The Investment Thread (stocks, bonds, real estate, retirement, just not gold)

[Muse600]

I make smoothies with a nutribullet...investment in my health! I would be happy to supplement your juice bar w' smoothies

so any way to have a substantial passive post-tax income when we're younger aside from renting out properties that are paid off?

and yeah f the mandatory withdrawals of 401k...roth 401k is the way to go!!

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[BenJammin]

I can't help but laugh at these people who think they're going to retire at a young age and then work part time. Those days are soon to be over. Either you have a job or you don't. Either retired or working.

 

[confettiflyer]

I can't help but laugh at these people who think they're going to retire at a young age and then work part time. Those days are soon to be over. Either you have a job or you don't. Either retired or working.

We have a gigantic on-call pool full of pre-retirees and young people who just want to work 2-3 days.

It's substantially cheaper to have a bunch non-benefitted on-call/per-diem pharmacists that work sporadically vs. a benefitted FT position.

So in a world of a pharmacist oversupply, working 1-3 days/week would be the norm. Sucks if you're a new grad trying to get a full salary, great if you don't really care for one.

 

[pezdispenser]

I can't help but laugh at these people who think they're going to retire at a young age and then work part time. Those days are soon to be over. Either you have a job or you don't. Either retired or working.

Over the past few years, my workplace actually started a flex full time arrangement where you are only guaranteed a base of 30-32 hours per week, and they flex you up prn. You still get full benefits. Right now half of the RPh are on this arrangement. Granted, some of them want 40 hours, but others volunteer for the 30.

 

[WVUPharm2007]

We have a gigantic on-call pool full of pre-retirees and young people who just want to work 2-3 days.

It's substantially cheaper to have a bunch non-benefitted on-call/per-diem pharmacists that work sporadically vs. a benefitted FT position.

So in a world of a pharmacist oversupply, working 1-3 days/week would be the norm. Sucks if you're a new grad trying to get a full salary, great if you don't really care for one.

Wife works like 24-32 hours every other week...still makes like $50k. Sort of amazing.

 

[BMBiology]

You can retire early or work less if you have paid off your debt but if you are not healthy, that is not gong to happen.

 

[sakigt]

Wife works like 24-32 hours every other week...still makes like $50k. Sort of amazing.

Im scheduled for 50 hours PPD and with extra shifts I make as much as the hubbs. If I can get my loans paid off life early life is gonna be niiiiice.

 

[ranmasama]

Anybody have this problem where you contribute in 401k max and receive a compliance refund because your coworkers don't contribute?

 

[confettiflyer]

Anybody have this problem where you contribute in 401k max and receive a compliance refund because your coworkers don't contribute?

I know there's the HCE test that every 401k plan has to do annually, but I don't know anyone personally who has had a compliance refund issued.

That really sucks...not much you can do about it except withhold for taxes and try to plow it into a Roth IRA or something productive.

 

[BenJammin]

Target date retirement mutual funds: yes or no?

 

[pezdispenser]

Target date retirement mutual funds: yes or no?

If you know nothing about investing, then yes, it's probably your best option.

Otherwise, no.

- expense ratios can be a bit high. Some like the Fidelity Freedom Funds are stuffed with 25 (mostly active) funds covering everything, so you may as well just use index funds like Vanguard Target Retirement which only use 4 index funds.

- you may not like the asset allocation, e.g. bonds, gold.

- They basically invest more conservatively as you get older, but this may not match your personal risk tolerance.

 

[confettiflyer]

Target date retirement mutual funds: yes or no?

Definite no, my reasons (specifically citing the Vanguard 2050, but this applies to most of them):

1) There's no reason for a 30 year old to have 10% of their money in bonds (Vanguard 2050 is 90/10).

2) Horribly underexposed to international markets and small/mid-cap
--> Historical data x 87 years (see DFA analysis) shows that small-cap outperforms over time, so you get all this risk of having 90% stock but none of the potential upsides of holding small-caps in adequate amounts.

3) The funds usually hold other index funds, and the fees are more than if you just buy them separately. Meaning you can build your own "target retirement fund" for cheaper and just rebalance. The difference in fees looks small, but it adds up over time.

4) Even if you don't want to spend more than 10 mins a year looking at your retirement plans, you can execute a better/cheaper strategy with about 1hr worth of initial research and 10 mins/year reallocating.

