Security, Ponzi Schemes, and Realistic ExpectationsRecent political debates have brought up comparisons between Social Security and Ponzi schemes. (Have you read the book about the real Ponzi?) Even though seemingly every single economist on Earth has weighed in, this discussion has been around for so long that the Social Security website already has an entire page dedicated to addressing it. To summarize, yes Social Security shares some traits with Ponzi schemes in that money from new participants goes to earlier participants. However, it relies on a rather straightforward transfer and does not depend on an exponential growth of new participants to be sustainable. It is, however, sensitive to demographics.
Social Security is a pay-as-you-go system. What I pay into Social Security today goes straight to a current retiree’s Social Security check. When I retire, my paycheck will be supported by a younger worker’s taxes. It is not an investment. It is not a savings account. The problem is, that the ratio of workers to retirees is getting rather low. In 1950, there were 7.3 working-age people for each person over 65; now, the ratio is 4.7 to 1, and it is scheduled to drop to 2.7 to 1 by 2035. [Source]
Since people are living longer as well, the reality is that for a 30-something like me, the math works out that there is little chance that we will get the same level of relative benefits that current retirees get. However, there will be no sudden Ponzi-like implosion. Now, the government could smooth this transition out even more if they do the hard thing and do some combination of higher taxes, extending retirement ages with higher life expectancy, or lowering benefits. But politicians are usually reactive as opposed to proactive, so don’t count on it. That’s too bad, because people are more dependent on Social Security than ever.70% of all eligible folks can’t even wait until 65 to start taking benefits, many as early as 62, even though that means lower payments and likely a lower total benefit. This is why in general financial experts say you should wait as late as possible to get a higher payment for the rest of your life.
Of course, Medicare is even worse. Take this analysis via this WaPo article:
Consider an average-wage two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services – including prescriptions and hospital care – worth $355,000, or about three times what they put in. [...] The same hypothetical couple retiring in 2011 will have paid $614,000 in Social Security taxes, and can expect to collect $555,000 in benefits.
Cash Reserves & Emergency Fund Update: Q2 2011Like many of you, I am a big fan of having a sizable cash reserves. Having at least six months of expenses provides financial stability, helps you avoid debt with high interest payments, and lowers stress levels. In addition, cash is an asset class where you can increase your return without having to take on additional risk (stay FDIC-insured or equivalent). Even though interest rates are low, consistently earning 1% more over time can be significant. I last shared my emergency fund breakdown in January, so here is a 2nd quarter update. The size of the circles are proportional to the balance I hold in each account.
Rewards Checking AccountsUsually through smaller credit unions with limited membership areas, these checking accounts pay a higher interest rate if you jump through some hoops each month. However, if you make a mistake you’ll forfeit virtually all your interest for that month, so it can be tricky.
Many now seem to be struggling and lowering rates, but one nationally-open example is the Free Rewards Checking at DanversBank, which amazingly is still paying 3.01% APY on balances up to $25,000, provided you satisfy the following each month.
* perform at least 12 debit card transactions (excluding ATMs);
* receive their monthly statement electronically and log into Online Banking
* sign up for direct deposit or receive a recurring ACH transfer
Find a local rewards checking account by using the filters at the Deposit Accounts database. I recently moved my money out of my local account, as they dropped their interest rate to 1%.
Long-Term CDs – Ally BankIf you have a large cushion, it’s quite likely to just sit there for years or more. Therefore, I think it’s okay to put some of it in longer-term investments. With the Ally Bank certificates of deposit, you can still access your money as long as you pay a early withdrawal penalty of 60 days interest. That’s significantly less than at other banks. I have 5-year CDs paying 3% APY, but the current rate for new deposits is 1.79%APY for a 5-year CD. I’ll show you below why this is both a competitive and flexible rate.
Let’s analyze a CD paying 2.40% APY with an early withdrawal penalty of the last 60 days of interest. (2.40% APY ~= 2.37% rate compounded daily.) Here’s how your actual annualized interest rate would fluctuate given your holding period.
After just 6 months, you’ll already be earning 1.59% even after the penalty. If you hold it a year and withdraw, you are already at 2% APY. Try to find any similar term CD that beats those rates. Basically after just 6 months I have nothing to lose and a lot to gain, so I keep a sizable chunk here.
