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Wall Street Trap

ArticleAdam M. Grossman | May 2, 2026

IN THE INVESTMENT world, May 1st is a notable day. It was on May 1, 1975 that the Securities and Exchange Commission deregulated the brokerage industry. For the 183 years prior to that, trading commissions on the New York Stock Exchange had been fixed at uniformly high rates. But when deregulation arrived, competition got going. That’s when discount brokers like Charles Schwab got rolling, and over time, May Day, as it’s now referred to, has delivered enormous savings to consumers. More than 50 years later, though, Wall Street still operates in ways that are often at odds with consumer interests. As an individual investor, what are the obstacles to be aware of? At the top of the list is Wall Street’s fixation with individual stocks. For almost 100 years, the data has been clear that stock-picking is counterproductive. Probably the first to uncover this was a fellow named Alfred Cowles. Cowles came from a wealthy family and wondered whether the investment advice his family had been receiving was worthwhile. He set about answering that question and in 1933, published a paper titled “Can Stock Market Forecasters Forecast?” Cowles’s conclusion: They can’t. More recently, research by finance professors Brad Barber and Terrance Odean came to a similar conclusion. The title of their most well known paper is self-explanatory: “Trading Is Hazardous to Your Wealth.” Along the same lines, Standard & Poor’s regularly examines actively-managed mutual funds to see how many are able to outperform the overall market. The most recent finding: Over the past 10 years, fewer than 15% of funds benchmarked to the S&P 500 managed to beat the index. Research by Jeff Ptak at Morningstar has found that the more active a fund is, the worse it performs. So-called tactical funds, which shift among different asset classes in response to economic forecasts have, in Ptak’s words, “incinerated” shareholder dollars. This data is fairly well known. The problem, though, is that trading activity generates revenue for the brokerage industry, so it has an interest in keeping investors engaged with the market. That’s why brokerage analysts are on TV every day, offering their forecasts for individual stocks, for the overall market and for the broader economy. To be sure, this makes for interesting television. The problem, though, is that it’s been shown to carry almost no value. According to research by Joachim Klement, the accuracy of Wall Street prognosticators is approximately zero. Why are they so poor at forecasting? For starters, there’s the simple fact that no one has a crystal ball. No one can know what a company—or its competitors—will do a month or a year from now, and how that will translate into stock price gains or losses. Sociologist Ezra Zuckerman Sivan uncovered a more subtle explanation. In research published after the technology selloff in 2000, Sivan found that Wall Street analysts are constrained by two obstacles. The first is that they’re dependent on access to companies’ management teams to help in their research. For that reason, it’s in their interest to maintain positive relationships with the companies that they follow. Investment banks that take a positive view on a company may also be rewarded with profitable mergers or acquisitions work when the need arises. Those factors bias stock recommendations overwhelmingly in the direction of “buy” ratings. Another reason analysts tend to avoid negative comments about the companies they cover: Sivan found that there is a community effect that tends to form among the analysts assigned to a given company, and thus an incentive develops to not “rock the boat” in saying anything too critical. People generally want to get along, and that results in a sort of self-censorship. This research is well understood, and yet Wall Street continues to generate forecasts day after day, year after year. Why? There are two explanations, I believe. The first is that it’s entertaining. I’ll be the first to acknowledge that index funds aren’t terribly interesting to talk about. It’s far more interesting to talk about smartphones or AI and the companies behind them. That makes Wall Street analysts invaluable to the media, who need to fill airtime. And as long as they’re granted that airtime, forecasters are of great value to the brokerage industry. Since trading activity is profitable for Wall Street, it’s in brokers’ interest to generate continued interest in stocks. That brings in commission dollars for brokers. And even though commissions have shrunk in recent years, brokers benefit in other ways from active trading, including the “bid-ask spread” on each trade. That’s the difference between what buyers pay and what sellers receive, and though these spreads are tiny, they add up for the brokers who collect them. For good reason, then, Wall Street continues to promote stock-picking. At the same time, the investment industry is always busy developing new funds. In the first half of last year, for example, fund companies rolled out more than 640 new funds. Among them: funds that hold single stocks with varying degrees of leverage and other seemingly unnecessary new formulations. The result: There are now many more funds than there are stocks trading on U.S. exchanges. Many of these new funds follow ever more esoteric strategies. They’re often opaque. And almost invariably, they carry higher fees. In a 2011 study titled “The Dark Side of Financial Innovation,” finance professor Brian Henderson and a colleague looked at one popular category of fund known as a structured product. Their conclusion: These funds were overpriced to the point that their expected return was actually a bit below zero. How were they able to market such an inferior product? Henderson’s hypothesis was that the fund companies designed them to be intentionally as complex as possible in order to exploit individual investors. The bottom line: To a great degree, Wall Street is upside down. But as an individual investor, you don’t have to be. My rule of thumb: In building a portfolio, investors should do more or less the opposite of what Wall Street recommends. That, I believe, is a reliable formula for success. 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.

