Just Diagnosed With MS - Rethinking Finances

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wobbly524
Posts: 2
Joined: Mon Jun 10, 2024 9:46 pm

Just Diagnosed With MS - Rethinking Finances

Post by wobbly524 »

Hello everyone. About three weeks ago, I was diagnosed with Multiple Sclerosis. Some relief in knowing what has been wrong and hopefully the medicine/path they have me on is successful. I have been very, very lucky in life - still am. I had hoped to retire early, and maybe I still can, but I also need to take this new medical situation into consideration and would be open to any advice people have.

Emergency Funds: 6 months of expenses on hand.
Debt: None
Tax Filing Status: Single - no kids/family
Tax Rate: 35% Federal, 4.95% State
Age: 45
Total Portfolio: ~$2.5 million (everything is below except for $25k in I Bonds)

Current Assets
Taxable: 59% of portfolio
- 80% in ITOT
- 20% in IXUS

Work Retirement Plan: 28% of portfolio
- 56% in VIIIX Vanguard Institution Index
- 28% in VPMAX Vanguard Primecap
- 8% in Nuveen International Equity
- 8% in Vanguard Intl Growth

Work Deferred Compensation Plan: 6% of portfolio
- 56% in VIIIX Vanguard Institution Index
- 28% in VPMAX Vanguard Primecap
- 8% in Nuveen International Equity
- 8% in Vanguard Intl Growth

Roth IRA: 5% of portfolio
- 85% in IVV
- 15% in IXUS

HSA: 2% of portfolio
- 100% in FZROX

Annual Contributions
Work Retirement - $23k (Maximum contribution) + $24k from work
Work Deferred Comp - $23k (Maximum contribution)
Backdoor Roth - $7k (Maximum Contribution)
HSA - $3.5k
Taxable - $160k

Questions
1. I was budgeting $25k a year for medical care before this diagnosis if I retired early and didn't have coverage. Get a Healthcare.Gov plan and expect to pay the maximum out of pocket. So Premiums x 12 + Max out of pocket and then a cushion got me to this number. And would need this X number of years until Medicare, so to retire at 50 it would be $375,000. Does this seem right still?

2. At what point do I start getting conservative? I have been investing super risky because I always felt like I could work longer if everything went to zero and that I'd always be able to work. This diagnosis can certainly change that.

3. My Retirement and Deferred Comp are through TIAA and their product "TIAA Traditional" is available. I have researched that a bit, and as far as safe investments available in those accounts, this seems to be it. Does anyone really like this product? What amount would you suggest I shift towards this? Once it is in TIAA Traditional, my understanding is I can't take it out until retirement.

4. What else should I be thinking about or taking into consideration now that I have a medical situation like this? I know how fortunate I am to not have had medical issues until this.

5. My living expenses are pretty low - $60k a year or less, I am pretty simple. But I do value flexibility. I know there are a lot of factors, but in my situation what $ amount would you say I really need to get to to not worry.

Thanks for reading this and for any advice. I am felt like I was at the point where I could kind of do whatever I wanted to whenever I wanted to, like quit if I started to hate work, volunteer, travel, etc. That was always my goal, have always saved like a maniac and worked to pay off all my student loans and other debts as quickly as possible. I'm not complaining at all, I know how lucky I am to have what I have at my age, seriously. I just know I have to think a bit differently now.
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MJS
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Re: Just Diagnosed With MS - Rethinking Finances

Post by MJS »

wobbly524 wrote: Mon Jun 10, 2024 10:25 pm ...
Work Retirement Plan: 28% of portfolio
- 56% in VIIIX Vanguard Institution Index
- 28% in VPMAX Vanguard Primecap
- 8% in Nuveen International Equity
- 8% in Vanguard Intl Growth
...
3. My Retirement and Deferred Comp are through TIAA and their product "TIAA Traditional" is available. I have researched that a bit, and as far as safe investments available in those accounts, this seems to be it. Does anyone really like this product? What amount would you suggest I shift towards this? Once it is in TIAA Traditional, my understanding is I can't take it out until retirement.
Best wishes on dealing with your health challenges.

