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This would be a great posting on a web site with the name “HaughtyDollar.”

R Quinn  |  Aug 28, 2026

"I don’t believe this answers the posed question."
- Marilyn Lavin
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Traditional or Roth

ArticleRichard Connor  |  Aug 29, 2026

THE CHOICE BETWEEN a traditional retirement account or a Roth is a frequent topic on HumbleDollar. The choice is generally framed as a choice between paying taxes up front (a Roth), or deferring taxes until withdrawal (traditional). I thought it would be interesting to evaluate a real-life example of how this choice might work out. In December of 2016 my wife and I had an opportunity to each open a Roth IRA. My wife took a partial sabbatical that year, and that, combined with maxing out our 401k accounts, gave us a chance to each open a $4,500 Roth IRA. The maximum allowable contribution that year was $6,500 for those 50 and over. Up until then we had assumed that our marginal tax bracket would likely be lower in retirement, and focused on contributing to our employer’s traditional 401k plans. Despite that, we decided to move forward with opening a Roth IRA. I thought it would give us some tax diversity, and the opportunity to do Roth conversions when, and if, it made sense in the future.  In December of 2016 we opened Roth IRAs at Vanguard and invested the $4,500 in their S&P 500 Index Fund. Those initial funds have been invested for almost 10 years. Over that decade we have added some additional funds, and have done a few conversions. I recently did a quick analysis to see how my Roth experience would have compared to investing in a traditional IRA.   In 2016, our marginal tax bracket was 28%.  To contribute the $4,500 required $6,250 of pre-tax income. Due to some financial engineering over the last year, including selling our second home in late 2025, I expect our 2026 marginal tax bracket to stay within the 12% bracket. I’ve been looking at this closely because I’m considering doing a Roth conversion later this year. The table below shows the comparison between the Roth performance, and what a traditional IRA would have produced. The annual rate of return was determined using Nick Maggiulli’s S&P 500 Historical Return Calculator. Roth vs Traditional The table shows that the Traditional IRA would have been the better choice, producing about $3,500 more in available funds, or about 22% more. This demonstrates that the primary driver in choosing between a Roth and a traditional qualified account is a consideration of the tax rates at the time of contribution and at the time of distribution. There have been a number of changes to the tax code in the last decade that have contributed to the result, but I certainly didn’t predict any of them.  If you guess wrong, you pay the price in a higher tax bill. In the example above, the extra $1,750 invested in the traditional account produced an additional $6,143.31 in earnings. The lower tax rate at the distribution of the traditional IRA results in the $3,500 in extra funds. Even though the Roth IRA had tax free earnings growth, the initial larger tax rate overcame that advantage, when compared to the traditional IRA.   Because of my pension and my wife’s social security benefit, 85% of her social security benefit is taxable income, so that is not a consideration in our tax calculation. I used Dinkytown’s 1040 Calculator to run a series of estimates of our 2026 tax return to assess if we want to execute a Roth Conversion this year. We are still 4 years from taking RMDs, and I will start my Social Security in a year when I turn 70. My current thinking is a conversion of about $40,000 will keep us in the 12% bracket. There would also be a small NJ state tax impact. My simple analysis reinforces what I’ve been taught. Roth contributions make the most sense when you think your current tax bracket is lower than when you expect to withdrawal the funds. There are secondary considerations, like no tax diversification, no RMDs, and uncertainty about future tax rates. If you intend to pass the funds to heirs, it might make sense to perform Roth conversions today at the 22% tax bracket if you intend to pass these accounts to heirs who may be in their peak earnings years. Not sure? I believe I recall several HumbleDollar contributors write something about splitting the difference?   Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
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Americans and their credit cards

R Quinn  |  Aug 24, 2026

"If 46% of cardholders carry credit card debt, how can 53% of Americans carry credit card debt to cover essential living expenses?"
- R Quinn
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Bad Maths, Good Fire.

Mark Crothers  |  Aug 28, 2026

"David, I'm with you on the peat fire. I still burn peat now and then in winter — messy fuel, but that smell is hard to beat. These days it's surprisingly hard to come by in Ireland, thanks to legislation protecting the peat bogs."
- Mark Crothers
Read more »

The Intentional Spendthrift

Mark Crothers  |  Aug 21, 2026

"The train from Milan to Zurich is a beautiful, scenic journey — though my first time was a big disappointment. I hadn't realised there were two different routes, and I mistakenly booked the one that goes through the tunnel under the Alps. A few years later, I made sure to book the right one!"
- Mark Crothers
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Inflation Hedge

