Search found 1848 matches

by BruceM
Mon Apr 24, 2023 5:25 pm
Forum: Personal Investments
Topic: Short term cap gain impact on tax brackets
Replies: 4
Views: 479

Re: Short term cap gain impact on tax brackets

C an short term capital gains push you into a higher tax bracket? Or are they all just simply taxed at your ordinary income rate based on other income? It depends. Short term capital gains are first netted out against short term capital losses, if any. At the same time, any long term capital gains are netted out against any long term capital losses. If the result of this is short term capital gains and long term capital losses, or visa versa, these are netted out with the result being a short term capital gain, a long term capital gain or a capital loss. If the result is a short term capital gain, this becomes ordinary income and is mixed in with all ordinary income as all is treated the same for tax purposes. If this is discretionary....th...
by BruceM
Wed Apr 19, 2023 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: A friend died
Replies: 37
Views: 6402

Re: A friend died

Good of you to help, particularly if surviving spouse was not involved with household financials. We've gone thru this with several family members. When a person dies, they will have a gross estate, which is the dollar value of all assets of the estate that are owned by them. Unless special provisions were made thru a prenuptial, retitling or designating other beneficiaries, all assets generally default to the surviving spouse. The gross estate can be divided into that part of the assets that legally transfer to others on death and those assets that don't. The latter is referred to as the probate estate which should not apply when the surviving spouse inherits everything, So one of the concerns of the surviving spouse, particularly if she i...
by BruceM
Tue Apr 18, 2023 6:40 pm
Forum: Personal Investments
Topic: Should I continue with SPAXX?
Replies: 6
Views: 2593

Re: Should I continue with SPAXX?

I have little over 100k in SPAXX mmf at fidelity. I assume this is a taxable account. SPAXX is our core account at Fido. We've got about $300K in it and about that much in FZDXX which has a better 7-day yield (4.2% vs 4.76%) although the latter has a $100K minimum. What you'll want to do is compare this yield to a muni bond fund, such as FTABX which we have (there are many others), with a current 7-day of 2.8%. For comparison, multiply the stated 7-day on taxable MMF, let's say FZDXX of 4.76% times 1 minus your combined Fed plus state tax rates, which for you in NJ looks like you'd be in the 8.97% marginal rate. So 4.76 X 1-(.24+.0897) = 3.19% which in this example exceeds the 2.8% rate of FTABX. This is an approximation as not all of your...
by BruceM
Tue Apr 18, 2023 11:54 am
Forum: Personal Investments
Topic: Portfolio feedback for the recently initiated
Replies: 6
Views: 1004

Re: Portfolio feedback for the recently initiated

Your investments seem to be well addressed by others, so let me speak to insurance -Insurance: We have both been hesitant on getting disability/life insurance since we both have stable jobs with strong future prospects and have no kids yet to support. My hospital does provide a token 50k life insurance policy and bare-bones short and long-term disability insurance. I consider ourselves underinsured and will probably look to get some additional coverage in place (especially if we decide to start a family), but would be interested in people’s thoughts on this. The purpose of insurance is to prevent financial catastrophe. If you were injured and couldn't work but qualify for SS disability, how would this impact your household cash flow? Most d...
by BruceM
Wed Mar 10, 2021 3:41 pm
Forum: Personal Finance (Not Investing)
Topic: Excel Experts? Rearrange data
Replies: 15
Views: 1734

Re: Excel Experts? Rearrange data

Rich126

The columns to the right of each data title would be headed by a date, correct? (day, week, month or year)

Are you asking how to sort to re-order the data title? For example, to put all the stocks price in one group and the stocks volume in another group and so on? If so, the only way I can think to do that is create another column to the left of the data titles and then go down and put numbers next to the rows you wish to combine, then do a sort on the number column for the entire sheet. A bit clunky and I'd bet there's some kind of Excel function that will do this, but I can't think of what it would be

BruceM
by BruceM
Tue Mar 09, 2021 5:34 pm
Forum: Personal Finance (Not Investing)
Topic: children roth ira
Replies: 29
Views: 2799

Re: children roth ira

The IRS has not provided firm guidance on contributions to a minor's IRA, except that any reportable income earned directly through work does qualify. But money paid for routine or normal house work, an allowance or money paid for anything intellectual, such as getting good grades, would almost certainly NOT qualify as earned income. I don't prepare taxes, but I have a couple of good friends who do, and for their clients who wish to contribute to their minor dependent children's IRA who do not have an employer that issues a W2, they require them to document the job done by date and the total amount the child received for it. If the dependent minor has total earned income that is more than the standard deduction ($12,550 for 2021) the minor ...
by BruceM
Sat Feb 13, 2021 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Equity Indexed Annuities
Replies: 143
Views: 14555

