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Re: DC Bogleheads next meeting is this Sunday the 22nd

SGM wrote:Was the above referenced paper presented at the 2014 social security sponsored retirement research conference in DC? I remember a discussion of framing.
I too think I sat thru a presentation of this paper, but I think it was 2012 or 2013.

BobK
by bobcat2
Sun Mar 22, 2015 8:30 am
 
Forum: Local Chapters and Bogleheads Community
Topic: DC Bogleheads next meeting is this Sunday the 22nd
Replies: 4
Views: 569

Social Security Claiming & Financial Planning

Here are links to some of the materials that will be covered at Sunday’s meeting. To get the most out of the discussion on Sunday I suggest perusing the first two articles before the meeting and perhaps bringing them with you either in hard copy or electronically. Efficient Retirement Design Combini...
by bobcat2
Fri Mar 20, 2015 4:26 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: DC Bogleheads next meeting is this Sunday the 22nd
Replies: 4
Views: 569

DC Bogleheads next meeting is this Sunday the 22nd

The next meeting of the Washington area Bogleheads is scheduled for this Sunday, March 22, 3-5 PM at the Ballston library. There should be plenty of time for general investment topics as well as a discussion of how to mesh Social Security claiming strategies with portfolio investments and withdrawal...
by bobcat2
Thu Mar 19, 2015 7:01 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: DC Bogleheads next meeting is this Sunday the 22nd
Replies: 4
Views: 569

Re: Kotlikoff: When Should you Take Social Security?

I admit I haven't read Kotlikoff's book yet, so I appreciate BobK's pasting in those remarkable stats about how few people postpone til age 70. It's really hard to believe. As pointed out above, the issue of delaying SS to 70 is tangled up with the issue of how to get by financially until that inco...
by bobcat2
Tue Mar 17, 2015 9:10 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

They see SS as a gamble between themselves and Uncle Sam and they don't want to lose that bet. In this last case framing the issue thru break-even analysis leads people to claim early, so they don't lose the bet. See the following research paper, Framing Effects and Expected Social Security Claimin...
by bobcat2
Mon Mar 16, 2015 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

I would guess that a fair number of those who currently delay until age 70 are still working and paying into the system for both Social Security and Medicare (improving the viability of those programs for everyone.) Since 1% of males and 2% of females delay until age 70 there isn't any 'fair number...
by bobcat2
Mon Mar 16, 2015 8:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Hi Christine_NM, What makes the book funny is 50 pages later Larry goes out to dinner with his friend and fellow economist, Glenn Loury. You know what's going to happen, but here there is a free meal and $120,000 involved. We're starting to talk real money. :happy Glenn is an interesting guy. At his...
by bobcat2
Mon Mar 16, 2015 7:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Here's part of a table from Get What's Yours . This is a table showing at what age men claimed SS in 2012. The top row is age of claimant The second row is % of claimants at each age 62 63 64 65 66 DI* 67-69 70 38 6 7 12 18 16 2 1 *DI - Disability payments are automatically converted to retirement p...
by bobcat2
Mon Mar 16, 2015 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

TomatoTomahto wrote:
dodecahedron wrote:ESPlanner software is apparently a labor of love, according to Larry.

As someone who developed software for 30+ years, I can see it -- ESPlanner is quite an achievement. If I had been involved, I'd be very proud.

:thumbsup :thumbsup

BobK
by bobcat2
Mon Mar 16, 2015 6:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

I see Get What's Yours is currently also the best selling book at Barnes & Noble. I would never have thought that a book on SS claiming strategies would be the #1 selling book in America for at least a period of several days. :shock: Amazing :!: This must be many viewers of the PBS Newshour buyi...
by bobcat2
Mon Mar 16, 2015 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Hi L, This morning I took my wife to the hospital for her chemotherapy and we started a conversation with a woman being infused in the next chair. The conversation turned to the book I was reading and I said that it was a fairly humorous read for such a dry topic. Here, read the first couple of page...
by bobcat2
Mon Mar 16, 2015 2:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

This book has really hit a chord with America. Currently at Amazon Get What's Yours is the overall #1 selling book, not just the #1 selling book in finance and economics. Amazing :!: :o

Congrats to the authors. :sharebeer

BobK
by bobcat2
Sun Mar 15, 2015 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Next meeting is on the 22nd, NOT the 15th

I have just approved a new member at DC Bogleheads. The reason the person gave for wanting to join now is to attend tomorrow's meeting. :shock: :oops: So once again the local moderators are sending a reminder. This month we are NOT meeting on the third Sunday, March 15. Instead we are meeting the fo...
by bobcat2
Sat Mar 14, 2015 5:02 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 31
Views: 4395

Re: Kotlikoff: When Should you Take Social Security?

