IN PROFESSIONAL sports, superlatives are often overdone. Even the GOAT designation—greatest of all time—is sometimes applied prematurely. But love him or hate him, Tom Brady is arguably the GOAT among NFL quarterbacks and perhaps among all NFL players. For proof, look no further than his collection of record-breaking statistics, Super Bowl rings and most valuable player awards. Could it be that he has added another GOAT designation with his epic fail at retirement? Brady reversed his retirement announcement from the Tampa Bay Buccaneers after just 40 days. What did he figure out in those 40 days that changed his plans? The Bureau of Labor Statistics says the median NFL player career is six years. Brady has played for 22. Didn’t he know that retirement was coming? Maybe it’s a matter of finances. Despite earning in a few years what most people earn in a lifetime, an unfortunate number of NFL players file bankruptcy after their football days are over. Tom and his wife Gisele reportedly have $26 million worth of homes in various states. Perhaps they neglected to factor the mortgage payments into their retirement plan. Maybe they miscalculated how much early retirees pay for health coverage. Perhaps they forgot to fund 529 plans for the kids’ college. Still, with a reported individual net worth of $250 million, coupled with his wife’s $400 million, I’m guessing Brady doesn’t need the paycheck. In a HumbleDollar article last October, Mike Drak described “failing” retirement because he didn’t recognize in advance what retirement would mean for his identity and sense of purpose. For Brady, maybe we shouldn’t discount the feeling that comes with having millions of fans scream his name at every snap. Brady’s stated reason for reversing his retirement decision was “unfinished business.” The fans take this to mean he wants another Super Bowl win. This speaks to Brady finding his life’s purpose in his work. He reportedly has other business interests and could readily step into a variety of post-NFL careers. We have to presume that, even at age 44, none of these other career options has the appeal or the competitive juice Brady finds in throwing the football to players half his age. With any job, there’s always unfinished business. The question is whether you can walk away from it. If you were hit by a bus, chances are the business would continue without you. Will the NFL struggle to survive without Brady on the field? It’s doubtful. Regardless of your work, there’s something to be said for going out at the top of your game. Being originally from Detroit, I remember running back Barry Sanders, a near GOAT, who walked away from the game in his prime. Tom Brady probably still has it. But it would be unfortunate if he plays so long that he ends up tarnishing his brilliant career.

MANY YEARS AGO, a Wall Street Journal article quoted a source as saying, and I paraphrase, “Young-old age should last as long as possible, while old-old age should last 15 minutes.” Those of us who have visited nursing homes can all relate to this. Public health initiatives and medical breakthroughs have extended lifespans significantly over the past 100 years. In his bestselling book Outlive: The Science and Art of Longevity, Peter Attia argues that we should focus not just on lifespan, but also on healthspan. The latter is a measure of how well we live, not necessarily how long.  Attia emphasizes that “longer lifespan with no improvement in healthspan is a curse, not a blessing.” His goal is to increase people’s healthspan so that they maximize their chances of avoiding chronic disease, thereby reducing the portion of their lives that they spend frail and infirm.  Attia believes that healthspan is about preserving these three elements of life for as long as possible: Brain: How long you can preserve cognition. Body: How long you can maintain muscle mass, functional movement, and strength, balance, flexibility and freedom from pain. Spirit: How robust is your social support network, as well as your happiness, mental health and sense of purpose. As an expert in longevity and preventive medicine, Attia has researched the ways we can achieve greater healthspan. He identifies four chronic conditions that have emerged in the developed world as the greatest contributors to reduced healthspan. His “four horsemen of the Apocalypse” are: Atherosclerotic disease. This includes cardiovascular disease and cerebrovascular disease. Cancer of all types. Neurodegenerative disease, including Alzheimer’s disease, Parkinson’s disease and various types of dementia. Metabolic dysfunction. This is a spectrum of everything from hyperinsulinemia to insulin resistance to fatty liver disease to Type 2 diabetes. These four diseases account for more than 80% of deaths among those over age 50 who don’t smoke. Reducing their toll is a primary focus of Attia’s work. Much needs to be done. Western medicine seems more focused on curing disease than preventing it. As an example, Attia cites how our medical system has evolved in the treatment of Type 2 diabetes. A person approaching middle