Search found 387 matches

by kenbrumy
Sun Aug 22, 2010 12:37 pm
Forum: Investing - Theory, News & General
Topic: Why I took early social security
Replies: 44
Views: 5899

I found it strange that none of those interviewed mentioned health care costs as a factor for taking SS early. Between age 62 and 65 when medicare kicks in health insurance can be very expensive. In case of job loss, COBRA can be picked up for 18 months maximum. I believe the government will pick up 65% for those laid off, not sure for how long, maybe 11 months. If my wife losses her job, which provides our health insurance, COBRA is our plan B. We just turned 63 so 18 months won't quite get us to 65. Her job does not feel very secure right now. In the plan B scenario, we will both put in for SS. The US taxpayers no longer pick up 65% of COBRA. It used to be for 15 months. When I was laid off in March, I was told that the COBRA subsidy was...
by kenbrumy
Sat Aug 21, 2010 4:19 pm
Forum: Personal Investments
Topic: Newly retired, need help with portfolio & allocation
Replies: 22
Views: 2564

You have to balance out the risk of losing principle against the risk of falling behind to inflation. Long term equities perform better than bonds and are intended to provide an inflation hedge. Bonds/CDs are to provide income and stability. At 59 you need a reasonable amount of equities. We're close to the same age and I was laid off earlier this year only to get a reprieve the day before my exit interview. I consider my job fragile at best and may not last past my current project set to be completed in November. When let go, I don't expect to find anything vaguely comparable so I also intend to retire. Here's my plan: 60% in laddered T-bills. I refuse to put any money to work long term at the current interest rates. I'm not getting any in...
by kenbrumy
Fri Aug 20, 2010 6:09 pm
Forum: Personal Consumer Issues
Topic: Another NYT article: What is it about 20-somethings?
Replies: 12
Views: 1619

I'm almost 60. If my parents were still alive and were sending me money, I'd take it.

It's not that kids "don't grow up as fast." Parents don't throw them out of the nest when they should.
by kenbrumy
Fri Aug 20, 2010 6:06 pm
Forum: Investing - Theory, News & General
Topic: NY Times: "Vanguard is sexy"
Replies: 9
Views: 2711

bob90245 wrote:Living below your means increases your odds of becoming independently wealthy. Which certainly is an attractive quality in a potential mate. :D
I observed back in my single days that spending like there's no tomorrow attracts the wrong sort of wife candidates but a great selection of one night stands. :lol:
by kenbrumy
Sun Aug 15, 2010 7:10 pm
Forum: Personal Finance (Not Investing)
Topic: Inheritance Question
Replies: 7
Views: 1572

Five months isn't nearly long enough of an emergency fund with a non-working (outside the home) spouse. Put it all in the emergency fund and build it up to at least a year ASAP. You'll understand if you lose your job and look at losing everything in 3 months without a job. At 41 you're starting to become "less than desirable" for most every major company.
by kenbrumy
Sun Aug 15, 2010 8:41 am
Forum: Personal Finance (Not Investing)
Topic: Permanent Insurance - for Retirement Savings?
Replies: 20
Views: 3525

Many years ago when I was just starting out, I fell for the whole life sales pitch based on the high rate of return promised by the agent. About 4 years went by (give or take) and I checked the cash value of the policy versus the agent's original projection. Not surprising to most Bogleheads, the amount was way below the promised return. It wasn't even worth the total of all my premiums. When I asked the agent, he told me interest rates hadn't kept up with his original projections "and the returns were, after-all, projected."

