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Homo economicus may always behave rationally. But the rest of us try not to keep too much chocolate in the house.

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Inflation, prices, COLAs, retirement and the last 16 years

"That's the format of an old joke. Kids must be much stronger than when I was small years ago. When I was a kid, it was really hard for me to carry $70 worth of groceries. But these days, my young grandson seems to have absolutely no problem with that."
- Martin McCue
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For most retirees, the greatest fear is not death—it is running out of money before they die.

"A steady income stream that cannot be outlived is the only practical answer. Social Security is the core and in the absence of a pension (which is rare in the private sector now) an annuity is the key in my opinion, an immediate annuity upon retirement. Back that all up with interest and dividend income which can be used or reinvested (turned on or off) as necessary over time."
- R Quinn
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Taxing Social Security benefits

"They sure could if they want to. I use that tool all the time. And note that eliminating the wage cap does not make SS sustainable."
- R Quinn
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When your 401(k) excludes target date funds

"What are the lowest fee funds? Maybe there's actually a good one."
- Randy Dobkin
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“Gerontocracy” in America

"Largely the same in UK. It's not that the elderly dominate politics here in the same way as the US seems to like electing geriatrics but more that old folks vote so no party wants to risk pissing them off too much. At least recent changes in inheritance tax rules (which kicks in at a much lower band than the US anyway) which prevent DC pension pots (401k equivalent) being used as an IHT avoidance vehicle should encourage the seriously wealthy to gift before their demise as heirs could easily be facing a double whammy of an effective 64% tax rate on anything they draw from an inherited pension."
- bbbobbins
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Short term and long term Social Security planning

"My statement,”If there are going to be further cuts in benefits and raises in taxation let younger people who have time to adapt their financial plans be the people to sacrifice to ensure their future beyond, just like we were asked to do in the past.”, is that the above changes would secure our promised benefits and those of younger generations. We had to sacrifice a significant amount from when we first started, so why not younger generations?"
- DavidHLancaster
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Yet-Another Social Security Spreadsheet Analysis on what Age to Start taking Benefits

"When the most important value in the equation is unknowable, any decision is simply a roll of the dice."
- Mike A
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Beware the CFP Designation?

"I wouldn’t count on any three letters behind a name to ensure moral or ethical behavior."
- Mike A
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One Piece Of Paper

"Thanks, Winston. I really like your phrase, “the birth lottery.” We all begin life’s journey from different starting points, and it’s easy to underestimate how much that shapes the opportunities available to us. I also smiled at your comment about computers. It’s wonderful when something that begins as simple curiosity or enjoyment turns into a rewarding career. Like you, the older I get, the more I find myself focusing less on achievement and more on gratitude for family, opportunities, and the unexpected turns that made life richer than I ever imagined."
- Andrew Clements
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Before Someone Else Decides

"Thank you! I’m glad you found both helpful. I hope that the e-Booklet makes this daunting decision feel a little more manageable—one conversation and one step at a time."
- Kathleen Rehl
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How Did You Find Paid Work After Retiring from Your Primary Career?

"Thank you for the very timely article and helpful responses. Per my “Fear of the unknown” post a few weeks ago, I find myself in the exact situation as Jeffrey. Over the past several weeks I have been exploring various lower paying, but potentially rewarding roles to pursue once my severance runs out. This includes visiting local places like the bank, library, supermarket, hardware store, Town Hall, etc. and observing the people at work. How old are they? Do they look happy? Could I see myself doing this? I have also been asking if there are any licenses or specific qualifications required so that I can pursue them while still receiving severance. This research has given me purpose and revealed some interesting results. At 59, I do not think that I am ready to veer too far away from the finance/investment field that I spent my career in, at least not yet. But there are plenty of ways to leverage my experience and help people, provided I get properly licensed. Yesterday I picked up Securities Industry Essentials (SIE) for Dummies at the library and based on my initial review of sample questions, I have my work cut out for me!"
- gnussen623
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Taking a Loss?

"Rob - What you are describing is interesting. Would you describe how your ladder was originally structured in 2017?"
- S Sevcik
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Inflation, prices, COLAs, retirement and the last 16 years

"That's the format of an old joke. Kids must be much stronger than when I was small years ago. When I was a kid, it was really hard for me to carry $70 worth of groceries. But these days, my young grandson seems to have absolutely no problem with that."
- Martin McCue
Read more »

For most retirees, the greatest fear is not death—it is running out of money before they die.

