Something good from Wade Pfau

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LadyGeek
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Re: Something good from Wade Pfau

Post by LadyGeek »

wade wrote: Thu Sep 09, 2021 1:06 pm
Soon2BXProgrammer wrote: Thu Sep 09, 2021 1:01 pm
wade wrote: Thu Sep 09, 2021 9:22 am because there are always going to be the cynics at Bogleheads.
As a Boglehead who has turned into one of your students at The American College, I appreciate the contribution's to the discipline of financial planning you have made. (I haven't read the book yet, as it just got published, but it is on my todo)
Thank you!
As someone who remembers when you attended the local Bogleheads Philadelphia chapter meetings, I also appreciate the contributions you have made. You attended quite a few meetings, which were just after you moved back to the Philadelphia area from Japan.

I still remember your presentation on Safe Withdrawal Rates. You may not remember me specifically, but I was the one asking all the questions. :)

BTW, I retired last year.
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Re: Something good from Wade Pfau

Post by Edify »

I read all of Wade's previous books and each has been invaluable in formulating my retirement plan. What I especially like about each book is that none are sales pitches for any product. Rather, I find Wade's approach is to explore many options (including the pros and cons) with the ultimate decision being left to the reader. I am looking forward to reading his new book.
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Re: Something good from Wade Pfau

Post by goodenyou »

I will throw my hat into the ring as a supporter of Wade. Not because I always agree with everything he has to offer, but because I value the level of discussion and sophistication that he brings to the Forum. I hope attempts at impugning one’s character or ad hominem attacks don’t push away valuable well-educated and published members that volunteer to share knowledge.

Thanks Wade.
"Ignorance more frequently begets confidence than does knowledge" | “At 50, everyone has the face he deserves”
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Re: Something good from Wade Pfau

Post by afan »

evofxdwg wrote: Sun Sep 12, 2021 12:17 am Im on the fence about buying the book.

Wife and I are retired (me 4 yrs now; her, longer). We have taken SS (at age 66). We always file jointly. And I have a spreadsheet plan (now 3 years in going on 4) that manages brackets and stays below the first IRMMA MAGI step limit to Roth convert the federal taxable headspace. I have been doing Roth conversions for 3 years now. State taxes are almost nil due to SS not being taxed at all and large exclusions on retiree income.

I plan to continue the above until RMD's kick in at 72 (Secure Act), and I guess I will continue conversions, but with smaller amounts since a lot of the headspace will be reduced by RMD withdrawals.

Rough projections show Im not going to get a large percentage of the big IRA converted before RMD's kick in at 72 (Secure Act).

These Roth conversions will likely benefit our children more than they will benefit us. One question I do have is how to manage this plan and/or estate differently if required to minimize (or possibly pay zero) inheritance tax. (We are spending some on travel and fun, just bought a new RV)

So a lot of our major decisions are cast in stone at this point. And our major concern is passing some to our heirs tax efficiently.

Will the book provide some worthwhile pointers for me?
Not having read the book yet, I cannot say whether it would tell you something you do not already know. Like you, I have a detailed plan based on the issues as I understand them. It is always possible that there are considerations that should be in these plans but I do not know enough to realize this. I am looking to the book as a check on my knowledge.

Yes, Roth conversions can reduce total taxes, including state and federal death taxes, without reducing federal income taxes. One would have to change the model from optimizing wealth after income taxes to optimizing after income and death taxes. Although everyone knows this is true, I have not seen any systematic approaches to doing this. I do not know whether Pfau's book addresses this.

If you will be subject to federal estate taxes and you plan to leave a large part of your assets to individuals, then Roth conversions could be part of the strategy. Paying higher income taxes, early, to send more money to your heirs later. If you will face federal estate taxes under the current exclusion level, then you presumably have no worries about running out of money in retirement.
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Re: Something good from Wade Pfau

Post by nedsaid »

wade wrote: Thu Sep 09, 2021 1:06 pm
Soon2BXProgrammer wrote: Thu Sep 09, 2021 1:01 pm
wade wrote: Thu Sep 09, 2021 9:22 am because there are always going to be the cynics at Bogleheads.
As a Boglehead who has turned into one of your students at The American College, I appreciate the contribution's to the discipline of financial planning you have made. (I haven't read the book yet, as it just got published, but it is on my todo)
Thank you!
Hi Wade. I wanted to let you know that your contributions through your writings and research are much appreciated. It is also good to see you post again here at the Bogleheads, we actually need industry experts to post here from time to time, it really helps the discussion.