If you really have zero interest/time and want to "set it and forget it" -- buy the target retirement fund and add-on the deficient sectors appropriately using specific/targeted index funds (which is really like #3 & 4 above but at least 75-80% of your portfolio rebalances itself automatically).

 

[fewaopi]

Definite no, my reasons (specifically citing the Vanguard 2050, but this applies to most of them):

1) There's no reason for a 30 year old to have 10% of their money in bonds (Vanguard 2050 is 90/10).

2) Horribly underexposed to international markets and small/mid-cap
--> Historical data x 87 years (see DFA analysis) shows that small-cap outperforms over time, so you get all this risk of having 90% stock but none of the potential upsides of holding small-caps in adequate amounts.

3) The funds usually hold other index funds, and the fees are more than if you just buy them separately. Meaning you can build your own "target retirement fund" for cheaper and just rebalance. The difference in fees looks small, but it adds up over time.

4) Even if you don't want to spend more than 10 mins a year looking at your retirement plans, you can execute a better/cheaper strategy with about 1hr worth of initial research and 10 mins/year reallocating.

If you really have zero interest/time and want to "set it and forget it" -- buy the target retirement fund and add-on the deficient sectors appropriately using specific/targeted index funds (which is really like #3 & 4 above but at least 75-80% of your portfolio rebalances itself automatically).

1) You mean a 30 year old should have their age in bonds? Or no bonds at all? I've heard the debate about technically we should all be stocks and bonds are there check human psychology. I've heard Vanguard Retirement Funds became pretty aggressive recently.

2) DFA...you mean Dimensional Fund Advisors? Would you recommend them over Vanguard index funds? Cause I'm a bit confused as to what DFA does exactly that's different than Vanguard and their performance. It's a lot easier to understand what Vanguard's philosophy is compared to DFA.

 

[confettiflyer]

I'm paraphrasing pieces of Warren Buffet, Paul Merriman, and whitecoatinvestor.com in this reply, in case it sounds familiar:

1) You mean a 30 year old should have their age in bonds? Or no bonds at all? I've heard the debate about technically we should all be stocks and bonds are there check human psychology. I've heard Vanguard Retirement Funds became pretty aggressive recently.

Haven't heard about Vanguard and being aggressive, but I think someone who has a timeline > 20-25 years should be 100% stocks and 0% bonds. It's fine having the opinion that someone should be at least 10% bonds or more, but at least you're having the discussion and the investor has that assumption of risk.

The problem with target date funds is that the decision is made for you*, even though an investor may have a larger appetite and expectation for risk than is given. Of course, that person should then branch out and invest themselves, but there's a false sense of risk/expected return conveyed in a paternalistic manner with these funds. My feeling is, if I see "2050" on a fund, I would expect the most aggressive style of investing, but that's not always the case. Even iShares' "aggressive" core holding (AOA) is upwards of 20% bonds.**

Buffet's recent letter reminded shareholders that volatility is a false surrogate marker for risk, risk is the permanent loss of capital, and failure to overcome inflation is the true risk. Being too conservative is thus the greater risk and therefore why I think these target date funds unduly expose novice investors to risk.

*yes I get that's the point of a target date fund
**yes it's right there in the prospectus... yes people should read those

2) DFA...you mean Dimensional Fund Advisors? Would you recommend them over Vanguard index funds? Cause I'm a bit confused as to what DFA does exactly that's different than Vanguard and their performance. It's a lot easier to understand what Vanguard's philosophy is compared to DFA.

DFA...whitecoatinvestor has a page devoted to this, I have to agree with them that hiring an advisor for the sole purpose of accessing DFA funds (remember, you can't buy DFA funds as a retail investor directly) is probably not worth it.

I personally like DFA funds for their value tilt, and use them when available depending on which friends/family members' money I'm managing. Their small-cap value fund goes MUCH deeper into value than Vanguard's...but factor in advisory fees, higher ER, etc... it will likely end up being a wash in the end (but who knows). Paul Merriman has a few good podcasts and articles devoted to small-value/small-cap tilting and cites the DFA study I talked about earlier.

If you really want DFA funds without an advisor, Utah's 529 plan (UESP) has them available for use in that vehicle.

 

[Ackj]

Haven't heard about Vanguard and being aggressive, but I think someone who has a timeline > 20-25 years should be 100% stocks and 0% bonds. It's fine having the opinion that someone should be at least 10% bonds or more, but at least you're having the discussion and the investor has that assumption of risk.