Re: Equity Indexed Annuities

Yes, they are quite complicated and difficult to dissect and understand. Most who purchase them learn their restrictions, caps, variable distribution rate, inflexibility, annual fees, surrender charges and other important details AFTER they've bought in. This complexity is not by accident. Interest rates today are so ridiculously low that you'd probably be better off leaving your IRA dollars invested in a money market fund or laddered CDs and withdraw from it as needed rather than buying an SPIA. Yes, the SPIA will pay over your life however long (or short) that may be. But the probability of your outliving life expectancy is priced into the SPIA. As to your friend....does he hold any financial planning credentials other than a CFP or CPA/P...
by BruceM
Thu Aug 13, 2020 10:41 am
Forum: Personal Finance (Not Investing)
Topic: CFP - One-Time Consultation (to Generate Plan), Worth It?
Replies: 22
Views: 1429

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

Dabretty Being a retired CFP let me offer this. Household financial planning is much more than investing. In fact, through the use of indexes and uncomplicated long term need, the investing portion of a plan is often the easiest part of the plan. Here are other plan components that are often more complicated but every bit as important. Catastrophic insurance. It does no good to plan for investment growth if a catastrophic loss claims much of your savings. Life and disability insurance to replace lost income, property and casualty (liability) to prevent losses from accidents you are responsible for. (note: I was fee only and never sold any insurance) Debt management, to include revolving credit, student debt and other consumer debt An Estate...
by BruceM
Wed Aug 05, 2020 11:47 am
Forum: Personal Finance (Not Investing)
Topic: Good (and bad) decisions/tips for home remodel?
Replies: 54
Views: 5614

Re: Good (and bad) decisions/tips for home remodel?

1. Since my spouse and I both work full-time we should hire a general contractor, correct? Yes. If you contract it, the subs....if you can find them....will see you as a one-off event and likely put you at the bottom of their priority....meaning they may not show up when scheduled. Worth it to pay a contractor who has his own subs he relies on. 4. We aren't sure whether to stay in the home during construction or move out. If you were in a two story and only the first floor was getting renovated then I'd say stay upstairs. But on a major renovation I think I'd be looking either for family members as temp space, a motor home or a hotel that rents monthly. 5. If you've remodeled, were you happy with the end result? Yes, quite happy.....but I ...
by BruceM
Sat Jun 22, 2019 12:17 pm
Forum: Personal Investments
Topic: VNQ (REITS) - Tax Rate On Capital Gains?
Replies: 7
Views: 1402

Re: VNQ (REITS) - Tax Rate On Capital Gains?

j
I wrote an article https://seekingalpha.com/article/396335 ... e-accounts a few years ago on the various tax characters of dividends with a bit more detail than my response above, that you may find interesting. The changes between then and now is the tax brackets and box 5 of the 1099-DIV that identifies 199A dividends of REITs, 20% of which are deductible.

BruceM
by BruceM
Fri Jun 21, 2019 12:58 am
Forum: Personal Investments
Topic: VNQ (REITS) - Tax Rate On Capital Gains?
Replies: 7
Views: 1402

Re: VNQ (REITS) - Tax Rate On Capital Gains?

A bit more clarification on REIT dividends in taxable accounts Per the 1099-DIV, REITs can have multiple tax characteristics, to include.... Ordinary Dividends, most of which will be ordinary income Qualified Dividends, represent that part of Ordinary Dividends that represent REIT income subject to tax. Usually a small amount, if any Long Term Capital Gains, represent the net appreciation on the value of properties the REIT has sold. Note these are capital gains as part of the REITs dividend which is different than, but for tax purposes are included with, capital gains reported on the 1099-B which represent Capital Gains from your sale of shares. Also note that capital losses are not distributed by REITs and any short term capital gains in ...
by BruceM
Mon Jan 21, 2019 3:11 pm
Forum: Personal Consumer Issues
Topic: Costco 'Goodyear' wiper blades
Replies: 51
Views: 19159

Re: Costco 'Goodyear' wiper blades

I'm coming into this discussion late, but it popped up on a google search for Costco Wiper blades.

This is the second set I've put on my 2005 Nissan Frontier in the last 2 years, both Goodyear from Costco....and I drive this truck fewer than 8,000 miles a year.

Has anyone tried RainX or Hella. Both get very good star ratings at Amazon with lots of votes.

Question: do all blades mount on the arm the same way?