I know that you got static in other threads, I suppose that just comes with the territory, the Bogleheads are a tough crowd. It is okay to debate ideas. There are times that personal motives get called into question and I think that is inappropriate. Also frustrating when people who work as financial professionals full time get told they don't know what they are talking about. My view is that no one or nothing in the industry is perfect, there are flaws and trade-offs to everything.

I do read your articles from time to time, your writings about annuities have been very helpful to me personally. I am about three to five years from retirement so I am thinking about my options for income in retirement.

So I hope you keep lurking here and that you will on occasion post here. Lots of us are interested in what you have to say.
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Que1999
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Re: Something good from Wade Pfau

Post by Que1999 »

BluesH wrote: Sat Sep 11, 2021 2:02 pm Just a quick question on format. I see the Kindle version is $8 cheaper than paperback. And in general, I prefer reading books (novels) on a Kindle. But I've found that books with lots of charts, graphs, maps, etc, don't do well on Kindle. That frequently applies to financial books. I have a Kindle Paperwhite, which is B&W and not scalable.

So the quick question is - would I do better to buy the paperback?
I'm not sure if this applies to Mr. Pfau's book, but I recently bought, "The Psychology of Money" by Morgan Housel. In the first few pages, it states that as a purchaser of the physical copy of the book, you are also entitled to the e-book as well. I followed the instructions, emailed the digital copy of the book to my Kindle email address, and now have access to both the physical copy & digital Kindle copy. Hopefully, this applies to Mr. Pfau's new book as well.

Thank you Mr. Pfau, I'll bump this up to my next reading assignment! :sharebeer
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Re: Something good from Wade Pfau

Post by kaesler »

My copy arrived yesterday. I’ve skimmed it and started to read it completely. From what I’ve seen so far, it is the best book I know of for my situation, which is a DIY guy in very early retirement, refining an income plan for myself.

Thanks to Dr Pfau for an excellent book.
Last edited by kaesler on Sun Sep 12, 2021 12:57 pm, edited 2 times in total.
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Re: Something good from Wade Pfau

Post by CrazyCatLady »

Thanks OP for posting the excerpt! I just bought the book and am looking forward to reading it. It was nice to see an example of a reasonably well off single person; usually the examples are for MFJ and not relatable to my circumstances.
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Re: Something good from Wade Pfau

Post by Rob_Burke »

I’m 47 and hope to retire by 60 with a balanced portfolio. If someone can design software that incorporates the math, AI, with full market info and personal preferences to give real time tax and goal based withdraws they will have a very successful business.
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Re: Something good from Wade Pfau

Post by Skeeter1 »

goodenyou wrote: Sun Sep 12, 2021 10:13 am I will throw my hat into the ring as a supporter of Wade. Not because I always agree with everything he has to offer, but because I value the level of discussion and sophistication that he brings to the Forum. I hope attempts at impugning one’s character or ad hominem attacks don’t push away valuable well-educated and published members that volunteer to share knowledge.

Thanks Wade.
+1
Thank you Mr Pfau for all that you do to try to help us continue to learn and evolve our financial knowledge.
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Re: Something good from Wade Pfau

Post by coolasadog »

wade wrote: Thu Sep 09, 2021 9:25 am
wrongfunds wrote: Thu Sep 09, 2021 8:14 am 28.99 years? That is short of the proverbial thirty years by a hair but that will be considered as failure in the infamous 4% “rule”. I was expecting that with assumed 2% interest income it should have crossed the thirty year barrier.
You are right about the idea that 2% is a high enough return for the 4% rule. A 1.33% real return makes it work. But this example wasn't about the 4% rule. The 4% rule doesn't consider taxes. And the initial spending goal in this example was already higher than 4%, with taxes then also added on top of that.
Sorry if this is a dumb question. I always assumed 4% (or any other % based guideline) included all expenses, including tax? If so is this a safety factor applied to 4%? Thanks
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Re: Something good from Wade Pfau

Post by GP813 »

Skeeter1 wrote: Sun Sep 12, 2021 1:42 pm
goodenyou wrote: Sun Sep 12, 2021 10:13 am I will throw my hat into the ring as a supporter of Wade. Not because I always agree with everything he has to offer, but because I value the level of discussion and sophistication that he brings to the Forum. I hope attempts at impugning one’s character or ad hominem attacks don’t push away valuable well-educated and published members that volunteer to share knowledge.

