September 18, 2014

Refinance Student Loans with

If you have student loans then its likely you're paying 6.8% or more in many cases.

Social Finance or is one option to refinance your student loans.

They advertise variable rates starting at 2.66% and fixed rates starting at 3.625%.    That will beat a lot of peoples current student loan rates.   However the rates are based on your credit and  profile so it could be higher.   They cite maximum rates of 5.285% variable or 7.740% fixed which are still better than a lot of private loans.

But it won't work for everyone.   They only loan to students from certain schools and you do have to have decent credit.   You also must be employed or have a current job offer.   And you must currently reside in one of the eligible states.   Their list is most states but its NOT available in Alabama, Delaware, Idaho, Mississippi, Montana, Nevada, North Dakota.   I have not been able to find specifics of the criteria like credit score or a list of schools on the Sofi website itself. 

Sofi says you must be a graduate of "a selection of Title IV accredited universities or graduate programs".  Thats not specific at all.   I found one reference to them lending to grads of about 100 schools but that was about a year ago and they may have expanded the number.   I found a list of eligible schools at a 3rd party site, but I don't know if its current or accurate.  The list of schools looks legit though but again it may be out of date.   Since Sofi's model has been to deal with schools that have low default rates so you could generalize that only the better schools are likely to be covered    (sorry University of Phoenix grads).   You can look up default rates by school at this site and if your school is very higher then they may not be covered or you may be offered a higher interest loan.

Note I don't have any specific information on how Sofi decides to approve loans or determine rates. 
I'm inferring some from descriptions of their business model mostly.  

The downside to doing a refinance is that you lose access to programs like the government IBR and loan forgiveness.  So thats something to consider.     You might not get great terms from Sofi either.  I've read reports of people with credit scores in the high 700's and good paying jobs getting offers of 6% loans, which isn't all that great.

But if you do have high interest student loans then looking into might be worth your while.


September 16, 2014

Hardly Anyone Moves Out of State After They Retire

If I was to take a guess I'd assume probably something like 5-20% of people move to another state after they retire.  I mean doesn't half the state of New York move to Florida on their 65th birthday?    Well no.

As it turns out only about 2% of retirees even move out of state.

At least thats what I found in this article : Retirees move, but not very far

They say :

"In 2010, just 1.6 percent of retirees between age 55 and 65 moved across state lines, according to an analysis of U.S. Census Bureau data by Richard Johnson, director of retirement policy research at The Urban Institute."

If I think about all the people I know who have retired, I can only think of one couple that moved across state lines.   Everyone else I know has stayed put.

My family all lives in the state I grew up in and I'd consider moving.  However if I end up living in my current state for very long I will probably have developed enough roots here that I'd probably stay put.


September 14, 2014

Immediate Annuity Rates September 2014

I actually hesitate to post this since I'm in doubt about the accuracy of the numbers.    I got the figures below from the Annuity QuickQuote website.   I'm suspicious of the accuracy since some of the numbers aren't linear.  e.g. there is no reason I can think of that the annuity rate of a 54 year old would be marginally better than a 55 year old.  Unless its just different quotes from different insurers but I don't know why insurers wouldn't quote all ages.

So anyway, big fat disclaimer, that I"m not sure all these figures are really accurate.   It doesn' matter anyway, you'd have to get a real quote from a real insurer so the numbers here are just meant for reference.

Here are the rates for a married couple with 100% survivor benefits.  Male age is on the rows and female is in the column. :

50 55 60 65 70
50 3.60% 3.63% 3.85% 3.93% 4.10%
55 4.59% 4.75% 4.90% 5.31% 5.36%
60 5.14% 5.28% 4.53% 5.55% 5.65%
65 4.22% 4.30% 4.58% 4.72% 4.84%
70 3.59% 3.70% 3.74% 4.82% 5.15%

So if for example you've got a 65 year old man and a 60 year old wife then they can get 4.58% payment rate.

Note that I"m not sure why the payout rates aren't always linear in that table.  For example why is the payout rate for a 60 year old man and 50 year old wife better than a 70 year old man and 50 year old wife?  I'd assume the 70 year old man and 50 year old wife would have lower payout.  I'm not sure if the numbers are inaccurate or if theres something going on with the mortality rates or how insurance companies quote the figures that I'm not aware of.  

Single life annuity rates are :

           50 4.45% 4.55%
           51 4.55% 4.57%
           52 4.60% 4.59%
           53 4.65% 4.62%
           54 4.75% 4.65%
           55 4.70% 4.76%
           56 4.98% 4.82%
           57 5.11% 4.85%
           58 5.20% 4.89%
           59 5.28% 4.95%
           60 5.25% 5.08%
           61 5.32% 5.15%
           62 5.10% 5.20%
           63 5.34% 5.23%
           64 5.70% 5.25%
           65 5.73% 5.29%
           70 6.60% 6.25%
           75 7.85% 7.30%

Again I'm not sure why the numbers aren't always linear.  I'm sure its not mortality tables doing that since.   I suspect there may be something wrong in the database.

These annuities would not have any kind of cost of living adjustment so keep that in mind.
It may be worth it to get an annuity with 10 or 15 year certain return.  Sometimes the 10 year certain return annuities are the same payout and the 15 year can be marginally lower.   Its kind of like an insurance policy for your heirs if you want just to feel confident that the money won't be wasted in the worst case that both spouses pass prematurely.


September 12, 2014

Best of Blogs for Week of September 12th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

DoughRoller covers  The 5-Year Roth IRA Rule for Contributions (breaking the rule is costly)

MyMoneyBlog points out that College Tuition Hasn’t Risen As Much As You Think
(and he even linked to one of my posts in that one which makes me like the article even that much more )


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