Jake
Wholenote
Posts: 551
|
Post by Jake on Jan 8, 2020 8:22:26 GMT -5
With 2019 year end statements coming in, the portion I have in stocks, a bit more than 80%, is up around 29% for the year. Index funds. I am almost 59.5, the age where i can start tapping these resources.
I try not to think of it as real money. And I don't need it for maybe five years or so, and I will only need a bit of it then. I am incrementally tapering towards bonds based on prices at certain calendar dates, assuming no big personal changes. By the time I am 63 or so it will be around 60-40 stocks and i will likely keep it there assuming again no big changes.
I also have a conservative (i.e. more than recommended) amount of rainy day funds not exposed, i can sleep OK. Having few responsibilities and a modest life style have helped.
I am under no allusions about near term pull backs and corrections, we are heading into 11 years of expansion and bull market.
I hope you all are doing OK?
|
|
MJB
Wholenote
Who's we sucka? Smith, Wesson and me.
Posts: 634
|
Post by MJB on Jan 8, 2020 8:32:05 GMT -5
My IRAs are doing great. It's a good feeling to take a withdrawal and then earn it all back before I need another.
|
|
|
Post by Chris Greene on Jan 8, 2020 8:56:07 GMT -5
I've explained my thinking on investments many times. Lots of baskets and diversity makes CG and Mrs. G sleep well at night. We own stocks, short term money markets, real estate, cash, CDs, long term annuities (SPDAs) that are paying their floor guaranteed rates now of 4 and 5%, a little precious metal, and guns and butter... As I am now fully and completely retired with the closure of the FDP and 69, I am able to tap into investments if needed but my wife is working for another year and a couple months until she reached 65 and will have a fat state pension along with SS whenever she decides to claim it. I already take mine. I suspect, the RMDs that are required after you turn 70 1/2 will be taxed and reinvested. Retirement, IMO, is mostly about income. If you have enough, you're good. That income, whether it comes from a defined benefit pension, SS, or income from investment drawdowns is the key to a comfortable retirement. That and what we used to call "FU" money invested broadly.
A lot of advisors follow the 4% drawdown rule if you are living off savings (IRA or Roth or plain non-taxed advantaged investments). Some are more conservative at 3%. Do plan for wild swings in the markets during your retirement years, they will happen.
|
|
|
Post by walshb 🦒 on Jan 8, 2020 8:58:52 GMT -5
My IRAs are doing great. It's a good feeling to take a withdrawal and then earn it all back before I need another. We take out the same amount every month, and it's nice to see the total amount increasing steadily, instead of decreasing.
|
|
|
Post by stratcowboy on Jan 8, 2020 9:10:20 GMT -5
Be sure to check the details in new rules for IRA withdrawals. There has been an adjustment to the requirements that no longer requires you to begin withdrawing in the year you turn 70-1/2. That has now been raised to 72 years of age, starting January 1, 2020. If you're already withdrawing, this doesn't apply to you. If you have not reached the 70-1/2 age at this point, you can delay your withdrawals. I'm same age as Chris, 69. Back at one of the market highs during summer of 2019, I took a **bunch** of profit out of my IRA and SEP accounts and put it into interest bearing cash (still in the retirement accounts) to protect the profits I've reaped. I don't want to have to start withdrawing funds from accounts that are being depressed by a stock market swoon. So much of the profits I've received are protected. I don't need the money now, anyway, but I don't want to leave myself vulnerable to the volatility I expect is coming when I have to actually make withdrawals. The accounts from which I've removed much of the profit remain open and active with some baseline funds still in them to keep the potential of growth in place. YMMV...
But, again...be sure to check the new rules for those who are on the cusp of having to deal with mandatory withdrawals. Your requirements may have changed.
|
|
|
Post by Chris Greene on Jan 8, 2020 9:29:14 GMT -5
I'd heard about the rise in RMD age but didn't know it was passed into law. Is that a fact? If so, for me that would be a very good thing.