Hi Miriam, Present value (PV) is pretty simple. It's what something is worth if I bought it today. This is easy if it's a lump sum today. A portfolio of stocks and bonds worth $300,000 today has a present value of $300,000. That's not difficult is it? :) But what instead of a lump sum today I have a...
by bobcat2
Fri Mar 13, 2015 9:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

In the current low real interest rate environment the gains from delaying SS benefits from age 62 to age 70 range from large to huge. At the low end are single males of below average health and earnings. In that case the NPV gain of delay is in the neighborhood of $50,000 (Shoven et al). At the high...
by bobcat2
Fri Mar 13, 2015 6:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

I agree that a break-even analysis with a zero discount rate doesn't make sense. And I agree that a break-even analysis with a super-high discount rate doesn't make sense. I would add though, that the same is true for NPV analyses. The difference is there is no incentive to do this when using NPV. ...
by bobcat2
Fri Mar 13, 2015 6:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Any NPV calculation done in the last 5 years will show that everyone, except the terminally ill and near terminally ill at these low real interest rates, should delay until age 70. If break-even also always shows that everyone but the gravely ill over the last 5 years should delay until age 70, then...
by bobcat2
Fri Mar 13, 2015 2:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Hi Mike, I know of no insurance that passes break-even analysis. I think break-even analysis is very weak gruel. OTOH NPV makes a lot of sense, is easy to do, and is rarely done. :oops: BobK I agree with the bolded part -- and that's why, in most cases, people should only buy insurance that they ne...
by bobcat2
Fri Mar 13, 2015 9:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Hi Mike,
I know of no insurance that passes break-even analysis. I think break-even analysis is very weak gruel. OTOH NPV makes a lot of sense, is easy to do, and is rarely done. :oops:

BobK
by bobcat2
Fri Mar 13, 2015 9:18 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

This thread is about Laurence Kotlikoff's new book and how to understand and optimize your choices for your circumstances under the current rules for Social Security. On pages 16-17 of his book, Kotlikoff writes about the claiming decision as a "break-even" calculation and gives the follo...
by bobcat2
Fri Mar 13, 2015 9:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Kotlikoff: When Should you Take Social Security?

Here is a link to an interesting discussion with Larry Kotlikoff, Alicia Munnell, and Stephen Goss (chief actuary at Social Security) about aggressive Social Security claiming strategies. Both Kotlikoff and Munnell seem to be in interesting situations vis-a-vis this subject. :wink: Link to discussio...
by bobcat2
Fri Mar 13, 2015 8:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Next meeting is on the 22nd, not the 15th

The next meeting of the Washington area Bogleheads is scheduled for Sunday, March 22, 3-5PM at the Ballston library. There will not be a meeting this coming Sunday, March 15. The day after our last meeting I scheduled the March meeting. We generally meet on the third Sunday of every other month, whi...
by bobcat2
Mon Mar 09, 2015 10:28 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 31
Views: 4395

Re: Kotlikoff: When Should you Take Social Security?

It's times like this I really miss sscritic. I'm sure that if he were to read the book and was still posting here, I would get a PM from an exasperated sscritic about how they screwed up some of the Social Security rules in the book. :) Come back sscritic :!: Why do I feel like I am channeling Shane...
by bobcat2
Mon Mar 09, 2015 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Boglehead degree status

Bachelors: Understands BH basics. Masters: Understands & contributes to topics such as bond maturity merits/pitfalls etc. Ability to converse well on the merits of Fama-French models among others & provide charts & analysis that goes along with those discussions. Doctorate: Understands ...
by bobcat2
Sun Mar 08, 2015 12:53 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Boglehead degree status
Replies: 52
Views: 4833

A Primer on Risk

Here's an old post that discusses the basics of financial risk.

Link to post - Risk - A Primer

BobK
by bobcat2
Sun Mar 01, 2015 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3372

Re: TIPS Yield Crash November 2008 - Why?

From Greg Mankiw's blog on 12/3/2008. According to U.S. Treasury data, the five-year real interest rate from the TIPS market on 11/28/08 was 4.17 percent. Yesterday, it was 2.03 percent. That is a huge change over only a few days. What happened? It appears to be, in large measure, a figment of data ...
by bobcat2
Thu Feb 26, 2015 5:15 pm
 
Forum: Investing - Theory, News & General
Topic: TIPS Yield Crash November 2008 - Why?
Replies: 18
Views: 1467

Re: Kotlikoff: When Should you Take Social Security?

