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by dhodson
Wed May 27, 2015 2:21 pm
Forum: Investing - Help with Personal Investments
Topic: I know you hate Whole Life Insurance
Replies: 24
Views: 2001

Re: I know you hate Whole Life Insurance

I think the recommendation of permanent insurance for special needs child is fine/ok since it may be a need for a permanent death benefit but one has to review. There is no magic in this world and people with special needs children may have substantial costs while they are alive and will result in t...
by dhodson
Wed May 27, 2015 10:19 am
Forum: Investing - Help with Personal Investments
Topic: I know you hate Whole Life Insurance
Replies: 24
Views: 2001

Re: I know you hate Whole Life Insurance

My FA admits it stinks as an investment but thinks its a good idea for estate planning. It seems unlikely to me that you will make sufficient gains in tax benefits to cover the costs of commission and decreased return compared to equities in a tax-advantaged account. Besides, why have the added wor...
by dhodson
Wed May 27, 2015 6:26 am
Forum: Investing - Help with Personal Investments
Topic: New Investor- how does Berkshire Hathaway fit in a Portfolio
Replies: 12
Views: 1708

Re: New Investor- how does Berkshire Hathaway fit in a Portfolio

Sents wrote:Any particular reason you keep REIT index in your taxable account? Those are usually tax-inefficient and best placed in tax-deferred accounts.


Id rather not have them at all then in taxable personally. They just don't seem necessary.
by dhodson
Wed May 27, 2015 6:21 am
Forum: Investing - Help with Personal Investments
Topic: I know you hate Whole Life Insurance
Replies: 24
Views: 2001

Re: I know you hate Whole Life Insurance

There is no hate here. It's just WL doesn't make sense mathematical. If you have questions, many of us would try to answer them. If you just want to purchase WL then go for it but don't expect anyone to believe it's a smart investment. I find it funny that you have no faith in the market but some ho...
by dhodson
Tue May 26, 2015 7:54 pm
Forum: Personal Finance (Not Investing)
Topic: Life insurance as college saving
Replies: 13
Views: 727

Re: Life insurance as college saving

Absolutely horrible idea. As others have mentioned, very likely if you have income then likely the assets you have that do count will make the attempt worthless on FASA and doesn't mean they wont ask about it in other required forms. Then besides the fact that it likely wont work and if did will lik...
by dhodson
Tue May 26, 2015 7:37 pm
Forum: Investing - Help with Personal Investments
Topic: Immediate annunities
Replies: 14
Views: 1222

Re: Immediate annunities

Remember that return with a SPIA include return of principal so it isn't a real 5-6% return.

With that said IF you need or want a guaranteed income stream then that is what you are purchasing and that can be a reasonable purchase.
by dhodson
Tue May 26, 2015 11:41 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

Hikes_With_Dogs wrote:
The Wizard wrote:Life insurance isn't necessary for everybody and especially not to retirement age...



He has a 5 year old!


May still not need insurance. Keep in mind his retirement savings for two (wife and him) may be sufficient. It just all depends. Having a 5 year old isn't the only factor.
by dhodson
Mon May 25, 2015 7:21 pm
Forum: Personal Finance (Not Investing)
Topic: 2 million dollar mistake meeting with MIL's financial guy
Replies: 37
Views: 10183

Re: 2 million dollar mistake meeting with MIL's financial guy

I agree with most of what's been written. One small nit to pick: My million of life insurance would cost $16.6k annually. The cash value of that would be about 350k guaranteed at age 66 with a 1 million death benefit. If I just invested the 16.6k annually at 6.5% it would be worth 950k. How sure ar...
by dhodson
Mon May 25, 2015 6:06 am
Forum: Personal Finance (Not Investing)
Topic: Do we need long-term care insurance?
Replies: 14
Views: 1509

Re: Do we need long-term care insurance?

There is no free ride by buying a combo product.

I haven't looked in a while but likely you can get both separately for cheaper and it's unlikely you want both.
by dhodson
Sun May 24, 2015 2:51 pm
Forum: Personal Finance (Not Investing)
Topic: Dispute a credit card payment or not
Replies: 22
Views: 1760

Re: Disput a credit card payment or not

Dell receipts/invoices do show them since I've done this several times. Now why it didn't show on yours is hard to say. If you don't see the gift card on your receipt during checkout then don't buy. Dell is a pain with these. I have had to call them before to get me be. Always print this at time of ...
by dhodson
Sun May 24, 2015 10:23 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

There is a thread on wade pfau article

Industry sponsored and not peer reviewed
by dhodson
Sat May 23, 2015 8:08 pm
Forum: Personal Consumer Issues
Topic: Electric Pressure Washer Recommendation
Replies: 13
Views: 853

