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David Jay

I hope you find a solution, but I finally gave up on trying to keep inkjet cartridges functional while snow-birding down south. I just bought a multifunction color laser printer for about $400. The laser uses dry powder for toner, so it "never" goes bad. I read a comment here on BH of a gu...

David Jay

I have looked at your numbers, and here is the conclusion that I come to: You should fill a portion of 24% tax bracket with Roth conversions for the next 5 years, with the goal to be able to stay in the 25% (that's your current 22% tax bracket, the rate changes in 2026) tax bracket after the 5 years...

David Jay

The OP got into a discussion on another thread and we are splitting out just the Roth conversion issue in this thread, as the title fits well with the discussion. The newer thread is here: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=346498 First, let's do a quick review a few principles...

David Jay

Looking at your earlier “Roth” thread, you have a pretty simple situation. All living expenses covered by pension and SS, all retirement funds in tax-deferred (1.7M). With your desire to leave the maximum legacy, all you really need to do is figure out a “good enough” Roth conversion strategy. I sa...

David Jay

Looking at your earlier “Roth” thread, you have a pretty simple situation. All living expenses covered by pension and SS, all retirement funds in tax-deferred (1.7M). With your desire to leave the maximum legacy, all you really need to do is figure out a “good enough” Roth conversion strategy. I say...

David Jay

He will ask for the same information that we ask for, so why not collect it now and post it here first. If you still want to spend ten grand with this guy after posting here you will have all the numbers in one place. Link to “Asking Portfolio Questions” format: https://bogleheads.org/forum/viewtopi...

David Jay

We have people on the board with more than 20 million. I can’t speak to their portfolio specifics, but they use broad-based index funds as core holdings.

David Jay

By this 50% analysis - Active Funds should exploit/outperform the passive indexes. Funds don't have as much room to maneuver as individuals. So passive funds can create market inefficiencies but active funds can’t take advantage of said inefficiencies? Those inefficiencies are sly little devils...

David Jay

First - I'm extremely grateful. You all are life savers. Thank you for taking the time. Also " yes ", withdraw from the non-qualified annuity (many allow 10% per year without penalty) for living expenses. Since they're over 59.5 (early withdrawal) and don't have significant surrender fees...

David Jay

If the pension has a COLA then I think 4% is a reasonable rule of thumb.

David Jay

Qualified Variable Annuities inside an IRA served exactly one purpose - to pay the annuity salesperson's BMW payment. Yes , dump them. Also " yes ", withdraw from the non-qualified annuity (many allow 10% per year without penalty) for living expenses. Finally, " yes ", the higher...

David Jay

Welcome to the forum! At Bogleheads we teach that the primary "control knob" for growth versus stability is your "asset allocation" (AA), the ratio of stocks to fixed income (bonds, CDs, cash, etc.). Replacing 1/3 of your cash with stocks will definitely boost your potential for ...

David Jay

Welcome to the forum! You are in great shape. Any portfolio "clean-up" is some trimming around the edges, the big number is that you can withdraw a very conservative 3% from your portfolio and well exceed your targeted living expenses. With future Social Security down the road, you can pro...

David Jay

One of the books I read said that if everything went wrong (months-long hospital stays, most expensive drugs possible, etc. for a couple of decades) that one could spend $900,000 over a lifetime on Medicare. I know it's just a theoretical number but it is still concerning. I would be more concerned...

David Jay

Welcome to the forum! 1. are we in reasonable shape to retire in 2 years assuming we keep an allocation of 60/40 for the next few years? Yes. With Social Security to back you up down the road I see no problem with a 4% withdrawal rate which, based on 3.8M would be $152,000 a year. 2. As we have no p...

David Jay

1. With high-deductible G I know the maximum per year and have nationwide acceptance. 2. With MA PPO I have zero monthly cost, so healthy out-of-pocket is the same as A + B but there will be no Part D penalty if I want to go to an A+B+D in the future due to a need for costly drugs. I am leaning tow...

