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Re: Backpedaling: Rising Equity Allocation During Retiremen

Well, if Pfau and Kitches have backpedaled, it's not by much. Here's what they say in their March, 2015 JFP article: •When retirements begin in overvalued market environments (which reflected the situation for new retirees in 2015), an accelerated rising equity glide path shows potential to provide...
by ourbrooks
Thu Mar 05, 2015 9:06 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 33
Views: 2559

Re: Backpedaling: Rising Equity Allocation During Retiremen

Well, if Pfau and Kitches have backpedaled, it's not by much. Here's what they say in their March, 2015 JFP article: •When retirements begin in overvalued market environments (which reflected the situation for new retirees in 2015), an accelerated rising equity glide path shows potential to provide ...
by ourbrooks
Thu Mar 05, 2015 5:07 pm
 
Forum: Investing - Theory, News & General
Topic: Backpedaling: Rising Equity Allocation During Retirement
Replies: 33
Views: 2559

Re: Help for a relative

If she doesn't care about a bequest, then the best option might be to use the IRA money to purchase an inflation adjusted Single Premium Immediate Annuity. The payments will last as long as she does, no matter how long she lives. If the purchase is done from within the IRA, the taxes will be due on ...
by ourbrooks
Sun Mar 01, 2015 7:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help for a relative
Replies: 4
Views: 473

Re: Oil ETF?

Well, if you want to take on more risk, why just do it with wimpy things like sector ETFs? If you're really serious about investing in oil, why not buy into a joint venture drilling an oil well? If the well is successful, for your one time investment, you own a share in all of the oil that comes out...
by ourbrooks
Fri Feb 27, 2015 9:16 pm
 
Forum: Investing - Theory, News & General
Topic: Oil ETF?
Replies: 9
Views: 762

Re: Oil ETF?

Search for the other threads which have discussed OIL; in the past, it has not tracked the price of oil very well. Why do you think OIL or any other energy related ETF is a good investment now? Everyone can read the same web sites you read. If a lot of people thought energy stocks were a good long t...
by ourbrooks
Fri Feb 27, 2015 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Oil ETF?
Replies: 9
Views: 762

Re: Immediate Pension Benefit Offering

I'm surprised that none of the actuaries who read this forum have piped up yet, but assuming a single age for an annuity can substantially undervalue an annuity; death rates are not evenly distributed around the median. The correct approach is to weight each payment by the probability of receiving i...
by ourbrooks
Fri Feb 27, 2015 4:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Immediate Pension Benefit Offering
Replies: 8
Views: 1062

Re: Safe Withdrawal Rate as it relates to Size of Portfolio

Just to preempt any confusion: The 4% rule comes from a study that showed if one withdrew 4% of his portfolio in his first year of retirement, then continued to withdraw this dollar amount adjusted for inflation in subsequent years, he would not outlive his money in 95% of 30-year historical scenar...
by ourbrooks
Thu Feb 26, 2015 4:37 pm
 
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate as it relates to Size of Portfolio
Replies: 25
Views: 2606

Re: Ideas of where to relocate

Larado, Uvalde or San Angelo, Texas. They're all "near" Big Bend National Park, using the Texas definition of "near."
by ourbrooks
Thu Feb 26, 2015 4:33 pm
 
Forum: Personal Consumer Issues
Topic: Ideas of where to relocate
Replies: 32
Views: 2482

Re: Is there a way to provide for inflation ?

You can certainly withdraw from an investment account each year to compensate for the effects of inflation, keeping in mind that every year you will be withdrawing more money. A better scheme is periodically, say, every five years, buy another SPIA whose payments would make up for the loss in purcha...
by ourbrooks
Wed Feb 25, 2015 7:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is there a way to provide for inflation ?
Replies: 22
Views: 1680

Re: Questions about portfolio and TIAA-CREF, old and new

One thing to be aware of: When you deposit any money into TIAA traditional, you can only get out it as some type of annuity. You cannot roll it over to an IRA or to a Vanguard 401(k), or even to other CREF funds. Ralph Hi Ralph, Thanks for your reply. I am aware of this, and my thoughts were: If I'...
by ourbrooks
Wed Feb 25, 2015 6:07 pm
 
Forum: Investing - Help with Personal Investments
Topic: Questions about portfolio and TIAA-CREF, old and new
Replies: 13
Views: 940

Re: Arguments for and against FSBO for house?

