James McGlynn

I HAD LUNCH RECENTLY with a longtime friend—a 66-year-old retiree. I asked him how he’s generating income since he hasn’t filed for Social Security and doesn’t have a pension.
He said that, for now, he’s just drawing down his savings. I know his wife is three years older and her lifetime earnings were much lower than his, so I asked him if she’d filed for Social Security. He proudly said that she hadn’t—because she expects to live to age 90,

I’M 64 AND PREPARING to sign up for Medicare next year. I’ve done extensive research, including earning the Retirement Income Certified Professional designation. I’ve also written articles for HumbleDollar on Medicare coverage, Medicare premiums, Medigap and health savings accounts.
In addition, I’ve befriended Medigap salespeople, advised others on which plans to choose, and asked those on Medicare for advice on their experience with the program. I feel as if I’ve been preparing to take the Medicare filing “exam,” and I’m excited to sign up.

RETIREMENT PLANNING is complex because there are so many topics to master. In my chapter for the HumbleDollar book My Money Journey, I organized those topics into four categories: guaranteed income, medical expenses, tax-free accounts and asset allocation. In the book, I went into more depth, but here’s my 10,000-foot view of each one:

Guaranteed income is reliable income that isn’t affected by changes in the stock and bond market,

FOR MOST SENIORS, purchasing Medicare Part D prescription drug insurance is the right move—even if they don’t require any expensive medicines right now. The coverage insures against the risk of someday needing prescription medication that costs thousands of dollars and might be otherwise unaffordable.

The federal government subsidizes Part D, so it’s cheaper than purchasing stand-alone private drug insurance. Another good reason to enroll in Part D at the first opportunity: You avoid the penalty associated with a late sign-up.

MANY COMMENTATORS worry about the stock market in October, a month associated with the crashes of 1929 and 1987. But I now pay more attention to March—especially March 10.
As an observer of the stock market since 1980, I stumbled upon an odd coincidence. Major financial events this century, like stock market peaks and troughs, have centered on the month of March. Here are four examples:
March 10, 2000: The Nasdaq peaked at 5048.

THE FEDERAL RESERVE raised the federal funds rate in 2022 from zero to more than 4% to combat high inflation. While those rate increases severely damaged the stock and bond markets, they made some financial products more attractive. In particular, there are three products that are more appealing now than they were a year ago: income annuities, long-term-care insurance and various interest-paying investments.
Like many people, to take advantage of low loan rates, I refinanced my home mortgage before 2022’s rising interest rates.

I’LL BE ENROLLING IN Medicare in a couple of years. I wish I knew how much my premiums will be, but that’s a mystery worthy of Sherlock Holmes. I’ve researched it thoroughly, as you shall see, and it all starts with something called IRMAA.
IRMAA is not the name of my seventh-grade crush. Instead, it stands for income-related monthly adjustment amount. It’s the premium surcharge that people with higher incomes pay for Medicare.
How much is the surcharge?

I RECENTLY LISTENED to a podcast during which the speakers lamented the death of a colleague who was in his 30s. They mentioned a GoFundMe campaign to assist his family, so I assume the deceased had no life insurance. According to LIMRA, which collects data on the life insurance industry, less than 50% of millennials have individual life insurance.
There are two major types of life insurance: term and whole life. Term insurance is intended to cover a specific period,

YOUR LIFE’S FINAL costly chapter may be paying for long-term care. Indeed, the odds of needing care if you’re age 65 or older are around 50%.
Two key questions: Will you need care for an extended period and how will you pay for it? If the duration is short—which it is for many seniors—paying probably won’t be much of a problem. But if long-term care is needed for many years, financial decisions today might protect the legacy you hope to bequeath decades from now.

I RECENTLY VISITED Eastern Europe, where I volunteered to teach English in Poland through an organization called Angloville. I received free room and board at a resort in exchange for conversing from breakfast through dinner with Polish adults who wanted to improve their English.
In addition to meeting Poles and being immersed in Polish culture, I used my free time to explore nearby countries. Planning a vacation abroad? Based on my recent trips to Poland,

I REMEMBER 40 YEARS ago listening to Salomon Brothers economist Henry Kaufman bemoaning government deficits and predicting higher interest rates as a result. We institutional investors would gather in a room to listen to his declarations through a “squawk box” intercom system—because conference calls weren’t yet a thing.
Federal Reserve Chair Paul Volcker was in the process of wringing inflation out of the financial system by raising the federal funds rate so high that investors would rather hold cash investments than spend money.

ONLINE SPORTS BETTING is currently legal in 30 states but eventually will be legal everywhere—because the tax revenue is simply too attractive. All this was made possible by the Supreme Court, which in 2018 struck down federal legislation prohibiting online sports betting.
The sports leagues spent decades denouncing gambling, saying it threatened the integrity of the game. But my concern isn’t the “integrity” of the game. Rather, I worry about the individual bettor who ends up wagering too much.

THE SECURE ACT, which took effect Jan. 1, 2020, made inheriting an IRA even more complicated. Before 2020, beneficiaries typically had the option of taking distributions from an inherited IRA over their lifetime, potentially squeezing many more years of tax-favored growth from these accounts.
The SECURE Act drew a new line, eliminating some beneficiaries’ ability to make use of the so-called stretch IRA. Beneficiaries now are divided into two groups. Some have to empty an inherited IRA within 10 years of the original owner’s death.

AS THEY APPROACH retirement age, workers sometimes get to choose between a monthly pension and a lump-sum payout. It’s a choice I recently made—one I researched carefully. In the end, I made an unusual decision that took a few extra steps.
Let me start at the beginning. In 1984, I began working for American National Insurance Company as an investment analyst. I left the company in 1991, but still qualified for a small pension.

I HAD A NEW HOME built in 2017. I financed it with a 30-year mortgage at a 3.875% interest rate.
Early last year, when interest rates dropped due to the pandemic, I suggested that readers refinance. I took my own advice, replacing my 30-year loan with a 15-year mortgage at 2.99%. The cost of refinancing seemed well worth the reduction in my loan interest rate.
Two months ago, I saw that mortgage rates had continued to decline,