David Jay

I have seriously looked at the “A + B only” based on this Doctor’s arguments: https://truecostofhealthcare.org/medicare-supplemental-insurance/ In the end, I chickened out and now we are focusing these choices: 1. High Deducible “G” + Placeholder “D” 2. Priority Health MA PPO, the network is affili...

David Jay

I would "rebalance" with my regular withdrawals. Which would mean that I would be withdrawing from bonds.

David Jay

To me, it means that one shouldn't try to "juice" their fixed income yield with things like junk bonds or index annuities.

Take what the market will give you, even in these low-yield times.

David Jay

In the end, my answer to all of these "passive creates inefficiencies" arguments is as follows:

"I will know exploitable inefficiencies exist when more than 50% of active funds beat their index according to the SPIVA scorecard."

David Jay

The smaller their weight, the slower the adaptation will be. Do you have a basis for that statement? I would argue that the smaller their weight, the more nimble they can be. And thus, the faster the adaption will be. Remember, the price is set, not by the volume of trading, but by the price of las...

David Jay

We are both up for Medicare this winter (birthdays are one month apart). I have seriously looked at the “A + B only” based on this Doctor’s arguments: https://truecostofhealthcare.org/medicare-supplemental-insurance/ In the end, I chickened out and now we are focusing these choices: 1. High Deducibl...

David Jay

NoblesvilleIN wrote: ↑Mon Feb 15, 2021 9:56 pmWe dropped our level term policies (one for me, one for spouse) when we were comfortable that the surviving spouse would be ok.

Same here.

David Jay

Welcome to the forum! Some questions: 1) How are we doing? You are doing great. I had an income similar to yours (wife was SAHM) and made my very first retirement contribution at age 30. I retired @ age 62 without any pension. So you guys are way ahead of us. Keep it up. 2) Does it seem reasonable t...

David Jay

Dug8498 wrote: ↑Sat Apr 17, 2021 5:39 amNothing wrong with any of those companies, but some of them definitely far too expensive right now.

Sounds like the good companies are too expensive and the cheap companies are on the verge of bankruptcy.

Maybe we can call that the “Value Paradox”.

David Jay

I keep reading to stay at the 22% or under. TurboTax said my effective fed rate is 21%. Your effective rate doesn’t matter for these types of decisions, it is your marginal rate, that is, the rate you pay on the next dollar of income. One must decide, based on what additional tax one will pay, whet...

David Jay

See my note in the OP. The "distribution" from the tIRA is also an immediate contribution to the HSA (and subject to HSA annual contribution limits). So there is no net reduction in tax liability compared to taking a [normal] distribution (after age 59.5) from a tIRA and making an HSA ann...

David Jay

It depends on how large the 401K is. If you have over a half million in the 401K then you will want to spend to at least the top of the 12% bracket (about $53,000 if filing single) from the 401K to prevent even larger RMDs in the future. If the 401K is small, then spending the cash is fine. I would...

David Jay

Welcome to the forum! I see that you have had nearly 60 views, but no one has responded. There are a very limited number of people here on the Boglehead forum who are running shorts in their portfolio. Most of us hold broad-based index portfolios without leverage, at least as core holdings. Let me b...

David Jay

It depends on how large the 401K is. If you have over a half million in the 401K then you will want to spend to at least the top of the 12% bracket (about $53,000 if filing single) from the 401K to prevent even larger RMDs in the future. If the 401K is small, then spending the cash is fine. I would ...

David Jay

Toyota certainly knows how to engineer hybrids.

David Jay

Or, to Taylor's point, will owning the entire market allow one to benefit from the newcomers as they ride up to the top, negating any real loss from the rotation? Exactly. GE down, Tesla up. To steal a thought from Nisiprius, in Total Market I owned Tesla before Tesla was cool. (there were discussi...

