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Re: Are SPIA's fairly priced? - A quick and dirty analysis

Obviously there has to be room in the price for the insurance company's expenses and profits. That's the price of insurance. If you need it, buy it. If you don't, well, it's obviously cheaper to self-insure. I agree. This thread started with a "quick and dirty analysis." Are SPIA's fairly...
by YDNAL
Mon Sep 22, 2014 4:04 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 73
Views: 3211

Re: Leeraar's Three-Holding Portfolio

....For example, suppose your overall desired AA is 70/30 stocks/bonds, but you have taxable savings and know that bonds are tax-inefficient, not recommended for taxable accounts. A solution is to go with LifeStrategy Moderate in your tax-advantaged accounts (60/40) and then add Total Stock Market ...
by YDNAL
Mon Sep 22, 2014 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: Leeraar's Three-Holding Portfolio
Replies: 18
Views: 1361

Re: Are SPIA's fairly priced? - A quick and dirty analysis

Longevity is unknown, and this is what drives the "cost" of either. And, in either case "this cost" is higher if we get hit by the probervial truck at an early age. The opposite is also true. There, I ran the numbers. :) IMO, you've completely missed the point of this thread. So...
by YDNAL
Sun Sep 21, 2014 10:29 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 73
Views: 3211

Re: Are SPIA's fairly priced? - A quick and dirty analysis

Longevity is unknown, and this is what drives the "cost" of either. And, in either case "this cost" is higher if we get hit by the probervial truck at an early age. The opposite is also true. There, I ran the numbers. :) IMO, you've completely missed the point of this thread. So...
by YDNAL
Sun Sep 21, 2014 9:15 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 73
Views: 3211

Re: Are SPIA's fairly priced? - A quick and dirty analysis

There have been some threads recently about the "cost" of an SPIA (Single Premium Immediate Annuity), and I thought I would run some quick numbers on the data. The circumstances between SPIA and social security are similar. • With SPIA, you save while working then turn money to an insuran...
by YDNAL
Sun Sep 21, 2014 8:24 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 73
Views: 3211

Re: Need urgent help for 85 y.o. parents just moved to Vangu

YDNAL, I apologize if I seemed defensive. I thought you had earlier re-posted my images with "corrections" written on them, and it felt a bit overkill. So I'm glad that wasn't your intent. No, I posted observations, followed by your quotes (no images) and left any reconciliation of changi...
by YDNAL
Sat Sep 20, 2014 10:36 am
 
Forum: Investing - Help with Personal Investments
Topic: Need urgent help for 85 y.o. parents just moved to Vanguard
Replies: 63
Views: 3602

Re: Bonds in portfolios ??

abuss368 wrote:We are seeing a lot of these threads lately!

I'm a bit concerned. The market timer in me may have to do some thinking this weekend. :)
by YDNAL
Fri Sep 19, 2014 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in portfolios ??
Replies: 11
Views: 805

Re: Inflation Bonds - Staying the Course?

How's the value of your human capital? I like to consider my human capital to be valuable! :) However, a post-doc in chemical engineering will not pay to that intrinsic value, haha. Looking forward, I suspect my salary will rise dramatically. Great! The most important metric for a 26yo (as yourself...
by YDNAL
Fri Sep 19, 2014 7:30 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3098

Re: What's the riskiest Bogleheadish asset?

...The LARGER question is: why did you choose to overweight and what has changed? Landy, Thanks for the reply. I not only mean less volatile , but less risky. I know nobody knows the future. I chose to overweight because I thought I liked more risk, and I expect more gain than the standard. No risk...
by YDNAL
Fri Sep 19, 2014 7:12 pm
 
Forum: Investing - Theory, News & General
Topic: What's the riskiest Bogleheadish asset?
Replies: 81
Views: 7057

Re: Need urgent help for 85 y.o. parents just moved to Vangu

abyan » Fri Sep 19, 2014 3:51 pm Thanks, but the figures I provided are correct. You don't have to be defensive when people are trying to help. If you sold items from $176K in original post re: trust (taxable) account, your subsequent schedules should have reflected the amount sold and currently in...
by YDNAL
Fri Sep 19, 2014 6:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need urgent help for 85 y.o. parents just moved to Vanguard
Replies: 63
Views: 3602

