Search found 4486 matches

by Peter Foley
Thu Aug 02, 2018 3:27 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirement withdrawal strategy
Replies: 17
Views: 2741

Re: Early retirement withdrawal strategy

earlyretirebound The updated numbers you provided make me more comfortable with your plan. The 457 plan and the brokerage accounts will provide for the first years of withdrawals with no penalties. In combination you are likely to be able to keep your tax liability quite low. Will the pension increa...
by Peter Foley
Wed Aug 01, 2018 11:03 pm
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA investing
Replies: 3
Views: 359

Re: Inherited IRA investing

RMD's are just that, required minimum distributions. I agree that the account should be considered as part of one's overall asset allocation. Bonds are likely the right answer if you have room for them in your AA and you are going to be taking the minimums over a long time period. Much depends on wh...
by Peter Foley
Wed Aug 01, 2018 9:00 pm
Forum: Investing - Help with Personal Investments
Topic: Early retirement withdrawal strategy
Replies: 17
Views: 2741

Re: Early retirement withdrawal strategy

Again welcome. While the overall numbers look okay with regards to an early retirement, the location of those assets in accounts may be problematic. I only have vague plan on draw down account order… probably a mix of deferred comp, taxable, and HSA (as applicable to hard health costs outside of pre...
by Peter Foley
Wed Aug 01, 2018 5:26 pm
Forum: Investing - Help with Personal Investments
Topic: Help set my investing mindset right with where to go managing Millions?
Replies: 11
Views: 1167

Re: Help set my investing mindset right with where to go managing Millions?

For very early retirement you will need to have funds in taxable accounts. I agree that that account should be your primary focus with your SEP account and back door Roths as secondary and tertiary savings/investing vehicles.
by Peter Foley
Wed Aug 01, 2018 11:54 am
Forum: Personal Consumer Issues
Topic: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?
Replies: 96
Views: 9226

Re: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?

Minneapolis is currently a mess because of road construction. This is especially true for areas south of downtown. With the 35W freeway closed local streets are filled with commuters to the southern suburbs.
by Peter Foley
Mon Jul 30, 2018 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: Use attorney or software for simple will
Replies: 35
Views: 2699

Re: Use attorney or software for simple will

I think with 3 million it might be difficult to consider the range of possibilities and ramifications of decisions with respect to specific accounts without professional help.
by Peter Foley
Mon Jul 30, 2018 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: Asking for help with his and her 401k investment options
Replies: 7
Views: 635

Re: Asking for help with his and her 401k investment options

You could greatly simplify this if you looked at the tax deferred accounts as a single portfolio. For example, there is no need for both of you to hold an index 500 fund. Ruralavalon suggested a very diversified, but simple makeover. +1 I might be inclined to hold a mid-cap or small cap (or both) to...
by Peter Foley
Mon Jul 30, 2018 4:01 pm
Forum: Investing - Help with Personal Investments
Topic: Allocation in Taxable acct.
Replies: 11
Views: 961

Re: Allocation in Taxable acct.

If you have the ability to hold more bonds in a tax deferred account I would hold a lower percentage and fewer bond funds in taxable. Also, I would be inclined to hold some I-bonds.
by Peter Foley
Sun Jul 29, 2018 10:19 am
Forum: Investing - Help with Personal Investments
Topic: Roth conversion questions
Replies: 17
Views: 1591

Re: Roth conversion questions

Celia wrote: You will pay the same amount of taxes on the tIRA withdrawal whether it is used for living expenses or converted to Roth. So if you don't need it for living expenses, it is a no-brainer to convert it so it can continue growing tax-free. Start by converting the asset(s) that is/are expec...
by Peter Foley
Sat Jul 28, 2018 7:11 pm
Forum: Investing - Help with Personal Investments
Topic: Your age in bonds?
Replies: 57
Views: 6649

Re: Your age in bonds?

gmaynardkrebs wrote: I think the bond = age rule has some real problems at the younger and older ends. For retirees, with bonds paying so little, how are they going to live off of a 62%-90% bond portfolio that pays 2% or 3%? For younger people 20-35 years old, 20%-35% bonds seems too high, when they...
by Peter Foley
Sat Jul 28, 2018 7:03 pm
Forum: Investing - Help with Personal Investments
Topic: Roth conversion questions
Replies: 17
Views: 1591

Re: Roth conversion questions

I have a rolling 5 year plan that we have been following. We have been retired for 6 years, ages 67.5 and 63. We have done Roth conversions every year to the extent that we would just bump into the next marginal tax bracket (15% to 25%). Taxes were paid from a taxable account. We are at a point wher...
by Peter Foley
Sat Jul 28, 2018 6:54 pm
Forum: Investing - Help with Personal Investments
Topic: Retirees: how much cash?
Replies: 61
Views: 6638

Re: Retirees: how much cash?

