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Catherine retired from the University of San Francisco, where she served as associate dean in the School of Management. As an associate professor her research and teaching focused on energy, public policy, public finance and government technology. She also spent over a decade in government jobs with the city and a public utility, and another decade in private sector IT. In retirement she serves on the Sacramento Independent Redistricting Commission, which created district maps to reflect population changes related to the 2020 US Census. Her retirement hobbies include investing, gardening, and home repair.
4% every year? even this one?
35 replies
AUTHOR: Catherine on 4/9/2025
FIRST: Mike Xavier on 4/9 | RECENT: Jack McHugh on 4/19
I’M A HOUSEHOLD of one—in theory. True, one adult child lives rent-free in our family home in California. Her first full-time job’s wages are too low for her to afford an apartment in our expensive urban area.
I’m also paying college expenses for another daughter living on campus 80 miles away. She’s working part-time and will graduate this coming spring semester. With a STEM (science, technology, engineering and math) degree, I hope she’ll find gainful full-time employment soon after.
DRIVING CROSSTOWN, my brother and I stopped at an onramp, where a man held a cardboard sign.
“Does anyone give these people money?” my brother asked, then immediately answered his own question by mentioning a friend who hands out bottles of water instead. “Anything helps,” read the man’s sign.
“Sure,” I said. “I’ve seen people pass $5 bills out the window.” A single dollar used to be enough for a panhandler to end his shift and shuffle off to the nearest mini-market.
STOCKS, BONDS, CASH—and a house owned free and clear. For many, that’s the recipe for a financially successful retirement. Our homes represent a central pillar of middle-class status. With a paid-off mortgage, we have an affordable place to spend our old age.
Yet signing up for decades of house payments has become controversial for its high opportunity cost—what you give up to pay the mortgage. Has a home mortgage, with its long, slow road to payoff,
SIPPING MORNING coffee on the porch of my 40-year-old aluminum box in the Sonoran Desert, I’m pondering the cost of housing.
My affordable unit sits on cement piers at the end of a street within an age-restricted park, at the sparsely populated edge of Tucson. Few jobs exist nearby. Civic amenities are modest. Summer weather is challenging, with heat, thunderstorms and seasonal rattlesnakes. Still, these conditions have created a financially comfortable place for a retiree to live.
IN JANUARY, I surrendered to passionate irrationality, buying a park unit in Arizona that has become my second home.
Now I understand why, at least in the movie cliché, a man might buy house slippers for his long-suffering wife’s birthday, while giving flashy, expensive baubles to his girlfriend for no reason at all.
My single-wide “girlfriend” is tiny and fragile, the bloom off her youth. Things that improve her are easily obtained. A phone call to a friendly fellow at a store,
WHEN I ASKED MY brother what to bring to my newly purchased winter home in Tucson, his response was succinct: “Money. Lots. And extra credit cards.”
The voice of experience, he bought a so-called park unit five years ago before home prices soared, up 47% since early 2020 . My expenses in buying my place—and making it into what I wanted—had me selling beaten-down shares in a total bond fund to refill my cash accounts.
I’M TYPICALLY FRUGAL and financially cautious. But this past January, I became reckless. No, it wasn’t love, at least not the ordinary kind. Rather, I saw a photograph and made an offer of $48,000 on a “park unit” located 1,000 miles from home.
Park unit, I learned, is a technical term for a variant of what I’d call a mobile home. My first task was to look up the term, so I’d know what I was offering to buy.
CAN IT REALLY BE TWO years since I wrote about sending my twins off to college? One is a chemistry major, midway through her junior year. Meanwhile, for her twin sister, the artist, there have been big changes in her college trajectory.
My initial criteria for college selections included published statistics on cost, likelihood of admission, timely graduation and low rates of loan default. I took this last stat as a reasonable proxy for post-college success.
ASSET ALLOCATION is usually a set-it-and-forget-it exercise. At least, that’s how I’ve handled it until now. I decided on my appetite for risk, then set my stock-bond ratio accordingly.
I tallied everything once or twice a year, and then rebalanced. I’d apply a portion of my winning positions to my less successful asset classes. Rebalancing this way forced me to buy low and sell high. Combined with dollar-cost averaging, it’s an investing approach that’s served me well for more than 20 years.
FINANCIAL FIRMS spend heavily on marketing to create a friendly, customer-first impression. But these firms aren’t your friends, at least not in the ordinary sense of the word. They make their money, fairly and legally, by providing specific services to customers.
