Master thread for Washington DC Area Bogleheads

Local Chapters, Wiki, and general Bogleheads community discussion, news, events, and announcements
SGM
Posts: 2722
Joined: Wed Mar 23, 2011 4:46 am

Re: Master thread for Washington DC Area Bogleheads

Post by SGM » Sun May 14, 2017 8:37 am

I am hoping to make the meeting. I may leave a little early for roast lamb and to see the dancers at St. Luke's in Potomac.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Calculating the Funded Ratio using real life annuity pricing

Post by bobcat2 » Mon May 22, 2017 8:59 am

At yesterday's meeting it was brought up that one can calculate the funded ratio for your retirement portfolio while working by dividing the size of your portfolio by the price of a deferred real (inflation-adjusted) life annuity with payouts at your desired retirement income level. The question that came up was where can I get the deferred life annuity price.

The answer is the website Immediateannuities.com. Link - https://www.immediateannuities.com/annu ... rs/?sce=hc

I went there this morning and asked for a quote for a 50 year old male that wants $30,000/year ($2,500/month) in real income starting in 15 years at his intended retirement age of 65. The quote was $377,135 with a payout rate of about 8%.

Assuming my hypothetical 50 year old has $320,405 in his portfolio, his funded ratio (FR) is the following.

FR = portfolio/PV(desired retirement income)*= 320,405/377,135= 0.85

*Where the present value (PV) of the desired retirement income is equal to the price of the deferred real life annuity for that level of income.

Our investor is in fairly good shape because he has 15 years to get the funded ratio up to 1.00 or more. He should continue to regularly monitor his progress by calculating the funded ratio at least on a trimester basis through the years.

For those at or in retirement they can calculate the funded ratio by pricing an immediate real annuity, aka an inflation-adjusted SPIA.

Best,
Bob
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
dodecahedron
Posts: 3688
Joined: Tue Nov 12, 2013 12:28 pm

Re: Master thread for Washington DC Area Bogleheads

Post by dodecahedron » Mon May 22, 2017 9:22 am

Back in March, there was post above stating that the four remaining meetings for 2017 would be held at Ballston Library, but clearly something changed those plans since yesterday's meeting was in Silver Spring. I am making plans to come to DC this summer and/or fall, are there any plans for a Ballston meeting?

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Mon May 22, 2017 9:35 am

dodecahedron wrote:Back in March, there was post above stating that the four remaining meetings for 2017 would be held at Ballston Library, but clearly something changed those plans since yesterday's meeting was in Silver Spring. I am making plans to come to DC this summer and/or fall, are there any plans for a Ballston meeting?
Our next meeting will be at the Ballston library on Sunday, July 16, from 3-5:30.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Calculating the Funded Ratio using real life annuity pricing

Post by VictoriaF » Tue May 23, 2017 11:28 am

bobcat2 wrote:At yesterday's meeting it was brought up that one can calculate the funded ratio for your retirement portfolio while working by dividing the size of your portfolio by the price of a deferred real (inflation-adjusted) life annuity with payouts at your desired retirement income level. The question that came up was where can I get the deferred life annuity price.

The answer is the website Immediateannuities.com. Link - https://www.immediateannuities.com/annu ... rs/?sce=hc
Bob,

Thank you for the presentation and the follow-up with annuity quotes. Very useful.

At the meeting I also had a question about buying TIPS. Right now I have some TIPS I have purchased in 2008-2009 at very good rates. But they are now expiring and I need to develop a new TIPS strategy.

I am and will be holding TIPS only in Roth IRAs, thus I am not concerned about taxes, only about the earnings.

If I understood your and David's comments correctly, the approach is as follows:
1. Assume life expectancy, e.g., 30 years.
2. Have a TIPS collection with the weighted average of 30 / 2 = 15 years.

