I’ve written often about the value of delaying Social Security (SS) payments until age 70. By waiting until you reach that age, you accumulate what the SSA calls delayed credits, and are effectively purchasing (using the payments you’ve given up) an inflation-adjusted immediate annuity paying 8%. You won’t find a better annuity anywhere on the…
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In 1994 William Bengen, a financial planner in Southern California, discovered that an individual starting retirement should be able to spend the equivalent of 4% of his/her investment assets, adjusted each year for inflation, for a period of 30 years without running out of money. The portfolio allocation that maximized this return was about 60%…
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Since we are currently in the midst of tax season, just for fun I thought I’d share some of the more creative tax deductions taxpayers have attempted to get away with. Warning: do not try this at home! From the Minnesota Society of Certified Public Accountants comes the following: A woman tried to claim her…
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I’ve written before about the advantages and disadvantages of reverse mortgages, especially Home Equity Conversion Mortgages (HECM) that are insured and regulated by the Federal Housing Administration (FHA) (see https://www.cognizantwealth.com/2014/02/20/reverse-mortgages-the-good-and-the-bad/). One of the advantages – the fact that you do not have to undergo an income and credit check in order to qualify for the…
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In 2013 the U.S. stock market had its best return in over 15 years. When you reviewed your portfolio in January of 2014, did you add to your investment in U.S. stocks because they did so well the previous year? If so, then you were guilty of what is called in the jargon of behavioral…
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It’s well understood that investment risk and returns go together. Simply put, investors expect a premium, generally in the form of a higher return, for investing in higher-risk securities, where risk is quantified as return variability or volatility. This explains why over time stocks outperform bonds and why the returns on small company stocks are…
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