Search found 13505 matches

by Rodc
Wed Jan 11, 2017 1:15 pm
Forum: Personal Finance (Not Investing)
Topic: 401k reached critical mass - 21% increase in one year
Replies: 14
Views: 2006

Re: 401k reached critical mass - 21% increase in one year

kenschmidt wrote:For example, Vanguard Target Retirement 2025:

2016: +7.48%
1 year: 13.15%

All that due to a 10 day difference between the two numbers.
Nice example of how choice of end points can skew results.
by Rodc
Wed Jan 11, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

If you still decide a strong case (and very high income :-) for 529 plan - this article is not complete without Kitches suggestions regarding correctly planning your 529 strategy: https://www.kitces.com/blog/grandparent-owned-529-plans-gifting-appreciated-assets-and-qualifying-for-fafsa-financial-a...
by Rodc
Wed Jan 11, 2017 12:58 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

General rule of thumb is to invest in retirement accts first then 529/ Coverdell. In terms of saving priorities your personal retirement first/ college second. How about a 529 versus paying down the mortgage? What are people's thoughts here? If you can pay off the mortgage before college it frees u...
by Rodc
Wed Jan 11, 2017 12:05 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

I'm a little confused regarding financial aid consideration. It seems to me the vast majority of people with 529s probably have enough income not to qualify for any financial aid to begin with? Maybe things have changed but middle class income basically rules out any financial aid. Yes, that's the ...
by Rodc
Wed Jan 11, 2017 11:59 am
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

General rule of thumb is to invest in retirement accts first then 529/ Coverdell. In terms of saving priorities your personal retirement first/ college second. How about a 529 versus paying down the mortgage? What are people's thoughts here? If you can pay off the mortgage before college it frees u...
by Rodc
Wed Jan 11, 2017 11:54 am
Forum: Personal Finance (Not Investing)
Topic: 401k reached critical mass - 21% increase in one year
Replies: 14
Views: 2006

Re: 401k reached critical mass - 21% increase in one year

Wouldn't a 401k with $100 invested the same as one with $1,000,000 both increase the same percentage every year? Would a better gauge be your 401k market gains were more than your contributions or similar? No, if I start with $100 and add $1000 I would get a huge increase in year over year portfoli...
by Rodc
Wed Jan 11, 2017 11:50 am
Forum: Personal Finance (Not Investing)
Topic: Predicting future Net Worth
Replies: 31
Views: 5324

Re: Predicting future Net Worth

As always it comes down to why are you asking?

That will tell you how sophisticated you want to be, what you want to include, do you want an average answer, a what if assets do poorly answer, a worse case answer, do you want a simple point estimate or a probability distribution.
by Rodc
Tue Jan 10, 2017 7:26 pm
Forum: Personal Consumer Issues
Topic: The funk - gym clothes
Replies: 46
Views: 5052

Re: The funk - gym clothes

And I don't worry about what clothes get mixed together. Polyester, lycra, acrylic, cotton, synthetic, natural, it makes no difference to me. If my clothes don't survive my treatment of them, I don't want them anyways. This is me also but I also don't care what colors I put in together. I don't own...
by Rodc
Tue Jan 10, 2017 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: 529 - With 6 year horizon
Replies: 13
Views: 1119

Re: 529 - With 6 year horizon

Bad to lose a bunch when you want it, but not as bad as losing your retirement since you can borrow or use other funds if needed. So while you want to be careful you may not want to go super safe - just need to balance risk and reward. I am using a glide path 2018 fund - so need to start using it in...
by Rodc
Tue Jan 10, 2017 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: How to build passive income
Replies: 45
Views: 6180

Re: How to build passive income

"I'm curious about this too. Are there other options besides rental properties?" I'm open to anything that will generate the best passive income for me. My thinking is a rental property but I'm open to any suggestions (stocks, bonds, etc). Ok. Stocks and bond then. :) Buy index funds. Buy some with...
by Rodc
Tue Jan 10, 2017 4:39 pm
Forum: Personal Consumer Issues
Topic: Weight machine vs free weight
Replies: 64
Views: 5384