Consider the following TIPS investments:
3. Vanguard Shrt-Term Infl-Prot Sec Idx Adm (VTAPX) (er = 0.07) --> x < 5 years (1-year return = 1.58%)
4. Vanguard Inflation-Protected Secs Inv (VIPSX) (er = 0.20) --> 7 years < x < 20 years (1-year return = 1.63%)
5. PIMCO 15+ Year US TIPS ETF (LTPZ) (er = 0.20) --> x > 15 years (1-year return = 2.69%)

6. Get a collection of (3), (4), and (5) such that the weighted average is 15 years.
7. Over time, buy and sell funds and ETFs in (6) to maintain the weighted duration corresponding to one's life expectancy.

Please let me know if this is an accurate representation of our discussion.

Thank you,
Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Thu May 25, 2017 12:06 pm

Hi Victoria,

I think you’ve got it, but I’ll put it in my own words.

There are two ways to get safe real (inflation-adjusted) income in retirement. One is real life annuities - SS, real pensions, and real commercial life annuities, and the other is real bonds – TIPS & I-bonds. IMO they are complements, not substitutes, for providing safe retirement income. The real life annuities have longevity protection, but provide inflexible income. The real bonds provide flexible income, but lack longevity protection.

Because of the lack of longevity protection here is how I handle my TIPS funds. I consider them safe flexible income above the safe income streams provided by my SS and pension benefits. I try to duration match my ST & LT TIPS funds to my IRA withdrawals from now until age 85. Age 85 is picked because that is approximately my life expectancy, and also the age at which you can last purchase life annuities.

If I get to 75 healthy, I intend to purchase a longevity annuity that begins payouts at age 85 for about a third of my annual withdrawals from the TIPS. I would then purchase another third at about age 80 if healthy, and the remaining third as I approach age 85. Beyond 85 I want longevity protection and I don’t want my future elderly self to be attempting to dynamically adjust TIPS allocations between funds. :wink:

The other way to use TIPS is to forego longevity protection thru annuitization, and estimate your age of death. In that case you would follow your plan. Here’s my advice for doing that.

Use two TIPS funds, not three, a ST fund & a LT fund. If you are making constant real withdrawals set the average duration of the combined two funds equal to the duration of the withdrawal time span. (This protects the withdrawals from the risk of changing interest rates.) If the withdrawals are for 30 years then the beginning duration of the liability is 15.

Lets say the current duration of the two funds is 22 and 2. The calculation for the beginning mix of the two funds to match the duration of the liabilities is the following:
22x + 2(1-x) = 15
x = 0.65 and (1-x) = 0.35
That is 65% of the TIPS assets should be in the LT fund and the remaining 35% in the ST fund.

This is a dynamic allocation between the two funds. For example, in two years the duration of the remaining liability will be 14, not 15. Also the duration of the funds will change over time as interest rates change and the fund managers adjust the mix of TIPS bonds in each fund. I would suggest that the calculation and re-balancing between the two TIPS funds be done on at least a quarterly or trimester basis.

You don’t need the third fund, the Vanguard intermediate TIPS fund. What I would do instead is have the first 12 months of withdrawals every year in the Vanguard Ultra-Short bond fund and have the TIPS funds allocated for all the remaining years. For example, in the first year of a 30 year plan, the amount of the first year withdrawals in the ultra-short fund, and the two TIPS funds duration matched for the remaining 29 years.

Also don’t forget that to keep the withdrawals constant in real terms, they need to be adjusted annually for inflation.

PM me if you have additional questions.

Best,
Bob
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Fri May 26, 2017 7:06 pm

Bob,

Thank you for an excellent review and recommendations! Now, I have to design my strategy for evolving from the current combination of income and assets to a combination of real annuities and real bonds.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sun Aug 13, 2017 10:57 pm

Our next meeting will be Sunday, September 17, from 3-5 in the 2nd floor meeting room of the Ballston library.

Tentatively, a special guest will be making a presentation on Social Security and Social Security claiming strategies. The guest has co-authored several articles and papers on Social Security and best Social Security claiming strategies and last year testified before the US Senate Special Committee on Aging on the topic of “Maximizing Your Social Security Benefits: What You Need to Know”.

I'll have more to say about the meeting as plans become finalized in the next week or so.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

Luv2Perform
Posts: 7
Joined: Fri Jul 28, 2017 7:33 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Luv2Perform » Mon Aug 14, 2017 7:37 am

Is this the library on Quincy street, known as the Central library?

