (or at least could be). That additional you're putting towards the mortgage would make 2% more for you if you parked it in the MM/CDs. I agree with everyone else -- figure out a few places to try to cut expenses (surely there's some fat in the budget -- the additional mortgage payments are one I immediately see, but I'm sure there's some unused subscriptions you could cut, etc.), encourage DW to take their time to figure out what the next step is for caree...
by Chadnudj
Sun Jan 28, 2024 12:46 pm
Forum: Investing - Theory, News & General
Topic: Called to Account: 4 Overlooked Benefits of Trad. 401ks, IRAs
Replies: 86
Views: 6620

Re: Called to Account: 4 Overlooked Benefits of Trad. 401ks, IRAs

The article misses one of the most important ones to me, at least:

Traditional 401ks allow you to put money away towards the future without sacrificing as much of your take-home paycheck.

If the whole point of money is to improve the quality of your life, it should be used to do so in the present as well as in your retired future. Many want to save for retirement and do, but also have present money demands (particularly when younger/raising families, etc.) that need to be met. Many will appreciate contributing as much as feasible to traditional accounts to be "good enough" for retirement planning, while leaving them with more take home pay to enjoy the present (at least, that's where I'm at now, more or less).
by Chadnudj
Sun Jan 28, 2024 12:25 pm
Forum: Personal Investments
Topic: Portfolio Review for Sanity
Replies: 21
Views: 2750

Re: Portfolio Review for Sanity

InvestorNewbie2016 wrote: Sat Jan 27, 2024 11:46 pm 2. Thoughts on rebalancing? I realize the bond allocation is low (even lower than 10% my investor policy calls for). I would like to gradually increase the bond % up to 5% this year and close to 15% in 5 years. Would you rebalance using the current investments or just where the next tax-deferred $ gets allocated?
Portfolio maximization suggests you want the bonds in tax-deferred accounts (traditional 401k/IRA) anyways, and there's no tax implications for just changing your asset allocation in those accounts generally speaking. I'd just change those accounts to get to your desired bond allocation, and then try to maintain it reasonably with new contributions (or, if necessary, new rebalancing in the tax-deferred accounts).
by Chadnudj
Sun Jan 28, 2024 12:10 pm
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

Agreed. People always talk about the freedom and sleep well at night feeling of not having a mortgage, but a big huge pile of cash does the job even better. It's true that barring a catastrophe, I wouldn't take on a mortgage at 3% once I pay this off, so what I'm saying is sort of contradictory. Oh well - I'm human and subject to human emotions and behaviors. But see, taking on a new 3% mortgage in the future would introduce new risk, after you've extinguished it. Presumably, you'd be taking it out at a time when safe returns do not exceed 3%. You'd have no guarantee that whatever you invested the loan amount in would exceed 3% annual returns, or that you'd have safe sources of income to make the mortgage payments each month without having...
by Chadnudj
Sun Jan 28, 2024 11:56 am
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

Okay, I'm convinced of what I knew all along and deep down knew was the right decision. I won't pay off the mortgage. In fact, I've never paid a dime extra to it. I may start thinking of diverting some money into a "payoff fund." I'd keep my portfolio 80/20 and have this payoff money on the side, effectively reducing overall equity allocation and thereby reducing risk. Another option is simply moving to a 70/30 portfolio or similar, as Klang Fool suggested. In reality, I'll probably end up doing what I've been doing. Holding an 80/20 portfolio, paying only the required monthly mortgage payment, and saving $75-80k a year. First, if you have any losses in the taxable account, you should tax-loss harvest. You could use the proceeds ...
by Chadnudj
Sun Jan 28, 2024 11:45 am
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

Pay your home off. Based on a bunch of the comments here, we should all be borrowing cash and dumping it into investments. And, many of these advisers, have new vehicles parked in their garages losing 6 to 10k a year in value. …and here is the thing most folks don’t calculate. One accident, one diagnosis, a divorce, one arrest, one job loss, one kid who goes off the rails, and guess what…the dues for the house note still keep coming. I’ll be minority. Pay your home off. It's exactly the opposite; not paying off the home provides you more options in such a circumstance because you have more liquidity. I tend to agree. Having $500k+ in a taxable account very likely gives me more warm and fuzzies than having a paid off home and $200k will, th...
by Chadnudj
Sun Jan 28, 2024 11:33 am
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

