Search found 211 matches

by Enkidu
Wed Apr 21, 2021 11:24 am
Forum: Personal Finance (Not Investing)
Topic: Received a "surprise" $13,000 IRS refund check on 2018 taxes. Please advise.
Replies: 70
Views: 10981

Re: Received a "surprise" $13,000 IRS refund check on 2018 taxes. Please advise.

I had a similar unexpected refund for my 2019 return. It took about a week to get the security token to establish an IRS account by mail. After examining the transcript I found that no adjustment was made. However a payment for the refund amount was credited to my account in September 2020. Looked at my bank records and determined that I did not make the payment. I concluded that the refund was issued in error and that I should return it.

I wrote about this in this thread viewtopic.php?f=11&t=342853

I received good advice about how to return an "erroneous refund", which I followed. The IRS received the returned check on March 24th, but as of today my account has not been updated.
by Enkidu
Fri Mar 12, 2021 5:15 pm
Forum: Personal Consumer Issues
Topic: Received IRS refund in error
Replies: 9
Views: 1246

Re: Received IRS refund in error

Barcelonasteve wrote: Fri Mar 12, 2021 3:05 pm I would not cash it. If it is a mistake, you would probably be charged interest if and when they correct it.

Here’s a link about what to do:

https://www.irs.gov/taxtopics/tc161
Thanks so much, this is what I was looking for. I will return the un-cashed check that I am not entitled to and follow the directions in the link.
by Enkidu
Fri Mar 12, 2021 2:57 pm
Forum: Personal Consumer Issues
Topic: Received IRS refund in error
Replies: 9
Views: 1246

Re: Received IRS refund in error

Thanks for the replies. It sounds like the consensus is not to send the check back without instructions. It seems that there is strong possibility of making matters worse.

The transcript showed that per return and per computer amounts were identical, which I think, indicates that no adjustment was made. The refund corresponds exactly to a deposit to my account that I did not make.

I may try the IRS help line a few more times, but I am not sure how much time I should spend on trying to correct an error that I did not make. Other than that I may just sit on the check for a while. The check says it is no longer valid after one year, but I don't plan to wait that long.
by Enkidu
Fri Mar 12, 2021 10:51 am
Forum: Personal Consumer Issues
Topic: Received IRS refund in error
Replies: 9
Views: 1246

Received IRS refund in error

Last week I received a Treasury check for several thousand dollars with notation that was a refund plus interest for my 2019 tax return. I efiled in March 2020 and the IRS withdrew the balance due from my bank account. I went to the IRS transcript site and was mailed a security code that took about a week to arrive. The transcript indicates that my return was correct as filed. However, the payment information showed a payment in September 2020 for the amount of the refund. I checked my bank records and verified that I did not make the payment and therefore I am not entitled to the refund. I suspect that another taxpayer has the opposite problem, they made a payment that was not credited to their account. I have tried to call the IRS to clea...
by Enkidu
Mon May 25, 2020 10:46 am
Forum: Personal Investments
Topic: Buying foreign ADRs on the OTC using Vanguard/Fidelity
Replies: 15
Views: 1668

Re: Buying foreign ADRs on the OTC using Vanguard/Fidelity

The Service fee is actually based on the number of shares:
Some ADRs are subject to periodic service fees, or "pass-through fees," intended to compensate the agent bank for providing custodial services. These charges, if any, generally run $0.01 to $0.03 per share. Information on any such fees should be available in the ADR prospectus. For ADRs that do levy this fee, it may be deducted from the dividend, if the company pays one, or it may appear as a separate fee on your monthly statement.
https://www.fidelity.com/learning-cente ... y-receipts

You will need to find the bank holding the shares and inquire about service fees if this of concern to you.
by Enkidu
Mon May 25, 2020 10:21 am
Forum: Personal Investments
Topic: Buying foreign ADRs on the OTC using Vanguard/Fidelity
Replies: 15
Views: 1668

Re: Buying foreign ADRs on the OTC using Vanguard/Fidelity

I held Iberdola (IBDRY) a sponsored ADR that trades OTC at one time. When dividends were paid twice a year there was a $12 service fee that was charged by the bank holding the shares, so $24 per year in service fees in addition to foreign tax withheld at source.

