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Moving is Expensive!

DrLefty | May 29, 2026

"Congrats on getting moved. Being prior military, I absolutely can't stand moving, but we have one more move left hopefully when I retire in a couple of years. From that next home they will have to carry me out in a body bag..."

- Jeff Peck

Time to share our financial info with children?

R Quinn | Jun 6, 2026

"My parents, who are in their mid-eighties, never shared anything about their finances. We knew my father had a decent pension, my mother had a miniscule pension from a part-time job, and they got whatever the Irish system pays out to OAPs (Old-age pensioners). We also knew that the house they paid $8000 for in 1973 was long paid off, so if they really needed money, it was there. This year, a series of health incidents has left them barely able to manage alone. My brother and sister have had to deal with a lot of paperwork to get power of attorney set up, manage medical bills, and figure out how to make the house more livable for them. We don't see them being able to stay in the house. Luckily, the Irish system will pay for them to move into assisted living by taking 21% of the value of their house as compensation. The break even point for that would only be three years, so we think it's a better option than selling the house, which they don't want to do anyway. The 21% due to the government is only paid when the estate is settled. It would have been a lot easier to get through all this if they had shared information in the past. With my mother in rehab and my father with dementia, tracking down all the necessary paperwork took months."

- David Mulligan

The Quiet Failure of Good Advice

Javier Escobar | May 29, 2026

"Bob, thank you for sharing this — your trajectory mirrors what several others have described, and the cognitive-decline motivation is one I think more of us should be talking about openly. Recognizing it before it becomes urgent is itself a form of planning. Your insight about AUM advisors potentially recommending strategies that conveniently keep more assets under management is something most clients never see, even when it's happening to them. On your question about the CFP: I took the program at Rice University in 2013–2014, a graduate certificate program that prepared me to sit for the CFP exam. My college roommate, Greg, a retired clinical psychologist, recently signed up to audit the CFP program at NYU. As I remember, the cost at Rice was around $6,000. Auditing is probably less expensive. But for me, all the fun was being in class with young finance professionals 30 or more years younger than me; being able to contribute to discussions with a vastly different perspective and experience; and the laser focus on purposeful learning that hormones and tear gas may have interfered with when I was in college in the early 1970s."

- Javier Escobar

The Ping

Mark Crothers | Jun 4, 2026

"Been there done that. I am 80 this year, and I split my entire coin collection mostly to the grands in 2015 but also the children. However ,I saved my birth year coins, so that folder of 21 coins represents them all! I suggest you keep 3 favorites, and maybe someone in the family will treasure those for years to come."

- William Dorner

Mourning the World

Jonathan Clements | Jun 5, 2026

"I found this article to be very challenging, both poignant and heartbreaking. Like many, I was amazed by Jonathan's equanimity during his journey. But I knew how much his family meant to him, and this article demonstrates the pain he felt. I recently lost a close friend to a butterfly glioblastoma that covered both hemispheres of his brain. He was about the same age as Jonathan, very sharp, with a big loving family, and young grandkids. His disease took his cognition first, and then his body. It was hard to know what he understood of his condition as it progressed. Two good friends, one stayed mentally sharp until the end, one lost his cognition well before he lost his life. I guess there are blessings and curses with each. I apologize for the mournful thoughts. My wife says the thing she dislikes the most about aging is that the challenges your loved ones face are big deals. As Jonathan often wrote, my takeaway is what a gift he gave us by allowing his family, friends, and the HD community to share his life, until the end."

- Rick Connor

SpaceX IPO: Is Margin Optional?

Mark Gardner | Jun 4, 2026

"Amen. Just buy that one share, it will be all you need for your grands. Get a picture of the share, and frame that instead."

- William Dorner

The thief of joy

greg_j_tomamichel | Jun 6, 2026

"I’m not at all envious of those who have more, and I do not gloat over those who have less. Having said that, why do those internet comparison hooks still pull me in? Not too many decades ago, keeping up with the Jones meant comparing ourselves to close neighbors, friends, relatives. The internet has taken comparisons to a whole new level, with all aspects of our lives becoming a competition. I wonder what the mental health experts have to say about this. "

- Dan Smith

Money & Me (Kindle version) has dropped

William Perry | May 26, 2026

"Looking forward to reading it!"

