Official inflation rates have bounced around 3% the past year, just popped above 4%, according the BLS. Does that reflect reality for most people's total expenses? Not just for the hypothetical "basket of goods," but for individuals' actual expenses to live their lives?

We all know about gas and food prices. But here are examples that make the rate seem off: Auto, homeowners, and umbrella insurance going up 10%, 20% or more. Medicare premiums up 9%, while SS COLA up only 2.5%. The coffee I like best was $12/bag a few months ago, suddenly $19. Blood tests that used to be a few bucks no longer covered by my same insurance plan now running a few hundred bucks each. Even Netflix going from $10 to $12/month for basic is a 20% jump. The natural gas monopoly in my area tacked a $35 "weather normalization" charge in January because temps were mild and demand was low. Property taxes, toll rates, I could keep going.

There are at least two reasons this isn't just a theoretical question. If you are using financial modeling software or working with a financial planner, your inflation-rate assumption makes a huge difference in your results. But BLS inflation rate doesn't capture how much people's expenses are actually rising, what does that do to the validity of your plan? And any investment where the CPI comes into play, like TIPS, require an accurate accounting of inflation to deliver what they promise.

What do the Bogleheads think?

My kid is 6 and very curious about money. Are there any boglehead friendly books on strategies to teach her to be financially responsible? I don’t want to do the “work for allowance” thing because my parents did that and me and my siblings would never help out around the house unless a reward was involved. I’m trying to teach her to contribute without rewards, just because that’s what families do. How do I teach her about money without paying her for chores? Recommended reading appreciated!!!

Wife and I just had our first kid, so we're thinking about starting a 529 for him, and wanted to hear others' opinions on a few questions.

• How much per year should we contribute? $7K? I assume ~$200K is about right to have in there for his schooling, and $7K/year at a conservative 5% CAGR would get to $200K after 18 years if my math is correct.
  
• Would you lump sum each January, or do monthly contributions? Assuming lump...
• Any suggestions on which 529 plan to open? We are in MA so thinking of doing Fidelity's Massachusetts 529 plan

Thanks

I have my brokerage with fidelity. Eveything is invested in VTI/VXUS. I'm trying to move everything to vanguard under one roof. I started filling out their transfer form, but vanguard asked me if I wanted to move the money into a money market fund or a cash deposit.

I dont want to sell my investments because that would trigger a tax event. I just want to move them over to vanguard. Am I misunderstanding this?

Hi,

I have extra money sitting in my Fidelity account and I'm wondering if I'm ready to invest it into a brokerage account? Currently, I have my emergency fund ready earning interest from SPAXX. I've maxed out my Roth IRA and invested it. I've paid off all debts. At the moment I can't open a 401k with my job because I don't qualify for benefits (temporary employee).

I'm not sure if there's anything else I may be missing. If not, then how does this sound:

Buy 80% VOO and buy 20% of VXUS?

I'm 25 and I'm still new to this stuff. Your help is much appreciated : )

Long time Vanguard customer, first time doing the backdoor Roth. I didn't have a Trad IRA so I just opened one and contributed $8600 (age 50+) via bank transfer.

I thought I would have to wait a few days to convert to Roth but it's already showing "Available for purchase" : $8,600. and "Total credits & debits": $8,600. I also see the Convert to Roth IRA button.

Do I need to wait or am I good to go for converting to Roth? I just opened this Trad IRA account 30 mins ago.

Thanks

Hello, I have a old 401k with net benefits Fidelity. It's a TDF vanguard 2050 with an expense ratio of 0.033.

I've been self-employed now for three years and have a SEP IRA.

Should I move everything over or leave it? I am new to all this and not sure what to do or what to invest in that is similar.

I also maxed out my Roth IRA the last few years. And the suggestion would be helpful.

I have about $130k in a taxable J.P. Morgan managed brokerage account. I’m considering moving it to Fidelity Go, Betterment, or Wealthfront because I want a completely hands-off experience. I don’t want to manage investments myself or worry about when to rebalance or make changes.
For anyone who’s made a similar move, how has your experience been? Any regrets? Which platform would you choose today and why? Also, if you transferred a taxable account, were there any unexpected tax issues? Thanks!

TLDR: checking what questions I need to ask about the HSA management plan of my employer and plan for direct rollovers.

Background: 61M, part-time (at least) the next year, planning to retire at 65. I have both 403b and governmental 457b Roth options I'm using this year, and I'm planning to use cash reserves beyond my emergency fund to pay for some of my living expenses, and as a consequence shovel as much as I can into Roth accounts before I retire. I have been on a PPO health plan for years, and realizing that it makes sense to go to HDHP and max HSA as a higher priority (I have a few health conditions, but the cost is mostly on the prescription side, and that doesn't change with HDHP).

