The Roth conversion decision does not have a definitive answer because it requires predicting the future for perhaps 30 or more years. When my wife and I retired, I bought a subscription to well-regarded software and after much calculating found that it did not matter if we converted or not. So, I converted around 20% of my traditional IRA over several years and paid the taxes with non-IRA funds. Will I do better than if I did not convert? Who knows? My kids will be glad I converted when they inherit my Roth, but it won't change my life at all. Good luck.
Social Security may be the only issue that gets older voters to stop automatically voting for incumbents. We don't usually do politics here, but Social Security is a political problem that needs solving. Someone's ox is going to get gored, and I hope that our usually feckless politicians spread the pain around, so we all share in the results. Poor people or those who are on the edge usually get screwed. I hope that doesn't happen with Social Security reform.
Alaska has the lowest tax burden of any state at 4.92% of personal income. The total includes property taxes, income taxes and sales/excise taxes. New Jersey, where I live is number eight at 9.52%. I am not moving to Aleska to save a few thousand dollars per year. Anyone reading this who wants to move to Alaska, to save tax dollars, be my guest.
I do all the things mentioned here. I do not like wasting anything, especially food and always try to conserve. I applaud everyone who tries to avoid waste.
About 95% of incumbent US members of congress and senators who run for office are reelected. So, if we don't like what they do for us, we should blame ourselves.
David, I like your idea of using the TIPS in the IRA. The IRA balance will continue to grow, and you will never run out of money in the IRA if you limit your withdrawals to the minimum required. TIPS at today's prices will continue to increase in value due to elevated inflation which I think is going to hang around for a while.
I have been using target maturity bond ETFs for several years to build bond ladders. They have many advantages. 1) diversification. 2) If you hold it to near maturity, you eliminate interest rate risk. 3) they are liquid. If you need a little money, you can sell a little, no need to sell a whole bond. 4) You can invest $25, no need for tens of thousands of dollars to build a proper ladder. 5) You don't pay the markup that you would pay when buying individual bonds from a dealer. There are probably other advantages too. The ETFs buy and sell bonds during the term as money flows into and out of the fund. As the term date nears, they let the bonds mature and hold the proceeds in cash, so the yield may start to decrease as the term date approaches. This is easy to deal with; just liquidate your position and buy the next rung before the term date; problem solved. My account is at Fidelity and I allow my term date ETFs to be borrowed by short sellers. This results in extra income when my ETFs are loaned. These ETFs are a great tool, one of the innovations that actually are good for individual investors.
I do not like dividends and I am not alone. Dividends do not increase your wealth. They result in double taxation since they are paid out of corporate profits after taxes and then taxed again when you receive them. There is an ETF run by Roundhill, XDIV, that indexes the S&P 500 without paying dividends. If you are not convinced yet, look at how Berkshire Hathaway has performed without ever paying a dividend. Warren Buffet does however buy back shares when they are attractively priced. That makes sense to me as it does not result in unnecessary taxes.
My wife and I made a deal in 1982 when we got married. We would contribute to whatever workplace plans we had available to get the maximum employer contributions. These started out as traditional profit-sharing plans and converted to 401(k) plans when they became available. I insisted on investing 100% in the stock funds available and it worked out great since we mostly contributed six percent and received four percent from the employers. We spent all the rest of the money as we had a house and children to support and when we had extra money, it went into college funds and an emergency fund. BTW, the success of this non-plan plan had a lot to do with the start of a generational bull market in stocks. Never confuse brains with a bull market.
Comments
The Roth conversion decision does not have a definitive answer because it requires predicting the future for perhaps 30 or more years. When my wife and I retired, I bought a subscription to well-regarded software and after much calculating found that it did not matter if we converted or not. So, I converted around 20% of my traditional IRA over several years and paid the taxes with non-IRA funds. Will I do better than if I did not convert? Who knows? My kids will be glad I converted when they inherit my Roth, but it won't change my life at all. Good luck.