- Nick Politakis

ChatGPT’s Portfolio Advice

Gary Klotz | Jun 6, 2026

"My experience with Chat and Gemini mirrored Gary's. While I'm certainly aware of AI models being a bit sycophantic, I largely neutralize that by starting conversations with something like this: "Act as a completely objective, fee-only financial analyst. Do not flatter my choices or validate my ideas just to be polite. Your job is to look for blind spots, misalignments, and hidden risks based strictly on the data I provide." Chat and GPT have been very helpful to me on a range of financial topics, in particular, positioning me to be ready to take RMDs in the most beneficial way possible. I've spent hours and hours asking follow-up questions to responses Chat or Gemini gave me. They are not perfect. And you can't take what they say at face value. But they are only going to get better. And they are pretty darn good right now, depending on how you tee up conversations. If nothing else, they help focus the mind on critical issues that provide the best possible blueprint for a discussion with a human CFP or other professional. If I were in the business of providing financial advice, I would be keeping a VERY close eye on AI models - and how younger people in particular were engaging with them."

- John Katz

Mega Backdoor Roth

ArticleBogdan Sheremeta | Jun 6, 2026

I WAS RECENTLY asked about strategies that high earners can use to reduce their tax bill.

Most people know the usual options. They contribute to a 401(k), fund a health savings account or make a Roth IRA contribution through the backdoor method. Business owners may have additional opportunities through retirement plans and business structures.

But there's another strategy worth knowing about: the Mega Backdoor Roth (MBDR).

The MBDR allows some workers to put far more money into Roth accounts than the usual contribution limits permit.

Consider somebody who contributes the maximum $24,500 to a 401(k) in 2026 and receives a $5,000 employer match. If the employer's retirement plan allows after-tax contributions, that worker may be able to contribute an additional $42,500 to the retirement plan.

This is because the total 401(k) contribution limit for 2026 is $72,000. That limit includes employee contributions, employer contributions and after-tax contributions. Subtract the $24,500 employee contribution and the $5,000 employer match, and there's room for another $42,500. Workers age 50 and older might be able to contribute even more ($80,000 total 401(k) limit in 2026) because of catch-up provisions.

For savers who have already exhausted other retirement account options, this can be a powerful way to build additional tax-free savings.

The catch

Your employer's retirement plan must permit after-tax contributions.

Many plans don't. According to Fidelity, only about 11% of employer-sponsored 401(k) plans offer MBDR conversions.

If you log into your retirement plan and review your contribution options, you may see a category labeled "after-tax." That's the option you need:

Importantly, don't confuse it with a Roth 401(k). They're similar, but different. Small-business owners with a solo 401(k) may also be able to use this strategy if their plan allows.

The MBDR process generally involves two steps:

Contribute money to the plan's after-tax account.
Move those funds to a Roth account.

Depending on your plan, the money may be rolled into either a Roth IRA or a Roth 401(k).

The rules vary from plan to plan. Check your plan documents or summary plan description before enganging in this strategy.

Why use it?

Suppose you've already maxed out your traditional 401(k) contribution and completed a backdoor Roth IRA contribution. You now have additional money to invest.

One option is a taxable brokerage account. Another is the Mega Backdoor Roth.

The Roth strategy offers several potential advantages:

Future growth can be tax-free.
Dividends aren't taxed each year.
Rebalancing investments doesn't trigger taxable gains.
Retirement assets may receive creditor protection under federal law.

A taxable brokerage account also has advantages:

No contribution limits.
No age-based withdrawal rules.
Greater flexibility if you need access to the money before retirement.

That flexibility shouldn't be overlooked. Retirement accounts come with restrictions, and those restrictions may matter depending on your goals.

