DC Bogleheads Meeting in Ballston with Sita Slavov

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bobcat2
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DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Sat Sep 16, 2017 1:49 pm

Our next meeting will be tomorrow, 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.

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 online 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 are links to some more 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

Professor Slavov’s testimony before the US Senate Special Committee on Aging -
Maximizing Your Social Security Benefits: What You Need to Know
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

Here is her latest research paper concerning Social Security.
Social Security Claiming Decisions: Survey Evidence
Shoven, Slavov, and Wise
NBER Working Paper issued August 2017.
https://www.nber.org/papers/w23729

I have yet to find a free version of this latest research paper.

After Sita's presentation we plan a short discussion on credit freezes and credit fraud alerts at the credit bureaus in light of the epic breach of personal data at Equifax.

Some of us will be going out to dinner after the meeting at Kapnos Taverna on Wilson Boulevard after the meeting – all are welcome. Sita plans to join us for dinner.

See the following linked post for directions to the library.
viewtopic.php?f=9&t=139752&p=3535152&hi ... k#p3535152

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by Wakefield1 » Sat Sep 16, 2017 4:36 pm

I only live about a mile from that library (Central) but am pretty busy with this household.
An idea occurs to me along the lines of issues of choosing when to start receiving Social Security Retirement,it seems that Arlington County Retirement offers an option to employees retiring under the present system where they receive an accelerated (temporarily increased monthly amount) pension payment during an initial period when they have not yet began to receive Social Security,then the pension payment is reduced (and reduced to less than it would have been all along had the "Social Security Pension" option not been taken) once the employee is receiving Social Security. I think the time of retirement and starting Social Security has to be pre-arranged upon initiating retirement in order for the numbers to be finalized. I don't know if taking Social Security at "FRA" or age 62 only is required (I am retired under an older County system)
County Employees can generally retire upon having 30 years service or having reached 55 years of age as I remember,Police and Fire have a somewhat earlier minimum. The County subsidizes Health Insurance to some extent for pre Medicare retirees who had sufficient service with the County. County Workers are covered under Social Security and pay Social Security Tax.
This would complicate things quite a bit for calculating when to take Social Security! -but I suspect that it would still be better to delay taking Social Security and perhaps to avoid the earlier temporary boost in pension payout unless one really feared a short lifespan or something.

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by VictoriaF » Sat Sep 16, 2017 9:26 pm

Bob,

Thank you for the detailed information. As I am reading the linked articles my main thought is that while most Bogleheads are familiar with the concept of delaying the Social Security and are incorporating it in our planning, the majority of the American population does not have access to this information.

Most people get their financial information from (a) their employers, (b) their financial advisers, (c) their social circle. Employer financial education, if any, if focused on their defined benefit and defined contribution plans. When employers have layoffs, they are not likely to advise their former employees to delay the Social Security.

Financial advisers have no incentive to recommend delaying Social Security, because this reduces their AUM fees. Members of the social circle either derive their information from advisers or use a heuristic "the sooner I take the Social Security the better."

Thus, even if some non-Bogleheads come across this information, they are likely to discard it. (Professional economists and mathematicians are exceptions.)

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

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by SGM » Sun Sep 17, 2017 7:56 am

Thanks Bob,

I have already made my decision to delay until 70, but I have referred others to the articles you have cited. A friend who is confused about the subject of when to take SS may attend with me.

I discussed this with another friend who is still working past 70 and he tried to keep delaying SS past 70. SS workers politely insisted he take his at 70 and he unsuccessfully argued with them that he should keep getting an increase of 8% if he delays past 70. :)

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Mon Sep 18, 2017 9:12 pm

Yesterday Professor Slavov gave an excellent presentation to DC Bogleheads concerning Social Security claiming strategies. Her presentation was about 45 minutes long, but since Sita allowed unlimited questions during the presentation, she stood for about an hour and a half. I don't see how she kept her train of thought on the presentation, given the deluge of questions and comments she received. Kudos for a job very well done by Sita.