Edit to correct.
by Enkidu
Fri Mar 20, 2020 4:38 pm
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion / Private Letter Ruling
Replies: 55
Views: 7852

Re: Roth Conversion / Private Letter Ruling

Vanguard's poor user interface for Roth conversions in brokerage accounts may be the problem here. I did two Roth conversions in January, one in a brokerage account, and one in a mutual fund account. The conversion in the mutual fund account was straightforward, but the brokerage account conversion has a twist for the unwary. I specified "sell in dollars" in my brokerage account then selected my Roth as the destination. A window pops up for the Roth conversion but the only option is to list the number of shares to convert. I thought that I made a mistake and started over with the same result. I had to look up NAV and estimate the number of shares to hit the dollar value target. There is no convert in dollars option. I could see ho...
by Enkidu
Sat Dec 28, 2019 11:06 am
Forum: Personal Finance (Not Investing)
Topic: SECURE Act - Special Needs Trusts
Replies: 75
Views: 9090

Re: SECURE Act - Special Needs Trusts

Title 4 Section 401 (a) (1) (H) (iv) of the SECURE Act provides a Special Rule in Case of Certain Trusts or Chronically Ill Beneficiaries (iv) SPECIAL RULE IN CASE OF CERTAIN TRUSTS FOR DISABLED OR CHRONICALLY ILL BENEFICIARIES.— In the case of an applicable multi-beneficiary trust, if under the terms of the trust— ‘‘(I) it is to be divided immediately upon the death of the employee into separate trusts for each beneficiary, or ‘‘ (II) no individual (other than a eligible designated beneficiary described in subclause (III) or (IV) of subparagraph (E)(ii)) has any right to the employee’s interest in the plan until the death of all such eligible designated beneficiaries with respect to the trust, for purposes of a trust described in subclause...
by Enkidu
Tue Sep 10, 2019 11:05 am
Forum: Personal Investments
Topic: RMD & Charitable Contribution
Replies: 17
Views: 1921

Re: RMD & Charitable Contribution

Here is what I think I would do: Take the QCD from VTSAX, $10,000 Take the balance of VTSAX, $7000 as an RMD and move to VTSAX in your taxable account Take the balance of your RMD from VTIAX $11,400 and withhold $4,100 for federal tax, assuming that you are in the 22% bracket. Move the balance to VTIAX, $7,300 in your taxable account. Take your wife's RMD and move to VTSAX $168 in your taxable account. This will leave you with approximately the same 40/60 stock/bond allocation and the same ratio of U.S. / international equities. In the future you can just take QCDs and RMDs from VTIAX and move the residual after tax withholding to VTIAX in your taxable account. Continue to take RMDs from your wife's account and direct to either VTSAX or VTI...
by Enkidu
Fri Apr 05, 2019 10:19 am
Forum: Personal Finance (Not Investing)
Topic: Purchased QLAC now how do I file my tax return?
Replies: 11
Views: 1287

Re: Purchased QLAC now how do I file my tax return?

What I wrote above about distribution codes 7,G would only be correct if there was a custodian to custodian transfer. If the custodian sent you a check, and then you purchased the QLAC the distribution code would be 7. The distribution would be taxable if you did not roll to a qualified plan, which you did by purchasing the QLAC.
by Enkidu
Thu Apr 04, 2019 4:31 pm
Forum: Personal Finance (Not Investing)
Topic: Purchased QLAC now how do I file my tax return?
Replies: 11
Views: 1287

Re: Purchased QLAC now how do I file my tax return?

You may want to check with the custodian who issued the 1099-R to see if they made a mistake in the distribution codes. It seems that the did not include a distribution code G for a qualified rollover. Perhaps they should have used 7,G If this is the case, then you may need to file an extension until the custodian can issue a corrected 1099-R. From the instructions for the 1099R: Use Code G for a direct rollover from a qualified plan, a section 403(b) plan, or a governmental section 457(b) plan to an eligible retirement plan (another qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an IRA). See Direct Rollovers, earlier. Also use Code G for a direct payment from an IRA to an accepting employer plan, and for IRRs...
by Enkidu
Tue Apr 02, 2019 10:39 am
Forum: Personal Finance (Not Investing)
Topic: Purchased QLAC now how do I file my tax return?
Replies: 11
Views: 1287

Re: Purchased QLAC now how do I file my tax return?

My question relates specifically how to treat the QLAC premium on the 2018 tax return. My IRA trustee has the QLAC premium, my QCD and my regular IRA distribution (to meet my RMD) included on the 1099R as part of my gross distribution in box 1 and as taxable amount in box 2 with taxable amount to be determined checked in box 2a. While I haven't dealt with this specific issue, it sounds like the premium is treated like a rollover to another tIRA or a qualified plan. What distribution codes are listed? The taxable amount will be total distribution - QLAC premium - QCD. The QLAC premium amount should be reported to to the IRS on Form 1098Q by the insurance company. You should also get a copy of 1098Q. Have you looked at the documentation that...
by Enkidu
Sun Mar 17, 2019 10:40 am
Forum: Personal Finance (Not Investing)
Topic: Why should FEHB members buy Medicare Part B?
Replies: 192
Views: 32000

Re: Why should FEHB members buy Medicare Part B?