ArticleAdam M. Grossman  |  Aug 29, 2026

THE OPEN KITCHEN restaurant has been a fixture in Charlotte, North Carolina for 75 years. The restaurant has an old-time feel, with memorabilia, including menus from years gone by, lining its walls. Those old menus provided David Enna, a financial journalist, with a laboratory for examining the effects of inflation. What did Enna find? The oldest menu on display is from 1963. To state the obvious, today’s prices make those from the 1960s look quaint. Back then, spaghetti and meatballs cost just $1.10. Today, it’s $15.50. But, as Enna points out, that was more than 60 years ago, so increases are to be expected. Over the past 60 years, the Consumer Price Index (CPI) has averaged 3.8% per year. That isn’t unreasonable, especially since that average includes the 1970s, when inflation sometimes topped 10%. What’s of more concern, though, is what consumers have experienced more recently. Since 2020, prices across the economy have risen 29%. And though those increases have slowed, the Fed is still struggling to ratchet inflation back to its preferred 2% level. This has given investors renewed interest in strategies to defend against inflation. At first glance, this doesn’t seem like it should be such a difficult problem. The U.S. Treasury offers an investment specifically designed for this purpose: Treasury Inflation-Protected Securities (TIPS). These are bonds that are guaranteed by the federal government to increase in value with inflation. And though I hesitate to use the words “bond” and “exciting” in the same sentence, today many investors are finding the return on TIPS compelling. The 30-year TIPS is now paying close to 3% on top of inflation. If inflation averages 2.5%, for example, over the next 30 years, this bond will end up returning a total of 5.5% per year, and with minimal risk. That sounds good in theory, but do these bonds make sense for your portfolio? It’s worth taking a closer look. The first thing to note is that this seemingly attractive 3% yield only applies to 30-year TIPS. Yields on shorter-term bonds are lower. So unless your investment horizon happens to be exactly 30 years, these bonds may be of limited practical value. Putting aside the yield question, though, a more fundamental challenge with individual TIPS—and individual bonds in general—is that they’re a cumbersome way to build a portfolio. Even if you didn’t mind the process of buying bonds one by one, which can be tedious, there’s the fact that it’s hard for most people to be able to forecast their cash flow needs each year into the future. That’s a problem because choosing maturity dates is the foundation on which bond portfolios are built. Ideally, if you can align the maturity dates of the bonds in your portfolio with your future cash needs, then you can hold bonds to maturity, which is when the issuer would promise to pay you back in full. But that redemption value is guaranteed only at maturity. Buy a 20-year bond and sell it after just 10 years, and there are no guarantees. A bondholder could easily lose money selling an individual bond before maturity. Given these challenges, would a TIPS fund be a better choice? To be sure, bond funds are much simpler to purchase and to manage, but they typically offer even less protection from losses than individual bonds. Most recently, shareholders in TIPS funds were disappointed by how they performed in 2022, when inflation spiked to 9%. Investors expected that to be the year when TIPS rewarded investors, but instead, diversified TIPS funds such as the Vanguard Inflation-Protected Securities Fund (ticker: VAIPX) lost nearly 12%. Why did funds like this fare so poorly when inflation was running so high? The problem is that, at the end of the day, TIPS are still bonds. And though they receive a bump in value when inflation rises, a countervailing force is that they lose value when interest rates rise. In 2022, the Federal Reserve raised interest rates aggressively to fight inflation. The negative impact from those rate increases far outweighed the benefit TIPS received from inflation being higher. That puts investors in a difficult position. If TIPS provide inflation protection in theory, but both individual TIPS and TIPS funds carry limitations, what other options are there? The good news is that not all TIPS funds are the same. Some hold only short-term bonds, and they have historically held up much better than more broadly diversified TIPS funds because short-term bonds are more resilient when interest rates rise. Over the past five years, a fund like Vanguard’s Short-Term Inflation-Protected Securities ETF (ticker: VTIP) has outperformed a comparable fund (ticker: VGSH) holding standard short-term Treasury bonds every year, as well as this year to-date. It’s important to note, though, that this is relative performance. In 2022, when the entire bond market was under pressure, even short-term TIPS funds like VTIP did still lose money. They just lost less than funds holding conventional bonds. The bottom line: We should never become too wedded to any one strategy. No investment can promise reliable and complete protection against inflation in every market scenario. That said, I do still recommend TIPS and would specifically recommend a short-term fund like VTIP. But I also suggest taking a diversified approach to inflation protection. Here are other steps to consider. If you’re in your 60s and considering when to claim Social Security, that decision offers a powerful lever. Because Social Security benefits increase with inflation and also increase with each year you delay claiming, it’s maybe the most effective way to build additional inflation protection into your plan. What else can you do? Fortunately, you may already own one of the most effective—and underappreciated—inflation-fighting instruments: stocks. While rising prices in recent years have been frustrating for consumers, the result has been that companies have been able to maintain their profit margins. That, in turn, has helped to support their stock prices through this period of inflation. To be sure, some companies have more of an ability to raise prices than others, but overall, stocks are, in my view, a good way to keep pace with inflation. The one thing I wouldn’t do is to buy gold. Despite its reputation, various studies have confirmed that gold really isn’t a reliable inflation hedge. In a paper titled “The Golden Dilemma,” researchers wrote: “Over practical investment horizons, gold is an unreliable inflation hedge,” though they acknowledge that it may be more reliable over longer timeframes—“if the investment horizon is measured in centuries.”   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.  
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How Did You Find Paid Work After Retiring from Your Primary Career?

Jeffrey Chan  |  Jul 31, 2026

"Good for you."
- Patrick Brennan
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The Wrong-Sided Man

Dennis Friedman  |  May 8, 2025

"I too walk early in the morning and now I carry a small can of pepper spray. It might be a vicious dog, wrong-way man as you describe, or a wayward hobo looking for an easy roll."
- art winslow
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You Heel!

