Search found 1894 matches

by BigJohn
Tue May 28, 2019 6:41 pm
Forum: Investing - Theory, News & General
Topic: [Nominal] Annuities are a bet on future inflation rates and should not be purchased by retirees
Replies: 183
Views: 14436

Re: Annuities are a bet on future inflation rates and should not be purchased by retirees

While I understand the theoretical argument, from a practical perspective is it possible to by an inflation indexed SPIA? From comments I’ve read on this forum I thought not but would be glad to be pointed in the right direction.
by BigJohn
Tue May 28, 2019 6:30 pm
Forum: Investing - Theory, News & General
Topic: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run
Replies: 337
Views: 21718

Re: Excellent Larry Swedroe Podcast Interview: Factors For The Long Run

Most people don’t appreciate that a typical 60/40 portfolio has 85-90% of its risk wrapped up in a single factor. Dave, I’m still not sure that I see factors as diversifying assets with higher risk adjusted returns. But I’m curious as to how much diversification the factor gurus think you can reall...
by BigJohn
Wed May 22, 2019 3:29 pm
Forum: Personal Investments
Topic: $400,000 gift to stepdaughter
Replies: 76
Views: 9315

Re: $400,000 gift to stepdaughter

I think your plan to give a modest amount each year is the right thing to do. I think directing the max to her Roth is also a good idea. I gift my kids their Roth contribution each year with the only stipulation being that I get to look at their account balance before the next gift. As long as it’s ...
by BigJohn
Tue May 21, 2019 5:41 pm
Forum: Personal Finance (Not Investing)
Topic: Fair mortgage rate with great credit and 40% down payment?
Replies: 29
Views: 1581

Re: Fair mortgage rate with great credit and 40% down payment?

You used the word “fair” in your title but that’s really not the question. The question is are USAA’s rates competitive? I think you have enough info to conclude that they are competitive although there will certainly be some small differences from lender to lender. So the best you can do is take th...
by BigJohn
Tue May 21, 2019 5:13 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Measuring Value In Forecasts
Replies: 40
Views: 2506

Re: Larry Swedroe: Measuring Value In Forecasts

While not just on the topic of economic forecasting, I found this article on the value and accuracy of all “expert” forecasters interesting reading in my news feed his morning. The article doesn’t use the term but it sure sounds like most experts are more susceptible to confirmation bias than one wo...
by BigJohn
Mon May 20, 2019 5:09 pm
Forum: Personal Investments
Topic: Individual treasuries vs treasury funds
Replies: 41
Views: 4292

Re: Individual treasuries vs treasury funds

Funds are the lazy option. I'm happy to pay Vanguard seven basis points a year so I don't have to think about it. Works for me. Works for me as well. I agree with comments above that you can essentially accomplish about the same thing either way. However, a fund is more simple and convenient which ...
by BigJohn
Mon May 13, 2019 6:16 pm
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 12106

Re: Does your retirement plan work if stocks are flat or in decline for decades?

Protagonist, I understand and agree with you about Japan. However, I think this scenario in the US market would be far more wide reaching and far less likely to be just a one country issue. We are a much larger market with lots of multinationals so this scenario implies a much broader worldwide econ...
by BigJohn
Mon May 13, 2019 5:22 pm
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 12106

Re: Does your retirement plan work if stocks are flat or in decline for decades?

If stocks return nothing for decades , most likely the entire worldwide economic system has collapsed. So I'd have go with No. +1 Planning for this scenario seems overkill to me. I’d be financially better off than the vast majority of people but the smart investment for this scenario is probably a ...
by BigJohn
Mon May 06, 2019 5:54 pm
Forum: Investing - Theory, News & General
Topic: Should we discourage the bond tent?
Replies: 179
Views: 20512

Re: Should we discourage the bond tent?

I don't want a bond fund for this portion of my portfolio, as I view individual treasuries as more appropriate for this purpose. Something on the order of 5 years of treasuries, which will work within any AA with at least 20% bonds, and the remainder of bonds going into a bond funds. I agree with y...
by BigJohn
Sat May 04, 2019 4:16 pm
Forum: Personal Investments
Topic: Fidelity's Total Bond Index Fund vs Vanguard Total Bond Index vs. Vanguard Intermediate Bond Index
Replies: 5
Views: 3667

Re: Fidelity's Total Bond Index Fund vs Vanguard Total Bond Index vs. Vanguard Intermediate Bond Index

I had to make this decision a few years ago when I retired and rolled over my 401k. I choose intermediate term bond index because it has a relatively fixed ratio of Treasuries to Corp bonds while Total Bond can and does move around with the market. See this post for some details https://www.boglehea...
by BigJohn
Sat May 04, 2019 8:59 am
Forum: Investing - Theory, News & General
Topic: Should we discourage the bond tent?
Replies: 179
Views: 20512

Re: Should we discourage the bond tent?

