Subscribe in a reader
Enter your email address:
Delivered by FeedBurner
« No surprise: kids who go to Cal Tech are smart |
| Compare and contrast »
Posted by Craig on 05:18:00 AM in Economics
You can follow this conversation by subscribing to the comment feed for this post.
For a 70-year-old man or a 73-year-old woman.
September 24, 2013 at 06:06 AM
I don't know about an 8.3 percent return (dubious), but I believe financial theory favors the idea of buying annuities once you have finished saving and are ready to begin withdrawing. I.e., index funds before retirement, converted to annuities after retirement.
The reason is simple: it hedges against mortality risk. Sure, leaving money behind for the kids is great, but the biggest concern is having enough to avoid being a burden (so says my Dad). Also, do not overlook the risk of swindling. Grandparents of close friends of ours were ripped off by a swindler into making very bad investments and are now dependent on their kids.
Jack PQ |
September 24, 2013 at 07:18 AM
It's a lie. The proponent of the immediate annuity compares a 2.75% return on Treasuries to an 8% cash flow from an immediate annuity, most of which is merely return of principal. Any investment company which returned your principal to you and called it investment return would be guilty of fraud. The nonsense continues: The proponent of the immediate annuity says you'll be safe from inflation as along as you ensure that only 10% of your expenses are subject to inflation. He doesn't say how to do that. How do you ensure that your food, clothing, utilities, transportation, house maintenance, health care, property tax and entertainment expenses do not go up in price?
Jack Olson |
September 24, 2013 at 08:44 AM
Bernie Madoff has been released?
September 24, 2013 at 01:36 PM
Big Henry, Mr. Madoff is still in stir and scheduled to be for another century, but the Beardstown Ladies got away with it. Their "Common Sense Investment Guide" was on the NY Times best seller list for eleven weeks, selling 300,000 copies on the claim that they achieved a 23% annual return from 1984 to 1993. "Better than nearly all the Wall Street experts and a good bit better than the S&P 500", they said. Then an accounting firm audited the books and noticed that they had included the mandatory $400/mo dues per member as income. Their actual return was a mediocre 9%. Meanwhile, they made millions selling deceitful books and giving lectures. A land shark sued their parent company, Disney, for false advertising but I assume the Beardstown Phonies got to keep their royalties and fees.
Jack Olson |
September 24, 2013 at 05:31 PM
The comments to this entry are closed.
Find new books and literate friends with Shelfari, the online book club.