Michael Flack  |  Aug 24, 2026

"Counterpoint- I purchased a brand new pair of Bostonian oxfords, maroon in color for about $20, about 25 years ago. I liked them so much I bought a black pair, but they were only reduced to $35. The black ones were go to shoes for my work environment for a couple decades. I spent ~$150 combined to replace the leather soles and rubber heels multiple times. I wondered if it was a prudent decision to keep spending so much more than the original cost. Then I shopped for equal quality and comfort in new shoes, and I found they were around $250 and could not be re-soled due to the rubber soles. I therefore succeeded in exercising my frugal muscle and got the maximum value out of a relatively paltry investment. And I supported small local businesses, making a modest living for their family. I call that a win-win. I've trashed the black shoes as I felt they were no longer worth repairing, or needed for work. I'll be wearing the maroon ones (original heel/sole) later this year in my son's wedding."
- John Verlautz
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A Place At The Table

Andrew Clements  |  Aug 26, 2026

"Thank you, William. I’m glad you enjoyed it. The Philippines has taught me quite a bit, and often it’s the small, everyday experiences that have left the biggest impression on me."
- Andrew Clements
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Blood Money

Michael Flack  |  Mar 28, 2026

"I agree with you about KO but XOM is involved in climate deception since it knew about global warming risks 60 years ago and ranks as one of the top global greenhouse gas polluters."
- Nick Politakis
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Feeling TIPSy?

ArticleSanjib Saha  |  Aug 22, 2026

NOT TOO LONG ago, Treasury Inflation Protected Security (TIPS) was a relatively obscure investment for safe long-term fixed-income investments. For the first twenty years of the new century, consumer prices were mostly stable or rising at a too-slow-to-notice rate. Why bother with anything related to inflation? Sadly, persistently low inflation made us complacent on the biggest long-term risk of bond investments -- the insidious unexpected inflation that robs us of the purchasing power of our “safe” investments. Yes, let’s not forget that the biggest risk of bond or bond-like investments is unexpected inflation. Any bond or CD with a maturity beyond a few years must either offer a sufficiently high interest rate to compensate for sudden bouts of inflation, or have its principal adjusted for the inflation actually realized. The former is nearly impossible to find without sacrificing safety. The latter is what TIPS is for. To be clear, the market and investors always expect some level of inflation. Therefore, a bond’s effective interest rate - measured by its YTM (Yield to Maturity) - must be high enough to not only compensate for “expected” inflation and the uncertainties around it but also provide a meaningful increase in the purchasing power of the original principal.  A concrete example might help. Consider a 10-year US Treasury nominal bond with a face value of $1,000, selling at $1,000 and paying 5% annual interest. The interest rate reflects the expectations about inflation and other factors over the next 10 years. The rate would be lower if market expected lower inflation, and higher if market expected the opposite. The omnipresence of inflation means we’re likely to lose some purchasing power when we get our $1,000 in 10 years. It won’t buy what $1,000 buys today. By how much? That’s the thousand dollars question (pun intended).  There isn’t a readily available number that explains why that 10-year Treasury Bond yields 5% instead of 3% or 7%. Investors essentially take a leap of faith that annual inflation stays low enough over the 10-year period for the interim interests to compensate for the purchasing power loss, plus some changes. Most of us are perfectly comfortable assuming that inflation won’t be as high as 5% for 10 years. But are we fooling ourselves? I suggest using an inflation calculator to see for ourselves. Spoiler alert: Late 1960s through early 1980s can be an eye-opening period. How’d we feel if the next 10 years turn out to be something similar? Think about how you might feel when you safekeep your money in a so-called secure investment, give up higher returns available from risky investments, and then encounter an inflationary regime. Your minimum expectation was that your purchasing power would remain intact and perhaps improve a little by the time your bond matures. Instead, unforeseen inflation erodes your purchasing power and compromises the financial goal the fund was supposed to cover.  Your “safe” investment fails you completely. You realize that it wasn’t safe at all.  If unexpected inflation is so devastating, why are we so lax about it?  I can think of two reasons.  First, our minds haven’t adapted to the reality that, unlike to a “real” asset like a bag of rice or a gallon of gasoline, money in its current form is inherently self-eroding. It slowly loses its worth over time. A hundred dollars sitting around will still be a hundred dollars next year, but it won’t buy the same amount. We don’t intuitively perceive the continuous loss of purchasing power. Even when we do internalize it with some effort, we get used to the “pace” of the loss. In other words, we view inflation as steady and unexpected inflation as highly unlikely. Alas, all it takes is a single prolonged inflationary period to change that perception. By then, however, the damage to existing fixed income investments may already be done. Frankly, I’d be very wary of keeping my long-term “safe” money -- fund that I need to preserve beyond a three-year horizon - in any form that isn’t protected against unexpected