Search found 10301 matches

by KlangFool
Sat Nov 10, 2018 9:23 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs. Traditional 401k
Replies: 124
Views: 5704

Re: Roth vs. Traditional 401k

OP,

It is very simple.

Max up the Trad. 401K and put the tax savings into the Roth IRAs. It is the best of both worlds. You get both: tax-deferred account and Roth. Roth 401K is the wrong answer for most people.

KlangFool
by KlangFool
Sat Nov 10, 2018 5:28 pm
Forum: Investing - Theory, News & General
Topic: "Rules-Based Risk Management System" = Market Timing = Momentum/Trend Following?
Replies: 64
Views: 3181

Re: "Rules-Based Risk Management System" = Market Timing = Momentum/Trend Following?

That said, I still agree with The hard part is developing a strategy that will work in the future. There is no strategy that is guaranteed to work in the future. Even if we have decent evidence that it really was a thing in the past (not just data mining), it's well possible that the market simply ...
by KlangFool
Sat Nov 10, 2018 2:02 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund in my situation
Replies: 17
Views: 1550

Re: Emergency fund in my situation

OP, 1) A better question would be under your circumstances, why you cannot afford a larget emergency fund? 2) What is the interest rate of your mortgage? 3) I keep 1 year of the emergency fund. My portfolio is at 20 times my annual expense. My portfolio is big enough that I can afford to keep 1 yea...
by KlangFool
Sat Nov 10, 2018 12:53 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency fund in my situation
Replies: 17
Views: 1550

Re: Emergency fund in my situation

OP, 1) A better question would be under your circumstances, why you cannot afford a larget emergency fund? 2) What is the interest rate of your mortgage? 3) I keep 1 year of the emergency fund. My portfolio is at 20 times my annual expense. My portfolio is big enough that I can afford to keep 1 year...
by KlangFool
Sat Nov 10, 2018 11:55 am
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

However, OP never says he wants to retire early or use Roth for college expenses. OP could save up separately for college expenses in a 529 or even taxable account or even pay from his salary when kids go to college. coupleofcents, << OP could save up separately for college expenses in a 529 >> At ...
by KlangFool
Sat Nov 10, 2018 11:32 am
Forum: Investing - Theory, News & General
Topic: This man can predict when bubbles burst: time to time the market?
Replies: 145
Views: 10516

Re: This man can predict when bubbles burst: time to time the market?

...Do you honestly think that people work for decades on behalf of their society or country? Come on... Yes. I do. I honestly think that. I really do. Some people. +1,000. The most famous member of my family died of abject poverty. His words are still read by millions of people after thousands of y...
by KlangFool
Sat Nov 10, 2018 10:45 am
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

IRA contributions reduce your AGI but the phaseout is based on MAGI, right? So I think the 403b helps, but the IRA doesn’t. I think... From IRS site: If you file Form 1040, refigure the amount on the page 1 "adjusted gross income" line without taking into account any of the following amounts. IRA d...
by KlangFool
Sat Nov 10, 2018 10:27 am
Forum: Investing - Help with Personal Investments
Topic: Roth vs traditional for lower income maid
Replies: 8
Views: 750

Re: Roth vs traditional for lower income maid

Thanks for the replies. I don't know how much they work with their friend who does their taxes or how knowledgeable that person is. I don't want to get into their personal business. I do know that for 25 years they sent money back to Peru to help their family. Now the wife is considered evil becaus...
by KlangFool
Fri Nov 09, 2018 8:29 pm
Forum: Investing - Theory, News & General
Topic: Would you still jump if you were ready, then the market dropped 50%??
Replies: 40
Views: 4612

Re: Would you still jump if you were ready, then the market dropped 50%??

Yes, we cannot be prepared for everything. But, if you are prepared for more than 10 years and you still have a problem, it is no longer a money problem. Do you have enough physical gold to get yourself to somewhere else? This is what I do. It is part of my plan. Finances/the numbers are one thing,...
by KlangFool
Fri Nov 09, 2018 6:51 pm
Forum: Investing - Help with Personal Investments
Topic: Strategy during the last stock market decline
Replies: 58
Views: 6032

Re: Strategy during the last stock market decline

OP,

50% of my portfolio was in the Vanguard Lifestrategy Moderate Growth Fund (60/40). The other 50% was in the Wellington Fund (65/35). They rebalanced themselves every day.