Importantly, some plans allow you to move after-tax contributions to either Roth IRA or Roth 401(k) accounts. A Roth 401(k) may be simpler because some plans offer automatic conversions. A Roth IRA typically offers a wider range of investment choices. It may also provide greater flexibility when it comes to withdrawals.

I generally prefer the Roth IRA option when it's available. Still, either choice can work well.

Mind the earnings

After-tax contributions are usually invested while they remain in the 401(k).

If the account earns money before the conversion takes place, those earnings are taxable when moved to the Roth account. For that reason, many investors try to complete the conversion quickly. Some plans even allow automatic conversions.

Suppose you contribute $10,000 to the after-tax portion of your 401(k). Before the conversion occurs, the account earns $100.

You then move the balance to a Roth IRA. The entire $10,100 can be transferred, but the $100 of earnings will generally be taxable if you put it all into Roth IRA. There are plans that allow you to split between Roth and Traditional, which could be helpful.

At year-end, you'll receive Form 1099-R reporting the transaction.

Using the example above, your tax return would show a $10,100 distribution, with $100 generally treated as taxable income.

If you work with a tax professional, make sure they understand exactly what happened. The reporting isn't especially complicated, but it should be handled correctly.

The Mega Backdoor Roth isn't available to everybody. But for those whose retirement plans allow it, the strategy offers a chance to put a substantial amount of additional money into a Roth account and enjoy tax-free growth for years to come.

Have you used this strategy to contribute to your retirement accounts? Let us know in the comments!

Bogdan Sheremeta is a licensed CPA based in Illinois with experience at Deloitte and a Fortune 200 multinational.

