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The Federal Debt and Social Security Payments

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

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

Federal debt

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

Tax Complications – How SS Benefits interact with Other Income

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

The Lottery of Birth

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

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

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

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

Income taxes on retirees with Social Security

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

What is the right percentage?

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

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

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

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

If Retirement  is Getting Close

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

Federal debt

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

Tax Complications – How SS Benefits interact with Other Income

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

The Lottery of Birth

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

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

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

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

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

Income taxes on retirees with Social Security

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

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Get Educated

Manifesto

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

humans

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

think

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

act

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

Retirement

Manifesto

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

Spotlight: Estate Plan

Details Matter

FOR THE PAST FOUR years, I’ve been dealing with both a revocable and irrevocable trust that my parents created decades ago. In 2020, I knew little about trusts, and my elderly parents weren’t willing or able to share much information with me. In retrospect, I don’t think they fully understood the details of either trust, instead relying on attorneys and financial advisors.
Since then, I’ve learned a lot about trusts. I’ve come to feel they’re unnecessarily complicated and allow unscrupulous advisors to take advantage of well-intentioned,

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Give Early and Often

KEY PROVISIONS IN 2017’s Tax Cuts and Jobs Act (TCJA) will expire in 2026 unless Congress steps in. That means folks have a two-year window to prepare.
What’s at stake? Income-tax rates will increase for many taxpayers. This creates an incentive to boost income over the next few years by, say, undertaking Roth conversions to shrink traditional retirement accounts and thereby lowering future required minimum distributions.
The sunsetting of key TCJA provisions would also cut the threshold for federal estate taxes in half,

Read more »

Share the Power

LIKE OTHER FOLLOWERS of HumbleDollar, I look forward to Jonathan’s Saturday articles. I have to admit that my interest has been heightened by his cancer diagnosis. Not many folks would have the courage to write about what’s going through their mind when they’re fighting for their life. We don’t often get this kind of insight into someone’s life.
Jonathan has probably received a lot of advice about treatment plans and the doctors he should see.

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If I Go First

I MARRIED CONNIE because she’s four years older than me. That meant our life expectancies would be similar and hence a survivor annuity would be less expensive.
I am, of course, joking. Sort of.
Providing for Connie, should I be the first to go, is among my top financial priorities. During my working years, I received far too many calls from new widows who had just learned their husband’s pension stopped when their husband died.

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What’s Your Plan?

MICK JAGGER IS AMONG the most successful entertainers of our time. But despite his wealth, Jagger tells his eight children that they’ll need to make their own way. Similarly, Shaquille O’Neal tells his children that they can earn some of his millions, but it won’t necessarily be given to them. Actor Jeff Goldblum puts it more bluntly: “Row your own boat,” he’s said. Other public figures have echoed a similar theme.
Why do these wealthy folks take such a seemingly uncharitable view?

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Look All Ways

WHAT HAPPENS WHEN you’re hit by the proverbial beer truck? Will it be easy for others to pick up the pieces—the pieces of your financial life, that is?
To my knowledge, my wife isn’t checking the delivery schedule for the Anheuser-Busch brewery here in Columbus, Ohio. Still, she’s worried about the complexities of our finances. I’ve made a concerted effort since I retired to consolidate and close financial accounts, reduce our investments holdings, and streamline where it makes sense.

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Spotlight: Hayes

Easy Street

A FEW YEARS AGO, my future husband and I took a trip to southern Utah to participate in a pistol shooting competition. We were taken by the area’s beauty and easy access to outdoor recreational activities. While there, we looked at a few homes and were pleasantly surprised to find the prices quite reasonable. We decided Utah would be high on our list of places to relocate to once I retired from my job. Soon after we returned home, St. George, Utah, was ranked as one of the fastest-growing metro areas in the country. As the population increased, so too did housing prices. Not long after our visit, we realized we were priced out of the market. Last year, we learned about a retirement community located just outside of Phoenix. Arizona was another state we were interested in retiring to, so we took a trip to investigate the area. Within a couple of days, we felt we’d found the right location for us and we began house hunting. It took two months before we closed on a home. We were outbid on two properties before finding a home we felt was ideal for us. We’d formulated a list of criteria for our retirement destination and the house checked every box. First, we wanted easy access to the various activities we enjoy participating in. Our retirement home is just 20 miles from a world-class shooting range. There are also multiple dog-training clubs throughout the region, which will help us keep our pack of four canines active and engaged. Live concerts, movies in the park and an overwhelming number of continuing education opportunities are available within the community itself. There are also multiple fitness facilities, a library and several clubs we look forward to joining. Next on our list was access to health…
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Did It Myself

I PURCHASED MY FIRST house almost 30 years ago. To call it a “fixer” would have been an understatement. It was 800 square feet of neglected space in desperate need of repairs and updating. Being fresh out of college and working at a job that paid less than $20,000 a year, I didn’t have a lot of money to spend on improvements. But I had the energy and enthusiasm of youth. Over a five-year period, I learned how to hang sheetrock. I figured out how to tear shingles off a roof. I became educated in how to run electrical wire, fix water leaks and refinish hardwood floors. Even though there were days when I wished I could have hired someone to complete a project, I was confident my sweat equity would pay off. When I walked away with nearly $60,000 in tax-free profit from the sale of that first house, I was hooked on home improvements. My continuing education in renovation and remodeling has been going on for three decades now. I’ve owned four homes so far and each has provided me with the opportunity to increase my knowledge. I’ve learned—often through trial and error—what I can and can’t do. All that experience has provided me with a wealth of tips for other home improvement wannabes: Give yourself plenty of time. If the vendor of a home improvement product tells you a project should take four hours to complete, double the estimate. If it’s a project you’ve never attempted before, consider tripling the number. Be sure to factor in the possibility of having to make multiple trips to the local home improvement warehouse store to purchase miscellaneous items you hadn’t anticipated needing. Evaluate your return on investment. When it comes to necessary repairs, such as fixing a leaking toilet, your…
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Healthy Investment