Thanks

BruceM
by BruceM
Fri Nov 09, 2018 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 181
Views: 28219

Re: IRS publishes draft 2018 1040 - Huge changes made

There will also be an updated 1099-DIV that adds box 5 to identify QBI from REITs.

https://www.irs.gov/pub/irs-pdf/f1099div.pdf

However, not sure how K-1s from MLPs will be handled. An eye-ball scan of the 2017 and 2018 1065s don't seem to show any difference....so unless there is a change, I'd imaging the MLP QBI will be box 1?

[OT comment removed by admin LadyGeek]

BruceM
by BruceM
Tue Oct 16, 2018 10:31 am
Forum: Investing - Theory, News & General
Topic: The Section 199A Tax Benefits Of REITs Over Direct Real Estate Investments at Kitces.com by Jeffrey Levine
Replies: 38
Views: 6124

Re: The Section 199A Tax Benefits Of REITs Over Direct Real Estate Investments at Kitces.com by Jeffrey Levine

Have you ever had to file amended tax returns because of mis-reporting by the reits before? I haven't, but for many, yes, that used to be quite common many years ago. My brokerage (Fidelity) would send out the 1099-DIV summary in late February, and then send out one, two or even three amended 1099-DIVs as some REITs would correct their own 1099s. So a few years ago, Fidelity sent out notice that their 1099-DIV would come out in mid to late March. Since then, they have not sent out an updated 1099-DIV. I generally owe a balance when I file so I typically delay filing until the second week of April anyway. But for those who get refunds each year and who want to file sooner than later, this could be an issue. This will be particularly true fo...
by BruceM
Mon Oct 15, 2018 10:57 am
Forum: Investing - Theory, News & General
Topic: The Section 199A Tax Benefits Of REITs Over Direct Real Estate Investments at Kitces.com by Jeffrey Levine
Replies: 38
Views: 6124

Re: The Section 199A Tax Benefits Of REITs Over Direct Real Estate Investments at Kitces.com by Jeffrey Levine

Since the late 90's I created my own REIT mutual fund, currently holding 21 Equity REITs, including preferred stock, in a taxable account. This provides a large part of our required household income. Needless to say, Sec. 199A will be a windfall to those who do what I do. But the challenge here is to estimate what the deduction will be. Here's what I've found so far, after reading this article a couple of weeks ago and speaking with a couple of the IR reps at the REITs I hold.... The Qualifying Business Income is not the REIT dividend....for most, it will only be part of it. The shareholder must reduce the dividend by any capital gains or "Non-Dividend" (read: Return of Capital) that is part of the dividend, as well as any 'qualif...
by BruceM
Mon Oct 15, 2018 10:24 am
Forum: Investing - Theory, News & General
Topic: Income/Dividend-paying investment in taxable?
Replies: 3
Views: 1585

Re: Income/Dividend-paying investment in taxable?

I decided to add some income/dividend investment to my accounts. I have brokerage and IRA accounts in Fidelity. I was thinking DGRO in taxable. Is this the right choice? or should I hold dividend-paying investments in IRA. If so there are other choices to consider for IRA not just DGRO but FAGIX,MLQD,LQD,HDV. Any reason not to hold DGRO in taxable? Not sure what DGRO stands for, but how you allocate and where you hold investments really depends on what it is your trying to accomplish. If you are retired and your goal is income from investments and you treat dividends as investment income, and the stocks/funds you hold are C-Corporations then you'd likely be better off holding them in a taxable account due to the preferential tax treatment ...
by BruceM
Sat Sep 08, 2018 3:31 pm
Forum: Personal Finance (Not Investing)
Topic: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?
Replies: 34
Views: 5414

Re: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?

As a F/U to my post above. As I mentioned, I've been retired from the industry for several years and my comment is based on my experience. But for fun...and I probably should have done this first before responding above...I went to the EJ web site and linked to two local EJ offices and browsed their web sites. The Dodd-Frank act of 2010 mandated a fiduciary standard of all "Financial Advisors", which largely targeted Series 7 broker-dealers but also insurance product salesmen who 'advise' on retirement plans and IRAs. In the pantheon of bad ideas, this kind of legislation will percolate up to the top of some not only bad but also silly ideas. I mean, trying to mandate commissioned salesmen suddenly become fiduciaries who act first...
by BruceM
Fri Sep 07, 2018 12:07 pm
Forum: Personal Finance (Not Investing)
Topic: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?
Replies: 34
Views: 5414

Re: Could One Work For Edward Jones and Put Clients in Boglehead Portfolios?

