Search found 263 matches

by PaulF
Mon Jan 29, 2024 10:53 pm
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

I guess you transferred a big chunk that period. So you have two accounts, one with 3.261% and one with 5.128%. So the weighted average is 3.5% given at the top. Yes, indeed. As I said in my original post on this thread: She has a some funds in TIAA Traditional (~$21k in an RCP @ 5.13%, and ~$172k in a GSRA @ 3.26%). Our institution is one of the many that went through a retirement plan reorganization, so there are two contracts within her plan; they can’t force her out of the contract with the GSRA, but we cannot move funds back to that contract. I don't honestly recall what the history was in detail, but I think that was the result of the above-mentioned cleaving of the account into two contracts due to a re-org of our institutional 403(...
by PaulF
Mon Jan 29, 2024 9:32 pm
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

greg24 wrote: Mon Jan 29, 2024 4:43 pm How accurate is the 3.26% you are reporting? Are you using old data under the assumption it never changes? Or did you check the account recently?

This past March, you would have seen your rates rise. 3.26% seems low.
This is from looking directly at the account. I can see all the vintages and their associated weight. I assume the top-line figure is a weighted average, and it comes to 3.261%. Almost all of the weight is in vintages with 3.25%:
Image
by PaulF
Mon Jan 29, 2024 1:33 pm
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

I don't know whether you have seen this before. It is old research but still quite useful. TIAA Traditional's return is similar to Total Bond but it smoothes out the curve with long term return slightly below Total Bond. http://collegeretirement.blogspot.com/2011/09/is-tiaa-traditional-good-deal.html Very helpful, thank you. Lest I convey a different impression, let me state that I am aware of some of the salubrious effects of this smoothing. For example, I am "complaining" in this thread that the yield on our GSRA dollars is only 3.26% right now, whereas other (conventional bond) funds are yielding signficantly higher. However, I do remind myself that other funds have a higher yield simply because they lost a lot of money in the...
by PaulF
Mon Jan 29, 2024 12:41 pm
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

In particular, I had no idea that the interest rate paid does not go up for old money, only for newly contributed funds. So now I am trying to decide if this fund still makes sense for us. This statement is simply wrong. Maybe if you describe a specific situation you are envisioning, I will better understand your error. RCP is a relatively new product, but in any given month of March, you can expect potential changes, up or down, in any given "vintage" of your TIAA Traditional dollars. They are also allowed to change the time-span of vintages, and add or delete vintages. I've had TIAA Traditional (initially, only RA) since 1976. While there is a latency of one to two years in most cases, ALL of my money has had interest rate incr...
by PaulF
Mon Jan 29, 2024 11:12 am
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

In particular, I had no idea that the interest rate paid does not go up for old money, only for newly contributed funds. So now I am trying to decide if this fund still makes sense for us. This statement is simply wrong. Maybe if you describe a specific situation you are envisioning, I will better understand your error. RCP is a relatively new product, but in any given month of March, you can expect potential changes, up or down, in any given "vintage" of your TIAA Traditional dollars. They are also allowed to change the time-span of vintages, and add or delete vintages. I've had TIAA Traditional (initially, only RA) since 1976. While there is a latency of one to two years in most cases, ALL of my money has had interest rate incr...
by PaulF
Sun Jan 28, 2024 3:04 pm
Forum: Personal Investments
Topic: TIAA traditional tradeoff between higher current rate and higher minimum rate
Replies: 78
Views: 8045

Re: TIAA traditional tradeoff between higher current rate and higher minimum rate

I am going to resurrect this thread, because the initial post and responses provide an excellent summary and intro to my small question. I appreciate the informative input from those posters. My wife and I are already retired (I am 60, she is 58). She has a some funds in TIAA Traditional (~$21k in an RCP @ 5.13%, and ~$172k in a GSRA @ 3.26%). Our institution is one of the many that went through a retirement plan reorganization, so there are two contracts within her plan; they can’t force her out of the contract with the GSRA, but we cannot move funds back to that contract. I confess that we didn’t know much about Traditional and all of its characteristics. We mostly just used it as a bond-fund substitute during the long period of low inter...
by PaulF
Sat Jul 10, 2021 11:50 am
Forum: Investing - Theory, News & General
Topic: Roth Conversions - McQuarrie study
Replies: 445
Views: 57062

