Search found 4722 matches

by bobcat2
Fri Feb 24, 2017 9:13 pm
Forum: Investing - Theory, News & General
Topic: Credit Suisse Yearbook 2017
Replies: 27
Views: 1981

Re: Credit Suisse Yearbook 2017

So to answer your question in the previous 760 years of the last 1000 years, humanity had progressed very little. In the thousand years before that, there was no discernible progress. BobK Bob I think your definition of "progress" lacks a sense of history? Or perhaps I just don't understa...
by bobcat2
Wed Feb 22, 2017 10:18 pm
Forum: Investing - Theory, News & General
Topic: Credit Suisse Yearbook 2017
Replies: 27
Views: 1981

Re: Credit Suisse Yearbook 2017

From the report: Mankind has enjoyed a wave of transformative innovation dating from the Industrial Revolution, continuing through the Golden Age of Invention in the late 19th century, and extending into today’s information revolution. This has given rise to entire new industries: electricity and p...
by bobcat2
Thu Feb 16, 2017 5:37 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

Re: An Effective DC Plan: The Flex MMM Model

Bogel0048 writes. But the size of the portfolio you are able to accumulate by the time you retire is the unalterable fact that will determine how much post-retirement income you can achieve. No it is not an unalterable fact, and that is one of the points made by those who favor liability driven inve...
by bobcat2
Thu Feb 16, 2017 3:45 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

Re: An Effective DC Plan: The Flex MMM Model

BHs look at post retirement income flows in terms of a sustainable withdrawal rate from a target savings portfolio accumulated by retirement. Not all BHs look at post retirement income flows in those terms. Some believe the target should always be, even before retirement, the retirement income flow...
by bobcat2
Thu Feb 16, 2017 12:23 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

Re: An Effective DC Plan: The Flex MMM Model

BHs look at post retirement income flows in terms of a sustainable withdrawal rate from a target savings portfolio accumulated by retirement. Not all BHs look at post retirement income flows in those terms. Some believe the target should always be, even before retirement, the retirement income flow...
by bobcat2
Wed Feb 15, 2017 9:42 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

Re: An Effective DC Plan: The Flex MMM Model

Hi Bogel0048, I suggest you read at least parts of the second paper I linked to, namely "The Case for Bonds for Financial Security". In particular read the subsections, "MPT and Challenges for Retail Investors - MPT and Liabilities", and "Focus on the Wrong Objective", ...
by bobcat2
Wed Feb 15, 2017 7:41 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

Re: An Effective DC Plan: The Flex MMM Model

Hi Bob, Does Modigliania's plan include borrowing prior to retirement. For current DC plans I believe that one of the reasons they are not as large as they might be is due to employees borrowing from 401Ks prior to retirement. Hi S**, :D Here is a Washington Post article from several years ago that...
by bobcat2
Wed Feb 15, 2017 6:53 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

The Case for Bonds for Financial Security (BFFS)

Abstract: There is a looming retirement crisis globally with the three pillars of retirement threatened because of insufficient funding, improper investment decisions, and transferring risk to individuals who are least capable of bearing such risk. This paper argues that the introduction of a uniqu...
by bobcat2
Wed Feb 15, 2017 5:13 pm
Forum: Investing - Theory, News & General
Topic: An Effective DC Plan: The Flex MMM Model
Replies: 19
Views: 1789

An Effective DC Plan: The Flex MMM Model

Robert Merton and Arun Muralidhar propose a DC Pension Plan that combines three innovations: (a) Merton's retirement income approach; (b) the late Franco Modigliani's innovative approach to allow short term borrowing from retirement accounts to meet life-cycle needs; and (c) Muralidhar's innovative ...
by bobcat2
Sat Feb 11, 2017 10:44 pm
Forum: Forum Issues and Administration
Topic: welcome home bogleheads.org
Replies: 30
Views: 2592

Re: welcome home bogleheads.org

Thank you very much Larry :!: :beer

Best,
BobK :happy
by bobcat2
Mon Feb 06, 2017 11:03 am
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

I called Vanguard this morning to inquire why all Principal life annuity quotes, including real life annuities, now show up as N/A. The annuity specialist at Vanguard told me that as of last week Vanguard no longer works with Principal, but the technical issues have not been resolved in showing quot...
by bobcat2
Sat Feb 04, 2017 4:26 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

i'm going to go out on a limb here and guess that perhaps the Principal real life annuities are somewhat of a ripoff- i.e. have too much commission baked into them to be palatable to Vanguard/"Income Solutions" to offer on their platform. Again all of this feels like a market failure- not...
by bobcat2
Sat Feb 04, 2017 4:06 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