age might see his blood sugar rise over time. At some point, the patient is defined as pre-diabetic and later diabetic. No good comes from being diabetic—it’s a risk factor for all four horsemen. Once the patient has a diagnosis of diabetes, the medical system intervenes, potentially spending thousands of dollars. Yet, for years, the patient was marching steadily toward this point, and prevention could have averted both the physical and financial costs. The book traces the evolution of medicine. Medicine 1.0 is how disease was treated up to the mid-1800s. This medicine had no foundation in science. Rather, it was based on “direct observation and abetted more or less by pure guesswork.” Medicine 2.0, the current industry practice, waits until someone has become sick before initiating treatment. Modern medicine has a phenomenal ability to diagnose and treat complex diseases and respond to medical crises. It’s adept at dealing with trauma and infection. Attia believes that what he terms Medicine 3.0 should focus on identifying negative trends early so we can zero in on prevention. In the diabetes example, early intervention might prevent the disease entirely before it can cause irreparable damage. There is much evidence—and also much hype—around prevention. He says the greatest surprise in his research is the incredible power of exercise. When he began his dive into the evidence, he expected exercise to be important. What surprised him was how vital it is to our health. On the flipside, he found that many claims about nutrition are based on weak studies. No doubt, proper nutrition is important, and he identifies some clear dos and don’ts. But fad diets or the constant drip of headlines saying this or that is or isn’t good are just noise. The book can be read at two levels: How does this relate to me and how can I increase my healthspan? What does his research say about how the practice of medicine—and the insurance industry—should evolve, so we reach the next level of preventive care? We can always learn and improve our current lifestyle. I would have benefited from reading this book at age 40 rather than 65. Even so, reading it now, I see that my health goals track well with Attia’s recommendations. As a numbers person, I’ve always monitored my health measures: body mass index (BMI), blood pressure, cholesterol, glucose, triglycerides, and PSA, a measure of prostate health. If you don’t know your current state, it’s hard to map a path to improvement. I have also done well with aerobic fitness, but struggled with strength training. Goals for how you live after 65 can also be defined in terms of function. This can mean completing daily activities without becoming short of breath, being able to get down on the floor—and then back up again—to play with grandkids, and managing household chores and bills without assistance. If these are your goals, too, what you do in the 20 years before retirement can determine your success. Long ago, I identified that there’s a consistent theme in articles about disease prevention. For almost any chronic disease, the prescription starts the same: don’t smoke, maintain a normal BMI and blood pressure, exercise, minimize alcohol consumption, eat sensibly and get enough sleep. These universal principles are covered in great detail in the book. It’s never too late to start them. I was introduced to Attia’s thinking through a podcast that I was, coincidently, listening to at the gym. The book is 496 pages long and some parts went into greater detail than I was willing to absorb. I did make some changes in my approach to exercise as a result of reading it, however. As much as I don’t like it, I’ve upped my strength training at the gym. The book also encouraged me to continue refining my diet. Howard Rohleder, a former chief executive of a community hospital, retired early after more than 30 years in hospital administration. In retirement, he enjoys serving on several nonprofit boards, exploring walking paths with his wife Susan, and visiting their six grandchildren. A little-known fact: In May 1994, Howard was featured—along with five others—on the cover of Kiplinger’s Personal Finance for an article titled “Secrets of My Investment Success.” Check out his previous articles. [xyz-ihs snippet="Donate"]

WHAT SHOULD I DO with the required minimum distributions from my rollover IRAs? I’m age 65, which means that—under last year’s tax law—I must begin taking taxable distributions in 2030, the year I turn 73. I’ve been looking at my retirement cash flow, and it appears that my wife and I won’t need the money for our living expenses. I’m investigating using the money to help fund my grandkids’ college education. I built a spreadsheet that maps my age against the age of each grandchild and determined the years they’re expected to attend college. Using an online calculator, I estimated my required withdrawals and dropped those amounts in. Currently, the six grandkids range in age from two-year-old twins to 11. My thought is to pay substantially all the cost of their junior and senior years. The kids are