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The Federal Debt and Social Security Payments

"The Social Security Trust Fund is in included in the approximate 40 trillion national debt as part of the debt from intragovernmental holdings. At 12/31/2025 a balance was about 2.5 trillion was due to the social security fund, which is shrinking fast, from the general fund. We even have pieces of paper to prove it. Per the last trustees report they estimate the trust fund will be fully depleted in late 2032. I hope it will last another six years. I am unsure what you have been specifically reading where you write "I keep reading about how Social Security payments are adding to the debt". My guess are articles are referring to the unfunded social security debt over the following 75 years that is not included the current "official" 40 trillion dollar debt. The Social Security fund unfunded debt is basically a liability of how much the program would pay out over the next 75 years over the amount the program is projected to collect over the next 75 years with both measures using current rules and lots of assumptions. A big guess would likely be an understatement but the unfunded liability is currently in the official national debt number as a zero liability. The balance as of the 1/1/2026 unfunded liability per the recently released trustees report was 29.3 trillion and that amount has been getting larger with each passing year. The US government balance sheet has massive items omitted, with the real liability balance being a mile long loaded freight train with very limited time to slow or stop before it crashes. This is no way to run a railroad."
- William Perry
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If Retirement  is Getting Close

"For the 2025 Pub 936 (worksheet page 14) for an example of how you do the calculation. The 2026 version of the worksheet typically comes out late 2026 or early 2027 timing usually depending on if congress makes any late in the year changes to this part of the tax law. I am not current on CA tax law and what differences there are from federal tax law. Best, Bill"
- William Perry
Read more »

Federal debt

"When the number of retired people is reaches 50% of the workforce, the taxes required to balance the budget would be crushing. It's not surprising they can't do it, and have to rely on deficit spending."
- Ormode
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Tax Complications – How SS Benefits interact with Other Income

""Clear as mud" is how a new client described the worksheet, after he made mistakes while doing his own taxes, and later getting a dreaded notice from the IRS."
- Dan Smith
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The Lottery of Birth

"Call it luck/karma/serendipity/providence ... As I like to point out when the subject is brought up here - a quarter of a million people are struck by lightning worldwide each year. "
- George Counihan
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TreasuryDirect changing login procedure to mandate ID.me later in 2026

"Could this ID.me outrage and threatened exit of Treasury Direct (TD) be exactly what the government wants? Think about it. Get people upset, push people away – that’s fewer customers to support. Want a Tbill? Go get it at your brokerage. Don’t come to TD. Eliminating paper savings bonds sure made it less desirable to gift one to a kid at a milestone life event. Look at the hassles of an electronic savings bond for a new $50 gift. That’s fewer customers for TD. Maybe Treasury Direct is effectively saying they just want everyone to get their treasury securities at their brokerage, not at TD. And you ask, what about ibonds? Suppose TD says just buy TIPS, we’re getting rid of ibonds. Many people think savings bonds are archaic and serve little purpose in a modern world. But I think they were a pretty good teacher to help develop a savings habit for a nation. Eliminating paper savings bonds killed a valuable tool in teaching people (young and old) to save which can lead to overall financial responsibility. Its too bad the government doesn’t see a role to make saving and conservative investing easily assessable to its citizens (young and old)."
- js
Read more »

Preparing for SS at Age 70….. How Do I Transition to Monthly Part B Premium Deduction?

"I am not taking SS yet, but am in year 3 on Medicare A&B. When that began, I was on the automatic quarterly billing cycle. I prefer as much stability from month to month for expenses, so requested monthly billing and that was granted. In the online conversation with the Medicare representative, I was assured the monthly billing cycle would continue when I began receiving SS benefits."
- Dave Melick
Read more »

Income taxes on retirees with Social Security

"We are in complete agreement that folks in those positions should receive Social Security. In the event my spouse and I ever are eligible at ages 67 and 70 respectively to receive S.S.; every dollar will be donated to Veterans' and First Responder related causes. BTW: Thank you for your service. I had a solemn stroll along the traveling Vietnam Memorial Wall recently and have visited the one in D.C. twice. It brings me to tears every time."
- Dunn Werking
Read more »

What is the right percentage?

