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BBCWatcher

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Thank you once again BBC. My spouse has a SSN and could keep the U.S. address on the account. Good thought on her letting the account grow until passing along to our kids... however if she is still a NRA at that time, wouldn’t the 40% estate tax apply between her and our USC kids for amounts above $60k? I’m assuming an IRA is considered U.S. situs.
Yes, the IRA generally holds U.S. situs assets, but hypothetically it could be structured (or restructured) as U.S. estate tax immune. The typical way would be for the assets within the account to be repositioned into direct holding of individual bonds. Obviously those wouldn’t be municipal bonds (since tax free bonds within a tax advantaged account don’t make sense), but corporate and government bonds are fine for these purposes. I don’t think the IRA “wrapper” matters for these purposes. This kind of defeats the idea of longer tax free/tax deferred growth, though.

Could an IRA that survives you be repositioned into offshore funds like VWRA? I don’t know, but that seems contrived. Maybe Interactive Brokers could pull it off. They’d then presumably need to be re-repositioned into onshore funds when your children inherit the IRA. (Or would they?) Mitt Romney evidently had/has all sorts of crazy things inside his IRA, so maybe offshore funds are possible right now. Something to check I guess.

Can your spouse benefit from an estate tax treaty? There are something like 16 countries that have estate tax treaties with the U.S.

This Roth is about 10% of our net investable assets, and there are no other tax advantaged accounts in the mix. If estate tax will be an issue for our USC children, maybe having them inherit from me is the way to go. They would definitely want to spread the RMDs over 10 years for maximum tax free growth in the account.
The SECURE Act (passed in December, 2019) threw a wrench into some inherited Roth plans, so I suppose you cannot be too clever for too long. The rules can change, and in this case they did.

To some extent you might be able to make your estate plan “IRS proof.” For example, you include instructions in your will that your spouse will inherit up to (cite part of the tax code) or (fixed figure), whichever is lower, of assets that are subject to (cite other part of the tax code). This gets a little complicated of course, but I did a little bit of this in some instructions I left in another obscure area of tax considerations. Also, I believe you can split the Roth IRA between heirs if you wish to do so.
 

CarlJung

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I was checking the FSM fees

  • buy EFT/stock 0.08%
  • holding of equity UT 0.0875% per quarter

0.0875% per quarter means 0.35% p.a.?
If so, considering the higher management fees of a UT, you also have to add 0.35% on top?

Am I missing something? I don't understand why they price UT in such expensive way. What market are they targeting? Who would buy a UT with such fees? And why?
 

BBCWatcher

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Am I missing something? I don't understand why they price UT in such expensive way. What market are they targeting? Who would buy a UT with such fees? And why?
The simple answer is they can, that there isn’t enough competitive market pressure and aren’t enough informed investors to lower these fees yet. Why do people buy high cost ILPs? Why are personal care products are so expensive in Singapore? It’s the same basic reason.
 

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Hi, u mentioned to have international health insurance for those with pre existing conditions. Are international health insurance more lenient to accepting ? I’ve never heard of such method to get insured
 

BBCWatcher

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Hi, u mentioned to have international health insurance for those with pre existing conditions. Are international health insurance more lenient to accepting ? I’ve never heard of such method to get insured
A few of them are, yes. Here's what Cigna says in their brochure, for example:

Cigna Global said:
Pre-existing conditions

There may be some medical conditions that we agree to include at an additional premium. Our Underwriters will determine whether we are able to include a medical condition that would normally have been excluded. Where applicable, we will present you with a quote with the option to include the condition.
Without a pre-existing condition a 40 year old male citizen of Singapore living in Singapore buying Cigna's standard "Silver" plan with a 20% co-pay (up to a maximum US$2,000 out of pocket cost for covered services) would pay US$225.21 per month for worldwide coverage excluding the U.S. (Since it does provide near worldwide coverage you probably wouldn't need any travel medical insurance.) It's an excellent policy compared to Integrated Shield plans, though -- rather more comprehensive -- but as you can see it's also more expensive, and you cannot use MediSave dollars to pay for any of it.