When I was in my early 50’s, I planned to hold 60/40 through out retirement. Some reading about the potential for sequence of return risk convinced me that I should start retirement at closer to 40/60. Was this decision based upon statistical probability of a 40/60 success, or was it because 40% ga...
by BigJohn
Fri May 03, 2019 5:54 pm
Forum: Personal Finance (Not Investing)
Topic: Experience Donating Shares (Not using DAF)
Replies: 12
Views: 942

Re: Experience Donating Shares (Not using DAF)

Extra paperwork on my part is not an issue. I will take it as a learning experience. I would like to know how much of a stock donation may not upset the receiving party with the paperwork. Charities of my choice are usually large and deal with donation of stocks all the time, e.g., universities, mu...
by BigJohn
Mon Apr 29, 2019 4:29 pm
Forum: Personal Finance (Not Investing)
Topic: Do insurance cos need SS number to quote auto & home?
Replies: 10
Views: 905

Re: Do insurance cos need SS number to quote auto &

I got quotes for home, auto and umbrella last week from a national company and just gave them my age and birth month.
by BigJohn
Thu Apr 25, 2019 5:46 pm
Forum: Personal Finance (Not Investing)
Topic: Interest on ibonds
Replies: 23
Views: 1826

Re: Interest on ibonds

I used the pay every year method for the I bonds my kids received when they were young. They owed no more very little tax for most of their lives. Now that they are young adults they can cash them in and only pay taxes on the current years interest.
by BigJohn
Thu Apr 25, 2019 5:33 pm
Forum: Personal Investments
Topic: Close Vanguard and go all in with Fidelity?
Replies: 109
Views: 15069

Re: Close Vanguard and go all in with Fidelity?

As I have aged and gone thru some rough patches healthwise, I appreciate greatly having everything at one place, with fewer things to track and such. Plus, my intent is to make it easy for someone to fill my shoes at some point in time. There are no guarantees so far as DW and I leaving any legacy,...
by BigJohn
Tue Apr 23, 2019 3:32 pm
Forum: Personal Investments
Topic: Techniques for doing NOTHING?
Replies: 48
Views: 5147

Re: Techniques for doing NOTHING?

My two cents.... the best approach for any stressful situation is to generate your plan when there is no stress. Then when the stress hits, you just execute what you’ve already decided. Applying that approach to investing might yield the following kinds of things 1) If there is a minor stock correct...
by BigJohn
Mon Apr 22, 2019 2:19 pm
Forum: Personal Investments
Topic: Does my non-NUA plan make sense?
Replies: 7
Views: 606

Re: Does my non-NUA plan make sense?

I agree with your analysis and comments above. I pulled out NUA stock before rollover but only to the extent that the cost basis (about 20% of market value) was covered by after-tax contributions.
by BigJohn
Thu Apr 18, 2019 6:21 pm
Forum: Personal Finance (Not Investing)
Topic: In Laws Retirement Nest Egg
Replies: 156
Views: 16099

Re: In Laws Retirement Nest Egg

Thanks all. One thing I will mention... I am not a man, I am a woman, and these are my husbands parents I am talking about. I don't want to ruffle more feathers by suggesting that this makes a difference, but despite the strides our society has made for women and equality, there is still a slight s...
by BigJohn
Sat Apr 13, 2019 3:54 pm
Forum: Personal Finance (Not Investing)
Topic: Gifting mutual fund shares to a charity from Vanguard
Replies: 12
Views: 1266

Re: Gifting mutual fund shares to a charity from Vanguard

I donate stock from VG to charities annually. The charity does not need to fill anything out, you just need to get account info from them, fill in form and mail to VG. One potential complication with funds is that their brokerage needs to be able to accept and sell them. I donate stock so not an iss...
by BigJohn
Fri Apr 12, 2019 5:28 pm
Forum: Personal Finance (Not Investing)
Topic: Large AMT credit - how to use?
Replies: 3
Views: 523

Re: Large AMT credit - how to use?