Thanks Wade.
+1
Thank you Mr Pfau for all that you do to try to help us continue to learn and evolve our financial knowledge.
Yes, I've started reading some of his articles online and will order the book as I try to help my mother navigate her upcoming retirement.
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Re: Something good from Wade Pfau

Post by antiqueman »

Wade ,thank you for your help on Bogleheads.

While others may make certain comments about your writings, my guess is the majority of people on the forum appreciate your insights.

For one, I do not want you to stop posting. I do not want you to believe you are not welcome on the forum and leave it like Larry Swedroe did.
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Re: Something good from Wade Pfau

Post by randomguy »

coolasadog wrote: Sun Sep 12, 2021 2:16 pm
wade wrote: Thu Sep 09, 2021 9:25 am
wrongfunds wrote: Thu Sep 09, 2021 8:14 am 28.99 years? That is short of the proverbial thirty years by a hair but that will be considered as failure in the infamous 4% “rule”. I was expecting that with assumed 2% interest income it should have crossed the thirty year barrier.
You are right about the idea that 2% is a high enough return for the 4% rule. A 1.33% real return makes it work. But this example wasn't about the 4% rule. The 4% rule doesn't consider taxes. And the initial spending goal in this example was already higher than 4%, with taxes then also added on top of that.
Sorry if this is a dumb question. I always assumed 4% (or any other % based guideline) included all expenses, including tax? If so is this a safety factor applied to 4%? Thanks
The 4% rule is how much you can take out of a portfolio. It doesn't count things like taxes. Someone asked why a 1.3% return was enough for the 4% rule to work but with 2%, we are seeing failures. The simple answer is cause they aren't talking 4% out of the portfolio. They are doing a slightly more complex thing where they are trying to generate a certain amount of spendable money (95k) out of a portfolio while dealing with taxes/IRMAA and deciding when to start talking out SS.
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Re: Something good from Wade Pfau

Post by coolasadog »

randomguy wrote: Sun Sep 12, 2021 2:45 pm
coolasadog wrote: Sun Sep 12, 2021 2:16 pm
wade wrote: Thu Sep 09, 2021 9:25 am
wrongfunds wrote: Thu Sep 09, 2021 8:14 am 28.99 years? That is short of the proverbial thirty years by a hair but that will be considered as failure in the infamous 4% “rule”. I was expecting that with assumed 2% interest income it should have crossed the thirty year barrier.
You are right about the idea that 2% is a high enough return for the 4% rule. A 1.33% real return makes it work. But this example wasn't about the 4% rule. The 4% rule doesn't consider taxes. And the initial spending goal in this example was already higher than 4%, with taxes then also added on top of that.
Sorry if this is a dumb question. I always assumed 4% (or any other % based guideline) included all expenses, including tax? If so is this a safety factor applied to 4%? Thanks
The 4% rule is how much you can take out of a portfolio. It doesn't count things like taxes. Someone asked why a 1.3% return was enough for the 4% rule to work but with 2%, we are seeing failures. The simple answer is cause they aren't talking 4% out of the portfolio. They are doing a slightly more complex thing where they are trying to generate a certain amount of spendable money (95k) out of a portfolio while dealing with taxes/IRMAA and deciding when to start talking out SS.
Thanks randomguy
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Re: Something good from Wade Pfau

Post by Tdubs »

wade wrote: Thu Sep 09, 2021 9:22 am
Exchme wrote: Thu Sep 09, 2021 8:04 am It was good to see a concrete example of some concepts, but hard to know what message the reading public comes away with. Bogleheads would know the approaches that he debunked are flawed and why, but I felt that the way the they were put forward was less about education so people could DIY and more about persuasion that the concepts were tricky and hard to grasp (with the unspoken point that you need an advisor).

A teacher would have put the optimal themes first (equalize tax rates, minimize taxes on SS, etc.) and then showed how some common withdrawal ideas don't match the themes so don't give the best results. But the persuader tests each seemingly smart withdrawal strategy and then the next even smarter strategy pops up. By the time we are on the last one, our jaws have dropped in awe of the big smarts of the advisor.