Bucket Strategy

ArticleAdam M. Grossman | Jun 6, 2026

A WHILE BACK, I was speaking with a fellow who had recently retired. He shared this observation, only half-jokingly: “Working was easy,” he said. What he meant was that financial management during our working years is more straightforward than it is in retirement. We earn and save and hope that our savings grow. But when we get to retirement, it becomes more complicated to know exactly how to manage those savings. In the 1950s, a Ph.D. student named Harry Markowitz developed a framework to help investors answer this question. His approach, which is now known as modern portfolio theory, provided new insights on how to effectively diversify a portfolio. He later won a Nobel Prize for this work. But useful as it was, modern portfolio theory involved a lot of math and didn’t offer investors any practical help in managing their savings. Other academic theories have emerged over the years, but all of them involved similar levels of complexity. It was for that reason that in 1985, financial planner Harold Evensky developed an idea that’s now known as the “bucket strategy.” The idea is that investors—especially those in retirement—should segment their portfolios. To understand this idea, we can look at a simple example. Suppose Tom is a recent retiree and planning to withdraw 5% of his portfolio each year for the next several years. To protect against a potential stock market downturn, it would be reasonable for him to hold five years worth of withdrawals in some combination of cash and short-term bonds, since that corresponds, more or less, to the length of the worst stock market downturns we’ve seen in modern times. In Evensky’s model, cash and bonds would be the first bucket, and the math is straightforward: If Tom wants to withdraw 5% each year and wants to set aside enough for five years, then he’d hold 25% (that is, 5% x 5) in the first bucket. With that 25% allocated to bonds for stability, Tom could then feel free to allocate the remaining 75% to stocks. The benefit of this structure is that Tom would then have the flexibility to withdraw from either the stock or bond side of his portfolio depending on where the stock market stood in any given year. Most importantly, by putting a wall between his stocks and his bonds, Tom would be able to avoid selling stocks during market downturns. The bucket concept can be very useful, but it’s important to know that there isn’t just one bucket strategy. Since Evensky first introduced the idea 40 years ago, a handful of alternatives have evolved. Evensky’s original structure consisted of just two buckets. This makes it simple and easy to manage. A downside, though, is that bonds can still lose money, so neither of the two buckets could be considered truly safe. In 2022, in fact, total-bond market funds lost more than 10% of their value, and it took several years for investors to get back to even. Thus, one of the most popular ways to structure a bucket portfolio is to add a third bucket, for cash. To be sure, cash doesn’t offer much growth potential. But it would’ve been extremely helpful in a year like 2022, when both bonds and stocks lost money. While it provides more protection, the downside of a three-bucket approach is that it’s more complicated and somewhat harder to manage. Proponents, however, argue that it doesn’t require much more effort than traditional portfolio rebalancing and is well worth the effort. In his book, The Aspirational Investor, Ashvin Chhabra lays out another bucket alternative. Chhabra is less concerned with the distinction between bonds and cash. Instead, he advises investors to focus on the riskier side of their portfolios. He suggests that investors distinguish between standard, publicly-traded stock market investments and any alternative assets, such as private funds and real estate, that they might hold. Chhabra feels this segmentation is important because of the nature of alternative investments. They’re a little like lottery tickets: They can turn into home runs but can also go to zero. If you’re constructing a portfolio and like the idea of a bucket approach, which way should you go? Since each of these approaches has merit, you could combine them all, creating a four-bucket setup, consisting of cash, bonds, stocks and alternatives. That wouldn’t be unreasonable, but it would also ratchet up the complexity level. Here’s the approach I recommend: First, like Chhabra, I would draw a distinction between traditional assets and alternatives. Traditional, publicly-traded investments, including standard stock and bond mutual funds and ETFs, would go in your core portfolio. These are the assets around which you’d build your plan. Alternatives, if you own them, would go in their own separate bucket. In general, I don’t recommend these types of assets because their performance is more variable and more unpredictable, and because they tend to carry higher fees. But if you already own some alternatives, I’d separate them from your financial plan and view them only as a bonus if they deliver value. In other words, make sure that your financial plan will still work if you were to rely on only your core portfolio. Within the core, I’d have just two buckets: one for stocks and one for bonds. The result is that you would have just two buckets, plus alternatives, if you happen to own them. But what about cash, since, as we saw earlier, bonds aren’t guaranteed and can certainly lose money? In my view, a dedicated, separate cash bucket isn’t necessary. Instead, what I recommend is to be diligent in diversifying your bond holdings. I wouldn’t own a total-bond market fund. Instead, take a building block approach, holding some short-term and some intermediate-term bond funds. Short-term funds will shine when rates are rising because they’ll decline much less than total-market funds. Intermediate-term bonds, on the other hand, will shine when rates are dropping. You could also add some inflation-protected bonds to round out your holdings. At the end of the day, the best portfolio structure is the one that’s simple to manage while also protecting your savings from whatever surprises the market delivers. 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.

Rethinking the “Right” Time for Social Security

Andrew Clements | Apr 23, 2026

"I’m still an outsider on all this as I cannot understand any relevance of social security break even concerns. Who cares? You begin SS when you need the money most or when you don’t, but want to enjoy it. Seems quite simple, no spreadsheet required😎 As I have said too often, I started our SS at FRA while I was still working. For years it was invested in Muni funds with interest reinvested (still is). We now use the incoming SS checks, but never touched the accumulated investment which is now well into six figures and generating tax-free income should we need it or it all goes to our family. When we stopped investing the SS checks several years ago after I retired it was our travel fund. These days the money goes into a bank account to be used as needed, but not routine spending. True, if we had delayed, the checks would be larger, but then we would not have a substantial nest egg and additional tax free income stream. I supposed ages 83 and 87 help my case though."

- R Quinn

Moving is Expensive!

DrLefty | May 29, 2026

- Jeff Peck

Time to share our financial info with children?

R Quinn | Jun 6, 2026

- David Mulligan

The Quiet Failure of Good Advice

Javier Escobar | May 29, 2026

- Javier Escobar

The Ping

Mark Crothers | Jun 4, 2026

- William Dorner

Mourning the World

Jonathan Clements | Jun 5, 2026

- Rick Connor

SpaceX IPO: Is Margin Optional?

Mark Gardner | Jun 4, 2026

"Amen. Just buy that one share, it will be all you need for your grands. Get a picture of the share, and frame that instead."