Re: Weight machine vs free weight

This should end the thread. OP, start off slowly and learn proper form and technique. The fact that there is more injury risk with free weights incorrectly is a benefit ; you aren't stuck with unnatural range of motions and you have to activate your core musculature and stabilizers. These are facto...
by Rodc
Tue Jan 10, 2017 4:05 pm
Forum: Personal Consumer Issues
Topic: Weight machine vs free weight
Replies: 64
Views: 5384

Re: Weight machine vs free weight

Strength is important, but as you get older you need to pay more attention to maintaining your overall ability to move. If you can't get down on the floor and back up by yourself, or bend over to pick something off the floor, you have suddenly become very dependent on having other people around. So...
by Rodc
Tue Jan 10, 2017 3:53 pm
Forum: Personal Consumer Issues
Topic: Weight machine vs free weight
Replies: 64
Views: 5384

Re: Weight machine vs free weight

I wouldn't have minded a hijack :D IMO, free weights have a special benefit for people our age, in that the small postural corrections you have to make improve balance. I also find the arc of machines artificial (e.g., compare the motion of a free weight squat to a Smith machine). I use machines fo...
by Rodc
Tue Jan 10, 2017 3:39 pm
Forum: Personal Finance (Not Investing)
Topic: How to build passive income
Replies: 45
Views: 6180

Re: How to build passive income

Being a landlord can work out very well if you buy at a good price in a good location and get good renters. But being a landlord is not passive when a renter calls to have you fix the plumbing on Sunday afternoon while you are watching football (or at 2am). Or when you have to interview several peop...
by Rodc
Tue Jan 10, 2017 2:00 pm
Forum: Personal Consumer Issues
Topic: Should I ask this contractor to lower his quote?
Replies: 13
Views: 1890

Re: Should I ask this contractor to lower his quote?

I think it is definetly reasonable to ask and expect a breakdown of labor and material. I would think any "professional" contractor would do that as part of the SOP. It usually goes something like this: Call person who you are interested in doing the work, they come out and take a look at the area ...
by Rodc
Tue Jan 10, 2017 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Do you really need 2.5 million to retire well?
Replies: 267
Views: 59639

Re: Do you really need 2.5 million to retire well?

To the opening question: Need is a strong word. If one retires at a more or less normal age, that means something like $100K per year. If you saved that (vs inherited) you likely had a very good job (and perhaps a spouse with a pretty good job) and so have decent SS. Maybe $30K to $60K. That is a lo...
by Rodc
Tue Jan 10, 2017 1:44 pm
Forum: Personal Finance (Not Investing)
Topic: Do you really need 2.5 million to retire well?
Replies: 267
Views: 59639

Re: Do you really need 2.5 million to retire well?

2.5 MM ? No you don't need that. My wife and I have income from pensions and SS which will be about 80K when we start taking SS. $80,000 a year from pensions and SS is the same as pulling 4% from $2 million. Wish I had a pension :( Hopefully you do have SS. Their $80K from pensions and SS might eas...
by Rodc
Tue Jan 10, 2017 12:00 pm
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 31653

Re: Annual Vacation Budget

I don't think you need to have won the game already to spend a significant amount money on it. I think 'On the way to winning' is more than sufficient. If you're on track with your desired plan and desired retirement age why not spend the money on something you like? Lots of stories out there about...
by Rodc
Tue Jan 10, 2017 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 31653

Re: Annual Vacation Budget

TheEternalVortex wrote:Lately it's been $0 ;). No desire to travel with toddlers.
A great winter vacation with toddlers (if you live somewhere with tough winters) can be driving to the nearest hotel with a pool, even if it is just five miles. :)
by Rodc
Tue Jan 10, 2017 10:20 am
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself: Dare I retire this year?
Replies: 27
Views: 5916

Re: Daring to figure it out for myself: Dare I retire this year?

The ORP calculator seems to be very goofy. If I put in one person retiring at age 65 with $1M in tax deferred accounts it returns a median income after tax of $32,000. Looking at the 2017 US federal tax calculations that means a pretax income of about $36,000. Depending on the state which it did not...
by Rodc
Tue Jan 10, 2017 6:51 am
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself: Dare I retire this year?
Replies: 27
Views: 5916

Re: Daring to figure it out for myself: Dare I retire this year?