DURING THE FIRST FEW months of the pandemic, my almost-daily trips to the gym ceased. I was home more of the time and snacking became a habit. I found myself five pounds heavier than I’d been a year earlier. Knowing that, at age 54, my metabolism isn’t quite as vigorous as it once was, I took action. I started a ketogenic diet and quickly dropped the extra weight. As we contemplate growing older, much of our time and energy is spent planning the financial aspects of our retirement years. But what about the health aspects of aging? Shouldn’t we be equally interested in investing in our physical well-being? A recent report found that more than 60% of U.S. adults over age 55 are overweight or obese. The health consequences are well documented. Besides an increased risk of dying younger, overweight and obese individuals suffer from more debilitating diseases than those who aren’t carrying extra weight. It’s difficult to deny the financial consequences of poor health, including the cost of multiple prescription drugs, insurance copays and health care deductibles. There’s recent evidence that 65-year-olds who describe their health as “good” or “excellent” are far less likely to require long-term-care services than those who say their health is “fair” or “poor.” What’s being done to combat elder obesity? Fitness programs like SilverSneakers are designed to target a 65-and-older population. Wearable fitness trackers, while not specifically marketed to older populations, provide an easy way to monitor how much exercise and sleep we’re getting, while also providing an estimate of how many calories we burn each day.
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My Retirement Home

WE BEGAN IN 2019 to think seriously about what we wanted our retirement to look like. My husband had retired in 2018. I was aiming to leave my job in 2022. We were hoping to have a plan in place long before my final day of work. Our first step was to decide where we wanted to live. We were both eager to escape the Pacific Northwest, so we zeroed in on a couple of potential destinations. We spent a few weeks during the summer of 2019 investigating our choices. Our initial pick was St. George, Utah. We quickly discovered we weren’t alone in our love of the southern Utah climate. Over the past decade, St. George has consistently ranked as one of the fastest-growing metro areas in the U.S. Knowing our retirement budget would be modest, we realized we needed to find a location where housing was more affordable. Sun City West, Arizona, an age-restricted community located just outside of Phoenix, was next. The desert climate appealed to us. The cost of homes was lower than in many other parts of the country. The question we had: Would we enjoy living in a retirement community? Our doubts didn’t last long. On our first trip to visit Sun City West in June 2019, my husband and I both commented on how easy it felt to be there. The community—which encompasses 12 square miles—consists of 17,000 single-story homes. Within the city boundaries are all the various amenities you’d expect to find in a small metropolis. Sun City West is home to three grocery stores, a gas station, a full-service hospital and a variety of restaurants. There are also numerous banks and credit unions, three fire stations, two hardware stores and several churches. The one thing conspicuously absent? Schools. With a median…
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Priceless to Me

AT AGE 55, I'M PERHAPS a bit young to spend time reflecting on my life. My maternal grandmother died at 101, so I could have many more decades to go. Nevertheless, I find myself more nostalgic now than I was just a few years ago. I often think back to my childhood and how it shaped who I am today. In 1976, when I was in fourth grade, my parents purchased a two-and-a-half-acre property in a small town outside of Eugene, Oregon. Within a couple of years, our hobby farm was filled with a variety of animals. Twelve Siberian husky dogs, a handful of barn cats and a herd of dairy goats resided in the various outbuildings my father constructed. Rabbits, chickens, sheep and a couple of pigs eventually moved in as well. My love of animals grew out of my daily interactions with our menagerie. Helping to care for all those creatures fell squarely on my shoulders. Every day, there were goats to milk and stalls to clean. Doing daily chores was a given. In return for my efforts, no monetary compensation was provided. I suspect my work ethic was shaped, in part, by the hundreds of hours I spent performing manual labor on our farm. In sixth grade, I became a member of the local 4-H club. During summer 1978, I attended my first county fair. Staring at the trophy table—filled with an assortment of gaudy plastic figurines mounted atop faux marble bases—my competitive nature was ignited. I walked away from that first fair with just a handful of ribbons. But I vowed to return the following year and bring home some hardware. For the next 12 months, I dedicated myself to learning as much as I could about the various competitions. My work paid off. My bedroom…
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My Wants

WHEN I CREATE MY monthly budget, I subtract expenses I deem to be “needs” from my take-home pay. What’s left is money I can spend on items I desire—my “wants.” For budgeting purposes, I divide my discretionary income into four equal amounts and budget that amount for each week of the month. Psychologically, I find it easier to keep my budget on track if I can see how much I spend on a weekly basis. For things I want, I don’t have discrete spending categories, like I do for necessities. Instead, I focus more on staying within my overall budget. If I overspend on my hobbies one week, I know I need to cut back in another area, like eating out. In looking over my budget for the past couple of months, it’s obvious where most of my discretionary income goes: Hobbies: My primary hobby is competitive pistol shooting. Nearly every weekend, I compete at a match. Between maintenance of my equipment, travel expenses and entry fees, my hobby easily eats up the largest portion of my discretionary budget. I have, however, figured out ways to make my money go further. By serving as a volunteer at matches, the hosting clubs usually provide me with free entry. I also write articles for a national shooting club’s magazine, which provides me with a small stipend. Entertainment: I subscribe to the most basic cable package available in my area. By bundling internet and television subscriptions, I get both services for less than either as a stand-alone. Thanks to my Amazon Prime subscription, I have access to thousands of movies and television shows I can stream through my Roku. And, as a fan of the UFC, I occasionally indulge my passion for the sport by springing for a pay-per-view fight. Dining Out: Unlike the…
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