- William Dorner

The thief of joy

greg_j_tomamichel | Jun 6, 2026

- Dan Smith

Money & Me (Kindle version) has dropped

William Perry | May 26, 2026

"Looking forward to reading it!"

- Nick Politakis

ChatGPT’s Portfolio Advice

Gary Klotz | Jun 6, 2026

- John Katz

Mega Backdoor Roth

ArticleBogdan Sheremeta | Jun 6, 2026

I WAS RECENTLY asked about strategies that high earners can use to reduce their tax bill.

But there's another strategy worth knowing about: the Mega Backdoor Roth (MBDR).

The MBDR allows some workers to put far more money into Roth accounts than the usual contribution limits permit.

For savers who have already exhausted other retirement account options, this can be a powerful way to build additional tax-free savings.

The catch

Your employer's retirement plan must permit after-tax contributions.

Many plans don't. According to Fidelity, only about 11% of employer-sponsored 401(k) plans offer MBDR conversions.

If you log into your retirement plan and review your contribution options, you may see a category labeled "after-tax." That's the option you need:

Importantly, don't confuse it with a Roth 401(k). They're similar, but different. Small-business owners with a solo 401(k) may also be able to use this strategy if their plan allows.

The MBDR process generally involves two steps:

Contribute money to the plan's after-tax account.
Move those funds to a Roth account.

Depending on your plan, the money may be rolled into either a Roth IRA or a Roth 401(k).

The rules vary from plan to plan. Check your plan documents or summary plan description before enganging in this strategy.

Why use it?

Suppose you've already maxed out your traditional 401(k) contribution and completed a backdoor Roth IRA contribution. You now have additional money to invest.

One option is a taxable brokerage account. Another is the Mega Backdoor Roth.

The Roth strategy offers several potential advantages:

Future growth can be tax-free.
Dividends aren't taxed each year.
Rebalancing investments doesn't trigger taxable gains.
Retirement assets may receive creditor protection under federal law.

A taxable brokerage account also has advantages:

No contribution limits.
No age-based withdrawal rules.
Greater flexibility if you need access to the money before retirement.

That flexibility shouldn't be overlooked. Retirement accounts come with restrictions, and those restrictions may matter depending on your goals.

I generally prefer the Roth IRA option when it's available. Still, either choice can work well.

Mind the earnings

After-tax contributions are usually invested while they remain in the 401(k).

Suppose you contribute $10,000 to the after-tax portion of your 401(k). Before the conversion occurs, the account earns $100.

At year-end, you'll receive Form 1099-R reporting the transaction.

Using the example above, your tax return would show a $10,100 distribution, with $100 generally treated as taxable income.

If you work with a tax professional, make sure they understand exactly what happened. The reporting isn't especially complicated, but it should be handled correctly.

Have you used this strategy to contribute to your retirement accounts? Let us know in the comments!

Bogdan Sheremeta is a licensed CPA based in Illinois with experience at Deloitte and a Fortune 200 multinational.

Bucket Strategy

ArticleAdam M. Grossman | Jun 6, 2026

Manifesto

Jun 7, 2026

NO. 60: WE SHOULDN’T necessarily be investment contrarians, but we should be leery of crowds. When “everybody” is buying, that’s a warning sign—and we should resist joining the stampede.

humans

Jun 7, 2026

NO. 25: WE LIKE the idea of choice—but we’re often happier when we have less of it. Welcome to the so-called paradox of choice: If we’re presented with too many options, we can become paralyzed and fail to make a decision, plus all the choice leads to added anxiety. Exhibit A: 401(k) plans, where more options often cause employees to make poorer investment decisions.

Truths

Jun 7, 2026

NO. 55: UPSIDE GAINS are a sign of downside risk. Investors will say they don’t care how quickly an investment rises, only about how fast it might fall. But if an investment’s price skyrockets, there's a risk it’ll plunge just as rapidly. The lesson: Pay attention to measures of volatility such as beta and standard deviation—and be leery of soaring stocks and funds.

act

Jun 6, 2026

BUY THE BIG THREE. The market portfolio consists of four major sectors, roughly equal in size: U.S. stocks, U.S. bonds, foreign shares and foreign bonds. Arguably, foreign bonds are optional, offering modest yields but wild currency swings. The other three sectors, however, are crucial to a diversified portfolio. Do you own enough of all three?