"A steady income stream that cannot be outlived is the only practical answer. Social Security is the core and in the absence of a pension (which is rare in the private sector now) an annuity is the key in my opinion, an immediate annuity upon retirement. Back that all up with interest and dividend income which can be used or reinvested (turned on or off) as necessary over time."
- R Quinn
Read more »

Taxing Social Security benefits

"They sure could if they want to. I use that tool all the time. And note that eliminating the wage cap does not make SS sustainable."
- R Quinn
Read more »

When your 401(k) excludes target date funds

"What are the lowest fee funds? Maybe there's actually a good one."
- Randy Dobkin
Read more »

“Gerontocracy” in America

"Largely the same in UK. It's not that the elderly dominate politics here in the same way as the US seems to like electing geriatrics but more that old folks vote so no party wants to risk pissing them off too much. At least recent changes in inheritance tax rules (which kicks in at a much lower band than the US anyway) which prevent DC pension pots (401k equivalent) being used as an IHT avoidance vehicle should encourage the seriously wealthy to gift before their demise as heirs could easily be facing a double whammy of an effective 64% tax rate on anything they draw from an inherited pension."
- bbbobbins
Read more »

Short term and long term Social Security planning

"My statement,”If there are going to be further cuts in benefits and raises in taxation let younger people who have time to adapt their financial plans be the people to sacrifice to ensure their future beyond, just like we were asked to do in the past.”, is that the above changes would secure our promised benefits and those of younger generations. We had to sacrifice a significant amount from when we first started, so why not younger generations?"
- DavidHLancaster
Read more »

Yet-Another Social Security Spreadsheet Analysis on what Age to Start taking Benefits

"When the most important value in the equation is unknowable, any decision is simply a roll of the dice."
- Mike A
Read more »

Beware the CFP Designation?

"I wouldn’t count on any three letters behind a name to ensure moral or ethical behavior."
- Mike A
Read more »

One Piece Of Paper

"Thanks, Winston. I really like your phrase, “the birth lottery.” We all begin life’s journey from different starting points, and it’s easy to underestimate how much that shapes the opportunities available to us. I also smiled at your comment about computers. It’s wonderful when something that begins as simple curiosity or enjoyment turns into a rewarding career. Like you, the older I get, the more I find myself focusing less on achievement and more on gratitude for family, opportunities, and the unexpected turns that made life richer than I ever imagined."
- Andrew Clements
Read more »

Free Newsletter

Get Educated

Manifesto

NO. 41: VERY FEW of us need life insurance for our entire life. That’s why term insurance makes sense and cash-value policies are usually a mistake—despite what insurance agents say.

think

INTRINSIC VALUE. It’s easy to get caught up in the stock market’s wild price swings. Feeling unnerved? Never forget that behind those price swings are companies of great value. While we can’t put a precise figure on their intrinsic value, we can get a sense by examining the profits they earn, the dividends they pay and the value of the assets they own.

act

CHECK YOUR Social Security statement to get an estimate of benefits and make sure your earnings record is correct. The easiest way to do this: Set up a “my Social Security” account, preferably adding two-factor authentication. This will also preempt scammers, who might otherwise try to set up an account in your name—and claim your benefits.

Truths

NO. 49: YOU CAN have stability of principal and stability of income but, in a liquid investment, you can't have both. Money-market funds and savings accounts offer stability of principal, but the rate paid can quickly rise and fall. Most bonds, by contrast, pay the same amount of interest each year until maturity, but they can fluctuate sharply in price.

How to think about money

Manifesto

NO. 41: VERY FEW of us need life insurance for our entire life. That’s why term insurance makes sense and cash-value policies are usually a mistake—despite what insurance agents say.

Spotlight: Happiness

Better Than Dollars

A FRIEND ASKED ME recently if I got paid for the writing I do. She assumed that I’d be compensated, especially for research articles published in scholarly journals.
“Yes,” I replied. “I’m paid generously—in psychic income.”
“What’s psychic income?” she asked.
I explained. “Instead of earning a paycheck for my paper, I earn the satisfaction of this well-respected periodical running my article.” That’s also the way it is for my short stories and poetry that appear in specialty publications.