How would your perspective change if the stock market went down 50% and short-term rates went back to near-zero? And perhaps one or both of you lost your jobs? I am not @Triple Digit Golfer, but in this scenario, I would think "Boy, am I super glad that I paid off my mortgage!! I got a triple win. I eliminated the stock market risk so less of my money lost 50%, and I win again by not having to pay 2.99% when the best I can earn is only 0.5%! I win a third time by having my monthly expenses slashed by a third!" And I win a fourth time by dollar cost-averaging the principal-interest portion of my old mortgage into my AA at a cheaper, per-share cost every month. EDIT TO ADD: Though, as I note above, it's not smart to pay off a 2.99%...
by Chadnudj
Sun Jan 28, 2024 11:24 am
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

Okay, I'm convinced of what I knew all along and deep down knew was the right decision. I won't pay off the mortgage. In fact, I've never paid a dime extra to it. I may start thinking of diverting some money into a "payoff fund." I'd keep my portfolio 80/20 and have this payoff money on the side, effectively reducing overall equity allocation and thereby reducing risk. Another option is simply moving to a 70/30 portfolio or similar, as Klang Fool suggested. In reality, I'll probably end up doing what I've been doing. Holding an 80/20 portfolio, paying only the required monthly mortgage payment, and saving $75-80k a year. First, if you have any losses in the taxable account, you should tax-loss harvest. You could use the proceeds ...
by Chadnudj
Sat Jan 27, 2024 8:56 am
Forum: Personal Investments
Topic: Is paying off a 2.99% mortgage always a bad idea?
Replies: 332
Views: 24659

Re: Is paying off a 2.99% mortgage always a bad idea?

Put it in savings at 5% or invest it and be almost certain to easily beat the mortgage rate....It's possible that the market could drop 50% and stay below current levels for a decade. I guess I look at paying the mortgage as sort of a de-risking, taking risky money invested at 80/20 stock/bond and putting it all into a sure return. Then the solution is to move a large chunk of your taxable portfolio representing the remaining balance of your mortgage (and taking into account taxes) into MMF/high yield savings/ultra-safe treasuries, all of which are paying more than the 2.99% on your mortgage. Then, keep paying off your mortgage on its normal schedule, but shift a portion representing the monthly principal paydown each month from the MMF/HY...
by Chadnudj
Thu Jan 25, 2024 4:23 pm
Forum: Personal Consumer Issues
Topic: Rome - Florence - Venice
Replies: 49
Views: 3795

Re: Rome - Florence - Venice

My spouse and daughter are planning a trip to Rome, Florence and Venice in June. Plan is to fly into Rome and spend two nights, then two nights in Florence, two nights in Venice and one night in Rome before flying out again. They would take the train between the three cities. We have watched a bunch of travel shows on Youtube, but were hoping that fellow BH'rs would have some suggestions. We normally aren't big on tours, but it seems that paying for a tour company in Rome can skirt some of the lines at the Coliseum and other places. Molte grazie in anticipo. 1. As others have said, I'd drop something from your itinerary, to make it a bit more doable. My suggestion? Skip Venice. Rome and Florence are magical and wonderful enough. And if you...
by Chadnudj
Wed Jan 24, 2024 3:53 pm
Forum: Personal Finance (Not Investing)
Topic: Anyone intend on SS@70, now thinking 68 or 69?
Replies: 86
Views: 8242

Re: Anyone intend on SS@70, now thinking 68 or 69?

