Larry Swedroe : Integrated Investment Plan

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Random Walker
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Larry Swedroe : Integrated Investment Plan

Post by Random Walker » Fri Apr 14, 2017 2:29 pm

http://www.etf.com/sections/index-inves ... t-plan-key

"Having a well-thought-out investment plan is a critical part of the financial planning process. However, it’s only the necessary condition for likely success. The sufficient condition is to integrate the investment plan into an overall financial plan that also addresses the risk management issues discussed above"

In this article from ETF.com Larry addresses longevity risk, mortality risk, disability risk, wealth protection insurance, tax alpha.

Dave

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Re: Larry Swedroe : Integrated Investment Plan

Post by carolinaman » Sat Apr 15, 2017 8:38 am

Good article. Thanks.

There are many risks that can potentially damage a good retirement plan. Risk assessment is an important part of developing a retirement plan. It should identify potential risks for the person(s) in question, their probability of occurring, their impact and mitigation strategies. We tend to focus heavily upon our investment plans but these risks can ruin our retirement if they are not planned for.

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Re: Larry Swedroe : Integrated Investment Plan

Post by SGM » Sun Apr 16, 2017 8:27 am

This is the follow up to Larry Swedroe's earlier article concerning employing human capital changes into a financial plan. This is a nice summary of what is needed and the kind of article I like to see from Mr. Swedroe.

He has succinctly discussed tax alpha which I have used to justify my Roth conversions prior to taking delayed SS.

Longevity risk includes delaying SS. He states that academic research shows deferred annuities are better than immediate annuities. I think I will used laddered SPIAs at some point.

He discusses mortality risk. Early on I had disability insurance until I felt I was sufficiently self insured. I have seen some people effectively utilize disability insurance to protect their income after a severe illness or accident. Also a relative bought life insurance of $1MM for each child. He died in a severe sporting accident.

He also discusses wealth insurance which we have some of, but it only protects one of us. I probably need to assess the need for some additional wealth insurance. I had this for my profession activities with tail coverage now that I am retired. We also have some property set up as separate LLCs which limits liability on certain properties.

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Artsdoctor
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Re: Larry Swedroe : Integrated Investment Plan

Post by Artsdoctor » Sun Apr 16, 2017 6:07 pm

Very succinct. I agree with each item outlined entirely.

2015
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Re: Larry Swedroe : Integrated Investment Plan

Post by 2015 » Sun Apr 16, 2017 8:11 pm

Last year, Dirk Cotton at The Retirement Cafe posted an excellent, thorough, 8-part series (including generous use of very helpful links) on creating a comprehensive financial plan. I recall reading somewhere Cotton being referred to as a retirement thought leader. His blog is outstanding.

Here's part 1, with links to the other parts:

http://www.theretirementcafe.com/2016/0 ... art-1.html

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Re: Larry Swedroe : Integrated Investment Plan

Post by junior » Sun Apr 16, 2017 9:39 pm

the use of Monte Carlo simulations can help analyze how the purchase of long-term health insurance impacts the odds of achieving one’s goals.
Do people really think the complexities of a decades long relationship with a long term care insurance company can be accounted for by a Monte Carlo simulation?

Longtermgrowth
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Re: Larry Swedroe : Integrated Investment Plan

Post by Longtermgrowth » Sun Apr 16, 2017 11:38 pm

Thank you for keeping us updated on the articles from Mr. Swedroe, Random Walker :sharebeer

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Re: Larry Swedroe : Integrated Investment Plan

Post by whodidntante » Sun Apr 16, 2017 11:44 pm

Longtermgrowth wrote:Thank you for keeping us updated on the articles from Mr. Swedroe, Random Walker :sharebeer
Someone should apologize to him privately and invite him back. I'm not up on who did what.

