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Fancy_Lad posted:I should have clarified in my post that I am referring to 457(b) governmental plans. I have limited knowledge of the non-governmental plans, beyond their existence. You're right, I think it's only the non-governmental 457(b) contributions that are at risk.
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Dec 8, 2015 01:29
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I've submitted a request for more plan information (needs to be snail mail apparently), but I was able to confirm that my company's plan is a 457b government plan as well.
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Dec 8, 2015 01:50
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Any thoughts on the new Can I Retire Yet post about withdrawal strategies? http://www.caniretireyet.com/new-research-the-best-retirement-withdrawal-strategies/ 2016 is going to be the year I get prepared to take a few years off for semi-retirement, so I'm interested in what the best withdrawal plans are. In this article, Darrow's models show that his CAPE strategy is the most favored: quote:"CAPE Median Strategy — If the CAPE is greater than its long-term median (a kind of average), then we assume that stocks are highly valued, and the strategy withdraws entirely from stocks. If the CAPE is below its long-term median, the strategy withdraws entirely from bonds*."
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Dec 29, 2015 03:03
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moana posted:Any thoughts on the new Can I Retire Yet post about withdrawal strategies? http://www.caniretireyet.com/new-research-the-best-retirement-withdrawal-strategies/ You have a chosen asset allocation based on balancing risk, volatility, and return and not maintaining that asset allocation when you start to withdraw doesn't make any sense to me. I think the reason that no one has done research into this subject is because the fundamentals of long term investing don't change when you begin with withdraw. Past data does show that his particular strategy is better, but he doesn't expound on the cases that failed and there is the huge caveat that past performance doesn't guarantee future performance. A comparison would be the percentage of stocks and bonds in your portfolio and I would expect similar results.
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Dec 29, 2015 03:19
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asur posted:You have a chosen asset allocation based on balancing risk, volatility, and return and not maintaining that asset allocation when you start to withdraw doesn't make any sense to me. I think the reason that no one has done research into this subject is because the fundamentals of long term investing don't change when you begin with withdraw. Past data does show that his particular strategy is better, but he doesn't expound on the cases that failed and there is the huge caveat that past performance doesn't guarantee future performance. A comparison would be the percentage of stocks and bonds in your portfolio and I would expect similar results. Yeah, forget about his CAPE thing, why exactly does the rebalancing strategy do so much worse than equal withdrawals? That seems highly suspect to me. He pooh-poohs Monte Carlo simulations, but I'd definitely want to see if this result holds up there.
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Dec 29, 2015 04:04
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He also doesn't give standard deviations, so who knows what crazy variance those approaches actually have.
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Dec 29, 2015 04:13
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Alhireth-Hotep posted:Yeah, forget about his CAPE thing, why exactly does the rebalancing strategy do so much worse than equal withdrawals? That seems highly suspect to me.
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Dec 29, 2015 04:21
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moana posted:Right? I'm not sure what historical simulations he's running, but it seems completely out of line with what I'd expect to be true. Why would it be out of line? Stocks return more than bonds over the long term so a withdrawal strategy that attempts to rebalance will withdraw more from stocks than bonds and thus lower the expected portfolio value.
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Dec 29, 2015 07:08
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asur posted:Why would it be out of line? Stocks return more than bonds over the long term so a withdrawal strategy that attempts to rebalance will withdraw more from stocks than bonds and thus lower the expected portfolio value. I wonder if it's because he started with a 50/50 split which is so bond-heavy that there's no way you could sell enough bonds to make your portfolio risky enough to fail. The CAPE strategy then works because it sells more bonds than any of the other strategies. If he started at an 80/20 or 90/10 stock/bond split, would that make the CAPE success rate lower than rebalancing? Now that I'm thinking about it, he's also doing a shorter retirement simulation than what I have in mind, which might alter the success rates. Sorry, posted without thinking enough about it before - these are really important variables that I wasn't taking into consideration.