In the last twenty minutes of our meeting Victoria gave a presentation on how to stay safe online, in an age where security breaches to major financial institutions appear to occur on a monthly basis. I had asked Victoria if she would lead a discussion on the topic, instead Victoria made the extra effort to prepare a well thought out presentation. Good job Victoria. :thumbsup :thumbsup

In the middle of the meeting I did an informal head count of 45 people at the meeting. An excellent turnout for DC Bogleheads, although I'm not sure the Arlington fire marshall would have been thrilled.

After the meeting about ten of us, including Sita, had an enjoyable dinner and conversation at Kapnos Taverna. Except for Sita, the dinner attendees were the usual suspects. :)

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by Wakefield1 » Mon Sep 18, 2017 9:28 pm

I am not sure whether Vanguard has an alert to do what Victoria said to do: get an e-mail message for each instance where your account is logged onto-by you or by some imposter?! I have alerts for transactions and money movements,I sent them a message asking whether there is an option to do what Victoria said to do (perhaps I just haven't found it) otherwise asking if they could add that option-also an alert if someone is making multiple password attempts (guesses?) using your log on name even if unsuccessful at getting in
I did set an alert of that type for my Credit Union log on.
A lot of information and intelligent questions and discussion from the speakers and group.

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Tue Sep 19, 2017 10:37 am

During Victoria's presentation on staying safe online, she brought up internet security expert Brian Krebs.

Here are Krebs's 3 basic rules for online safety.

1) If you didn’t go looking for it, don’t install it!
2) If you installed it, update it.
3) If you no longer need it, remove it.

If Krebs were to expand the number of rules, he says the following would be rule 4.
4) Create and use a “standard” user account for internet browsing.

And here's my contribution for rule 5.
Backup your computer and back it up frequently! Backups are the best protection against both ransomware and serious computer crashes.

If I were more quick witted, I would have brought up these points Sunday. :?

Link to Brian Krebs's website. - https://krebsonsecurity.com/

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by TBillT » Tue Sep 19, 2017 11:16 am

Oh wow sounds like a good presentation ...maybe next time...did not realize we had a chapter

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Tue Sep 19, 2017 11:34 am

There was considerable discussion Sunday about the long-term solvency of the Social Security system. Those interested in this issue should find the following helpful in understanding the causes of the shortfall.

In 2013 at the Retirement Research Consortium annual meeting here in Washington the Chief Actuary of the Social Security Administration, Stephen Goss, gave the keynote address and discussed the challenges Social Security faces in the future, including projecting the future solvency of the Social Security Trust Fund.

I was expecting a very dull speech from an accountant, but it turns out that Goss is a very engaging speaker. A key point Goss made is what projection errors after the last Social Security fix in 1983 have accounted for the shortfall. Many things were projected accurately, e.g. GDP growth, inflation, demographics, etc. It turns out that two projection errors made in 1983 have caused the great bulk of the shortfall since 1983, particularly error #2.

1) Real average wages and salaries were projected to grow 1.5% per year. They have actually grown about 1.0% per year.

2) The ceiling on wages and salaries taxed set in 1982 was expected to capture 90%-91% of all wages and salaries going forward. But because of greater dispersion in earned income since 1983 (greater income inequality because an increasing share of income has gone to the very highest income groups over time since '83) the ceiling is only covering about 83%-84% of earned income. This forecast error by itself (projection that the wage ceiling would capture 90%-91% of wages and salaries vs actually capturing just over 83%) accounts for over half of the shortfall that has occurred in the Social Security program since the 1983 Social Security fix.

You can see that in 1982 the Social Security income cap was set based on capturing 90% of payroll into the indefinite future by looking at page 7 point #7 (Changes in financing provisions) of the following document.
http://www.ssa.gov/policy/docs/ssb/v41n3/v41n3p3.pdf
Those who set the income cap back then did not envision the degree of income inequality we see today, which results in significantly less than 90% (83%-84%) of wages & salaries being subject to Social Security taxes.

