Search found 548 matches

by Independent
Tue Jun 09, 2015 4:26 pm
Forum: Personal Finance (Not Investing)
Topic: How to financially prepare to enjoy your best years?
Replies: 16
Views: 3477

Re: How to financially prepare to enjoy your best years?

Do other Bogleheads think this way and how are you approaching balancing this financially instead of just saying my expenses will best $X from here to eternity? Definitely. I mentally "carved out" additional dollars for spending in early retirement. In fact, it was more than "mentally" because I ha...
by Independent
Mon Jun 08, 2015 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: What Percent Of Your Annual Expenses Are Property Taxes?
Replies: 101
Views: 18984

Re: What Percent Of Your Annual Expenses Are Property Taxes?

The BLS gets thousands of people to fill out detailed spending reports. The average for 2013 ( for about 4,000 households , chosen to reflect US averages) was: Property tax: $2,867 Total spending: $56,652 Ratio: 5.1% (Spending includes principal payments on mortgages, but excludes FIT and payroll t...
by Independent
Mon Jun 08, 2015 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: Insurance check-up--do we need more?
Replies: 5
Views: 1049

Re: Insurance check-up--do we need more?

I think you've got the right analysis for DI. You'd like to maintain your lifestyle. The ins company doesn't want you to get "too comfortable". For someone with your income, there's an inherent conflict, as your income could provide an extremely comfortable lifestyle. My direct DI experience is too ...
by Independent
Mon Jun 08, 2015 1:30 pm
Forum: Personal Finance (Not Investing)
Topic: What Percent Of Your Annual Expenses Are Property Taxes?
Replies: 101
Views: 18984

Re: What Percent Of Your Annual Expenses Are Property Taxes?

The BLS gets thousands of people to fill out detailed spending reports. The average for 2013 ( for about 4,000 households , chosen to reflect US averages) was: Property tax: $2,867 Total spending: $56,652 Ratio: 5.1% (Spending includes principal payments on mortgages, but excludes FIT and payroll ta...
by Independent
Mon Jun 08, 2015 1:18 pm
Forum: Personal Finance (Not Investing)
Topic: How to financially prepare to enjoy your best years?
Replies: 16
Views: 3477

Re: How to financially prepare to enjoy your best years?

Do other Bogleheads think this way and how are you approaching balancing this financially instead of just saying my expenses will best $X from here to eternity? Definitely. I mentally "carved out" additional dollars for spending in early retirement. In fact, it was more than "mentally" because I ha...
by Independent
Sun Jun 07, 2015 2:35 pm
Forum: Personal Finance (Not Investing)
Topic: Insurance check-up--do we need more?
Replies: 5
Views: 1049

Re: Insurance check-up--do we need more?

Looking at the life insurance: If he dies, he leaves her with $800,000 of assets plus $1.1 million of employer-paid life insurance. And, that's on top of her $60,000 job. I can't imagine why anyone would "need" more. I understand that in his income bracket, $500 is only a half day's pay, but I'd dro...
by Independent
Sat Jun 06, 2015 4:03 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

On Monday, I'll make charts for this 0% fee case. This thread started on Saturday, May 16. Wade was good enough to respond to a number of comments, then said he wanted to do some further analysis. I think the thread kind of died as people waited for Wade to get back. I found an interview dated June...
by Independent
Sat Jun 06, 2015 3:29 pm
Forum: Personal Finance (Not Investing)
Topic: Retirement costs by David Blanchett
Replies: 4
Views: 1678

Re: Retirement costs by David Blanchett

I hope that any Boglehead realizes that the 70-80% replacement rule of the thumb is a poor substitute for actual planning. By the time we're 50, we should have a good handle on our actual spending and how that is likely to change by retirement. Paying off the mortgage, the kids becoming financially ...
by Independent
Sun May 31, 2015 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: Home and Auto Insurance Deductible
Replies: 10
Views: 2334

Re: Home and Auto Insurance Deductable

I'd assume that at any deductible level, the insurance company collects more in premiums than it pays out in claims. After all, they have to cover their expenses and they want to earn a profit. So, if you increase your deductible, the dollars you save in premiums are greater than the dollars of expe...
by Independent
Sun May 31, 2015 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: Your opinion on realistic income to live in a $1 million home?
Replies: 144
Views: 53839

Re: Your opinion on realistic income to live in a $1 million home?

