Search found 1393 matches

by BigJohn
Tue Oct 25, 2016 4:53 pm
Forum: Investing - Help with Personal Investments
Topic: How to balance Tax Efficiency and Risk when Retiring Early
Replies: 22
Views: 2442

Re: How to balance Tax Efficiency and Risk when Retiring Early

I was in a similar situation a few years ago as I prepared to retire. There is no perfect answer and some compromise between your competing objectives will be required. I decided that managing overall risk, especially sequence of return risk, was the far more important objective. As a result, I have...
by BigJohn
Mon Oct 24, 2016 5:17 pm
Forum: Investing - Theory, News & General
Topic: Dr. Bill Bernstein Books
Replies: 40
Views: 4357

Re: Dr. Bill Bernstein Books

I've read them all and would say it depends on your focus. I agree that Four Pillars is the best for general investing advice. The Investing for Adults series that RipRap linked to formed much of the basis for how I set up my retirement finances, especially The Ages of Investors. If You Can is a gre...
by BigJohn
Mon Oct 24, 2016 4:55 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

Thanks Peter, I considered this approach but one of my goals in retirement is to greatly simplify my portfolio. Ultimately I decided that the simplicity of my current plan was more important than the potential gain I might forego.
by BigJohn
Sun Oct 23, 2016 4:23 pm
Forum: Personal Consumer Issues
Topic: Amazon Prime Shipping Issues since move from UPS to USPS
Replies: 122
Views: 45429

Re: Amazon Prime Shipping Issues since move from UPS to USPS

Well, at least I'm not alone in having recent issues with Amazon Prime and USPS. The USPS showed package as delivered yet it wasn't. Not too surprising as in my experience USPS tracking only bats about 500. While not consistent with Prime 2 day shipping, in this case there was no urgency so I waited...
by BigJohn
Sun Oct 23, 2016 3:01 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

You have obviously analyzed your situation thoroughly and understand it down to the individual dollar. Can you confirm that yours is a relatively "rare" case that the rest of us likely won't have? If others may have the same situation, can you define the characteristics of your situation ...
by BigJohn
Sun Oct 23, 2016 10:19 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

Compounding is a great tool, given enough time, but don't forget that everything in your calculations having to do with assets is compounding: Taxable money that could otherwise be used for taxes this year Taxable money not used for taxes this year The balance in your tIRA The FUTURE RMDs/CONVERSIO...
by BigJohn
Sat Oct 22, 2016 6:33 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

once I'm past the break even point, the compounding in the Roth is now a tax free gain while the same compounding in the tIRA remains taxable. After writing this yesterday I got to thinking. Even before the break even point the growth in taxable still has a tax liability while the growth in the Rot...
by BigJohn
Fri Oct 21, 2016 3:48 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

I'll be dealing with the same choices soon and was confused by Peter Foley and BigJohn's mention of loss of compounding. I did not understand how a Roth conversion would impact future compounding of "my portion" of a tIRA vs a converted Roth. Sorry for any confusion. Loss of compounding i...
by BigJohn
Fri Oct 21, 2016 12:48 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

Responses to several comments/questions above.... My initial plan was to level income using conversions now to be about equal to RMDs+taxable SS later assuming between 3% - 4% real growth rate. This would not convert all tIRA to Roth but would leave me with about a 50/50 split which feels like a goo...
by BigJohn
Thu Oct 20, 2016 11:05 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Re: Roth Conversion Target - Time to Break Even

However, does one convert into the mid to high 25% tax bracket now to avoid hitting the 28% bracket in 10 years? In other words, does the loss of compounding in tax deferred over the next few years outweigh the loss of an extra 3% in taxes much later? I wish I knew the answer. I don't think there i...
by BigJohn
Thu Oct 20, 2016 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion Target - Time to Break Even
Replies: 25
Views: 3035

Roth Conversion Target - Time to Break Even

This is a follow-up to my last post on this subject here https://www.bogleheads.org/forum/viewtopic.php?p=2645133 . I've continued to try to develop some rational decision criteria for how much to convert each year based on expected income tax details. Because of large medical deductions I can do so...
by BigJohn
Thu Oct 13, 2016 6:16 pm
Forum: Personal Finance (Not Investing)
Topic: ? Wisdom of Roth conversion
Replies: 34
Views: 3790

