Here is team 4. Similar scoring to team 1, similar league.

12 teams, 5 keepers. My 5 keepers were Brees, Gore, S Young. I then drafted Holt and Roy Williams in the keeper draft (keeper draft occurs before regular draft).

Quarterbacks D_Brees J_Campbell, P_Rivers
Running backs F_Gore C_Johnson, A_Hall, S_Young, E_Graham
Wide Receiver T_Holt, R_Williams DeSean_Jackson, A_Gonzalez, D_Bowe
Tight End K_Boss
Kicker A_Vinatieri
Defensive Linemen A_Thomas, J_Peppers
Linebackers DJ_Williams, J_Peterson AJ_Hawk, L_Tatupu
Defensive Backs T_McGee, A_Jones E_Reed

This team is probably one of league's best, in my opinion.

Here is how my fantasy draft ended for team #1. This is a 12 team keeper league. Entry is free, and league is ran online by someone I met thru work. If you ever want to join, let me know- there are 5 leagues each with 12 teams and there is uaually an opening in one league or another. This league is the toughest of all the leagues I am in (serious owners and experienced owners).

12 team keeper league, each team keeps 5 players. 12 positions start each week (QB, RB, 2 WR, TE, K, 2 DL, 2 LB, 2DB).

My keepers were Addai, Eli Manning, Anquan Boldin, Marques Colsten and Dallas Clark.

Quarter Backs J_Kitna E_Manning
Running Backs J_Addai M_Forte R_Rice C_Brown L_Jordan D_Rhodes A_Pittman
Wide Receivers M_Colston A_Boldin J_Gage K_Walter D_Branch R_Brown
Tight Ends D_Clark
Kickers S_Gostkowski
Defensive Linemen A_Thomas
Linebackers G_Brackett EJ_Henderson C_Pace T_Howard
Defensive Backs A_Jones D_Revis L_McKelvin

Overall, this team looks marginal. If the rookie RBs do well, I might be able to trade for better WR which is where this team is weak.

Wife's birthday is Friday and I need to buy her something. She does not want me to spend more than $150.

Most years in the past I get her clothes- she wears suits to work and I do a reasonable job picking out good ones. Her best 3 or 4 power suits were picked out by me.

Because we were going through some expensive fertility treatments last year at this time she did not want a gift... and because she was in hospital for my birthday she did not get me a gift either.

So I am going shopping today or tomorrow after work. Any of you guys out there- do you buy your wife clothes, or am I just too unique in that regard?

Any fantasy football owners out there? I am in middle of my drafts right now (5 online leagues) and curious what everyone's outlook for 2008 looks like?

Because birth was an emergency C section, we did not find out at time of birth if kids are identical or fraternal twins.

Look at this pic and tell me.

Here are photos of twins on 4th of July.

Here are first family pictures with the twins not taken in the NICU.

The four of us


Dad and boys


Mom and Boys

I will post more pictures once my wife gets them transferred to CD.

In meantime the growth of both boys has been nothing short of amazing.

DS1 was born 2 lbs 14 oz, was discharged at 5 lbs. 5 lbs was 5th percentile for weight of premature babies. He weighed in at 11 lbs 14 oz last week, which is 87th percentile for premature babies at his age.

Once he is 100 percentile that means he is not "premature" and can start being compared to normal babies (born at 37 weeks or later).

DS2 was born 2 lbs 6oz and discharged at 6 lbs. He was 3rd percentile weight at discharge. He weighed in at 9 lbs 10 oz today and that is about 67th percentile. Doctor was pleased enought that his formula's calory intake was reduced from 26 to 24. Doctor said in one month he will probably be moved to a more normal formula (like the one his brother uses).

Formula for DS1 costs about $15/can in store and we have been getting it for $5-$10/can on ebay.

Formula for DS2 costs about $35/can in stores and we get it for about $15-$19/can on ebay.

Many recent posts on the forums have people looking to get out of debt.

My generic plan:

List your gross income (60k for example)
Take 20% of the gross income.

(12k for this example)
The 12k is the amount per year to apply to debt (1k per month or 20% of monthly gross income applied to debt).

The remainder of the money (80%) should be marked for living expenses. I would include car loans for living expenses, and a mortgage as a living expense, so these bills can come from the 80%.