"As a general guideline, your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income." The 28% has been around a long time for conventional mortgages. At 4% interest, and a 15 year amortization, a...
by Independent
Sat May 30, 2015 10:11 am
Forum: Personal Finance (Not Investing)
Topic: Can my husband retire yet?
Replies: 112
Views: 27167

Re: Can my husband retire yet?

We still have a mortgage about 132K-133K. The house is not included in our portfolio of 700K. We should be able to sell the house between 400K-450K. I don't know for a fact though because we never had an appraisal. I have 2 jobs total income of 90K. My husband doesn't really drink and he is not dep...
by Independent
Fri May 29, 2015 7:19 pm
Forum: Personal Finance (Not Investing)
Topic: Can my husband retire yet?
Replies: 112
Views: 27167

Re: Can my husband retire yet?

Okay, I'm getting caught up. So you're 35 with two small children and a 90k job that you like. That's about the median income for four person families. Presumably your $700k net worth includes a paid up house, so you don't have a mortgage payment. You should be able to afford an "average" US lifesty...
by Independent
Fri May 29, 2015 3:23 pm
Forum: Personal Finance (Not Investing)
Topic: Just general comments for a 22 y/o on financial position
Replies: 40
Views: 7684

Re: Just general comments for a 22 y/o on financial position

You say you wouldn't touch my money until I hit retirement. I understand that completely, its just theres one thing I need to purchase in the next year or two that I'm not sure I have the money for, and thats a car. I don't need a nice car, I just want a car worth around 5K or so that will work for...
by Independent
Fri May 29, 2015 2:52 pm
Forum: Personal Finance (Not Investing)
Topic: Can my husband retire yet?
Replies: 112
Views: 27167

Re: Can my husband retire yet?

My husband inheritance finally came through. He will receive it mid December of this year. This windfall will bring the portfolio to about 700K. After months of searching for job, we decide that he is just going to retire for good. He is 54 year old. I am working and bringing home 90K a year. Of co...
by Independent
Fri May 29, 2015 11:55 am
Forum: Personal Finance (Not Investing)
Topic: Pre-Retirement Guidance
Replies: 18
Views: 2883

Re: Pre-Retirement Guidance

My income has fluctuated pretty drastically throughout my life. Some years pretty high and some pretty low. I've also experienced one decent size liquidation event ($500k). My wife has not worked for the majority of her life. I'd love help learning how to estimate our SS so we can manage our expect...
by Independent
Fri May 29, 2015 9:36 am
Forum: Personal Finance (Not Investing)
Topic: Just general comments for a 22 y/o on financial position
Replies: 40
Views: 7684

Re: Just general comments for a 22 y/o on financial position

I have this charles schwab portfolio (see below) that will continue to grow at about on average 15% per year, and I'm unsure of when I should actually start taking money out of that. I'm thinking of using it on a vacation house potentially. Does anyone else have any other ideas? Or should I just no...
by Independent
Thu May 28, 2015 9:28 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-Retirement Guidance
Replies: 18
Views: 2883

Re: Pre-Retirement Guidance

Have you looked at your Social Security benefit? If you were retiring this year with average indexed annual earnings of $115,000, you'd have a PIA of about $33,000. I assume you'd get a similar inflation adjusted amount for your actual full retirement age (which appears to be 67). You could increase...
by Independent
Thu May 28, 2015 8:35 pm
Forum: Personal Finance (Not Investing)
Topic: Early/Earlier/Earliest Retirement?
Replies: 30
Views: 9934

Re: Early/Earlier/Earliest Retirement?

Independent, Do you mind explaining this one in more detail? The house is your long term care plan. Thanks! Luke is correct. I was figuring that, as a single person, you could sell the house to fund a few years of LTC. I had you buying a $325k house. Full nursing home costs are pushing $100k/year. ...
by Independent
Tue May 26, 2015 4:46 pm
Forum: Personal Finance (Not Investing)
Topic: Early/Earlier/Earliest Retirement?
Replies: 30
Views: 9934

Re: Early/Earlier/Earliest Retirement?