As to the different income estimates. If you leave your portfolio to compound for 40 years you get really big values. When you run a Monte Carlo type simulation all your errors compound in the same way so when you simulate a 40 year retirement the errors compound for 40 year and get huge. You would ...
by Rodc
Tue Jan 10, 2017 6:28 am
Forum: Personal Finance (Not Investing)
Topic: A dead year, never get it back
Replies: 90
Views: 12701

Re: A dead year, never get it back

In accumulation your first dollar might be invested for say 40 years, say you start at age 25 and retire at 65. The last bit of savings before retiring are invested for approximately 0 years. So on average your dollars are invested, in accumulation, for 20 years. It depends on how you plan to withd...
by Rodc
Tue Jan 10, 2017 6:18 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 199
Views: 31972

Re: Your Retirement Number, or, calculating the funding ratio

Excellent points. Nobody knows what tomorrow will bring, let alone next year. Any predictions what the stock market will do or if we are still alive in 20 years and what are needs would, are a crap shoot. That is why a funding ratio sets up a baseline which in my opinion gives you the most secure i...
by Rodc
Mon Jan 09, 2017 8:51 pm
Forum: Personal Consumer Issues
Topic: Bedroom is colder than rest of house. Radiator heating question.
Replies: 70
Views: 5252

Re: Bedroom is colder than rest of house. Radiator heating question.

sport wrote:I am not trying to be disrespectful. However, perhaps the solution to your problem is an electric blanket. I find that a cool bedroom makes for better sleeping, as long as the blankets are sufficiently warm.
+1

or just a thicker down comforter.
by Rodc
Mon Jan 09, 2017 8:37 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

But a Roth IRA is a pretty decent way to save for college expenses. Why wouldn't one do that before putting money in a 529 plan? That was my original plan. But I found out I made too much money to contribute to a Roth. Now if I were smarter and harder working I might be able to find a backdoor way ...
by Rodc
Mon Jan 09, 2017 8:23 pm
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself: Dare I retire this year?
Replies: 27
Views: 5916

Re: Daring to figure it out for myself: Dare I retire this year?

Can you wait to take retirement until 65 or something and have it go up nicely like SS @Rodc, if by 'it' you mean my pension, no. My pension was frozen in the late 90s. It goes up slightly each month because some notional sum in my employer's ledger is divided by fewer months of payout. If you are ...
by Rodc
Mon Jan 09, 2017 7:59 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 199
Views: 31972

Re: Your Retirement Number, or, calculating the funding ratio

Hi JamesG, The funding ratio (FR) is not a forecast. However, there is nothing that prevents a retirement investor from forecasting what the size of their portfolio will be sometime in the future (by whatever method they choose) and calculating the PV of the retirement income liability at that futu...
by Rodc
Mon Jan 09, 2017 7:52 pm
Forum: Personal Finance (Not Investing)
Topic: A dead year, never get it back
Replies: 90
Views: 12701

Re: A dead year, never get it back

If the actuaries are to be trusted, my wife and I have a 50 year investment horizon that includes both savings and drawdown periods. Who cares about one year?!?! For that matter, given our investment horizon, another 2008 is not at all out of the question. These things happen and should be expected...
by Rodc
Mon Jan 09, 2017 7:25 pm
Forum: Personal Finance (Not Investing)
Topic: Best Financial Moves You've Made
Replies: 158
Views: 23198

Re: Best Financial Moves You've Made

Got a good degree to develop marketable skills. Bought a modest house in a good location and never moved (23 years ago). Bought modest cars and kept them a long time. Do not try to keep up with the Jones'. Started investing the day I got my first real job. Kept debt very low. Never got divorced. (at...
by Rodc
Mon Jan 09, 2017 7:15 pm
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself: Dare I retire this year?
Replies: 27
Views: 5916

Re: Daring to figure it out for myself: Dare I retire this year?

Can you wait to take retirement until 65 or something and have it go up nicely like SS? If so you might look at how that changes things. If you need say 6 years of income to cover the gap until SS that is about $180K. If you wait 10 years that is $300K. Likely would increase your income if you do th...
by Rodc
Mon Jan 09, 2017 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 199
Views: 31972

Re: Your Retirement Number, or, calculating the funding ratio

Hi JamesG, The funding ratio (FR) is not a forecast. However, there is nothing that prevents a retirement investor from forecasting what the size of their portfolio will be sometime in the future (by whatever method they choose) and calculating the PV of the retirement income liability at that futu...
by Rodc
Mon Jan 09, 2017 4:58 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 199
Views: 31972