Re: ? Wisdom of Roth conversion

You got that right -- the early-in-the-plan tax consequences of IRA to Roth IRA conversions tend to cause panic amongst the novices. This is my first year doing significant conversions and I'll agree the up-front tax costs are a significant emotional obstacle, especially since without any conversio...
by BigJohn
Fri Oct 07, 2016 6:05 pm
Forum: Investing - Help with Personal Investments
Topic: Ed Slott
Replies: 20
Views: 3724

Re: Ed Slott

"Buying permanent life insurance as an investment"--whoa, big red flag In general I agree but I read Ed's books a few years back and don't think he recommends this as an investment. His most important objective is protecting the stretch option for the tIRA which your heirs inherit. If whe...
by BigJohn
Fri Oct 07, 2016 5:39 pm
Forum: Investing - Theory, News & General
Topic: PBS Program on Roth IRA - Ed Slott
Replies: 31
Views: 6302

Re: PBS Program on Roth IRA - Ed Slott

Roths are a great way to pass tax free income to your heirs. I agree with this unless your heirs are going to be in a lower tax bracket after their RMDs than the one in which you are doing your conversion. In that case they'd be overall better off inheriting a tIRA and paying the lower rate. Now, i...
by BigJohn
Fri Oct 07, 2016 5:29 pm
Forum: Investing - Theory, News & General
Topic: If you own Vanguard Total Stock Market, do you re-invest dividends?
Replies: 75
Views: 10987

Re: If you own Vanguard Total Stock Market, do you re-invest dividends?

if I wanted to use the "specifying lots" method, do I need to keep a log of such lots? or does Vanguard do that for me so that when/if I sell they have and show me the data so that I can pick lot/s? Based on new government regulations that went into effect a few years ago, all investment ...
by BigJohn
Fri Oct 07, 2016 6:20 am
Forum: Investing - Theory, News & General
Topic: If you own Vanguard Total Stock Market, do you re-invest dividends?
Replies: 75
Views: 10987

Re: If you own Vanguard Total Stock Market, do you re-invest dividends?

BigJohn, Your reply helped me understand the essence of this discussion, does one save (a lot?) in taxes when selling IF specifying lot compared to using average cost? thank you Your welcome, glad it was helpful. Specifying lots is typically used to minimize taxes in a couple of situations. First m...
by BigJohn
Thu Oct 06, 2016 4:57 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion recharacterization question
Replies: 2
Views: 285

Re: Roth conversion recharacterization question

If you want to take the "horse race" conversions approach you'd convert $100k, $50K into bonds and $50K into stocks, Then you'd recharacterize the loser. Here's a discussion with more details https://www.bogleheads.org/forum/viewtopic.php?p=2634343 If you don't want the complexity of this ...
by BigJohn
Thu Oct 06, 2016 2:11 pm
Forum: Investing - Theory, News & General
Topic: If you own Vanguard Total Stock Market, do you re-invest dividends?
Replies: 75
Views: 10987

Re: If you own Vanguard Total Stock Market, do you re-invest dividends?

can someone explain what people mean by different "lots" in beginner terms? Here's why this has come up so much in this discussion. Two people both own 1000 shares of megacorp. One purchased all 1000 at the same time and the same price. He has one lot of 1000 shares. The other purchases 1...
by BigJohn
Tue Oct 04, 2016 5:34 pm
Forum: Investing - Help with Personal Investments
Topic: Rethinking Roth conversions
Replies: 13
Views: 1879

Re: Rethinking Roth conversions

There are a lot of unknowns that can impact the conversion economics. Just because QCDs don't have to be renewed each year does not mean that we should think of them as "permanent". Look at the changes made and talked about over the last 5 - 10 years and realize that there is no telling wh...
by BigJohn
Mon Oct 03, 2016 10:52 pm
Forum: Investing - Help with Personal Investments
Topic: How to manage multiple portfolio with different asset allocation?
Replies: 13
Views: 1120

Re: How to manage multiple portfolio with different asset allocation?

Thanks for your advice! I thought about the allocation for downpayment and decided to go for 30/70 because 1) I'm not sure if I will actually buy a (second) house, and 2) The downpayment is like 5~6 year near term. Very different circumstance than I presumed from you initial post (first house, 1 - ...
by BigJohn
Mon Oct 03, 2016 5:46 pm
Forum: Investing - Help with Personal Investments
Topic: How to manage multiple portfolio with different asset allocation?
Replies: 13
Views: 1120

Re: How to manage multiple portfolio with different asset allocation?