Using Rick Ferri's definitions of working capital: Age 67.5, retired 6 years with a pension that covers about half of our annual spending needs. We average holding about 6 months worth of cash. This fluctuates a bit during the year. I only replenish cash when I get down to about 2-3 months worth of ...
by Peter Foley
Wed Jul 25, 2018 11:24 am
Forum: Investing - Help with Personal Investments
Topic: Investments during retirement
Replies: 5
Views: 699

Re: Investments during retirement

Wellesley is a possibility. It has a long history and is conservatively invested.
by Peter Foley
Wed Jul 25, 2018 10:16 am
Forum: Investing - Theory, News & General
Topic: When Buckets Really aren’t Buckets.
Replies: 18
Views: 1962

Re: When Buckets Really aren’t Buckets.

WormWood I find no fault in your approach IF you have substantial other retirement savings and IF you have considered the tax consequences of accessing these accounts. It sounds like these funds are separate from your main retirement account. Is you main retirement account strictly tax deferred or i...
by Peter Foley
Wed Jul 25, 2018 10:06 am
Forum: Investing - Help with Personal Investments
Topic: Precious Metals ETF
Replies: 11
Views: 738

Re: Precious Metals ETF

Do a little research on Harry Brown's "Permanent Portfolio." It has evolved a bit over time: Harry Brown Permanent Portfolio: Original configuration S&P 500 stocks, the longest Treasury bonds, Spot Gold, money market funds. Revised: 35% government securities, 20% gold bullion, 15% aggressive growth ...
by Peter Foley
Tue Jul 24, 2018 8:46 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement Portfolio Advice-State DB/457b/Roth IRA
Replies: 7
Views: 528

Re: Retirement Portfolio Advice-State DB/457b/Roth IRA

No reason to hold Bonds in a Roth if you can hold them in tax deferred space (457b). Unless the expense ratios are high, why not hold the Roth 403b? It might simplify accounting over the long term and would allow you to make contributions directly if there comes a time when your income does not allo...
by Peter Foley
Mon Jul 23, 2018 8:00 pm
Forum: Personal Consumer Issues
Topic: Coast to Coast 2-3 Week Road Trip
Replies: 16
Views: 1984

Re: Coast to Coast 2-3 Week Road Trip

Somewhat based on Toons map the Black Hill and Devil's Tower would be on the route. There is a fair amount to see in Western South Dakota.

Oops - I forgot. The Corn Palace?
by Peter Foley
Mon Jul 23, 2018 7:50 pm
Forum: Investing - Help with Personal Investments
Topic: Looking for assistance simplifying retirement accounts
Replies: 14
Views: 1279

Re: Looking for assistance simplifying retirement accounts

I agree with the suggestion to move to Vanguard, Fidelity, or Schwab. If you live in a larger city and want in person meetings from time to time, Schwab has local offices. I have used Schwab for a number of years so I have direct experience with the following: If you are going to make a transfer it ...
by Peter Foley
Mon Jul 23, 2018 5:31 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Review & Feedback - Help Needed!
Replies: 15
Views: 1393

Re: Portfolio Review & Feedback - Help Needed!

Overall I like your fund choices although as retiredjg points out you could stand some simplification. I too would recommend putting some of the cash into a back door Roth. By the way, take it from a St. Paulite, Utopia is just across the river - the Mississippi, not the St. Croix. There is a strong...
by Peter Foley
Mon Jul 23, 2018 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Changes
Replies: 4
Views: 461

Re: Portfolio Changes

Probably not what you want to hear but you should really have at least 10% bonds unless you are talking about a total portfolio value of less than $50,000. I would be inclined to use the Schwab Total Stock Market index and then add the Small Cap Value if you want that tilt. If you put the Internatio...
by Peter Foley
Fri Jul 20, 2018 10:39 pm
Forum: Personal Finance (Not Investing)
Topic: Will my 529 contribution exceed the annual gift tax exemption?
Replies: 9
Views: 758

Re: Will my 529 contribution exceed the annual gift tax exemption?