Re: Your Retirement Number, or, calculating the funding ratio

I see the point of the funding ratio (and indeed have now added it to my retirement calculations – thank you!), but I am not convinced that, on its own, it tells a complete story of how one stands today with respect to meeting one’s retirement income target. This is because it seems to miss the val...
by Rodc
Fri Jan 06, 2017 5:22 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on a Bogle quote
Replies: 29
Views: 3217

Re: Thoughts on a Bogle quote

If you want more comments do a search of the site and you can find thousands of posts on the subject. Or wait a week for a new thread. It gets debated endlessly and no new ideas have surfaced in years. :) Short answer is some people agree and some do not. :) And it probably will not matter all that ...
by Rodc
Fri Jan 06, 2017 5:16 pm
Forum: Personal Finance (Not Investing)
Topic: Retirees: How much cash do you keep?
Replies: 103
Views: 12122

Re: Retirees: How much cash do you keep?

I am really trying to wrap my head around this topic as I plan to retire early and am worried about sequence of returns risk. I have a 4-5 year cash position. I don't see how you could justify not having a significant cash equivalent position to decrease risk of disaster. I am including cash/ibonds...
by Rodc
Fri Jan 06, 2017 3:27 pm
Forum: Personal Finance (Not Investing)
Topic: Is a prenup always necessary when remarrying?
Replies: 49
Views: 4878

Re: Is a prenup always necessary when remarrying?

No...a prenup should not be needed because someone should not remarry for the 2nd time. Marriage is nothing more than a contract between 2 people recognized by the state. Thats it. Your relationship will not change whether you sign that contract or not. Dont do it! Why does that kick in on marriage...
by Rodc
Fri Jan 06, 2017 2:44 pm
Forum: Investing - Theory, News & General
Topic: Bernstein-"To Make Money They Didn't Need".....and Pascal's Wager
Replies: 187
Views: 23215

Re: Bernstein-"To Make Money They Didn't Need".....and Pascal's Wager

What if I can cover basics+ with just dividends, interest and small pension? And neither my wife nor I have started social security. I also keep about 3 years of basic expenses in cash, savings bonds and ibonds in addition to a year's worth of expenses in a stable value fund. In this low rate envir...
by Rodc
Fri Jan 06, 2017 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: Retirees: How much cash do you keep?
Replies: 103
Views: 12122

Re: Retirees: How much cash do you keep?

Why does one need much cash in retirement? Is it to make sure if you have an emergency you do not have to pull out savings from a 401K which might bump you into a higher tax bracket? There really is no meaningful difference between 50% stocks, 40% in bonds with an average maturity of 10 years and 10...
by Rodc
Fri Jan 06, 2017 1:05 pm
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 31653

Re: Annual Vacation Budget

Family of 4, maybe $1k. We both travel a lot for work. I do not enjoy it, wife does. She usually "vacations" on the company dime; (California) Disneyland, (Florida) Disneyworld and Universal Studios, New Orleans, and Germany in the last six months. We visit my family in California probably twice a ...
by Rodc
Fri Jan 06, 2017 12:45 pm
Forum: Personal Finance (Not Investing)
Topic: Annual Vacation Budget
Replies: 320
Views: 31653

Re: Annual Vacation Budget

Family of four. I could only make a wild guess. Very un-Boglehead I know. Big trips get planned well in advance and so one month the airfare gets paid. Maybe some other month the accommodations get paid. Small weekend getaways come out of cash flow. Big trips are cash flow and some savings. A few ye...
by Rodc
Fri Jan 06, 2017 9:46 am
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 4502

Re: "Academic Research Doesn't Always Make Grade in Real World"

One of the challenges is that the higher the moment the more data you need because the higher the moment the more the calculation is numerically sensitive to noise - kind of like higher order derivatives. We can hardly accurately estimate the expected mean of the total stock market. Hard to believe...
by Rodc
Fri Jan 06, 2017 6:50 am
Forum: Personal Finance (Not Investing)
Topic: Investing in a Masters and Ph.D?
Replies: 101
Views: 7211

Re: Investing in a Masters and Ph.D?

Sounds like you have plenty of intellectual firepower and interest to make a go of something. You just need to be creative to find a good outlet and a way to monetize your efforts. The great news is the modern internet connected world makes this easier than at any time in history.