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Dec 29, 2015 07:40
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I'm in the market for a new podcast or two, I currently listen to Money for the rest of us and Radical Personal finance; Radical Personal finance was my jam for a while when he interviewed some really interesting people but he's started to recycle his content a bit so I'm looking for for something new. Any other Go-tos anyone here recommends?
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Jan 13, 2016 01:55
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I think the problem is that there really isn't that much to financial independence. Just like weight loss, the steps are really simple. Following them year after year is the hard part
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Jan 13, 2016 18:20
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If you can get past the Jesus and politics, Dave Ramsey is basically BWM stories: the podcast. It kept me on the straight and narrow while I was paying down student loans. I like NPR's Planet Money too, even though it has zero impact on one's day to day.
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Jan 13, 2016 19:34
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Struensee posted:I think the problem is that there really isn't that much to financial independence. Just like weight loss, the steps are really simple. Following them year after year is the hard part This is what i've found. Once my husband and I got beyond the math to achieve our goals, its been pretty easy to just keep chugging along down the path now that we've our FI year in mind.
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Jan 13, 2016 19:38
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This couple took being frugal to an extreme. They decided to not buy a house. Instead launching a travel website to they stay for free in luxury hotels all the time. The cheap bastards. http://www.stuff.co.nz/travel/theme...hotels-for-free
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Jan 14, 2016 00:18
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Chadzok posted:Market stalls that do well: (you'd be shocked at how much money some of these people are making) So how did this pan out? Are they still running the market? Struensee posted:I think the problem is that there really isn't that much to financial independence. Just like weight loss, the steps are really simple. Following them year after year is the hard part Pretty much this. I still listen to the radical PF podcast on and off, but it's very US-centric and there isn't much new content for people who've already read up on the subject. And I described FI using the weight loss analogy!
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Jan 17, 2016 16:43
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froglet posted:So how did this pan out? Are they still running the market? I think the particular guy I was thinking of didn't get the spot, was outbid by the 'big player' in our local market scene. It greatly depends on how saturated the market scene is in an area, we've got way too many in Sydney now and they have to compete not only for foot traffic but also for decent stallholders. The trend I've seen lately is for new markets to have a bumper first day followed by a several month decline into obscurity/cancellation.
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Jan 17, 2016 21:00
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froglet posted:Pretty much this. I still listen to the radical PF podcast on and off, but it's very US-centric and there isn't much new content for people who've already read up on the subject. And I described FI using the weight loss analogy! Yeah, I liked it when he just talked to people about really out of the box business ventures or people living interesting lives as I'd always have some sort takeaway from their unique perspective; most of the chat recently has been the same stuff everyone knows if they take their FI situation seriously, such as savingand investing and living below your means etc. I really liked the one about the guy who turned plots of land/large properties in the city into urban farms. Not something I'd really do but that kind of stuff was fun to listen to.
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Jan 19, 2016 18:58
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How does the Safe Withdrawal Rate factor in tax? I'm from Canada, so when I retire and start drawing down, I'll have three accounts to draw from: RRSP - Considered taxable income when withdrawing TFSA - Not considered taxable income when withdrawing Non-Registered - 50% of capital gains are considered income. I don't even know which account is best to draw from in the beginning? I'm guessing it's best to leave the TFSA maxed, since the capital gains inside that account are not taxed.
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Jan 19, 2016 20:30
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Safe withdrawal rates are independent of tax rates, but whatever you withdraw has to cover your expenses and expected tax rates. Since TFSA doesn't count as income my methodology to correct for it is to figure out how much I expect to need in retirement, and break it down into taxable and tax free components. Say you want 50k in today's dollars 30 years from now, before taxes. By then a single TFSA will have about 650k (at 5500/yr, 5.5%). That provide 26k/yr at 4% withdrawal, leaving you a difference of 24k to make up with other investments. If it's all going to come from income sources (CPP, RRSP, pension etc) then you can backwards calculate needing to withdraw 28k/year. Usual caveats of personal circumstance, past history, etc etc apply. Adjust rates accordingly if you're married/pension splitting/using capital gains etc. If your tax rates are low enough you may want to consider tax gain harvesting to reset your ACB, or even better, turn RRSP income into TFSA contributions since you never lose TFSA room. That has the sweet effect of increasing your tax free SWR, allowing you to wash even more RRSP income through your TFSA and create a vicious cycle that will make you feel like a rich old white guy  e. Accidentally a word Guest2553 fucked around with this message at 07:42 on Jan 20, 2016 |
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Jan 19, 2016 21:06
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Guest2553 posted:If your tax rates are low enough you may want to consider tax gain harvesting to turn RRSP income into TFSA contributions since you never lose TFSA room. That has the sweet effect of increasing your tax free SWR, allowing you to wash even more RRSP income through your TFSA and create a vicious cycle that will make you feel like a rich old white guy How does this work? You withdraw from your RRSP to contribute to your TFSA? So you withdraw more than you need in a given year and contribute the excess to your TFSA?
