MY RELATIONSHIP WITH money is complicated. I want to get the best value for our dollars, so I spend a lot of time comparison shopping. Other people hunt for bargains. I go on long safaris. My frugality and comparison shopping have served Jim and me well. In our double-income household, we managed to save 50% of our combined pay—basically living on one income and saving the rest. That, coupled with some lucky breaks, propelled us to early retirement. Going from saving for retirement to spending in retirement, however, brings with it a shift in mindset. You become less focused on getting the most from your dollars—and more focused on getting the most from your time. Yes, you still want to save money, but you need to balance that against the time and effort involved. That brings me to our retirement income plan. We have five years of living expenses in cash investments, so we can sleep at night without worrying about short-term stock market performance. But cash, of course, pays almost nothing these days, so I’m always looking for the best deal I can. Until recently, I conducted those searches from Spain, where we spent the first three years of our retirement until our recent move back to Dallas. To open new financial accounts in the U.S., we needed a U.S. address. To that end, like many expats, we rented a virtual mailbox. That gave us a physical address in the U.S., plus 24/7 access to our mail, all from the convenience of a laptop or smartphone. (This is different from a P.O. box from the postal service.) In the past few years, using our virtual mailbox address, I opened two new travel credit cards in the U.S. to earn mileage. That gave us enough promotional airline points to pay for roundtrip flights from Spain to both the U.S. and Thailand. I also used the address to open high-interest savings accounts with Customers Bank, Salem Five Bank and TIAA Bank. All this required relatively little time and effort—a few hours to search the internet and a few more hours to set up the new account and transfer the money electronically. Last November, however, I took the hunt for savings too far when I opened a Citi Priority checking account. Citi offered a $700 cash bonus for new customers if they maintained a balance of at least $50,000 for 60 days, equal to an annualized return of more than 8%. I transferred $1,000 to open the new Citi account and planned to transfer another $50,000 within 30 days. [xyz-ihs snippet="Mobile-Subscribe"] The bank’s account opening process was relatively easy and, as with all our other accounts, I used our virtual address. A few weeks later, I got an email from Citi saying it needed proof of my physical address and my identity. But without waiting for my response, Citi froze my account and sent it to “new account fraud.” After several phone calls with wait times that often lasted more than an hour, as well as text messages over several weeks, Citi admitted that it had caused the problem. It had violated the Patriot Act by opening my account without first validating my identity and address. I sent the bank a copy of my passport and driver’s license, along with a receipt showing that it was indeed me who paid for the virtual mailbox. But Citi still refused to unfreeze my account. After a few months of back and forth, I requested that Citi close my account and return my money the same way it had received it—by electronic bank transfer. Citi refused. A representative told me that Citi could only return the money by sending a check to a residential address and not to my virtual mailbox, even though I had provided proof that I owned the mailbox. I ended up filing complaints with the Office of the Comptroller of the Currency and with the Consumer Financial Protection Bureau. I finally got my initial deposit mailed to my virtual mailbox—seven months after I opened the account. My experience was hardly unique. I discovered many other Citi Priority customers had faced similar situations. Citi either froze or closed their accounts, and then refused to return their money or refused to deposit the $700 promo incentive. We all have limited time and money. I’m mad about the $700 I never got. But mostly, I’m mad about the time I’ll never get back. Jiab Wasserman, MBA, RICP®, has lived in Thailand, the U.S. and Spain. She spent the bulk of her career with financial services companies, eventually becoming vice president of credit risk management at Bank of America, before retiring in 2018. Head to Linktree to learn more about Jiab, and also check out her earlier articles. [xyz-ihs snippet="Donate"]

THE OPEN KITCHEN restaurant has been a fixture in Charlotte, North Carolina for 75 years. The restaurant has an old-time feel, with memorabilia, including menus from years gone by, lining its walls. Those old menus provided David Enna, a financial journalist, with a laboratory for examining the effects of inflation. What did Enna find? The oldest menu on display is from 1963. To state the obvious, today’s prices make those from the 1960s look quaint. Back then, spaghetti and meatballs cost just $1.10. Today, it’s $15.50. But, as Enna points out, that was more than 60 years ago, so increases are to be expected. Over the past 60 years, the Consumer Price Index (CPI) has averaged 3.8% per year. That isn’t unreasonable, especially since that average includes the 1970s, when inflation sometimes topped 10%. What’s of more concern, though, is what consumers have experienced more recently. Since 2020, prices across the economy have risen 29%. And though those increases have slowed, the Fed is still struggling to ratchet inflation back to its preferred 