Retirement Toys

Mark Crothers | May 4, 2026

"That’s what I was wondering, thanks. I think I’ll get a great gas grill and maybe add a smoker later. We do have room in the yard. I’m even thinking about a pizza oven!"

- DrLefty

Saving for Grandchildren

ArticleJohn Yeigh | May 2, 2026

OUR FIRST GRANDCHILD recently arrived, which naturally has us thinking about the smartest ways to build a strong financial foundation for her future. In 2019, I wrote Take a Break, which outlined saving strategies on behalf of children. Since then, the landscape has changed with the introduction of Trump accounts and Roth-conversion pathways for 529 accounts. Families have four tax-advantaged savings approaches on behalf of young children plus the Roth IRA option once the child has earned income – 529 education savings account, a Uniform Gift to Minor (UGM) custodial account, a Coverdell account, and the new Trump account. Each option offers a different mix of tax benefits, contribution requirements and withdrawal rules. 529 Accounts Pros

Tax-free growth when used for qualified education expenses
High gift-tax contribution limits: $19K per contributor per year (indexed)
New ability to convert up to $35K into a Roth IRA for the beneficiary

Cons

Relatively complex with penalties and taxes on non-qualified withdrawals
Limited, state-approved investment options
Risk of underutilization if the child does not pursue qualifying education

Caveats

Technology and AI could significantly reduce education’s cost structure in the future
Roth conversions are capped at $35K lifetime
The 529 must be open 15 years, and contributions must age 5 years before conversion
Conversions require the beneficiary to have earned income (i.e. they could Roth anyway)
Annual Roth contribution limits still apply (e.g., $7.5K in 2026), so completing the full $35K conversion would take five years

UGM Custodial Accounts Pros

Brokerage account where up to $2.7K of unearned income can be tax-free each year
High gift-tax contribution limits: $19K per contributor per year (indexed)
Broad investment flexibility — stocks, bonds, funds, etc.
Few restrictions on how funds may be used for the child’s benefit
Potential for low taxes on capital gains, but subject to marginal “kiddie tax” at parent’s rates until tax-independency or age 24

Cons

Higher income or capital gains could trigger the kiddie tax at the parents’ marginal rate
Assets count as the child’s for financial-aid purposes

Caveats

Custodians have some ability to spend down the account for legitimate child expenses if the child is a wild-child in the later teen years

Coverdell Accounts Pros

Tax-free growth for qualified education expenses
More flexible investment choices than most 529 plans

Cons

Low contribution limit: $2K per year plus income limits restrict who can contribute
Essentially irrelevant today given the expanded options within 529 plans

Trump Accounts Pros

$1K government seed deposit for children born 2025–2028
Contribution limit of $5K per year in 2026, indexed to inflation
Parent employers may contribute up to $2.5K per year (also indexed)
Tax-deferred growth with Roth-conversion opportunities beginning at age 18
No earned-income requirement for Roth conversions
Roth conversions are ideal in low-income years starting after age 18 once the child has transitioned to tax-independency of parents or at age 24 when “kiddie taxation” ends. Early tax independence could even be a combined Roth plus student financial-aid strategy
Potential to convert large account values over several years at relatively low tax rates (potentially marginal 10-12% tax-rates, but averaging less due to the standard deduction).