Money Guide

Manifesto

Jun 7, 2026

Spotlight: Saving

Frugal but Foolish

Ken Cutler | Apr 18, 2024

JEFF WAS A NEW engineer who began his nuclear power career a couple of decades ago as part of my group. He’d graduated from a middling engineering school with a stellar grade point average. Quiet, though not shy, he had a serious demeanor.
Jeff had a goal of purchasing a house as soon as possible. Needless to say, this was a tall order for someone just starting his career. He lived a spartan lifestyle,

Raising Savings

Greg Spears | Nov 14, 2024

When I was working full-time, I always saved the maximum to my 401(k). Before my employers had a 401(k) plan, in the early 1980s, I saved the maximum to an IRA—a princely $2,000. Pretty soon I felt rich. I had $40,000 saved.
For this reason, I always pay attention to changes in plan savings limits. And there are higher savings limits for 401(k) plans in 2025, plus a new “super catch-up” category. For those who are interested,

Feeling grateful and paying forward

Mark Crothers | Jun 16, 2025

Just weeks into my retirement, while sitting on a beach beside the Giant’s Causeway on Ireland’s north coast, a profound sense of gratitude washed over me. It was for a person whose name I couldn’t recall and a face I’d forgotten.
Forty years prior, in my very first job, I served a customer who turned out to be a pension salesman. To make a long story short, he persuaded an 18-year-old me to open a personal pension,

Aiming for Less

Richard Quinn | Jan 5, 2024

WHAT DOES IT MEAN to “live within your means”? To answer the question, we first need to define “means.”

If your gross income is $60,000, that income isn’t your means. For starters, you need to subtract income and payroll taxes. To live within your means, you need to spend no more than your net income—income after taxes and other withholdings.

I’ll go further and suggest that your true means are your income net of monthly savings for retirement and financial emergencies.

Smoke and Mirrors with a $1 Million Portfolio

Mark Crothers | Sep 11, 2025

Everyone wants more security for their retirement savings, and outside of Social Security, the most reliable way to achieve this is often the much-maligned annuity. The main issue for many people is losing control of a large chunk of their retirement pot—they simply don’t like the idea. But what if you could get some of the security an annuity provides without giving up control of your cash?
No solution is perfect, but this idea might be of interest.

HSA Tips

Bogdan Sheremeta | Feb 28, 2026

HEALTH SAVINGS ACCOUNT (HSA) is the most efficient tax-advantaged investment account because it offers a triple tax advantage:

Contributions are tax-deductible
Earnings grow tax-free
Withdrawals are tax-free if used for medical expenses

One of the best uses of an HSA is to actually invest the balance.
For example, I keep $500 (the minimum required balance) in cash. The rest, I invest in low-cost index funds. This allows me to maximize compounding inside the HSA account.

Margin of Safety

Richard Connor | Oct 28, 2020

MANY FINANCIAL planners say they “stress test” portfolios. That sounds like a good idea, but it isn’t well defined. I decided to do some research to see how I could apply the notion to the investments owned by my wife and me. I came across a number of useful articles. Investopedia, one of my go-to resources for all things financial, provides this definition: “Stress testing is a computer simulation technique used to test the resilience of institutions and investment portfolios against possible future financial situations.” Forbes, meanwhile, provides a three-step process that I thought was useful. Among financial planners, two common approaches are historical data analysis and Monte Carlo simulations. The historical approach uses past asset class returns to analyze how a portfolio would have fared historically. The idea: If your portfolio survived the past ups and downs of the financial markets, you’ll probably be okay in future. The Monte Carlo method is similar, but takes the idea even further. It’s a mathematical method that starts with historical asset class returns for, say, each calendar year and then, over and over again, assumes these annual returns occur in a different order. This results in hundreds or even thousands of different possible scenarios, allowing you to develop a statistical distribution that shows how your portfolio might perform. Monte Carlo simulations are especially useful for looking at whether folks will have enough money for retirement, given the amount they plan to withdraw each year from their portfolio and the range of potential returns. One big worry: Retirees get hit with atrocious returns early in retirement and those returns, coupled with their own spending, eviscerates their portfolio. I think both the historical approach and Monte Carlo analysis are useful exercises, and they can help boost confidence in a retirement plan. But both also assume that…