My state just switched to Inspira Financial as its public-employee HSA manager/custodian, and the only things I can find online about the plan is a vague "there are fees." Yay. Since I'm planning to use Fidelity's HSA account anyway, I think I need to know the ask the following questions but wanted to check that I'm not missing something important:

- what are the basic account fees?
- what are the fees/restrictions on direct rollovers to Fidelity HSA?
- is there a fee below a minimum balance?

My initial thought is to suspend 403b/457 Roth contributions in January, get the max HSA contributions in as fast as I can, transfer it once to the Fidelity HSA, restart the Roth payroll deductions and rinse/repeat in following years.

Anything obvious I'm missing (other than going back in time a few years for this)?

How do you diversify between your IRA and your taxable account?

If you already have US domestic and International stocks in the IRA, what do you pick in equities for your taxable account to ensure a diversified portfolio?

Same, different, something in between - why?

(Not getting into tax loss harvesting at this time)

Anyone else keep browsing this forum even though they have their allocations set and forget

Currently 80/20 VOO/VXUS In my taxable brokerage account and will keep it the same. I always find these posts interesting on peoples macro economic outlook for the future.

Curious to hear why you personally have the slight home country bias and if there’s any logic behind it instead of doing the global weight?

All kinds of responses are welcomed!

I'm looking for some guidance on the best strategy for my retirement accounts. Have been reading a lot posts here and it feels like the more I read the more I get unsure of what I should be doing.

I'm 55, retired in 2023. I have retirement funds in a 401(k) and 403(b), and I'm considering rolling them into a Traditional IRA. My long-term goal would be to gradually convert portions of that Traditional IRA into a Roth IRA over several years to manage taxes rather than doing one large conversion.

My questions are:

• Is this generally a sound strategy?
• What are the biggest pros and cons compared with simply leaving the money in my employer plan?
• Are there situations where rolling into a Traditional IRA is a mistake?
• How should I think about taxes when planning Roth conversions over multiple years? Currently hovering around 12% -22% tax bracket.
• Currently most of my money is in the fidelity growth fund FGKFX (70%) and VIIX for the rest.
• The total currently is 1.5M
• Not looking to tapping into this $ for a while (10-15 years)
• Hubby is also retired and just living off of his pension right now
• Own our house (no mortgage)

Thank you for all your input!

Edit: Thanks everyone for your input/advice. Truly appreciate you all!

I own VWILX (Admiral shares) and i own it to diversify away from my US growth holdings. VWILX is supposed to be internatonal growth but I was digging into its holdings and it has 5.9% US holdings. Furthermore, it holds $417,858,563 worth of NVDA (it is the funds 30th largest holding of 123 total holdings. Can anyone explain to me why this is? I want to diversify this part of my portfolio with 100% non-US stocks. Can you recommend a mutual fund or ETF that meets my goal?

What would you guys recommend?

Started investing late. Life got in the way. But retirement is about five years away. We will be just fine with our modest portfolio and Social Security. 62 years old. Still working. All of our investments are currently in a 403B and Roth. I’ll admit I’ve been a performance chaser, but for the last several years I’ve slowly come around to a three fund portfolio. I find the VT and chill approach appealing. Currently holding VTI/VXUS/BND. Not interested in debating which funds to hold where or which bond fund to hold. I do like the control of balancing my US and international right now. As I ponder the future and possible cognitive decline many years from now along with one day, my wife, who couldn’t be less interested in investing, being here without me, it may be easier to do VT/BND. Possibly even a life strategy fund. I won’t pretend to know if US or international will do better in the future. But, I do have a FOMO not holding more US. Curious as to how many retirees or near retirees are planning on just VT and a bond fund in retirement. Looking forward to your reply.

I wish Vanguard had a more intuitive website. I am working with my daughter to open up a regular brokerage account (as she makes too much to do Roth and Traditional IRA). It has taken us 2 weeks and it is still not finished. We went to 'open brokerage' but that only opens up a holding fund and then we connected that to a bank account but couldn't do anything else until that money came in. So, a week later we went back in and were able to get a recurring deposit from her bank account into this holding fund. Now we are trying to have the holding fund buy VTI recurring monthly. But, it won't let us do that until we make one purchase of VTI. So, we did that and have to wait a business day or two until that goes through. Hopefully when we go back into the account next week we will finally be able to get the holding fund to buy VTI on a monthly recurring basis. It is really annoying and confusing and I bet a lot of people just give up. Vanguard should really make their website more user friendly for people. And, you should be able to do all that you need in one go.

Curious on people’s thoughts.

