Search found 1485 matches

by Frugal Al
Wed Jul 29, 2015 3:34 am
Forum: Personal Consumer Issues
Topic: Mandatory vehicle collision avoidance systems are coming
Replies: 39
Views: 2141

Re: Mandatory vehicle collision avoidance systems are coming

One piece of tech I've come to personally dislike is the emergency brake assist on my 2015 4runner. A technique I've ingraned in myself over the years is to instantly move my foot to the brake and partially press it whenever something unexpected happens in front of me. This lights up my brake light...
by Frugal Al
Tue Jul 28, 2015 1:31 pm
Forum: Investing - Theory, News & General
Topic: Why do people buy annuities?
Replies: 73
Views: 7666

Re: Why do people buy annuities?

Call it what you want. A 10-15% "payout" is still higher than you can get on your own, unless you have access to some secret magic investment vehicle. Let's try to stay above arguing petty semantics and stick to the ideas. I'm not just calling it what I want, you are. This is not just pet...
by Frugal Al
Tue Jul 28, 2015 10:41 am
Forum: Investing - Theory, News & General
Topic: Why do people buy annuities?
Replies: 73
Views: 7666

Re: Why do people buy annuities?

rca1824 wrote:Once you start getting quotes for a 10 or 15% yield...

Please stop conflating yield with the payout rate.
by Frugal Al
Tue Jul 28, 2015 8:44 am
Forum: Investing - Theory, News & General
Topic: Why do people buy annuities?
Replies: 73
Views: 7666

Re: Why do people buy annuities?

Annuities are a bit magical because they let you tap into the capital of other people who died before you. This form of risk-sharing gives each living person a higher income. Certainly nothing magical here; it's the nature of insurance. Some things we choose not to self-insure against, and that's f...
by Frugal Al
Wed Jul 22, 2015 3:27 pm
Forum: Investing - Help with Personal Investments
Topic: [Pension buyout ] Lump sum help
Replies: 17
Views: 2001

Re: [Pension buyout ] Lump sum help

If (today), I planned on taking the pension at age 62, then my choice is take the guaranteed 3.8% return from now until then by waiting until age 62 to collect the pension... or... invest the lump sum today (and hope to do better than 3.8% over the next 15 years). And, of course, the decision is sl...
by Frugal Al
Tue Jul 21, 2015 3:55 pm
Forum: Personal Consumer Issues
Topic: CNBC & Fox Business Websites
Replies: 26
Views: 2868

Re: CNBC & Fox Business Websites

I try to avoid all news. If it's important I'll hear about it from my parents or co-workers. Financial news, world news, local news all seems so depressing and negative. Nothing like well filtered news. Of course instead of just getting the bias of the news org (all news is biased, even Bloomberg) ...
by Frugal Al
Tue Jul 21, 2015 1:17 pm
Forum: Personal Consumer Issues
Topic: Do you hate your vehicle infotainment system?
Replies: 73
Views: 5902

Re: Do you hate your vehicle infotainment system?

Are you meaning to imply that in purchasing a new vehicle your top priority is the "infotainment system?" Honestly that would be pretty low on my list of considerations. These systems are becoming an integrated part of the control system within the vehicle. Ease of use, or lack thereof, c...
by Frugal Al
Wed Jul 08, 2015 6:01 am
Forum: Personal Finance (Not Investing)
Topic: Pension Question - Early Retirement
Replies: 38
Views: 5034

Re: Pension Question - Early Retirement

They're not theoretical and they're certainly not accurate or reflective of TB's situation Uber, you seem to have an ongoing conceptual problem with this issue (this thread and others). I said they (the PV's) are theoretical for this purpose . They do not exist as lump sums, which is fine since lum...
by Frugal Al
Tue Jul 07, 2015 3:57 pm
Forum: Personal Finance (Not Investing)
Topic: Pension Question - Early Retirement
Replies: 38
Views: 5034

Re: Pension Question - Early Retirement

it doesn't reflect what she would be offered in reality as a lump sum in place of those annuities ; it's more like $122K at age 55 and an estimated $160K at age 65 . I agree the PV method is confusing for non-finance people. And although the PV's are accurate, they are theoretical for this purpose ...
by Frugal Al
Sat Jul 04, 2015 3:03 am
Forum: Investing - Help with Personal Investments
Topic: Should I Avoid My Adviser? - American Funds to Vanguard
Replies: 25
Views: 2916