47percent posted the key information needed in response to the OP's question. Just so it doesn't get missed here it is: Even if it is more than that, there is a special provision that allows you to bunch 5 years worth of gift exemption as long as it is used for contribution to 529. So you can transf...
by Peter Foley
Thu Jul 19, 2018 7:59 pm
Forum: Investing - Help with Personal Investments
Topic: Heresy: Is It Worth Converting tIRAs to Roth?
Replies: 46
Views: 4657

Re: Heresy: Is It Worth Converting tIRAs to Roth?

I have run a number of scenarios in both i-orp and RPM. Per the scenarios it is best to convert early as it takes many years to gain back the tax money you have paid out. I personally would be inclined to do a smallish conversion now just to get the clock rolling on your Roth accounts. Also, having ...
by Peter Foley
Wed Jul 18, 2018 10:49 pm
Forum: Personal Finance (Not Investing)
Topic: Options to lower my tax liability with RMD’s
Replies: 12
Views: 2054

Re: Options to lower my tax liability with RMD’s

Here is the template. I didn't post all five years but you can get the picture of my approach to withdrawal planning. My goals are to convert some IRA to Roth because Roths weren't available to us for all but a few years while employed. The second goal is to keep tax liability fairly level through t...
by Peter Foley
Tue Jul 17, 2018 11:03 pm
Forum: Personal Finance (Not Investing)
Topic: Options to lower my tax liability with RMD’s
Replies: 12
Views: 2054

Re: Options to lower my tax liability with RMD’s

Some rough numbers based on what you posted. 54K in income - I will assume that is your adjusted gross income. With a standard deduction of $24,000 you will have $30,000 in taxable income. The top of the 12% federal tax bracket is $77,400 in taxable income. The taxation of long term capital gains at...
by Peter Foley
Tue Jul 17, 2018 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Simple question on where to fund - 401k > IRA > what next
Replies: 20
Views: 1448

Re: Simple question on where to fund - 401k > IRA > what next

Does your wife plan to return to employment outside the home when your children reach a certain age? If yes and your current low taxation level is temporary, I would argue that some contribution to Roths would be in order. You could more heavily fund tax deferred accounts when there are two incomes ...
by Peter Foley
Mon Jul 16, 2018 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: A different take on retirement income: time segmentation
Replies: 179
Views: 12567

Re: A different take on retirement income: time segmentation

The Wizard hit on something that occurred to me while I was reading the thread. We are really talking about an investment approach for a select cross section of retirees here. Snowjob followed up with an insightful anecdote about how different retirees spend their time in retirement. Both hit on the...
by Peter Foley
Thu Jul 12, 2018 2:16 pm
Forum: Personal Finance (Not Investing)
Topic: What rate of return are you using for retirement projections?
Replies: 99
Views: 9793

Re: What rate of return are you using for retirement projections?

My retirement planning spreadsheet has two tabs. One tab is 4% real and the other is 7% real. I've used the same spreadsheet for a dozen years. I've never put much stock in the 7% tab. I chose to retire based on the projections from the 4% tab. That was in 2012 and I've been fortunate to have a good...
by Peter Foley
Thu Jul 12, 2018 2:07 pm
Forum: Personal Finance (Not Investing)
Topic: Question for pre-ACA Early Retirees and pre-ACA solo folks
Replies: 33
Views: 2005

Re: Question for pre-ACA Early Retirees

Both my wife and I retired a couple years before the ACA took affect. We both had options to continue with employer plans and, although a bit expensive we did so. The plan I am on also offered supplemental plans once one reached Medicare eligibility. I continued with that plan. It is not the cheapes...
by Peter Foley
Thu Jul 12, 2018 10:00 am
Forum: Investing - Help with Personal Investments
Topic: Inherited IRA slowly funneled into Roth IRA
Replies: 9
Views: 855

Re: Inherited IRA slowly funneled into Roth IRA

I agree that the full funding of two Roth IRAs from the inherited IRA is a good plan if you are able to stay in the 12% bracket. A potential bonus might be that one usually invests a Roth more aggressively than a traditional IRA. I would have the IRA invested in bonds as part of my bond allocation a...
by Peter Foley
Thu Jul 12, 2018 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 3178

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

MrBeaver You are correct in that some conversions are better in the long term. Sometimes, however, it takes many years. The retirement calculator that uses excel, Retiree Portfolio Model, has a output table that shows the break even point for Roth conversions in given scenarios. For me it is one of ...
by Peter Foley
Wed Jul 11, 2018 4:58 pm
Forum: Personal Finance (Not Investing)
Topic: Effect of Social Security when Retiring before Benefits Begin
Replies: 24
Views: 6043