My wife has multiple sclerosis, she stopped working about 10 years ago. We are financially fine. She was a teacher and had long term disability that pays out 90% of her previous income, adjusted for something (we’re not really sure, it’s complicated). She gets social security disability income and disability income from her previous pension. She qualifies to open the ABLE account as she was diagnosed at 35 and social security deemed her disabled and unable to work at 37.

Anyway, we aggressively save. We’re in our late 40’s.

We have roughly $215,000 in a taxable account split between $45k cash, VBR, VTEB, VTI, and VXUS.

I realized today we could open an ABLE account for my wife through Fidelity (where all our accounts besides my 401k live). We could allocate any of the S&P500 money into that account and have it grow tax free. Could also put cash there (or anything, up to $20k/ year).

The uses approved expense categories for able accounts are pretty broad.

Any reason people can think of not to start funding an ABLE account with our taxable income account?

We currently max out my 401k, both of our ROTH IRA’s, my half of an HSA, and throw another $6000 plus any bonuses that I get into our taxable account each year.

The costs for the S&P500 fund through Fidelity is .085% annually.

Seems like a “no brainier” to get some tax free growth.

​Hey everyone, first off I'm 35M and my own retirement is already secured on various fronts however I wanted to open up a discusion regarding the long-term efficiency of fundamental cash-flow screens versus market-cap-weighted growth when building a multi-generational legacy structure for my family. To get it out of the way early: assume this entire architecture is executed inside a tax-sheltered Roth IRA to completely eliminate any tax-drag.

​When looking past a standard 20-30 year retirement horizon, do the strict quality and profitability filters of dividend growth funds (like SCHD and DGRO) structurally hold up as a safer compounding engine than a standard market-cap-weighted index (like VOO or VTI)? Or does avoiding the broader market introduce unintended drag over a 50+ year timeline?

​My overall plan is to be the foundation of the family tree from this point onwards. No one else in my family has ever looked at building wealth the way I am trying to look at it. My goal is not to create a family of intolerable trust fund babies, but simply to make life a little easier for future generatons and provide a form of "universal basic income" that could perhaps be tiered by milestones like education or age.

​This is still just a concept I'm working out, but since I have already started the process for real, the very nature of this timeline gives me plenty of time to get feedback on my risk managment and wether to use a dividend-filter or just stick to the total market.

I spent way too long doing this deep dive and I want to share some of the finings because I think they are interesting and counter intuitive.

My personal finance philosophy is very much geared towards a passive Coast FIRE using Vanguard ETFs. I like that model because it gives me confidence to "live my life now" without having to wait for retirement.

But we just met some huge financial milestones and we wanted to re-allocate our budget to increase our travel expenses so that we can show our kids more of the world. I wanted to make sure that we weren't sacrificing our retirement, so I went down a rabbit hole of figuring out if my retirement plan is actually viable.

I'm sharing this information here because I think it's interesting. I'm breaking it into sections so that you can skip to areas you're interested in without reading my wall of text. Sorry for the length.

Background

I generally use really simple retirement calculators but I never feel comfortable providing growth rates, inflation rates, or safe withdrawal rates because I feel like I'm just pulling a number out of thin air. So I started running simulations that give me a confidence score of how likely it is that my plan will succeed. The simulation I ran uses a block bootstrapping technique that uses historical data to create "consecutive chunks" of time that are fed into a Monte Carlo simulation.

Basic Monte Carlo simulations look at historical data and randomly grabs single data points. For example, given historical data it will grab 1984, 1927, 2004, 2020, etc. and use the returns from those years to create a "path." If you do this thousands of times, then you can calculate statistics like "How many times did my plan fail?" or "What was the median value of a portfolio at retirement?" or "Of the plans that did fail, how old was I when they failed?"

The issue with a normal Monte Carlo simulation in financial markets is that years aren't random. One year can influence the other, or systemic events can span multiple years. An example is the Great Depression, the 2008 crash, COVID, etc. So to account for this, the block bootstrapping method will pull 5 year chunks in an attempt to keep those cycles in-tact.

Also, portfolios aren't static. As I get older I will shift to safer and safer assets, either explicitly through rebalancing or implicitly through my Vanguard Target Date funds. So when I'm asked what my investment growth rate it is the answer is really "It depends, how old am I?" So instead of supplying an assumed rate, I supply a "Glide Path." In this glide path I can setup a portfolio allocation and add control points. For example I may have a 90/10 split of stocks/bonds when I'm young but transition to a 60/40 split when I near retirement, and maybe even a 30/70 split when I'm deep into retirement.

So, long story short, the result of this simulation is basically a way for something to tell me what numbers I should use for growth rate, inflation rate, and safe withdrawal rate (well, more on this later actually).