I generated an AMT credit years ago for the same reason although not that large. The credit is only useable when your AMT tax is lower than your normal tax. I found it was not very useful when doing Roth conversion prior to 2018 because I usually ended up in a place with a very small difference betw...
by BigJohn
Thu Apr 11, 2019 5:27 pm
Forum: Personal Investments
Topic: Pro's and Con's to using one investment account!
Replies: 16
Views: 2103

Re: Pro's and Con's to using one investment account!

The biggest issue with one company holding all accounts is that if they are "hacked" or have other operational difficulties you are stuck till it gets sorted out. Some might decide to divide things up IRAs at one place and taxable account elsewhere. But ideally you would have taxable accounts (with...
by BigJohn
Sun Apr 07, 2019 8:05 pm
Forum: Personal Investments
Topic: TIPS Funds Dividend.
Replies: 8
Views: 1514

Re: TIPS Funds Dividend.

I agree it’s not a loss of return. However, I contacted my VG rep and confirmed that the dividends were kept in the fund and not paid out, at least for the IT funds. I gave her some feedback that including it on a page that starts with a statement that these funds are going to “distribute a quarterl...
by BigJohn
Fri Apr 05, 2019 12:46 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Estimating Future Tax Rates
Replies: 47
Views: 3235

Re: Roth Conversions - Estimating Future Tax Rates

As a match AGI person I’ll make the following comments. Your observations for this approach seem consistent with my situation. I did AGI matching of averages on 10 years each side of 70.5. My prediction is to end up at about 50/50 traditional/Roth and I see lots of benefits to having this diversity ...
by BigJohn
Thu Apr 04, 2019 6:00 pm
Forum: Investing - Theory, News & General
Topic: Good resources for liability matching
Replies: 21
Views: 2295

Re: Good resources for liability matching

I view inflation as one of the more significant risks in retirement and since I was mentioning non-inflation protected choices, I did not include them. Not sure I've ever seen a recommendation to use nominal long term treasuries for liability matching in retirement but someone may think that's a go...
by BigJohn
Thu Apr 04, 2019 5:37 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Estimating Future Tax Rates
Replies: 47
Views: 3235

Re: Roth Conversions - Estimating Future Tax Rates

Here's how I handled taxes. All my calculations are in real current year dollars. I assume no change in tax rates from current as there is no way to predict that so I use this year's version of TurboTax to predict the future since both ordinary income and LTCG brackets are indexed for inflation. I t...
by BigJohn
Tue Apr 02, 2019 9:56 pm
Forum: Investing - Theory, News & General
Topic: Good resources for liability matching
Replies: 21
Views: 2295

Re: Good resources for liability matching

If you wish to forego that insurance, then CDs or very high quality short/intermediate terms bonds should work. Beyond that I think you’re outside of the liability matching paradigm, at least as I understand it. Why are you leaving out long term treasuries? If you have a long term liability, then y...
by BigJohn
Tue Apr 02, 2019 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Estimating Future Tax Rates
Replies: 47
Views: 3235

Re: Roth Conversions - Estimating Future Tax Rates

I recommend a focus mainly on your AGI, not your marginal tax bracket... Another point in favor of this is that your real marginal tax rate can move around based on phase ins/outs and other discontinuities in the tax code. Things like moving out of the zero percent capital gains rate or the IRMMA c...
by BigJohn
Tue Apr 02, 2019 5:56 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversions - Estimating Future Tax Rates
Replies: 47
Views: 3235

Re: Roth Conversions - Estimating Future Tax Rates

I keep it simple. I just do Roth conversions in my late 60s to get my AGi up to approximately the level it will be in my early 70s with SS and RMDs, but no further Roth conversions. I also have been watching Medicare IRMAA tiers since I'm well beyond the $85k first tier... This is my approach as we...
by BigJohn
Tue Apr 02, 2019 5:43 pm
Forum: Investing - Theory, News & General
Topic: Good resources for liability matching
Replies: 21
Views: 2295

Re: Good resources for liability matching

The whole point of liability matching is to put those assets in something very safe at which point you can invest the rest in whatever riskier assets you wish. William Bernstein advocates TIPS for liability matching to get the inflation risk protection. If you wish to forego that insurance, then CDs...
by BigJohn
Thu Mar 28, 2019 7:28 am
Forum: Personal Investments
Topic: Executing a Backdoor Roth at VG
Replies: 5
Views: 606

