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News

"Brown is the new green," says local water district


Lina Broydo/Special to the Town Crier
Are downtown Los Altos flower pots getting too much water? The Santa Clara Valley Water District plans to hire “water cops” to discourage overwatering.

The Santa Clara Valley Water District is spending nearl...

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Schools

Foothill camps prepare local students for STEM careers

Foothill camps prepare local students for STEM careers


Photos Ellie Van Houtte/Town Crier
Middle school students make robotic hands using 3-D printers during a STEM Summer Camp at Foothill College.

From designing roller coasters to developing biodegradable plastics, high school students received an i...

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Community

Local entrepreneur opens home to Afghan and Rwandan women

Local entrepreneur opens home to Afghan and Rwandan women


Ellie Van Houtte/Town Crier
Businesswomen Joan Mazimhaka of Rwanda, third from left, and Fakhria Ibrahimi of Afghanistan, in orange, traveled to the U.S. with a 26-woman delegation through the Peace Through Business program.

Employees scoop ice ...

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Comment

Moving on: The Rockey Road

Just over a month ago, we decided to put our house on the market. My husband and I had been tossing around the idea of moving back to the area where we grew up, which is only approximately 40 minutes from here. Of course, Los Altos is a great place t...

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Business

Halo heads to Los Altos: Blow-dry bar founder opens new First Street location Monday

Halo heads to Los Altos: Blow-dry bar founder opens new First Street location Monday


ElLie Van Houtte/ Town Crier
Armed with blow dryers, Halo founder Rosemary Camposano, left, and store manager Nikki Thomas prepare for the blow-dry bar’s grand opening on First Street Monday.

A blow-dry bar is set to open downtown Monday, and i...

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Books

"Frozen in Time" chronicles harrowing WWII rescue attempts


Many readers can’t resist a true-life adventure story, especially those that shine a spotlight on people who exhibit supreme courage in the face of adversity and end up surviving – or not – against the odds.

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People

DR. ALFRED HUGHES

Long time Los Altos resident, Dr. Alfred Hughes, died May 1st after a long illness. Dr. Hughes was born in 1927 in Maspeth, NY. He served in the US Army from 1945-6, attended Brooklyn Polytechnic University, then graduated from Reed College in Portla...

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Travel

Travel Tidbit: Ritz-Carlton, Lake Tahoe offers spa getaway

Travel Tidbit: Ritz-Carlton, Lake Tahoe offers spa getaway


Courtesy of Ritz-Carlton
The Ritz-Carlton in Lake Tahoe offers fall getaway packages that include spa treatments and yoga classes.

Fall in North Lake Tahoe boasts crisp mornings and opportunities to spend quality time in the mountains. Specially ...

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Stepping Out

'Wizard' winds down at Bus Barn

'Wizard' winds down at Bus Barn


Town Crier file photo
Local actors rehearse a scene from “The Wizard of Oz.”

Los Altos Youth Theatre and Los Altos Stage Company’s collaborative production of “The Wizard of Oz” is slated to close Sunday at Bus Barn Theater, 97 Hillview Ave.

T...

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Spiritual Life

Stanford University appoints new dean for religious life

Stanford University appoints new dean for religious life


Shaw

Stanford University named the Very Rev. Dr. Jane Shaw, dean of Grace Cathedral in San Francisco, its new dean for religious life.

Provost John Etchemendy announced Shaw’s appointment July 21, adding that she also will join the faculty in...

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Magazine

Festival features fun for everyone

Festival features fun for everyone


TOWN CRIER FILE PHOTO
The Los Altos Arts & Wine Festival boasts more than 375 craft and arts booths.

This weekend’s 35th annual Los Altos Arts & Wine Festival promises to be jam-packed with fun activities for just about everyone. The eve...

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Congressional Budget Office paper says don’t buy annuities

A working paper recently published by Felix Reichling of the Congressional Budget Office and Kent Smetters of the University of Pennsylvania’s Wharton School concludes that most people should not buy annuities. This is a controversial finding bound to spark significant debate within the financial services community.

The annuity model is simple: You give up a portion of your savings to an insurance company in exchange for a guaranteed stream of payments for the remainder of your life. Gil Weinreich, editor-in-chief of ThinkAdvisor, an online and print publication family for financial advisers, interviewed Smetters to find out why he believes that’s not a good idea. He quoted Smetters as stating, “The average American should probably not annuitize any of their wealth.”

Smetters explained that it is in fact uninsured health-care shocks – the most common being disability while working or the need for long-term care while retired – that impact the usefulness of annuities more than anything else.

Here’s the logic: Suppose that you are retired and develop a medical condition requiring long-term care, for which you are not insured. If you had previously purchased an annuity, it would not be much help, because you now have the need for a lot more income than the annuity had been designed to produce. You could sell your annuity – there is a secondary market for this – but because of your medical condition, your expected longevity is reduced. As a result, the amount of cash you can get for the annuity will be lower, because its value is based on the expectation of its future cash flows. That’s just the opposite of what you need during such a situation.

Smetters went so far as to recommend that younger people actually “short” annuities.

“You can get a negative annuity by buying life insurance,” he said. “It is well known … that whereas an annuity pays me for living, life insurance pays me for dying. What happens when I get sick is that my life insurance increases in value. You can cash that out and get protection against uninsured expenses.”

Is there anyone who would benefit from an annuity? According to Smetters, “those who should buy annuities have already incurred health costs or are quite elderly.” Insurance companies can afford to offer such people annuities with larger monthly or yearly payments because there’s a higher likelihood they’ll die sooner.

Most advisers think of annuities as low-risk investments. But as Smetters pointed out, they are actually higher risk because they fail at exactly the times you need them the most: during health-care crises. The better alternative, he said, is long-term care insurance for older people and disability insurance for younger people.

I believe that annuities – particularly single-premium immediate annuities – can be a valuable part of a well-diversified investment portfolio. But Smetters and Reichling suggest that they should be used sparingly until you reach an age where the payments become significant.

To read the CBO working paper, visit cbo.gov/sites/default/files/cbofiles/attachments/44374_MortalityProbabilities-Reichling_2_0.pdf.

Artie Green, a Los Altos resident, is a Certified Financial Planner and professional investment adviser. For more information, call (408) 747-1222.

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