On 5/11/2021 9:40 AM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:
>> On 5/10/2021 3:07 PM, dpb wrote:
>>> On 5/10/2021 1:32 PM, Leon wrote:
>>>> On 5/10/2021 10:35 AM, Scott Lurndal wrote:
>>>>> DerbyDad03 <teama...@eznet.net> writes:
>>>>>> On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:
>>>>>
>>>>>>> In the current interest climate, there's essentially no "stable
>>>>>>> bucket"
>>>>>>> that even makes the current (relatively) low inflation rate so you're
>>>>>>> losing ground in purchasing power besides.
>>>>>>>
>>>>>>
>>>>>> That is not true. There are indeed bond funds that are still making
>>>>>> more than inflation. If you look hard enough or have a financial
>>>>>> advisor that knows where to look, there is still money that can be
>>>>>> made in bonds. Managed products, not index funds.
>>>>>
>>>>> Even Municipal Bonds. My collection thereof returned slightly over 4%
>>>>> last year. Tax free.
>>>>
>>>> All of my bond funds are currently averaging 3.5%, not great but
>>>> better than any bank.
>>>
>>> My dividend-paying stocks portfolio is 5.65% average dividend plus the
>>> composite annualized capital gain since purchase is 7.76% or 13.4% total.
>> Well I have the mutual funds too. Just had a meeting with my money
>> manager last week. Since about 2008 my portfolio has tripled. That was
>> when I dropped my previous money manager.
>>
>> I was mostly mutual funds until the crash last year. I got out before
>> it hit bottom and back in about 3 weeks later, lower than when I got
>> out. But with a more conservative approach, 50% bond funds and 50%
>> mutual funds.
>>
>
> Bond funds are mutual funds.
>
> I assume you mean bond mutual funds and equity mutual funds.
>
Mutual bond and stock 50/50.

On 5/11/2021 9:29 AM, Leon wrote:
> On 5/10/2021 3:07 PM, dpb wrote:
>> On 5/10/2021 1:32 PM, Leon wrote:
>>> On 5/10/2021 10:35 AM, Scott Lurndal wrote:
>>>> DerbyDad03 <teamarrows@eznet.net> writes:
>>>>> On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:
>>>>
>>>>>> In the current interest climate, there's essentially no "stable
>>>>>> bucket"
>>>>>> that even makes the current (relatively) low inflation rate so you're
>>>>>> losing ground in purchasing power besides.
>>>>>>
>>>>>
>>>>> That is not true. There are indeed bond funds that are still making
>>>>> more than inflation. If you look hard enough or have a financial
>>>>> advisor that knows where to look, there is still money that can be
>>>>> made in bonds. Managed products, not index funds.
>>>>
>>>> Even Municipal Bonds.   My collection thereof returned slightly over 4%
>>>> last year.  Tax free.
>>>
>>> All of my bond funds are currently averaging 3.5%, not great but
>>> better than any bank.
>>
>> My dividend-paying stocks portfolio is 5.65% average dividend plus the
>> composite annualized capital gain since purchase is 7.76% or 13.4% total.
>
> Well I have the mutual funds too. Just had a meeting with my money
> manager last week.  Since about 2008 my portfolio has tripled.  That was
> when I dropped my previous money manager.
....

Been pretty hard to lose in that time frame since from the approximate
lows in early 2009 the DJIA is ~4X and S&P 500 ~6X. "Rising tide..."

--

On 5/11/2021 1:01 PM, dpb wrote:
> On 5/11/2021 9:29 AM, Leon wrote:
>> On 5/10/2021 3:07 PM, dpb wrote:
>>> On 5/10/2021 1:32 PM, Leon wrote:
>>>> On 5/10/2021 10:35 AM, Scott Lurndal wrote:
>>>>> DerbyDad03 <teamarrows@eznet.net> writes:
>>>>>> On Sunday, May 9, 2021 at 4:43:18 PM UTC-4, dpb wrote:
>>>>>
>>>>>>> In the current interest climate, there's essentially no "stable
>>>>>>> bucket"
>>>>>>> that even makes the current (relatively) low inflation rate so
>>>>>>> you're
>>>>>>> losing ground in purchasing power besides.
>>>>>>>
>>>>>>
>>>>>> That is not true. There are indeed bond funds that are still making
>>>>>> more than inflation. If you look hard enough or have a financial
>>>>>> advisor that knows where to look, there is still money that can be
>>>>>> made in bonds. Managed products, not index funds.
>>>>>
>>>>> Even Municipal Bonds.   My collection thereof returned slightly
>>>>> over 4%
>>>>> last year.  Tax free.
>>>>
>>>> All of my bond funds are currently averaging 3.5%, not great but
>>>> better than any bank.
>>>
>>> My dividend-paying stocks portfolio is 5.65% average dividend plus
>>> the composite annualized capital gain since purchase is 7.76% or
>>> 13.4% total.
>>
>> Well I have the mutual funds too. Just had a meeting with my money
>> manager last week.  Since about 2008 my portfolio has tripled.  That
>> was when I dropped my previous money manager.
> ...
>
> Been pretty hard to lose in that time frame since from the approximate
> lows in early 2009 the DJIA is ~4X and S&P 500 ~6X.  "Rising tide..."
>
> --
>
Fortunately. Unfortunately i went through the fiasco of the 1999-2000
tech bubble. My money manager was not good. I was pissed that he did
not suggest to go to cash long before we did.

