Bogleheads.org

I just want to know how money I can spend in my go-go years and slow-go years. I don’t want to think about funding an LMP for long term durations if I should have “enough”.

I would pay close attention to what Watty says about the availability of medical care specialists and facilities in small communities in Washington State. Most of the providers are mostly only available near the major Seattle/Tacoma metro areas of puget sound, Spokane and the Vancouver/Portland area. Traveling very long distances in remote areas could be very difficult if your health depends heavily on good specialty care. This isn't only true in WA State. What might seem like a reasonable distance when you're younger might not when you're older. I am aware that east coast communities like Massachusetts have small communities but relatively much shorter distances to major communities with adequate medical facilities. So it’s important for ...

I would pay close attention to what Watty says about the availability of medical care specialists and facilities in Washington State small communities. Most of the providers are mostly only available near the major Seattle/Tacoma metro areas of puget sound, Spokane and the Vancouver/Portland area. Traveling very long distances in remote areas could be very difficult if your health depends heavily on good specialty care.

I should have posed the question differently, with stock and fixed income. In my mind it doesn't really matter much if it's cash/tbills/bonds/CDs, as long as it's NOT a cash "bucket" separate from the stocks and bonds. Not for you and not for me, but the usual post on this is quite clear that it IS a cash bucket. That's exactly what I overlooked in my question, as posted. I should have been more clear - no separate cash bucket! So if you are including bonds as a cash equivalent then isn’t it obvious that whole group is where the spending would come from? It is to me, but I guess when people hear "cash" they think you mean it's separate from your bonds. I don't think of it that way. You might want to review the McClung P...

It might make some minor differences, but I believe the difference comes at a cost of having a riskier portfolio position. Without rebalancing over time the non-volatile cash is nearly spent down increasing the risk. Sometimes you will win and sometimes you will lose when you need to replenish the cash.

Issues seem to be mostly easy compared with my teenage years and college days, My early years were very painful, emotional unstable with lacking in confidence in my abilities. In the 50’s, some concern with the great recession, helping daughter pay for college expenses and health issues with parents but by then I was able to handle challenging issues with confidence. In my 60’s now, luckily in good health and coasting in retirement.

Roly wrote: ↑Wed Aug 28, 2024 2:37 pm What's the simplest rule to withdraw in retirement? I have HSA, Roth, 401K and taxable, in addition to social security and pension. I do have a heir but I am more interested in simplicity for myself and the spouse. It may not be perfect but good enough. Is there one?

Roly, it depends
You might want to read the following wiki
https://www.bogleheads.org/wiki/Retirem ... n_priority

McQ wrote: ↑Sat Aug 24, 2024 9:39 pm I see things differently.

You started a market timing thread. Market timing can be the liquidation of long TIPS in favor of shorter-duration income funds.

Does your family allow you to use their network as a guest?

I don’t notice any difference between T-mobile and Mint since they use the same cell towers in my area.

I would think you would want a long elimination period perhaps 3+ years to insure only extreme cases. Unfortunately, I don't think LTCi policies are sold this way.

He always seems to have a well coherent perspective with plenty of data to back up his reasoning. I am very thankful that he is willing to share his insights.

David Jay wrote: ↑Wed Aug 07, 2024 6:13 pm

2pedals wrote: ↑Tue Aug 06, 2024 9:17 pmI don't see the difference between the QOR risk and just lower-than-expected return risk.

Apparently a lot of people don’t see the difference between lower-than-expected return risk and SOR risk.

My core interest is to differentiate general risk from SOR risk. QOR is my name for “non-SOR” risk.

+1
When planning for retirement it’s important to understand that sometimes actual returns are poor in retirement. Everyone that retires lives through different periods of time. Planning to reduce only SOR risks seems to be suggesting that we will all eventually have the same actual returns in retirement.