I don't see that this is now law or has even been voted on in the senate. IRS website still says 70 1/2.
Edited:
Looks like the president signed the Secure Act at the end of last year. So interesting! Good and bad in it (typical). For us, I think mostly good.
|
|
|
Post by stratcowboy on Jan 8, 2020 9:39:54 GMT -5
I got notification from Fidelity Investments (my primary brokerage), saying it was now in effect. My guess is that they are probably more up to date on these things than IRS--just 'cause for them there's more "skin in the game" as relates to their business.
You can see the details here:
|
|
|
Post by Chris Greene on Jan 8, 2020 9:46:19 GMT -5
I got notification from Fidelity Investments (my primary brokerage), saying it was now in effect. My guess is that they are probably more up to date on these things than IRS--just 'cause for them there's more "skin in the game" as relates to their business.
You can see the details here:
Thanks. As I looked around, I found most of the financial firms had updates, just not the IRS. Gub'mint efficiency at its best. ;o)
|
|
|
Post by Chris Greene on Jan 8, 2020 10:00:49 GMT -5
Now that I've read through the changes, for us, it's good. For our kids, if they end up inheriting leftover IRA monies, instead of a lifetime distribution, they have to take it over a 10 year period. Pros and cons to that. I know my mother's situation and most of her wealth is in a family trust that I'm the trustee of and not in IRAs. I do not know anything about my in-laws situation because they don't discuss it with their kids. I believe they said they have a trust as well (something smart to do in California and other high probate cost states).
|
|
|
Post by Mfitz804 on Jan 8, 2020 10:32:33 GMT -5
Now that I've read through the changes, for us, it's good. For our kids, if they end up inheriting leftover IRA monies, instead of a lifetime distribution, they have to take it over a 10 year period. Pros and cons to that. I know my mother's situation and most of her wealth is in a family trust that I'm the trustee of and not in IRAs. I do not know anything about my in-laws situation because they don't discuss it with their kids. I believe they said they have a trust as well (something smart to do in California and other high probate cost states). One of the guys I worked for in law school gave me this piece of advice when asked his best Estate planning tip: “Three words. Die with nothing.” To extrapolate that out, don’t sit on a huge stockpile of cash to give to your kids when they are older and less likely to need it. Give it to them now. If you don’t want to do that, put it in trust and get it out of your Estate. Keep more than what you think you need, but take care of the extra. Transfer your real estate for Medicaid planning purposes. Give Junior your dad’s watch now, rather than leaving it for the first person with a key to come into your home and grab it. The more you have, the more it’ll cost to probate your Estate. Plus, you run the risk of people fighting with each other over who gets what, whether you were of sound mind when your Will was made, etc. If it’s done right, everyone gets what they are supposed to, nobody argues, and at the end of the day, you’ve accomplished your plan your way.
|
|
Jake
Wholenote
Posts: 551
|
Post by Jake on Jan 8, 2020 10:56:23 GMT -5
"Live Rich, Die broke" was a pretty good book along those lines wrangler. He said your last check should be to the undertaker and that it should bounce. He wasn't big on leaving stuff to the kids, not necessarily.