Re: Roth Conversions - McQuarrie study

It does seem "...the assumption [in the journal article] is that RMDs are not spent, but rather invested - as opposed to the assumption that lump sum distributions are spent instead of invested." If so it would be good to make that explicit. Given an assumption one can draw conclusions based on it. Situations that don't fit the assumption, e.g., when one spends RMDs, may lead to different conclusions. I am not sure what you mean about lump sums being spent, perhaps you can provide a simple example? For us the amount that we will choose to spend will have nothing to do with the amount of RMDs. We would not spend more or less based on the relative balances in Roth, TIRA, taxable. So in this constant tax scenario, the question would...
by PaulF
Sat Jul 10, 2021 11:17 am
Forum: Investing - Theory, News & General
Topic: Roth Conversions - McQuarrie study
Replies: 445
Views: 57062

Re: Roth Conversions - McQuarrie study

I had hoped someone else would chime in with some interpretations, but as that appears unlikely.... Again, the commutative property would suggest otherwise unless there is an assumption to RMDs that is not obvious. I don't understand most of McQ's analysis, but I think at least part of it is that once RMDs are required that means some of the non-converted balance would be moved to taxable each year :?: . Suppose I have $100,000 in a TIRA and my tax rate is always 20%. If I convert and pay tax from the IRA, I now have $80,000 in a Roth and will pay no additional tax on that, ever. Alternatively, if I leave $100K in TIRA, at age 72 I will have to move 3.66% to a taxable account and continue moving more to taxable each year. The TIRA/taxable ...
by PaulF
Tue Jun 29, 2021 3:07 pm
Forum: Investing - Theory, News & General
Topic: Roth Conversions - McQuarrie study
Replies: 445
Views: 57062

Re: Roth Conversions - McQuarrie study

I I'm not sure I understand the exception to the indifference theorm, as it seems if a single conversion is taken out in discreet yearly withdrawals, each withdraw can be seen as a lump sum withdrawal of a smaller conversion, each happen to have the same starting point, so if each is individually indifferent, how can the sum of cases not be? This seems to be the core on how this analysis is performed, and forms the focus on the long pay off period, but I strongly question it's validity. Exactly! I do not understand the assertion that the indifference theorem is not valid in the circumstances contemplated. Here is what the paper says: But, and this is crucial to the present effort, the indifference theorem only holds if all three assumption...
by PaulF
Wed Jun 02, 2021 9:40 am
Forum: Personal Investments
Topic: Retirement Planning
Replies: 17
Views: 2385

Re: Retirement Planning

, 43, and will remain this status in foreseeable future. The current asset allocation is heavily in cash. Here is the basic info: Asset allocation (excluding real estate): cash/equity in mutual funds/bonds: 70%/20%/10%; total current market value: 1 million @btenny Thank you for your reply. $150k of 700k is in a money maket account which generates nothing currently. The money is my savings over the years. Yes, I’m very risk-averse in the financial planning. I am a bit confused by these two posts about what your AA actaully is. Based on your first post, I think that you have (approximately): $700k in cash or equivalents $200k in equity (stock) mutual funds $100k in bonds or bond mutual funds. To facilitate this discussion, could you confirm...
by PaulF
Wed Apr 21, 2021 9:59 pm
Forum: Personal Investments
Topic: For "bucket" strategy...WTH do I use for my second "bucket"?
Replies: 22
Views: 4219

Re: For "bucket" strategy...WTH do I use for my second "bucket"?

You (and many others!) refer to a bucket "strategy."

To me, figuring out what the "strategy" is is not answering the questions you ask; it is not setting up initial allocations. Rather, I think the "strategy" part is figuring out the spendown rules you will follow. And also deciding if you will do any rebalancing or not. Woodspinner's post provides a good explanation of this, IMHO.
by PaulF
Sun Apr 18, 2021 11:31 pm
Forum: Personal Investments
Topic: Need Help with Investment Plan - Close to Retirement
Replies: 16
Views: 2929

Re: Need Help with Investment Plan - Close to Retirement

FOOT101 wrote: Sat Apr 17, 2021 7:17 pm At that time we felt it would be better to be more diversified even though we know the Total Stock Market is diversified...
You used the word "diversify" 5 times in the first 7 sentences of your post. But, as you say in the sentence I quoted above, there is no reason to think that the portfolio of many small positions is any more diversified than a simple, three-fund portfolio. The assets you have are highly correlated and overlapping. I think you have constructed merely the illusion of greater diversification.
by PaulF
Sun Dec 20, 2020 9:34 pm
Forum: Investing - Theory, News & General
Topic: Decumulation: tax-deferred first or Roth first?
Replies: 5
Views: 822

Re: Decumulation: tax-deferred first or Roth first?