Maybe more advice than you asked for but my two cents.... If house down payment is near term (say 1 - 2 years), 30-70 is a pretty aggressive allocation. A major market correction could easily set you back 10% of the total amount. Not nearly as severe but if the bond fund is intermediate term there c...
by BigJohn
Thu Sep 29, 2016 5:31 pm
Forum: Investing - Help with Personal Investments
Topic: Financial adviser's advice
Replies: 22
Views: 3164

Re: Financial adviser's advice

The most important question before you get to his recommendations is "How much is this going to cost me?". I suspect this will come in at least three different buckets and you'll need to ask specific questions. First is the adviser's fee, this is normally a % of assets under management (AU...
by BigJohn
Wed Sep 28, 2016 6:00 pm
Forum: Investing - Theory, News & General
Topic: Asset Allocation in taxable close to retirement
Replies: 8
Views: 1370

Re: Asset Allocation in taxable close to retirement

The answer is very dependent on your spending plan in retirement. I retired about 2 years ago, My plan is to live off our taxable account while leaving our tIRAs untouched until RMDs hit. During that time I also plan to do some substantial Roth conversions and pay taxes out of our taxable account as...
by BigJohn
Wed Sep 28, 2016 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Reason NOT to wait past 66 to take Social Security
Replies: 48
Views: 6577

Re: Reason NOT to wait past 66 to take Social Security

.....delaying until 70 is still typically the best choice, given today's interest rates..... I think the point about current interest rates is key and could become a reason not to take SS at FRA. I haven't run the numbers but expect that if intermediate term treasury rates were 5% you'd might get a...
by BigJohn
Tue Sep 27, 2016 5:29 pm
Forum: Personal Finance (Not Investing)
Topic: Reason NOT to wait past 66 to take Social Security
Replies: 48
Views: 6577

Re: Reason NOT to wait past 66 to take Social Security

Unless you have a known terminal condition, I believe this to be true no matter what your family history might indicate. You can make a very strong case that trying estimate your own longevity is one of the worst forms of behavioral finance. Which leads to this as the reason I plan to wait until age...
by BigJohn
Tue Sep 27, 2016 5:22 pm
Forum: Investing - Theory, News & General
Topic: If you own Vanguard Total Stock Market, do you re-invest dividends?
Replies: 75
Views: 10987

Re: If you own Vanguard Total Stock Market, do you re-invest dividends?

During accumulation phase I reinvested, even in taxable accounts. Yes it creates more tax lots but I maximize my time in the market which is more important that a little more paperwork on taxes. When retired I turned off reinvestment and use dividends as my first tranche of income.
by BigJohn
Wed Sep 21, 2016 11:40 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax-Exempt Bond ETF.....
Replies: 6
Views: 1247

Re: Vanguard Tax-Exempt Bond ETF.....

Thanks all, My dad is a retired teacher, has some annuity income along with SS. If he invested in a mutual fund vs an ETF, would he have to continue to contribute monthly vs a one time lump sum investment? He should be able to buy at will with either. Here's a wiki article on the differences that m...
by BigJohn
Tue Sep 20, 2016 8:11 pm
Forum: Investing - Help with Personal Investments
Topic: Should fixed income percentage stay the same in current environment?
Replies: 26
Views: 2811

Re: Should fixed income percentage stay the same in current environment?

With a significant macro event, and a fund duration of say 5yrs, you would suddenly be faced with a drop of 50% or more. This would require a very rapid jump in 5 year rates from 2% to 12%. While not impossible, the probability of this happening is extremely low. On the other hand, while the exact ...
by BigJohn
Tue Sep 20, 2016 5:26 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Tax-Exempt Bond ETF.....
Replies: 6
Views: 1247

Re: Vanguard Tax-Exempt Bond ETF.....

Here's a long discussion about the pros and cons of this fund (at least I think it's the one you are talking about). https://www.bogleheads.org/forum/viewtopic.php?p=2322536 For me the up front load and the worry about bid/ask spread in a crisis are enoungh not to invest. I like VGs Intermediate Ter...
by BigJohn
Tue Sep 20, 2016 5:10 pm
Forum: Investing - Help with Personal Investments
Topic: Should fixed income percentage stay the same in current environment?
Replies: 26
Views: 2811

Re: Should fixed income percentage stay the same in current environment?

