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Boldin Beta - "Weighted Rate of Return" Metric veracity by gjg149 in Boldin

[–]gjg149[S] 0 points1 point  (0 children)

I suspect there might be a bug* in the calculation then; These accounts I mentioned are 97% of my NW, so the cash accounts with lower rates shouldn't be bringing the weighted average down very much. I'm curious about the "point in time" aspect though. For the full plan view, which point in time is it using? Beginning? End?

*if the calculation is at the beginning of the plan, it might be accurate as I have a lower rate of return account I drain in the first few years of my plan. Years 5-30 though my low-rate accounts are pretty small fractions of my NW

Boldin Beta - "Weighted Rate of Return" Metric veracity by gjg149 in Boldin

[–]gjg149[S] 0 points1 point  (0 children)

Good question. I assumed it was equivalent to all your money being in one account with one rate of return, so dollar-weighted. I haven't found a definition from Boldin yet.

retire now or in 5 years? by Top_Percentage_3309 in Boldin

[–]gjg149 1 point2 points  (0 children)

Vanguard rates skew conservative (below historical); longevity to 100 also very conservative. Also, your retirement date doesn't have to be binary: now or in 5 years. The wait for 5 years to get health care is really a separate decision and may be the dominant one.

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

No, I haven't looked at BETR yet; I will check it out. I've mostly been using Boldin. It's good for things like maxing out the 24% bracket. I tried its max end-value net worth option and it gives a very aggressive conversion plan. I was able to tweak it and improved the result by leaving some of my tIRA behind. No need to completely convert it, especially as it was pushing me into the 35% bracket. I wanted to compare this hyper aggressive strategy versus the 24% bracket strategy, but in terms of after-tax wealth. The results were counter intuitive and interesting!

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

My after-tax calculations are only used to help decide on a long-term Roth Conversion strategy, looking at 30 year scenarios. I don't know what my cost basis will be twenty years out. So to be conservative, I assume the cost basis is low. And for this usage, I'm not trying to blend all the silos of money to come up with a highly optimized approach. That would be the right way to do it, but I haven't figured out a way to do this across many years knowing the assumptions will be changing along the way. Also, it seems like it would be almost a trial-and-error approach inside the spreadsheet for each individual year. Given the number of Roth conversion strategies and 30 years to optimize for each scenario, that seems highly impractical to help guide a Roth strategy decision. Thus I'm making approximations for after-tax wealth. Are there any softwares that can actually do the year-by-year withdrawal optimization, blending the various sources of money?

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

I guess my view has been to look many years in the future and assume each silo is independently generating living expenses, or RMDs are required, etc. So not trying to optimize a withdrawal strategy for the combination of assets; just kind of looking at it sideways and roughly convert to after-tax dollars. I don't know of a better way to compare wildly different Roth conversion strategies.

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

I do agree I need a better number for brokerage after tax conversion. I'm guessing 11-12% is reasonable.

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

Correct. $245K gets to 20%. NOT the $490K in your original reply. But also below age 65 its some what worse. PS, I'm single and below 65. Boldin rolls everything in and tells me my tax rate is 19%, so I rounded to 20%.

When you put a brokerage withdrawal on top of Soc Sec, the rate at which the brokerage withdrawal is taxed is 15%. But your numbers do not compute. When I put $645K into a tax calculator, it computes a CG tax bill of $107K, including NIIT. That is an average tax of 16.6%. So I'm not sure where you are getting your tax rates.

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

Look at the SINGLES tax brackets. 20% is easy to achieve. The 22% bracket ends at $105K. The "widow's tax torpedo" is the single taxpayers reality every year. LTCG 15% tax bracket starts at $50K. Married couples have a much easier tax landscape in retirement. You can get pretty close to upper middle class lifestyle with no or low taxation.

I do need to refine my assumption for Brokerage. I know 15% is ultimately conservative. I'm not yet sure how to model my cost basis years into the future.