On 5/11/2021 9:29 AM, Leon wrote:
> On 5/10/2021 3:07 PM, dpb wrote:

....

....

> I was mostly mutual funds until the crash last year.  I got out before
> it hit bottom and back in about 3 weeks later, lower than when I got
> out.  But with a more conservative approach, 50% bond funds and 50%
> mutual funds.
....

My overall mix is closer to 60:40 when I categorize my dividend-paying
stocks portfolio as "fixed income" which purpose it serves at present
despite being equities. Being long-time continuous-dividend-paying
stocks, as a group they don't appreciate at the same rate as those held
solely/mostly for growth, so do have a somewhat similar dampening effect
on overall appreciation gain, but not nearly as strong an effect in
current market as do actual bonds or bond funds.

When conditions change (as they will, eventually) to a more historical
pattern, I'll adjust the mix to match; meanwhile I see no reason not to
ride the rocket as long as can...

Do have to pay attention and be willing to "pull the plug!" when it's
time this way, though, granted, and not leave it all up to somebody else.

I certainly take broker's advice/recommendations into account, but don't
wait around for him to tell me it's time to move--he has a ticker that
gives him flags, but he's also got a bunch of other clients (as all do)
so can't rely on being the first on the call list.

--

Leon <lcb11211@swbelldotnet> writes:
>On 5/11/2021 9:40 AM, DerbyDad03 wrote:
>> On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:

>>>
>>> I was mostly mutual funds until the crash last year. I got out before
>>> it hit bottom and back in about 3 weeks later, lower than when I got
>>> out. But with a more conservative approach, 50% bond funds and 50%
>>> mutual funds.
>>>
>>
>> Bond funds are mutual funds.
>>
>> I assume you mean bond mutual funds and equity mutual funds.
>>
> Mutual bond and stock 50/50.

Let's step back to basic definitions:

Mutual Fund

A fund where multiple individuals provide investment capital
which is allocated to a class of assets, or a mix of asset
classes by the fund manager.

So you can have "Bond" fund where the capital from the investors
is allocated amonst one or more bonds (or a subset of bond classes
such as Municipal, Industrial Aaa rated, or Junk), an "Equity" fund where
the capital from the investors in the fund is allocated amongst
one or more equity (AKA stock) positions. Or a fund that invests
in multiple asset classes (e.g. 50/50 bonds and equities).

There are other asset classes as well that can be the target of
mutual fund investment managers, such as real property (land,
buildings, tangible assets or derivative financial instruments
such as collateralized debt obligations).

There are also exchange traded funds (ETF) which have similar investment
philosophies and goals but where the investor simply buys or
sells shares in the fund on the equity markets. Examples are DIA,
IVV, QQQ, et alia.

dpb <none@none.net> writes:

>My overall mix is closer to 60:40 when I categorize my dividend-paying
>stocks portfolio as "fixed income" which purpose it serves at present
>despite being equities. Being long-time continuous-dividend-paying
>stocks, as a group they don't appreciate at the same rate as those held
>solely/mostly for growth

Although if you enroll them in a DRIP, they do compound over time...

On 5/11/2021 2:18 PM, Scott Lurndal wrote:
> dpb <none@none.net> writes:
>
>> My overall mix is closer to 60:40 when I categorize my dividend-paying
>> stocks portfolio as "fixed income" which purpose it serves at present
>> despite being equities. Being long-time continuous-dividend-paying
>> stocks, as a group they don't appreciate at the same rate as those held
>> solely/mostly for growth
>
> Although if you enroll them in a DRIP, they do compound over time...

They are...and have at an annualized rate of about 7-8%.

OTOH, a portfolio concentrating on growth stocks may have doubled that
over the same time frame (with much higher volatility, too).

These are not serving that purpose, however, however tempting it is to
always go for the gains! :)

--

On 5/11/2021 1:20 PM, dpb wrote:
> On 5/11/2021 9:29 AM, Leon wrote:
>> On 5/10/2021 3:07 PM, dpb wrote:

Snip
>
> When conditions change (as they will, eventually) to a more historical
> pattern, I'll adjust the mix to match; meanwhile I see no reason not to
> ride the rocket as long as can...
>
> Do have to pay attention and be willing to "pull the plug!" when it's
> time this way, though, granted, and not leave it all up to somebody else.
>
> I certainly take broker's advice/recommendations into account, but don't
> wait around for him to tell me it's time to move--he has a ticker that
> gives him flags, but he's also got a bunch of other clients (as all do)
> so can't rely on being the first on the call list.
>
> --
>

Exactly, I have had more than one conversation with moth of my money
managers concerning the OBVIOUS.