Here is a link to Goss's presentation. The whole thing is interesting IMO, but if you simply want to hear about what the projections got right and wrong after the last fix to Social Security start the talk at about the 14 minute mark. The "got wrong part" starts at about the 16 minute mark. Goss gets back to this point late in the Q & A that follows his presentation.

Link to Goss presentation - https://www.c-span.org/video/?314374-1/ ... ment-costs

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by VictoriaF » Tue Sep 19, 2017 5:09 pm

bobcat2 wrote:
Mon Sep 18, 2017 9:12 pm
...
In the last twenty minutes of our meeting Victoria gave a presentation on how to stay safe online, in an age where security breaches to major financial institutions appear to occur on a monthly basis. I had asked Victoria if she would lead a discussion on the topic, instead Victoria made the extra effort to prepare a well thought out presentation. Good job Victoria. :thumbsup :thumbsup
...

BobK
Thank you Bob. I must repeat what I've said at the meeting: I have an MS degree in Cyber security and I attend lectures and seminars to maintain my CISSP. But when it comes to practical cyber security I look up to you.

Victoria
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Wed Sep 20, 2017 3:09 pm

One thing I learned from Sita Slavov's presentation, which is rather important, is that when interest rates are low, as they have been for the last several years, postponing retirement becomes an increasingly more potent retirement financial tool relative to increasing your pre-retirement savings rate.

This makes perfect sense because similar to delaying Social Security becomes a better deal when interest rates are low (because by law the return on Social Security is set to the long-run average rate), so also postponing retirement is a more powerful retirement tool than additional savings when interest rates are low. Of course the opposite is true when prevailing interest rates are above the long-run average rate. In that case increasing your pre-retirement savings rate is a relatively more powerful retirement financial tool than postponing retirement.

This point seems rather obvious once you think about it, but it hadn't occurred to me until Sita pointed it out in her presentation Sunday. So as far as I know, this is the first time this point about the power of postponing retirement, relative to increasing your savings rate, when interest rates are low has been made at Bogleheads.

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by dodecahedron » Wed Sep 20, 2017 3:52 pm

Deleted my previous comment, because I didn't read BobK's comment carefully enough before posting.

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by The Wizard » Wed Sep 20, 2017 4:12 pm

bobcat2 wrote:
Wed Sep 20, 2017 3:09 pm
One thing I learned from Sita Slavov's presentation, which is rather important, is that when interest rates are low, as they have been for the last several years, postponing retirement becomes an increasingly more potent retirement financial tool relative to increasing your pre-retirement savings rate...
Hmm, I'd have to ponder this a bit. The point about delaying SS being a better strategy in a low interest rate environment is definitely true.

But that's about the only guaranteed financial benefit out there.
Waiting for interest rates to start creeping upward isn't going to increase total return of intermediate term bonds, for instance.

And the stock market tends to like low interest rates as being good for business.

So aside from SS, I don't think I agree with the speaker's premise...
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by dodecahedron » Wed Sep 20, 2017 4:36 pm

The Wizard wrote:
Wed Sep 20, 2017 4:12 pm
bobcat2 wrote:
Wed Sep 20, 2017 3:09 pm
One thing I learned from Sita Slavov's presentation, which is rather important, is that when interest rates are low, as they have been for the last several years, postponing retirement becomes an increasingly more potent retirement financial tool relative to increasing your pre-retirement savings rate...
Hmm, I'd have to ponder this a bit. The point about delaying SS being a better strategy in a low interest rate environment is definitely true.

But that's about the only guaranteed financial benefit out there.
I was scratching my head about this one too. I think I might understand the point being made re delaying filing vs delaying retirement in a low interest rate environment, but not well enough to feel confident trying to explain it and would love to have BobK elaborate in case I am missing something.
Last edited by dodecahedron on Wed Sep 20, 2017 4:37 pm, edited 1 time in total.

