Bogleheads.org

David Jay

abqguy wrote: ↑Tue Apr 20, 2021 4:36 pm The original money was after-tax (i.e. this is a 'non qualified' annuity). My understanding is that for non-qualified annuities, there is no requirement to start withdrawing the money at age 72.

My bad, I was thinking that these were qualified funds (i.e. traditional IRA, etc.)

David Jay

I think a carefully considered change in IPS due to changes in life-stage is always appropriate. The only time one should not change their IPS in in the midst of turmoil (any turmoil: markets, work situation, family, health or natural environment). Keep the emotion out of it.

David Jay

And then of course there is the option of not annuitizing at all, and just pulling money from the account as needed, like a typical mutual fund account. Not annuitizing will require RMDs beginning at age 72, so you really don’t have the option of “leaving the money in there”. The RMDs must come out...

David Jay

A revocable trust is a nice way to simplify handling the estate. We did one (two adult children, 50/50 split) just so there was no need of probate. They know to contact the law office in the event of our demise and everything will be handled from there. One stop takes care of everything.

David Jay

And struck fear in the hearts of an industry built on OPM. Which is why we see this "passive creates market inefficiencies" argument resurrected every few weeks... It's a very natural question to ask. In fact, I'd claim that it's an obvious question, given that no matter whether we like i...

David Jay

In the market for investment products the rise of passive investing has created (and is continuing to create) greater efficiencies. And struck fear in the hearts of an industry built on OPM. Which is why we see this "passive creates market inefficiencies" argument resurrected every few we...

David Jay

I will leave off the HELOC question and focus on the business I have some friends that run a partnership where the one who is a builder and has a team does the work on remodeling/new builds and the other provides a lot of capital for acquiring properties. I have an opportunity to join in on providin...

David Jay

1. I think it is reasonable to hold a couple years of expenses in cash or cash equivalents, especially after the run-up that stocks have had over the last dozen years. Go ahead and move some of your expense money out of equities. 2. Stop looking at your accounts so closely, it drives recency bias. ...

David Jay

Looks like ill need to take the pain now for a better tomorrow. What were your thoughts on using a HELOC to pay the taxes rather than having to withdraw more from the traditional IRA during the conversion? I don’t see the advantage. I think you are going back to Lange’s advice to use taxable funds ...

David Jay

1. I think it is reasonable to hold a couple years of expenses in cash or cash equivalents, especially after the run-up that stocks have had over the last dozen years. Go ahead and move some of your expense money out of equities. 2. Stop looking at your accounts so closely, it drives recency bias. W...

David Jay

I guess it’s a tough question to answer, it feels like any cash (unless it’s sitting in an I-bond I bought 12 months ago) is just dead weight. And that irritates me. It’s not “dead weight”, it is “ballast”. If you can see it this way it will help provide perspective. Ballast is there to keep the bo...

David Jay

I held a large portion of my portfolio in company stock due to an ESOP. I always converted all company stock at the earliest diversification period. I would never choose (given the option) to have both my retirement and my paycheck dependent on a single corporation.

David Jay

If the check was made out to you it is a once-in-12- months rollover, even if it was sent directly to Fidelity. The check should have been made out to Fidelity Investments FBO SuperOwl. (FBO = “for benefit of”)

David Jay

They are not all fools simply because they're doing something that’s not suited for you. This is where BH stops being a best practices guideline for the average investor and starts being an ideology. Questions: 1. Did you notice that the OP is a month-old member of the forum? 2. Did you read the re...

David Jay

Near as I can tell, a reportable rollover is a rollover that is not trustee-to-trustee. It is "reported" because you can only do one such rollover in a 12 month period. Fidelity is reporting this, so you will not be allowed to do another such rollover within 12 calendar months. There are n...

David Jay

Welcome to the forum! I see you have listed a few accounts and their respective AA. Most here on BH would select an AA for their overall portfolio and then use tax-efficient fund placement to determine which assets to put in which accounts. Some accounts may still have a mix of assets but it is comm...

David Jay

Your plan to annuitize falls into the "reasonable" category. Two thoughts: 1. Remember that the 7.04% is not inflation adjusted. So the spending power will shrink over the decades. Traditional SWR formulas assume inflation adjustment, so one can't directly compare 7% to 2% 2. You mentioned...

David Jay

At least they won't put your folks in annuities

(Ken Fisher hates annuities).

David Jay

At this point, your willingness to take short term pain for long term gain seems like the biggest decision. IRMAA has a 2-year look-back, and since you are already paying the higher premium I would certainly convert all the way to the top of the 24% tax bracket in 2021. This is over a $200,000 conve...

David Jay

There is also a middle-ground. Low cost hearing aids. For instance Lively and Costco Signature. Available for less than $2000 a pair. Costco Signature 9.0 is $1495.

David Jay

mushripu wrote: ↑Mon Apr 19, 2021 9:33 am I would not mention owner having arrear taxes on lot. It can be a bad start to the conversation.

+1

David Jay

I like a combination of your #1 and #2: * I’d like to buy your lot at 1234 County Road. I live in the home at 1236 County Road and would like to preserve the "green space" around my home. I do not intend to develop the lot. This does a few things. It shows you are serious, it shows that yo...

David Jay

Welcome to the forum! ...questions that are more complicated than what I know now. This is true for every one of us. There are things we don't know. Andragogy (the study of how adults learn) tells us that adults learn in response to need . Three years ago I knew nothing about Medicare, skipped over ...

David Jay

The premise of the title question is wrong. Active investing is not foolish, but it is wasteful (of my resources).

David Jay

Regardless of the additional items covered in Advantage plans, the patient is always responsible for 20% of the treatment costs . ??? I just got done wading through a Medicare Advantage EOC (that's the 297 page official coverage document). You were mis-informed if you were told that this is true of...

David Jay

Sorry but I forgot to tell David about my mortgage's principle and interest per month: Principle = $1,336.53 Interest = 177.74 Escrow = 756.70 which covers RE tax and insurance I'm adding $1,000 a month so that in 4 years (a little more) it'll be paid off This puts you on track for retirement at ag...

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 Deducib...

David Jay

I think you are close to meeting your goal. I show about $60,000 in available income at age 70.

What is the principle + interest on your mortgage? If it is more than $900 a month then you can maintain your current spending levels after paying off the mortgage.

David Jay

David, I haven't been able to follow all of the numbers here. Is that the rationale here that the OP's withdrawals after age 2026 are large enough to exceed the standard deduction and place the OP in the 22% bracket at that time? Also, could you speak to holding some tax-deferred funds to be used f...

David Jay

I did some quick googling on SMAs and I just don’t get it.

Seems like a lot of cost for so-called “professional management” of TLH. But of course, most of us here on BH are DYI type investors.

David Jay

One other thing related to “running the numbers” is that I do not have outside money to pay the taxes. Lange rec’d to use a HELOC to pay those taxes on the conversion money rather than having to dip deeper into the traditional IRA to pay the taxes. He said that otherwise, I’d need to take out 133K ...

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.

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