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Wedding Cost is just the beginning

luvtoride44afe9eb1e  |  Sep 8, 2026

Be the first to comment.
Read more »

A Wedding Too Far

Mark Crothers  |  Sep 7, 2026

"I think the “tiers” on the tissues is a typo… send them back for replacement and see what your daughter says"
- luvtoride44afe9eb1e
Read more »

Financial Fraud

ArticleAdam M. Grossman  |  Sep 5, 2026

RECENTLY, A FELLOW—let’s call him Tom—contacted me with a distressing story of financial fraud. I’ll describe what happened then review steps you might take to prevent this same sort of thing. Tom first noticed there might be a problem when he spotted a larger-than-average withdrawal from his checking account. The payee was a 529 college savings plan. But because Tom and his wife—let’s call her Jane—have 529 accounts for their children, the transaction almost went unnoticed. Tom assumed it was a transfer into his own family’s account. But when he mentioned it to Jane, she noted that they had stopped contributing to their 529. That prompted them to investigate further. What they found was that scammers had set up a new 529 account in Tom’s name. They then initiated an electronic funds transfer to move more than $2,000 from Tom and Jane’s checking account into the new 529 set up by the thieves. The intention presumably was to then withdraw the funds from the 529, at which point the theft would become unrecoverable. How were the thieves able to initiate the transfer from Tom and Jane’s bank? This is the part that’s distressing: They took advantage of the widely-used Automated Clearing House (ACH) system. Unfortunately, this system has key weaknesses that make it susceptible to fraud like this. First, it allows funds to be “pulled” out of an account. That’s in contrast to a wire transfer, which can only be “pushed” out by someone with access to the account. So a thief would only need your name, account number and bank routing number to siphon funds from that account. And unfortunately, that information is printed on the front of every check, making it accessible to someone looking to perpetrate this type of scheme. Once the thief had the new 529 account set up in Tom’s name, it was just one simple step to initiate a transfer from Tom and Jane’s bank since the accountholder’s name was the same on both accounts. It was so seamless that if Tom hadn’t been reviewing the transactions in his account, he might never have noticed the theft. According to the FBI, losses due to cybercrime have increased from $1 billion per year to $21 billion over the past 10 years, and ACH theft is a tactic thieves are using more frequently, so it’s worth looking at strategies to help keep your accounts secure. Here are six recommendations.
  1. Secure the login to your bank account by setting up two-factor authentication. And if your bank supports it, use an authenticator app, rather than text messages, for the authentication codes. Ideally, if your bank supports it, switch to a passkey. This is a newer technology that represents a significant advance over traditional passwords. Most importantly, they aren’t vulnerable to phishing attacks. They’re also easier to use, providing one-click logins, and you can store passkeys in a password manager. For those reasons, more websites are beginning to support passkeys. I’d make the switch as soon as your bank makes them available.
  2. Set up alerts through your bank to monitor activity in your checking account. Every bank is different, but most allow you to set up email- or text-based alerts to let you know when transactions above a specified threshold are processed, or when other types of activity occur.
  3. Monitor your transactions. These days, it can be hard to keep an eye on every account. Households often have one or more bank accounts plus credit cards and electronic payment services like Venmo or Zelle. Most people realistically don’t have the time to review every account in real time. That’s why I recommend a service like Monarch or YNAB, which are web-based versions of traditional budgeting tools like Quicken. These services can pull in transactions from all your accounts and present them in a consolidated list, making review much easier. If you kept Monarch or YNAB open in a browser window on your home computer, you could scroll through recent transactions whenever you have a spare minute.
  4. To narrow the circle of people who have access to your account information, try limiting the number of paper checks you write. Especially with Zelle and Venmo as alternatives for making payments, this is getting easier. If you do write paper checks, be sure to use a gel pen and to avoid freestanding mailboxes. Those steps can help prevent a related type of fraud, as Jonathan Clements explained a few years back.
  5. Pay attention to notifications of data breaches. Unfortunately, breach announcements seem to occur so frequently that we’ve become immune to them. It’s worth paying attention, though, to understand which particular pieces of information have been stolen. If it looks like your banking information is included in a breach, it might be worth opening a new account, inconvenient as that would be.
  6. Have your guard up against unsolicited phone calls, emails or text messages. If someone is contacting you about an “account security issue,” or claims to be calling from your bank or from the IRS, be especially wary. Those are common tactics for creating a sense of urgency that can cause people to let their guard down.
What if, like Tom and Jane, you spot a fraudulent transaction in your account? Then it’s important to report it as quickly as possible. Regulation E can limit your liability, but the faster you report a suspicious transaction, the more protection it provides. Liability is limited to just $50 if a theft is reported within two business days, but that exposure increases to $500 if it’s reported later. And after 60 days, there are no guarantees. Thieves, unfortunately, don’t seem to sleep, which means that we need to be more vigilant than in the past, and need to be continuously vigilant. As personal finance author Mike Piper wrote recently, “Cybersecurity should be considered another core area of personal finance—no different from insurance planning, for instance.” 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.
Read more »