Interesting to revisit this after almost 3 years. My wife took Medicare B and is in Kaiser Senior Advantage for FEHB members while I signed up for Medicare Part A only and remain in Kaiser through FEHB. So far we are both happy with this decision.

My wife's total health care costs are higher if all premiums and copays are included. But her copays for specialists and prescription drugs are somewhat lower than mine. Last year she had a lot of tests and cataract surgery and she liked the low copays, although the difference in copays is less than the Part B premium. As discussed earlier in this thread, she is also in a better position if we were to divorce, which is unlikely but still worth considering.
by Enkidu
Mon Apr 23, 2018 1:47 pm
Forum: Investing - Theory, News & General
Topic: Asset Decumulation or Asset Preservation? What Guides Retirement Spending?
Replies: 0
Views: 1538

Asset Decumulation or Asset Preservation? What Guides Retirement Spending?

https://www.ebri.org/pdf/briefspdf/EBRI_IB_447.pdf A short paper by Sudipto Banerjee, at Employee Benefit Research Institute is an interesting read. Key points: The study shows that retirees generally exhibit very slow decumulation of assets. More specifically, within the first 18 years of retirement, individuals with less than $200,000 in non-housing assets immediately before retirement had spent down (at the median) about one-quarter of their assets; those with between $200,000 and $500,000 immediately before retirement had spent down 27.2 percent. Retirees with at least $500,000 immediately before retirement had spent down only 11.8 percent within the first 20 years of retirement at the median. While some retirees do spend down most of ...
by Enkidu
Thu Apr 12, 2018 5:30 pm
Forum: Personal Consumer Issues
Topic: New faster DNS - 1.1.1.1 by CloudFlare
Replies: 97
Views: 14603

Re: New faster DNS - 1.1.1.1 by CloudFlare

Does anyone know if changing DNS to 1.1.1.1 in the ISP router will change the DNS for all devices that use the router?

Do you have to change DNS address for each device, and the router?

What if the router is set for the ISP DNS but you change a device to the 1.1.1.1 What takes prescience, router or device?
by Enkidu
Mon Apr 02, 2018 11:59 am
Forum: Personal Consumer Issues
Topic: $20,000 book - what to do with it
Replies: 34
Views: 7815

Re: $20,000 book - what to do with it

Why not have it digitized for public access and then keep it. Store it properly and have it conserved if necessary, but if you don't really need the money, why sell it? Take it out and enjoy it once in a while. Do you have any family members who you could leave this unique treasure to when you die?

Is $20,000 a significant portion of your assets? The book is both a family heirloom and an asset. It may appreciate more than the stock market in the coming years and it adds some diversity to your assets.

I am just not sure why you would want to part with book just because it is rare and valuable.
by Enkidu
Sun Jan 07, 2018 11:29 am
Forum: Personal Investments
Topic: Do I need $$ in taxable?
Replies: 26
Views: 5266

Re: Do I need $$ in taxable?

I think what the OP is proposing is using the the Roth account to pay operating expenses during the year rather than putting the money in a taxable account and paying expenses from there. Let's say estimated operating expenses for the year are about $50,000. Option 1: Transfer $50,000 from tIRA to an interest bearing taxable account in January and make transfers to checking as needed during the year. If only $40,000 is needed then the $10,000 excess remains in the taxable account at the end of the year. Option 2: Convert $50,000 from the tIRA to an interest bearing Roth account in January and make transfers to checking as needed during the year. If only $40,000 is needed then the $10,000 excess remains in the Roth account at the end of the ...
by Enkidu
Mon Aug 21, 2017 11:32 am
Forum: Personal Investments
Topic: best strategies for income now retired for 2 months
Replies: 5
Views: 1754

Re: best strategies for income now retired for 2 months

You don't say what your expense are, but imply that your basic expenses will be covered your pension, and discretionary travel expense will be covered by withdrawals from your TIAA Traditional for the next few years. It also appears that you are single and will be in at least the 25% federal tax bracket. If so, it looks like you are in good shape and can relax and prioritize your issues. I have about 500k with Vanguard 403B with a 65/35. Is there any advantage(s) to transferring to an IRA? If i transfer to an IRA, do i need to declare this on my income tax 2017 . I am 56 years old. It's not money I need till i am at least 59 1/2. There is no reason to move your 403B now. Many people roll their 403Bs to traditional IRAs for lower fees and be...
by Enkidu
Fri Aug 18, 2017 11:01 am
Forum: Personal Investments
Topic: Asset Allocation for 82 yr old widow in TN
Replies: 20
Views: 2130

