August 26, 2007

Here is a collection of in information which may be of interest to some of you:

COSTCO has a very cheap Health insurance in 5 US states. Please check with them if it applies to your state. Further, Consumers Report states that if you need eye glasses, COSTCO is one of the better choices.

Memorabilia: This is interesting for all NY Cargo retirees : John Murray, ex LH Cargo now retired in Florida, developed an outstanding webpage about the New York Cargo Building 261. It is beautifully done. Please see it at http://www.trailsend-themurrays.com/lcag

September is the month of the Steuben Parade. Most states have them and at times connected to an Oktoberfest. In New York, there will be a 50th German American Steuben Parade on Saturday, September 15.2007 on 5th Avenue from 63rd to 86th street.
Lufthansa is one of the sponsors.

The DLS (Der Lufthansa Senior) is our printed venue to all retirees who do not own a computer. If any region has some interesting information pertaining their area or a specific event, please send the information via email or USMail to Wolfram Knoblauch. The board will collect it a send it to the DLS publisher. Next Target date is : October 10.2007.
The following would be January 10.2008.
Therefore, if you have a Christmas party or Thanksgiving get-together's, please give us the place and date of the event so that everybody can be informed.

Remember that with all the sub-prime mortgage loan problems, you have a very good friend in our Lufthansa Federal Credit Union. They have a great team and ready to help.

Thank you.

July, 2007

Financial Investment

Scott Burns' Articles -- Recent and Archived

Annuity Income May Increase Portfolio Survival.It's an extension of the old joke--- too much month at the end of the money.
But in retirement, when you have too many years at the end of the money, it's not a joke. It's a serious problem.
Some new research indicates an unexpected solution. Annuities.

Yes, you read that right. Convert some of your retirement savings into alifetime income and you'll increase the odds you'll be able to pay yourphone, cable, and Visa bills forever. The new evidence is a studypublished in the December Journal of Financial Planning. A sharedproject by John Ameriks, Robert Veres, and Mark J. Warshawsky, "Making Retirement Income Last a Lifetime" extends previous work by others. Itexamines the relationship between how we invest our money, how much wewithdraw, and how long the money will last.
But this time the researchers did something different. Instead of substituting otherasset classes---such as REITs or international equity investments---that may grow or shrink in value, they examined how long portfolioswould last if 25 to 50 percent of the assets were turned into lifetimeannuity incomes.
The result? The odds of financial survivalimprove. Here's an example: A conservative portfolio that is 20 percentstocks, 50 percent bonds, and 30 percent cash, has only a 32.6 percentchance of lasting 30 years if you ask it to provide a 4.5 percentinitial withdrawal rate followed by annual adjustments for inflation.Annuitize 50 percent of the portfolio, however, and the odds ofportfolio survival jump to 81.3 percent.

Indeed, the primeingredients appear to be a combination of an aggressive portfolio(defined as 85 percent equities, 15 percent bonds, 0 percent cash) anda hefty annuitization. Annuitize 50 percent of such a portfolio andsurvival odds increase to 97.5 percent. (You can see how the odds shiftin the table below.)

Average Success Rate For Making WithdrawalsLast 30 Years

Portfolio Type                      No annuity 25% Annuity 50Annuity
Conservative (20/50/30)                32.6%   53.3%              81.3%
Balanced (40/40/20)                     76.3         85.1                94.5
Growth (60/30/10)                     87.4           92.2                96.7
Aggressive (85/15/0)                    91.6        94.6                97.5

Source: TIAA-CREF Institute Quarterly, winter 2002; portfolios are (stocks/bonds/cash)
Does this mean we should trade in a portion of our portfolios for annuities when we retire?
Maybe. Maybe not.
Whilethere is much to be said for having a variety of income flows and forincreasing our assured income in retirement, obtaining an attractiveannuity payout isn't easy. Poor execution of a sound idea could defeatthe purpose of annuitizing.
There is another reason to approach annuitizing with caution. The benefits diminish as the equity portionof the original portfolio increases. A conservative portfolio'ssurvival rate will more than double. The improvement for a 60 percentequity portfolio is much smaller--- from 87.4 percent to 96.7 percent.
Related work by retired engineer Robert Greaney* shows that substituting TIPS(Treasury Inflation Protected Securities) for conventional fixed incomesecurities works to increase portfolio survival. TIPS with a 3.4percent current coupon for instance, will give an aggressive portfolioa 96.2 percent chance of survival for 30 years. 60 percent equity, 40percent TIPS portfolio will have a 99.2 percent chance of survival.

Readers who would like to experiment with different portfolios and possible withdrawal rates have two choices. They can download Mr. Greaney's Excel spreadsheet free, or they can use an online version.
It should be noted that there are some differences in method here. Mr.Greaney uses Yale economist Robert Schiller's data in his model andtests against historical return patterns. The annuity study used MonteCarlo simulation and Ibbotson Associates data. While the results aresimilar, they are not identical.
What's the message for you and me?
Simple.More equity, not less, increases portfolio survival odds. More current income, not less, also increases portfolio survival odds. The hard partis that the two positives are mutually exclusive.

* The earlier column on Robert Greaney

09:00 - 09:30 AM
Welcome by Wolfram Knoblauch, President
Saturday Presentation of the Board, guests and past officers. Details of the meeting agenda for both days.

09:30 - 10:00 AM
Presentation by the Lufthansa Credit Union.
Speaker : Mr. Joe Herzig

10:30 - 11:00 AM Coffee Break

11:00 - 01:00 PM
Adding-up the year 2006

New regional representatives - Regional luncheons
Presentation by Regional Chapters.
Administration - Treasurer report.
FRA GeLH - Volunteers.
Sponsored mailings and supported Website.
Distribution of voting ballots - Items:
1. For President period 2007-2009
2. 2008 convention place and/or City
3. Any changes of the existing by laws ?
4. New ideas and opinions.
Question and answer period.

05:00 - 07:00 PM
Caribbean BBQ/Buffet including the performance of
the Irie-Irie Steel Band. Tropical shirts suggested.

Sunday 09:00 - 09:30 AM
Opening remarks by the President
Membership Health and Life Insurance - CIGMA -
Lufthansa Pension Plan - S.S.A,
Medicare, Voting results.
09:30 - 10:30 AM Presentation by Creative Profesional & Executive Planning Corp. Financial planning for the retired Person.
10:30 - 11:00 AM Coffee Break
11:00 - 11:45 AM Investment options for retirees Tax effects on Minimum distributions
11:45 - 12 Noon Closing summary by the president.

06:00 - 07:00 PM Cocktails
hosted by ALRONA - Music by BATIE's
07:00 - 11:00 PM Dinner - Dance.
Members invited by ALRONA
Music by DJ : Skill Entertainment Group