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  #11  
Old 05-16-2018, 01:27 PM
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I model those trends with general factor model or AR(2) autoregressive process. That way I can incorporate projection risk into my estimates.
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  #12  
Old 05-16-2018, 01:32 PM
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I don't include the house as an asset, it is a reduction in housing costs, so no appreciation assumed.
Mark it zero.

I'm mostly concerned with a) when we will pay it off, as I pay more than the min payment and b) when we'd have enough equity to move to a lower COL area and pay cash, which we may do. But yeah, I don't count that in my bucket of assets I'll use for income in retirement.

Unless we buy a place with a guest house and AirBnB it, of course. Which we've discussed.
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  #13  
Old 05-16-2018, 03:22 PM
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I model those trends with general factor model or AR(2) autoregressive process. That way I can incorporate projection risk into my estimates.
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  #14  
Old 05-16-2018, 03:33 PM
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I model those trends with general factor model or AR(2) autoregressive process. That way I can incorporate projection risk into my estimates.
Triggered.
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  #15  
Old 05-16-2018, 06:13 PM
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inflation ex medical: 3%
med inflation: 6%
total portfolio return (stock & bond mix, domestic & international): 5%
planning to age 100, die with money left over even though we have no desire to leave a financial legacy
would investing in healthcare ETF/MF be a decent hedge against healthcare cost trend?

If I can convince myself that it is, then I may fund an HSA and invest it all in healthcare related funds.
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  #16  
Old 05-16-2018, 09:10 PM
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would investing in healthcare ETF/MF be a decent hedge against healthcare cost trend?

If I can convince myself that it is, then I may fund an HSA and invest it all in healthcare related funds.
i have absolutely no idea
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  #17  
Old 05-17-2018, 08:27 AM
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you only have an 18 to 20 percent chance of making it to 90
Also I would rather be about right than precisely wrong on these type of things.

with that said I always project an age at death of 45 and 30% annual returns.


What you want to do is assume negative returns and overshoot. greater chance of being happy at the end.
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  #18  
Old 05-17-2018, 08:43 AM
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you only have an 18 to 20 percent chance of making it to 90
Also I would rather be about right than precisely wrong on these type of things.

with that said I always project an age at death of 45 and 30% annual returns.


What you want to do is assume negative returns and overshoot. greater chance of being happy at the end.
perhaps if I get into loan sharking those would be appropriate assumptions.
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Old 05-17-2018, 09:16 AM
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Great thread. I was just thinking about this...

Assumptions
Investment portfolio return: 7.00%
Inflation: 3.00%
Salary (me / spouse): 1.50% / 0.75%
401(k) max contribution allowed: current + $200/year
Social security: apply 50% haircut
Pension (spouse): apply 25% haircut
Death (fund through): age 90
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Old 05-17-2018, 09:59 AM
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Mark it zero.

I'm mostly concerned with a) when we will pay it off, as I pay more than the min payment and b) when we'd have enough equity to move to a lower COL area and pay cash, which we may do. But yeah, I don't count that in my bucket of assets I'll use for income in retirement.

Unless we buy a place with a guest house and AirBnB it, of course. Which we've discussed.
I was also marking my person home as zero. Are you modeling the potential difference in costs between your current home and lower COL area as an asset? Just curious.
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