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Introverted Me

NOW THAT I’M RETIRED—and living in a warm desert climate—walking has become one of my favorite activities. Most days, I log between six and eight miles trekking around our neighborhood. I usually listen to a podcast during my journey, but it just serves as background noise. My real focus is contemplating dog training strategies or the subject matter of my future HumbleDollar posts.
Some days, I play the “what if” game.

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Divide and Rule

EACH OF US TAKES our monthly income and then makes countless decisions—some big, some small—about how to use those dollars. How can we get the most from the money that flows through our hands? I find it helpful to look at this “income allocation” through three prisms.
Divvying it up. We can use our income for three main purposes: spending it today, saving it for tomorrow or giving it to others. Our instinct is to spend today,

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Can’t Compare

COMPARISONS ARE the death knell of happiness—and they aren’t good for our wallets, either.
If we’re to get the most out of our time and money, we need to devote those two precious resources to things we consider meaningful. But how do we figure out whether something is indeed meaningful to us, and not a reflection of the influence of others?
For “meaningful,” dictionaries offer synonyms such as “important” and “significant.” What we’re talking about are things that have some special emotional resonance,

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Looking Forward

JOY DOESN’T COME easily to me. I tend to default toward melancholy, so I try to ensure my discretionary purchases bring as much happiness as possible.
Like many readers, I’m a firm believer that buying experiences sparks more joy than buying stuff. The dollars we’ve spent on family vacations, sporting events, church mission trips and, more recently, escape rooms—worth trying sometime—have created memories that’ll last a lifetime. Yet obviously not all of our discretionary money is spent on experiences.

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Feeling Rich

ON ONE OF OUR TRIPS to visit my in-laws in South Carolina, my mother-in-law asked me what I thought of her home in a 55-plus retirement community.
“It looks like a house,” I said sarcastically.
Her response gave me food for thought. She said, “I feel rich living here.”
My mother-in-law’s home was far from being a McMansion. It was a single-story two-bedroom house, but it had cathedral ceilings. I think it was the high ceilings that,

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Spotlight: Peck

The Art of Spending Money

I just finished reading Morgan Housel’s The Art of Spending Money, and it hit a different nerve than most financial books. Most of us spend years talking about how to earn more, save more, invest better, and retire sooner. All of those matter. But Housel pushes a harder question: What is the money actually for? Is it buying back time? Peace? Family memories? Health? Independence? Or is it quietly being used to chase status, comparison, or applause? One line I keep coming back to is this: A raise that becomes a payment is not really a raise anymore. It is a new obligation. That made me think about retirement, lifestyle creep, debt, and how easy it is to look successful while feeling trapped. For me, the bigger lesson is that spending is not automatically good or bad. The real question is whether the purchase supports the life you actually want — or the image you feel pressured to maintain. So, here’s the conversation starter: What is one purchase you made that genuinely improved your life — not because it impressed anyone, but because it gave you more peace, time, health, family connection, or freedom? And on the flip side: What is one purchase you thought would make life better, but later realized it was mostly about status, pressure, or keeping up?
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Should Retirees Get a Temporary Flat Tax Window on IRA and 401(k) Withdrawals?

A friend shared an interesting idea from David Bach’s “IRA Flat Tax” proposal, and it got me to thinking. Here is the white paper if you haven't read it: IRA Flat Tax White Paper - David Bach.pdf - Google Drive The basic idea is simple: for a limited window, maybe 2026–2033, retirees could voluntarily withdraw money from traditional IRAs, 401(k)s, and similar retirement accounts at a flat federal tax rate — possibly around 12%. The goal would be to make it easier for retirees to use the money they spent decades saving, instead of letting fear of taxes, RMDs, and complicated tax planning keep that money locked up until later in life. On paper, I can see the argument. Many retirees did the right thing. They worked, saved, invested, delayed gratification, and built retirement accounts. But once they retire, some are afraid to touch the money because every withdrawal feels like a tax event, an IRMAA risk, or a planning mistake. A temporary flat-tax window might encourage people to spend, gift, convert, repair homes, help family, travel, or simply enjoy more of what they earned while they are still healthy enough to use it. But there are fair questions too. Would this mostly benefit people with larger retirement accounts? Would it pull too much future tax revenue forward? Would it complicate Social Security taxation, Medicare premiums, and long-term tax planning? And would Congress ever create something this simple without adding layers of rules? My Practical Take: Retirement accounts were built to support retirement — not just to become a tax puzzle for retirees and heirs. A simple, temporary tax window could be a useful idea, but the details would matter greatly. Would you support a temporary flat tax on traditional IRA and 401(k) withdrawals? And if the rate were 12%,…
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A Life You Build

