[CoachKandSportsguy]

I just built a financial model for retirement decision making, ie: When to take SS, take out IRA/ keep working, for a cash flow analysis, including federal taxes, std deduction changes, expenses, pensions, IRA balances and bond payoff along with auto replacement, insurances, roof replacements, etc. .

for the next 20 years for anyone to use. . testing it out tonight with a neighbor who just lost his job here in TV, and is 62, so needs some help making a decision. .

What i found in reproducing the Bond payoff amount by year, is that the numbers published on the district web site are pretty funky. . . doesn't fit the typical amortization schedule as presented. . its weird as the District interest and principal total is $1,790 versus the $1,824 as calculated by the excel formula, and tested out and its correct. .

Below is the comparison between excel amortization calculated schedule for the first 4 years, against the district schedule. . . I can't figure out what they are doing, and i suspect there are some cell adjustments which is why the schedule is a pdf, and the interest and principal totals are different. .

Here is the snapshot, any financial types help me out here?

Here is the link to the original schedule
https://www.districtgov.org/departme...Unit%2020V.pdf

[Bill14564]

Just a quick guess: A two-year, interest free deferral would lead to a 28 year payoff and a payment of $1,889.36 which is pretty close to the schedule they show. EDIT: Not so close (off by $100, bad math in my head).

Also, the interest rate they are using changes from year to year. 4.13% for 2021 interest, 4.15% for 2022, and up to 4.17% for 2024. Then at the end of the schedule the interest is 3.68% for 2048 and 3.31% for 2049. Haven't figured how that makes sense yet.

[Bogie Shooter]

Seems to me it would make more sense to call these folks rather than ask for opinions on social media.

Finance Department
984 Old Mill Run
The Villages, FL 32162

4856 South Morse Boulevard
The Villages, FL 32163

Phone: 352-753-0421

[CoachKandSportsguy]

Originally Posted by Bill14564

Just a quick guess: A two-year, interest free deferral would lead to a 28 year payoff and a payment of $1,889.36 which is pretty close to the schedule they show. EDIT: Not so close (off by $100, bad math in my head).

Also, the interest rate they are using changes from year to year. 4.13% for 2021 interest, 4.15% for 2022, and up to 4.17% for 2024. Then at the end of the schedule the interest is 3.68% for 2048 and 3.31% for 2049. Haven't figured how that makes sense yet.

not sure how two years interest free plays into it, as the payoff periods are still 30, count them, and there is no interest accrual on the schedule, which would be misleading.

The question would be when did they float the actual bond, and what is the schedule for interest payments to the bond holders. . . i guess that would play into this somehow. . .

things that make one go hmmmm, but not keep one up at night.

[CoachKandSportsguy]

Originally Posted by Bogie Shooter

Seems to me it would make more sense to call these folks rather than ask for opinions on social media.

Finance Department
984 Old Mill Run
The Villages, FL 32162

4856 South Morse Boulevard
The Villages, FL 32163

Phone: 352-753-0421

Thanks, but this question is not a question that I need to waste the finance departments time on, as they don't need an amateur auditor questioning their tried and true practices, and then disagreeing with them and turning it into a spreadsheet ****ing contest. I am assuming i will get the same answer as the water bill spike. . .

[GoRedSox!]

It could be as simple as a misprint in the interest rate.....it could be 4.13% instead of 4.33%.

If it isn't that, I don't have another guess.

[elevatorman]

Did you subtract the administrative fees from the payment?

[Caymus]

Originally Posted by CoachKandSportsguy

I just built a financial model for retirement decision making, ie: When to take SS, take out IRA/ keep working, for a cash flow analysis, including federal taxes, std deduction changes, expenses, pensions, IRA balances and bond payoff along with auto replacement, insurances, roof replacements, etc. .

Does your model include anticipated life expectancy? 😊That seems to be the big issue when deciding when to take SS.

[Carla B]

Originally Posted by elevatorman

Did you subtract the administrative fees from the payment?

Bingo, that's what I thought it was, when we paid our bond off in 2011.

[bhferri85]

Change 30 to 28 and see how that works out.

[CoachKandSportsguy]

Originally Posted by Caymus

Does your model include anticipated life expectancy? 😊That seems to be the big issue when deciding when to take SS.

The model doesn't tell you when to do anything, The future is always uncertain, sometimes more uncertain than others. if you want to put a constraint on an input, then you run an optimization routine against the constraint for the best outcome of a strategy listed below.

The model tells you what happens when you plug in any date for taking social security at your current cost of lifestyle, or how much to take out of your IRA and taxable investment accounts without taking SS, or any combination of the three depending upon the size of each of the three piles:

Income from SS
Income from IRA
Cover expenses from taxable investments which doesn't drive the same tax expense impact.

There are several ways to optimize the model, which requires keeping a certain lifestyle, and then optimizing on one or more of the several dimensions over time:

Maximum asset value (minimizing asset withdrawals)
Minimizing your tax expense (doesn't care about amount of assets)
Minimizing the tax effect post your death on your beneficiaries (doesn't care about your assets nor your taxes)

Keep in mind that your lifestyle and the wrong strategy given the size of each pile can bankrupt you before your dirt nap.

but still doesn't answer the impact of the admin fee. . adding or subtracting, but that doesn't answer the question of why the principal repayment values are different than the standard loan amortization schedule, but still totals the loan total. ie, their schedule they publish as gospel manipulates the numbers slightly to pay for their staff to manage the money stream and accounting / auditing requirements.

[smcmahon2002]

There's an annual management fee. If I recall correctly (not a safe assumption) it's $149/yr.

[BobGraves]

Does the admin fee get deducted from the principle?

[nancymiller217@yahoo.com]

Originally Posted by CoachKandSportsguy

I just built a financial model for retirement decision making, ie: When to take SS, take out IRA/ keep working, for a cash flow analysis, including federal taxes, std deduction changes, expenses, pensions, IRA balances and bond payoff along with auto replacement, insurances, roof replacements, etc. .

for the next 20 years for anyone to use. . testing it out tonight with a neighbor who just lost his job here in TV, and is 62, so needs some help making a decision. .

What i found in reproducing the Bond payoff amount by year, is that the numbers published on the district web site are pretty funky. . . doesn't fit the typical amortization schedule as presented. . its weird as the District interest and principal total is $1,790 versus the $1,824 as calculated by the excel formula, and tested out and its correct. .

Below is the comparison between excel amortization calculated schedule for the first 4 years, against the district schedule. . . I can't figure out what they are doing, and i suspect there are some cell adjustments which is why the schedule is a pdf, and the interest and principal totals are different. .

Here is the snapshot, any financial types help me out here?

Here is the link to the original schedule
https://www.districtgov.org/departme...Unit%2020V.pdf

Former accountant here-

I believe the interest rate given is the APR, which would have included the amortization of fees. On the original bond.

If you back into the rate by dividing the interest vs. the balance you get something closer to 4.1308, which is much closer.

[Maker]

One year of interest percentage = interest / principal (x100)
Looking at the next few years' numbers shows nonsense. Interest percentage value is changing yearly.
Oddly, the admin fee changes slightly every year. So does the total payment amount. This must be some sort of new math.

1252.40 / 30318.37 = 4.13083%
1234.64/29780.71 = 4.14577%
1216.28/29225.45 = 4.16172%
1195.63/28650.99 = 4.17308%

and in 2031... 1010.5 / 23968.9 = 4.2158%
and in 2049... 113.34 / 3429.17 3.30517%