"Question: What’s the one investment that Wall Street prognosticators have been telling us to avoid for years because they are overpriced and thus risky? Answer: Bonds! While some of this is true, you need to put the conclusion about risk in context. Yes, a good low cost, high quality, interme...
by BigJohn
Mon Sep 19, 2016 6:26 pm
Forum: Investing - Theory, News & General
Topic: Bond Fund vs. Individual Bonds
Replies: 20
Views: 2234

Re: Bond Fund vs. Individual Bonds

One issue I haven't seen mentioned is the fees. An individual buying bonds is likely paying a significant fee and therefore not getting a competitive price. This is not a transparent process and the fees are hard (maybe impossible) to see but there none the less. This has a negative impact on return...
by BigJohn
Mon Sep 19, 2016 11:29 am
Forum: Investing - Help with Personal Investments
Topic: Understanding taxation in retirement
Replies: 8
Views: 1814

Re: Understanding taxation in retirement

One Q: In terms of the conversion to Roth, is the purpose here to simply reduce the balance of the pre-tax account and thus reduce the RMD, or is the purpose to pay the 15% tax during the conversion to fill up the lower bracket? Or both? I think the answer is both but there is nothing magical about...
by BigJohn
Sun Sep 18, 2016 5:40 pm
Forum: Investing - Help with Personal Investments
Topic: 24 year old new dividend portfolio
Replies: 151
Views: 10388

Re: 24 year old new dividend portfolio

I'm not a stock trader and with motif I buy 30 stocks at once. Again, I'm buying companies with a balance sheet I like, a wide moat and a proven track record. High speed data doesn't mean much to me. Did you really read my post? Don't you think professionals know more about balance sheets, wide moa...
by BigJohn
Sun Sep 18, 2016 5:30 pm
Forum: Investing - Help with Personal Investments
Topic: Understanding taxation in retirement
Replies: 8
Views: 1814

Re: Understanding taxation in retirement

Not really enough information to get too detailed. Here are some generic answers that apply to all scenarios based on my plans (retired 2 years ago at 58). To the extent they exist, pensions, SS and any annuities usually represent the first tranche of income for retirees. Pensions and annuities are ...
by BigJohn
Sun Sep 18, 2016 10:12 am
Forum: Investing - Help with Personal Investments
Topic: 24 year old new dividend portfolio
Replies: 151
Views: 10388

Re: 24 year old new dividend portfolio

Let's not worry about the math, back testing or philosophical purity for a moment. You are an amateur investor using readily available internet tools on a very part time basis. There are lots of professional fund managers using much more sophisticated tools with better, faster data analysis that wor...
by BigJohn
Fri Sep 16, 2016 9:11 pm
Forum: Investing - Theory, News & General
Topic: Taxation of RSUs - vest day vs deposit day
Replies: 4
Views: 763

Re: Taxation of RSUs - vest day vs deposit day

Sportswhiz00 wrote:Be very careful about asking tax questions on this forum because it is very easy to get the wrong answer.

Good point Sportswhiz, my answers were for Restricted Stock, I have no experience with RS Units.
by BigJohn
Fri Sep 16, 2016 4:26 pm
Forum: Investing - Theory, News & General
Topic: Taxation of RSUs - vest day vs deposit day
Replies: 4
Views: 763

Re: Taxation of RSUs - vest day vs deposit day

Your reported income from RSU is based on the price the day they vest. Your deduction for shares (RSU or otherwise) is based on the average of the high and low price on the day that the charity receives them.
by BigJohn
Wed Sep 14, 2016 5:20 pm
Forum: Investing - Help with Personal Investments
Topic: 24 year old new dividend portfolio
Replies: 151
Views: 10388

Re: 24 year old new dividend portfolio

For someone just starting out I'd suggest reading William Bernstein's "If You Can". It's written by a very well respected author, it's only 16 pages long and it's specifically written for people in their 20's. Best of all it's available for free here http://www.etf.com/docs/IfYouCan.pdf . ...
by BigJohn
Wed Sep 14, 2016 6:19 am
Forum: Investing - Theory, News & General
Topic: TIPS - Did you give up?
Replies: 476
Views: 69110

Re: TIPS - Did you give up?

Essentially there is no cash flow from dividends. Somewhere upthread you made a similar comment and I responded https://www.bogleheads.org/forum/viewtopic.php?p=2951034#p2951034 . I still think you are wishing TIPS could to do something which is not really possible. TIPS provide a unique benefit in...
by BigJohn
Tue Sep 13, 2016 5:16 pm
Forum: Investing - Help with Personal Investments
Topic: I am going to stop tilting. Sanity check.
Replies: 66
Views: 7528

Re: I am going to stop tilting. Sanity check.

