John C

Comments:

• Good article. I am one who has decided a small percentage (15-20%) of our portfolio will include annuities. During the pandemic I purchased a book called Safety First by Wade Pfau and listened to numerous podcasts with him discussing the concept. He stated that purchasing annuities should be considered a replacement for a portion of one's bonds but they have longevity that bonds cannot offer. Additionally, Mr. Pfau states having some guaranteed income allows one to be more aggressive with your allocation to equities. I found some of the large participating insurance carriers have fixed annuities with the potential of dividend income on top of a guarantee. That is the route we are taking and I have already started the process of slowly purchasing some annuities toward my target retirement date.

  Post: Getting to the Number

  Link to comment from October 3, 2022

• Very well said. It's a good reminder of why using an advisor can be a good idea for some. A balanced or target date fund might help us not tinker around the edges or try to time the market, but it may not be possible if one has a number of investment accounts including both qualified and taxable funds.

  Post: Proud of Nothing

  Link to comment from April 27, 2022

• Great topic Jonathan. I started building a portfolio years ago and didn't have a dozen funds but found over time it was somewhat of a pain to rebalance plus I sometimes second guessed my choices at time. I have more taxable investments than qualified money so tax consequences mattered. In my case working with a low cost advisor took away those burdens for me. I realize it's probably not the route for you but have you given thought to the possibility of low cost advisor as you grow older? We are never certain of our future health and in a way like asset diversification it may be another form of portfolio insurance.

  Post: Mix and Match

  Link to comment from December 5, 2021

• Very good insight for many of us pondering our next phase of life after full time work.

  Post: Retirement Pro

  Link to comment from November 11, 2021

• Wonderful observations Mr. Ellis. For those of us who use an advisor these are good points for to ensure the "whole picture" is being taken into consideration. Thank you and Jonathan's creation Humble Dollar for sharing such good nuggets with us all.

  Post: My Total Portfolio

  Link to comment from October 14, 2021

• This is a good eye opener. I think if inflation is stuck at a high level for long periods it will be difficult for many types of assets. I am considering allocating a portion of my portfolio to fixed annuities but just a portion. Studies have been made where the mortality credits offer a different value to a portfolio than having only stocks and bonds. It seems the key is not to rely 100% on any single asset class be it stocks, bonds or an annuity.

  Post: Deflated Pensions

  Link to comment from September 30, 2021

• This is a good article. I have worked in the insurance business for many years and the story summarizes many of the challenges I have heard faced by insurers. My wife and I purchased group LTC policies through my employer approximately 12 years ago we had our first increase last year at approximately 80%. It's important after receiving an increase and having a policy for a period of time to request an inflated benefit schedule which summarizes today's current benefits after the inflation indexing taking place over the years (assuming a policy has inflation indexing). I was surprised how much our benefit had increased and we made the decision to eat the increase while I am still working. In the future we may decide to drop future inflation compounding to hold the future costs down but will not lose what benefit we accrued to date. I agree that even with the high increases many people still have coverage they couldn't obtain in today's market and provisions unmatched by the newer generation of policies.

  Post: Their Loss, Your Gain

  Link to comment from June 29, 2021

• These are good points. I believe you've said you don't make a budget so am curious how do you estimate the amount of cash and bonds needed each year for spending prior to social security? Do you total up your annual expenses and then come up with an estimate of after tax dollars needed to spend each year? Thanks.

  Post: Work in Progress

  Link to comment from May 15, 2021