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    #16
    Just because the S&P500 has gone up doesn't mean it will go up. It could go down. Hence, the benchmark has to be the risk-free return (savings or something like that). When you factor that level of return, you lose with the lump sum. Or at least that was my scenario.

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      #17
      Huh. Well, "continuing monthly benefit payments until 65 years old" isn't risk free, either, nor is it consequence free (since the income doesn't keep up with inflation), so I don't think the alternatives needs to be, either.

      (I.e. These plans have no survivorship, so if others also depend on that monthly income, early death is a risk. They can also be administratively, or medically, ended early, annually, if you're late on the paper work, or miss it, or have trouble with continued medical support, etc. They also inhibit any other sources of income, so there is also (depending on other earning potential) opportunity cost sunk into keeping a monthly benefit.)

      "I have great faith in fools; ‘self-confidence’, my friends call it." - Edgar Allen Poe

      "If you only know your side of an issue, you know nothing." -John Stuart Mill, On Liberty

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        #18
        I'm not saying don't consider alternatives. Of course, you should consider alternatives including the S&P. I'm saying the S&P isn't a benchmark for this scenario. Because comparing a guaranteed return to one that has no guarantee is apples to oranges. I've considered it and the conclusion I came to is that the S&P is a fine alternative as long as you have other sources of income. If it's your only source of income it's too risky for this scenario IMO. It will "probably" go up (the key word is "probably"). Even if goes down, it will "probably" come back up. The catch is that if it goes down how much time will it take to go back up vs am I too old to see that recovery in my life?

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          #19
          I understand. I'm not trying to convince anyone to make one decision or the other. Just adding more details to consider.

          i.e. The issue with that whole notion, that savings accounts are "safe", is quite simply that they are not.

          Average savings APR around here is .06%. That doesn't keep up with inflation.

          At 2.5% target annual inflation (what The Fed wants), savings accounts lose half their value every 22-23 years instead of 20.

          Savings accounts are not safe, they are guaranteed losses. The only way to store value is to invest. The only way to gain value is to invest.

          Savings accounts simply can not function as "stores of value" unless we exist in a deep monetary recession, for decades.

          I guess if a guaranteed ~50% loss over ~20 years seems more reasonable to someone than a potential >50% loss that comes along with a potential +800% gain (at ~10% annual reinvested returns) over the same period, then that's certainly a valid personal decision.

          I'd just hope they were informed as to as many of the moving parts and potential decision points as possible prior to making it.

          Which is what I hope the point of all this is.

          "I have great faith in fools; ‘self-confidence’, my friends call it." - Edgar Allen Poe

          "If you only know your side of an issue, you know nothing." -John Stuart Mill, On Liberty

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            #20
            I remember someone (can't remember who) saying that the biggest risk of all is taking no risk. Your point is well taken. However, you've conveniently danced around this one point. You could have a catastrophic loss in the stock market. Then what? You're ruined. Bird in the hand...

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              #21
              The catch about investing in the stock market is that you have to be a position to invest in the stock market. The saying that the biggest risk of all is taking no risk at all is applicable to the rich, the young, and the gainfully employed. But it's just sending the wrong message to someone in their sixties living off disability insurance. If the rich, the young, or gainfully employed invest and lose, they can wait it out. Better yet, they can add to that investment at a lower price and make even more money. But if someone in their sixties living off disability insurance invests everything they have in the S&P and loses, that could ruin them. Because they need the money now and have no time to wait for a recovery. Basically, it has to go up and it has to go up now. IMO it's irresponsible to put yourself in that position in your old age.

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                #22
                personally i would not get in at this point

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                  #23
                  Yeah. The "bird in hand" is a sure thing, even if it isn't a great thing. I opted to decline my buyout when it came for exactly that reason, so I totally understand. But, if my (wife's) circumstances income-wise were then what they are today, I'd have jumped on it. The market has been good to me, these past 20-30 years, including one catastrophic ~50% loss in '08, so I'm probably a bit bullish. It's almost like free money. Until it isn't. If that loss had come when I was nearer to retirement age, and using that money to live, it would have really hurt. So, yeah. No real simple or risk free alternatives.
                  "I have great faith in fools; ‘self-confidence’, my friends call it." - Edgar Allen Poe

                  "If you only know your side of an issue, you know nothing." -John Stuart Mill, On Liberty

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                    #24
                    Well, I'm glad we got that straight.

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                      #25
                      I'm hoping to retire soon but wonder if I should first apply for STD and LTD and then retire? I would really like to try the Kunming PT and if that works I might be able to continue to work longer if desired but I most likely would retire anyway (I'll b 60 end of next year).

                      Anyone try something like this before?

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                      • August West
                        August West commented
                        Editing a comment
                        Can you go on LTD and still be an employee?

                      • SCI-Nurse
                        SCI-Nurse commented
                        Editing a comment
                        It depends on how disability is defined by your state (if it is state LTD) or employer benefits. Most require that you be unable to work. With SSDI you can work, but are very limited in the income you can make. (KLD)
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