income for seniors I spent the last 5 years as a caregiver for my elderly parent. Things happen in steps as we age so prepare for these "steps" by trying to be one step ahead of the next "step". Most of these steps move in the opposite direction of what we are use to.
Income is a misnomer at this age (85 & older) because, as we age, less and less of our income is spent on maintaining a lifestyle and more is spent on maintaining a life.
A decision should be made on where this 85 year old will reside for their next 5-10-15 years. If the hope and desire is to stay at home (somewhat independently) realize that this can change instantly..a car crash, a fall, a major illness and this person will be unsafe living alone. Determine who (loved ones or community services or elderly care agencies) will dovetail with this independent living arrangement...often it is all three.
Outside of these personal resources (low six figure assets), what other resources will this 85 year old also have access to? This could be a VA Aid & Attendance benefit, community heating allowances, renters rebates, SS waivers (on premiums), subsidies for the costs of home care, family leave benefits for family members, Home modification loans or grants, and many many more that would be unique to where you live and how you qualify. Usually qualifying means being below an income and an asset threshold. Come up with a spend down plan for these assets to maximize the time that this elderly person can live independently.
Care changes as the elderly person's medical need increase. Spend down or transfer of assets need to occurred 5 years prior to medicaid becoming available for helping pay for LT care. I just completed this process with my elderly mom and it was an honor, a privileged and the hardest damn thing you'd ever want to do (mostly) alone.
Remember that care facility costs for LT care can be substantial...$4-7K / month is not uncommon.
David Snowball's February Commentary Is Now Available Hi, David.
He's using average, which is inflated relative to Leuthold's calculation and including the frothiest part of the tech/telecom bubble (1997-20) in his calculation of what's normal. Using the average overweights the impact of the largest, priciest stocks relative to the majority of stocks in the index.
Here are Leuthold's 1957 to date historical median numbers on the S&P 500 for what interest they hold:
normalized p/e: 19 (now 25.3)
non-normalized, operating p/e: 16.8 (21 now)
ROE based p/e: 18.1 (25.4 now)
price/cash flow: 9.9 (14.3 now)
dividend yield: 2.9 (1.9 now)
price/book: 2.0 (2.0 now)
I think Grantham is using 1990 - present in his writing, as a nod to the argument that we're in the whole new era in which long-term data (back to 1927 or, in some cases, the late 1800s) is irrelevant.
As ever,
David
Posting Links of no informative value lots of >$1M bets made, I heard on the radio, so some major payouts
Eagles sure were the better team tonight
"Sure were?" The game was up in the air until the last few mins.
David Snowball's February Commentary Is Now Available Leuthold (usually bearish [edited], iirc) contrasts interestingly with this from Marvin Schwartz of NB; really makes you want to check his history:
\\ For 20 years, the average price/earnings ratio has been 19.3. If you go back 50 years, it’s 15.6 times. In periods where inflation grew 3% or less—which is 22 of the past 50 years—the P/E of the market was 19.7. Now, at 17 for 2019 and 15.9 for 2020, P/Es don’t look particularly stretched.
Posting Links of no informative value lots of >$1M bets made, I heard on the radio, so some major payouts
Eagles sure were the better team tonight
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" https://www.citylab.com/equity/2016/06/do-taxes-really-cause-the-rich-to-move/487835/https://www.njpp.org/budget/the-exodus-is-more-like-a-trickle>> gut feel based on a sample size of one?
too funny
>> The fact that some of your neighbors are inured to rising taxes doesn't mean the other 99% take them in stride.
Right again. If you went to town meetings in the expensive suburbs you would know that many do not take them in stride at all, although of course the very wealthy, many of whom do take it in stride, tend not to speak about it at town meetings. I'm a believer in taxes but the tensions among class diversification, fair compensation of public employees (average Wayland teacher salary is $94k or so, well above Weston), and tax burden often seem intractable.
Posting Links of no informative value Its a message board dominated by 1 poster. Very heavy-handed and squashes outside interest.
LarryB, did you make a large contribution to MFO? Otherwise your comments will fall on deaf ears.
Shades of a Trump society.
Adding "value" would be a few posts per day, not a constant barrage of noise.
