Search found 887 matches

by smitcat
Thu Dec 07, 2017 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Timing the housing market
Replies: 35
Views: 2579

Re: Timing the housing market

You need to wait to find out the final form of the tax law change re property tax deduction and mortgage interest deduction. The old rule of thumb of qualifying for a mortgage with 28% or less of your monthly income for PITI was always based on the ability to deduct tax and interest. So, after the ...
by smitcat
Thu Dec 07, 2017 10:33 am
Forum: Investing - Theory, News & General
Topic: How would you value a business if you considered investing in it
Replies: 30
Views: 2575

Re: How would you value a business if you considered investing in it

It's helpful to know the norms of the industry in the context of the negotiation but the variation between companies in the same industry can be extreme. Norms are all about pricing and not about valuing. I'd try to get a really good handle on yearly cash flow to the owners and how persistent you t...
by smitcat
Wed Dec 06, 2017 5:57 pm
Forum: Investing - Help with Personal Investments
Topic: Will I make it? (Another "evaluate my financials" post..)
Replies: 19
Views: 1473

Re: Will I make it? (Another "evaluate my financials" post..)

Perhaps consider buying a smaller two family home and renting out one side - it worked for us.
by smitcat
Wed Dec 06, 2017 1:46 pm
Forum: Personal Finance (Not Investing)
Topic: Friend buys a lot of stuff because he want's to reduce his tax liability. Is this thinking flawed?
Replies: 47
Views: 4211

Re: Friend buys a lot of stuff because he want's to reduce his tax liability. Is this thinking flawed?

OP, With Solo/Individual 401K, he would not have to pay tax on his small business income. So, why is he spending money to save tax? KlangFool I don't think he knows about the solo/individual 401k or maybe thinks that investing is riskier. I know that he only picked individual stocks before and lost...
by smitcat
Wed Dec 06, 2017 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Friend buys a lot of stuff because he want's to reduce his tax liability. Is this thinking flawed?
Replies: 47
Views: 4211

Re: Friend buys a lot of stuff because he want's to reduce his tax liability. Is this thinking flawed?

Yes, obviously your friend's thinking is flawed. Running a "business" with the main objective to avoid income tax is counterproductive. Would I rather make $10,000 and pay a percentage of that to the government, or just spend the 10K on things that I don't need? The answer is obvious. All that bein...
by smitcat
Wed Dec 06, 2017 12:47 pm
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 18
Views: 1429

Re: Small Business Retirement Options

As I pointed out the minimum safe harbor employer non-elective contribution is 3%., but the minimum safe harbor employer match is 4%. This is 100% of the 1st 3% and 50% of the next 2% = 4% on the 1st 5%. Your experiences are an anomaly. After a dip during the great recession, recent studies have sh...
by smitcat
Wed Dec 06, 2017 12:15 pm
Forum: Personal Finance (Not Investing)
Topic: Timing the housing market
Replies: 35
Views: 2579

Re: Timing the housing market

I live in a HCOL area and I am currently looking for a house. I've been reading articles about the "prohibited topic," and many are very pessimistic about what it may do to housing costs and job growth in my area. I realize much of this is speculation. However, it did spark a question in me. One of...
by smitcat
Wed Dec 06, 2017 12:02 pm
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 18
Views: 1429

Re: Small Business Retirement Options

As pointed out by ERISA Stone, the safe harbor minimum non-elective contribution is 3%. Or the safe harbor minimum match is 100% of the 1st 3% of compensation and 50% of the next 2% of compensation. Assume the average NHCE match is 3%. If instead you pay a 5% non-elective contribution to facilitate...
by smitcat
Wed Dec 06, 2017 10:22 am
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 18
Views: 1429

Re: Small Business Retirement Options

Is there a retirement plan that would allow us to apply a lower employer contribution rate to these employees vs. the partners You should investigate a 401k with a "New Comparability Method" of profit sharing. This will require a higher employer contribution rate than a standard safe harbor plan, b...
by smitcat
Wed Dec 06, 2017 10:11 am
Forum: Investing - Theory, News & General
Topic: How would you value a business if you considered investing in it
Replies: 30
Views: 2575