Pacific Prime, the large health insurance broker in Singapore (and elsewhere), dedicates a portion of its Web site to pre-existing condition coverage. However, I would call or write them directly to explain your situation, see if anyone could provide coverage, and get a quotation. Their Web site's quotation engine isn't going to help too much except to give you an idea of minimum premiums (without pre-existing conditions), not actual.
 

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What I never understood is, you buy a "local" IP for your health. You buy young to cover in case you lose your employer coverage and whatnot.
Then you develop a condition and at 50 yo you decided to go live in Thailand or any other country.
How do you cover yourself? How do you switch insurance to cover you in the new country if you have a condition?
 

Kaypohji

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International health insurance but I think local one still can reimburse u? As long as u remains as sg pr or citizen and that the claim is within ur limit

This part I’m not sure

What I never understood is, you buy a "local" IP for your health. You buy young to cover in case you lose your employer coverage and whatnot.
Then you develop a condition and at 50 yo you decided to go live in Thailand or any other country.
How do you cover yourself? How do you switch insurance to cover you in the new country if you have a condition?
 

celtosaxon

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Yes, the IRA generally holds U.S. situs assets, but hypothetically it could be structured (or restructured) as U.S. estate tax immune.

That is a good point, it probably does depend on the investment. I have read that being in a brokerage account versus bank account can also impact U.S. situs as well.

I need to keep things as simple as possible for them. They won’t understand any of this.

Can your spouse benefit from an estate tax treaty? There are something like 16 countries that have estate tax treaties with the U.S.

Nope, ASEAN country.

To some extent you might be able to make your estate plan “IRS proof.” For example, you include instructions in your will that your spouse will inherit up to (cite part of the tax code) or (fixed figure), whichever is lower, of assets that are subject to (cite other part of the tax code). This gets a little complicated of course, but I did a little bit of this in some instructions I left in another obscure area of tax considerations. Also, I believe you can split the Roth IRA between heirs if you wish to do so.

I have to face reality. My wife would probably just take the entire distribution in full the first year she got it, since it’s a smaller piece of our NIA. If they withhold 30% there is a real chance she would never claim it back.

My kids have the aptitude to do the RMD properly for 10 years, but may not have the patience or inclination... at least they wouldn’t have to worry about 30% withholding or estate tax avoidance.
 

BBCWatcher

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What I never understood is, you buy a "local" IP for your health. You buy young to cover in case you lose your employer coverage and whatnot.
Then you develop a condition and at 50 yo you decided to go live in Thailand or any other country.
How do you cover yourself? How do you switch insurance to cover you in the new country if you have a condition?

International health insurance but I think local one still can reimburse u? As long as u remains as sg pr or citizen and that the claim is within ur limit.
Integrated Shield plans cover emergency care outside Singapore up to Singapore’s limits. They don’t cover medical evacuations or repatriations. There are a couple carriers that offer optional riders that start to expand the international coverage.

In my view the generally sensible approach is to maintain an “as charged” public hospital B1 ward Integrated Shield plan back in Singapore then insure in your country of residence. Keep the Integrated Shield plan in force while there’s any possibility you might return to Singapore — and you have to assume that if you don’t have a clear, durable, legal right of abode elsewhere.

That is a good point, it probably does depend on the investment. I have read that being in a brokerage account versus bank account can also impact U.S. situs as well.

I need to keep things as simple as possible for them. They won’t understand any of this.
Makes sense.
 

BBCWatcher

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Should You Buy the Stocks of Bankrupt Companies?

Hertz (HTZ) filed for Chapter 11 bankruptcy protection. Its debts exceed its assets, and it’s highly likely common shareholders will be wiped out. Yet Hertz stock is trading well above its post filing low. And Hertz got permission to sell more shares, in bankruptcy — something that’s apparently never happened before. Nor has a sharply negative price on West Texas Intermediate crude oil futures, but that happened, too. What’s going on?