Since this was done in the late 70's, interest rates had actually shot way up. I cashed out and so began my long history of mistrusting insurance companies.
by kenbrumy
Sat Aug 14, 2010 8:55 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 6 of 6
Replies: 19
Views: 3665

sometimesinvestor wrote:Namely when is this an approriate investment and for whom.
For equity indexed annuities the answers are never and no one.
by kenbrumy
Fri Aug 13, 2010 6:09 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 6 of 6
Replies: 19
Views: 3665

Congratulations. You managed to get all six articles out without being assassinated. Were there any attempts? BTW - my wife (and I by acceptance) just bought an annuity today. It was for a pre-paid funeral for my father-in-law who is in hospice. Even though the expected need is this year they still wrote it up as an annuity. I went along with it but wondered what the purpose was other than a "protection" from failure of the mortician/undertaker. I've heard of various problems with people that had parents prepay decades before need that had massive additional expenses. I can't imagine how we're at a significant risk since the need is pretty soon. We have a 5 year payment plan of less than $200/month so the cash involved is trivial....
by kenbrumy
Mon Aug 09, 2010 7:10 pm
Forum: Personal Consumer Issues
Topic: Long Term Care policy... is it a good thing?
Replies: 16
Views: 3349

Like all insurance you are statistically better off if you can afford to self-insure. My parents had LTC insurance and paid for years on the policy. Neither used a day of it. My in-laws didn't have LTC insurance and one spent 3 years and another (so far) 4 but that's probably coming to an end soon. My parents would have been wiped out if either of them went into a LTC facility. My in-laws have easily covered the cost with my FIL's pension & SS covering all of his care. There's a lot of risk buying too far in advance. Government regs change. Insurance companies adjust premiums. Insurance companies and/or their LTC subsidiaries go under. I am in the self-insure group but it does require creating a substantial reserve fund for LTC. On the ...
by kenbrumy
Sun Aug 08, 2010 6:30 pm
Forum: Personal Investments
Topic: new so cut me some slack!!! [settlement payout options]
Replies: 13
Views: 2828

makinminey,

You need to educate yourself quickly. Don't listen to anyone that makes money off of your investment choices. Search the forum for the recommended reading list. Feel free to post questions about what your thoughts are about possible investments.

Doing nothing for six months or more is probably a good idea.
by kenbrumy
Sun Aug 08, 2010 6:27 pm
Forum: Personal Investments
Topic: new so cut me some slack!!! [settlement payout options]
Replies: 13
Views: 2828

Ron wrote:
nisiprius wrote:...they are not your friend.
Well, not quite; they certainly are your friend, but you are paying them to be one :lol: ...

- Ron
I've heard there are women like this. :lol:
by kenbrumy
Sun Aug 08, 2010 6:26 pm
Forum: Personal Investments
Topic: new so cut me some slack!!! [settlement payout options]
Replies: 13
Views: 2828

fishndoc wrote:Nisiprius gave you some very good advice.

One thing I would add: when "friends" and even close family ask you about your settlement, tell them that everything you received is in a structured settlement that just "meets my expenses each month".
That way you are already off the hook when someone (and they will) hits you up for a loan.
You: "man, I would love to be able to help you out, but if I did I couldn't pay my electric bill this month"...
This is wonderful advice for the newly affluent that wish to stay that way.
by kenbrumy
Sun Aug 08, 2010 6:11 pm
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

May I ask you to cite your source that "buyers remorse" is common? I quick Google search for "satisfaction survey among fixed annuitants" produced this survey: http://www.tiaa-crefinstitute.org/pdf/research/trends_issues/ti_definedcontribution0410.pdf Satisfaction levels among annuitized retirees are high. Over one-half (57%) of annuitants are very satisfied with the decision to purchase a payout annuity and an additional 32% are somewhat satisfied; 6% are not satisfied, with 5% not responding. I skimmed the rest of the paper and thought this table had more useful information from the survey: Table 2 Reasons for Purchasing a Payout Annuity For the regular monthly income 27% Seemed like a good, safe investment for retire...
by kenbrumy
Sun Aug 08, 2010 12:40 pm
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

dpbsmith wrote:I think it was bob90245 who called my attention to a very sensible article entitled--yep, it was him, Google found it on his website--Tools and Pools. Very good. I think you'd appreciate it.
It was interesting. It's similar to what I've come up with but with one extra pool. He also talked about buying extra fixed and variable annuities in a pool which isn't any part of my plan.

One thing he said which I hadn't really thought of was using the RMD calculation for withdrawals. Treating my personal IRAs like they were inherited (RMDs before 70 1/2) would significantly reduce the cash I was planning to dedicate to my safe money amount above the SS and pension amount. I'll think about that.