inflation. For bond investments, the most meaningful option would be TIPS. Why? Because, in addition to being secured by the full faith and credit of the US Government just like any other Treasury securities, TIPS provides three important assurances upfront. First, it provides protection against unexpected inflation, which is a realized inflation that differs from what we expected when purchasing it. If the actual inflation averages 12% instead of the expected 2%, the principal is automatically adjusted to reflect the actual inflation. No guesswork or unexpected risk involved. Second, it provides a “real interest rate” upfront that tells us how much the purchasing power of the investment will increase over time, regardless of what the actual inflation turns out to be. Buying a 10-year TIPS with real 2% annual interest means the investment’s purchasing power will grow 2% per year over the holding period, before considering taxes and other factors. The third aspect is more nuanced. It involves the possibility of inflation being lower than expected, or even negative inflation (aka deflation). Let me elaborate. If a regular nominal 10-year Treasury Bond offers 5% annual yield and an equivalent TIPS offers a real annual interest rate of 2.75%, the market-implied inflation, the breakeven inflation rate, is roughly 2.25% (5% minus 2.75%). Actual inflation, of course, will be known only after 10 years when the bond matures. Suppose the actual inflation turns out to be only 1.25%. The nominal Bond investor would end up with more purchasing power than the TIPS investor because the TIPS principle would be adjusted by only the actual 1.25% inflation rate.  The primary objective of the TIPS investor would still have been met: preserving and improving purchasing power by about 2.75% annually. But there would be a “missed opportunity”. The nominal Treasury investor would end up with even greater purchasing power. Does it mean that a TIPS investor can face an unlimited opportunity cost if inflation turns out to be negative? What happens if the actual inflation is, hypothetically speaking, negative 5%, in a severely deflationary period? Does the TIPS investor get back proportionately reduced principal at maturity? Thanks to the third assurance of TIPS, the answer is NO.  TIPS guarantees that the principal returned at maturity will never fall below the original face value. During periods of deflation, the inflation-adjusted principal can fall below its face value and the interim interest payments will decline accordingly. But at maturity, the principal is floored at the original principal amount. Therefore, the breakeven inflation rate, the difference between the yield of a nominal Treasury bond and the real yield of an equivalent TIPS, represents the maximum annual yield advantage that the nominal bond can have over TIPS in an unexpectedly low inflation regime.  To summarize, a TIPS investor gets unlimited protection against unexpectedly high inflation, while accepting a limited opportunity cost should the actual inflation be low or even negative. The magnitude of that trade-off is reflected in the breakeven inflation rate at the time of the TIPS purchase.  An aside: given the destructive impact of deflation on economy and society, policy makers are generally more concerned about preventing prolonged deflation than about preventing modest inflation. Therefore, prolonged deflation is usually considered less likely. Still, we cannot ignore deflation risk altogether and should be prepared for the possibility that TIPS can underperform a nominal bond if inflation runs low.  Therefore, the decision to favor TIPS over an equivalent nominal Bond hinges in part on the current breakeven inflation rate. If it’s low enough, favoring TIPS can be an easy decision. Getting unlimited protection against unexpectedly high inflation is worth accepting the relatively small opportunity cost if inflation comes below the breakeven rate. There is, however, a cautionary note about buying TIPS bonds in the secondary market, especially older issues. Consider a 30-year TIPS bond issued 20 years ago and a 10-year TIPS issued within last 6 months. Both might appear to be valid choices if they mature within a few months of each other and offer similar yields. But beneath the surface, one may be more favorable than the other.  The older TIPS will likely have a much higher inflation-adjusted principal because it accumulated 20 years of inflation adjustments. But the protection against unexpected deflation applies only to the bond’s original face value, which is typically $1,000.  In a prolonged deflationary period, the older bond has much more room for its inflation-adjusted principal to decline before reaching the $1,000 floor. The newer issue, whose adjusted principal is much closer to the $1,000 face value, has less exposure to this risk. Therefore, all else being equal, I’d favor a TIPS with a low inflation-adjusted factor when buying in the secondary market. All things considered, my vote goes to TIPS for long-term “safe” investments, provided the break-even inflation is reasonably low. For secondary market purchases, however, a high inflation-adjustment factor would give me pause.   Sanjib Saha retired early from software engineering to dedicate more time to family and friends, pursue personal development and assist others as a money wellness mentor. Self-taught in investments, he passed the Series 65 licensing exam as a non-industry candidate. Sanjib is the president and cofounder of Dollar Mentor, a 501(c)(3) nonprofit organization offering free investment and financial education. Follow his nonprofit on LinkedIn, and check out Sanjib’s earlier articles.
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This would be a great posting on a web site with the name “HaughtyDollar.”