I'm far from having to claim, but: While many espouse coming out ahead by taking SS early and investing it, aren't they missing something? Namely, that if you wait until 70, once you hit 70 you're taking far less out of your nest egg (because of the much larger SS benefit), meaning that your withdrawal rate is lower and your nest egg is then growing faster (or depleting far slower). Given how (in many instances) the Trinity study on SWR, etc. show that a large proportion of retirees using 4% SWR (or even less) end up GROWING their nest egg in retirement, it would seem to me that there'd be some potential benefit (at least for legacy/heirs/inheritance purposes) to taking SS at 70, thereby cutting your SWR down at that point (because more of ...
by Chadnudj
Sat Jan 20, 2024 1:16 pm
Forum: Investing - Theory, News & General
Topic: At what invested net worth do contributions start to matter less?
Replies: 48
Views: 8281

Re: At what invested net worth do contributions start to matter less?

skipper wrote: Sat Jan 20, 2024 10:34 am For me, it said, "A penny saved is a penny earned."

Scientific formulas are fine for physics, where there are rigid laws of nature. But they can give you false information in the subjective world of financial planning. Thomas L. Romens (The Bogleheads' Guide to Retirement Planning)
If you factor in the impact of taxes, a penny saved is often more than a penny earned.
by Chadnudj
Sat Jan 20, 2024 7:29 am
Forum: Investing - Theory, News & General
Topic: At what invested net worth do contributions start to matter less?
Replies: 48
Views: 8281

Re: At what invested net worth do contributions start to matter less?

One way to think about this: Long term real returns on the stock market are somewhere around 6-7%. If you want to figure when, on average, your gains on your portfolio (Y) will equal the amount you contribute (X), you'd start with this formula: 0.06Y = X or 0.07Y =X. So, solving for X, you'd find that your average return on your portfolio (assuming an average 6-7% real return) would equal your annual contribution amount at somewhere around 14.28X-16.7X. (I think I did that very simplistic math correctly). Of course, stock market returns are lumpy, and while they may overall equal the average, they are not the average each year. Some years you'll get 20%+, some years you'll have losses. Thus, in a year you get a 20% return, your portfolio on...
by Chadnudj
Fri Jan 19, 2024 4:20 pm
Forum: Personal Consumer Issues
Topic: what to put in a time capsule that will be valuable in 50 or 100 years?
Replies: 65
Views: 6208

Re: what to put in a time capsule that will be valuable in 50 or 100 years?

As for OP's question:

Honey (if properly sealed) lasts forever (they even found honey in the pharoah's tombs).
Balsamic vinegar also can be aged for extensive periods of time.
And I'd probably put in a Stanley cup and a fidget spinner, just because they're both currently fads and both would last that long without breaking down.
by Chadnudj
Fri Jan 19, 2024 4:16 pm
Forum: Personal Consumer Issues
Topic: what to put in a time capsule that will be valuable in 50 or 100 years?
Replies: 65
Views: 6208

Re: what to put in a time capsule that will be valuable in 50 or 100 years?

WhitePuma wrote: Fri Jan 19, 2024 2:26 pm
Glockenspiel wrote: Fri Jan 19, 2024 1:03 pm
WhitePuma wrote: Thu Jan 18, 2024 9:07 pm
Glockenspiel wrote: Mon Jan 15, 2024 1:02 pm a sealed Taylor Swift vinyl album
Excellent music is timeless, which explains why this will be worthless within 5 years.
I can tell you haven't actually listened to anything other than the singles that are played on the radio. She's universally known as one of the greatest lyricists of the modern era.
I just read her lyrics to one of her radio hits “Shake It Off”. They’re vacuous as all heck. She’s just a pop tart with a large following.
She says she loves you
And you know that can't be bad
Yes, she loves you
And you know you should be glad, ooh
She loves you, yeah, yeah, yeah
She loves you, yeah, yeah, yeah
With a love like that
You know you should be glad

But sure, Taylor Swift is the one with vacuous lyrics.
by Chadnudj
Fri Jan 19, 2024 7:06 am
Forum: Personal Finance (Not Investing)
Topic: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)
Replies: 67
Views: 6999

Re: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)

If you take it too late (die earlier than expected) then all you've done is pay for other people's "insurance." My goal will be to extract the maximum possible benefit from SS since I was taxed to fund it. What is SS? It's an income stream. It's neither insurance nor an investment. The net income is about the same regardless of start time IF one lives to the 'target age.' However none of us know when the end will come. Hence I'm planning on taking SS at the earliest opportunity. If I'm taxed more, so be it. At least I've clawed back some of those taxes! And yet you still had the benefit of that insurance all along, in the event you had gotten disabled, died young with children, or needed to claim it early. So Social Security work...
by Chadnudj
Thu Jan 18, 2024 9:58 pm
Forum: Personal Finance (Not Investing)
Topic: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)
Replies: 67
Views: 6999