I like the QOR vs SOR framing, but disagree somewhat on the attribution of the risk reduction to a volatility phenomenon. Partly it depends on what the default is. Suppose an investor plans to be 80/20 as a base allocation, but starts retirement with a more conservative 60/40 “bond tent” with the intent of spending down the extra bonds in first few years while leaving the stock to grow untouched. In that case, it’s only half fair to say that the balanced allocation is lowering SORR by reducing volatility. Because another investor who plans to stay at 60/40 for the entirety of retirement might begin with the same fact pattern, yet by withdrawing proportionally from both bonds and stocks, accepts a higher SORR to sustain a lower QORR despite...

I’m not sure if this article helps:

https://www.colburnlaw.com/who-is-at-fa ... rked-car/#

It appears that you are both at fault.

We retired in late 2018 with a significant pension and soon full social security benefits covering most if not all expenses. My IPS says let my equity float but not beyond 80% equity and/or take some income harvesting if the equity amount exceeds more than I desire from market gains. So far no rebalancing in retirement. An asset allocation in terms of percentages doesn’t matter much to me. I pay much more attention to the fixed income investments and income amounts needed to cover future expenses.

GaryA505 wrote: ↑Sat Jul 27, 2024 4:36 pm I was listening to a recording of Rick Ferri in which he explains how he arrives at a recommended AA for a client. He said he does not actually tell them what it should be. He said he asks the client questions until eventually the client tells him what it should be.

Yes I listen to that as well. It was a very well done. “Bogleheads on Investing Podcast, episode #72”

Rick Ferri talks about how he helps clients develop their AA in his podcast.

Maybe that’s what advisors should be doing, facilitating the conversation rather than suggesting an AA.

2.5m is the price in the current market. The same house might be worth significantly more 6 years from now but our income may not be able to catch up in order to take out a large mortgage comfortably. A 2.5m house today only cost about 1.5m 6 years ago. It would not be a huge problem if we both have great potentials in increasing the income, but that’s unlikely the case in our 40s. The only way I know how to eliminate your current concern is to buy that property now, but your concern doesn’t seem reasonable. It seems extremely unlikely that your VHCOL area becomes a VVVHCOL area. Even if local valuations continue to skyrocket you should be able to sell your current property at much higher prices. Furthermore you can continue invest your in...

I’m not sure what the following statement means: “The risk here is that by then we'll be approaching 40, and our income might plateau.”. The risk would be you might not be able sustain your high income levels. I think we are able to sustain the income levels unless the entire industry declines significantly. But I don’t think our income will increase as quickly as now given the increased difficulty of climbing the corporate ladder. How is it a risk if you’re able to reasonably manage to maintain your income levels? If they plateau what is the risk that you’re taking about? Are you planning to substantially increase your living standards and spending beyond a 2.5 million home with already significant equity than can be used to reduce mortga...

You’re doing great! You both are working with some very big shovels and probably can do whatever you want. You might also include your total taxes in your expenses calculations.

I’m not sure what the following statement means:
“The risk here is that by then we'll be approaching 40, and our income might plateau.”. The risk would be you might not be able sustain your high income levels.

You can cry all you want, the stock market is like a honey badger. The honey badger don’t care.

I might sell some equity after more market gains but I already have enough income from pensions, social security and fixed income probably for the rest of my life and DW’s life.

Yes, this is good list. Among the points, I think this one receives too little attention. Earning and saving matters. In fact, it matters more than your investments. Most of America (and the world) has an income problem. People dramatically overestimate the difficulty of doubling their income. People also are very bad at saving money. The secret to having large investment accounts is putting a lot of money in there. "What to invest in" becomes almost meaningless if you don't have much money to invest. It's the old story of first investing in yourself, building up your personal capital, and increasing your earning power. Easy to say, but often not so easy to do. I'd agree with most of Dahle's quote except the part "people dra...

If your neighbor is slow to act, you should at least clear your driveway enough for emergencies reasons alone.

The bigger question in my mind is the realized returns during my withdrawal period. Maybe the annualized returns are lower than expected.