Thanks to you and bob90245
by kenbrumy
Sun Aug 08, 2010 12:33 pm
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

Ozonewanderer wrote:Knowing the way I handle such financial decisions with so many competing factors to consider I'll probably be dead by the time I decide.
That's my usual recommendation. :D

Laddering purchases if you decide to buy is also the way to do it. Once you sign on the dotted line and give them the check you can't get your cash back. Buyers remorse is common amongst annuity buyers and it can't be undone. Wading into things slowly with low amounts of your assets lets you see how you react and see how it works for you.
by kenbrumy
Sun Aug 08, 2010 10:40 am
Forum: Personal Consumer Issues
Topic: Advice on planning a Hawaiian destination wedding?
Replies: 25
Views: 4229

dixdak wrote:People who plan their weddings as if they were children's birthday parties are not mature enough to get married. I find it highly inconsiderate that you are essentially taking over family and friend's vacation plans and thousands of dollars in costs to go along with your dream wedding photo op.
I was trying to be gentle but you pretty much expressed what I was trying to get across.

To the OP - Get married at home. Have as simple a wedding as you can get your fiance to have. Blow the bucks on Hawaii if that's where you want to go but go by yourselves. Everyone will thank you for it.
by kenbrumy
Sun Aug 08, 2010 7:40 am
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

If you say so. Let's just say I did not make a conscious effort to target my AA depending on the SPIA (or any other guaranteed income source). - Ron You must not be a techno nerd like me and bob90245. BTW, you should go to Bob's website if you haven't. It has a lot of interesting articles. I've sliced and diced my expected SS, pensions and withdrawal strategies way too many times. The more of my living expenses that can be covered by "guaranteed" funds the more aggressive I can be with the assets remaining based on the lifestyle desired. Eventually, I came to believe the most reasonable approach is to do layers of funding. My pensions are relatively small but not insignificant. By deferring SS to 70, DW and I can live comfortably...
by kenbrumy
Sun Aug 08, 2010 7:21 am
Forum: Personal Consumer Issues
Topic: Advice on planning a Hawaiian destination wedding?
Replies: 25
Views: 4229

My kids have been invited and/or involved in a couple of destination weddings. It always created a bit of friction and grumblings. It may be the "big day" to you but you are effectively forcing family and friends to spend major dollars and probably very limited vacation days to go there. See how excited you prospective guest list is before you put them on the spot.
by kenbrumy
Sat Aug 07, 2010 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

I look at the SPIA in the same manner that I look at SS, pension, or any other retirement income source. It just reduces the amount of required income in retirement from non-guaranteed sources (such as your portfolio). I/we did not forumulate our target AA based upon the SPIA or any other current/future income source. We look at the AA strictly from a risk vs. goal view. In our case, our target AA in early retirement is probably higher than most folks would consider prudent at our age; however we are not only investing for ourselves, but also for the next generation and can afford "dips" along the way. The SPIA did not impact that decision at all. Just a view from somebody who is in the actual situation. - Ron But you probably di...
by kenbrumy
Sat Aug 07, 2010 12:08 pm
Forum: Personal Finance (Not Investing)
Topic: Taylor: Request for immediate annuity advice
Replies: 21
Views: 4835

Before you actually give money to an insurance company for a SPIA, I suggest you consider funding a sinking fund investment to pay you your social security equivalent until age 70. Deferring SS to age 70 is the best buy available for acquiring an inflation adjusted, US govt guaranteed annuity. The cost for deferring an age 70 SS check between 66 and 70 is a little less than $140,000 and increase a top end SS check from about $29,000 per year to around $39,000. These sums increase with inflation which most SPIAs will not. The reason you would want a SPIA is that you are expecting or afraid you will significantly outlive your mortality table life span. Right now for males, that's about age 79. I've run numbers in the past and found that you h...
by kenbrumy
Mon Aug 02, 2010 5:31 pm
Forum: Personal Finance (Not Investing)
Topic: Is this just more fancy marketing for a whole life policy?
Replies: 14
Views: 2478

