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Old 04-02-2014, 05:42 PM
 
31,680 posts, read 40,970,152 times
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Quote:
Originally Posted by happyinca View Post
After a decade of making good money in TIPS I did lose money last year. (mutual funds). I want to share this so people don't blindly buy TIPS. The money I made was far more than I lost but it is not risk free money. I dumped them in August and have done much better with a balanced fund and some equity funds. I know there is still risk but in the long run it should work out better.

We plan on collecting social security at age 62. My husband's Dad died at age 60 and my husband has many health problems. In his case it makes no sense to wait. I have a pension so the social security will be fun money so I will collect at age 62 also. Or I will use it to pay for health insurance, that is really where all the "fun" money is going, not so fun. Every situation is different, there is not a one size fits all.

Appreciate the link and article, knowledge is power even if you make a different decision.
Best of luck with everything
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Old 04-02-2014, 09:16 PM
 
35 posts, read 51,697 times
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as I check today, 5-year TIPS offer a real yield of 0.03%, 10-year TIPS are 0.6%,

Seems to me that putting money in TIPS isn't investing money. Your basically parking
the money. Not much better than putting the money in a Bank savings account. Am I missing something? Why bother.
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Old 04-03-2014, 02:21 AM
 
106,238 posts, read 108,237,907 times
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you are counting on future inflation rising and getting to the party a little early with tips. but even so there really is nothing else on par with social security that isn't a gamble .

bonds can be devastated by inflation so while they are okay now 20 years from now getting paid back and losing 1/2 your purchasing power can suck and thats at only 3%.

Last edited by mathjak107; 04-03-2014 at 03:25 AM..
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Old 04-03-2014, 07:46 AM
 
Location: in the miseries
3,576 posts, read 4,497,795 times
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Quote:
Originally Posted by mathjak107 View Post
you are counting on future inflation rising and getting to the party a little early with tips. but even so there really is nothing else on par with social security that isn't a gamble .

bonds can be devastated by inflation so while they are okay now 20 years from now getting paid back and losing 1/2 your purchasing power can suck and thats at only 3%.
The rate I'm looking at is 3.4 for ten years. And I get my principal back.
These are sellable on the market.
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Old 04-03-2014, 07:59 AM
 
106,238 posts, read 108,237,907 times
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rate on what? bonds?
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Old 04-03-2014, 08:52 AM
 
Location: Living on the Coast in Oxnard CA
16,289 posts, read 32,270,302 times
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OK So what I am hearing is that I may as well take the social security benefit at age 70 even if I do not need it. (Will it even be around in 22 years?) Fine with that. I would prefer to reinvest it anyway. By age 70 our home will be paid off and we will have no other debts. We have no intention of moving. As long as I work my insurance will be covered. I guess at that age you can use Medicare anyway. Still the Hospital offers insurance, I am thinking that they will still offer it 22 years from now. Who knows though. (All things asume that i am still working here at the hospital and as we all know their are no guarentees in life.)
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Old 04-03-2014, 10:57 AM
 
Location: Sugarmill Woods , FL
6,234 posts, read 8,410,624 times
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The longer you wait, the more money will be available to the people taking early retirement! Why are you working in the first place? Are you working to live, or living to work? Set priorities and retire as soon as you can and enjoy your life , it is the only one you have!

Last edited by froglipz; 04-03-2014 at 12:07 PM.. Reason: chg
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Old 04-03-2014, 11:13 AM
 
Location: UpstateNY
8,612 posts, read 10,729,200 times
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Soon2B, when my DH's ex wife turned 65 they cut off her insurance, assuming she was on Medicare.
She had 10K out of pocket because she was seeing doctors at the time (as well as being a hypochondriac).
Make sure that doesn't happen to you.

Does anyone use an advisor or financial planner here?

Or was/is one and that's how you learned?
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Old 04-05-2014, 11:42 AM
 
106,238 posts, read 108,237,907 times
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i was listening to an interview with jason zweig on this topic. he brought up a very important point.

social security is an income stream that really can be converted to an asset and what he means is this:

if you take your ss and muliply by 30x it is a very rough idea of the equivalent in bonds it would take to generate that income.

if you are getting 1k a month in ss that is 12k a year. as a very rough rule of thumb ,you have an income stream coming in that would be like having 350k in bonds to duplicate.

so if you get 22k at 62 and 39k at 70 like i would that represents having 660k in bonds vs having the equivalent of 1.17 million in bonds.

having the equivalent of 1.2 million in bonds lets you actually cut back on your fixed income holdings and put much more in to equities than only 350k in bonds would allow.

the end result is the higher level of aggressiveness allowed can refill savings much faster than just looking at how long the additional ss stream alone would bring you to break even.

Last edited by mathjak107; 04-05-2014 at 11:53 AM..
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Old 04-05-2014, 11:59 AM
 
Location: in the miseries
3,576 posts, read 4,497,795 times
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Quote:
Originally Posted by mathjak107 View Post
rate on what? bonds?
Cd,s
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