evenly spaced. Other than the twins, no two will have upper-class standing in the same year. I have 529 college-savings accounts for each child. Based on my current contribution levels, those accounts could be exhausted in their freshman years. Fidelity Investments’ college planning tool suggests that the average public university might cost $28,000 a year by 2031, which is when our oldest grandchild would be a freshman. The average private school might cost $64,000 by then. These costs inflate to $35,000 and $80,000, respectively, by 2038, when the twins are projected to begin college. Of course, these costs are only averages and could vary sharply depending on the specific school the grandchildren attend. On top of that, Fidelity is inflating current college costs by just 2.5% a year, which may be too conservative. For comparison, I’ve looked at the current cost of attending the private colleges my two children attended, as well as public universities in the states where the grandchildren live. After inflating these costs and comparing them to Fidelity’s results, I decided to increase my 2031 college cost estimates to $42,000 a year for a public school and $81,000 for a private school. I plan to use my 2030 required minimum distributions to open an investment account to pay future college costs. By investing in money market funds, certificates of deposit or Treasury bills, I could earn some interest before making college payments. Based on my projections, I estimate that I could provide up to $80,000 toward college in 2031. This will fund roughly a year of private college tuition, room and board. I inflated this amount by 2.5% a year to estimate the future college costs for the younger grandchildren. Eleven years of after-tax required minimum withdrawals will generate enough to cover two years of college for each grandchild. After that, my withdrawals can be used to support my needs in late retirement. [xyz-ihs snippet="Mobile-Subscribe"] If the grandchildren attend public schools, any extra money in their last two years of college could be used to repay student loans generated in their first two years. Some of the grandchildren might also earn scholarships that reduce their need for my money. If so, I have no problem giving them the planned money to jumpstart graduate school or their post-graduate life. There’s always a chance that some of the grandchildren won’t attend college or won’t make it to their junior year. My wife and I are flexible. Funding trade school, an apprenticeship or starting a business are all acceptable uses. Our goal is to help launch each grandchild into the adult world with minimal student loans or other debt. We’ll also have to consider disqualifying circumstances. We don’t like thinking about it, but our grandchildren might make choices that would make it unwise to turn over the money as planned. I could see holding it for them to see if they turn things around. We’ve not shared these thoughts with our children. I’m honestly not sure providing $160,000 per grandchild is a good idea. I would welcome thoughts from HumbleDollar readers. But it is a comfort to know the money is available to help them. No plan is perfect, of course. Here are three uncertainties that might affect my strategy: My projections are based on earning 5% a year on my rollover IRAs. Actual returns could affect the amounts available. Changes in the tax law could change my required withdrawal amounts. Our living expenses could increase to the point that implementing this plan would compromise our standard of living. These risks don’t mean we must abandon the plan entirely, but they could change the amount we can pay toward college. Once we commit to the first grandchild, we’ll have to be prepared to fund the other five. With the spreadsheet built, I can monitor growth in my IRA balances, changes in college costs and changes in the tax law. All this will allow us to zero in on a specific plan when the oldest hits high school. Then we can share it with the whole family. Watch this space for an update around 2027. Howard Rohleder, a former chief executive of a community hospital, retired early after more than 30 years in hospital administration. In retirement, he enjoys serving on several nonprofit boards, exploring walking paths with his wife Susan, and visiting their six grandchildren. A little-known fact: In May 1994, Howard was featured—along with five others—on the cover of Kiplinger’s Personal Finance for an article titled “Secrets of My Investment Success.” Check out his previous articles. [xyz-ihs snippet="Donate"]

