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Re: Annuities a Mistake?

If one doesn't have enough money to live on for the rest of their life, then there are hard choices to be made. Does she have a lot of equity in her house? Regardless of the answer to that, if it is possible to reduce her expenses by selling her house and moving into an apartment, while annuitizing ...
by technovelist
Fri Aug 29, 2014 5:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Annuities a Mistake?
Replies: 3
Views: 552

Re: Newbie - Boglehead method rid need for financial advisor

I think there is a place for financial advisors, but not primarily to advise on portfolios, which are simple enough to do oneself. The entirety of financial planning, especially with respect to retirement, is very complex. Just figuring out when to take Social Security is a big task in itself, and w...
by technovelist
Fri Aug 29, 2014 5:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: Newbie - Boglehead method rid need for financial advisors?
Replies: 7
Views: 488

Re: High net worth in CA - what % of bonds in munis?

I would have 0% in California bonds. Saving taxes is not worth the risk, IMHO.
And I HATE taxes.
by technovelist
Fri Aug 29, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: High net worth in CA - what % of bonds in munis?
Replies: 21
Views: 1459

Re: Bond Bubble?

If only I had a dollar for every time a poster on this site in past five years has suggested bond bubble and avoiding longer term bonds or going short term. Wait, I have even done better than that, every time saw these posts in last 5 years my contrarian nature kicked in and did more allocation to ...
by technovelist
Fri Aug 29, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Bubble?
Replies: 10
Views: 877

Re: Are assets split in kind or liquidated on death?

The assets are all liquidated immediately. It makes no sense to do otherwise because there is a basis step-up at death that eliminates capital gains (if you sell everything on the date of death the gains are precisely zero). The trustee incurs risk if she chooses to make or keep investments. Furthe...
by technovelist
Fri Aug 29, 2014 4:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Are assets split in kind or liquidated on death?
Replies: 12
Views: 606

Re: should I buy a 5 yr annuity to get me to 70

May wish to tell us what kind of annuity you are considering Oops, sorry, I am looking at an immediate variable annuity to start Oct. 1, indexed to the CPI, paying either 500/mo or 600, thereabouts. If it's a normal kind of variable annuity, I see a few problems: 1. The payout is not guaranteed; 2....
by technovelist
Fri Aug 29, 2014 4:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: should I buy a 5 yr annuity to get me to 70
Replies: 8
Views: 706

Re: Help out family without compromising my own retirement?

It is very likely that whatever you might send them, they would still be in trouble. So no, don't give them money you need to save for your retirement. Who would help you if you got into trouble as a result of insufficient savings?
by technovelist
Fri Aug 29, 2014 3:43 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help out family without compromising my own retirement?
Replies: 55
Views: 3461

Re: A Low-Return Future? Are We Prepared?

Where do you see the lowest balance results? I went to the firecalc page but didn't see where they display that data. Edit: I see that now but I also get this warning for the 30 year run with 2.1%: "(Caution: The portfolio failed, or went negative, during some of the years in your scenario, bu...
by technovelist
Fri Aug 29, 2014 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 153
Views: 8467

Re: milestones, skepticism, wealth creation. A thought

Here is my thinking on this: If one is saving a lot, then they will have maxed out their retirment plan contributions and will be forced to save in a taxable account. Or perhaps one has received a significant inheritance that ended up in a taxable account. In any event, Line 9a is a measure of most...
by technovelist
Fri Aug 29, 2014 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: milestones, skepticism, wealth creation. A thought
Replies: 15
Views: 1658

Re: A Low-Return Future? Are We Prepared?

Yes, but what was the value of that $1 million in constant dollars after 50 years? Certainly far less than $1 million. In other words, it was depleted by inflation even though not nominally. You know, I hadn't actually looked into that portion of the FireCalc site before. Here is what it says "...
by technovelist
Fri Aug 29, 2014 3:27 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 153
Views: 8467

Re: The Power of Zero: Controversial New Book About Taxes

I can already see one other very obvious flaw in his plan: whatever he tells you to do to eliminate taxes may be itself eliminated by changes in tax laws. And I agree that the sales pitch for life insurance is very suspect as well. The author admits this is possible, but says that it's more likely ...
by technovelist
Fri Aug 29, 2014 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: The Power of Zero: [Book and tax planning for retirement]
Replies: 51
Views: 4507

Re: 3MM Casino Jackpot

how sure are you the payer would still be there 20 years on? Always have to account for that non-zero risk in the equation. In the example you gave, I'd strongly recommend the annuity. That's based purely on unfair judgments about a mid 40s person living on $30k/yr in disability. That is, he'd be l...
by technovelist
Fri Aug 29, 2014 3:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: 3MM Casino Jackpot
Replies: 10
Views: 1729

Re: Programming and Database Classes

The best way to learn about database systems is to work on database systems. I started by fixing old legacy systems with lots of patches, spaghetti, and zero documentation. Or almost zero. I once found a comment that read, "I think I'm losing my mind, I'm getting addicted to cocaine to keep up...
by technovelist
Fri Aug 29, 2014 3:03 pm
 
Forum: Personal Consumer Issues
Topic: Programming and Database Classes
Replies: 15
Views: 1040

Re: The Power of Zero: Controversial New Book About Taxes

I can already see one other very obvious flaw in his plan: whatever he tells you to do to eliminate taxes may be itself eliminated by changes in tax laws.