Not sure it's worth it, especially if you are giving away 0.65% of the incremental return to ER. I decided years ago not to tilt as to get any meaningful incremental return you have to tilt very heavily. Here's an example for my chosen asset allocation and risk tolerance. In his book "Rational ...
by BigJohn
Tue Sep 13, 2016 4:53 pm
Forum: Investing - Help with Personal Investments
Topic: Set SWR to Total Stock Market yield?
Replies: 11
Views: 969

Re: Set SWR to Total Stock Market yield?

Link above is dividend per share which isn't very meaningful in the context of your question. Here's a graph of the dividend yield history. Even this isn't exactly what you are talking about because absolute dividend value will be down when price is down. However, 2.4% is very conservative so if suc...
by BigJohn
Fri Sep 09, 2016 7:15 am
Forum: Personal Finance (Not Investing)
Topic: Nursing home question [Can they go after my Mom's assets?]
Replies: 28
Views: 4041

Re: Nursing home question [Can they go after my Mom's assets?]

Based on my experience the rules are a pretty fair balance between the well spouse not having to eat cat food and the taxpayers not having to pay for care for someone who can afford it themselves.
by BigJohn
Thu Sep 08, 2016 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: Nursing home question [Can they go after my Mom's assets?]
Replies: 28
Views: 4041

Re: Nursing home question [Can they go after my Mom's assets?]

With nursing home costs being so outrageously expensive ($7k/month), does it make more sense for that person to live at home and hire a home health aide/nurse? DireWolf, based on my experience it depends on the level of care required. If all that is required is a few hours of help a day (eg bathing...
by BigJohn
Thu Sep 08, 2016 5:32 pm
Forum: Personal Finance (Not Investing)
Topic: Nursing home question [Can they go after my Mom's assets?]
Replies: 28
Views: 4041

Re: Nursing home question [Can they go after my Mom's assets?]

I worked this in detail for my parents in Illinois. There are some state specific differences so you need to work details for FL. Just as an example, here's are some of the details for Illinois. Their situation is similar, my mother is in long term nursing home care and father is still independent l...
by BigJohn
Mon Sep 05, 2016 11:27 am
Forum: Investing - Theory, News & General
Topic: Anyone else experiencing number drift
Replies: 51
Views: 7260

Re: Anyone else experiencing number drift

After reading over and over again in threads this weekend how returns over the next 10 years will be somewhere between minuscule and negative. Apparently 2.5% is the new 4%. It has got me thinking I need to bump my original number by 78.57%. Agree with comments above that 4% was based on surviving ...
by BigJohn
Sun Sep 04, 2016 12:51 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard Core Bond Fund
Replies: 55
Views: 7837

Re: Vanguard Core Bond Fund

The difference is, when it hits the fan, Total Bond has outperformed everything else do to the amount if Treasury bonds in the fund. This was vital during the financial crisis. If stability is that vital, what's the rationale for not going all the way to 100% Treasury bonds using VG Intermediate Te...
by BigJohn
Sun Sep 04, 2016 7:19 am
Forum: Investing - Help with Personal Investments
Topic: Vanguard Core Bond Fund
Replies: 55
Views: 7837

Re: Vanguard Core Bond Fund

If you want an index bond fund with less treasuries and more corporates take a look at VG Int Term Bond Index (VBIIX). According to VG it's in the same style box as Total Bond. Not sure why but M* has it in a very different place with medium quality and extensive interest rate risk. Anyone understan...
by BigJohn
Wed Aug 31, 2016 5:08 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 2915

Re: Parent Obamacare Tax Penalty For College Student

I'm trying to determine if that is a valid argument for avoiding the Obamacare penalty. My post above was based on what I know about Obamacare penalties. I'm just a tax preparation volunteer with a modest amount of IRS training/testing in this area but this did come up several times and the answer ...
by BigJohn
Wed Aug 31, 2016 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Parent Obamacare Tax Penalty For College Student
Replies: 31
Views: 2915

Re: Parent Obamacare Tax Penalty For College Student

My question is whether we should simply not claim daughter as a dependent based on the above reasoning. Based on what I know, claiming someone as a dependent is not really a matter of choice. Here's a link to the IRS rules in Publication 17 https://www.irs.gov/publications/p17/ch03.html#en_US_2015_...
by BigJohn
Tue Aug 30, 2016 7:24 pm
Forum: Investing - Help with Personal Investments
Topic: Oil & Gas Long Term Risk
Replies: 31
Views: 2379

Re: Oil & Gas Long Term Risk

The issue of time is limited by tech....and it is all there and affordable. What affordable tech exists today that can replace gasoline and diesel fuel in transportation? I firmly believe it will exist someday but predicting the timing of technology breakthroughs is even more difficult that market ...