In most states, the seller pays the commissions of both the seller's agent and the buyer's. That's why they claim a buyer's agent is "free" for the buyer. Nowadays, commissions are negotiable. That being said, most people end up paying the full 3% commission to the buyer's agent. You want ...
by ourbrooks
Tue Feb 24, 2015 7:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: Arguments for and against FSBO for house?
Replies: 14
Views: 1194

Re: What to do with Aunt's house

Depression can have other causes than senile dementia. If her depression can be treated, she may be perfectly capable of living in her home with minimum and affordable support. Do check that she's being treated by a psychiatrist or geriatrician who is knowledgeable about psychiatric medications in t...
by ourbrooks
Sat Feb 21, 2015 5:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: What to do with Aunt's house
Replies: 26
Views: 1462

Re: Going to Austin, TX in March. What should we be doing?

Torchy's Tacos. Gingerbread pancakes at Magnolia's. Tour the Capitol. Eat at Chuy's. Visit Mt. Bonnell. If you're there during SXSW however ... abandon all hope and instead explore the hill country. If you have time take a daytrip to Shiner (brewery tour) then Lockhart (Black's). I'm honestly not o...
by ourbrooks
Sat Feb 21, 2015 4:42 pm
 
Forum: Personal Consumer Issues
Topic: Going to Austin, TX in March. What should we be doing?
Replies: 24
Views: 1371

Re: Factoring lump-sum pension into AA

You should only figure into your asset allocation assets that you actually have on hand.
Wait until August, 2045 until you receive the cash; then use it to buy stocks/bonds in proportion to your desired asset allocation.
by ourbrooks
Fri Feb 20, 2015 5:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Factoring lump-sum pension into AA
Replies: 3
Views: 253

Re: What to do with Aunt's house

I don't understand your aunt's physical situation. Could she get out of bed, walk, do some chores if she had physical therapy? Is she afraid that if she gets out of bed she'll fall? I don't understand her physical situation either. I think if she had some therapy she could do more things but she is...
by ourbrooks
Fri Feb 20, 2015 5:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: What to do with Aunt's house
Replies: 26
Views: 1462

Re: Projecting “Increasing Withdrawal Rates” and not SWR

1. Consider some scenarios which replace bonds with SPIAs. Wade Pfau argues that in low interest rate environments, this will yield better results. 2. What about irregular large expenses, such as new cars or new roofs? A common way to model these is as annual "savings." The problem is that...
by ourbrooks
Mon Feb 16, 2015 7:43 pm
 
Forum: Investing - Theory, News & General
Topic: Projecting “Increasing Withdrawal Rates” and not SWR
Replies: 35
Views: 2545

Re: Pfau: Four Risks of Retirement Income

In an earlier paper, Wade Pfau did consider inflation adjusted SPIAs. Interestingly, they weren't superior to fixed payment SPIAs. How could that be? Well, the role of SPIAs in a stock/SPIA approach is to use the SPIA income for expenses early on, while the equity portion grows. It doesn't really ma...
by ourbrooks
Mon Feb 16, 2015 6:13 pm
 
Forum: Investing - Theory, News & General
Topic: Pfau: Four Risks of Retirement Income
Replies: 31
Views: 4337

Re: finding a buyer for private equity - avoiding commission

I'm sure someone is out there, but I don't really know how to go about finding them (perhaps make a website where people can contact me, or post an ad?) guess my question is, how can I do this? It seems tricky to find people who are interested in this company. I also don't want to attract too much ...
by ourbrooks
Sat Feb 14, 2015 1:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: finding a buyer for private equity - avoiding commissions
Replies: 21
Views: 1322

Re: Projecting “Increasing Withdrawal Rates” and not SWR

I think it's perfectly okay to do a detailed plan, down to the monthly level in retirement. Then, do a couple more detailed plans, with different assumptions. This will let you spot at least the major factors regarding your financial situation. In the OP's case, the detailed planning has worked perf...
by ourbrooks
Sat Feb 14, 2015 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: Projecting “Increasing Withdrawal Rates” and not SWR
Replies: 35
Views: 2545

Re: talk me out of it - investing in oil

I absolutely agree that net crude imports, even excluding Canada, are more than the maximum draw rate of the SPR. My point is, that the SPR was never intended to cope with a complete or, even a substantial, block of imports. It was intended to cope with drops of the size produced during the Arab oil...
by ourbrooks
Fri Feb 13, 2015 8:01 pm
 
Forum: Investing - Theory, News & General
Topic: talk me out of it - investing in oil
Replies: 50
Views: 4740