And I agree that the sales pitch for life insurance is very suspect as well.
by technovelist
Fri Aug 29, 2014 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: The Power of Zero: [Book and tax planning for retirement]
Replies: 51
Views: 4507

Re: When to take Social Security

That depends. Do you have 35 years of relatively high earnings? In that case, there will be very little difference whether or not you work. If you don't have that type of earnings record, it could make a significant difference. sscritic could give you a lot more information, but you'll need to provi...
by technovelist
Fri Aug 29, 2014 2:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: When to take Social Security
Replies: 4
Views: 564

Re: A Low-Return Future? Are We Prepared?

Even that rate leads to depletion due to inflation. For a 50/50 portfolio, using the current dividend + coupon rate of 2.21% there are no historical failures at the 10, 20, 30, 40 or 50 year time frames. Lowest balance during the retirement period by timeframe (starting with $1 Million): 10 $532,92...
by technovelist
Fri Aug 29, 2014 2:45 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 153
Views: 8467

Re: Bond Bubble?

I'm still waiting to see what happens if the Fed ever tries to shrink its balance sheet, even if by just letting the bonds mature.
by technovelist
Fri Aug 29, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Bubble?
Replies: 10
Views: 877

Re: Programming and Database Classes

You actually want to take three or four different courses. Here's what you want: 1. Software engineering methods/practices/tools This course will probably be taught at a school which offers a software engineering degree, as versus the much more common computer science degree. 2. Software Project Ma...
by technovelist
Fri Aug 29, 2014 2:21 pm
 
Forum: Personal Consumer Issues
Topic: Programming and Database Classes
Replies: 15
Views: 1040

Re: A Low-Return Future? Are We Prepared?

Why even worry about failure rate, when you can employ VPW that cannot fail. You'll probably start out with a WR of over 4%. VPW has a 0% chance of Failure. If times get tough, VPW will employ a 2% WR, but only IF it needs to. And it will do it at the Proper time! Unless you can pick the exact date...
by technovelist
Fri Aug 29, 2014 2:17 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 153
Views: 8467

Re: Mortgages and financial freedom

4strings wrote:i dont understand how everyone on this forum has already either paid off their mortgage or is carrying one at a meager 3% :confused :confused :confused


2 5/8ths for me, refinanced early last year for 15 years. :D
by technovelist
Fri Aug 29, 2014 2:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6677

Re: Poll: How many own zero/few stocks?

I don't own any stocks.
I also don't own any index funds, actively-managed funds, or bonds.
I do have a couple of closed-end funds that invest solely in precious metals.
by technovelist
Fri Aug 29, 2014 10:19 am
 
Forum: Investing - Help with Personal Investments
Topic: [Sell off individual stocks?] How many own zero/few stocks?
Replies: 68
Views: 2666

Re: Do Bogleheads worry about institutional risk?

A custodian does not own the assets it has in custody . It's just charging a fee for holding on to them. They are not pledged as collateral, not rehypothecated, not monkeyed with, unless, as I said, the institution or some of its units are practicing outright theft of assets, as happened with Jon C...
by technovelist
Thu Aug 28, 2014 6:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads worry about institutional risk?
Replies: 33
Views: 1641

Re: The Worst Investment You Can Make: Buying a Home

To me a lot of the difficulty with home ownership is still the undesirable allocation tilt, illiquidity, etc. that it introduces into my portfolio if the "amount at risk" is any significant fraction of my whole portfolio. Luckily, in my case that is not a big problem at the moment, due par...
by technovelist
Thu Aug 28, 2014 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 15864

Re: Mortgages and financial freedom

Swope Park is one of the nation's largest city parks, comprising 1,805 acres (730 ha) (2.82 sq. mi.), more than twice as big as New York's Central Park . It features a full-fledged zoo, a woodland nature and wildlife rescue center, two golf courses, two lakes, an amphitheatre, day-camp area, and nu...
by technovelist
Thu Aug 28, 2014 4:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6677

Re: My husband's " WILL", $ left for me to live on....