But maybe I'm too cynical and too primed to look for a sales pitch.
This comment is really frustrating and really encapsulates why I've lost interest in participating at Bogleheads over the years. People just like to express opinions about things they haven't read. It happens over and over to me. This book excerpt is at the end of the tax planning chapter. It began 56 pages in. It follows careful explanations about the different tax concepts at work, and it simply provides an example at the end to show how those pieces all fit together. The chapter does what you've asked of it.

I worked very hard to make this book serve as a standalone tool for self-directed people. There is a brief discussion of working with financial advisors on pages 440 to 444, but even there it is clear that not all individuals perceive advisors as providing value beyond their fees. Being self-directed is a fine option to choose. This book is NOT a sales pitch for working with a financial advisor. And I know it doesn't matter how hard I work to make this clear, because there are always going to be the cynics at Bogleheads.
Been considering a purchase and went to the comments at Amazon. I'm struck by how many people thought the book was great for DIYers or gave them confidence to go it alone. So, if Wade's goal was to snag clients, he failed.
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Re: Something good from Wade Pfau

Post by Mr. Rumples »

antiqueman wrote: Sun Sep 12, 2021 2:40 pm Wade ,thank you for your help on Bogleheads.

While others may make certain comments about your writings, my guess is the majority of people on the forum appreciate your insights.

For one, I do not want you to stop posting. I do not want you to believe you are not welcome on the forum and leave it like Larry Swedroe did.
Ditto...
I've only read one investing book in my life - one of Venita VanCaspel's. I will check out this book. Meanwhile, I have followed Mr. Pfau's writings/commentary where I can find them and have adopted a reduced withdrawal rate and a "rising equity glide-path" in retirement.
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Re: Something good from Wade Pfau

Post by afan »

Tdubs wrote: Mon Sep 13, 2021 6:58 am
Been considering a purchase and went to the comments at Amazon. I'm struck by how many people thought the book was great for DIYers or gave them confidence to go it alone. So, if Wade's goal was to snag clients, he failed.
Does he have clients?

I know he has the Retirement Researcher operation. He sells books. There is a link on the RR site to have a consultation with an asset management firm, so I assume their is some financial relationship there. But I do not know of a way to hire him personally to do anything for an individual.

If he does offer such a service, he does not seem to market it. I assume hiring him to do a retirement plan for you would cost a fortune.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama
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Re: Something good from Wade Pfau

Post by Soon2BXProgrammer »

afan wrote: Mon Sep 13, 2021 8:00 am

Does he have clients?

I know he has the Retirement Researcher operation. He sells books. There is a link on the RR site to have a consultation with an asset management firm, so I assume their is some financial relationship there. But I do not know of a way to hire him personally to do anything for an individual.

If he does offer such a service, he does not seem to market it. I assume hiring him to do a retirement plan for you would cost a fortune.
https://www.mcleanam.com/team/wade-pfau/

Note: i actually don't know what services he provides via that relationship.
Earned 34 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
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Re: Something good from Wade Pfau

Post by Tdubs »

afan wrote: Mon Sep 13, 2021 8:00 am
Tdubs wrote: Mon Sep 13, 2021 6:58 am
Been considering a purchase and went to the comments at Amazon. I'm struck by how many people thought the book was great for DIYers or gave them confidence to go it alone. So, if Wade's goal was to snag clients, he failed.
Does he have clients?

I know he has the Retirement Researcher operation. He sells books. There is a link on the RR site to have a consultation with an asset management firm, so I assume their is some financial relationship there. But I do not know of a way to hire him personally to do anything for an individual.

If he does offer such a service, he does not seem to market it. I assume hiring him to do a retirement plan for you would cost a fortune.
Perhaps I needed an emoji to go with the joke. I was just supporting Wade's comment that he crafted a book to help DIYers. His readers seem to agree.
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Re: Something good from Wade Pfau

Post by Ocean77 »

My copy just came in today. It looks like a very comprehensive book, with the topics covering all angles on retirement one could think of, on close to 500 densely written pages. I'm glad I have a few more years to retirement, so I can make it through this book. :D
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Re: Something good from Wade Pfau

Post by sixtyforty »

BluesH wrote: Sat Sep 11, 2021 2:02 pm Just a quick question on format. I see the Kindle version is $8 cheaper than paperback. And in general, I prefer reading books (novels) on a Kindle. But I've found that books with lots of charts, graphs, maps, etc, don't do well on Kindle. That frequently applies to financial books. I have a Kindle Paperwhite, which is B&W and not scalable.

