Search found 438 matches

by Bill M
Tue Dec 30, 2014 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversions in excess of normal retirement tax bracket
Replies: 4
Views: 730

Re: Roth conversions in excess of normal retirement tax brac

Part of this makes sense, as I can either pay the 28% tax on the RMD or on the conversion for the amounts that are distributed as RMDs. not sure if this is really what you intended to write but if you did..............you can't convert RMDs. It was badly stated. I can take the RMD at age 70, and pa...
by Bill M
Tue Dec 30, 2014 8:04 am
Forum: Personal Finance (Not Investing)
Topic: Roth conversions in excess of normal retirement tax bracket
Replies: 4
Views: 730

Roth conversions in excess of normal retirement tax bracket

I've been looking at various Roth conversion strategies and seem to find some strange situations. I'm wondering if others have seen anything similar. My situation -- retired now at 62, waiting until 70 to start Social Security and waiting until 65 to start pension. Tax bracket once SS starts will be...
by Bill M
Mon Dec 29, 2014 11:06 am
Forum: Investing - Theory, News & General
Topic: 401k contribution deadline
Replies: 7
Views: 1338

Re: 401k contribution deadline

I never tried to hit the maximum; always aimed high and overshot. The initial overshot went in as after-tax contributions, which turned out to be "mega-backdoor Roth". After hitting the 415(c)(1)(A) limit, the contributions still went into the 401k, and received the company match, and were...
by Bill M
Mon Dec 29, 2014 9:16 am
Forum: Personal Finance (Not Investing)
Topic: What would you have done differently when retiring?
Replies: 116
Views: 16815

Re: What would you have done differently when retiring?

Things I would have done differently: (1) Have a longer list of things to do. Start with a list of things to do that is much much much longer than you can possibly do. When I started to feel "stuck" doing the bottom-of-the-list things, it was time to expand the list. Also, (2) I didn't app...
by Bill M
Sat Dec 27, 2014 10:16 pm
Forum: Personal Finance (Not Investing)
Topic: Excel question
Replies: 18
Views: 2614

Re: Excel question

Try "=15.83-15.8" and display the result out to 25 decimal places or so.
Try "=15.8-15" to 25 decimal places.
However, if you take a number that _can_ be expressed in binary, =15.25-15" ...
by Bill M
Sat Dec 27, 2014 5:34 pm
Forum: Investing - Theory, News & General
Topic: Stable value funds - is there a catch?
Replies: 13
Views: 3391

Re: Stable value funds - is there a catch?

If you know of one outside a company retirement account, please post the details. I've not even seen one available to an IRA. Retirement accounts have very restrictive withdrawals, so the bonds owned by the fund are long duration and thus have higher yields. The insurance contract is covering the di...
by Bill M
Sat Dec 27, 2014 5:19 pm
Forum: Personal Finance (Not Investing)
Topic: What price are you planning to pay for your next car?
Replies: 91
Views: 10515

Re: What price are you planning to pay for your next car?

Don't know, but the time is coming soon. DW's car is 12 years old and has 220K miles; mine is a few years older but only has 135K miles. Both were purchased new, so it has been a while since we've been through the process. Both run fine and look good, but DW is getting concerned. In anticipation, we...
by Bill M
Fri Dec 26, 2014 8:12 am
Forum: Personal Finance (Not Investing)
Topic: Increasing expenditure
Replies: 10
Views: 1367

Re: Increasing expenditure

Maintaining the same standard of living will involve an inflation adjustment, so saving the entire after-tax raise isn't reasonable. Also there are some things that seem to grow faster than inflation, like real estate taxes, and some that are a fixed percentage of total income, like charity. So don'...
by Bill M
Wed Dec 24, 2014 10:38 am
Forum: Personal Finance (Not Investing)
Topic: Poll: Include Pensions/SS/Annuities in NW Calculations?
Replies: 50
Views: 4295

Re: Poll: Include Pensions/SS/Annuities in NW Calculations?

I include all of these in net worth, but basically ignore the answer. Far more important, I feel, is the number I call the "safety margin." This is calculated as the projected savings/investment account balance when we turn 105. This projection certainly involves every source of retirement...
by Bill M
Tue Dec 23, 2014 11:57 pm
Forum: Investing - Theory, News & General
Topic: TIPS CPI Adjusted Principal vs Market Close
Replies: 2
Views: 960

Re: TIPS CPI Adjusted Principal vs Market Close

The quotes for TIPS (e.g., at http://online.barrons.com/mdc/public/page/9_3020-tips.html?mod=bol_topnav_9_3000), give a bid/ask and also "Accrued principal." You multiply the trade price by the accrued principal to get the $$$ that will change hands. So QD5, with quote of 99.24 ask (99 24/...
by Bill M
Tue Dec 23, 2014 11:35 pm
Forum: Personal Finance (Not Investing)
Topic: How much notice to give prior to Retirement ?
Replies: 62
Views: 24465

Re: How much notice to give prior to Retirement ?