I was unclear about what you meant by "large-deferred" vs. "small-deferred." I may have missed it, but I don't think you defined it anywhere.

If you were making a distinction between two different tax-deferred accounts that you have, one with a large balance, one with a small balance, then that is a meaningless distinction. Treat them the same. (This cuts your parameter space in half!)
by PaulF
Mon Nov 23, 2020 10:17 pm
Forum: Personal Investments
Topic: What is your percentage of debt to NW?
Replies: 203
Views: 20287

Re: What is your percentage of debt to NW?

On a different note, here was some guidance I read a LONG time ago in an article in the Journal of Financial Planning. (https://www.coloradolinux.com/~sjg/FPA- ... Ratios.pdf) The authors devised a set of rules of thumb for where you were in your investment/savings career, and posited what ratios of debt-to-income and savings-to-income were healthy (or at least tolerable) at different ages:

Code: Select all

age	savings       debt
       to income   to income
30	0.1	         1.7
35	1.2	         1.5
40	2.5	         1.25
45	4.1	         1
50	6.1	         0.75
55	8.5	         0.5
60	11.4	         0.2
65	15	         0
Personal Financial Ratios: An Elegant Road Map to Financial Health
and Retirement
by Charles J. Farrell, J.D., LL.M.
by PaulF
Sun Sep 13, 2020 11:11 pm
Forum: Personal Finance (Not Investing)
Topic: Hawaii state tax- too good to be true
Replies: 44
Views: 5951

Re: Hawaii state tax- too good to be true

marcopolo wrote: Sun Sep 13, 2020 6:21 pm
bayview wrote: Sun Sep 13, 2020 5:02 pm
CAsage wrote: Sun Sep 13, 2020 2:22 pm I will observe that the cost of living in Hawaii is quite a bit higher than stateside. They import almost everything.... But it's sunny there!
Sorry, but... Mainland, not stateside. “Stateside” tends to irk Hawaii residents. :D :beer
Eh, You get used to it pretty quickly...
Well I found it jarring, and I have only been to HI twice! :)
by PaulF
Wed Jul 08, 2020 11:56 am
Forum: Personal Finance (Not Investing)
Topic: Longevity Annuity Purchase Timing w/ Today's Rates
Replies: 19
Views: 1609

Re: Longevity Annuity Purchase Timing w/ Today's Rates

jimkinny wrote: Wed Jul 08, 2020 6:33 am PaulF, thanks

Jim
You are welcome. I am just doing my best to keep learning! It gave me a chance to review Pfau and reinforce what I think I gleaned from it...
by PaulF
Tue Jul 07, 2020 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Longevity Annuity Purchase Timing w/ Today's Rates
Replies: 19
Views: 1609

Re: Longevity Annuity Purchase Timing w/ Today's Rates

I will provide a longish quote from Wade Pfau's Safety-First Retirement book. I think I am still within fair-use guidelines. All typos are due to my mistakes, and I will add emphases as I see fit. We looked at longevity insurance as it applies to a sixty-five-year-old female purchasing a deferred income annuity with income starting at eighty-five. We may also consider the alternative of just waiting until age 85 and then buying an immediate annuity. During those 20 years, interest rates and mortality tables can change in unexpected ways, which will impact the future pricing calculations. Exhibit 4.4 shows the calculated cost for this income annuity if we assume that interest rates and mortality data remain the same (an unlikely outcome, of...
by PaulF
Tue Jul 07, 2020 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Longevity Annuity Purchase Timing w/ Today's Rates
Replies: 19
Views: 1609

Re: Longevity Annuity Purchase Timing w/ Today's Rates

I will provide a longish quote from Wade Pfau's Safety-First Retirement book. I think I am still within fair-use guidelines. All typos are due to my mistakes, and I will add emphases as I see fit. We looked at longevity insurance as it applies to a sixty-five-year-old female purchasing a deferred income annuity with income starting at eighty-five. We may also consider the alternative of just waiting until age 85 and then buying an immediate annuity. During those 20 years, interest rates and mortality tables can change in unexpected ways, which will impact the future pricing calculations. Exhibit 4.4 shows the calculated cost for this income annuity if we assume that interest rates and mortality data remain the same (an unlikely outcome, of...
by PaulF
Tue Jul 07, 2020 4:06 pm
Forum: Personal Finance (Not Investing)
Topic: Longevity Annuity Purchase Timing w/ Today's Rates
Replies: 19
Views: 1609