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Mon Aug 14, 2017 7:41 am

Luv2Perform wrote:
Mon Aug 14, 2017 7:37 am
Is this the library on Quincy street, known as the Central library?
Yes, it is. I am not Bob (obviously), but I have been attending most DC meetings.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Sunday Sept 17 meeting on Social Security claiming strategies

Post by bobcat2 » Fri Aug 18, 2017 3:38 pm

Our next meeting will be Sunday, September 17, from 3-5 in the 2nd floor meeting room of the Ballston library. Sita N. Slavov, professor of public policy and director of the public policy Ph.D. program at George Mason University, will be our guest speaker. Sita is also a faculty research fellow at the National Bureau of Economic Research (NBER) and a visiting scholar at the American Enterprise Institute (AEI).

Professor Slavov’s research focuses primarily on public finance and the economics of aging. In particular, in recent years she has co-authored several articles and papers on what are the optimal Social Security claiming strategies. Her presentation at our meeting will be on that topic.
Here are links to some of her papers on Social Security claiming strategies.

The Decision To Delay Social Security Benefits: Theory And Evidence
https://www.nber.org/programs/ag/rrc/rr ... Slavov.pdf

When Does It Pay to Delay Social Security? The Impact of Mortality, Interest Rates, and Program Rules
http://www.aei.org/files/2012/07/10/-sl ... 253206.pdf

Leaving Big Money on the Table: Arbitrage Opportunities in Delaying Social Security
http://web.stanford.edu/~gilaw/Arbitrag ... g%20SS.pdf

The Financial Feasibility of Delaying Social Security
https://siepr.stanford.edu/system/files ... 0Paper.pdf

Efficient Retirement Design – Policy Brief
http://siepr.stanford.edu/research/publ ... ent-design

Maximizing Your Social Security Benefits: What You Need to Know
Professor Slavov’s testimony before the US Senate Special Committee on Aging
https://www.aging.senate.gov/imo/media/ ... _14_16.pdf

Sita made a presentation at the Retirement Research Consortium annual conference in 2012 on Social Security claiming strategies. Here is a link to her presentation slides. I was at that presentation and thought it was excellent. It changed the way I approach Social Security claiming strategies.
https://www.nber.org/programs/ag/rrc/rr ... %203.3.pdf

Lastly, Sita said she is looking forward to going out to dinner with us after the meeting. :D

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Sunday Sept 17 meeting on Social Security claiming strategies

Post by bobcat2 » Tue Aug 22, 2017 1:16 pm

In my post just before this one, the number of articles referenced on the topic of Social Security claiming may seem overwhelming to the reader. So for Sita Slavov's take on Social Security claiming I would suggest starting with the following two articles.

The first is the policy brief by her frequent co-author John Shoven of Stanford which has an overview of what he and Sita have discovered in terms of best strategies for SS claiming.
Here is a link to the policy brief. - http://siepr.stanford.edu/sites/default ... mvp2_0.pdf

The second article is the booklet, Efficient Retirement Design, co-authored by Shoven and Slavov.
Here is a link to the booklet in pdf form. I suggest downloading the booklet because the booklet on line is in a somewhat awkward format in my opinion. The button to download the booklet is underneath the graph at the beginning of the following linked page.
Link - http://docplayer.net/5675214-Efficient- ... _full_text

Here is one of the key takeaways from the booklet. (See page 20.)
To put it in technical terms, the adjustments are actuarially fair if Social Security benefits have the same expected present value regardless of when they are commenced. Obviously, actuarial fairness depends on life expectancy and interest rates. This is why we believe that the conventional wisdom – that Social Security benefit adjustments are actuarially fair – no longer holds. The commencement age adjustments
may have been actuarially fair for single people at some time in the past
, but today’s longer life expectancies and extremely low interest rates make deferral actuarially advantageous.
BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sat Sep 16, 2017 1:44 pm

Our next meeting will be tomorrow Sunday, September 17, 3:00-5:00, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. The second floor meeting room is on the south side of the library, just to the left of the glass enclosed quiet reading room. The library has a free parking lot for patrons behind the building and free parking in a garage below the building.

