Bogleheads.org

KlangFool

OP,

1) I have 3 years of expense in CASH as my EF

2) My 60/40 portfolio (excluding EF) is at 27 years. I have a minimum limit of 5 years of expense in bond/fixed income as my second bucket.

KlangFool

KlangFool

Fennec wrote: ↑Tue Apr 20, 2021 12:30 pm
she definitely wants to go OOS.

Fennec,

I told my kids that I only pay for in-state public university. If they want to go OOS or spend more, they have to find the money to pay for the difference. And, I am not co-signing a student loan for them.

KlangFool

KlangFool

OP, 1) Which state are you in? This is an important question. The chances of she is a NMSF is dependent on the state. 2) What is the asset allocation (AA) of your whole portfolio? Why do you need to invest this 150K separately? I do not see a reason why you need to do this? You can just invest this ...

KlangFool

For Tax Loss Harvesting, for my purposes, you're saying I shouldn't use the same VINIX (S&P index) in my 401k and my current ROTH as in my taxable account? 25feelingold, You have more choices in your taxable account. So, you should use S&P 500 Index fund in your 401K and Roth IRA. Choose To...

KlangFool

I figure it's time to buy my first house. I know this is the right long term move, but it feels like a kick in the junk to start. How do you "know" that this is the right long term move? Having ~22% of my annual income spent in rent as a irrecoverable expense versus a comparatively low mo...

KlangFool

If you're saving/investing $80K+ a year, are you going to miss that $6000 in case of an emergency? Can you earn more than 2.88% guaranteed on any fixed income investment over your timeframe? This is why I largely lean towards slight mortgage payoff. In a couple years my deferred comp account will b...

KlangFool

vanbogle59 wrote: ↑Tue Apr 20, 2021 9:30 am
KlangFool wrote: ↑Tue Apr 20, 2021 8:57 am I reached my FI number with my severance pay
CHEATER!
LOL
Seriously, congratulations.

Thanks. It was a very close call.

KlangFool

KlangFool

If you're saving/investing $80K+ a year, are you going to miss that $6000 in case of an emergency? Can you earn more than 2.88% guaranteed on any fixed income investment over your timeframe? This is why I largely lean towards slight mortgage payoff. In a couple years my deferred comp account will b...

KlangFool

My hybrid plan was to have a mild mortgage payoff, in which the mortgage would be paid off by the times my kids were in school. This would require about $6,000 extra per year for 16 years (we save about $80,000-90,000 per year, so this is a fractional amount of our overall savings). CoastLawyer2030...

KlangFool

In other words, when should one de-risk and take the guaranteed 3% return? Triple digit golfer, My answer when your portfolio and EF is big enough. In my case, it meant portfolio = 25X and the EF = 3X. KlangFool Correct me if I'm wrong, but it seems that you'd only pay anything extra on a mortgage ...

KlangFool

My hybrid plan was to have a mild mortgage payoff, in which the mortgage would be paid off by the times my kids were in school. This would require about $6,000 extra per year for 16 years (we save about $80,000-90,000 per year, so this is a fractional amount of our overall savings). CoastLawyer2030...

KlangFool

Triple digit golfer wrote: ↑Tue Apr 20, 2021 7:17 am
In other words, when should one de-risk and take the guaranteed 3% return?

Triple digit golfer,

My answer when your portfolio and EF is big enough. In my case, it meant portfolio = 25X and the EF = 3X.

KlangFool

KlangFool

Is 0% real truly anti fragile? TPIR, What do you mean by that statement? A) If you meant that a person with 0% REAL requirement and put 100% into TIPS, the answer is no. Nothing is anti fragile if you keep all the eggs in one basket. Regardless what the basket is. B) If the person with a portfolio ...

KlangFool

Is 0% real truly anti fragile? TPIR, What do you mean by that statement? A) If you meant that a person with 0% REAL requirement and put 100% into TIPS, the answer is no. Nothing is anti fragile if you keep all the eggs in one basket. Regardless what the basket is. B) If the person with a portfolio ...

KlangFool

retired@50 wrote: ↑Mon Apr 19, 2021 5:10 pm I'd probably use the TGCFX fund, even though the expense ratio isn't ideal.

Regards,

I seconded that opinion.

KlangFool

KlangFool

dred pirate, 1) My simple answer to you. You don't have to and it is not necessary. The basic assumption is wrong anyhow. You do not know that you would retire in 17 years. It could be earlier or later. So, you plan for financial independence (FI) instead. You just use your current annual expense a...