Re: Effect of Social Security when Retiring before Benefits Begin

#Cruncher My terminology is probably imprecise. By tax discounted savings I meant to take one's tax deferred savings and discount it by one's combined federal and state tax rate. Because there is a bit of guesswork here one could use either the tax rate as calculated by tax software or one's margina...
by Peter Foley
Wed Jul 11, 2018 2:22 pm
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 3178

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

walkingdue: The Roth conversion amounts are somewhat arbitrary. They are intended to keep a couple well within the old 15% (new 12%) tax bracket. They are partially driven by a plan to delay SS benefits and convert sufficient assets so as not to jump into a much higher tax bracket and a higher level...
by Peter Foley
Wed Jul 11, 2018 1:11 pm
Forum: Personal Finance (Not Investing)
Topic: Retired, age 60 - Tax Plan. Please suggest improvements.
Replies: 30
Views: 3178

Re: Retired, age 60 - Tax Plan. Please suggest improvements.

I think you have done a good job. Here is a generic template that I created based on the "withdrawal strategy" plan I created. It has not been fully updated based on the new tax law. 2017: Assumption – Husband, age 65 retired with pension, wife age 60 part time work. Husband delay SS benefits. Adjus...
by Peter Foley
Wed Jul 11, 2018 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: Effect of Social Security when Retiring before Benefits Begin
Replies: 24
Views: 6043

Re: Effect of Social Security when Retiring before Benefits Begin

Interesting work. I appreciate your efforts with this spreadsheet and number crunching you have done. One weakness to the approach you propose is that not all withdrawals from "savings needed" are equal. Assuming retirement at age 60 and a need for a couple of $100,000 per year. (I'm cherry pricking...
by Peter Foley
Tue Jul 10, 2018 11:00 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring soon.....401K vs rollover to IRA?
Replies: 28
Views: 3256

Re: Retiring soon.....401K vs rollover to IRA?

inbox788 wrote: If you hold half in each, where do you draw RMDs? half and half or predominantly from one account or the other? Do you have to worry about turning off automatic RMDs in any accounts? Or making sure the tax agencies know you're taking out from one account and counting RMD on another? ...
by Peter Foley
Tue Jul 10, 2018 8:36 pm
Forum: Investing - Help with Personal Investments
Topic: Should I rollover 401 and 457? Newbie
Replies: 11
Views: 785

Re: Should I rollover 401 and 457? Newbie

My wife and I both have governmental 457b accounts. There are a host of issues here and I fear you are getting some advice that is imperfect (I'm being kind here) because of a lack of knowledge of 457 plans and their advantages. 1. It is your 457 plan, not your wife's. At your current age you can wi...
by Peter Foley
Mon Jul 09, 2018 5:18 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring soon.....401K vs rollover to IRA?
Replies: 28
Views: 3256

Re: Retiring soon.....401K vs rollover to IRA?

Perhaps a few years after you retire.

When you get to Required Minimum Distributions, Qualified Charitable Distributions in lieu of some or all of an RMD can be made from an IRA but not from a 401k. At some point it may be a good idea to hold some retirement funds in both types of accounts.
by Peter Foley
Sun Jul 08, 2018 10:47 am
Forum: Investing - Theory, News & General
Topic: Why 3-funds and not 4-funds or even 2-funds?
Replies: 56
Views: 4741

Re: Why 3-funds and not 4-funds or even 2-funds?

I'm not a believer in the 3 fund approach. The 3 fund approach offers ample diversification in stocks, but not in bonds. I am a believer in simplicity. Those with access to a good stable value fund can use that as a fourth. Others can round out/diversify their bond allocation by adding inflation pro...
by Peter Foley
Sat Jul 07, 2018 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Ratings of free online retirement income calculators
Replies: 8
Views: 1057

Re: Ratings of free online retirement income calculators

Thanks for the link Bob. Darrow Kirkpatrick's list is much more complete. As Kirkpatrick points out there are calculators with different levels of "fidelity". The MN Bogleheads did a review of calculators at a meeting about a year ago. ESPlanner Basic made the cut. Firecalc was another better rated ...
by Peter Foley
Fri Jul 06, 2018 11:44 am
Forum: Investing - Help with Personal Investments
Topic: Pension, Income needs, and Asset Allocation Question
Replies: 32
Views: 4871

Re: Pension, Income needs, and Asset Allocation Question

While I don't disagree with JW's approach, I'm close to a Case 4 scenario and set my AA to 45/55 shortly before retirement with the understanding that I would let it drift up if I had reasonable returns in the early years. I retired in 2012 and have had a good sequence of returns. I'm in the ballpar...
by Peter Foley
Wed Jul 04, 2018 8:05 pm
Forum: Investing - Help with Personal Investments
Topic: When is ok to change your IPS?
Replies: 21
Views: 1360

Re: When is ok to change your IPS?

