Home - HumbleDollar

Anyone For S.K.I.ing?

Mark Crothers | Sep 22, 2026

"Thanks Mark, a great piece. I like the moderate approach of spending the inheritance now .... on the people that would eventually get it anyway. Big family trips, help with education costs, assistance with a house deposit. Nothing new in this idea, but I really do think that it's a lot better than dying with a big pile of money, that then goes to your 60 year old "kids" who longer need it."

- greg_j_tomamichel

In Retirement

Keep an eye on Medigap policies

R Quinn | Sep 26, 2026

"We wouldn't need Medigap if Medicare had a reasonable out-of-pocket limit."

- Randy Dobkin

In Retirement

Widow’s Penalty Redux

ArticleRichard Connor | Sep 26, 2026

A RECENT post by achnk53 about the impact of a spouse’s death on the survivor’s taxes piqued my interest. The post referenced an interesting Kiplinger article about the “Widow’s Penalty”, or the negative tax implications on a surviving spouse after the death of a spouse. A surviving spouse can file Married Filing Jointly (MFJ) in the year of their spouse’s death. In the full year following the spouse’s death you must file Single. There are some beneficial filing rules for surviving spouses who have dependent children, but that is beyond this post. Nine days later John Urban published an article running the tax numbers for 3 different retiree scenarios, and using the data to provide some excellent suggestions for readers. In between these two articles I had run some similar case studies to understand the impacts. I ran some case studies using the 2026 Dinkytown 1040 Calculator. I considered a “lower" income retired couple. The impact of one spouse passing is very dependent on the sources of income. Assume the retired couple were each receiving $36,000 in annual SS benefits. They have no other sources of income. The couple filing jointly would have no taxable income, and no tax for 2026. Had the husband died in 2025, the surviving widow would have seen her income reduced to $36,000. If she needed the lost income, and found a job that paid $36,000, her income would match the original $72,000. But $21,500 of her SS benefit would be taxable, her taxable income would be $33,350, and her annual tax bill would be $3,757. The table below shows the details of this analysis: Tax Calculation

After accounting for the reduction in Medicare related spending, she has similar spending power. But she had to go back to work to achieve that. This, and the previous examples, reinforce the importance of understanding a couple’s financial details before and after the passing of a spouse. Income will likely be reduced, but expenses may also be reduced. Lower income retirees who depend primarily on both partners SS benefits may see the biggest impact. I also ran a comparison of our tax return for 2026, for both MFJ and if my wife filed single. I assumed our income consisted of my pension, my wife’s SS benefit, and my SS benefit had I claimed it on January 1, 2026. When I die my wife will receive 75% of my pension, and my higher SS benefit. The results were not surprising.

Her total income would be 68% of our combined pre-death income.
Her annual tax bill would be $1,250 more than our joint tax bill.
Her effective tax rate would increase by 4.2%.
85% of her SS benefits would be taxable
Her spendable income after taxes would be about 65% of the joint amount.
She would lose about 20% of the new Senior Deduction
She would have no NJ State Tax liability

I then ran an additional scenario with the same assumptions, but also assuming we were 4 years older and would both have to take initial RMDs in 2026. This scenario reflects one of the concerns frequently expressed when discussing this topic – what happens when the surviving spouse is responsible for reporting the income from both RMDs on her Single tax return. The results changed to reflect the scenario.

Her total income would be about 79% of our combined pre-death income.
Her annual tax would be $708 more than the joint tax filing.
Her effective tax rate would increase by 3.8%.
Her spendable income after taxes would be about 80% of the joint amount.
She would lose all of the new Senior Deduction.
Her NJ State Income tax would be $540 more than the joint tax filing.
She would be pushed up one IRMAA bracket in 2028.

These results are a simplified look at our finances today. My pension and my wife’s SS benefit cover our non-discretionary, and a decent portion of our discretionary, expenses. The wild card is travel – how much we spend in any year is our choice and may require additional income. I’m about 11 months from claiming my SS benefit, at which point virtually all of our expenses will be covered in a fairly tax-efficient way. RMDs are still 4 years away. This was a good exercise to get a feel of how my demise would impact my wife’s finances. It would have some financial impacts, but I believe our plan can handle them. I’m considering running some more detailed projections varying the age at death to assess the impacts, but a quick look made me reasonably confident our retirement savings will be adequate, even considering long term care. I will also continue to look at Roth conversions each year. Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.

