I wonder if the impact of 0-Care on people is forcing them in taking SS early?
Another thought is that by taking SS early, one does not have to use their tax deferred retirement savings, in the hope they will experience gains. In my calculations, if I take SS at FRA ,my break even age is 70 figuring the total amount received if I took it at 62.

Did you include COLA in your calculation? Remember, you will often receive COLA increases most years and they are cumulative. Also, this lower income may qualify you for programs that are income dependent.
The hardest nut seems to be covering healthcare costs yourself during these early retirement years prior to qualifying for Medicare at age 65.

http://www.marketwatch.com/story/3-out-of-4-retirees-receiving-reduced-social-security-benefits-2015-05-05
"Of course, the best way to maximize Social Security is to delay claiming benefits until “full retirement age,” which is climbing gradually to 67, or beyond. A person due to receive a benefit of $1,000 at a full retirement age of 66 would receive only $750 at age 62 (the earliest age at which most people can claim benefits) – and $1,320 at age 70."
Note that underlined part. People will still need to take it earlier but (I'm guessing) when they do take it earlier and the full amount is 67 or later they will receive even less at 62.
This adds to my "give up hope of retiring early" thread.
From what I not see about my finances (having been retired for 9 years, starting at 51) I am feeling less flush. A the major change in that feeling is Obamacare. I was paying $3,000/year before OC. I will be paying $7,200 under OC. If, OC was the law before my retiring I may have had second thoughts.

FYI: (The king is dead, long live the king ! Vanguard Total Bond Market Index Fund )
The Pimco Total Return Fund, launched by Bill Gross, has lost its title as the world's biggest bond mutual fund, following two years of withdrawals.
On Monday, Pimco said investors yanked another $5.6 billion from the Pimco Total Return Fund last month, bringing its assets to $110.4 billion at end of April.
By comparison, the Vanguard Total Bond Market Index Fund had $117.3 billion as of April 30, according to a Vanguard spokesman
Regards,
Ted
http://www.reuters.com/article/2015/05/04/us-investing-pimco-flows-idUSKBN0NP1W820150504

Hi, Alex.
In general, we describe our coverage universe as "all those funds that are off Morningstar's radar." In general, we're willing to initiate coverage of a way cool fund if it is: (1) less than three years old or (2) has less than $150 million AUM. That covers roughly half of all of the funds in existence (about 1300 meet the first criterion, 3100 meet the second, some meet both). Once we've started tracking a fund, we'll stick with it even as it becomes older and larger so long as it continues to do stuff that we think you need to know about.
We will make exception and write about larger funds from time to time. Two categories come to mind: (1) there's been a change so substantial that it has de facto become a new fund. An example would be when FPA Paramount went from a quality-growth domestic smid cap under one team to a mid-cap absolute value global fund under a new team. And (2) if a newly reopened fund has been closed so long that it's dropped off the radar. Matthews Asia Growth & Income is an example of that.
Could we cover larger funds? Sure. Two things constrain us: (1) I do 99% of the fund profiles personally and it's hard to track more than 3000 funds while also having a full-time job and being dad and (2) the value-added isn't necessarily as great because other folks are likely to write about such funds.
Hope that helps,
David

I think it's hopeless. ... You're willing to assume some extra credit or duration risk to pick-up what? An extra 1 or 2%? Face the truth.
DODIX has done surprisingly well the past few years. Surprised me - and I own it, but am cutting back. They've kept maturities on the shorter end in recent years, but are still out there a bit. Will take a modest hit if rates rise sharply. Their most recent fund report alluded to concerns over heavy inflows and hinted they might have to close the fund at some point.
There's one problem with heavy inflows. That $$ can reverse and flow back out even faster than it flowed in - and they know it.
Everybody's chasing yield.