KlangFool
by KlangFool
Fri Nov 09, 2018 5:20 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

OP, If you early retired, you need 5 years of expense in your Roth IRAs and emergency fund in order for Roth conversion ladder to work. Then, you need some money in the Roth IRAs for your kid's college education. You have only 11K per year of Roth IRAs to work with. After all said and done, is it w...
by KlangFool
Fri Nov 09, 2018 3:23 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

OP, If you early retired, you need 5 years of expense in your Roth IRAs and emergency fund in order for Roth conversion ladder to work. Then, you need some money in the Roth IRAs for your kid's college education. You have only 11K per year of Roth IRAs to work with. After all said and done, is it wo...
by KlangFool
Fri Nov 09, 2018 1:59 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

How come? In retirement/early retirement I can't see myself pulling out more than 75k/year. Right now I'm paying 22% taxes on Roth contributions. justinpmhnp, 1) What is the size of your emergency fund? 2) How do you plan to pay for your kid's college education? 3) You need to be employed long enou...
by KlangFool
Fri Nov 09, 2018 1:53 pm
Forum: Investing - Theory, News & General
Topic: Take taxes into account when rebalancing?
Replies: 44
Views: 2230

Re: Take taxes into account when rebalancing?

When one rebalances based on bands does one just rebalance to the band limit? Or does exceeding the band limit trigger full rebalance to the target AA? Seems like the former might be more appropriate when you having to pay taxes to rebalance. I researched the band rebalance thing and did not see an...
by KlangFool
Fri Nov 09, 2018 1:35 pm
Forum: Investing - Help with Personal Investments
Topic: Traditional or Roth IRA for spouse and I
Replies: 28
Views: 1587

Re: Traditional or Roth IRA for spouse and I

How come? In retirement/early retirement I can't see myself pulling out more than 75k/year. Right now I'm paying 22% taxes on Roth contributions. justinpmhnp, 1) What is the size of your emergency fund? 2) How do you plan to pay for your kid's college education? 3) You need to be employed long enou...
by KlangFool
Fri Nov 09, 2018 12:35 pm
Forum: Investing - Help with Personal Investments
Topic: Roth vs traditional for lower income maid
Replies: 8
Views: 750

Re: Roth vs traditional for lower income maid

I was discussing retirement with our maid who is in her 60s. She and her husband have never heard of IRAs. They are fairly recent legal immigrants. They have no retirement accounts or 401ks. I discussed the advantages of traditional IRAs and Roth IRAs and referred them to Vanguard. The husband will...
by KlangFool
Fri Nov 09, 2018 12:30 pm
Forum: Investing - Theory, News & General
Topic: Take taxes into account when rebalancing?
Replies: 44
Views: 2230

Re: Take taxes into account when rebalancing?

Your math is over my head, but I get the big concept. This discussion comes up every so often here. My own feeling, which has often been confirmed by others, is never (or perhaps ALMOST never) rebalance anything that requires paying tax to do so. The drag of the permanently lost tax paid is general...
by KlangFool
Fri Nov 09, 2018 10:19 am
Forum: Investing - Theory, News & General
Topic: Take taxes into account when rebalancing?
Replies: 44
Views: 2230

Re: Take taxes into account when rebalancing?

Your math is over my head, but I get the big concept. This discussion comes up every so often here. My own feeling, which has often been confirmed by others, is never (or perhaps ALMOST never) rebalance anything that requires paying tax to do so. The drag of the permanently lost tax paid is general...
by KlangFool
Fri Nov 09, 2018 10:15 am
Forum: Investing - Theory, News & General
Topic: Take taxes into account when rebalancing?
Replies: 44
Views: 2230

Re: Take taxes into account when rebalancing?

I have been playing around with using after-tax values for rebalancing. Roth funds need no reduction so the after-tax multiplier factor is 1 For tax-deferred, the factor is about 0.7325 for me. That's assuming a 22% federal marginal tax plus my state tax rate. For taxable, the factor is about 0.9 w...
by KlangFool
Thu Nov 08, 2018 4:12 pm
Forum: Investing - Theory, News & General
Topic: Would you still jump if you were ready, then the market dropped 50%??
Replies: 40
Views: 4612

Re: Would you still jump if you were ready, then the market dropped 50%??