In Retirement

The Security Money Can’t Buy

Dennis Friedman | Sep 25, 2026

"Dennis, thanks for such an open and honest piece. From the comments below, it's clear you've tapped into something felt very deeply by so many of us."

- greg_j_tomamichel

From HumbleDollar Founder Jonathan Clements

Lists

Why HumbleDollar?

IN OUR 20s, WE TEND to be a confident lot: We figure we know what we want from our life, that the goal is…

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.

Behavior

The Art of Making Do

Mark Crothers | Sep 25, 2026

"My wife has recently acquired herself a sewing machine after a TV program called The Great British Sewing Bee rekindled her interest in dressmaking. She's planning on making a Halloween outfit for our five-year-old granddaughter as her first project. She's said a nice dress for herself is the ultimate goal... I await the result with interest. I'm not sure if it's a frugal activity or an enjoyable new hobby."

- Mark Crothers

Taxes

Shouldn’t property taxes be a realistic part of retirement planning? Sorry, I think this is a major financial and social issue.

R Quinn | Sep 23, 2026

"What I think is wrong with property taxes is they can be very regressive. They are a wealth tax that hits working and middle classes much harder than the rich. Say someone is paying property taxes of 1% on an assessed house value of $600K. They just started out, so have only $20K equity in the house, and maybe $80k other net worth. So they are paying a 6% wealth tax -- $6K on $100K net worth. No multi-billionaire pays even close to a 6% wealth tax."

- Bruce Trimble

Behavior

Time Is Priceless

Andrew Clements | Sep 23, 2026

"Jeff, thank you for the kind words. I think giving our time to help and encourage others is one of the most meaningful ways we can spend it. We may never fully know the difference we make in someone else’s life, but that time and kindness can stay with them long after the moment has passed. I hope we both have many years ahead to keep doing just that"

- Andrew Clements

Life Events

It’s been one year

Elaine M. Clements | Sep 21, 2026

"Thank you for this. Jonathan was the BEST, and one of a kind."

- William Dorner

Investing

Structuring Bonds

ArticleAdam M. Grossman | Sep 19, 2026

IT'S BEEN AN UNUSUAL week in the bond market, and not necessarily in a good way. This has many investors questioning the value of bonds, which is understandable. Bonds are supposed to be the “safe” side of a portfolio, but they’ve struggled in recent years. Arguably, the drama we’re seeing in the bond market today began more than 50 years ago. To put today’s situation in perspective, I’ll briefly summarize that long history. Then we can look at what steps you might take to better protect your portfolio from here. Back in the 1970s, as you’re probably aware, inflation rose above 10%. Policymakers struggled for years to bring it under control, but in the early 1980s a Fed chair named Paul Volcker finally succeeded. He accomplished that by raising the Fed’s benchmark rate to nearly 20%. With this step, Volcker succeeded in calming inflation, and that allowed the Fed to begin lowering rates, a gradual process that continued for most of the following 40 years. Because bond prices move inversely to interest rates, that entire stretch was extremely beneficial for bonds. As rates fell, bonds rose. Between 1980 and 2020, intermediate-term U.S. government bonds returned 7% per year, on average. That multi-decade run helped seal the reputation of bonds as an easy and reliable way to offset the risk of stocks. But then the other shoe dropped. Due to pandemic-related government spending and tangled supply chains, inflation began rising around 2021. Well aware of what the economy experienced in the 1970s, the Fed responded by raising rates aggressively. For a time, that appeared to bring inflation under control, and the government had even started to lower rates again last year. But then the war with Iran started. That caused energy prices to jump higher, and that, worryingly, has caused inflation to start creeping back up again. In response, the Fed this week was forced to take action, raising rates in an effort to contain inflation before it gains steam. Interest rates on long-term bonds are now at 20-year highs. And because bond prices move inversely to interest rates, bonds are having another difficult year. Total-bond market funds like Vanguard’s BND are now negative year-to-date. Where the bond market goes from here is anyone’s guess, but this history is important, in my view, because bonds are unlikely to see another long, positive stretch like the one investors enjoyed a generation ago. Instead, I believe investors need to be more cautious. What steps might you take? Since we don’t know whether rates will go higher or lower over any given timeframe, the approach I recommend is to own bonds in each of several categories. That way, you’ll benefit, in part, if rates go up, and you’ll benefit, in part, if rates go down. Here’s how I’d structure a bond portfolio today: For me, the most important thing is to own mostly short-term bonds. Specifically, you might allocate 60% of your bond portfolio to short-term Treasurys, using a fund like Vanguard’s VGSH. This fund should be among the most stable investments available because it’s backed by the U.S. government, which, for better or worse, has the ability to print money to meet its obligations. And its short duration means that, all things being equal, it will be less susceptible to rising interest rates if rates do continue to rise. As a point of reference, in 2022, when rates rose quickly, this fund lost less than 4% of its value. That’s in contrast to total-bond market funds, which lost an extremely unpleasant 13% that year. If you’re in a high tax bracket (over 30%), you could split your short-term holdings between Treasurys, which are taxable at the federal level, and municipal bonds, which are exempt from federal tax. You might consider a short-term municipal fund like Vanguard’s VTES or VWSUX. Next, I’d allocate 20% to intermediate-term bonds. While these will be more susceptible to losses when rates rise, they’ll also gain more when rates fall. Last year, for example, when rates fell, intermediate-term government bond funds like Vanguard’s VGIT gained more than 7%. So I see them as worth the additional risk. That said, if this risk concerns you, there’s a relatively easy alternative: For this part of your portfolio, you could purchase a ladder of individual bonds covering maturities between five and 10 years. While it requires additional effort to purchase individual bonds, what you’ll receive in return is greater certainty. At the moment that you purchase an individual bond, you’ll know the yield to maturity. Barring a default—which is unlikely with a government bond—that’s precisely the return you will earn. For the final 20% of a bond portfolio, I recommend inflation-protected Treasury bonds, known as TIPS. Here again, you could purchase individual bonds or a bond fund, and there’s a lot of debate on this topic. But according to research I find convincing, the best way to protect against inflation is with short-term TIPS. So to keep things simple, I would opt for a fund rather than a ladder of individual bonds, which would require frequent trading. One good fund in this category is Vanguard’s VTIP. At the end of the day, the most important thing, in my view, is to build a bond portfolio that’s diversified enough that you could reliably draw on it in years when stocks are down. And recognizing that even short-term bonds carry some amount of risk, it’s worth also holding a “floor” of cash, using a government money market fund, as an additional element in your portfolio. These won’t gain in value when interest rates fall, but they’re designed not to lose any value if rates rise. Put it all together, and I see this as an effective sleep-at-night structure no matter where things go next. 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.