I was under the assumption that you had to have at least something in bonds, so that you would have funds available to rebalance in the event that stocks should crash. If 100% of your portfolio is down, you don't have the funds to shift and buy shares at the lower prices. Yes, over the 25 years, it will all rebound anyway, but I believe the ability to rebalance should increase overall performance. Similarly, when stocks are outperforming, rebalancing the excess back into bonds will "lock in" the gains and protect them from the net wave of volatility.

 

[confettiflyer]

I was under the assumption that you had to have at least something in bonds, so that you would have funds available to rebalance in the event that stocks should crash. If 100% of your portfolio is down, you don't have the funds to shift and buy shares at the lower prices. Yes, over the 25 years, it will all rebound anyway, but I believe the ability to rebalance should increase overall performance. Similarly, when stocks are outperforming, rebalancing the excess back into bonds will "lock in" the gains and protect them from the net wave of volatility.

Technically you're right, as equities' values swell, the target fund has to sell excess and buy bonds to return to its preset allocation. So in a way it does "bank" the returns...but again, with a time horizon that long, you're "banking" relatively short term returns and relegating them to lower yields over time. That would be appropriate for someone who is 50, not 30, though (in my opinion).

You're protecting your portfolio from volatility, but volatility is not risk, as Buffet argues. It's a trap everyone falls into.

 

[pezdispenser]

so any way to have a substantial passive post-tax income when we're younger aside from renting out properties that are paid off?

By post-tax income, do you mean investing outside of retirement accounts? For that, I have been doing $22k/yr in ESPP. Has been great for the past several years making $10k-20k/yr in profits, and the profits beyond the discount can get taxed at long-term capital gains tax rates of 15% if you hold more than 1 year.

I would only do this after paying off student loans and building up substantial retirement savings though, because it is very risky to be investing in a single stock. There have been many moments where mine dropped 20%, but luckily I had more cash on hand to use that as a buying opportunity.

I'm not that keen on buying rental properties. Particularly if you need to use a mortgage, I feel like after you pay all the interest, taxes, HOA, maintenance, etc, and say you have a few hundred bucks leftover each month, that's hardly worth it for the time and risk you put in.

 

[BMBiology]

^ good point about risk. When the economy goes south (and it will), the value of your asset is going to drop like a rock. You may loss your job and therefore your employer sponsored health benefits. Your investment may drop from 50 k to 35 k. Your health may deteriorate from the stress.

People who have been saving are going to do just fine...perhaps even benefit from a bad economy. People who are in debt and people who took on too much risk may loss everything they have worked hard for. The effect may even be lasting as your credit dries up, your debt continues to build up and your credit score is ruined.

OK, that is enough optimism for a nice Sunday.

 

[BMBiology]

My plan to retire at 55 years old:

I need to have the mortgage paid off by then and I need to be in good health. I also need to have some kind of passive income like rental properties.

- 55-59.5 years old: I need to save enough money for at least 5 years. I will start to cash out my taxable investment. I will also need to have a lot of cash on hand for the unexpected.

59.5-64 years old: I will start to cash out my ROTH IRA and 401 k (eligible to cash out at age 59.5)

> 64 years old: I will start to collect my Social Security and I will qualify for Medicare. I will continue to collect from my 401 k.

Worst case scenario: the economy goes into a recession like 2008 when I hit 55. My health deteriorates. My investment collapses. In a desperate attempt to survive, I gambled away the rest of money at the blackjack table in Vegas.

What do you think of my plan?

 

[pezdispenser]

^ I think you'll be fine. Even just based on the fact that you have a plan at all, and that you know you need to save for the future probably puts you ahead of 80% of Americans already lol. But anyway, I do strongly believe that having a paid off house is the major game changer and the tipping point on the way to building wealth.

 

[Momus]

^ I think you'll be fine. Even just based on the fact that you have a plan at all, and that you know you need to save for the future probably puts you ahead of 80% of Americans already lol. But anyway, I do strongly believe that having a paid off house is the major game changer and the tipping point on the way to building wealth.

7% Stock returns > 3.5% guarantee mortgage saving. Nuff said. I can pay off my house right now cash but I will never do that. Debt is not the enemy.