"Duly noted. Your 'inflation beware' advisement is duly noted.Thanks! Inflation muddles the mind. Using less than 4% of total portfolio value yields greater than 100% of former salary is another math point, but it's all inflated dollars."
- luigi767
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COBRA insurance: No need to fear the bite

"Heidi! Very timely post. Missus and me are in the same boat. We work for large companies with great health plans. We are 10 years out from qualifying for Medicare, but here we are contemplating early retirement. One of the things I have tossed around is this and it maybe something else you might keep in your tool box. We plan to retire at aged 57 and take COBRA because even with us paying full rates, it's gold standard health insurance and the full premiums would be comparable to a market place plan. At aged 57, we do get a small subsidy of about $4k per year towards health costs. Once COBRA at the current employer runs out, I might just take a role for 6-12 mos somewhere else, hop on their insurance, then do COBRA again for another 18 months. Then the missus can take a turn. This is hoping we can get hired, she's an RN, so that's in our favor. I could potentially take a job working retail at Home Depot or one of the chains and play the COBRA carousel. Just another path to consider. Of course it makes sense to compare ACA vs COBRA to see what make the most sense, but that's another option that most do not consider. Good luck and let us know how things go."
- Mike Xavier
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Medicare Advantage Part C — Not too soon to start planning for 2027

"MedigapSeminars is the site that I check to see what is the landscape each year. It helped me choose a plan with them when I retired and I have had to switch to another Medigap G plan last year based on their recommendation. Lots of information on the site to educate oneself."
- V Saraf
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The Federal Debt and Social Security Payments

"The Social Security Trust Fund is in included in the approximate 40 trillion national debt as part of the debt from intragovernmental holdings. At 12/31/2025 a balance was about 2.5 trillion was due to the social security fund, which is shrinking fast, from the general fund. We even have pieces of paper to prove it. Per the last trustees report they estimate the trust fund will be fully depleted in late 2032. I hope it will last another six years. I am unsure what you have been specifically reading where you write "I keep reading about how Social Security payments are adding to the debt". My guess are articles are referring to the unfunded social security debt over the following 75 years that is not included the current "official" 40 trillion dollar debt. The Social Security fund unfunded debt is basically a liability of how much the program would pay out over the next 75 years over the amount the program is projected to collect over the next 75 years with both measures using current rules and lots of assumptions. A big guess would likely be an understatement but the unfunded liability is currently in the official national debt number as a zero liability. The balance as of the 1/1/2026 unfunded liability per the recently released trustees report was 29.3 trillion and that amount has been getting larger with each passing year. The US government balance sheet has massive items omitted, with the real liability balance being a mile long loaded freight train with very limited time to slow or stop before it crashes. This is no way to run a railroad."
- William Perry
Read more »

If Retirement  is Getting Close

"For the 2025 Pub 936 (worksheet page 14) for an example of how you do the calculation. The 2026 version of the worksheet typically comes out late 2026 or early 2027 timing usually depending on if congress makes any late in the year changes to this part of the tax law. I am not current on CA tax law and what differences there are from federal tax law. Best, Bill"
- William Perry
Read more »

Federal debt

"When the number of retired people is reaches 50% of the workforce, the taxes required to balance the budget would be crushing. It's not surprising they can't do it, and have to rely on deficit spending."
- Ormode
Read more »

Tax Complications – How SS Benefits interact with Other Income

""Clear as mud" is how a new client described the worksheet, after he made mistakes while doing his own taxes, and later getting a dreaded notice from the IRS."
- Dan Smith
Read more »

The Lottery of Birth

"Call it luck/karma/serendipity/providence ... As I like to point out when the subject is brought up here - a quarter of a million people are struck by lightning worldwide each year. "
- George Counihan
Read more »

TreasuryDirect changing login procedure to mandate ID.me later in 2026

"Could this ID.me outrage and threatened exit of Treasury Direct (TD) be exactly what the government wants? Think about it. Get people upset, push people away – that’s fewer customers to support. Want a Tbill? Go get it at your brokerage. Don’t come to TD. Eliminating paper savings bonds sure made it less desirable to gift one to a kid at a milestone life event. Look at the hassles of an electronic savings bond for a new $50 gift. That’s fewer customers for TD. Maybe Treasury Direct is effectively saying they just want everyone to get their treasury securities at their brokerage, not at TD. And you ask, what about ibonds? Suppose TD says just buy TIPS, we’re getting rid of ibonds. Many people think savings bonds are archaic and serve little purpose in a modern world. But I think they were a pretty good teacher to help develop a savings habit for a nation. Eliminating paper savings bonds killed a valuable tool in teaching people (young and old) to save which can lead to overall financial responsibility. Its too bad the government doesn’t see a role to make saving and conservative investing easily assessable to its citizens (young and old)."
- js
Read more »

Preparing for SS at Age 70….. How Do I Transition to Monthly Part B Premium Deduction?