Re: Electric Pressure Washer Recommendation

I'd still recommend gas. Just more powerful.
by dhodson
Fri May 22, 2015 5:50 pm
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

The cash value certainly will come out ahead with the mixture your outlined. The death benefit depends on when you die. Agents like to pretend its likely you will die prematurely when the insurance company rates you super preferred. While thats technically possibly, if it happened very often then of...
by dhodson
Fri May 22, 2015 8:11 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

The answer is neither. This is one of the situations where a permanent policy makes sense, simply because of his age, and because he has a young child to support. A whole life policy is a money pit for this use but his eligibility for term is likely to run out in the future. What comes to mind is a...
by dhodson
Fri May 22, 2015 7:05 am
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

The answer is neither. This is one of the situations where a permanent policy makes sense, simply because of his age, and because he has a young child to support. A whole life policy is a money pit for this use but his eligibility for term is likely to run out in the future. What comes to mind is a...
by dhodson
Thu May 21, 2015 7:08 pm
Forum: Personal Finance (Not Investing)
Topic: Whole life or term life?
Replies: 35
Views: 2847

Re: Whole life or term life?

With permanent insurance you are ALWAYS paying the insurance plus the investment piece. There is no special deal. They invest primarily in bonds but have huge fees/commissions which drag the return. The insurance piece is also more expensive (just check the term rates for the company selling the who...
by dhodson
Mon May 18, 2015 3:18 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3406

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

... Roughly 1/3 of people surrender very early on and get almost nothing back which greatly helps the insurance company. These contracts are front loaded to the extreme. Another 1/3 surrender before they even break even especially when you consider inflation. A small percentage keep it long enough ...
by dhodson
Sun May 17, 2015 7:45 pm
Forum: Investing - Help with Personal Investments
Topic: Surrender annuities and take penatly better than sitting it out?
Replies: 14
Views: 1014

Re: Surrender annuities and take penatly better than sitting it out?

The problem with that mentality is that it assumes you can guess when a correction has occurred. Market timing isnt as easy as it sounds. If it drops 10% and then you take out the money only for it to drop another 10%, you will be mad and find yourself 2nd guessing the timing of it and your actions ...
by dhodson
Sun May 17, 2015 10:20 am
Forum: Personal Consumer Issues
Topic: MDs--Academics or Private Practice?
Replies: 25
Views: 2262

Re: MDs--Academics or Private Practice?

im not sure i agree with the pros/cons exactly. It depends on your field and location.

for instance not all private practice opportunities involve partnership or allow you to be the boss. In my field, pretty much private also starts above academic in regards to pay.
by dhodson
Sun May 17, 2015 8:14 am
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3406

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Lapse rates for LTCi were actually lower than permanent insurance which is why they caused a problem. They had to pay out more benefits then they anticipated. One has to realize that these products have been around for over 100 years but they mostly lapse. Thats going to continue or as mentioned abo...
by dhodson
Sat May 16, 2015 9:26 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3406

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

That's less than 20% of people who purchase whole life.


If lapse rates decreased whole life returns would plummet.

Assuming the average non boglehead will pay those high fees but some how not be in the majority who lapse seems questionable at best.
by dhodson
Sat May 16, 2015 4:05 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3406

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

Nor does it consider the facts that over 80% of people who buy permanent life insurance surrender it. "Bond like" returns only occur/illustrated with that continuing.
by dhodson
Sat May 16, 2015 1:42 pm
Forum: Personal Finance (Not Investing)
Topic: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities
Replies: 41
Views: 3406

Re: Forbes article by Wade Pfau: Improving Retirement Outcomes with Investments, Life Insurance, and Income Annuities

is this the one where the assumptions include paying an advisor 0.75% and the average ER 0.84%?
Wasnt the work also sponsored by the insurance industry?

Maybe im being harsh but im not sure im going to spend much additional time on that...
by dhodson
Fri May 15, 2015 9:47 pm
Forum: Investing - Help with Personal Investments
Topic: Surrender annuities and take penatly better than sitting it out?
Replies: 14
Views: 1014

Re: Surrender annuities and take penatly better than sitting it out?

Obviously you arent in a good situation and i know what this is like. By the way, i do not in the insurance of finance fields, just another poster here on this site. If you can remove 10% without penalties then this seems like a no brainer. Doing that also buys you some time to think. While i person...
by dhodson
Wed May 13, 2015 11:03 pm
Forum: Personal Consumer Issues
Topic: Home Internet - Cat 5e or Cat 6
Replies: 49
Views: 3150

Re: Home Internet - Cat 5e or Cat 6

Id try to provide them the cat6 cable
by dhodson
Wed May 13, 2015 12:07 pm
Forum: Investing - Help with Personal Investments
Topic: Annuity with UBS!!!
Replies: 20
Views: 2016

Re: Annuity with UBS!!!