So the quick question is - would I do better to buy the paperback?
I recently downloaded the Kindle version and the charts I've seen look just fine.
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci
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Re: Something good from Wade Pfau

Post by vectorizer »

wade wrote: Thu Sep 09, 2021 9:22 am This comment is really frustrating and really encapsulates why I've lost interest in participating at Bogleheads over the years. People just like to express opinions about things they haven't read. It happens over and over to me.
...
I worked very hard to make this book serve as a standalone tool for self-directed people. And I know it doesn't matter how hard I work to make this clear, because there are always going to be the cynics at Bogleheads.
I can't imagine how it feels to have ones expert work denigrated by ungrateful people, but I'm sure you know that for every post like the one you're reacting to, there are many people like me grateful for you sharing your research and analysis in multiple media. I've been a "fan" for a long time, and you've helped me to think differently about retirement income and related subjects. You have helped me be financially secure in retirement. Thank you Wade.
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Re: Something good from Wade Pfau

Post by L82GAME »

vectorizer wrote: Tue Sep 14, 2021 7:30 am
wade wrote: Thu Sep 09, 2021 9:22 am This comment is really frustrating and really encapsulates why I've lost interest in participating at Bogleheads over the years. People just like to express opinions about things they haven't read. It happens over and over to me.
...
I worked very hard to make this book serve as a standalone tool for self-directed people. And I know it doesn't matter how hard I work to make this clear, because there are always going to be the cynics at Bogleheads.
I can't imagine how it feels to have ones expert work denigrated by ungrateful people, but I'm sure you know that for every post like the one you're reacting to, there are many people like me grateful for you sharing your research and analysis in multiple media. I've been a "fan" for a long time, and you've helped me to think differently about retirement income and related subjects. You have helped me be financially secure in retirement. Thank you Wade.
+1!
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Re: Something good from Wade Pfau

Post by sleepysurf »

**Flash Notice**

Folks, Wade Pfau has graciously agreed (despite short notice) to be our guest presenter for the "Retired Life Stage" meeting on Tue, Sep 21, starting 8 PM *Eastern*. He'll cover some retirement topics of general interest, along with some Q&A. Further details, once finalized, will be posted in our Retired Life Stage "Master Thread".

His presentation (but not the Q&A segment) will be recorded, so try to join us for the full discussion.

In the meantime, mark your calendars, and please RSVP here... https://forms.gle/qQfYtTn6BD4E7ETa8
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Re: Something good from Wade Pfau

Post by wade »

Thanks for the kind words everyone. Of course I remember you from Bogleheads events, LadyGeek.

There have been a number of threads in the past where people express a lot of hate toward me, and I just thought I better jump in after that first comment making an assumption that this book was just a pitch for advisor services, before 10 more people jumped in with the same uninformed opinion.

I do understand that feeling. I've read, or at least skimmed, a lot of financial planning books. There's a whole genre of ghostwritten books from financial advisors that basically serve as a "business card" for the advisor. That's not at all what this book is.

Though I do work with a financial advising firm, I've always written for an audience that is a combination of financial advisors (since another hat I wear is to train advisors at the American College) and sophisticated do-it-yourselfers like Bogleheads. I fully embrace that.

And I'm looking forward to that event which sleepysurf organized for next Tuesday's (September 21) "Retired Life Stage" meeting, discussed in the comment right before this. Hope to see some of you there!
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Re: Something good from Wade Pfau

Post by bog007 »

:sharebeer wade
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Re: Something good from Wade Pfau

Post by LeeMKE »

Wade was looking for people to review this book, and I'm always interested in reading his work. I just didn't realize it was a smidge over 700 pages!

Excellent book for we Bogleheads. When you start looking at planning for withdrawals (anytime after age 50 IMHO) this book will be a necessary guidebook. Each chapter is explanation, checklist of things to consider/do for yourself and cites for the over achievers in the group to continue a deeper study.

