Critical Mass - Care and Feeding For Once Attained

Top 842. Nov 17, 2005 8:29 AM

» bob90245 - Re: Mutual Funds

In response to Mutual Funds posted by Normxxx:

If you start with a nest egg of $500,000, this portfolio will enable you to generate a significant stream of income— an inflation-adjusted $27,500 annually for at least 20 years, and probably more.

This is too aggressive for two reasons. First, the initial withdrawal rate is 5.5% ( $27,500 / $500,000 ). And second, the time frame is too short. A 65 year old should plan for 30 more years in retirement. I have family members who are over 90 years old and still going strong!

The behavior of this portfolio is a lesson in caution: It may not eke out the total return of 8.5% this year required to allow you to draw out $27,500 and still have your original $500,000, plus an extra 3% to match the inflation rate.

This is the third reason to lower the initial withdrawal rate to something closer to 4%. While the author's widely diversified portfolio will reduce volatility, nevertheless, a stretch of poor returns early in retirement could force depleting principal at a faster rate than expected. The resulting portfolio shrinkage may damage the chance of catching up later even if there is a stretch of above average returns down the road.

-- posted by bob90245

Top 843. Nov 17, 2005 11:26 AM

» Normxxx - Re: Re: Mutual Funds

In response to Re: Mutual Funds posted by bob90245:

This is why I am in favor of withdrawing a set maximum percentage (e.g., 4% - 5%) each year (and redepositing any unused funds) rather than taking out a set amount based on, say, an initial 4%. This may be harder to plan for, but it sure is safer!

While the author's widely diversified portfolio will reduce volatility, nevertheless, a stretch of poor returns early in retirement could force depleting principal at a faster rate than expected.

Which is why I would also have an additional mechanism for gradually increasing equity while the real S&P was decreasing (to as much as 70% after the real S&P had dropped by 50% or so from its previous high), and gradually decreasing equity while the real S&P was increasing (to as little as 40% after the real S&P had increased by 100% or so from its previous low).

Remember, too, I am anticipating a world (for the next 10 - 20 years or so) in which it will be extremely hard to earn anything like the 8.5% that Tim is predicting. Also, about now, I would plan on 3.5% - 4% inflation, until proved false (say over the next 5 - 10 years).

-- posted by Normxxx

Top 844. Nov 17, 2005 2:21 PM

» bob90245 - Re: Re: Re: Mutual Funds

In response to Re: Re: Mutual Funds posted by Normxxx:

Given all the flaws you and I found in the author's article, I wonder why you thought it worth posting it here?

Remember, too, I am anticipating a world (for the next 10 - 20 years or so) in which it will be extremely hard to earn anything like the 8.5% that Tim is predicting.

See what I mean? That 8.5% is the TOTAL return for the WHOLE portfolio! The author really does believe the equity side is going to be higher than 8.5% going forward.

-- posted by bob90245

Top 845. Nov 17, 2005 6:31 PM

» Normxxx - Re: Re: Re: Re: Mutual Funds

In response to Re: Re: Re: Mutual Funds posted by bob90245:

I thought hard about it; but if you change the withdrawal rate to around 4%, it is a nicely distributed portfolio. And, who knows, if you are willing to take a chance (or go into a Medicaid paid for nursing home), it might prove out!

-- posted by Normxxx

Top 846. Nov 21, 2005 9:28 AM

» Normxxx - Permanent Tourist

Permanent Tourist (PT)

By Harry Schultz | 21 November 2005

PT
A wise old PT hand sent me this valid comment: "All countries are unfree in different ways. So a PT will pick a place that is easy on his/her proclivities & harsh on things they don't care about. Depending on your lifestyle, there are probably many places far freer for most people than the leading Anglo Saxon democracies. U just have to look around & test the waters before settling in for a few years of good fishing."

••••• It gets ever harder to write PT copy, especially as Anglo Saxon nations follow like cowardly sheep behind Washington's neo cons, who continue to delete individual freedoms & impose ever more restrictions. Yet, on a trip to Switzerland 3wks ago I found free-spirited people are fighting back, but with more subtle approaches. Freedom is hard to smother to death. This requires U read between the lines, from now on. E.g., new types of credit cards are available that don't have your name or address & not your bank (but some bank). If U surf the Net U may find them, or via some small Swiss banks which now offer them to clients (only).