There are some funds that M* gets enthralled with, data aside. WPVLX is one of them. Like David, I took a flier on this fund in the late 90s and got burned. I looked through the M* analyst report archive to find the following headlines:
3/2000: WPVLX's bet on financial may be worth the short-term pain it is causing.
6&7/2001: We think that this is the kind of fund to buy and put away for years.
11/2001: This could be a buying opportunity.
2/2002: This fund's strict attention to value has paid off over the long haul.
4,6,&10/2002: Despite its struggles, WPVLX is worth keeping.
1&2/2003: Better than it looks right now.
7/2003: Investors in this offering have long been rewarded for patience.
12/2003: This fund is worth waiting for.
3/2005: Is this glass half full, or half empty? -and- Not for everyone.
9/2005: We still think there's good reason to like this mutual fund.
5/2006: Despite a very tough year and a half, we thing this mutual fund still has the goods.
12/2007 & 1/2008: This fund fund is down but definitely not out.
6/2008: Be patient with this fund.
11/2008: Recent performance woes don't dim our support for this mutual fund.
4/2009: Investors should stick with this fine mutual fund.
9/2013: Take a bow, Wally Weitz et al. -
the analysis says: "this fund has never been better than duringthe past 4.5 years." After which it wound up in the 63rd percentile for all of 2013 (meaning it had a dreadful latter part of the year) and 82nd percentile for 2014.
Briefly on costs. The M* article concedes that ARTKX's cost is not above average, but they wish it were lower given the large size of the fund. But the article wasn't about sizes of funds, it was about costs, and ARTKX isn't challenged by a high cost.

FPNIX is IMHO a unique fund, one managed for preservation (using a wide variety of strategies and derivatives defensively), as contrasted with a fairly vanilla (albeit well managed) short term bond fund.
Different paths to the same end. As you note, performance is very similar after expenses. Which suggests that the modest incremental cost of the more wide ranging fund has been paying for itself, even in a pretty constant low interest environment. When the markets shift sooner or later, I expect its defensive strategies to show their mettle.
If one just looks at average figures (which, especially in the case of FPNIX I feel do not tell the whole story), one is getting double the SEC yield and duration that's only 3/4 as long (1/2 year shorter) in exchange for diving into some junk. (Though nearly 70% of the fund's bonds are AAA rated - more than BSBIX's AAA, AA, and A combined.)
I'm a fan of Baird funds, so I'm not knocking BSBIX. Rather, I'm addressing what is different about FPNIX.

I'm another fan of the Baird Funds, but I'd say the main difference between BSBIX and FPNIX is that the disastrous year of 2008 saw BSBIX lose 1.79% while FPNIX managed a gain of 4.31%. That would probably be something of a worst case scenario for BSBIX in a comparison with FPNIX. Otherwise, BSBIX seems to pretty consistently outperform FPNIX by a small margin.
I should think if the original poster is willing to wait 3-5 years that pretty much any solid short term bond fund will provide a small gain (maybe 2% or so). I wouldn't argue against either BSBIX or FPNIX, or even ZEOIX or RSIVX (which are quite different but still pretty safe over 3-5 years, I think).

Gosh, Solarcity 5y bonds, if you can go 5y, and perhaps others similar.
This is assuming BERIX and VWINX are too risky for your taste.

I own BERIX and VWENX in the moderate portion of my portfolio (10-15 years away).

My interpretation of not taking "a big risk with principal", and of "near cash", and of "3-5 years" is that one is willing to live with short term fluctuations and minor dips in principal, but expects to come out positive at the end of 3-5 years.
That puts pretty tight limits on what one can do with the money. Otherwise, I wouldn't consider it part of a "cash" allocation. In other words, I tend to be a bit more cautious with cash. YMMV.
So I like the NTAUX suggestion (I wasn't familiar with this fund). Unfortunately, while it beats your current 0.50% taxable yield (since it's a muni fund), its 0.50% tax-free yield still doesn't beat FDIC-insured internet banks (yielding around 1% taxable now).
I also like FPNIX (and have suggested it before myself). I'm comfortable with its junk bond (BB) rating, but only because I've followed this fund for years (never invested). Otherwise, I'd be leery of delving into junk now, especially with my cash allocation.
Another thought is to use defined maturity bond funds. Here's an AAII paper explaining them, discussing the pros and cons, and listing (most of) the current options. (It omits the older American Century Zero Coupon series, which will be more volatile because with zeros, duration = maturity).
If you're fairly sure you won't need the cash for 4-5 years, you might use an "immunization strategy". You can buy a fund like FMCFX (maturity 2019, muni bond fund, SEC yield 1.13%; it beats iShare's 2019 IBMH's 1.07% SEC yield w/o bid/ask spread); or Guggenheim's BSCJ (2019, corporate inv. grade, SEC yield 1.83%).

