Biggest crash in stock market history?

Santapez

Well-Known Member
Team MTBNJ Halter's
Up until age 62, Social Security is a tax. After you start collecting it, it is a transfer payment. But from age 62 until you claim it, it is insurance. Specifically, it is insurance against outliving your money. Postpone and it grows 8% a year. I totally get the breakeven analysis. But here's the thing. Breakeven analysis is the wrong tool for insurance. I have auto insurance. I never break even. I have a fire extinguisher. I never break even there either. All insurance fails breakeven analysis. Insurance is the small payment vs the big catastrophe. That catastrophe is being old, unemployable, and broke. The bigger question is will you still be alive when your money is gone, and getting a much bigger check each month—months when you can't particularly get employment—is the goal.

Try looking at it this way: The monthly check I have postponed collecting is treated as the insurance premium I pay to get a check at age 70 which is nearly double the age 62 check. As you breakeven guys point out, I'm not really paying it, since I will get it all back later.

Some other considerations. Social Security is taxable income for most. Not only do you give up the 8% growth each year postponed provides, but you subject the lower amount you do get to income taxation, again, for most people.

So what am I doing? I am retired, and collect dividends. With no wage income, and no Social Security income (yet) I pay zero % tax on dividends and LTCG. I'm taking that. I harvest capital gains to supplement the dividends. So far, zero tax. I have ten years before my RMDs kick in. That means I can do ten more Roth conversions—one each year— deciding how much tax I am willing to pay (last year 14%), so that my RMDs will be lower and I have a source of funds that are tax-free. I plan on claiming Social Security at age 70 unless my doctor recommends I claim sooner.
Jim, you pretty much typed out a nice concise summary of my thoughts on it. I'm hoping at that point I'm in a similar situation.

We're discussing SS in a thread about the stock market crashing. There's something to be said about spending the volatile money first before the insurance plan backed by the US Government. That's also assuming I'm not 100% relying on SS but it is a nice constant base.

Someone can point out that SS will have no money in a few years, but if that's the case the stock market probably isn't looking so hot either.
 

clarkenstein

JORBA Board Member/Chapter Leader
JORBA.ORG
SS will be able to pay only 75% of planned benefits by 2035.


Whenever I hear stats I have a personal issue that’s dumb. I don’t like percentages like “75%” or “80%”. Those numbers are too common - it’s rounded or something. If they said something like 72% or 76.4% I’d buy it. 75% is too nice a number to land on.
 

Santapez

Well-Known Member
Team MTBNJ Halter's
SS will be able to pay only 75% of planned benefits by 2035.


Whenever I hear stats I have a personal issue that’s dumb. I don’t like percentages like “75%” or “80%”. Those numbers are too common - it’s rounded or something. If they said something like 72% or 76.4% I’d buy it. 75% is too nice a number to land on.

Yeah, I'm assuming there could be a drop.

75% at the current trajectory. Which, while it isn't 100%, is still 75% of that amount.

Currently any income over $137,700yr does not pay tax. So just by increasing that amount by a great deal, or eliminating it would bring a large amount of money into SS. Or increase the tax. Or put money from regular taxes into SS. Many options.

I'm more concerned about Medicare/Medicaid bankrupting our country...
 

MadisonDan

Well-Known Member
Team MTBNJ Halter's
SS will be able to pay only 75% of planned benefits by 2035.


Whenever I hear stats I have a personal issue that’s dumb. I don’t like percentages like “75%” or “80%”. Those numbers are too common - it’s rounded or something. If they said something like 72% or 76.4% I’d buy it. 75% is too nice a number to land on.
37% of statistics are made up.
 

pkovo

Well-Known Member
I did some gambling yesterday in my non-retirement account and picked up some shares of Wells Fargo and Carnival. Both look ugly right now and carry risk. Heck, I bought Carnival on the day it was updated to "junk"

My plan for them is to "look away" and see what they look like a few years down the road.
 

rick81721

Lothar
Up until age 62, Social Security is a tax. After you start collecting it, it is a transfer payment. But from age 62 until you claim it, it is insurance. Specifically, it is insurance against outliving your money. Postpone and it grows 8% a year. I totally get the breakeven analysis. But here's the thing. Breakeven analysis is the wrong tool for insurance. I have auto insurance. I never break even. I have a fire extinguisher. I never break even there either. All insurance fails breakeven analysis. Insurance is the small payment vs the big catastrophe. That catastrophe is being old, unemployable, and broke. The bigger question is will you still be alive when your money is gone, and getting a much bigger check each month—months when you can't particularly get employment—is the goal.