Cons

Investment options limited to low-cost indexed stock funds (not necessarily a drawback)
Penalty-free withdrawals must wait until age 59½, but the accounts could be advantageous even including penalties
Limited custodian control and intervention possibilities if the teen is a wild-child

Caveats

If Roth conversions are not undertaken during the child’s low-income years, a UGMA invested to capture long-term capital gains tax-rates may outperform a Trump Account taxed at ordinary income tax-rates
Watch this space as future adjustments or eligibility changes are possible

In effect, the 529 is a two-decade college savings program having some complexity and withdrawal limitations; the UGM is a reasonably flexible, 18-30-year college or house downpayment savings program; and the Trump account is a somewhat inflexible, sixty-year retirement accelerator. Resulting Playbook Here is our family’s intended playbook for tax-advantaged accounts in the grandchild's name:

Parents’ retirement account fundings remain their top priority - 401K’s at a minimum up to the match, HSAs with their triple tax advantages, and Roths as long as eligible within income limits.
A Trump account has already been initiated to secure the free $1K government seed contribution – grows to potentially $2.6K at age 18 after penalties and taxes.
Limited 529 funding has also been initiated to start the 15-year clock for potential later Roth conversions.
The family’s next priority is to fund the Trump account which starts at $5K later this year. Maximizing the Roth conversion opportunity will require ~$116K of contributions (at 3% inflation) over 18 years which we grandparents intend to help fund. I estimate the Roth converted Trump account could grow to ~$2 million of tax-free money at age 60 (6% growth) assuming early-age Roth conversions, and the Wall Street Journal projects as much as $3 million (link likely paywalled).
The subsequent priorities are to start UGM taxable account and 529 account contributions in parallel to perhaps initial levels of about $35K each. This may take our family some years depending upon available resources for contributions.

For the UGM account, a balance of $35K should capture a sizeable chunk of the annual $2.7K tax-free income limit by investing in high-yield income alternatives. For the 529 account, $35K aligns with the Roth conversion limit. On a personal note, we had extremely positive UGM outcomes with our children. We saved taxes for two decades, and each child used the ~$60K balance as down payments on their first house shortly after college. Due to the 529’s withdrawal rigidities and potential technology impacts, we are unlikely to fund the 529 to the max.

We will skip Coverdells as the alternatives offer ample savings opportunity in the child’s name ($200K+).
Depending upon spare resources available for gifting, we can always reassess future contributions.

That’s our plan, and we’re sticking to it…. until something changes. John Yeigh is an author, coach and youth sports advocate. His book “Win the Youth Sports Game” was published in 2021. John retired in 2017 from the oil industry, where he negotiated financial details for multi-billion-dollar international projects. Check out his earlier articles.

The reality of Social Security and Medicare- My real life experience.

R Quinn | May 4, 2026

"Do you actually believe that our high school teachers could even explain finances to their students? When I took a college finance course taught by a stockbroker, he said that to compare taxable bond yield to a tax-exempt bond yield, you just double the coupon of the tax-exempt bond yield. Yikes. This was intended to be a comment on Nick's comment."

- Harry Crawford

How much to provide a college student monthly?

Chris | Apr 25, 2026

"“Concerned” seems a misnomer here😎"

- R Quinn

Is saving really that hard? Nope, not for the great majority of Americans.

R Quinn | Apr 28, 2026

"Difficult requiring great discipline, yes. Impossibility, no. Simply because some people do it. Don’t focus on the $3,000, that’s an illustration. It’s the concept that is important. Many people earning double the amount claim they can’t save. An 8% return for the stock market is pretty close to the average over the last 50 years."

- R Quinn

Investing Fundamentals: A Simple Guide for Beginners

W.D. Housley | Apr 24, 2026

"Excellent article. Now let’s forward it to our young relatives and friends who have limited attention spans."