If Mr Gross was of his stature in years past, this article would be generating a lot of buzz on this board. But now he's just another prophet of pessimism, the likes of many we have seen since 1982 (not sure where it gets 1981) Still, an interesting missive by Mr Gross and let's face it, at some point these talking heads will get it right about the End of the end. On a personal note, albeit still 2 years away from the dreaded 70 of Mr. Gross, I can certainly empathize with his phobia of being 70. Even though I am as active and healthy as I was 50 years ago, unlike turning 40, 50, or 60, I simply am unable to put a positive spin on turning the big 70. Yuck!
Edit: where does he get that " fully invested investors wound up with 20 times as much money as when they began" (since 1981 and the Dow at 900) It's much more than that when you factor in the compounding of reinvested dividends.

"I put 10% of a price target fund (an appropriate year) as a control on how I was doing.While probably not as capable as some on this site I suspect I am at least average. Some years I outperformed, other years I didn't My underperformance in recent years occurred for two major reasons. Too much in emerging markets in recent years and using more stable income than a bond fund. Both strategies were wrong in recent years/I think you have to be very capable to have a diversified portfolio that will outperform a decent target fund over a longish period of time."
---
Jerry: I assume your reference is to T. Rowe Price. Yep - they do a great job overall. I like not only their retirement funds, consisting largely of holdings in other Price funds, but also most of their "fund-of-funds." During healthy markets it's difficult for an individual to outperform these. What you give up is the ability to overweight sectors (be it cash, currencies, gold or whatever) that you think are undervalued. I'm not sure that's a great idea anyway.
Currently hold TRRIX and RPSIX. I read somewhere once that they give investors a slight break when they determine fees for these funds, figuring it's cheaper for them to administer a single fund for someone rather than having the person own, say, a half dozen different funds. I haven't been able to re-confirm that however. That would mean you can own several funds under the umbrella of one of these at a lower ER than if you owned each fund individually.
The strong performance of their fund-of-funds, including the target date series, is likely related to three factors: (1) a strong underlying fund line-up, (2) attractive fees on these funds, (3) excellent calls when it comes to underweighting or overweighting specific areas inside their fund-of-funds. In addition, I think you'll also find Price generally takes a somewhat more aggressive position on the amount of equity exposure an individual should undertake at various stages of their life.
My one concern about all target date funds is the glide path that moves to increasingly higher bond allocations over time. This near 0% interest rate environment is unprecedented as far as I know. And where I think JohnC and others have a valid point is that one can own the same types of investments these target date funds hold at a substantially lower cost. In theory, anyway, that should translate into better long-term performance.
Regards

I have a 529 account in Utah (with Vanguard index funds) and one in West Virginia (using DFA funds) and it is interesting to compare. Over the past 4 years, the Utah plan has outperformed, but again its not apples to apples. FWIW

"Target-date funds have selected dates at which time the assets will be liquidated"
Once again we find a financial writer who doesn't seem to know what he is talking about.
Target date funds' dates refer to the general date of one's retirement. They tend to come in two varieties: one with a glide path that reaches its terminal allocation at the retirement date (e.g. 70/30 or 80/20), and one where the fund holds a gradually declining amount of equities for 10-15 years into retirement (in anticipation of a 25-35 year need). Either way, these funds are not liquidated.
There are two types of funds I'm aware of that are liquidated on a specified date (excluding UITs that pretty much by definition terminate). One type is target maturity bond funds, like the American Century Zero Coupon Bond Funds, or Fidelity's newer Defined Maturity Funds, or Guggenheim BulletShare ETFs. Here's a good Vanguard paper on defined-maturity bond funds.
Another type includes some managed payout funds. Managed payout funds are funds that are designed to work like annuities (if all goes well - they're not guaranteed). Some, like Vanguard's, are designed to pay out in perpetuity. Others, like Fidelity's Income Replacement Funds, are designed to terminate on a specific date. These funds hold a mix of equity and debt, and are liquidated on the specified date.
That subtype of managed payout fund is the only one I know that match the description of a "target date fund" given in the article here.

bee, I *rarely* buy anything recommended by another as I like to do my own research/monitoring. But I must admit, much of the reason I had a good 2012 (better than the stock indexes and junk bonds) was entirely your doing. You were a vocal proponent of PONDX back then and I jumped aboard as it met my all my trendiness criteria. It was one smooth ride. So a belated thanks!