Your list of reasons to make a change are sound. Making a change just in reaction to the market is not particularly advisable. I built changes into my first IPS to cover the period when I approached retirement.
by Peter Foley
Wed Jul 04, 2018 8:01 pm
Forum: Investing - Help with Personal Investments
Topic: General portfolio check up and question about 457 distribution
Replies: 2
Views: 333

Re: General portfolio check up and question about 457 distribution

I would hold the old 457b plan for now. A plan with a public university should be safe. I have a 457b as does my wife. The stable value funds offered are very good (my wife's a bit better than mine). For me the reason to hold the 457b account is that if you decide to retire early the funds can be wi...
by Peter Foley
Wed Jul 04, 2018 7:51 pm
Forum: Personal Consumer Issues
Topic: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?
Replies: 96
Views: 9226

Re: Thinking about moving to Madison, WI or Minneapolis, MN..Any advice?

What are your hobbies? Biking was mentioned in an earlier post. I've biked a fair amount in both cities and the Minneapolis/St. Paul trails are extensive, while Madison are good but a bit more limited. More theater, arts, concerts in a larger city with more venues. I live in St. Paul near the Minnea...
by Peter Foley
Mon Jul 02, 2018 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Does It Make Sense to Wait to Claim SocSec?
Replies: 62
Views: 7062

Re: Does It Make Sense to Wait to Claim SocSec?

Munemaker, JW, Wizard, et. al. I have mentioned this in other threads and will repeat it here. A round about way of "reducing RMD's" is to make qualified contributions to charities. This can be planned in advance so that it is relatively simple: I will have a IRA funded at a specific amount in advan...
by Peter Foley
Sat Jun 30, 2018 4:16 pm
Forum: Investing - Help with Personal Investments
Topic: Is it ok to invest in bonds?
Replies: 39
Views: 5042

Re: Is it ok to invest in bonds?

Using mortgage interest rates as a proxy . . . 1981 16% + then a long term downward trend to 3.6% in 2017. That is the past environment for interest rates in general. Falling interest rates are favorable for bonds. A 35 + year trend has essentially leveled off over the past 5 years or so. Something ...
by Peter Foley
Sat Jun 30, 2018 10:58 am
Forum: Investing - Help with Personal Investments
Topic: Is it ok to invest in bonds?
Replies: 39
Views: 5042

Re: Is it ok to invest in bonds?

Jester wrote: I would like to contribute a little more money to my bond index fund on a two year horizon to earn a little more than what I earn in my money market account (1.6%) but I worry about how an increase in interest rates may affect the fund. A two year time horizon is too short. You would b...
by Peter Foley
Fri Jun 29, 2018 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: Roth calculator?
Replies: 6
Views: 664

Re: Roth calculator?

The Retiree Portfolio Model is another excellent tool. It is a downloadable excel file. I find it a little more comprehensive than I-orp and does a better job for those who have a higher percentage of their total assets in tax deferred accounts. I've run a number of different scenarios to be able to...
by Peter Foley
Fri Jun 29, 2018 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Another Social Security Strategy Question
Replies: 11
Views: 1233

Re: Another Social Security Strategy Question

For him to claim restricted spousal benefits, does his wife have to file for hers?
by Peter Foley
Fri Jun 29, 2018 3:44 pm
Forum: Investing - Help with Personal Investments
Topic: Wellesley and Wellington performance on Simba's Backtest Spreadsheet
Replies: 6
Views: 828

Re: Wellesley and Wellington performance on Simba's Backtest Spreadsheet

I think any decision should take into account the fact that we have had falling interest rates for almost 30 years.
by Peter Foley
Fri Jun 29, 2018 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Does It Make Sense to Wait to Claim SocSec?
Replies: 62
Views: 7062

Re: Does It Make Sense to Wait to Claim SocSec?

A lot of good information has already been posted in response to the OP's question. I would summarize some considerations as follows: Health concern - does the early retiree have a normal life expectancy? Spouse - does the spouse have higher SS benefits? If yes, can the couple afford to delay benefi...