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Risk Adjusted: The Family Ledger 

"This is a wonderful article, and I hope those among us who are still young enough to make a meaningful change in their lives read it and take the message to heart. As my wife and I approach our 52nd wedding anniversary next week, on the 23rd of June, I am thankful that on the occasions when I placed work and earning a higher income before my family, which was not an uncommon event, she was there to carry the load on the home front. We are comfortably retired. Our children are well-balanced, college-educated, taxpaying citizens, so I didn't miss the boat entirely, but if I had it to do over again, there would be changes. One of those changes might have been retiring a few years earlier, instead of "socking more away for retirement.""
- Mike Lynch
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He Said I Wasn’t Very Nice

"Living out in the country seems to have solved that problem. We moved into our (at the time) newly built home the week of Thanksgiving, 2018. I had my FIRST solicitor knock on our door this week. After seeing if I knew who he was (apparently an "influencer" well known on Facebook), he started his spiel. I politely cut him short and explained my "children" were in their mid-forties and had selfishly denied me any grandchildren, so I didn't need the books he was selling. I then offered him a bottle of water and wished him well."
- Mike Lynch
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Leverage

"I suspect part of the discomfort is that this wasn’t clearly an emergency, nor was it clearly discretionary. It fell into that messy middle ground where reasonable people could justify either spending cash or borrowing. The other thing that struck me is that avoiding debt and avoiding regret aren’t necessarily the same thing. You may sleep better without the loan, yet still feel a twinge as you watch the accounts slowly recover. Sometimes the financially optimal choice and the psychologically satisfying choice aren’t the same."
- Mark Gardner
Read more »

Many seniors think we paid for our Social Security benefits based on the FICA taxes we paid. Let’s dispel that myth- we didn’t

"That is correct, as I pointed out in my second post. You called it actuarial gain...I called it "interest earned and the benefits that inured to the SS Program because of people like my father, who, after working a lifetime and contributing to the SS system, died without collecting a penny of their benefits.""
- Mike Lynch
Read more »

How well off are Americans compared to the rest of the world? Fun facts.

"There is no question that merely being BORN in the United States of America makes you a privileged person, from a global financial perspective. As has been demonstrated for generations, however, what you do with that privilege determines your "success," however you define it. As for me, thank you, Lord!"
- Mike Lynch
Read more »

How financially illiterate are Americans?

"I learned from my parents who barely finished grade school but were reasonable and realistic."
- Nick Politakis
Read more »

…..taxes and you

"So true that the states need to get their money from somewhere. That said, I'll take my higher Texas property taxes any day over the nearly 10% income tax I was paying in the extremely poorly run state we left over 10 years ago. That state also has a similar sales tax to Texas on top of that. Tipping (which is generally getting out of hand everywhere) is no different based on visits back to the poorly run state. The lower annual car registration tab fee in Texas vs the poorly run state is also a bonus."
- Dunn Werking
Read more »

What Addiction Couldn’t Take: My Sister’s Story

"Thank you Catherine for such a thoughtful and compassionate comment. I was particularly struck by your observation that every human being is more than the tolls of a disorder. That was very much at the heart of why I wanted to write about Tory. I didn’t want her to be remembered for her addiction. I wanted her to be remembered for her kindness, humor, accomplishments, and the love she gave to others. I also appreciate your reflections on the financial costs that families often quietly absorb over many years. Those costs can take many forms, from direct financial support to countless small acts of kindness and assistance that arise from love and concern. As you point out, they accumulate gradually, often alongside hope that things will improve. Thank you as well for sharing your thoughts on tough love. Every family’s situation is different, and there are rarely easy answers. If there were, far fewer families would be carrying these burdens. Most of all, thank you for taking the time to reflect so deeply on Tory’s story and for bookmarking the SAMHSA number. If it helps even one person or family find support, then sharing it was worthwhile. "
- Andrew Clements
Read more »

Fixing Social Security is not that hard, here’s how

"I found https://www.fisherinvestments.com/en-us/insights/market-commentary/the-politics-and-practicalities-of-the-social-security-trust-fund useful on this topic."
- Mark Gardner
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HD Reader’s Demographics

"Glad to be of service! Ha! Just calling them as I see them."
- Mike Lynch
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Interesting insight