I believe CathyG...wherever she may be... was the first mentioned PONDX here at MFO. Investments work until they don't. This one has had some legs. Thanks to good management at Pimco (Dan Ivascyn).

As to your question the research on various tight stops on non volatile trending markets, open end junk bond funds in particular, and then when to reenter was given to me by a fellow poster here. He and I have been e-mailing back and forth on junk bonds for many years now. So not to sound like a ..., but wouldn't feel right sharing the fruits of his labor without his permission. The basics is when a heretofore strongly trending non volatile market declines a certain percentage from any new highs, there is a greater percentage that decline will continue further. I recall that methodolgy got me out of PONDX in 2013 with most of the early 2013 gains intact and it eventually went on to much further declines before stabilizing and rising again, albeit never as high as my exit point..

I'm not looking to get my kneecap bust so I'll stop you right there...thanks.

It ranking family funds, did anyone take into consideration the effect of a family, merging a fund or liquidating it ?
If memory serves me right, Turner closed one or merged one a few years back. Wouldn't this detract from it's overall ranking ?
Derf

Good point John.
If you are reading this board (and therefore Ted's link) .... you probably shouldn't buy these funds.

I put 10% of a price target fund (an appropriate year) as a control on how I was doing.While probably not as capable as some on this site I suspect I am at least average. Some years I outperformed, other years I didn't My underperformance in recent years occurred for two major reasons. Too much in emerging markets in recent years and using more stable income than a bond fund. Both strategies were wrong in recent years/I think you have to be very capable to have a diversified portfolio that will outperform a decent target fund over a longish period of time

I know this topic has been tossed around numerous times on this board, but I'm always looking for suggestions on what to do with my cash. I'm 50 years old with more than $100,000 sitting in banks and credit unions earning about 0.50 % in interest. I know it will erode in value over time due to inflation, so I would like to beat that at the very least without taking a big risk with principal. I already have nearly $1M in a conservative portfolio (35% Bonds) (40% equities) (25% cash) so I'm looking to do something with a portion of the cash. Part of it should stay in an emergency fund, but I have about $100,000 that doesn't need to be used for at least 3-5 years. I call it "near cash." I've been looking at a few suggestions on the board, such LALDX, OSTIX and RSIVX. It appears that interest rates will be higher over the next few years so I do have to take that into consideration with any bond funds. Any other suggestions? Thanks in advance.

bee, I *rarely* buy anything recommended by another as I like to do my own research/monitoring. But I must admit, much of the reason I had a good 2012 (better than the stock indexes and junk bonds) was entirely your doing. You were a vocal proponent of PONDX back then and I jumped aboard as it met my all my trendiness criteria. It was one smooth ride. So a belated thanks!
As to your question the research on various tight stops on non volatile trending markets, open end junk bond funds in particular, and then when to reenter was given to me by a fellow poster here. He and I have been e-mailing back and forth on junk bonds for many years now. So not to sound like an ..., but wouldn't feel right sharing the fruits of his labor without his permission. The basics is when a heretofore strongly trending non volatile market declines a certain percentage from any new highs, there is a greater percentage that decline will continue further. I recall that methodolgy got me out of PONDX in 2013 with most of the early 2013 gains intact and it eventually went on to much further declines before stabilizing and rising again, albeit never as high as my exit point..

Mark makes a very good point. Maybe I'm wrong, but my sense is we have very few "stay-put" type investors posting on this board. There's one notable exception (And I'd rather not go there, thank you.)
Don't mean to suggest we're a bunch of highly active market timers. That I don't know. On the other hand, I doubt many here have held mostly the same funds year-in and year-out for 15 - 25 years or longer without at least varying the allocations to each. I'll confess I haven't.

Thanks for posting this Ted. I had been considering similar items for my sleeve of holdings which account for 4 years of spending dollars heading into retirement. I had previously considered short terms bond funds, or market neutral funds like MERFX. Your post is handy as it provides some additional options for this purpose.
Press