Re: Asset Allocation for 82 yr old widow in TN

1) Mom has $22K/yr of income and needs an additional $38K/yr from $1.4M investments (2.7% withdrawal rate) to fund retirement. Her RMDs from $300K IRA/401K are $18K. She is fine with some risk and would like input on asset allocation given her wishes to fund her retirement but also provide an inheritance. 2) Currently she has around $300K in individual TN muni bonds (due to Hall Tax - which is getting phased out by 2021. Should she continue holding that much in TN munis? I have never purchased individual munis and would prefer moving towards muni bond funds in taxable. 3) Her investments are spread out over many locations including Schwab, Fidelity, 2 banks, and an insurance company (6 taxable accounts, IRA, 401k, small roth ira, many CDs,...
by Enkidu
Tue Aug 08, 2017 12:08 pm
Forum: Personal Investments
Topic: What is an appropriate lower risk asset allocation once one has "won the game"
Replies: 50
Views: 9035

Re: What is an appropriate lower risk asset allocation once one has "won the game"

The stocks and bonds are contained in a combination of VTINX, VBIAX, & TSP G fund. The cash in bank savings & Vanguard money market accounts. What would be a better asset allocation given a goal of asset protection to keep up with inflation? More bonds? CDs?, Treasuries?, perhaps increase stocks to 20% ? Grateful1 You are exposed to considerable inflation risk, but you have some good options. Here is a suggestion: 1. Move cash and VBIAX to VTINX. 2. Leave 5% to 10% in cash. 3. Leave TSP G alone. 4. Investigate Treasury Direct where you can buy TIPS and iBonds directly from the US Treasury for part of your 5-10% cash holdings to further decrease your inflation risk. VTIAX is 30% stocks and includes diverse bonds so BVIAX is not need...
by Enkidu
Sun Jul 30, 2017 5:43 pm
Forum: Personal Investments
Topic: Tax (and other?) Implications of Spending Dividends
Replies: 11
Views: 1511

Re: Tax (and other?) Implications of Spending Dividends

There is nothing wrong with taking dividends for your tIRA and Roth to increase income now, but there may be alternatives that are better in the long run. You may want to look at what your expected income and taxes will be after you and your husband start SS and also after RMDs start. It appears that you are currently in the 15% bracket, and are not too close the the 25% boundary... yet. That may change with the addition of SS and RMDs in a few years With that in mind, you may want to take 10k per year from your tIRA to reduce RMDs and taxes after age 70.5, especially if RMDs put you in the 25% bracket. You could just take $10k/12= $833 per month by setting up an automatic withdrawal schedule from your tIRA rather than bothering with the di...
by Enkidu
Sat Jul 29, 2017 10:47 am
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Maybe someone made a mistake somewhere. "Never attribute to malice that which is adequately explained by stupidity". It is possible that this was a mistake that the customer service people will not acknowledge. All we know for sure is that our account was closed and the number recycled without our authorization. The customer service people claim that a caller was verified but we will probably never know if this is true. We have: filed a complaint with FCC, escalated through customer service, ordered new credit cards, already have a credit freeze, deleted the phone number from bank / financial profiles, notified friends and family that the number is no longer valid. It's hard to know how much work to put into this. We may file a w...
by Enkidu
Fri Jul 28, 2017 6:18 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Have you seen this article? Your mobile phone account could be hijacked by an identity thief https://www.ftc.gov/news-events/blogs/techftc/2016/06/your-mobile-phone-account-could-be-hijacked-identity-thief It mentions that companies are obligated to provide written records related to identity theft to victims. If you haven't already, it might not hurt to request (in writing) a copy of records. Unfortunately, I know from personal experience with identity theft that companies don't always comply. In my case, the company refused to send anything. I had to refer the problem to an identity theft resolution firm to handle it. Best wishes resolving your problem. I know firsthand how aggravating...and time consuming...it is to patch the holes afte...
by Enkidu
Fri Jul 28, 2017 5:08 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Either get the phone number back in the next 24 hours by escalating to appropriate management level at your carrier or get a new number. Do not let this situation with a potential stolen number go on without addressing and resolving. Your phone number is like your SSN these days. It unlocks too many doors. Then if you have a new number go thru every possible online social, email, and financial account as well as all local directories, schools, neighborhood, friends, etc and make double sure the old number is removed. In addition your wife's carrier failed to adequately secure her account. I'd drop them like a hot potato at your first opportunity. Agree with this. She has just completed a complaint with the FCC. PagePlus so-called customer ...
by Enkidu
Fri Jul 28, 2017 4:11 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