Roughly 30% fixed income -- bonds, TIAA Trad -- seems reasonable in your situation. TIAA Trad is working well for me in retirement (also single, otherwise very different. ) The Bogleheads TIAA wiki may give you some good questions to ask: https://www.bogleheads.org/wiki/TIAA
Ipsa scientia potestas est. Bacon F.
shuchong
Posts: 125
Joined: Mon May 05, 2008 7:19 pm

Re: Just Diagnosed With MS - Rethinking Finances

Post by shuchong »

wobbly524 wrote: Mon Jun 10, 2024 10:25 pm
4. What else should I be thinking about or taking into consideration now that I have a medical situation like this? I know how fortunate I am to not have had medical issues until this.
So sorry to hear about your diagnosis. We're in similar situations (similar ages, net worth, and med issues, though different diseases). Two things come to mind:

1) Take a look at any employer-offered disability policy you have. (I was surprised to learn that my employer-sponsored disability policy included "partial disability," which helped lessen the financial blow of part-time work.) Also look at your employer's/state's medical leave policies. And know that if you're eligible for FMLA, you can take it sporadically to deal with flares if need be. You can also ask your workplace for accommodations. My employer has been far more willing to work with me than I ever expected, allowing me to work part-time and mostly remote, which has been a godsend for the past few years.

2) One thing to be aware of if you retire early is that you generally need to have worked 5 of the last 10 years to be eligible for SSDI. (It can be a small amount of work, just enough to earn 20 SS credits in the last 5 years -- see https://www.ssa.gov/benefits/disability/qualify.html). Personally, I plan to stay eligible as long as I can, and if I need to file for disability, to do so soon after I stop working. SSDI would provide about $3500 a month for me given my work history, and also provides medicare coverage after a two-year waiting period. That's more of a benefit than I thought -- I imagined it would be a pittance, because most disabled people I know did not have a significant work history and are on SSI rather than SSDI.

3) On the less financial side, people here often talk about the "go go years" of retirement. I am not sure I will have those, making me more inclined to do "bucket list" things now.
wobbly524 wrote: Mon Jun 10, 2024 10:25 pm
2. At what point do I start getting conservative? I have been investing super risky because I always felt like I could work longer if everything went to zero and that I'd always be able to work. This diagnosis can certainly change that.
I don't know if there is one right answer here, but what I have done is keep my asset allocation the same (75/25 stocks/bonds) but started to transition my fixed income into a 30-year TIPs/Ibond ladder which could bridge me to social security if I needed it. That ladder, plus dividends from my taxable stock portfolio, would cover my basic living expenses. It looks like you have no fixed income now, and it seems like it would make sense to add some.
HomeStretch
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Joined: Thu Dec 27, 2018 2:06 pm

Re: Just Diagnosed With MS - Rethinking Finances

Post by HomeStretch »

Welcome to the forum.

+1 to the feedback, above. If you have not already done so, consider executing the legal documents you need as part of your support system (durable power of attorney and healthcare POA/advance directives).
aristotelian
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Re: Just Diagnosed With MS - Rethinking Finances

Post by aristotelian »

You are well set up financially. I would not hesitate to retire early if that is something you hoped to do. How much are you spending aside from the $25k planned for health care?

Our allocation is 30% bonds and fixed income with most in TIAA Traditional Annuity in my work plan.
David Althaus
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Re: Just Diagnosed With MS - Rethinking Finances

Post by David Althaus »

1. You state you can live on $60k per year. In that case you can almost live forever and still grow your net worth. Argues for retiring now.
2. Your support system will be critical. There may be a support group for those with similar problems. Believe may people have found those kinds of groups helpful and provide insights that may not have occurred to you.
3. You may benefit from setting aside two years living expenses at the custodial care rate. That rate will probably start at about $15 k per month.