The last 20 years or so I have wanted to be a financial advisor. I am, however, a committed Boglehead and understand the sheer difficulty in running an advisor business that adheres to Boglehead principles. Could a person work for Edward Jones/Massmutual/et al. and put their clients in index funds/other Boglehead type investments? Those places all have index funds/term life/etc available for their customers. Or do places like Edward Jones force their employees to churn/load/whole life their clients? Having retired from this industry as a Fee-Only CFP.... I'll assume you really wish to be a financial planner. 'Financial Advisor' can be, and usually is, anyone with any (including no) formal training in matters of personal finance. Eddie Jone...
by BruceM
Fri Sep 07, 2018 11:48 am
Forum: Investing - Theory, News & General
Topic: Dividend variances per quarter
Replies: 6
Views: 1217

Re: Dividend variances per quarter

US companies typically pay dividends quarterly, but a mutual fund (open end, closed end or ETF) may pass through dividends monthly, quarterly, semiannually or annually. They may have a policy of passing them through as they receive them or holding them to a later date. Another variable is the paying of fund expenses, which is usually not done evenly over the year. Another variable are capital gains realized by the fund, although these are usually paid out in the 4th quarter. One more variable is the timing of the buying and selling of dividend paying stocks by the fund relative to the stock's Ex-Dividend date. I mean, its possible for a fund to buy and sell stocks in the short term getting 2 or 3 (or more) dividends paid on the same investe...
by BruceM
Fri Aug 03, 2018 10:35 am
Forum: Personal Finance (Not Investing)
Topic: IRMAA and MAGI Definition Confusion
Replies: 7
Views: 1436

Re: IRMAA and MAGI Definition Confusion

Yes....a Roth conversion made in 2016 if recharacterized, must be done by Oct 15 of 2017. A Roth conversion made in 2017 has until Oct 15, 2018 to be recharacterized. Roth conversions done in 2018 through 2025 may not be recharacterized.

BruceM
by BruceM
Thu Aug 02, 2018 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: IRMAA and MAGI Definition Confusion
Replies: 7
Views: 1436

Re: IRMAA and MAGI Definition Confusion

The table on page 2 of the Congressional Research Service will probably answer your question on how to calculate the right MAGI

https://fas.org/sgp/crs/misc/R43861.pdf

BruceM
by BruceM
Wed Jul 04, 2018 12:41 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 181
Views: 28219

Re: IRS publishes draft 2018 1040 - Huge changes made

Section 199A(b)(1) defines "Combined Qualified Business Income" as consisting of qualified business income plus "20 percent of the aggregate amount of the qualified REIT dividends and qualified publicly traded partnership income of the taxpayer for the taxable year". Qualified REIT dividends are dividends from a REIT that are neither a capital gain dividend nor qualified dividend income. My (limited) understanding is that this applies to individual REITS but not to funds. Is that your understanding? Yes...and most I've read consider this an oversight, as there is no reason a mutual fund cannot pass through the QBI component of the REIT dividend. Most of the accounting web sites see this as part of technical corrections ...
by BruceM
Sun Jul 01, 2018 11:54 am
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 181
Views: 28219

Re: IRS publishes draft 2018 1040 - Huge changes made

Bruce, The 20% deduction will apply to "qualified business income". REIT dividends and income from publicly traded partnerships (MLPs) are excluded from the definition of qualified business income. IRC Sec 199A(c)(1) Bruce, Another provision of Sec 199A may provide more clarity. 199A defines "qualified business income" as the "net of qualified items of income, gain, deduction or loss from a qualified trade or business of the taxpayer." In the definition of "qualified items of income, gain, deduction, or loss", Sec 199A(c)(3)(B) specifically excludes: "any dividend, income equivalent to a dividend, or payment in lieu of a dividend". Given this language, I don't see any validity to a claim th...
by BruceM
Fri Jun 29, 2018 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 181
Views: 28219

Re: IRS publishes draft 2018 1040 - Huge changes made

One new adjustment on page 2 of the 1040 is line 9 for “qualified business income deductions (see instructions)” which I assume is for the 20% small business deduction under Section 199A. The following is all I could find on line 9, from the WSJ https://www.wsj.com/articles/the-new-1040-tax-form-its-shorter-but-there-are-more-forms-to-fill-out-1530178201 The new line 9 is the deduction for qualified business income, the 20% deduction for income earned by pass-through businesses such as partnerships and S corporations. Details and crucial regulations on what income qualifies for the break haven’t been written yet. There has been quite a bit written on how this will be determined for small business...but I've seen almost nothing written on h...
by BruceM
Fri Jun 29, 2018 11:24 am
Forum: Personal Finance (Not Investing)
Topic: IRS publishes draft 2018 1040 - Huge changes made
Replies: 181
Views: 28219