Re: How would you value a business if you considered investing in it

The banking world's go-to measurement is an EBITDA multiple. Depending on the Company's growth rate, the multiple is currently 6x-10x EBITDA. There's many exceptions, but that will get you in the ball park. More concerning to me is the OP seemingly having difficulty finding the numbers needed to ca...
by smitcat
Wed Dec 06, 2017 10:04 am
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2372

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

Could someone tell me what OI and RMP stand for? Ok, I'm guessing OI is ordinary income... RPM - a spreadsheet calculator developed by a sharing bogle that we find to be really great tool. It is a little difficult to load and get correct but IMO is very much worth it as it can supply all kinds of g...
by smitcat
Wed Dec 06, 2017 10:01 am
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2372

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

munemaker wrote: Working with BigFoot's spreadsheet and iOrp, spending the taxable first while making heavy Roth conversions gave me the best results, and I experimented with it quite a bit. I've commented on both the RMP and I-ORP calculators before. I have run a number of scenarios in both progra...
by smitcat
Wed Dec 06, 2017 9:54 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

Some of us are old enough to have been through this exact concern in the past "SS cannot make it as is". Its not the first time it will be a challenge requiring some changes and flexibility and it likely wont be the last. We have been present for the adjustments taken in the past , how much notice w...
by smitcat
Tue Dec 05, 2017 8:16 pm
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2372

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

You generally want to spend your money in the way that gives you the maximal amount of spendable money. That is rarely selling taxable first. It is also rarely selling taxable first. In general it is some blend between both taxable and tax deferred that depends on current and future income expectat...
by smitcat
Tue Dec 05, 2017 7:29 pm
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2372

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

So it is necessary to have aft-tax account to cover the expense while doing the Roth conversion. From this point of view, pre-pay mortgage will reduce the aft-tax asset. Let say someone choose to take SS at 70.5. Let say he will 80k need for living expense. He is now X years old. So he would need (...
by smitcat
Tue Dec 05, 2017 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Why ORP-I suggests you spending down aft-tax saving 1st?
Replies: 29
Views: 2372

Re: Why ORP-I suggests you spending down aft-tax saving 1st?

I think ORP will try to keep the account that you have said will have the highest return the longest. So be sure to tell ORP that all your accounts will have the same expected annualized return. This is very likely the answer - folks set up these calculators with various income %'s and then they wo...
by smitcat
Tue Dec 05, 2017 3:32 pm
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

I assume I won't be getting SS. And if I were able to claim it I would do it ASAP. I don't think it will stick around forever. It will stick around in some form, but it is very unlikely to be what it is today. I also assume no SS because I expect means testing to become part of the program. Other c...
by smitcat
Tue Dec 05, 2017 1:19 pm
Forum: Investing - Help with Personal Investments
Topic: Small Business Retirement Options
Replies: 18
Views: 1429

Re: Small Business Retirement Options

For the last five years, my small firm has operated as a partnership and utilizing an individual 401(k) retirement plan. In doing so, we were able to max out both employer and employee contributions. Our firm needs to grow to keep up with demand for our business. New hires will likely be brought in...
by smitcat
Tue Dec 05, 2017 1:13 pm
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

I assume I won't be getting SS. And if I were able to claim it I would do it ASAP. I don't think it will stick around forever. It will stick around in some form, but it is very unlikely to be what it is today. I also assume no SS because I expect means testing to become part of the program. Other c...
by smitcat
Tue Dec 05, 2017 11:08 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

You want to prepare for 75% cut in social security and the market tanking by 75% and the inflation going up by 10% every year and the interest rates staying in low 2%, medicare going away and being in long terms care facility for 30 years; is there anything else you need to be ready for? is that wo...
by smitcat
Tue Dec 05, 2017 8:45 am
Forum: Investing - Theory, News & General
Topic: How would you value a business if you considered investing in it
Replies: 30
Views: 2575