Re: Executing a Backdoor Roth at VG

Thanks!
by BigJohn
Wed Mar 27, 2019 7:00 pm
Forum: Personal Investments
Topic: Executing a Backdoor Roth at VG
Replies: 5
Views: 606

Executing a Backdoor Roth at VG

I’m trying to help my daughter execute a backdoor Roth at VG and am looking for the voice of experience here. She has a non tax deductible tIRA sitting there ready to go. I’ve done on-line Roth conversions at VG from my tIRA with no cost basis by just transferring MF shares via the “Roth conversion”...
by BigJohn
Tue Mar 26, 2019 4:14 pm
Forum: Personal Investments
Topic: The IRA Lightbulb just went on
Replies: 28
Views: 4200

Re: The IRA Lightbulb just went on

Curious as to why you incurred the capital gains? Did you need that as income to live on? If not, then you should probably sit on the gains as long as possible. Someday someone will inherit and either get a stepped up basis (if a person) or not care about the gains (if a charity). Also, you can't do...
by BigJohn
Tue Mar 26, 2019 4:05 pm
Forum: Personal Investments
Topic: Mulling Roth Investments: Thoughts on Future Tax Rates
Replies: 25
Views: 1757

Re: Mulling Roth Investments: Thoughts on Future Tax Rates

I agree with Alan, there is far more uncertainty here than just tax law changes. My personal approach is to keep my taxable income between retirement and age 70.5 about level with what it will be after SS and RMDs hit. This should make sure that I’m not too far off in either direction. I also do a b...
by BigJohn
Mon Mar 25, 2019 8:50 pm
Forum: Personal Investments
Topic: Regarding allocation and Roth conversion appropriateness
Replies: 9
Views: 958

Re: Regarding allocation and Roth conversion appropriateness

I’ll just second and add a bit to a few comments from above based on my experience (retired at 58, now 62). I ageee that 80/20 is too aggressive for your current situation. I’d suggest 60/40 or 50/50. Managing complex financial strategies as you age does not get easier. It’s a fact that even without...
by BigJohn
Fri Mar 22, 2019 3:14 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Why The Size Premium Should Persist
Replies: 62
Views: 4572

Re: Larry Swedroe: Why The Size Premium Should Persist

Dave, Thanks for the link, I appreciate the education, it was an interesting read. I'll be honest and say that what I read sounds more like a defense of these as independent sources of risk based on looking backwards than on any fundamental basis, at least that I can understand. For example, I under...
by BigJohn
Fri Mar 22, 2019 1:15 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Why The Size Premium Should Persist
Replies: 62
Views: 4572

Re: Larry Swedroe: Why The Size Premium Should Persist

I believe the size factor is entirely risk based, I I don’t believe there is any reason to expect higher risk adjusted return. I think there is reason to expect higher risk and higher commensurate return. In an efficient market all risky assets should provide about the same risk adjusted returns. T...
by BigJohn
Thu Mar 21, 2019 7:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Why The Size Premium Should Persist
Replies: 62
Views: 4572

Re: Larry Swedroe: Why The Size Premium Should Persist

Seems to me that common sense would indicate a size premium. The expected return for a company is its cost of capital. If I were lending money, I charge more for a small company with fewer streams of income than a larger more diverse one with multiple streams. Moreover small stocks are less liquid,...
by BigJohn
Thu Mar 14, 2019 6:06 am
Forum: Personal Finance (Not Investing)
Topic: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?
Replies: 11
Views: 936

Re: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?

Don't assume that just because you are both trustee and beneficiary that comingling finances isn't an issue. You might endanger what little asset protection a self-settled trust has. It's not a self-settled trust. It's my wife's testamentary trust. However, this is just another example of the compl...
by BigJohn
Wed Mar 13, 2019 11:32 pm
Forum: Personal Finance (Not Investing)
Topic: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?
Replies: 11
Views: 936

Re: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?

I'm interested in the answer as I did my first trust tax return as the trustee this year. The trust owed no taxes but this might not always be the case. With no check writing enabled on the trust, my plan would have been to pay it from my checking account and then do an ACH transfer from the trust ...
by BigJohn
Wed Mar 13, 2019 9:20 pm
Forum: Personal Finance (Not Investing)
Topic: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?
Replies: 11
Views: 936

Re: Can a trustee pay an irrevocable trust's taxes on behalf of the trust via personal check?