It Feels 'A Bit Like 2006' For Stocks And The Economy. That Should Scare Us. FYI: The world's elite are partying like it's 2006, and that should probably scare us. Top business and political leaders, who met last week in the quaint ski chalet town of Davos, Switzerland, couldn't stop talking about the booming global economy, record stock markets and President Trump's tax cuts. They toasted the good times with bottles of bourbon that cost several thousand dollars each.
But there is something unnerving about all of this: 2006 was followed by 2008, the worst financial crisis of just about everyone's lifetime. Some of the wisest minds at Davos said it feels eerily similar right now, and that's not comforting.
Regards,
Ted
https://www.washingtonpost.com/news/wonk/wp/2018/01/30/it-feels-a-bit-like-2006-for-stocks-and-the-economy-that-should-scare-us/?utm_term=.661bb5048b46
Here Is Another -- Totally Legitimate -- Way To Shield Money From Taxes FYI: I am jealous.
Any time you can protect your money from the tax man, I want in.
George Papadopoulos is 50 years old and has a tax-free stash to cover health care expenses that is close to $
100,000 and growing. It will continue to grow for the rest of his life just like an Individual Retirement Account.
“It’s a nice bucket of totally tax-free money,” the wealth manager from Novi, Mich., said.
The account is known as a Health Savings account, a financial device that is growing in popularity as the Baby Boomer generation chews through its golden years and their attendant health issues.
Regards,
Ted
https://www.washingtonpost.com/news/get-there/wp/2018/02/01/here-is-another-totally-legitimate-way-to-shield-money-from-taxes/?utm_term=.080c24bc89a3
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" I simply asked you to substantiate or at least quantify your statement that taxes were close (very or not). Or was this just a gut feel based on a sample size of one?
In any case please let us know how your NJ friends are feeling about their taxes these days after you ask them. For NJ, emmigration has been a problem for over a decade, even if your friends are staying.
The increase in the loss of tax revenue from New Jersey has plagued the state since 2004, when state legislators imposed the infamous “millionaire’s tax.” The inception of this tax, coupled with New Jersey’s already high property and estate taxes, leaves no mystery about why the term “tax migration” has become a buzzword among state residents and financial, legal, and political professionals.
https://regentatlantic.com/File Library/Tax paper/Exodus-on-the-Parkway-2-25-14-FINAL-VERSION.pdfI'm pretty sure that Danoff doesn't care what his taxes are. The fact that some of your neighbors are inured to rising taxes doesn't mean the other 99% take them in stride.
Weston median income (20
15): $20
1K (from Census survey).
https://www.bostonglobe.com/metro/2015/12/18/town-town-look-income-massachusetts/cFBfhWvbzEDp5tWUSfIBVJ/story.html(
CNN thinks it's over $600K, but you can't trust everything you read on the web.)
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" But as you like to tutor us, averages can be so misleading. (And rates mean little.) The tax on my old 3ksf ranched-out cape worth a little over $1M in a town next to Weston Mass. is within a few percent of the average of the NJ towns listed above
You wrote that taxes in eastern Mass suburbs were very close to the NJ level. I'm fine discussing whatever metric you had in mind when observing that the levels of taxes were close.
Rates mean little when they're just the "official" figures. The state rates given in the USA Today article were "effective" rates, i.e. actual percentages after exemptions, abatements, whatever chicanery goes into one's tax bill. For example, the official rate for California is
1% (Prop
13), while the effective rate in the article is 0.77%. That's because Prop
13 caps annual increases, so the effective rate of each home is reduced over time. (California is the oddball state where property taxes are standardized.)
Geographically, you must be right on the Weston border: "Danoff my neighbor in Weston"
https://mutualfundobserver.com/discuss/discussion/comment/92578/#Comment_92578
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" Just a little math and a little music...To qualify for a $800K mortgage in any of these high tax communities requires an pretty sizeable income...your call.
Let say this process of home "loanership" is a 30 year adventure...a decent career for you and a time spread for all your kids to get out on their own. Half of us will have divorced and need additional resources to somehow make two households work.