A bleak picture for retirement in the future?

R Quinn  |  Sep 2, 2026

"My calculations say married filing jointly in 2024 with MAGI of $250k would be in the 1.4x IRMAA bracket. Part B would be about $974 more per person per year in 2026 ($202.90*12*0.4)."
- Randy Dobkin
Read more »

Locking it in

greg_j_tomamichel  |  Sep 5, 2026

"Interesting. That’s a new one on me. Does that mean if you made extra payments to accelerate payoff that if you take some back, your mortgage if set back with longer to payoff than before you took the money?"
- R Quinn
Read more »

Behind The Finery

Mark Crothers  |  Sep 3, 2026

"Scott, we're still handling our side of the wedding — currently running about 15% over the budget we set for our daughter. I've gotten pretty good at the silent head-shake-and-sigh combo. It doesn't fix anything, but it helps."
- Mark Crothers
Read more »

The Economy of Expectations

W.D. Housley  |  Sep 5, 2026

"So you rode your bike past my house. 😁"
- W.D. Housley
Read more »

Taking It With You

ArticleJeffrey K. Actor  |  Sep 5, 2026

DEEP DOWN INSIDE, I want to be the richest person in the graveyard.  I retired at age 62, confident in our financial plan to survive market fluctuations. We saved over 25% of our income for nearly three decades. Perhaps a bit too much, but we lived well and always had sufficient funds to raise a family, maintain our household, and put our children through postgraduate education. If anything, our retirement spending level is conservative, based on a 40 year time frame for both my wife and I. We have a slightly nuanced financial plan. Suffice to say it is reassuring to know that we are beyond financial security if we simply maintain an inflation adjusted 4% withdrawal rate. Indeed, calculations suggested we could double our pre-retirement budget, with no worries or loss of sleep. Risk be damned! Slowly, we made a conscious decision to spend more. At first it was tough to break old habits. I mean, frugality runs deep in my immediate family. You could use my brother and I as chromosomal templates in a genetic search to discover the frugality gene.  My wife and I now go out for coffee without blinking an eye at paying nearly 6 bucks for a cup of Joe (plus tip). We don’t hesitate to escape the Houston heat by scarfing 5 dollar a scoop ice cream. We no longer plan our restaurant outings according to Happy Hour schedules or local senior discounts.  Even so, three years into retirement, our annual spending remains well below what our financial plan says we can safely afford.  Time to up the ante. We bought season tickets to the symphony and added a dinner date before the performance. We took international vacations twice a year, exploring new countries and cultures. We drove to national parks and treated ourselves to overnights in hotels instead of motels. We gifted our children, with hopes they would bolster their own long-term savings. Gosh, we even made significant charitable gifts to institutions we only previously dreamed of supporting.  Spending is easy. Spending wisely is a challenge. Ironically, the strong stock market since our retirement has made it remarkably difficult to spend our money as initially planned. It sounds counter intuitive, but let me explain.  Our retirement portfolio allocation has a stock to bond ratio of 75:25.  The stock component primarily matches total market returns. Specifically, our stock component has grown more than 65% since we retired. Because of this, we put aside 10 years of safer funds (bonds and cash equivalents) to weather any potential market storm. We successfully navigated the immediate sequence of return risk (SORR) hurdle, that pesky danger of facing a poor investment market performance in earliest years of retirement.  We feel both blessed and safe. We sleep well at night. Our financial calculators now indicate that we can spend even more than original predictions. Yet that realization is causing me angst. After all, we spent a lifetime saving, scrimping and sacrificing to reach this point. Indeed, we value the concepts of avoiding excess, of seeking value and purpose in purchases. Our goals were never to impress the neighbors, but rather be content and grateful with what we have.   I want people to know I had a choice about how I spent my accumulated dollars. I chose a life of frugality, questioning everything I purchased. Do I really need that new phone? My current one makes calls, surfs the web, and navigates when I need directions.  Do I need a new car? My dented 11 year old Honda gets me safely to my destinations. Shall I purchase the kayak I’ve been eyeing, or simply rent one for the two times a year I brave the waters?  Perhaps the real measure of a successful retirement is not how much money remains at the end, but whether those resources were used in ways that enriched the lives of others and brought meaning to our own. Financial independence now gives us choices, and a freedom after decades of disciplined saving. It is okay if I leave this world with more than enough funds still in the bank. There are values I learned along the way; those of prudence, generosity, gratitude, and the quiet confidence that comes from living well below one's means. In the end, wealth is simply a tool; character is the true legacy. Perhaps the goal isn't to die with the largest portfolio, but to know that every dollar reflected the values by which we chose to live. Therefore, if I can’t spend it all according to my values, I guess I’m okay with being the one of the richest men in the graveyard.  Jeffrey K. Actor, PhD, was a professor at a major medical school in Houston for more than 25 years, serving as an academic researcher with interests in how immune responses function to fight pathogenic diseases. Jeff’s retirement goals are to write short science fiction stories, volunteer in the community and spend time in his garden. Check out his earlier articles.
Read more »