Post: Sourcing Taxes for Roth Conversions
Link to comment from September 30, 2026
Social Security may be the only issue that gets older voters to stop automatically voting for incumbents. We don't usually do politics here, but Social Security is a political problem that needs solving. Someone's ox is going to get gored, and I hope that our usually feckless politicians spread the pain around, so we all share in the results. Poor people or those who are on the edge usually get screwed. I hope that doesn't happen with Social Security reform.
Post: Will Congress Wait Until the Last Minute on Social Security?
Link to comment from September 27, 2026
Alaska has the lowest tax burden of any state at 4.92% of personal income. The total includes property taxes, income taxes and sales/excise taxes. New Jersey, where I live is number eight at 9.52%. I am not moving to Aleska to save a few thousand dollars per year. Anyone reading this who wants to move to Alaska, to save tax dollars, be my guest.
Post: Shouldn’t property taxes be a realistic part of retirement planning? Sorry, I think this is a major financial and social issue.
Link to comment from September 26, 2026
I do all the things mentioned here. I do not like wasting anything, especially food and always try to conserve. I applaud everyone who tries to avoid waste.
Post: The Art of Making Do
Link to comment from September 26, 2026
About 95% of incumbent US members of congress and senators who run for office are reelected. So, if we don't like what they do for us, we should blame ourselves.
Post: Keep an eye on Medigap policies
Link to comment from September 26, 2026
David, I like your idea of using the TIPS in the IRA. The IRA balance will continue to grow, and you will never run out of money in the IRA if you limit your withdrawals to the minimum required. TIPS at today's prices will continue to increase in value due to elevated inflation which I think is going to hang around for a while.
Post: Target Maturity Bond Funds
Link to comment from September 24, 2026
I have been using target maturity bond ETFs for several years to build bond ladders. They have many advantages. 1) diversification. 2) If you hold it to near maturity, you eliminate interest rate risk. 3) they are liquid. If you need a little money, you can sell a little, no need to sell a whole bond. 4) You can invest $25, no need for tens of thousands of dollars to build a proper ladder. 5) You don't pay the markup that you would pay when buying individual bonds from a dealer. There are probably other advantages too. The ETFs buy and sell bonds during the term as money flows into and out of the fund. As the term date nears, they let the bonds mature and hold the proceeds in cash, so the yield may start to decrease as the term date approaches. This is easy to deal with; just liquidate your position and buy the next rung before the term date; problem solved. My account is at Fidelity and I allow my term date ETFs to be borrowed by short sellers. This results in extra income when my ETFs are loaned. These ETFs are a great tool, one of the innovations that actually are good for individual investors.
Post: Target Maturity Bond Funds
Link to comment from September 19, 2026
I do not like dividends and I am not alone. Dividends do not increase your wealth. They result in double taxation since they are paid out of corporate profits after taxes and then taxed again when you receive them. There is an ETF run by Roundhill, XDIV, that indexes the S&P 500 without paying dividends. If you are not convinced yet, look at how Berkshire Hathaway has performed without ever paying a dividend. Warren Buffet does however buy back shares when they are attractively priced. That makes sense to me as it does not result in unnecessary taxes.
Post: I will still take the dividends
Link to comment from September 14, 2026
My wife and I made a deal in 1982 when we got married. We would contribute to whatever workplace plans we had available to get the maximum employer contributions. These started out as traditional profit-sharing plans and converted to 401(k) plans when they became available. I insisted on investing 100% in the stock funds available and it worked out great since we mostly contributed six percent and received four percent from the employers. We spent all the rest of the money as we had a house and children to support and when we had extra money, it went into college funds and an emergency fund. BTW, the success of this non-plan plan had a lot to do with the start of a generational bull market in stocks. Never confuse brains with a bull market.
Post: Locking it in
Link to comment from September 9, 2026
I'm from North Jersey so it's Taylor Ham (which I have never eaten).
Post: The best state to retire? Take a close look.
Link to comment from September 7, 2026