Re: Savings rate, when you start, withdrawal rate > AA

I often see scattered around several different threads, the idea that it's much more important to save as much as you can, start early, and then maintain a SWR during retirement than obsess over asset allocation. Is there a short article or maybe a really good thread here that kind of summarizes th...
by YDNAL
Fri Sep 19, 2014 4:35 pm
 
Forum: Investing - Theory, News & General
Topic: Savings rate, when you start, withdrawal rate > AA
Replies: 3
Views: 445

Re: Need urgent help for 85 y.o. parents just moved to Vangu

I would appreciate some help coming up with a final investment plan for my 85 y.o. parents. abyan, As you can imagine, the detailed recap of your parents' circumstances is overwhelmingly long and a bit confusing. Then there are updates and follow-ups. For instance, I can't reconcile why the "l...
by YDNAL
Fri Sep 19, 2014 3:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need urgent help for 85 y.o. parents just moved to Vanguard
Replies: 63
Views: 3602

Re: What's the riskiest Bogleheadish asset?

Bogleheads, I have both Vanguard Emerging Markets and Vanguard Reit fund in my portfolio. To make it less volatile, which one could I drop?? I hold 5% of each one within the total portfolio. The core is Vanguard Total Stock Market Index Vanguard International Index fund Vanguard Total Bond Index fu...
by YDNAL
Fri Sep 19, 2014 11:44 am
 
Forum: Investing - Theory, News & General
Topic: What's the riskiest Bogleheadish asset?
Replies: 81
Views: 7057

Re: "Here Come the Bogleheads" by Jason Zweig

Is it that troublesome to hit the link in the original post and go to about >> ? :annoyed ps. did you even read the article (subject of this thread)? My apologies to you. I missed the "About" tab on the link. I had never heard of the guy. Certainly did not mean to annoy you. The apology s...
by YDNAL
Fri Sep 19, 2014 11:30 am
 
Forum: Investing - Theory, News & General
Topic: "Here Come the Bogleheads" by Jason Zweig
Replies: 10
Views: 2040

Re: Immediate payable annuity is a bad investment?

The concept of an annuity is a good one. The point of the Forbes’ article is that SPIA product currently offered is not very good. I like insurance if it is properly priced and covers an event that has a decent percentage of taking place. The odds of a fire completely burning down a house are small...
by YDNAL
Fri Sep 19, 2014 10:47 am
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 45
Views: 2433

Re: Proposed: 35% Maximum Bond Allocation, For Life

Good question. MM is not million. A Roman numeral for 1 million is $1M with line over M. You can see it on the table to the right , but the line doesn't copy/paste if you use it. So, I use $1M. But the article to which you linked reads It can be abbreviated MM in some financial contexts. Sure, and ...
by YDNAL
Fri Sep 19, 2014 8:19 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Proposed: 35% Maximum Bond Allocation, For Life

I'm curious. Do you people who abbreviate million as MM abbreviate thousand as M? Good question. MM is not million. A Roman numeral for 1 million is $1M with line over M. You can see it on the table to the right , but the line doesn't copy/paste if you use it. So, I use $1M. Thousands would be K.
by YDNAL
Fri Sep 19, 2014 7:44 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: "Here Come the Bogleheads" by Jason Zweig

This morning I Goggled my favorite article about a Boglehead convention with the title: "Here Come the Bogleheads." The article was written by Jason Zweig for Money Magazine. Jason is now a highly respected columnist for the Wall Street JournaI. This wonderful article, written in 2001, is...
by YDNAL
Fri Sep 19, 2014 7:04 am
 
Forum: Investing - Theory, News & General
Topic: "Here Come the Bogleheads" by Jason Zweig
Replies: 10
Views: 2040

Re: Proposed: 35% Maximum Bond Allocation, For Life

If a person retires at 60 with 1MM, 650k in equity and 350k in bonds, and the market drops by 50%, he then has 350k in bonds and 325k in equity for a total portfolio value of 675K. He started withdrawals at 2.3% or 23k of total. After the crash he's withdrawing 3.4% (23k). If he draws down from onl...
by YDNAL
Thu Sep 18, 2014 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Inflation Bonds - Staying the Course?