The library is between the Virginia Square and Ballston stations on the Metro Orange Line. From Virginia Square, walk four blocks west (left, away from Washington) on Fairfax Drive, turn right on N. Quincy, and go one block to the library. From Ballston, walk three blocks east (right, towards Washington) on Fairfax Drive, turn left on N. Quincy, and go one block to the library. The library is on the east side of N. Quincy Street.
Last edited by bobcat2 on Sun Mar 04, 2018 10:27 am, edited 6 times in total.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Next meeting Sunday, November 19, from 5-7

Post by bobcat2 » Mon Nov 13, 2017 10:14 am

Our next meeting will be this coming Sunday, November 19, from 5:00-7:00, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. Note the time change to 5-7 instead of the usual 3-5. Also, if some of us want to go to dinner as a group, we need to decide if we want to go before or after the meeting. Please post in this thread about dinner timing, and not by sending emails to all 271 members of the group at the local DC area Vanguard Diehards (Bogleheads) site.

David Grabiner will be making a presentation at the meeting, which will probably run about 40 minutes. Here's the title and brief abstract.

Simplify! How to Think About Financial Decisions
Should you make extra mortgage payments, or invest the money? When should you take Social Security? Is a high-deductible health plan a good deal? Should you hold your bonds in a 401(k) or Roth IRA? These decisions, and many others, can often be simplified, by making comparisons which look at one factor at a time. If you can create a comparison of options with similar risk, you can choose the option with higher expected return. Even when you cannot simplify all the way, making a fair comparison which is as simple as possible will help you work out the decisions.
The second floor meeting room is on the south side of the library, just to the left of the glass enclosed quiet reading room. The library has a free parking lot for patrons behind the building and free parking in a garage below the building.

The library is between the Virginia Square and Ballston stations on the Metro Orange Line. From Virginia Square, walk four blocks west (left, away from Washington) on Fairfax Drive, turn right on N. Quincy, and go one block to the library. From Ballston, walk three blocks east (right, towards Washington) on Fairfax Drive, turn left on N. Quincy, and go one block to the library. The library is on the east side of N. Quincy Street.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
grabiner
Advisory Board
Posts: 22682
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Master thread for Washington DC Area Bogleheads

Post by grabiner » Mon Nov 13, 2017 11:18 pm

I would prefer dinner after the meeting rather than before. Since I am speaking (likely an hour with questions), I would like to use the hour before the meeting to go over my presentation.
Wiki David Grabiner

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sat Nov 18, 2017 2:12 pm

David et al.,

Looks like we eat after the meeting. :)

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

mmw6
Posts: 1
Joined: Sun Nov 26, 2017 2:55 pm

[Re: Master thread for Washington DC Area Bogleheads]

Post by mmw6 » Sun Nov 26, 2017 3:01 pm

[Moved here from: DC Bogleheads Meeting in Ballston with Sita Slavov --admin LadyGeek]

I would like to join he DC Bogleheads group. How do I do that? Thank you for your help.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: [Re: Master thread for Washington DC Area Bogleheads]

Post by bobcat2 » Sun Nov 26, 2017 6:25 pm

mmw6 wrote:
Sun Nov 26, 2017 3:01 pm
I would like to join he DC Bogleheads group. How do I do that? Thank you for your help.
Go to the following linked page and click on "Join Group".

Link - https://groups.yahoo.com/neo/groups/DCAreaDiehards/info

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

morsetaper2
Posts: 3
Joined: Mon Jan 01, 2018 11:38 am
Location: Gaithersburg, MD

Re: [Re: Master thread for Washington DC Area Bogleheads]

Post by morsetaper2 » Mon Jan 01, 2018 11:43 am

I attempted to join the local group using the "Join Group" button. And multiple attempts to get past the captcha image failed. Even when it is plainly obvious what the displayed text in the image was. And the audio did not work either.

Edit: Tried again a couple weeks later and was able to register :-)

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Tue Jan 16, 2018 1:58 pm

The next DC Bogleheads meeting will be from 2:30-4:30 this coming Sunday, January 21, in meeting room #2 at the Silver Spring Library, 900 Wayne Ave, Silver Spring, MD. (The meeting room closes at 4:30 and the library closes at 5:00.)