- Nick Politakis

Ageing and the Open Road

ArticleMark Crothers | May 2, 2026

RECENTLY I TOOK a free ride on a driverless bus trialling its proposed route, part of my local administration's ten-year rollout plan for self-driving public transport and taxis. I see real potential in this technology, and I'm hoping the infrastructure and implementation stay on schedule. That hope is mostly selfish, I'll admit. In fifteen years I'll be in my mid-seventies, and I'd love to ditch my car and rely on cheap, dependable robo-taxis instead. It would give me freedom precisely in that decade of life when driving starts to become genuinely problematic. I'm planning to change my car in 2027 for a modern hybrid, but in the back of my mind is the thought that it could be my last. If the self-driving rollout hits its targets, I can see the case for never buying another. The advantages for someone in my demographic at that stage of life would be hard to argue with. Think about what car ownership actually costs. There's the purchase price, insurance, road tax, fuel, servicing, tyres, and the occasional bill that arrives like a punch to the stomach. For most people, a car is the second most expensive thing they own after their home. In retirement, when income typically drops and budgets tighten, that ongoing drain becomes harder to justify. This is especially true when the car spends the vast majority of its time sitting on a driveway looking pretty. A robo-taxi model, where you pay only for the journeys you actually take, could represent a dramatic shift in how much personal transport really costs. The numbers, I suspect, will be compelling — with current estimates from real world operations suggesting an 80% reduction in the cost of fares being achievable. Then there's the question of independence. This is the one that matters most to me personally, and I'd imagine it resonates with anyone approaching or already in their later years. Giving up your car keys is one of those milestones that nobody really talks about, but everyone in that demographic understands. It represents a loss of spontaneity and self-sufficiency that can genuinely affect quality of life. The difference with autonomous vehicles is that surrendering the wheel doesn't have to mean surrendering the freedom. A reliable, affordable self-driving taxi available on demand restores something that previous generations simply had to go without once driving became difficult. This could be a trip to the supermarket on a weekday morning or a late evening visit to family. The safety dimension is also worth considering. Reaction times slow as we age. Night vision deteriorates. Concentration over long distances becomes harder. Most older drivers are aware of this and manage it carefully, but there comes a point for everyone where the road becomes a source of anxiety rather than freedom. Autonomous vehicles remove that calculation entirely. You get in, state your destination, and arrive, without the cognitive load of navigating, anticipating other drivers, or worrying whether your responses are still sharp enough. That peace of mind shouldn't be underestimated. There are wider social benefits too. Older people who can no longer drive are disproportionately affected by isolation. Poor rural transport links, infrequent bus services, and the general assumption that everyone has access to a car all contribute to a situation where many retired people find their world gradually shrinking. Autonomous vehicles, particularly if integrated intelligently with existing public transport, have the potential to reverse that. A robo-taxi that can be summoned by a smartphone, or even a simple voice command, could keep people connected to their communities, their families, and their routines far longer than is currently possible. There are, of course, reasons to be cautious. Technology rollouts rarely go entirely to plan. The ten-year schedule my local administration is working to is ambitious, and a lot can change in funding priorities, in public appetite, and in the regulatory environment. The early trials are promising, but promising trials and full-scale dependable infrastructure are very different things. It's worth keeping in mind, with a groan inducing pun: your mileage will vary — literally. Dense urban and suburban areas will almost certainly see reliable services first, and I'm fortunate that describes my situation. For those in more rural communities, the very people for whom isolation is already the sharpest problem, the wait could be considerably longer. I'm hopeful, but I'm not banking on it entirely. Which is why the 2027 hybrid still makes sense. It's a practical hedge, a good, modern, efficient car that will serve me well through the transition years, whatever pace that transition takes. But the fact that I'm already thinking of it as potentially my last car feels significant. A decade ago that thought wouldn't have crossed my mind. The technology has moved from science fiction to credible near-future fast enough to genuinely reshape how I'm thinking about retirement planning. If it delivers, the generation hitting their seventies in the late 2030s could be the first in history for whom ageing and mobility don't have to be in conflict. That's not a small thing. That might turn out to be one of the most personally transformative shifts of the entire autonomous vehicle revolution. It is not about the flashy early adopters or the logistics industry efficiencies. Instead, it is the simple dignity of an older person getting where they need to go, independently, on their own terms. I'm hopeful I'll be taking that ride and certain my children and grandchildren definitely will.

Mark Crothers is a retired small business owner from the UK with a keen interest in personal finance and simple living. Married to his high school sweetheart, with daughters and grandchildren, he knows the importance of building a secure financial future. With an aversion to social media, he prefers to spend his time on his main passions: reading, scratch cooking, racket sports, and hiking.