I have read that phone numbers are being "stolen" and used for phone scams; that is, when a telephone call is received, the stolen number shows as the CID so it looks legitimate and you are more likely to answer and answer "Rachael" or whomever. My wife received a call a few days ago from somebody who claimed that he was returning her call. He said that her number showed on his caller ID. She did not call his number. I wonder if this could be related. By the way she has an Iphone SE if this is relevant. I received a very similar first text saying "I can't talk right now whats up" which I did not reply to and then a phone call at 2:30am that I did answer but did not answer any questions when he asked who was th...
by Enkidu
Fri Jul 28, 2017 4:09 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Iliketoridemybike wrote:They wanted that number for a reason. You just have to figure out why.
That will keep me awake at night. :shock: Apparently they had enough information about her to convince PagePlus.
by Enkidu
Fri Jul 28, 2017 4:03 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

I am trying to find anywhere her phone was used for two-factor authentication or used as a secondary number. For instance our "home phone" is actually a Google voice number that forwards all calls to both of our mobile phones. Also used as a secondary number on my Gmail account. So far I don't think that she had two factor authentication set up with her cell, she used email in most cases. My cell is another story.
by Enkidu
Fri Jul 28, 2017 3:48 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

littlebird wrote:I would file a complaint with the Federal Communications Commission, stressing the risk to your security by the refusal of the carrier to cooperate in reversing the theft of your phone #. I would also call my local police agency and ask if they have an identity theft unit, and in either case, find out whether you can file a complaint, either for theft, fraud or identity theft.

I will check on how to file a complaint with FCC.

Not sure it is worth filing a police report. The last time we had an issue the local police wanted to know the dollar damages before they would take any information.
by Enkidu
Fri Jul 28, 2017 3:30 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Iliketoridemybike wrote:I have heard of money transfers being set-up and when the call to verify is made....it goes to the stolen number and confirmed as legit.

Yes, this worried me, but after checking it appears that all our accounts use either our home phone or my cell.
by Enkidu
Fri Jul 28, 2017 3:23 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Re: Phone number stolen

Sheepdog wrote:I have read that phone numbers are being "stolen" and used for phone scams; that is, when a telephone call is received, the stolen number shows as the CID so it looks legitimate and you are more likely to answer and answer "Rachael" or whomever.
My wife received a call a few days ago from somebody who claimed that he was returning her call. He said that her number showed on his caller ID. She did not call his number. I wonder if this could be related.

By the way she has an Iphone SE if this is relevant.
by Enkidu
Fri Jul 28, 2017 3:09 pm
Forum: Personal Consumer Issues
Topic: Phone number stolen
Replies: 41
Views: 4434

Phone number stolen

My wife's phone stopped working today, no calls in or out. When she called her provider (PagePlus) they said that she had called yesterday to discontinue the account and "gave the number away". PagePlus claims there is nothing that they can do about it because the caller had enough information to verify ownership. They won't provide any information about the new owner or even the provider name. Calls to the number go to a recording that says the number is not in service. My wife had the number for over 15 years and is very upset. After Googling a bit it appears that there are some fairly complex identity theft schemes that involve stolen phone numbers. Our credit is frozen, but just to be on the safe side we called the credit card...
by Enkidu
Tue Feb 07, 2017 10:52 am
Forum: Personal Finance (Not Investing)
Topic: Any downside to Grandparent 529
Replies: 20
Views: 4244

Re: Any downside to Grandparent 529

I made monthly 529 contributions for each of three grandchildren from the time they were born until I retired. I stopped contributing after I retired for two reasons: I no longer paid state tax, so there was no deduction, and contributions would have come from my tIRA. It made no sense to take funds from a tIRA and pay Federal taxes to contribute to a 529 when I could do a Roth conversion. A Roth is much more flexible than a 529, but I am happy to have both. Good points about the grandparent 529: Earmarked college funds for each grandchild. I want to encourage the kids to go to college and this may be a nice carrot as well as a way to help them. They don't get the funds if they don't go to college, but the funds are easily transferred to on...
by Enkidu
Sat Dec 10, 2016 10:52 am
Forum: Personal Finance (Not Investing)
Topic: Retirement planning implications for eventual death of spouse
Replies: 27
Views: 3275

Re: Retirement planning implications for eventual death of spouse

• My current thinking is to pick an age that it is likely for one of us to be gone and plan based on that age. Based on family history, I’ve picked age 85 for one of us to be gone. To some degree, this age is totally arbitrary and based on the hope we have many good years together but I needed pick an age for this exercise. You may want to consider what happens to the surviving spouse if one of you dies early and the other lives beyond average life expectancy. For instance, what if you die at 65 and your wife lives to 98? When I did this exercise I found that the short life -long life combination put a lot of stress on the portfolio. The solution in my case was to get term life insurance to cover the early years of retirement. In our case ...
by Enkidu
Tue Oct 11, 2016 11:48 am
Forum: Personal Finance (Not Investing)
Topic: Large IRA withdrawal and SS
Replies: 27
Views: 4483

