Vanguard Diehards

Re: Dress Code for Diehards Event

chinwhisker — Sun, 09 Mar 2008 22:16:51 GMT

Mel Lindauer:
chinwhisker:
I guess I'll just have to go to one of your little meetings. Is it OK I show up in blue jeans and a t-shirt? Dress shirts get wrinkled in the saddle bags, and I don't think I can afford the gas in my old truck. ;o)
Chin
Jeans and a t-shirt would be fine for some of the events, Chin. Might look a bit out of place for the banquet However, knowing you, that probably would't matter one bit!
And you'd get a chance to meet and put faces on a lot of the names you're probably already familiar with (Jack Bogle, Bill Bernstein, Rick Ferri, Larry Swedroe, Bill Schultheis, Professor Ed Tower from Duke, Sue Stevens, M* Darrin, Christine Benz from M*) and, of course, Taylor and Michael, as well as about 130 others who's names you may recognize from their posts on the forums.
Diehards VII in San Diego in September is already sold out, but we'll be holding Diehards VIII in Dallas in 2009. Start saving up some gas money and invest it wisely so you won't be saddle sore when you get there! :-)
Best regards,
Mel

Hi Mel,

I was kidding, and was talking about my bike as opposed to my horse. ;o),

However, if it is going to be in Texas, I might actually consider coming down early, leave late, ride my bike, and stop buy Louisiana for some gumbo.

Still just joking, but hmmm?

Oh, and yeah, I'm pretty sure Wifey has a decent knit shirt in the black hole that has swallowed up all my good stuff. ;o),

Chin

Dress Code for Diehards Event

Mel Lindauer — Sun, 09 Mar 2008 17:01:19 GMT

chinwhisker:
I guess I'll just have to go to one of your little meetings. Is it OK I show up in blue jeans and a t-shirt? Dress shirts get wrinkled in the saddle bags, and I don't think I can afford the gas in my old truck. ;o)
Chin

Jeans and a t-shirt would be fine for some of the events, Chin. Might look a bit out of place for the banquet However, knowing you, that probably would't matter one bit!

And you'd get a chance to meet and put faces on a lot of the names you're probably already familiar with (Jack Bogle, Bill Bernstein, Rick Ferri, Larry Swedroe, Bill Schultheis, Professor Ed Tower from Duke, Sue Stevens, M* Darrin, Christine Benz from M*) and, of course, Taylor and Michael, as well as about 130 others who's names you may recognize from their posts on the forums.

Diehards VII in San Diego in September is already sold out, but we'll be holding Diehards VIII in Dallas in 2009. Start saving up some gas money and invest it wisely so you won't be saddle sore when you get there! :-)

Best regards,

Mel

Re: Why we purchased lifetime annuities

chinwhisker — Sun, 09 Mar 2008 13:48:44 GMT

Mel Lindauer:

Hi Chin:
Thanks for the kind words. AFAIC, you're no trouble at all. You're both well-informed and persistent, two traits I admire. Hopefully we'll get to meet in person at some point in time.
I consider you and Bill (bilperk) to be two of the stalwarts and voices of reason on the forum. Both your and Bill's BS meters are great at sniffing out the smelly stuff and responding in a much kinder, gentler way than I'm able to.
Keep up the good work! Taylor and I will be around as long as there are investors who need help, regardless of which forum they choose to post on. You and Bill make major contributions in that area, too, so hopefully together we can make a difference.
Best regards,
Mel

See!

After all I have put you through, I'm thinking in particular the I-bonds debate, you still come back with something like this.

But, yes, it is this knowledge and persistency I appreciate from you as well as other Diehards who have been forced out to the Bogleheads. Speaking of which, I do miss Larry too. I just don't have time to post on both boards, and the most lost sheep are here.

I guess I'll just have to go to one of your little meetings. Is it OK I show up in blue jeans and a t-shirt? Dress shirts get wrinkled in the saddle bags, and I don't think I can afford the gas in my old truck. ;o)

Chin

Re: Why we purchased lifetime annuities

Mel Lindauer — Sat, 08 Mar 2008 23:49:19 GMT

chinwhisker:

Thanks Taylor, and good insight Mel. I was wondering if they could do more.
After writing my last reply, I thought of all the help you two have offered over the years here, all I have put you through ;), and I think a word of gratitude is in order.
You've been good to me, and I am glad Y'all are back over this way some now.
Chin

Hi Chin:

Thanks for the kind words. AFAIC, you're no trouble at all. You're both well-informed and persistent, two traits I admire. Hopefully we'll get to meet in person at some point in time.