How you apply the money to the debt (snowball method, highest interest rate first, other) is a matter of personal prefernence.

Once the debt is paid off, I suggest taking the 20% debt payment and breaking this up into a 15% and 5% portion.

The 15% portion gets set aside for retirement.

The 5% portion gets set aside for short and mid term expenses.

There is a thread on the forums suggesting someone needs to spice up their relationship.

A poster made a comment which got me thinking of some funny movie lines.

"Where are you stationed"
"I am stationed in poon-tang"

"What's it like out there?"
"Hot and wet. Great if your with a lady, but it ain't no good if you're in the jungle"

Both lines from Good Morning Vietnam. I highly recomend that movie to anyone which needs a good laugh.

That also has some awesome music to it.

What are your favorate funny movies and feel free to share some lines from it to remind us how funny it is.

"Was it over when the German's bombed pearl harbor? NO. When the going gets tough the tough get going"
-Animal House

"I wish I was a louffa"
-Stripes

"This is no way to run a desert"
-National Lampoons Vacation

"One time at bandcamp..."
-American Pie

Police Academy and Beverly Hills cop are also among my favorates.

This is an attempt to summarize the last several retirement related posts I have had.

First- When executing all of this, it is important to sum the balanced of all accounts and make sure a person is withdrawing 4% of the overall balance or less.

The 4% is before taxes. The 4% can come from any combination of accounts.

The end goal of all withdraws is to be in the 15% tax bracket.

If there is a taxable account, I would use the dividends from this account as the first source of income.

If there is interest in a taxable account, I would use the interest as the second source of income.

In any more income is needed, it should come from either a tax deferred or tax free account.

It's possible if there is interest or dividends paid inside the Roth account, to use that as the next source (to keep taxes low).

Then draw down the tax deferred accounts for income. Make sure this withdraw is less than the 15% tax bracket threshold, and remember the interest from a taxable account (already mentioned) will be added to same taxable income.

If there is room left in the 15% tax bracket, convert that difference into the Roth.

How much do you pay for home internet? We currently have it thru Cincinnati Bell as part of our home phone (fuse is the high speed service we have now).

The phone bill is $100/month and we'd like to pay for only home internet for around $30 or $40. Anyone have good options for this?

How much does your family budget for vacations each year?

The asset allocation thread had me thinking there is not much discussion on these boards about asset allocations and rates of return/withdraw rates.

For example-

With a 100% equity portfolio I think the expected return should be 10-11%. If I had to withdraw in retirement from a portfolio like this, It would be around 2.5% (which should be the dividend yield).

With an 80-20 portfolio (80% equity, 20% bonds), I would expect an 8-9% return and I could expect to withdraw about 3.5% from this portfolio. Most (all) of the withdraws would come from either interest on the bonds portion or dividends on the equity portion.

With a 60-40 portfolio, I would expect a 6-7% annual return and would plan on withdrawing 4% of this portfolio. The 4% withdraw would involve selling shares.

With a 40-60 portfolio, I would expect a 4-5% annual return. I would expect to withdraw 4% of portfolio and I would expect the entire withdraw could be from interest and dividends.

There is a general withdraw convention which is assumed by most withdraw calculators which affects withdraw rates, investment strategy and taxes paid.

The convention is to withdraw from taxable accounts first, tax deferred accounts second, and tax free accounts third.

The convention has some good logic and tax advice built in.

1) Withdraw from taxable accounts first allows tax deferred and tax free accounts to compound longer, allowing each to increase in value.

2)Withdraw from tax deferred acounts second. This allows tax free accounts to compound longer.

3) Withdraw from tax free accounts last. This maximizes the compounding on withdraws you will never pay taxes on.

A slightly more flerible take on this is to attempt to maximize the tax free account value.

This requires some tax planning assumptions:

1) A person needs to assume their withdraws are relatively consistent (increased only for inflation).
2) A person needs to assume the US will maintain a tiered tax structure. Teired tax structure means there will be a poor 10% tax bracket, middle 15% tax bracket, upper middle 25% tax bracket and a rich 28%-33%-35% tax bracket.
3) A person needs to assume these brackets will have income caps close to the level of spending/withdraws desired.

Example- a person needs 100k of spending per year. This required an investment portfolio of $2.5 M.

Assume there is $750k in taxable accounts, $750k in tax free accounts, and $1 M in tax deferred accounts.