State Farm Dividend

Bogdan Sheremeta  |  Sep 2, 2026

"Good point re: the Umbrella policy. Would you kindly share who you’re with? Ty"
- Scott Dailey
Read more »

The best state to retire? Take a close look.

R Quinn  |  Sep 3, 2026

"Finances, taxes and such were not a consideration. Only being near family which in our case all are within an hour drive."
- R Quinn
Read more »

Make the Attic Great Again

Dan Smith  |  Sep 1, 2026

"A Humble example for HumbleDollar 😉 My cluttered attic awaits me….. 🤣"
- Andy Morrison
Read more »

The Intentional Spendthrift

Mark Crothers  |  Aug 21, 2026

"Gotcha. Yes, the coast line is spectacular. I thought it was cool standing at that point on the continent. We had a memorable/fun lunch in a nearby beach town after visiting the point. Money well spent."
- Andy Morrison
Read more »

Wedding Cost is just the beginning

luvtoride44afe9eb1e  |  Sep 8, 2026

Be the first to comment.
Read more »

A Wedding Too Far

Mark Crothers  |  Sep 7, 2026

"I think the “tiers” on the tissues is a typo… send them back for replacement and see what your daughter says"
- luvtoride44afe9eb1e
Read more »

Financial Fraud

ArticleAdam M. Grossman  |  Sep 5, 2026

RECENTLY, A FELLOW—let’s call him Tom—contacted me with a distressing story of financial fraud. I’ll describe what happened then review steps you might take to prevent this same sort of thing. Tom first noticed there might be a problem when he spotted a larger-than-average withdrawal from his checking account. The payee was a 529 college savings plan. But because Tom and his wife—let’s call her Jane—have 529 accounts for their children, the transaction almost went unnoticed. Tom assumed it was a transfer into his own family’s account. But when he mentioned it to Jane, she noted that they had stopped contributing to their 529. That prompted them to investigate further. What they found was that scammers had set up a new 529 account in Tom’s name. They then initiated an electronic funds transfer to move more than $2,000 from Tom and Jane’s checking account into the new 529 set up by the thieves. The intention presumably was to then withdraw the funds from the 529, at which point the theft would become unrecoverable. How were the thieves able to initiate the transfer from Tom and Jane’s bank? This is the part that’s distressing: They took advantage of the widely-used Automated Clearing House (ACH) system. Unfortunately, this system has key weaknesses that make it susceptible to fraud like this. First, it allows funds to be “pulled” out of an account. That’s in contrast to a wire transfer, which can only be “pushed” out by someone with access to the account. So a thief would only need your name, account number and bank routing number to siphon funds from that account. And unfortunately, that information is printed on the front of every check, making it accessible to someone looking to perpetrate this type of scheme. Once the thief had the new 529 account set up in Tom’s name, it was just one simple step to initiate a transfer from Tom and Jane’s bank since the accountholder’s name was the same on both accounts. It was so seamless that if Tom hadn’t been reviewing the transactions in his account, he might never have noticed the theft. According to the FBI, losses due to cybercrime have increased from $1 billion per year to $21 billion over the past 10 years, and ACH theft is a tactic thieves are using more frequently, so it’s worth looking at strategies to help keep your accounts secure. Here are six recommendations.
  1. Secure the login to your bank account by setting up two-factor authentication. And if your bank supports it, use an authenticator app, rather than text messages, for the authentication codes. Ideally, if your bank supports it, switch to a passkey. This is a newer technology that represents a significant advance over traditional passwords. Most importantly, they aren’t vulnerable to phishing attacks. They’re also easier to use, providing one-click logins, and you can store passkeys in a password manager. For those reasons, more websites are beginning to support passkeys. I’d make the switch as soon as your bank makes them available.