The location is a short walk from the Silver Spring station on the Metro Red Line. Take the "South side Colesville Road" exit from the Metro station, turn right, then right on Wayne Avenue (walking around the bus depot), and go five blocks to Fenton Street; the library is on the right. Parking garages in downtown Silver Spring are free on Sundays. The closest garage is at Wayne and Fenton, diagonally across from the library.

Ed will be chairing the meeting. At this time it is an open meeting with no presentations.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
Rager1
Posts: 895
Joined: Fri Jun 01, 2007 12:03 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Rager1 » Sat Jan 20, 2018 7:52 pm

For those attending tomorrow, if we run out of topics for discussion I've prepared a synopsis of the 2018 Tax Law Changes impacting individuals.

See you tomorrow.

Ed

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sun Mar 04, 2018 10:13 am

Our next meeting will be Sunday, March 18 from 4:30-6:30, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. Note that the starting time is not the usual 3 PM. We tried to schedule the Silver Spring library, but it was fully booked for March 18, and this was the only time slot still available at Ballston.

The library is between the Virginia Square and Ballston stations on the Metro Orange Line. From Virginia Square, walk four blocks west (left, away from Washington) on Fairfax Drive, turn right on N. Quincy, and go one block to the library. From Ballston, walk three blocks east (right, towards Washington) on Fairfax Drive, turn left on N. Quincy, and go one block to the library. The library is on the east side of N. Quincy Street. The second floor meeting room is on the south side of the library, just to the left of the glass enclosed quiet reading room. The library has a free parking lot for patrons behind the building and free parking in a garage below the building.

There will be a short presentation on the wisdom, or lack of same, of treating Social Security as a bond in your asset allocation. The rest of the meeting is, as of now, open for general discussion. If you have a particular topic you would like to discuss you can post it here or bring it up at the meeting.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Sun Mar 04, 2018 7:37 pm

bobcat2 wrote:
Sun Mar 04, 2018 10:13 am
If you have a particular topic you would like to discuss you can post it here or bring it up at the meeting.

BobK
Thank you, Bob,

It would be interesting to discuss the implications of the new tax law.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Sat Mar 10, 2018 3:30 pm

VictoriaF wrote:
Sun Mar 04, 2018 7:37 pm
bobcat2 wrote:
Sun Mar 04, 2018 10:13 am
If you have a particular topic you would like to discuss you can post it here or bring it up at the meeting.

BobK
Thank you, Bob,

It would be interesting to discuss the implications of the new tax law.

Victoria
It turns out that this topic was discussed at the January meeting. I missed that meeting and was not aware of this. I withdraw my suggestion.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

morsetaper2
Posts: 3
Joined: Mon Jan 01, 2018 11:38 am
Location: Gaithersburg, MD

Re: Master thread for Washington DC Area Bogleheads

Post by morsetaper2 » Tue Mar 13, 2018 9:05 pm

I recently discovered this website & thread. Am going to try and attend next Sunday. One thing that could be a topic, that has been on my mind. Is the way bond funds are going to go, looking out the next few (or more) years as the Fed steadily raises rates.

We all know, as bond rates rise, the price of bonds (and bond funds) fall.

I am in my later 50's and was always hoping to retire about age 62. We've had a good run in the stock market for nearly 10 years now and I have remained way overweight in VG Total Stock Market Index, given my age, and desired retirement date. To date its paid off, but being 80% in stocks at age 59 is asking for trouble looking forward at a looming retirement date. I've had a good run, but want to begin to rotate out of stocks into an age/retirement date appropriate stock to bond ratio.

But which bond fund? Bond fund/ETF prices are expected to fall looking forward but they still add portfolio stability, even if they fall. What to do & where to go? I have my own answer but would like to discuss and hear all sides & opinions.

I Am no expert, just a guy trying to do it on my own. Been in VG funds since the early 80's. Be pleased to connect w/ others.