I am a 26 y.o, with no plans of retiring anytime soon, and I hold 6% of my ~80/20 portfolio in TIPS in my rIRA (VIPSX fund). Is this reasonable of me? Thank you for the advice. How's the value of your human capital? IF I was your age, that would of most importance to me. You see, human capital is d...
by YDNAL
Thu Sep 18, 2014 4:09 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3098

Re: Where do I put my cash now?

The Wizard is correct. My goal is 10% cash, but in the last year, it has gone up to 15% as all purchase orders for ETFs have expired because they were at prices below the market. I am reluctant to put that 5% in a stock fund only to find that the fund undergoes a "correction" that I antic...
by YDNAL
Thu Sep 18, 2014 3:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where do I put my cash now?
Replies: 23
Views: 2519

Re: Bonds in portfolios ??

Hi ,I was wondering on opinions/views ,if bonds still have a place in both retirement and non-retirement portfolios anymore?? I appreciate your input /opinions here. Has anything changed?... things like diversification, risk-control, etc. If NO, and "opinions/views" were that bonds have a...
by YDNAL
Thu Sep 18, 2014 3:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bonds in portfolios ??
Replies: 11
Views: 805

Re: Revising AA, significant difference

Summary Emergency fund, mortgage payoff in 14 yrs, all on track there DH, 37 public service job $90k/yr, 10% to 403b, 10% to pension (if pension comes through as planned, retire in 16 yrs) Dw, 33 part time megacorp job $37k/yr, 10% to 401k (2015 will up this to 20%) Fully funding Roth IRA for both ...
by YDNAL
Thu Sep 18, 2014 1:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Revising AA, significant difference
Replies: 11
Views: 874

Re: Interest rates, Bonds and Fed

This subject is regarding bonds. I am relatively new to Bonds and bond funds (although I have traded equities over the years and have a basic understanding of bonds). I have an interest in buying Bonds to balance a portfolio but both the yields are low now and the value of any bond seems poised to ...
by YDNAL
Thu Sep 18, 2014 12:05 pm
 
Forum: Investing - Theory, News & General
Topic: Interest rates, Bonds and Fed
Replies: 16
Views: 1542

Re: Bond Index Conundrum

Thanks guys! That helps clarify it for me. Follow on question. Does the same logic apply to Total International Bond fund as well? The holdings are largely investment grade Bonds from international government, agency, and lesser from corporate securities (see Overview tab on link). Japan Bonds, for...
by YDNAL
Thu Sep 18, 2014 11:58 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 9
Views: 697

Re: Bond Index Conundrum

Bond index funds (like TBM and Total International), however, give you the organizations that are the most indebted and the most need of cash (maybe in trouble, like someone opening multiple credit card lines)? Is this even a problem? TBM holds 62.7% investment grade Bonds from Treasury and Gov't a...
by YDNAL
Thu Sep 18, 2014 10:57 am
 
Forum: Investing - Theory, News & General
Topic: Bond Index Conundrum
Replies: 9
Views: 697

Re: Proposed: 35% Maximum Bond Allocation, For Life

I'm not getting the premise. I can see setting bond percentage to 35% for all time. But that doesn't seem consistent with having the bond total be sufficient to meet all withdrawal needs under any scenarios.... It is not "consistent..." because that is not the OP's hypothesis. Let's say t...
by YDNAL
Thu Sep 18, 2014 10:36 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Proposed: 35% Maximum Bond Allocation, For Life

If one has a FI portfolio tilted to an IRA CD ladder, what you suggest is not only possible, but what my wife and I could actually do (we are both 67). Stated another way, we have enough in IRA CDs, cash and bond funds, and after-tax CDs, to never, ever, touch our equities. We could leave the equit...
by YDNAL
Thu Sep 18, 2014 6:48 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Proposed: 35% Maximum Bond Allocation, For Life

Would "minimal downside risk" be considered to also mean 1/3 of your assets? I know you said that question was rhetorical, but I'd like to amend that phrase to say "minimal long-term downside risk." The past 30 years (never mind 15 years) should be irrelevant in looking at histo...
by YDNAL
Wed Sep 17, 2014 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Roth help

2 additional questions. If I have the ability to move this money into a ROTH/401k offering at her current employer would that make more sense? Should I move my Roth and hers to no load funds? We both have separate ROTHs' through American Last question first. I see no reason to have a Roth IRA - tha...
by YDNAL
Wed Sep 17, 2014 3:18 pm
 
Forum: Investing - Help with Personal Investments
Topic: Roth help
Replies: 14
Views: 567

Re: Inflation Bonds - Staying the Course?