You deserve our admiration for your attitude of resilience and gratitude. I'm not sure I could muster up the same courage.

Good luck and all the best
niagara_guy
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Joined: Tue Feb 11, 2020 7:32 am

Re: Just Diagnosed With MS - Rethinking Finances

Post by niagara_guy »

I am sorry that you have MS.

If you get to the point where you cannot work then you will file for SSDI (and for private disability insurance if you have it). I believe that after 2 years on SSDI you will be eligible for Medicare which is very good coverage. It only covers 80% of qualifying bills but Medicare sets the allowed cost so it's a very good deal. For example, an ER visit bill from the hospital was 20k, Medicare allowed the hospital to bill 4k and paid 80% of that. You can also buy a supplement policy to help with the 20%.

Your asset allocation (AA) is a very personal decision and there is no 'right' answer other than what you think is right for you. I do believe that for the long term it's important to keep some of the portfolio in the stock market (low cost index funds like a s&p 500 index fund).

Here's a link, there are other wiki articles that might be helpful as well:

https://www.bogleheads.org/wiki/Tax-eff ... _placement

be aware that selling in a taxable account will result in taxes, if you are considering that it might be good to post a question here first.
WhyNotUs
Posts: 2687
Joined: Sun Apr 14, 2013 11:38 am

Re: Just Diagnosed With MS - Rethinking Finances

Post by WhyNotUs »

wobbly524 wrote: Mon Jun 10, 2024 10:25 pm Best wishes on your treatment plan
Questions
1. I was budgeting $25k a year for medical care before this diagnosis if I retired early and didn't have coverage. Get a Healthcare.Gov plan and expect to pay the maximum out of pocket. So Premiums x 12 + Max out of pocket and then a cushion got me to this number. And would need this X number of years until Medicare, so to retire at 50 it would be $375,000. Does this seem right still?

Now would be a good time to study your state's options and learn the rules for your state. Unfortunately, there are differences. Your number seems appropriate without that knowledge.


2. At what point do I start getting conservative? I have been investing super risky because I always felt like I could work longer if everything went to zero and that I'd always be able to work. This diagnosis can certainly change that.
This still seems fresh, I would revisit this question in 6 months and focus my energy on other issues, you have done a good job being in a favorable financial position to support your health care needs.

3. My Retirement and Deferred Comp are through TIAA and their product "TIAA Traditional" is available. I have researched that a bit, and as far as safe investments available in those accounts, this seems to be it. Does anyone really like this product? What amount would you suggest I shift towards this? Once it is in TIAA Traditional, my understanding is I can't take it out until retirement.

4. What else should I be thinking about or taking into consideration now that I have a medical situation like this? I know how fortunate I am to not have had medical issues until this.
Look at the medical network in your area and make sure the resources are available to help you thrive, if not look for resources out of the area that will supplement your needs. You can afford excellent care, use it. Friend and family support are very helpful, tend to your relationships. Longer term, if there is anything unusual about your housing situation, determine a trigger point for making a change.

5. My living expenses are pretty low - $60k a year or less, I am pretty simple. But I do value flexibility. I know there are a lot of factors, but in my situation what $ amount would you say I really need to get to to not worry.
Your $60k probably doesn't include $25k for medical. Regardless, you have enough and are continuing to work. As others have noted, make sure and do the things that you really want to do as well. Maybe spend a little more on yourself.

Thanks for reading this and for any advice. I am felt like I was at the point where I could kind of do whatever I wanted to whenever I wanted to, like quit if I started to hate work, volunteer, travel, etc. That was always my goal, have always saved like a maniac and worked to pay off all my student loans and other debts as quickly as possible. I'm not complaining at all, I know how lucky I am to have what I have at my age, seriously. I just know I have to think a bit differently now.
Your positive outlook and economic position are very favorable toward you learning to live with MS in the best way possible. You are on the right track. Advocate for yourself!
I own the next hot stock- VTSAX
bd7
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Re: Just Diagnosed With MS - Rethinking Finances

Post by bd7 »

I think your portfolio is just fine, you appear to be doing everything right. TIAA traditional is a good product, but I wouldn't put more than about $500K in it, that's enough to set up an annuity at retirement age that would provide most of your living expenses--assuming they haven't increased. Other than that, I would not get "conservative" with your portfolio, it has to grow and last you for a long time.