  2. Set up alerts through your bank to monitor activity in your checking account. Every bank is different, but most allow you to set up email- or text-based alerts to let you know when transactions above a specified threshold are processed, or when other types of activity occur.
  3. Monitor your transactions. These days, it can be hard to keep an eye on every account. Households often have one or more bank accounts plus credit cards and electronic payment services like Venmo or Zelle. Most people realistically don’t have the time to review every account in real time. That’s why I recommend a service like Monarch or YNAB, which are web-based versions of traditional budgeting tools like Quicken. These services can pull in transactions from all your accounts and present them in a consolidated list, making review much easier. If you kept Monarch or YNAB open in a browser window on your home computer, you could scroll through recent transactions whenever you have a spare minute.
  4. To narrow the circle of people who have access to your account information, try limiting the number of paper checks you write. Especially with Zelle and Venmo as alternatives for making payments, this is getting easier. If you do write paper checks, be sure to use a gel pen and to avoid freestanding mailboxes. Those steps can help prevent a related type of fraud, as Jonathan Clements explained a few years back.
  5. Pay attention to notifications of data breaches. Unfortunately, breach announcements seem to occur so frequently that we’ve become immune to them. It’s worth paying attention, though, to understand which particular pieces of information have been stolen. If it looks like your banking information is included in a breach, it might be worth opening a new account, inconvenient as that would be.
  6. Have your guard up against unsolicited phone calls, emails or text messages. If someone is contacting you about an “account security issue,” or claims to be calling from your bank or from the IRS, be especially wary. Those are common tactics for creating a sense of urgency that can cause people to let their guard down.
What if, like Tom and Jane, you spot a fraudulent transaction in your account? Then it’s important to report it as quickly as possible. Regulation E can limit your liability, but the faster you report a suspicious transaction, the more protection it provides. Liability is limited to just $50 if a theft is reported within two business days, but that exposure increases to $500 if it’s reported later. And after 60 days, there are no guarantees. Thieves, unfortunately, don’t seem to sleep, which means that we need to be more vigilant than in the past, and need to be continuously vigilant. As personal finance author Mike Piper wrote recently, “Cybersecurity should be considered another core area of personal finance—no different from insurance planning, for instance.” 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.
Read more »

A bleak picture for retirement in the future?

R Quinn  |  Sep 2, 2026

"My calculations say married filing jointly in 2024 with MAGI of $250k would be in the 1.4x IRMAA bracket. Part B would be about $974 more per person per year in 2026 ($202.90*12*0.4)."
- Randy Dobkin
Read more »

Locking it in

greg_j_tomamichel  |  Sep 5, 2026

"Interesting. That’s a new one on me. Does that mean if you made extra payments to accelerate payoff that if you take some back, your mortgage if set back with longer to payoff than before you took the money?"
- R Quinn
Read more »

Behind The Finery

Mark Crothers  |  Sep 3, 2026

"Scott, we're still handling our side of the wedding — currently running about 15% over the budget we set for our daughter. I've gotten pretty good at the silent head-shake-and-sigh combo. It doesn't fix anything, but it helps."
- Mark Crothers
Read more »

The Economy of Expectations

W.D. Housley  |  Sep 5, 2026

"So you rode your bike past my house. 😁"
- W.D. Housley
Read more »