Mark Long

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Tue Mar 13, 2018 11:06 pm

Hi Mark Long,

In 2016 I made a presentation at DC Bogleheads on bond basics. Here is a link to the notes I passed out at the meeting. The spreadsheet follows page 8 of the Word document. Why don't you look thru this before the meeting on Sunday.
Link to Bond Basics https://groups.yahoo.com/neo/groups/DCA ... %20Basics/

You should understand the difference between real and nominal bonds, what a zero coupon bond is and how it is different from a coupon bond, and also understand duration - both Macauley and modified. All these topics are covered in the presentation notes.

BobK

PS - You may not be able to access the data. In that case sign-in to the Yahoo Group DC Vanguard Diehards and look in the files section for "Bond Basics". If you still can't access the notes, write back on this thread.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sat Mar 17, 2018 8:36 am

Our next meeting is tomorrow Sunday, March 18 from 4:30-6:30, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. Note that the starting time is not the usual 3 PM.

There will be a short presentation on treating Social Security as a bond in your asset allocation. Also one person has asked to discuss the role of bonds in the portfolio.The rest of the meeting is, as of now, open for general discussion. If you have a particular topic you would like to discuss you can post it here or bring it up at the meeting. For directions to the library see the post in this thread I made last week about the meeting.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

morsetaper2
Posts: 3
Joined: Mon Jan 01, 2018 11:38 am
Location: Gaithersburg, MD

Re: Master thread for Washington DC Area Bogleheads

Post by morsetaper2 » Sun Mar 18, 2018 12:37 pm

What is the parking situation at the library? Where best to park? Not familiar w/ this area. Thank You.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sun Mar 18, 2018 1:17 pm

The library has a free parking lot for patrons behind the building and free parking in a garage below the building. Usually on Sundays there are more parking spaces available in the garage than in the lot.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

Jason Librarian
Posts: 2
Joined: Wed Mar 21, 2018 6:38 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Jason Librarian » Wed Mar 21, 2018 6:43 pm

Hello,

I am a Librarian with Loudoun County Public Library. I have a patron who now lives in Loudoun County (Ashburn) who is looking for a Bogleheads group who meets in eastern Loudoun or western Fairfax (Herndon, Reston, or close to these two locations).

I believe she used to attend the group when she lived in Arlington, but Arlington is now too far for her.

Is anyone aware of any group out this way or can you point me in the right direction to find a group?

Thank you very much for your time.

Best.

Jason

User avatar
Rager1
Posts: 895
Joined: Fri Jun 01, 2007 12:03 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Rager1 » Wed Mar 21, 2018 7:02 pm

Hello Jason,

There isn't a current group in eastern Loudoun county or western Fairfax.

Sorry.

Ed

Miriam2
Posts: 2281
Joined: Fri Nov 14, 2014 11:51 am

Re: Master thread for Washington DC Area Bogleheads

Post by Miriam2 » Wed Mar 21, 2018 7:43 pm

Jason Librarian wrote: I am a Librarian with Loudoun County Public Library. I have a patron who now lives in Loudoun County (Ashburn) who is looking for a Bogleheads group who meets in eastern Loudoun or western Fairfax (Herndon, Reston, or close to these two locations).

I believe she used to attend the group when she lived in Arlington, but Arlington is now too far for her.

Is anyone aware of any group out this way or can you point me in the right direction to find a group?
We also have a Virtual On-Line Bogleheads Chapter that meets on-line every two months or so with interesting presentations and an opportunity for questions (anonymously or out loud :happy ) The on-line chapter helps to reach Bogleheads who don't live near a local chapter.

viewtopic.php?f=9&t=126449 - Virtual On-Line Chapter

Jason Librarian
Posts: 2
Joined: Wed Mar 21, 2018 6:38 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Jason Librarian » Thu Mar 22, 2018 6:39 pm

Thank you, all for your responses!

LIGuy82
Posts: 67
Joined: Mon Apr 16, 2018 12:51 am

Re: Master thread for Washington DC Area Bogleheads

Post by LIGuy82 » Sat May 12, 2018 2:06 pm

Hello - Is there a group in or around Arlington, VA that meets? I would appreciate it if someonecould point me in its direction.

