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Old 11-01-2013, 04:29 PM   #41
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There are so many things that can result in anomalous lab readings.

I remember that once on a physical, my doc became quite concerned about my results and seriously wondered about my liver functions. Then I told him that a few days before my blood draw I had run my first marathon and he immediately relaxed and said "Never mind." Subsequent results went back to normal.

One thing you haven't mentioned is what your actual spending has been. Have you done any tracking of your spending by category? If not, that will be crucial to your planning.
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Old 11-01-2013, 04:38 PM   #42
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Quote:
Originally Posted by DevonMiles19 View Post
(Apologees folks, I know this is an investment thread)

WC-RN.....also, my "micro alb/creat ratio" is high. Ever heard of that? My Nephro said it certainly could be kidney disease, but he said sometimes it's just a function of high blood pressure, and if bp is brought in line, then microalb/creat ratio goes down. Ever heard of that? Thanks

An elevated ACR (albumin/creatinine ratio) can indicate kidney disease or diabetes or hypertension. It can also just be a one time not too serious issue. A one time elevated ACR is fairly common, especially in overweight or borderline diabetic or hypertensive people. People who are either extremely muscular or have very little muscle mass also will often have strange creatinine levels which will of course cause a skewed ACR. I have looked at lab results for thousands of patients. If everyone on this forum were to have full labs drawn today most of them who are otherwise healthy would have at least a few out of normal limits lab values. If I was told that I had an elevated ACR I would be concerned but not too concerned unless I had a repeat ACR that was also elevated. Think good thoughts until you get more information on this.
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Old 11-01-2013, 04:58 PM   #43
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The amount seems quite adequate. But still you need to make sure that it gets to the ones you want to at the right time.

I hope everything turns out all right.

The following are good to follow in general for everyone. But when you are worried, they may provide an outlet to channel your energy and in fact help in maintaining a sense of control.

You mentioned the total amount but not where they are right now. Just make a clear and complete list of everything, documenting access information, passwords etc. with any instructions for actions to be taken on specific events/times etc.

Simplify the management/access of where they are managed/located. Simpler the better. Make sure each and everyone of those investments are titled appropriately and have beneficiaries designated appropriately.

When it goes to the designated beneficiary the cost basis is stepped up. If properly planned, it could mean a huge difference. $4mm with a $3mm basis is very different from a $4mm with a $2mm basis.

Make sure life insurance policies are put in the appropriate holding vehicles (trusts) to minimize any tax impact.

Even if everything goes as is to the spouse, it will be helpful to prepare an explicit will that would stand up legally.

You can always amend the will twenty years from now and name your favorite Vegas blackjack dealer!

Good luck.
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Old 11-01-2013, 05:19 PM   #44
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A friend of mine became a very rich widow on 9-11 (nothing to do with the WTC but may have been due to the stress of the day). She was only 40 and was dating after awhile. She was always concerned about protecting her financial assets from a scammer.

No one would necessarily know how much she was worth but she had all the outward signs of wealth so it wouldn't be hard for someone to figure it out. As it turned out, she married a guy wealthier than she who has been increasing his wealth during their marriage.

Hopefully, OP's wife won't have to worry about this because OP is going to be fine but vulnerability to scammers has to be considered.
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Old 11-01-2013, 11:39 PM   #45
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I am still waiting to hear how your advisor is earning that $20,000 a year. Probably spends a whole 8 hours a year on your portfolio, so he is making $2500 an hour....nice! Or maybe he working 40 hours a year just for you, stil a very generous $500 an hour and I want to see time sheets regardless.
FIRE THE THIEVING ADVIOR!!!!
You can hire an advisor for a much lower AUM, like Portfolio Solutions, or a flat rater like Evanson, or use Vanguard services for free, or find a fee only financial planner who won't charge much more than $200 an hour and won't take 100 hours a year. More likely fewer that 5 hours a year.
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Old 11-02-2013, 01:32 PM   #46
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1% on $2M is $20,000, not $2,000. Ditch the advisor.