Re: Should I Avoid My Adviser? - American Funds to Vanguard

This certainly seems to be an amazing amount of hand wringing over $8k--everyone is making this much more difficult than it needs to be (save for Celia and a couple others). With the limited amount investment we're talking about, just decide upon a simple investment plan at this time. Why the conste...
by Frugal Al
Fri Jul 03, 2015 5:22 am
Forum: Investing - Help with Personal Investments
Topic: Should I Avoid My Adviser? - American Funds to Vanguard
Replies: 25
Views: 2916

Re: Should I Avoid My Adviser? - American Funds to Vanguard

You don't need a financial adviser at this point or perhaps ever. You're a student with limited or no income so your cap gains rate will be zero. There's no sense in keeping any of your American Capital fund. Close out the fund in it's entirety and get started down the right investing path with Vang...
by Frugal Al
Wed Jul 01, 2015 3:47 am
Forum: Personal Finance (Not Investing)
Topic: Lucent offering pension buyout to retirees: what to do?
Replies: 78
Views: 11037

Re: Lucent offering pension buyout to retirees: what to do?

Here's the paradox. Despite the fact that people don't want to buy annuities - preferring to be their own amateur investment managers - when offered the choice between keeping their current defined benefit pension vs. going to a 403(b) public employees in several states have strongly preferred the ...
by Frugal Al
Wed Jul 01, 2015 2:32 am
Forum: Personal Consumer Issues
Topic: Used, Reliable, Safe, Financially Sound cars
Replies: 56
Views: 6315

Re: Used, Reliable, Safe, Financially Sound cars

Oil usage seems to be a problem with quite a few makes, including Honda and Subaru. As we've said many times, almost all makers have a few skeletons in the closet, reliability wise: http://www.consumerreports.org/cro/maga ... /index.htm
by Frugal Al
Sat Jun 27, 2015 5:14 am
Forum: Personal Finance (Not Investing)
Topic: Assuming Retirement Withdrawal from Portfolio Value
Replies: 14
Views: 1818

Re: Assuming Retirement Withdrawal from Portfolio Value

The other issue is that the annuity calculator that cranks out $40k per year for a $700k SPIA is NOT inflation indexed--it is a fixed $40k per year not adjusted for inflation. The 4% recommendation assumes the payout is corrected for inflation, thus maintaining purchasing power over the 30 years.
by Frugal Al
Wed Jun 24, 2015 3:43 pm
Forum: Personal Finance (Not Investing)
Topic: [CNBC article: Social Security Denying Delayed Benefits]
Replies: 30
Views: 4426

Re: [CNBC article: Social Security Denying Delayed Benefits]

No doubt Kotlikoff is trying to sell columns and books, but he is not wrong that the system really needs improvement. It needn't be as complex as it is. My experience with my local office was pathetic. I was amazed by the overall lack of knowledge there. I love it when governments and/or corporation...
by Frugal Al
Sat Jun 20, 2015 2:18 pm
Forum: Personal Consumer Issues
Topic: Anyone have A/C fail on an older Honda CRV?
Replies: 30
Views: 3307

Re: Anyone have A/C fail on an older Honda CRV?

Sorry about your A/C, Browser. As vehicles age things start to fail. What amazes me are the types of failures we see. Of course we know about some of the larger issues, such as their automatic transmissions in the 6 cylinder vehicles, and some of their bad cylinder blocks. But I never thought I'd se...
by Frugal Al
Fri Jun 05, 2015 8:44 am
Forum: Personal Consumer Issues
Topic: New car warranty about to expire
Replies: 18
Views: 1980

Re: New car warranty about to expire

If the vehicle is running normally, there are no leaks, and all fluids that can easily be checked look and smell normal (especially the tranny oil if an automatic) I'd save my time and money. If you take it to the dealer for an inspection you will be charged, and they will most likely find nothing. ...
by Frugal Al
Thu Jun 04, 2015 9:49 am
Forum: Personal Finance (Not Investing)
Topic: ACA and retiring before 65
Replies: 28
Views: 3474

Re: ACA and retiring before 65

As others have noted, a threshold benefit of ACA is getting coverage and it seems to have bent the cost curve in a good direction.If people with means manipulate their income to achieve undeserved subsidies, $5,000 per year in the example on the blog, then the system will fail and/or the rest of us...
by Frugal Al
Tue Jun 02, 2015 12:11 pm
Forum: Investing - Help with Personal Investments
Topic: Annuities the Fixed Index Annuity FIA
Replies: 30
Views: 2069