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by ray.james » Wed Sep 20, 2017 4:36 pm

VictoriaF wrote:
Tue Sep 19, 2017 5:09 pm
bobcat2 wrote:
Mon Sep 18, 2017 9:12 pm
...
In the last twenty minutes of our meeting Victoria gave a presentation on how to stay safe online, in an age where security breaches to major financial institutions appear to occur on a monthly basis. I had asked Victoria if she would lead a discussion on the topic, instead Victoria made the extra effort to prepare a well thought out presentation. Good job Victoria. :thumbsup :thumbsup
...

BobK
Thank you Bob. I must repeat what I've said at the meeting: I have an MS degree in Cyber security and I attend lectures and seminars to maintain my CISSP. But when it comes to practical cyber security I look up to you.

Victoria
Victoria can u share the presentation? I would be interested to learn more on security.
-Thank you
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Wed Sep 20, 2017 5:20 pm

You want to increase your level of retirement assets at retirement in several years. You could
a) Increase your savings rate
b) Postpone retirement

The higher the interest rate the more benefit you get from increasing your savings rate. Postponing retirement is much less affected by the level of interest rates. Instead postponing retirement allows you to reduce the number of years you'll need to finance retirement and gives your assets more time to grow. Therefore, when interest rates are low postponing retirement is a relatively more powerful an option compared to increasing your savings rate, relative to when interest rates are high. The gain from postponing retirement isn't about waiting for interest rates to creep up or guessing about what the stock market will do.

Slavov had a table that compared saving 1% more of your income for a fixed number of years compared to how many months you would have to postpone retirement to get the same retirement benefit. The lower the interest rate, the fewer months you had to postpone retirement to get the same benefit as saving 1% more of your income for those fixed number of years.

BobK
Last edited by bobcat2 on Wed Sep 20, 2017 5:57 pm, edited 5 times in total.
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by The Wizard » Wed Sep 20, 2017 5:43 pm

bobcat2 wrote:
Wed Sep 20, 2017 5:20 pm
You want to increase your level of retirement assets at retirement in several years. You could
a) Increase your savings rate
b) Postpone retirement

The higher the interest rate the more benefit you get from increasing your savings rate. Postponing retirement is much less affected by the level of interest rates. Instead postponing retirement allows you to reduce the number of years you'll need to finance and gives your assets more time to grow. Therefore, when interest rates are low postponing retirement is a relatively more powerful an option compared to increasing your savings rate, relative to when interest rates are high. The gain from postponing retirement isn't about waiting for interest rates to creep up or guessing about what the stock market will do...
So I definitely don't agree with this.
Increasing your savings rate from 25% to 30% your last few years of full-time work is always a good idea.
Higher interest rates tend to be correlated with higher inflation; it's the net after inflation that matters.

I don't see a pre-retirement person with a 60/40 portfolio anticipating a better situation if interest rates were only higher.
This approach seems targeted toward old school people who fear the stock market and have the bulk of their savings in CDs, as my late ex-MIL did...
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Wed Sep 20, 2017 5:57 pm

Slavov had a table that compared saving 1% more of your income for a fixed number of years compared to how many months you would have to postpone retirement to get the same retirement benefit. The lower the interest rate, the fewer months you had to postpone retirement to get the same benefit as saving 1% more of your income for those fixed number of years.
Wizard, why do you doubt the above result?

No one is saying saving more of your income is a bad idea. What is being said is additional saving compared to postponing retirement is more advantageous when interest rates are higher. That doesn't make saving more bad, but simply relatively more advantageous to postponing retirement when interest rates are high. And conversely, less advantageous when interest rates are low.