I think 3.05% plus inflation is very realistic. The CDs will get you 2% now and likely more in the future and, as stated before, a single highly rated mutual fund like Vanguard Wellington will earn well over the 4.10% needed for total portfolio return to be >3.05%. Wellington's 10 yr and ITD (since 1929) returns have both been >8%/yr.
Hi Huston (and everyone)....

I've been looking at Wellington and Wellsley and it looks so tempting, even easy. Historical returns are 8% so heck, what if I just forecast 4% returns? I park the money there, and Wife has to live on $160k per year....very strong right?

My consternation is that of course there are bear markets. I'm worried about $800k going missing during a 20% crash.....and of course that will come right when college money is needed, or something like that.

That's why I'm hoping this might work:

$2,100,000 in CD's@2.5% (Today it's 1.8%, hoping by 2019 it's 2.5)

$1,900,000 in Wellington/etc @3.5%


This generates 119,000 pre-tax per year theoretically, or 2.98% returns.

In "How long will my money last" calculators.....if I use this return, factor in 3.5% annual inflation in the withdrawals every year ..... factor in large college costs....

That means DW would be "60" when both kids are theoretically debt-free college grads.

DW would have $2,000,000 + own a home free and clear.

That would give her $6,000 per month withdrawals for 25 years.


How's that sound?
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Old 11-02-2013, 01:40 PM   #47
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How much will $6000 per month buy you in 25 years?
What if DW lives to be 100?
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Old 11-02-2013, 03:29 PM   #48
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I am (slowly) creating the "when I wake up dead" folder for the young wife. If I have not already accomplished the task by that time, I will tell her to put it all in VWELX, and then, every December 31, take out $XX,000 and put it in the bank. The End.
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Old 11-02-2013, 04:55 PM   #49
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The other scary thing is that each person gets $500k worth of stocks/bonds per bank insured by the Feds.

So if I put the whole pot at Vanguard, only $500k out of 4mm is insured. Does this concern any of the savers/investors on this board?
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Old 11-02-2013, 05:07 PM   #50
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Quote:
Originally Posted by DevonMiles19 View Post
(Apologees folks, I know this is an investment thread)

WC-RN.....also, my "micro alb/creat ratio" is high. Ever heard of that? My Nephro said it certainly could be kidney disease, but he said sometimes it's just a function of high blood pressure, and if bp is brought in line, then microalb/creat ratio goes down. Ever heard of that? Thanks
Yes, the albumin (protein)/creatinine (muscle metabolism waste product) ratio is a measure of kidney disease. Kidneys are very sensitive to untreated high blood pressure and diabetes where the delicate filtration system within the kidneys gets damaged over time. Thus, large amino acids, such as proteins, end up getting excreted through the kidneys - this is measured and reported as the albumin part of the test. Same with creatinine. The difference is creatinine should be in your urine. So if the creatinine measurement is low (not being filtered through the kidneys), then it has no where to go but back into the bloodstream.

Age/gender/race will factor in when diagnosing kidney disease. Your age alone is an excellent predictor of recovery: you have the resilience that older folks don't. Have you been diagnosed with high blood pressure? Or diabetes? It sounds like you have gone from seeing a primary care physician to a nephrologist who is now managing your health issues.

Before you go in on the 11th to your next appointment, make sure you have a (long) list of questions, including your suspicions that you have a terminal disease. You need to allow for a long discussion, get your questions answered, and hopefully relieve you of your worries and stress. And please do include your wife in these discussions, she needs to be part of the treatment course.
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Old 11-02-2013, 05:36 PM   #51
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T...So if I put the whole pot at Vanguard, only $500k out of 4mm is insured. Does this concern any of the savers/investors on this board?
Actually, Vanguard provides more protection through additional insurance they provide. See https://personal.vanguard.com/us/wha...ountprotection

But what about asteroids? What's your plan for that?

My point is, don't get silly about such things.
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Old 11-02-2013, 07:24 PM   #52
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Asteroids

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Actually, Vanguard provides more protection through additional insurance they provide. See https://personal.vanguard.com/us/wha...ountprotection

But what about asteroids? What's your plan for that?