Park Place

Richard Connor | Jul 31, 2021

OUR SOUTH JERSEY beach town transforms from empty to overrun during the summer. This past July 4th weekend was one of the busiest many of us had ever experienced. On these occasions, parking spaces go from a mass-produced commodity to the rarest of diamonds. We had company for the weekend, so we had to park four cars instead of the usual three. Before the weekend, we grabbed a desirable spot in front of our house and vowed never to move it. I carefully squeezed our remaining two cars into our two rear parking spots, leaving just enough room for a third car to park perpendicular, blocking the other two cars. All weekend, we kept an eye on the street, just in case a prime spot opened up. When one did, my wife grabbed one car and tried to snag it, only to be outdone by a passing SUV. We were crushed. Looking back, it’s hard to believe how much time and energy we spent worrying about parking—and how much pride we felt over successfully managing the parking situation. But then I think about how I stocked up at the beginning of the pandemic, including buying cases of paper goods, hundreds of coffee K-Cups and freezers full of meat. Clearly, perceived scarcity creates economic stress—and decision-making often suffers when we feel stressed. Was my reaction appropriate? Maybe organizing our weekend parking didn’t require a plan comparable to the Apollo program. It’s worth examining our behavior in such situations, especially those that are of so little consequence. That brings me to a second question. Was our perception of the scarcity accurate? There were shortages of some important items at the beginning of pandemic and it is indeed tough to park in our beach town on summer weekends. But was it as bad…

Pretty Nice Joint

Richard Connor | Apr 6, 2023

JOINT REPLACEMENT surgery is a rite of passage for many retirees. I’d be willing to wager that a majority of HumbleDollar readers have either had one themselves or know someone who has. The American Academy of Orthopaedic Surgeons says hip and knee replacements are the most common types of total joint replacement. From 2012 to 2021, 2.55 million of these procedures were performed, according to the American Joint Replacement Registry, which is the academy’s data repository. Today, younger and more active patients are undergoing joint replacements. Patients who had total knee or hip replacement procedures were age 67, on average. I developed severe osteoarthritis in my right knee in my late 50s. I lived with it until it became debilitating. I elected to have a total knee replacement in September 2019. At the time, my left knee also showed signs of osteoarthritis, but it wasn’t as severe. I was told I could have both knees replaced simultaneously, but it wasn’t recommended, so I chose to have just the right knee done. My surgery and rehabilitation went well, and my right knee feels great. My left knee hung in there for the next two years. In 2022, I started to have more knee pain, as well as “referred” pain in the lower leg. My knee joint wasn’t straight and put constant stress on the leg muscles. Standing was worse than walking. I decided to have the left knee joint replaced last fall, and had the surgery on Jan. 3. My 2019 surgery was performed in a hospital and included an overnight stay. I was not a candidate for a same-day procedure in an ambulatory surgery center because of my weight. I had in-home physical therapy for three weeks and then did outpatient physical therapy at a local office. It took six…

