David Shapiro

Comments:

• I preface my inexhaustible supply of fascinating stories with: "Stop me if I already told you this one today . . ."

  Post: Signs of the Times

  Link to comment from July 20, 2024

• oh, that one's just a pup! At one point the average age of our 3 vehicles was 17. I literally drove my 24-year-old Volvo into the grave(yard): the local Air Quality Management Board paid me $1,000 to drive it to the junkyard for dismantling. (hey this humble brag thing is fun!--bragging, one-upping and feeling good about it)

  Post: Humble Bragging by Jonathan Clements

  Link to comment from July 13, 2024

• me, too. Full name is maxifiplanner. The default settings are conservative in the direction of not running out of money (e.g., the default assumption is that one lives to age 99) but all defaults can be varied by the user to explore alternative scenarios or the effect of making various moves. Takes into account all the complicated interactions between the various variables, which is something individuals cannot do with spreadsheets. I highly recommend.

  Post: Faulty Assumptions

  Link to comment from February 21, 2024

• For many years I occasionally had the exact same dream, mine was about a class in graduate school! I haven't had it for a long time, and had forgotten about it, but now that you've stirred up that old memory . . . . but don't worry, I won't hold it against either of you! :)

  Post: Retirement Dreams

  Link to comment from February 21, 2024

• A partial alternative or supplement to an annuity ladder, for those who are able, is I-bonds which if bought before the end of April 2024 are paying a guaranteed fixed rate of 1.3% over inflation for the 30-year life of the I-bond. They can't be cashed in the first year, and there's a 3-month interest penalty if cashed before 5 years, but after that there is no downside to cashing them at any time. The interest compounds tax-deferred and is state tax free (not an advantage in states without an income tax, like Florida). Administratively the only hassle is up front, establishing the TreasuryDirect.gov account; once purchased you can forget about it until you cash it. Individuals can only purchase a maximum of $10,000 each calendar year (plus another $5,000 can be bought with a federal tax refund), but one can buy the maximum this month and then again in 2024. A living trust can also buy one each year, as can any businesses you own that have a separate bank account. A website I recommend for information about I-bonds (and TIPS) is tipswatch.com

  Post: A Taller Ladder

  Link to comment from December 13, 2023

• I think that depends on what you mean by "not that much lower." According to the SSA, if you were born between 1943 and 1954 your retirement benefit would have been 32% higher at age 70 than if you had claimed benefits at your Full Retirement Age of 66. Note that the 32% is on top of the yearly SS inflation adjustments, which have totaled about 20% over the past 5 years. And since you claimed your benefit a year before your FRA, your retirement benefit at 70 would have been even more than 32% (plus inflation) above what you received by claiming at 65. With your savings over those 5 years you'll certainly be ahead for a long time, but hopefully at some point you'll reach a "break-even" point and be behind after that. (I'm not a pro so please correct this info if it is wrong!)

  Post: Searching for When

  Link to comment from December 6, 2023

• Yes. One problem with the break-even calculation is that it is difficult to estimate accurately on your own: it is affected by the interaction of taxes, continued earnings from work, retirement account withdrawal strategies, etc. I don't know how well the various software packages (free and commercial) take those factors into account.

  Post: Searching for When

  Link to comment from December 6, 2023

• I'd like to throw another unknown onto the pile you're considering, which is the power and future potential of modern medicine to treat your aches and pains and extend your physically active period of life. At 67, for the last 3 years I have experienced a series of annoying neuromusculoskeletal issues that have sidelined me from my sports activities, but physical therapy and two minor operations have fixed each one so far (physical therapy has been amazingly effective). Joint replacement surgery has become one of the most effective treatments of modern medicine and continues to improve yearly (lower back surgery is not as good, but it too continues to get better). Your "active" years, particularly for travel, might extend 10-15 years past your early 70s, particularly taking into account future medical advances. Anecdotes prove nothing but can be illustrative: my stepfather at age 87 has had both knee joints replaced as well as the shoulder of his dominant arm and he plays tennis several times a week, travels to a different part of the globe yearly, and enjoys gardening in his large, hilly yard. It is hard to weigh near-term consumption versus far-off consumption given how unknown the far-off future is, but your friends who have been happy with their decision to take SS early aren't the right ones to consult unless they are already in their far-later years and are possibly experiencing the downside of that decision. I've only discussed this with a few much older people, but those who took SS early regret it now (of course, after enjoying its benefits earlier), and the ones who took it later are pleased. But people who took SS early and died early clearly made the right decision. The decision completely depends on individual circumstances and preferences. For myself I view Social Security -- an inflation-protected annuity -- as longevity insurance that helps insure I won't outlive my ability to maintain a lifestyle I'm content with even if my savings and investments don't perform as projected, but since my wife and I will have earned income until 70 we don't have to reduce our present consumption to delay claiming benefits until then. (I personally am not worried about future benefits cuts: Social Security has long been considered the "third rail" of politics, and in a few years all of the boomers will be on it, making it even more untouchable!)

  Post: Searching for When

  Link to comment from December 6, 2023

• On #5, if you are married and live in a community property state, the basis of all the equities you and your spouse own as community property will be stepped up when one spouse dies.

  Post: So Much to Like

  Link to comment from April 1, 2023

• As someone considering an individual TIPS bond ladder in a retirement account, I'd like to learn more about your comment on the need "to worry about coupon rates, accrued principal, inflation factors and real yields to maturity" if you buy individual TIPS on the secondary market. In a tax-sheltered retirement account, buying on the secondary market gives you a guaranteed real yield to maturity, which seems like the most important thing. How do the other factors you mention come into play? thanks!

  Post: Time for a Ladder?

  Link to comment from March 29, 2023