AUTHOR: Kevin Lynch on 1/22/2025 FIRST: mytimetotravel on 1/22 | RECENT: Charles Moser on 1/23
Comments
Mark: There is an old saying that says, "Figures never lie, but sometimes liars figure." The US is not the only country in which political gamesmanship is practiced when reporting economic data, I am sorry to say. I am not familiar with the UK method of reporting economic data, nor am I concerned about it, but I would guess the same shenanigans occur across the pond as well.
CPI is a rigged game, period. When you calculate COLA info and you don't count three of the most important components in the cost of living for most Americans, what is actually being accomplished?
Charles, you will rarely get a positive response on HD to any question related to annuities. With that said, I'm sharing my take on your question, as a person who 1.) Authored/Edited textbooks on Annuities , during my 15 years as a college professor, teaching in Financial Services Professional Education curricula 2.) Owns FIAs 3.) Is happily receiving tax-free income from my Roth IRA Funded annuities. Bonuses on FIAs are not "free money." Bonuses on FIAs cannot be used to pay the taxes due on conversions. Any upfront bonus dollars credited to your account will vest, usually over a 10-year period. That vesting period, in and of itself, is not necessarily negative, as it helps you stick to the commitment to stay invested, which is the purpose of long-term annuities. However, the insurance company giving you bonuses will lower some other feature of the annuity...participation rates, cap rates, etc., to fund the up-front bonus. With that said, doing Roth conversions to purchase annuities for your retirement deserves your attention and consideration if you are a "safety first" investor. I am 10 years older than you, and I retired at age 73 and 4 months. I "turned on" my annuities' income streams in 2024 (2 of them) and 2025 (the other two of them). My wife and I are receiving $36,562.00 in annuity income, added to our $73,340 in Social Security Benefits. (I waited until age 70 to file for my Social Security, to maximize benefits for my wife, who is 4 years younger than me.) This guaranteed joint life income, which is almost twice the amount of our retirement expenses annually, allows us to keep our invested portfolio in equities, maximizing our returns and future legacy for our children. Since we do not need to spend down this portfolio for income, we are free to do so, and since we do not need further fixed income, we do not need to hold bonds in our portfolio. As far as our RMDs are concerned, our annual RMDs are used to fund QCDs. In your case, however, when your RMDs do kick in, the dollars you converted to Roth will no longer be included in the amount upon which your RMDs are calculated. Good Luck with your planning, and remember, opinions are like belly buttons, everyone has one, but only yours matters!
I would add the following... Before you consider spending 4-5 years and thousands of dollars on an education outside of the STEM arena, carefully consider why you are doing it. Is it your "dream" or one you are being pushed into by parents or peer pressure? Liberal Arts Degrees are basically "vanity" degrees. And be very leery of graduate studies if you intend to join academia... especially if you are a white male. The number of PhDs graduated annually in the US is 2-3 times the number of academic faculty openings available, and in the current anti-higher education environment, it will not get better anytime soon. The trend, for at least the last decade, has been to replace tenure-track professors with adjuncts. Have you considered a trade school? There is a crying need for almost all trades today, and you can bet your as_ AI will not be replacing carpenters, plumbers, brick masons, HVAC techs, etc. In addition, you will not be replaced by some lower-paid person from India, the Philippines, or Ireland, if you are pursuing a degree in the formerly lucrative field of computer science. Having spent 54 years in financial services, including the last 15 years in financial professional education, I second the idea of pursuing professional education and designations. In some fields, they are almost a requirement for growth and success.
I think your thought process is admirable, and I hope, as you do, that there will be "peace in the valley" after you are gone. In my instance, I had to use a trust. One of my children, now aged 41, is simply not financially responsible. While I will treat both of my children equally, I will not give him access to his inheritance in a lump sum. (His older sister will get her inheritance as a lump sum because she is responsible.). Were he to receive a substantial sum in the near term, he would likely use it to sit on his as_ at home, playing video games, vs. working.
I have his inheritance established to give him 10% per year for 10 years, or until he reaches age 55, whichever is sooner. I figure if he hasn't managed to get his head out of his as_ by 55, there's not much hope for him anyway.
Mark... Absolutely NO Apology necessary! I thought our piece was just fine. I got the point, and I chuckled while reading the piece. Those who don't agree are welcome to their opinion, as well. After all, most of us still live in states that espouse freedom of speech.
"Simplicity is the Art of Virtue." I am chuckling over your comment, "...almost all my personal investment experience has been in some type of qualified account where taxes don’t matter." Hopefully you don't realy believe there is any investment where, Taxes don't matter." As far as the 30 somethings" go, owning VTI and VXUS from 18 to 60 would be a great portfolio. I only added age 60 in the event the person believed they needed a bond allocation, later in life. Were that the case, they could considering adding BND and BNDX." All the macinations people go through, by adding various segments or tilts are rarely fruitlful, but as long as people believe they are smarter than the average investor, they will continue to try and prove it. Personally, I am happy with the World's Markets averages contuing to beat 99% of advisors and investors. 100% of my investment portfilio is in VTI and VXUS, even though I am older (75 in October.). I can afford to do that because I have 15 months of retriement expenses in VFMXX (money market) and my wife and I have significant guaranteed income, through Social Security and Annuities. Our SS alone equals 113% of our retirement living expenses. Life on Earth is Good...and OB3 made it even better!