Taxes

Does the new-for-2026 $1000/$2000 charitable deduction for non-itemizers reduce AGI?

Andrew Forsythe | Sep 22, 2026

"William, you might want to check the comments below, including Bill Perry's link to the draft 2026 1040. It has line 12f showing this deduction is anticipated to be below-the-line (after AGI is calculated)."

- Andrew Forsythe

Spending

Anyone For S.K.I.ing?

Mark Crothers | Sep 22, 2026

- greg_j_tomamichel

In Retirement

Keep an eye on Medigap policies

R Quinn | Sep 26, 2026

"We wouldn't need Medigap if Medicare had a reasonable out-of-pocket limit."

- Randy Dobkin

In Retirement

Widow’s Penalty Redux

ArticleRichard Connor | Sep 26, 2026

Her total income would be 68% of our combined pre-death income.
Her annual tax bill would be $1,250 more than our joint tax bill.
Her effective tax rate would increase by 4.2%.
85% of her SS benefits would be taxable
Her spendable income after taxes would be about 65% of the joint amount.
She would lose about 20% of the new Senior Deduction
She would have no NJ State Tax liability

Her total income would be about 79% of our combined pre-death income.
Her annual tax would be $708 more than the joint tax filing.
Her effective tax rate would increase by 3.8%.
Her spendable income after taxes would be about 80% of the joint amount.
She would lose all of the new Senior Deduction.
Her NJ State Income tax would be $540 more than the joint tax filing.
She would be pushed up one IRMAA bracket in 2028.

In Retirement

The Security Money Can’t Buy

Dennis Friedman | Sep 25, 2026

"Dennis, thanks for such an open and honest piece. From the comments below, it's clear you've tapped into something felt very deeply by so many of us."

- greg_j_tomamichel

From HumbleDollar Founder Jonathan Clements

Lists

Why HumbleDollar?

IN OUR 20s, WE TEND to be a confident lot: We figure we know what we want from our life, that the goal is…

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.

Behavior

The Art of Making Do

Mark Crothers | Sep 25, 2026

- Mark Crothers

Taxes

Shouldn’t property taxes be a realistic part of retirement planning? Sorry, I think this is a major financial and social issue.