"Friends," IMHO are more likely to sell you things you don't really want or need. There is no reason to buy this insurance product. If you are planning to have kids in the near future, you might want to start shopping for term. Since "the bun isn't in the oven," it's very premature to actually buy anything. Going through the motions now will at least get you familiar with the process. When you do actually buy something, you need to factor in the length of time you'll need coverage and allow for inflation over the period. At your age, you should probably "over buy" because it will not cost much for a 25 year level term policy. By then any kids should be out of college and your assets should be pretty solid with ...
by kenbrumy
Sat Jul 31, 2010 4:45 pm
Forum: Investing - Theory, News & General
Topic: Why a 4% withdrawal rate is still okay
Replies: 29
Views: 4357

There's always the Smith & Wesson plan. If it looks like you'll end up using all your assets, make sure your last asset is your S&W and a bullet. I've seen people focus on the 4% rule. Quite honestly, getting your "number" to the magical 25 times expenses is planning for failure. In their effort to retire at the first possible moment or extract the maximum amount greatly increases the risk because the 4% rule depends on historical performance of asset returns and inflation. That may not work going forward. It also doesn't program in emergencies or the failures of LTC or annuity insurance providers. I have a layered approach. I have a very modest lifestyle planned that depends almost entirely on SS and some small pensions. ...
by kenbrumy
Fri Jul 30, 2010 4:48 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 5 of 6
Replies: 24
Views: 3501

I did not see any mention in the article of the "life with installemnt refund" option. In this option (which I purchased in my SPIA), the insurance company promises to refund an amount equal to the unpaid balance of the original purchase amount to an annuitant's heirs in case he/she dies before the company has paid an amount equal to the original purchase price. This is important because many people worry that if they die early, then they will lose all the money they have paid the insurance company and which they haven't yet received in payouts. Annuities of all types are insurance products. There are an infinite number of insurance options available if you want to hunt them down. Ultimately, you'll get less money in a SPIA payou...
by kenbrumy
Fri Jul 30, 2010 3:47 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 5 of 6
Replies: 24
Views: 3501

dpbsmith wrote:Mel, one small request. Ask Forbes to unlink my name, because the Dan Smith it links to is not me.

Neither am I the Daniel Smith who plays the bassoon, nor yet the Dan Smith who manufactures candy in Pennsylvania.

There are many Dan Smiths and most of them are not me.
You've always struck me as a man of many talents. I'm sure that if you commit yourself you could play the bassoon and manufacture candy. The Pennsylvania part may be harder for you.
by kenbrumy
Tue Jul 27, 2010 4:56 am
Forum: Personal Investments
Topic: NY Life Annuity Death Benefit Payment
Replies: 3
Views: 888

I'm sorry about your situation but I need more details. Unfortunately, you need to read the annuity contract. Also, you can ask both sales people what happens if your mother takes the money in cash. Look for specifics and not "she'll have to pay taxes" which is a classic scare tactic. I'm afraid their advice is primarily driven by the possible sale of a high commission product.

If it was truly insurance then the cash should be available. She may have to pay some ordinary income tax on any "deferred gains" in your father's annuity. That would probably be the best route to go rather than continue the pain by buying another annuity product with high fees.
by kenbrumy
Sun Jul 25, 2010 4:26 pm
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

Don't forget, even if a term was not specified and it was only for joint lifetime, while they are alive they (assuming one/both live that long) will still be getting both SS and SPIA income. I don't think you read the cases I used very closely. The first option was to pay themselves cash until SS kicked in at age 70. The second option purchased an annuity that brought the total age 63 SS up to the same non-inflation adjusted amount that he would get at age 70. In both cases the dollar amounts were the same without inflation adjustments and terminated at the second persons death. Her SS is totally separate and irrelevant to the comparison although to be fair the annuity must be 100% to the survivor. That's where I thought the 5.6% was a bit...
by kenbrumy
Sun Jul 25, 2010 7:54 am
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