Getting laid off (some called it "raptured") solved this problem for me. But the planning I was doing prior to that notice was based on company policies. Vacation days for the entire calendar year were available as of January first, but once you gave notice of retirement you could only tak...
by Bill M
Tue Dec 23, 2014 11:20 pm
Forum: Personal Finance (Not Investing)
Topic: Paying Just One Estimated Tax Payment
Replies: 14
Views: 6205

Re: Paying Just One Estimated Tax Payment

I also have large dividend and capital gain distribution that are unpredictable and received late in the calendar year, and make an estimated payment in the fourth quarter to cover them. I've always wondered.....while the total payments (estimated and withheld) are adequate to avoid the penalty, the...
by Bill M
Mon Dec 22, 2014 5:01 pm
Forum: Personal Finance (Not Investing)
Topic: 'Post-Tax' / Non-Deductible 401k Contributions
Replies: 16
Views: 2166

Re: 'Post-Tax' / Non-Deductible 401k Contributions

Current Tax Rate Federal Marginal Tax Rate: 28% (would be 39.6% if not for AMT) Be careful about the AMT exemption phaseout. If you are getting a partial AMT exemption, then the Federal Marginal Rate is 33%, not the 28% from the tax formula. The difference between 28% and 33% was enough to change o...
by Bill M
Mon Dec 22, 2014 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: What are your 2015 Financial Goals?
Replies: 102
Views: 12008

Re: What are your 2015 Financial Goals?

My financial goal for 2015 is to spend more than ever on travel and entertainment. Victoria +1 +1 +1 ... Have now finished first full year of retirement. (The Good) We significantly simplified our investments, not quite to three-fund, but very close. (The Bad) The year didn't go as planned, since D...
by Bill M
Mon Dec 15, 2014 3:42 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion tax question
Replies: 23
Views: 1958

Re: Roth conversion tax question

Since this thread has gotten into the devilish details, let me add my strange case--- My Mom opened a Roth IRA in 2013, and did a conversion of a traditional IRA into it. No previous Roth IRA. I inherited that Roth IRA in 2014. My personal Roth IRA was opened back in 1999, so that 5-yr period has pa...
by Bill M
Sun Dec 14, 2014 11:40 pm
Forum: Personal Finance (Not Investing)
Topic: How much is reasonable to spend on vacation?
Replies: 30
Views: 4989

Re: How much is reasonable to spend on vacation?

I'm finding it tough as a Boglehead to spend the money because I keep thinking this 1k or 2k invested in a tax deferred vehicle over 40 yrs would be worth x amount. Vacations are something you save for in advance, just like college tuition and for your retirement. Saving has to have a purpose, and ...
by Bill M
Sun Dec 14, 2014 11:31 pm
Forum: Personal Finance (Not Investing)
Topic: Roth 401K to Roth IRA
Replies: 3
Views: 562

Re: Roth 401K to Roth IRA

I've done this every year since my employer's plan allowed Roth 401k contributions. They were all "trustee-to-trustee" rollovers, and I was over 59 1/2. Not sure if any other type of rollover would have been allowed. I think the change this year was Notice 2014-54 that permits basis isolat...
by Bill M
Sun Dec 14, 2014 10:39 pm
Forum: Personal Finance (Not Investing)
Topic: Roth conversion tax question
Replies: 23
Views: 1958

Re: Roth conversion tax question

IRS Pub 590 gives a flowchart telling whether a distribution is taxable or not. Has it been five years since you set up and first contributed to the Roth IRA? If not, then partially taxable. Were you 59 1/2 at time of distribution? If yes, then tax-free Distribution used to buy or build first home? ...
by Bill M
Fri Dec 12, 2014 3:21 pm
Forum: Investing - Theory, News & General
Topic: Retirees: Withdrawals by time and amount
Replies: 36
Views: 4696

Re: Retirees: Withdrawals by time and amount

We start with our estimate of annual spending and divide it in half. First half is withdrawn in January, second half in July. This goes into an online savings account which also stores our "emergency fund". This gets moved as needed into the near-zero-interest checking account. The investm...
by Bill M
Thu Dec 11, 2014 10:30 pm
Forum: Personal Finance (Not Investing)
Topic: (Poll) Did you tap into emergency fund in the past 10 years?
Replies: 64
Views: 8251