I'll agree with randomguy. You have enough money to retire today, if you stay in place. Here's my (similar) financial plan - Retire today and spend $325k of you taxable money on a house. (That seems adequate for a single person.) Your living expense goes down a little since taxes, insurance, utiliti...
by Independent
Mon May 25, 2015 7:05 pm
Forum: Personal Finance (Not Investing)
Topic: Do Bogleheads plan to utilize Independent Living facilities?
Replies: 108
Views: 12110

Re: Do Bogleheads plan to utilize Independent Living facilities?

...... CCRC's might have three levels of care - independent, assisted, and nursing. Care in any of them is guaranteed in exchange for a large initial entry fee plus some (lower) monthly fee. Are you certain of that? That care is guaranteed (underlining mine, not yours) in all of them, even with fai...
by Independent
Mon May 25, 2015 3:09 pm
Forum: Personal Finance (Not Investing)
Topic: Question about Taxes on Social Security
Replies: 28
Views: 4456

Re: Question about Taxes on Social Security

BL's link to TaxCaster might be helpful though I am not sure how reliable it is on fine points of SS taxable income. I prefer NBER's TaxSim online software (also free but less snazzy user interface): http://users.nber.org/~taxsim/taxsim9/ . Thanks for the link. I had to smile when I saw this is a F...
by Independent
Mon May 25, 2015 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: Question about Taxes on Social Security
Replies: 28
Views: 4456

Re: Question about Taxes on Social Security

I would like to get some additional feedback on my view of the Social Security "Break Even" concept. As stated above, when I suspend SS payments until 70 years of age, I am effectively leaving $100K uncollected. This would give me an extra $700 per month at age 70. But I have to collect that larger...
by Independent
Mon May 25, 2015 2:20 pm
Forum: Personal Finance (Not Investing)
Topic: Do Bogleheads plan to utilize Independent Living facilities?
Replies: 108
Views: 12110

Re: Do Bogleheads plan to utilize Independent Living facilities?

Not sure what the OP means. I have considered a CCRC simply because that would take the place of LTC insurance. .... Good point. I'm not sure, either. To me "independent living facility" refers to a level of care - generally one meal per day, light housekeeping, a van for local transportation, some...
by Independent
Mon May 25, 2015 11:56 am
Forum: Personal Finance (Not Investing)
Topic: Do Bogleheads plan to utilize Independent Living facilities?
Replies: 108
Views: 12110

Re: Do Bogleheads plan to utilize Independent Living facilities?

My mom lived in one for 15 years. It worked well for her. Some of her neighbors had a spouse in the adjoining nursing home. The ability to visit via a short indoor walk was a big deal to them. I'd certainly look at which services they provide and whether I could stay in a regular condo and buy those...
by Independent
Mon May 25, 2015 9:57 am
Forum: Personal Finance (Not Investing)
Topic: Do we need long-term care insurance?
Replies: 23
Views: 4732

Re: Do we need long-term care insurance?

I'll add one more vote to: "Don't see any point in buying a hybrid policy. Why pay for $150,000 of life insurance you don't need?"
by Independent
Sun May 24, 2015 2:59 pm
Forum: Personal Finance (Not Investing)
Topic: A different way of calculating when to retire
Replies: 26
Views: 3813

Re: A different way of calculating when to retire

Instead of having 25x or 33x or ?x annual expenses , what is your annual savings $ as % of previous year's net worth that would definitively tell you that your time is better spent enjoying your wealth rather than continuing to increase it? I think there's some confusion about "annual expenses". I ...
by Independent
Sat May 23, 2015 12:58 pm
Forum: Personal Finance (Not Investing)
Topic: The end of the nest egg
Replies: 30
Views: 9154

Re: The end of the nest egg

People who post here are accustomed to looking forward. If they retired in 1999 and suffered through some poor investment returns, they adjusted their spending. They simply aren't the type to spend blindly then run out completely. A better question might be "How much did you cut your spending in the...
by Independent
Sat May 23, 2015 12:51 pm
Forum: Personal Finance (Not Investing)
Topic: Calculating Future Finances? Quicken etc.
Replies: 8
Views: 1293

Re: Calculating Future Finances? Quicken etc.