Re: equity indexed annuities

I went to a free luncheon whereby financial firm offered these annuities and explained them. It sounded to good to be true, along with all of their examples. I decided not to purchase them because of the thought that if it sounds to good you best not to purchase. Maybe I made a mistake and we should have purchased. What do you think? Thanks, keniles You provide so few details about the product that you definitely did the right thing by walking away. It was almost certainly some form of deferred annuity. The "rubber chicken" presentations typically tell you that a big bonus immediately goes into your account and that you are guaranteed a big return until you choose to withdraw your money. What they don't tell you is that to get th...
by kenbrumy
Sun Jul 25, 2010 7:48 am
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

In this scenario, don't forget that your SPIA payments continue (regardless of their true value due to any inflation) after you start drawing your SS. You have to add that monthly payment to what you anticipate your monthly SS income will be. Assuming you purchase an SPIA that covers both you/your wife's lifetime, payments continue till the end of term, regardless if you are alive or not (subject to the terms of the policy). Based on scant detail of the SPIA from the OP (about 5.6%), I made the assumption that it was for both their lifetimes. You are implying that they could buy a SPIA with a term certain provision. The OP would have to come back with more info. I had bought enough SPIA to bring his age 63 SS up to the same amount as his a...
by kenbrumy
Sat Jul 24, 2010 3:39 pm
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

There are numerous articles about deferring social security and how it's the most cost effective way to increase your retirement income rather than purchase a commercial annuity. I meant to say annuity because you're not buying anything. You're getting a much better increase in your SS by spending down your capital instead of buying a SPIA. Go to Scott Burns' website and look for articles there. Since you gave me all your numbers, it's easier and I hope clearer below. I'll pretend you would buy enough of a SPIA to equal your age 70 SS amount of $35,640. I'm assuming the SPIA is a 100% joint survivor since your wife will probably need something to live on if you die before her. Option 1 - Start SS @63 ($21,300) and buy $247,241 annuity ($14,...
by kenbrumy
Sat Jul 24, 2010 11:26 am
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

Re: Retirees advise on Annuities as part of retirement portf

I was a little concerned that my advisor was just trying to sell me something for the good of Fidelity. Actually just before I stopped working the market dropped 1000 points in one day and has been up and down since. That opened my eyes to the real world of the stock market and it's impact on "retirees". I will start a part time job in Aug to keep me busy which will pay around the SS limit. Another component to add to the portfolio analysis. I am going to take another look Bob; and the calculators and see what I can come up with. I cut a lot of text to make my comments clearer. For the first point -- Yes is was trying to sell you something for the good of Fidelity. At least it was a SPIA which isn't anywhere near as bad as a lot ...
by kenbrumy
Sat Jul 24, 2010 11:19 am
Forum: Personal Investments
Topic: Retirees advise on Annuities as part of retirement portfolio
Replies: 81
Views: 13475

I'll start off by recommending you buy an annuity and it's fully backed by the US government. Take that $200,000 the Fidelity guy wants you to use and give yourself a $30,000 payout every year until you reach 70. This is just about the combined total of $32,900 you'd get with taking SS now and buying the annuity. At 70 you start taking a much larger SS benefit. Your wife can then also collect this higher amount if you predecease her. A SS deferral is a much better investment than any commercial annuity I've ever seen. I have assumed that the $21,300 is your personal SS payment at 63. If true, you're just about maxed out on SS payment. If you defer until 70, your annual payout should be around $39,000 plus any inflation adjustments. That's a...
by kenbrumy
Tue Jul 20, 2010 6:17 pm
Forum: Investing - Theory, News & General
Topic: If you need an advisor, read this:
Replies: 81
Views: 9370

Stupid question time - why does anyone need an advisor. Don't they just add cost and produce zero value? The majority of investors are fully incapable of managing their own investment portfolio. More specifically, they are unable to develop a suitable target allocation, and even if they can, they are unable to maintain said allocation through good times and bad. They choose high-cost funds, get in and out of stocks at the wrong times, and invest way too aggressively or way too conservatively. A competent advisor/portfolio manager can add value even at a fee rate of 2-3%, because the investor would otherwise kill themselves with bad investor behavior. Unfortunately, most advisors exhibit the same symptoms attributed to ordinary investors ab...
by kenbrumy
Sat Jul 17, 2010 5:01 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 4 of 6
Replies: 29
Views: 3733