I consider you and Bill (bilperk) to be two of the stalwarts and voices of reason on the forum. Both your and Bill's BS meters are great at sniffing out the smelly stuff and responding in a much kinder, gentler way than I'm able to.

Keep up the good work! Taylor and I will be around as long as there are investors who need help, regardless of which forum they choose to post on. You and Bill make major contributions in that area, too, so hopefully together we can make a difference.

Best regards,

Mel

Re: Why we purchased lifetime annuities

chinwhisker — Sat, 08 Mar 2008 22:16:28 GMT

Thanks Taylor, and good insight Mel. I was wondering if they could do more.

After writing my last reply, I thought of all the help you two have offered over the years here, all I have put you through ;), and I think a word of gratitude is in order.

You've been good to me, and I am glad Y'all are back over this way some now.

Chin

Re: Why we purchased lifetime annuities

Mel Lindauer — Sat, 08 Mar 2008 18:45:41 GMT

chinwhisker:
How much at 80 for him, and let's say around 75 for a hypothetical wife -- not my Mom of course ;), could they expect to draw from a $200,000 investment? -- that is the most they could have insured by the Gov, right?
Thanks again,
Chin

Hi Chin:

As Taylor pointed out, each state has its own limits (normally around $100,000), so it's advisable to buy a number of $100,000 annuities rather than one big one, since there's less likelihood of multiple companies going broke during the annuity period and needing the state's guarantee to bail them out. Kind of like spreading your money around at different banks to make sure you have FDIC insurance.

Thus, Taylor has two $100,000 policies, since he only wanted to annuitize $200,000, not because that's the limit. So, if someone wanted to annuitize $500,000, they'd probably want to have five $100,000 annuities, each from a different insurance company.

Best regards,

Mel

Re: Answer to Chin's questions

Taylor Larimore — Sat, 08 Mar 2008 18:38:03 GMT

Hi Chin:

How much at 80 for him, and let's say around 75 for a hypothetical wife -- not my Mom of course ;), could they expect to draw from a $200,000 investment?

You can get exact current figures from Vanguard using the link below:

http://www.aigretirementgold.com/vlip/VLIPController?page=RequestaQuote

That is the most they could have insured by the Gov, right?

Every state has their own rules as shown below:

http://www.immediateannuities.com/guaranty_liability/guaranty.htm

Best wishes.
Taylor

Re: Why we purchased lifetime annuities

chinwhisker — Sat, 08 Mar 2008 18:18:34 GMT

Thanks to you as well Bruce. I'll have to look at this for NC.

Chin

Re: Why we purchased lifetime annuities

chinwhisker — Sat, 08 Mar 2008 18:16:29 GMT

Thanks Taylor,

I am thinking of my mom and dad who is 39 ;), and he is 80. (notice the little winky-smiley on Mom's age)

Dad handle's the finances, and is currently not comfortable with anything over CDs. He wants to make sure the money is there for Mom.

I do need something very simple for him to consider, and guaranteed.

How much at 80 for him, and let's say around 75 for a hypothetical wife -- not my Mom of course ;), could they expect to draw from a $200,000 investment? -- that is the most they could have insured by the Gov, right?

Thanks again,

Chin

Re: Why we purchased lifetime annuities

tar42 — Sat, 08 Mar 2008 18:10:35 GMT

Taylor, I was responding to your post. Also, Bruce, had some good additional thougthts. Thanks all

Tim

Re: Why we purchased lifetime annuities

Mel Lindauer — Sat, 08 Mar 2008 18:10:15 GMT

orygunduck:

Taylor
A couple of added points to your great discussion of life annuities.
Every state that I've read about carries a Life and Health Guaranty fund that will protect life (including annuity) insurance holders up to $100,000, but this is typically only for fixed products For example, in Oregon, the guaranty fund specifically excludes all variable products.
Also, some states allow insurers to pass through 'extraordinary' expenses to current life annuity holders. The conditions, as I understand them, must be dire, but I suspect its there to help forego bankruptcy and the state guaranty fund from picking up the tab. Now, I've never read of this having happened, but if my understanding is correct, in states that allow insurers to do this, the lifetime annuity payment truly isn't guaranteed.
And I look at straight life annuities like I look at advertisements for eyeglasses. You've seen the ad that offers the buyer a set of frames and lenses, from their huge selection, for $99.99. But everything else is an add-on option. So by the time you're added the no-line bifocal, the lighter and tougher plastic, the UV coating, the non-polarization, the lifetime warranty, and so on......you're now into the eyeglasses you really want for $400. Simple life annuities do this through the joint survivor benefit, the death benefit, guaranteed period certain, inflation adjustments, a variable componenet, and so forth. But if the consumer has the strength to just say no, then I would agree that a life annuity could well provide the fixed income part of one's investments, providing its a strong underwriter.
BruceM

All good points, Bruce. Perhaps the most important advice, though, is your final sentence about selecting a "strong underwriter", since an investor's undisturbed stream of income is inexorably tied to that insurance company's strength.