Why use the word "should"? Can your fixed income portion support at least 5 years of expense? 10 years? 20 years? I had been through many recessions/economy crisis. "Should" is not good enough for me to "Sleep Well At Night" (SWAN). In my opinion, if you are retiring, your fixed income portion shou...
by KlangFool
Thu Nov 08, 2018 11:09 am
Forum: Personal Finance (Not Investing)
Topic: If expenses are low, are some of us over saving?
Replies: 120
Views: 11660

Re: If expenses are low, are some of us over saving?

Helpful to hear from everyone and seems that at least some see it the same way I do. I’m not suggesting no savings or extreme lifestyle creep. I’m suggesting that a couple earning $250k, who might be paying a $4k mortgage and maxing 2 401k’s is “living on” less than $100k/year after taxes, mortgage...
by KlangFool
Thu Nov 08, 2018 10:41 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Then of course there is the obvious problem that people who currently make $2mm income undoubtedly don't live like the Millionaire Next Door. These would be investment bankers, executives and sports/entertainment figures. MindBogler, There are exceptions to every rule. You could be a US ex-pat in t...
by KlangFool
Thu Nov 08, 2018 9:43 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Folks, My saving rate is based on my annual expense. I save 100% of my annual expense every year because I want to reach my goal in less than 25 years. The reason why I use this saving rate and method is that I want to balance saving and spending. I save as much as I spend is a good balance for me. ...
by KlangFool
Thu Nov 08, 2018 8:50 am
Forum: Investing - Theory, News & General
Topic: Would you still jump if you were ready, then the market dropped 50%??
Replies: 40
Views: 4612

Re: Would you still jump if you were ready, then the market dropped 50%??

Have this thought now and again. We're planning to walk away in ~ 2 years and this is something I'm trying to come to grips with now. With a 55/45 AA we should should have enough to weather most storms. I think I would still jump (with wobbly knees). What would you do? Better yet, did this happen t...
by KlangFool
Wed Nov 07, 2018 8:11 pm
Forum: Personal Finance (Not Investing)
Topic: If expenses are low, are some of us over saving?
Replies: 120
Views: 11660

Re: If expenses are low, are some of us over saving?

The thread on Baby Boomer savings brought this to mind. For a higher earning couple, assuming they’re debt free and have a paid off home at retirement, why not aim to have expenses be at/below the expected Social Security benefit? Assuming that’s ~$3k to cover property taxes, healthcare, food, tran...
by KlangFool
Wed Nov 07, 2018 8:08 pm
Forum: Personal Finance (Not Investing)
Topic: If expenses are low, are some of us over saving?
Replies: 120
Views: 11660

Re: If expenses are low, are some of us over saving?

OP,

I know that I will not be fully-employed until 62 years old. I had been unemployed for more than 1 year a few times. So, unless and until I reach at least 62 years old or have enough money to survive until 62 years old, I do not know that I save enough.

KlangFool
by KlangFool
Wed Nov 07, 2018 3:51 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

I have no idea why some believe that savings rate is meaningless. Nothing could be further from the truth. Your savings rate is closely linked to how long it will take you to reach financial independence (FI), a major goal for most Bogleheads. Assuming 5% real returns and a 4% withdrawal rate, it w...
by KlangFool
Wed Nov 07, 2018 8:51 am
Forum: Personal Finance (Not Investing)
Topic: Is it more advantageous to live in HCOL or LCOL area in terms of financial independence?
Replies: 180
Views: 10997

Re: Is it more advantageous to live in HCOL or LCOL area in terms of financial independence?

I don’t see how many people live in LCOL areas could afford to invest in properties in California. Which is the catch. The higher earnings in a HCOL area allow you greater leverage in the real estate market that someone in a LCOL area could most likely never obtain. Similar to the 401k matching and...
by KlangFool
Tue Nov 06, 2018 5:49 pm
Forum: Investing - Theory, News & General
Topic: This man can predict when bubbles burst: time to time the market?
Replies: 145
Views: 10516

Re: This man can predict when bubbles burst: time to time the market?