Friendliness at a retail level keeps your capital in place, where it works for the firm’s benefit. Every once in a while, I see language that clearly expresses what they want from our “relationship.” These communications help me review where I do business,
IT’S BEEN A MONTH since I dropped off my twins at college, one east, one west. Each has a debit card for an account with the credit union here in our hometown. One has downloaded the credit union’s mobile app. Both are already developing their own ideas and strategies for managing college life on a shoestring budget.
I got them their debit cards some time ago. I also opened a teen account for their brother,
MY TWINS ARE OFF to college. They’re on different paths. One is attending an institution less than 100 miles from home, while the other will be on the far side of the continent. One has a full-ride package of financial aid from her chosen college. The other isn’t getting as much.
Every morning this past week, I’ve intended to pay the first semester for the twin who didn’t get a full ride. I have the cash.
AS MY TWINS DEPART for college, they leave behind a home base where they find food in the refrigerator, get new clothes and shoes when needed, have bills paid and extra-curriculars funded, and receive a small weekly allowance to save or spend.
Now, they’re headed far from familiar security. They gain instead independence and the opportunity to explore other ways of living and spending, all part of their higher education. Cold cereal for supper?
MY TWIN DAUGHTERS just finished sorting through college offers and making their decision ahead of the May 1 acceptance deadline. With nearly 3,000 four-year colleges to choose from, how did they decide?
It wasn’t easy. The pandemic didn’t just close our local public schools. It also ended visits from universities and limited school-based college counseling. Counselors compensated with lunchtime workshops, links to webinars, and lots of robocalls and emails urging students to fill out and submit the Free Application for Federal Student Aid (FAFSA).
MY FIRST JOB AFTER college was at a global engineering firm. A roommate also worked there. It was a tedious office job, but my bosses thought I had potential and encouraged me to study engineering, which I didn’t.
Instead, I quit and went to graduate school to study linguistics, a field where I observed the most professors having the most fun. My last paycheck at the engineering firm included an extra sum. It was a refund for a retirement account that had failed to vest because I hadn’t stayed long enough.
A LIFE OF FRUGALITY might mean your children graduate college debt-free, which is a major accomplishment. But what about your happy-go-lucky neighbors, who spent every dime they earned and never saved for college?
At issue here is the Free Application for Federal Student Aid (FAFSA), which is the basis for the all-important expected family contribution (EFC). The whole thing can seem like one big crapshoot, as I can now attest.
The EFC may determine that your spendthrift neighbors’ kids also get to graduate debt-free.
MY TWINS ARE SENIORS in high school. That means, pandemic or no pandemic, we spent the fall applying to colleges.
Here in California, the pandemic closed public schools in March and most did not reopen for in-person teaching with the start of the current academic year. That forced parents to stand in for college counselors. The preparations high school juniors usually engage in, such as visiting colleges and taking standardized tests, didn’t occur this past spring or summer.
LIKE OTHERS, I TOOK my first part-time job as a teenager and, once working fulltime, stayed at it steadily for decades. Being an adult meant being a worker, affiliated with some firm or another, one industry or another.
My plans for ever exiting the labor force were vague: “Save for the future, so someday you will retire with honor and dignity to spend your waning days as you desire.” I saved steadily,
AS MY PERSONAL and financial life gradually became more orderly in the months after my husband’s death, I found myself wrestling with one particular investment: My late husband had spent the bulk of his working life with Union Pacific and, like longtime employees at so many companies, he’d accumulated a significant number of shares. What should I do with those shares?
My husband and I occasionally discussed the dangers of overweighting company stock—something that often happens when shares are used for the employer’s 401(k) matching contribution or they’re granted as part of incentive pay packages.
FOLLOWING MY husband’s death, I went from feeling prosperous to precarious in the space of a few short months. For decades, I’d had something extra in hand, beyond the minimum sum necessary to keep going. That sense of prosperity was now gone.
This wasn’t just my imagination. Studies have found that widows are significantly less wealthy than their married counterparts. One academic article notes, “The death of a spouse is an event that may precipitate a large decline in wealth.” Similarly,
I LIKE TO THINK my husband and I were savvy and careful when planning our estate. Yet anybody can make an occasional dumb mistake. That brings me to my next surprise in settling my husband’s affairs—and it came with an unfortunate legal bill.
As a couple, we’d established a revocable living trust at a young age, when death was a strictly theoretical idea. The trust eliminated the need for our estate to go through probate,
SAVING FOR THE FUTURE entails a pinch in the present. Every so often, it makes sense to reconsider how much we save—and whether it’s time to take a break from saving. As a recent early retiree, I was pondering this, even before the latest stock market disruption.
Unfortunately, none of us has a reliable crystal ball that tells us when to buy low or sell high. We also don’t have complete knowledge of our future self.
DESPITE MY independent nature, I called family and friends after my injury. I thanked them for what they’d already done following my husband’s death—and requested additional, more intensive support.