I'm assuming you are a highly-compensated academic, so retirement may not be what you want to do. Are you burned out or something? Or just wanting to do more things in life? Travel and recreation may become very difficult long before your disability impedes you from doing normal things like your regular work. Having a secure job where you have some ability to set your own pace and schedule is probably better for your health and well being than voluntary retirement.

Your location may matter as many people with MS become weather sensitive. If you are in the SF Bay area or the Pacific Northwest, that's ideal. If you are currently in Houston, that may not work out. As good as your financial condition is now, improving it further might give you options later that will increase your comfort and happiness.
Anina
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Re: Just Diagnosed With MS - Rethinking Finances

Post by Anina »

I am so sorry to hear of your diagnosis.

You can apply for social security disability if your symptoms make it impossible for you to work.

You will need your birth certificate, tax forms, and identification. You will also need to sign a release for them to have your medical records. You can apply online or in the office. They will assign you a case manager.

I know of this because my brother became very ill in May of last year. He applied in Aug. The case manager worked with him. He was approved in Feb of this year. Got his 1st check in Mar. His 1st check had a retroactive amount. There is a 5 month wait from diagnosis where you don't get paid unless your medical condition is severe.

Once you are on disability there is a 2 year wait to get on Medicare.

I had a patient who had MS for years and she was able to work. Once her symptoms became overwhelming, her MS doctor told her it was time to apply for disability. I hope your symptoms remain manageable for many, many years.
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LilyFleur
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Re: Just Diagnosed With MS - Rethinking Finances

Post by LilyFleur »

Welcome to the forum. I'm glad you have reached out here. I wish you the best. Many of us learn to live with difficult health conditions gracefully and with gratitude, and it seems that you are doing that. I hope that you can do some bucket list items, like travel, earlier rather than later. Perhaps as you get to know how to manage the illness, you'll know what type of travel will be manageable.
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Wiggums
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Re: Just Diagnosed With MS - Rethinking Finances

Post by Wiggums »

LilyFleur wrote: Tue Jun 11, 2024 1:50 pm Welcome to the forum. I'm glad you have reached out here. I wish you the best. Many of us learn to live with difficult health conditions gracefully and with gratitude, and it seems that you are doing that. I hope that you can do some bucket list items, like travel, earlier rather than later. Perhaps as you get to know how to manage the illness, you'll know what type of travel will be manageable.
+1
"I started with nothing and I still have most of it left."
ut2sua
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Re: Just Diagnosed With MS - Rethinking Finances

Post by ut2sua »

wobbly524 wrote: Mon Jun 10, 2024 10:25 pm 2. At what point do I start getting conservative?
If I were you, I would move to an AA of 60/40.
Since you were not me, and we have different risk tolerance, a couple of imagined scenarios may help:
1- If stock goes up another 50% in the next 3 years, will you regret having some bonds in your portfolio thus missing out on the gain (assuming bond is gaining a lot less than that).
2- If stock crashes by 50% and stays that low in the next 3 years with no end in sight (it will always feel like that), will you regret not having a significant portion of your NW in bonds (thereby insuring that you are still FI. assuming bonds will give you 4->5% in the next 3 years).
Would you rather deal with 1 or 2 above (with the knowledge that stock will probably recover in the long run, but...)?
Only you can answer the above question.
BTW, it is not an easy question to answer for many of us.
Wishing you the best of luck
persimmon_tree
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Re: Just Diagnosed With MS - Rethinking Finances

Post by persimmon_tree »

To OP:
Someone very dear/close to me, has had MS for past several years.
I am not a doctor. But I believe MS progression is different for different individual(s).