Re: Large IRA withdrawal and SS

She may want to make a three year plan to minimize overall taxes and preserve as much of the IRA as possible. 2016 Withdraw up to the top of the 15% bracket from the tIRA and send the money to the IRS right away. If she is earning $30,000 she should be able to withdraw about $7,000. Additional tax should be about $1,000. It's best if she can cover this from another source. 2017 File for SS and quit one job, keeping wage income at about $15,000 + SS $22,800 = $37,800. She should send another $7,000, at least to the IRS with her monthly payments. No IRA withdrawal this year. 2018 She will need to withdraw about $6,000 from the tIRA and cover the taxes on the withdrawal from her SS and wage income. If she is still working this will put her in ...
by Enkidu
Mon Aug 22, 2016 12:22 pm
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk and Annuities -
Replies: 27
Views: 3028

Re: Sequence of Returns Risk and Annuities -

One quandary is how much to spend in the two-to-four year period between paychecks and SS checks. Knowing that at age 72 I would have more than enough guaranteed annual income for life without taking a penny from my savings seems to open all kinds of possibilities - it's a heckuva back-stop! Johnnie, one way to approach this is to make a bridge with safe assets like a CD ladder and high yield saving. Here is an example assuming $1,000,000 initial portfolio with the annuity values you gave. Year....SS........Annuity.....Bridge.....Floor........Portfolio.....Total pretax income 1.................................$65,000.....$65,000....$20,800........$85,800 2..................................65,000.......65,000......20,800.........85,800 3......
by Enkidu
Mon Aug 15, 2016 11:51 am
Forum: Personal Finance (Not Investing)
Topic: how get money at retirement
Replies: 11
Views: 3293

Re: how get money at retirement

Gopro, There is another active thread that gets to the question that I think you are asking: How to set up withdrawals from your retirement accounts? Sometimes a small difference in the way a question is asked has an outsize influence on the response. You may get some ideas from this thread, but what is best for you really depends on your needs and preferences. https://www.bogleheads.org/forum/viewtopic.php?f=2&t=197458&newpost=3016843 Things that you may want to consider- 1. Do you want to maintain your asset allocation? 2. How much cash do you want to have on hand? 3. How often do you want to mess around with this? How you answer these questions will help you understand what is best for you. I have been retired for two years and c...
by Enkidu
Thu Aug 04, 2016 10:58 am
Forum: Personal Finance (Not Investing)
Topic: How to value a deferred annuity?
Replies: 15
Views: 1724

Re: How to value a deferred annuity?

My question is how to carry this asset in my own calculations of net worth. My first inkling is to treat this like my home -- it's an asset, but it's not liquid, but someday it might provide me with some real liquidity, if I live into my 90s. But what is it worth today? The $125K I paid? Probably not -- it needs to be discounted to reflect my actuarial expectation. What will it be worth in 2035, when I am 84? If I'm dying of cancer, probably $0. If I'm running marathons, maybe a lot more than $125K. Still thinking about OP's original question. It seems reasonable to me that he would want to carry the value of the deferred annuity on his books, after all, the insurance company will carry the estimated value of the annuity contract as a liab...
by Enkidu
Wed Aug 03, 2016 11:13 am
Forum: Personal Finance (Not Investing)
Topic: How to value a deferred annuity?
Replies: 15
Views: 1724

Re: How to value a deferred annuity?

My question is how to carry this asset in my own calculations of net worth. My first inkling is to treat this like my home -- it's an asset, but it's not liquid, but someday it might provide me with some real liquidity, if I live into my 90s. But what is it worth today? The $125K I paid? Probably not -- it needs to be discounted to reflect my actuarial expectation. What will it be worth in 2035, when I am 84? If I'm dying of cancer, probably $0. If I'm running marathons, maybe a lot more than $125K. The value of the QLAC would go up over time as long as you are alive. I looked at https://www.immediateannuities.com/ for the current payout for a deferred annuity for a 65 year old male in my state. You don't say what your payout is, or the ag...
by Enkidu
Thu Jul 28, 2016 3:16 pm
Forum: Personal Finance (Not Investing)
Topic: Premium increase for federal employee long term care insurance
Replies: 69
Views: 13446

Re: Premium increase for federal employee long term care insurance

I just received my rate increase letter and benefit option form. My wife and I have had policies for about five years and have a 12% rate increase for the same benefit amount. We have 3 years of coverage and used the Future Purchase Option (FPO). Inflation is not included in the premium, but the price adjusts every 2 years, most recently in January 2016. I was presented with four options and I looked for a way to evaluate them. The good old benefit cost ratio seems to work pretty well and is easy. Here are my options: .....................................Current............1...............2..............3..............4 Daily benefit amount.........$210.00........$210.00.......$201.30......$190.16......$206.00 Monthly premium..................
by Enkidu
Mon Jul 25, 2016 5:30 pm
Forum: Personal Investments
Topic: single premium deffered annuities- traditional tax deferred or ROTH
Replies: 11
Views: 2270