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Re: Larry Swedroe : Integrated Investment Plan

Post by Longtermgrowth » Mon Apr 17, 2017 12:42 am

whodidntante wrote:
Longtermgrowth wrote:Thank you for keeping us updated on the articles from Mr. Swedroe, Random Walker :sharebeer
Someone should apologize to him privately and invite him back. I'm not up on who did what.
I'm not sure who should apologize either, as there have been a number of posters over time that have crossed the line in my opinion. I hope none of my questions contributed to the angst; the few questions I asked in his threads, or in direct response to his posts, were only in hopes of hearing his valued opinion on specific question.

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nedsaid
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Re: Larry Swedroe : Integrated Investment Plan

Post by nedsaid » Tue Apr 18, 2017 12:55 am

whodidntante wrote:
Longtermgrowth wrote:Thank you for keeping us updated on the articles from Mr. Swedroe, Random Walker :sharebeer
Someone should apologize to him privately and invite him back. I'm not up on who did what.
As much of a Larry Swedroe fan that I am, Larry was not blameless. It is a good reminder to us all to be measured in our criticisms and to be kind to those who disagree with us. I have seen a few valued posters here that got run off here on the forum (not by Larry), a couple of which were favorites of mine. It is easy to get to caught up in our own opinions and forget about other's feelings. I know I have not been 100% blameless either. Humility is a good trait and sometimes even I need more of it. I can think of a few instances where I was too tough in my disagreements.
A fool and his money are good for business.

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Re: Larry Swedroe : Integrated Investment Plan

Post by azanon » Tue Apr 18, 2017 11:47 am

Just my observation, Larry spent quite a bit of time making posts about his articles and/or his books. So it seems a bit strange to view this as him leaving us, as if to suggest he were only here to help, and meaning I'm not sure who's hurt more by his departure; him or everyone else. Now if others are going to post links to his articles and books like he used to do, maybe he doesn't really lose anything, but we lose the commentary. Bottom line - it was never just benevolence that he's now taken away, as his last post would suggest, but more of a quid pro quo relationship that used to exist. Or at least that's how I saw it.

Random Walker
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Re: Larry Swedroe : Integrated Investment Plan

Post by Random Walker » Tue Apr 18, 2017 12:52 pm

Azanon,
I think your view is incorrect. I believe Larry was only trying to give back. He was just trying to get the word out on the winning strategy. he doesn't get much of anything in return except the satisfaction of helping others. I could be wrong, but doubt it strongly.

Dave

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Re: Larry Swedroe : Integrated Investment Plan

Post by bigred77 » Tue Apr 18, 2017 1:28 pm

Random Walker wrote:Azanon,
I think your view is incorrect. I believe Larry was only trying to give back. He was just trying to get the word out on the winning strategy. he doesn't get much of anything in return except the satisfaction of helping others. I could be wrong, but doubt it strongly.

Dave
Being active on a board like this certainly garners clicks for his articles, has some sort of impact on his book sales, and I'm sure generates awareness of his firm. I'm not sure just how much of a return he see's on all the time he spends on Bogleheads interacting with members but I'm positive it isn't zero. I would also acknowledge that BH members as a whole probably benefit more from the exchange than he does. He was/is a tremendous resource and I hope he comes back one day.

I think Larry was growing more and more frustrated with his interactions here (just my impression, I am not trying to put words in his mouth). He's an expert, author, and knows more about finance than the vast majority of BH members. I think he needed to understand he was not solely discussing ideas with other MBA's and academics. It appeared to me that he started to lose patience with constantly defending his positions and suggestions with less experienced investors. I hope he cools off and comes back to Bogleheads, because I certainly thought he added a lot to the discussions.

Random Walker
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Re: Larry Swedroe : Integrated Investment Plan

Post by Random Walker » Tue Apr 18, 2017 3:01 pm

Big red,
Yes I'm sure that you are right: participation in Bogleheads would drive Bogleheads to read his books, read his articles, and might drive a few to check out his firm (it did me). But the benefit he derives from all that other than personal satisfaction in helping others is likely very minimal. I believe he's already won the game and is just giving back.
I think one of Larry's great strengths is his ability to communicate with people at very different levels of knowledge and interest. His ability to translate and consolidate academic journal information into enjoyable books for the layman displays that ability. Teaching is in his DNA.