My point is, don't get silly about such things.
I hear what you are saying but respectfully, we just went thru a rather interesting period of time. A time when things we take for granted....our currency, our banking system, gold at the Federal Reserve, etc are things that most of us can't quite vouch for. GM will never go bankrupt...people on this board a few generations ago would've said. Lehman will never go under. My employee perk stock in Enron is safe.

All I'm saying is that yeah, we can't plan for asteroids or armageddon. I'm just asking if anyone is concerned that should something happen (imagine, banks and wall streeters cooking books!)....do you feel secure having a huge chunk of non insured money with an institution.

I guess I've become too skeptical for my own good.
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Old 11-02-2013, 09:37 PM   #53
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.... GM will never go bankrupt...people on this board a few generations ago would've said. Lehman will never go under. My employee perk stock in Enron is safe.
No rational person would have said any of those things. 'Never'?, really?


Quote:
All I'm saying is that yeah, we can't plan for asteroids or armageddon. I'm just asking if anyone is concerned that should something happen (imagine, banks and wall streeters cooking books!)....do you feel secure having a huge chunk of non insured money with an institution.
If you have money invested in mutual funds with Vanguard or Fidelity, or many others, it really isn't 'with the institution'. It is invested in those companies in the fund. They just hold the paper receipts, and you have a copy.

And I won't say 'never', but if Vanguard or Fidelity absconds with all the funds that people on this forum has invested there, things will be so bad that money will be the last thing on our minds. Think bullets and rations and drinking water.

If I were you, I'd be focused on what I can control - do you really have a health issue, and if so, what are your options for the most positive outcome. You're all over the map right now. One thing at a time.

Good luck with everything.

-ERD50
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Old 11-02-2013, 10:23 PM   #54
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Something that may not be that apparent, but is worth highlighting: if you pay a wealth manager 1%, that reduces the amount you can draw by a quarter to a third. Learn enough and teach your DW enough to avoid the use of an advisor. Its about the most remunerative thing you will ever do.
Interesting post by Michael Kitces regarding this, basically saying that it's not 1% in fact, but much less because of declining assets

http://www.kitces.com/blog/the-impac...hdrawal-rates/
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Old 11-02-2013, 10:36 PM   #55
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Interesting post by Michael Kitces regarding this, basically saying that it's not 1% in fact, but much less because of declining assets http://www.kitces.com/blog/the-impac...hdrawal-rates/
Frankly if the above is true, I.e. What Kitces says that 1% is really less than 1/2% I would strongly recommend a wealth management company! yes! one of those 1% guys. Your wife will really need hand holding and advice in times of stress like 2008/9. If the market is down 30% she will probably bail. A good conservative wealth management company does this very well, and answer all her calls, and tell her everything will be fine when the roof is collapsing on the market.

And no my money would never go there in my situation, but if I was in your shoes it would.
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Old 11-02-2013, 10:48 PM   #56
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....I guess I've become too skeptical for my own good.
Yes, you probably have.

But please note that in the last 5 hours you haven't received any responses other than mine to your query as to whether any savers/investors on this board are concerned about the SIPC limitations. I think there's your answer.

BTW, SIPC coverage is by account, so if you have multiple accounts (your IRA, DW IRA, joint investment account, individual investment accounts, roth IRA, etc. with a broker-dealer that fails and funds are missing, each account is insured to $500k.

Quote:
That limit is $500,000 per person per account type.

A customer could increase his SIPC coverage at the same brokerage by having different account types. For example, he could have a regular taxable account, a regular individual retirement account, a Roth IRA and a 401(k) plan covered up to $500,000 each, for a total of $2 million, says Steve Harbeck, SIPC's president and chief executive.
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Old 11-02-2013, 10:57 PM   #57
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Interesting post by Michael Kitces regarding this, basically saying that it's not 1% in fact, but much less because of declining assets

Impact of Investment Fees & Costs on Safe Withdrawal Rates | Kitces.com
If anybody reads the article at that link and 1) accepts its assumptions and 2) is comforted by them, then that person is a fool.

