For retirees, a reverse mortgage should be a last resort—but it’s mighty comforting to know what that last resort is worth.

Piling On

FORGET XBOX and PlayStation. If you’re an investment nerd, nothing beats playing with a financial calculator, especially running scenarios that combine dollars, investment returns and great gobs of time. Here are six mathematical musings—not all of them happy:

Got a newborn daughter or granddaughter? If you invest $1,000 on her behalf and the money notches 6% a year, she’ll have almost $106,000 at age 80. That 6% is my assumption for long-run annual stock returns.

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Hot Topic

IT WAS 90 DEGREES—and we were the unfortunate owners of a broken, 18-year-old heat pump. After evaluating our system, one heating, ventilation and air conditioning (HVAC) contractor recommended replacement at a cost of $7,472.
Reluctant to spend that chunk of change, we opted for a second opinion. Company No. 2 spent an hour and a half at our house, changed out a capacitor, added refrigerant and treated the system with “stop-leak,” all for $837.99.

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Taking Your Lumps

READ THE MEDIA and you’ll likely be convinced that health care costs in retirement will be overwhelming. One example: The Motley Fool says the average couple will need $400,000 for retirement health care expenses—if they’re healthy.
Pretty scary stuff. But let’s be realistic: Every ongoing living expense stated as a lump sum looks scary. For instance, my total property taxes over my retirement will come to $435,000, excluding annual increases.
Not reassured? Consider this from a recent study by the Employee Benefit Research Institute: “For the majority of surveyed people,

Read more »

Latest Blogs

Piling On

FORGET XBOX and PlayStation. If you’re an investment nerd, nothing beats playing with a financial calculator, especially running scenarios that combine dollars, investment returns and great gobs of time. Here are six mathematical musings—not all of them happy:

Got a newborn daughter or granddaughter? If you invest $1,000 on her behalf and the money notches 6% a year, she’ll have almost $106,000 at age 80. That 6% is my assumption for long-run annual stock returns.

Read more »

Hot Topic

IT WAS 90 DEGREES—and we were the unfortunate owners of a broken, 18-year-old heat pump. After evaluating our system, one heating, ventilation and air conditioning (HVAC) contractor recommended replacement at a cost of $7,472.
Reluctant to spend that chunk of change, we opted for a second opinion. Company No. 2 spent an hour and a half at our house, changed out a capacitor, added refrigerant and treated the system with “stop-leak,” all for $837.99.

Read more »

Taking Your Lumps

READ THE MEDIA and you’ll likely be convinced that health care costs in retirement will be overwhelming. One example: The Motley Fool says the average couple will need $400,000 for retirement health care expenses—if they’re healthy.
Pretty scary stuff. But let’s be realistic: Every ongoing living expense stated as a lump sum looks scary. For instance, my total property taxes over my retirement will come to $435,000, excluding annual increases.
Not reassured? Consider this from a recent study by the Employee Benefit Research Institute: “For the majority of surveyed people,

Read more »

Blog archive »

Numbers

FACED WITH A $400 unexpected expense, 59% of Americans say they could easily cover it, up from 50% five years ago, the Federal Reserve found. What about those who couldn’t? Typically, they’d carry a credit card balance or borrow from family or friends.

Act

CHECK YOUR FUND EXPENSES. If you own index funds, aim for weighted average annual expenses below 0.2%. If you own actively managed funds, you’ll pay more—but allocate enough of your portfolio to index funds to keep your average below 0.4%. By holding down costs, you’ll keep more of what you make, plus low-cost funds typically outperform high-cost competitors.

Think

REBALANCING. For major market segments—emerging markets, high-quality bonds, small-cap stocks and so on—we should have target portfolio percentages. Every so often, we should bring our portfolios back into line with these targets, preferably making any sales in a tax-deferred account. Rebalancing is mostly about controlling risk—but it can bolster returns.

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My One and Only

IS IT TIME TO STOP messing around with our portfolios—and go for radical simplicity? I’ve been asking myself that question in recent months, as I eye the growing list of funds that offer broadly diversified “one-stop shopping” portfolios built solely with low-cost index funds.
Take Vanguard Target Retirement 2050 Fund, which invests its assets in four Vanguard index funds and is geared toward those retiring in 2050 or thereabouts. The 2050 fund has a $1,000 investment minimum and charges just 0.15% a year,

Read More »
Jonathan Clements

About Jonathan

Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His latest book: How to Think About Money.

Money Guide

Start Here

Rising Margins

BASED ON THE U.S. EXPERIENCE of the past 50 years, there appears to be a fairly tight connection between economic growth and stock returns. But the story is messier than it seems. While economic growth and per-share profits for the S&P 500 companies grew at a similar pace over the past 50 years, earnings per share were only able to keep up with economic growth because of falling corporate tax rates and rising corporate profitability.

Read more »

Money Guide

Start Here

Rising Margins

BASED ON THE U.S. EXPERIENCE of the past 50 years, there appears to be a fairly tight connection between economic growth and stock returns. But the story is messier than it seems. While economic growth and per-share profits for the S&P 500 companies grew at a similar pace over the past 50 years, earnings per share were only able to keep up with economic growth because of falling corporate tax rates and rising corporate profitability.

Read more »
Home Call to Action
Jonathan Clements

About Jonathan

Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His latest book: How to Think About Money.

Free Newsletter

My One and Only

IS IT TIME TO STOP messing around with our portfolios—and go for radical simplicity? I’ve been asking myself that question in recent months, as I eye the growing list of funds that offer broadly diversified “one-stop shopping” portfolios built solely with low-cost index funds.
Take Vanguard Target Retirement 2050 Fund, which invests its assets in four Vanguard index funds and is geared toward those retiring in 2050 or thereabouts. The 2050 fund has a $1,000 investment minimum and charges just 0.15% a year,

Read More »