READER COMMENTS on one of my blog posts prompted me to dig deeper into my thinking about asset allocation. A trip to the HumbleDollar archive led me to a Charley Ellis article where he emphasized that readers should incorporate Social Security, pensions and annuity payments into any analysis of their asset allocation and portfolio risk. A guaranteed stream of income is clearly valuable. I knew this, but I had missed the obvious conclusion—that the net present value (NPV) of these income streams should be considered part of a portfolio. Specifically, they’re bond substitutes but without the interest rate risk of true bonds. I used the NPV function in Excel to value the three income streams I’m due, so I could then evaluate each as part of my portfolio’s asset allocation. This required some assumptions: When will I begin Social Security? I decided to use my full Social Security retirement age, with benefit values based on my current statement, which I downloaded from the Social Security website. I factored in my wife’s spousal benefit at 50% of my benefit. Since my start date for Social Security is in the future, the NPV calculation had to account for a few years with no payments. For future cost-of-living adjustments for Social Security, I used the average for the past 10 years, which was 1.88% per year. Given current inflation, that may prove conservative. The other two income streams I’m due are a pension and an income annuity. One has started and the other will start later this year. Both are fixed amounts, so there was no need to estimate annual inflation increases. For all three income streams, I had to assume how long my wife and I would collect. For this I went to the IRS joint life expectancy tables and, based on our ages, arrived at 28 years. The final input was the discount rate. Ultimately, I decided to use 3%, recognizing that anywhere from 2% to 5% might be justified in today’s environment. I did want to acknowledge some credit risk implicit in pensions and income annuities, which justifies a small premium above the risk-free Treasury rate. By building this model in Excel, it was easy to see the impact of changes in assumptions. What if we both live to 100? What is the impact of a 5% discount rate versus 3%? What if Social Security cost-of-living adjustments average 3% instead of 1.88%? I was also able to model the difference if I opt to defer Social Security until age 70. Incorporating the three present value calculations into my portfolio added 25% to its worth. Treating them as bond substitutes led to a key conclusion: I could move considerable bond and cash investments into stocks, and still sleep at night. This is a reversal of the quandary I discussed in my earlier blog post. One revelation: Because my three income streams aren’t subject to interest rate risk in the same way an investment in bonds would be, I already enjoy downside portfolio protection, and don’t need to shift money into bonds at a time when interest rates may rise. At the same time, this exercise highlighted how the cushion provided by regular income payments can help my wife and me weather a big stock market decline.

WHEN I WAS IN MY early 30s, I decided to determine “the number.” What would be enough money to allow me to retire, and what was the path to get there? Personal computers were newly available, so I decided to work this out in Lotus 1-2-3. There was no internet to speak of. Investment companies didn’t have online calculators running Monte Carlo simulations that incorporated hundreds of possible retirement outcomes and spat out a most-likely scenario with a 95% confidence level. Instead, I developed my own rudimentary retirement planner, starting with the premise that my wife and I could live comfortably on $50,000 a year in 1991 dollars. I made several assumptions. Some would, today, make a financial planner cringe: Inflate my $50,000 target income by 8% annually. Keep my savings goal separate from any Social Security or pension income, which I’d treat as cushions. Earn 10% a year on my investments. Withdraw 8% annually in retirement. Increase my retirement plan contributions by 5% a year. I created the spreadsheet and used my investment balance as a base. I plugged in my assumptions and ran it out to age 85. It showed I could achieve my goal, which was to retire in my mid-50s. Compared to the online calculators available today, it wasn’t very sophisticated. Regardless of how “the number” is calculated, however, putting a plan in black and white provided me with some savings discipline. It allowed me to know: My long-term goal. My original calculation said “the number” was just under $1.7 million. A path to get there. I saw that the steps to reach the goal were readily achievable. A way to assess my progress annually. In the years when the market dropped, I didn’t hit my target. But I learned that the up years made up for the down years. There was something about going through this thought process and creating the spreadsheet that solidified my thinking. Each year, I diligently compared my actual investment totals to my target. As time went by, I updated the spreadsheet with new assumptions. I brought down my withdrawal rate and assumed investment return to more reasonable levels. I increased my savings contributions faster than anticipated. I also extended the planning horizon to age 100. And, yes, when they became available, I used online calculators to validate my plan. I recently found a 1995 copy of my one-page plan printed by a dot-matrix printer. It said I would meet my goal by 2012—the year I did actually retire.