Re: Hypothetical chance of bond or stock index going to zero

Well, suppose the current trend for companies to go private continues, to the point where only new companies issue publically traded stock and S&P quits issuing the index. Private companies might still want to issue bonds, though. This is not such a far fetched scenario; in 1998 the Wilshire 500...
by ourbrooks
Fri Feb 13, 2015 7:09 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical chance of bond or stock index going to zero
Replies: 8
Views: 780

Re: talk me out of it - investing in oil

The policy makers are still correct and we still need a strategic petroleum reserve. The U.S. now produces about 9 million barrels per day, the largest of any country. The U.S. now consumes about 19 million barrels per day, also the largest of any country. Energy self sufficiency? No where close. It...
by ourbrooks
Fri Feb 13, 2015 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: talk me out of it - investing in oil
Replies: 50
Views: 4740

Re: Before building your house, what should you haven known/

Make friends with a builder and follow her/him around a day a week for long enough to see at least one job from start to finish. They're more likely to agree if (a) you promise to always buy lunch (b) say that you need more exercise and offer to lift and carry things and (c) tell them (truthfully in...
by ourbrooks
Fri Feb 13, 2015 5:26 pm
 
Forum: Personal Consumer Issues
Topic: Before building your house, what should you haven known/read
Replies: 14
Views: 1202

Re: Social Security as a bond?

Well, the Social Security retirement benefit is really two inflation adjusted annuities. One annuity is the spousal benefit; it pays as long as the primary beneficiary is alive, so, even though it's paid to the spouse, to determine its value, you need to use the life expectancy of the primary benefi...
by ourbrooks
Thu Feb 12, 2015 6:28 pm
 
Forum: Investing - Theory, News & General
Topic: Social Security as a bond?
Replies: 47
Views: 3178

Re: When 60/40 just isn't appropriate

I, of course, am using a 0/0 portfolio for my core expenses. No stocks, no bonds. I can't tell my health insurer that I'm not making my full payment this year because interest rates rose and my bonds dropped. It's LMP for me! For my discretionary expenses, I'm using "age in stocks" and exp...
by ourbrooks
Mon Feb 09, 2015 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13124

Re: Worth Upgrading to LED Lighting?

Here's a variant on texasdiver's approach: The incandescent BR30 bulbs we replaced had a 2,000 hour average lifetime and they were relatively new. The incandescent uses 65 watts; over its life time it'll use 130 kwh@12.56/kwh = $16.33 The LEDs we replaced them with use 8.5 watts; over the same 2,000...
by ourbrooks
Sun Feb 08, 2015 5:48 pm
 
Forum: Personal Consumer Issues
Topic: Worth Upgrading to LED Lighting?
Replies: 45
Views: 3510

Re: In retirement: S&P500 versus Total Stock Market

Trying to live off of the dividends is not as good a strategy as it used to be, because many companies now do share buybacks instead of dividends. If you want to continue to focus on dividends, the Vanguard High Dividend Yield Index Fund might be worth looking at. It has almost 400 stocks, so it's n...
by ourbrooks
Sat Feb 07, 2015 1:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: In retirement: S&P500 versus Total Stock Market
Replies: 2
Views: 884

Re: Asymmetric Rebalancing in Withdrawal Phase

Actually, there's a study by Wade Pfau in which he looks at market timing based on whether or not the CAPE is above it's long term average. His result was that it works and delivers about 1% more per year than buy and hold. Only one problem, it's unlikely that any retiree would actually use it, beca...
by ourbrooks
Sat Feb 07, 2015 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: Asymmetric Rebalancing in Withdrawal Phase
Replies: 27
Views: 1850

Re: Best laptop under $1000

What probably matters more than screen size is screen resolution; you can get a 15" with 1368X768 resolution or 1920x1080. You'll be able to fit much more text on the screen with the later than the former; alternately, text which is the same size will appear sharper and easier to read on the hi...
by ourbrooks
Sat Feb 07, 2015 11:49 am
 
Forum: Personal Consumer Issues
Topic: Best laptop under $1000
Replies: 26
Views: 2257

Re: Attic Insulation: benefit of only adding to part?