Re: (Poll) Did you tap into emergency fund in the past 10 ye

The purpose of an emergency fund is to have a supply of liquid cash to cover the expenses if/when the paychecks don't come. We're retired now, and so the role of the emergency fund has changed -- there are no more paychecks - they never come. So we use the "emergency fund" as a (what I cal...
by Bill M
Thu Dec 11, 2014 8:17 am
Forum: Personal Finance (Not Investing)
Topic: A puzzle about Social Security
Replies: 46
Views: 5196

Re: A puzzle about Social Security

Thanks for both posts. Very interesting and helpful. Social Security is actuarially neutral among the various single-person claiming strategies. Excluding the spousal benefits, is it also actuarially neutral among two-person (married couple) strategies? Of course not, but you set up the problem suc...
by Bill M
Thu Dec 11, 2014 1:13 am
Forum: Investing - Theory, News & General
Topic: Poll: Your Portfolio Tax Diversification
Replies: 45
Views: 4543

Re: Poll: Your Portfolio Tax Diversification

The trouble is this isn't under our control, like asset allocation is. I'd love to move all my taxable accounts to Roth, but rules get in the way. Likewise there is a high cost to move traditional IRA to Roth. So its hard to take the results of the poll as being a measure of desired allocation. BTW,...
by Bill M
Thu Dec 11, 2014 12:55 am
Forum: Personal Finance (Not Investing)
Topic: A puzzle about Social Security
Replies: 46
Views: 5196

Re: A puzzle about Social Security

It was just pointed out to me in a private message that my understanding of life expectancy is incorrect. Life expectancy does not represent the median projected age, but the average. (For some reason, I assumed the distribution of remaining years was normal. Alas.) Without some research, I don't k...
by Bill M
Thu Dec 11, 2014 12:33 am
Forum: Personal Finance (Not Investing)
Topic: A puzzle about Social Security
Replies: 46
Views: 5196

Re: A puzzle about Social Security

Social Security is actuarially neutral among the various single-person claiming strategies. This assumes, of course, that the lifetime of the person follows the standard mortality tables. That is given in the puzzle statement; there is no known information that their expected lifetime of the aunt or...
by Bill M
Wed Dec 10, 2014 11:07 pm
Forum: Personal Finance (Not Investing)
Topic: Pension Help
Replies: 22
Views: 1831

Re: Pension Help

For questions like this one, I always go to Vanguard's Annuity Access (https://investor.vanguard.com/annuity/fixed), run by Hueler, and get some quotes. For a 57-year-old male, $38,000 premium paid now will get $296.36 or $287.65 per month starting 8 years from now (two numbers because two different...
by Bill M
Wed Dec 10, 2014 10:44 pm
Forum: Personal Finance (Not Investing)
Topic: POLL: Timing of Jan 1st payments
Replies: 9
Views: 1783

Re: POLL: Timing of Jan 1st payments

We're in the "reason other than bunching" category. Bunching doesn't do much for us, because (1) the "light" years for bunching are still above the standard deduction, and (2) we get hit with AMT every year, which takes away almost all the deductions anyway. So we just pay things...
by Bill M
Tue Dec 09, 2014 12:14 am
Forum: Personal Consumer Issues
Topic: How long do grilles last?
Replies: 26
Views: 4076

Re: How long do grilles last?

I have a propane grill, and cook year round. I replace the burner about every two or three years. Also I have to replace the grill cooking surface about every five years, and usually the vaporizers at the same time. At some point getting replacement parts becomes difficult, and that determines the l...
by Bill M
Thu Dec 04, 2014 5:11 pm
Forum: Investing - Theory, News & General
Topic: How do you rebalance?
Replies: 40
Views: 4406

Re: How do you rebalance?

We rebalance once per year, and I answered that way in the poll. But the more interesting aspect, not covered by the poll, is how. We have both taxable and IRA accounts, and want to maintain the asset allocation across the total, not for each individual account. It would be ideal if every rebalance ...
by Bill M
Thu Dec 04, 2014 9:21 am
Forum: Investing - Theory, News & General
Topic: What % of your fixed-income is TIPs?
Replies: 71
Views: 6074

Re: What % of your fixed-income is TIPs?