R Quinn  |  Aug 28, 2026

"I don’t believe this answers the posed question."
- Marilyn Lavin
Read more »

Traditional or Roth

ArticleRichard Connor  |  Aug 29, 2026

THE CHOICE BETWEEN a traditional retirement account or a Roth is a frequent topic on HumbleDollar. The choice is generally framed as a choice between paying taxes up front (a Roth), or deferring taxes until withdrawal (traditional). I thought it would be interesting to evaluate a real-life example of how this choice might work out. In December of 2016 my wife and I had an opportunity to each open a Roth IRA. My wife took a partial sabbatical that year, and that, combined with maxing out our 401k accounts, gave us a chance to each open a $4,500 Roth IRA. The maximum allowable contribution that year was $6,500 for those 50 and over. Up until then we had assumed that our marginal tax bracket would likely be lower in retirement, and focused on contributing to our employer’s traditional 401k plans. Despite that, we decided to move forward with opening a Roth IRA. I thought it would give us some tax diversity, and the opportunity to do Roth conversions when, and if, it made sense in the future.  In December of 2016 we opened Roth IRAs at Vanguard and invested the $4,500 in their S&P 500 Index Fund. Those initial funds have been invested for almost 10 years. Over that decade we have added some additional funds, and have done a few conversions. I recently did a quick analysis to see how my Roth experience would have compared to investing in a traditional IRA.   In 2016, our marginal tax bracket was 28%.  To contribute the $4,500 required $6,250 of pre-tax income. Due to some financial engineering over the last year, including selling our second home in late 2025, I expect our 2026 marginal tax bracket to stay within the 12% bracket. I’ve been looking at this closely because I’m considering doing a Roth conversion later this year. The table below shows the comparison between the Roth performance, and what a traditional IRA would have produced. The annual rate of return was determined using Nick Maggiulli’s S&P 500 Historical Return Calculator. Roth vs Traditional The table shows that the Traditional IRA would have been the better choice, producing about $3,500 more in available funds, or about 22% more. This demonstrates that the primary driver in choosing between a Roth and a traditional qualified account is a consideration of the tax rates at the time of contribution and at the time of distribution. There have been a number of changes to the tax code in the last decade that have contributed to the result, but I certainly didn’t predict any of them.  If you guess wrong, you pay the price in a higher tax bill. In the example above, the extra $1,750 invested in the traditional account produced an additional $6,143.31 in earnings. The lower tax rate at the distribution of the traditional IRA results in the $3,500 in extra funds. Even though the Roth IRA had tax free earnings growth, the initial larger tax rate overcame that advantage, when compared to the traditional IRA.   Because of my pension and my wife’s social security benefit, 85% of her social security benefit is taxable income, so that is not a consideration in our tax calculation. I used Dinkytown’s 1040 Calculator to run a series of estimates of our 2026 tax return to assess if we want to execute a Roth Conversion this year. We are still 4 years from taking RMDs, and I will start my Social Security in a year when I turn 70. My current thinking is a conversion of about $40,000 will keep us in the 12% bracket. There would also be a small NJ state tax impact. My simple analysis reinforces what I’ve been taught. Roth contributions make the most sense when you think your current tax bracket is lower than when you expect to withdrawal the funds. There are secondary considerations, like no tax diversification, no RMDs, and uncertainty about future tax rates. If you intend to pass the funds to heirs, it might make sense to perform Roth conversions today at the 22% tax bracket if you intend to pass these accounts to heirs who may be in their peak earnings years. Not sure? I believe I recall several HumbleDollar contributors write something about splitting the difference?   Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
Read more »

Americans and their credit cards

R Quinn  |  Aug 24, 2026

"If 46% of cardholders carry credit card debt, how can 53% of Americans carry credit card debt to cover essential living expenses?"
- R Quinn
Read more »

Bad Maths, Good Fire.

Mark Crothers  |  Aug 28, 2026

"David, I'm with you on the peat fire. I still burn peat now and then in winter — messy fuel, but that smell is hard to beat. These days it's surprisingly hard to come by in Ireland, thanks to legislation protecting the peat bogs."
- Mark Crothers
Read more »

The Intentional Spendthrift

Mark Crothers  |  Aug 21, 2026

"The train from Milan to Zurich is a beautiful, scenic journey — though my first time was a big disappointment. I hadn't realised there were two different routes, and I mistakenly booked the one that goes through the tunnel under the Alps. A few years later, I made sure to book the right one!"
- Mark Crothers
Read more »