You might want to consider foam insulation for the sloping part. Per inch, the R value is double that of fiber insulation, but, as important, it seals off air movement. It's also two or three times as expensive as fiber insulation but it might be worth it for the draft reduction if not for the actua...
by ourbrooks
Fri Feb 06, 2015 8:55 pm
 
Forum: Personal Consumer Issues
Topic: Attic Insulation: benefit of only adding to part?
Replies: 10
Views: 1099

Re: Foreign to energy

Oh, one more thing: You can't "sell Foreign and buy energy." The largest Foreign stocks ARE energy stocks, companies like BP and Shell and Gazprom and PetroChina. Of the 10 largest publicly traded energy companies, only two, Exxon and Chevron are U.S. based. In fact, it's the drop in the s...
by ourbrooks
Fri Feb 06, 2015 8:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Foreign to energy
Replies: 10
Views: 728

Re: Foreign to energy

No, you should have energy anyways, and you shouldn't be worrying about it, especially if it is 1.25% of your portfolio. Besides there is energy in VXUS and VTI and so forth... http://finance.yahoo.com/q/hl?s=VXUS+Holdings Yep, energy in the top 10 holdings, you're covered! :sharebeer In fact, if e...
by ourbrooks
Fri Feb 06, 2015 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Foreign to energy
Replies: 10
Views: 728

Re: How much is a safe car worth?

To go back to the original topic of the thread, here are the used cars recommended by the IIHS: http://www.iihs.org/iihs/news/desktopnews/iihs-issues-recommendations-on-used-vehicles-for-teens-after-research-finds-many-arent-driving-the-safest-ones Certainly, it would be better to buy one of the car...
by ourbrooks
Sun Feb 01, 2015 7:56 pm
 
Forum: Personal Consumer Issues
Topic: How much is a safe car worth?
Replies: 170
Views: 9026

Re: How much is a safe car worth?

What you could do to increase your safety by a bigger amount than any car decision is to let your wife drive, or, better still, let her mother or your mother drive. Men 21-25 have three times the fatality rate as women the same age and women 21-25 have twice the fatality rate of women 61-65! Here's ...
by ourbrooks
Sat Jan 31, 2015 10:15 pm
 
Forum: Personal Consumer Issues
Topic: How much is a safe car worth?
Replies: 170
Views: 9026

Re: question about investing in oil, USO

Rather than USO, a better bet would be investing in a Master Limited Partnership (MLP) or royalty trust that's engaged in producing oil or gas. When the price of oil goes up, the amount of money these companies receive more money for the oil and gas they pump out of the ground. Be careful which one ...
by ourbrooks
Sat Jan 31, 2015 8:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: question about investing in oil, USO
Replies: 15
Views: 1101

Re: Vehicles are (apparently) MUCH safer in last few years

Or not. Of the 19 vehicles, 13 were classified as mid sized. Of the worst cars, two were classified as very large and two were classified as large. Sounds like the extremes are bad, too big and too small. Those 13 vehicles were mid-sized in their class. Even a mid-sized SUV will be heavier than all...
by ourbrooks
Fri Jan 30, 2015 10:45 am
 
Forum: Personal Consumer Issues
Topic: Vehicles are (apparently) MUCH safer in last few years
Replies: 54
Views: 4268

Re: Vehicles are (apparently) MUCH safer in last few years

I saw two take-aways. 1. Size matters. Of the 19 safest vehicles in the study, 14 were SUVs, 1 was a mini-van, and 1 car was classified as very large. 2. You don't have to buy a luxury vehicle to get safety features. The Subaru Legacy was safer than a BMW, Mercedes, or Lexus 4-door car. Or not. Of ...
by ourbrooks
Thu Jan 29, 2015 7:50 pm
 
Forum: Personal Consumer Issues
Topic: Vehicles are (apparently) MUCH safer in last few years
Replies: 54
Views: 4268

Re: Vehicles are (apparently) MUCH safer in last few years

I had examined the previous 2011 IIHS report in great detail by downloading the raw data, and performing my own analysis. I did this because there were some glaring inconsistencies within the 2011 report itself, and between the 2011 and 2007 reports. Basically the model to model comparisons were ut...
by ourbrooks
Thu Jan 29, 2015 7:31 pm
 
Forum: Personal Consumer Issues
Topic: Vehicles are (apparently) MUCH safer in last few years
Replies: 54
Views: 4268

Re: Need Income-Wellesley & Wellington or just Wellesley

One of the things you might not know about the Wellesley fund is that if interest rates rise, the value of your shares will drop, although you'll continue to receive the same amount of interest. This might or might not upset you, but if it does, one of the ways to avoid this is to not hold Wellesley...
by ourbrooks
Mon Jan 26, 2015 10:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Need Income-Wellesley & Wellington or just Wellesley
Replies: 27
Views: 4726

Re: Vanguard Energy ETF

I bought some VDE which by the way is an index fund at around $105 per share. At less than 2% of our portfolio it won't make us rich or ruin us. It is a domestic energy fund but tracks VGENX fairly well. No, VDE is not an index fund, if by "fund" you mean mutual fund; it's an Exchange Tra...
by ourbrooks
Mon Jan 26, 2015 9:49 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Energy ETF
Replies: 6
Views: 1110

Re: Vanguard Energy ETF

The problem with VDE is that it only covers American companies. That leaves out #2, BP and #3, Shell. You might be better off with the VGENX mutual fund, which includes BP and Shell. I note that every company in either of these vehicles is in some other widely held index, such as the S&P 500, De...
by ourbrooks
Mon Jan 26, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard Energy ETF
Replies: 6
Views: 1110

Re: Parents Retirement Advice 62 y.o.