U.S. Savings BondsFor inflation-linked Series I Savings Bonds, the total rate earned consists of a fixed rate and a variable rate that adjusts with inflation every 6 months. The new inflation rate officially announced in May is 4.60%. If you bought a bond now, you’d get a 0% fixed rate and 4.60% inflation rate, you would have an opportunity to earn at least 2% over the next 11-14 months.
My patience with my older I-Bonds is paying off, as some of them have a higher fixed rate of about 1%. Currently, I am only earning 0.94% to 1.94% for six months, but soon I’ll be earning 4.6-5.6% for the next six months. There is an annual purchase limit of $5,000 in paper bonds and $5,000 in online bonds per Social Security Number. For a couple, that’s $20,000 per year.
Online Checking and Savings AccountsEach day there are more online banks competing with online checking and savings accounts. Last time, I was putting the remainder of my funds at SmartyPig, an online piggy bank that with some tricks could be used an a savings account. They still offer a competitive 1.35% APY, but I discovered that they don’t let you withdraw money when there are “pending” transfers for a few business days, and if you have a regular transfer something always seems to be pending. They are still good for savings goals, but not as much if you want to make regular withdrawals.
Since I already have my CDs there, I’m trying out Ally Bank for my daily banking convenience and emergency fund needs. Their Interest Checking currently pays 0.50-0.90% and their Online Savings is at.89%APY. Most other online banks are clustered around 1% APY as well, and I am only going with Ally due to theirchecking features like no fees, fee rebates for an ATM, and free overdraft transfers from savings. This allows me to keep a minimal balance in checking and more in savings/CDs. Check out my Ally Bank Checking account review for an in-depth rundown.
Alternatively, SalemFiveDirect is was guaranteeing 1.25% APY until April 2012. Everbank has their Yield Pledge Money Market paying 1.26% APY for the first 3 months for new accounts. Alliant CU also offers a good checking account solution at 1.10% APY, though their ATM rebates are more limited.
Application Tips For Individual Health Insurance
In a NY Times Op-Ed piece entitled Money Won’t Buy You Health Insurance, Donna Dubinsky shares her troubles with getting individual health insurancecoverage, even though she has many millions from co-founding Palm. Based on this article, here are some ways to improve your chances of getting coverage.
- Use an independent insurance broker. By going with an experienced broker that represents several companies instead of a sales agent employed by one single company, you have a better chance of finding a policy that best fits your needs.
- Apply simultaneously to many different companies. Insurers always ask “Have you ever been denied health insurance?”, and you don’t want to have to answer yes. By applying to many at the same time, you won’t have to. Besides, different insurers can also have very different underwriting criteria.
- Instead of applying as a family, apply to each company as individuals.One insurer might have a problem with one person in your family, and then reject everyone as a result. Dubinsky eventually found coverage for everyone in her family by going this route.
- Be smart when filling out your medical history. You don’t want to leave anything important out, because that can invalidate your coverage later on. The insurer will be requesting a copy of your medical records. However, on your end it’s best to provide only exactly what is required with short, direct answers.
- Find a way to join a group plan indirectly. The most obvious is trying to add yourself to a spouse’s group plan. Alternatively, look for potential professional groups and organizations to join in order to qualify for group health insurance plans. In some states, as long as you have a business with at least two total employees (including yourself), you qualify for a group health plan. Consider hiring an employee or even another family member part-time to qualify.
A good resource for learning about the specific health insurance rules for your state is StateHealthFacts.org. Look under “Health Insurance & Managed Care”. Finally, I absolutely agree with the final words of her article:
The new health care reform legislation is not perfect. Nothing that complex could be. But I have no doubt that the system is broken and reform is absolutely essential. If we are not going to have universal coverage but are going to rely on employer plans, then we must offer individuals, self-employed people and small businesses a place to purchase insurance at a reasonable price.
If members of Congress feel so strongly about undoing this important legislation, perhaps we should stop providing them with health insurance. Let’s credit their pay for the amount that has been paid by the taxpayers, and let them try to buy health insurance in the individual market. My bet is that they all would be denied. Health insurance reform might suddenly not seem to them like such a bad idea.
Poll: How Big Is Your Emergency Fund?
Below is a chart of the median duration of unemployment from July 1967 to December 2010, based on data supplied by the US Department of Labor. Things are bad out there, and remember, this is just the median!