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Jan 19, 2016 21:11
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Yep. There's very little change in average tax rate between, say, 28k/year or 41k/year because the marginal rates are already quite low. But withdrawing an extra 13k allows you to max out your TFSA room or replace an earlier year's withdrawal. Numbers change slightly if you're talking about capital gains in an open account but the accounting is similar - you could trigger an extra 26k in gains allowing you to replace even more TFSA room, or resetting the ACB of some of your investments.
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Jan 19, 2016 21:31
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What if my girlfriend withdraws $20.5k from her RRSP and I withdraw $20.5k from mine. We're taxed at the individual level, correct? So we could avoid the provincial (Nova Scotia) tax rate jump at $29k.
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Jan 20, 2016 13:51
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After 65 you can pension split with RRSPs, but before that it is taxed individually, yes. On mobile so I can't look up tables or anything ATM though. Going back to the 50k target example, if both of you have 650k in a TFSA after 30 years you could withdraw 52k/year (4%) that isn't subject to tax, take out just enough from an RRSP to keep your income in very low tax brackets, and put it back in your TFSAs. By law you have to convert an RRSP to an RRIF no later than the year you turn 71, and there are minimum withdrawal amounts that you have no choice over (starting at 5-and some percent and increasing every year) so if you have a large RRSP balance there it may make sense to start withdrawals earlier or to take out larger amounts since it may reduce overall tax liability for the whole retirement. OAS and CCP are based on income as well (assuming they still exist in 30 years, lol) so taking the up front hit when you're younger can net you more overall income when factoring those in. If that doesn't quite make sense I can give some samples later when I'm on a computer. Guest2553 fucked around with this message at 17:50 on Jan 20, 2016 |
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Jan 20, 2016 17:35
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I think I've got it! Thanks.
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Jan 20, 2016 18:54
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No worries. If you're going to have substantial RRSP assets, another way to attack it could be to minimize your tax liability through strategic withdrawals over the course of your retirement, and then augment as required with tax free savings (or cap gainz) to keep your brackets low enough to collect fogey pogey. All this poo poo is subject to change as personal circumstance changes/loopholes open and close/western Canada turns into a Mad Max-esque post-apocalyptic hellscape, but if you have an overall objective you're trying to reach and aren't financially illiterate you can update your plan as required. My own plan, for instance, is to use RRSP to augment the pension I'll start collecting upon retirement until the pension becomes indexed to inflation and I can collect CPP. The tax brackets, pension amount, eligibility ages etc are all subject to change in the next 20 years so until I get terminal it's all improvisation around a theme 
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Jan 21, 2016 03:19
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This week's New Yorker has a lengthy profile on MMM. http://www.newyorker.com/magazine/2016/02/29/mr-money-mustache-the-frugal-guru "One gets a sense of a family living under a benevolent dictatorship, where every act or decision is subject to review or scrutiny. The Mustachian mission is pervasive, like the “revolution” in Cuba. On walks with Simon, Adeney sometimes maintains a running critique of the instances of excess and waste they encounter along the way. He is aware that he is a handful. He imagines that his wife’s inner voice whispers, “Your relentless optimizations are a drain on my life energy.”