Re: How would you value a business if you considered investing in it

Let's say I want to offer to buy a share of the company I am working for. What are the steps involved in finding real value of any company? I can find out yearly operational revenue for last few years, and overall cost (with a ballpark salary/compensation) which would give me an idea how much it ma...
by smitcat
Mon Dec 04, 2017 12:18 pm
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

OK new inputs..... "I will be a practicing physician soon and am wondering whether it is stupid to set up a private practice assuming I make the same amount as a doctor at the hospital.[/color]" Going into any business assuming that you will make the same amount of dollars before benefits as if you...
by smitcat
Mon Dec 04, 2017 12:10 pm
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

As has been pointed out by other replies you premise is based on a false equivalency. No doctor or any other professional would ever agree to be an Independent Contractor at an equivalent rate of pay as a W-2 employee. For example, ER physicians who are ICs, typically receive a 25% - 50% (or more) ...
by smitcat
Mon Dec 04, 2017 12:09 pm
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

Are you looking at nominal salary or the total value of salary plus benefits? A typical employee with a 100k salary would receive total compensation of more than 100k, while a self-employed person with 100k in income is receiving 100k in total compensation. Total compensation for an employee would ...
by smitcat
Mon Dec 04, 2017 11:34 am
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

Are you looking at nominal salary or the total value of salary plus benefits? A typical employee with a 100k salary would receive total compensation of more than 100k, while a self-employed person with 100k in income is receiving 100k in total compensation. Total compensation for an employee would ...
by smitcat
Mon Dec 04, 2017 11:32 am
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

So it seems there is no tax/financial advantage to being a sole proprietor other than freedom/flexibility? Am I correct on this point? Otherwise it is almost that the employee gets to keep more of their earned money (again, accounting for taxes, healthcare, benefits, etc. and assuming little to no ...
by smitcat
Mon Dec 04, 2017 10:15 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

I respectfully disagree. Planning ahead financially is important and social security is a part of financial planning. My goal is not to leave this earth with to much or to little. If I take SS in it's current form at 67 (full benefit), my planner says I leave over 3 million, which means I left to m...
by smitcat
Mon Dec 04, 2017 9:44 am
Forum: Investing - Help with Personal Investments
Topic: Variable annuities Yes/No
Replies: 49
Views: 5391

Re: Variable annuities Yes/No

I’m like friar1610 above. Own a large Vanguard VA funded back in an earlier millennium. I bought it because we were maxed out on tax-deferred space in 401(k)/IRA. I certainly haven’t lost money or gone broke because I purchased a Vanguard Variable Annuity. It keeps growing tax-deferred. Have alread...
by smitcat
Mon Dec 04, 2017 9:37 am
Forum: Personal Finance (Not Investing)
Topic: Regrets for taking SS at 62 or waiting?
Replies: 100
Views: 9463

Re: Regrets for taking SS at 62 or waiting?

I started SS at 66. The halfway point between 62 and 70. Retired at 65. I thought it was a good compromise on the when to take it question. I think the question of when is tied to whether or not you are working. How many are there that retire at 62 and wait verses those that work all the way throug...
by smitcat
Mon Dec 04, 2017 9:31 am
Forum: Personal Finance (Not Investing)
Topic: How do I convince my employees to invest more?
Replies: 92
Views: 5384

Re: How do I convince my employees to invest more?

You will not reach them for the most part. It will be great if you can supply a good 401K for 10-15% of the employees who take advantage of it. And that will be a bit better than the overall population so you can only do what you can. We have been down this road ourselves with many of these ideas ov...
by smitcat
Mon Dec 04, 2017 9:20 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

Doing any elaborate math or planning concerning social security when you are 12+ years away from it is an exercise in futility in my opinion... It's almost certain that the rules will change by then, so why bother. To be conservative/safe, I assume that the plan will be means tested, and that I wil...
by smitcat
Mon Dec 04, 2017 7:57 am
Forum: Investing - Help with Personal Investments
Topic: Who keeps more money out of 100k? Self-employed vs Employed?
Replies: 39
Views: 2910

Re: Who keeps more money out of 100k? Self-employed vs Employed?

bottlecap wrote:
Mon Dec 04, 2017 6:57 am
If a salaried employee makes $100k plus benefits, the employee is not being paid $100k, but $100k, plus whatever the value of the benefits is.