According to this December 2010 report from the Bureau of Labor Statistics, out of the 9.4% unemployment rate, 44.3% of them are considered long-term unemployed (those jobless for 27 weeks or more). That means over 4% of the total US workforce – 6.4 million people – has been unemployed for over 6 months.
Which leads to the poll question of the week. How prepared are you for an extended period without a paycheck? In this case, by emergency fund I am talking about a cash (or similar) cushion that is accessible, not lines of credit.
The most well known part of the Fair and Accurate Credit Transactions Act (FACT act) is that you can get a free copy of your credit report from all three major credit bureaus once every 12 months. However, there are also several other consumer databases that you should check as well which are also available every 12 months, and they can also have a significant financial impact.
ChexSystems Banking History
ChexSystems is a consumer information database used by an estimated 80-90% of all banks to help determine the risk of opening new accounts. Think of it as the bank’s version of a credit bureau. If a person commits check fraud or overdraws their account, it will be listed here. In addition, the simple act of opening or closing a bank account may be recorded in their database. Getting a negative ChexSystems record can leave you blacklisted from opening bank accounts at most major banks.
Get your free ChexSystems consumer report here.
Medical History Used For Insurance Underwriting
MIB (previously known as Medical Information Bureau) is run by 470 insurance companies and has a “primary mission of detecting and deterring fraud that may occur in the course of obtaining life, health, disability income, critical illness, and long-term care insurance.” They record information of “underwriting significance” for those who have applied for life and health insurance with MIB member companies. If you have not applied for individually underwritten life, health, or disability income insurance during the preceding seven year period, then you probably don’t have a record.
Free Credit Score Estimates From Transunion, Equifax, and Experian
why not a status check on your credit scores? In a previous post, I explained the relationships between credit reports vs. FICO credit scores vs. FAKO credit scores. Give it read if you haven’t already. You can obtain a free copy of your credit report from all three major credit bureaus once every 12 months fromAnnualCreditReport.com, as mandated by the government.
As for credit scores, chances are you’ll have to pay up for a FICO Score. But even though I feel that such FAKO scores are only good as a credit score estimate, I’ll still take it if it’s free. Remember, there are three different credit reports out there for you, so there are also three FAKO credit scores you should track. It happens that there are websites that will either provide a free FAKO or a credit score range for all three credit bureaus with no credit card required. Pulling your own credit score doesn’t hurt your score either.
CreditKarma.com is an ad-supported site that offers you a free FAKO as often as you like, called a Transrisk score, based on your Transunion credit report. The score range is the same as FICO, from 300-850. Brave souls!
You don’t get your credit report details, but you do get a few tips on what recent changes to your credit report have impacted your score. CreditKarma recently added two new free scores as well – the VantageScore and Auto Insurance Risk Score, both based on your TransUnion data. VantageScore is basically a challenge to FICO and has a completely different scoring range system, and the other one is used by auto insurers to “assess your riskiness and to assist in pricing your premiums”.
The Equifax Credit Score Card comes directly from Equifax and provides a free credit score range of Low (280-559), Below Average (560-659), Average (660-724), Above Average (725-759), and High (760-850). It’s called the Equifax Risk Score. FICO has a range of 300-850, and this range is 280-850 so you don’t really have to do any scaling.
It doesn’t provide any specific data from your Equifax credit report, but it does include a short summary of any negative factors that you may have on your report.
Quizzle.com is a site owned by Quicken Loans that offers you a free FAKO score every six months, called a “CE Credit Score”, based on your Experian credit report. FICO has a range of 300-850, and this range is 350-850 so you don’t really have to do any scaling. They just seem to alter it just enough so FICO doesn’t sue them.
The site also provides access to the details of your Experian credit report, so this can be handy if you’ve already used up your freebie from government-mandatedAnnualCreditReport.com.
One annoying part of the site is that they ask “required” questions about your home and mortgage that seem to imply that the answers are needed to access your credit score, but in fact are not. They just want the data to better target you for things like home equity loans or refinances (remember who runs the site).
FICO Score Estimator
Just for good measure, I filled out the FICO Score Estimator and got the following result:
If you really want your official FICO score, you can still get it with a free trial and immediately cancel with minimal hassle. Here are step-by-step instructions. The FICO is based on your Equifax report.