2% level. This has given investors renewed interest in strategies to defend against inflation. At first glance, this doesn’t seem like it should be such a difficult problem. The U.S. Treasury offers an investment specifically designed for this purpose: Treasury Inflation-Protected Securities (TIPS). These are bonds that are guaranteed by the federal government to increase in value with inflation. And though I hesitate to use the words “bond” and “exciting” in the same sentence, today many investors are finding the return on TIPS compelling. The 30-year TIPS is now paying close to 3% on top of inflation. If inflation averages 2.5%, for example, over the next 30 years, this bond will end up returning a total of 5.5% per year, and with minimal risk. That sounds good in theory, but do these bonds make sense for your portfolio? It’s worth taking a closer look. The first thing to note is that this seemingly attractive 3% yield only applies to 30-year TIPS. Yields on shorter-term bonds are lower. So unless your investment horizon happens to be exactly 30 years, these bonds may be of limited practical value. Putting aside the yield question, though, a more fundamental challenge with individual TIPS—and individual bonds in general—is that they’re a cumbersome way to build a portfolio. Even if you didn’t mind the process of buying bonds one by one, which can be tedious, there’s the fact that it’s hard for most people to be able to forecast their cash flow needs each year into the future. That’s a problem because choosing maturity dates is the foundation on which bond portfolios are built. Ideally, if you can align the maturity dates of the bonds in your portfolio with your future cash needs, then you can hold bonds to maturity, which is when the issuer would promise to pay you back in full. But that redemption value is guaranteed only at maturity. Buy a 20-year bond and sell it after just 10 years, and there are no guarantees. A bondholder could easily lose money selling an individual bond before maturity. Given these challenges, would a TIPS fund be a better choice? To be sure, bond funds are much simpler to purchase and to manage, but they typically offer even less protection from losses than individual bonds. Most recently, shareholders in TIPS funds were disappointed by how they performed in 2022, when inflation spiked to 9%. Investors expected that to be the year when TIPS rewarded investors, but instead, diversified TIPS funds such as the Vanguard Inflation-Protected Securities Fund (ticker: VAIPX) lost nearly 12%. Why did funds like this fare so poorly when inflation was running so high? The problem is that, at the end of the day, TIPS are still bonds. And though they receive a bump in value when inflation rises, a countervailing force is that they lose value when interest rates rise. In 2022, the Federal Reserve raised interest rates aggressively to fight inflation. The negative impact from those rate increases far outweighed the benefit TIPS received from inflation being higher. That puts investors in a difficult position. If TIPS provide inflation protection in theory, but both individual TIPS and TIPS funds carry limitations, what other options are there? The good news is that not all TIPS funds are the same. Some hold only short-term bonds, and they have historically held up much better than more broadly diversified TIPS funds because short-term bonds are more resilient when interest rates rise. Over the past five years, a fund like Vanguard’s Short-Term Inflation-Protected Securities ETF (ticker: VTIP) has outperformed a comparable fund (ticker: VGSH) holding standard short-term Treasury bonds every year, as well as this year to-date. It’s important to note, though, that this is relative performance. In 2022, when the entire bond market was under pressure, even short-term TIPS funds like VTIP did still lose money. They just lost less than funds holding conventional bonds. The bottom line: We should never become too wedded to any one strategy. No investment can promise reliable and complete protection against inflation in every market scenario. That said, I do still recommend TIPS and would specifically recommend a short-term fund like VTIP. But I also suggest taking a diversified approach to inflation protection. Here are other steps to consider. If you’re in your 60s and considering when to claim Social Security, that decision offers a powerful lever. Because Social Security benefits increase with inflation and also increase with each year you delay claiming, it’s maybe the most effective way to build additional inflation protection into your plan. What else can you do? Fortunately, you may already own one of the most effective—and underappreciated—inflation-fighting instruments: stocks. While rising prices in recent years have been frustrating for consumers, the result has been that companies have been able to maintain their profit margins. That, in turn, has helped to support their stock prices through this period of inflation. To be sure, some companies have more of an ability to raise prices than others, but overall, stocks are, in my view, a good way to keep pace with inflation. The one thing I wouldn’t do is to buy gold. Despite its reputation, various studies have confirmed that gold really isn’t a reliable inflation hedge. In a paper titled “The Golden Dilemma,” researchers wrote: “Over practical investment horizons, gold is an unreliable inflation hedge,” though they acknowledge that it may be more reliable over longer timeframes—“if the investment horizon is measured in centuries.”   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.