JT
A great and accurate answer...
by smitcat
Mon Dec 04, 2017 7:44 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

Doing any elaborate math or planning concerning social security when you are 12+ years away from it is an exercise in futility in my opinion... It's almost certain that the rules will change by then, so why bother. To be conservative/safe, I assume that the plan will be means tested, and that I wil...
by smitcat
Sun Dec 03, 2017 3:07 pm
Forum: Investing - Help with Personal Investments
Topic: What to do with a variable annuity?
Replies: 21
Views: 2648

Re: What to do with a variable annuity?

Twelve months ago, a female relative who is now 69.5 yoa put down $500K of Tax-Deferred money into a variable annuity . She has Not started collecting income yet. Any thoughts on how much roughly she might receive back if she were to cancel this variable annuity? I understand the contract/prospectu...
by smitcat
Sat Dec 02, 2017 9:01 am
Forum: Investing - Help with Personal Investments
Topic: Divs and Cap Gains are killing me
Replies: 96
Views: 7913

Re: Divs and Cap Gains are killing me

^in theory yes. In practicable terms and with inflation; Not always. I call this a "Qwack", Qualified Withdrawal Account aCK. In theory, an IwRA, will return more $$$ to the Treasury, than $ was collected at wage time. Interesting legislation history. Ymmv :greedy Practically we expect to come out ...
by smitcat
Fri Dec 01, 2017 11:40 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

I'm anticipating the news to report the SS fund to run out by 2034 as we get closer to that date, which can be misleading. "oh no, I won't get a SS check anymore in 2034". The SS fund will have enough money to pay only 79% of benefits starting in 2034. I expect the majority of those 62 at that time...
by smitcat
Fri Dec 01, 2017 11:00 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

If you started at age 62 with $1,000 a month you would have received $96,000 by age 70. That's a loss of $96,000 if you wait until age 70 to start collecting. How long would it take with the "higher" benefits at age 70 to make up the $96,000 loss? And there's a "health depreciation" factor that nee...
by smitcat
Fri Dec 01, 2017 10:56 am
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

Thanks to all for the input, thoughts, resources, and suggestions. I am having a hard time finding a calculator that allows one to financially plan that includes social security without working until age 62 or later, or even a social security calculator that will allow a user to figure the retireme...
by smitcat
Thu Nov 30, 2017 1:46 pm
Forum: Personal Consumer Issues
Topic: Does it make sense to drop health insurance?
Replies: 198
Views: 7641

Re: Does it make sense to drop health insurance?

However, if we keep our income under about $65k, we're eligable [sic] for a subsidy that brings the cost down to $55 a month. Yes, fifty-five. So we would be highly incentivized to keep our income low. So we'd drop from $32k per year down to $4.6 k. It makes no sense, but it's the law. This confuse...
by smitcat
Thu Nov 30, 2017 9:23 am
Forum: Investing - Help with Personal Investments
Topic: Claim S.S. and Invest it
Replies: 13
Views: 2036

Re: Claim S.S. and Invest it

Part of the answer to the question is one's tax bracket. SS is taxable by the feds and by many states, so you would have less to invest and have to have a very high total market return to come out anywhere close to even. A "guaranteed" 8% each year up to age 70 is hard to beat considering that numb...
by smitcat
Wed Nov 29, 2017 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

More broadly, if you are going to invest every dollar of your social security rather than spend it, it doesn't really matter what you choose to do because you have no need for it. This statement helps me see: If I will invest my SS rather than spend it, can I beat 8%/year guaranteed? If I'm not goi...
by smitcat
Wed Nov 29, 2017 12:52 pm
Forum: Investing - Help with Personal Investments
Topic: Retirement: how to forecast where you’re at?
Replies: 43
Views: 5063

Re: Retirement: how to forecast where you’re at?