"I am not taking SS yet, but am in year 3 on Medicare A&B. When that began, I was on the automatic quarterly billing cycle. I prefer as much stability from month to month for expenses, so requested monthly billing and that was granted. In the online conversation with the Medicare representative, I was assured the monthly billing cycle would continue when I began receiving SS benefits."
- Dave Melick
Read more »

Income taxes on retirees with Social Security

"We are in complete agreement that folks in those positions should receive Social Security. In the event my spouse and I ever are eligible at ages 67 and 70 respectively to receive S.S.; every dollar will be donated to Veterans' and First Responder related causes. BTW: Thank you for your service. I had a solemn stroll along the traveling Vietnam Memorial Wall recently and have visited the one in D.C. twice. It brings me to tears every time."
- Dunn Werking
Read more »

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Get Educated

Manifesto

NO. 14: WE SHOULD avoid impulse spending and investment decisions. Our instincts often lead us astray, but we can usually figure out the prudent choice—if we pause and ponder.

humans

NO. 39: WE LATCH on to information that confirms what we already believe. Instead of dispassionately reviewing the evidence, bullish investors spot reasons for optimism wherever they look, while naysayers see just the opposite. The risk: Such confirmation bias convinces folks they know the market’s direction, prompting them to make big bets they later regret.

think

BETA AND ALPHA. Beta measures an investment’s volatility relative to a benchmark index. If the investment has a positive alpha, it means it beat the index on a risk-adjusted basis, with that risk measured by beta. For instance, a mutual fund could trail the market averages, but still have a positive alpha if its performance wasn’t especially volatile.

act

MAKE SURE SPENDING money is out of stocks. Calculate how much cash you’ll need from your portfolio over the next five years. That money should be out of stocks and invested in nothing more volatile than high-quality short-term bonds. You don’t want to be forced to sell shares at depressed prices—and that could happen if your time horizon is less than five years.

Retirement

Manifesto

NO. 14: WE SHOULD avoid impulse spending and investment decisions. Our instincts often lead us astray, but we can usually figure out the prudent choice—if we pause and ponder.

Spotlight: Happiness

Doin’ the Charleston

I WROTE RECENTLY about my wife’s lifelong love of traveling, and of my resolve to get in step with her as she resumes her rambles. To that end, earlier this summer, I drove our family to Charleston, South Carolina, to attend the retirement ceremony for my cousin Chris, and to see a bit of the city, to boot.
As our departure time approached, we learned that the original schedule for retirement day had been altered.

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Lessons on the Ground

THE OTHER DAY, WHILE walking to my mailbox, I noticed a summer class schedule for a private gifted youth academy lying on the ground. I assumed it belonged to one of my neighbors, who has elementary-aged children.
Their interest in extra academics didn’t surprise me. Many families move to this area because of its excellent schools. Parents here clearly value education. On any given day, it’s common to hear children practicing the piano or violin as you walk through the neighborhood.

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Still Above Ground

I WAS WORRIED ABOUT what we’d be giving up when, a few years ago, we moved to a 55-plus community in Atlanta. We downsized from a large home to a small apartment, plus all our neighbors were considerably older. It was obvious we had to adjust and start enjoying our unfamiliar environment or we’d end up miserable.
My wife and I made a conscious decision to slow down, and make every effort to get to know other residents and their life stories.

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What’s It All About?