KlangFool

so like many here I am a numbers geek. I am 43 and track all of my spending and take home pay, etc. Trying to calculate what "my number" is to retire, obviously the biggest unknown in healthcare, and this isn't the place to debate that big unknown. I took what I actually spend each year (...

KlangFool

Congratulations to your daughter! Being an immigrant coming to US for graduate school with full scholarship, I have a hard time to believe parents with 250K AGI are willing to pay $320K for undergraduate degree in STEM. I don't think there is enough justification for ROI but more from a life experi...

KlangFool

Congratulations to your daughter! Being an immigrant coming to US for graduate school with full scholarship, I have a hard time to believe parents with 250K AGI are willing to pay $320K for undergraduate degree in STEM. I don't think there is enough justification for ROI but more from a life experi...

KlangFool

so like many here I am a numbers geek. I am 43 and track all of my spending and take home pay, etc. Trying to calculate what "my number" is to retire, obviously the biggest unknown in healthcare, and this isn't the place to debate that big unknown. I took what I actually spend each year (...

KlangFool

Klang, thank you for the response. As I said, not everyone will be able to fully fund their expenses with just the fixed income portion of their portfolio. You are fortunate that your Residual Living Expenses are quite low at $15,000. Others may not be as fortunate. Do you consider your portfolio t...

KlangFool

I buy a house assuming ZERO appreciation. Aka, it is significantly cheaper than renting. As per my rule, I buy a house when the PITI is 20% to 30% lowered than renting. The PITI is based on 20% down payment and 30 years fixed-rate mortgage. If you do that, you make money purely on imputed rent. You...

KlangFool

Klang, thank you for the response. As I said, not everyone will be able to fully fund their expenses with just the fixed income portion of their portfolio. You are fortunate that your Residual Living Expenses are quite low at $15,000. Others may not be as fortunate. Do you consider your portfolio t...

KlangFool

Unfortunately, not everyone will be able to fully fund their expenses with just the fixed income portion of their portfolio. 1210sda, It depends on how much the social security cover their annual expense. For example, A) My annual expense with mortgage = 60K per year B) My annual expense without mo...

KlangFool

OP,

I know that I know nothing. However, many "experts" pretend that they know something.

KlangFool

KlangFool

OP, 1) You are not conservative. You have a 900K house and 450K investment outside the house. You are "house poor" asset wise. What if the house crash 50% and do not recover for 10 years, then, what would you do? 2) It is not safe to put more money into the house. Hence, why do you think ...

KlangFool

My portfolio is at 25x in a three fund stocks and bonds. I am comfortable with that since it only needs to last 15 years. corn18, Are you comfortable enough not to do anything if your portfolio goes up to 30X in a few months? That is the question that you may want to answer. I am not. If you are no...

KlangFool

Personally I don’t think it’s as simple as tax rates today vs tax rates in retirement. In our case we are on the 35% bracket, but I don’t think I’ll ever need all the money we are projecting to have saved before retirement. We don’t count on it, but it very likely we will inherit from both DW and M...

KlangFool

My portfolio is at 25x in a three fund stocks and bonds. I am comfortable with that since it only needs to last 15 years. corn18, Are you comfortable enough not to do anything if your portfolio goes up to 30X in a few months? That is the question that you may want to answer. I am not. If you are no...

KlangFool

I was RIF'd this past Mar (age 55). Severance package was very generous, so I set aside $300k for the next three years expenses. Never held any cash prior to that. Not even an EF. That covers the how did we accumulate it question. We have more than enough to retire, so I am not looking for a new jo...

KlangFool

OP, Why does this matters? You need to fund your retirement/Financial Independence first. And, when the time comes, you help your kids in whatever amount that you can afford. They can borrow for their college education. You cannot borrow for your retirement. This is false if you are counting your ki...

KlangFool

OP,

40% of my portfolio is in the Wellington Fund. I want some "active management" of my stock and bond to protect myself from time when passive index failed.

KlangFool

KlangFool

I understand it can hurt to truthfully face the data and compare 100% stock return vs 60/40 returns. bornloopy, 1) You have to face the fact. Sometimes, the 60/40 beats the 100/0. You are moving the goal post. You were claiming that in March 2020, both stock and bond drop. Hence, it is pointless to...

KlangFool

If you don't have this, you should not be in the 3 funds portfolio. KlangFool Can you elaborate on this? If you don't re-balance you should not be in 3-funds or if you don't have an IPS? Then, you are not maintaining your Asset Allocation (AA). It is not 60/40 or whatever that you think you have. Y...