Re: Longevity Annuity Purchase Timing w/ Today's Rates

I will provide a longish quote from Wade Pfau's Safety-First Retirement book. I think I am still within fair-use guidelines. All typos are due to my mistakes, and I will add emphases as I see fit. We looked at longevity insurance as it applies to a sixty-five-year-old female purchasing a deferred income annuity with income starting at eighty-five. We may also consider the alternative of just waiting until age 85 and then buying an immediate annuity. During those 20 years, interest rates and mortality tables can change in unexpected ways, which will impact the future pricing calculations. Exhibit 4.4 shows the calculated cost for this income annuity if we assume that interest rates and mortality data remain the same (an unlikely outcome, of ...
by PaulF
Tue Jul 07, 2020 9:31 am
Forum: Personal Investments
Topic: TIAA CREF Monte Carlo Simulations
Replies: 30
Views: 2097

Re: TIAA CREF Monte Carlo Simulations

I was hoping to see if anyone knew what assumptions were made by TIAA-CREF. I would not be surprised it the TIAA person was just using something they found on the web and not an officially-sanctioned TIAA piece of software. If you ended up communicating with a different person at TIAA, then you might not get the analysis and/or a completely different analysis. As an aside, a firm like Fidelity has similar tools available for clients directly on its web site. I can add a little, but only a little, to this discussion. I attended an "adult education" series of workshops offered through our local university's School of Continuing Education. This turned out to be a series of presentations from a local wealth management group, who were...
by PaulF
Mon Jul 06, 2020 11:41 pm
Forum: Personal Finance (Not Investing)
Topic: Longevity Annuity Purchase Timing w/ Today's Rates
Replies: 19
Views: 1609

Re: Longevity Annuity Purchase Timing w/ Today's Rates

adamthesmythe wrote: Mon Jul 06, 2020 10:06 pm > The annuity price increases as I get older due to expiration of some mortality credits

Umm, no?

The older you are the larger the monthly payout for a given amount of money.
True, but that is not what the OP was referring to. I grant you it is a little counterintuitive.

The earlier you start, the more mortality credits help you (assuming you yourself don't die early). The earlier you start, the more months you will be (likely) be collecting the increased payout due to other peoples deaths.

The later you start, the more return of principal you get per month (which is what the increased payout you were referring to is due to).
by PaulF
Sun Jun 21, 2020 10:50 am
Forum: Personal Finance (Not Investing)
Topic: "Open Social Security" calculator: feature requests, bug reports, etc.
Replies: 641
Views: 88328

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

Thank you Brian and Mike. That feature is a significant enhancement. Just wonderful.
by PaulF
Tue Jun 02, 2020 9:31 pm
Forum: Personal Investments
Topic: Withdrawal Strategy
Replies: 27
Views: 3744

Re: Withdrawal Strategy

Totally a minor point, but just so you know:
Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):

It is designed to help aged, blind, and disabled people, who have little or no income; and
It provides cash to meet basic needs for food, clothing, and shelter.
I am guessing you did NOT mean SSI, right?
by PaulF
Mon Apr 20, 2020 10:14 pm
Forum: Personal Investments
Topic: Combining Investments with Actuarial Science
Replies: 26
Views: 2218

Re: Combining Investments with Actuarial Science

All these helpful comments greatly appreciated! Next steps is to get more educated. But here's a summary of my new understanding: - Avoid whole life. High fees. Obscured fees. Complexity. Additional complexity mixing insurance with investment. - Buy term life (if life insurance required). - The actuarial method to insure retirement risk is a single premium immediate annuity (SPIA). - Consider the Variable Percentage Withdrawal method in the Bogleheads wiki. You won't run out of money. My understanding from other Bogle information related to my original question: - Diversify. Ideally when something is going down something else is going up. Therefore, not forced to sell in a bad market. - Have % index bonds = age. Portfolio gets more conserv...
by PaulF
Mon Apr 20, 2020 1:41 pm
Forum: Personal Finance (Not Investing)
Topic: Strategy With 2020 RMD's Waived
Replies: 14
Views: 1943