We entered a new slave age in about 1970, which escalated sharply in the 80's, 90's & went ballistic since 2000. Our political masters want us to have zero liberty, privacy, choice. That is not conjecture. They require that in order to control us, which may be a subliminal need for some of them. They've achieved much of this aim. U have to think further out of the box now. Becoming a free man/woman (PT) via "Permanent Tourist" was always the best route, however U implement it. Some leave their country & return later to a different location to make a fresh start with no ties to the former city. Some leave & only return for short visits. Some never return. Many change (or set in motion to change) citizenships, though that's optional, except for Americans, Filipinos & some Scandinavians.

PT is a broad category that U may wish to employ only in regard to sending funds abroad so it's out of reach of where U live. History says that's prime wisdom. Some employ certain PT tactics just to be low profile, & stay put. Some prepare a nest abroad just in case, & prepare to leave on 1-day notice. Some keep citizenship but prefer to live abroad in a safer or freer environment. Etc.

•••Using E-mail to communicate sensitive, private subjects is very non-PT. It ranges between stupid & ridiculous + lazy— even if encoded— in fact, coding can attract attention. Snailmail (post) is most private. Faxing is a compromise, as is courier.

Sending funds offshore, wherever U live, is now not optional. It's now essential— to preserve your buying power, safety & accessibility. And, whereas before that was just with a nestegg sum, now it should be the majority of liquid assets. Feel free to ignore this counsel; it's your life! U want to start all over again? U feel snug as a bug in a rug? Bugs get vacuumed.

Since creating the PT concept decades ago, it has spread far & wide. Many young Turks have taken up the reins from me, retired from the field. I get a chuckle when I see my prior copy coming back on the Net from young bucks. One such is David MacGregor, Sovereign Life Enterprises, 126 Aldersgate St, London, EC1 A4JQ, UK. I don't know him, but he writes interesting copy. Here is one such bit, regurgitated: "This strategy is often known as being a 'PT'— which means Perpetual Traveller. It can also mean: Permanent Tourist; Prior Taxpayer; Possibility Thinker; Post Tyranny; Privacy Tactician, & any other positive label U can think of that spells 'PT'."

•••• If U want legal/structural advice from a real PT lawyer/advisor, in Channel Isles, contact Hslm Stefan Gomoll at SG@SGLAW.CO.UK. Fax +44 1481 832802.

•••• I hear that an ultimate PT book by 'grandpa' will be out by Xmas. Will try to get details for next HSL.

••••Meantime, be a Positive Thinker to be a Prosperous Trader or Timetraveler. .

PT #2
Rare coins solve some PT problems for US readers says US coin dealer Hslm Ed Lee. He says "U can privatize a big % of your assets via collectibles like rare US coins. Why? No gov reports needed on buy or sell so it's private, & portable (unlike heavy bullion coins). Not subject to confiscation. US gov values rare coins at face value upon US exit (vs bullion coins at mkt value). Rare nickel just sold for $4.15 mil; can take in carry-on luggage, & 100% legal. Rare coins also offer legal tax-deferred/tax-free trading for other rare coins, as with real estate, except property trades require a gov report. A rare privacy opportunity. Only buy rare coins from reputable dealers w/low overhead, & all must be lab-graded by NGC or PCGS. When sold, $ can be wired to any nation U choose for PT life. Some feel US gov will move against non-rare gold as terrorists can use. For more info contact me (47 yrs coin experience). Free consult re the above. OK mention hsl. Edlee2001@aol.com. Tel 603-429-0869/ 800-836-6000; fax: 603-429-2095."

[Normxxx Here: If you are not prepared to take up numismatism, avoid rare coins! It is not a market for amateurs (if any are). ]

Uncle Harry D (for Demystifying) Schultz

______________

The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx

Top 847. Dec 12, 2005 8:16 AM

» pbradford6 - FYI

I found and recommend this site for us who may need some help.

http://fincalc.com/

Merry Christmas to all!

