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Is now the time for an annuity?

R Quinn | Oct 2, 2026

"The timing of your post is excellent as we’re thinking seriously about it. For context, we’re not as fixated on the steady stream of income in retirement. We take a total portfolio approach and are willing to sell assets as needed for cash flow. But as you point out, interest rates are in a very different place now. I liken buying an annuity a bit to buying individual bonds, locking in a fixed return that’s somewhat safer from interest rate and market gyrations (discounting gyrations that are so bad the insurance company can’t meet its commitments). For a number of reasons, we’re currently investigating a single premium annuity, either immediate or deferred. If we did buy one, it would be from taxable funds, so most of the payments would be either tax free or tax deferred, potentially indefinitely, unlike bond interest."

- Michael1

Lists

Jonathan’s Parting Thoughts: No. 6

Jonathan Clements | Oct 2, 2026

Be the first to comment.

Saving

A Very Humble Saving

Mark Crothers | Oct 1, 2026

"I was going to reply with a pun-heavy message, but I thought I'd better quit while I was only slightly behind 😁"

- Mark Crothers

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

From HumbleDollar Founder Jonathan Clements

Happiness

Let’s Get Happy

AMERICA’S HAPPINESS plunged during the pandemic. I’d assumed that survey result was an aberration, and perhaps that’ll still prove to be the case. But…

In Retirement

Is your retirement plan counting on a Social Security COLA in the future?

R Quinn | Sep 24, 2026

"Every time I read about this strategy I try and get myself to understand, but I have yet to do it. The thought of taking money from savings in the hope of receiving a larger monthly payment seven years hence and then hoping it lasts long enough to make it worthwhile simply befuddles me. Hope it all works out as planned and beyond. I guess I’m just a bird in the hand type person."

- R Quinn

Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

"Mark, I just edited my reply above to clarify. Yes, I plan to do only do modest Roth conversions for the next 2 to 3 years. I’m utilizing the 0% LTCG/dividend rate for these upcoming years and doing Roth conversions within that tax bracket to stay at 0%."

- Bill C

Abuse

If you don’t think AI is powerful and scary, think again!

R Quinn | Sep 30, 2026

"Dick, you might have told ChatGPT your age and income in a previous query. It will remember everything unless you set it to forget it. You'll find the button in Settings."

- Mike Gaynes

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

"FYI - CMS has loaded the 2027 plans and they are now available for comparison shopping on Medicare.gov"

- Mark Eckman

Retirement

Will Congress Wait Until the Last Minute on Social Security?

Jeff Peck | Sep 27, 2026

"From AI:… the upcoming general election race in North Carolina is projected by media analysts to potentially exceed $600 million in total spending. Maybe all the money being spent on federal politicians’s electoral dreams would be better spent on feeding and housing their constituents."

- DavidHLancaster

In Retirement

Dealing with a reduction in Social Security benefits. Is there a backup plan?

R Quinn | Aug 26, 2025

"Congressmen qualify for a pension after serving only three terms (six years)."

- Paul Ward

Family

A Broken Boy

Andrew Clements | Sep 30, 2026

"Thank you, Dan. I lost touch with most of my classmates, so I really don’t know how those years affected them later in life. My circumstances were also somewhat different from most of theirs. While many could go home for weekends or shorter breaks, Nick and I had parents living some 10,000 miles away in Bangladesh, so home simply wasn’t an option. I’m sure we all carried away different experiences from those years, but I can only really speak to the impact they had on me."

- Andrew Clements

In Retirement

Is now the time for an annuity?

R Quinn | Oct 2, 2026

- Michael1

Lists

Jonathan’s Parting Thoughts: No. 6

Jonathan Clements | Oct 2, 2026

Be the first to comment.

Saving

A Very Humble Saving

Mark Crothers | Oct 1, 2026

"I was going to reply with a pun-heavy message, but I thought I'd better quit while I was only slightly behind 😁"

- Mark Crothers

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.

From HumbleDollar Founder Jonathan Clements

Happiness

Let’s Get Happy

AMERICA’S HAPPINESS plunged during the pandemic. I’d assumed that survey result was an aberration, and perhaps that’ll still prove to be the case. But…

In Retirement

Is your retirement plan counting on a Social Security COLA in the future?

R Quinn | Sep 24, 2026

- R Quinn

Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

- Bill C

Abuse

If you don’t think AI is powerful and scary, think again!

R Quinn | Sep 30, 2026

"Dick, you might have told ChatGPT your age and income in a previous query. It will remember everything unless you set it to forget it. You'll find the button in Settings."

- Mike Gaynes

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

"FYI - CMS has loaded the 2027 plans and they are now available for comparison shopping on Medicare.gov"

- Mark Eckman

Manifesto

Oct 2, 2026

NO. 75: WANT TO give to charity or family? We’ll boost happiness and possibly save on taxes by giving now. But if we’re struggling to fund retirement, we should bequeath the money instead.

Truths

Oct 2, 2026

NO. 108: OUR HUNTER-gatherer instincts tell us to consume right away—and not save for the future. What to do? We might automate our regular savings. We should visualize our goals, so they seem more alluring than today’s spending. We might share our financial ambitions with others, so fear of their disapproval prods us to spend less and save more.

humans

Oct 1, 2026

NO. 7: WE'RE ALWAYS comparing ourselves to others. Thinking we’re in for a treat, we go to expensive resorts and renowned restaurants. Imagining it’ll make our life better, we move to a ritzy town where our neighbors are all wealthier. But instead of boosting our happiness, these actions can drag it down—because we’re reminded that others are better off.

think

Oct 1, 2026

CONFIRMATION BIAS. We like to imagine that we objectively assess information and reach unbiased conclusions. The reality: We often start with an opinion—and then latch onto information that confirms what we believe. Those bullish on stocks, for instance, will devour optimistic news reports, while ignoring those that are troubling.