Re: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)

As most of you, I see all sides and understand them all. One thing that always gets under my skin is the notion that “if I die before collecting I won’t miss it because I’m dead”. Well, to my mind that’s just selfish thinking because your estate and heirs certainly will miss the money you spent while waiting to collect a larger check that never comes. Why save for college for your kids under that line of reasoning? If you die before they attend college you’ll never see the debt they have to take on so why save? Why save at all because if you die you won’t care. Point is no one is wrong. If someone wants to collect at 62 so they don’t have to tap investments and get the money earlier then fine. If someone wants to wait because they think th...
by Chadnudj
Thu Jan 18, 2024 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)
Replies: 67
Views: 6999

Re: My Social Security Timing "Aha" Moment (hint: It's Insurance, not an Investment)

Most of us approaching 60 have looked at charts of social security "break even" age or total lifetime benefits, etc. Then one night it occurred to me; if I die before I break even, I don't care, I'll be dead! If I come down with a terminal disease at age 65, not taking SS for the last 3 years won't be of much concern. OTOH, my wife and I took early retirement (61 & 57) which carries some risk of running out of money. When to take SS benefits should be framed around reducing the risk of outliving our nest egg, not some vague concept of maximizing your net worth at death. Think of it as longevity insurance or old age insurance as it's actually named, OASDI. YMMV, but for us, it makes sense to delay benefits. Yes. Far too many p...
by Chadnudj
Thu Jan 18, 2024 4:49 pm
Forum: Personal Finance (Not Investing)
Topic: It Does not Seem to Make Sense for Me to Ever Pay Home off Early
Replies: 51
Views: 5595

Re: It Does not Seem to Make Sense for Me to Ever Pay Home off Early

It doesn't have to be a black-and-white decision here. Investing excess funds gives you liquidity and the possibility to generate greater than 6.75% (plus more if you factor in taxes) returns, but greater risk. Depending on how you value liquidity and assess the likelihood of generating higher returns, that could be awesome for you. Alternatively, paying down the mortgage is a guaranteed 6.75% return that frees up monthly cashflow for you to deploy elsewhere, but ties that amount up in an illiquid asset (your home). But you could always do both: take one of your extra paychecks and invest it, put the other towards paying down principal (or take 50% of excess money and invest, 50% towards mortgage paydown). In that sense, you actually get a ...
by Chadnudj
Thu Jan 18, 2024 4:38 pm
Forum: Personal Finance (Not Investing)
Topic: Which loan to pay off?
Replies: 22
Views: 1333

Re: Which loan to pay off?

Are there other factors I should consider that I haven't mentioned? What would you do? I think you should put the money in a money market fund/high yield savings account/Treasuries, all of which are paying higher interest (~4-5%) than EITHER of your debts, meaning you'd come out ahead, safely, with nearly zero risk so long as that remains the case. But if you want to pay off a debt (and I understand there are psychological reasons you may feel it would be smart to do so), the question you need to answer is what do you value more: having more cash flow in your budget, or getting the higher interest rate return on this debt payoff? If it's the latter, you'd (a) still be advised to do what I suggest and hold the cash instead in safe investmen...
by Chadnudj
Tue Jan 16, 2024 2:11 pm
Forum: Personal Finance (Not Investing)
Topic: Need Advice - Retirement Tax Strategy (15yrs) in my 30's
Replies: 17
Views: 1879