Re: IRS publishes draft 2018 1040 - Huge changes made

One new adjustment on page 2 of the 1040 is line 9 for “qualified business income deductions (see instructions)” which I assume is for the 20% small business deduction under Section 199A. The following is all I could find on line 9, from the WSJ https://www.wsj.com/articles/the-new-1040-tax-form-its-shorter-but-there-are-more-forms-to-fill-out-1530178201 The new line 9 is the deduction for qualified business income, the 20% deduction for income earned by pass-through businesses such as partnerships and S corporations. Details and crucial regulations on what income qualifies for the break haven’t been written yet. There has been quite a bit written on how this will be determined for small business...but I've seen almost nothing written on h...
by BruceM
Sat Jun 09, 2018 4:35 pm
Forum: Personal Finance (Not Investing)
Topic: Home Insurance : H03 Vs H05 policy types
Replies: 27
Views: 9188

Re: Home Insurance : H03 Vs H05 policy types

Wow....didn't even remember this posting..... :happy Yes, your analysis is correct. The HO-5 should be any peril except exclusions, which you need to be aware of. You don't mention where you live, but I understand excluding of cosmetic damage of hail in the SE U.S. is now excluded on most HO forms and wind damage may have a large deductible. As part of your research, you may want to check with your state insurance commissioner's consumer affiairs office. They will often provide data on claims rates, claims denial rates, average time to settlement and other useful consumer information on insurers doing business in your state. You could do this through an independent agent, as they tend to be very knowledgable on what works best for your stat...
by BruceM
Thu May 31, 2018 8:43 pm
Forum: Personal Finance (Not Investing)
Topic: Beach condo vs mountain cabin investment property
Replies: 30
Views: 4751

Re: Beach condo vs mountain cabin investment property

We hold both. Developable land offering seclusion and privacy near a large body of water or tall mountains will almost certainly grow in value over the decades ahead. Do you want this for long term investment or future development purposes?

BruceM
by BruceM
Mon May 07, 2018 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: Want an HSA but have Tricare Prime
Replies: 8
Views: 4928

Re: Want an HSA but have Tricare Prime

We retired USAF in 1998 and have been on TriCare Prime and TriCare Select (formerly TriCare Extra/Standard) up until age 65 when we got coverage from Medicare. Here's our experience.... If you live in an area covered by TriCare Prime (many geographic areas of the US do not offer Prime), then your Annual Premium is $578.16 for retired member, spouse and any dependents. For this annual premium, there is no deductibles, with $20 to $60 copay depending on the service, and a $150 charge per hospital admission. Rates are higher if you go out of the Prime network. If you do not reside in a Prime area, then you pay no annual premium but you will have an annual deductible of, I believe $300/family, and then copays. If you have not, take a look at th...
by BruceM
Mon May 07, 2018 12:28 pm
Forum: Personal Finance (Not Investing)
Topic: How much should I save or would be available for health care in retirement?
Replies: 43
Views: 6125

Re: How much should I save or would be available for health care in retirement?

Early in January on a routine dental visit (usually in January and July) my Kaiser dentist spotted a cracked molar for which there were not yet any symptoms. She x-ray'd it again and dug around and said she thought a crown would likely take ok as it seemed the crack was not yet to the base of the tooth. So in Feb she installed a gold crown. Cost to me: $520. Cost my sister paid for same thing at local dentist 2 years prior with no dental insurance: $1,260. The $700+ savings makes up most of the $1,056 annual premium for DW and I for this coverage. Add to this savings what we are not paying for routine cleaning and x-rays, and I figure it only takes one major dental procedure each year for either of us along with the savings on eye glasses f...
by BruceM
Mon May 07, 2018 12:11 pm
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

Thanks....I hope it helps. The hard part for an accumulator who has spent a lifetime investing for total return where share price is the center of every measure, whether managed or passive, and who wishes to transition to an income only method of generating long term reliable income, is letting go of total return. Its easy to say, but very hard to actually do, as lifetime methods have deep roots. BruceM Why would you let go of total returns? You still need to know what is happening to your assets, maybe even more than before. Simply because capital appreciation is a low priority investment goal. Our primary goal is reliable and growing income over retirement years. A legacy to our estate is not a goal. Our estate will almost certainly leav...
by BruceM
Mon May 07, 2018 9:47 am
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

Thanks....I hope it helps.

The hard part for an accumulator who has spent a lifetime investing for total return where share price is the center of every measure, whether managed or passive, and who wishes to transition to an income only method of generating long term reliable income, is letting go of total return. Its easy to say, but very hard to actually do, as lifetime methods have deep roots.

