I must be missing something as I don't understand this reply thread - "rebalance with gains, not losses". When stocks go down significantly, I'm buying more - not selling. There's never a (realized) loss. When eventually my asset allocation is exceeded on the high side I'm selling stocks for realized gains (in a tax advantaged account so no taxes). So rebalancing, at least as I understand and practice it, never results in a realized loss. I don't understand the concept of rebalancing with losses.
As a youngster I dabbled in mutual funds but had no real plan. I had perhaps $10K invested. During a fortuitous casual conversation with a co-worker in the late 80's, he mentioned the concept of "pay yourself first" and it struck me as a fabulous idea. (Thank you Henry!) I immediately set up an allotment to have a percentage of my pay invested in a mutual fund. Anytime I received a raise, I would increase the allotment. Not by the full amount, but most of it. And I made it a one way street - I never took any money out until after I retired at 55 in 2012. This made "budgeting" easy. As I had already "paid myself", anything left over could be spent without a second thought. If I needed significant money, for a car for example, I would put in on my HELOC. At the time, the interest was deductible and I didn't need to interrupt my retirement accumulation and compounding. I paid the HELOC off as quickly as possible. I have access to the TSP and wish I had invested from the beginning. But being young (don't trust anyone over 30!) I didn't trust that it was legit for a few years. I finally did get on board when I discovered that Richard Headlee was on the TSP board. (In Michigan, Headlee is famous for the Headlee Amendment which limits property tax increases. He's still saving me money.) Unfortunately, I was late to the indexing game. I didn't learn about index investing until I was nearly retired. When I did learn about it, the logic and math behind it seemed inescapable.I switched to an all index fund portfolio (on the equity side) and use the G Fund for my primary fixed income holding. Another thing about index investing that I like is that once setup, no thought is required. No research, no stock picking, no timing decisions, etc. Makes for a much more pleasant life. I've have been an index investor for the past 15 years and the stock market has had a good run the last several years. I have more assets than I ever thought possible. So, no complaints. I can only image what I would have now if I knew in the beginning what I know now. But then wouldn't we all?
I understand the “insurance” argument for PMs, but I’ve always wondered about the practical side. In a true stock-market and dollar crash, what’s the realistic endgame for PMs? Trading them for worthless dollars seems pointless. How would you actually use them?
I don't have any federal taxes withheld from our pensions. I pay all my federal income tax once a year when I make a withdrawal from our retirement accounts. I adjust the withdrawal so that I can fill up my current tax bracket and adjust the withholding so that I pay just over the previous year's tax liability (safe harbor). I generally owe a bit when taxes are due and I'm fine with that.
Dennis, The numbers are somewhat comforting and we all hope to be in that top fifth. I'm not as pessimistic as it may have seemed. I see it as a hope for the best, prepare for the worst situation.
Been thinking about this for years. Wife and I have no kids. I wouldn't want to be a burden to my siblings who are of similar age regardless. Would love in-home care, and have sufficient funds and income (I think) but prospects seem dim in this country. Friends who have hired in home care complain of frequent "no shows". My mom was in a nice, highly rated CCRC, but when she declined and moved to memory care it wasn't really all that nice. Regardless, at that point it's all down hill. My current best case scenario is being able to see the decline coming in time to make a Danny Kahneman exit.
Comments
I must be missing something as I don't understand this reply thread - "rebalance with gains, not losses". When stocks go down significantly, I'm buying more - not selling. There's never a (realized) loss. When eventually my asset allocation is exceeded on the high side I'm selling stocks for realized gains (in a tax advantaged account so no taxes). So rebalancing, at least as I understand and practice it, never results in a realized loss. I don't understand the concept of rebalancing with losses.
Post: The Anatomy of a Threshold Rebalance: April 2025
Link to comment from March 14, 2026
As a youngster I dabbled in mutual funds but had no real plan. I had perhaps $10K invested. During a fortuitous casual conversation with a co-worker in the late 80's, he mentioned the concept of "pay yourself first" and it struck me as a fabulous idea. (Thank you Henry!) I immediately set up an allotment to have a percentage of my pay invested in a mutual fund. Anytime I received a raise, I would increase the allotment. Not by the full amount, but most of it. And I made it a one way street - I never took any money out until after I retired at 55 in 2012. This made "budgeting" easy. As I had already "paid myself", anything left over could be spent without a second thought. If I needed significant money, for a car for example, I would put in on my HELOC. At the time, the interest was deductible and I didn't need to interrupt my retirement accumulation and compounding. I paid the HELOC off as quickly as possible. I have access to the TSP and wish I had invested from the beginning. But being young (don't trust anyone over 30!) I didn't trust that it was legit for a few years. I finally did get on board when I discovered that Richard Headlee was on the TSP board. (In Michigan, Headlee is famous for the Headlee Amendment which limits property tax increases. He's still saving me money.) Unfortunately, I was late to the indexing game. I didn't learn about index investing until I was nearly retired. When I did learn about it, the logic and math behind it seemed inescapable.I switched to an all index fund portfolio (on the equity side) and use the G Fund for my primary fixed income holding. Another thing about index investing that I like is that once setup, no thought is required. No research, no stock picking, no timing decisions, etc. Makes for a much more pleasant life. I've have been an index investor for the past 15 years and the stock market has had a good run the last several years. I have more assets than I ever thought possible. So, no complaints. I can only image what I would have now if I knew in the beginning what I know now. But then wouldn't we all?
Post: How did you avoid being in the 39%?
Link to comment from March 4, 2026
I understand the “insurance” argument for PMs, but I’ve always wondered about the practical side. In a true stock-market and dollar crash, what’s the realistic endgame for PMs? Trading them for worthless dollars seems pointless. How would you actually use them?
Post: Gold Isn’t Special
Link to comment from January 10, 2026
I don't have any federal taxes withheld from our pensions. I pay all my federal income tax once a year when I make a withdrawal from our retirement accounts. I adjust the withdrawal so that I can fill up my current tax bracket and adjust the withholding so that I pay just over the previous year's tax liability (safe harbor). I generally owe a bit when taxes are due and I'm fine with that.
Post: How do you pay income tax withholding in retirement?
Link to comment from October 17, 2025
Dennis, The numbers are somewhat comforting and we all hope to be in that top fifth. I'm not as pessimistic as it may have seemed. I see it as a hope for the best, prepare for the worst situation.
Post: Who Will Care for Us?
Link to comment from June 5, 2025
Been thinking about this for years. Wife and I have no kids. I wouldn't want to be a burden to my siblings who are of similar age regardless. Would love in-home care, and have sufficient funds and income (I think) but prospects seem dim in this country. Friends who have hired in home care complain of frequent "no shows". My mom was in a nice, highly rated CCRC, but when she declined and moved to memory care it wasn't really all that nice. Regardless, at that point it's all down hill. My current best case scenario is being able to see the decline coming in time to make a Danny Kahneman exit.
Post: Who Will Care for Us?
Link to comment from June 4, 2025
Another firm keeping tabs on us is LexisNexis. You can request a report from them.
Post: Checking on You
Link to comment from July 6, 2022