Re: Annuities the Fixed Index Annuity FIA

Why is the SPIA a bad deal? I'd bet there are a lot of people out there in retirement right now that would consider 4.2% ROI guaranteed for the rest of their lives as a good thing? SPIA's are not necessarily a bad deal when used properly. In this case, however, it is a pretty bad deal? You're confl...
by Frugal Al
Sun May 31, 2015 6:32 am
Forum: Personal Finance (Not Investing)
Topic: Pension or Unfair Lump Sum
Replies: 39
Views: 5229

Re: Pension or Unfair Lump Sum

I think the OP is saying that the $1M lump sum would only buy a $3900 monthly annuity, whereas the pension would pay $4900. That's a 20% haircut, and probably more than I'd want to take just to have the lump sum. There are many other variables, however, that should be considered. If married, are you...
by Frugal Al
Tue May 19, 2015 7:53 am
Forum: Personal Consumer Issues
Topic: Estate Trustee Auto Title Transfer
Replies: 7
Views: 583

Re: Estate Trustee Auto Title Transfer

I appreciate the insights by all. Carefreeap, I wouldn't have to go to Florida as the seller has the car and the FL title in MD. Dolphin, I agree that this would be much more palatable if this were a MD title in the name of the trust.
by Frugal Al
Mon May 18, 2015 9:06 am
Forum: Personal Consumer Issues
Topic: Estate Trustee Auto Title Transfer
Replies: 7
Views: 583

Re: Estate Trustee Auto Title Transfer

I think I'll probably pass on the deal at this time. One of my concerns is that beneficiaries of the trust might come back and argue against the trustee's actions. Still, I suspect that wouldn't impact my ownership provided the alleged trustee had the right to sell the property, even if negligent in...
by Frugal Al
Mon May 18, 2015 6:28 am
Forum: Personal Consumer Issues
Topic: Estate Trustee Auto Title Transfer
Replies: 7
Views: 583

Estate Trustee Auto Title Transfer

I ran across a great deal on a not too expensive sports car, in a hard to find configuration. The previous owner was a professional in Florida that passed away. His estate trustee lives in Maryland, where the car is now, but the title is a FL title with no liens. I live in Ohio. So, if I want this c...
by Frugal Al
Thu May 14, 2015 8:18 am
Forum: Personal Finance (Not Investing)
Topic: Pension (annuity) vs lump sum decision
Replies: 10
Views: 876

Re: Pension (annuity) vs lump sum decision

I didn't look at every option due to taxation rendering most of them a poor choice. However, even assuming a conservative 5% nominal return over the next 23 years or so until age 65, the annuity payout then needed to provide $636 would be about 7.6% for a 100% jt survivorship SPIA. Today that annuit...
by Frugal Al
Thu May 07, 2015 1:48 pm
Forum: Personal Consumer Issues
Topic: New car vs used car -- what's your approach?
Replies: 57
Views: 3183

Re: New car vs used car -- what's your approach?

The TLX is available with a fairly potent 4 cylinder and with that engine the car is a very good value, though probably not quite as good as an Accord 4 cylinder that has almost as much power. Before you totally rule out a 4 cyl you should at least test drive it. I can't recommend Honda/Acura's V6 a...
by Frugal Al
Thu Apr 30, 2015 8:09 am
Forum: Personal Consumer Issues
Topic: Help re Car [convertible]
Replies: 43
Views: 3463

Re: Help re Car [convertible]

Since the OP wants to buy new rather than used, the MX-5/Miata and Mustang are great possibilities at a reasonable cost and inexpensive maintenance--as others have pointed out. I don't think a 2009 Honda S2000 (last year made) would be a good choice, but it's a great sports car in its own right. The...
by Frugal Al
Tue Apr 28, 2015 9:06 am
Forum: Investing - Help with Personal Investments
Topic: Help with SIMPLE IRA
Replies: 6
Views: 593

Re: Help with SIMPLE IRA

The Simple IRA will not effect the eligibility to contribute in a personal Roth IRA. For 2015 the Simple IRA contribution limit is $12,500 for those under age 50, and the make-up contribution has been increased to $3,000 for those over age 50, for a max Simple IRA contribution of $15,500 for 2015.
by Frugal Al
Sat Apr 25, 2015 3:15 pm
Forum: Investing - Help with Personal Investments
Topic: Retiring August 31, Company terminating pension plan
Replies: 16
Views: 2638