|
|
|
Post by Chris Greene on Jan 8, 2020 11:29:12 GMT -5
Now that I've read through the changes, for us, it's good. For our kids, if they end up inheriting leftover IRA monies, instead of a lifetime distribution, they have to take it over a 10 year period. Pros and cons to that. I know my mother's situation and most of her wealth is in a family trust that I'm the trustee of and not in IRAs. I do not know anything about my in-laws situation because they don't discuss it with their kids. I believe they said they have a trust as well (something smart to do in California and other high probate cost states). One of the guys I worked for in law school gave me this piece of advice when asked his best Estate planning tip: “Three words. Die with nothing.” To extrapolate that out, don’t sit on a huge stockpile of cash to give to your kids when they are older and less likely to need it. Give it to them now. If you don’t want to do that, put it in trust and get it out of your Estate. Keep more than what you think you need, but take care of the extra. Transfer your real estate for Medicaid planning purposes. Give Junior your dad’s watch now, rather than leaving it for the first person with a key to come into your home and grab it. The more you have, the more it’ll cost to probate your Estate. Plus, you run the risk of people fighting with each other over who gets what, whether you were of sound mind when your Will was made, etc. If it’s done right, everyone gets what they are supposed to, nobody argues, and at the end of the day, you’ve accomplished your plan your way. I don't really agree with the die with nothing philosophy if you have kids. Our family has increased its wealth, for the most part, the last couple of generations due to good estate planning and the use of trusts. The size of our probate estates tend to be small. A lot depends on the state you live in. Idaho is a good place to die. California and NY, not so much. Trusts are good in most any estate if you have assets. I prefer to die rich and help make my kids (if they meet certain conditions at our death, rich too. And if we live long enough to have grandchildren, that's also part of our estate planning.
Now, if you don't have heirs or care about heirs you do have, while I wouldn't bounce the check to the undertaker, dying broke makes more sense.
|
|
|
Post by Mfitz804 on Jan 8, 2020 12:12:09 GMT -5
One of the guys I worked for in law school gave me this piece of advice when asked his best Estate planning tip: “Three words. Die with nothing.” To extrapolate that out, don’t sit on a huge stockpile of cash to give to your kids when they are older and less likely to need it. Give it to them now. If you don’t want to do that, put it in trust and get it out of your Estate. Keep more than what you think you need, but take care of the extra. Transfer your real estate for Medicaid planning purposes. Give Junior your dad’s watch now, rather than leaving it for the first person with a key to come into your home and grab it. The more you have, the more it’ll cost to probate your Estate. Plus, you run the risk of people fighting with each other over who gets what, whether you were of sound mind when your Will was made, etc. If it’s done right, everyone gets what they are supposed to, nobody argues, and at the end of the day, you’ve accomplished your plan your way. I don't really agree with the die with nothing philosophy if you have kids. Our family has increased its wealth, for the most part, the last couple of generations due to good estate planning and the use of trusts. The size of our probate estates tend to be small. A lot depends on the state you live in. Idaho is a good place to die. California and NY, not so much. Trusts are good in most any estate if you have assets. I prefer to die rich and help make my kids (if they meet certain conditions at our death, rich too. And if we live long enough to have grandchildren, that's also part of our estate planning.
Now, if you don't have heirs or care about heirs you do have, while I wouldn't bounce the check to the undertaker, dying broke makes more sense.
I think you misunderstood the concept. Even if you have heirs, you can make sure they are taken care of BEFORE you die. Give gifts, set up trusts, etc., so that the money is out of your Estate. Let's say you have a million dollars more than what you "need". Start spreading it around before you go. There's no need to die sitting on a stack of $1,000,000 just to say you had it. My own addition to the Estate planning concept is, make sure whatever accounts, life insurance policies, etc. have correct beneficiaries, and that you update them when they need to be updated. I can't even tell you how often this is not the case after someone has kids, or remarries, or otherwise. Don't leave your current wife holding a life insurance policy that pays a huge death benefit to your ex-wife!! I'm not saying go out and blow your entire wad on a giraffe farm and die with nothing. Hmm wait...maybe I am.
|
|
|
Post by Chris Greene on Jan 8, 2020 14:20:59 GMT -5
I don't really agree with the die with nothing philosophy if you have kids. Our family has increased its wealth, for the most part, the last couple of generations due to good estate planning and the use of trusts. The size of our probate estates tend to be small. A lot depends on the state you live in. Idaho is a good place to die. California and NY, not so much. Trusts are good in most any estate if you have assets. I prefer to die rich and help make my kids (if they meet certain conditions at our death, rich too. And if we live long enough to have grandchildren, that's also part of our estate planning.