WE’RE ALWAYS STRIVING—the next pay raise, the next consumer purchase, the next self-improvement goal. But to what end?
Our time on this earth is fleeting, our impact minimal and our legacy quickly forgotten. A decade after we’re gone, we might be remembered by family and close friends, but not by many others. And yet we keep pushing forward.
Does death’s approach shed any light on this curious behavior? Far from it. If anything,

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Divide and Rule

EACH OF US TAKES our monthly income and then makes countless decisions—some big, some small—about how to use those dollars. How can we get the most from the money that flows through our hands? I find it helpful to look at this “income allocation” through three prisms.
Divvying it up. We can use our income for three main purposes: spending it today, saving it for tomorrow or giving it to others. Our instinct is to spend today,

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Runner’s High

I’VE RECENTLY BEEN reading and listening to health experts who study the brain chemical known as dopamine. I’m no health expert and I don’t claim any specialized knowledge on the subject, but I’ve learned dopamine is widely considered to be the “pleasure chemical.”
Think about the feeling in between bites of chocolate cake, when we know just how good that next bite is going to be. As we anticipate our reward, our dopamine spikes,

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Spotlight: Drak

My Ozempic Nightmare

EARLIER THIS YEAR, I came up with what I thought was a brilliant idea. I’d signed up for the August 2025 Ironman Ottawa to celebrate my 70th birthday and thought, “Why not jump on the Ozempic bandwagon for six months to drop some significant excess weight before the heavy training starts?” I’ve struggled with my weight for years. My doctor calls me an emotional eater. I thought, if I dropped the weight and committed to keeping it off, an added bonus would be getting off the statin and blood pressure medicine I’m on. I visited my doctor, and was put on Ozempic in April. Welcome back, depression. The weight started dropping off, but in May I began experiencing feelings of depression. My wife and others noticed a significant change in my mood and behavior. I began withdrawing into myself, not talking or laughing much, just wanting to be alone. I’d experienced depression when I retired and knew the signs well—a loss of interest in activities I used to enjoy; feeling tired and moody all the time; forgetfulness; feelings of hopelessness, helplessness and worthlessness; lack of concentration; not able to make decisions. I had no desire to do anything. I gave up writing articles and working on my new book. I didn’t understand what was happening to me, and I couldn’t put my finger on what triggered my depression. Could it be the skin cancer I was dealing with? Was it because a number of my friends were sick, dying or dead? Things were bad, but they were about to get a lot worse. Panic attacks kicked in. Thoughts of impending doom raced through my head. I imagined something bad was going to happen to the house. I had this fear that my basement would flood, and would run down and…
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Movies That Move Me

EVERY DECEMBER, I watch two Christmas movies—movies I’ve been watching for as long as I can remember. My favorite is A Christmas Carol, based on the novel by Charles Dickens. It’s about the mean and miserable Ebenezer Scrooge, a money lender who constantly bullies his poor clerk, Bob Cratchit, and rejects his nephew Fred’s wishes for a merry Christmas. Scrooge lives only for money. He has no real friends or family, and cares only about his own well-being. As the story goes, on Christmas Eve, Scrooge is visited by three ghosts. They teach him about the Christmas spirit through visions of Christmases past, present and future. In each visit, he sees either the negative consequences wrought by his miserly nature or the good tidings that others bring about through their love and kindness. Scrooge sees his future—dying alone with no one to mourn him. He has his money and his possessions, yes, but nothing else. He finally understands why qualities like generosity and love are some of the most important things in life. He’s grateful when he realizes he has a chance to redeem himself and change his future. This is the important message conveyed by Dickens. If Scrooge can change and improve his future, then anyone can. Dickens reminds us that we still have a last chance to be remembered as we would wish. But we need to start living that way today, while we still have the opportunity to change the direction of our lives. Seven years ago, after being packaged off by my employer at age 59, I once again watched the movie while suffering from a bad case of retirement shock. I started to think deeply about what I wanted my life to look like, and what I needed to do to get there. Similar to…
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Retirement Preview

THE PANDEMIC HAS given many folks a taste of what retirement could be like. An abrupt end to work. A loss of social connection. Trying to make ends meet on a much lower income. Many haven’t been happy with the experience. Worried that your retirement could be similar? Here are eight lessons we can learn from the pandemic, all drawn from my new book, Retirement Heaven or Hell: 1. Retirement can be a shock. In fact, it’s quite similar to what people experienced during the pandemic. Sure, it might have felt good for a little while, not having to set an alarm, not having to deal with a long, brutal commute and not having a demanding work schedule that left you exhausted. But at some point, being forced to shelter in place got a little irritating, and people began to feel antsy and depressed. Indeed, some started eating and drinking too much to mute the anxiety and tedium they were experiencing. 2. Life without work can be boring. The virus showed us how miserable our days can be if we have too much time on our hands. The weeks slowed to a crawl for people who couldn’t work. They had trouble remembering what day it was, because it didn’t matter. Without a plan for how to spend our time, this is how our retirement could be, too. 3. Strong relationships are crucial. During the pandemic, we’ve been forced to spend long periods of time alone, with little social interaction. Being isolated has made us appreciate the value of the relationships we have with family and friends. We all crave social connection—and we need to make sure our retirement plan addresses that need. 4. Quitting work strains marriages. Once the pandemic’s initial restrictions were lifted, divorce applications spiked. Sadly, divorce rates…
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Who’s a Senior?