A review of retirement income calculators by financial planner Dana Anspach earlier this month.
https://www.thebalance.com/web-s-best-r ... rs-2388842

Wow - I really do not agree with that article rating the AARP tool over TRP and Fidelity after viewing/using all of them.
by smitcat
Wed Nov 29, 2017 12:43 pm
Forum: Personal Consumer Issues
Topic: Does it make sense to drop health insurance?
Replies: 198
Views: 7641

Re: Does it make sense to drop health insurance?

"My question is: Is my family at the point where it is rational to forego coverage?" Have you priced a catastrophic plan that would protect you on the very high side of medical costs? The price I quoted is for a very high deductible plan aka a catastrophic plan. The low-deductible plans are much mo...
by smitcat
Wed Nov 29, 2017 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Why not take Social Security at 62
Replies: 334
Views: 26758

Re: Why not take Social Security at 62

More broadly, if you are going to invest every dollar of your social security rather than spend it, it doesn't really matter what you choose to do because you have no need for it. This statement helps me see: If I will invest my SS rather than spend it, can I beat 8%/year guaranteed? If I'm not goi...
by smitcat
Wed Nov 29, 2017 12:35 pm
Forum: Personal Consumer Issues
Topic: Does it make sense to drop health insurance?
Replies: 198
Views: 7641

Re: Does it make sense to drop health insurance?

"My question is: Is my family at the point where it is rational to forego coverage?"

Have you priced a catastrophic plan that would protect you on the very high side of medical costs?
by smitcat
Wed Nov 29, 2017 10:19 am
Forum: Personal Finance (Not Investing)
Topic: Taxes in Retirement [ways to forecast]
Replies: 30
Views: 2920

Re: Taxes in Retirement [ways to forecast]

First off, thank you for all the useful investing info over the years. We've learned so much from this forum. Now as we are approaching our number - we are looking at retirement. Taxes (and healthcare - that's another subject) have been the vague unknown and we're hoping to get a grasp on how to fi...
by smitcat
Wed Nov 29, 2017 9:06 am
Forum: Personal Consumer Issues
Topic: Honda CRV All Wheel Drive VS Front Wheel, Which One?
Replies: 88
Views: 6873

Re: Honda CRV All Wheel Drive VS Front Wheel, Which One?

I live in Florida and just bought a new CR-V. It is front wheel drive. I wish it was all wheel drive. Nothing worse than front wheel spin. Get AWD — you won’t regret it. I have one CRV with AWD and one CRV with FWD - we live in the northeast and they have very similar capabilities. You can make a l...
by smitcat
Tue Nov 28, 2017 11:42 am
Forum: Personal Consumer Issues
Topic: Tesla truck unveil
Replies: 142
Views: 9086

Re: Tesla truck unveil

Smitcat, do you think that Tesla’s lead in Superchargers will make a difference? I see many more L2 chargers locally, but tbh, they strike me as neither fish nor fowl. I don’t want/need to charge while I’m at the grocery store, or movie, etc. and they are surely too slow to facilitate long distance...
by smitcat
Tue Nov 28, 2017 11:38 am
Forum: Personal Consumer Issues
Topic: Honda CRV All Wheel Drive VS Front Wheel, Which One?
Replies: 88
Views: 6873

Re: Honda CRV All Wheel Drive VS Front Wheel, Which One?

AWD only ! Stop being cheap. Safety first, so much better in rain, snow, slick roads. For the most part I have found that not to be true - the difference is not significant. Please check the road tests for these types of AWD and see what you can find. FWIW - the statement above about having the bes...
by smitcat
Tue Nov 28, 2017 11:04 am
Forum: Personal Consumer Issues
Topic: Tesla truck unveil
Replies: 142
Views: 9086

Re: Tesla truck unveil

Smitcat, EV fans hope that you’re right, because we are more pro-EV than Pro-Tesla. I’m sure that they have internal opposition at mainstream manufacturers, even more than we see on BH, to a changing landscape. I agree - maybe I was more vague than I intended above when I mentioned that I am a fan ...