"I wonder about this, too. I find I can live on my Social Security income alone (admittedly, it would be a spartan lifestyle), but I've reached the age of RMDs. I spend part of my RMD and save/invest the balance. At the same time, the boom you've described is growing both my investment and retirement accounts - in spite of all the bad news we're pounded with each day. One of my two kids is doing very well for himself. The other was doing fine until all the wheels fell off - job loss, divorce, kid expenses, etc. I can be a financial backstop as needed and within reason, but not forever. In your second to last paragraph you refer to Boomers not being immortal. That's all well-and-good, the end comes to us all. But I intend to keep living as well and as long as possible - so the Boomer wealth transfer will need to wait!"
- Jeff Bond
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A Sunday Thought About Money

"I am so jealous...my kids haven't had kids, so my best grandparents' years are going to waste. I thought your grandparents might enjoy this comedy from Kathleen Madigan. https://www.youtube.com/watch?v=8LeOMMqvwLI&t=8s. The grandparents' part starts at 1:45."
- Mike Lynch
Read more »

Risk Adjusted: The Family Ledger 

"This is a wonderful article, and I hope those among us who are still young enough to make a meaningful change in their lives read it and take the message to heart. As my wife and I approach our 52nd wedding anniversary next week, on the 23rd of June, I am thankful that on the occasions when I placed work and earning a higher income before my family, which was not an uncommon event, she was there to carry the load on the home front. We are comfortably retired. Our children are well-balanced, college-educated, taxpaying citizens, so I didn't miss the boat entirely, but if I had it to do over again, there would be changes. One of those changes might have been retiring a few years earlier, instead of "socking more away for retirement.""
- Mike Lynch
Read more »

He Said I Wasn’t Very Nice

"Living out in the country seems to have solved that problem. We moved into our (at the time) newly built home the week of Thanksgiving, 2018. I had my FIRST solicitor knock on our door this week. After seeing if I knew who he was (apparently an "influencer" well known on Facebook), he started his spiel. I politely cut him short and explained my "children" were in their mid-forties and had selfishly denied me any grandchildren, so I didn't need the books he was selling. I then offered him a bottle of water and wished him well."
- Mike Lynch
Read more »

Leverage

"I suspect part of the discomfort is that this wasn’t clearly an emergency, nor was it clearly discretionary. It fell into that messy middle ground where reasonable people could justify either spending cash or borrowing. The other thing that struck me is that avoiding debt and avoiding regret aren’t necessarily the same thing. You may sleep better without the loan, yet still feel a twinge as you watch the accounts slowly recover. Sometimes the financially optimal choice and the psychologically satisfying choice aren’t the same."
- Mark Gardner
Read more »

Many seniors think we paid for our Social Security benefits based on the FICA taxes we paid. Let’s dispel that myth- we didn’t

"That is correct, as I pointed out in my second post. You called it actuarial gain...I called it "interest earned and the benefits that inured to the SS Program because of people like my father, who, after working a lifetime and contributing to the SS system, died without collecting a penny of their benefits.""
- Mike Lynch
Read more »

How well off are Americans compared to the rest of the world? Fun facts.

"There is no question that merely being BORN in the United States of America makes you a privileged person, from a global financial perspective. As has been demonstrated for generations, however, what you do with that privilege determines your "success," however you define it. As for me, thank you, Lord!"
- Mike Lynch
Read more »

How financially illiterate are Americans?

"I learned from my parents who barely finished grade school but were reasonable and realistic."
- Nick Politakis
Read more »

…..taxes and you

"So true that the states need to get their money from somewhere. That said, I'll take my higher Texas property taxes any day over the nearly 10% income tax I was paying in the extremely poorly run state we left over 10 years ago. That state also has a similar sales tax to Texas on top of that. Tipping (which is generally getting out of hand everywhere) is no different based on visits back to the poorly run state. The lower annual car registration tab fee in Texas vs the poorly run state is also a bonus."
- Dunn Werking
Read more »

What Addiction Couldn’t Take: My Sister’s Story

"Thank you Catherine for such a thoughtful and compassionate comment. I was particularly struck by your observation that every human being is more than the tolls of a disorder. That was very much at the heart of why I wanted to write about Tory. I didn’t want her to be remembered for her addiction. I wanted her to be remembered for her kindness, humor, accomplishments, and the love she gave to others. I also appreciate your reflections on the financial costs that families often quietly absorb over many years. Those costs can take many forms, from direct financial support to countless small acts of kindness and assistance that arise from love and concern. As you point out, they accumulate gradually, often alongside hope that things will improve. Thank you as well for sharing your thoughts on tough love. Every family’s situation is different, and there are rarely easy answers. If there were, far fewer families would be carrying these burdens. Most of all, thank you for taking the time to reflect so deeply on Tory’s story and for bookmarking the SAMHSA number. If it helps even one person or family find support, then sharing it was worthwhile. "
- Andrew Clements
Read more »