Re: Need Advice - Retirement Tax Strategy (15yrs) in my 30's

5) What is your annual mortgage payment? Rounding the payment up, we are paying $2000/mo. Because of some potential instability with my work, we are considering throwing additional savings at our mortgage. We are in a small town with limited high paying jobs. My job is one of two employers in the area that would pay anywhere remotely near this wage. Both of our families are located within a few miles of us, so relocating due to potential job loss would be very undesirable. I would sacrifice retiring early to remain in the area if that happened. I disagree with this thought process, respectfully. You have an ultra low-rate home mortgage. Your home is an illiquid asset, particularly so in a small town with limited high paying jobs, which wou...
by Chadnudj
Tue Jan 16, 2024 8:06 am
Forum: Investing - Theory, News & General
Topic: Bucket Withdrawal Strategy
Replies: 20
Views: 2446

Re: Bucket Withdrawal Strategy

Thanks, all good replies here. How do you adjust the timings, so say someone retires at 50 and wants to take SS at 62, 65 or 70. So from initial years from year 50+ to SSN you need little more stability but once you have SS your risk taking increases for that longer duration. Essentially, I can take less to moderate risk from 50-SS years and go lot more aggressive in SS years portfolio. So in my example buckets 4,5 etc. can be super super aggressive as you have time plus SS payments, two BIG cushions for any volatility vs the short term. Also 50-60/65 are essentially best years of life which you want to enjoy more money, travel etc. as you never know what happens later. How to adjust for SWR taking these SS payments into account for future...
by Chadnudj
Tue Jan 16, 2024 8:02 am
Forum: Investing - Theory, News & General
Topic: Bucket Withdrawal Strategy
Replies: 20
Views: 2446

Re: Bucket Withdrawal Strategy

ondarvr wrote: Mon Jan 15, 2024 4:19 pm I don't particularly like the bucket strategy because it's just a term used so a person can better navigate the mental picture of what's going on.

It's all one bucket of funds with a predetermined AA that you may need to pull from as needed. The best place to pull those funds from in the future is unknown until you need them.
I mean, having a mental picture of what's going on with one's finances is kind of the point of personal finance, isn't it?

If it works for the OP, so be it. It seems needlessly complex to me when a predetermined AA in one bucket (as you posit) does the exact same thing, but I'm not going to quibble with reasonably sound mental accounting by the OP if that's a system that works for the OP.
by Chadnudj
Tue Jan 16, 2024 7:40 am
Forum: Personal Finance (Not Investing)
Topic: Need Advice - Retirement Tax Strategy (15yrs) in my 30's
Replies: 17
Views: 1879

Re: Need Advice - Retirement Tax Strategy (15yrs) in my 30's

5) What is your annual mortgage payment? Rounding the payment up, we are paying $2000/mo. Because of some potential instability with my work, we are considering throwing additional savings at our mortgage. We are in a small town with limited high paying jobs. My job is one of two employers in the area that would pay anywhere remotely near this wage. Both of our families are located within a few miles of us, so relocating due to potential job loss would be very undesirable. I would sacrifice retiring early to remain in the area if that happened. I disagree with this thought process, respectfully. You have an ultra low-rate home mortgage. Your home is an illiquid asset, particularly so in a small town with limited high paying jobs, which wou...
by Chadnudj
Mon Jan 15, 2024 3:55 pm
Forum: Personal Consumer Issues
Topic: Chicago Vacation
Replies: 56
Views: 4574

Re: Chicago Vacation

Dornhoefer wrote: Mon Jan 15, 2024 12:35 pm Two more thumbs down for Navy Pier.
I will say, the fireworks off of Navy Pier in the summer (on Wednesdays) are pretty great/fun for the kids. And there was (is?) a good Shakespeare theater on Navy Pier, and the kids may enjoy the Ferris wheel (which offers some good views of the city). But Navy Pier is (sadly, given its pretty great location) a pretty blah tourist trap.
by Chadnudj
Mon Jan 15, 2024 8:18 am
Forum: Personal Consumer Issues
Topic: Chicago Vacation
Replies: 56
Views: 4574