BruceM
by BruceM
Sun May 06, 2018 3:45 pm
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

In September 2017, I started a combined dividend portfolio following the My 7.5% Income Portfolio ( https://seekingalpha.com/article/4098771-7_5-percent-income-portfolio ) and then adding some additional CEFS stocks, (1) Market Fund & ETF's. So far, I have seen the portfolio value fluctuate within 2.5% up & down, but Even with the ups and downs in the stock market my dividend portfolio is still on target to average 7 to 8 % annual dividend yield :D - I'm hoping it will continue to do that. Percent / Symbol / Security 1.47% ABBV - AbbVie Inc 2.09% APPL - Apple Inc 2.95% ARCC - Ares Capital Corp 3.01% T - AT&T Inc 1.34% MCI - Barings Corporate Investors 2.09% BGH - Barings Global Short Duration High Yield 1.62% BIF - Boulder Grow...
by BruceM
Sun May 06, 2018 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: How much should I save or would be available for health care in retirement?
Replies: 43
Views: 6125

Re: How much should I save or would be available for health care in retirement?

Regular dental insurance is rarely very beneficial. Most plans have a maximum payout of $1500-2000. I sign up for the basic plan at work because there is no premium but the plans with premiums don't cover much more than the basic and the return on premium is quite bad. "Dental Insurance" really has nothing...or very little...to do with insurance. Its a cost sharing scheme, that over time you'll spend more on than if you'd just called around and shopped for the lowest costs for routine (X-rays and cleanings) and periodic dental proceedures (crowns, root canals, extreactions, bridges, etc). We added to the Kaiser Senior Advantage MA plan, the "plus" plan that for $88/mo for both of us, for which we get the dental coverage...
by BruceM
Fri May 04, 2018 11:57 am
Forum: Personal Finance (Not Investing)
Topic: How much should I save or would be available for health care in retirement?
Replies: 43
Views: 6125

Re: How much should I save or would be available for health care in retirement?

I understand that Medicare has premiums and right now don't have a lot of health issues. I assume I can rely on Medicare, but probably not. Maybe that's where an HSA is advantageous, but since I have no health issues, not sure what extra costs would be. What are your thoughts or your experience here? For most, the principal medical cost at age 65 and older are insurance premiums. For example, a couple hitting 65 this year will pay $3,216 in Part B premiums, assuming no IRMAA premium increase. If they then use a Medicare Supplement, such as United Healthcare Plan F at $122/mo each = $2,928, and then a Part D plan at $40/mo each = $960 yr, total $7,104.......or.......pay the Part B premium and then enroll in a Medicare Advantage plan, which ...
by BruceM
Mon Apr 30, 2018 3:29 pm
Forum: Personal Investments
Topic: Is it worth it to dissolve this inherited annuity?
Replies: 33
Views: 4020

Re: Is it worth it to dissolve this inherited annuity?

Hi Steve You are paying considerably more than the 125bp M&E expense they're showing you. You're right, its almost impossible to try to discern how much you're actually paying in fees and expenses on such products....and it is not this way by accident. A way to approximate all fees is to kind of back into the calculation. I do this by recreating the portfolio allocation you've shown, but used Vanguard ETFs. VOO for large cap, VO for midcap, VB for smallcap, VWO for emerging markets, VNQ for REITs and BND for fixed income, using the percent allocation you've shown (this comes out to be 98% allocation, so I'd assume the other 2% was in cash, which I ignore in this calc). Per Morningstar, the weighted portfolio return for 2017 was 14.66%. ...
by BruceM
Mon Apr 16, 2018 2:39 pm
Forum: Personal Finance (Not Investing)
Topic: Minimizing taxes for 2018
Replies: 12
Views: 2277

Re: Minimizing taxes for 2018

Hi Kathys Assuming 1. you are using Form 1040 2. your only Above-The-Line deductions are the IRA contributions 3. the total income you are showing is represents all of your ordinary income (wages, net self employment, interest, non-qualified dividends) 4. your itemized deductions are less than $24,000 (MFJ) 5. you and/or spouse are not yet age 65 or older 6. you have no other employer benefit deductible withholding than retirement plan salary deferrals 7. you operate a business that is organized as a pass-through entity (Proprietorship, LLC or partnership), 8. the $10,000 you show as 'Business Expense' is either for non-reimbursed employee business expenses...OR.... has already been taken into account in arriving at net business profit that...
by BruceM
Sun Apr 15, 2018 3:43 pm
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