Try looking at it this way: The monthly check I have postponed collecting is treated as the insurance premium I pay to get a check at age 70 which is nearly double the age 62 check. As you breakeven guys point out, I'm not really paying it, since I will get it all back later.

Some other considerations. Social Security is taxable income for most. Not only do you give up the 8% growth each year postponed provides, but you subject the lower amount you do get to income taxation, again, for most people.

So what am I doing? I am retired, and collect dividends. With no wage income, and no Social Security income (yet) I pay zero % tax on dividends and LTCG. I'm taking that. I harvest capital gains to supplement the dividends. So far, zero tax. I have ten years before my RMDs kick in. That means I can do ten more Roth conversions—one each year— deciding how much tax I am willing to pay (last year 14%), so that my RMDs will be lower and I have a source of funds that are tax-free. I plan on claiming Social Security at age 70 unless my doctor recommends I claim sooner.

That's an interesting way to look at it. It's a different calculation for everyone. For me, I retired 4 years ago with a full pension. The difference for me taking SS at 62.5 vs 70 is with the former, I collect ~ $190,000 over the next 7.5 years. I'd rather spend the money now when I can best enjoy it. If I waited until 70, I'd collect $1700 more per month, but then 1.5 years later I have to start taking RMDs, which will be significantly more than SS. I pay fed tax on the pension (no state tax in FL), will pay tax on SS as well and when RMDs start, that will be taxable too.
 

Magic

Formerly 1sh0t1b33r
Team MTBNJ Halter's
4 weeks ago we were speculating about shorting TSLA. It was under $1000. At one point today it nearly tagged $1800! That's like a 500% rise since March lows. Over $300 billion market cap. Shortable Yet :)
Do people listen to DT for stock advice? His entire portfolio is in gold.
 

MadisonDan

Well-Known Member
Team MTBNJ Halter's
Do people listen to DT for stock advice? His entire portfolio is in gold.
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Dave Taylor

Rex kwan Do
4 weeks ago we were speculating about shorting TSLA. It was under $1000. At one point today it nearly tagged $1800! That's like a 500% rise since March lows. Over $300 billion market cap. Shortable Yet :)
Today I think it is but haven’t touched it. Have a mental block with companies that are larger than the next four largest in their class combined yet have NEVER turned a profit. I thinkk the shooting star candle in AAPL today may be the top.
 

Dave Taylor

Rex kwan Do
I did call gold however. Which I own via GLD, CEF and silver via CEF and SLV calls. I am not perfect. If you find one true trader that thought the market was recovering this much post em up. I’ve been adding to my TCES and FNGD position the last couple weeks. I am about 40% invested with my trading account.
 

pkovo

Well-Known Member
Today I think it is but haven’t touched it. Have a mental block with companies that are larger than the next four largest in their class combined yet have NEVER turned a profit. I think the shooting star candle in AAPL today may be the top.

I feel the same way with TSLA I saw a stat that at it's intraday high yesterday it was indeed bigger than all of the major autos. By the close it was only bigger than 4...including Toyota! Nuts!

The thing with Tesla that makes it so dicey to predict is Elon. Whether you like him or not, he is a visionary so people seem to be willing topay for the stock since it includes him which is really an intangible. It's more like a tech stock than an auto stock.
 

Patrick

Overthinking the draft from the basement already
Staff member
i just moved some money out of the market and into corporate paper.

is the direct to home sales model more efficient than stores?
automobiles should be doomed no? in the world of autonomous shared cars (maybe corona just put a kibosh on that)
 

Bike N Gear

Shop: Bike N Gear
Shop Keep
Today I think it is but haven’t touched it. Have a mental block with companies that are larger than the next four largest in their class combined yet have NEVER turned a profit. I thinkk the shooting star candle in AAPL today may be the top.

Are you saying I should sell the AAPL I have? Paid almost $50 for it.
 
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