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Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

"And I’m only considering the 1st IRMAA bracket increase ($81?) not the higher ones. I hope."

- Mark Ukleja

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

"Shopping plans won’t do much good; the cause of most increases is not because of underlying costs, but because laws and political decisions have simply shifted costs and the insured population will pick up the different. For some reason the thinking is, don’t send money to insurance companies because they are ripping us off. Instead let the patients send it and government saves money. This is an amazing smoke and mirrors strategy to find another scapegoat. I doubt most Medicare beneficiaries will understand what is actually going on. 😢🥵 Most people won’t believe this, but insurance companies are not the enemy, they don’t make excessive profits, their net profit margins are low, about the same as regulated utilities. But I guess we have to have someone else to blame. The ironic thing is the majority of workers with employer coverage don’t even have insurance. Their employer is self-insured and the company on their ID “insurance” card just processes claims for a fee and has no risk for claim payments."

- R Quinn

Retirement

Will Congress Wait Until the Last Minute on Social Security?

Jeff Peck | Sep 27, 2026

"Members of Congress are like children. Procrastinate until the very last minute to do anything. How many government shutdowns threats have we endured because they are mostly all child-like. Just please remember you are working for your constituents, not yourselves."

- Ted Tompkins

Behavior

Time Is Priceless

Andrew Clements | Sep 23, 2026

"Andrew-You are a fantastic writer-keep it up!"

- Philip Russell

From HumbleDollar Founder Jonathan Clements

Lists

Why HumbleDollar?

IN OUR 20s, WE TEND to be a confident lot: We figure we know what we want from our life, that the goal is…

Behavior

My favorite question.

Richard Hayman | Aug 6, 2025

"You are indeed rich. Rich is not just about money."

- Steve Skillman

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

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.

In Retirement

Widow’s Penalty Redux

ArticleRichard Connor | Sep 26, 2026

A RECENT post by achnk53 about the impact of a spouse’s death on the survivor’s taxes piqued my interest. The post referenced an interesting Kiplinger article about the “Widow’s Penalty”, or the negative tax implications on a surviving spouse after the death of a spouse. A surviving spouse can file Married Filing Jointly (MFJ) in the year of their spouse’s death. In the full year following the spouse’s death you must file Single. There are some beneficial filing rules for surviving spouses who have dependent children, but that is beyond this post. Nine days later John Urban published an article running the tax numbers for 3 different retiree scenarios, and using the data to provide some excellent suggestions for readers. In between these two articles I had run some similar case studies to understand the impacts. I ran some case studies using the 2026 Dinkytown 1040 Calculator. I considered a “lower" income retired couple. The impact of one spouse passing is very dependent on the sources of income. Assume the retired couple were each receiving $36,000 in annual SS benefits. They have no other sources of income. The couple filing jointly would have no taxable income, and no tax for 2026. Had the husband died in 2025, the surviving widow would have seen her income reduced to $36,000. If she needed the lost income, and found a job that paid $36,000, her income would match the original $72,000. But $21,500 of her SS benefit would be taxable, her taxable income would be $33,350, and her annual tax bill would be $3,757. The table below shows the details of this analysis: Tax Calculation

After accounting for the reduction in Medicare related spending, she has similar spending power. But she had to go back to work to achieve that. This, and the previous examples, reinforce the importance of understanding a couple’s financial details before and after the passing of a spouse. Income will likely be reduced, but expenses may also be reduced. Lower income retirees who depend primarily on both partners SS benefits may see the biggest impact. I also ran a comparison of our tax return for 2026, for both MFJ and if my wife filed single. I assumed our income consisted of my pension, my wife’s SS benefit, and my SS benefit had I claimed it on January 1, 2026. When I die my wife will receive 75% of my pension, and my higher SS benefit. The results were not surprising.

Her total income would be 68% of our combined pre-death income.
Her annual tax bill would be $1,250 more than our joint tax bill.
Her effective tax rate would increase by 4.2%.
85% of her SS benefits would be taxable
Her spendable income after taxes would be about 65% of the joint amount.
She would lose about 20% of the new Senior Deduction
She would have no NJ State Tax liability

I then ran an additional scenario with the same assumptions, but also assuming we were 4 years older and would both have to take initial RMDs in 2026. This scenario reflects one of the concerns frequently expressed when discussing this topic – what happens when the surviving spouse is responsible for reporting the income from both RMDs on her Single tax return. The results changed to reflect the scenario.