KlangFool

I understand it can hurt to truthfully face the data and compare 100% stock return vs 60/40 returns. bornloopy, 1) You have to face the fact. Sometimes, the 60/40 beats the 100/0. You are moving the goal post. You were claiming that in March 2020, both stock and bond drop. Hence, it is pointless to...

KlangFool

OP, It is very simple. 1) I borrowed 300K at 3.49%. The Principal and Interest portion of the mortgage is 15K per year. 2) I invest in my 60/40 portfolio with an average annual return of 7%. I make 3.5% per year with this 300K. 3) It is safer to invest than pay off the mortgage because of the liquid...

KlangFool

While it may be logical, I don't think having a higher equity in ones home is going to make folks sleep better if the market takes a good hit and they watch their investment balance get chopped in half. Did everyone forget bonds getting crushed like stocks during March 2020’s market crash? bornloop...

KlangFool

While it may be logical, I don't think having a higher equity in ones home is going to make folks sleep better if the market takes a good hit and they watch their investment balance get chopped in half. Did everyone forget bonds getting crushed like stocks during March 2020’s market crash? bornloop...

KlangFool

OP, I am giving you my interpretation. A) My 60/40 portfolio was at 25X and my EF (not part of the portfolio) is at 3X. And, I have a 3.49% 30 years mortgage B) I had decided that I have enough in my portfolio and my EF. C) I decided to de-risk and lowered my exposure to the market. Hence, when my p...

KlangFool

OP,

Max up your Trad 401K and put the tax savings into Roth IRA. You get the best of both worlds: tax-deferred account plus Roth IRA.

KlangFool

KlangFool

Unless you are fully retired, why bother having a bond allocation? Treasury rates yield much lower than your mortgage rate. Nobody has a mortgage rate lower than 1.6%. Therefore shouldn’t your bond allocation be used to pay down your mortgage as you will achieve a higher “return” this way? Plus the...

KlangFool

@klangfool - Why would one even be in 60/40. Wouldn’t it be sufficient to have say a 5 year buffer in bonds and the rest in stock. m@ver1ck, 1) My AA is 60/40 with 10+ years of expense in Fixed Income. My minimum limit is 5 years of expense in fixed income. Hence, I have the FI tolerance for rebala...

KlangFool

When you need to rebalance into stocks during a crash, would you rather be selling bonds that are appreciating in value or bonds that are also taking a hit? burritoLover, I am not smart enough to predict which bond fund will do well in March 2020. Hence, I am using total bond market index fund. And...

KlangFool

I didn't realize for someone in mid 40s (i.e. 20 years from retirement) 75% in stocks and 25% bonds is considered aggressive. NabSh, A) Unless you can predict your future, how do you know that you are 20 years from retirement? Many of my peers are permanently unemployed or under-employed in their 4...

KlangFool

OP,

If you choose not to buy BOND but stay in CASH instead, it means that you can predict the future. Aka, you know that CASH will do better than the BOND in the future. Please let me know how you can do that.

I know that I know nothing. I have STOCK, BOND, and CASH. I am diversified

KlangFool

KlangFool

Folks, Annual expense with mortgage = 60K per year. Annual Expense without mortgage = 45K per year. The AA should maintain 10 years of expense in Fixed Income. A) 1.5 million in 60/40 with 300K mortgage -> 900K stock, 600K bond, 300K mortgage. 600K bond = 10 X 60K = 10 years in fixed income. B) Pay ...

KlangFool

OP, They are not retirement accounts. They are tax-advantaged accounts. You can withdraw the money tax-free and penalty free before 59 1/2 years old. Please check out the following URL. https://www.madfientist.com/how-to-access-retirement-funds-early/ So, you should invest all your money as one port...

KlangFool

Do you rebalance after the 50% drop? Not sure - but sounds like that might be part of the answer to "What would you do.." What did you do in March 2020? Did you rebalance? It should be part of your IPS. Please note that this has nothing to do with withdrawal. It is part of your IPS. If yo...

KlangFool

Clarified initial hypothetical case: The 3% withdrawal rate is a rough initial withdrawal rate (SWR rule of thumb), increased for inflation - not 3% of portfolio balance annually bb, Do you rebalance after the 50% drop? That would be your first action. Withdrawal comes much later? In my case, the a...

KlangFool

The issue I am trying to explore is not necessarily how much money could be withdrawn but rather what would you do given the hypothetical case, how much money would you withdraw, how much would you cut back, when would you be comfortable increasing your spending again. bb, 1) I probably go with a s...

Search found 19986 matches