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by The Wizard » Wed Sep 20, 2017 7:37 pm

bobcat2 wrote:
Wed Sep 20, 2017 5:57 pm

Wizard, why do you doubt the above result?

No one is saying saving more of your income is a bad idea. What is being said is additional saving compared to postponing retirement is more advantageous when interest rates are higher. That doesn't make saving more bad, but simply relatively more advantageous to postponing retirement when interest rates are high. And conversely, less advantageous when interest rates are low.

BobK
Two reasons:
1) I went through a high inflation, high interest rate environment back early in my working years from the mid 70s to early 80s. I don't believe that sort of financial environment is anywhere close to optimal for retirees.
2) I have a tendency to think that low interest rates are better for companies who wish to expand their operations, thus increasing corporate value and total return to shareholders.

The idea that an Ally Bank high yield savings account rate of 3% to 4% is incredibly better than 1.0% or 1.5% for pre retirees is quite misleading.

Either way, it's not necessary for folks to agree on stuff like this...
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by bobcat2 » Wed Sep 20, 2017 7:45 pm

I should have made this point explicitly in my earlier posts, but I didn't. We are talking about real interest rates and changes in real interest rates. We are not talking about nominal interest rates or changes in nominal interest rates.

BobK
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by dodecahedron » Wed Sep 20, 2017 8:23 pm

bobcat2 wrote:
Wed Sep 20, 2017 7:45 pm
I should have made this point explicitly in my earlier posts, but I didn't. We are talking about real interest rates and changes in real interest rates. We are not talking about nominal interest rates or changes in nominal interest rates.

BobK
More specifically, I think you need to talk about *after-tax* real interest rates.

The period wizard mentioned was indeed an incredibly bad one for retirees because 1) marginal tax rates were very high and 2) income taxes are applied to nominal interest, not real interest. In the late 70s/early 80s, nominal interest payments were high and full taxed even though they were mostly phantom income (i.e., compensation for inflation). Thus after-tax real interest rates were deeply negative. It's actually a great illustration of Sita Slavov's point. That period would have been a great time to keep working longer, as salaries were generally keeping up with inflation much better than accumulated savings did.

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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by VictoriaF » Thu Sep 21, 2017 12:44 pm

ray.james wrote:
Wed Sep 20, 2017 4:36 pm
VictoriaF wrote:
Tue Sep 19, 2017 5:09 pm
bobcat2 wrote:
Mon Sep 18, 2017 9:12 pm
...
In the last twenty minutes of our meeting Victoria gave a presentation on how to stay safe online, in an age where security breaches to major financial institutions appear to occur on a monthly basis. I had asked Victoria if she would lead a discussion on the topic, instead Victoria made the extra effort to prepare a well thought out presentation. Good job Victoria. :thumbsup :thumbsup
...

BobK
Thank you Bob. I must repeat what I've said at the meeting: I have an MS degree in Cyber security and I attend lectures and seminars to maintain my CISSP. But when it comes to practical cyber security I look up to you.

Victoria
Victoria can u share the presentation? I would be interested to learn more on security.
-Thank you
Ray,

I did not have slides. I used concepts from my thread "Beyond Equifax: Dealing with ID theft" viewtopic.php?f=2&t=227487 and shared some other cyber security insights.

I emphasized that one of the most valuable things to guard is one's email address, especially because the logical link between the Equifax breach (and other breaches) and email is not immediately obvious. The problem is that if a criminal gains access to your email he will monitor communications with your financial institutions and may take over your email for his purposes. Thus:
- have a unique strong password for your email
- guard your email with two-factor authentication (2FA)
- set alerts in your financial institutions to notify you about any changes.

Banks, credit unions, and other financial institutions have a variety of approaches to 2FA, but for as long as your email is secure you should be able to catch any abnormalities immediately. Be careful with small banks and credit unions that don't provide 2FA or immediate alerts.

If you go away for a long time, without access to your email and other communications, set web locks in your accounts so that even you would not be able to access them without additional authentication.