 

[pezdispenser]

7% Stock returns > 3.5% guarantee mortgage saving. Nuff said. I can pay off my house right now cash but I will never do that. Debt is not the enemy.

Heh, I knew you would say that. I'll admit it is true that you are better off investing instead of paying off a mortgage, but that strategy relies on you actually investing the money, and not spending it on something else instead. Kudos to you for doing that, but most people (including me!) are not totally disciplined with their investing and spending habits. Spending more than you earn is the real enemy, and debt plays a big role in enabling that.

 

[Muse600]

so f paying off a property to collect rent; just invest everything in stocks?!?

why even buy a property at all? if I split a 2br room in long beach, it's ~$675/month (maybe less if I can find a cheaper apt once all the college kids move out)...then I don't have to shell out for a down payment/insurance/repairs/closing costs/etc and can just keep maxing out the roth 401k, roth IRA, and my lazy man's 3-fund portfolio through Vanguard.

Edit - might not even be worth it! $627,000 single family in college park = ~$678/month for property taxes + insurance...throw in any PMI and maintenance and it blows away a $675/month rent cost. Then in that situation the only benefit of owning is the appreciation on the value of the property; which has to exceed what I could earn in a lazy man's portfolio...but on the other hand, if I am renting out rooms to offset the cost of the mortgage, and I now get a tax write-off on interest, and splitting utilities; it might be worth it.

then once I get to momus status I can just cash out some long term investments so I can support myself to ride dirt bikes 2-3 times/week?

also @ confetti - 100% stocks sounds about right - I have roughly 28% in bonds w' the 3 fund lazy portfolio I setup last week w' Vanguard...I was going to contribute to all 3 funds every paycheck going forward, but I might just contribute to the stocks and leave what's left of the bonds to ^ that stock percentage

 

[BMBiology]

What is your 2014 federal and state effective tax rate?

 

[pezdispenser]

What is your 2014 federal and state effective tax rate?

Federal 17.7% of AGI. (AGI does not include 401k or health insurance)
No state income tax.

 

[BenJammin]

16.8%. No state income tax.

 

[MatCauthon]

Anybody more aggressive with their retirement funds than the basic market index funds? What are your strategies?

I've been researching sector investing. I've subscribed to sector newsletter that was reviewed by the Hubert Financial report and has consistently beaten the market for the past 20 years by a couple percentage points. One other website I've been researching is the Sector Surfer, www.sumgrowth.com. I am still only experimenting with the website, but I like the methodology of switching sectors.
I've definitely made quite a bit with healthcare and biotech over the past couple years.

 

[ranmasama]

Anybody invest in individual biotech stocks? I'm currently heavy in INO and used to be ONCS and ZGNX. ADXS ran up over 700% in 6 months. Missed that completely of course. ATHX data out on sunday if anyone want to gamble on roulette table of biotech

 

[BenJammin]

How many of you actually max out your 401k?

 

[BMBiology]

How many of you actually max out your 401k?

I do and I also max out my ROTH IRA (via backdoor).

 

[MatCauthon]

I do and I also max out my ROTH IRA (via backdoor).

How much does your employer contribute to your 401k? I am slowly increasing my contributions but it is hard to max out a 401k and the $6500 for a ROTH IRA, even on my salary.

 

[BMBiology]

How much does your employer contribute to your 401k? I am slowly increasing my contributions but it is hard to max out a 401k and the $6500 for a ROTH IRA, even on my salary.

In the pharmacy world, 4-5% match is typical. I usually try to put in as much as possible at the beginning of the year so I get to delay paying my taxes. Check with your company's policy. Your matches may also be delayed if you don't consistently put a certain % every paycheck.

 

[MatCauthon]

In the pharmacy world, 4-5% match is typical. I usually try to put in as much as possible at the beginning of the year so I get to delay paying my taxes. Check with your company's policy. Your matches may also be delayed if you don't consistently put a certain % every paycheck.

I fund my personal 403b account with an additional 13% of my own money. My employer also gives out a generous portion to 403b pension account. But it is definitely hard to max out the whole 18k without a match. But at least I've got about 25% of my income (counting pension) going to retirement savings right now. I eventually want to up to 30-33%, but it may take a few more raises before I can do that.

Just to do the 12% eats up about $350 after-tax money out of every biweekly paycheck. I would love to save more, but it is hard to do more than that right now.

Do you adhere to the Boglehead method of investing, or do you branch out a little bit more?