Very worthwhile, as are all his books.
The mightiest Oak is just a nut who stayed the course.
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Re: Something good from Wade Pfau

Post by sleepysurf »

wade wrote: Wed Sep 15, 2021 8:32 pm Thanks for the kind words everyone...
And I'm looking forward to that event which sleepysurf organized for next Tuesday's (September 21) "Retired Life Stage" meeting, discussed in the comment right before this. Hope to see some of you there!
Thanks Wade. We're really looking forward to hearing your perspectives! BTW, my Co-Coordinator Robert gets the credit for reaching out to you and getting your commitment despite the short notice.

We encourage all those who wish to attend to please RSVP (it's totally anonymous), so we can plan accordingly. Link... https://forms.gle/qQfYtTn6BD4E7ETa8
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chazas
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Re: Something good from Wade Pfau

Post by chazas »

wade wrote: Thu Sep 09, 2021 9:22 am
Exchme wrote: Thu Sep 09, 2021 8:04 am It was good to see a concrete example of some concepts, but hard to know what message the reading public comes away with. Bogleheads would know the approaches that he debunked are flawed and why, but I felt that the way the they were put forward was less about education so people could DIY and more about persuasion that the concepts were tricky and hard to grasp (with the unspoken point that you need an advisor).

A teacher would have put the optimal themes first (equalize tax rates, minimize taxes on SS, etc.) and then showed how some common withdrawal ideas don't match the themes so don't give the best results. But the persuader tests each seemingly smart withdrawal strategy and then the next even smarter strategy pops up. By the time we are on the last one, our jaws have dropped in awe of the big smarts of the advisor.

But maybe I'm too cynical and too primed to look for a sales pitch.
This comment is really frustrating and really encapsulates why I've lost interest in participating at Bogleheads over the years. People just like to express opinions about things they haven't read. It happens over and over to me. This book excerpt is at the end of the tax planning chapter. It began 56 pages in. It follows careful explanations about the different tax concepts at work, and it simply provides an example at the end to show how those pieces all fit together. The chapter does what you've asked of it.

I worked very hard to make this book serve as a standalone tool for self-directed people. There is a brief discussion of working with financial advisors on pages 440 to 444, but even there it is clear that not all individuals perceive advisors as providing value beyond their fees. Being self-directed is a fine option to choose. This book is NOT a sales pitch for working with a financial advisor. And I know it doesn't matter how hard I work to make this clear, because there are always going to be the cynics at Bogleheads.
Don’t be too frustrated. I just bought your book based on this thread.

People will argue about literally anything on social. Even something as well moderated and full of, well, “life experienced” posters as bogleheads. I’m a nationally recognized expert and author in my (admittedly narrow) field and people routinely try to dispute me by posting links. That they misread.
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Re: Something good from Wade Pfau

Post by sleepysurf »

"Retired" Life Stage meeting update!

Wade Pfau, Ph.D., CFA, will be presenting two topics at tomorrow's Zoom meeting (8 PM *Eastern*)...
  • How can Retirement Income Style (RISA) be a useful tool for Bogleheads?
  • Tax Planning for Efficient Retirement Distributions
We'll take some questions after each segment, but due to time constraints, will not be able to address them all.

The Zoom link can be found on the BH Calendar of Events

If you plan to attend, please RSVP here, so we'll have a better idea of head count.
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Re: Something good from Wade Pfau

Post by sleepysurf »

LeeMKE wrote: Thu Sep 16, 2021 1:19 pm Wade was looking for people to review this book, and I'm always interested in reading his work. I just didn't realize it was a smidge over 700 pages...
FYI, the PRINT version of the book is 453 pages (excluding 7 page index). I presume it's the Kindle version that runs over 700 pages.
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LeeMKE
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Re: Something good from Wade Pfau

Post by LeeMKE »

FYI, the PRINT version of the book is 453 pages (excluding 7 page index). I presume it's the Kindle version that runs over 700 pages.
Yup. I was reviewing from a pre-pub version. And it is very worthwhile reading.
The mightiest Oak is just a nut who stayed the course.
bagle
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Re: Something good from Wade Pfau

Post by bagle »

Although I haven't yet read the book, I found Pfau's webinar - and recent Advisor Perspectives article - intelligent and rigorous. Particularly, the tax bracket strategies that go against the common rule of thumb of exhaust taxable first.