Tax Free Income Trap, Dealing With MAGI

DAN SMITH | Apr 21, 2026

"Agree! When it comes to Roth conversions, tax arbitrage is usually the focus of discussion, but “portfolio return“ arbitrage (if that’s a proper term?) is usually less mentioned."

- Andy Morrison

A Life You Build

Jeff Peck | Apr 19, 2026

"Jeff, That is an incredible article. One of if not the best HD articles I’ve ever read.That moved me. As I was reading I was thinking to mention a couple of the most inspiring takeaways you included but there were so many. Thank you so much for taking the time to write and share this piece with the HD community. Ideally, I hope this reaches way beyond HD. Well done on your life’s journey and well done capturing it here!"

- Andy Morrison

Blood Money

Michael Flack | Mar 28, 2026

"On April 30 (with WTI closing at $105.07/bbl.) I sold another 10% of my XOM shares @ $154.413 (up nicely from it mid-month low of $146.44). Plan is to continue selling next month."

- mflack

New Face, old scam

Jim Wasserman | May 2, 2026

"Thanks. Good to see you contributing again."

- Jeff Bond

Wall Street Trap

ArticleAdam M. Grossman | May 2, 2026

Retirement Toys

Mark Crothers | May 4, 2026

"That’s what I was wondering, thanks. I think I’ll get a great gas grill and maybe add a smoker later. We do have room in the yard. I’m even thinking about a pizza oven!"

- DrLefty

Saving for Grandchildren

ArticleJohn Yeigh | May 2, 2026

Tax-free growth when used for qualified education expenses
High gift-tax contribution limits: $19K per contributor per year (indexed)
New ability to convert up to $35K into a Roth IRA for the beneficiary

Cons

Relatively complex with penalties and taxes on non-qualified withdrawals
Limited, state-approved investment options
Risk of underutilization if the child does not pursue qualifying education

Caveats

Technology and AI could significantly reduce education’s cost structure in the future
Roth conversions are capped at $35K lifetime
The 529 must be open 15 years, and contributions must age 5 years before conversion
Conversions require the beneficiary to have earned income (i.e. they could Roth anyway)
Annual Roth contribution limits still apply (e.g., $7.5K in 2026), so completing the full $35K conversion would take five years

UGM Custodial Accounts Pros

Brokerage account where up to $2.7K of unearned income can be tax-free each year
High gift-tax contribution limits: $19K per contributor per year (indexed)
Broad investment flexibility — stocks, bonds, funds, etc.
Few restrictions on how funds may be used for the child’s benefit
Potential for low taxes on capital gains, but subject to marginal “kiddie tax” at parent’s rates until tax-independency or age 24

Cons

Higher income or capital gains could trigger the kiddie tax at the parents’ marginal rate
Assets count as the child’s for financial-aid purposes

Caveats

Custodians have some ability to spend down the account for legitimate child expenses if the child is a wild-child in the later teen years

Coverdell Accounts Pros

Tax-free growth for qualified education expenses
More flexible investment choices than most 529 plans

Cons

Low contribution limit: $2K per year plus income limits restrict who can contribute
Essentially irrelevant today given the expanded options within 529 plans

Trump Accounts Pros

$1K government seed deposit for children born 2025–2028
Contribution limit of $5K per year in 2026, indexed to inflation
Parent employers may contribute up to $2.5K per year (also indexed)
Tax-deferred growth with Roth-conversion opportunities beginning at age 18
No earned-income requirement for Roth conversions
Roth conversions are ideal in low-income years starting after age 18 once the child has transitioned to tax-independency of parents or at age 24 when “kiddie taxation” ends. Early tax independence could even be a combined Roth plus student financial-aid strategy
Potential to convert large account values over several years at relatively low tax rates (potentially marginal 10-12% tax-rates, but averaging less due to the standard deduction).