Note: Unless you’re going directly with a credit bureau (which already has your sensitive data), you’re going to have to give your personal information including Social Security Number to a third-party website. I am not a online security expert, so you’ll have to do your own due diligence as to whether you want to proceed. I have agreed to be the test monkey and have used all these sites, and am showing you real screenshots of my results above.
New Marketing Trick: Short-term FDIC-Insured Bank CDs With Really High RatesIf you still read newspapers like me, you may have come across an advertisement like this one recently touting an abnormally high 3-month or 6-month CD rate in last Sunday’s issue:
According to Bankrate, the current national average for a 6-month certificate of deposit is 0.37% APY, with their top yield being 1.25% APY. Highly-advertised Ally Bank offers less. So how can a tiny local non-bank that you’ve never heard of beat the rates of even online banks by over 2 whole percentage points?
It turns out that this is the newest version of the “free show tickets for timeshare presentations” marketing ploy. In this case, you must go into the office of an life insurance agent and listen to their sales pitch before getting the bank CD. Allan Roth over at CBS Marketwatch visited one of these offices and wrote about it. These non-bank salespeople are supplementing bank CDs from other FDIC-insured banks with their own money to reach the advertised rate. Questionable? Yes. Scam? Well, maybe not.
How It Works…
- You respond to the newspaper ad, and the terms always require you to physically come over to their office.
- After dealing with varying levels of life insurance and/or annuities salesmanship, you maintain your desire to open the account.
- You write the check for the CD directly to an FDIC-insured bank, with which the sales office is not officially affiliated with. This CD has a realistic rate, say 1% APY or similar.
- After a week or two, enough to make sure your funds cleared, the insurance people will cut you a check which together with the bank’s interest, add up to the advertised APY (assuming they are still in business).
How Much Extra Interest?But really how much money are they losing on this? If you buy a six-month CD with an annual percentage yield (APY) of 3.35% and commit $25,000, you’ll earn approximately $418. With a APY of 1.25%, that is $156. The difference is $262. That’s basically the “bonus” that they are paying to get you into the door.
The article by Roth was initially published more than 8 months ago, so that would suggest that this marketing ploy is working and the word is spreading amongst insurance salespeople. Now, I’m sure some people will call about the CD and either not have the $25k or otherwise decided not to go for it, so that improves their bottom line. I am pretty certain that their ad targets those with large cash balances looking for income-type investments, so that they can pitch annuities with seemingly safe and high yields.
WarningsIf you still want to invest in one of these bank CDs + incentives, you should be prepared to be presented with annuities that will actually seem to yield even more that their advertised 3-month CDs. They will be carefully packaged to look like a good deal. They will be described as “insured” and “safe” because they will be backed by an insurance company. The actual yields will be computed by a formula too complex for most math PhDs to fully understand.
Next, you should check if the extra interest is really worth it due to the fact that you’ll have to deal with paper checks. If you are writing a check from a bank account that isn’t earning interest, that is some lost days of interest right there. Since you’ll be receiving the CD funds as a check as well, that’s another few business days of potential lost interest. Use my handy Ultimate Rate Chaser Calculator to see your net interest boost.
Finally, you should be sure to only write the check to an FDIC-insured institution. You should interact with them directly to ensure safe transfer of funds and proper opening of account. Double-check the CD renewal guidelines, so you are not stuck rolling the CD over for another 3 months.
Here’s a list of other companies that I found offering similar ads. Some are pretty shady in my opinion, and pretend to be an elite broker supplying high-yield bank CDs. Others are actually pretty transparent about the fact that they are offering a carrot for you to listen to their pitch. If you know of any others, please leave a comment below, and I’ll add it to the list.
- Sun Cities Financial Group (http://www.scfg.com)
- First Fidelity Tax & Insurance (http://www.firstfidelityamerica.com)
- American First Assurance (http://americanfirstassurance.com)
- Integrifirst USA (http://integrifirstusa.com)
Umbrella Insurance: Examples of Actual ClaimsPersonal umbrella insurance is additional liability insurance, designed to pay out on top of your existing auto and homeowner’s/renter’s insurance policies. For example, you may only have $300,000 in liability coverage on your car insurance. If you are hit with a claim of $1,000,000, you would be on the hook for $700,000 yourself unless you had an adequate umbrella insurance policy. Here is a diagram explaining this from MSN Money:
This was taken from a previous post of reasons why I have umbrella insurance, which included some examples from news clippings. I won’t expand too much further here.