OP,

I prepared for a market crash plus unemployment lasting 5 years. It could happen at any time. But, it won't matter to me. So, why do you need to rely on any prediction when you can be prepared instead?

KlangFool
by KlangFool
Tue Nov 06, 2018 3:01 pm
Forum: Investing - Help with Personal Investments
Topic: Save tuition money or fund 401(k)?
Replies: 10
Views: 893

Re: Save tuition money or fund 401(k)?

An MS can often be done while working. I did it twice. Many companies will pay the tuition in that case. If he's going to go full time, then likely he will get teaching or research assistant stipends. +1. So, there is no reason why he should pay and/or save money for his master degree. KlangFool
by KlangFool
Tue Nov 06, 2018 3:00 pm
Forum: Investing - Help with Personal Investments
Topic: Save tuition money or fund 401(k)?
Replies: 10
Views: 893

Re: Save tuition money or fund 401(k)?

chipperd wrote:
Tue Nov 06, 2018 5:12 am
Probably time for your son to start job shopping for an employer who will pay for grad school
+1.

KlangFool
by KlangFool
Tue Nov 06, 2018 1:09 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

This thread reminds me of the net worth threads. Someone asks "How do you calculate X?" Without establishing what the Value X is being used for. The varying opinions seem do to the fact this value is being used in different ways (savings rate: is it to calculate retirement progress or to compare to...
by KlangFool
Tue Nov 06, 2018 1:07 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Current annual expense excluding taxes (Social Security, Medicare, Federal income, and State income) and college education expenses. KlangFool That's what I always figured, but wanted to clarify it. We've been on a tear the past few years trying to match that discipline. What about your 25X figure ...
by KlangFool
Tue Nov 06, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

OP, I calculate my saving rate based on my current annual expense. I save 100% of my annual expense every year. It makes zero sense to calculate the saving rate based on income. KlangFool Hey, Klang - you always post the 100% of annual expenses every year and I like the premise. Question for you: i...
by KlangFool
Tue Nov 06, 2018 10:18 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

To repeat something I said earlier, everyone's calculation will be a bit different, what is important is to pick a target that will allow you to reach your goals, however it is calculated. Picking one based on expenses is certainly sensible. But it it isn't all that different than a percent of inco...
by KlangFool
Tue Nov 06, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Just to be clear, in my system, the taxes include Federal and state income taxes too. Those numbers could be found easily from the payslips and tax filing. But how does it make sense to exclude these particular types of taxes (income and payroll taxes), but not others (sales & consumption taxes) ? ...
by KlangFool
Tue Nov 06, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Just to be clear, in my system, the taxes include Federal and state income taxes too. Those numbers could be found easily from the payslips and tax filing. But how does it make sense to exclude these particular types of taxes (income and payroll taxes), but not others (sales & consumption taxes) ? ...
by KlangFool
Tue Nov 06, 2018 8:37 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

1) It is not 50% of gross income. The taxes include social security, Medicare, state, federal. So, it is about 20% or more. It is probably around 30% to 40% of gross income. 2) My expense does not include taxes. 3) If I include college expenses, I save nothing. KlangFool Well, that's certainly a co...
by KlangFool
Tue Nov 06, 2018 7:44 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

1) It is not 50% of gross income. The taxes include social security, Medicare, state, federal. So, it is about 20% or more. It is probably around 30% to 40% of gross income. 2) My expense does not include taxes. 3) If I include college expenses, I save nothing. KlangFool Well, that's certainly a co...
by KlangFool
Mon Nov 05, 2018 6:10 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking a balanced, aggressive portfolio
Replies: 25
Views: 1184

Re: Seeking a balanced, aggressive portfolio

I know there is an overlap between my VTSAX and VFINX. But I want to keep my VFINX inside my ROTH to avoid the tax hit. Plus, I'm capped on contribution at 5000 per year. Where else am I going to put my extra money? ---- Into a conservative VTTHX target fund that earns only 4% per year? Not going t...
by KlangFool
Mon Nov 05, 2018 6:09 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking a balanced, aggressive portfolio
Replies: 25
Views: 1184