Dave

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Re: Larry Swedroe : Integrated Investment Plan

Post by backpacker » Tue Apr 18, 2017 4:13 pm

I agree with what was said above. Larry contributed a large amount of content to the forum and that is something that will genuinely be missed. What will not be missed is the way he treated those he disagreed with. There is no list of credentials or number of published books and articles that justify not treating others with kindness and respect.

Among the posters on Bogeleads are some of the most impressive, thoughtful, and humble people that I've met. Thanks everyone for being patients while I've (very slowly) learned so much from all of you! :beer

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Re: Larry Swedroe : Integrated Investment Plan

Post by bayview » Tue Apr 18, 2017 7:14 pm

As I recall, he left the forums for a while several years ago for similar reasons.

I hope he decides to come back. I value many of his contributions, while sometimes raising my eyebrows when things got heated.

It takes all kinds in this world. If we're all of the same temperament, things get both dull and less informative.

Namaste, y'all. 8-)
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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Re: Larry Swedroe : Integrated Investment Plan

Post by Slick8503 » Tue Apr 18, 2017 8:06 pm

I've been a member of many forums over the years. Bogleheads has by far the most collective intelligence of any, BUT the amount of snark, cold, rude, whatever you want to call it, comments that get posted here are too much at times, and I don't understand why that is. There is no need for it.

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Re: Larry Swedroe : Integrated Investment Plan

Post by johnz1001 » Wed Apr 19, 2017 5:38 am

Larry Swedroe is absolutely one of the most generous responders to people on this forum. He reads people's posts, gives his argument and moves on. And he did that time and time again with a wide range of people, not just the academic sort. It's very rare to find someone who by no means needs this forum take the time to interact with people of all levels. He would answer specific questions about financial moves, and I know hardly anyone of stature willing to do that. So, imo, it's the caliber of this forum that brought him here; but he raised the caliber a notch with his articles and sustained high quality input to people's questions and criticisms. Whatever he does in the future, I appreciate him being on this forum as long as he was.

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Re: Larry Swedroe : Integrated Investment Plan

Post by azanon » Wed Apr 19, 2017 8:41 am

Random Walker wrote:Azanon,
I think your view is incorrect. I believe Larry was only trying to give back. He was just trying to get the word out on the winning strategy. he doesn't get much of anything in return except the satisfaction of helping others. I could be wrong, but doubt it strongly.

Dave
I don't see how it's possible for my view to be incorrect. I, myself, purchased 3 of his books as a direct result of learning about him and his work through his participation on this forum. Many others have done just the same. It is simply a matter of fact that he would have indirectly profited at least some by his interaction here. This would be true whether it was the reason he participated here or not.

My point was I was just a little put off by his last post, where he said he's leaving, and he left with the implication that we all (who are left) are going to lose out and he loses nothing. He didn't say that, but her certainly implied it, at least in my opinion. I believe that he also loses a few things, one of them being the joy of participating with like-minded people with the same passion and the financial benefits that would be increased by his activity here whether that's why he did it or not. And if it's not why he did it, then why did he send me a PM or two asking me to write a review about one of his books on Amazon?

Now don't get me wrong. I hope to see him back as well, but if that doesn't happen then I'd actually call that a loss for everyone, Larry included.

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nedsaid
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Re: Larry Swedroe : Integrated Investment Plan

Post by nedsaid » Wed Apr 19, 2017 8:49 am

backpacker wrote:I agree with what was said above. Larry contributed a large amount of content to the forum and that is something that will genuinely be missed. What will not be missed is the way he treated those he disagreed with. There is no list of credentials or number of published books and articles that justify not treating others with kindness and respect.

Among the posters on Bogeleads are some of the most impressive, thoughtful, and humble people that I've met. Thanks everyone for being patients while I've (very slowly) learned so much from all of you! :beer
Backpacker, good to see you post here. Welcome back!
A fool and his money are good for business.