Fixing Social Security is not that hard, here’s how

"I found https://www.fisherinvestments.com/en-us/insights/market-commentary/the-politics-and-practicalities-of-the-social-security-trust-fund useful on this topic."
- Mark Gardner
Read more »

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Get Educated

Manifesto

NO. 33: WE HAVE two great financial advantages: time and our income-earning ability. To grow wealthy, we should take a slice of each month’s earnings—and invest it for as much time as possible.

Truths

NO. 76: TAX DEFERRAL lets you use dollars that’ll eventually go to Uncle Sam to earn extra gains for yourself. An example: If you invested $1,000 at 6% a year and paid 22% in taxes every year, you would have $3,944 after 30 years. But if you put off the 22% tax bill for 30 years by funding a tax-deferred retirement account, you’d end up with $4,700, or 19% more.

humans

NO. 75: WE'RE HAPPIER when we count our blessings. All of us have reasons to be happy—we just need to keep those things in mind. If we spend a few minutes pondering our friends and family, the lovely things we own and the great experiences we’ve had, we can squeeze more happiness out of our past spending and get more joy out of each day.

think

SKEWNESS. The most a stock can lose is 100%, but its potential gain is unlimited. Every year, a minority of stocks with huge returns skew the market higher, so most stocks end up trailing the averages. The irony: The big winners make beating the market seem easy—and yet betting on a handful of stocks will likely result in market-lagging performance.

Article archive

Manifesto

NO. 33: WE HAVE two great financial advantages: time and our income-earning ability. To grow wealthy, we should take a slice of each month’s earnings—and invest it for as much time as possible.

Spotlight: Markets

Lessons from First Brands

SOME NEWS STORIES are unusual in ways that it’s hard to know what to make of them. Such is the case with the recent collapse of a relatively unknown company called First Brands.
On the surface, it might seem like a mundane story. First Brands is an auto parts supplier, making commodity items like brake pads and windshield wipers. The company was founded in 2013 by a fellow named Patrick James, who built it up over the years by acquiring several other,

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Sell America

OVER THE PAST YEAR, a new term has entered the lexicon: “Sell America.” The idea is that investors are losing confidence in the U.S. economy due to persistent deficits and concerns about other policy choices. Owing to these fears, some investors are pulling money out of U.S. stocks and reallocating to international markets. Others are opting for gold and silver. The result: In 2025, for the first time in a long time, international stocks demonstrably outpaced domestic equities,

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Trump Account

TRUMP ACCOUNT WAS created as part of the OBBBA signed on July 4, 2025. I’ve been getting a lot of messages about it, because there is a lot of conflicting information. The IRS has also posted some instructions for the account.
My goal with this post is to walk through the rules and give my take on when (if ever), this account makes sense.
Timing & Creation
First and foremost, no contributions are allowed in this savings account for children until 12 months after the law’s enactment,

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Asset Location Decisions

WHERE YOU PUT your investments can make a huge difference for your after-tax wealth. 
As you know, we have 3 main investment accounts:

Taxable account. A traditional brokerage account where you are taxed every time you dividends or sell investments at a gain.
Tax deferred account. Traditional 401(k), 403(b), and traditional IRAs allow taxes to be deferred to the future. You pay taxes when your investments are withdrawn, and generally come with an immediate tax deduction.

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Decision Frameworks

IN THE SUMMER of 1966, author John McPhee spent two weeks lying on a picnic table in his backyard. Why?
McPhee was suffering from writer’s block. As he described it, “I had assembled enough material to fill a silo, and now I had no idea what to do with it.”
Investors find themselves in a similar situation today. There’s no shortage of financial information around us. But that doesn’t make it easier to know what to do with it. 