Looks like you have a portfolio that is very well put together.
For potential future disability/medicaid/ACA, I think your portfolio already provides low level of taxable income.

New drugs/treatments are evolving...stay strong.
donocash
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Re: Just Diagnosed With MS - Rethinking Finances

Post by donocash »

I am sorry to hear that you have received this diagnosis. I would suggest you consider the following:

1) In matching your financial resources to your life expectancy and health care needs, keep in mind that multiple sclerosis has a wide variety of clinical outcomes depending on a wide variety of factors. It is entirely possible to live a normal life expectancy with this diagnosis. I would press your health care team to review all of the prognostic factors that are known currently, and discuss them with you as they apply to you, so that you have a better idea of both life expectancy and possible disabilities, with the understanding that a wide variety of outcomes are possible even when all known prognostic factors are taken into account.

2) There are charitable organizations that are designed to help those with a diagnosis of MS. Do not hesitate to contact them. This will be especially helpful if you need to navigate the complex maze that our health care/insurance system has become. They will know more than us, as experience is the best teacher. You will be in touch with others who have your diagnosis, and they may offer helpful tips with problems as they arise, be they medical or financial.
bmwr1200s
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Re: Just Diagnosed With MS - Rethinking Finances

Post by bmwr1200s »

Sorry to hear about your diagnosis. First off, don't panic and if you do feel the panic coming on, just breath. I say this as someone whose wife was diagnosed 25yrs ago and as an occupational therapist who has treated numerous MS pts over the years. Everyone's diagnosis is their own.

As stated, my wife was diagnosed 25yrs ago and is still fully ambulatory and working full time as a corporate lawyer all while living in the 10th circle of Hell known as Houston.

If you live near a decent medical center, there will be neurologists who specifically deal w/ MS pts. Find one who fits your personality and goals as this will be a long term relationship. Additionally, reach out to the local chapter of the MS Society as they will be a great source of educational material and services available.

As for disease modifying treatments, you may have to try several until you find one that works for you. Don't feel like you have to stick w/ what your neurologist first puts you on. My wife has gone through many and unfortunately they have all tried to do her in, thus she hasn't been on treatment for over a decade.

Some will tell you to immediately stop working as stress can affect the disease course. Play it by ear and listen to your body. I've treated MS pts and those that stopped doing everything for fear of stress generally seem to do worse. Again, everyone's MS journey is their own unique journey.

Clean your diet up and continue or start exercising to maintain your strength. Swimming, pliates, yoga etc are all great. Just keep moving.

Finally, whatever you do, limit your internet research time as it'll take you down all sorts of crazy rabbit holes. Also, it's ok to get mad and even have a good cry every once and a while. Let it happen and move on. Again, don't panic and feel free to reach out to me w/ any questions.

Gerry
bmwr1200s
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Re: Just Diagnosed With MS - Rethinking Finances

Post by bmwr1200s »

One more thing....you're about to enter the world of neurologists....if you're the type who likes/needs concrete answers, prepare yourself for soft non-committal answers such as, "maybe', "possibly", "we don't know", etc

Gerry
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my2p
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Re: Just Diagnosed With MS - Rethinking Finances

Post by my2p »

I am a fan of Dr. Michael Greger (author of the book "How not to die") when it comes to health conditions.

Please check his video on MS and see if it makes sense in your case: https://www.youtube.com/watch?v=B-mvh23M3fU

Wishing the best!
“The simple path to wealth” — JL Collins.
bmwr1200s
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Re: Just Diagnosed With MS - Rethinking Finances

Post by bmwr1200s »

Not to start a diet argument, just be careful going down the diet rabbit hole. There's the above mentioned one, there's the anti-inflammatory diet and a dozen others. Just find a healthy diet that you can maintain because if you aren't able to maintain it and you have an exacerbation of symptoms, you'll beat yourself up thinking it was diet related.
Topic Author
wobbly524
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Re: Just Diagnosed With MS - Rethinking Finances

Post by wobbly524 »

THANK YOU all so very much. This has been so incredibly helpful. I don't know enough how to quote different pieces of what everyone said.