Inflation Hedge

ArticleAdam M. Grossman  |  Aug 29, 2026

THE OPEN KITCHEN restaurant has been a fixture in Charlotte, North Carolina for 75 years. The restaurant has an old-time feel, with memorabilia, including menus from years gone by, lining its walls. Those old menus provided David Enna, a financial journalist, with a laboratory for examining the effects of inflation. What did Enna find? The oldest menu on display is from 1963. To state the obvious, today’s prices make those from the 1960s look quaint. Back then, spaghetti and meatballs cost just $1.10. Today, it’s $15.50. But, as Enna points out, that was more than 60 years ago, so increases are to be expected. Over the past 60 years, the Consumer Price Index (CPI) has averaged 3.8% per year. That isn’t unreasonable, especially since that average includes the 1970s, when inflation sometimes topped 10%. What’s of more concern, though, is what consumers have experienced more recently. Since 2020, prices across the economy have risen 29%. And though those increases have slowed, the Fed is still struggling to ratchet inflation back to its preferred 2% level. This has given investors renewed interest in strategies to defend against inflation. At first glance, this doesn’t seem like it should be such a difficult problem. The U.S. Treasury offers an investment specifically designed for this purpose: Treasury Inflation-Protected Securities (TIPS). These are bonds that are guaranteed by the federal government to increase in value with inflation. And though I hesitate to use the words “bond” and “exciting” in the same sentence, today many investors are finding the return on TIPS compelling. The 30-year TIPS is now paying close to 3% on top of inflation. If inflation averages 2.5%, for example, over the next 30 years, this bond will end up returning a total of 5.5% per year, and with minimal risk. That sounds good in theory, but do these bonds make sense for your portfolio? It’s worth taking a closer look. The first thing to note is that this seemingly attractive 3% yield only applies to 30-year TIPS. Yields on shorter-term bonds are lower. So unless your investment horizon happens to be exactly 30 years, these bonds may be of limited practical value. Putting aside the yield question, though, a more fundamental challenge with individual TIPS—and individual bonds in general—is that they’re a cumbersome way to build a portfolio. Even if you didn’t mind the process of buying bonds one by one, which can be tedious, there’s the fact that it’s hard for most people to be able to forecast their cash flow needs each year into the future. That’s a problem because choosing maturity dates is the foundation on which bond portfolios are built. Ideally, if you can align the maturity dates of the bonds in your portfolio with your future cash needs, then you can hold bonds to maturity, which is when the issuer would promise to pay you back in full. But that redemption value is guaranteed only at maturity. Buy a 20-year bond and sell it after just 10 years, and there are no guarantees. A bondholder could easily lose money selling an individual bond before maturity. Given these challenges, would a TIPS fund be a better choice? To be sure, bond funds are much simpler to purchase and to manage, but they typically offer even less protection from losses than individual bonds. Most recently, shareholders in TIPS funds were disappointed by how they performed in 2022, when inflation spiked to 9%. Investors expected that to be the year when TIPS rewarded investors, but instead, diversified TIPS funds such as the Vanguard Inflation-Protected Securities Fund (ticker: VAIPX) lost nearly 12%. Why did funds like this fare so poorly when inflation was running so high? The problem is that, at the end of the day, TIPS are still bonds. And though they receive a bump in value when inflation rises, a countervailing force is that they lose value when interest rates rise. In 2022, the Federal Reserve raised interest rates aggressively to fight inflation. The negative impact from those rate increases far outweighed the benefit TIPS received from inflation being higher. That puts investors in a difficult position. If TIPS provide inflation protection in theory, but both individual TIPS and TIPS funds carry limitations, what other options are there? The good news is that not all TIPS funds are the same. Some hold only short-term bonds, and they have historically held up much better than more broadly diversified TIPS funds because short-term bonds are more resilient when interest rates rise. Over the past five years, a fund like Vanguard’s Short-Term Inflation-Protected Securities ETF (ticker: VTIP) has outperformed a comparable fund (ticker: VGSH) holding standard short-term Treasury bonds every year, as well as this year to-date. It’s important to note, though, that this is relative performance. In 2022, when the entire bond market was under pressure, even short-term TIPS funds like VTIP did still lose money. They just lost less than funds holding conventional bonds. The bottom line: We should never become too wedded to any one strategy. No investment can promise reliable and complete protection against inflation in every market scenario. That said, I do still recommend TIPS and would specifically recommend a short-term fund like VTIP. But I also suggest taking a diversified approach to inflation protection. Here are other steps to consider. If you’re in your 60s and considering when to claim Social Security, that decision offers a powerful lever. Because Social Security benefits increase with inflation and also increase with each year you delay claiming, it’s maybe the most effective way to build additional inflation protection into your plan. What else can you do? Fortunately, you may already own one of the most effective—and underappreciated—inflation-fighting instruments: stocks. While rising prices in recent years have been frustrating for consumers, the result has been that companies have been able to maintain their profit margins. That, in turn, has helped to support their stock prices through this period of inflation. To be sure, some companies have more of an ability to raise prices than others, but overall, stocks are, in my view, a good way to keep pace with inflation. The one thing I wouldn’t do is to buy gold. Despite its reputation, various studies have confirmed that gold really isn’t a reliable inflation hedge. In a paper titled “The Golden Dilemma,” researchers wrote: “Over practical investment horizons, gold is an unreliable inflation hedge,” though they acknowledge that it may be more reliable over longer timeframes—“if the investment horizon is measured in centuries.”   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.  
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How Did You Find Paid Work After Retiring from Your Primary Career?

Jeffrey Chan  |  Jul 31, 2026

"Good for you."
- Patrick Brennan
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The Wrong-Sided Man

Dennis Friedman  |  May 8, 2025

"I too walk early in the morning and now I carry a small can of pepper spray. It might be a vicious dog, wrong-way man as you describe, or a wayward hobo looking for an easy roll."
- art winslow
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You Heel!

Michael Flack  |  Aug 24, 2026

"Counterpoint- I purchased a brand new pair of Bostonian oxfords, maroon in color for about $20, about 25 years ago. I liked them so much I bought a black pair, but they were only reduced to $35. The black ones were go to shoes for my work environment for a couple decades. I spent ~$150 combined to replace the leather soles and rubber heels multiple times. I wondered if it was a prudent decision to keep spending so much more than the original cost. Then I shopped for equal quality and comfort in new shoes, and I found they were around $250 and could not be re-soled due to the rubber soles. I therefore succeeded in exercising my frugal muscle and got the maximum value out of a relatively paltry investment. And I supported small local businesses, making a modest living for their family. I call that a win-win. I've trashed the black shoes as I felt they were no longer worth repairing, or needed for work. I'll be wearing the maroon ones (original heel/sole) later this year in my son's wedding."
- John Verlautz
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Manifesto

Aug 30, 2026

NO. 24: OUR ONLY earthly immortality will be the memories of others. We should make sure those memories are good—by spending our wealth on special times with friends and family.

humans

Aug 31, 2026

NO. 26: WE TEND to be overconfident—which isn’t a bad thing. Self-confident individuals tend to be happier, have a wider circle of friends and enjoy greater career success. Problem is, if we’re too confident in our financial abilities, there’s a risk we’ll rack up hefty investment costs and make big undiversified bets, both of which could come back to haunt us.

think

Aug 31, 2026

PASCAL’S WAGER. Belief in God is rational, argued Blaise Pascal. If you believe and God doesn’t exist, the price is modest: a less immoral life. But if you don’t believe and God does exist, the price is far higher: an eternity in hell. The lesson? When managing money, we should focus less on the odds of something happening and more on the consequences.

Truths

Aug 30, 2026

NO. 86: CARRYING a mortgage into retirement can cost a heap of taxes. To cover the monthly payment, you might sell winning investments in your taxable account or tap retirement accounts, thus boosting your taxable income. That, in turn, could trigger higher Medicare premiums and taxes on your Social Security benefit. Result: You suffer a double tax hit.