Cons

Investment options limited to low-cost indexed stock funds (not necessarily a drawback)
Penalty-free withdrawals must wait until age 59½, but the accounts could be advantageous even including penalties
Limited custodian control and intervention possibilities if the teen is a wild-child

Caveats

If Roth conversions are not undertaken during the child’s low-income years, a UGMA invested to capture long-term capital gains tax-rates may outperform a Trump Account taxed at ordinary income tax-rates
Watch this space as future adjustments or eligibility changes are possible

Parents’ retirement account fundings remain their top priority - 401K’s at a minimum up to the match, HSAs with their triple tax advantages, and Roths as long as eligible within income limits.
A Trump account has already been initiated to secure the free $1K government seed contribution – grows to potentially $2.6K at age 18 after penalties and taxes.
Limited 529 funding has also been initiated to start the 15-year clock for potential later Roth conversions.
The family’s next priority is to fund the Trump account which starts at $5K later this year. Maximizing the Roth conversion opportunity will require ~$116K of contributions (at 3% inflation) over 18 years which we grandparents intend to help fund. I estimate the Roth converted Trump account could grow to ~$2 million of tax-free money at age 60 (6% growth) assuming early-age Roth conversions, and the Wall Street Journal projects as much as $3 million (link likely paywalled).
The subsequent priorities are to start UGM taxable account and 529 account contributions in parallel to perhaps initial levels of about $35K each. This may take our family some years depending upon available resources for contributions.

We will skip Coverdells as the alternatives offer ample savings opportunity in the child’s name ($200K+).
Depending upon spare resources available for gifting, we can always reassess future contributions.

The reality of Social Security and Medicare- My real life experience.

R Quinn | May 4, 2026

- Harry Crawford

How much to provide a college student monthly?

Chris | Apr 25, 2026

"“Concerned” seems a misnomer here😎"

- R Quinn

Is saving really that hard? Nope, not for the great majority of Americans.

R Quinn | Apr 28, 2026

- R Quinn

Investing Fundamentals: A Simple Guide for Beginners

W.D. Housley | Apr 24, 2026

"Excellent article. Now let’s forward it to our young relatives and friends who have limited attention spans."

- Nick Politakis

Ageing and the Open Road

ArticleMark Crothers | May 2, 2026

Tax Free Income Trap, Dealing With MAGI

DAN SMITH | Apr 21, 2026

"Agree! When it comes to Roth conversions, tax arbitrage is usually the focus of discussion, but “portfolio return“ arbitrage (if that’s a proper term?) is usually less mentioned."

- Andy Morrison

Manifesto

May 6, 2026

NO. 40: WE SHOULD all know the minimum dollar amount we need each month to keep our financial life afloat. This will drive our emergency fund’s size and our cash holdings once we’re retired.

act

May 6, 2026

INVESTIGATE a reverse mortgage. Once you're retired, borrowing against your home’s value shouldn’t be a first choice, but a last resort. Still, it’s helpful—and comforting—to know what that last resort might be worth. To that end, try playing with a reverse mortgage calculator. Pay attention to the money you’ll receive—and to the hefty fees you will incur.

Truths

May 5, 2026

NO. 111: WALL STREET tries never to send us a bill, so we’re unaware of how much we’re paying. Fund expenses and financial advisor fees are quietly subtracted throughout the year. Stock trading spreads and bond markups are built into security prices. Load mutual fund commissions are swiped from our initial investment or they're deducted when we sell.

act

May 4, 2026

GO TO THE LIBRARY. You can borrow DVDs, rather than paying to stream movies and TV shows. You can cancel your magazine and newspaper subscriptions, and peruse the library’s periodicals instead. You can borrow the latest books, rather than ordering from Amazon. All this will get you out of the house, meeting your neighbors and reading more—at no cost.

Money Guide

Manifesto

May 6, 2026

NO. 40: WE SHOULD all know the minimum dollar amount we need each month to keep our financial life afloat. This will drive our emergency fund’s size and our cash holdings once we’re retired.

Spotlight: Health

Medicare Advantage may be a “potential threat to your health.”

ostrichtacossaturn7593 | Dec 20, 2024

Anyone considering a Medicare Advantage plan should take a look the Executive Summary of this U.S. Senate report. It starts with this: “Every day, doctors evaluate thousands of seniors recovering from falls, strokes, and other ailments, and enter a recommended course of treatment into an online portal, or in some cases feed it into a fax machine. But whether the requested service is determined to be medically necessary is a decision that belongs to people at the other end of the line.