Liz: While I can appreciate your concerns for doctors and dentists, etc., regarding limits on student loan debt, for many other graduate students this is a blessing in disguise. After spending 40 years in financial services and 15 years in academia, i assure you,a great numnber of "graduate students" have no business being in school. This is especially true for PhD students. During my doctoral studies, which I started and completed in my 60's, I was surrounded by 20 year old and 30 year old students, "finding themselves." Many of their dissertations were garbage, and merely "checked the boxes" for graduation. Considering the number of faculty positions available annaully is roughly 1/3 of the number of graduatung PhDs, for most of these students, universities are simply taking their money, or more correctly, Government Student Loan money, and producing unemployable graduates. I am actually encouraged by the recent realization that college educations for many are no tthe answer...and that pursuing careers in the trades makes much more sense, intellectually and financially. Take a guess which of the following individuals, on average, chieves greater financial success and actually contrubutes to the ecomnmy of the US... A master plumber, electrician, HVAC installer/repairman....or a PhD, in any non-STEM field?
Mark: You are fortunate to have a working spouse who will listen to your concerns regarding her portfolio. I am glad she has taken the steps necessary to begin to transfer her accounts to Vanguard. I can guarantee you that there is no way a "wealth manager" of any kind, from anywhere, can beat Vanguard (or Fidelity, or Schwab) when they are gouging their client for 2% in fees annually. Having been intimately involved in training 1000's of CFP, ChFC, CLU, and RICP candidates for over 15 years, the math is the math. As a few others mentioned, planning for your financial future with your portfolio being separately advised is absolutely suboptimal. Good luck getting it all combined under one roof. Even if you choose to use Vanguard's PAS Program, the 30 basis points vs. 2% alone will enable your wife to increase her returns, to say nothing about stopping the endless bleeding in fees.
Comments
Mark: There is an old saying that says, "Figures never lie, but sometimes liars figure." The US is not the only country in which political gamesmanship is practiced when reporting economic data, I am sorry to say. I am not familiar with the UK method of reporting economic data, nor am I concerned about it, but I would guess the same shenanigans occur across the pond as well.
Post: Should I Be Concerned?
Link to comment from August 3, 2025
CPI is a rigged game, period. When you calculate COLA info and you don't count three of the most important components in the cost of living for most Americans, what is actually being accomplished?
Post: Should I Be Concerned?
Link to comment from August 3, 2025
In this case, however, the individual wasn't fired for telling the truth. She was fired for exactly the opposite.
Post: Should I Be Concerned?
Link to comment from August 3, 2025
Charles, you will rarely get a positive response on HD to any question related to annuities. With that said, I'm sharing my take on your question, as a person who 1.) Authored/Edited textbooks on Annuities , during my 15 years as a college professor, teaching in Financial Services Professional Education curricula 2.) Owns FIAs 3.) Is happily receiving tax-free income from my Roth IRA Funded annuities. Bonuses on FIAs are not "free money." Bonuses on FIAs cannot be used to pay the taxes due on conversions. Any upfront bonus dollars credited to your account will vest, usually over a 10-year period. That vesting period, in and of itself, is not necessarily negative, as it helps you stick to the commitment to stay invested, which is the purpose of long-term annuities. However, the insurance company giving you bonuses will lower some other feature of the annuity...participation rates, cap rates, etc., to fund the up-front bonus. With that said, doing Roth conversions to purchase annuities for your retirement deserves your attention and consideration if you are a "safety first" investor. I am 10 years older than you, and I retired at age 73 and 4 months. I "turned on" my annuities' income streams in 2024 (2 of them) and 2025 (the other two of them). My wife and I are receiving $36,562.00 in annuity income, added to our $73,340 in Social Security Benefits. (I waited until age 70 to file for my Social Security, to maximize benefits for my wife, who is 4 years younger than me.) This guaranteed joint life income, which is almost twice the amount of our retirement expenses annually, allows us to keep our invested portfolio in equities, maximizing our returns and future legacy for our children. Since we do not need to spend down this portfolio for income, we are free to do so, and since we do not need further fixed income, we do not need to hold bonds in our portfolio. As far as our RMDs are concerned, our annual RMDs are used to fund QCDs. In your case, however, when your RMDs do kick in, the dollars you converted to Roth will no longer be included in the amount upon which your RMDs are calculated. Good Luck with your planning, and remember, opinions are like belly buttons, everyone has one, but only yours matters!