Even the IRS is still coming out from under a backlog generated in 2020. It should be no surprise that some medical billing went astray and some things that fell through the cracks are just now being rectified. I think we will be seeing more of these "late" bills. I think some of the medical billing went astray even before 2020. I am sure it got worse for many providers. I would guess the providers who tried hard to recover from the crisis had fewer issues and wouldn't need or want to be in a position to bill several years later. In my case, the billing department was not honest about what happened and why we received a "FINAL STATEMENT" for services provided years ago (see my comment above). They said I was a "dea...

You are not alone. This year I received a bill for radiology services provided over 3 years ago. The bill said you owe about $200 and this is the "FINAL NOTICE" for something done early in 2021. I had other services provided by the same provider. They sent me bills for each one but never mentioned past due payment for the radiology services over 3 years ago. When I inquired about the bill they said they previously sent 6 bills out and it was sent to a collections agency about 3 years ago and they sent the "FINAL NOTICE" in error. :oops: We were never contacted by the collections agency and no record of debt from any of the consumer credit agencies. I researched our records and noticed (we keep very detailed records) that...

That doesn't answer the question of how someone who has no knowledge of planning, taxes, etc. will know that (in this example) a recommendation to do very a large 100% conversion, maybe in a single year or over a small number of years, isn't "fair" or reasonable. Compare the scenario's end after tax net worth compared to the baseline of no Roth. The recommendation might be far from optimal, but at least not inferior It may not be that cut and dried. Do you know which scenarios will have value to your plan and why? Usually higher taxes are not risk mitigation issues, they can be “good” problems to have based on a generally progressive tax system. For example if a spouse dies early but has the same income that now single spouse can...

The biggest concern are the unknowable unknowns. What will the tax brackets be later in life? When will I or DW die? If either of dies early the could have an important impact on the tax tables and IRMAA for a long period. Also what will congress decide to the tax tables to be as we age? What will are aging expenses be the could be tax deductible from a tax deferred account? No planning software will help with these issues. I do like RPM and Pralana Gold so they can help someone go through the what if scenarios to help with these risk factors. It’s more of a risk management exercise, than than trying to optimize something that isn’t predictable. The kind of "optimization" software can sometimes help with is saying that within the...

The biggest concern are the unknowable unknowns. What will the tax brackets be later in life? When will I or DW die? If either of us dies early that could have an important impact on the tax tables and IRMAA for a long period time. Also what will congress decide the tax tables to be as we age? What will our aging expenses be and could they be tax deductible from a tax deferred account? What if some reason we later decide to move from Washington State (no income tax) to California? No planning software will help with these issues. I do like RPM and Pralana Gold so they can help someone go through the what if scenarios to help with these risk factors. It’s more of a risk management exercise, than than trying to optimize something that isn’t ...

The biggest concern are the unknowable unknowns. What will the tax brackets be later in life? When will I or DW die? If either of us dies early that could have an important impact on the tax tables and IRMAA for a long period time. Also what will congress decide the tax tables to be as we age? What will our aging expenses be and could they be tax deductible from a tax deferred account? What if some reason we later decide to move from Washington State (no income tax) to California? No planning software will help with these issues. I do like RPM and Pralana Gold so they can help someone go through the what if scenarios to help with these risk factors. It’s more of a risk management exercise, than than trying to optimize something that isn’t p...

This is a recurring thread from the same member. TIPS are clearly not worthless.

viewtopic.php?p=7643002#p7643002

For those that do have/invest in individual stocks, what methodology do you use to decide when to sell? The fact that every individual stock eventually ends up at 0 seems to necessitate some sort of strategy. Is it when the stock gains 100%? 150%? Or loses 50%? I do still hold some individual stocks that I bought before I fully bought into the Boglehead philosophy but decided to keep them. Some have done quite well, an example being Micron Technology. Micron has soared 140% since I bought it. Can it possibly go up any more? I also don’t feel like plopping a big tax bill on myself right now. Thats what I’m grappling with. That's why I stopped buying stocks and only buy funds. There are constant decisions to make almost every day when you ow...