Money Guide

Manifesto

Oct 2, 2026

NO. 75: WANT TO give to charity or family? We’ll boost happiness and possibly save on taxes by giving now. But if we’re struggling to fund retirement, we should bequeath the money instead.

Spotlight: Behavior

The Ultimate Tail Risk

Mark Gardner | Sep 13, 2026

As retirees, we spend a lot of time thinking about risks that may never happen. We diversify our investments, buy insurance and keep emergency reserves. We don’t need to know that something bad will happen before protecting ourselves against it. I’ve been wondering whether we…

Pricing the Future

Adam M. Grossman | Jun 20, 2026

THE WAY INVESTORS think about the stock market may be entirely wrong. Intuition tells us, and academic research confirms, that a company’s stock price should respond to important news and information. When a company announces a new product, for example, its stock should go up.…

Resist the Urge to Act

Mark Crothers | Apr 11, 2026

BEFORE WE GET into it, a brief word. We lost Jonathan last year, and those of us who followed his work felt it more than we perhaps expected. He had a saying that I always liked - that there are really only twenty stories in…

Quiet Failure: Time for Me to Say What I Think

Javier Escobar | Jun 11, 2026

I'm beginning to feel like I'm sitting on the sideline watching everyone else play. So far, I've asked questions (The Quiet Failure of Good Advice), listened to your answers, and fed back what I've heard (Reflections on a Quiet Failure). Thank you all again. But…

What Remains: Money and Me

Andrew Clements | Jun 10, 2026

“Family. Readers. Words.” At Jonathan’s memorial service, one of the songs he selected was the Bee Gees’ Words. At the time, I simply thought it was a beautiful melody, a favorite of ours from the Bangladesh days. Only later did I realize how perfectly it…

Gold and Diamonds

Mark Crothers | Jun 12, 2026

I was in my friend's workshop recently. He's a goldsmith, the proper kind, with a laser welder, a magnifying glass tucked above one eye, and old fashioned tools he uses to make expensive things even more expensive. We were there because Suzie had lost a…

Friend Request

Ken Begley | Sep 29, 2023

HOW’S YOUR FRIENDSHIP account balance looking? I spent my life watching my bank account, and taking great pleasure as it grew and grew. I never cared much for what I could buy with the money, but I loved the feeling of security it offered. Friendships, meanwhile, took a back seat. That was pretty much normal for my family, and maybe…

Nothing Saved

Ken Begley | Jul 10, 2023

THIS IS MY SIXTH STORY for HumbleDollar. You don’t know how happy you’ve made this old hick from Kentucky feel by taking the time to read my stuff, let alone comment on it. I've done and continue to do a lot of dumb things in my walk down life’s path. I hope to share most of them to give…

Making Their Own Way

Ken Begley | Jun 20, 2023

OUR FIVE KIDS SPENT a collective 24 years in college. All five have bachelor’s degrees, and three also have master’s degrees. The youngest graduated May 2023. Only one child qualified for non-merit aid—a $300 Pell grant. My wife and I didn’t give them money for college. We don’t live near a major public university, so four of the five had…

Taught by My Parents

Ken Begley | Nov 1, 2023

MY DAD LIVED TO BE age 92 and my mom is going strong at 95. I was involved with my father’s care as he struggled with dementia, and I continue to assist my mother, who still lives independently. Helping an elderly family member? Here are 16 important lessons that I’ve learned. 1. Don’t be blind. My dad started developing dementia…

Doctor’s Orders

Ken Begley | Oct 16, 2023

HERE'S ONE OF THE most important lessons I’ve learned in retirement: Bad health will limit what you can do—or feel like doing—no matter how much money you have. Good health is the biggest determinant of how rich and fulfilling your retirement years will be. You and you alone are responsible for your health care. It’s not your spouse, your children,…

Road Less Traveled

Ken Begley | Mar 26, 2024

I HAVE A SIDELINE writing stories for a local newspaper. Every now and then, even in a small rural community, you’ll find folks who blow your mind. One such individual is a retiree named Junius R. Tate, who goes by J.R. and who spent his youth in Washington County, Kentucky. Tate hiked the Appalachian Trail, which crosses 14 states from…

Is now the time for an annuity?

Jonathan’s Parting Thoughts: No. 6

A Very Humble Saving

Financial Lessons

Let’s Get Happy

Is your retirement plan counting on a Social Security COLA in the future?

Sourcing Taxes for Roth Conversions

If you don’t think AI is powerful and scary, think again!

Medicare Part D premium shock 2027

Will Congress Wait Until the Last Minute on Social Security?

Dealing with a reduction in Social Security benefits. Is there a backup plan?

A Broken Boy

Is now the time for an annuity?

Jonathan’s Parting Thoughts: No. 6

A Very Humble Saving

Financial Lessons

Let’s Get Happy

Is your retirement plan counting on a Social Security COLA in the future?

Sourcing Taxes for Roth Conversions

If you don’t think AI is powerful and scary, think again!

Medicare Part D premium shock 2027

Free Newsletter

Get Educated

Manifesto

Truths

humans

think

Money Guide

Manifesto

Spotlight: Behavior

The Ultimate Tail Risk

Pricing the Future

Resist the Urge to Act

Quiet Failure: Time for Me to Say What I Think

What Remains: Money and Me

Gold and Diamonds

Spotlight: Begley

Friend Request

Nothing Saved

Making Their Own Way

Taught by My Parents

Doctor’s Orders

Road Less Traveled