I think it's a fine idea. However, if you're looking at "years" you might want to use Quicken Lifetime Planner instead. I assume it's set up for long term planning. I don't use QLP because I prefer to build my own worksheets (I think I understand the assumptions and methods better if I write them). ...
by Independent
Sat May 23, 2015 9:31 am
Forum: Personal Finance (Not Investing)
Topic: Does this inflation Calculator Make Sense ???
Replies: 12
Views: 2049

Re: Does this inflation Calculator Make Sense ???

Oh I certainly understand that it is an average. What I don't understand if the CPI for a year is X%, it would seem that a calculator would be pretty simple. If you want to see what $100 would buy after that year. Multiply X% by $100 giving you the Amount. What is "a year"? Do you want Dec 2013 to ...
by Independent
Fri May 22, 2015 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: Does this inflation Calculator Make Sense ???
Replies: 12
Views: 2049

Re: Does this inflation Calculator Make Sense ???

I'm with Nisiprius and Cruncher -- all these calculators are trying to regurgitate BLS numbers. If you want CPI data, just go to the source.

Note that you can get various categories broken out. I assume the low recent rates are due to low gasoline prices.
by Independent
Wed May 20, 2015 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Need Budgeting Help ASAP!
Replies: 42
Views: 7702

Re: Need Budgeting Help ASAP!

Others have talked about how to track actual spending. But, what's a "reasonable" plan? Nobody can tell you what you should spend, but one starting point for your own budgeting is what other people spend. This is a list from a couple hundred individuals who kept careful records of every expense. The...
by Independent
Mon May 18, 2015 1:40 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

I think I see what you mean, but I'll rephrase it for my own benefit. The median Scenario 3, before tax, "Legacy Wealth at Age 100", is $1.46 million. That number assumes that Steve lives to be 100. Susie probably died earlier, or may still be alive, but the important thing is that Steve makes it th...
by Independent
Sun May 17, 2015 9:16 am
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

On the subject about using the illustrated whole life policy in the simulations, this is something I considered a lot. For the median and 90th percentile outcomes for investments, I do think it is reasonable to expect that the illustration will hold. It may be harder for the illustration to hold in...
by Independent
Sat May 16, 2015 7:36 pm
Forum: Personal Finance (Not Investing)
Topic: How much does social security factor into your retirement income?
Replies: 169
Views: 43025

Re: How much does social security factor into your retirement income?

When I retired at 59 in 2006, I ran projections that assumed 100% of our SS benefits (I tried multiple claiming ages). I also assumed 100% of a private pension, and some ( small) real return on our investments. (and I also tried stochastic returns) This gave us plenty of cushion for unforeseen event...
by Independent
Sat May 16, 2015 2:57 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Wade Pfau explicitly says that he is not buying inflation-indexed SPIAs. That leads to higher initial payouts at the cost of keeping up with inflation. But, the 3.5% SWR rate assumes that the retiree will increase IRA withdrawals annually with inflation. So, when he compares income at age 65, he is ...
by Independent
Sat May 16, 2015 2:50 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Wade's investor has a 3.5% withdrawal rate, but is still losing 1.5% to fees in retirement. That means a Boglehead could withdraw 5% with the same amount of risk. Combining that with the higher returns means that the Boglehead can spend more than twice as much as Wade's ill-fated investor without t...
by Independent
Sat May 16, 2015 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 42
Views: 10760

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Well, the results of the paper are interesting. If your portfolio has an expense ratio of 1.59%. :shock: :shock: We also set mutual fund fees equal to the 0.84% average portfolio administration cost as determined by Morningstar in the same report. A financial advisory fee of 0.75% is also charged t...
by Independent
Thu May 14, 2015 8:48 pm
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

But, my impression is that the 2015 SPIA market is way too competitive to allow 15% loads. IMO, it's not quite right to think of this as a load. That implies that the insurance company and salespeople are making that much in profit, which I don't think they are. The fact is, an annuity is a much mo...
by Independent
Thu May 14, 2015 3:40 pm
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

Somehow, you saw the 80-85% but missed the 90-94%. I was interpolating. If you look on page 1308, table 3, you'll see that once you take insurer credit risk into account, the present value is around 85% even using the annuitant mortality table. Okay, that's what the paper says. But, my impression i...
by Independent
Thu May 14, 2015 9:45 am
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