My husband moved in my house when we got married and my house is under my name. Maybe your DH should be paying rent - a lot of rent. He said since he pays all the bills including health insurance, car insurance, food, vacation, clothes, property tax (around $6000-7000 a year), home insurance And I ...
by technovelist
Thu Aug 28, 2014 3:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: My husband's " WILL", $ left for me to live on....
Replies: 258
Views: 16760

Re: If you had an extra $100,000

inbox788 wrote:
Lynette wrote:1/3 to charity, 1/3 for travel, 1/3 for retirement.


1/3 taxes, 1/3 credit card bills, 1/3 bookie


And the rest you would just throw away, I assume? :beer
by technovelist
Thu Aug 28, 2014 2:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: If you had an extra $100,000
Replies: 56
Views: 4629

Re: When, if ever, should an annuity be used in retirement p

A single premium immediate annuity (SPIA) has a significant benefit in retirement, namely that you can't run out of money. This can enable you to put the rest of your money into a more aggressive allocation than you would use if you didn't have the annuity.
by technovelist
Thu Aug 28, 2014 2:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: When, if ever, should an annuity be used in retirement plans
Replies: 32
Views: 2306

Re: Only need $315k non-retirement $ to retire at Age 43?

As noted above, you need to adjust for inflation. That said, I think $400K in retirement accounts and $315K in taxable is actually enough for a 43-year-old single person to retire to a modest standard of living (~$30K/year), assuming one is eligible for Social Security. Keep in mind, you'll likely ...
by technovelist
Thu Aug 28, 2014 1:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Only need $315k non-retirement $ to retire at Age 43?
Replies: 36
Views: 5171

Re: Mortgages and financial freedom

I'm in the camp that piling a bunch of money into an illiquid asset is not likely to "make" people feel more comfortable. In our case, it would mean that over 50% of our net worth would be tied up into California real estate. Now THAT's scary. Not sure if I'm the first to point this out: ...
by technovelist
Thu Aug 28, 2014 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6677

Re: Do Bogleheads worry about institutional risk?

I believe in institutional diversification along with all the other "regular" kinds.
by technovelist
Thu Aug 28, 2014 12:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do Bogleheads worry about institutional risk?
Replies: 33
Views: 1641

Re: Tax loss harvesting

A simple example: You invest 90K and the market crashes so your investments are worth 0. You TLH and get 90K in losses. If you have an ideal BH portfolio that doesn't generate any LTCGs, you get to use 3K of losses each yr. If you are in the 25% bracket, you benefit from $750 in tax benefits each y...
by technovelist
Thu Aug 28, 2014 11:58 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax loss harvesting
Replies: 32
Views: 1469

Re: No car for 10 years - should I scratch the itch?

Sharke, I'm in the opposite position. I live in a rural setting and have zero access to public transportation. I live similarly in the boonies. I never thought of it before I moved here, but there are indeed places where there is zero public transportation. You can't even get a cab to come here. Me...
by technovelist
Thu Aug 28, 2014 11:18 am
 
Forum: Personal Consumer Issues
Topic: No car for 10 years - should I scratch the itch?
Replies: 28
Views: 2055

Re: Mortgages and financial freedom

Those are small potatoes compared to a mortgage or rent, generally speaking. If I only had to pay for prop taxes, insurance and utilities, I could probably get by working at McDonalds. We paid off our mortgage long ago, and today the cost of property tax, utilities and insurance on our very nice, c...
by technovelist
Wed Aug 27, 2014 4:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Mortgages and financial freedom
Replies: 111
Views: 6677

Re: Savers vs. Spenders: Default Mode

I was thinking about this today and thought it would be a good subject to develop here. For "savers" (a minority), the default mode is that income should be saved, and it's somewhat painful to spend part of it. But for spenders, the mindset is that all income should default to spending, a...
by technovelist
Wed Aug 27, 2014 3:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savers vs. Spenders: Default Mode
Replies: 34
Views: 2188

Re: Savers vs. Spenders: Default Mode

Generally it has been discovered people will find a way to afford what they want. If they want to save they will find a way to afford it either through reducing costs or increasing income. Some people are irresponsible (spenders generally), the thing is people aren't only irresponsible with one asp...
by technovelist
Wed Aug 27, 2014 3:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savers vs. Spenders: Default Mode
Replies: 34
Views: 2188

Re: Savers vs. Spenders: Default Mode

I think it's hard for most people to save because most people just don't make that much money. In my opinion, saving is more of a privilege than a norm. I have to disagree. All of my friends make considerably more than me. They are spenders. They laugh at me when I mention savings and investing. My...
by technovelist
Wed Aug 27, 2014 3:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savers vs. Spenders: Default Mode
Replies: 34
Views: 2188

Re: Life insurance with Long term care rider

Then why don't all the companies offer it? It seems obvious that if it doesn't cost them anything, and it looks good even to a relatively informed prospective buyer, they should...
by technovelist
Wed Aug 27, 2014 3:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 1847