Clarifying a couple things -
1. I do not own any property, so the $60k annually would include rent, utilities, I have a basic (but safe) car, general stuff like that. $25k for healthcare would be in addition to that.

2. I am not unhappy at work. I am fairly compensated and (imho) am good at what I do and it is rewarding generally. Part of what has made me good is that I've been willing to take risks and appropriately disagree when things didn't make sense. Like any work place, there are a lot of politics though I'm not burned out or anything. So over time will I find myself less effective as I may not advocate as hard for a position or my group because I don't want to ruffle any feathers? Before this my thinking was, I can always get another job if I get ousted or I can survive based on what I have. I am well liked at work, not universally of course, and still think I could find another job it's not that. It's just something that now is in the back of my head. The job comes with stress, but manageable. I wanted to have flexibility/options basically and if someone drove me crazy enough, ride off into the sunset. The other thing in this bucket is that it is very, very important to be highly effective in what I do. The organization broadly, those who support us, the team who works with me, and those whom we support all deserve that. So I've always wanted to make sure if there was a time when I didn't feel like I was the best person to be in this position that I didn't have something hold me back from making the right decision to move on. Sorry that's a lot, but there were some questions around this.

Here are new questions.
1. When it comes to my money in the HSA or Qualified Medical Expenses generally, if I am unemployed do my insurance premiums count? And what if I need to be in a long term care facility, could I use my HSA towards that cost? My intention is to keep maxing that out and not use the $ while it is invested.

2. Is there an equivalent to TIAA Traditional that I could put in my Taxable Brokerage? Is that the better place to have fixed income instead of my Retirement that is tax advantaged? I guess if it is paying dividends each year, maybe not.

3. Is $25k a safe estimate for what medical expenses would be on Medicare if I get a supplemental insurance policy with it? To include the premiums + any covered care? Meaning, should I be calculating $25k a year in medical expenses every year until I die.

I will be doing the following shortly.
1. Reviewing my employer's disability policy and FMLA. I took a quick look at this a couple weeks ago but need to get intimately familiar with it. Understanding how this and SSDI etc work are crucial. And knowing like Schuchong pointed out that I have to have been working 5 of the previous 10 years to qualify for SSDI, that impacts a full early retirement do nothing consideration.

2. Learn about TIPS. I know about I Bonds and started about a year ago buying $2,500 each quarter to max my $10k but for some reason felt like having them mature once a quarter could be advantagous vs once a year doing a lump $10k. I also overpaid my taxes so I could get a $5k I Bond and will keep doing this to get $15k in bonds each year. Should I look at E Bonds if I am wanting to ladder and will hold them for the amount of time needed for them to mature?

3. Revisit my legal documents around POA/healthcare. I put some of that into place last year but I told myself then it should be checked every year.

4. Adding needing to have two years of Custodial Care Rate funds set aside to my overall needs. Thats a hefty $360k chunk. I will try to have $375k for Medical needs for 15 years and $360k for that earmarked.

5. Really looking at the healthcare systems and resources in my area and seeing they can support this. I am in a metro area with good hospitals/systems but I need to really understand this deeply. Add to this longterm thinking about geography for a condition like this.

6. Really, really think about the ideal AA for me. What great advice from all of you as expected. Since I have practically 0 in the low risk category I will be pointing some in that direction, I just don't know how much yet.

7. More deeply understanding MS and working with my care team to get the full perspective on what may be coming down the line for me. Same goes with reading the MS forums out there and support organization materials. And not getting too far down the rabbit holes out there.

8. I guess it's time to make a bucket list. Again I'm so lucky. I never thought I would have a million dollars or have been to the places I have been. Watching that video about saturated fat did make me question all the steaks I have enjoyed though :)
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