Re: Seeking a balanced, aggressive portfolio

This is what I have and seeking to hold for the next 20 years. VTSAX - total stock market VFINX- vanguard 500 VTMFX - tax managed VHDYX - dividend fund It is 89% stocks/ 11% bonds. Any recommendations to balance out portfolio to protect my downside in case market tanks again? I had VTTHX, but sold ...
by KlangFool
Mon Nov 05, 2018 6:03 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking a balanced, aggressive portfolio
Replies: 25
Views: 1184

Re: Seeking a balanced, aggressive portfolio

I know there is an overlap between my VTSAX and VFINX. But I want to keep my VFINX inside my ROTH to avoid the tax hit. Plus, I'm capped on contribution at 5000 per year. Where else am I going to put my extra money? ---- Into a conservative VTTHX target fund that earns only 4% per year? Not going t...
by KlangFool
Mon Nov 05, 2018 4:50 pm
Forum: Investing - Help with Personal Investments
Topic: Seeking a balanced, aggressive portfolio
Replies: 25
Views: 1184

Re: Seeking a balanced, aggressive portfolio

This is what I have and seeking to hold for the next 20 years. VTSAX - total stock market VFINX- vanguard 500 VTMFX - tax managed VHDYX - dividend fund It is 89% stocks/ 11% bonds. Any recommendations to balance out portfolio to protect my downside in case market tanks again? I had VTTHX, but sold ...
by KlangFool
Mon Nov 05, 2018 3:11 pm
Forum: Personal Finance (Not Investing)
Topic: Teaching kids there is an ample amount of money
Replies: 108
Views: 7954

Re: Teaching kids there is an ample amount of money

My message to kids is that you are destitute unless you develop the abilities and work capacity to do something that other people are willing to trade their money for. No one owes you anything. You have no right to anything. But if you develop the right skills and work ethic, you can take care of y...
by KlangFool
Mon Nov 05, 2018 2:24 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

I calculate my saving rate based on my current annual expense. I save 100% of my annual expense every year. It makes zero sense to calculate the saving rate based on income. Isn't this the exact same thing as saying that you're saving 50% of net income? No. It is hard to calculate net income. And, ...
by KlangFool
Mon Nov 05, 2018 2:01 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

Huh, it's a bit of an "Aha" moment for me. I've been reading about people's savings rates for years and always assumed they meant net. Talking about it in terms of gross income makes zero sense to me. Two people with the same savings rate may have vastly different times required to retire. My savin...
by KlangFool
Mon Nov 05, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

I calculate my saving rate based on my current annual expense. I save 100% of my annual expense every year. It makes zero sense to calculate the saving rate based on income. Isn't this the exact same thing as saying that you're saving 50% of net income? No. It is hard to calculate net income. And, ...
by KlangFool
Mon Nov 05, 2018 11:46 am
Forum: Investing - Theory, News & General
Topic: Do people calculate savings rate on gross income?
Replies: 118
Views: 7345

Re: Do people calculate savings rate on gross income?

OP,

I calculate my saving rate based on my current annual expense. I save 100% of my annual expense every year. It makes zero sense to calculate the saving rate based on income.

KlangFool
by KlangFool
Mon Nov 05, 2018 11:34 am
Forum: Personal Finance (Not Investing)
Topic: Mid-career change dilemma - STEM
Replies: 8
Views: 936

Re: Mid-career change dilemma - STEM/Engineering

OP, Some random answers to your random questions. 1) People hire people. If you had worked 15+ years, you know a lot of people. You could find out the hiring manager of each position and contact the person directly. Why do you need to go through HR? Lack of a STEM degree is only an issue if you dea...
by KlangFool
Mon Nov 05, 2018 10:22 am
Forum: Personal Finance (Not Investing)
Topic: Mid-career change dilemma - STEM
Replies: 8
Views: 936

Re: Mid-career change dilemma - STEM/Engineering

OP, Some random answers to your random questions. 1) People hire people. If you had worked 15+ years, you know a lot of people. You could find out the hiring manager of each position and contact the person directly. Why do you need to go through HR? Lack of a STEM degree is only an issue if you deal...