At best, I'm a thorn in the side of annuity pushing trolls on this forum and have managed to save a few people from really crappy insurance products. Oops! Then I won't talk about my SPIA :lol: ... - Ron If you're selling, thank you. However, I think you bought one; and if you are who I remember, it made sense. An SPIA can be useful in some limited situations. I get a chuckle out of the people I refer to as "another McLeod of the clan McLeod." Surprisingly, their first name isn't Conner or Duncan. For an SPIA to make any sense you typically have to live about 5 years beyond your mortality table, keep the amount under $100,000 per annuity and not have a massive bout of inflation after you buy it. I think most bogleheads can do a b...
by kenbrumy
Sat Jul 17, 2010 2:11 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 4 of 6
Replies: 29
Views: 3733

I didn't recall reading anything about MYGA annuities on any of these articles. Were they covered or addressed? If so, anyone have the link? They haven't been covered yet. They are longer term commitments with very limited liquidity. They are definitely not like CDs except to the people making the sales pitch. They can be for any time period but I've typically heard of 5 to 10 years. There's a serious cancellation fee and the redeemed amount is based on what the insurance company considers its current discounted cash value. That will rise and fall with interest rates. The guarantee is via the state guarantee association which may consider the contract "redeemed" if the original issuing company fails and pay you off with whatever ...
by kenbrumy
Sat Jul 17, 2010 1:25 pm
Forum: Personal Finance (Not Investing)
Topic: Answering the "Do I Have Enough to Retire" questio
Replies: 45
Views: 9228

Re: Answering the "Do I Have Enough to Retire" que

Exceeding the state guarantee limit on annuities seems too risky. You'd be at risk for the credit of a single insurance company for the rest of your life. Unfortunately, there are only a handful of companies issuing inflation indexed annuities. Not to hijack this to an annuity thread but the "state guarantee" is not a guarantee of the state. It's an arrangement where the insurance companies that sell in the state where you reside say they'll "make good" on any annuities that fail. It's a long way from FDIC type insurance and nowhere near as good as the "full faith and credit" of your state of residence. As to the OP, there are so many variables and totally unknowns out there that you really have to "buy y...
by kenbrumy
Sat Jul 17, 2010 9:45 am
Forum: Personal Finance (Not Investing)
Topic: Darn, they found me [junk mail]
Replies: 23
Views: 3522

The problem with the opt out web site is that it doesn't stop companies that "have a business relationship with you." That means any credit card affiliated with any frequent flier program you're in, the bank you use, etc.

I like #2. I've periodically gotten pissed off at the number of solicitations and I'll start mailing them back with a big marker saying to stop soliciting me. I did it once for 3 months and saw no change. They must enjoy paying the postage.
by kenbrumy
Fri Jul 16, 2010 3:01 pm
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 4 of 6
Replies: 29
Views: 3733

Nice summary on why not to buy a Fixed Deferred Annuity.

Any assassination attempts yet?

Unfortunately, most buyers are like my father-in-law that bought two about age 80 from "friends." When we took over his finances at around 85, he was adamant that they were yielding 5%. That was the one year teaser rate and their yield had fallen to 2 3/4% and 3%. At the time 5 year CDs were running over 5%.
by kenbrumy
Thu Jul 15, 2010 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Answering the "Do I Have Enough to Retire" questio
Replies: 45
Views: 9228

Re: The medical care costs are my biggest worry.

I'm not sure the new health plan will address these issues. You may be able to get insurance but at what cost? I wish I knew how to plan for this. No denial of coverage for pre-existing conditions, state insurance exchanges and a variety of cost savings ideas should help. I certainly don't think the new law will make it any more difficult to plan. How do you plan today? As always, the devil is in the details. In Texas there is a high risk plan. I have personally known of no one over the age of 50 that could get any private coverage in Texas. Everyone gets forced into the high risk plan. For a $7000 annual deductible, it only costs about $7,500 per year per person. So a couple is out $15,000 and gets no coverage unless something very, very ...
by kenbrumy
Sat Jul 10, 2010 7:44 am
Forum: Personal Finance (Not Investing)
Topic: European countries raising their retirement ages
Replies: 16
Views: 2354