Re: Strategy With 2020 RMD's Waived

PinotGris wrote: Sun Apr 19, 2020 9:39 pm Is the IRMA tier tied to the tax brackets?
No, the tiers are specified in other parts of the code: https://www.federalregister.gov/documen ... g-coverage
by PaulF
Fri Apr 17, 2020 11:42 pm
Forum: Personal Investments
Topic: Combining Investments with Actuarial Science
Replies: 26
Views: 2218

Re: Combining Investments with Actuarial Science

d. However, when the market is down there's risk that the income draw also reduces the 401k account value making it harder for the 401k to recover and grow. e. The overall argument (as I understand it) is to draw income from another investment when the market is down to give the 401k time to recover and reduce the risk of running out of retirement funds. And that whole life insurance is the only investment vehicle available that bakes in actual science (and includes tax advantages). Good points! Great reference table! My understanding from the table is that a 3% withdrawal is safe. The pitch on the whole life product is that because down markets can be avoided it's possible to safely increase the withdrawal rate to 6-8%. So, the "pitc...
by PaulF
Thu Mar 19, 2020 8:04 pm
Forum: Investing - Theory, News & General
Topic: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested
Replies: 10
Views: 721

Re: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested

Capiche! Well, I'll be back then with many questions over time. I have one question right now. I opened a taxable account with Vanguard Monday and put 12K in it. Should I not bother at this stage in my development, or would it be okay to put this money in a total market stock index fund which I just read is okay since they are extremely tax-efficient. I want to make sure I understood you correctly when you said At this stage of the game, I think what you should focus on is not making expensive mistakes. Keep saving, max out your tax-advantaged spaces, invest in simple, reasonable funds like total market index funds or total bond index funds. Were you advising me not to make any taxable account moves at this stage of the game, or only do so...
by PaulF
Thu Mar 19, 2020 4:58 pm
Forum: Investing - Theory, News & General
Topic: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested
Replies: 10
Views: 721

Re: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested

Thanks Paul! This is exactly what I was looking for. It's tough coming in blind because there's so much info spread over so many posts and the way posters speak when they are well-steeped in this knowledge is just a little over my head. From what I can tell just by perusing that link you gave me, this is exactly what I wanted/needed to know. Thanks again for steering me in the right direction! Yes, there is a lot to learn! For me, it took several years of interested readings of books and Bogleheads to get comfortable. And, of course, I am still learning. At this stage of the game, I think what you should focus on is not making expensive mistakes. Keep saving, max out your tax-advantaged spaces, invest in simple, reasonable funds like total...
by PaulF
Thu Mar 19, 2020 11:08 am
Forum: Investing - Theory, News & General
Topic: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested
Replies: 10
Views: 721

Re: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested

I have one follow-up question to you, if I may. What do Bogleheads do if they have maxed out their contributions to their tax advantaged retirement accounts and still have extra money laying around (from living below their means) and want to do some investing with it? Do they open up a taxable account and do the same 3 or 4 fund portfolio? Thanks again, Sir. Largely, yes, but with a large caveat. When investing in taxable accounts, it is important to keep tax-efficiency in mind. Generally speaking, the most tax-efficient funds (which should be held in taxable) are: broad-based equity passive (index) funds. Bond funds tend not to be tax-efficient, in that they throw off dividends (at least in normal times! :) ) that are subject to taxation ...
by PaulF
Wed Mar 18, 2020 9:59 pm
Forum: Investing - Theory, News & General
Topic: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested
Replies: 10
Views: 721

Re: Stocks and/or ETF/Mutual Fund Investing Wisdom Requested

I know you don't mean to do so, but you are coming onto the BH site and asking for stock-picking tips! This forum is not about that. We honestly would be happy to help you meet your late-blooming goals. Suffice it to say that the approach that intuitively appeals to you (Buy the beaten down stocks!) is going to be viewed as simply gambling. Take some time to educate yourself before committing funds to a security that you don't understand. A fine place to start is Jack Bogle's https://www.bogleheads.org/wiki/The_twelve_pillars_of_wisdom or anything by Bill Bernstein. In response to your particular question about "what could go wrong" with buying stocks of beaten down companies: What do you think you know about their future prospect...
by PaulF
Mon Mar 16, 2020 10:47 pm
Forum: US Chapters
Topic: [Archived] Bogleheads community discussion - Coronavirus
Replies: 4963
Views: 298553

Re: Preferred greeting with clients for social distancing, elbow bump or other?