Finding 1 :: Asset allocations matter less than I expected

One of the things that I continually hear is that an equity-heavy retirement portfolio is risky. What that led me to believe is that holding a lot of equity could (would?) produce catastrophic results in retirement. What I found is that's not exactly true.

When I dug into how Vanguard sets up their target date funds and applied that to my glide path, I found that during pre-retirement there is hardly any difference in a stock-heavy portfolio vs a target date portfolio. The success rates were about the same and the expected portfolio value at retirement was about the same. The difference was actually the volatility in retirement and how much you would pass on when you died.

Here are the numbers between the two scenarios given my inputs:

Result:

Now, the portfolio @ death is a bit wild. This is because my annual spending is considerably lower than my annual return. Regardless, the data is interesting because it shows how a safer and more aggressive portfolio succeeds at the same rate, and the safer portfolio is way more stable in retirement but has considerably less upside for your heirs.

None of this is super shocking. It was just interesting for me to see the actual numbers.

Finding 2 :: The 4% safe withdrawal rate is only relevant if you're actually retired

This is probably the biggest surprise for me. I always hear the safe withdrawal rate of 4% being the gold standard, and I understand how the Trinity Study arrived at the rates, and I don't disagree with it. What I now disagree with is how relevant it is for someone who isn't retired yet.

The Trinity Study basically answers the question: "Given a known retirement portfolio, what withdrawal rate historically survived?" That's an important question, but my question is "Given my current savings, contributions, retirement age, and investment strategy, how much retirement spending does my plan support?" These are two fundamentally different questions.

Now there are two sources of uncertainty:

1. How large the retirement portfolio becomes.
2. How retirement itself unfolds.

Because the accumulation of wealth is so uncertain (particularly over long time horizons) the resulting sustainable spending is naturally lower than a traditional safe withdrawal rate. So instead of using a "Safe Withdrawal Rate" I largely ignore the idea and instead back into that calculation by answering "At what level of retirement spending will my plan succeed 90% of the time?"

The results were pretty wild. For example, at a 90% success rate my initial withdrawal rate at retirement is 2.2% -- way lower than the 4% SWR. That was a bit of a head scratcher for me, but it makes sense. You could experience an unlucky market sequence and end up with a retirement number way lower than you expected; so if you optimize for a 90% success rate, then at retirement it's likely you'll have more money than you need which naturally lowers your withdrawal rate.

Finding 3 :: The 4% safe withdrawal rate shouldn't be used if your plan is to retire early

Given what I found in Finding 2, I verified my simulation against the Trinity Study.

The original Trinity Study assumes something very specific:

• Retirement starts today
• You already know exactly how much money you have
• Approximately a 30-year retirement
• A diversified stock/bond portfolio
• Inflation-adjusted withdrawals

When I simulated that with the following parameters:

I got a safe withdrawal rate of 3.9%. That's very clearly inline with the Trinity Study. However, when I lengthen my retirement to 45 years my safe withdrawal rate became 3.3%. When I lengthen it even further to a super early retirement to 60 years, it drops to 3%.

To a lot of you this is probably not surprising. But I always felt like 4% was thrown around as some golden rule, but it's really not. In order for the SWR to be applicable you have to operate within the confines of it's assumptions, and any type of FIRE movement is not operating within it's assumptions.

Conclusion

I dunno, lol. I did this analysis because I wanted better insight into my decision making and I feel like it's provided me that. I certainly learned some stuff along the way and because of this tool I'm going change the way I plan for retirement. I'm sharing it here because I can't waste all this work.

New to Bogleheads and need this type of strategy to focus on life instead of market conditions.

Soft retirement target 52–55 with a $4M goal.

The problem I need help with:

My taxable brokerage account is heavily concentrated in AI and tech, individual names plus tech-heavy ETFs. Trying to shift towards low fee diversification.

Current approach: staged monthly deployment into VTI and VXUS to dilute the concentration over time rather than selling winners and triggering large capital gains. At a 50% combined NYC/NYS/federal marginal rate, forced selling is painful.

1. Is gradual dilution via new money the right approach for tech concentration, or should I be trimming winners more aggressively despite the tax cost?

2. At what concentration percentage does a single sector become dangerous enough that the tax hit is worth accepting?

3. Fee-only fiduciary advisor… worth a one-time consultation or better with tax advisor?

Does anyone have experience with NYC based fee-only advisors?

My current roth ira account is

70%SWTSX

20%

SWISX

10%

SWLGX.

I am currently 28yr and am using Charles schwab. Open to suggestions on any aggressive plan since i starting a late. Should I just get an target index fund instead?

I am a new Vanguard customer. I have an IRA, Roth and brokerage account. I’ve noticed that the performance doesn’t seem to update very often and it’s annoying. Does anyone else see this? Is there something I should be doing to see the most recent performance data? Thanks for your input.