Now, if you don't have heirs or care about heirs you do have, while I wouldn't bounce the check to the undertaker, dying broke makes more sense.
I think you misunderstood the concept. Even if you have heirs, you can make sure they are taken care of BEFORE you die. Give gifts, set up trusts, etc., so that the money is out of your Estate. Let's say you have a million dollars more than what you "need". Start spreading it around before you go. There's no need to die sitting on a stack of $1,000,000 just to say you had it. My own addition to the Estate planning concept is, make sure whatever accounts, life insurance policies, etc. have correct beneficiaries, and that you update them when they need to be updated. I can't even tell you how often this is not the case after someone has kids, or remarries, or otherwise. Don't leave your current wife holding a life insurance policy that pays a huge death benefit to your ex-wife!! I'm not saying go out and blow your entire wad on a giraffe farm and die with nothing. Hmm wait...maybe I am. Perhaps we misunderstood each other. I've been doing this stuff for a long time, within my family and helping clients when I used to practice financial planning. I mentioned trusts a couple times.
|
|
|
Post by Mfitz804 on Jan 8, 2020 14:30:29 GMT -5
I think you misunderstood the concept. Even if you have heirs, you can make sure they are taken care of BEFORE you die. Give gifts, set up trusts, etc., so that the money is out of your Estate. Let's say you have a million dollars more than what you "need". Start spreading it around before you go. There's no need to die sitting on a stack of $1,000,000 just to say you had it. My own addition to the Estate planning concept is, make sure whatever accounts, life insurance policies, etc. have correct beneficiaries, and that you update them when they need to be updated. I can't even tell you how often this is not the case after someone has kids, or remarries, or otherwise. Don't leave your current wife holding a life insurance policy that pays a huge death benefit to your ex-wife!! I'm not saying go out and blow your entire wad on a giraffe farm and die with nothing. Hmm wait...maybe I am. Perhaps we misunderstood each other. I've been doing this stuff for a long time, within my family and helping clients when I used to practice financial planning. I mentioned trusts a couple times. Perhaps. I wasn't suggesting one should "die broke", but in terms of ease at the time of your death, that's the easiest plan. There's plenty of ways to accomplish it (trusts being one, we agree on that). My point was, if your concern is to take care of certain people, you don't have to swim around in a room full of Krugerrands like Scrooge McDuck until you die. You can do it while you're alive. Some even derive some joy in doing so, I'm told. I had a client for whom we made provisions for his 4 daughters, including a piece of real property for each of them, to either live in or use as he did as a rental property. All done while he was alive, and it made him extremely happy to know that all 4 daughters were taken care of. He still had sufficient assets to live on comfortably for the rest of his days. When he died, the cost of his probate was zero, because all assets were made non-testamentary. Everyone he wanted to get assets either got them before he died, or by operation of law at the time of his death. That's the way my former employer advocated an Estate should be planned.
|
|
|
Post by Chris Greene on Jan 8, 2020 14:32:44 GMT -5
Mike, we're really on the same page. This is what we've done in my own family.
|
|
|
Post by Mfitz804 on Jan 8, 2020 14:38:02 GMT -5
Mike, we're really on the same page. This is what we've done in my own family.
I know, that's why I didn't understand why you were disagreeing with me. There are some (not saying you) who want to hang onto every penny until the moment they die, when really there's not a great reason for doing that once your assets pass a certain point. Occasionally my own parents ask me for estate planning advice. We have done a few things, but the whole "you should give me your money while your still alive" advice comes off a little self-serving, in my opinion, so I haven't gone down that road. I told them there's things to do, and if they ever feel like discussing it, we will. They have not taken me up on that. Truthfully, I haven't got a clue what assets they even have. I told my mother to make some sort of good summary of where everything is, and she says they have done that. But I don't know where that summary is.
|
|
|
Post by Chauncy Gardner on Jan 8, 2020 15:33:59 GMT -5
Can I add that if you have a living trust, make sure it is properly funded. So many times I have seen that a trust is established and the assets are not transferred into the trust. Also assets acquired after a trust is established are often not properly put into the trust's name.