Taking It With You

ArticleJeffrey K. Actor  |  Sep 5, 2026

DEEP DOWN INSIDE, I want to be the richest person in the graveyard.  I retired at age 62, confident in our financial plan to survive market fluctuations. We saved over 25% of our income for nearly three decades. Perhaps a bit too much, but we lived well and always had sufficient funds to raise a family, maintain our household, and put our children through postgraduate education. If anything, our retirement spending level is conservative, based on a 40 year time frame for both my wife and I. We have a slightly nuanced financial plan. Suffice to say it is reassuring to know that we are beyond financial security if we simply maintain an inflation adjusted 4% withdrawal rate. Indeed, calculations suggested we could double our pre-retirement budget, with no worries or loss of sleep. Risk be damned! Slowly, we made a conscious decision to spend more. At first it was tough to break old habits. I mean, frugality runs deep in my immediate family. You could use my brother and I as chromosomal templates in a genetic search to discover the frugality gene.  My wife and I now go out for coffee without blinking an eye at paying nearly 6 bucks for a cup of Joe (plus tip). We don’t hesitate to escape the Houston heat by scarfing 5 dollar a scoop ice cream. We no longer plan our restaurant outings according to Happy Hour schedules or local senior discounts.  Even so, three years into retirement, our annual spending remains well below what our financial plan says we can safely afford.  Time to up the ante. We bought season tickets to the symphony and added a dinner date before the performance. We took international vacations twice a year, exploring new countries and cultures. We drove to national parks and treated ourselves to overnights in hotels instead of motels. We gifted our children, with hopes they would bolster their own long-term savings. Gosh, we even made significant charitable gifts to institutions we only previously dreamed of supporting.  Spending is easy. Spending wisely is a challenge. Ironically, the strong stock market since our retirement has made it remarkably difficult to spend our money as initially planned. It sounds counter intuitive, but let me explain.  Our retirement portfolio allocation has a stock to bond ratio of 75:25.  The stock component primarily matches total market returns. Specifically, our stock component has grown more than 65% since we retired. Because of this, we put aside 10 years of safer funds (bonds and cash equivalents) to weather any potential market storm. We successfully navigated the immediate sequence of return risk (SORR) hurdle, that pesky danger of facing a poor investment market performance in earliest years of retirement.  We feel both blessed and safe. We sleep well at night. Our financial calculators now indicate that we can spend even more than original predictions. Yet that realization is causing me angst. After all, we spent a lifetime saving, scrimping and sacrificing to reach this point. Indeed, we value the concepts of avoiding excess, of seeking value and purpose in purchases. Our goals were never to impress the neighbors, but rather be content and grateful with what we have.   I want people to know I had a choice about how I spent my accumulated dollars. I chose a life of frugality, questioning everything I purchased. Do I really need that new phone? My current one makes calls, surfs the web, and navigates when I need directions.  Do I need a new car? My dented 11 year old Honda gets me safely to my destinations. Shall I purchase the kayak I’ve been eyeing, or simply rent one for the two times a year I brave the waters?  Perhaps the real measure of a successful retirement is not how much money remains at the end, but whether those resources were used in ways that enriched the lives of others and brought meaning to our own. Financial independence now gives us choices, and a freedom after decades of disciplined saving. It is okay if I leave this world with more than enough funds still in the bank. There are values I learned along the way; those of prudence, generosity, gratitude, and the quiet confidence that comes from living well below one's means. In the end, wealth is simply a tool; character is the true legacy. Perhaps the goal isn't to die with the largest portfolio, but to know that every dollar reflected the values by which we chose to live. Therefore, if I can’t spend it all according to my values, I guess I’m okay with being the one of the richest men in the graveyard.  Jeffrey K. Actor, PhD, was a professor at a major medical school in Houston for more than 25 years, serving as an academic researcher with interests in how immune responses function to fight pathogenic diseases. Jeff’s retirement goals are to write short science fiction stories, volunteer in the community and spend time in his garden. Check out his earlier articles.
Read more »

State Farm Dividend

Bogdan Sheremeta  |  Sep 2, 2026

"Good point re: the Umbrella policy. Would you kindly share who you’re with? Ty"
- Scott Dailey
Read more »

Free Newsletter

Get Educated

Manifesto

Sep 6, 2026

NO. 55: THE BEST PART of spending is often the anticipation, while the purchase itself usually disappoints. Buying a new car? Plan far ahead, so you enjoy a long period of eager anticipation.