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nedsaid
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Re: Larry Swedroe : Integrated Investment Plan

Post by nedsaid » Wed Apr 19, 2017 8:53 am

azanon wrote:
Random Walker wrote:Azanon,
I think your view is incorrect. I believe Larry was only trying to give back. He was just trying to get the word out on the winning strategy. he doesn't get much of anything in return except the satisfaction of helping others. I could be wrong, but doubt it strongly.

Dave
I don't see how it's possible for my view to be incorrect. I, myself, purchased 3 of his books as a direct result of learning about him and his work through his participation on this forum. Many others have done just the same. It is simply a matter of fact that he would have indirectly profited at least some by his interaction here. This would be true whether it was the reason he participated here or not.

My point was I was just a little put off by his last post, where he said he's leaving, and he left with the implication that we all (who are left) are going to lose out and he loses nothing. He didn't say that, but her certainly implied it, at least in my opinion. I believe that he also loses a few things, one of them being the joy of participating with like-minded people with the same passion and the financial benefits that would be increased by his activity here whether that's why he did it or not. And if it's not why he did it, then why did he send me a PM or two asking me to write a review about one of his books on Amazon?

Now don't get me wrong. I hope to see him back as well, but if that doesn't happen then I'd actually call that a loss for everyone, Larry included.
I do think Larry gained a lot here by posting on the forums, not financially, but by testing his ideas in the crucible of a forum. Bogleheads can be a tough crowd but Larry could get an idea of how his ideas would be received in book form. Not quite peer review in the academic sense but a place where he could bounce ideas and where he could hone his explanations of financial concepts. It was really win-win for everybody.
A fool and his money are good for business.

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Re: Larry Swedroe : Integrated Investment Plan

Post by cantos » Wed Apr 19, 2017 9:14 am

Thanks OP & Larry. A terrific mini series of posts. Excellent thoughts on what you should think about, given your employment/income source, when allocating your portfolio.

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Re: Larry Swedroe : Integrated Investment Plan

Post by matjen » Wed Apr 19, 2017 10:52 am

I sense a fair amount of pearl clutching about how Larry handled certain interactions. My thoughts: 1) I think it is important to remember that in the vast amount of scenarios it was him responding to someone else who cast the first stone IMO. 2) He has dealt with many of the issues raised over and over again. So, again IMO, cut him some slack. He has gone through the whole "Prospectus Argument" before for instance. I mean how many times has someone claimed that holding total market means you have all the factors? 3) Whatever you believe about him being partly responsible, the fact remains that every "pro" stops posting here and if you look through the archives you will see at one time there were plenty of DFA guys, etc. more active. Why do you think that is? I mean who wants to post things here and get harangued about past thoughts on commodities or managed futures or incentives?

Even if you are a religious Three-Funder who thinks anything over 7 bps is a crime, this forum is much better off IMO with those folks around.

Bill Bernstein is the most influential person in my investing life. If he deigns to show his face around these parts again I'm going to keep bringing up his suggestion to move to short term treasuries post global financial crisis. Nothing like say 40% of ones portfolio under performing by a couple percentage points a year for seven or eight years. Thanks Bill you know it all! :wink:
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Re: Larry Swedroe : Integrated Investment Plan

Post by gkaplan » Wed Apr 19, 2017 11:35 am

matjen wrote:I sense a fair amount of pearl clutching about how Larry handled certain interactions. My thoughts: 1) I think it is important to remember that in the vast amount of scenarios it was him responding to someone else who cast the first stone IMO. 2) He has dealt with many of the issues raised over and over again. So, again IMO, cut him some slack. He has gone through the whole "Prospectus Argument" before for instance. I mean how many times has someone claimed that holding total market means you have all the factors? 3) Whatever you believe about him being partly responsible, the fact remains that every "pro" stops posting here and if you look through the archives you will see at one time there were plenty of DFA guys, etc. more active. Why do you think that is? I mean who wants to post things here and get harangued about past thoughts on commodities or managed futures or incentives?