I SEE THIS LABEL used a lot. But it hit me that I really didn’t know what “senior” means. I know it’s used to describe old people. But truthfully, I don’t know what “old" means, either. We’ve been manipulated into believing that, when we turn 65, we automatically turn old—which isn’t true. It’s a mistake to label people based on their age, because biological age can vary considerably from chronological age. A person’s age is a meaningless number unless we’re dealing with hard-and-fast rules, like when we’re eligible to claim Social Security and Medicare. I like hanging around retirement rebels—people who are rebelling against outdated beliefs about old people and what it means to be retired. We’ve been brainwashed into believing that people aren’t supposed to celebrate their 100th birthday by skydiving, and that they shouldn’t attempt an Ironman in their 80s, start a new business in their 70s or complete that degree they never finished in their 90s. But “seniors” are doing all these things—and they’re the people having all the fun in retirement. Retirement rebels remain kids at heart, living on the edge, exploring their potential, travelling to new places, meeting new people, learning new technologies and entering marathons in different countries, and posting about it on social media. Are these people old? I think not.
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Better Together

I’VE LONG STRUGGLED with the fact that, despite living in one of the world’s richest nations and having the best medical care in the world, Americans have a shorter average life expectancy than the citizens of 30 other developed nations. I believe it all comes down to the high level of stress that Americans carry, much of it caused by economic hardship. Far too many Americans, both young and old, live paycheck to paycheck. That can feel helpless and uncertain. It’s stressful to have too much debt or to lack the savings needed to meet everyday needs. Out of necessity, Americans are returning to intergenerational living. According to Pew Reseach Center, 16.1% of Americans lived in multigenerational households as of 2008—and the long-term trend has been up. That’s one in six American households where there are adults from at least two generations or where there’s a grandparent living with a grandchild. Living together and supporting each other makes good economic sense. It’s cheaper to run one household than two. There are also emotional benefits, especially for working parents. Stress levels can be greatly reduced if you no longer have to pay for daycare, find babysitters or arrange for summer camps. On top of that, it’s comforting to know there will always be someone to meet the kids at the school-bus stop, and maybe also a hot meal waiting on the table after a long day at work. You can see that I’m a big fan of multigenerational living. And it comes with the added benefit of bringing families closer together.
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Home Rich Cash Poor

ACCORDING TO MY local newspaper, the average home price in my town rose 450% over the past 25 years. That made me ponder how I could use my home equity to fund my desired retirement lifestyle. I’m certainly not alone in thinking this way. There are three ways you can access home equity. You can sell your home and downsize, you can take out a home equity line of credit or you can take out a reverse mortgage. The first option isn’t attractive to many retirees. These folks want to maintain their current lifestyle, and remaining in their home can be a big part of that. The stories of COVID-19 outbreaks in nursing and retirement homes only reinforce the desire to stay put. Meanwhile, with a home equity line of credit, you’ll be compelled to make repayments during your lifetime. What about the third option? I find reverse mortgages quite attractive. They allow you to unlock the equity you’ve accumulated in your home while still living there. That sounds great. Why be house rich and cash poor when you don’t have to be? Yes, reverse mortgages come with steep upfront and ongoing costs. Still, they can play an important role in a retirement income strategy, offering the following features: They give you the choice to receive your home equity as a lump sum, as annuity payments or as a line of credit. There are usually no repayments required until the home is sold—typically after your death. They’re nonrecourse loans. That means that neither you nor your estate will ever owe more than the property’s market value, even if the sum borrowed plus accrued interest is greater. There are other reasons I like reverse mortgages. For example, they can significantly increase your liquidity in retirement. You can use the extra cash…
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