Truths

Sep 8, 2026

NO. 117: TREASURY bonds offer lower yields than corporates, but they come with a key advantage: They usually hold up better when the stock market declines. Bear markets are often triggered by a weakening economy. That leads to falling interest rates and concerns about the safety of corporate bonds, bolstering the price of Treasury securities.

think

Sep 7, 2026

DISPOSITION EFFECT. Investors tend to sell their winners too quickly and hang on to losers too long, often hurting their returns and generating unnecessarily large tax bills. Blame all this on our loss aversion: We’re anxious to turn paper gains into cash profits, before they slip away. Meanwhile, with losing investments, we hope to “get even, then get out.”

humans

Sep 6, 2026

NO. 61: WE'RE anxious to help family and friends—but that desire can blind us to the risks involved. Think about things like lending money to a family member who doesn’t pay us back or investing in a friend’s business that fails. In such situations, we can not only lose significant money, but also the relationship involved is often irreparably damaged.

Money Guide

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Manifesto

Sep 6, 2026

NO. 55: THE BEST PART of spending is often the anticipation, while the purchase itself usually disappoints. Buying a new car? Plan far ahead, so you enjoy a long period of eager anticipation.

Spotlight: Retirement

A Bit More Humble

Edmund Marsh   |  Apr 18, 2026

I LOVE TO PLAN. My wife, Sharon, often catches me nestled in my chair, gazing out a window at a distant object as my mind wanders even farther afield. My musings become scribbles on a scrap of paper, destined for discussion with Sharon at length over coffee and long walks. Eventually, we hammer out the settled strategies we think will best bring us happiness in adventures ranging from our next hike to the next few decades of life.

Read more »

401(k) participants want annuities – some form of guarantee – RDQ

R Quinn   |  May 22, 2025

I have expressed my opinion on the need for and desirability of a steady income stream in retirement, as guaranteed as possible. Next Friday my pension will be deposited in our bank account. On the second and forth Wednesday each month our Social Security will be deposited. All that has happened each month for the last seventeen years.
I don’t worry about withdrawal strategies, withdrawal percentages, guard rails, tip ladders or any similar strategy. The IRC tells me what I must withdraw from my IRA. 

Read more »

Rule of 55: Early Retirement

Bogdan Sheremeta   |  Nov 1, 2025

MOST PEOPLE THINK their retirement accounts are completely locked until age 59½ due to the 10% early withdrawal penalty, but that’s not really true. There are many ways to access your money earlier without the penalty, and knowing them can give you flexibility. Of course, you shouldn’t be touching your retirement accounts unless you’re ready to retire.
Here are some distributions that are not subject to the 10% penalty, per the IRS list:

Birth or adoption (up to $5,000 per child)
Series of substantially equal payments (72t)
First-time homebuyer (up to $10,000,

Read more »

Asset Protection Ideas

Bogdan Sheremeta   |  Jan 10, 2026

MANY PEOPLE FOCUS on building wealth through asset allocation and investment choices. Far fewer think about asset protection. In my opinion, protecting wealth is just as important as building it, especially since decades of disciplined saving and investing can be undone in one unfortunate event.
In this article, I wanted to discuss some of the strategies and tips that I’ve learned, and implemented in my personal finance journey.
Quick disclaimer: I’m not a lawyer,

Read more »

Today’s the Day!

DrLefty   |  Jul 1, 2025

Well, I tried to stay up until midnight to pop a cork, but it just wasn’t happening. So today I woke up as a retired person!  If you’ve read my articles from 2024 on the topic, you know this didn’t sneak up on me.
My road through the logistics of retiring from two university systems and applying for Medicare went…somewhat smoothly. I was pretty meticulous in my preparation. I attended webinars for both systems last year and put the application dates on my calendar.

Read more »

What If

Dan Smith   |  Mar 2, 2025

Last month I did my best to analyze investments to the market as an alternative to payroll taxes for Social Security. My conclusion was that the payroll taxes were worth it, though some readers respectfully disagreed.
But what if I could go back in time for a do-over. What if at age 16 I began to invest an amount into the market that was equal to and in addition to the payroll tax deducted from my pay?