All, thanks very much for your comments. A CD ladder could fund the $300 per month until age 76... I don't see how. Current rates on 5 year jumbo CDs are 2.25%. Assuming we buy a CD for the full $130,000 that yields $2,925.00 a year or $243.75 a month, unless my math is wrong. "CD ladder" suggest t...
by Independent
Thu May 14, 2015 9:34 am
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

This 1999 research paper by Mitchell, et al. took a crack at the problem and here's what they found: This paper presents new evidence on the expected discounted value of payments for annuity policies and compares the cost of purchasing an individual annuity contract. We find that the average annuit...
by Independent
Wed May 13, 2015 3:22 pm
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

She might consider withdrawing the absolute minimum for a few years hoping that a bit of growth in the market, and increases in interest rates , and just getting older will improve the yield for the SPIA. Note that if her money is in a "Target" fund, it may be heavily into bonds by now. If interest...
by Independent
Wed May 13, 2015 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: SPIA for mom?
Replies: 33
Views: 3930

Re: SPIA for mom?

If she "just started" SS, she could reverse her decision and defer to age 70. IMO, that's a better deal than a private SPIA. Her monthly benefit might go from $1,700 to $2,244. That's a CPI-adjusted life annuity that exceeds her $2,000/mo target. She would need to spend almost all her 403b to live b...
by Independent
Wed May 13, 2015 2:55 pm
Forum: Personal Finance (Not Investing)
Topic: Amount needed for medical expenses in retirement
Replies: 14
Views: 2768

Re: Amount needed for medical expenses in retirement

Have recently seen several excerpts touting that the average individual needs to have $364,000 set aside for medical expenses in retirement. This seemed way out of whack to me and was wondering if this was fear mongering, etc. With an individual having Medicare which covers 80% of medical and suppl...
by Independent
Tue May 12, 2015 1:32 pm
Forum: Personal Finance (Not Investing)
Topic: Define "Take Home Pay"
Replies: 15
Views: 3556

Re: Define "Take Home Pay"

Sounds simple, I know. But just out of curiosity how do you define it? I've always found it interesting that that term gets used all over the place as an "understood" figure that can be used for all sorts of affordability and other personal finance calculations, but to me that number can vary treme...
by Independent
Tue May 12, 2015 1:23 pm
Forum: Personal Finance (Not Investing)
Topic: New Math for Retirees and the 4% Withdrawal Rule
Replies: 96
Views: 21161

Re: New Math for Retirees and the 4% Withdrawal Rule

About TIPS, I remember that 5-10 yrs back TIPS were very frequently mentioned as a key part of a retirement portfolio. Now, they are rarely mentioned it seems. What happened? (I don't think I ever heard Mr. Bogle mention them much.) Real interest rates fell. Back when new TIPS had 3% coupons, it wa...
by Independent
Sat May 09, 2015 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: New Math for Retirees and the 4% Withdrawal Rule
Replies: 96
Views: 21161

Re: New Math for Retirees and the 4% Withdrawal Rule

One thing these studies do not address, insofar as I can tell, is how to "calculate" a SWR for folks who defer touching their stock/bond portfolios until age 85 or thereabouts.. The "studies" may not talk about that, but the calculators are flexible. For example, if I ask FireCalc to give me the hi...
by Independent
Sat May 09, 2015 9:13 am
Forum: Personal Finance (Not Investing)
Topic: New Math for Retirees and the 4% Withdrawal Rule
Replies: 96
Views: 21161

Re: NYT article on 4% retirement

The claim was "4% includes a fat margin of safety for all economic and market conditions ever previously experienced . This seems a little too strong to me. I think of FireCalc as a "typical" backtesting calculator. It shows a 5% failure rate over 30 years. There are some past years when a new reti...
by Independent
Thu Apr 30, 2015 8:49 pm
Forum: Personal Finance (Not Investing)
Topic: Finding the actuarial value of delaying SS benefits
Replies: 54
Views: 12043

Re: Finding the actuarial value of delaying SS benefits

Thanks. It turns out that I could read your documentation without loading the worksheet. You've obviously put serious effort into this. The only comment I'd make on mortality is that, AFAIK, the Social Security tables include all lives, including people living in hospices or with known, terminal ill...