I sent an email today asking the following questions: 1. what "guarantees" is he referring to? 2. what are the fees? 3. is the annuity qualified or non qualified? 4. why did we put IRA money in an annuity? 5. what is the surrender schedule and exact walk away value in 2017? I received a v...
by dhodson
Tue May 12, 2015 12:14 pm
Forum: Personal Finance (Not Investing)
Topic: Whole Life Insurance 'Gift' from Parents
Replies: 60
Views: 4948

Re: Whole Life Insurance 'Gift' from Parents

All premiums paid forms your basis. Any gains over premiums paid will be taxed as income to you.

Use a site such as term4sale (there are others). This gives you an idea what you could qualify for. I'd be happy with any A rated company personally. I would not over pay for a higher level of A.
by dhodson
Mon May 11, 2015 8:31 pm
Forum: Investing - Help with Personal Investments
Topic: Annuity with UBS!!!
Replies: 20
Views: 2016

Re: Annuity with UBS!!!

I'm going to assume this money is not within a IRA (individual retirement account). I'd ask what the exact walk away value is for 2017. Sometimes the account value they are talking to you about isn't the true walk away value but a shadow account value that only applies if you either annuitize or act...
by dhodson
Sun May 10, 2015 7:35 pm
Forum: Personal Finance (Not Investing)
Topic: $25K Whole Life policy for daughter - $130/year - keep it?
Replies: 10
Views: 1209

Re: $25K Whole Life policy for daughter - $130/year - keep it?

Whole life insurance like this is a terrible deal, because it's drawn out in payments and only paid off when she's 98(!). It's not a rare deal - it's a raw deal. A policy paid up at age 98 is basically a lifetime $130 per year gamble on your daughter dying that year. It's only a good deal if we hav...
by dhodson
Sun May 10, 2015 5:21 pm
Forum: Personal Finance (Not Investing)
Topic: $25K Whole Life policy for daughter - $130/year - keep it?
Replies: 10
Views: 1209

Re: $25K Whole Life policy for daughter - $130/year - keep it?

if you want to evaluate it then what you do is request an inforce illustration from the company looking at both the guaranteed and illustrated columns. Likely it will perform in between there over time. These are horrible purchases. With that said, occasionally you can make some sense of keeping it ...
by dhodson
Sun May 10, 2015 8:04 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 2019

Re: Vanguard Variable Annuity

My apologies as I misspoke. The estate would not have had to pay any estate or income taxes but income taxes would need to be paid on the accumulated gains thereby reducing the net amount to the beneficiaries of the annuities. It is true that the value of the annuities would be included in the dece...
by dhodson
Sun May 10, 2015 8:01 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 2019

Re: Vanguard Variable Annuity

I bought my financially-illiterate and disinterested spouse one years ago, and neither know nor care how it compares with everything else as an investment. The point was to tax-shelter some cash years ago and mostly to diversify late-life financial assets. The plan has always been that if I disappe...
by dhodson
Sat May 09, 2015 9:08 pm
Forum: Personal Finance (Not Investing)
Topic: Vanguard Variable Annuity
Replies: 24
Views: 2019

Re: Vanguard Variable Annuity

mindboggling, You may want to consider this scenario if have no income need coming from the annuity and you want to pass it on to heirs. You could exchange it for a SPIA and use a portion of the income to pay the premium for life insurance. The other portion would be used to pay any income taxes ow...
by dhodson
Wed May 06, 2015 2:32 pm
Forum: Personal Consumer Issues
Topic: Viatical Settlement For Life Insurance Policy
Replies: 4
Views: 408

Re: Viatical Settlement For Life Insurance Policy

I don't have any personal experience doing this but did look into it very briefly for a policy I unfortunately purchased and I find it questionable. Its typically for cash value life insurance and what they do is offer the person slightly more than the cash surrender value. They typically are only i...
by dhodson
Wed May 06, 2015 9:44 am
Forum: Personal Finance (Not Investing)
Topic: Military SBP--Delicate Situation [also bad VUL]
Replies: 11
Views: 1112

Re: Military SBP--Delicate Situation [also bad VUL]

This is likely a situation where getting someone like James Hunt to evaluate the policy for I think he charges 100 buck would be a good idea. Keep in mind with any UL, the cost of insurance rises with age. The only way to make this work at all is to keep it in force until death. Taking loans has cos...
by dhodson
Sat May 02, 2015 10:24 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4224

Re: Annuities: Bad in principle or practice?

The state doesn't actually back these. The association tries to get other companies to make you whole up to the limits. This understates the protection, at least in Md. The state requires membership in the mutual assessment pool to write policys in the state. All companies are subject to pro rata a...
by dhodson
Sat May 02, 2015 1:21 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4224

Re: Annuities: Bad in principle or practice?