It there is bad news on the networks. The long time awaited tech stocks
crash leading up to the first quarter in 2000. and then The Corona virus
at the first of last year.

Their answer is, it will come back. My response, why in the world ride
it to the bottom? Get back in "near the bottom. Get out until the the
stocks come back up. And I am not talking about knee jerk market
reactions.

Yes it is hard to tell when the recovery starts but some thing are obvious.

On 5/11/2021 3:54 PM, dpb wrote:
> On 5/11/2021 2:18 PM, Scott Lurndal wrote:
>> dpb <none@none.net> writes:
>>
>>> My overall mix is closer to 60:40 when I categorize my dividend-paying
>>> stocks portfolio as "fixed income" which purpose it serves at present
>>> despite being equities.  Being long-time continuous-dividend-paying
>>> stocks, as a group they don't appreciate at the same rate as those held
>>> solely/mostly for growth
>>
>> Although if you enroll them in a DRIP, they do compound over time...
>
> They are...and have at an annualized rate of about 7-8%.
>
> OTOH, a portfolio concentrating on growth stocks may have doubled that
> over the same time frame (with much higher volatility, too).
>
> These are not serving that purpose, however, however tempting it is to
> always go for the gains! :)

I have considered letting the dividends go to cash for the income stream
to satisfy the RMD, yes, but there are other places/ways in the overall
portfolio to do that, so, so far, I've just let them grow in situ in
order to keep roughly same balance.

Since they haven't done quite as well as the overall portfolio, they
have slipped some in the overall mix percentage; I did buy into one here
in the recent downturn to boost the overall up a little and also was a
real opportunity to raise the effective dividend rate by bringing down
the average cost/share a little.

--

On 5/11/2021 2:16 PM, Scott Lurndal wrote:
> Leon <lcb11211@swbelldotnet> writes:
>> On 5/11/2021 9:40 AM, DerbyDad03 wrote:
>>> On Tuesday, May 11, 2021 at 10:29:28 AM UTC-4, Leon wrote:
>
>>>>
>>>> I was mostly mutual funds until the crash last year. I got out before
>>>> it hit bottom and back in about 3 weeks later, lower than when I got
>>>> out. But with a more conservative approach, 50% bond funds and 50%
>>>> mutual funds.
>>>>
>>>
>>> Bond funds are mutual funds.
>>>
>>> I assume you mean bond mutual funds and equity mutual funds.
>>>
>> Mutual bond and stock 50/50.
>
> Let's step back to basic definitions:
>
> Mutual Fund
>
> A fund where multiple individuals provide investment capital
> which is allocated to a class of assets, or a mix of asset
> classes by the fund manager.
>
> So you can have "Bond" fund where the capital from the investors
> is allocated amonst one or more bonds (or a subset of bond classes
> such as Municipal, Industrial Aaa rated, or Junk), an "Equity" fund where
> the capital from the investors in the fund is allocated amongst
> one or more equity (AKA stock) positions. Or a fund that invests
> in multiple asset classes (e.g. 50/50 bonds and equities).
>
> There are other asset classes as well that can be the target of
> mutual fund investment managers, such as real property (land,
> buildings, tangible assets or derivative financial instruments
> such as collateralized debt obligations).
>
> There are also exchange traded funds (ETF) which have similar investment
> philosophies and goals but where the investor simply buys or
> sells shares in the fund on the equity markets. Examples are DIA,
> IVV, QQQ, et alia.
>

Of course. I have been pretty heavily invested since 1993. It is
complicated listing all of the types of investments I have been involved
with.
Mutual Property investments did not go well for me. Mutual Medical has
not been bad. Those are two separate smaller accounts.

On 5/2/2021 2:43 PM, DerbyDad03 wrote:
Snip

So I have indicated that there is not a shortage of building materials
in this area. A new subdivision is being built across the street from
our subdivision, about 1/16 mile from our home.

The infrastructure began in early December and about half of the streets
have gone in since March, they are still hauling dirt and pouring concrete.

The model home started going up over the concrete foundation week before
last and or Monday two weeks ago. In a MUD meeting this morning the
builder rep, Meritage Homes, gave us updates. The model will be
completed this week. 3 weeks start to finish after the foundation was
poured. The home looks finished on the outside. 6 more foundations
were poured yesterday morning. In all there should be 130 or so homes
and estimated build out will be at the end of the year.