Best of luck!
by Rodc
Fri Jan 06, 2017 6:45 am
Forum: Personal Finance (Not Investing)
Topic: Study on SWR rates for Early Retirement
Replies: 63
Views: 8019

Re: Study on SWR rates for Early Retirement

Thanks for the link, OP. Very interesting! If you're looking at SWR for the very young, then you might look at "perpetual withdrawal rates" +1. This is my approach as well, and I recently wrote an explanation of how perpetual withdrawal rates work and why they're a good option for very early retire...
by Rodc
Fri Jan 06, 2017 6:36 am
Forum: Personal Finance (Not Investing)
Topic: How many $ to self fund long term care?
Replies: 73
Views: 7670

Re: How many $ to self fund long term care?

Many good points above. One take away: retiring on a barely doable income has this as one of its dangers. In a few areas around the country where I checked a few years ago for my mom, it seemed like buying into a decent CCRC (continuing care retirement community) was about the cost of a local median...
by Rodc
Thu Jan 05, 2017 9:32 pm
Forum: Investing - Theory, News & General
Topic: "Academic Research Doesn't Always Make Grade in Real World"
Replies: 47
Views: 4502

Re: "Academic Research Doesn't Always Make Grade in Real World"

The problem with the comments in this thread is that they equate the Sharpe ratio with "risk". This involves ignoring the higher moments of the return distribution. If you do that you can identify portfolios with high Sharpe ratios that no human would consider optimal. As discussed by Campbell Harv...
by Rodc
Thu Jan 05, 2017 8:25 pm
Forum: Personal Finance (Not Investing)
Topic: spousal disagreement over how much house to buy
Replies: 99
Views: 7830

Re: spousal disagreement over how much house to buy

I see this thread getting locked anytime now.... nothing more to contribute and it is clear OP is not the one having the say in this partnership, as per his last post the wife is the breadwinner and it is clear where this is going. EDIT: Also, I found this from OPs previous home purchase. I guess y...
by Rodc
Thu Jan 05, 2017 7:10 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

But a Roth IRA is a pretty decent way to save for college expenses. Why wouldn't one do that before putting money in a 529 plan? That was my original plan. But I found out I made too much money to contribute to a Roth. Now if I were smarter and harder working I might be able to find a backdoor way ...
by Rodc
Thu Jan 05, 2017 7:09 pm
Forum: Investing - Theory, News & General
Topic: "Why 97% of People Don't Use 529 College Savings Plans."
Replies: 262
Views: 48439

Re: "Why 97% of People Don't Use 529 College Savings Plans."

I myself am anticipating a major shakeup in higher education that cuts costs. At some point it makes more sense to give your children a duplex that they can live in and get a sinecure from than pay for $300,000-$400,000 worth of college. No one has to pay upwards of $100,000 a year for college. You...
by Rodc
Thu Jan 05, 2017 5:11 pm
Forum: Personal Finance (Not Investing)
Topic: spousal disagreement over how much house to buy
Replies: 99
Views: 7830

Re: spousal disagreement over how much house to buy

Off topic, but is 23% a crazy high number for gross pay? I just calculated ours, and our total house payment+utilities is ~28% of our gross. It doesn't feel like a lot...is it? Nope 25% is the extreme "conservative" opinion in the industry the "traditional" opinion is 34% according to mortgage brok...
by Rodc
Thu Jan 05, 2017 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: spousal disagreement over how much house to buy
Replies: 99
Views: 7830

Re: spousal disagreement over how much house to buy

Off topic, but is 23% a crazy high number for gross pay? I just calculated ours, and our total house payment+utilities is ~28% of our gross. It doesn't feel like a lot...is it? While there is something of a tax break for many home owners, I think it makes a lot more sense to look at how your paymen...
by Rodc
Thu Jan 05, 2017 5:02 pm
Forum: Personal Finance (Not Investing)
Topic: spousal disagreement over how much house to buy
Replies: 99
Views: 7830

Re: spousal disagreement over how much house to buy

That last 2% could cost you 50%. Everything works until it doesn't. Don't live in fear! :) Why not let her worry you will leave her instead? :) At some level I am sure there is some tongue in cheek going on when people say that, and that is of course fine. Marriage is a partnership, whether buying ...