Has anyone considered whether these tax strategies are inconsistent with, say, Prime Harvesting strategies by M. McClung? If I recall correctly, these dealt with pre-tax harvesting, without tax complications.
LeeMKE
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Re: Something good from Wade Pfau

Post by LeeMKE »

OP is correct that McClung does not address taxes between accounts. For that, I use my worksheet from I-ORP.com (extended calculator) which gives the specific direction as to which account, and how much from each, every year of retirement.

The moving parts are not a trivial calculation. So I use the I-ORP worksheet for optimizing the taxes.

As an aside, I take from my portfolio on a variable withdrawal schedule. Once a year I run 3 tools: McClung’s Prime Harvesting worksheet, I-ORP extended calculator, and my legacy calculator, Fidelity Retirement Planner. I pick a number based on these three suggestions. Then I split where the money is drawn, according to I-ORP because that one is best at the tax optimization.

Someday I’ll do less work for my withdrawals, but right now, during my sequence of returns risk period, I need the extra calculations to sleep well at night.

YMMV
The mightiest Oak is just a nut who stayed the course.
bagle
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Re: Something good from Wade Pfau

Post by bagle »

revhappy wrote: Wed Sep 08, 2021 10:28 am I am bit disappointed that guys like Michael Kitces and Wade Pfau do great research, but all from the US investor perspective. There is much bigger world out there and people out there look upto these people to help them out.
Having lived in Europe, I'm very conscious that there is a lack of equivalent there in qualified personal finance authors writing for a motivated DIY audience. Honestly, IMHO, we're lucky to have writers such as Wade, Bernstein and Kitces despite potential conflicts of interest.

It seems to me that one could model some of these parameters (e.g., tax bracket management) for a non-US setting. But others such as the Social Security hump/torpedo and HSAs are particular to the US. And the non-US countries I'm familiar with don't allow the choice to defer SS in return for a higher payout.
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sleepysurf
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Re: Something good from Wade Pfau

Post by sleepysurf »

sleepysurf wrote: Mon Sep 20, 2021 2:00 pm "Retired" Life Stage meeting update!

Wade Pfau, Ph.D., CFA, will be presenting two topics at tomorrow's Zoom meeting (8 PM *Eastern*)...
  • How can Retirement Income Style (RISA) be a useful tool for Bogleheads?
  • Tax Planning for Efficient Retirement Distributions
...
FYI, we recorded Wade's excellent presentation yesterday on the above topics, and it should be available on the Bogleheads YouTube channel within a few days.
Retired 2018 | ~50/45/5 (partially sliced and diced)
randomguy
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Re: Something good from Wade Pfau

Post by randomguy »

bagle wrote: Wed Sep 22, 2021 9:26 am Although I haven't yet read the book, I found Pfau's webinar - and recent Advisor Perspectives article - intelligent and rigorous. Particularly, the tax bracket strategies that go against the common rule of thumb of exhaust taxable first.

Has anyone considered whether these tax strategies are inconsistent with, say, Prime Harvesting strategies by M. McClung? If I recall correctly, these dealt with pre-tax harvesting, without tax complications.
That common rule of thumb is just wrong. People need to stop repeating it.

With prime harvesting, your issues are going to be with asset placement. Assuming you stick bonds in tax deferred and stocks in taxable, You will end up having to do swaps (sell stocks in taxable, sell bonds and buy stocks in tax deferred) to be efficient. Things like funding Roth conversions arent really selling stocks. They are moving them from one bucket to another.
Chip
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Re: Something good from Wade Pfau

Post by Chip »

randomguy wrote: Wed Sep 22, 2021 12:42 pm
bagle wrote: Wed Sep 22, 2021 9:26 am Although I haven't yet read the book, I found Pfau's webinar - and recent Advisor Perspectives article - intelligent and rigorous. Particularly, the tax bracket strategies that go against the common rule of thumb of exhaust taxable first.
That common rule of thumb is just wrong. People need to stop repeating it.
Absolute statements are always wrong. :P

Spending first from taxable isn't wrong for a certain subset of early retirees -- those with large tax-deferred balances and no pension or other ordinary income producing assets. Spending from taxable while converting to Roth makes all kinds of sense in that situation.
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