On 5/11/2021 4:01 PM, dpb wrote:
> On 5/11/2021 3:54 PM, dpb wrote:
>> On 5/11/2021 2:18 PM, Scott Lurndal wrote:
>>> dpb <none@none.net> writes:
>>>
>>>> My overall mix is closer to 60:40 when I categorize my dividend-paying
>>>> stocks portfolio as "fixed income" which purpose it serves at present
>>>> despite being equities.  Being long-time continuous-dividend-paying
>>>> stocks, as a group they don't appreciate at the same rate as those held
>>>> solely/mostly for growth
>>>
>>> Although if you enroll them in a DRIP, they do compound over time...
>>
>> They are...and have at an annualized rate of about 7-8%.
>>
>> OTOH, a portfolio concentrating on growth stocks may have doubled that
>> over the same time frame (with much higher volatility, too).
>>
>> These are not serving that purpose, however, however tempting it is to
>> always go for the gains! :)
>
> I have considered letting the dividends go to cash for the income stream
> to satisfy the RMD, yes, but there are other places/ways in the overall
> portfolio to do that, so, so far, I've just let them grow in situ in
> order to keep roughly same balance.
>
> Since they haven't done quite as well as the overall portfolio, they
> have slipped some in the overall mix percentage; I did buy into one here
> in the recent downturn to boost the overall up a little and also was a
> real opportunity to raise the effective dividend rate by bringing down
> the average cost/share a little.
>
> --

I learned a few days ago that RMD can be rolled over in to a ROTH IRA
with no RMD from those IRA's

On 5/11/2021 5:39 PM, Leon wrote:
....

> I learned a few days ago that RMD can be rolled over in to a ROTH IRA
> with no RMD from those IRA's

Not exactly "rolled over"; you can convert, but it's not painless by any
stretch for most.

I've converted some, but it ain't a no-brainer it's agonna' be a win in
any short time.

You pay tax on it first at ordinary marginal income rates unless you
have post-tax contributions inside the ordinary IRA.

Plus, RMDs are not eligible to be rolled over and you must take the RMD,
anyway. Thus, whatever you convert will first be ordinary income above
and beyond that of the RMD for the year. And, that extra can be enough
extra to kick in the AMT bite to make the pain even more.

If you can stand that immediate pain, then remember that a distribution
from a Roth is tax- and penalty-free after a five-year aging period.

If you're of an age that you debate buying green bananas, ... :)

I shoulda' done starting 30 years ago; now it's pretty painful first
bite to undergo.

--

On Tuesday, May 11, 2021 at 6:39:29 PM UTC-4, Leon wrote:
> On 5/11/2021 4:01 PM, dpb wrote:
> > On 5/11/2021 3:54 PM, dpb wrote:
> >> On 5/11/2021 2:18 PM, Scott Lurndal wrote:
> >>> dpb <no...@none.net> writes:
> >>>
> >>>> My overall mix is closer to 60:40 when I categorize my dividend-paying
> >>>> stocks portfolio as "fixed income" which purpose it serves at present
> >>>> despite being equities. Being long-time continuous-dividend-paying
> >>>> stocks, as a group they don't appreciate at the same rate as those held
> >>>> solely/mostly for growth
> >>>
> >>> Although if you enroll them in a DRIP, they do compound over time...
> >>
> >> They are...and have at an annualized rate of about 7-8%.
> >>
> >> OTOH, a portfolio concentrating on growth stocks may have doubled that
> >> over the same time frame (with much higher volatility, too).
> >>
> >> These are not serving that purpose, however, however tempting it is to
> >> always go for the gains! :)
> >
> > I have considered letting the dividends go to cash for the income stream
> > to satisfy the RMD, yes, but there are other places/ways in the overall
> > portfolio to do that, so, so far, I've just let them grow in situ in
> > order to keep roughly same balance.
> >
> > Since they haven't done quite as well as the overall portfolio, they
> > have slipped some in the overall mix percentage; I did buy into one here
> > in the recent downturn to boost the overall up a little and also was a
> > real opportunity to raise the effective dividend rate by bringing down
> > the average cost/share a little.
> >
> > --
> I learned a few days ago that RMD can be rolled over in to a ROTH IRA
> with no RMD from those IRA's

Another option...

If you donate to charities, you may be able to do the donations directly
from your IRA and not pay any taxes on the RMD. They are called Qualified
Charitable Donations. You just can't take possession of the funds. You
have to have them sent directly to the charity(s).

Plus side: Even though the RMD age has been raised to 72, they still
allow QCD's starting at age 70-1/2. They would have screwed a lot of
charities out of donations if they didn't make that exception.

So, all you "kids" out there...donate!

On Tuesday, May 11, 2021 at 7:54:31 PM UTC-4, dpb wrote:
> On 5/11/2021 5:39 PM, Leon wrote:
> ...
> > I learned a few days ago that RMD can be rolled over in to a ROTH IRA
> > with no RMD from those IRA's
> Not exactly "rolled over"; you can convert, but it's not painless by any
> stretch for most.
>
> I've converted some, but it ain't a no-brainer it's agonna' be a win in
> any short time.
>
> You pay tax on it first at ordinary marginal income rates unless you
> have post-tax contributions inside the ordinary IRA.
>
> Plus, RMDs are not eligible to be rolled over and you must take the RMD,
> anyway. Thus, whatever you convert will first be ordinary income above
> and beyond that of the RMD for the year. And, that extra can be enough
> extra to kick in the AMT bite to make the pain even more.
>
> If you can stand that immediate pain, then remember that a distribution
> from a Roth is tax- and penalty-free after a five-year aging period.