My hope is this resonate with some of you and you will tell your own story. It's probably more of an article, but my hope is it creates good conversation and your wisdom as well. The life we built, the family we raised, and the future we prepared for were not handed to us. They were built—day by day, dollar by dollar, choice by choice. Most people will never have the exact same story. The details change. The names change. The setting changes. But the themes are often familiar: doing the best you can with what you have, learning responsibility early, carrying more than you expected, and trying to build a better life one decision at a time. That is what this story is really about. I grew up in a fatherless home, born in the mid-1960s and raised by two strong women—my mother and my grandmother. I was the youngest of four, with three older sisters ahead of me, and while we never had a lot, we always had enough. My mother worked as a nurse, and my grandmother did whatever honest work she could find—ironing, sewing, cleaning houses, and working at a donut shop. There was no easy road laid out in front of us. But there was faith, effort, sacrifice, and a willingness to keep going. I was also shaped by where I came from—the Texas Panhandle. Amarillo is a place of hard wind, blowing dust, blue northers, ice, heat, and weather that can turn on you in a hurry. It is a place that teaches you early that comfort is never guaranteed. The land is open, the climate is harsh, and life tends to toughen you in ordinary ways. Looking back, that environment matched the values I was being raised with: work hard, endure, adapt, and…
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When a One-Time Rental Sale Triggers an IRMAA Surprise

My understanding is that IRMAA is not permanent. It follows the two-year lookback. A friend and I were discussing the possible sale of his rental property, and that raised the question of what happens if a one-time capital gain pushes someone into a higher Medicare premium bracket. From what I understand, if someone sells a rental property and has a one-time income spike, that higher income may show up in Medicare premiums two years later, but it should eventually fall back down once a lower-income year becomes the lookback year. The part that catches people is that a voluntary rental sale may not always qualify for an immediate IRMAA appeal, so you may have to ride out the higher premium for the affected year. That is why timing matters. A one-time gain may be worth it, but it can still create a Medicare surprise two years later.
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Spending Without Guilt: An Overlooked Retirement Skill

Many of us have decades of practice saving, budgeting, and optimizing. But retirement requires a different skill: spending confidently—not impulsively, but without unnecessary guilt when the plan supports it. I’m curious how others handle the mental side of spending after (or near) retirement: What’s the hardest part about spending money now? Do you use a “permission system” (annual splurge, travel fund, monthly allowance, separate bucket)? Piggybacks off Dick's topic. What purchase meaningfully improved your quality of life long-term? Any regrets about not spending on something important? How do you distinguish prudence from fear-based reluctance? What has helped you make the shift from accumulation to using your resources well?
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“Too Much House” vs “Not Enough House”—But Through the Lens of Aging in Place

We talk a lot about downsizing, upsizing, and “right-sizing.” But I think the more useful question is: How well will your home support you 10–15 years down the road—and what are you willing to pay for that flexibility? I’m planning a retirement build and I’m intentionally designing for aging in place—wide doors and hallways, single-floor living, an easy/step-free entrance, and a walk-in shower with a minimal curb (plus the usual goal: fewer maintenance headaches). The catch is that many of these features add cost up front, even if they reduce risk, hassle, and remodeling later. A few questions to spark discussion: If you could design (or redesign) your home for age 75–85, what would be your top 3 priorities? Which aging-in-place feature has been most valuable in your experience (or your parents’/friends’)? What did you think would matter in a retirement home, but later realized didn’t? How do you balance comfort now with future-proofing—without overbuilding or overspending? If you moved or built again, what would be non-negotiable (single-level, walkability, low-maintenance exterior, wider doors, curbless shower, etc.)? If you’ve already downsized, built, remodeled, or helped someone transition later in life—what would you do the same, and what would you do differently?  
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