-- posted by pbradford6

Top 848. Dec 12, 2005 10:19 AM

» Normxxx - ElderDrugs?

Kids and their parents sit down for the talk

By Richard Wolf, USA TODAY | 12 December 2005

An unlikely topic is being wedged between the turkey and the TV football this holiday season: Medicare's new prescription drug coverage.

Children of Medicare beneficiaries— some of them on Medicare themselves— are sitting down with their mothers and fathers to pick a plan. With about 3,000 private plans nationally, and several dozen in every state, it's not a simple task. The plans offer a range of premiums and co-payments and drug formularies, forcing many families to do considerable research and arithmetic.

[Normxxx Here: Moreover, the plans are free to alter their conditions and terms almost at will, and those already signed up are without recourse for about a year. Bait and switch? ]

Some families have succeeded and become closer in the process. Many have been overwhelmed by the range of options. Others have been sent from agency to agency and given conflicting advice.

"If you are enrolling somebody in a drug plan and their drugs are their life, you want to make darn sure that you have the correct information," says Barbara Feltes of Portland, Maine, who's struggling to help her elderly mother, Anna.

The Medicare drug program, passed by Congress in 2003, is being implemented nationwide. Less than a month into the sign-up period, government, private and non-profit groups are offering help, from websites and phone lines to one-on-one counseling. Wherever they go, those experts are besieged not only by seniors but by their baby boomer children.

In New Jersey for Thanksgiving, Howard Houghton, a county government insurance counselor in Fairfax, Va., couldn't sit down to dinner until he had helped his mother and his aunt, and then his brother-in-law, who was trying to pick a plan for his mother in Connecticut. "I figured if I didn't do it, I wouldn't get a meal," he quips.

With real money at stake, seniors— only about 25% of whom use the Internet— increasingly are relying on their children to sort through the Medicare maze. That help is encouraged by federal officials, who have launched an ad campaign to encourage children to assist their parents. "We want people talking about this," says Kathleen Harrington, director of external affairs for the Centers for Medicare and Medicaid Services.

The ad campaign is part of the government's effort to educate seniors and their children, in hopes that 28 million to 30 million of Medicare's 42 million beneficiaries join. The six-month sign-up period began Nov. 15; officials will release initial enrollment data next week. Coverage begins Jan. 1.

'This is a manageable decision'

For Michael Leavitt, secretary of the Department of Health and Human Services— the man in charge of the nation's Medicare system— enrolling his parents over Thanksgiving was easy. It also was "rewarding," he says. And it will save them a bunch of money on their health insurance.

Leavitt lined up the drugs taken by his father, Dixie, 76, and mother, Anne, 73, of Cedar City, Utah, on a desk and entered them into the "Plan Finder" on Medicare's website. "Medicare will do the math," he says. Within an hour, he had selected a plan with monthly premiums of $6.33 that will reduce their costs from about $7,000 to $2,200 a year.

[Normxxx Here: At least until the plan is changed. ]

He also had learned some things for the first time about their health.

"We had a powerful experience," Leavitt, 54, told a gathering here at the Newark Senior Center recently. "This is a manageable decision."

Joseph Miro, a Delaware state legislator, wanted to sign up his mother, Elvira, 93, on Thanksgiving without missing too much football. "It took me 33 minutes from beginning to end," he says.

Last year, Elvira Miro paid about $1,400 for her medications, and about $800 this year with a Medicare drug card. Her son selected a plan with a monthly premium of more than $50 but generous coverage, so that if his mother needs more drugs in the future, "that will represent a huge savings." For next year, her costs will drop to $648.

"Family members, caregivers, they really need to be involved, because it is intimidating for an adult," Miro says. "And it's that much more intimidating for an older person, especially a person like my mother, who doesn't even know how to turn a computer on. Having been through it, it's not such a horrible situation."

It also can bring parents and children closer.