Re: Chicago Vacation

Our family (wife, 2 children, ages 11 and 7, and myself) are planning a vacation to Chicago in July. We've got a few questions... Transportation: Are the CTA buses and trains generally considered safe? If it was just my wife and I, I probably wouldn't be too concerned but can't be too sure since we'll have our children. Is traveling on the bus a relatively straightforward process and hassle-free? Can the buses get us pretty much anywhere we want to go within walking distance? Climate: What can we expect as far as weather? Entertainment: We're opting to get the City Pass and do what that allows us. Outside of the City Pass, what are some dos and don'ts? Looking at exploring Navy Pier since it's a few blocks down from the hotel. Thanks in ad...
by Chadnudj
Sun Jan 14, 2024 12:18 pm
Forum: Personal Investments
Topic: Thoughts on Ideas for Deploying $250K in Cash into Tax Deferred Retirement Accounts?
Replies: 21
Views: 2386

Re: Thoughts on Ideas for Deploying $250K in Cash into Tax Deferred Retirement Accounts?

The setting is I have $250K in my tax deferred retirement accounts in cash (don't ask why, it's a quirk). Do not plan to withdraw for 20+ years Idea #1 - Deploy it all into VTI. Idea #2 - Deploy into a mix of small/medium cap Strategic Equity (VSEQX) and large cap Windsor 2 fund (VWNFX) to match VTI asset class of small/medium/large. Tax efficiency is moot - Clearly Idea #1 is more tax efficient but this is in a tax deferred account. Return is comparable - Idea #1 returns about 8% and Idea #2 closer to 10% but that's historical so let's assume both the same. Growth vs Value - VTI is growth VSEQX/VWNFX is value. ER: VTI is under 0.1% but VSEQX/VWNFX is on average 0.25% Cost of Units - Here is the big difference. As VSEQX/VWNFX spin off all ...
by Chadnudj
Sat Jan 13, 2024 9:00 am
Forum: Personal Finance (Not Investing)
Topic: Traditional IRA to Roth IRA conversion
Replies: 4
Views: 411

Re: Traditional IRA to Roth IRA conversion

CAsage wrote: Sat Jan 13, 2024 8:57 am Any other IRA? If you have pre-tax money in any traditional IRA, the taxable portion of any conversion you make is prorated over all your traditional IRAs; you cannot convert just the nondeductible amount. Suggest you read the Wiki carefully:

https://www.bogleheads.org/wiki/Backdoor_Roth
Pay careful attention to this point. You may (if its available/fees aren't too high) want to roll your current traditional IRA into your 401k plan, which would then allow you to do a backdoor Roth without worrying about the prorated aspect mentioned by CAsage above.
by Chadnudj
Sat Jan 13, 2024 8:55 am
Forum: Personal Finance (Not Investing)
Topic: Is financial leverage a good approach at this stage?
Replies: 26
Views: 3198

Re: Is financial leverage a good approach at this stage?

Invictus002 wrote: Sat Jan 06, 2024 8:52 pm I would like to use my cash as 20% down, and leverage out to invest in assets (real estate or others, where leverage is availably), service debt over a period of time, in hopes to make a larger return than parking my $250k in VTI/VOO.
VTI's 10 year annual return is currently 11.44%. You get that without lifting a finger to fix a clogged toilet, paying to replace a broken furnace, screening tenants, or spending a minute of time dealing with renters.

As someone who tried rental real estate, let me tell you -- I wish I had put every penny into VTI and just lived my life. I would have made a better return AND had far fewer headaches.
by Chadnudj
Fri Jan 12, 2024 12:00 pm
Forum: Personal Investments
Topic: Traditional 401k or Roth 401k??
Replies: 20
Views: 1487

Re: Traditional 401k or Roth 401k??

Hi All - Would love thoughts on recommendations for why a Traditional 401k or Roth 401k option would work best for my situation. I'm 34, have 5 youngish children, work in higher education that has a 2 to 1 match (10% to my 5%) after 5 years - and currently don't make much money (would definitely to be in a higher tax bracket at retirement). Don't plan to retire too early and we don't plan to live a crazy lavished life in retirement. We have option for Trad 401k or Roth 401k (or mix). On the surface, Roth seems to make most sense. However, I've heard good arguments for both sides recently. Thanks for any input! I'll merely mention traditional 401k will give you more take-home pay now than Roth 401k, which may be a significant factor in your...
by Chadnudj
Thu Jan 11, 2024 10:36 am
Forum: Personal Consumer Issues
Topic: Family of 4 debating 3 row SUV
Replies: 71
Views: 7634