Would be fun to chat with you and your strategy, but I know it is not typical BH fodder. Yes, it isn't typical BH fodder, but I consider myself of the BH strain. I don't listen to middlemen, I keep expenses lower than any BH investor and I rely only on objective measures I take right off the Statement of Cash Flows (the corporate check book). Once purchased, I ignore price and keep focused on trends in cash flows for those dividend paying stocks I hold. Its an approach to providing retirement income that requires focus and discipline. You may be interested in reading my book on this subject....(I hope the BH Police don't mind my posting this link) https://www.amazon.com/Retirement-Investing-Income-ONLY-Dividends-ebook/dp/B00O28ELH4/ref=sr_...
by BruceM
Sat Apr 14, 2018 11:01 am
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

It is dangerous to go without healthcare insurance. Quite a lot of people don't think so, but that's politics, so we cannot discuss it. It isn't about politics--the financial risk of a catastrophic illness can easily exceed the entire cost of a total loss on a home. And for someone who likes to race cars that risk is that much higher. As financial insolvency risks go, for most households, its auto liability risk that should be the first risk mitigated, as not adequately insuring this risk can put a household into financial insolvency quickly. Protracted and expensive medical need can also be quite costly to the household, but for those without the insurance to mitigate this risk, there are numerous non-profit foundations, particularly for ...
by BruceM
Sat Apr 14, 2018 10:42 am
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

Hi Cyclingduo Curious about a couple of things if you wouldn't mind addressing. But it requires the discipline to focus on income only, which is much harder than it sounds. What part of it is much harder than it sounds? What is difficult if not impossible for most wanting to adopt a pure income approach is letting go of total return and ignoring the price movement of the dividend paying stock...but in my experience, one has to do this. Example: if stock X is paying a dividend of $Y, the company is in a stable industry, the company has a wide moat and a study of company cash flows shows the dividend to be well covered, as the dividend grows, so will the stock price. However, the price will fluctuate along the way. The income investor must te...
by BruceM
Fri Apr 13, 2018 10:58 am
Forum: Personal Investments
Topic: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?
Replies: 93
Views: 26964

Re: How can I Invest 4 million dollars to earn 120k (inflation adjusted) a year for life?

Hi nocisko The answer to your question of how to invest $4MM to generate a REAL $120K for life (REAL = Inflation adjusted), really depends on your overall investment goals. These goals need to speak to the following: 1. Reliability of Income (consistency of income through economic cycles and portfolio survivability) 2. Liquidity (the ability to convert your investments into cash with short notice and without loss of principal) 3. Preservation of Capital for later years or to estate 4. Willingness to self-manage 5. Ability/Willingness of others (spouse/children/investment advisor) to manage if you are unable 6. Valuation volatility (psychological) It is the answer to these questions that will drive what you invest in and how it is managed. O...
by BruceM
Thu Apr 12, 2018 11:01 am
Forum: Personal Finance (Not Investing)
Topic: Form 8606 and Turbotax
Replies: 7
Views: 906

Re: Form 8606 and Turbotax

Yes, then short of doing a 1040X (which you'd have to file manually anyway) or deleting the 2016 TT file and redoing it (ugh!), you're probably going to have to keep the hardcopy of the 8606 for future reference. Fortunately, TT lets you override its record of TIRA basis when you do a withdrawal or Roth conversion.

I suggest including this 8606 for you (and for spouse if applicable) in a file that is accessible to your heirs. We keep our most recent 8606s in our estate plan notebook. This way if we're run over by a truck, our kids won't end up paying tax twice on the same dollars they withdraw from our TIRAs.

BruceM
by BruceM
Thu Apr 12, 2018 10:06 am
Forum: Personal Finance (Not Investing)
Topic: Form 8606 and Turbotax
Replies: 7
Views: 906

Re: Form 8606 and Turbotax

Wrongfunds
I would have gone back and finished the 2016 return in TT, entering the TIRA non-deductible contribution and from that, generated the 8606. The TT file you saved for that year would then load the next year as you begin your 2017 return, and so the 8606 info would be carried forward.

Just being curious: why contribute after tax to a TIRA? Does your AGI put you over the max for contribution to a Roth IRA or are you 70.5 or older?

BruceM
by BruceM
Thu Mar 29, 2018 5:55 pm
Forum: Investing - Theory, News & General
Topic: Fisher Investments hard sell
Replies: 40
Views: 51353

Re: Fisher Investments hard sell

"I wonder how they pay for all that expensive advertising and agents that go to your house......"