What I find hilarious is how the option to buy an Inflation-Indexed SPIA just quietly disappeared. Did any retirement expert say if you were planning to buy one you better get it before they run out? There was no announcement by anyone that a deadline was coming up. Nope, just suddenly one day the ...
by bobcat2
Fri Feb 03, 2017 8:44 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

I saw a whitepaper from Moshe Milevsky where he said that based on private insurance data fewer than 1% of annuity quotes were for full CPI-linked annuities and fewer than 9% wanted any kind of adjustment at all. That isn't that surprising. Money illusion remains alive and well. Supposedly the stan...
by bobcat2
Fri Feb 03, 2017 6:53 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

As of today, I'm seeing The Principal still listed, but "no quote" in ANY column, not even "single life only" (the leftmost column, no increases). Yes. After reading the above I tried getting life annuity quotes from "The Principal", but the results were N/A for any li...
by bobcat2
Fri Feb 03, 2017 2:01 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

I suspect the main reason few insurance companies offer real life annuities is lack of demand, which is probably due to low inflation and the great majority of Americans being confused when it comes to money illusion. Not understanding money illusion was a problem when Irving Fisher first discussed ...
by bobcat2
Thu Feb 02, 2017 3:53 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

The only firm quoting an inflation-adjusted annuity was The Principal. But, they quoted them! Various survivor benefits were also available for joint annuities. I also compared to a fixed percentage increase, and the pricing of a CPI was between the pricing of the 2%- and 3%-increasing ones, closer...
by bobcat2
Thu Feb 02, 2017 3:26 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

I just checked immediateannuities.com, and Principal does offer (thru them) a CPI adjusted immediate annuity. Joe Seeing your post I also checked at immediateannuities.com, and Principal does offer (thru immediateannuities) CPI adjusted immediate annuities in Md. It's strange that Principal is also...
by bobcat2
Thu Feb 02, 2017 2:58 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

The Wizard wrote:It's easy enough to do modest additional annuitizations every so often to combat inflation.

How do you do it after age 85 when you need it most?

BobK
by bobcat2
Thu Feb 02, 2017 2:56 pm
Forum: Investing - Theory, News & General
Topic: No Inflation-Adjusted SPIAs at Vanguard
Replies: 120
Views: 5302

Re: No Inflation-Adjusted SPIAs at Vanguard

When I checked the Vanguard Income Solutions portal about 10 days ago one company, I think it was Lincoln * , was offering inflation-indexed life annuities, both immediate and deferred. After seeing this thread I checked today and no companies are offering inflation-indexed annuities. :( My state of...
by bobcat2
Sun Jan 29, 2017 11:18 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

In using the funded ratio the step that generates by far the most contention, is how to go about calculating the denominator, the price of the retirement income goal. Here is an article I came across this evening by Moshe Milevsky from a few years ago that concurs that the best way to price the reti...
by bobcat2
Sun Jan 29, 2017 11:28 am
Forum: Investing - Theory, News & General
Topic: New Retirement Income Solution for DC Retirement Plans
Replies: 6
Views: 950

Re: New Retirement Income Solution for DC Retirement Plans

Thanks,but i guess i'm unimpressed. Looks like just a "me too" of the DFA target date funds approach. Sure you can annuitize on retirement but you will be subject to whatever they are doing with annuity rates at that point in time. The DFA approach is useful but one can replicate it onese...
by bobcat2
Sat Jan 28, 2017 9:31 pm
Forum: Investing - Theory, News & General
Topic: New Retirement Income Solution for DC Retirement Plans
Replies: 6
Views: 950

New Retirement Income Solution for DC Retirement Plans

TIAA is launching new custom target date funds (TDFs) for Defined Contribution (DC) retirement plans. These new TDFs include a mechanism for converting retirement savings into pension-like income during retirement. TIAA calls one of these new series of TDFs, the Target Income Models. According to TI...
by bobcat2
Mon Jan 23, 2017 10:05 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Investors planning for retirement can use annuity pricing to easily calculate an overall funded ratio. Take the example where the investor is expecting a nominal pension and Social Security in addition to retirement income generated by their portfolio. That investor can calculate a funded ratio usin...
by bobcat2
Sun Jan 22, 2017 3:28 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Hi Bob, Thanks for the update with Merton's revised calculation. Hi Sa*, :wink: I'm sure this was Merton's original intent, and not a revision on his part. The revision is on my part. The finance professor who in your words, talks like a Brooklyn cabbie, is always ahead of the rest of us. :) Best, ...
by bobcat2
Sun Jan 22, 2017 10:44 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funded ratio