R Quinn | Sep 23, 2026

- Bruce Trimble

Behavior

Time Is Priceless

Andrew Clements | Sep 23, 2026

- Andrew Clements

Manifesto

Sep 25, 2026

NO. 77: TO BUY ourselves happiness, often the best strategy is to not buy anything at all. That can leave us with a plump bank account and the sense of financial security it offers.

humans

Sep 26, 2026

NO. 53: WE FEAR spoiling our kids, and yet the next generation almost always seems spoiled because rising living standards mean our children typically live better than we did at their age. In fact, we may want to “spoil” our kids by giving them money and then nudging them to use it responsibly. Think of this as a trial run before they receive any inheritance.

act

Sep 26, 2026

EXPLORE EASING into retirement. Could you work fewer hours at your current job or switch to a new career that’ll carry you through your initial retirement years? By phasing into retirement, you can limit your portfolio withdrawals and put off claiming Social Security, while also giving yourself time to figure out what a fulfilling retirement might look like.

Truths

Sep 25, 2026

NO. 100: THE BIGGEST “death tax” paid by your family will probably be the income taxes still owed on your retirement accounts. One possibility: Pay the tax to convert part of your traditional IRA to a tax-free Roth IRA, and then bequeath that account—an especially smart move if your heirs are likely to be in a higher income-tax bracket than you.

Money Guide

Manifesto

Sep 25, 2026

NO. 77: TO BUY ourselves happiness, often the best strategy is to not buy anything at all. That can leave us with a plump bank account and the sense of financial security it offers.

Spotlight: Advisors

Beware the CFP Designation?

DavidHLancaster | Aug 3, 2026

Today I read the following article by the very respected Allan Roth:
https://www.advisorperspectives.com/articles/2026/07/20/how-cfp-board-sold-public-profession
I have always regarded the CFP designation was the gold standard for advisors, and meant I could trust the advisor was looking out for my best interests. It appears this may no longer be the case.
About a year from now I will be looking for a new financial advisor as we analyze our overall financial situation once we both claim Social Security,

Financial AI: Benefit or Danger? I Don’t Know

Mark Crothers | Jul 10, 2025

There’s a debate ongoing in the UK at the moment around a cash-only tax-advantaged account, and if the benefit should be reduced from a yearly £20,000 deposit allowance to £4,000. This is with the aim of making people favor equity-based, tax-advantaged accounts to enhance returns. Very UK specific, but it got me thinking once again about the general idea of holding cash as a defensive asset in your portfolio for sequence of returns (SOR) risk when in retirement.

My Mistakes

Dana Rusinak | Feb 21, 2025

Thank you Jonathan for as always, for your willingness to tell your story, the good and the bad.
I have one big mistake to get out there.
About 10 years before my wife and I retired, I started getting interested in money. I educated myself about index versus managed funds, fees, etc. While both of us had sizable 403b accounts that were tied up at work, I put all our after tax money in Vanguard. When we retired,

Beyond fees, is using a financial advisor, advisable? If you do or don’t why?

R Quinn | Jul 10, 2025

There was a discussion recently on HD about the costs/benefit of a financial advisor.
I have more questions. Who needs a financial advisor and why? I have looked up the pros and cons and certainly a case can be made for using an advisor, but not always.
I have never used an advisor, but that doesn’t mean I wouldn’t be better off if I did. I asked at Fidelity, but the fee percentage – I think it was 1% a few years ago –

No TIME Left For You

Michael Flack | Jun 6, 2025

On my way to better things
(No time left for you) I found myself some wings
(No time left for you) Distant roads are callin’ me
(No time left for you)
– The Guess Who
It had been a while since I had been mailed the opportunity to “get guaranteed income that you can’t outlive,” “preserve your capital,” and most importantly “enjoy a complimentary dinner.” I was concerned that there might have been some sort of cosmic shift away from financial planners who charge 1% of assets or even worse that my name had fallen off the free steak mailing list.

Your Results May Vary

Dan Smith | Jun 12, 2024

“SELL THE SIZZLE, BOYS.” With those words from the sales manager at a big insurance company, the 2003 class of newly minted registered representatives were off to the races, extolling the virtues of the firm’s products to family, friends and anyone else who would listen.
I still vividly remember that moment. Yes, I was there.
To become registered reps, the 2003 class had to pass the necessary exams to get a Series 6 securities license and a license to sell life and health insurance.

