OUTinMinnesota

Comments:

• .

  A healthy person has a thousand wishes, a sick person only one

  Attribution: unsure

  Post: Fit to Retire

  Link to comment from December 2, 2021

• In the area of finance for retirees, it's good to consider new ideas - while still being cautiously skeptical. That's a fancy way of saying "maybe" to the question you asked:

  "Is a shift towards dividend paying stocks something you would recommend to retirees?"

  I'm offering a thought. But you should definitely talk with a pro who's aware of your specifics... for example: Are you at/near the age for taking RMDs? My Thought:
  • If you hold investments within a tax-advantaged account and you're 8+ years away from tapping into that money, that's a great place to hold the Total Market Index funds you favor. Let 'em grow!
  • If you additionally hold funds in a brokerage account, and you're already selling shares now-and-then to maintain an enjoyable retirement, there's a tax matter to consider:

  A) You're taxed on quarterly dividends that get paid, regardless of whether they're reinvested or transferred to your checking account.

  
  

  B) When you sell shares to maintain enjoyable life, you're taxed on capital gains (if any).

  
  

  If you're currently having dividends reinvest and then (later) selling shares, could you possibly pay less tax through a strategy of having dividends transferred to your checking; thereby selling fewer shares (later)?

  As always, be skeptical of advice you read on the interwebs. Check with a pro who knows the specifics of your situation.

  Post: Preservation Mode

  Link to comment from November 4, 2021

• This column is in my top-ten for HumbleDollar. That's because it gives guidance that's easy to try AND it tells why it's worth the effort. In particular: Take a look at the yellow-colored cells in Mr. Ehart's example. For people who periodically do their own rebalancing, it's awesome to have a tool for comparing a target percentage for each sector against the current (actual) percentage. A tool like this makes rebalancing decisions less emotion-based. Easy enough to try it out. It's merely a spreadsheet.

  Post: Who’s Counting?

  Link to comment from October 26, 2021

• Hi, Guest. You've posted questions in response to A. Grossman's posting Beyond the Numbers... an article that invites readers to think about the quantified and non-quantified factors that go into making financial decision like the one on your mind... choosing between taking pension as annuity or as a lump sum. Even though I'm a spreadsheet nerd, no, I didn't develop a spreadsheet before making my choice to take pension as annuity. Didn't need to. Instead, it was some NON-quantitative factors that caused this to be the right decision for me:

  • a family history of longevity
  • excellent health
  • laziness - not wanting to add to my workload of investment-management
  Choosing the lump sum will be the right decision for many other people. But you won't find the NON-quantitative factors for this decision in any spreadsheet. Instead, they're found in your answers to three questions:
  • Do I have the self-discipline to resist spending the lump sum so that it can grow (or generate income)?
  • Do I have education, experience, and self-discipline needed to put that lump-sum to work and continue maintaining it?
  • What benchmark will I use as a signal that it's safe to begin decumulating?
  As Mr. Grossman's article says:

  There’s no magic bullet for addressing any of these topics. Still, a useful starting point in decision-making is to simply recognize that these intersections exist.

  Post: Beyond the Numbers

  Link to comment from October 24, 2021

• Statistimacal analysis is hard. : )

  Post: Feeling Naked

  Link to comment from October 11, 2021

• Glad to. The article self-discloses that your phone has been set up to function as a set of keys capable of granting access to:

  • your ATM account
  • your Starbucks payment app
  • the digital wallet you use at the grocery store
  • your 401(k)
  However, You are not the only person who knows:
  • your telephone number
  • your name
  • your address.
  Do you need additional explanation about why this article has potentially placed a bullseye on your phone and/or phone number?

  Post: Feeling Naked

  Link to comment from October 11, 2021

• In a busy parking lot, as we locked the car doors, my spouse called over to me asking if I'd locked the laptop in the trunk. I answered: "Yes, right next to the bag of diamonds". He got the point and we both had a good laugh. The premise for an article about seniors & tech is good. But as a retired CISSP, it makes me cringe that the author's phone number has now been identified as a potential target - either for theft or for SIM-swap.

  Post: Feeling Naked

  Link to comment from October 11, 2021

• I'm almost always pleased learning new things about selling investments, like in this article. So, I was glad to review the paper titled “Selling Fast and Buying Slow”, even though it seems to be written from a perspective of accumulating. The follow-up lessons outlined in Mr. Grossman's article... when & what to sell... also seem to come from this valuable perspective of accumulating wealth. But selling is also an ongoing challenge for people in the "DEcumulation" stage.

  "Decumulation" is the period for when one gradually withdraws from retirement savings.

  It's still a good problem to have (accumulating vs. decumulating). But repetition doesn't make the decision-making process any easier for retirees, unless maybe you're a retired institutional investor. Even after the 6th time; the 10th time; it's still just as challenging; every time one needs to sell a little of something because the balances in checking & savings are getting a little low. The useful lessons in Adam Grossman's column align pretty well from this "decumulation" perspective:
  • "First, treat selling with as much deliberation as buying." (strike-throughs added by me)
  • "Second, map out a plan with decision rules for selling shares."
  My example checklist:

  [ ] Can I postpone the need to sell something by adjusting my plans for future spending? By temporarily adjusting current spending habits? ("When to sell" decision)

  
  

  [ ] If not, then will the sale will cause my annual AGI to exceed the current-year IRMAA threshold? ("What to sell" decision)

  
  

  [ ] If yes, then avoid selling from 401k.

  
  

  • "Third, consider how each stock fits into your overall portfolio."
  • "Finally, and maybe most counterintuitively, don’t cavalierly sell small positions just because of their modest size."
  When decumulating, there's an ongoing need to sell. That's what makes learning to be better at selling important to me in my quest to avoid being an unsophisticated, over-confident, loss-averse, non-professional retail investor who exhibits limited attention to my trading decisions.

  Post: Leaving on Bad Terms

  Link to comment from September 12, 2021

• What a strange thing to say, R. Quinn. My posting shows the Medicare Part B costs from both 2013 and from 2021. It also shows the method used for calculating rate-of-increase over an 8-year period.. 3.97% per year.

  • Are you suggesting that this very real out-of-pocket cost-increase that was actually paid by very real people should not be considered inflation?
  In mathematics, there are no alternative facts.

  Post: Where do you see signs of inflation?

  Link to comment from September 7, 2021

• The question you asked...

  "Do you know how the IRS treats the possibility of funding a fixed annuity with retirement 401K/403b/IRA funds in order to reduce the totals and help lower the RMD?"

  Please ask a tax advisor who knows the specifics of your situation...
  • your age;
  • your income;
  • your willingness to take a tax hit and how large of a hit you're willing to take, because most folks want to avoid paying alternative minimum tax.
  And after a good conversation about federal taxes, then you can ask about state tax consequences.

  Post: Containing the Issue

  Link to comment from September 5, 2021