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2026 Financial Plan

LOOKING TO UPDATE your financial plan for 2026? Below are ten strategies you might consider:
Gaining control
January is a good time to audit your investments. I’d start with this very basic step: If you have accounts at multiple brokerage firms, see if you can consolidate them. This won’t necessarily lead to better investment results, but if you have fewer accounts, it’ll be easier to monitor and to manage them. This might not seem like an important exercise,

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Spotlight: Connor

Running the Numbers

THE HOLIDAY SEASON is upon us. Our thoughts—or mine at least—turn to family, friends, wine, decorations, gifts, wine, food, fun and wine. But before I ring in the new year, I have a few financial questions I need to resolve. Our 2022 income hasn’t been what I expected. I earn consulting income in two ways. I’m a part-time employee of a small engineering consulting firm. In this role, I’m an hourly employee with no benefits. I get a paycheck with federal, state and Social Security payroll taxes withheld. At the end of the year, I receive a W-2 tax form from my employer. This year, the work I expected hasn’t materialized and, to date, I’ve earned just $850. I also own a small business—a sole proprietor LLC. I use this for direct consulting to several small businesses. I invoice customers and receive a check based on an hourly rate and how much time I put in. At the end of the year, I’m sent a 1099-NEC form by the companies I’ve worked for. The primary project I expected to support this year seems to have been delayed until 2023, so I’ve earned a mere $280. As you can see, it hasn’t been a lucrative year for my consulting. That’s okay. We don’t count on me collecting a specific amount of earned income. Anything I make is nice, but it isn’t necessary. The previous two years were better, but not greatly so. The pandemic limited both my consulting opportunities and my willingness to travel. To handle the variations in the income collected by my wife and me, I developed a spreadsheet that tracks our income, tax withholding and expected tax bills. I update it as things change. I found this necessary because, as a business owner, I’m required to pay quarterly…
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Hierarchy of Savings

EARLY IN MY CAREER, one of my mentors at work used to talk about “excess paychecks.” He was a single, senior engineer who lived frugally. Back then, the concept seemed ridiculous to me. But I’ve come to realize he was right: Most of us don’t need every dollar we’re paid for living expenses, so we should think carefully about where to stash the excess. That notion came to mind recently when taking to a friend. She’s five years from retirement, concerned about today’s high stock market valuations and wondering if maxing out her 401(k) is her best choice. Would it be smarter, she wondered, to use her extra money to pay down consumer debt, pay ahead on her mortgage or make some home improvements? Here’s my take on the “hierarchy of savings”: Emergency fund. I would make this a top priority. An annual Federal Reserve survey has found that 37% of U.S. families can’t handle an unexpected $400 expense. The pandemic’s economic fallout has highlighted how perilous that can be. My advice: Depending on how secure your job is, set aside between three and six months of living expenses in conservative investments as an emergency reserve. High-interest debt. After you’ve established an emergency fund, it’s time to attack high-cost debt. For most of us, that means credit card balances. Even in today’s low-rate environment, credit cards charge an average 16%, according to Bankrate. Paying down high-interest debt is smart financially, plus it provides a great psychic win. Employer retirement plans. There’s a host of tax-favored employment-based retirement plans, including for self-employed individuals. The standard financial guidance is to invest at least enough to capture any matching employer contribution. I recommend to my sons that they start with a minimum 10% of their income. Health savings accounts. As I’ve written before,…
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Showing Up

MY WIFE AND I recently re-watched a video made by one of our nephews. In the video, he interviewed his grandparents—my wife’s parents—about their lives. He wanted to understand what they’d done or taught that built such strong family bonds that lasted over such a long time. My wife is one of five children: three boys and two girls. Each of her four siblings is married with at least two children—11 kids in total. Eight of those 11 are married and have, so far, produced 12 grandchildren. Not an enormous family, but a family event usually consists of at least 40 attendees. Far from perfect, the family represents the broad spectrum of humanity. But there are some obvious similarities. First, I’d say everyone possesses a strong work ethic. All work or—in the case of those who have retired—once worked. This they surely got from their parents. My father-in-law drove a truck for almost 50 years, regularly logging 60-plus hours a week. My mother-in-law was a nurse. When the youngest child was old enough to be on his own, and with college costs looming, she went back to work. She handled the midnight shift as a nursing supervisor at a major Philadelphia hospital. She had an amazing ability to work from 11 p.m. to 7 a.m., come home, sleep four hours, and then get up and run the household. All of their five children share a reasonable approach to money. No one lives a flashy, wasteful life. Their parents somehow owned a home, raised, fed and educated five children, and saved for retirement. They lived well within their means, didn’t spend wastefully, and saved regularly. This allowed them a comfortable retirement. The strongest and most important trait they share is devotion to family. They had lots of aunts, uncles and cousins…
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Rates Up Lumps Down