3CT_Paddler wrote:The US needs to make similar moves for the sake of future solvency of Social Security.
Social Security is petty cash compared to the vast unfunded government pensions (federal, state and local). Social security can be "fixed" by a slight tweak in retirement age for the under 50 or a minor increase in the SS tax rate. Government pensions need a major overhaul.
by kenbrumy
Sat Jul 10, 2010 7:09 am
Forum: Personal Investments
Topic: Retirement/Investment advice (apologies, long post)
Replies: 17
Views: 2515

It's hard to figure out your situation. Your post is both extremely detailed and extremely lacking in relevant information. You may want to repost if you'd like advice better suited to your total situation. Search for the suggested format. As for your questions, I didn't see anything that would make me suggest you go 100% CDs. You have a long time ahead of you and you should probably have some equities. At age 60 I think most people would recommend you have 30 to 40% in index mutual funds. The rest could certainly go into laddered CDs. Stop looking at your equity values except for annual rebalancing. If you are really risk adverse, lower equities to 25% but I wouldn't recommend anything lower. As for a house, your situation is very fluid. I...
by kenbrumy
Fri Jul 09, 2010 3:37 pm
Forum: Investing - Theory, News & General
Topic: Father-in-law's Long-Term Cash Flow Deficit
Replies: 7
Views: 1725

I'd suggest laddering into 5 year CDs. As a CD matures, keep what you think you'll need for the next year plus a little emergency cash. With any leftovers, buy a CD 5 years out.

My in-laws have been in various stages of care for the last 5 years. My mother-in-law has passed away but my 90 YO father-in-law is in memory care. Other than Alzheimer's, he's still in great shape. There are people in assisted living that are still going strong that were there when my in-laws first showed up in assisted. You could be looking at a longer life for your FIL than he has money but you never know.

You can look for other programs for money. You can look for cheaper places. There aren't any easy answers. Good luck.
by kenbrumy
Wed Jul 07, 2010 12:07 pm
Forum: Personal Investments
Topic: DFA fund approved investment advisors
Replies: 18
Views: 5063

DFA diversification and it's academic approach to buy & hold investing is a key selling point for these advisors. You can only buy DFA through these approved advisors. DFA does seem to do a little better than a similar vanguard portfolio but how much ramains in question especially when you add in these advisors fees. I suspect that the fees eat a good portion of the so-called DFA advantage. It might be a wash. I've noticed DFA periodically tweeks their AA. About 2 years ago they added "commodities" but backcalculated their returns like it's always been there. I'm sure there have been other cases. Asset Builder claims that even with fees their DFA portfolios beat Vanguard. Of course, careful picking of timeframes, etc can alwa...
by kenbrumy
Sun Jul 04, 2010 4:07 pm
Forum: Personal Consumer Issues
Topic: Thomas Jefferson and John Adams
Replies: 20
Views: 4837

NAVigator wrote:Burr was dropped from the ticket in the next election after killing Hamilton in a duel. Burr was also tried for treason, but acquitted.
There were no "tickets" at this point in US history. Burr fell so far out of favor that he was not a viable candidate for president and received few, if any, electoral votes.

Jefferson and Adams were political opposites. During their political years, they truly hated each other. I won't elaborate on all their fights but they were vicious. Only after they had retired and mellowed did they become close friends.
by kenbrumy
Sun Jul 04, 2010 4:01 pm
Forum: Investing - Theory, News & General
Topic: Pension Paradox (or, Is there an Actuary in the House?)
Replies: 7
Views: 1897

You can assume your pension will be made far less generous as time goes on. The private sector will have to come to grips with the massive, unfunded pension liability most plans have built up.
by kenbrumy
Sun Jul 04, 2010 3:57 pm
Forum: Personal Investments
Topic: What Should My Parents Do?
Replies: 9
Views: 2493