I see that Get What's Yours is currently the #1 Best Seller in Business & Money at Amazon and the hard copy edition is out of stock, which figures if it is the #1 seller. :)

BobK
by bobcat2
Wed Feb 25, 2015 2:44 am
 
Forum: Personal Finance (Not Investing)
Topic: Kotlikoff: When Should you Take Social Security?
Replies: 220
Views: 19551

Re: Risk vs Uncertainty

pkcrafter wrote. I believe the distinctions in definitions (of risk & uncertainty) is still worth knowing. HI Paul, I also believe the meaning of the word risk is important. Here is the meaning of the word risk from several dictionaries and an encyclopedia. The possibility of loss or injury - Me...
by bobcat2
Thu Feb 12, 2015 8:25 pm
 
Forum: Investing - Theory, News & General
Topic: Risk vs Uncertainty
Replies: 19
Views: 1426

Re: Risk vs Uncertainty

Hi pkcrafter, You are referring to the definitions of risk and uncertainty that Frank Knight promulgated in his 1921 book, Risk, Uncertainty, and Profit. Knight distinguished uncertainty from risk. He died over 40 years ago. You are referring to the book that he wrote about a 100 years that was dela...
by bobcat2
Thu Feb 12, 2015 1:08 pm
 
Forum: Investing - Theory, News & General
Topic: Risk vs Uncertainty
Replies: 19
Views: 1426

Re: Is Risk Real?

A risky situation is one where the outcome is not certain. Risk management is making choices under conditions of uncertainty. There is no risk to be managed if the outcomes are certain. If there were no uncertainty, then there would be no risk and the field of finance would be essentially reduced to...
by bobcat2
Tue Feb 10, 2015 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: Is Risk Real?
Replies: 74
Views: 3871

Re: Master thread for Washington DC Area Bogleheads

The Alexandria public library has meeting rooms available to patrons and their organizations for meetings of an educational, cultural or civic nature. However, to reserve the meeting rooms you must be " a library cardholder in good standing (no fines or fees on your account) who lives in, or o...
by bobcat2
Thu Feb 05, 2015 1:50 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 31
Views: 4395

Re: "how to measure risk?"

When has the global equity market gone down and stayed down? The answer is never. It can't happen if society is to continue as most of the world is capitalistic, i.e. those who provide the capital are the ones who profit. Myth meet reality. From the point of view of a US investor, who is invested i...
by bobcat2
Thu Feb 05, 2015 11:34 am
 
Forum: Investing - Theory, News & General
Topic: "how to measure risk?"
Replies: 35
Views: 1867

Re: "how to measure risk?"

How to measure portfolio risk. Portfolio risk (uncertainty) is typically measured by annual standard deviation (SD). This measure of risk is often called volatility. Its value is usually found either by taking the standard deviation (SD) of annual returns or annualizing the SD of monthly returns. S...
by bobcat2
Wed Feb 04, 2015 11:50 am
 
Forum: Investing - Theory, News & General
Topic: "how to measure risk?"
Replies: 35
Views: 1867

Re: What's wrong with volatility if buy&hold

Hi nedsaid, My post where I had the VIX at 30% on a particular day was purely a hypothetical example of a day when the VIX is high. Such a day would be 50% above the average amount of volatility in the stock market. In reality, I don’t believe there has been a single day in the last three years when...
by bobcat2
Thu Jan 29, 2015 3:54 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

Hi Beliavsky, Bobcat, I'm pleased to see another GARCH advocate on the board -- I have discussed GARCH models too. I began using ARCH models in early 1986. That year I met with Rob Engle and others including Clive Granger and Mark Watson at I believe three workshops on new time series modeling techn...
by bobcat2
Thu Jan 29, 2015 1:42 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

nedsaid wrote. But isn't this stating the obvious? We know the markets are nervous. There are pretty big world events going on now. The Greek election and nervousness about the Euro. The Charlie Hebdo attacks in Paris. Instability in the Middle East. A whiff of deflation in Europe. All this after a ...
by bobcat2
Thu Jan 29, 2015 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

nedsaid writes. Where I disagree is that the time to "panic" is when the market is nearing new highs. I don't get the logic of selling after the market has already fallen 15%. Is the VIX indicator that infallible? My take is that an investor should Where I disagree is that the time to &quo...
by bobcat2
Wed Jan 28, 2015 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