Regards,

Mel

Re: Why we purchased lifetime annuities

tar42 — Sat, 08 Mar 2008 18:05:46 GMT

Thanks for a great explaination.......I will send this on to the couple I was referring to in the initial post.

Tim

Re: Why we purchased lifetime annuities

orygunduck — Sat, 08 Mar 2008 17:57:35 GMT

Taylor

A couple of added points to your great discussion of life annuities.

Every state that I've read about carries a Life and Health Guaranty fund that will protect life (including annuity) insurance holders up to $100,000, but this is typically only for fixed products For example, in Oregon, the guaranty fund specifically excludes all variable products.

Also, some states allow insurers to pass through 'extrordinary' expenses to current life annuity holders. The conditions, as I understand them, must be dire, but I suspect its there to help forego bankruptcy and the state guaranty fund from picking up the tab. Now, I've never read of this having happened, but if my understanding is correct, in states that allow insurers to do this, the lifetime annuity payment truly isn't guaranteed.

And I look at straight life annuities like I look at advertisements for eyeglasses. You've seen the ad that offers the buyer a set of frames and lenses, from their huge selection, for $99.99. But everything else is an add-on option. So by the time you're added the no-line bifocal, the lighter and tougher plastic, the UV coating, the non-polarization, the lifetime warranty, and so on......you're now into the eyeglasses you really want for $400. Simple life annuities do this through the joint survivor benefit, the death benefit, guaranteed period certain, inflation adjustments, a variable componenet, and so forth. But if the consumer has the strength to just say no, then I would agree that a life annuity could well provide the fixed income part of one's investments, providing its a strong underwriter.

BruceM

Re: Why we purchased lifetime annuities

Taylor Larimore — Sat, 08 Mar 2008 16:59:49 GMT

Hi Chin:

I was once licenced to sell annuities (I never did) and I have long been intrigued with lifetime annuities--the only financial instrument that guarantees the highest lifetime income.

Walter Updegrave of Money magazine wrote a good article about using a lifetime annuity in retirement. The article includes a chart by Ibbotson Associates showing that a portfolio with 25% or 50% invested in a lifetime annuity has greater survivability than a portfolio without a lifetime annuity. Here is a link:

http://money.cnn.com/2006/09/07/pf/retirement/retire0610_updegrave.moneymag/index.htm

The uninformed public think of "annuities" as a single product. This is incorrect. There are hundred's of different type annuities, and most have multiple variations. I think most annuities are terrible products and are so complex that few people understand them--except the insurance company who made them complex so prospects will not know they are being fleeced. I have an Equitable Variable Deferred Annuity Prospectus that is 176 pages!

The immediate lifetime annuity is different. It is relatively simple to understand, variations are few, and prices are competitive and available. We have two Single Premium Joint Lifetime immediate annuities. Our AVIVA contract is 4 pages; our Genworth contract is 8 pages.

I think (based on research) it is usually best to wait until 70 or 80 before buying an annuity. If you die earlier you won't need it. If you wait, and are in poor health, you probably won't need it either. By waiting you get a higher guaranteed income and inflation is less of a problem. Also, the taxable portion of the monthly income is smaller. We are in our early 80s.

One advantage of annuities that is seldom mentioned is that we are not concerned about stock market fluctuation for the annuitized part of our portfolio. We went with two companies for the safety of diversification.

A primary reason we purchased the annuities is that with a guaranteed lifetime income we felt we could give more to our heirs now instead of having them wait until we are gone.

:We know the time will come when we will be unable to manage our simple portfolio. An annuity has no management responsibility (except taxes). One less thing to spend valuable time thinking about.

I hope this answers your question.

Best wishes.
Taylor

Re: Why not a fixed annuity at 55?

chinwhisker — Sat, 08 Mar 2008 15:32:37 GMT

Hi Taylor,

May I ask how you personally decided on an annuity?

Chin