There's two questions here. The first is what you asked. (What would you do in their situation?) The overwhelming majority of bogleheads would have been miles away from Edward Jones long, long, long ago. The second (but unasked) is "what should you do?" You are attempting to "parent" your parents. You are trying to help them learn something from you. Since both of them powdered your butt, they have a very hard time thinking of you as being able to be more knowledgeable then they are. The EJ broker is probably very nice to them. He/she tells them encouraging things and always leaves them feeling good after the contact. They are assured that EJ gets better returns for them even after their fees than what they'd get using t...
by kenbrumy
Sat Jul 03, 2010 12:35 pm
Forum: Personal Investments
Topic: BMY yields 6%
Replies: 13
Views: 2413

baw703916 wrote: Sorry, but I have to agree with Ken on this one. To randomly pick a dividend-oriented ETF, DHS has a distribution yield of 4.5%, a reasonable expense ratio (0.38%), and less than 10% of its holdings in any single company. It seems like a pretty inexpensive way to hedge company specific risk, if one wants to follow a dividend-based approach. (I don't own this fund).

Brad
Be careful, most people found agreeing with me on any subject are frequently referred to as "sorry." :lol:
by kenbrumy
Sat Jul 03, 2010 10:52 am
Forum: Investing - Theory, News & General
Topic: Mel's Forbes Series on Annuities - Part 3 of 6
Replies: 13
Views: 2486

And, I'd be willing to bet that the vast majority of decision-makers don't have a clue about investing, and yet they're charged with deciding on a plan that will affect the lives of so many. It's really sad and something needs to be done about it. It's a shame everyone can't just sign up for the TSP as an option, or simply opt out of the company plan an be eligible for a much larger IRA contribution by doing so. What I've seen is that the plans offered by the company is "free" to the company. They let a financial firm manage the plan. That financial firm puts together a series of funds that the company rep approves. Unfortunately, the approval of the load and high fee funds are necessary to keep the plan "free." The com...
by kenbrumy
Sat Jul 03, 2010 10:43 am
Forum: Personal Investments
Topic: BMY yields 6%
Replies: 13
Views: 2413

---------------- This is crazy. The reason a boglehead would stay out of individual stocks is because of company specific risk. . . but . . There isn't really a mass exodus from "smart money" selling BMY to lower prices so that the dividend is higher. According to Yahoo, there has been a net selling of 3.57% of shares AND only 2.4% shares are short. The stock is going lower because the overall market is in a poor environment. What's wrong with a Return on Equity of 23% and Quarterly Earnings Growth of 16%? The only bad thing is the pay out ratio of 91%. That's pretty steep. Staying out of invidual stocks such as COP with a 4.5% yield, or MO with a 7% yield, or VZ with a 6.8% yield is fear. No one made any money by making investin...
by kenbrumy
Sat Jul 03, 2010 10:36 am
Forum: Personal Finance (Not Investing)
Topic: Neighbor told me he's thinking of walking away
Replies: 42
Views: 7826

Me thinks that DiscoBunny is in the real estate business. The basic realtor mantra is that it's always a great time to buy a house. We're going through a total upheaval of the USA concept of home ownership. Pre-WWII you bought a house because you needed a place to live and it was cheaper than renting. Of course, you had to have a decent job, a stable lifestyle and at least a 20% downpayment. Pre-New Deal you typically needed a 30-40% downpayment but FDR started the government insurance of mortgages and lowered the downpayments to increase home ownership. After WW II we saw the baby boom and rapid increase in property prices far in excess of inflation in many locations. Before, homes typically depreciated as they got older. Your personally r...
by kenbrumy
Sat Jul 03, 2010 8:58 am
Forum: Personal Investments
Topic: BMY yields 6%
Replies: 13
Views: 2413

Holding individual stocks is always a losing game even for dividends. An individual stock even if it pays a dividend is subject to the same risk factors for such a focused investment. Bank of America, Fannie, Freddie, Citi, BP and many others used to pay a good dividend. Right now they are "gone with the wind."

An index fund of high dividend paying stocks along the lines of a total market index would be a better approach.

BMY pays 6% for a reason. The "smart money" must see a big drug coming off patent soon or high risk due to an existing drugs liability. The list goes on and on.

My advice is to stay out of individual stocks.