Just a brief, soulful kiss. No lingering.
by PaulF
Mon Mar 16, 2020 10:41 pm
Forum: US Chapters
Topic: Staying Grateful
Replies: 37
Views: 4062

Re: Staying Grateful

Absolutely! I worry about my health aides, they aren't paid much to begin with, and I am probably going to pay them directly if they can't come to me. I am very grateful for their loyalty to me, and I would hate to see them stressed if the healthcare company suspends their jobs for any reason. My out of pocket cost would be nearly halved if I simply pay them the salary they are paid. I am grateful I can do that. Hopefully it won't come to that, but who knows where this will go. I don't want to lose either of my aides, so whatever I can do I am willing to do. I feel I should be willing to help those who help me. DW can care for me, with help from DDs. I never wanted DW to provide my care as I observed the stress DW had in caring for her mot...
by PaulF
Fri Mar 06, 2020 3:03 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Est benefits question
Replies: 11
Views: 1521

Re: Social Security Est benefits question

Our own neurosphere has a nice one here: viewtopic.php?f=2&t=262772&start=50#p4791837

Also, there is a similar one as part of the Case Study/Personal Finance Toolbox/Cashflow spreadsheet: https://www.bogleheads.org/wiki/Tools_a ... ce_toolbox

But, as alluded to above, the formula for SS benefits is very progressive. Once you are above the second bend point, it is hard to increase PIA much, so you may not benefit much from having 35 years...
by PaulF
Wed Mar 04, 2020 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Is "buy in" to a CCRC deductible as a medical expense?
Replies: 59
Views: 4710

Re: Is "buy in" to a CCRC deductible as a medical expense?

But wow, if you did want to pony up say 300k or 400k for an entrance fee to a CCRC, you could do a huge Roth conversion that year, and if nothing else, make your heirs happy. That is true only if you were funding the entrance fee from post-tax sources. I imagine most of us with sizable tax-deferred accounts would withdraw from tax-deferred to fund the CCRC fee, then take a deduction to eliminate (most of) the tax liability. That's true. Where to pull the money from depends on the individual situation. Though a third (often less convenient) option would be selling one's current house and using those proceeds for the buy-in. And of course, the amount of the deduction depends on the type of CCRC and such. Even so, I was quite intrigued by the...
by PaulF
Tue Mar 03, 2020 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Is "buy in" to a CCRC deductible as a medical expense?
Replies: 59
Views: 4710

Re: Is "buy in" to a CCRC deductible as a medical expense?

TN_Boy wrote: Tue Mar 03, 2020 6:03 pm But wow, if you did want to pony up say 300k or 400k for an entrance fee to a CCRC, you could do a huge Roth conversion that year, and if nothing else, make your heirs happy.
That is true only if you were funding the entrance fee from post-tax sources. I imagine most of us with sizable tax-deferred accounts would withdraw from tax-deferred to fund the CCRC fee, then take a deduction to eliminate (most of) the tax liability.
by PaulF
Tue Mar 03, 2020 10:06 pm
Forum: Personal Finance (Not Investing)
Topic: What % of total assets do YOU have in DAF?
Replies: 13
Views: 1149

Re: What % of total assets do YOU have in DAF?

I think of it more in terms of "years of expected donations." The entire reason to fund a DAF in my opinion is to bunch the itemized deduction into one year, while taking the standard deduction in other years. So my question to myself is how often does it make sense to bunch? The answer is complicated by tax-law changes, etc.

In any event, we decided to fund ~7 years of planned giving (admittedly at modest donation levels! :| ) and then re-evaluate in a few years.
by PaulF
Thu Feb 27, 2020 10:54 pm
Forum: Personal Investments
Topic: Time to Rebalance?
Replies: 2
Views: 533

Re: Time to Rebalance?

Ready3Retire wrote: Thu Feb 27, 2020 9:48 pm I've seen IPS examples that say to rebalance if stock/bond percentages get out of whack by more than 2.5% or 5%. We've centainly exceeded that and more this week!
Don't be so sure. It takes a lot of motion on, say, the stock side of the equation to amount to a given movement on the overall AA.

Let's say you have $1M, and you are 50/50 initially; then stocks fall 10%, while bonds don't change. Now you have 0.5*$1M + 0.5*$1M*0.9 = $950k. Your AA only changes to 47.3/52.6. Is this less than you thought?