Even if you are a religious Three-Funder who thinks anything over 7 bps is a crime, this forum is much better off IMO with those folks around.

Bill Bernstein is the most influential person in my investing life. If he deigns to show his face around these parts again I'm going to keep bringing up his suggestion to move to short term treasuries post global financial crisis. Nothing like say 40% of ones portfolio under performing by a couple percentage points a year for seven or eight years. Thanks Bill you know it all! :wink:

Thank you, for your voice of reason.
Gordon

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Re: Larry Swedroe : Integrated Investment Plan

Post by jhfenton » Wed Apr 19, 2017 12:04 pm

matjen wrote:[T]his forum is much better off IMO with those folks around.
Indeed. :beer

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backpacker
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Re: Larry Swedroe : Integrated Investment Plan

Post by backpacker » Wed Apr 19, 2017 12:17 pm

matjen wrote: Bill Bernstein is the most influential person in my investing life. If he deigns to show his face around these parts again I'm going to keep bringing up his suggestion to move to short term treasuries post global financial crisis. Nothing like say 40% of ones portfolio under performing by a couple percentage points a year for seven or eight years. Thanks Bill you know it all! :wink:
I suspect that Bill would respond with a chuckle and some comment about the dangers of trusting experts, including him. Something I think I've learned is that the people who really understand their field---people like Bernstein and Bogle and Schiller and Fama---usually display the most intellectual humility and kindness to others.
Last edited by backpacker on Wed Apr 19, 2017 12:22 pm, edited 2 times in total.

bigred77
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Re: Larry Swedroe : Integrated Investment Plan

Post by bigred77 » Wed Apr 19, 2017 12:20 pm

matjen wrote:I sense a fair amount of pearl clutching about how Larry handled certain interactions. My thoughts: 1) I think it is important to remember that in the vast amount of scenarios it was him responding to someone else who cast the first stone IMO. 2) He has dealt with many of the issues raised over and over again. So, again IMO, cut him some slack. He has gone through the whole "Prospectus Argument" before for instance. I mean how many times has someone claimed that holding total market means you have all the factors? 3) Whatever you believe about him being partly responsible, the fact remains that every "pro" stops posting here and if you look through the archives you will see at one time there were plenty of DFA guys, etc. more active. Why do you think that is? I mean who wants to post things here and get harangued about past thoughts on commodities or managed futures or incentives?

Even if you are a religious Three-Funder who thinks anything over 7 bps is a crime, this forum is much better off IMO with those folks around.

Bill Bernstein is the most influential person in my investing life. If he deigns to show his face around these parts again I'm going to keep bringing up his suggestion to move to short term treasuries post global financial crisis. Nothing like say 40% of ones portfolio under performing by a couple percentage points a year for seven or eight years. Thanks Bill you know it all! :wink:
I mean, I agree in general but one of the best aspects of this board is that everything that gets posted gets poked, prodded, and questioned. Whether it's a discussion of the role of commodities in a diversified portfolio or whether or not it's appropriate to tip an Uber driver. That's just a part of it, and I think it's a good thing. I'll bet every time Larry got into yet another discussion about the small and value premiums it informed another couple of new members.

I understand why it could be frustrating for "pro's" to be active on this board. They know more than most of the people they're interacting with. It's a great thing for the board in general because we benefit from their knowledge and insights but they need to understand they are probably going to see some skepticism and questioning from investors who simply aren't as familiar with concepts and topics they bring up for discussion. They're going to probably have to rehash old concepts that may be required knowledge to understand whatever the current topic is that they bring up. No doubt this requires tremendous patience and acknowledging that some people just aren't going to get it.

I think Larry's articles and books are tremendous. I think he writes those in a way where an intermediate investor can understand his points and message. I think when he was posting here on Bogleheads he would get a little too technical at times (just my opinion here, and it certainly wasn't all the time). I don't think everyone understood the points he was trying to make when he starting talking about kurtosis and skew.

