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  I'm 75. I have a ROTH IRA. Can i still contribute to it?
Posted by: toganet - 12-19-2018, 07:25 AM - Forum: Life Events - Replies (2)

I'm 75.  I have a ROTH IRA.  Can i still contribute to it?

  Ignorant tax question
Posted by: Ynari - 12-19-2018, 07:22 AM - Forum: Taxes - Replies (1)

My wife, with her MBA, does the taxes. Me, as a lowly engineer, is tasked with creating spreadsheets projecting cash flow in retirement. My question concerns marginal Federal tax rates. The projection for 2020 includes $405K in ordinary income and $125K in qualified dividend income. When estimating taxes I assume a $24K standard deduction. What are the appropriate rates for each income group? I am assuming that the qualified dividends are taxed at 20% + 3.8% and the ordinary income $91379.00 35% over $400K  

  Social Security in a diversified portfolio.
Posted by: Ynari - 12-19-2018, 07:15 AM - Forum: Social Security - Replies (3)

Why do most financial planners not count social security as part of your diversified portfolio? (60% cash, bonds, 40% stocks. Social security should count in this 60% example)

  Tax free bond fund
Posted by: Ynari - 12-19-2018, 07:13 AM - Forum: Funds - Replies (5)

A little over 3 years ago I started buying FTABX I have been putting money into it a few times a year. It pays me $100.00 a month but the fund is down 5%, I don't think I have ever seen it to be on the plus side is this normal or should I sell it and move it so thing else?

  HSA in Retirement - Tax Advantage?
Posted by: Ynari - 12-19-2018, 07:05 AM - Forum: Retirement - Replies (7)

I retired early this year at age 60. I have a non-employer HSA account that I was funding with after tax wage earnings and then claiming the credit on my taxes. Now that I’m retired, I’m taking taxable distributions from my retirement account.
Is there any advantage in still funding the HSA?  Seems the answer would be no, since I’m paying taxes on the IRA distribution only to turn around and claim a tax credit on my tax return. Am I missing something?  Seems like it should be more complicated than that, since nothing Involving the tax code is ever simple.
Thanks for your insight.

  REITS for Retirement
Posted by: stoaX - 12-19-2018, 06:45 AM - Forum: Retirement - Replies (4)

What do you"all think about REITS for retirement income. 20% of my account is in REITS. I own O, SPG, STOR, WPC, EPR, and STAG. Any thoughts?

  Need to do a Roll Over of 25% of our assets.
Posted by: stoaX - 12-19-2018, 06:44 AM - Forum: Life Events - Replies (3)

The new Trend and Volatility are NOT my friend.
Any ideas on a 401k transfer from an Empowerment Retirement account to another company sponsored Fido 401k?
Wife has been told they will issue a check to the new account, not in her name, that she deposits to the new account.
This is a qualified RollOver.
With Mr Market tanking/recovering slightly on a day to day/week to week basis, what's the best way to accomplish this?

  What is important to you when selecting a Fund?
Posted by: Marty998 - 12-12-2018, 06:54 AM - Forum: Funds - Replies (2)

What criteria to you use when selecting funds?
In my own case, I have a planned asset allocation (e.g., US Large Caps x%, Emerging Markets y%, Intermediate Bond Funds Z%, etc.). Then, for a given asset class, I may own one or more funds.  I will consider both mutual funds and ETFs.  I have a preference for low-cost passive index funds, but will consider low-cost active funds as well.
The general criteria I use in selecting funds to own are as follows:
1. Performance versus similar funds in the same asset class.  If one fund shows a continued deterioration versus another, I will favor the one that consistently does better.  However, if the performance seems to cycle, I might consider the one that is currently out of favor.
2. Expenses. I try to keep annual expenses low. No-Load mutual funds only. The acceptable annual expense level may depend on the particular asset class. Consider transaction costs.
3. Turnover. Funds with lower turnover will have lower "hidden" costs (transaction fees/ bid-ask spreads, etc.) that do not show up in the annual expenses. (You may find transaction cost information in the Statement of Additional Information  (SAI) for a fund).  Funds with high turn-over may also be more vulnerable to paying capital gains, which can result in costs in taxable accounts.  Note that most bond funds are generally going to have higher turn-over than equity funds (e.g., as bonds are replaced when they expire or are sold).
4. Manager tenure. Longer is usually better.  (But if there is a forthcoming change, the new manager may sell the old holdings and buy new holdings, resulting in higher turnover/capital gains.)
5. Size and liquidity (especially for ETFs). Bigger is generally better.  For ETFs, be careful about tracking error and premium/demium to Net Asset Value (NAV).
6. Tax-efficiency, especially in taxable accounts.   Be aware of potential Capital Gains Exposure.  Consider after-tax results.  ETFs are generally more tax-efficient than mutual funds, although there are some mutual funds that are tax-efficient.  (Vanguard's structure - where ETFs are another mutual fund class - helps allow some of their mutual funds to avoid capital gain distributions.) Note that some currency-hedged funds may potentially throw off the hedging benefits as ordinary income. (I personally prefer non-hedged equity funds as the currency volatility may provide buying/selling opportunities as I re-balance).
7. Longevity of a fund. I would not consider a fund without an adequate track record (e.g., 5 years).  Be wary of a fund has not gone through a particular cycle (e.g., economic downturn; interest rate increase).
8. Yield for bond funds.  But yield is not the only consideration. Credit Quality and Duration are equally important.  The particular sector exposure may also be important (e.g., energy, Russia).
9. Credit-quality for bond funds.  There has to be an adequate premium for lower quality (e.g., 5% higher yield for junk vs Treasuries). If an economic downturn is coming, higher yield bonds may be impacted significantly. Limit exposure to below-investment grade funds (say, to <15% of fixed income).
10. Duration for bond funds.  As interest rates rise, longer duration bonds may be negatively impacted - at least in the near term. (They may benefit if rates fall).
11. Leverage risk. I avoid funds which utilize leverage, as there may be risks that only become apparent when something goes wrong. (There may be others who do not mind taking this risk).
13. Closed End Fund premium/demium to NAV, but I do not personally use Closed End Funds.
14. Preferred Stock Funds have similar considerations to both equity and bond funds, but I do not personally use Preferred Stock funds.
Do you agree/disagree with my list? Do you have other factors to add to the list? 