Read more »

Spotlight: Rohleder

College in Retirement

Howard Rohleder   |  Jun 29, 2023

I RECENTLY COMPLETED a course called England: From the Fall of Rome to the Norman Conquest. Before that was Books That Matter: The Federalist Papers. Okay, I’m a nerd, I’ll admit it. Since I retired, I’ve looked for avenues to broaden and deepen my understanding of subjects that I was taught in high school and at the liberal arts college I attended. Back then, there were college courses, like accounting, that I felt I had to take to earn a living. Still, some of my favorite courses were American history, Shakespeare, philosophy and poetry. If I could go back, I might take more of these latter topics—and less accounting. But wait, I can go back. For years, retirees interested in learning needed to find a way to take a class at a local college or build their own curriculum with books they borrowed from the library or bought. Later, books on tape and CDs offered a way to bring courses to your dashboard or den. Now, quality courses can be streamed. While some educational resources are available on a subscription basis, many courses are available free or at a low cost. And those accounting courses taught me that free is good. My go-to source for serious college content is The Great Courses offered by The Teaching Company. I’ve worked my way through dozens of its courses. The company offers a wide variety of subjects. Some I have no interest in, but many others are on my wish list. The marketing material brags that the company seeks out professors known for their teaching ability. No disagreement here. I’ve yet to come across a dud. The courses I’ve taken range in length from six to 36 lectures, each 30 minutes long. The longest I’ve seen in the catalog is a 48-lecture course…
Read more »

Never Going Back

Howard Rohleder   |  Dec 12, 2022

A FRIEND ONCE explained to me his theory of lifestyle creep—and how there’s a ratchet effect. Let’s say you move to a better neighborhood. A bigger house means larger utility bills. Property taxes will be higher, the lawns bigger and the landscaping more extensive. The neighbor’s cars are nicer, and the shopping and restaurants are more upscale. Like a socket wrench, once the one-way ratchet of lifestyle creep clicks in, it’s nearly impossible to go back. Two years ago, I moved to a metro area from a small town. My expenses are definitely up. Besides substantially higher property taxes, there are several vendors who now have their hands in my pocket. I continue to pay for the services that I’ve always had: trash collection, internet, lawn treatments, cell phone and a security system. Yet the urban prices are much higher than the small-town prices I was accustomed to paying. To reduce outlays, I’ve converted other expenses from pay-as-you-go to annual prepayment. There’s a convenience factor, plus vendors always provide a discount. This includes the pest control company, as well as the folks who service my furnace, air-conditioning and sprinkler systems. We even subscribe annually for dental care. We pay the dentist in advance to get two cleanings and routine X-rays, along with a discount on needed treatments. On the other side of the ledger, I’ve increased my spending with new monthly subscriptions. I’ve replaced our magazine and newspaper subscriptions with online equivalents. I did drop cable TV, but now I pay for several streaming services. Then there’s the satellite radio. We continued the service after a free trial when we bought a new car. Technology has added several new “necessities.” I have taken on software subscriptions that I never had before. I resisted them for as long as I could,…
Read more »

A Difficult Choice

Howard Rohleder   |  Nov 27, 2021

FEAR OF MISSING OUT, or FOMO, seems to be everywhere. We suffer it when we read about our friends’ fabulous experiences on social media. We can also suffer it when investing, as we fret that our friends are making more on their investments than we are. My own concern in recent months, however, hasn’t been FOMO, but FOLB. No, it doesn’t roll off the tongue like FOMO. It’s my own invention—and it stands for fear of losing big, a particular worry of mine. The U.S. stock market is near record highs. With my regular rebalancing, my stock allocation sits at 60%. When I look at the dollar value of that 60%, and think about the possibility of losing 30% to 40% of it in a bear market, I hear alarm bells. When I focused on the percentage I had in stocks, I thought I could weather a bear market. But I’d lost sight of the total dollars at risk. Losing 30% to 40% of that money doesn’t feel nearly as manageable. That’s why I’ve let my stock allocation trend down from 64% a year ago. I’ve lived through several bear markets. I’d learned to look at them as buying opportunities. I also have sufficient cash reserves to go several years without having to sell a stock or stock fund. Theory says that as long as I don’t sell after a big drop, the possible paper loss is irrelevant. I can add to my positions while the market is down, and the next bull market will make me whole again and then some. These thoughts should be comforting. But the sheer magnitude of the potential dollar loss is disquieting. The other concern I have: There are few good alternatives to owning stocks. Cash earns next to nothing. Bonds have the potential…
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Location, Location