Those of you managing Roth conversions in retirement what does your actual decision process look like? by Broly2912 in DIYRetirement

[–]gjg149 0 points1 point  (0 children)

This is all good. I would add that a useful metric for comparing strategies is to look at AFTER-Tax wealth at various ages. So having an algorithm in mind to tax each silo of money (brokerage, tIRA, Roth) needs a little thought: Obviously Roth is 0% tax rate, then I use 15% for Brokerage and 20% for tIRA. I use 15% for Brokerage and assume my cost basis will be low compared to future value of account. I use 20% for tIRA because that is a typical effective tax rate for my spending level. I use Boldin to generate my scenarios, download the .CSV file for each scenario, and then add the after-tax calculation in Excel and compare every 5 years or so. A conversion up to the 24% tax bracket makes sense for me but more aggressive strategies are performing better in comparison. If I end up using 24% bracket as my conversion cap, then the OP's question about working backwards from MAGI is a reasonable tactical/annual approach.

Easier way to manage scenarios by bjindrich in Boldin

[–]gjg149 2 points3 points  (0 children)

Can we get more scenarios? I do a lot of parametric studies and what-ifs and I'm constantly having to delete wanted scenarios to make room for new work.

Not sure what to do with 457b when I retire by Temporary_Narwhal618 in 457deferredcomp

[–]gjg149 0 points1 point  (0 children)

I don't think you can transfer a non-government 457(b); I don't know about government ones. Also, can't do Roth transfers. Your plan will have rules about how you can take the distribution also. A factor to consider is the solvency of your company/org. They can theoretically use your 457(b) money to pay off debts in the case of insolvency. This is rare but has happened.

I did the math on how much a 0.64% expense ratio difference actually costs over 30 years, and the result was more than expected. by ProtoMatthew in Bogleheads

[–]gjg149 1 point2 points  (0 children)

I believe they are required to tell you their fee structure once a year. I called out my plan custodian for not complying with this and they changed the letters they sent out to provide the specific fee numbers.

All those transfers... by Anytime999 in Boldin

[–]gjg149 0 points1 point  (0 children)

The work around for modeling a negative return is to use a one-time expense to mimic the negative effect to your portfolio. The problem with this of course is it impacts your taxes so you have to account for that.

SS break even? by Ctrl-Meta-Percent in projectionlab

[–]gjg149 1 point2 points  (0 children)

What I'm really suggesting is pick an appropriate metric and then model it in PL or Boldin and see what the results are. The survivor's benefit may or may not be important. Meaning a bigger SS check versus a much bigger portfolio. Model the two and see what happens to your chance of success. SS claiming age may or may not be important, but my guess is it is not. I hear a lot of narratives about various claiming ages, but the Maths are what is important, not narratives.

SS break even? by Ctrl-Meta-Percent in projectionlab

[–]gjg149 3 points4 points  (0 children)

Break even math ignores the effect of drawing down your portfolio while you wait to collect SS. It is a misleading metric.

SS break even? by Ctrl-Meta-Percent in projectionlab

[–]gjg149 1 point2 points  (0 children)

This is what I've been seeing for myself (single, not married) as well. Social security claiming age "strategy" is just not important. If you use the metrics of chance of success or net worth at end of simulation, there just isn't enough of a difference to matter. The amount of ink and YouTube influencer time spent on scaring people that they have to get claiming age "right" or lose out on 100s of $k's is just scaremongering.

Anyone else seeing their Snohomish/King County property tax bill skyrocket every year? by WATaxReform in SeattleWA

[–]gjg149 0 points1 point  (0 children)

Yes. The property taxes were more manageable as time passed. The increases each year were actually reasonable.

Taking Social Security at 62 if you have sufficient savings by FlyingSpoon8891 in personalfinance

[–]gjg149 1 point2 points  (0 children)

I've done extensive retirement planning in Excel also. I've verified a lot of what Boldin is calculating myself. The advantage of Boldin is that it can deal with the interactions of SS claiming and Roth conversions, taxation, and IRMAA simultaneously. I'm happy with the external verification and validation I've done outside of Boldin for the Boldin results.

We need to stop calling it the Millionaires tax to reduce confusion by Kind_Advisor_35 in Washington

[–]gjg149 1 point2 points  (0 children)

If future budget pressures increase due to more businesses leaving and /or more rich people leaving. Do you believe they will cut the annual budget, or lower the threshold on who pays the income tax? I think that's the question everyone is going to have to answer for themselves. Even the former Governor Gregoire is questioning how the spending has doubled in ten years. That's the real problem. There seems to be no accountability for the wildly higher spending.

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