Doris Doran of Falls Church, Va., doesn't need much help figuring out her options. The 77-year-old has attended two information sessions and boiled it down to a grid comparing three plans: one with a low premium, one with a high premium and one in the middle. She's leaning toward a plan sponsored by AARP that she thinks will cover all five of her medications and save her $100 a month.

Still, daughter Pam, 53, is monitoring things to make sure her mom chooses well. "I need to learn this stuff anyway," Pam Doran says. "I don't want something to happen where all of a sudden I'm clueless."

Doing the homework

For others, the process is proving more daunting.

Tim Janaitis admits that for years, his mother, Jean, in Upstate New York was almost "out of sight, out of mind" because other relatives were nearby. But after she fell and broke her hip this year at age 88, Janaitis moved her to an Arlington, Va., retirement home and assumed responsibility for her. That means trying to decipher the Medicare law for his mother, who takes about a dozen daily medicines.

He took time from work to attend an information session last week at Brighton Gardens, his mother's new home, and emerged somewhat overwhelmed.

"I'm just starting to pick-ax my way through all of this," says Janaitis, 60. "I'm very apprehensive about selecting the right plan or making the right decision. I'm going to have to do a lot of homework."

At 78, Hilda Miles doesn't anticipate much problem picking a prescription drug plan for herself. She only takes Motrin, for knee pain, and an occasional sleeping pill. She'll pick a cheap plan "in case I get a catastrophic illness. Then I would need drugs," she says.

But her problem doesn't end there. Miles, who lives outside Richmond, Va., is more worried about her 100-year-old mother, Joan Adams. "Of course, my mother takes lots of medicines," she says— about 15, which cost $250 to $300 a month. Adams is just over the income limit to get extra financial assistance.

Miles has a computer, but she has not visited the Medicare website. "I don't like getting on the computer a whole lot," she says. After talking it over with a friend in the insurance business, Miles chose a plan for her mother last week that will reduce her out-of-pocket costs, but not by much. "I still don't know if I understand it," she says.

Katherine Oliver is a half-century younger than Miles, but she too must pick a plan for her mother. Sylvia Oliver, 61, just started on Medicare due to a lung condition after two years on Social Securitydisability. So Katherine, 27, went to a session in Richmond, where she was "the youngest person in the room."

For now, her mother's out-of-pocket drug costs are only about $100 a month. But last spring, she was diagnosed with non-Hodgkin's lymphoma, a form of cancer, and her costs are likely to increase. That makes the younger Oliver nervous.

"It's just really frightening, because it's her future we're talking about," Katherine Oliver says. She has called some insurance plans directly to get more information. Her advice: "Start this three months before you go on Medicare, because it takes about that long to get it all figured out."

The responsibility for her mother's health weighs heavily as well on Pat Pfeifer, 52, of Delaware. She recently quit her job to take care of her mother, Dell Deady, 82, who has Alzheimer's disease. Deady takes five drugs costing about $150 a month.

With no computer at home, both of them attended Leavitt's session here late last month. By the end, Pfeifer was still confused. "I need to go home and read the packet," she said. "All of this happened so fast."

Finding the right information

Things are happening even faster for seniors who have been getting their drugs from Medicaid, the federal-state program for low-income Americans. They are being automatically enrolled in Medicare plans that usually won't cost them anything. Still, families must find out if those plans cover their medications.

Barbara Feltes' mom was placed in a drug plan by Medicare, but initially it didn't appear on the Plan Finder. Feltes made a series of phone calls but feels that the people on the other end of the phone "only have a limited knowledge."

Unlike many of her peers, Feltes isn't satisfied to simply match up her mother's drugs with a plan. She wants to know about generics, about "step therapy" that could mandate other drugs first, about the rules on prior authorization. She's not keeping the plan assigned to her mother and is investigating others.

Natalie Thomas of Atlanta has been working with her mother, Madeline, 75, to get Medicare drug coverage for her father. Lamar Thomas, who turned 80 on Saturday, lives in a nursing home in Fitzgerald, Ga., and has vascular dementia. Her mother mistakenly shredded a letter regarding her father's automatic switch from Medicaid to Medicare drug coverage. The result was seemingly endless calls to Medicare, Medicaid and Social Security to get a new letter. Now his pharmacist is checking to see if the plan covers his drugs.