Re: single premium deffered annuities- traditional tax deferred or ROTH

The one thing that I find odd is the way that the tIRA IRR moves with different tax rates and The IRR goes from 2.1% for the ten year at 15% tax rate, then drops to 1,4% for the 25% tax rate with a ten year delay, but then goes up to 1.7% with a fifteen year delay. Your comment caused me to look at this more closely, and I learned something interesting. I calculated the after tax IRR for different delay periods for an annuity in a tIRA using the same assumptions as above. The finding? Longer delay improves after tax return when an annuity is held in a tIRA. Delay Years.........15% tax.......25% tax.....33% tax 0...............1.60%.........0.61%........-0.23% 5...............1.90%.........1.09%.........0.38% 10.............2.10%..........1...
by Enkidu
Sun Jul 24, 2016 5:08 pm
Forum: Personal Investments
Topic: single premium deffered annuities- traditional tax deferred or ROTH
Replies: 11
Views: 2270

Re: single premium deffered annuities- traditional tax deferred or ROTH

I thought that I should do a couple more examples while I am thinking about this. Assumptions same as above except 25% tax rate. Note that I am assuming that no tax is paid until payments begin. Gender: Female Current age: 65 Start Annuity age: 75 Interest rate: 3.00% Longevity: well above average Tax rate now and in the future: 25% Premium: $100,000 I also figured that 7.7% of the taxable annuity was taxable at age 75, rising to 100% at age 88. 100% of tIRA is taxable at age 75 on. With these assumptions the monthly payout would be about $1,127 using my spreadsheet, or $1,111 using ImmediateAnnuities.com 25% tax rate .....................................................Roth.......Taxable.........tIRA Expected present value of taxes...........
by Enkidu
Sun Jul 24, 2016 12:35 pm
Forum: Personal Investments
Topic: single premium deffered annuities- traditional tax deferred or ROTH
Replies: 11
Views: 2270

Re: single premium deffered annuities- traditional tax deferred or ROTH

How does one determine if one should make a SPDA choice in a ROTH or tIRA account? I am pretty sure that a SPDA is an appropriate choice for my wife, since most of her female relatives have lived into their late 90s. Shes has enough money in both ROTH and tIRA to fund this, but I am not sure which is more advantageous. What are the factors to consider, and how should they be weighted? Heirs and charity are not a consideration. Ralph A good question that few people ask. The Roth IRA is the most tax efficient place to hold an annuity, followed by a taxable account, and the tIRA bring up the rear. Things that will have an impact on the outcome are the expected tax rate, longevity, and interest rates. I looked at a example making the following...
by Enkidu
Sat Jul 16, 2016 11:15 am
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself .. mind numbing pension post
Replies: 17
Views: 4509

Re: Daring to figure it out for myself .. mind numbing pension post

Could you post your estimated SS income at 62 and FRA as a percentage of x, with x being the pension income if you just claimed at retirement (59). Sure if x is my pension at age 59, .79x is my SS at age 62 and 1.10x is my SS at FRA which is between 66 and 67. Also the factors for the pension if you delay until FRA, which I am assuming is 66. T Actually the pension requires that I start payment the month I turn 65 at the latest. However, I do get a small bump in the pension if I hold out until then. The higher amount is 1.06x. I would rule out the leveling option that provides higher payments between 59 and beginning SS at 62, and then lower pension payments. It seems to be a very bad deal considering a normal life expectancy. The same is ...
by Enkidu
Fri Jul 15, 2016 11:40 am
Forum: Personal Finance (Not Investing)
Topic: Daring to figure it out for myself .. mind numbing pension post
Replies: 17
Views: 4509

Re: Daring to figure it out for myself .. mind numbing pension post

Income leveling I can request 'income leveling'. Megacorp gives me 1.58x/month until age 62, then it cuts to .75x with the understanding .75x + SS at age 62 = x. There's a range of income leveling options depending on whether I want to claim SS at 62 or any year up to age 67. I am intrigued by the income leveling option, but don't have enough information to analyze it properly, and I have never seen this option before. This could be a way to maximize your safe income, and replace non-cola pension income with cola SS income. Could you post your estimated SS income at 62 and FRA as a percentage of x, with x being the pension income if you just claimed at retirement (59). Also the factors for the pension if you delay until FRA, which I am ass...
by Enkidu
Thu Jun 30, 2016 9:29 am
Forum: Personal Finance (Not Investing)
Topic: Contribute to traditional while converting to Roth
Replies: 3
Views: 374

Re: Contribute to traditional while converting to Roth

JW-Retired wrote:Only that there is no difference.
Agree with this. Each option yields $20,000 less in the tIRA and $30,000 more in the Roth.
by Enkidu
Wed Jun 29, 2016 10:37 am
Forum: Personal Investments
Topic: Thrift Savings Plan Expert Needed- Rollover possible for inherited, inherited?
Replies: 6
Views: 826

Re: Thrift Savings Plan Expert Needed- Rollover possible for inherited, inherited?