  Did anybody have the nerve to buy the dip?
Posted by: SilverAg47 - 12-04-2018, 07:48 PM - Forum: Stocks - Replies (10)

Everybody that has  money on the sidelines did they put any to work the last few days.  Buy low sell high or when their is fear in the eyes.. Well the last two days we sure had fear.  I wonder how much Buffet brought.  I personally brought all of 5 shares of  (amzn) yesterday.  I find it very hard to do,  Did anybody take advantage of it?

  Are you a Grasshopper or an Ant in your retirement?
Posted by: SilverAg47 - 12-04-2018, 07:47 PM - Forum: Retirement - Replies (5)

The June'18 issue of the AAII Journal has an interesting article about observed spending/withdrawal habits of retirees across 2 different types of people: Spenders and Savers. If you have AAI subscription and haven't had a chance to read the Grasshoppers and Ants in Retirement  - please consider taking a look.

The gist of the article is that, those who have developed a life-long habit of thrift and made spending sacrifices during their work years in order to live better in retirement, find it hard to break the habit of frugality, and are likely to spend much less than what they can afford to in their retirement. This is especially puzzling for people who do not have a desire to leave a bequest. On the other hand, people who have lived a relatively lavish life during their working years do a better job in smoothing down their spending pattern from working-life to retired-life, and exhibit better "economically rational" consumption pattern. The article suggests that the habitual savers should feel relived that they are unlikely to outlive their asset, and have saved enough to dial-up their consumption pattern to a level of the typical "spenders".


Note that the article uses the terms Ants and Grasshoppers (to imply thriftier vs spenders) to draw parallel from the Aesop's fable. I personally find the analogy misleading, because unlike the Grasshoppers in the fable, the "spenders" being discussed in the article are not necessarily irresponsible spenders who make no future plans. I think "Habitual Savers" and "Responsible Spenders" are more appropriate names for the purpose of the article.


The article is based on a survey from Health and Retirement Study, using a sample of 20000 households over several years. The comparisons are done across similar asset/income categories. A Grasshopper is identified as a household who demonstrated significantly higher spending than the financial model suggests. A few interesting observations:


  1. Amongst the entire sample, 15% were identified as Grasshoppers (based on their consumption pattern before and after retirement)

  2. On average, Grasshoppers spend 10K/year more than Ants in retirement. The difference in spending between working years and retirement years falls much faster for Grasshoppers.

  3. Wealthiest 20% Grasshoppers spend up to 140K in retirement, compared to about 80K for wealthiest Ants.

  4. Grasshopper tend to spend more on non-durable consumptions (vacation, auto, hobbies, etc.).

  5. When a windfall (e.g. inheritance) is received in retirement, Grasshoppers tend to spend about quarter of the windfall amount each year, and end up consuming it in 4 years. Ants on the other hand consumes only 0.5% of the windfall amount per year - almost a negligible increase.

  6. When additional "guaranteed income" (annuitized income) is available, Grasshoppers spend 40% of the additional guaranteed income, compared to 17% for Ants.

Old habits die hard!

So, if you are already retired, are you an Ant or a Grasshopper in your retirement? If you are still working, are you an Ant or a Grasshopper now, and do you think you will transition to the other camp at retirement?