Great advice on transferring to heirs while you are alive and you can see them enjoy it, but you know they are not going to spend it how you would like them to!
|
|
|
Post by Mfitz804 on Jan 8, 2020 15:50:16 GMT -5
Can I add that if you have a living trust, make sure it is properly funded. So many times I have seen that a trust is established and the assets are not transferred into the trust. Also assets acquired after a trust is established are often not properly put into the trust's name. Great advice on transferring to heirs while you are alive and you can see them enjoy it, but you know they are not going to spend it how you would like them to! I had a client that was charged over $20,000 for an "estate plan" who thought everything was taken care of, but when the attorney they went to went to jail, they came to me to review it. That's exactly what happened, trust was created and never funded. It also was completely unnecessary given that client's intentions, and they basically spent $20,000 for a couple of Wills that they wanted re-done. I think I charged them $1,500 to un-do all the damage that guy did. If retaining control over how the funds are used is your intention, then definitely do not give them away while alive lol.
|
|
|
Post by Chris Greene on Jan 8, 2020 16:19:52 GMT -5
An unfunded trust is an empty envelope.
|
|
|
Post by Mfitz804 on Jan 8, 2020 16:26:00 GMT -5
An unfunded trust is an empty envelope. In this case it was an empty binder, which is exactly how I described it to the client. You paid $20,000 for a fancy binder.
|
|
|
Post by Chris Greene on Jan 8, 2020 16:47:00 GMT -5
When explained simple living trusts to clients, I used the envelope metaphor. I explained that our firm can create a trust for you but until you fund it (like changing the ownership of your home or significant investments) all it is is an empty envelope. Trusts in California are almost necessary for anyone who owns a home as that's usually their largest asset and probate costs are nearly criminal.
|
|
|
Post by Seldom Seen on Jan 8, 2020 19:49:05 GMT -5
Yes it's been a very good year. Having lived through market corrections, pullbacks, and downright crashes for thirty-plus years I know another downturn is ahead so I keep enough in other bushels to provide a buffer until it rebounds.
|
|
|
Post by FlyonNylon on Jan 8, 2020 21:28:46 GMT -5
Good.
Hard to buy every month with record highs but I'm relatively young at 35 and just started maxing retirement investments. Channel Jack Bogle and ride the bull market..
|
|
|
Post by stratcowboy on Jan 8, 2020 22:49:49 GMT -5
It's good to be young and actively investing. Just keep at it. The rest of us geezers gotta think about dipping into some of those gains to keep the motor running.
|
|
Jake
Wholenote
Posts: 551
|
Post by Jake on Jan 9, 2020 9:01:44 GMT -5
Flyon: Jack Bogle is right, as far as I am concerned. Founded Vanguard, just down the street from where I live in Malvern PA. Large local employer. They got most of my money. RIP Mr. Bogle. Chris et al, the 4% "rule", which may today be better at 3%, as I understand, describes the percentage that can be distributed out of a portfolio of around 60-40 stocks-bonds ratio and to keep the amount roughly the same over the long haul? I don't think it's in my plan to try to maintain the balance but to spend it down gradually. I'd like to know how to do that.
|
|
|
Post by Chris Greene on Jan 9, 2020 12:24:44 GMT -5
Well, one thing for sure, don't take advice from us. See a CPA.
|
|
Jake
Wholenote
Posts: 551
|
Post by Jake on Jan 9, 2020 12:50:25 GMT -5
Chris: I'll search the innerwebs.
|
|
Jake
Wholenote
Posts: 551
|
Post by Jake on Jan 9, 2020 16:40:30 GMT -5
Another record close.
|
|
|
Post by Larry Madsen on Jan 9, 2020 18:15:52 GMT -5
I'm up .6 (ROTH portion) for the first 9 days on 2020.
|
|