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Manifesto

Aug 30, 2026

NO. 24: OUR ONLY earthly immortality will be the memories of others. We should make sure those memories are good—by spending our wealth on special times with friends and family.

Spotlight: Abuse

I want to see less of me on the internet

Nick Politakis   |  Apr 24, 2025

There is an excellent article in the Wall Street Journal about how to find what there is about you on the internet and how to delete it if you want.  Here is the Link.
I read the article followed the suggestions and it was very easy.  I hope it works.  Has anyone tried this?

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Pig Butchering

Nick Politakis   |  Jul 20, 2025

Sounds awful doesn’t it?
The Article in the WSJ was so painful to read but it led me to the awareness of how to protect myself and those I love.
in the article the problem was the spouse trusted the other spouse who was starting the long road of dementia.  How do you protect your financial well being from something like that?
HumbleDollar readers, how do you protect yourselves?  I need your wisdom.

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Stay Safe Out There

Adam M. Grossman   |  Sep 22, 2024

SOME YEARS AGO, an elderly neighbor came to our door, asking for a favor. She was looking for packing tape because she’d sold her television and needed to ship it. She went on to say that the buyer, who she’d found on eBay, was in Nigeria. It was, of course, an obvious scam. But for whatever reason, she couldn’t see it.
Today, scams like this are better known and easier to recognize. But what makes online fraud such a problem is that the crooks are always developing new tricks.

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Hope is Not a Plan

David Powell   |  Mar 9, 2025

The risk of sensitive personal data leaks is higher than ever, fueling identity theft, phishing attacks, financial account hijacks, and scams. It’s also a time when nation-backed hackers skillfully target critical infrastructure like mobile networks. A major hack revealed last year led the FBI to advise trusting only end-to-end encrypted communications.
No security is foolproof against a determined attacker, but you can make yourself a harder target. Nancy and I have so far avoided major cybercrimes but have faced fraud attempts.

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Who Do You Trust?

Casey Snyder   |  Apr 14, 2023

MORE THAN 92,000 people over age 60 reported losses to fraud totaling $1.7 billion in 2021, according to the FBI’s Internet Crime Complaint Center. That represented a 74% increase in losses from the year before.
With the population of older Americans growing, the need to protect this vulnerable population is more critical than ever. Enter the concept of a trusted contact.
The trusted contact has its origin in a Financial Industry Regulatory Authority (FINRA) rule issued in March 2020.

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Analog versus Digital

Dan Smith   |  Sep 24, 2024

Bob’s a little out of place in the 21st century. He does not own a computer. He does possess a recent iPhone, but not the depth of understanding to take full advantage of its capabilities. I have to admit that my iPhone skills aren’t all that deep either.
Bob just found out that his SS number is on the dark web. The notices suggested freezing his credit along with some other ideas to protect himself. He tried doing the work on his smart phone,

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Spotlight: Smith

No Time Left for Calculating My Net Worth

Dan Smith   |  Jun 14, 2025

Oh my, I’m beginning to think that some of the articles I find on the internet aren't really news at all. Below is one I clicked on today. It reminds me of those free dinners that Mike Flack recently posted about. I also think it ties in well with Dave Lancaster's post about calculating net worth.  The article didn’t define how it calculated net worth. I assume it includes checking and savings, IRAs and similar accounts, it did mention that home equity is included. It probably did not include the monetized value of pensions and Social Security, though these factors can greatly impact financial security. For example, I know couples with meager savings, but close to $200k per year in pension and SS; I wouldn’t classify them as belonging in levels 1, 2, 3, or possibly 4. The article ended by telling me that the level 6 people use advisors, and asking me if I used one, providing me with a link that could hook me up. I still have about $20 million to go before I hit level 6, so no need to click on that link yet.  Here you go, enjoy. Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid? Financial vulnerable (Household net worth $69,500 and under) Lower middle class (Household net worth between $69,500 and $394,300) Solidly middle class (Household net worth between $394,300 and $1.16 million) Upper middle class (Household net worth between $1.2 million and $2.9 million) Affluent (Household net worth $2.9 million or more) Top 1% (Household net worth $21.7 million or more)
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Artificial Intelligence and Payroll Tax

Dan Smith   |  Jan 2, 2026

I don’t know about your state, but in Ohio, if you drive a hybrid or electronic vehicle, expect to cough up between $100 and $200 extra for license plates, in order to offset the loss of gas tax revenue. Gas tax revenue helps keep our roads in good condition, so it’s only fair that vehicles using less gas, or no gas at all, do their part to maintain the roads. Even before Henry Ford invented the assembly line, machines have been eliminating jobs. Today we have self service gas stations, self checkout lanes, spreadsheets, and Turbo Tax. All things that have cost people jobs.  Now comes Artificial Intelligence (AI). AI is replacing workers. Workers, and their employers, pay a total of 12.4% into Social Security, and 2.9% into Medicare. Fewer workers means less income. Currently, Social Security is funded by the payroll tax, interest earned from Treasury Bonds, and income tax paid on benefits. Should a tax on AI become a 4th source of income based on the jobs it eliminates? I truly don’t know. Is it time to think outside the box when it comes to funding Social Security and Medicare? I can think of arguments both for and against. What’s your opinion?
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Your Results May Vary