At times, some members can be inconsiderate when responding to the pro's, and that should not occur. We all have to remember to remain civil at all times, especially in disagreements and heated debates. The board is undoubtedly better when the pro's participate, and I hope they can find the patience to rejoin/join in the future. If John Bogle ever jumped on here to interact with members my first post to him would probably be "So in terms of your views on International equities..."

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Re: Larry Swedroe : Integrated Investment Plan

Post by Random Musings » Wed Apr 19, 2017 1:07 pm

Haven't posted in quite a while (but always looking) and I just have to say that it's a shame that Larry S. won't be providing his expertise on this board any more. Even though I don't use any of the (in my mind) esoteric products that he sometimes recommends, I find it very beneficial (and educational) to learn what new financial products are in the market and how they can be potentially fit in a portfolio, regardless of whether I will use them or not.

It's certainly far more compelling reading than talking about 2 bps. :mrgreen:

Thank you for your time, Mr. Swedroe.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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Re: Larry Swedroe : Integrated Investment Plan

Post by CyclingDuo » Thu Apr 20, 2017 7:47 am

Random Walker wrote:http://www.etf.com/sections/index-inves ... t-plan-key

"Having a well-thought-out investment plan is a critical part of the financial planning process. However, it’s only the necessary condition for likely success. The sufficient condition is to integrate the investment plan into an overall financial plan that also addresses the risk management issues discussed above"

In this article from ETF.com Larry addresses longevity risk, mortality risk, disability risk, wealth protection insurance, tax alpha.

Dave
Another excellent article!

We're taking on those risks listed as we make our plans. Although we are still about a decade out from our target retirement, it's nice to be thinking about all of this now.

Found this to be especially pertinent in his closing summation...
If your planning doesn’t address each of these issues, I hope this serves as a wakeup call. It’s not too late to act—until it is.
In terms of the longevity risk, Larry makes the suggestion: It's also important to understand that delaying social security benefits as long as possible provides longevity insurance.

That is in our plans with regard to SS.

In addition, one of us has a defined benefit plan, and we are studying the difference in the monthly payout based on the age retirement is taken. It's obvious that working one additional year, or two additional years, and so on bumps the monthly amount up which adds a bit more and improves the longevity insurance.

At this point, we remain at odds with regard to LTC insurance. If we purchase it now in our 50's, it looks like we would pay nearly $195K (that's not even accounting for rises in rates, just using what the premium would be in our first year) in premiums over the next 30 years before reaching the age where only one of our four parents needed LTC.

What are the thoughts of others on the LTC insurance and the risks, pros/cons? Our plans currently include working on staying in shape and healthy, as well as continue with our accumulation phase to hopefully reach the point that we can self-insure. It's certainly a piece of the integrated financial plan we need to study and research more than we have.
Last edited by CyclingDuo on Thu Apr 20, 2017 9:54 pm, edited 1 time in total.

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Re: Larry Swedroe : Integrated Investment Plan

Post by itstoomuch » Thu Apr 20, 2017 5:16 pm

@ CyclingDuo, YMMV on LTCi.
We had a salesman who answered our questions. We bought in our early 50s when this insurance segment was pushing LTCI. If you have ever visited a LTCi facility or cared for a loved one, Only then will you understand Its value.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

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Re: Larry Swedroe : Integrated Investment Plan

Post by dave_k » Thu Apr 20, 2017 5:43 pm

CyclingDuo wrote:At this point, we remain at odds with regard to LTC insurance. If we purchase it now in our 50's, it looks like we would pay nearly $1.6M (that's not even accounting for rises in rates, just using what the premium would be in our first year) in premiums over the next 30 years before reaching the age where only one of our four parents needed LTC.