I went to the Income Solutions website, and saw that it will give you prices of real life annuities starting many years in the future. I'll bet that surprised you. I know it surprised me to find that out last week. 8-) Keep in mind that deferred real life annuities do not account for inflation duri...
by bobcat2
Sat Jan 21, 2017 7:50 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: MEA CULPA

Bob, how should one go about getting the present (i.e. today's) value of a real life annuity starting in the future? Should one: 1. Get a quote today for the real life annuity starting at the future age. 2. Discount that number to today using a real interest rate. Thanks, Alec Hi Alec, "Get a ...
by bobcat2
Sat Jan 21, 2017 10:04 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

MEA CULPA

I offer a mea culpa for how I have priced the income liability of the funded ratio for individuals. I now believe the better way to price the retirement income liability in the denominator of the funded ratio (FR) is to use the price of a real life annuity. If you are at retirement or in retirement,...
by bobcat2
Fri Jan 20, 2017 11:23 am
Forum: Investing - Theory, News & General
Topic: "How Much Inflation Protection Do You Need?"
Replies: 7
Views: 1477

Re: "How Much Inflation Protection Do You Need?"

For most people their portfolio is primarily for providing income during retirement. It follows that the investor's concerns about inflation should not be with protecting the portfolio against inflation, but rather protecting retirement income against inflation. This change in perspective is far fro...
by bobcat2
Wed Jan 18, 2017 10:25 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Using the funded ratio to drive retirement investment strategy

Goal Based Investing focused on what matters most: Income Investments Planning Process Conventional Retirement Goal-Based Retirement Investment Goal Wealth accumulation Retirement Income (No specified wealth Goal) (Specified desired income goal) Risk Measure Volatility of portfolio returns Volatili...
by bobcat2
Tue Jan 17, 2017 12:31 am
Forum: Investing - Help with Personal Investments
Topic: When to annuitize?
Replies: 36
Views: 3962

Re: When to annuitize?

When to annuitize?

Not all at once, but instead in chunks. 8-)

BobK
by bobcat2
Sun Jan 15, 2017 10:32 am
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 90
Views: 21199

Re: Master thread for Washington DC Area Bogleheads

I have written an article on the funded ratio, the topic of this afternoon’s meeting, that is now available at the Bogleheads blog site. BH Barry Barnitz maintains the blog on his personal financial page. Here is a link to the article - Monitoring Your Retirement Goal – the Funded Ratio https://blba...
by bobcat2
Sun Jan 15, 2017 10:12 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Monitoring Your Retirement Goal – the Funded Ratio

A much revised version of the original post in this thread is now available at the Bogleheads Blog. Barry Barnitz maintains the BH Blog on his personal blog at Financial Page. Here is a link to the revised version - Monitoring Your Retirement Goal – the Funded Ratio https://blbarnitz4.wordpress.com/...
by bobcat2
Mon Jan 09, 2017 10:50 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Hi JamesG, The funding ratio (FR) is not a forecast. However, there is nothing that prevents a retirement investor from forecasting what the size of their portfolio will be sometime in the future (by whatever method they choose) and calculating the PV of the retirement income liability at that futur...
by bobcat2
Sun Jan 08, 2017 10:52 pm
Forum: Local Chapters and Bogleheads Community
Topic: Master thread for Washington DC Area Bogleheads
Replies: 90
Views: 21199

Next Meeting Sunday Jan 15 @ Silver Spring library

Our next meeting will be from 2:30-4:30 next Sunday, January 15, in meeting room #2 at the Silver Spring Library, 900 Wayne Ave, Silver Spring, MD 20910. (The reason for the time change is that the meeting room closes at 4:30 and the library closes at 5:00.) This will be our first of two planned mee...
by bobcat2
Fri Jan 06, 2017 5:30 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

OP: I never got your point/motivation of this thread. For individuals from Kiplinger. In planning for retirement, you have probably crunched many numbers: the value of your investment portfolio, the income stream from Social Security or a pension, your projected annual spending, and your life expec...
by bobcat2
Wed Jan 04, 2017 10:42 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