Ijim wrote:When breaking down your portfolio, what portion (or %) of your fixed-income/bonds are TIPs?
We do a floor-upside strategy. The floor is 100% TIPS. The upside is three-fund, so 0% TIPS. So the overall percentage is meaningless.
by Bill M
Thu Dec 04, 2014 9:10 am
Forum: Personal Finance (Not Investing)
Topic: Roth Conversion make sense in our situation?
Replies: 8
Views: 1123

Re: Roth Conversion make sense in our situation?

If you are waiting until 70 to start Social Security, then you will then have a significant bump in taxable income. The key thing to determine is the marginal rate you will face in your 70's, with both the RMDs and Social Security. The 25% bracket is wide. If the marginal rate is still 25%, then the...
by Bill M
Tue Dec 02, 2014 3:46 pm
Forum: Personal Finance (Not Investing)
Topic: [Poll] What's Your Tax Prep Strategy?
Replies: 70
Views: 7260

Re: [Poll] What's Your Tax Prep Strategy?

I'm surprised that for a very-DIY-type group, there is no DIY option to the poll. I think it is important to realize how actions through the year affect taxes, and the only way to know that is to understand, in depth, how taxes are calculated. The various computer programs, like TurboTax, TaxAct, et...
by Bill M
Mon Dec 01, 2014 2:41 pm
Forum: Personal Finance (Not Investing)
Topic: Tax deductions for donating a lot
Replies: 20
Views: 2217

Re: Tax deductions for donating a lot

Also, check on that $5000 number, maybe it is really $500? Between $500 and $5000 form 8283 is required. I've always tried hard to avoid filing this, rather breaking up donations into $500 portions and spreading them out one each year. Donating more than $500 in a single year seems to require knowi...
by Bill M
Tue Nov 25, 2014 11:02 am
Forum: Personal Finance (Not Investing)
Topic: 401k limits
Replies: 1
Views: 647

Re: 401k limits

There's going to be earnings on the excess contribution, and that portion will be taxable whenever you receive it. So there will be a 1099-R in either case. But it's not much of a "tax mess" -- I regularly overcontributed to my MegaCo 401k (since the ERs in that plan were lower than I get ...
by Bill M
Tue Nov 18, 2014 4:12 pm
Forum: Investing - Theory, News & General
Topic: Is investing more risky today today than before the internet
Replies: 30
Views: 5645

Re: Is investing more risky today today than before the inte

Actual value is still driven by earnings; the internet didn't change anything beyond creating new markets and earning potential. The noise (fluctuations around actual value) is still driven by fear and greed. I don't think the internet has had any impact on the greed side, but I think it is likely t...
by Bill M
Tue Nov 18, 2014 3:59 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Planning for 2015 Roth conversion
Replies: 11
Views: 1911

Re: Tax Planning for 2015 Roth conversion

I have to wonder how sure you are about the 2015 income figures. I do a similar sort of projection of income, and plan for a Roth conversion, but delay the conversion until December when I am more sure of the income figures. The full year's amount of interest and dividends and capital gains is hard ...
by Bill M
Tue Nov 18, 2014 3:46 pm
Forum: Personal Finance (Not Investing)
Topic: What to calculate withdrawals on?
Replies: 11
Views: 1396

Re: What to calculate withdrawals on?

A regular withdrawal percentage, such as 4%, would only start when you are both retired, and both are collecting pensions (if any) and Social Security. Prior to that time, withdrawals are likely to be significantly different than the long term rate. I think it is best to think of two phases: (1) pre...
by Bill M
Thu Nov 13, 2014 8:08 am
Forum: Personal Finance (Not Investing)
Topic: Contribution to ROTH in 401K
Replies: 13
Views: 1505

Re: Contribution to ROTH in 401K

So I am looking for advice on whether I should do the company's option of contribution to a ROTH or just continue on with the max pre tax for 2015 ? There are certainly calculators that evaluate the tradeoffs between pre-tax 401k and Roth-401k contributions, and I ran them and ignored the results. ...
by Bill M
Thu Nov 13, 2014 6:34 am
Forum: Personal Finance (Not Investing)
Topic: Transition from Saving to Spending
Replies: 37
Views: 6478

Re: Transition from Saving to Spending

I'd call it auto-withdrawal. It then makes you contemplate how to spend it, it is just sitting there in your checking account. Actually, it just gives you an assurance that spending is OK. I constantly have to tell my wife, we've earned it, do what you want. Somehow, if it's a balance in our checki...
by Bill M
Thu Nov 13, 2014 6:28 am
Forum: Personal Finance (Not Investing)
Topic: How do you track the value of your illiquid assets ?
Replies: 50
Views: 4546

Re: How do you track the value of your illiquid assets ?