Sort of...distribution of funds from contributions/conversions is allowed at
any time. It's the *growth* that can't be withdrawn tax/penalty free prior
to 59 1/2 or before 5 years, whichever is longer. There are also exceptions
to that rule. IRS Publication 590-B can be a fun read. ;-)

>
> If you're of an age that you debate buying green bananas, ... :)
>
> I shoulda' done starting 30 years ago; now it's pretty painful first
> bite to undergo.
>
> --

On 5/11/2021 7:18 PM, DerbyDad03 wrote:
....

> If you donate to charities, you may be able to do the donations directly
> from your IRA and not pay any taxes on the RMD. They are called Qualified
> Charitable Donations. You just can't take possession of the funds. You
> have to have them sent directly to the charity(s).
....

If one does have to take the RMD, the QCD is a no-brainer for _any_
charitable deductions, no matter the size.

If you're going to donate anyway, it's throwing money down the tax hole,
otherwise.

In particular, a QCD is even better than a charitable contribution--the
latter is a tax deduction but from income; the QCD portion of an RMD is
not even counted as income; it's just reported as nontaxable.

It's especially easy if your IRA is set up with check-writing
privileges-- you can write the check yourself rather than have the
holder of the IRA do it for you.

The only limitation on a QCD to qualified charity is $100K/year.

With the higher personal exemption, many who used to be able to itemize
and no longer can do so; the QCD is a savior in that regards for those
in the RMD boat.

The CARES Act did add a provision that each can deduct up to $300 in
charitable contributions ($600 joint return) even if don't itemize
deductions. This was extended into 2021 by the last stimulus bill; it's
not permanent law so likely will sunset with the demands for higher
taxes all the proposals are going to generate.

The 100% AGI deduction is still in play if you're between 59-1/2 and
70-1/2 for withdrawals from a conventional IRA but not RMD.

As always, "consult your own tax professional" :) but having been
President of the local community college foundation for last 10 years or
so, I've become pretty familiar with the rules for nonprofits.

--

On 5/11/2021 7:45 PM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 7:54:31 PM UTC-4, dpb wrote:
....

>> If you can stand that immediate pain, then remember that a distribution
>> from a Roth is tax- and penalty-free after a five-year aging period.
>
> Sort of...distribution of funds from contributions/conversions is allowed at
> any time. It's the *growth* that can't be withdrawn tax/penalty free prior
> to 59 1/2 or before 5 years, whichever is longer. There are also exceptions
> to that rule. IRS Publication 590-B can be a fun read. ;-)
....

I glossed over the Roth side, yes...if one has an RMD requirement that
is already painful from the tax side that one doesn't really need for
current income, then even if it's not taxable, there's not much
incentive to pull out from the Roth even if can without penalty.

Hence, it doesn't rank very high on my radar but if one is in different
circumstances, yes, it could be helpful.

--

On Tuesday, May 11, 2021 at 4:59:51 PM UTC-4, Leon wrote:
> On 5/11/2021 1:20 PM, dpb wrote:
> > On 5/11/2021 9:29 AM, Leon wrote:
> >> On 5/10/2021 3:07 PM, dpb wrote:
> Snip
> >
> > When conditions change (as they will, eventually) to a more historical
> > pattern, I'll adjust the mix to match; meanwhile I see no reason not to
> > ride the rocket as long as can...
> >
> > Do have to pay attention and be willing to "pull the plug!" when it's
> > time this way, though, granted, and not leave it all up to somebody else.
> >
> > I certainly take broker's advice/recommendations into account, but don't
> > wait around for him to tell me it's time to move--he has a ticker that
> > gives him flags, but he's also got a bunch of other clients (as all do)
> > so can't rely on being the first on the call list.
> >
> > --
> >
> Exactly, I have had more than one conversation with moth of my money
> managers concerning the OBVIOUS.
>
> It there is bad news on the networks. The long time awaited tech stocks
> crash leading up to the first quarter in 2000. and then The Corona virus
> at the first of last year.
>
> Their answer is, it will come back. My response, why in the world ride
> it to the bottom? Get back in "near the bottom. Get out until the the
> stocks come back up. And I am not talking about knee jerk market
> reactions.
>
> Yes it is hard to tell when the recovery starts but some thing are obvious.

Have you ever verified that you made the correct moves? Ever tracked
where you would have been if you had followed the advice to stay in?

Perhaps you did time it correctly or perhaps you just assume that you
did. Only you can determine that. Well, your advisor probably could too,
assuming he knows what moves you made and when.

I know you aren't talking about hard core market timing or panic moves,
but missing even a few of the market's best days can be detrimental.
This article deals more with the standard definition of market timing,
so feel free to disregard most of the text and just review the "How
much exactly?" section.

https://www.fool.com/investing/2020/12/31/missing-just-a-few-of-the-best-stock-market-days-c/

Yes, I know, maybe you missed some good days but you offset it by
missing some of the bad ones too. I get it. Like I said, the only way
to really know is to go back and chart where you would be today
if you stayed in - assuming you care. If doing it your way makes you
feel better, that's fine too. My only point is that if you want an
accurate answer to your question "Why in the world ride it to the
bottom?" you'd have to actually figure it out using your numbers and
your moves.

