The mutual fund firm Vanguard, in its column “IRA Insights,” said that approximately 20 percent of its investors who take RMDs move the money to a taxable account because they do not need to spend it. (from article provided by @msf)
That’s a curious statement for Vanguard to make. How do they know that? I guess they must have conducted some sort sort of study in which they queried their investors. Reason I’m curious is because at Price I routinely have RMDs (and all other IRA distributions) transfered first into a cash equivalancy non-sheltered account on which I can write checks or otherwise transfer from at a later time. (I use their ultra-short fund for this purpose.) There’s a lot of reasons for doing this. Most importantly, I feel that should the distribution process somehow get “muffed” (perhaps by incorrectly withholding Michigan’s pension tax against my instructions), it would be a lot easier to resolve the issue with Price while the money is still under their umbrella.
Now to the crux of the issue here. Sometimes the RMD or other funds I take from a sheltered account are actually “needed” right away. But much more often they’re simply “rolled” into an annual household budget and may not actually be spent for up to a year. At still other times the purpose of the money is simply to “replenish” depleted cash reserves after an unusually large / unexpected household expenditure. So tracking the actual purpose to which withdrawals from an IRA are ultimately applied would seem to be a difficult (near impossible) undertaking.
Just my H/O on this one ... But I’ve long felt that way too much is made of being “forced” (author’s word) to withdraw a small percentage of sheltered funds annually upon reaching RMD age. There are some great tax efficient stock funds which have been discussed here over the years. Munis are a possibility as well. Recently while I was using Price’s high yield muni fund (PRFHX), it seemed to be consistently outperforming their Spectrum Income fund (RPSIX) which I hold inside an IRA. Risk level appeared about the same too. My thinking on this, however, might be warped, as have about 65% of retirement monies inside a Roth.

Y'aaaar, matey, eye been doin' just that, me bucko. Eye've since learrrrrrrned me lesson!
Fair winds an' followin' seas to yew fer th' weekend, matey! ;)

@rforno- Good Lord! You've been dredging through the Sargasso Sea of Lost Links all this time? Years ago we (read: David and Chip) spent months finding a decent way to evade the dreaded Sea of Lost Links without edging into the even more dangerous waters ("Here There Be Dragons") of censorship.
(Something seems to be prompting me to nautical images this morning. Might be lack of coffee- I'm off to have mine now. :) )

@rforno- Good Lord! You've been dredging through the Sargasso Sea of Lost Links all this time? Years ago we (read: David and Chip) spent months finding a decent way to evade the dreaded Sea of Lost Links without edging into the even more dangerous waters ("Here There Be Dragons") of censorship.
(Something seems to be prompting me to nautical images this morning. Might be lack of coffee- I'm off to have mine now. :) )

great article on Long Short funds, David.
You have profiled several others over the years, but dont mention them in the article.
Can you list the funds that met your three criteria?

I do wonder about spending habits and personal debt compared to 50-60 years ago. Back then, it wasn't so easy to get loans, mortgages, buy stuff on Amazon and Wal-Mart, purchase the iPhone and Sony Playstation 4. To me, it seems that it's much easier to spend your money than it was in the 1950s. Everyone ready for Amazon Prime Day coming up in July?

Used to be we took time to save money. now we spend money to save time. I read that a while back.

I do wonder about spending habits and personal debt compared to 50-60 years ago. Back then, it wasn't so easy to get loans, mortgages, buy stuff on Amazon and Wal-Mart, purchase the iPhone and Sony Playstation 4. To me, it seems that it's much easier to spend your money than it was in the 1950s. Everyone ready for Amazon Prime Day coming up in July?

“Why Aren’t Most Americans Rich?“
Duh - A silly question deserves a silly answer. That’s not to diminish the very qualitative thoughts on the subject by several respondents. (They’ve shown you really can make lemmonaid out of lemons.)
My own take would be that most Americans are indeed rich when compared to the way we lived during my childhood. (They just don’t realize it.) Even the most affluent back in the 50s likely had only black & white TVs in their homes, telephones anchored to their wall with something known as a “phone cord”, and cars that were a struggle to drive lacking power steering and, for the most part, automatic transmissions. Add to all that: A math problem that today can be quickly solved with a $2-3 calculator that fits in your pocket took hours to calculate by hand back than. (The simplest of these weren't on consumer store shelves until about 1970 and sold for around $200.)
So in one sense Americans today are richer beyond the dreams or hopes of Americans 50 years ago.