Post: ROTH Conversions and Fixed Index Annuities
Link to comment from August 3, 2025
I would add the following... Before you consider spending 4-5 years and thousands of dollars on an education outside of the STEM arena, carefully consider why you are doing it. Is it your "dream" or one you are being pushed into by parents or peer pressure? Liberal Arts Degrees are basically "vanity" degrees. And be very leery of graduate studies if you intend to join academia... especially if you are a white male. The number of PhDs graduated annually in the US is 2-3 times the number of academic faculty openings available, and in the current anti-higher education environment, it will not get better anytime soon. The trend, for at least the last decade, has been to replace tenure-track professors with adjuncts. Have you considered a trade school? There is a crying need for almost all trades today, and you can bet your as_ AI will not be replacing carpenters, plumbers, brick masons, HVAC techs, etc. In addition, you will not be replaced by some lower-paid person from India, the Philippines, or Ireland, if you are pursuing a degree in the formerly lucrative field of computer science. Having spent 54 years in financial services, including the last 15 years in financial professional education, I second the idea of pursuing professional education and designations. In some fields, they are almost a requirement for growth and success.
Post: Raising Dough
Link to comment from July 26, 2025
I think your thought process is admirable, and I hope, as you do, that there will be "peace in the valley" after you are gone. In my instance, I had to use a trust. One of my children, now aged 41, is simply not financially responsible. While I will treat both of my children equally, I will not give him access to his inheritance in a lump sum. (His older sister will get her inheritance as a lump sum because she is responsible.). Were he to receive a substantial sum in the near term, he would likely use it to sit on his as_ at home, playing video games, vs. working. I have his inheritance established to give him 10% per year for 10 years, or until he reaches age 55, whichever is sooner. I figure if he hasn't managed to get his head out of his as_ by 55, there's not much hope for him anyway.
Post: Letting Go
Link to comment from July 26, 2025
Mark... Absolutely NO Apology necessary! I thought our piece was just fine. I got the point, and I chuckled while reading the piece. Those who don't agree are welcome to their opinion, as well. After all, most of us still live in states that espouse freedom of speech.
Post: A Very Politically Incorrect Ramble With a Potentially Real Point: Is Your Retirement Calculator Sexist?
Link to comment from July 23, 2025
"Simplicity is the Art of Virtue." I am chuckling over your comment, "...almost all my personal investment experience has been in some type of qualified account where taxes don’t matter." Hopefully you don't realy believe there is any investment where, Taxes don't matter." As far as the 30 somethings" go, owning VTI and VXUS from 18 to 60 would be a great portfolio. I only added age 60 in the event the person believed they needed a bond allocation, later in life. Were that the case, they could considering adding BND and BNDX." All the macinations people go through, by adding various segments or tilts are rarely fruitlful, but as long as people believe they are smarter than the average investor, they will continue to try and prove it. Personally, I am happy with the World's Markets averages contuing to beat 99% of advisors and investors. 100% of my investment portfilio is in VTI and VXUS, even though I am older (75 in October.). I can afford to do that because I have 15 months of retriement expenses in VFMXX (money market) and my wife and I have significant guaranteed income, through Social Security and Annuities. Our SS alone equals 113% of our retirement living expenses. Life on Earth is Good...and OB3 made it even better!
Post: VG Portfolio Suggestions for Taxable Account
Link to comment from July 23, 2025
Liz: While I can appreciate your concerns for doctors and dentists, etc., regarding limits on student loan debt, for many other graduate students this is a blessing in disguise. After spending 40 years in financial services and 15 years in academia, i assure you,a great numnber of "graduate students" have no business being in school. This is especially true for PhD students. During my doctoral studies, which I started and completed in my 60's, I was surrounded by 20 year old and 30 year old students, "finding themselves." Many of their dissertations were garbage, and merely "checked the boxes" for graduation. Considering the number of faculty positions available annaully is roughly 1/3 of the number of graduatung PhDs, for most of these students, universities are simply taking their money, or more correctly, Government Student Loan money, and producing unemployable graduates. I am actually encouraged by the recent realization that college educations for many are no tthe answer...and that pursuing careers in the trades makes much more sense, intellectually and financially. Take a guess which of the following individuals, on average, chieves greater financial success and actually contrubutes to the ecomnmy of the US... A master plumber, electrician, HVAC installer/repairman....or a PhD, in any non-STEM field?
Post: What to Know About The One Big Beautiful Bill
Link to comment from July 12, 2025
Mark: You are fortunate to have a working spouse who will listen to your concerns regarding her portfolio. I am glad she has taken the steps necessary to begin to transfer her accounts to Vanguard. I can guarantee you that there is no way a "wealth manager" of any kind, from anywhere, can beat Vanguard (or Fidelity, or Schwab) when they are gouging their client for 2% in fees annually. Having been intimately involved in training 1000's of CFP, ChFC, CLU, and RICP candidates for over 15 years, the math is the math. As a few others mentioned, planning for your financial future with your portfolio being separately advised is absolutely suboptimal. Good luck getting it all combined under one roof. Even if you choose to use Vanguard's PAS Program, the 30 basis points vs. 2% alone will enable your wife to increase her returns, to say nothing about stopping the endless bleeding in fees.
Post: The High Cost of Financial Advice: A Tale of Two Portfolios
Link to comment from July 9, 2025