WE HAVE ALL BEEN affected by rising interest rates in 2022, from skyrocketing mortgage rates to plunging bond prices. A less-publicized casualty: Higher interest rates are having a big effect on those approaching retirement who are eligible for a pension. How so? Many pension plans offer a choice between a lifetime stream of monthly income and a onetime lump sum payment. Rising rates could reduce the lump sum payment that many employees would receive next year by 25% or 30%. My former employer’s pension plan offers a good example. It’s a final average pay plan that provides a lifetime monthly annuity payment at retirement, typically defined as age 65. The monthly income amount is based on three factors: an employee’s years of service, an accrual factor usually expressed as a percentage of annual pay and the employee’s average salary over his or her final three years of employment. In 2014, my company added a lump sum option to the pension plan. An employee could elect to get a large, onetime payment instead of a monthly annuity. We were told the plan would follow the IRS section 417e method and use the minimum interest rates. It turns out the calculation uses the time value of money. Specifically, the lump sum can be thought of as the amount you’d need to invest today, at a specified interest rate, to generate a stream of payments equal to or greater than the monthly annuity. The calculation uses an employee’s age to model his or her expected longevity. The critical factor, however, is the chosen interest rate. The higher the interest rate, the smaller the lump sum. This makes intuitive sense. If you can earn a higher rate of return on your money, you need less of an investment to generate a stream of payments equal to…
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Pay as You Leave

MY BROTHER AND sister-in-law are approaching retirement age and will likely relocate so they can be nearer their children. The last time they sold a house, it took more than a year to find a buyer. But they’ve spent time and money fixing up their current home, and it’d likely sell quickly, especially in today’s hot real estate market. Their thought: Why not sell now, and then rent for a few years until they retire and move? That possibility raised a key question: Would the sale of their home be taxable? It’s an issue that confuses many. The Taxpayer Relief Act of 1997 created a permanent capital-gains exclusion for those selling their main home. Today, the tax code provides a $250,000 exclusion on the sale of a primary residence for tax filers who are single and a $500,000 exclusion for those married filing jointly. IRS Publication 523 provides detailed explanations and instructions—and it does a good job of making the topic understandable. Want to know more? Here’s a look at four key questions: 1. Are you eligible? To qualify for the exclusion, you must pass an ownership test, a residency (or use) test and a look back test. The quick answer: To be eligible, you must have owned and used your home as your main residence for a period totaling at least two years out of the five years prior to the date of sale. In addition, there’s a look back test, meaning you can’t have used the exclusion in the last two years. There are some exceptions to the eligibility test for divorce, death and military or government service. Under certain circumstances, you may be eligible for a partial exclusion. These circumstances include a work-related move, a health-related move or unforeseeable circumstances. 2. Do you have a gain? To determine…
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Making Your Claim

THE SOCIAL SECURITY claiming decision is one of the most complex—and contentious—choices that retirees have to make. I was reminded of that in December, while at a Christmas party. Two former colleagues were discussing their Social Security decision. Both are male, single, childless, retired engineers. Each has a traditional pension, a paid-off home and significant retirement savings. Ted is age 77. Fred is 66. Ted took his Social Security at 62. His reason was longevity or, rather, the lack thereof. He had been a smoker for many years. He calculated his breakeven age as 77, at which point he would get back as much as he’d paid into the system. He decided to collect a lower benefit as early as allowed and then invest the money. Ted lives frugally, and will leave a handsome legacy to his nieces and nephews. Fred is waiting until age 70 to collect. He’s in generally good health, and family history suggests he could live a long life. Although retired, he does some consulting for his former employer. It provides mental stimulation, while covering the extras—travel, electronics, cigars, wine—in his budget. If you're younger than your full Social Security retirement age, which is 66 or 67, depending on the year you were born, Social Security has rules limiting how much you can receive if you're also earning an income. Since Fred hasn’t yet reached his full retirement age, his benefit would be reduced if he claimed early. That was another reason he decided to wait. In short, here we have two retirees in fairly similar situations who made entirely different choices based on their circumstances. Still, unlike many retirees, they’re fortunate: Both have the financial wherewithal to make taking Social Security an option, not a necessity. Many retirees have no choice but to start Social Security as soon…
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