Another point of interest is to distinguish what you do and what a criminal does, and the types of harm:
- You have existing financial accounts where you keep the bulk of your assets. You main goal is not to let anyone to steal all your money. Credit freeze is irrelevant in these cases. You need to secure access to these accounts and to secure email used with these accounts so that you would not lose your assets.
- You have existing credit cards. Credit freeze does not help with this, and in case of a credit card fraud your liability is limited. Using credit cards is preferable to using debit cards.
- A criminal may open a bank account or a credit card in your name, accumulate large debt and eventually affect your credit score and even criminal record. Eventually, you should be able to prove fraud, but it's a long effortful stressful process. Credit freeze prevents perpetrators from opening financial accounts in your name.
- It's worthwhile to create online accounts with the IRS and SSA, even if you don't think you need them. Because if you don't do it, a criminal may do it on your behalf.
- If you plan to create online IRS and SSA accounts do it before you do credit freeze.

If you are concerned about the IRS fraud consider:
- file early if you can, before criminals do it for you; but this may not work if you are waiting for brokerage forms
- if you expect a large return and your IRS account is breached, you may have to wait for a long while
- minimizing your IRS refund would make this wait irrelevant, but some Bogleheads intentionally overpay to use the refund to buy I Bonds
- eventually, you will be able to straighten it out with the IRS
- if your IRS account is breached, the IRS will provide you with a private PIN for future filing.

Here is a curious insight in cyber security that I've read about a while ago and I think still applies. It's a contrast between the top-3 cyber security actions by amateurs and professionals:
Armatures think that top-3 cyber security precautions are:
- mindful surfing
- not clicking on links in email
- complex passwords.

Professionals consider the top-3 security precautions as:
- immediate patching of software
- two factor (multi-factor) authentication
- using a password manager.

I have also mentioned that I regularly read Brian Krebs's blog, https://krebsonsecurity.com/ . Not only Brian covers major breaches and provides solid recommendations, but he also alerts to major new software patches, presents excellent illustrations of the ATM machine fraud(*), and tells gripping stories of the Russian cyber crime. Brian is a journalist, but he is well known in the cyber security field, and his sources are highly knowledgeable cyber security professionals who usually prefer to remain anonymous.

(*) According to Krebs, very few people cover their hand when entering the ATM PIN. This is one of the simplest and highly effective security measures.

Victoria
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Re: DC Bogleheads Meeting in Ballston with Sita Slavov

Post by ray.james » Thu Sep 21, 2017 5:57 pm

VictoriaF wrote:
Thu Sep 21, 2017 12:44 pm
Ray,

I did not have slides. I used concepts from my thread "Beyond Equifax: Dealing with ID theft" viewtopic.php?f=2&t=227487 and shared some other cyber security insights.

I emphasized that one of the most valuable things to guard is one's email address, especially because the logical link between the Equifax breach (and other breaches) and email is not immediately obvious. The problem is that if a criminal gains access to your email he will monitor communications with your financial institutions and may take over your email for his purposes. Thus:
- have a unique strong password for your email
- guard your email with two-factor authentication (2FA)
- set alerts in your financial institutions to notify you about any changes.

Banks, credit unions, and other financial institutions have a variety of approaches to 2FA, but for as long as your email is secure you should be able to catch any abnormalities immediately. Be careful with small banks and credit unions that don't provide 2FA or immediate alerts.

If you go away for a long time, without access to your email and other communications, set web locks in your accounts so that even you would not be able to access them without additional authentication.