AUM fees on accounts that require minimal hourly commitment are extremely lucrative. A $1MM IRA, once set up, will require maybe 5 man-hours per year of investment management time with today's technology. At an AUM fee of 1.5%, that's $3,000 an hour. 'Regular' financial planning offices will typically offer a number of financial planning services along with the investment management for 100bp.
by BruceM
Fri Aug 28, 2015 12:47 pm
Forum: Personal Investments
Topic: Dividend investment
Replies: 17
Views: 2689

Re: Dividend investment

However, these are behavioral issues on the investor side of things That, in my view, is exactly correct. For C-Corporations and LLCs filing as corporations where the dividend is elective, the dollars used to pay a dividend as opposed to retaining those dollars and used in company Investing Activities at a Cap Rate the market will reward with periodic price appreciation for the periodic selling of shares, net of transaction costs, will provide...OVER TIME...the same income benefit to the retired investor requiring the income as will investing solely for the company's dividend. The operative here is over time. Certainly, one could use cash buckets to smooth out the periodic sales, although this does introduce a timing factor, potential oppo...
by BruceM
Thu Aug 27, 2015 10:57 am
Forum: Personal Investments
Topic: Dividend investment
Replies: 17
Views: 2689

Re: Dividend investment

I've come across a few blogs that advocate dividend investment. One particular one shows a person making a little over $1800 a month off dividends. What's the consensus on this? I wouldn't mind getting 1800 a month but does it make tax reporting a hassle? We have been living off dividends + Federal Pension for the past 14 years of our retirement (we're delaying SS). This is called....or at least I call it....a pure income approach to retirement investing. It is a different approach to providing sustainable and growing income during retirement and requires its own unique investment discipline. It works well as long as it is managed correctly. But this requires, in my experience, letting go of the tenets of total return and adopting a refocu...
by BruceM
Sat Feb 14, 2015 2:13 pm
Forum: Personal Finance (Not Investing)
Topic: Hancock increasing rates on LTC
Replies: 55
Views: 4531

Re: Hancock increasing rates on LTC

I should have been more clear with this. The premium increase we had was expected and optional. The policy offers a 3% annual inflation adjustment. To get that inflation adjustment you need to pay a higher premium. I am OK with that. That increase was no where near 90%. What I am worried about is one day getting a notice from John Hancock saying our premiums are doubling and we get no increase in benefits. What I fear will become the greatest concern to QLTCI polcies in the decades ahead is denial of claim. The insured will be near the end of life, being unable to do 2 of 6 ADLs or a cognitive disorder, either of which means they will be ill-equipped to deal with the insurer if their claim is denied. This means that for most, the children ...
by BruceM
Mon Jun 17, 2013 12:07 pm
Forum: Personal Investments
Topic: John Bogel: The Problem with 401(k)s
Replies: 2
Views: 1335

Re: John Bogel: The Problem with 401(k)s

Thanks....missed it
by BruceM
Mon Jun 17, 2013 2:06 am
Forum: Personal Investments
Topic: John Bogel: The Problem with 401(k)s
Replies: 2
Views: 1335

John Bogel: The Problem with 401(k)s

An interview with Christine Benz as a sort of clarification of what he said on the recent Frontline Special

http://www.morningstar.com/cover/videoc ... UTUALFUNDS

BruceM
by BruceM
Fri Jun 14, 2013 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question [Social Security income and fund distributions]
Replies: 6
Views: 1047

Re: Tax Question

If a person is 65 years old and has 16k income from Social Security how much can they have in Vanguard Target Retirement 2015 Fund (VTXVX) before they would pay taxes? This is all taxable money. Social Security is there only income. Provisional Income (PI), used to calculate how much of one's SS benefit will be includable as ordinary income, = 1/2 SS + Modified AGI + any mini bond interest. For a single person, if this exceeds $25,000 but is less than $34,000, then the lesser of 1/2 of SS or 1/2 the amount the PI exceeds $25,000 will be includable as ordinary income. So with an AGI (I assume there are no above-the-line deductions and no muni bond interest) of X and 1/2 SS = $8,000, the above formula would mean X= 25,000 - 8,000 = 17,000 fr...
by BruceM
Fri Jun 14, 2013 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Using SIMPLE IRA for First Time Home Buyer Downpayment
Replies: 23
Views: 3370

Re: Using SIMPLE IRA for First Time Home Buyer Downpayment

MMc7 Because you have had contributions made to the SIMPLE over 2 years ago, you may roll over the balance to any other IRA custodian you wish without tax or penalty....and from your description, the sooner, the better. Yes, the Franklin Growth Fund (FKGRX) has underperformed both the S&P 500 and the large growth index over the past 1 and 3 years, according to Morningstar. And note, this will not include any other fees or charges assessed against your account. And I believe that you can direct all future contributions to your SIMPLE go directly to your IRA....you do not have to wait to the end of the year. But you will need to check your SIMPLE plan description to verify this. Although you don't have a lot in this plan, it is still tax ...