<p>Then you should cancel the book…</p>
<p>If you have 1,000,000, can you live on 10000? Do you think that ss is going to keep up with inflation? Do you think any fixed income strategy will keep up with the REAL rate of inflation - the one that includes food and energy - you know the ones that you really have to live with? My father thought that also - he’s 94 and has lived like a miser for years and it is still tough. He’s been collecting cr** for years now from his fixed income investments.</p>
<p>When I retired (recently) I had savings, no debt and a house free and clear. I moved and found a beautiful home at 1/5 of the price I sold at. Our monthly expenses are just 20% of what they were before. </p>
<p>Fact is; We have everything we want and need even less. </p>
<p>If one finds themselves in retirement, living retirement check to retirement check they have made a mistake and, by definition, living above their means. And that goes for whatever the amount of the check. </p>
<p>You want to die after a long retirement with your pre-retirement net worth either intact or greater. Good luck with that. </p>
<p>Our worries are focused on our children and the young people of our country in general. They will be paying dearly for our poor stewardship of the nation we left them.</p>
<p>We’re not the only folks looking for returns. There’s an article out this morning on the severe problems in large union pension funds suffering from poor investment returns. Everyone wants yield.</p>
<p>BCEagle91…I would like to read that article. A link?</p>
<p>[VEBA</a> Retirement Trusts Face Funding Shortfalls - WSJ.com](<a href=“VEBA Retirement Trusts Face Funding Shortfalls - WSJ”>VEBA Retirement Trusts Face Funding Shortfalls - WSJ)</p>
<p>DETROIT—Retirement trust funds created to cover billions of dollars in medical costs for unionized workers and their families are running short, forcing the funds to cut costs, trim benefits, and ask retirees and companies to pony up more cash.</p>
<p>The biggest such fund—a trio of United Auto Worker trusts covering benefits for more than 820,000 people, including Detroit auto-maker retirees and their dependents—is underfunded by nearly $20 billion, according to trust documents filed with the U.S. Labor Department last month.</p>
<p>thanks…</p>
<p>The numbers never add up up, do they BCEagle91…</p>
<p>"The UAW VEBA has indeed fallen short of the 9% annual return that was assumed at the fund’s creation to be enough to provide current benefits to retirees for 80 years, Mr. King says. Health-care costs, meantime, have risen far more quickly than the 5% a year assumed by the union.</p>
<p>According to VEBA trust officials, the funds for all autos averaged a 9.7% rate of return in 2010. They decline to say how the funds have performed in 2011 but, in response to written questions, they say the fund has adopted a more conservative assumption of 7% going forward. At GM, the fund currently has total assets of $33.23 billion and total benefit obligations of $44.68 billion, resulting in an $11.4 billion, or 26%, shortfall."</p>
<p>I don’t know how they teach finance in school…but the expectation of 9 percent a year is a tough hurdle to meet…I’m being nice 
Ok…now it is 7%…getting closer…</p>
<p>For the 55 - 65 age group where I work, this is all we talk about (when we aren’t working). 10 years ago, we assumed we would get 8% yearly return from the market. Now we are happy to get a consistent 3 - 4%. Annuities have been pushed by financial planners but like everything else they come in so many flavors and there has been a lot of negative press in the past, its hard for the old guys like me to figure them out.</p>
<p>The annuities I see don’t look good …maybe there are some decent annutities out there…but…the financial firms that sell these have to make money…and that money is going to come out of the pocket of the annuity buyer…</p>
<p>The firms that sell annuities are living in the same low yield world we are living in…</p>
<p>What do they do to guarantee their returns?</p>
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<p>There’s a Columbia student on the Rich Dad, Poor Dad that believes that it’s easy to make 20-25% a year returns and he seems pretty adamant about it. I don’t think that he’s ever done any trading, investing or running a business. He also expects to make $500 to $700 thousand a year. Do they get this stuff from Columbia (the professors surely know better) or from myths?</p>
<p>If you are Jim Simons its easy.</p>
<p>They lie…;)</p>
<p>The guarantees are around 4% now days, right?</p>
<p>My opinion…</p>
<p>One… they are expecting you to die…</p>
<p>They could be using leverage and borrowing short and lending long…</p>
<p>They could be using foreign debt…</p>
<p>They could be using collars…</p>
<p>They could be investing some of their money in PE and hedge funds…</p>
<p>Some munis have yields above 4%…</p>
<p>They say the guaranteed return is X%…but the annuity doesn’t take affect for a few years…so you are really getting zero on your money the first few years and your return isn’t really X…</p>
<p>They could be trading derivatives like Warren Buffett…
for example…you sell puts in the S&P 10 years out…and you take that money…and you invest it…and you make over 10 years your risk in the puts plus…</p>
<p>They do borrow some money at negative rates…
I am sure I am missing things…</p>
<p>What guarantees are you seeing?</p>
<p>As I have said before…I would love to know what Jim Simons’ firm does…</p>
<p>“Do they get this stuff from Columbia (the professors surely know better) or from myths?” I love Columbia…so I hope not… :)</p>
<p>As far as myths…yeah…people are told that you can make 10% a year compounded in the stock market…but what they don’t mention is that a large part of that is dividends…
the country was in a large growth stage for decades…and the indexes are made up of different stocks over time…</p>
<p>I haven’t looked carefully how much they guarantee. I think it depends on the setup. In some you contribute money for 10 years, and then are guaranteed some amount each month as long as you don’t withdraw and then there is a penalty. A supposedly independent financial planner suggested putting in some amount and seeing how it performs. I’m by nature not a very trusting individual when it comes to money. A coworker who is more savy on this stuff says not to bother with this stuff as an individual investor can do the same things without the added fees.</p>
<p>I also know of a coworker who is up 80% above the S&P since 2004. Unfortunately, he was so conservative on his investments that he didn’t put much money in that particularly methodology.</p>
<p>“They say the guaranteed return is X%…but the annuity doesn’t take affect for a few years…so you are really getting zero on your money the first few years and your return isn’t really X…”</p>
<p>“In some you contribute money for 10 years, and then are guaranteed some amount each month as long as you don’t withdraw and then there is a penalty”</p>
<p>Yeah…your stated guaranteed return is not what you are really receiving…You are really getting a lower return…You did not make any money for 10 years…In the real world…you have to put that in your numbers to figure out your return…</p>
<p>One methodology that has a long history of providing solid performance while reducing risk is to focus on the 200 DMA. It has been REALLY good over the past decade or so.</p>
<p>[ETF</a> Moving Average Backtest](<a href=“http://www.etfreplay.com/backtest_ma.aspx]ETF”>http://www.etfreplay.com/backtest_ma.aspx)</p>
<p>There are numerous methodologies. I’ve used 50 day crossing the 200 day mvg but that works best when during the cross - the slopes are negative. There is a method that trounces the market which involves buying low and selling high - the trick is doing this. The method that I know of is very good at doing this.</p>