Another point of interest is to distinguish what you do and what a criminal does, and the types of harm:
- You have existing financial accounts where you keep the bulk of your assets. You main goal is not to let anyone to steal all your money. Credit freeze is irrelevant in these cases. You need to secure access to these accounts and to secure email used with these accounts so that you would not lose your assets.
- You have existing credit cards. Credit freeze does not help with this, and in case of a credit card fraud your liability is limited. Using credit cards is preferable to using debit cards.
- A criminal may open a bank account or a credit card in your name, accumulate large debt and eventually affect your credit score and even criminal record. Eventually, you should be able to prove fraud, but it's a long effortful stressful process. Credit freeze prevents perpetrators from opening financial accounts in your name.
- It's worthwhile to create online accounts with the IRS and SSA, even if you don't think you need them. Because if you don't do it, a criminal may do it on your behalf.
- If you plan to create online IRS and SSA accounts do it before you do credit freeze.

If you are concerned about the IRS fraud consider:
- file early if you can, before criminals do it for you; but this may not work if you are waiting for brokerage forms
- if you expect a large return and your IRS account is breached, you may have to wait for a long while
- minimizing your IRS refund would make this wait irrelevant, but some Bogleheads intentionally overpay to use the refund to buy I Bonds
- eventually, you will be able to straighten it out with the IRS
- if your IRS account is breached, the IRS will provide you with a private PIN for future filing.

Here is a curious insight in cyber security that I've read about a while ago and I think still applies. It's a contrast between the top-3 cyber security actions by amateurs and professionals:
Armatures think that top-3 cyber security precautions are:
- mindful surfing
- not clicking on links in email
- complex passwords.

Professionals consider the top-3 security precautions as:
- immediate patching of software
- two factor (multi-factor) authentication
- using a password manager.

I have also mentioned that I regularly read Brian Krebs's blog, https://krebsonsecurity.com/ . Not only Brian covers major breaches and provides solid recommendations, but he also alerts to major new software patches, presents excellent illustrations of the ATM machine fraud(*), and tells gripping stories of the Russian cyber crime. Brian is a journalist, but he is well known in the cyber security field, and his sources are highly knowledgeable cyber security professionals who usually prefer to remain anonymous.

(*) According to Krebs, very few people cover their hand when entering the ATM PIN. This is one of the simplest and highly effective security measures.

Victoria
Thanks Victoria. These are quite helpful overall. I somehow was following the long thread but missed your one on the hack and security. A few more that I can adapt easier for my personal security.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939

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bobcat2
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Slides from Sita Slavov presentation on Social Security claiming strategies

Post by bobcat2 » Sat Sep 23, 2017 12:45 pm

Yesterday Sita Slovac was kind enough to email me her Powerpoint slides from her presentation last Sunday. Here is a link to the presentation slides.
Efficient Retirement Design: Combining Private Assets and Social Security to Maximize Retirement Resources
Link - https://drive.google.com/file/d/0B533Cv ... sp=sharing

This research by Slovac and Shoven was supported by the Social Security Administration and the Sloan Foundation.

Here are some highlights from the presentation.

- Most people commence Social Security benefits as soon as they retire - little surprise there. See histogram on first page.

- Delaying Social Security benefits is particularly attractive when real interest rates are low.

- Life expectancy for the second to die of a couple currently in their mid to late 60s is to ages 90-91, which makes the inflation protected longevity insurance of Social Security very beneficial. Particularly since the higher benefit of the two Social Security benefits goes to the survivor. That makes deferral for the higher earner in a couple a great deal.

- Funding the Social Security delay decision can be done by working longer, using other retirement assets such as defined contribution assets, or taking a lump sum option from a defined benefit plan.

- Delaying retirement, not simply delaying Social Security benefits, is a potent tool for achieving your retirement financial goals.

- The Work Longer table on page 12 shows that working longer becomes a more powerful retirement tool, relative to saving more, when interest rates are low.

- A strategy of a couple both claiming at age 62 is dominated by the higher earner delaying to age 70.

BobK

PS - Thanks to LadyGeek for tips on how to make this available as a link at Bogleheads.

I've checked these slides for malware using Webroot SecureAnywhere, F-Secure, Malwarebytes, and HitmanPro. These files are clean! :happy
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.

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