We currently invest in Total Bond and Intermediate Tax Exempt. If we added a second bond fund, it would probably be Intermediate TIPS. This fund is non-overlapping and recommended by David Swensen and Rick Ferri. I would guess an allocation of 30% of bonds as a starting point. Mr. Swensen and Mr. F...
by YDNAL
Wed Sep 17, 2014 2:52 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3098

Re: Proposed: 35% Maximum Bond Allocation, For Life

What is the reason to take 65% Equity risk? The reason would be to maximize asset growth (and corresponding quality of life during retirement) while maintaining minimal downside risk. Would "minimal downside risk" be considered to also mean 1/3 of your assets? (rhetorical, food for though...
by YDNAL
Wed Sep 17, 2014 1:50 pm
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Why should young people invest in bonds at all?

Because when, not if, but when the market tanks 30 or 40% the next time you will have money to jump in and make $$ on the recovery by rebalancing. Am I the only one who's thick enough to not know what that means!? :?: This page explains it well. http://www.bogleheads.org/wiki/Rebalancing If that's ...
by YDNAL
Wed Sep 17, 2014 1:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why should young people invest in bonds at all?
Replies: 87
Views: 7879

Re: Florida prepaid college plan. Dumb or undumb?

l2yangop wrote:Florida prepaid college plan. Dumb or undumb?

Undumb!

Both my kids when through a Florida university under the plan.
by YDNAL
Wed Sep 17, 2014 12:49 pm
 
Forum: Investing - Theory, News & General
Topic: Florida prepaid college plan. Dumb or undumb?
Replies: 14
Views: 1070

Re: Proposed: 35% Maximum Bond Allocation, For Life

Well if the "reason" to take 65% equity risk is that the 35% at 2.3% covers your basic expenses then it all seems to make sense.... That's not what OP said. Let's say that a retiree has a plan to draw down from only the bond portion of his portfolio during a significant stock market downt...
by YDNAL
Wed Sep 17, 2014 11:32 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Inflation Bonds - Staying the Course?

There is an article on Yahoo Finance today that inflation is now at the lowest point in 16 months. That should be irrelevant, while the risk of UNexpected inflation is real and damaging to retirees on fixed income. FWIW, note that I don't hold TIPS currently (personal circumstances). I plan on hold...
by YDNAL
Wed Sep 17, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3098

Re: Proposed: 35% Maximum Bond Allocation, For Life

Let's say that a retiree has a plan to draw down from only the bond portion of his portfolio during a significant stock market downturn. This retiree plans to withdraw a yearly sum equal to the safe perpetual withdrawal rate of 2.3% of his assets, adjusted for inflation. A 35% allocation to bonds m...
by YDNAL
Wed Sep 17, 2014 10:41 am
 
Forum: Investing - Theory, News & General
Topic: Proposed: 35% Maximum Bond Allocation, For Life
Replies: 37
Views: 3728

Re: Roth stock/bond allocation

Yes that is the plan.Hopefully we will never touch the Roths or Ibonds.If something happens and I cannot keep working until I am 70 or more in my small business as planned :oops: there are a lot of unknowns that can alter even the best laid plans :D I have decided to be in protection mode,thus the ...
by YDNAL
Tue Sep 16, 2014 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: Roth stock/bond allocation
Replies: 8
Views: 667

Re: Roth stock/bond allocation

Going forward at age 62 I have settled on a stock allocation of 25 pct.We currently have about 70k in our 2 Roths combined and will contribute another 35,000 the next 3 years which will give us about 100k depending on the market.My question is .....our total invested in stocks will be about 300 to ...
by YDNAL
Tue Sep 16, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Roth stock/bond allocation
Replies: 8
Views: 667

Re: How much you need to save as multiple of salary

TIME article quotes a Fidelity study which says: Here are the guideposts: At age 35, you should have saved an amount equal to your annual salary. At age 45, you should have saved three times your annual salary. At 55, you should have five times your salary. When you retire at age 67, you should hav...
by YDNAL
Tue Sep 16, 2014 7:44 am
 
Forum: Investing - Theory, News & General
Topic: How much you need to save as multiple of salary
Replies: 51
Views: 6259

Re: The dangerous practice of rebalancing...