100k for a married couple is in middle of 25% tax bracket. With creative withdraw strategies (which defy traditional convention) a person can save themselves 10% on taxes.

I will assume the 750k in taxable accounts is primarily invested in dividend paying stocks yielding 3% ($22500 in income taxed at 15% is a net of $19125 in income).

I will assume the 750k in tax free accounts are growth oriented with some bonds.

I will assume the $1 M in tax deferred accounts are income oriented with some growth.

Overall portfolio is 60% stocks and 40% bonds.

The basic withdraw strategy is:

1) withdraw cap to 15% tax bracket. I will use $66100 in this example. Because of exemptions and similar tax deductions, it''s probable a person could withdraw $82k and still have only $66100 of taxable income.

2) Use the dividends for income from the taxable account. This adds $19k of income to the $66100.

3) Either sell some of the taxable account, or withdraw some from the Roth account to keep marginal tax bracket at 15%.

$100k-$66.1k-$19k=$15k needed.

The basic premise here is to keep the tax rate low over an extended period of time. The extra 15k would probably be withdrawn from the taxable accounts first to allow Roth accounts to compound longer.

There is another "bucket" approach worth mentioning:

Tax deferred
Tax free
Taxable

As in 3 buckets which are each taxed differently.

Tax deferred implies you have not paid taxes on that money.

Tax free means you have paid taxes on the money and will not pay taxes again.

Taxable means you have paid taxes on the money and you only pay taxes on the interest, capital gains, or dividends generated (each year).

Tax deferred accounts pay taxes at marginal rates based on the federal and state tax brackets.

Taxable accounts pay taxes at capital gains rates.

A follow up post will discuss how to use the part I buckets with the part II buckets.

There was an asset allocation thread on the forums and I suggested the bucket approach to retirement spending would take on less risk than the aggressive equity portfolio mentioned.

Here is the bucket approach:

You create different pools of money. The most common I have heard is three.

There is a cash bucket. This is where "next years expenses" are and more than likely is 2-3 years expenses, and this is a cash account/taxable account.

There is an income bucket. The goal of this bucket is to replenish the cash bucket. The general goal is to have the interest and dividends from this bucket replenish bucket #1, and have bucket #2 grow in value at a moderate amount (maybe 4% paid in interest and appreciation of 2-3% per year). This bucket is probably allocated around 20-80 to 40-60 (stocks-bonds).

The third bucket is a growth bucket. The goal is to assign any volatile assets to this bucket, and only withdraw from this bucket in two cases:
1) must be an UP year in the market
and
2) bucket 2 needs more money to allow the income generation to keep up with inflation. It's possible this allocation is 100% equities, or it could be a stable value portfolio with stocks, bonds and commodities.

A person would assign 2-3 years expenses to the cash bucket
A person would assign enough money to second bucket to generate the income needed.
The remaining money is allocated to bucket 3.

Bucket 3 is kept in tax defferred or tax free accounts as long as possible.

Bucket 2 is tax defferred and taxable. RMDs would be taken from bucket 2.

The 15% tax bracket is an important bracket to understand.

The bracket caps for 2008 are $66100 for marrried filing jointly and $33050 for single filers.

If a person can manage to keep IRA withdraws below these amounts, they will get considerable tax advantages.

Capital gains in taxable accounts will be taxed at 5%. While the goverment might change this rate, if they do their political opponents will tell others they raised taxes on the poor, so I think using this mnumber to plan is a good thing.

So if you need 80k in income (married filing jointly) for retirement, my suggestion is to use buckets of money:

Your deductable IRA/401k bucket should only provide $66100 of income.

The other $12900 of income needs to come from somewhere else-

a Roth IRA
dividends
capital gains

The dividends and capital gains need to be held in a taxable account.

There are 3 important numbers when doing tax planning. Gross Income, Adjusted Gross Income and Taxable income. If you use turbo tax, the software regurgitates these numbers to you in a summary at the end of the return when you file.

Here is the definition of all 3.

Gross Income- sum of all the wages you earned. If you have two jobs both salaries are summed, if two spouses work, the two salaries are added up.

Gross income determines a few things. Medicare and SS liability is the biggest. Gross income is also the guideline used for saving (for example save 20% means save 20% of the GROSS income calculated by adding all salaries together).