I generally like Kitces' articles, but this is the very worst I've seen from him.

1% fees result in a very large reduction in safe annual withdrawals.
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Old 11-02-2013, 11:04 PM   #58
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If anybody reads the article at that link and 1) accepts its assumptions and 2) is comforted by them, then that person is a fool. I generally like Kitces' articles, but this is the very worst I've seen from him. 1% fees result in a very large reduction in safe annual withdrawals.
A rebuttal other than calling BS might be more useful...
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Old 11-02-2013, 11:22 PM   #59
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A rebuttal other than calling BS might be more useful...
The article speaks for itself. In a nutshell: "If you withdraw 4% PA and you go broke, the declining balance means you didn't really pay the FA 1% of the initial balance every year for the entire time". It is sublimely obvious in its own twisted way (who measures fees like that?), and it is entirely beside the important point (the client has gone broke. Did the FA's fees accelerate that?).

Furthermore, if the client's portfolio does well (which we would hope would be the majority of cases), the same bizarre measurement standard (constant % of initial investment) would mean the client paid considerably >more< than 1%. Kitces brushes this off--since the client didn't die destitute, I guess he shouldn't care what he paid the FA. We don't get a nice chart from Kitces or a long explanation, or even a number, just a few words minimizing the relevance of these (growing) fees. Well, if he's got the historical returns and he gave us the most "favorable" case (1% fees really = 0.4%), he should use the same methodology and give us the mean and median amounts (what would that be? 1% fees really = 1.5%? 2%? 5%?). We don't know, because he doesn't tell us these less flattering results.

Sorry, it's drivel. And self-serving drivel served up to those who will repeat it to their marks clients. If a portfolio can safely support a withdrawal rate of 4%, and if fees are 1%, then the client will be living on just 3%, a heck of a lot less than if he didn't have those fees. If Kitces had stuck with that, he would have been fine. And right.
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Old 11-03-2013, 12:21 AM   #60
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The article speaks for itself. In a nutshell: "If you withdraw 4% PA and you go broke, the declining balance means you didn't really pay the FA 1% of the initial balance every year for the entire time". It is sublimely obvious in its own twisted way (who measures fees like that?), and it is entirely beside the important point (the client has gone broke. Did the FA's fees accelerate that?).

Furthermore, if the client's portfolio does well (which we would hope would be the majority of cases), the same bizarre measurement standard (constant % of initial investment) would mean the client paid considerably >more< than 1%. Kitces brushes this off--since the client didn't die destitute, I guess he shouldn't care what he paid the FA. We don't get a nice chart from Kitces or a long explanation, or even a number, just a few words minimizing the relevance of these (growing) fees. Well, if he's got the historical returns and he gave us the most "favorable" case (1% fees really = 0.4%), he should use the same methodology and give us the mean and median amounts (what would that be? 1% fees really = 1.5%? 2%? 5%?). We don't know, because he doesn't tell us these less flattering results.

Sorry, it's drivel. And self-serving drivel served up to those who will repeat it to their marks clients. If a portfolio can safely support a withdrawal rate of 4%, and if fees are 1%, then the client will be living on just 3%, a heck of a lot less than if he didn't have those fees. If Kitces had stuck with that, he would have been fine. And right.

I agree with Samclem. There are so many problems with this super simplistic assumption.

For Kitces argument to be true, the client's portfolio needs to be run to the ground. What is the client supposed to do after the portfolio hits zero?

The "safe" withdrawal rate is supposed to provide some cushion even for unexpectedly long life and possibly leave a reasonable amount for the next generation. It is supposed to deplete the entire asset only probabilistically at the worst case and not deterministically as a matter of course.

Even given all this the client and the adviser need to be in a permanent relationship for this to be even remotely be true. The fact remains that if you go separate ways after 5 years, you are out somewhat close to 5% of the original amount. More if the portfolio did well and increased. Less if it tanked. But then you have more than the fees to be mad about.

One way to look at this: You take 1% out of 3% it is one third, unless the plan all along is to take the entire 100% in a few years.
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