One aunt, a government employee, arranged to work for a week at a nearby federal building. My sister-in-law also came for a week, and a cousin who is a nurse volunteered, too. A professional colleague parked her RV in the driveway and brought along her friendly pooch.
TWO WEEKS AFTER my husband’s death, we held a memorial service for local friends and family. Days later, after a reasonable amount of online research, I visited a car dealer.
It’s my experience that bringing at least one youngster along speeds up dealmaking, plus a parent can get unvarnished opinions about life in the backseat. So I brought along my 13-year-old. The two of us test drove two used cars and bought one of them.
AFTER LEAVING THE hospital, our family met up at a favorite neighborhood restaurant.
“What’s next?” the teenagers asked.
“Now begins the parade of covered dishes,” I answered.
For the month after my husband’s death, when preparing food hardly seemed possible, friends and neighbors made sure our refrigerator and freezer bulged. The kids experienced a variety of main meals, side dishes and desserts. There was enough for us and our many helpers, and we experimented with time and labor-saving meal shortcuts.
IT STARTED INNOCENTLY. A doctor’s visit. A blood test. Results. Admit to hospital for “a couple days of observation” that instead cascaded, over six days, into my husband’s death at age 71. His death certificate states “etiology unknown.” While doctors suspected prescribed medication, we will never know just what caused his liver to fail.
Throughout, the situation had been confusing. Clarity regarding treatment options—and the likely outcome from procedures—was in short supply. He and I and doctors made medical decisions in the face of this uncertainty and without regard to costs.
Comments
Thank you, Mark, for this reminder, and for your own solution to reflect on the immense luxuries that surround us everyday. All of us in the US have an extreme amount of public luxury with which we can participate if we choose. Not a single nickel is required to visit public parks, admire public works of art, travel through neighborhoods generally safer than most of the world's, participate in open festivals or movie nights or sports leagues organized by local parks and rec departments or local nonprofits. No money is required to visit a supermarket and ponder the astounding array of breakfast cereals that relatively open markets and a bent toward capitalism has produced (and after looking at all them, I can go home and eat a simple bowl of oatmeal for my own breakfast, which even with the recent run of inflation is still not too expensive.) Is it harder for those in our nation who are disfavored, or sick? Of course. Must some navigate something of an environmental or criminal or political wasteland to get to these free things? Yes. But most still can go to a public library where they can watch and read and mostly check out much of the world's creative production of the past couple millennia. And much public money is spent each day to provide a pretty dang big social safety net. (Consider the pivot to a "community school" model in many urban areas, where many public services are provided into neighborhoods, no questions asked.) It's a complex reflection, one's wealth and poverty, absolute and relative. Related to money, opportunity, health, and other metrics. People interested might review the Supplemental Poverty Measure https://www.congress.gov/crs-product/R45031 or the Census's vocabulary of poverty page. https://www.census.gov/topics/income-poverty/poverty/about/glossary.html Beyond these intellectual rabbit holes, there's the universe of our personal experiences and many of those are shared in the comments, most particularly the value one may derive by direct experience of the rest of the world's living standards. We live in a time where many are vociferous about what they believe is wrong, what is owed whom, and what changes ought to be taken to improve matters towards achieving this or that end which its advocates believe would be better. For the most part, I doubt much of this activity is increasing personal wealth, autonomy or happiness. But I pay my taxes and make my donations in time and money, and hope for the best. All of this sits in stark contrast to the particulars of the life we have been extolling this week, our friend, mentor, teacher, advisor Jonathan Clements, who in his last year relished some travel (still reluctant to upgrade to business class) and many sunny moments in his garden with friends and family. In addition to losing Jonathan, many on HD are at an age where we periodically experience the loss of others in our circle of friends and acquaintances. Reflecting on how these people have lived their lives, we can see anew how we compare and what corrections may be warranted to make the most of the time and money that remain to us. How can we be grateful enough? Where's the moment when we've given our fair share to reduce the disparity, and have enough for ourselves? Should we even try to do so, ethically? Tracy Kidder's book on Paul Farmer, Mountains Beyond Mountains, provides Dr. Farmer's answer. But that is a rare level of mindful living.
Post: The 1% Club: Our Unnoticed Wealth
Link to comment from September 27, 2025
I wanted to be an astronaut. I still do. : )
Post: Dreams I Had
Link to comment from September 25, 2025
Thanks for floating last year's invite/meetup post back to the top, David. Sorry I'm out West but I'll join you in spirit. Maybe after your pizza you could drop by Jonathan's tree and sit near his rock with a cup of coffee, and listen to the birds. In memoriam. I imagine a second rock is warranted, inscribed with Allen Roth's words (thanks to William Perry for posting them this week): guide teacher friend inspiration
Post: Pizza, Anyone?
