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28 minutes ago, GoBirds said:

I keep a good size cash reserve in a CD in case of emergency then go mostly stocks as I'm a long ways out from retirement as well. Although sending a check to Binky the Doormat is also can't miss. 

 

GD right pal.  I wouldn't give you any advice I wouldn't take myself.  :thumbup:

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Well, today we paid off the last 22 years of our mortgage.  We sold/closed our investment property last week that we bought in 2013.  We did well on it and rolled that money up with some savings and p

My big win was in getting educated on personal finance, getting organized, and making a plan. Details: 1. Learned the value of an HSA and contributed for 2019 and 2020. 2. Got my wife’s

Get fired

22 minutes ago, Sand said:

I was kidding.  

I will say most people are just fine with big dollops of risk (like now) when everything is running well.  Then they panic in 2009 when their portfolio drops like a rock because they really aren't as risk averse as they thought.  If someone truly isn't comfortable with their portfolio dropping by more than half, then they shouldn't be 100% equities.  I'm not, which is why I'm comfortable giving up .4% per year to drop 40% of the risk.

 

Dead on target.  

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3 minutes ago, Binky The Doormat said:

:lmao: agree, sounds like a bad idea.  I was serious, though I would never say that allocation was wrong, I would say that it is more about an individual's level of risk tolerance and where they in relation to when they need the money and what their goals are.  One of the first things an advisor is going to do is have to take a risk tolerance test (hopefully an in-depth one) as a part of your initial assessment.  

I have focused on saving and investing since my early 30s - and have made plenty of mistakes.  I have had several planners/advisors over the years and read lots of books - later on, I got hooked into the boglehead site and have read a lot there (including the books).  I would also suggest looking into Firecalc - a retirement planning tool that is free and allows for a number of detailed scenarios - it then runs Monte Carlo simulations based on what you have set up.  

BTW - I am retired, 58, and at a 52% equities / 41% bonds / 7% cash split across what we currently have.  If I was still working I would have a little higher in equities and lower amount in cash.  

Below is a paste from the Bogelhead boards that describes the historical return difference between a 100% equities & an 80%-20% equities/bonds portfolio.  

Right, someone might feel this way if volatility were measured on an annual basis, I'm arguing that if it were measured on a 10 year basis, the volatility increase of 80% vs 100% would be negligibly small. In the mean time, you are significantly sacrificing return by going from 100% equities to 80% equities. 

https://personal.vanguard.com/us/insigh ... llocations 

100% Stocks has an historical return of 9.9% 

80/20 Stocks/Bonds has an historical return of 9.4% 

If you are 20 years old and plan on retiring at 65, a $10,000 investment in a Roth IRA (so neglect taxes) at 9.9% grows to $699,000. That same investment at 9.4% grows to $569,000. A $130,000 difference on only a $10,000 investment.

Bogleheads board is great info, must read for anyone that hasn't checked it out yet. 

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Not sure where I came across it (could've been on this board), but this has always been my go-to retirement calculator. It allows you to get extremely granular, including options for pension, social security income, anticipated rates of inflation / earnings % / increased savings, all of it. It then gives you a year-by-year breakdown of your annual savings and spending to provide a full snapshot of your planned finances for life. It's really a great tool.

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8 minutes ago, eoMMan said:

On Fidelity's website, is there an easy way to see how your portfolio did over the past year or YTD? 

Under summary -> Statements, put in a date range and it will tell you how you did.  14.4% last year.  Not too shabby.   One last time, thanks obama.  

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18 hours ago, Michael Brown said:

Not sure where I came across it (could've been on this board), but this has always been my go-to retirement calculator. It allows you to get extremely granular, including options for pension, social security income, anticipated rates of inflation / earnings % / increased savings, all of it. It then gives you a year-by-year breakdown of your annual savings and spending to provide a full snapshot of your planned finances for life. It's really a great tool.

This looks to be very generous.  I'd be sure to double check with other calculators (firecalc being one).

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1 minute ago, ex-ghost said:

I second this - started reading it about a year ago and it has changed the way I invest.

I skim the general forum a few days a week......always great info on a wide spectrum of things. While I'm not quite as frugal as some on there it's a great guide. 