Re: Life insurance with Long term care rider

After doing a bit of research I have found some information about my likelihood of living to 85. According to the Society of Actuaries report on preferred risk mortality (https://www.soa.org/2001-cso-preferred-class-structure-mortality-tables.pdf), the mortality rate of "preferred best" in...
by technovelist
Wed Aug 27, 2014 2:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 1847

Re: Life insurance with Long term care rider

However, for my plan to fail, I have to live past 85 outside a nursing home, then have to go into a nursing home after that age. I think the probability of that is fairly low. Since you have actuarial background, I refer you to the Society of Actuaries 1987 - 2007 Long Term Care and Intercompany Re...
by technovelist
Wed Aug 27, 2014 2:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 1847

Re: Can someone make a living as a Boglehead financial advis

I would say that just being able to answer SS questions correctly would be a valuable contribution, for which someone should be able to charge a reasonable fee. I'm pretty good with complex stuff, but SS is really ridiculously difficult to understand.
by technovelist
Wed Aug 27, 2014 1:53 pm
 
Forum: Investing - Theory, News & General
Topic: Can someone make a living as a Boglehead financial advisor?
Replies: 25
Views: 3675

Re: Economic Forecasts

Yes, there is a basis for retirement planning, but it's not economic forecasts, which are pretty much useless.
by technovelist
Wed Aug 27, 2014 1:51 pm
 
Forum: Investing - Theory, News & General
Topic: Economic Forecasts
Replies: 5
Views: 654

Re: Savers vs. Spenders: Default Mode

Money's purpose (or telos, in the philosophical sense) is to be spent. I want to "enjoy" every dollar that I spend, because I use it to provide for my needs and to give me the pleasure of the things that I want. If I don't enjoy spending my money, then the money hasn't served its purpose....
by technovelist
Wed Aug 27, 2014 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Savers vs. Spenders: Default Mode
Replies: 34
Views: 2188

Re: 87 yr old mom just inherited $200,000 - what to do with

Perhaps 50-50 in the money market and Total Bond, adjust the percentages as desired. Given her existing portfolio of $55,000 + $200,000 = $255,000, and her monthly withdrawals of $1500 x 12 months = $18,000, this gives an annual withdrawal rate of 7%. Consider a SPIA with part of the money :confuse...
by technovelist
Wed Aug 27, 2014 12:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: 87 yr old mom just inherited $200,000 - what to do with it?
Replies: 7
Views: 962

Re: 87 yr old mom just inherited $200,000 - what to do with

Perhaps 50-50 in the money market and Total Bond, adjust the percentages as desired. Given her existing portfolio of $55,000 + $200,000 = $255,000, and her monthly withdrawals of $1500 x 12 months = $18,000, this gives an annual withdrawal rate of 7%. Consider a SPIA with part of the money :confuse...
by technovelist
Wed Aug 27, 2014 12:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: 87 yr old mom just inherited $200,000 - what to do with it?
Replies: 7
Views: 962

Re: Term to Perm Insurance

I have the option to convert some or all of my 15-year term policy to permanent at the end of the level premium term, which is next year. I figured it would be ridiculously expensive but actually it's not totally absurd; the universal life premium is about 10x what the term premium was, and of cours...
by technovelist
Wed Aug 27, 2014 10:27 am
 
Forum: Personal Finance (Not Investing)
Topic: Term to Perm Insurance
Replies: 4
Views: 227

Re: To take pension early or not, that is the question...

Thanks celia for your advice. This approach would provide some additional much-needed insight. Also, we have considered the thought of converting some TIRA in the 25% tax bracket as well but I have been a bit hesitant on the extent of our available taxable savings we wish to allocate for ROTH conve...
by technovelist
Wed Aug 27, 2014 10:00 am
 
Forum: Investing - Help with Personal Investments
Topic: To take pension early or not, that is the question...
Replies: 7
Views: 597

Re: Life insurance with Long term care rider

Personal experience shows you have a good chance of living past 85. If you are comfortable with your plan it's all good. I know that my chance of living past 85 is reasonable, given that I got approved at "Preferred Best" for a term policy to that age, even though the insurance company is...
by technovelist
Wed Aug 27, 2014 9:51 am
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 1847

Re: What are you up YTD?

5.7% investment return YTD, as of last Friday. I keep track weekly.
by technovelist
Tue Aug 26, 2014 8:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: What are you up YTD?
Replies: 94
Views: 6276

Re: Life insurance with Long term care rider

He means likely the term will be over when you need ltc so the rider won't help you then. My policy doesn't expire until age 85. I have assumed that most admissions are before that age, but I can't find any statistics on a quick search. Edited to add: "An individual's average age when he or sh...
by technovelist
Tue Aug 26, 2014 7:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Life insurance with Long term care rider
Replies: 34
Views: 1847
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