The Sickest Patients Are Fleeing Private Medicare Plans—Costing Taxpayers Billions

rgscl | Nov 15, 2024

Not that this is a great surprise but a sad state affairs for those who are enticed by the “low” premiums with added benefits but feel eventually trapped by MA when they need it the most. For the folks in NY (in this article) who are lucky enough to be able to switch from MA to Original Medicare. I can’t imagine for those in states where they can’t switch and are truly trapped.
https://www.msn.com/en-us/money/insurance/the-sickest-patients-are-fleeing-private-medicare-plans-costing-taxpayers-billions/ar-AA1tUtML?ocid=nl_article_link

Seeking Input on Medicare Supplement Carriers

Andrew Forsythe | Jul 27, 2025

After just being hit with an almost 30% premium increase from Mutual of Omaha (MOO), I’m shopping around for a new Medicare Supplement carrier.
I actually like MOO for their generally good customer service, user friendly website, and fast claims processing. Twice in past years, I’ve been able to stay with MOO but avoid a price hike by switching to one of their sister companies, which I wrote about here.
It seems that option is no longer available,

Medicare Open Enrollment and Medigap

James Mcglynn | Nov 25, 2024

The Medicare Annual Enrollment period runs from October 15th to December 7th. I initially believed this was the only time I could switch my Plan G Medigap supplement. However, these dates specifically apply to those changing Part D or Medicare Advantage plans.
In contrast, Medigap plans can be changed at any time during the year, although underwriting may be required. I turned 65 in June and enrolled in Medicare Plan G, already changing plans once during my initial 6-month sign-up period.

What I learned in 50 years about selecting and using health insurance-tips to consider-RDQ

R Quinn | Dec 23, 2024

Choosing and understanding health insurance can be a challenge. Much like retirement, it requires assumptions, understanding your risk tolerance and even budgeting.
There are several key factors.
Deductibles before benefits are paid
Co-insurance and co-payments – your share of each charge
Out-of-pocket limits-the point annually where payments are at 100% by your insurance.
If you have family coverage, there may be a family deductible limit of two people so each individual does not need to satisfy a deductible.

Paradox of choice. What to do, what to do?

R Quinn | Nov 5, 2024

I used to be a big fan of choice when it came to employee benefit plans including life insurance, health insurance and, of courses 401k investment options.
When working I crafted a plan with lots of choices. Employees said they wanted choice, it was all the rage at the time. Our unions were not so thrilled, but went along.
The unions were right and I was wrong.
People may say they want choice, but when faced with it for very important decisions,

Peter Mallouk posts podcast #78 of Down the Middle

William Perry | Sep 13, 2025

Thank you Peter for posting on August 29, 2025 Looking Back on Jonathan Clements’ Best Moments

Tips, not TIPS

William Perry | Sep 11, 2025

Humble Dollar frequently posts articles about TIPS - Treasury Inflation-Protected Securities. This post is not about inflation protected bonds. The OBBBA includes new code 224, a deduction for tax years 2025-2028, for up to $25,000 in qualified tips received during the year for cash tips received by an individual in an occupation that customarily and regularly received tips before 2024. That code section also includes subsection 224(d)(2)(B) which provides that tips do not qualify for the deduction if they are received in the course of certain specified trades or businesses -- including the fields of health, performing arts, and athletics. The Treasury Department posted on its website in early September 2025 a preliminary list of occupations that customarily and regularly received tips on or before December 31, 2024. Expect to see a final list posted to the federal register in the future. Cornell Law School LII has published the new law which you can read for other requirements and limitations. Be advised that the deduction is for income taxes and will not reduce the payroll taxes on the qualified tips.