Howard Rohleder   |  Oct 12, 2023

WANT TO IMPROVE YOUR portfolio’s long-run performance? You could boost your stock allocation—something I wrote about last year—or cut your investment costs. But don’t overlook another key strategy: thinking carefully about which accounts you use to hold your various investments, or what financial experts call “asset location.” My wife and I have taxable accounts, Roth IRAs, traditional IRAs and a health savings account. Earnings in each account get different tax treatment both now and in the future. By carefully allocating our investments among these various accounts, we can reduce the taxes we pay over the long term. Time horizon is a key consideration. We’re unlikely to ever spend down all our assets. As a result, some accounts have an unknown but likely very long time horizon. At the same time, we need to generate some income to cover living expenses, so other accounts have a much shorter time horizon. Because we have some guaranteed cash flow coming in from a pension and annuities, and will eventually have more from Social Security, we’ve settled on an overall stock and alternatives allocation of 75%. How should we allocate our investments among our various accounts? We sought some professional advice and, based on that, here’s how we’re thinking about each account type: Taxable accounts. Our top priority is to maintain sufficient cash for living expenses and financial emergencies. That money is invested conservatively and generates interest income that’s taxed as ordinary income. The key is to have enough cash, but not too much, to meet current spending needs. The remainder of our taxable money is invested in individual stocks and stock funds. That helps to minimize our tax bill, because the dividends and capital gains are taxed at preferred rates. Over time, we’ve added more index funds, which are less likely than actively…
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One Step at a Time

Howard Rohleder   |  Nov 3, 2021

IN MY LATE 20s, I found that I was 15 pounds heavier than when I was in high school. My cholesterol was over 200 and rising. I was huffing and puffing while mowing the lawn. I didn’t like where this was going, plus I didn’t want to buy a new set of business suits. I decided that investing in my health was as important as investing for my wealth. If my health was shot by the time I retired, my wealth would bring me less happiness. To get started, I applied the concept of continuous quality improvement (QI) to my goal of becoming healthier. QI is practically a religion in health care, where I worked for 30 years. The notion originated in Japanese manufacturing. The idea: continually add incremental value for the customer. One model for QI is the PDCA (plan, do, check, act) cycle. Once an opportunity for improvement is identified, you push it through these four steps: Brainstorm how to make it better (plan) Implement your best ideas for improvement (do) Use data to evaluate whether you’re truly adding value (check) Adjust based on data-driven evidence of what works and what doesn’t (act) One thing I like about this approach: It allowed me to take small steps. I’ve noticed that big lifestyle leaps often aren’t sustainable. Just as success in personal finance can be achieved by simple, inexpensive processes followed diligently over a long period of time, improvements in personal wellness can be achieved in much the same way. I didn’t have a lot of extra time, and it was the middle of winter. My plan was to wake up 20 minutes early to jump rope. I started slowly, but eventually could jump rope for the entire 20 minutes. No trainer would want this to be your only…
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College or Plan B?

Howard Rohleder   |  Aug 30, 2021

WE’RE PROGRAMMED to believe that a four-year college degree is the only path to success. After spending several years on both a small-town school board and an economic development board, I saw the disservice that this belief is doing to many of our students. Students and their parents are led to believe that everyone is taking a college prep curriculum in high school. There are indeed students who are actually preparing for college. Then there are many more students who think they’re preparing for college, although they have little chance of succeeding there. The statistics are bleak. Getting into college is relatively easy. It’s much harder to earn a degree in four years in a field that has good job prospects. Fully 40% of students entering a four-year college fail to graduate within six years. Half of those who do graduate never use their college major in their careers. Both groups risk running up so much student debt that it hobbles their start in life. In most areas of lending, the borrower is expected to put up collateral. Not so with student loans. It’s hard not to qualify. The collateral being offered is the student’s future earnings—an intangible. It’s left to the borrower, not the bank, to determine if that’s a good risk. What are the student’s prospects of graduating? In how many years? With what major? Unfortunately, many families never answer these questions before borrowing, only to discover later that they can’t repay their loans on time. College isn’t for everyone, but teenagers often tell adults what they want to hear. “Are you planning to go to college?” Kids can sense that the desired answer is, “Yes.” Parents should take a more active role in gauging their children’s career prospects. It begins in elementary school when students are asked,…
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