 

Anyone that hasnt give it a shot bogleheads.org  :thumbup:

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2 minutes ago, GoBirds said:

I skim the general forum a few days a week......always great info on a wide spectrum of things. While I'm not quite as frugal as some on there it's a great guide. 

 

Anyone that hasnt give it a shot bogleheads.org  :thumbup:

Same as you, try to skim it 4-5 times per week. There are some real thrifty people there. And rich people.

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14 hours ago, Sand said:

This looks to be very generous.  I'd be sure to double check with other calculators (firecalc being one).

Not debating it since I'm an idiot about this stuff, but what do you mean by generous? I assumed the breakdown you get was all based on the math you put in. Is that not right?

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1 minute ago, Michael Brown said:

Not debating it since I'm an idiot about this stuff, but what do you mean by generous? I assumed the breakdown you get was all based on the math you put in. Is that not right?

I think it calculates too high of balances than it should.  In other words, it's non-conservative.  I'd run your same case on firecalc and see what you get.

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21 minutes ago, Michael Brown said:

Not debating it since I'm an idiot about this stuff, but what do you mean by generous? I assumed the breakdown you get was all based on the math you put in. Is that not right?

An example of non-conservative vs conservative is using the historical rate of return from the stock market vs using a percent or even two less than that just to be on the safe side.  That will make a huge difference on projections.

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4 minutes ago, NutterButter said:

An example of non-conservative vs conservative is using the historical rate of return from the stock market vs using a percent or even two less than that just to be on the safe side.  That will make a huge difference on projections.

Yep, it's amazing what 2% annually will do.  But that's an advantage of being able to adjust it yourself.  It's also my biggest gripe about Dave Ramsey (he uses 12% in his calculations)

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34 minutes ago, FUBAR said:

 It's also my biggest gripe about Dave Ramsey (he uses 12% in his calculations)

That's ####### insane.  For my retirement calcs I use 4% real return (return - inflation).  Even under the rosiest scenarios 7% real return is the top end.  Which, coincidentally, is what pension funds like CalPers uses.  And they're severely underfunded.

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8 hours ago, Sand said:

I think it calculates too high of balances than it should.  In other words, it's non-conservative.  I'd run your same case on firecalc and see what you get.

Oh. You can adjust the calculations of the rate of return. I typically put a 5% pre-retirement return and 3% post.

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On 1/15/2017 at 10:20 AM, NutterButter said:

Under summary -> Statements, put in a date range and it will tell you how you did.  14.4% last year.  Not too shabby.   One last time, thanks obama.  

Assuming you are talking about the Summary tab.  If so, I do not see an option to enter a date range (only shows the 1 year rate of return under the tabs).  Welcome any help in finding this, as I would love to run it on each individual account.

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14 hours ago, Michael Brown said:

Oh. You can adjust the calculations of the rate of return. I typically put a 5% pre-retirement return and 3% post.

Is it also assuming you'll need the exact same amount of income in retirement that you have now?

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22 hours ago, FUBAR said:

Yep, it's amazing what 2% annually will do.  But that's an advantage of being able to adjust it yourself.  It's also my biggest gripe about Dave Ramsey (he uses 12% in his calculations)

What is his justification for using 12%?

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12 minutes ago, eoMMan said:

Is it also assuming you'll need the exact same amount of income in retirement that you have now?

No you can adjust that too so that if you estimate needing less or more income than you currently make, you can enter that as a %. I estimate needing about 60-65% income replacement, because my mortgage will be paid off and we won't be saving 30% of our paychecks anymore. But we'll also probably do a bit more traveling than we do now

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26 minutes ago, Cjw_55106 said:

What is his justification for using 12%?

http://www.daveramsey.com/blog/the-12-reality

percent—whether you first heard Dave mention it in the Financial Peace University or you read it on daveramsey.com, it was undoubtedly followed by questions.

But most of those questions boil down to two important ones: “Can I really get a 12% return on my mutual fund investments, even in today’s market?”and “If I can, what mutual funds should I choose?”

Where Does It Come From?