EDIT: See this thread for more details: viewtopic.php?p=5048868#p5048868
by PaulF
Thu Feb 27, 2020 10:43 pm
Forum: Personal Investments
Topic: How is AA across multiple accounts easier/simpler than mirrored AA?
Replies: 13
Views: 1222

Re: How is AA across multiple accounts easier/simpler than mirrored AA?

corp_sharecropper wrote: Thu Feb 27, 2020 8:24 pm I just don't see how this isn't the easiest scenario for a majority of people considering all the 401K/403b/etc options I see people post these days. Am I mistaken in this? Am I just lucky in my accounts/options?

Perhaps the latter. The conventional wisdom was, IMHO, born of an age where it was not likely that you could find good choices in all of your accounts. If you have good choices in all of your accounts that let you mirror your desired AA in each account, there is nothing wrong with doing that. It wasn't always that easy!

The only caveat I will add is to consider tax-efficient placement of funds: https://www.bogleheads.org/wiki/Tax-eff ... _placement
by PaulF
Mon Feb 24, 2020 1:14 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security reduction and breakeven
Replies: 67
Views: 6678

Re: Social Security reduction and breakeven

Big Dog wrote: Mon Feb 24, 2020 11:38 am Now, I guess one could argue that the un-mortality BE is a 'BE if you live that long'....
I will say that this is how I (naively?) have always understood it, in analogy to the general business sense of the "breakeven point." I.e., I have to sell 2200 of these units to cover my fixed costs, so 2200 sales is my breakeven point. I can then try to assess the likelihood of selling 2200 units, but that does not affect the value 2200.

Note that I am a layman in this area. This is simply how I have understood the term, and I suspect most of people I have discussed SS with have as well: "If I delay to 70, I have to live to at least 86 (or whatever) to come out ahead."
by PaulF
Sun Feb 23, 2020 10:35 pm
Forum: Investing - Theory, News & General
Topic: 4% SWR: It is not a rule and it is not safe (anymore).
Replies: 286
Views: 25840

Re: 4% SWR: It is not a rule and it is not safe (anymore).

knpstr wrote: Sun Feb 23, 2020 7:40 pm
I'd say that's a fair attitude -- this isn't anything that causes any physical/emotional stress. But it is also worth realizing how much of a waste the current system is. Where if it ever comes up in conversation and someone is interested you can let them know they are being cheated out of hundreds of thousands if not millions by government mandate.
And have you considered what the "I" is in SSDI? How would you feel about being "cheated" if you became disabled tomorrow?
by PaulF
Sat Feb 22, 2020 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: Net present value of mortgage considering inflation
Replies: 28
Views: 2053

Re: Mortgage vs no mortgage break even w/ inflation

mega317 wrote: Sat Feb 22, 2020 4:14 pm
mbasherp wrote: Sat Feb 22, 2020 9:05 am With fixed rate debt, the interest rate is always the same. Saying you pay more in interest in the first years is like saying the sky is blue. The loan is larger in the earlier years, but the rate on the balance is always 3%. Throwing out numbers like 59% and implying that they relate at all to 3% is disingenuous.
I asked a question like this some time ago. Grabiner had a very thoughtful response that helped me understand it. Search for my early posts--it might have been my first post ever.
Indeed it WAS your first post: viewtopic.php?f=2&t=189522&p=2875679#p2876398
by PaulF
Sat Feb 22, 2020 12:52 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security reduction and breakeven
Replies: 67
Views: 6678

Re: Social Security reduction and breakeven

There are two ways to answer this, though they both actually say the same thing. 1) A general premise of finance is that the discount rate in any PV calculation should be a function of risk. That is, it should be the expected return we'd get on something else with a similar level of risk. 2) The assumption is essentially that the person already has an overall economic picture that is suited to their willingness and ability to take risk. So we want to spend down the asset that has the most similar risk level (i.e., we're not looking to change the overall risk level, but rather simply maximize expected present value of total spending). I want to thank you for this. I am retiring early (57), and am intending to use a "bridge" to SS ...
by PaulF
Sat Feb 22, 2020 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Net present value of mortgage considering inflation
Replies: 28
Views: 2053

Re: Mortgage vs no mortgage break even w/ inflation

corn18 wrote: Sat Feb 22, 2020 8:36 am Now, if you want to discuss how to make more money, then all the invest vs. mortgage silliness comes into play. That is a horse that has been beaten, shot, stabbed, poisoned and Corona virused to death on all fora (it even came up on a BMW forum I am on).
BMW forum?!?! This is BH. You need to sell the Bimmer, buy an older Camry, and invest the difference in VTSAX. :mrgreen:
by PaulF
Sun Feb 16, 2020 9:32 pm
Forum: Investing - Theory, News & General
Topic: When did (will) your accumulation phase end?
Replies: 56
Views: 7710

Re: When did (will) your accumulation phase end?