Rates Up Lumps Down

Richard Connor | Nov 29, 2022

WE HAVE ALL BEEN affected by rising interest rates in 2022, from skyrocketing mortgage rates to plunging bond prices. A less-publicized casualty: Higher interest rates are having a big effect on those approaching retirement who are eligible for a pension. How so? Many pension plans offer a choice between a lifetime stream of monthly income and a onetime lump sum payment. Rising rates could reduce the lump sum payment that many employees would receive next year by 25% or 30%. My former employer’s pension plan offers a good example. It’s a final average pay plan that provides a lifetime monthly annuity payment at retirement, typically defined as age 65. The monthly income amount is based on three factors: an employee’s years of service, an accrual factor usually expressed as a percentage of annual pay and the employee’s average salary over his or her final three years of employment. In 2014, my company added a lump sum option to the pension plan. An employee could elect to get a large, onetime payment instead of a monthly annuity. We were told the plan would follow the IRS section 417e method and use the minimum interest rates. It turns out the calculation uses the time value of money. Specifically, the lump sum can be thought of as the amount you’d need to invest today, at a specified interest rate, to generate a stream of payments equal to or greater than the monthly annuity. The calculation uses an employee’s age to model his or her expected longevity. The critical factor, however, is the chosen interest rate. The higher the interest rate, the smaller the lump sum. This makes intuitive sense. If you can earn a higher rate of return on your money, you need less of an investment to generate a stream of payments equal to…

Beginning Badly

Richard Connor | Sep 15, 2022

SEQUENCE-OF-RETURN risk has long been a major concern among retirees—and it’s a real danger right now for those who just quit the workforce or soon will. Also known simply as sequence risk, it refers to the chance that the market declines sharply, forcing retirees to sell investments at depressed prices to generate income. Wade Pfau, a leading retirement researcher, published a paper highlighting the danger involved. As he makes clear, a few years of market losses coupled with portfolio withdrawals can decimate savings, increasing the risk that a retiree will run out of money. You might view sequence-of-return risk as the opposite of dollar-cost averaging. Instead of buying more shares when stock prices are down, you’re selling additional shares at lower prices to generate the same amount of income. This year, unfortunately, provides a good example of how market forces can affect retirees’ savings—and their plans. Consider a retired couple with a $1 million portfolio who need $50,000 a year from savings to cover their expenses. If they withdraw $50,000 at the beginning of the year, their balance is reduced to $950,000. If the stock market returned 10% that year, their balance at the end of the year would be $1,045,000. If this continued year after year, the retired couple would be in great shape. By the end of the fifth year, their balance would be $1,274,370. But what if the market declined 10% in the year when they made their initial withdrawal? At the end of that first year, just as the couple was about to withdraw another $50,000, their balance would be $855,000. What if this continued? At the end of five years, their balance would be slashed by nearly 60%, to $406,211. Folks who retired during the 2008-09 Great Recession encountered this risk head-on. I had a colleague…

Bonding for Life

Richard Connor | Jul 30, 2022

WHEN MY WIFE AND I were young, it was common to receive savings bonds for major events, such as birthdays and religious celebrations. We carried on the tradition with our two sons and we’re planning to do the same for our grandchildren. With our sons, we bought savings bonds to mark significant childhood milestones. We held on to those paper bonds for many years, and gave them to our sons when they graduated college. They appreciated the significant sum and used the money to help fund the transition from college to the working world. But one bond they each received was unexpected—and extremely meaningful. The story begins in summer 2004. My mother, who lived with us, was diagnosed with B-cell lymphoma. At first, brain surgery and aggressive chemotherapy seemed to cure her. But weeks after her last chemo treatment, the cancer came back and ravaged her brain. By December, it was clear there were no treatment options, and she chose to go on hospice care at our home. My mom was especially sad about losing the opportunity to see her nine grandchildren grow up. They spanned a wide range of ages, and she had a special relationship with each of them. At the time, our oldest son was a senior in college, and she lamented that she wouldn’t see him graduate. That reminded my wife and me of something my wife’s grandmother had done. She bought savings bonds for her great-grandchildren to commemorate religious milestones that would come later in their life. My mother-in-law held on to the bonds that her mother had bought, and then gave them with a card to each great-grandchild as the milestones occurred, which was often long after their great-grandmother had died. It was a nice way to connect them with a beloved family member.…