User avatar
grabiner
Advisory Board
Posts: 22682
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Master thread for Washington DC Area Bogleheads

Post by grabiner » Sat May 12, 2018 5:12 pm

LIGuy82 wrote:
Sat May 12, 2018 2:06 pm
Hello - Is there a group in or around Arlington, VA that meets? I would appreciate it if someonecould point me in its direction.
The DC group usually meets in either Arlington or Silver Spring (on the Metro either way). Our next meeting is on June 3 in Silver Spring; see the first post of this thread. Our later meetings this year will probably be in the Arlington Central Library.
Wiki David Grabiner

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Thu May 31, 2018 1:37 pm

Our next meeting is this coming Sunday, June 3, from 2:30-4:30 at the Silver Spring library. Here are some suggested topics for discussion at the meeting.

Can some actively managed stock mutual funds be expected to beat the indexes? If they exist, what are the properties of such funds?

What should an investor do if there is a severe bear market that lasts for an extended period of time?

Should you invest in international stock funds? Should you invest in international bond funds?

None of the above issues have agreed upon right answers, so they should provoke some interesting discussions.
If you have other topics you would like to discuss, post them here.

Directions to library.
Our meeting will be held in meeting room #2 at the Silver Spring Library, 900 Wayne Ave, Silver Spring, MD 20910. The library is located a short walk from the Silver Spring station on the Metro Red Line. Take the "South side Colesville Road" exit from the Metro station, turn right, then right on Wayne Avenue (walking around the bus depot), and go five blocks to Fenton Street; the library is on the right.

Parking garages in downtown Silver Spring are free on Sundays. The closest garage is at Wayne and Fenton, diagonally across from the library.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Sat Jun 02, 2018 5:43 pm

Our next meeting is tomorrow, June 3, from 2:30-4:30 at the Silver Spring library. If you have topics you would like to discuss, post them here. See preceding post for more info.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

SGM
Posts: 2722
Joined: Wed Mar 23, 2011 4:46 am

Re: Master thread for Washington DC Area Bogleheads

Post by SGM » Sun Jun 03, 2018 3:08 am

Hi BobK. Here is a question I would like to see discussed at the meeting. What are good options to keep cash for a projected expense in 18 months given possible increases in interest rates and a preference for municipal bond funds?

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Tue Jun 05, 2018 12:10 pm

As of today we have 300 registered DC Bogleheads :!:
:D

Our next meeting will be Sunday, July 29, from 2:30-5:00 at the Arlington central library in Ballston. Note that we will meet in the first floor auditorium - not in the 2nd floor meeting room where we usually meet.

We will have a special guest speaker making a presentation on financial planning for retirement. I'll post more about the speaker and the presentation in early July.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Wed Jul 04, 2018 10:31 pm

Our next meeting will be Sunday July 29 from 2:30-5:00 at the Arlington central library in Ballston. Note that we will meet in the first floor auditorium - not in the 2nd floor meeting room where we usually meet.

Our guest speaker will be Arun Muralidhar. Arun’s presentation will cover his new book, 50 States of Gray.

The book and presentation cover the global retirement crisis and offer innovative and practical solutions to this global problem. In particular Arun, along with Nobelist Robert Merton, have been promoting, both here in the US and in several foreign countries, a new type of government bond that pays an inflation-protected income stream for a person’s projected life in retirement.

Arun in his presentation will also discuss the MMM retirement plan that includes in addition to these new retirement bonds the late Nobelist Franco Modigliani’s innovative approach for allowing short-term borrowing from retirement plans to meet life-cycle needs, and Robert Merton’s retirement income approach. Thus the MMM plan (Merton, Modigliani, & Muralidhar).

Here are links to threads here at Bogleheads that discuss the MMM retirement plan and the proposed retirement bonds.