On Tuesday, May 11, 2021 at 8:58:40 PM UTC-4, dpb wrote:
> On 5/11/2021 7:18 PM, DerbyDad03 wrote:
> ...
>
> > If you donate to charities, you may be able to do the donations directly
> > from your IRA and not pay any taxes on the RMD. They are called Qualified
> > Charitable Donations. You just can't take possession of the funds. You
> > have to have them sent directly to the charity(s).
> ...
>
> If one does have to take the RMD, the QCD is a no-brainer for _any_
> charitable deductions, no matter the size.

....and not just for RMD's.

>
> If you're going to donate anyway, it's throwing money down the tax hole,
> otherwise.
>
> In particular, a QCD is even better than a charitable contribution--the
> latter is a tax deduction but from income; the QCD portion of an RMD is
> not even counted as income; it's just reported as nontaxable.
>
> It's especially easy if your IRA is set up with check-writing
> privileges-- you can write the check yourself rather than have the
> holder of the IRA do it for you.

Sure, you can write the check, but you better have cash in your IRA or
the ability to raise cash on your own. Some firms allow client trading
in IRA's, some don't.

The main drawback is the inability to control when the cash is withdrawn.
The distribution doesn't happen until the "personal" check is deposited by
the charity. If the custodian issues the check, the distribution occurs on
the day the check is issued.

Worst case is you decide to do a QCD as your RMD late in the year and the
charity holds your check until January. Technically you would be on the hook
for a IRS penalty of 50% of the RMD because you never really took your RMD
for the previous year. You could probably get out of it, but it would take some
work. I'm just saying that letting the custodian issue the check eliminates that
issue.
>
> The only limitation on a QCD to qualified charity is $100K/year.

Thus my use of the word "may". ;-)

>
> With the higher personal exemption, many who used to be able to itemize
> and no longer can do so; the QCD is a savior in that regards for those
> in the RMD boat.

Also works for those who turn 70 1/2 after January 1, 2020. The
SECURE Act left the QCD age at 70 1/2 when it increased the RMD
age to 72.

>
> The CARES Act did add a provision that each can deduct up to $300 in
> charitable contributions ($600 joint return) even if don't itemize
> deductions. This was extended into 2021 by the last stimulus bill; it's
> not permanent law so likely will sunset with the demands for higher
> taxes all the proposals are going to generate.
>
> The 100% AGI deduction is still in play if you're between 59-1/2 and
> 70-1/2 for withdrawals from a conventional IRA but not RMD.

>
> As always, "consult your own tax professional" :)

Best. Advice. Ever.

> but having been
> President of the local community college foundation for last 10 years or
> so, I've become pretty familiar with the rules for nonprofits.
>
> --

On 5/11/2021 11:17 PM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 8:58:40 PM UTC-4, dpb wrote:
....

>> It's especially easy if your IRA is set up with check-writing
>> privileges-- you can write the check yourself rather than have the
>> holder of the IRA do it for you.
>
> Sure, you can write the check, but you better have cash in your IRA or
> the ability to raise cash on your own. Some firms allow client trading
> in IRA's, some don't.

Well, if you are one who doesn't keep track of and ensure the cash is
where you want it, then yes, Virginia, this option is probably not for
you...

> The main drawback is the inability to control when the cash is withdrawn.
> The distribution doesn't happen until the "personal" check is deposited by
> the charity. If the custodian issues the check, the distribution occurs on
> the day the check is issued.
>
> Worst case is you decide to do a QCD as your RMD late in the year and the
> charity holds your check until January. Technically you would be on the hook
> for a IRS penalty of 50% of the RMD because you never really took your RMD
> for the previous year. You could probably get out of it, but it would take some
> work. I'm just saying that letting the custodian issue the check eliminates that
> issue.
....

Find a better-managed charity to which to donate and/or don't wait until
the last minute...

--

On 5/11/2021 10:35 PM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 4:59:51 PM UTC-4, Leon wrote:
>> On 5/11/2021 1:20 PM, dpb wrote:
>>> On 5/11/2021 9:29 AM, Leon wrote:
>>>> On 5/10/2021 3:07 PM, dpb wrote:
>> Snip
>>>
>>> When conditions change (as they will, eventually) to a more historical
>>> pattern, I'll adjust the mix to match; meanwhile I see no reason not to
>>> ride the rocket as long as can...
>>>
>>> Do have to pay attention and be willing to "pull the plug!" when it's
>>> time this way, though, granted, and not leave it all up to somebody else.
>>>
>>> I certainly take broker's advice/recommendations into account, but don't
>>> wait around for him to tell me it's time to move--he has a ticker that
>>> gives him flags, but he's also got a bunch of other clients (as all do)
>>> so can't rely on being the first on the call list.
>>>
>>> --
>>>
>> Exactly, I have had more than one conversation with moth of my money
>> managers concerning the OBVIOUS.
>>
>> It there is bad news on the networks. The long time awaited tech stocks
>> crash leading up to the first quarter in 2000. and then The Corona virus
>> at the first of last year.
>>
>> Their answer is, it will come back. My response, why in the world ride
>> it to the bottom? Get back in "near the bottom. Get out until the the
>> stocks come back up. And I am not talking about knee jerk market
>> reactions.
>>
>> Yes it is hard to tell when the recovery starts but some thing are obvious.
>
> Have you ever verified that you made the correct moves? Ever tracked
> where you would have been if you had followed the advice to stay in?