In a recent Bogleheads post, forum member Quasimodo shared an informative CBS Marketwatch article that included several more real-life examples where umbrella insurance coverage kicked in to save the day. Read it for the actual stories, but here are a few example scenarios:
- You are an car accident with multiple people with serious injuries, and the medical bills are astronomical.
- You are in a car accident on the freeway involving a semi-truck carrying $750,000 of cargo.
- An acquaintance gets injured at your house.
- You are a chaperone on a field trip and one of the kids hurts themselves.
- You host a party, someone else brings alcohol, and someone underage gets hurt or DUIs.
- Your son or daughter borrows a friend’s car, and wrecks the car or injures someone.
You can get a third-part insurer to be the umbrella over differing auto and/or homeowner’s insurers, as long as you have the required liability amounts underneath. I wouldn’t fall for the argument that if you don’t have significant assets – especially as compared to your current liability limits – then you don’t need umbrella insurance. If you have $100,000 and are covered for $100,000, what if you are found liable for $200,000? You’d still be completely broke – and how long did it take you to accumulate that in the first place?
Auto Insurance Rate Averages by StateHere is a chart of average auto insurance rates by state, via AARP.com, shaded by overage ranges. Click for an interactive map with more details and a ranking.
From the site: “Rates were calculated for more than 2,400 vehicles for model year 2010; based on a 40-year-old single male driver who commutes 12 miles to work; includes $500 deductible on collision and comprehensive coverage.” I wish they also shared how much liability coverage they chose, as that is the largest component of my premium.
How To Appeal Health Insurance Claim Denials – FlowchartThe US Department of Labor estimates that about 1 in 7 claims to employer health insurance plans are initially denied. A patient advocate says that she wins 80% of appeals. Yet only 4% of denials are appealed. These stats are taken from the AARP article The Health Claim Game. Are insurance companies relying on the “hassle factor” to help their bottom line? (…reminds me of The Incredibles and Insuricare)
Whether you think so or not, dealing with health insurance claims can be a nightmare. At the end of this article, a handy flowchart is provided which walks you through the “claim game”. Here’s the text:
To Make Insurers PayThe article also mentions a few potentially helpful groups to ask for further assistance – the Medicare Rights Center, the Patient Advocate Foundation, andAdvocacy for Patients with Chronic Illness.
WHEN YOUR CLAIM IS DENIED…
1. Don’t pay the bill.
2. Get a reason for the denial in writing.
3. Review and follow your plan’s rules.
…Make the easy fixes…
• Missing information? Fill it in.
• Coding mistake? Have your doctor fix it.
…And assess other reasons for the denial.
Health care reformers want to end these exceptions, but for now they are hard to overcome:
• Preexisting condition
• Lifetime-benefit cap
• Change of employer, so coverage was delayed
These may be worth challenging:
• No network facility or physician was available
• Drug wasn’t FDA-approved for your illness
• Treatment was deemed unnecessary or unproven
WHEN PREPARING AN APPEAL…
1. Check the back of your denial notice to see how long you have to file—it’s usually 180 days.
2. Gather objective evidence of medical necessity, such as test results and prior failed treatments.
3. Gather journal articles showing the treatment is safe, effective.
4. File the request in writing (certified mail, return receipt).
IF YOU WANT HELP, SEEK OUT…
• A nonprofit patient advocate (your state’s insurance regulator or a disease association can suggest names)
• A lawyer if there’s a large sum of money at stake and you might end up in court.
IF YOUR INSURER STANDS FIRM, YOU CAN SEEK AN INDEPENDENT REVIEW…
If yours is a fully insured plan—that is, the insurer pays the claims. (Though insurers administer all kinds of health plans, roughly half are self-funded, meaning your employer pays the claims.) You have a fully insured policy if you buy insurance on your own.
To appeal a final rejection by a fully insured plan…
Go to your state insurance regulator.
To appeal a final rejection by a self-funded plan…
You will likely need to go to court, though your state insurance regulator can sometimes jawbone on your behalf.
Are You Protecting Your Most Valuable Asset?