Isn't being rich a moving relative target? So if most Americans had $2.4 million in personal net worth, wouldn't that amount cease to be the one necessary to be rich? Then being rich would be $62 million. The article also of course--like most financial propaganda pieces--doesn't mention that wages for the poor and shrinking middle class have stagnated when adjusted for inflation for over 35 years, especially for the poor who have seen wages decline when adjusted for inflation. Invariably these pieces blame people for spending too much on avocado toast, lattes and cell phones when the situation is far more complex and also inequitable than that.

FYI: The Forbes 400 list of the world’s richest people looks fairly similar at the top every year.
Buffet, Gates, Bezos, Bloomberg and the Walton family are at the top of the list in some order year in and year out (they’ve been joined by Mark Zuckerberg in recent years as well).
But this list isn’t as stable as it may appear.
Over 70% of those who made this list (or their heirs) lost their status in this rarified group between 1982 and 2014. Getting there is easier than staying there for most.
High-income earners have a similarly difficult time staying at the top.
Regards,
Ted
http://awealthofcommonsense.com/2018/07/sustaining-wealth-is-harder-than-getting-rich/

I would like to hear Ted's personal thoughts or comments regarding how the tariff's may or may not affect his corn crop. There's tons of info and conjecture all over the web so let's here it straight from someone maybe directly affected. Then again maybe he eats it all or sells it from a stand out on the road.

@Mark - Yep. Would be nice if @Ted would share more about the AG business. From what I’ve read, farms have grown larger over the years and, while 1200 is considered a nice spread, it’s not real big anymore in comparison to the largest farms.
Never been on a farm. So this aspect of the thread has peaked my curiosity. Here’s an interesting article explaining how farming is actually quite similar to investing in the equity markets. Never would have guessed.
http://moneygrower.co.uk/2015/12/stock-market-investing-is-like-farming/

Bogle was 80+years old and his portfolio is also very aggressive... I guess great minds think alike... But know when to get out is upmost important...Ted portfolio Very simple easily controlled and easily to manipulate /changed portfolio
Related getting mutualiized w bogle
https://www.bloomberg.com/news/audio/2018-06-27/getting-mutualized-with-jack-bogle

Cash in a checking or savings account should not be included in an asset allocation exercise. This is purely investments.

@JoJo26,

If the cash is already earmarked for near-term needs, than I agree with you. I also think it’s extremely important folks plan ahead at least a year out and have secure reserve funds for those near term needs.
But, If the cash is being held back as a lever for potential investment at a later date (perhaps in anticipation of a more attractive market entry point or opportunity), than I would respectfully disagree with you. It should be included.
Some investors believe in holding back some “dry power” for possible future deployment (in the form of cash). If that’s their purpose, than I’d vote for counting that sum as part of the overall portfolio. And I believe the questions being asked of @Ted (essentially to fully disclose his cash position on the investment side, if any) are perfectly reasonable.
Agree with your underlying premise that cash held in a savings or checking account is unlikely to be part of one’s investment pool. However, it could be. One interesting case is Price’s ultra short term bond fund (TRBUX). In our own case that fund is held in both an “IRA” (comprising investment cash) and also in a “TOD” account (cash earmarked for near term needs). Regarding the “TOD” account (Transfer on Death in TRP’s language), I actually write checks against that account (minimum $500) to cover near term needs.
Bottom line: When posting one’s holdings as a discussion topic (Let’s assume the purpose here is to provide instruction for others), I think it’s important to be totally clear.
BTW - There is also a “gray area” in that many do hold a large cash reserve (5+ years worth of living expenses). The reason I most often hear is that this allows them to remain very aggressively invested with their invested portfolio. The problem with not counting that cash, is that its mere existence does in fact improve their long-term portfolio performance. So it’s adding to their yearly portfolio numbers - whether or not they want to admit it.

If that's how you're thinking about cash then I do agree. It should also be included in any performance calculation of the overall portfolio then as well.

Cash in a checking or savings account should not be included in an asset allocation exercise. This is purely investments.