Adjusted Gross Income- Gross income minus pre-tax contributions or payments.

To calculate AGI, 401k contributions are substracted from gross income. So are health care premiums paid by employer, HSA/FSA contributions, child care account contributions, traditional IRA (deductable IRA) contributions and a few other things not mentioned here. Add up the contributions or payments and subtract that sum from the gross income above.

It should be noted that AGI is used to determine whether you are eligible for some of the deductions which reduce AGI (like deductable IRAs). AGI is also used to determine if you eligible for a Roth IRA (even though the Roth contribution does not modify AGI).

The third number is taxable income. Taxable income is calculated by adding up deductions and substracting the deductions from AGI.

Popular deductions include mortgage interest paid, property taxes paid, federal, state and local taxes paid, business expenses paid, education expenses and student loan interest paid, and many many others.

Some deductions are phased out based on AGI. If your AGI is high enough, you cannot deduct student loan interest for example.

It is also good to know the tax tables. The reference I use is http://fairmark.com/refrence/index.htm.

Why is this important?
Take my 2007 tax return. Married filing jointly.

Gross income of 120k+
AGI was around 103k. 401k contributions are the key reducer for me in this regard.
Taxable income was 62k. I had deductions which added up to more than 40k. Mortgage interest and taxes were the keys here.

Now look at the tax tables from fairmark:
Married filing jointly.

Income between 0 and $16050 is taxed at 10% (tax from prior bracket is zero).
Income between $16051 and and $65100 is taxed at 15% (so add $1605 from 10% bracket to any income less than $65100).
Income between $65101 and $131450 is taxed at 25% (plus the $8962.50 which is the $1605 from 10% bracket and the $7357.50 from the 15% bracket).

If you looked at my gross income, you would think I was square in middle of 25% tax bracket. If you looked at AGI, same issue. But after deductions are factored in, my taxable income is at top end of 15% bracket.

15% bracket caps at $65100
My taxable income was 62k and change. I can get 3k of raises and still be in 15% bracket- this makes the Roth IRA a real good deal for me- I am contributing to it while paying 15% taxes and will probably withdraw when I am in 25% tax bracket based on my income need.

A few points-
Taxes change each year. The percentages (10%-15%-25%...) change around every 8-10. The caps ($16050, $65100, $131450) change each year.

I am not a tax accountant or tax preparer. Most of what is above was learned or interpreted from turbo tax.

Someone asked about why choose a taxable account over a traditional IRA (if a person is over limits for a Roth).

The short answer is TAXES.

The long answer:

Withdraws from a traditional IRA are taxed at ordinary income tax rates. Does not matter if you are holding a CD, a bond, interest from the bond, a stock or a dividend from a stock. If you withdraw 100k from the traditional IRA, it will be taxed according to ordinary income tax rates.

For federal these rates are 10%-15%-25%-28%-33%-35%. FYI- 2/3 of the USA files taxes in the 15% rate ($66100 married or $33500 single) or lower. Most people are taxed at a relatively low 15% federal tax rate.

Withdraws from a taxable account are taxed at either 5% or 15%. If you are in the majority of federal tax filers, you will pay 5% on capital gains and dividends in a taxable account.

If you are in 25% federal bracket or higher you will pay 15% tax for capital gains and dividends in a taxable account.

So long term capital gains and dividends actually have favorable tax status- they get a discounted tax rate (relative to ordinary income).

Interest on bonds and from savings accounts will get taxed at marginal bracket levels (meaning 10-15-25-28-33-35% brackets mentioned previously).

This information can lead to conclusions-

1) keep bonds and CDs in IRAs if possible- they do not get any special tax treatment one way or other, so may as well shelter the interest from taxes until withdraw.

2) if you can put dividend paying stocks in taxable accounts, you get a favorable tax on them each year a dividend is paid.

3) a traditional IRA (and 401k for that matter) converts a small tax item (capital gains and dividends) into a high tax item if inside the IRA tax shelter.

the counter on the main blog page counts the drafts as posts even before they are posted.

in addition creating drafts removes the blog from the list on the left.

I just finished reading another poster's blog and that poster had BAD information.

He suggested a Roth IRA is the first place retirement contributions go. No mention of tax deductions, company matches, tax rates or other.