When Dave says you can expect to make 12% on your investments, he’s using a real number that’s based on the historical average annual return of the S&P 500. The S&P 500 gauges the performance of the stocks of the 500 largest, most stable companies in the Stock Exchange. It is often considered the most accurate measure of the stock market as a whole.The current average annual return from 1926, the year of the S&P’s inception, through 2011 is 11.69%.That’s a long look back, and most people aren’t interested in what happened in the market 80 years ago.

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I would like to talk savings for kids, in particular for college.  I'm aware of 529 plans, but I'm not sure which way to go.  I plan on putting aside $150/month for each kid (3 kids).  I live in Oklahoma which has an "OK" plan (it has annual fees .50% and higher closer to 18) and not sure it outweighs the tax benefits (roughly $200 total for each year).

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12 minutes ago, rascal said:

I would like to talk savings for kids, in particular for college.  I'm aware of 529 plans, but I'm not sure which way to go.  I plan on putting aside $150/month for each kid (3 kids).  I live in Oklahoma which has an "OK" plan (it has annual fees .50% and higher closer to 18) and not sure it outweighs the tax benefits (roughly $200 total for each year).

How old are your kids?  529 accounts are very good for younger kids as there is more time for the tax benefits of untaxed appreciation.  Also, another benefit is you can use one kids account for one of your other kids college costs if they wind up getting a scholarship or do not go to college.

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Just now, Don't Noonan said:

How old are your kids?  529 accounts are very good for younger kids as there is more time for the tax benefits of untaxed appreciation.  Also, another benefit is you can use one kids account for one of your other kids college costs if they wind up getting a scholarship or do not go to college.

8, 2, and 2

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16 minutes ago, rascal said:

I would like to talk savings for kids, in particular for college.  I'm aware of 529 plans, but I'm not sure which way to go.  I plan on putting aside $150/month for each kid (3 kids).  I live in Oklahoma which has an "OK" plan (it has annual fees .50% and higher closer to 18) and not sure it outweighs the tax benefits (roughly $200 total for each year).

I guess that would depend on how much you plan to have in there.  I decided upon the new york plan which doesn't go above .16%.

http://www.savingforcollege.com/529_plan_details/index.php?page=plan_details&plan_id=37

Here's the exact fund option I chose

https://www.nysaves.org/nytpl/fund/details.cs?fundId=1003015

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Re: 529s, keep in mind that each state's rules differ as to what state plans are tax-deductible.  Some states allow you to contribute to any state's 529 plan and take a deduction.  Some states, like NY for example, only allow a tax deduction if you contribute to that particular state's plan.  Check your state's rules before making a decision.

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4 minutes ago, Steve Tasker said:

Re: 529s, keep in mind that each state's rules differ as to what state plans are tax-deductible.  Some states allow you to contribute to any state's 529 plan and take a deduction.  Some states, like NY for example, only allow a tax deduction if you contribute to that particular state's plan.  Check your state's rules before making a decision.

Are you saying that's there's plans that allow you deduct from your state taxes even if you don't live in the state of the plan?

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19 minutes ago, NutterButter said:

I guess that would depend on how much you plan to have in there.  I decided upon the new york plan which doesn't go above .16%.

http://www.savingforcollege.com/529_plan_details/index.php?page=plan_details&plan_id=37

Here's the exact fund option I chose

https://www.nysaves.org/nytpl/fund/details.cs?fundId=1003015

NY gets a lot of love from sites that rank plans. Vanguard also runs the Nevada plan IIRC, and handful of other states invest in Vanguard funds. I picked Nevada in large part because I can manage that account within my existing Vanguard and it's just administratively more convenient. 

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40 minutes ago, rascal said:

I would like to talk savings for kids, in particular for college.  I'm aware of 529 plans, but I'm not sure which way to go.  I plan on putting aside $150/month for each kid (3 kids).  I live in Oklahoma which has an "OK" plan (it has annual fees .50% and higher closer to 18) and not sure it outweighs the tax benefits (roughly $200 total for each year).

Do you have your retirement covered?  General rule of thumb is not to allocate any $$ into 529 until you've satisfied your retirement contributions.  Thought process behind that is that you can always get scholarships and loans for school (if they even go to college)...can't do that for retirment.

