misc.invest.financial-plan Google Group

Re: Traditional vs charitable annuities

2010-01-08T22:58:13Z

As I understand it, the problem is not just doing a calculation based
on an interest rate, but rather knowing the interest rate the insurance
company uses to do its calculation. Suppose next year interest rates go
to 6% and then stay at 6% for several more years. The annuity you get
next year may still be based on the 4% rate of this year. It may be a

Re: Traditional vs charitable annuities

2010-01-08T20:45:00Z

Unless I'm missing something, it isn't rocket science. Find a set of mortality
tables such as: [link]
Find out how long a person of your desired age and gender is expected to live,
then do an NPV on the annuity's payments for that period using the interest rate

Re: Traditional vs charitable annuities

2010-01-08T20:24:19Z

Yes, that calculator would be useful. Surely, someone familiar with
insurance products should be able to answer the question.

Re: Traditional vs charitable annuities

2010-01-08T17:55:39Z

In that case it may pay to wait. Anybody know of a calculator that
will calculate net present value of an immediate annuity based on an
interest rate and a person's sex and age?

Re: Mortgage backed securities.

2010-01-08T15:10:40Z

If you consider a mutual fund remember that unlike the actual MBO a
mutual fund has no maturity date so there is no point in time at which
you will recover your original investment. The value of the fund shares
will go down as interest rates go up. Considering how low interest
rates are today there is a very high probability that rates will go up

Re: Mortgage backed securities.

2010-01-08T13:39:36Z

There is the Vanguard GNMA Fund Investor Shares (mutual fund), symbol
VFIIX and the Vanguard Mortgage-Backed Securities ETF, symbol VMBS .
You could also buy a mortgage REIT.

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-08T04:59:12Z

I had in mind riots in the streets and possibly mobs killing at random
in parts of the country. I do not expect some kind of coup. I think it
is something for which everyone at all levels of community should be
vigilant at this point, especially as high unemployment persists. But
we are on the same page.

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-08T01:13:14Z

Agreed. My guess is the USA will escape violent revolution this time,
because even in the Great Depression with the poverty and despair at
that time, the elected government survived. On the other hand, with a
few more Bush-Cheney administrations in a row and a few more financial
meltdowns that even Obama-like saviours couldn't fix, anything could

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-08T00:39:49Z

I do think the chances of a violent revolution are higher now than
they have been in decades. I also think this is a characteristic of
all societies over time, not just the United States. Take away enough
people's ability to make a living (that keeps up with others well
enough), and then they have nothing to lose and in fact much to gain

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-08T00:27:58Z

Correction: Elle quoted from the NY Times.
I am curious about how much higher the interest rates tend to be and
how much smaller the percentage of purchase price; how it compares to
the interest rates lower income folks pay; how much more negotiating
room and skill a corporation gets from and applies to a lender

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-07T23:27:37Z

Why people walk away from their homes and not from their cars, which
are underwater immediately upon driving out of the dealer lot, beats
me. The author has a point that we all need a roof over our heads,
not an investment. But that was the first mistake committed by the
homeowner, consciously or not. So, since the homeowner is living in

Re: Traditional vs charitable annuities

2010-01-07T22:50:34Z

There isn't any leftover money. You are buying an insurance policy against
living too long. Like buying auto insurance, once you've bought it, the money
is gone.
If you live too long, the insurance company pays you more than you paid in with
interest. If you die too soon, the insurance company pays you less than you

Re: Traditional vs charitable annuities

2010-01-07T22:12:19Z

(big snip of 11 diff policies)
Yep, but none of the 11 stated here (except maybe the Installment
Refund) say what is done or who is to get the "leftover" money, i.e. any
principal left when all payment obligations are fulfilled. I understand
that the INS company keeps it.
Chip

Re: Traditional vs charitable annuities

2010-01-07T22:04:51Z

I was considering a piggy-back college endowment
annuity as an option when I dont have earned income.
In the case you get 5% of principal or an age-related
immediate rate. With the exception of 2007, the
endowment investors do better than most investment pools.
So the the piggy-back would catch up to the immediate

Re: NY Times: Why Not Walk Away from Your Mortgage?

2010-01-07T21:03:01Z

I would call that a small distinction rather than a big distinction.
The crux of the matter is that in one case default is regarded as a
part of business and in the other case as a moral or ethical failing
and dishonorable act on the part of an individual. I see it as sort of
"pushing the little guy around" for commercial benefit. Two sayings