As an AARP volunteer Tax Aide for a second tax season, I completed about 100 returns and reviewed many others prepared by other volunteers. I volunteer two days a week from February 1 to April 14 at two different senior centers and continue to make observations based my clients’ tax situations. The Tax Aide program is free and not limited to seniors or AARP members. Even though most clients are retired seniors, we can serve all ages and incomes. Only more complex returns are out of scope. It is not unusual to be helping someone whose spouse has recently passed away. I had a couple of situations where the death was in 2023 which had allowed them to continue to file “married filing jointly” last year. As I prepared the 2024 return, they were hit with the implications of now filing “single.” Their standard deduction is essentially cut in half. If their income and withholding stayed the same, this meant a big tax bill. This led to difficult conversations where I explained that: 1) they had to come up with the money to pay this year’s taxes; 2) they were potentially on the hook for penalties associated with under withholding because they owed more than $1000; and 3) they had to consider increasing withholding for the current year to avoid a penalty next year. As many of our clients have low incomes, these prospects were daunting. If I saw someone where the spouse died in 2024, I was able to counsel them to increase their withholding now so they did not get caught short next year. I saw a smattering of W-2G forms. These represent gambling winnings, usually from one of our local casinos. Not surprisingly, the state and city have taken their cut and this is disclosed on the W-2G. A friendly single man nearing retirement brought in a W-2G showing about $1,600 in slot machine winnings. I congratulated him on his luck. I did the return and then the reviewer and I got to talking to him about whether he had any offsetting losses. In the end, he made a quick trip to the casino and obtained a report for the year based on his membership card. His losses for the year from playing the slots were $15,000. He had no idea. I was thinking about his situation as I was driving home that day. I would never do what he is doing… I have actually never been inside a casino. On the other hand, he was single. He had a well-paid government job for which he had a significant portion of his pay directed to his pension plan. Gambling presumably represented his preferred entertainment. If he went to the casino to play the slots a couple of times a week, who am I to say that was wrong? In the end, we could not deduct the losses… and he had to pay taxes on the $1,600. After seeing the whole picture, I was less inclined to think he was lucky. One lady came to me who had not used our service before. She had been widowed a few years ago and was anxious about sharing her information with a stranger because she and her late husband had used the same small local accounting firm to do their taxes for the last 40 years. She knew them and trusted them. She handed me last year’s return in a nicely bound booklet and pointed out the reason she came to us: the invoice tucked in the back was $360. A friend at church sent her to us. It was one of the simplest returns I did all year since all she had was social security, a pension and a few dollars in bank interest. She went away happy because she would keep this year’s refund instead of paying most of it to the accountant. We have a fair number of clients who owe zero tax on either their federal or state return. Some tell me that a friend told them that they don’t need to file anymore. While technically correct, we are taught to counsel them that filing prevents someone appropriating their social security number and filing to scam the system. More so this year than last, I am seeing clients come in with IP PIN numbers. These are six-digit numbers provided annually by the IRS to tax payers who request this identity protection. Think of it as similar to the multi-factor authentication numbers online accounts text to you. The only difference is that for victims of tax identity fraud, these are mailed to the taxpayer near the end of the calendar year. Note that these numbers are different from the PIN you are asked to put in if you e-file. One morning two out of the first three clients had IP PINs because their social security number had been compromised with a fraudulent tax filing. One man in his mid-eighties told me that his daughter had to spend hours on the phone with the IRS straightening out the fraud. He said he would never have been able to work through it without her. You don’t have to wait until your identity is stolen to get an IP PIN. The only catch is that if you proactively apply, they don’t mail you the IP PIN… you have to sign on to your IRS account each year to get it. I’ve decided to apply for one for myself…preemptively protecting my identity. I readily repeat my observation from last year: this is challenging and sometimes frustrating work. It is also interesting and rewarding. Assuming each of my clients would have paid $360 to have a paid preparer do their taxes, I put $36,000 in the pockets of people who need it for their daily expenses. Multiply that by 28,000 tax aide volunteers across the country. Not bad.