An easy way to file a tax return extension due today

William Perry | Apr 15, 2025

One option per the IRS - Pay online and click on extension. Taxpayers simply pay what they owe using an online payment option, then click on extension as the reason for the payment. The taxpayer will receive a confirmation number of their extension for their records. There’s no need to file any additional forms. https://www.irs.gov/payments The failure to pay penalty is 0.5% per month. The failure to file penalty is 5.0% per month. Both are typically capped at a maximum of 25%. Just a word to the wise. If you owe big bucks pay as much as you can now with your extension to help keep interest and penalty as small as possible. If you overpay you can choose to apply all or part of your over payment to your 2025 taxes when you file your 2024 return. As of 12/31/2024 you can not longer purchase electronic I-Bonds with your federal tax over payment. Most tax preparers will take this April 16 off. If you will use a preparer they will appreciate you not waiting until near the 10/15/2025 extended due date, for individuals, to get your preparer your tax information and electronically file your return(s). Help your preparer, and yourself, by completing any tax organizer they provide. There are certain questions the IRS mandates the preparer ask you like do you have any digital assets or foreign accounts in 2024? To avoid headaches please verify your bank routing number, account number and type of account if you will have any over payment direct deposited or if you are are having any balance due drafted. If possible, provide your data to your preparer in the format they prefer. When I review a return for a colleague I type any notes or comments as I have lousy penmanship. I suggest you…

Managing Transitions: Best Practices for When a Practitioner Passes Away

William Perry | May 17, 2025

On Friday, May 15, I received the attached email Alert from the IRS Office of Professional Responsibility. The email topic, When a Practitioner Passes Away, is mostly focused directly at anyone subject to Circular 230 that practices before the IRS, typically attorneys, certified public accountants, enrolled agents and others who prepare tax returns for pay. I think it likely that every state also has their own additional laws and regulations regarding protection of your data. Over my career, I have found myself being a subsequent tax preparer numerous times where a CPA colleague has died. Lately, I have also been involved with "orphan" clients where a firm has merged their practice with a different (typically larger) firm but the new firm has decided to no longer offer tax services to a particular class of clients or specific clients. Frequently, those orphan clients are either not expected to be profitable in the eyes of the new firm, the new firm does not have the staff to appropriately serve the client, the client has a history of actions, such as providing initial documents just before a tax deadline, not paying invoices timely, and so forth which can stress the process of providing accurate and timely tax services, or all of the above. The nightmare situation for clients does occur when a client has just dropped off original information to the preparer, the preparer dies and there is no one to return the information and that job of returning client data falls to a non preparer volunteer executor. You may want to request any needed extension yourself if you are near a tax due date. I agree with the article's first point that early and often communication with your existing preparer is key to a smooth transition to a new preparer. Your original…

Jonathan’s obit on Legacy.com

William Perry | Oct 2, 2025

Jonathan Clements Obituary Obituary published on Legacy.com by Logan Funeral Home, Inc. - Philadelphia on Sep. 26, 2025. I thought many of the readers of Humble Dollar would want to google and read the published obit.

EO 14249 Mandated Electronic Payments

William Perry | May 8, 2025

On March 25, 2025, the President of the United States signed Executive Order #14249 titled Protecting America’s Bank Account Against Fraud, Waste, and Abuse, which was published in the Federal Register on March 28. The fact sheet states that, effective September 30, 2025, the Federal government will cease issuing paper checks for all disbursements, including intragovernmental payments, benefits, vendor payments, and tax refunds. The fact sheet also states payments made to the Federal government, such as fees, fines, loans, and taxes, must also be processed electronically where permissible under existing law. You can read the full Executive Order as it appears in the Federal Register here and the White House Fact Sheet which summarizes the Executive Order here. If you are still writing paper checks to pay your estimated tax payments or the balance due then you may want to switch over to electronic payments sooner rather than later to avoid the learning curve. I was stationed in Germany in 1973 and the first half of '74 in a maintenance company for the Army's Third Armored Division. When my company XO was promoted to CO, I was his personal clerk and driver for a while. The standard process to pay enlisted troops on our base was that once a month the XO, his driver and a appropriate armed detail would go to a nearby Kaserne where we received and counted the cash to pay everyone who did not have direct deposit which I would guess to be 90%+ of the enlisted men in our company of about 200 men (we had no women assigned to our company). When we returned to our base we then divided the cash into the amount each man would receive. At that point usually mid-morning the company would fall into formation. After announcements those with…

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