What are the thoughts of others on the LTC insurance and the risks, pros/cons? Our plans currently include working on staying in shape and healthy, as well as continue with our accumulation phase to hopefully reach the point that we can self-insure. It's certainly a piece of the integrated financial plan we need to study and research more than we have.
Your LTC premiums would average over $50,000 per year for 30 years, is that correct? That sounds extreme. My wife and I started it a few years ago in our early 40s. Our combined premiums are about $1200/yr. I would expect it to be cheaper starting younger, but not by a factor of 40.

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Re: Larry Swedroe : Integrated Investment Plan

Post by itstoomuch » Thu Apr 20, 2017 9:51 pm

We are traveling on the Amtrak Coast Starlight, heading North to Seattle. About 80minutes late, just below Olympia, WA. We're retired and the seats are fine. Got nothing to do but make comments.

Thx for, Random Walker's cite, integrated investment plan , by L. Swedrow.
Apparently I think like Swedrow. (See signature line below)
If he is to later republish, and on a friendlier forum, I'd call the article, "Integrated Risk Management." After all, Asset allocation, factors, diversification, and everything else, is risk management, active, and timed. :oops: :beer :annoyed :greedy

YMMV :oops: . Some more than other's :sharebeer . GL
Last edited by itstoomuch on Thu Apr 20, 2017 9:56 pm, edited 1 time in total.
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

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Re: Larry Swedroe : Integrated Investment Plan

Post by CyclingDuo » Thu Apr 20, 2017 9:56 pm

dave_k wrote: Your LTC premiums would average over $50,000 per year for 30 years, is that correct? That sounds extreme. My wife and I started it a few years ago in our early 40s. Our combined premiums are about $1200/yr. I would expect it to be cheaper starting younger, but not by a factor of 40.
My bad.

Edited it: $195K without a rise in premiums.

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Re: Larry Swedroe : Integrated Investment Plan

Post by itstoomuch » Thu Apr 20, 2017 10:04 pm

^ in current dollar$ or future inflated dollar$. :confused
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

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CyclingDuo
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Re: Larry Swedroe : Integrated Investment Plan

Post by CyclingDuo » Fri Apr 21, 2017 7:13 am

itstoomuch wrote:^ in current dollar$ or future inflated dollar$. :confused
If you were talking to us, that was In today's dollars.

Running a couple of quote services for our current ages, cost for a semi private as well as a single room in California, using 4 years as the duration of requiring LTC (basing it on the one parent of ours who required 6 years of care), and the cost per day that was paid in the facility where our parent received LTC - the combined annual premium quote for the two of us for that specific situation is $6500 per year.

Obviously, one could seek a lower cost facility; different state or area in that state; choose a lower per day charge; choose 3 years, or 2 years instead of 4 and come up with a lower quote. However, the Genworth calculators for the costs using the 2016 calendar year data show the average daily charges for a semi-private room and a private room in the location we expect to be at that age - are a bit higher than the lower cost facility one of our parents was being charged in that area. Factoring in some of the spend would come from our own assets as well.

For the quotes we were provided, weighing the difference between investing that same amount each year to self-insure with our own assets as opposed to paying 30+ years of premiums becomes a strategy we need to weigh. If you know of other ways to plan for LTC in terms of premiums and quality insurance, we're all ears.

itstoomuch
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Re: Larry Swedroe : Integrated Investment Plan

Post by itstoomuch » Fri Apr 21, 2017 11:20 am

We took the attitude that LTCi would pay part of the total care expenses; for that person in LTC; best assumed scenario, 2002(?):
SS check would go to LTC.
LTCi would pay its amount.
Personal funds from retirement accounts next.
Personal investment accounts for that person would be used last.

Assumption then that LTCi would used for partially in the beginning of care and then fully in the latter care. Total care for up to 6 years before LTCi would be exhausted and personal assets would used thereafter. Hopefully we would never reach the exhaustion of the LTCi money.
We each have single LTCi, ~$200/day, 1095days.
YMMV
Rev90517; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax 25%. Early SS. FundRatio (FR) >1.1 67/70yo

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