Unfortunately you can not roll a beneficiary TSP account over. If it is in a regular TSP account (not Roth TSP), all tax will have to be paid on the whole balance as ordinary income this year. The 20% withholding probably will not cover it. From Your TSP Account, A Guide for Beneficiary Participants , page 15: Death benefit payments made from your beneficiary participant account must be paid directly to your beneficiary(ies). These payments are subject to certain tax restrictions and cannot be transferred or rolled over into an IRA or eligible employer plan. In addition, your beneficiary(ies) will have to pay the full amount of taxes on the taxable portions of the payment in the year it is received. (Your beneficiaries will not owe taxes on...
by Enkidu
Fri Jun 24, 2016 12:59 pm
Forum: Personal Finance (Not Investing)
Topic: Why should FEHB members buy Medicare Part B?
Replies: 192
Views: 32000

Re: Why should FEHB members buy Medicare Part B?

I ran across the OPM FEHB Call Letter while researching this question, and it gives some insight into what OPM is asking the insurance companies to include in the plans for 2017. Here is a link to the letter: https://www.opm.gov/healthcare-insurance/healthcare/carriers/2016/2016-03.pdf This is what caught my eye: V. Coordinating Benefits for the Medicare Population In recent years, an increasing number of carriers have adopted plan design changes or member education efforts to promote increased enrollment in Medicare Part B by those enrollees eligible for Medicare. Carriers should propose benefit changes that allow members to maximize their benefits under FEHB and Medicare, such as reduced cost sharing under hospital, medical or pharmacy be...
by Enkidu
Fri Jun 24, 2016 12:25 pm
Forum: Personal Finance (Not Investing)
Topic: Why should FEHB members buy Medicare Part B?
Replies: 192
Views: 32000

Re: Why should FEHB members buy Medicare Part B?

I think the savings for Aetna Direct comes from the HRA-type fund it sets up for the plan participant, which for self + 1 is $1500. Not sure this feature is reflected in the above table comparing costs. This feature can reduce your Part B premium by $1500, since you can use the Fund to pay for your premium. I went back to look at this chart after my wife relayed a conversation she had with friends of ours (a couple) who have a high option FEHB plan along with Medicare Part B and are paying at the highest premium levels for Part B, which is $390 per month. This is truly flushing money down the toilet, in my opinion. But who cares when you have lots of money to burn. I just used the cost from the last page of the plan brochure, so special fe...
by Enkidu
Thu Jun 23, 2016 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Why should FEHB members buy Medicare Part B?
Replies: 192
Views: 32000

Re: Why should FEHB members buy Medicare Part B?

In researching the question posed in this thread I ran across the Congressional Research Service report discussing the FEHB: Federal Employees Health Benefits (FEHB) Program: An Overview https://www.fas.org/sgp/crs/misc/R43922.pdf It is recent (February, 2013), succinct, and authoritative. As mentioned above, CRS reports are strictly nonpartisan. It is worth a read, even if you think that you know a lot about FEHB. Here is a quote from the section on Medicare that gives some enlightening data: Medicare Participation by FEHB Enrollees Approximately 1.2 million FEHB retirees aged 65 and older had Medicare coverage in FY2013. Table 1 shows the proportion of those retirees with coverage in Medicare Part A and the proportion who chose to enroll ...
by Enkidu
Thu Jun 23, 2016 11:36 am
Forum: Personal Finance (Not Investing)
Topic: Why should FEHB members buy Medicare Part B?
Replies: 192
Views: 32000

Re: Why should FEHB members buy Medicare Part B?

Yes indeed. It's also true that Congress are FERS employees too (I'm just saying). Congress people and many of their staff have to get coverage through an ACA exchange while they are working, but they are eligible for FEHB when they retire. The health insurance details for congress and staff are summarized in this Congressional Research Service report: Health Benefits for Members of Congress and Designated Congressional Staff https://www.fas.org/sgp/crs/misc/R43194.pdf CRS reports are strictly non-partisian, and stick to facts and analysis. Here is a quote from the section on Medicare: Members and designated staff who become eligible for Medicare while actively employed can have SHOP coverage and Medicare coverage concurrently. For those M...