Her total income would be about 79% of our combined pre-death income.
Her annual tax would be $708 more than the joint tax filing.
Her effective tax rate would increase by 3.8%.
Her spendable income after taxes would be about 80% of the joint amount.
She would lose all of the new Senior Deduction.
Her NJ State Income tax would be $540 more than the joint tax filing.
She would be pushed up one IRMAA bracket in 2028.

These results are a simplified look at our finances today. My pension and my wife’s SS benefit cover our non-discretionary, and a decent portion of our discretionary, expenses. The wild card is travel – how much we spend in any year is our choice and may require additional income. I’m about 11 months from claiming my SS benefit, at which point virtually all of our expenses will be covered in a fairly tax-efficient way. RMDs are still 4 years away. This was a good exercise to get a feel of how my demise would impact my wife’s finances. It would have some financial impacts, but I believe our plan can handle them. I’m considering running some more detailed projections varying the age at death to assess the impacts, but a quick look made me reasonably confident our retirement savings will be adequate, even considering long term care. I will also continue to look at Roth conversions each year. 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.

In Retirement

Is your retirement plan counting on a Social Security COLA in the future?

R Quinn | Sep 24, 2026

"Little wonder many young people view SS and Medicare as huge scams that simply transfer their income to older generations. Using regressive taxes to boot. Many SS recipients receive much more than they put in."

- Paul Ward

Health

My Name is Dan, and I’m a CPAP User

DAN SMITH | Sep 24, 2026

"I was super-resistent to using the CPAP at night. It took me several tries over several years to get it right. Here are two things that turned it around: 1) I wore the mask during the day for increasing amounts of time so I'd get acclimated to the 'feel' of it. This helped me to mentally accept the device and not resist it at night. 2) I use a Breath Right nasal strip each evening to keep my nostrils open. This removes the feeling of restricted nose breathing (which kept me from falling asleep). Good luck. Hope this helps."

- Doug Burke

In Retirement

Keep an eye on Medigap policies

R Quinn | Sep 26, 2026

"Premiums are not based on individual usage. They vary by whether they are community based, entry age based or current age based."

- R Quinn

In Retirement

The Security Money Can’t Buy

Dennis Friedman | Sep 25, 2026

"Mark, Pushing ourselves to build those friendships is so important for men, and you gave a great example. That feeling of an empty house is exactly what I feel when Rachel is away, too."

- Dennis Friedman

Taxes

Sourcing Taxes for Roth Conversions

Mark Ukleja | Sep 29, 2026

"And I’m only considering the 1st IRMAA bracket increase ($81?) not the higher ones. I hope."

- Mark Ukleja

Health

Medicare Part D premium shock 2027

R Quinn | Sep 29, 2026

- R Quinn

Retirement

Will Congress Wait Until the Last Minute on Social Security?

Jeff Peck | Sep 27, 2026

- Ted Tompkins

Behavior

Time Is Priceless

Andrew Clements | Sep 23, 2026

"Andrew-You are a fantastic writer-keep it up!"

- Philip Russell

From HumbleDollar Founder Jonathan Clements

Lists

Why HumbleDollar?

IN OUR 20s, WE TEND to be a confident lot: We figure we know what we want from our life, that the goal is…

Behavior

My favorite question.

Richard Hayman | Aug 6, 2025

"You are indeed rich. Rich is not just about money."

- Steve Skillman

Investing

Financial Lessons

ArticleAdam M. Grossman | Sep 26, 2026

WHAT'S THE MOST important idea in personal finance? It’s hard to single out just one, but over the years, I’ve found the following dozen ideas to be among the most useful.

