Q. My wife and I are 76 years old. We have no retirement fixed income other than Social Security. Our nice house is paid for. We have a nest egg of just under $1 million invested in three conservative portfolios of managed funds. The portfolios include domestic and some foreign equities, short-term corporate bonds, and considerable liquid accounts as…
Consider Michael Kitces as the Thinking Man’s Financial Planner. He’s smart. He’s prolific. And he spends his best hours where the rubber meets the road, in the analysis of the actual financial products most of us encounter in real life. The results can be surprising.
Here’s an example: Suppose you are one of the millions of people who too…
Q. I am confused about the taxation of Social Security income. I have a pension of $88,000 a year. I am eligible for Social Security in 2 years—about $1,900 monthly.
Based on all other itemized deductions, my net income tax is about 16 percent. When I start to withdraw Social Security, will I pay 85 percent of it in tax, or will I pay 16 p…
The nearest Starbucks to my house is 15 miles away. It is in the town of Bee Cave, which also happens to be the location of the West Pole. If you are thinking of visiting one of the poles, try the West Pole first. Unlike the North or South poles, shopping is close by. No special clothing required. Indeed, if you survive crossing the traffic on Texas …
Q. How about municipal bond funds rather than individual bonds? Do they make sense? I have money in a closed-end muni fund (MAV) that’s paying over 7 percent. The interest income comes in at the end of the month, every month. I know that can’t go on forever and I would imagine when interest rates go up I will need to make an adjustment. But 7 p…
I’ve lost count of the surveys telling us that all Americans will suffer deprivation when they retire. I’m sure you have, too. A recent Harris Poll found that 74 percent of Americans worried about retirement. The National Retirement Risk Index now indicates that 53 percent of Americans are “at risk.”
So where are the riots? How did we miss T…
Q. I have a small IRA that I have in certificates of deposit at a local credit union. The interest rates are low and I am willing to move the funds. But I need advice about where and how. I love your idea of low cost investing. Are there funds that will take my small contributions of $500 at a time? The total balance of my reg…
Here today, gone tomorrow. Attention to the annual reports from the Social Security and Medicare Trustees disappeared overnight. They were released on July 28th and media reports noted the lack of exciting news.
It appears that things are getting better, if you can believe it. (You can’t.) Exhaustion of the Medicare trust fund is now 2030. That…
Q. Would you comment on my thinking about the own vs. rent decision?First, even if I could sell my house, today, for $100,000 more than I paid, I could never sell it for enough money to recoup all the interest I paid on a 20-year mortgage, all the dollars for maintenance, all the dollars for insurance, all the dollars for property tax – over the 38 …
Inflation: The Chicken Little problem of the last five years. Everyone thought it, or hyperinflation, was coming. Meanwhile, the Federal Reserve was worrying about deflation. Our central bank targeted a 2 percent inflation rate as healthy and worried when it was lower. Inflation has obediently averaged a 2.1 percent annual rate since 2010, albeit wit…
Q. Your article advocating simple index fund investing at a 50/50 mix of stocks and bonds intrigued me. I have been retired for a year and currently have a managed account with a major discount brokerage firm. The account has a 30/70 stocks/bonds mix with a management fee of $735 per quarter. The discount brokerage firm buys and sells stocks to acco…
How many employers are wasting the money they spend on employee match contributions? How much can a cost efficient plan add to your retirement security?
Those questions came to mind as I spent more time examining “The 401(k) Averages Book.” That’s the publication I discussed last week. I likened it to a “map” of the world of smaller 401(…
Q. My 37 year-old grandson is in business for himself. He is a great saver, but has never used any method for saving except banking his money. I told him that was like sticking his money under a mattress and that he desperately needs to get into some kind of retirement saving program. I am a great fan of Vanguard funds and would…
Is your 401(k) plan wildly expensive, average, or wickedly efficient and inexpensive?You probably don’t know. Your employer may not, either— particularly if you work for a small company.
Sadly, while the laws have changed to require expense disclosures, the information provided is often foggy. The new disclosures are far less than a “You…
Q. I am receiving numerous sales calls for reverse mortgages from many sources. Please tell me about the downside to this program, if there is one. —W.W., Austin, TX
A. Historically, reverse mortgages have had two major drawbacks. First, they were relatively expensive in closing costs, insurance cost and interest rate. Second, most of the pe…
A lot of people are down on home ownership these days, some for good reason.
Young people with student debt can’t be enthusiastic because it’s too painful. Their debt takes them out as homebuyers.
Those who overreached during the bubble are still recovering. At best, they are a long way from having the trauma of being “up…
Q. I’m 71 years old and retired. I have two IRA accounts. One is with Vanguard and has about 24 percent of my total retirement money in it. The other is with a large brokerage firm. It has about 13 percent of my money in it. Vanguard has very low costs. The other brokerage firm charges me 1.35 percent a year to hold my IRA acc…
The passage, or failure, of a single piece of legislation is going to tell us a lot about whether our Congress represents the people of the United States or just its financial service industry donors.
The legislation is the Restoring Main Street Investor Confidence and Protection Act, HR 3482 and Senate bill S 1725. The website govtrak.us gives the…
Q. In 2000 our CPA convinced us to incorporate our construction business. He also said to give my husband, as President of the company, as low a salary as possible. So he paid himself $36,000 per year. This supposedly saved us from being so heavily taxed. But it kept his salary so low that he did not pay much into Social Security. Six years ago I be…
We should always be grateful for small things. This year I am grateful to French economist Thomas Piketty and his best selling book, “Capital in the Twenty-First Century.” I haven’t read the entire 700-page tome yet and I have some questions about how he translates the wealth concentration of 19
th century landed gentry in France to the weal…
Diversified Asset Allocation Portfolios For Your Plans
| Vanguard ETF: | 10%* |  |
| Diversified Core: | 11%* | |
| Six Core Asset ETFs: | 10%* | |
Bogleheads Latest Posts