We are all leading busy lives, and it’s all to easy to “miss the woods for the trees”. What if we prioritized by taking a step back and simply asked ourselves – what is our most important asset? Are we adequately protecting that asset?
Unless you’ve got a trust fund or are close to retirement, you’re likely going to have to rely on yourself to work for a while. What if you couldn’t? You need disability insurance.
The first place a lot of people go for disability insurance is work. There is either short-term and long-term insurance, and it’s important to know both what triggers a insurance payout and how much money you’ll get. Sometimes, as long as you can sit and do some form of work, you’re not considered disabled. If you want to get a form of disability insurance that kicks when you can’t do your specificjob anymore, then I usually see a recommendation to see an independent insurance broker that works with several different insurers. Social Security will kick in as a last resort, but it’s also hard to qualify and definitely won’t replace all your income.
If you’ve got children or are already disabled yourself, you might depend most on your spouse for income. If that person is your most important asset, then you need both disability and life insurance. Term life insurance is cheaper because it is straight insurance without any investment component to muddle things up. Start with Term4Sale for some quotes and leads to local agents. Don’t forget about life insurance for yourself, as you might be the most important asset to your spouse as well.
Your Home Equity
Even after the credit crisis, a lot of people have a great chunk of their net worth tied up in their house. Do you have adequate homeowner’s insurance? It’s important to check on how much coverage you have, and what it covers. Do you have actual replacement cost coverage, or just an estimate? Are you covered in case of hurricane, flood, or earthquake?
Your Pension / Investments
Perhaps you are nearly or already living off your accumulated assets. Good job! If you have a pension, be aware of the financial stability of your former employer. Understand what the Pension Benefit Guaranty Corporation will pay out in the worst case. Some people decide to take a lump sum in case of future bankruptcy. In general, make sure your investment mix is aligned with your need and tolerance for risk. Consider this rough rule of thumb.
Avoid a Madoff situation. Is someone else in charge of your investments? Do a basic check at FINRA. Whoever manages your portfolio should use an independent financial institution, known as a custodian, to hold your assets. They should also be audited by a licensed, independent, and preferably well-known firm.
As for me, I’ll be looking at some individual disability plans in the near future.
Nashville Flood Lessons: Do You Need Flood Insurance?
After reading about the recent flooding in the Nashville area, I again find myself reminding people to consider optional flood insurance. First, some background. Most homes that are in 100-year flood plains are required to buy flood insurance. This is because the banks know that this designation means that you have a 26% chance of a 100-year level flood within a 30 year span.
However, even if you are outside these areas, you may still be in danger of a serious flood. Often these areas are shown on flood maps as 500-year flood plains. Many people read this and think something like “…last flood was in 1909, we’re good for another 400 years!” Actually, having a 0.2% chance of a flood each and every year works out to a 6% chance of occurring at least once over a span of 30 years, or 1-in-17. According to an article from from CNM News:
The flooding in Nashville has been deemed a “500 year” flood, as the Cumberland River rose to over 51 feet (floods occur at 40 feet). The flood waters took over portions of Downtown Nashville, as well as the Opryland area.
What if it happens to you? Most homeowner’s insurance policies don’t cover flood damage. More from BusinessInsurance.com:
The National Flood Insurance Program, which is run by the Federal Emergency Management Agency, may cover some losses experienced by businesses and homeowners that purchased the coverage.However, Mr. Costner and other insurance experts said flooding reached areas that are not federally designated flood zones. According to FEMA, Nashville and Davidson County, Tenn., had 4,100 NFIP policies in force as of March.
All of Nashville only had 4,100 policies? This means that not very many people were even required to buy it. This USA Today piece tells the stories of several riverfront homes that weren’t covered.
Tiffany Wiggers says she doesn’t have flood insurance and, in fact, she paid $15,000 extra to be closer to the river. “Everybody on this side of the street, we paid lot premiums to be near the river: $15,000. You have to laugh to keep from crying,” [...] She says she and her husband questioned the real estate agent, builder, lender and an insurance agent about flood insurance, but all said it wasn’t necessary. “They all said, ‘You’re not in a flood plain, so you don’t need it,’ ” recalled Wiggers for USA Today, who was taken from her home via rescue boat. “I was like, ‘FEMA and the bank said we won’t need it, so we’re in the clear.’