Whether it’s on TV or online, there’s never any shortage of market prognosticators. Especially during a bull market, everyone seems to have an opinion on where things are headed. The reality, though, is that people can only guess about how the economy, the market or any individual investment will perform. Convincing as they might sound, no one has a crystal ball. That’s why, when it comes to investing, I suggest taking an evidence-based approach, one that relies as much as possible on data and research rather than on the simple stories, anecdotes and sayings that are so prevalent among market commentators.
What does the data tell us? Among the most significant research in recent years is the work of Hendrik Bessembinder. In looking at the historical returns of stocks, he found that just a tiny fraction—only 4%—have accounted for the vast majority of the market’s gains over and above what Treasury bills paid, and the median stock actually delivered a negative return. This is one of the key reasons I recommend index funds rather than picking individual stocks or investing in an actively-managed fund. Identifying that 4% is almost impossibly difficult. But if you invest in a broad-based index fund, you’ll have a high likelihood of owning the next Apple or Nvidia.
Be careful not to miss the forest for the trees. The most important driver of investment risk and return for most people, most of the time, is asset allocation. In other words, the dollars you have in stocks vs. in bonds or in cash will almost always be the most consequential decision. It’s easy to lose sight of that, though, because so much of the investment commentary from day to day focuses on details like small differences in fund expenses or small differences in bond yields. To be sure, details can be important, but only after considering the big picture.
Another challenge in investing is that certain rules of thumb gain so much popularity that they end up being seen as rules rather than just guidelines. For example, some say that the percentage of a portfolio allocated to bonds should be equal to an investor’s age. To me, that’s illogical. Consider Bill Gates. He’s 70 years old, but it stands to reason that he shouldn’t have the same asset allocation as any other 70-year-old. Rules of thumb are useful as points of reference, but we shouldn’t lose sight of the fact that everyone’s situation is different, and our investments should reflect that. More to the point, don’t worry if you’re doing something different from the next person.
Buy insurance, but only to protect against losses you couldn’t absorb on your own. What does this mean in practice? In many cases, it’s possible to significantly cut insurance premiums by increasing deductibles. For example, if you have a seven-figure net worth, you might consider raising the deductible on your homeowner’s insurance to $5,000 or $10,000 or even more. Similarly, you might re-evaluate your life insurance as your net worth grows. You’ll likely become “self-insured” at some point, and then you could reduce or drop that coverage.
Personal finance is quantitative, but we should never make decisions based only on the numbers. For example, a common question is how much cash to keep on hand. While we could work out an optimal number on a calculator, that shouldn’t be the final answer. You should also consider what would provide you with peace of mind. That is equally important.
Be wary of the psychological pitfall known as recency bias. This is the tendency to extrapolate from recent experience and to downplay the possibility that things might change. The most famous example? In the late-1920s, when the stock market was booming, Yale University economist Irving Fisher declared that the stock market had reached a “permanently high plateau.” Just nine days later, the market crashed, ultimately dropping 89% from its peak.
Avoid high fees. The research firm Morningstar once wrote, “If there’s anything in the whole world of mutual funds that you can take to the bank, it’s that expense ratios help you make better decisions. In every single time period and data point tested, low-cost funds beat high-cost funds.”
Keep things simple. Most importantly, I would be wary of investments that aren’t easily understood. Not only can this help keep investment costs down, but it also makes it much easier to monitor your financial picture. Legendary fund manager Peter Lynch said it best: “Never invest in any idea you can't illustrate with a crayon.”
Avoid “interesting” investments. So far this year, Wall Street has introduced more than 1,000 new exchange-traded funds (ETFs). How many of these are worth your attention? My guess is you could probably count them on one hand. More than 80% of these new funds are actively-managed, and more than 30% employ leverage. And there are more to come. Fund companies recently filed paperwork to create ETFs that will track the performance of major league sports teams. They won’t actually own shares in the teams; instead, they’re expected to rise and fall in response to each team’s wins and losses.
For years, I’ve argued that bitcoin isn’t a valid investment. Even though it’s gone way up since I first made that argument, I still feel the same way, and for the same reason: because it lacks intrinsic value. Unlike stocks or bonds, it doesn’t generate any dividends or interest. Bitcoin’s price is not anchored to anything measurable or tangible, and that’s why, in my opinion, its price is so volatile.
When it comes to investment risk, investors’ attention usually turns to the stock market. That makes sense, but as we’ve seen this year, bonds are not without risk. And unfortunately, the total-bond market index, which is often seen as the simplest, set-it-and-forget-it option, is one that carries quite a bit of risk. If you’re choosing bond investments, my recommendation is to pay attention to a metric known as duration. This tells you how sensitive a bond, or bond fund, will be to interest rate changes. In my view, investors should hold a sizable portion of their bond investments in a fund, or in individual bonds, with a duration of less than two years.

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.

In Retirement

Widow’s Penalty Redux

ArticleRichard Connor | Sep 26, 2026

Her total income would be 68% of our combined pre-death income.
Her annual tax bill would be $1,250 more than our joint tax bill.
Her effecti