In answer to your updated question:

For me, the transition came in a fairly short period due to unrelated developments, one happy, one sad. The happy one was that my wife and I both got large (~20%) raises, which in turn meant that our pensions would be ~20% higher than planned (provided we worked for 3 more years). The sad development was that my dear sister died of cancer in her mid/late 50's, and I came to realize that tomorrow is guaranteed to no one. Essentially at the same time, I also realized that we were close to being FI due to diligent savings. The switch was flipped, and my time since then has been spent trying to plan the decumulation period before pulling the plug (now planned for mid-2021).
by PaulF
Thu Feb 13, 2020 8:03 pm
Forum: Personal Investments
Topic: Delays in Vanguard Charitable?
Replies: 9
Views: 920

Re: Delays in Vanguard Charitable?

I was in a hurry on my last answer. I said the EIN was provided; in fact, the organization was listed among their charities. (Okay, it was the Roman Catholic Archdiocese of Philadelphia, fer crying out loud! Not a small operation.)

Yeah, I agree, if I want to get to the bottom of it, I must call them, not post on BH. But I was just curious to know if this was a widespread problem or an isolated incident. I've been thinking about transferring to Fido for the lower minimum grant, and wanted to know if this was a widespread reason to do so.

Thanks, all.
by PaulF
Thu Feb 13, 2020 5:23 pm
Forum: Personal Investments
Topic: Delays in Vanguard Charitable?
Replies: 9
Views: 920

Re: Delays in Vanguard Charitable?

Gill wrote: Thu Feb 13, 2020 4:17 pm Was the check to an established charity or did VC have to do considerable research?
Gill
Good question. No, it was a large established charity with an EIN number provided.
by PaulF
Thu Feb 13, 2020 3:51 pm
Forum: Personal Investments
Topic: Delays in Vanguard Charitable?
Replies: 9
Views: 920

Delays in Vanguard Charitable?

Has anyone encountered VERY slow disbursement from VG Charitable?

Generally, they have been very quick to send out checks, maybe 2 or 3 three days after my request. Last year, on 11/2/2019, I sent a request, and the check was not sent out until 1/30/2020! (It didn't clear until 2/10, but I don't suppose VGC can be blamed for that.) Thanks, VGC, now I look like a deadbeat for my Mother's memorial fund! :annoyed (Not really a problem, JK.)

Anyone else experience this?
by PaulF
Wed Feb 12, 2020 8:50 am
Forum: Investing - Theory, News & General
Topic: Turning 62 and SS alternatives
Replies: 60
Views: 4019

Re: Turning 62 and SS alternatives

I would like to point out that the reason you have not gotten an answer to your question is that it is absolutely not answerable with the information we have in front of us. As you point out, there are multiple factors, and they interact. Upthread, I spoke of levelizing income. That is just a crude first pass, of course. Off the top of my head, here are the factors you will need to consider to answer this question (most of which have been mentioned already): -IRMAA -taxation of SS (google "tax torpedo") -filing MFJ vs. single -qualified vs. non-qualified dividends -tax treatment of your capital gains -will the tax brackets revert in 2025, or will the law change? -NIIT -Roth conversions as a means to affect many of the above -when ...
by PaulF
Wed Feb 12, 2020 8:17 am
Forum: Investing - Theory, News & General
Topic: Turning 62 and SS alternatives
Replies: 60
Views: 4019

Re: Turning 62 and SS alternatives

It is about the best funding mechanism to use when delaying SS. I have listed three options, which have different tax treatments short and long term. That is what I want to get an answer to. The best funding mechanism is employment. You haven't provided enough details to determine what would be most beneficial tax-wise. Sure, employment would always be, but I am looking to the post-employment life and deferring SS to FRA. Let's say my expenses are $50k, my after-tax income from my taxable bond fund is $50k. My options: 1. I can use draw the $50k from my IRA without any penalty. 2. I can use the $50k of dividend income to pay my expenses. 3. I can sell long-term shares in my taxable bond fund to raise $50k All options can be repeated every ...