The problem with calculating the funding ratio may be that it requires a paradigm/cognitive shift. To me calculating the funding ratio is common sense. Of course if you can not afford to depend on the "number" as in that you cut it to close and and you may be victim to vicissitudes of sto...
by bobcat2
Tue Jan 03, 2017 10:08 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Quotes from another thread where the funding ratio (FR) is discussed. Unfortunately the funding ratio is based on funding retirement with a TIPS ladder which is going to be very tough with a 60 year horizon. One can up the discount rate to say assume a higher return based on holding stocks and bonds...
by bobcat2
Mon Jan 02, 2017 10:32 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

What is a real discount number? I don't understand what present value actually is. Why do I need to calculate it? I have the current balance of my accounts. The real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation. Use...
by bobcat2
Mon Jan 02, 2017 6:29 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Let me put it another way, your way is too incredibly complicated with way too many variables to be estimated that you can't possibly get to. What discount rate will you use for your PV starting 25 years from now? How to calculate the FR with only retirement portfolio and SS & you treat SS as i...
by bobcat2
Mon Jan 02, 2017 1:54 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Since Dean thinks stocks are safe in the LR, it follows that he would think investing part of the SS Trust Fund in the stock market would be a jim-dandy idea. :wink: Except, of course, there is no SS Trust fund, it is simply bookkeeping entries. Every dollar of FICA received was spent. This (there ...
by bobcat2
Mon Jan 02, 2017 1:21 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Another simple way to calculate: price an annuity, immediate or deferred, real or nominal, as appropriate. In other words, how much income can you buy with your current portfolio. Compare income stream from this annuity to desired income stream. This was raised earlier. Was there a response? This i...
by bobcat2
Mon Jan 02, 2017 1:09 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

I believe you're confusing Dean Baker with someone else. He has long been opposed to subjecting Social Security recipients to stock risks. No, I am not. Dean thinks exposing individual recipients to stock risks is a bad idea. I agree. But he thinks subjecting the funding of SS to the risks of the s...
by bobcat2
Mon Jan 02, 2017 12:50 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Another simple way to calculate: price an annuity, immediate or deferred, real or nominal, as appropriate. In other words, how much income can you buy with your current portfolio. Compare income stream from this annuity to desired income stream. This was raised earlier. Was there a response? This i...
by bobcat2
Mon Jan 02, 2017 12:39 pm
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

...Finance and economics are clear on this issue. The PV of a liability that must be met with high probability has nothing to do with the expected return on the assets. This is true whether we are discussing the county firefighters' pension fund or your 401k. If the liability is to be met with high...
by bobcat2
Mon Jan 02, 2017 12:08 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3512

Re: Good time to buy inflation-adjusted SPIA?

Here Larry Kotlikoff discusses life annuities and the real life annuity from Principal he bought for his mother Would you still buy a SPIA if you only needed 2.5% from your portfolio (40% equity funds) in retirement to live on? Maybe for peace of mind? Thanks This depends on how risk averse you are...
by bobcat2
Mon Jan 02, 2017 11:43 am
Forum: Personal Finance (Not Investing)
Topic: Your Retirement Number, or, calculating the funding ratio
Replies: 190
Views: 21739

Re: Your Retirement Number, or, calculating the funding ratio

Bacchus01 wrote:Here is a much simpler process:

Desired Income / Safe Withdrawl Rate

Voila. Your target.


For every complex problem there is an answer that is clear, simple, and wrong.
- H. L. Mencken
by bobcat2
Sun Jan 01, 2017 9:16 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3512

Re: Good time to buy inflation-adjusted SPIA?

Bob, thank you for your response. Are you aware of how many companies offer Real (Inflation Adjusted) Single Premium Immediate Annuities? I went to the Income Solutions site thru the Vanguard portal and looked at quotes from six insurance companies. A few years ago three insurance companies at Inco...
by bobcat2
Sun Jan 01, 2017 6:41 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3512

Re: Good time to buy inflation-adjusted SPIA?

Bob, the problem with TIPS in 2008-2009 was a liquidity issue if I remember right. From peak to trough, the Vanguard Inflation Adjusted Bond fund dropped 9.4%, while nominal treasuries rose. This was an anomaly, and longer term TIPS matched to the duration of a Real Single Premium Immediate Annuity...
by bobcat2
Sat Dec 31, 2016 2:14 pm
Forum: Investing - Theory, News & General
Topic: Good time to buy inflation-adjusted SPIA?
Replies: 47
Views: 3512

Re: Good time to buy inflation-adjusted SPIA?

The other thing that made me a bit leery was the performance of TIPS during the 2008-2009 financial crisis. Asset classes don't always act in the way that we expect them to. I have a wariness about putting too many eggs in the TIPS basket. What if TIPS again at some point act in a way investors don...

Go to advanced search