Re: Retiring August 31, Company terminating pension plan

What should I be concerned with in the coming announcements? Should I take the lump sum and be done with it? What sort of "due dilligence" is required when I get the name of the insurance company? Every case is different, and there's not necessarily a right or wrong answer for everyone, e...
by Frugal Al
Thu Apr 23, 2015 10:50 am
Forum: Personal Consumer Issues
Topic: Cocktail Hobby
Replies: 11
Views: 2128

Re: Cocktail Hobby

For those with the same hobby, any favorite bitters or other ingredients to recommend? We've also found our favorite rum - Pyrat is so far above the rest (not affiliated, arrgr, not a pirate :) +1 on the Pyrat Rum XO Reserve. I first tried Pyrat at their blending operation in Anguilla, and was frus...
by Frugal Al
Wed Apr 08, 2015 3:19 pm
Forum: Personal Finance (Not Investing)
Topic: Lump sum pension vs future annuity
Replies: 7
Views: 1138

Re: Lump sum pension vs future annuity

Are you married or will you be married? Is the $1112 per month 100% survivorship? If not, what is the 100% survivorship payout?
by Frugal Al
Thu Mar 12, 2015 3:47 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

And it sounds like you've been doing the calculation before just recently receiving some key tidbits from G$$ . I don't see any benefit to the "key tidbits" that G$$ provided regarding the interest rate used for corporate pension obligations. We're talking different purposes/objectives he...
by Frugal Al
Wed Mar 11, 2015 10:07 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

We're kind of getting off-topic here. Why do you need to know these rates? Not off topic at all. We need to understand the lookback rates and their timing to determine when the lump sum might change, as well as estimate the direction of that change. I agree with the OP, the timing probably won't ge...
by Frugal Al
Wed Mar 11, 2015 8:19 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

Plan sponsors are allowed to take an average of any one or more of the five months proceeding the "stability period". The "stability period" can be one month, one quarter, or one year. Most don't average because it is a hassle. Al, that's probably why you haven't seen this avera...
by Frugal Al
Wed Mar 11, 2015 8:15 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

3.8% to 4.5% seems like an OK assumption to me if you're trying to get an IRR for the annuity. I would use a rate similar to that mandated by the IRS (high quality corporate bonds rated AA or above with an emphasis on long duration). Coincidentally, this is the same kind of rate plan sponsors use t...
by Frugal Al
Wed Mar 11, 2015 8:08 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

g$$ wrote:Interest rates used by the plan sponsor for funding purposes (i.e. the actuarial valuation) are generally smoothed over 24 months. Interest rates used to calculate lump sums are snapshot.

And how do you think they come up with the segment interest rates for the snapshot? They are an average.
by Frugal Al
Wed Mar 11, 2015 8:02 am
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

g$$ wrote:They can't cherry-pick

Established plans can't cherry-pick, but new lump sum offers can initially cherry-pick. I've seen it done.
by Frugal Al
Tue Mar 10, 2015 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

You're right, Uber. I've never seen nor read of this machanation either. And although my initial thinking was that it seemed fair, it's only fair when compared to new lump sum offers that often cherry-pick the lookback month. In an established plan with a lump offer, and in a market whose overall di...
by Frugal Al
Tue Mar 10, 2015 2:22 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

that's interesting - Frugal , does this answer your question ? Yes, that is interesting. Averaging over 3 month increments certainly seems like a fair way of doing it. So I take it Mar/Apr/May will be the rates used for 3rd quarter. I'd be surprised if they are much lower than for 2nd quarter. I ha...
by Frugal Al
Tue Mar 10, 2015 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

Does this make sense? Pension option income at age 70.5 = 32k rental + 56k pension + 70k socsec + 47k RMD on 1.3M = 205k taxable inc Lump option income at age 70.5 = 32k rental + 70k socsec + 80k RMD on 2.1M = 182K taxable inc Yes, it makes sense. Your RMD's wouldn't hit the 6% level (the pension p...
by Frugal Al
Tue Mar 10, 2015 12:42 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

Nobody knows, but going by W. Bernstein's opinon, 5% is unreasonable to say the least. He thinks more like 2% real. The 2% real plus average inflation gets to about 5% nominal, as I stated. It's important to keep it apples to apples, as the pension isn't COLA'd. It's an imperfect planning number, b...
by Frugal Al
Mon Mar 09, 2015 3:14 pm
Forum: Personal Finance (Not Investing)
Topic: Pension vs. Lump
Replies: 58
Views: 3813