David Jay

I think your other plan (MYGA) from your 6:30am thread is a much less bad idea. At least the MYGA has a termination so you can evaluate at the end of the term (3, 5, 7 ,10 years - whatever). An SPIA is forever. If inflation spikes the value of the annuity income stream will plummet. Imagine 5% annua...

David Jay

My understanding is that the IRA->HSA rollover takes the place of your contribution. There is nothing fancy about this. You could just withdrawal from the IRA and make an HSA contribution.. and the net on your taxes should be the same (in most cases) Note the bold, above. " The distribution [i...

David Jay

Let me start this off by saying that you two are doing great! I do not see any "red flags" in your plan. Because your ultimate AA is 2.5%, you can easily withdraw more than 4% for 15 years. In my case, I am currently withdrawing about 7% per year from age 62 to 69, but at age 70 withdrawal...

David Jay

AerialWombat wrote: ↑Fri Apr 16, 2021 9:29 am I’ve frequently thought it would be fun to buy up all shares of the cheapest publicly traded company that exists and reverse merge my other business into it. But who needs that headache.

That's one way to go public...

David Jay

Do it now.

The future is unknown but likely will not follow your preferred plan. Do something for them now and then you can choose to do more later.

David Jay

Sounds reasonable. It comes down to economies of scale and all of the various share classes contribute to the scale.

David Jay

No index annuities. Don’t even get us started on these evil products. Please do tell. My understanding of an Index annuity is that if the market crashes you lose nothing and if the market rallies in a year, you get some of the upside. Return is typically better than a CD over most years and I am th...

David Jay

relativeratio wrote: ↑Fri Apr 16, 2021 5:30 am What if the 60% is still in equities but the 40% bonds are replaced by MYGAs and/or Index annuities?

No index annuities. Don’t even get us started on these evil products.

David Jay

No. Just no. For so many reasons, but let’s start with the margin rate not being a fixed rate. Margin rates will go up as interest rates go up. Not necessarily I bonds Rates are based on inflation and margin rate is based on Fed BM rate, I could always payoff margin loan if Fed target rate went up,...

David Jay

No. Just no.

For so many reasons, but let’s start with the margin rate not being a fixed rate. Margin rates will go up as interest rates go up.

David Jay

senex wrote: ↑Thu Apr 15, 2021 1:53 pm The payment must be made directly to the qualifying educational organization and it must be for tuition."
The payment must be to the care provider."

The key phrases above: Payment cannot be made to the individual.

David Jay

8606 is not the correct form. If one is gifting more than $15,000 per year per recipient then the gift must be recorded (on Form 709) and this amount will come out of the lifetime estate limit when the estate is settled (after one's death). If married, you and your spouse can each gift $15,000 per y...

David Jay

Thanks for the answers all. One more medicare question .... I've heard that some docs will not take medicare patients due to the lower compensation. Has anyone found this to be true? If so I suppose that would be a huge advantage for an HMO type advantage plan. A doctor can choose to take no Medica...

David Jay

No, because the catastrophic coverage provision of part D seems really important to me, so, definitely, part D (prescription drugs). If one has no expensive prescriptions, one can get a "limited coverage" Part D for about $15 - $20 a month at age 65. Well worth having Part D coverage - an...

David Jay

The beauty of Roth accounts is that funds can be withdrawn without adding to your taxable income. If in any given year you are up against a phase-out for a particular tax benefit you simply spend from your Roth. Also, heirs can withdraw the funds tax free, so the Roth tax advantage is multi-generati...

David Jay

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David Jay

Vanguard LifeStrategy Conservative. 40% stocks, 60% bonds. I am transitioning to a "one-fund" portfolio, with everything in a single LifeStrategy fund, for the simplicity. Does simplicity trump the need for tax efficiency? I am fortunate to have essentially all funds in tax-advantaged acc...

David Jay

Cyclist2 wrote: ↑Wed Apr 14, 2021 8:31 pmLuckily I don't have to make that decision at this time.

Yup, and the benefit increases 8/12 of 1% every month after FRA, so just keep deferring until you can’t stand it anymore.

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