The Right Tools

Richard Connor | Oct 6, 2021

WE RECENTLY UPGRADED our home with smart locks, which open with a keypad code or cellphone command. After a bunch of research, we settled on Yale Assure Locks, which I’d also seen on an episode of This Old House. I’ve installed many locksets in the past, so I didn’t expect any problems. Once they arrived, I gathered my tools, opened the packages and read the instructions. It seemed pretty straightforward. I set to work on the deadbolt, first removing the old one. The next step is to insert the new bolt mechanism in the side of the door. The hole needed to be one inch in diameter. Unfortunately, the existing hole was 1/8 inch too small. I was pretty sure I had a one-inch drill bit, but couldn’t find it. I tried using a smaller bit, working around the inside of the circle, trying to gouge out the material. After almost an hour, I was about halfway there. I realized I might have to repeat this tedious process three more times. We have two doors, with a deadbolt and a handle on each. I grabbed my car keys and drove to the hardware store for a one-inch drill bit. As I expected, there were a half-dozen choices. After consulting with the store’s owner, I bought a nice boring bit. Back home, it took about a minute to drill a perfect one-inch hole. The rest of the installation took about 10 minutes. The moral of this story is obvious: Always try to use the right tool. A good neighborhood hardware store is invaluable. It isn’t just the tools, it’s also the years of wisdom that the owner offers for free. We need the same expertise in our financial life, but we don’t always get it. That got me thinking about the…

Where’s My Rate Hike?

Richard Connor | Oct 7, 2022

RISING INTEREST RATES are impacting everyone. The Federal Reserve has raised short-term rates at its last five meetings. It hiked interest rates 0.75 percentage point at its September meeting, the third time this year it’s raised rates by that amount. Bankrate reports that current projections see the Fed boosting rates by another 1.25 percentage points before year-end. These increases affect what consumers pay for mortgages, car loans and credit card debt. As I write this, Bankrate says the current average rate for a 30-year fixed-rate mortgage is 7.06%. This is almost half a percentage point higher than a week ago. With all these rates rising, why aren’t my bank accounts following this meteoric path? Capital One 360 Savings is currently paying 2.2%, but its checking account still pays just 0.1%. That 0.1% is also typical for savings accounts from big banks, according to Bankrate. Meanwhile, one-year CDs are 3.25% and five-year CDs are 3.5%. Vanguard Federal Money Market Fund (symbol: VMFXX) is yielding 2.78%. I understand that banks need a margin between what they charge customers to borrow money and what they pay savers on deposits. The difference is how they earn a profit. But it always feels like the borrowing rates go up faster than the savings rate. Earlier this week, The Wall Street Journal ran a story that helped explain this phenomenon. The article said large banks have plenty of cash to cover all their lending, so they don’t need to raise rates to attract new savings. Some banks have increased their yields, especially online banks, in response to the Fed’s rate increases. But there are many still paying paltry interest. My TD Bank checking account is paying 0.1%. How do banks get away with this? I was surprised to learn that the problem is us, the saver.…

Happy Winter Solstice

Rick Connor | Dec 21, 2024

The Winter Solstice occurred today at 4:21 AM, Eastern time. The Winter Solstice is defined as the point in the Earth's orbit when the sun is furthest south, and the Earth's northern hemisphere is tilted furthest from the sun. It is the shortest day of the year; days will start getting longer. When I was an aerospace engineer, designing thermal control systems for geosynchronous satellites, the Winter Solstice was one of 4 important dates in the year, along with the Spring and Fall Equinoxes, and the Summer Solstice. Somewhat surprisingly, the Winter Solstice is the closest point in the Earth's orbit to the sun. This means it was the warmest condition for satellites orbiting the Earth's equator. The Equinox points were the coldest because they created the longest eclipse periods for the satellites. Knowing these extreme conditions allowed us to bound the worst-case environments, and design a system, using the proven analytical tools, verified material properties, and qualified design features that would work effectively within these extremes. We did extensive ground testing of our designs to make sure they would perform during the satellite's planned lifetime. I used this approach on our financial plan. I wanted to make sure it was designed to survive during worst-case conditions. These conditons might include falling markets, failing health, expensive home or auto repairs, and many other risks. The tools we can use included hard work, career advancement, saving, investing, insuring, tax planning, and careful spending. A satellite needs to do more than just survive the extreme conditions of space. It needs to perform its mission. We tailored the design to try to optimize the mission performance. This was often complex and contradictory, since different equipment worked better at different temperatures. It takes more time, resources, and effort to optimize a complex system. Similarly,…

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