There are those who rebalance when stocks have fallen and the percentage of stocks in the portfolio is some percentage below their target equity percentage. Buy on the dip. This is a market strategy that doubles down on risk when markets are declining and typically market risk measures are high. Wha...
by bobcat2
Mon Jan 26, 2015 9:40 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

Here's a clip of Rob Engle discussing market volatility last October with Fox News. Engle's real time assessment of the slight hiccup in volatility in October looks quite sound in retrospect today. http://video.foxbusiness.com/v/3849629094001/nobel-prize-winner-in-volatility-most-worried-about-euro-...
by bobcat2
Mon Jan 26, 2015 9:24 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

First, bobcat2, the big question. In your opinion, are we in a volatility cluster now? Should we be cutting back on stock allocation now? How does an ordinary guy know? First of all, I wouldn't consider cutting back until the market has dropped at least 15% and the market certainly has not done tha...
by bobcat2
Mon Jan 26, 2015 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

nedsaid wrote. It seems to me that market volatility can turn on a dime, it just seems too short term to base an asset allocation decision on. Market volatility usually doesn't change on a dime. That's why it's called "volatility clustering." Unusually large market moves in either directio...
by bobcat2
Mon Jan 26, 2015 7:32 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

In any case, this is when Lo gave that interview. The chart is the VIX index, which is supposed to be a measure of "volatility." Source http://s5.postimg.org/g8xa0wrw7/lo_and_vix.jpg By the way, "Most of us didn't sign up for the kind of volatility we're seeing right now?" What ...
by bobcat2
Mon Jan 26, 2015 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

A Lo strategy for an individual investor would look something like this. If the market falls at least 15% and the VIX is high (say 28 or more) sell some percent of your equity holdings (perhaps 10% or 15%). If the market continues to drop and has fallen say more than 25% and the VIX remains high, or...
by bobcat2
Mon Jan 26, 2015 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Re: What's wrong with volatility if buy&hold

Bobcat2 in this forum introduced me to the concept of volatility clustering . I liked the comment "I understand volatility clustering, but I don't see where you tell me what I'm supposed to do about it. Can I time the market with it?" As I read on in that thread I am not at all sure I lik...
by bobcat2
Mon Jan 26, 2015 1:07 pm
 
Forum: Investing - Theory, News & General
Topic: What's wrong with volatility if buy&hold
Replies: 52
Views: 3531

Meeting today at 3PM

Time, directions, parking, etc. for today's meeting (1/18/2015). We meet in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. The library is between the Virginia Square and Ballston stations on the Metro Orange/Silver Lines. From Virginia...
by bobcat2
Sun Jan 18, 2015 11:41 am
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 31
Views: 4395

Re: Master thread for Washington DC Area Bogleheads

Hi Victoria, I have scheduled the meeting room at the Ballston library for Sunday January 18 from 3-5:30 PM. I usually send out announcements on the preceding Tuesday and Friday. I don't know if something was inadvertently triggered from the past by Yahoo Groups, which sometimes seems to have a mind...
by bobcat2
Mon Jan 12, 2015 2:24 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 31
Views: 4395

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

For there to be sustained deflation in an economy the price of the biggest item in that economy will almost certainly be falling. That item is wages. Either nominal wages on average will be falling, or unemployment will be growing rapidly, or some of both.

BobK
by bobcat2
Mon Jan 12, 2015 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6373

Re: What Movie Have You Recently Watched?

Selma Best movie I've seen this year, and I've seen quite a few since early September. If Selma doesn't move you, you have a hard heart. I would imagine the only movie I haven't seen this year that I might think is better would be Boyhood. I have a friend Paul who is a true movie fanatic. Every year...
by bobcat2
Fri Dec 26, 2014 10:10 pm
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 654
Views: 85357

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

I can certainly understand why it's not possible to have perfectly level real income during retirement, but I don't see why it would be undesirable. I always thought the ultimate retirement income situation would be a sufficient level of Social Security benefits, an inflation indexed private pensio...
by bobcat2
Fri Dec 12, 2014 9:47 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2382

Re: Comparing Results from VPW, RMD, & 4% Rule Withdrawals

In retirement you want to minimize, as much as you reasonably can, year to year unplanned fluctuations in income. Obviously, people aren't going to have perfectly level real income during retirement. That is neither possible nor desirable. You also want to avoid large planned fluctuations in income ...
by bobcat2
Fri Dec 12, 2014 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Comparing Results from VPW, RMD, & 4% Rule Withdrawals
Replies: 40
Views: 2382
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