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Feb 22, 2016 14:47
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quote:He started telling his colleagues that he was going to retire soon. “They’d say, ‘That’s pretty neat. But I have three kids.’ Or: ‘I like horses.’ ” His co-workers continued to borrow money, to buy road bikes, granite countertops, and enormous TVs.
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Feb 22, 2016 20:33
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Well horses are very expensive.
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Feb 22, 2016 20:46
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quote:He told me that his blog is now earning around four hundred thousand dollars a year. He was reluctant for this to become public, without his being able to provide a detailed explanation. He makes money from the products and services he recommends—Betterment, Lending Club, Geico, and numerous others. They pay him for every customer who comes to them via his site.
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Feb 22, 2016 23:13
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Welp, it was a big mistake to let that out. No matter how anal you are about saving, it's hard to truly believe someone who espouses the possibility of FIRE for the layman while making mid-6-figures from sponsorships. Hell, I found it hard to buy into it knowing that he rode the height of the dot com boom to an exceedingly good start in his 20s.
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Feb 23, 2016 01:24
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I think it rings more true if he genuinely lives as frugally as he claims while having the option of never thinking about money ever. The attitude towards spending was always the valuable part for me, it's not like he played himself as some rags to riches hero before. I haven't read his site in awhile but I'm pretty sure he discussed his wife and him having some 200k years before retiring.
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Feb 23, 2016 01:33
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He never hid the fact that he curated a small selection of affiliate links
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Feb 23, 2016 01:36
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Shouldn't be a shock, this is a guy who won't drive to work in the middle of winter but was OK with recommending betterment active management fees
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Feb 23, 2016 01:41
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I don't drive to work in the middle of winter and live in Boston 
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Feb 23, 2016 01:43
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Props to you if you rode a bike in Boston last winter. I hope you don't lecture your co-workers for their wasteful habits.
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Feb 23, 2016 01:48
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Jeffrey of YOSPOS posted:I think it rings more true if he genuinely lives as frugally as he claims while having the option of never thinking about money ever. The attitude towards spending was always the valuable part for me, it's not like he played himself as some rags to riches hero before. I haven't read his site in awhile but I'm pretty sure he discussed his wife and him having some 200k years before retiring. I don't know, I think living frugally is more 'fun' when you know you have that much income to fall back on and when you can write off your vacations as apart of business expenses rather than personal household expenses.
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Feb 23, 2016 02:04
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$400k/year, from a blog that's about learning when you have enough, I mean what the gently caress. To paraphrase the expression, the best time to donate to malaria research was 20 years ago, the second best time is now.
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Feb 23, 2016 02:20
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I'm surprised that people are surprised. His blog is extremely popular and it was already known that he monetizes it, he's talked about this before. It'd be one thing if someone discovered that he secretly takes luxury trips to Paris every year or something, but simply making lots of money doesn't directly undermine his message, especially since he stopped working before he had the blog. Not a Children posted:Welp, it was a big mistake to let that out. No matter how anal you are about saving, it's hard to truly believe someone who espouses the possibility of FIRE for the layman while making mid-6-figures from sponsorships. Hell, I found it hard to buy into it knowing that he rode the height of the dot com boom to an exceedingly good start in his 20s. Whether the path he followed to initially become FI applies to "the everyman" depends on your definition of everyman. If you go by the median household income for everyone, becoming FI quickly is definitely very difficult. On the other hand, if you're talking median household income for college-educated white collar professionals (which seems to be the target demographic for the blog), then it's at least moderately realistic, especially if it's a DINK household. Cicero fucked around with this message at 02:32 on Feb 23, 2016 |
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Feb 23, 2016 02:27
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He preaches low expense living, not low income living. What's the problem of generating an extra $400,000 if he's still living on the $25,000/year lifestyle that his blog is all about?
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Feb 23, 2016 03:48
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GoGoGadgetChris posted:He preaches low expense living, not low income living. Because you get lovely advertisement posts for stuff like Betterment disguised as advice: http://www.mrmoneymustache.com/betterment-vs-vanguard/ If he doesn't need the money, why shill?
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Feb 23, 2016 04:05
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