Links - viewtopic.php?f=10&t=211164&hilit=arun
viewtopic.php?f=10&t=248861&hilit=arun

Here is a link to the book, 50 States of Gray @ Amazon.
Link - https://www.amazon.com/States-Gray-Inno ... dpSrc=srch

Arun Muralidhar is the founder, M-Cube and AEGIS – companies that assist pension funds and sovereign funds in asset allocation, currency management, and external manager oversight. Prior to that Arun was Managing Director at JP Morgan Investments and FX Concepts. He began his career issuing bonds/swaps for The World Bank and later managed The World Bank Pension Fund. Currently Arun is also an adjunct professor of finance at George Washington University. He received his PhD in Managerial Economics from the Sloan School of Management at MIT.

Here is a link to an article about Arun. https://www.wabash.edu/news/displaystor ... ws_ID=3210

BobK

BTW – As some of you already know, my avatar at Bogleheads is a photo of Franco Modigliani.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5227
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: Master thread for Washington DC Area Bogleheads

Post by bobcat2 » Thu Sep 13, 2018 1:38 pm

Our next meeting will be Sunday, September 16 from 3:00-5:00, in the second floor meeting room at the Arlington, VA Central Library, 1015 N. Quincy Street, Arlington, VA 22201. We have the room reserved until 5:30, so we can run over a little if need be. Note the projector in the room is not working therefore any presentation materials will need to be done by handout.

The library is between the Virginia Square and Ballston stations on the Metro Orange Line. From Virginia Square, walk four blocks west (left, away from Washington) on Fairfax Drive, turn right on N. Quincy, and go one block to the library. From Ballston, walk three blocks east (right, towards Washington) on Fairfax Drive, turn left on N. Quincy, and go one block to the library. The library is on the east side of N. Quincy Street. The second floor meeting room is on the south side of the library, just to the left of the glass enclosed quiet reading room. The library has a free parking lot for patrons behind the building and free parking in a garage below the building.

The meeting is open for general discussion. If you have a particular topic you would like to discuss you can post it here or bring it up at the meeting.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Thu Sep 13, 2018 2:41 pm

Thank you, Bob. See you Sunday,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

SGM
Posts: 2722
Joined: Wed Mar 23, 2011 4:46 am

Re: Master thread for Washington DC Area Bogleheads

Post by SGM » Sat Sep 15, 2018 10:28 am

Have there been any discussions of the impact of the tax law changes? I would take you all out to dinner but my first delayed SS payment doesn't come until next week. :wink:

User avatar
VictoriaF
Posts: 18548
Joined: Tue Feb 27, 2007 7:27 am
Location: Black Swan Lake

Re: Master thread for Washington DC Area Bogleheads

Post by VictoriaF » Sat Sep 15, 2018 3:50 pm

SGM wrote:
Sat Sep 15, 2018 10:28 am
Have there been any discussions of the impact of the tax law changes? I would take you all out to dinner but my first delayed SS payment doesn't come until next week. :wink:
SGM, I am so sorry about your financial hardship. May I buy you a dinner tomorrow?

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

Lindyhopper
Posts: 10
Joined: Wed Aug 08, 2018 3:34 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Lindyhopper » Mon Sep 17, 2018 7:00 am

Was a date set for the next meeting?

SGM
Posts: 2722
Joined: Wed Mar 23, 2011 4:46 am

Re: Master thread for Washington DC Area Bogleheads

Post by SGM » Mon Sep 17, 2018 7:52 am

VictoriaF wrote:
Sat Sep 15, 2018 3:50 pm
SGM wrote:
Sat Sep 15, 2018 10:28 am
Have there been any discussions of the impact of the tax law changes? I would take you all out to dinner but my first delayed SS payment doesn't come until next week. :wink:
SGM, I am so sorry about your financial hardship. May I buy you a dinner tomorrow?

Victoria
Thank you Victoria. No hardship here. Your best gift is to enterain us with your humor and your outstanding approach to enjoying retirement and trying out new things. You are an inspiration to this retiree.

User avatar
Rager1
Posts: 895
Joined: Fri Jun 01, 2007 12:03 pm

Re: Master thread for Washington DC Area Bogleheads

Post by Rager1 » Mon Sep 17, 2018 9:12 am

Lindyhopper wrote:
Mon Sep 17, 2018 7:00 am
Was a date set for the next meeting?
Bob is coordinating with the next speaker to set the next date. He'll post it here once it's set.

Ed

Post Reply