Re: Family of 4 debating 3 row SUV

Hi all So I currently own a Lexus RX hybrid and since I started my lease, ending in two months, our family has welcomed 2 kids. So the current RX is quite cramped with 2 car seats, stroller, etc. We have decided to get a 2nd car but I'm debating whether a 3 row SUV is a good idea. We don't have any plans on having more kids so we obviously don't need the 3rd row for people, but for the additional storage space. We've been living with 1 car for many years now but with school and commuting to work, it is getting harder to make the logistics work. Btw, my DW has no interest in a minivan so that's a no-go. Conceptually I like the idea of a 3 row and have had my eye on the new Lexus TX, but I don't want to buy too big of a car and regret it. I ...
by Chadnudj
Thu Jan 11, 2024 10:06 am
Forum: Personal Investments
Topic: 3-5 Years Before Retirement Check-In
Replies: 23
Views: 5008

Re: 3-5 Years Before Retirement Check-In

New annual Contributions Social Security His Benefit at 70 $54k per year Her benefit at 62 $6.6k per year Her benefit at 70 $18k per year I think there must be an error here.....she's entitled to claim on her own record or half of yours (as your spouse), whichever is higher, and if she's continuing to work she'll probably increase her own amount too ($6.6k per year seems VERY low for someone who is SS eligible). Obviously there are some unknowns about projecting Social Security, but I'd check with a reliable source that you're not shortchanging your spouse on Social Security by claiming on her record rather than your own. And as someone above mentioned, make sure you're forecasting based on what you've already earned, and not the Social Se...
by Chadnudj
Thu Jan 11, 2024 10:01 am
Forum: Investing - Theory, News & General
Topic: How big a portfolio is okay for 100% stock?
Replies: 115
Views: 20624

Re: How big a portfolio is okay for 100% stock?

Part of what's missing here is the goal. Presumably, someone in their 60s with, say, 60X expenses, might consider going 100% stock IF they have as a goal making as large of a charitable bequest/inheritance for heirs as possible upon their death.

As for me, I'm far from there, but I'm hoping to have enough where I can just ride Vanguard LifeStrategy Growth (80-20) for life -- some bond ballast/safety, but plenty of equity upside for growth so I can leave an inheritance/charitable bequest behind.
by Chadnudj
Tue Jan 09, 2024 10:43 am
Forum: Personal Finance (Not Investing)
Topic: How Can I Truly Calculate Net Worth (include primary home or not)
Replies: 55
Views: 6762

Re: How Can I Truly Calculate Net Worth (include primary home or not)

I keep all my real estate on my balance sheet at purchase price - I don't mark to market since there is no reliable way to do it. I keep my cars on my balance sheet but I depreciate them down to zero over 5 years. I calculate NW using everything on my balance sheet - all assets minus all liabilities. An interesting but non-actionable number. I calculate NPV (Net Portfolio Value) as NW - primary home value - cars. NPV is what I care about - it's how much I actually have to live on in retirement. I sure wish our state valued my house at the purchase price! I wouldn't have to be concerned about them taking 10%, or about 60,000 Estate tax! LOL Well, you won't have to be concerned about it. You'll be dead. The taxes are the concern of your heir...
by Chadnudj
Tue Jan 09, 2024 9:06 am
Forum: Personal Finance (Not Investing)
Topic: How Can I Truly Calculate Net Worth (include primary home or not)
Replies: 55
Views: 6762

Re: How Can I Truly Calculate Net Worth (include primary home or not)

mall0c wrote: Tue Jan 09, 2024 8:49 am I keep all my real estate on my balance sheet at purchase price - I don't mark to market since there is no reliable way to do it.

I keep my cars on my balance sheet but I depreciate them down to zero over 5 years.

I calculate NW using everything on my balance sheet - all assets minus all liabilities. An interesting but non-actionable number.

I calculate NPV (Net Portfolio Value) as NW - primary home value - cars. NPV is what I care about - it's how much I actually have to live on in retirement.
Exactly this (though I don't do cars at all).