stelea99

Comments:

• Suppose you were going to retire and among your investments you had $190k in some kind of tax deferred account. You could purchase an annuity without inflation protection and get something around $700/mo on a joint and survivor annuity. Over the next 16 years you would collect a total of around $135,000. With a 2% inflation rider your initial payment would be less, but your total collected might be more. Alternatively, you could do what we did when my spouse inherited the same amount of money in 2007. She left it in the IRA and began withdrawals in 2008 on a 23.5 year life expectancy. These funds were invested 80% in US stock index funds, and the balance in US bond index funds. In the first year she received $8119. Over the rest of the time since then she has collected over $200,000. She still has 8.4 years of life expectancy left on the IRS table. The current balance in the account is over $209,000. Every year her withdrawals have increased now to the mid-$20k range. The return from this account has crushed inflation. To deal with inflation, you need some funds invested in the stock market earning market average returns. You have to have faith in the US economy. You don't need all your funds in the market, just some....you cannot beat inflation without accepting some risk....

  Post: Hedging your bet in retirement-dealing with inflation. What’s your strategy? R Quinn

  Link to comment from October 6, 2024

• QCDs are a very important tool for doing something good and saving on taxes at the same time and I salute you for using it. I wonder if your IRA custodian offers check writing for your IRA? Schwab does, and this gives a person the opportunity to make all those smaller charitable donations during the year. If you had check writing, next year you could mentally set aside a amount for these miscellaneous charitable gifts, and write checks for them all year as you needed to. The only QCD requirement that you have to be careful for is the need for a written acknowledgment of each gift. (Note: some check writing plans might have a minimum.) So, you need to send a form letter along with the check. If your custodian doesn't offer check writing you lose a lot of flexibility. Having to go on line and deal with having to have the custodian send the check is a PITA. If you had the checkbook, Connie could still write the check, but you would have to sign them.

  Post: Our annual give it away meeting 🤑

  Link to comment from October 5, 2024

• The price of water, like real estate or other commodities is a function of market prices. In Death Valley, there is no water and if you were there and thirsty you might pay a lot to get some. You won't find a drinking fountain at a truck stop on the interstate, but you will find lots of bottled water. It is expensive to run a store out in the boonies, so why give away water when you can charge for it. And, at concerts, and sporting events it isn't just the water that is expensive. Ask your flight attendant the time you fly for some water. Get out your wallet first......

  Post: A clarification of the bottled water post

  Link to comment from October 4, 2024

• As a thrifty person, I can say that there is no shortage of things that folks spend $ on that seem foolish to others. But, it is kind of important not to jump to conclusions when you look at that case of bottled drinking water in someone's shopping cart. Virtually all children who are growing up these days participate in team sports like soccer. For every game some parent has to provide bottled water. Then, of course, there are those whose source of water comes from a well and tastes terrible, or is cloudy/colored. And, how many CPAP machines or others with disabilities who are buying gallons of distilled water? And, finally, there are places which have very, very hard water and without bottled water, they must either have a water softener or buy bottled water. Water softeners increase sodium levels and folks with blood pressure issues must watch this. If you are fortunate to live somewhere with delicious, soft, safe tap water you should enjoy it because a lot of people cannot.

  Post: Truth is Often Stranger Than Fiction

  Link to comment from October 3, 2024

• Gee, how do you spell pensione? Isn't that a place you stay on vacation in Italy? Just an observation from one who knew his entire working life that, just like Dad, he wasn't going to get a pension. Knowing you will get one can make you weak from a retirement savings/investment point of view. You are leaning/counting/depending on that pension for your retirement funding (along with SS). When you know you won't get one, you know it is up to you to have enough to deal with things like inflation, big medical expenses, long-term care and/or anything else that might come along. So, you plan, save, and invest. And if you are fortunate (lucky) you can even retire early, live the good life in retirement, pay for grandchildren to go to college, and still watch your pile grow. Once you have enough so that your withdrawals are always less than 2% (along with SS), you have reached the comfort zone. COLAs are not material. Your total investments are enough.

