Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Good read on deferring SS versus QLAC
Old 02-01-2016, 11:31 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
Good read on deferring SS versus QLAC

How much can I afford to spend in retirement?
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-01-2016, 12:33 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
What is the spending assumed in the model?... doesn't say that I can find.... or is he just looking at income but if so how is he including investment results on the retirement assets.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 02-01-2016, 03:15 PM   #3
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 4,962
His conclusion is based on when the subject is going to die. Rather not helpful for most.
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is online now   Reply With Quote
Old 02-01-2016, 03:22 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
Quote:
Originally Posted by pb4uski View Post
What is the spending assumed in the model?... doesn't say that I can find.... or is he just looking at income but if so how is he including investment results on the retirement assets.
Not sure he models spending - he's a retired actuary
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 02-01-2016, 03:23 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
Quote:
Originally Posted by DrRoy View Post
His conclusion is based on when the subject is going to die. Rather not helpful for most.
we all have finite lifetimes
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 02-01-2016, 06:21 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
Quote:
Originally Posted by Big_Hitter View Post
Not sure he models spending - he's a retired actuary
I'm not sure his approach makes a lot of sense but it is less than totally clear what he is calculating and how it is relevant to assessing the optimal alternative. Like many actuaries, his communication skills could be better. (From a former life finance guy who spent a lot of time with life actuaries - most very good and some much less so.)
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 02-02-2016, 08:14 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
Quote:
Originally Posted by pb4uski View Post
I'm not sure his approach makes a lot of sense but it is less than totally clear what he is calculating and how it is relevant to assessing the optimal alternative. Like many actuaries, his communication skills could be better. (From a former life finance guy who spent a lot of time with life actuaries - most very good and some much less so.)
words, pictures and numbers

instead of using an annuity factor he's estimating a present value at 65 depending on age at death. as you can see on the chart, the longer you live the better the qlac option
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 02-02-2016, 08:18 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
Quote:
Originally Posted by Big_Hitter View Post
.....instead of using an annuity factor he's estimating a present value at 65 depending on age at death. as you can see on the chart, the longer you live the better the qlac option
Yeah... perceptive glimpse of the obvious.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 02-02-2016, 08:20 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
Quote:
Originally Posted by pb4uski View Post
Yeah... perceptive glimpse of the obvious.
I would have used an annuity factor at 65 to compare the options rather than an assumed age at death. Not my blog though.
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 02-02-2016, 08:26 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,263
I agree... an expected present value approach combining mortality and the time value of money to assess which approach is optimal.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is offline   Reply With Quote
Old 02-02-2016, 08:30 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Big_Hitter's Avatar
 
Join Date: May 2013
Location: Les Bois
Posts: 5,761
well when I finally pull the chute I'll probably do a lot of blogging on this and other subjects
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
Big_Hitter is offline   Reply With Quote
Old 02-02-2016, 05:39 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 4,629
I can't match his numbers.

In the first column, it appears that the pv of the first 5 SS benefits is $96,227.
And, the pv of the next 5 SS benefits is ( $183,551 - $96,227 ) = $87,324.

In the second column, the pv of the first 5 SS benefits is, of course, $0.
Each of the second 5 SS benefits should be 1.4143 times the corresponding SS benefit in the first column. (I'm using the factor he provides for the SS increase from deferring to age 70.)
Therefore, in the second column, I expect the pv of the second 5 SS benefits to be 1.4143 x $87,324 = $123,501.

But, his table shows it as $113,330.
Independent is offline   Reply With Quote
Old 02-03-2016, 09:20 AM   #13
Thinks s/he gets paid by the post
nun's Avatar
 
Join Date: Feb 2006
Posts: 4,872
In all my planning I simply assume I'll live an average lifespan....83.....as I have no way to come up with a better number. I have longevity insurance as I have a small COLAed pension so the higher income past 83 that deferring SS would give me isn't a big factor for me. In my projections when I take SS has an insignificant difference to my net worth at age 83. So when I take it will just depend on my desire for the extra income.
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”

Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
nun is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Carrying a Mortgage but deferring the income? Wingnut FIRE and Money 9 09-09-2014 06:49 PM
QLAC - recent IRS ruling and guidelines LRDave FIRE and Money 1 07-09-2014 11:50 AM
Deferring property taxes: poll Meadbh FIRE and Money 29 01-22-2013 09:29 PM
Deferring cash payout, IRA or Annuity? csgraff FIRE and Money 1 10-23-2012 12:39 PM
Really a good read here. Quite good today Friedman NYtimes. dumpster56 Other topics 86 12-10-2007 04:26 PM

» Quick Links

 
All times are GMT -6. The time now is 04:52 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.