Most people on this forum recommend delaying social security but I am not one of them. Comparing ages 62 to 66, you get 75% of the age 66 benefit if you take SSA "early." However, using actuarial life tables (I use the SSA ones but know there is debate as to whether the actuarial society ...
by ourbrooks
Fri Jan 23, 2015 1:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Parents Retirement Advice 62 y.o.
Replies: 8
Views: 991

Re: Hedging home value risk

Another problem with the Case-Shiller index is that it's national, but price drops can be local. If you walk away from a mortgage, even if the mortgage company writes off the debt, you'll probably never be able to get a mortgage for the rest of your life. You might not even be able to rent in your o...
by ourbrooks
Fri Jan 23, 2015 1:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Hedging home value risk
Replies: 23
Views: 1121

Re: Parents Retirement Advice 62 y.o.

I'm guessing that the mortgage payment is somewhere in the neighborhood of $450 a month + taxes. If they paid off their mortgage, their monthly expenses would go down to $1950 a month. If your mother took her pension, that'd leave about $850 a month for your dad to cover, less than he's bringing in ...
by ourbrooks
Fri Jan 23, 2015 12:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Parents Retirement Advice 62 y.o.
Replies: 8
Views: 991

Re: Why are people buying 10 year Bunds?

Most of the people who buy German bonds have Euros in their bank accounts. They'd have to convert them to dollars first. The Euro is at recent historical lows, so they'd have to pay a lot for the dollars. Once they've got the bonds, there's another risk. The dollar might go back down relative to the...
by ourbrooks
Thu Jan 22, 2015 4:53 pm
 
Forum: Investing - Theory, News & General
Topic: Why are people buying 10 year Bunds?
Replies: 14
Views: 1426

Re: Surviving the Tax Bite of RMD Withdrawals in Retirement

The required withdrawal percentage goes up as your life expectancy goes down; the first year it's about 3.65%; when you're 71, it goes up to 3.77%, and so on. Let's suppose that you're in the middle of the 15% bracket for your first withdrawal. You take out more than the required 3.65% Next year, wh...
by ourbrooks
Thu Jan 22, 2015 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: Surviving the Tax Bite of RMD Withdrawals in Retirement
Replies: 79
Views: 7160

Re: Is a Traditional Annuity ever worth it?

Look up the history of TIAA. It was founded in 1918 and it's a mutual insurance company; the owners are the holders of the accounts. The TIAA Traditional product also was first offered in 1918. Vanguard, in contrast, has yet to be through a Great Depression so no one is really sure how it will hold ...
by ourbrooks
Tue Jan 20, 2015 10:11 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is a Traditional Annuity ever worth it?
Replies: 18
Views: 1424

Re: Ditch Wells Fargo banking for online banking?

We have an Ally account and a free Wells Fargo account (Our mortgage is through Wells Fargo). We love Ally, it was the best decision that we have made. The only downfall is the lack of an ability to move cash into your bank account. Our work around at the moment is to move it to our free Wells Farg...
by ourbrooks
Tue Jan 20, 2015 9:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Ditch Wells Fargo banking for online banking?
Replies: 25
Views: 2150

Re: “How Does Aging Affect Financial Decision Making?”

I worry about any method which relies on a set of instructions for someone else as long as I can still change the instructions. One of the results of the study is that there's no decline in confidence about financial decisions; I'd be just as confident about changing my ISP to pick individual stocks...
by ourbrooks
Tue Jan 20, 2015 9:31 pm
 
Forum: Investing - Theory, News & General
Topic: “How Does Aging Affect Financial Decision Making?”
Replies: 54
Views: 2830

Re: Moca Adapters

Powerline Ethernet does the same thing, but over electrical wiring. You plug one end into a wall socket near the Cox box and run an Ethernet cable to the Cox box. Upstairs you plug another powerline adapter into a wall socket and run an Ethernet cable from the adapter to your router. The powerline a...
by ourbrooks
Mon Jan 19, 2015 8:58 pm
 
Forum: Personal Consumer Issues
Topic: Moca Adapters
Replies: 12
Views: 937
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