Dan Smith   |  Jun 12, 2024

"SELL THE SIZZLE, BOYS." With those words from the sales manager at a big insurance company, the 2003 class of newly minted registered representatives were off to the races, extolling the virtues of the firm’s products to family, friends and anyone else who would listen. I still vividly remember that moment. Yes, I was there. To become registered reps, the 2003 class had to pass the necessary exams to get a Series 6 securities license and a license to sell life and health insurance. These licenses are the bare minimum required to be in the business. While there are suitability tests to be met before selling anything to a client, registered reps are not fiduciaries, which would legally bind them to act in a client’s best interest. Clients need life insurance. Clients need retirement savings. Why not combine the two? Meet the variable universal life insurance policy, or VUL. The VUL coupled life insurance with mutual fund investments. “Listen, you’re probably not going to die before your time, but you might. So, here’s a product that’ll protect your loved ones just in case. You do love your family, don’t you? If you live, it’ll provide you with tax-free money when you retire via loans from the policy’s cash value that don’t ever have to be repaid.” That’s sizzle, and that’s what you talk about. “Just look at the illustration I’ve prepared for you.” The illustration is a multi-page document that shows the life insurance benefit, the premiums you’ll pay, and the accumulated cash value when you retire. “Look here at the fortune you’ll have with this policy when you retire.” More sizzle. The illustration depicted several scenarios based on market performance. The best case usually projected 10% or 12% average annual growth. That’s more sizzle—and that’s what you talk about.…
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Setting the Hook, Reeling In the Fish

Dan Smith   |  Jun 2, 2026

“The window to make advantaged Roth IRA conversions closes in 2028” was the hook my friend Sherry got from the salesman at the free steak dinner. Scheduling an appointment with him was Sherry being reeled in.  Sherry asked if I would go with her to a meeting with the guy to discuss the proposal. The  first thing I had to do was figure out what an “advantaged Roth conversion” even was. Feel free to correct me if I am wrong, but the best I could come up with was that he was talking about the expiring Senior Tax Deduction, which would have allowed her to convert an additional $6,000 before moving up to the  next tax bracket. That would indeed count as “advantaged” if Sherry was age 65, but she’s only 62.  Next, I looked Mr. Dinner Seminar Guy up on the ole innerweb. No complaints had been filed. One instance of writing a bad check in 2013 was dismissed by the court. He recently left a position with an insurance company, and went out on his own. I was not impressed by his thin resume. I relayed this information to her, and she wisely decided to cancel her appointment with ‘steak dinner fella’.  I then gathered some facts from Sherry, and in my opinion she will not benefit from Roth conversions for the following reasons.    Sherry's marginal tax rate now and in the future will not exceed 12% Roth conversions to the top of the 12% bracket between now and her 75th birthday will carry a cumulative tax liability of approximately $56000. (Sherry currently receives Social Security; the conversions would triple the amount of SS that is taxable). She will begin RMDs at her age 75. Her tax liability (not adjusted for inflation) at age 75, without Roth…
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Lessons Learned Along the Way

Dan Smith   |  Jun 25, 2026

At every stage of my life, I picked up at least a tidbit of knowledge that helped me when I moved on to the next step. Here is some of the curriculum from my school of life.    Don’t Drive Like My Brother, 101. Dave is three years my senior. We used to go out driving around after he got his license. He drove like a mad-man. Tickets, accidents, street racing, you name it. He was a one man wrecking crew. I did some stupid things behind the wheel of a car, but not quite like Dave. Ironic that he became a policeman, and later a magistrate.  Box Cutter, 102. My first job was at a supermarket. I learned how not to open my veins when opening cases of Sugar Frosted Flakes with a razor cutter. More importantly I learned the value of networking. I befriended a vendor who got me my first full time job, which set the stage for much of my life's story.  Community College, 103. I never graduated, still, I did learn a thing or two. There was a communications course that taught me the basics of writing. I still don’t know the difference between an adverb and a pronoun, but I manage to write in a manner that sometimes gets me an up-vote or two. I also composed quarterly newsletters for my fledgling tax practice, which helped the business grow and to maintain a very low turnover rate. I took a basic accounting course that didn’t really interest me at the time, but would prove useful several years later. And after just barely escaping high school math classes without being sentenced to summer-school, there was a business math class that, for some reason, came extremely easy to me in college; I actually had the highest…
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If Retirement  is Getting Close

Dan Smith   |  Aug 18, 2026

This post is an extension of Rick’s and Richard’s recent posts regarding taxes in retirement.  A recurring issue I dealt with as a tax preparer was calculating a (unpleasant) surprise the first year that someone retired. While working, the employee typically gets a paycheck with adequate tax withholding. When he leaves the job behind for the greener pastures of retired life, things can get a little more complicated. Now, instead of a single W2 to deal with, there may be forms from Social Security, pension(s), IRA distribution(s), and if they're unlucky enough to have a commission hungry financial rep, multiple forms from annuities and K1s. If married, the forms may double in number. It was also very common for people not to realize some of their SS could be taxable.  So this is a cautionary post for those approaching retirement. Schedule an appointment with your tax preparer, or if you are a DIYer, use one of the tax calculators, or prepare a dummy tax return on your software in order to calculate your approximate tax liability.  Especially if there are lots of 1099s, I find it easier to not do any withholding, and instead arrange quarterly estimates for both federal and state taxes. I put these on autopilot (direct debits) from my checking, though many people prefer doing it the old fashioned way, by writing checks and mailing them in each quarter.
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