In Milburn, a $
1M home will require a $200K down payment to avoid PMI...good luck with that as you are just out of college with $200K in student loan debt. An $800K mortgage (P&I @ 4% for 30 yrs) will run you about $3800/ month. Add almost $2K/M for taxes and $200/M for insurance and as a "home loaner' you will need $6K/month or $72K/YR to hang your hat. I have not mentioned the lifestyle costs nor the $250K/kid costs you will encounter...I did mention the likelihood of divorce.
Over 30 years the cumulative cost of property taxes alone will equal or exceed the $800k mortgage. So the banks gets paid...the city gets paid...the ex gets paid... the dentist gets paid...the utilities get paid...you get screwed.
You get to wake up everyday and try to prove to your boss that you are worthy of this rat race salary so you have the privilege of getting clipped to cover all these costs plus the ongoing cost of maintaining the properties (after the divorce your property is a little smaller and a little outside of Milburn, but still costly) and other monthly bills.
Welcome...Home Sweat Home...here's to a simpler time that we threw away:
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" Oh, I know; there are worse. But as you like to tutor us, averages can be so misleading. (And rates mean little.) The tax on my old 3ksf ranched-out cape worth a little over $1M in a town next to Weston Mass. is within a few percent of the average of the NJ towns listed above (just under $19k compared w/ just over $20k). Everything will be higher this year, of course. I must ask my NJ friends in some of the above towns about the reality of "losing their tax base as high income earners flee". One argument is that this will be a good thing in the long run.
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" Mass:
17th highest property tax rate,
1.2
1%
NJ:
1st highest property tax rate: 2.3
1%
https://www.usatoday.com/story/money/personalfinance/2017/04/16/comparing-average-property-taxes-all-50-states-and-dc/100314754/Highest average property tax for a town in Mass: Weston, MA $
18,059
http://realestate.boston.com/luxury/2017/02/14/like-live-weston/Highest average property tax for towns in NJ:
Millburn $23,327 ($
1M average home value)
Loch Arbour $22,323 ($
1M average home) - hardly counts, just
189 people
Tavistock $2
1,689 ($
1.7M average home) - only 4% as large, just 8 people
Alpine $20,9
10 ($2.7M average home) - property tax rate a relative bargain for NJ
Tenafly $
19,866 ($800K average home)
Mountain Lakes $
19,775 ($800K average home)
Rumson $
19,
146 ($
1.3M average home)
Glen Ridge $
19,045 ($500K average home)
Mendham Township $
18,752 ($900K average home)
Essex Fells $
18,743 ($900K average home)
https://www.app.com/story/news/investigations/data/2017/07/31/highest-property-taxes-nj/487845001/
As Robo-Advisors Cross $200 Billion In Assets, Schwab Leads In Performance The numbers in the article for the Schwab robo seem accurate based on my own Intelligent Portfolio. Maybe a little higher then my actual return. My portfolio is about 62:26:12, eq:bonds:cash. I continue to bench mark my robo to make sure it is doing what I hoped. In comparing my own 2016 and 2017 return to some other balanced and target funds, it's doing just fine.
Comparing 2 year return as the article did, my robo beats the TRP 2020 retirement fund, Fidelity Balanced, Vanguard Balanced Index and the venerable Vanguard Wellington.
2016 2017 accumulative
VFINX 11.8 21.7 33.5
my robo 11.7 15.1 26.8
TRRBX 7.4 15.7 23.1
FBALX 7.0 16.5 23.5
VBINX 8.6 13.8 22.4
VWELX 11.0 14.7 25.7
So far so good :)
Q&A With Scott Minerd, CIO, Guggenheim Partners: "The Bull Market’s Days Are Numbered" I got to read the whole article through google, this
google search may or may not work for you.
You're right that the cost of lending just got lower for high tax states. He doesn't discuss this. What he says is that Connecticut and NJ are losing their tax base as high income earners flee (at least in NJ this has been happening for some years thanks to NJ's rising property taxes).
The loss of SaLT deductions, effectively hiking taxes for these states, accelerates the trend. This in turn lowers property values (reducing state & local revenue) and income tax revenue, putting bond ratings at risk. For good measure, he threw in Illinois.
Completely separate, he's predicting a GDP growth of 2.5%, up from 2%, due to companies being able to immediately write off of capital expenditures (instead of amortizing).