I see a bunch of people in this thread touting the dangers of rebalancing. Well, yeah, there are risks. Investing is full of risks but you have to play the odds with a reasonable plan. Rebalancing to maintain an asset allocation based on ones willingness, need, and ability to take risk is one of th...
by YDNAL
Mon Sep 15, 2014 3:21 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: The dangerous practice of rebalancing...

To me, at this stage in my life, "enough" means nothing about percentages, but rather "enough" real inflation-protected *dollars* in my fixed income accounts... Exactly how do you do this? Presumably a serious question. If you need $1000 monthly "real inflation-protected do...
by YDNAL
Mon Sep 15, 2014 1:32 pm
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: The dangerous practice of rebalancing...

To me, at this stage in my life, "enough" means nothing about percentages, but rather "enough" real inflation-protected *dollars* in my fixed income accounts... Exactly how do you do this? Presumably a serious question. If you need $1000 monthly "real inflation-protected do...
by YDNAL
Mon Sep 15, 2014 10:59 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: Why do so many think their home is a foolproof investmen

Why do so many people believe that owning/buying a home is a surefire way to make money on it down the road? Why do you believe "so many people" believe that? Do you have a source for your belief? Owning a *folio number* can replace *renting the SAME* after considering of ALL costs - incl...
by YDNAL
Mon Sep 15, 2014 8:46 am
 
Forum: Investing - Theory, News & General
Topic: Why do so many think their home is a foolproof investment?
Replies: 125
Views: 6405

Re: The dangerous practice of rebalancing...

What if the answer to rebalancing in a falling market to double your rebalancing schedule? For example, if you rebalance every year, do it every two years. If you rebalance every 6 months, do it every 12 months. Etc. Rebalancing while accumulating - in contrast to consuming - is supposed to control...
by YDNAL
Mon Sep 15, 2014 8:03 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: Share your Hot-Rod Portfolio

Too much emphasis on bets = casino gambling. :) The proposed portfolio owns only 2,100 different companies . Everything has diminishing returns, including diversification. :beer "Too much emphasis" = 1/4 (28.2%) of FTSE Global All Cap Index :beer ^ It's like the difference between holding...
by YDNAL
Mon Sep 15, 2014 7:38 am
 
Forum: Investing - Theory, News & General
Topic: Share your Hot-Rod Portfolio
Replies: 55
Views: 4143

Re: The dangerous practice of rebalancing...

Please forgive me for sounding (or being) simplistic. I've been accused of this before. After years of screwing around with my personal finances, I finally found peace a number of years ago as a Boglehead. Two things: 1. One of the overriding aspects of the BH philosophy is to set an allocation tha...
by YDNAL
Mon Sep 15, 2014 7:27 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: The dangerous practice of rebalancing...

If the stock market tanks 50% tomorrow and I rebalance into more stocks, how have I increased my risk? Seems to me I am taking the same risk as I was yesterday. The only way one can claim I am taking on more risk is if one believes they can see the future of the market. I can't. No, Strevlac, it is...
by YDNAL
Sun Sep 14, 2014 11:53 am
 
Forum: Investing - Theory, News & General
Topic: The dangerous practice of rebalancing...
Replies: 184
Views: 12403

Re: Time + Savings Rate > Asset Allocation

I think that the most important thing (and I have heard several others mention this) is how much you earn/save (living within your means and having a stable job), investing continuously throughout your career, and how early you start investing in your life towards retirement..... Absolutely! 1. Sav...
by YDNAL
Sun Sep 14, 2014 9:24 am
 
Forum: Investing - Theory, News & General
Topic: Time + Savings Rate > Asset Allocation
Replies: 17
Views: 1661

Re: Could you sleep with all your money in Berkshire Hathawa

Could you sleep with all your money in Berkshire Hathaway? A Boglehead, one who even remotely follows the Bogleheads® investment philosophy , will opt for diversification using Index funds. 1 Develop a workable plan 2 Invest early and often 3 Never bear too much or too little risk 4 Diversify 5 Nev...
by YDNAL
Sun Sep 14, 2014 8:58 am
 
Forum: Investing - Theory, News & General
Topic: Could you sleep with all your money in Berkshire Hathaway?
Replies: 49
Views: 3793
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