In a word, it’s high stakes gambling. There’s a very slight chance Hertz’s shareholders won’t be wiped out, and gamblers (speculators) are having fun with that. At 60 cents a share, why not buy 100 or even 10 shares? It’s a pure lottery ticket, and if there’s a greater fool to come along — and so far there have been — why not?

Market veterans are shaking their heads, of course. Jim Cramer, who is about 99% entertainment and 1% sage, actually had some insightful comments late this past week. He explained how this form of gambling can be really, really long-term devastating. Early career workers who do this so often get burned, and the “lesson” they learn is that stocks are risky, awful things, never to be touched again. Which means these gamblers exit with their gambling losses and never prudently invest, an entirely different practice. And that’s sad. We see many such stories in this forum.

No, I don’t think you should gamble, or if you do then try to pick something that isn’t even somewhat related. Play mahjong once a week for coin stakes, for example.
 

jhyeo_

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Robinhood magic. With easy access and free trading, it is really providing access to cheap lottery. Ironic to the name, I was wondering if the commoners are robbing the rich, among themselves or the other way round?

Hertz (HTZ) filed for Chapter 11 bankruptcy protection. Its debts exceed its assets, and it’s highly likely common shareholders will be wiped out. Yet Hertz stock is trading well above its post filing low. And Hertz got permission to sell more shares, in bankruptcy — something that’s apparently never happened before. Nor has a sharply negative price on West Texas Intermediate crude oil futures, but that happened, too. What’s going on?

In a word, it’s high stakes gambling. There’s a very slight chance Hertz’s shareholders won’t be wiped out, and gamblers (speculators) are having fun with that. At 60 cents a share, why not buy 100 or even 10 shares? It’s a pure lottery ticket, and if there’s a greater fool to come along — and so far there have been — why not?

Market veterans are shaking their heads, of course. Jim Cramer, who is about 99% entertainment and 1% sage, actually had some insightful comments late this past week. He explained how this form of gambling can be really, really long-term devastating. Early career workers who do this so often get burned, and the “lesson” they learn is that stocks are risky, awful things, never to be touched again. Which means these gamblers exit with their gambling losses and never prudently invest, an entirely different practice. And that’s sad. We see many such stories in this forum.

No, I don’t think you should gamble, or if you do then try to pick something that isn’t even somewhat related. Play mahjong once a week for coin stakes, for example.
 

Sweetangtang

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Yes, but only to a certain point. S$9,000/year is very roughly US$6,500/year. At that pace (even if fixed), and assuming some growth in your chosen fund's value, it'd probably take about 12 years for you to reach US$100,000 of total global stock index fund value. Once you reach that level Interactive Brokers no longer levies a monthly minimum commission of US$10. So IB then overtakes Standard Chartered to be less expensive in terms of costs (foreign exchange conversion, brokerage commissions).

So if you wish to start with IB even though it's a little more expensive initially, go right ahead. That'll still work out fine. (You don't save very much during that ~12 year period.) But with IB you would buy your global stock index fund monthly since it costs no extra to do that. You'd pay US$10 per month no matter what, because that would cover your foreign currency conversion commission and your fund purchase commission. There's no need to "batch up" your monthly purchases.

Of course this is all based on today's charges. Occasionally Standard Chartered runs some special promotion, and likewise Interactive Brokers may lower its commissions.

Hi BBCW,

After a long wait, my online trading account with SCB has finally activated. I wanted to place an order for VWRA but there are 2 kinds of order 1) limit 2) market. What will you advise new investor like me to to go after? For a start, should I just go with market order? Thank you.
 

Davo23

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Dear BBCwatcher,



My insurance coverages are as per below, can you advise if I should go for DII?

And also if having 2 personal accident policy is too much?





1. Aviva Group term life

2. Aviva Group personal accident

3. Aviva Group living care

4. Pru-Shield

5. Pru-Extra

6. Pru-personal accident





Many thanks
 

BBCWatcher

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After a long wait, my online trading account with SCB has finally activated. I wanted to place an order for VWRA but there are 2 kinds of order 1) limit 2) market. What will you advise new investor like me to to go after? For a start, should I just go with market order?
There's a slight chance something "crazy" could happen with a market order, so I would try a limit order.