  Post: Hedging your bet in retirement-dealing with inflation. What’s your strategy? R Quinn

  Link to comment from October 1, 2024

• Back to the late 60s, phone calls were expensive, Ma Bell still had a monopoly, there was no unleaded gas, or microwave ovens. Airline travel was expensive because of regulation so there was much less traveling. There were the three big networks for TV, and if you wanted something different you could go to the movies. There was no internet, if you wanted to know something you went to the library, or looked at an encyclopedia. The amount of scientific knowledge doubles every 15 years, and what you have to know to do many modern jobs is much more than it used to be. I think that life is much more complex these days that it used to be…..complexity has a price.

  Post: How did it all work for us? Why not now?

  Link to comment from September 26, 2024

• I think we need more facts about the past to understand the present. I graduated from UC Berkeley in 1967. One dollar in 1967 is now $9.43 today. But, some things have escalated much more than this. Tuition at UCB in 1967 was $240 a year. Now it is $16,608. If this cost increase was just inflation it would be $2263.....In 1967 a person with a taxable income of $100k was in a 62% Fed Tax Bracket. That $100k would be worth $943k today. And, a person making $943k would at most be in the 37% bracket today. In 1967 the state paid most of the cost of running UCB, today the state pays a tiny fraction of that cost. There was no need for today's extensive network of childcare providers in 1967 as most women didn't work, and kids could just play at elementary school in the afternoon after school was over until a working parent came home. I used to walk home by myself from elementary school.....Today this is viewed as not safe, and school children in elementary school must either be picked up or bussed. Obviously something changed in how state universities are funded since 1967. These changes produced the entire student loan and debt situation.......

  Post: How did it all work for us? Why not now?

  Link to comment from September 26, 2024

• Many of the billionaires included in the list were not investors, but entrepreneurs. Think of Henry Ford as a role model. These single minded, extremely driven individuals, can sometimes produce wealth at an extraordinary level. Elon Musk would be a current example. But, unlike most other people, their personalities and activities can also produce an outsized impact on society. And, it isn't all good.

  Post: In defense of billionaires

  Link to comment from September 24, 2024

• Anchoring is a new name for an old concept. I first read about things being fixed in customer minds many years ago in the book Positioning, by Ries and Trout. The focus in this book wasn't decision making per se, but how hard it is to change something that had been "positioned" previously and how people dealt with new information. One of the best examples of this was the attempt by Xerox to market one of the earliest versions of a personal computer. Even though Xerox, at its Palo Alto Research Center, had invented things like the graphical user interface and pointing devices, Xerox, to most people, meant copier and could not mean computer....and their new PC flopped. If you have not read, it is a great, short read.

  Post: Anchors Away by Ken Cutler

  Link to comment from September 24, 2024

• I started wearing a mask again this AM when I went to the grocers. Wife and I have all the Covid shots,(6) and neither of us has caught the thing. At 78, with both having health issues we try to be careful. I vividly remember in maybe the third grade standing in a line to get vaccinated with the Sauk Vaccine. I think there were several doses over some months, and then we went back several years later to get the 3 doses Sabin Oral Vaccine. Then at age 21 upon going into the military I walked down through a group of medics getting many needles in both arms, including things like Bubonic Plague, Yellow Fever, typhus, typhoid fever etc……and polio again. More recently there were shots for Hep A for a trip to China, 2 sets of different shingles shots, annual flu shots, 3 different pneumonia shots, Tdap, and last year RSV. We will wait till mid-Oct to get Flu and Covid this Fall hoping that the immunity will last through the season. As of mid April this year it is reported that something like 1.2million folks in the US have died from Covid since it began. Even if this is off by 20% still a large number. After a lifetime of getting vaccinated, I don’t understand the fear.

  Post: Jabs Anyone?

  Link to comment from September 22, 2024