 

[BenJammin]

How much does your employer contribute to your 401k? I am slowly increasing my contributions but it is hard to max out a 401k and the $6500 for a ROTH IRA, even on my salary.

What's your salary? I have no problem maxing out a roth and 401k. I max out the roth first of the year though.

 

[Momus]

I fund my personal 403b account with an additional 13% of my own money. My employer also gives out a generous portion to 403b pension account. But it is definitely hard to max out the whole 18k without a match. But at least I've got about 25% of my income (counting pension) going to retirement savings right now. I eventually want to up to 30-33%, but it may take a few more raises before I can do that.

Just to do the 12% eats up about $350 after-tax money out of every biweekly paycheck. I would love to save more, but it is hard to do more than that right now.

Do you adhere to the Boglehead method of investing, or do you branch out a little bit more?

If you can't max out 401k with 120k salary (like $5.5k/mo to spent after maxing 401k), you are living large... Try to cut some expenses more.

 

[MatCauthon]

If you can't max out 401k with 120k salary (like $5.5k/mo to spent after maxing 401k), you are living large... Try to cut some expenses more.

My yearly pay is around 120k in my primary job. Unfortunately, I only take home about 67k of that. My biweekly paychecks come to about $2600 after paying out 13% for retirement, paying my benefits, disability insurance, taxes, and union dues. One thing that hits me hard is the 10% state income tax. If I didn't have that, it would be much easier to increase up the retirement .

 

[BMBiology]

How much is disability insurance? Is it long or short term? Does your company cover short term disability?

How much is union fee per paycheck?

 

[BMBiology]

I fund my personal 403b account with an additional 13% of my own money. My employer also gives out a generous portion to 403b pension account. But it is definitely hard to max out the whole 18k without a match. But at least I've got about 25% of my income (counting pension) going to retirement savings right now. I eventually want to up to 30-33%, but it may take a few more raises before I can do that.

Just to do the 12% eats up about $350 after-tax money out of every biweekly paycheck. I would love to save more, but it is hard to do more than that right now.

Do you adhere to the Boglehead method of investing, or do you branch out a little bit more?

I think the boglehead method is the way to go if you are a passive investor and you don't have much room for risk. The majority of my money is in index funds but I also have a low 6 figures in individual stocks. I have been buying strong companies that are going thru a hard time. For example, I purchased Walgreens stocks late last year when it dropped like a rock.

It is really about your risk tolerance and your ability to hang in there thru the rough times. The last 6 years has been relatively easy because of fed's low interest rate and because everything has been going up. If you had money in the stock market during that period, I am sure you made money.

It comes back to your risk tolerance. I have been buying emerging market index and putting it in my Roth IRA. I just bought energy index which is also considered as high risk. I am planning to hold on these indexes for a while so it doesn't bother me if they go up and down.

I also made some right calls. Dumping bonds, buying healthcare stocks and recently, trading my large caps for mid caps stocks.

Yes, a lot of it is luck and timing but your ability to hang in there makes a big difference.

 

[confettiflyer]

also @ confetti - 100% stocks sounds about right - I have roughly 28% in bonds w' the 3 fund lazy portfolio I setup last week w' Vanguard...I was going to contribute to all 3 funds every paycheck going forward, but I might just contribute to the stocks and leave what's left of the bonds to ^ that stock percentage

That's a lot of bonds....that would maybe be appropriate in your 40's or so (which you might be, or you're retiring very early, I don't know).

What is your 2014 federal and state effective tax rate?

14.99% federal, 4.85% California.

(for reference, Calif. taxable income is less than federal AGI, total taxes paid to both divided by total federal AGI = 19.76%, over total income = 19.12%)

Anybody more aggressive with their retirement funds than the basic market index funds? What are your strategies?

I bent into the healthcare ~2 years ago and recently cashed out; I also increased my European allocation at the end of last year (holding long); I picked up an energy fund and an oil company specific ETF in ~January this year (hold plan minimum 5 years).

I tilt maybe 10-15% of my overall portfolio into individual sectors and overload a particular "area" (ex-US, europe developed, pacific, etc...) bouncing that around as market conditions change, the rest are broad indexes (Boglehead method) -- Maybe < 5% of my overall portfolio is designated Mad Money.

How many of you actually max out your 401k?