Re: Pension vs. Lump

The part of the retirement puzzle we don't know is the amount of social security payments, which would further offset the $54k of necessary retirement income, $80k - 26k ( $32k house rental income less vacancy/misc expense). If it's significant, it really makes the decision to take the lump sum that...
by Frugal Al
Sun Mar 08, 2015 6:34 am
Forum: Investing - Help with Personal Investments
Topic: Pension as a substitute for bond funds
Replies: 17
Views: 1506

Re: Pension as a substitute for bond funds

I don't see anything not to like with this plan. I'd be all over it.
by Frugal Al
Wed Mar 04, 2015 4:41 pm
Forum: Investing - Help with Personal Investments
Topic: Betting on your life expectancy with an SPIA
Replies: 18
Views: 1863

Re: Betting on your life expectancy with an SPIA

Sure, but don't purchase the SPIA until you are at least age 75 and you can hedge it by requiring a term certain return of principal. That may lower the return paid to you but should still be worth it, if you believe you will outlive the 20 year guarantee period. These hedges can be useful in some ...
by Frugal Al
Mon Mar 02, 2015 4:58 pm
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 48
Views: 5746

Re: ...it is madness to risk losing what you need in pursuin

According to firecalc.com a 3.7% withdrawal rate succeeded in 99% of historical scenarios with many of them leaving a a hefty legacy. Why would someone go for an annuity? The difference between guaranteed and theoretical comes to mind. Some people have no legacy intent. Some people can't stand the ...
by Frugal Al
Mon Mar 02, 2015 4:34 pm
Forum: Investing - Theory, News & General
Topic: ...it is madness to risk losing what you need in pursuing wh
Replies: 48
Views: 5746

Re: ...it is madness to risk losing what you need in pursuin

To compare with SWR, USA Today got quotes of 3.79% and 3.63% payouts for an inflation adjusted annuity for a 65 year old man:http://www.usatoday.com/story/money/col ... y/1639119/ The USA Today article is a little old now. I'd still be surprised if that was for a single life payout in 2013. When I ...
by Frugal Al
Sat Feb 28, 2015 6:25 am
Forum: Investing - Help with Personal Investments
Topic: Help with retirement pension
Replies: 2
Views: 539

Re: Help with retirement pension

For a 70-year-old at retirement age, based on the limited info you've provided, converting the pension to a commercially available annuity generally isn't the way to go. However, that assumes the pension is PBGC guaranteed and not in danger of getting a haircut due to underfunding, such as some mult...
by Frugal Al
Fri Feb 27, 2015 2:03 pm
Forum: Investing - Help with Personal Investments
Topic: How much is a pension worth?
Replies: 23
Views: 3943

Re: How much is a pension worth?

TwoByFour wrote:A pension that includes COLA is a huge benefit to a retirement plan.

Did the OP state that this was a COLA'd pension? But you're correct, a COLA'd pension changes everything, assuming it actually delivers on its promises.
by Frugal Al
Fri Feb 27, 2015 8:58 am
Forum: Investing - Help with Personal Investments
Topic: How much is a pension worth?
Replies: 23
Views: 3943

Re: How much is a pension worth?

What is the OP's current age? It's very difficult to value something that might not even be around very long, given the current trend in DB plan terminations. This Single Premium Immediate Annuity ("SPIA") calculator has been recommended here in the past. You can enter either lump sum inve...
by Frugal Al
Thu Feb 26, 2015 7:22 am
Forum: Investing - Help with Personal Investments
Topic: Immediate Pension Benefit Offering
Replies: 8
Views: 1366

Re: Immediate Pension Benefit Offering

I figure that I can invest the lump sum in an IRA of Vanguard's standard four-fund portfolio (probably 70/30 or 60/40 stocks/bonds). I'll probably double the money before 12/23. I'm generally not a fan of long time horizons and non-COLA'd annuities. I think you're on the right track, but I don't th...
by Frugal Al
Mon Feb 23, 2015 4:32 pm
Forum: Investing - Help with Personal Investments
Topic: Yes, another Pension / Lump Sum dilemma !
Replies: 15
Views: 1552

Re: Yes, another Pension / Lump Sum dilemma !

It doesn't matter how many income streams it --matters what the total the steams equal. Your right, but my point is, and according to the OP, the 3 current streams more than cover his needs. These 3 sources of COLA pensions will cover essential living expenses with a little left over. Adding yet an...

Go to advanced search