@JoJo26,
If the cash is already earmarked for near-term needs, than I agree with you. I also think it’s extremely important folks plan ahead at least a year out and have secure reserve funds for those near term needs.
But, If the cash is being held back as a lever for potential investment at a later date (perhaps in anticipation of a more attractive market entry point or opportunity), than I would respectfully disagree with you. It should be included.
Some investors believe in holding back some “dry power” for possible future deployment (in the form of cash). If that’s their purpose, than I’d vote for counting that sum as part of the overall portfolio. And I believe the questions being asked of @Ted (essentially to fully disclose his cash position on the investment side, if any) are perfectly reasonable.
Agree with your underlying premise that cash held in a savings or checking account is unlikely to be part of one’s investment pool. However, it could be. One interesting case is Price’s ultra short term bond fund (TRBUX). In our own case that fund is held in both an “IRA” (comprising investment cash) and also in a “TOD” account (cash earmarked for near term needs). Regarding the “TOD” account (Transfer on Death in TRP’s language), I actually write checks against that account (minimum $500) to cover near term needs.
Bottom line: When posting one’s holdings as a discussion topic (Let’s assume the purpose here is to provide instruction for others), I think it’s important to be totally clear.
BTW - There is also a “gray area” in that many do hold a large cash reserve (5+ years worth of living expenses). The reason I most often hear is that this allows them to remain very aggressively invested with their invested portfolio. The problem with not counting that cash, is that its mere existence does in fact improve their long-term portfolio performance. So it’s adding to their yearly portfolio numbers - whether or not they want to admit it.

Fascinating fund. About the best investment you could possibly have made over its first 17-18 years of life (1965 onward) as it profited from one financial disaster after the next. After that, not so sweet as the stock of disasters dried up a bit. The fund has now posted a net loss over the past 3, 5, 10, 20 and 30 year periods.

And Robert Samuelson weighs in via The Washington Post:
"We’re going to lose this trade war"
"If we are to have a “trade war” with China, it would be best to win it. We should be better off after the fighting. Unfortunately, the chances of this happening seem slim to none, because President Trump’s plan of attack suggests that everyone — us and them — will lose."
"Trump has suggested imposing a 25 percent tariff on imported cars, trucks, sport utility vehicles and parts. This might reduce the trade deficit, but only because higher-priced vehicles would reduce consumer demand and vehicle production. Other countries would retaliate. The estimated U.S. job loss would total 624,000 over one to three years."
"But whatever Congress and Trump do won’t be effective [against China] unless it’s matched by other major trading countries. Trump either doesn’t realize this or doesn’t care. He’s infuriating the very countries whose support he desperately needs. His policies are more than misguided; they’re backward."
"The resulting antagonisms among our allies — already evident... would intensify." "This is doing long-term damage. Trump is upending U.S. trade policy since World War II — one of the most successful policies in history.”
(The excerpts above have been lightly edited for brevity.)

And likely to get much messier before it's over... this from The Wall Street Journal:
As Trade Barriers Go Up, Global Supply Chains Unravel
"The numbers of jobs gained and lost probably end up a wash. The real costs are higher prices and fewer choices for consumers."
"But imposing tariffs on existing supply chains is rife with unintended consequences."
For example:
"Canadian steel uses iron ore from Minnesota, so Mr. Trump’s tariffs hurt both. About 17% of the value of Mexican-made cars exported to the U.S. originated in the U.S.
"Beckett Gas Inc., family-owned manufacturer of components for boilers, furnaces and water heaters, has over the years shifted production from abroad to its Cleveland-area factories. By continuously improving its production process, it has avoided price increases and now sells all over the world.
But that arrangement has been endangered by the 25% tariff on imported steel, the dominant input into Beckett’s products. “There are only foreign competitors to what we do,” Morrison Carter, the company’s chief executive, says. Those competitors now have a 25% cost advantage."

FYI: Earlier this week I wrote about how holding can be one of the hardest aspects of investing. Anyone can buy or sell but holding takes discipline. I promised a follow-up to discuss how I handle this.
To offer a potential solution I’m going to walk you through my evolution on how I’ve come to think about asset allocation over the years
Regards,
Ted
http://awealthofcommonsense.com/2018/06/my-evolution-on-asset-allocation-2/

It's going to be interesting when their "feeling" that "their financial health is in good to excellent shape" meets reality.

Yep - Those working class stiffs are making out just fine. Retire on Social Security alone (if it’s still there) and then live another 30 years. What could possibly go wrong?

I’m can’t help but wonder if there will be similar columns five years from now about Pimco Income (PIMIX).

FYI: In the spring of 2013, PIMCO Total Return (PTTRX) was the world's largest mutual fund. Its fortunes were about to change, and then some. That May, the fund suffered the first of what would become 51 straight months of net outflows. PIMCO Total Return now ranks 28th in assets. It is not even the company's biggest offering, having been overtaken by PIMCO Income (PIMIX).
Regards,
Ted
https://www.morningstar.com/articles/870740/5-years-later-pimco-total-return.html