Hitting the Road

Richard Connor | Sep 20, 2022

MY WIFE AND I JUST returned from the first extended road trip of our retirement. We were away two weeks, drove 2,800 miles and visited 10 states. The primary reason for the trip was to stay five days on a houseboat on Beaver Lake, Arkansas, with seven friends. We broke the trip into three phases. The first part took us from New Jersey to northwest Arkansas in two-and-a-half days. Along the way, we stopped in St. Louis to visit the Gateway Arch National Park. We also drove a short distance along legendary Route 66 in Missouri. It wasn’t a very exciting section of the historic 2,448-mile highway. Next time, I’d like to traverse some of the more celebrated sections, especially a special corner of Winslow, Arizona. Phase No. 2 was five days and nights on an 80-foot houseboat on Beaver Lake. We fished, swam, paddled, grilled, read, played games and enjoyed each other’s company. Seven of the nine passengers are retired or about to retire. Two of our friends are still actively working but looking forward to retirement. There were lots of discussions about travel destinations, Medicare and retirement locations. The third phase consisted of a semi-leisurely drive through Memphis, Nashville and three places in North Carolina—Asheville, Winston-Salem and Raleigh. In Memphis, we toured Graceland, ate some good barbecue and heard terrific music on Beale Street. A special place in Memphis is the National Civil Rights Museum. The museum is located at the Lorraine Motel, where Dr. Martin Luther King was shot. It’s quite sobering and educational, and well worth the time. In Nashville, we hit some of the honky-tonks—Kid Rock’s and Jason Aldean’s—and had dinner with our nephew. Meanwhile, in Asheville, we hiked some of the Blue Ridge Parkway and strolled the city’s River Arts District with another nephew. We…

Taking Your Lumps

Richard Connor | Sep 9, 2019

I’M ONE OF THOSE lucky folks whose employer had a traditional defined benefit pension plan. I worked in the aerospace industry, starting with GE in the 1980s. Various mergers led to us to become part of Lockheed Martin. Through these multiple sales and mergers, our benefits and pension plan stayed largely the same, though—to be honest—I didn’t pay a lot of attention in my early years and was only vaguely aware of the details. This lack of interest, however, changed dramatically later in my career. After 26 years of service, my division was sold to a private equity firm. Lockheed and the firm that bought us were able to come to an agreement that kept our pension intact and active. Four years after the divestiture, however, our traditional defined benefit pension was frozen and replaced with a cash balance plan. At that time, a lump sum option was added, but its calculation was confusing and not consistently applied across all retirement scenarios. I realized the time had arrived to become much more familiar with the pension’s design and its various options. It was during this research that I became acquainted with a wonderful word: superannuated. The Cambridge Dictionary defines superannuated as “old, and almost no longer suitable for work or use.” In the pension world, it might be rephrased as “highly paid employees whose current productivity doesn’t warrant their salary.” Many pension plans include a design feature to incentivize employees to retire early to help with this problem. Like these other plans, my pension plan had provisions for “early retirement.” The plan had two distinct categories of “early retirement” that allowed an employee to receive a reduced pension as early as age 55. The first category was for employees with five years in the pension plan who voluntarily left the company…

Exposing Themselves

Richard Connor | May 19, 2023

RICHARD NIXON IS best known for the infamous Watergate scandal. But how many of us remember that, prior to Watergate, he got caught up in another scandal over a suspect tax deduction? In 1969, Nixon donated more than 1,000 boxes of his official papers to his presidential library and attempted to claim a $576,000 charitable deduction. This caused an uproar, and served to start turning much of the nation against the president. Congress got involved, created an investigative panel and eventually disallowed the deduction. Nixon felt his strategy was legal, and voluntarily provided three years of income-tax returns to Congress for the panel’s review. This set the precedent for presidents—and presidential candidates—to submit their tax returns for public scrutiny. This anecdote, and many more, are contained in a fascinating new book entitled All the Presidents’ Taxes, written by Charles Renwick, a Chartered Financial Analyst and Certified Public Accountant. Renwick’s goal is to expose readers to some of the more interesting stories of presidents, and presidential candidates, and their tax challenges. But the book isn’t just an exposé of suspect tax strategies. The author highlights legal tax-cutting strategies that are used by our highest leaders, but that are also available to everyday taxpayers. Part One consists of four chapters. The first provides a concise and informative overview of the history and construction of our tax system. The second chapter asks the question, “How can we assess a president’s taxes?” The author proposes four questions: Are they a cheater? Is there a conflict of interest? Are they paying their fair share? Do they have any foreign business dealings? Renwick then adds a fifth question to help readers with their own taxes: What can we learn and borrow from presidents and presidential candidates? The author uses this framework to look at President Jimmy…

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Shouldn’t property taxes be a realistic part of retirement planning? Sorry, I think this is a major financial and social issue.

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Rates Up Lumps Down

Beginning Badly

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Hitting the Road

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