S&P calculates an index of real estate prices, the Case-Shiller Index, and publishes it monthly. Latest values available at http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us---- Take your purchase price, divide by the index value for ...
by Bill M
Sun Nov 09, 2014 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Pay for Release from Escrow
Replies: 5
Views: 869

Re: Pay for Release from Escrow

When I did this years ago there was no fee. But I had enough equity in the house that the mortgage company wasn't worried about recovering the outstanding balance even if I never paid any of the taxes. It sounds like your mortgage company is worried, rightly or wrongly. I suspect if you wait a few y...
by Bill M
Sun Nov 09, 2014 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Home ownership/refinance paperwork - keep or shred?
Replies: 7
Views: 2594

Re: Home ownership/refinance paperwork - keep or shred?

I'm generally in favor of scanning everything and discarding the paper. But, ... There are two categories here - (1) stuff that might be interesting to you sometime later, and (2) stuff that might be essential in future real estate transactions. (1) interesting later - this is stuff that I'd scan an...
by Bill M
Tue Nov 04, 2014 8:11 am
Forum: Personal Finance (Not Investing)
Topic: After Tax 401k question
Replies: 7
Views: 1094

Re: After Tax 401k question

Its certainly reasonable; my 401k with MegaCo allowed this, and I did it several times. You need to check the plan documents carefully for withdrawal types: does the plan allow a withdrawal of just the after-tax subaccount? Or is it a withdrawal of all employee contributions? Either way, part of the...
by Bill M
Wed Oct 29, 2014 10:02 pm
Forum: Personal Finance (Not Investing)
Topic: Early SS or Higher IRA Withdrawal??
Replies: 19
Views: 2277

Re: Early SS or Higher IRA Withdrawal??

The higher withdrawal rate is not a problem by itself, especially since it would be significantly reduced once SS starts. You obviously have projected figures for spending and investment returns, since you gave calculations for withdrawal rates for each year. Spending goes up by some inflation facto...
by Bill M
Sat Oct 25, 2014 10:31 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard, TIPs, Accrued Interest & RMDs
Replies: 22
Views: 3552

Re: Vanguard, TIPs, Accrued Interest & RMDs

I think I found the answer to my question in Pub 550 The following paragraph covers the treatment of TIPs in a taxable account, but I think it is reasonable to apply it to when interest is constructively received for valuing a retirement account. "Inflation-Indexed Debt Instruments If you hold...
by Bill M
Thu Oct 23, 2014 7:47 am
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 194
Views: 26730

Re: Gross Yearly Income needed in Retirement (Speculation)

Then the "extras". Pure speculation. How many European/African/Asian vacations per year?? How much other stuff?? To get a handle on the amount, I assumed one big trip per month -- and since that is a gross overestimate of what we actually have done, we can feel good about saving the exces...
by Bill M
Wed Oct 22, 2014 7:41 am
Forum: Personal Finance (Not Investing)
Topic: Gross Yearly Income needed in Retirement (Speculation)
Replies: 194
Views: 26730

Re: Gross Yearly Income needed in Retirement (Speculation)

The "rules of thumb" all seem to be a percentage of pre-retirement income. I found that ridiculous, since (like most Bogleheads) we saved a LOT. So instead, I kept track of actual expenses for several years. Everything went through our joint checking account, so it was simple to get a CSV ...
by Bill M
Wed Oct 15, 2014 7:11 am
Forum: Personal Finance (Not Investing)
Topic: PhD in Computer Engineering?
Replies: 33
Views: 4786

Re: PhD in Computer Engineering?

Its not the admission that you should care about. Just about any PhD program will grant admission if you are paying full price. Its the assistantship/fellowship application that matters, so that you are paid to go to school. If you apply for and get an outside fellowship, you can basically have your...
by Bill M
Wed Oct 08, 2014 6:51 am
Forum: Personal Finance (Not Investing)
Topic: Spiking HSA Contribution limits
Replies: 10
Views: 1750

Re: Spiking HSA Contribution limits

I gave up years ago with funding my HSA from payroll deductions. I just do an online transfer in early January each year. The HSA provider, Optum Bank, is more than willing to take my deposits any time I want to send them in. There is no requirement that you have only a single HSA account, though yo...
by Bill M
Tue Oct 07, 2014 10:57 am
Forum: Personal Finance (Not Investing)
Topic: 529 or not
Replies: 38
Views: 5688

Re: 529 or not

Whether the parents or the students pay for college is an individual family matter. I think it's part of a parent's responsibility, but I recognize that others have different opinions. CEEB (same organization that does the SAT exams) used to put out an annual survey of college costs (and maybe they ...