I'm interested in the answer as I did my first trust tax return as the trustee this year. The trust owed no taxes but this might not always be the case. With no check writing enabled on the trust, my plan would have been to pay it from my checking account and then do an ACH transfer from the trust t...
by BigJohn
Wed Mar 13, 2019 8:53 pm
Forum: Personal Investments
Topic: Roth rollovers post retirement - or not?
Replies: 16
Views: 1659

Re: Roth rollovers post retirement - or not?

I retired at age 58 and spent long hours with spreadsheets trying to analyze this same scenario. After all that work, I concluded that there were just too many unknowns to be very accurate and landed on the same approach as suggested by Alan S. I am deferring SS until age 70 so both that and RMDs st...
by BigJohn
Fri Mar 08, 2019 8:48 pm
Forum: Investing - Theory, News & General
Topic: Do you have 1 or 2 numbers for expenses in retirement?
Replies: 59
Views: 4772

Re: Do you have 1 or 2 numbers for expenses in retirement?

I have a bare bones budget that includes what I considered survival essentials but that does not include nice dinners out weekly or any significant travel. This gave me the boundary conditions for evaluating those SWR’s and the robustness of my plans if things get really ugly. I don’t see much point...
by BigJohn
Fri Mar 08, 2019 8:28 pm
Forum: Personal Investments
Topic: Roth conversion advice for newly widowed 68 year old
Replies: 24
Views: 2302

Re: Roth conversion advice for newly windowed 68 year old

Keep Qualified Charitable Distributions in mind if she is so inclined. QCDs are a good potential strategy but you need to be aware of the rules. You have to be older than 70 1/2 and this in not like RMDs where it’s the year you turn that age. You actually have to be that age so don’t do this too ea...
by BigJohn
Wed Mar 06, 2019 8:19 pm
Forum: Personal Finance (Not Investing)
Topic: tIRA to ROTH conversions-LTC considerations
Replies: 12
Views: 1095

Re: tIRA to ROTH conversions-LTC considerations

I am still not grasping why someone might need tIRA for LTC, but it does not matter for us because we will have tIRA anyways. Two extreme examples just to illustrate. All income from tIRA RMD with no Roth, LTC deductions lower income so effective tax rate on withdrawal is less than the Roth convers...
by BigJohn
Mon Mar 04, 2019 7:40 pm
Forum: Personal Investments
Topic: Wells Fargo Vs. Vanguard Target Date Fund
Replies: 8
Views: 1022

Re: Wells Fargo Vs. Vanguard Target Date Fund

Well, index means different things to different people but I was reacting to comments above about high turnover and “factor enhanced” which is normally inconsistent with a low cost broad market index. I googled the first one and found this. It’s based on a WF generated index so it can be whatever th...
by BigJohn
Mon Mar 04, 2019 6:08 pm
Forum: Personal Investments
Topic: Wells Fargo Vs. Vanguard Target Date Fund
Replies: 8
Views: 1022

Re: Wells Fargo Vs. Vanguard Target Date Fund

The low ER for WF seems a bit incongruous with the active funds used. Does that ER include the ER of the underlying funds or is it just the ER for the target date “wrapping” with the individual fund ERs taken out in addition?
by BigJohn
Fri Mar 01, 2019 8:31 pm
Forum: Personal Investments
Topic: Multiple Roth Conversions = multiple 1099-Rs?
Replies: 7
Views: 732

Re: Multiple Roth Conversions = multiple 1099-Rs?

In 2018 I did 2 conversions from/to the same accounts at VG and received just one 1099-R
by BigJohn
Thu Feb 28, 2019 10:08 pm
Forum: Personal Investments
Topic: Why Does a Custom Variable Universal Life Insurance Policy Not Make Sense For Me?
Replies: 46
Views: 3038

Re: Why Does a Custom Variable Universal Life Insurance Policy Not Make Sense For Me?

After 20 years, assuming a 7.79% return in Vanguard Total Stock Market.... Are you sure you're getting the full return on your chosen investment? Obviously I'm not sure about this one but there are three things the salesmen never mention about these policies. The fine print often indicates that the...