PCG member here. I get a phone call once or twice a year, asking if they can help me with my investments. The call seems to be important to Fidelity for some reason for the past few years, possibly because Fidelity is working to increase revenue these days. Cold calls from Fidelity were very rare for me from the mid-1980’s to the mid-2010’s. The phone calls are usually mildly annoying. Fidelity knows that I am a self-directed investor but they still try to make me aware of some of their non- boglehead type fee-based products. Last year was a bit pushy when a Fidelity Wealth Management representative told me he wanted to schedule a meeting with him. I said wasn’t interested twice and he continued to ask me when was a good time to schedule th...

I hear people saying that a pension isn't and asset for net worth. I really disagree for a few reason: 1. In a divorce they are 100% treated as an asset and the person walking away with the pension income generally gives up other assets of equal value. 2. There is literally an investment product called an annuity that you can purchase and price that does the same thing. In fact, most pensions are superior to American annuities because of COLA. 3. Yes, a pension is completely illiquid, but that is a characteristic of several investments. The whole purpose of net worth is to get a grasp on how your finances compare to others and to what you are trying to accomplish in the world. It's hardly fair to compare your net worth with someone else if...

My future older self thinks a SPIA without a COLA clause is front loaded. Yes, and because it is front loaded, it is likely LESS exposed to unexpected inflation that could occur in the out years. If you take your higher payments in the early years, you get the higher payments before unexpectedly high inflation has eroded their value. If you take your higher payments in the out years, unexpected inflation has a a greater chance to erode your higher payments before you get them. On the other hand, If you don't buy a SPIA with an escalation clause you don't even cover expected inflation (currently somewhere between 2% and 3%). A SPIA without a fixed COLA that covers expected inflation will reduce the expected present value of the mortality cr...

My future older self thinks a SPIA without a COLA clause is front loaded.

IDpilot wrote: ↑Sat Jun 08, 2024 12:50 pm You are correct does not cover unexpected inflation but neither does the TIPS hedged fixed SPIA. When you build the TIPS hedge you have to size it for how much inflation you want to hedge against. If inflation comes in above the amount you used to size your hedge, then you are exposed to that inflation.

Sorry, I didn’t want to give the impression that the TIPS hedged fixed SPIA gave complete coverage for unexpected inflation. I don’t think I implied that, only the portion invested in TIPS does that with some additional amount above expected inflation if one invested in annuity that has a fixed COLA above expected inflation. There are sequence of inflation risks as well with a fixed COLA annuity.

I checked immediateannuities.com for a 74 yo male, cost for SL and 10 year GA with 3% COLA New York Life is $136,857. Without the COLA it’s $111,239 for a monthly income of $833 (annual 10k) That's not really a good comparison since McQ is working with a 74-year-old couple. Above McQ reports that buying a 10,000/year SPIA plus a TIP's ladder that protects that SPIA against 3% inflation for twenty years would cost $183,890 New York Life would sell an inflation adjusted at 3% SPIA with ten years certain that pays out 10,000/year for $167,905. * This protection against inflation would last until death instead of going away at 20 years. Seems to me that protecting a fixed SPIA against 3% inflation with a TIPS ladder would be a bad idea when yo...

I checked immediateannuities.com for a 74 yo male, cost for SL and 10 year GA with 3% COLA New York Life is $136,857. Without the COLA it’s $111,239 for a monthly income of $833 (annual 10k)

How about a comparison with an SPIA that has a 3% escalation clause?

TomatoTomahto wrote: ↑Mon Jun 03, 2024 10:42 am Back to real price. Up around $8k for the day.

You missed your chance to do some TLH.

CloseEnough wrote: ↑Sat Jun 01, 2024 9:40 am It's not clear to me that for just 5 years a TIPS ladder would be needed. I think the risk of inflation to a retiree is more likely one that plays out over many years.