Yes, I pulled the plug myself after watching $70K disappear over an 8
month period. And it stayed down pretty much for several years after that.

When I decided to get back in I went with a new money manager and of all
people he said that I had timed the market well as far as getting back
in goes.

Last time around the big 3 indexes were still down compared to where I
am now as apposed to before it crashed last year. Basically when the
market came back to where it was last year I was better off.

>
> Perhaps you did time it correctly or perhaps you just assume that you
> did. Only you can determine that. Well, your advisor probably could too,
> assuming he knows what moves you made and when.

Not an assumption. I track the major indexes too.

>
> I know you aren't talking about hard core market timing or panic moves,
> but missing even a few of the market's best days can be detrimental.
> This article deals more with the standard definition of market timing,
> so feel free to disregard most of the text and just review the "How
> much exactly?" section.
>
> https://www.fool.com/investing/2020/12/31/missing-just-a-few-of-the-best-stock-market-days-c/
>
> Yes, I know, maybe you missed some good days but you offset it by
> missing some of the bad ones too. I get it. Like I said, the only way
> to really know is to go back and chart where you would be today
> if you stayed in - assuming you care. If doing it your way makes you
> feel better, that's fine too. My only point is that if you want an
> accurate answer to your question "Why in the world ride it to the
> bottom?" you'd have to actually figure it out using your numbers and
> your moves.
>

I'm certain that I indeed did not make the perfect moves but better than
doing nothing.

My investment in the market is pretty much emergency money and or what I
plan to pass on to my son. I do not want to put myself in the position
of being at a low with the market and needing money at that point.

The market remained down for several years after the tech stock crash 20
years ago. I knew that the pandemic reaction would be temporary and I
decided to not ride it to the bottom but get back in when the fear in
the market subsided.

And the feel better factor is a big part, I sleep better at night and
that is important for me.

Leon <lcb11211@swbelldotnet> writes:
>On 5/11/2021 4:01 PM, dpb wrote:
>> On 5/11/2021 3:54 PM, dpb wrote:
>>> On 5/11/2021 2:18 PM, Scott Lurndal wrote:
>>>> dpb <none@none.net> writes:
>>>>
>>>>> My overall mix is closer to 60:40 when I categorize my dividend-paying
>>>>> stocks portfolio as "fixed income" which purpose it serves at present
>>>>> despite being equities.  Being long-time continuous-dividend-paying
>>>>> stocks, as a group they don't appreciate at the same rate as those held
>>>>> solely/mostly for growth
>>>>
>>>> Although if you enroll them in a DRIP, they do compound over time...
>>>
>>> They are...and have at an annualized rate of about 7-8%.
>>>
>>> OTOH, a portfolio concentrating on growth stocks may have doubled that
>>> over the same time frame (with much higher volatility, too).
>>>
>>> These are not serving that purpose, however, however tempting it is to
>>> always go for the gains! :)
>>
>> I have considered letting the dividends go to cash for the income stream
>> to satisfy the RMD, yes, but there are other places/ways in the overall
>> portfolio to do that, so, so far, I've just let them grow in situ in
>> order to keep roughly same balance.
>>
>> Since they haven't done quite as well as the overall portfolio, they
>> have slipped some in the overall mix percentage; I did buy into one here
>> in the recent downturn to boost the overall up a little and also was a
>> real opportunity to raise the effective dividend rate by bringing down
>> the average cost/share a little.
>>
>> --
>
>I learned a few days ago that RMD can be rolled over in to a ROTH IRA
>with no RMD from those IRA's

Yes, at a cost. You pay the taxes on the rollover. The ROTH grows
tax free from that point forward, but you still need to pay the taxes
deferred by the 401k/IRA.

On 5/11/2021 6:54 PM, dpb wrote:
> On 5/11/2021 5:39 PM, Leon wrote:
> ...
>
>> I learned a few days ago that RMD can be rolled over in to a ROTH IRA
>> with no RMD from those IRA's
>
> Not exactly "rolled over"; you can convert, but it's not painless by any
> stretch for most.

Yes, distributed, taxed, and then moved into a ROTH IRA.

AND IIRC there is a limit that can be reinvested in the ROTH each year. $7K?