He suggested that a $5000 Roth contribution is really $7500 (because of taxes paid). I know of no 50% tax bracket which is federal+state.

If anyone is following other blogs, please read and post questions. There is not one simple formula, and choosing something like a Roth IRA is investment advice and TAX advice. Looking at one without calculating the other properly will lead to bad decisions.

Anyone in 28% tax bracket which is still eligible for a Roth would best consider other options from a tax standpoint.

Anyone in 25% tax bracket which contributes to a Roth should do a tax analysis and see if they can into 15% tax bracket and make some contributions, or see if withdraws will be in 15% tax bracket which would make Roth a less than effective option.

Anyone in 15% tax bracket should strongly consider a Roth. The probability taxes go up when in 15% tax bracket is high, making the Roth a good bet to save you money in the long run.

It bothers me when I see people suggest to others that invest the 401k up to the match, then do Roth, then either do a taxable account or increase the 401k amounts.

Depending on the income of the family or individual, this advice will cost a person a considerable amount of money.

If a person in 25% tax bracket contributes to a Roth IRA, that investment cost the person $1250.

If I had to choose:

$5000 in a roth
or
$6250 in a 401k

I am choosing the 401k hands down. The tax savings now (while in the 25% tax bracket) are too much to pass up.

If that person can get their income down to the 15% tax bracket, that same $5000 Roth contribution cost them only $750. In this case the Roth is a GREAT investment.

The Roth works best when tax rates are low. Most people refer to the government changing (raising) tax rates. I think "personal" tax rates are much more beneficial to make the decision by.

Here is the strategy I would recomend:

Review tax tables
(I use http://fairmark.com/refrence/index.htm )

Check the 15% federal bracket cut off:
Single $32550, Married $66100

If you are under this (this is TAXABLE income, not gross income), the Roth is an excellent deal.

If you are over this, use the 401k as much as possible. It's possible the 401k puts you back UNDER the cap. In that case, you have from January-April to either recharactorize IRA contributions or make prior year contributions to a Roth.

I would not blindly put money into a Roth until you have done some tax planning.

Example:
I have a gross income of over 110k (married filing jointly). Between 401k contributions and deductions, our taxable income for 2007 was $62k. 15% tax bracket.

For 2007 we maxed one Roth (mine) and contributed 11% to my 401k and 6% to wife's 401k. If I dropped my 401k down to 6% (match cap) to start wife's Roth, the two Roths would have been in 25% tax bracket ($4000 would put us in 25% tax bracket).

When I first started investing, most recomendations were to save 10% of gross income and have 3-6 months expenses set aside for emergencies.

I have come to the conclusion this general advice is not good enough.

My new paradigm is save 15% for retirement- before the match, and have an additional 5% saved in taxable accounts (each month) for emergencies in addition to having 3 months expenses in the bank.

Too many bills come up each month and year which cannot be reliably budgeted for. Car repairs, child hospital bills and perscriptions also come to mind.

Currently more than 16% of our gross income is going to Roth or 401k accounts (with the raise I have not calculated the new annual saving %- I will do that at tax time).

Curious if anyone out there does anything similar?

I received a more than 3% raise in July. That money is going to wife's Roth IRA, which is now $400/month.

I now contribute $625/month to my Roth
wife now contributes $400/month to hers.

I allocated my wife's Roth across 7 funds from T Rowe Price. I decided on a 3 dimensional asset allocation approach.

Normal "1 dimensional" asset allocation is large cap-mid cap-small cap-foreign. My Roth, my rollover, wife's 401k and my 401k follow that plan.

Wife's Roth has a growth and value fund in it- meaning the funds own large-mid-small but are vertically allocated according to traditional style boxes.

Wife's Roth also has some sector funds. Global tech, developing tech, health care, natural resources, financial services and emerging markets.

The plan is to use growth and value as core holdings, then overweight a sector or two (right now overweighting global tech and financial services) in an effort to be more aggressive than the market as a whole.

Twins turned 4 months old on July 27. WOW what a difference 4 months makes.



Both eat like it is going out of style. I survive on about 5 hours of sleep on a good night.

I have modified my work schedule to be 1pm-10 pm so I can be with kids in morning. Most afternoons my wife works from home and watches them.

The savings of us modifying the work schedules is close to $13k per year.

That is 13k which is still getting invested.