I agree, I think the more challenging life stage is a cross-over for when personal income doesn't keep up with your personal inflation rate much later in life, say about age 80. At the same time longevity risk may play a part.

kelway wrote: ↑Sat Jun 01, 2024 8:35 am

2pedals wrote: ↑Fri May 31, 2024 8:40 pm
Very sad statement, it seems that any AI should be “intelligent enough” to read, understand and follow the copyright rules posted on each web site.

rules#

For me, the goal here is to educate, and aren't you ultimately glad that AI tools are learning from the best? I can't imagine why anyone would want to prevent it.

Can you imagine the potential that the makers of AI tools have to produce a tool that doesn't follow copyright laws? Do you believe copyrights should protected?

MtnBiker wrote: ↑Fri May 31, 2024 10:30 pm

2pedals wrote: ↑Fri May 31, 2024 9:40 pm I can't get my comprehend the numbers being used by "typical" investors in long-term TIPS. Bogleheads who are funding retirement using LMP and TIPS, what numbers are we typically talking about? How much in total dollar amounts (100k-2M?), how long is the projected ladder (5-30 years?), what annual income is being funded (5k-100k?), and how much of the total investable portfolio (10%-70%?).

Another common pattern would be to supplement Social Security. For example, age 70 to 85 with supplemental income of 20K/yr.

$20K x 15 of real spending costs you about $257K right now (using the tipsladder tool).

Just another example.

Is this something you plan on doing?

I can't get my comprehend the numbers being used by "typical" investors in long-term TIPS. Bogleheads who are funding retirement using LMP and TIPS, what numbers are we typically talking about? How much in total dollar amounts (100k-2M?), how long is the projected ladder (5-30 years?), what annual income is being funded (5k-100k?), and how much of the total investable portfolio (10%-70%?). One common pattern is to fund a "bridge" to Social Security. For example, retire at age 57 in 2015, plan to claim SS at 67 with estimated SS benefits of $35k per year. A out $35k x 10 of real spending costs you about $314k right now (see https://www.tipsladder.com/build?incomeRequirementKind=Avg&firstYear=2025&income=35000&...

I'm not surprised, I'm guessing somehow they need to pay for the Mint Mobile acquisition, inflation, and the naming of T-Mobile Park (home of the Seattle Mariners).

I can't get my comprehend the numbers being used by "typical" investors in long-term TIPS. Bogleheads who are funding retirement using LMP and TIPS, what numbers are we typically talking about? How much in total dollar amounts (100k-2M?), how long is the projected ladder (5-30 years?), what annual income is being funded (5k-100k?), and how much of the total investable portfolio (10%-70%?).

Discussion from June 2023: https://www.bogleheads.org/forum/viewtopic.php?t=406998 Alex Frakt, site founder wrote: They are already scraping the site, or perhaps more accurately, are trained with data that has been scraped from the site. I've tested both chatGPT and Bard and the responses use phrases that clearly come from the wiki and the forum. There's not much, if anything, we can do about it. Our situation is different from Reddit or Twitter in that we have no background APIs that allow third parties to extract data. All we provide is the web interface you are looking at. There's no way to stop anyone who wants it badly enough from downloading the site's contents one page at a time. Very sad statement, it seems that any AI should be “i...

I’m not understanding how someone can determine their future annual liabilities beyond creating a minimum income floor that someone feels is needed to cover basic needs plus a small buffer. I think that's the general idea. Say, someone has figured that they'll be OK with Social Security, or their pension and Social Security, or some such scheme. But they're going to wait five years between retiring at 65 and starting Social Security at 70, for maximum Social Security. Their Social Security will be 50K (in today's dollars), so they need 50K a year (based on today's dollars) that they can safely spend. When the moment comes, they will have no choice but to spend that money on food, shelter, health insurance, etc.--or start Social Security ea...

I’m not understanding how someone can determine their future annual liabilities beyond creating a minimum income floor that someone feels is needed to cover basic needs plus a small buffer. Asking someone with limited resources to invest millions in long term TIPS to pay for a 30 year lifestyle seems like a waisted opportunity to invest in equities, unless you have already won the game and just want to sleep well at night.