The state doesn't actually back these. The association tries to get other companies to make you whole up to the limits.
by dhodson
Sat May 02, 2015 7:14 am
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4224

Re: Annuities: Bad in principle or practice?

Both Even if you found a "good one", you are trading long term capital gains to income, no ability to tax loss harvest, increased costs even if not terrible, lack of liquidity, and no step up basis at death. apples and oranges. Annuities provide for consumption over a lifetime. your examp...
by dhodson
Fri May 01, 2015 11:20 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4224

Re: Annuities: Bad in principle or practice?

While true, u mentioned VAs and index ones. What I said remains. Additional riders are mentioned by some but they are costly for what they offer.
by dhodson
Fri May 01, 2015 11:13 pm
Forum: Investing - Theory, News & General
Topic: Annuities: Bad in principle or practice?
Replies: 75
Views: 4224

Re: Annuities: Bad in principle or practice?

Both

Even if you found a "good one", you are trading long term capital gains to income, no ability to tax loss harvest, increased costs even if not terrible, lack of liquidity, and no step up basis at death.
by dhodson
Wed Apr 29, 2015 8:44 am
Forum: Investing - Help with Personal Investments
Topic: Help with Wife's VUL
Replies: 3
Views: 437

Re: Help with Wife's VUL

The cost of insurance within a VUL rises over time so considering the performance so far and the apparent lack of need or desire for a permanent death benefit then after being sure I had all the term in place I wanted/needed, id surrender this thing. As mentioned above, if the surrender charges will...
by dhodson
Tue Apr 28, 2015 5:35 pm
Forum: Personal Finance (Not Investing)
Topic: Physician Own Occ Disability Insurance
Replies: 20
Views: 1464

Re: Physician Own Occ Disability Insurance

I think you made the right call about non can personally.
by dhodson
Tue Apr 28, 2015 5:32 pm
Forum: Personal Consumer Issues
Topic: Freshly roasted coffee beans
Replies: 29
Views: 1934

Re: Freshly roasted coffee beans

How about for espresso beans?
by dhodson
Tue Apr 28, 2015 5:18 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1834

Re: Which SPIA ?

That's over stating it. Wether or not the event will happen isn't completely random. Most people have a period of declining health. They have a decent idea that they might die at 75 or 76 and thus they start drawing more.
by dhodson
Tue Apr 28, 2015 3:01 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1834

Re: Which SPIA ?

SPIA Annuities is NOT an investment. You are buying an INSURANCE product. I like to consider them an income stream.... Yeah, it technically is insurance against living for a long time, but a SPIA is very different from most insurance that you buy. They are very simple... Give an insurance company a...
by dhodson
Tue Apr 28, 2015 12:56 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1834

Re: Which SPIA ?

I read that people who are in not so good health are grouped along with people in good health,( predictably collecting the money for a longer time), when the Annuity/Insurance companies calculate their payments, foreseeing their company benefits. Thus people who predictably have a shorter life span...
by dhodson
Tue Apr 28, 2015 12:54 pm
Forum: Personal Finance (Not Investing)
Topic: Physician Own Occ Disability Insurance
Replies: 20
Views: 1464

Re: Physician Own Occ Disability Insurance

Read the disability articles at whitecoatinvestor.com I'd be fine personally with any of the own occ companies. Typically fewer words is better but the truth is that you wont be able to find real data to confirm that one own occ is better than another. The real key is not to allow any of these agent...
by dhodson
Mon Apr 27, 2015 9:43 pm
Forum: Personal Finance (Not Investing)
Topic: Which SPIA ?
Replies: 20
Views: 1834

Re: Which SPIA ?

Genworth had a high comdex until recently. The ratings don't predict distant future that well. Keep in mind the association tries to tax other companies still in operation or transfer the policy to a solvent company up to the limits to make you whole. They do not use state or fed money to back the p...
by dhodson
Sun Apr 26, 2015 7:41 am
Forum: Personal Finance (Not Investing)
Topic: Help with VAL policy, UTMA accounts, and EE/E Savings Bonds
Replies: 10
Views: 880

Re: Help with VAL policy, UTMA accounts, and EE/E Savings Bo

For the life insurance policy, id request an in force illustration. Id also compare the current surrender value to basis. if close then id just surrender the thing assuming you dont want to keep it until death (looking at the illustration may provide some guidance on that). If you surrender and have...
by dhodson
Sat Apr 25, 2015 10:11 am
Forum: Investing - Help with Personal Investments
Topic: LTC premiums vs. Self-Insure resources
Replies: 3
Views: 423

Re: LTC premiums vs. Self-Insure resources

additionally long term care insurance doesnt guarantee the premium so you would also have to guess when and by how much premiums will rise. There are very few limited pay polices at this time.

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