>
> I've converted some, but it ain't a no-brainer it's agonna' be a win in
> any short time.
>
> You pay tax on it first at ordinary marginal income rates unless you
> have post-tax contributions inside the ordinary IRA.
>
> Plus, RMDs are not eligible to be rolled over and you must take the RMD,
> anyway.  Thus, whatever you convert will first be ordinary income above
> and beyond that of the RMD for the year.  And, that extra can be enough
> extra to kick in the AMT bite to make the pain even more.
>
> If you can stand that immediate pain, then remember that a distribution
> from a Roth is tax- and penalty-free after a five-year aging period.
>
> If you're of an age that you debate buying green bananas, ... :)
>
> I shoulda' done starting 30 years ago; now it's pretty painful first
> bite to undergo.
>
> --

I first IRA's were in the 80's, first ROTH, 2009 IIRC.

On 5/11/2021 7:45 PM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 7:54:31 PM UTC-4, dpb wrote:
>> On 5/11/2021 5:39 PM, Leon wrote:
>> ...
>>> I learned a few days ago that RMD can be rolled over in to a ROTH IRA
>>> with no RMD from those IRA's
>> Not exactly "rolled over"; you can convert, but it's not painless by any
>> stretch for most.
>>
>> I've converted some, but it ain't a no-brainer it's agonna' be a win in
>> any short time.
>>
>> You pay tax on it first at ordinary marginal income rates unless you
>> have post-tax contributions inside the ordinary IRA.
>>
>> Plus, RMDs are not eligible to be rolled over and you must take the RMD,
>> anyway. Thus, whatever you convert will first be ordinary income above
>> and beyond that of the RMD for the year. And, that extra can be enough
>> extra to kick in the AMT bite to make the pain even more.
>>
>> If you can stand that immediate pain, then remember that a distribution
>> from a Roth is tax- and penalty-free after a five-year aging period.
>
> Sort of...distribution of funds from contributions/conversions is allowed at
> any time. It's the *growth* that can't be withdrawn tax/penalty free prior
> to 59 1/2 or before 5 years, whichever is longer. There are also exceptions
> to that rule. IRS Publication 590-B can be a fun read. ;-)
>

Medial costs can offset distribution taxes. My dad was in a memory care
canter for about 4 years. I was able to liquidate his IRA's enough to
offset the medical cost and not pay additional taxes.

This may have or might disappear.

>>
>> If you're of an age that you debate buying green bananas, ... :)
>>
>> I shoulda' done starting 30 years ago; now it's pretty painful first
>> bite to undergo.
>>
>> --

On 5/11/2021 7:18 PM, DerbyDad03 wrote:
> On Tuesday, May 11, 2021 at 6:39:29 PM UTC-4, Leon wrote:
>> On 5/11/2021 4:01 PM, dpb wrote:
>>> On 5/11/2021 3:54 PM, dpb wrote:
>>>> On 5/11/2021 2:18 PM, Scott Lurndal wrote:
>>>>> dpb <no...@none.net> writes:
>>>>>
>>>>>> My overall mix is closer to 60:40 when I categorize my dividend-paying
>>>>>> stocks portfolio as "fixed income" which purpose it serves at present
>>>>>> despite being equities. Being long-time continuous-dividend-paying
>>>>>> stocks, as a group they don't appreciate at the same rate as those held
>>>>>> solely/mostly for growth
>>>>>
>>>>> Although if you enroll them in a DRIP, they do compound over time...
>>>>
>>>> They are...and have at an annualized rate of about 7-8%.
>>>>
>>>> OTOH, a portfolio concentrating on growth stocks may have doubled that
>>>> over the same time frame (with much higher volatility, too).
>>>>
>>>> These are not serving that purpose, however, however tempting it is to
>>>> always go for the gains! :)
>>>
>>> I have considered letting the dividends go to cash for the income stream
>>> to satisfy the RMD, yes, but there are other places/ways in the overall
>>> portfolio to do that, so, so far, I've just let them grow in situ in
>>> order to keep roughly same balance.
>>>
>>> Since they haven't done quite as well as the overall portfolio, they
>>> have slipped some in the overall mix percentage; I did buy into one here
>>> in the recent downturn to boost the overall up a little and also was a
>>> real opportunity to raise the effective dividend rate by bringing down
>>> the average cost/share a little.
>>>
>>> --
>> I learned a few days ago that RMD can be rolled over in to a ROTH IRA
>> with no RMD from those IRA's
>
> Another option...
>
> If you donate to charities, you may be able to do the donations directly
> from your IRA and not pay any taxes on the RMD. They are called Qualified
> Charitable Donations. You just can't take possession of the funds. You
> have to have them sent directly to the charity(s).
>
> Plus side: Even though the RMD age has been raised to 72, they still
> allow QCD's starting at age 70-1/2. They would have screwed a lot of
> charities out of donations if they didn't make that exception.
>
> So, all you "kids" out there...donate!
>

But 100% of that donation is gone...vs. only the taxable amount of a non
donation.

But if making donations anyway that would be helpful. I donate my time,
and a lot of it.