Neil Imus

Comments:

• Are inflation protected single premium income annuities (SPIAs) available with no inflation cap?

  Post: Laying Down a Floor

  Link to comment from September 14, 2024

• Can you guarantee yourself that you will receive the posted interest rate of a bond fund on the day that you invest if you hold that investment in the fund as long as the "average effective maturity" (AEM) of the bond fund? In other words, is holding a bond fund for the length of its AEM the same as holding an individual bond to maturity?

  Post: Question of Interest

  Link to comment from August 4, 2024

• Thanks for the reminder, Jonathan, about how much luck plays a part in our lives, and that we should therefore remain humble and help those who haven’t been so lucky.

  Post: Feeling Lucky by Jonathan Clements

  Link to comment from July 26, 2024

• You have been the financial writer I trusted for the truth since I first started reading your columns in the Wall Street Journal. Thank you for all you have done and continue to do for me, my family and all of your readers. You make a real difference in our lives.

  Post: The C Word

  Link to comment from June 15, 2024

• Like you, Jeff, I have been trying to simplify our finances. I used to have our money spread among different TreasuryDirect accounts, banks and financial companies but have now consolidated everything into one checking account and Vanguard accounts. We are both retired, receiving SS and a very small pension. At the beginning of each year I put enough money to cover our estimated expenses for the year into our Vanguard Treasury Money Market Fund VUSXX. I move money from there to our checking account as needed. I hold the rest of our retirement funds in three buckets: (a) 3 years of estimated expenses in Vanguard’s Short-Term Treasury Index bond fund VSBSX, (very low risk - 99% US government bonds with average duration of 1.9 years), (b) 7 years of estimated expenses in the Vanguard Total Bond Market Index Fund VBTLX, (relatively low risk with average duration of 6 years) and (c) the rest in Vanguard stock funds - mostly Vanguard Total World Stock Index Fund VTWAX. The most complicated thing is rebalancing each year. Have to decide whether to sell some of the stock fund and move to bond funds (which I would not do in a stock downturn). By consolidating everything into three funds I’m hoping this rebalancing isn’t to complicated for my wife or adult kids (who don’t have the same interest or get the same enjoyment in financial matters as I do).

  Post: Not So Simple

  Link to comment from June 11, 2024

• Great article on bonds, and I think your advice for investing money for the longer term is spot on. To me, the risk/reward calculus tips in favor of holding money I won't need for 10 years or longer in a diversified, low cost, stock fund. If history is a reasonable guide, over long periods the overall stock market should provide returns that exceed the returns from bonds and exceed inflation by a good margin. The added benefit is that the tax rate on stock gains will be lower than the tax rate for bond income. There are no guarantees, but over long investment horizons it seems to me that the downside risk of a broadly diversified stock portfolio is far outweighed by the upside potential.

  Post: Comfort Has a Cost

  Link to comment from March 2, 2024

• Your concern resonates with me. For a long time I kept five years' worth of expenses in a bond ladder of 5 year Treasury Notes directly with the U.S. Treasury (in our TreasuryDirect account ) for this very reason. However TreasuryDirect is not a particularly user-friendly portal and it is a "complication" that I decided was not worth the effort. The internet says that as of December 31, 2023, Vanguard has 50 million investors. If something at a macro level happens to Vanguard that makes my investments inaccessible for more than a short amount of time (not smart enough to predict what this might be: hackers? fraud? something else?) I'd be in a boat with 50 million other people and there would be a good chance that the Federal Reserve, the SEC, Congress or somebody else would force a fix pretty quickly. And I suppose my individual investments at Vanguard could be stolen somehow, but this could happen whether I have them all at Vanguard or split amoung several different companies.

  Post: Keeping It Simple

  Link to comment from February 26, 2024

• Now that my wife and I are retired and getting older I completely agree with the KISS approach for finances. I have spread our IRAs (regular and Roth) among two Vanguard bond funds (Total Bond Market Index, Short Term Treasury Index) and one Vanguard Stock fund (Total World Stock Index). I'd love to do the same thing with our taxable investments (which are currently invested in several different Vanguard stock index funds), but don't want to incur the capital gains taxes that would be triggered to move them into different funds. I, like you David, realize that we may be leaving money on the table, but at our point in life I think simplicity has value that outweighs trying to squeeze the last few dollars from our investments. In the event of my death (or mental inability to continue to handle our investments) I want my wife to be able to easily manage our finances. And upon her death I want our children to be able to figure things out fairly easily. I note, however, that this "simplification" process has taken some time and perseverance to put into action. "KISS" isn't necessarily "simple" to do.

  Post: Keeping It Simple

  Link to comment from February 26, 2024

• To me, it goes back to the idea of thinking of SS as insurance, specifically longevity insurance, rather than thinking of it as an investment. I am "buying" (by using up some of my savings) insurance to help me insure against the possibility of outliving my financial resources. Sure, I might die at age 69 before I receive any SS payments. This would make it a bad investment for my heirs (I spent my own money to delay SS and got nothing for it), but that does not necessarily a bad decision for me. I may live until 100 (fingers crossed), and if I do, I will receive the larger SS payments for 30 years. You could of course take the money you use to delay SS and instead invest it. But I think you would have to take a lot of investment risk and have a lot of luck to create a guaranteed income stream for 25 or 30 years (if it turns out you live that long) that would equal the benefits of delaying SS until age 70.

  Post: Covering the Basics

  Link to comment from March 22, 2023

• I agree with you and the author that the decision about when to start SS "should reflect the need for the income and nothing else" and "that need must include consideration of other steams of income" (pensions, rental income, annuities etc.). But in addition to "streams of income" I think in many cases it makes sense to cash in some of your savings if you need the money to fund your living expenses during the 62–70-year-old period so that you can delay taking SS. In effect you would be trading some of your investments for a larger, inflation-protected payment for life.

  Post: Covering the Basics

  Link to comment from March 22, 2023