Let's suppose you have US$1,568.25 ready for your quarterly buy of IWDA, the London Stock Exchange is open, and the current market asking price is US$60.50 per share. That means you can get 25 shares (not quite enough for 26), so you could place a limit order for 25 shares at US$61.00, which will cost no more than US$1,535.70 (commission inclusive). The order gets filled at US$60.48 let's suppose, and that's that. Go to sleep until next quarter's buy, loop, repeat.

A limit price about 1% above the asking price should work fine. Your order will get filled reliably, but you won't risk something "wacky" happening, like a sudden flash spike to US$100/share.

My insurance coverages are as per below, can you advise if I should go for DII?
Of course. If you genuinely need the life insurance, you need the DII at least as much.

And also if having 2 personal accident policy is too much?
Yes, most probably. Even 1 might be 1 too many.
 

Davo23

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There's a slight chance something "crazy" could happen with a market order, so I would try a limit order.

Let's suppose you have US$1,568.25 ready for your quarterly buy of IWDA, the London Stock Exchange is open, and the current market asking price is US$60.50 per share. That means you can get 25 shares (not quite enough for 26), so you could place a limit order for 25 shares at US$61.00, which will cost no more than US$1,535.70 (commission inclusive). The order gets filled at US$60.48 let's suppose, and that's that. Go to sleep until next quarter's buy, loop, repeat.

A limit price about 1% above the asking price should work fine. Your order will get filled reliably, but you won't risk something "wacky" happening, like a sudden flash spike to US$100/share.


Of course. If you genuinely need the life insurance, you need the DII at least as much.


Yes, most probably. Even 1 might be 1 too many.


Ok. I would go for Aviva Group DII and also i would like to cancel 1 of the PA then.

Aviva Group PA - 600K
Pru PA - 300K

Which do you advise to cancel as I was told by my Pru agent that Aviva coverage is not that good. But he is working for Pru so would like a 2nd opinion.
 

Sweetangtang

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There's a slight chance something "crazy" could happen with a market order, so I would try a limit order.

Do you mean there is a possibility for the prevailing price to shoot up very high unexpectedly if you place a marker order?


Let's suppose you have US$1,568.25 ready for your quarterly buy of IWDA, the London Stock Exchange is open, and the current market asking price is US$60.50 per share. That means you can get 25 shares (not quite enough for 26), so you could place a limit order for 25 shares at US$61.00, which will cost no more than US$1,535.70 (commission inclusive). The order gets filled at US$60.48 let's suppose, and that's that. Go to sleep until next quarter's buy, loop, repeat.

A limit price about 1% above the asking price should work fine. Your order will get filled reliably, but you won't risk something "wacky" happening, like a sudden flash spike to US$100/share.


Thanks for the guidance. Are you saying 1% above the bid price at the point you are buying? If I can't get the order filled at that price I buy for the day, do I modify the bid price before trading closes or wait for lower bid price next day to trade?
 

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BBC, if we have 100k lying around in IB waiting to be deployed over 12 months, I recalled there are short term bonds to invest it in. What exactly are they and how does one invest in them?
 

BBCWatcher

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Are you saying 1% above the bid price at the point you are buying?
Try a limit order at 1% above the current asking price during normal trading hours.

Aviva group PA - 600K: $77.04 per year
Pru-PA - 300K: $388 per year
I think they’re both pretty ridiculous honestly, so I’ll vote for the lower priced ridiculous. ;)

BBC, if we have 100k lying around in IB waiting to be deployed over 12 months, I recalled there are short term bonds to invest it in. What exactly are they and how does one invest in them?
If these are U.S. dollars you could try U.S. T-Bills which are available in maturities as short as 4 weeks at original issue. Or you could try an ultrashort U.S. Treasury bond fund domiciled outside the U.S. (assuming you’re not a U.S. person).
 
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