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19 minutes ago, Tiger Fan said:

Do you have your retirement covered?  General rule of thumb is not to allocate any $$ into 529 until you've satisfied your retirement contributions.  Thought process behind that is that you can always get scholarships and loans for school (if they even go to college)...can't do that for retirment.

I've run simulations on Firecalc and I'm good.

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10 minutes ago, rascal said:

I've run simulations on Firecalc and I'm good.

:thumbup:

I have twin boys (almost 6).  I max their 529s every month and each year check the balances to see if they're still in line with what I expect their college expenses to be when they turn 18.  I'm using LSU as my baseline, b/c there's probably the most likely place they would end up.  There's likely a chance when they're around 16 or so where I would have to pull back the contributions based on some assumed performance metrics...but you never know.

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45 minutes ago, NutterButter said:

Are you saying that's there's plans that allow you deduct from your state taxes even if you don't live in the state of the plan?

Certain states used to allow deductions for contributions to any state's 529 plan.  I can't say I've researched this in recent years, so I don't know if that's still the case.

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6 hours ago, Big Blue Wrecking Crew said:

Assuming you are talking about the Summary tab.  If so, I do not see an option to enter a date range (only shows the 1 year rate of return under the tabs).  Welcome any help in finding this, as I would love to run it on each individual account.

This is what their site looks like for me. 

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3 hours ago, Tiger Fan said:

Do you have your retirement covered?  General rule of thumb is not to allocate any $$ into 529 until you've satisfied your retirement contributions.  Thought process behind that is that you can always get scholarships and loans for school (if they even go to college)...can't do that for retirment.

what do you considered "covered" as it relates to retirement? 

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35 minutes ago, Rick James said:

what do you considered "covered" as it relates to retirement? 

I assume he meant, "Do you have a retirement plan that you are able to fully fund?"  His stance, which I agree with, is if you are not able to save for retirement at the appropriate amount, you shouldn't be putting money aside for a 529.

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2 hours ago, rascal said:

I assume he meant, "Do you have a retirement plan that you are able to fully fund?"  His stance, which I agree with, is if you are not able to save for retirement at the appropriate amount, you shouldn't be putting money aside for a 529.

:goodposting:

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8 hours ago, NutterButter said:

Are you saying that's there's plans that allow you deduct from your state taxes even if you don't live in the state of the plan?

Five of these states offer taxpayers a deduction for contributions to any state’s 529 plan: Arizona, Kansas, Missouri, Montana and Pennsylvania.

http://www.savingforcollege.com/articles/how-much-is-your-states-529-plan-tax-deduction-really-worth-733

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17 hours ago, rascal said:

I assume he meant, "Do you have a retirement plan that you are able to fully fund?"  His stance, which I agree with, is if you are not able to save for retirement at the appropriate amount, you shouldn't be putting money aside for a 529.

and I'm asking how to define "appropriate amount"

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1 hour ago, Rick James said:

and I'm asking how to define "appropriate amount"

First, you need to find out how much you need to live on now.  I would then make a decision on whether you need that full amount when you retire, unlikely, or if you expect it to drop X%.  I assumed I would need 80% of my current life requirements when I retire (no kids, will have a smaller house, probably one car, etc).

Second, go to firecalc and enter in what you need from above, your retirement balance/inputs/etc and see what it tells you.

Third, if firecalc says you are good (FWIW, I have zero situations when my plan fails and in fact end up with a healthy balance at age 90) then drink a cold one.  If it doesn't, re-evaluate your plan.

Fourth, Consider some other major events (living to 100), reduced/no SS annuity, etc and see if your plan still works. 

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2 hours ago, FUBAR said:

Just to get an assessment of reputation, what do y'all think of Edward Jones?   I just applied to work with them. 

I've never had exposure to them, but everything I read is that they are salesmen first - putting folks in very high expense funds and raking in as much as possible.  I'm not sure if EJ has a reputation for "helping".  You can read up on bogleheads - the opinion there is pretty low.

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15 hours ago, Long Ball Larry said:

Five of these states offer taxpayers a deduction for contributions to any state’s 529 plan: Arizona, Kansas, Missouri, Montana and Pennsylvania.

http://www.savingforcollege.com/articles/how-much-is-your-states-529-plan-tax-deduction-really-worth-733

See I wasn't making it up!

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