"I don't know what my mother would have done had I not been in the field that I'm in," says Thomas, who works for Georgia's elder rights program. "She was actually in tears on Thanksgiving Day about this."

The experience has left Thomas convinced that children hold the key to making Medicare's prescription drug coverage a success. Without them, she says, seniors "are going to opt to not enroll in the plans at all, which is a dangerous thing."

For their hard work, children of all ages hope for a happy ending to their Medicare sagas.

"I think it's a shame we have to go through all of this," says Miles, the woman with the 100-year-old mom. "But I guess we're lucky, in a way, that they've got a plan. I just hope it will work."

-- posted by Normxxx

Top 849. Feb 28, 2006 3:24 PM

» pbradford6 - Amen

I still haven't learned how to subscribe to the new sites when they old ones expire. Help
=========

Inflation is greater than you think
Commentary: Focus on 'core' rate is foolhardy
By Dr. Irwin Kellner, MarketWatch
Last Update: 5:00 AM ET Feb 28, 2006

HEMPSTEAD, N.Y. (MarketWatch) -- Don't be fooled: the true pace of price increases these days is not the so-called core rate of inflation, but more like the top-line figure.

When January's consumer price index was released last week, the financial markets breathed a sigh of relief. This is because participants looked past the headline number -- which jumped 0.7 percent -- and focused instead on the core rate of inflation, which was only 0.2 percent above the previous month.

Since the Federal Reserve pays a great deal of attention to core prices, the markets concluded that January's CPI alone was not likely to cause the central bank to adjust upward its eventual target for interest rates.

The Fed likes core prices because, by excluding food and energy, they are supposed to provide a better measure of underlying inflation trends. After all, both food and energy prices are volatile, and tend to be influenced more by the weather and/or by geopolitical developments than by the state of the economy.

I have several problems with all this emphasis on core prices.

First of all, we all use food and energy, so it's pretty clear that what happens to their prices has an impact on our buying power -- not to mention on our attitudes toward inflation.
Second, in recent years, the trend of energy prices has been up -- not up and back down again. This means costlier energy is becoming part of our lives, and has already begun to affect the overall price level through surcharges and other add-ons.

Third, one key reason why inflation looks benign when you strip out changes in food and energy prices is the way the government treats housing prices.

Rather than include the price of a new or existing home the way it does prices of cars, computers or clothing, the government instead uses the rental equivalent. This is because it considers housing an investment, not a consumable good.

Treating housing this way produces an anomaly: the faster home prices rise, the slower the increase in rents. No mystery why: people tend to buy when prices rise, sensing a good investment.
As the demand for owning goes up, the demand for renting goes down. This tends to moderate the overall rise in prices.

January's CPI showed another peculiarity. The cost of medical care went up only 0.1 percent as prices of physicians' services were reported to have fallen by a record 0.8 percent.

Know anyone whose doctor actually lowered his fees last month? Or, for that matter, who did not experience a big hike in his health care insurance premiums?

If you want more proof that the core CPI is lulling people into a false sense of security, take a look at another gauge of prices, the producer price index. Not only did prices of finished goods rise 0.3 percent in January, core prices jumped 0.4 percent -- the largest one-month rise in a year.

This should convince even believers in the concept of core prices that more inflation is headed our way.

-- posted by pbradford6

Top 850. Feb 28, 2006 6:02 PM

» Kirk - PLEASE USE NEW FORUM

.
In response to Amen posted by pbradford6:

You should see how frustrating it is for me... I have articles to post and the software has us writers locked out... they are working hard to try and figure it out since we earn our Google money from those!

Try this new Critical Mass Forum link.

Please send me an email if you can not find the new forum HERE .

This forum is shut down and there should be no more new posts on it.

I'd be happy to start any new forums there you want. Just send me an email request or post your request in Kirk's Market Thoughts on the new site.

Hopefully, you can repost that good article and any others from here you want to be sure are saved, in the new forum.

Thanks for your patience.

-- posted by Kirk