::raises hand::

I fund my personal 403b account with an additional 13% of my own money. My employer also gives out a generous portion to 403b pension account. But it is definitely hard to max out the whole 18k without a match. But at least I've got about 25% of my income (counting pension) going to retirement savings right now. I eventually want to up to 30-33%, but it may take a few more raises before I can do that.

The employer match does not count against the $18k limit. Your contributions are limited to $18k, the employer can match for a grand total of something like $52k or so (I'm basing this off the SEP-IRA limit or solo 401(k) limit which functions the same as your employer 403(b) limit wise, sort of).

If you can't max out 401k with 120k salary (like $5.5k/mo to spent after maxing 401k), you are living large... Try to cut some expenses more.

How much is disability insurance? Is it long or short term? Does your company cover short term disability?

How much is union fee per paycheck?

I have been buying strong companies that are going thru a hard time. For example, I purchased Walgreens stocks late last year when it dropped like a rock.

Did you look into airline stocks at all in the past month? Just curious.

 

[BMBiology]

14.99% federal, 4.85% California.

How did you get such a low rate?

Did you look into airline stocks at all in the past month? Just curious.

No, not airline stocks. I looked at UPS. It took a hit and it has been hovering at $96. I can't get excited about this stock tho. I would rather buy FedEx. It seems to be a stronger company. It seems like there are not too many bargains anymore. I am waiting for the fed to increase interest rate and planning to go from there.

 

[confettiflyer]

How did you get such a low rate?

I dunno...I do family taxes, one set grossed > $200k and their CA effective rate is like 5.1%.

 

[MatCauthon]

How much is disability insurance? Is it long or short term? Does your company cover short term disability?

How much is union fee per paycheck?

Here is a breakdown per biweekly paycheck:


1. Benefits: $42
2. Short-term disability: $13 (
3. Long-term disability: $16
4. Union dues: $35
5. State income tax: $350

 

[pezdispenser]

How many of you actually max out your 401k?

Yes, and Roth IRA, and ESPP. Not much left to live on, but that's fine by me because it keeps my spending in check.

 

[pezdispenser]

5. State income tax: $350

Wow! What state is this?

 

[WVUPharm2007]

I have no idea. My wife is Jewish. She does the taxes.

 

[BMBiology]

Here is a breakdown per biweekly paycheck:


1. Benefits: $42
2. Short-term disability: $13 (
3. Long-term disability: $16
4. Union dues: $35
5. State income tax: $350

Do you really need disability insurance? Doesn't your state already have disability benefits?

That is $29 every 2 weeks you could be saving and putting it in your 401 k.

 

[BMBiology]

Christie proposed changes to social security. Just to show you the government has no problem with changing the rules in the middle of the game.

http://abcnews.go.com/Politics/wire...ng-overhaul-social-security-benefits-30303865

"In a speech in New Hampshire, site of the first 2016 presidential primary, the New Jersey governor also proposed reducing Social Security benefits in the future for retirees earning more than $80,000 a year and eliminating them for those with annual incomes of $200,000 or more. He said seniors who work after age 62 should be exempt from the payroll tax."

"Christie proposed increasing the retirement age for Social Security to 69, beginning with gradual increases in 2022, as well as raising the early retirement age to 64 from 62, and changing the way cost-of-living increases are calculated for Social Security and other benefit programs, an adjustment that would mean smaller increases in the future.

He'd also increase the Medicare eligibility age gradually to 67 by 2040 — and turn Medicaid into a block grant program to the states, which Republicans have long proposed and critics say could mean reduced benefits over time."

 

[MatCauthon]

Do you really need disability insurance? Doesn't your state already have disability benefits?

That is $29 every 2 weeks you could be saving and putting it in your 401 k.

I've asked myself the same question. The real answer: I don't know. Every financial guru seems to tell me I need them.
It seems like I would need both of them though, just in case, because the short term activates at 30 days and the long term at 6 months.

How many of you guys have disability insurance? Has anyone opted out?

 

[owlegrad]

How many of you guys have disability insurance? Has anyone opted out?

I don't have it.

 

[BMBiology]

I've asked myself the same question. The real answer: I don't know. Every financial guru seems to tell me I need them.
It seems like I would need both of them though, just in case, because the short term activates at 30 days and the long term at 6 months.

How many of you guys have disability insurance? Has anyone opted out?

I guess it depends on your health and how much money you would need if you become disabled.