Link to comment from September 25, 2025
We are few but mighty, Kristine. Your contributions to HD are relevant and inspiring. You illustrate the many ways a person with a typical income (that's most people) can create a rewarding life and save enough for a comfortable retirement too. A path we all aspire to follow. Keep those posts coming.
Post: Thank you, Jonathan
Link to comment from September 25, 2025
At my fingertips (via my phone's email app) reside six years of email exchanges with Jonathan (alas, we never met in person). These began in the fall of 2019, eight months after my spouse died unexpectedly, leaving me with three children and physical malady following a freak accident. During those eight months I struggled mightily to organize my family's finances before retiring years earlier than anticipated, of necessity more than desire. I'd found HD in those eight months, delighted that Jonathan had started the site, as I'd been a longtime reader of his Getting Going column in my WSJ subscription era. I wrote Jonathan to offer a submission about finances in the days, weeks, and months immediately following the death of one's spouse, which at that time I considered my sole financial expertise (era of mistakes, that is, lessons learned). In our opening exchanges, we traded perspectives on different financial planning strategies based on median life span, one's remaining years per IRS life expectancy tables, or the financial services industry standard of a 30-year retirement (go ahead, plan to live to 95). Also the inevitability of darn bad luck, at least for some. We became pen pals of a sort, and I went on to contribute 26 HD pieces according to his count. I feel further humbled to be among my respected peers here who wrote chapters for his edited book, My Money Journey. Jonathan lived and wrote openly about life and money here on HD. His successes. His challenges. His early house that he didn't like but lived in anyway for way too long because it was cheap (at least that's how I remember the story.) How he got over that housing frugality in his beautiful Philadelphia row house (great photos he shared of the kitchen remodel.) His love for Elaine (and I for one was excited to see him get past the 9-month-married marker he so wanted to reach, and indeed he went on quite a ways beyond that), his love and care for his kids and how he prepared holistically for this week's end, to ease this time for his family as best he could. Jonathan invited, cajoled, insisted on us being equally open and frank about our life and money stories, as crucial to the success of HD. Because of that, I feel a sense of camaraderie and community here. I thank Jonathan, and all of you, for creating and maintaining Jonathan's Guide and the many good reminders found throughout the site that lead to a financially healthy and stable future for ourselves, our families, and our communities.
Post: Thank you, Jonathan
Link to comment from September 25, 2025
Can't believe the coincidental timing, so soon after reading your post, but last night our living room TV made a big popping sound and died. Did an internet search and it's likely a capacitor failure. In days of yore, we might have been able to pull the board, go to the parts store, buy a new one, fix it ourselves and possibly get a thousand more hours of television life. However, it's been at least a decade since our neighborhood TV service guy retired and though there's a couple shops in the larger metro area, it doesn't seem likely this 14-year-old plasma television is reparable. Your tale hits home. We had originally purchased what seemed to be a gigantic 50" television so my spouse wouldn't sit right in front of the TV to better watch football and baseball games. But now 50" is nearer the "small" end of the television spectrum. Plus, a generation of technological improvements result in a brighter, clearer picture, at a fraction of the cost of a decade ago. Still, the best quality picture and sound don't come cheap. For now I'm watching TV on the smaller18-year-old LCD in the kitchen, but I'm looking at those pretty screens at the front of Costco like I haven't in years...
Post: What They Don’t Tell You About Retirement: Part 1 – Everything Breaks
Link to comment from September 7, 2025
My house has a 30-year-old furnace and it's not given me trouble. Last year I called the company that replaced my neighbor's furnace anyway. After measuring the space and talking about what they'd likely replace it with, we agreed the most cost-effective strategy is letting the old gal just keep going, at least one more season. The same for my AC though the outdoor condenser seems more likely to give up the ghost before much longer. These major systems have lasted so long because honestly the climate is milder here. Plus this equipment lacks bells, whistles, and computer circuits. Meanwhile the "routine" repainting of the house has turned into a more intense project, and work on the in-ground pool (already here when we bought the place) is causing a cascade of effects since city code on overhead lines has changed since the pool was originally constructed an estimated half century (or earlier) ago... Similar problems with work on the 95-year-old garage, big bucks required. I budget 2% of current value of my house for maintenance every year, sufficient though expenses are lumpy. One year might be only 0.5%, the next 5%.
Post: What They Don’t Tell You About Retirement: Part 1 – Everything Breaks
Link to comment from September 5, 2025
Thank you, Adam, for this column, timely and appreciated. I haven't got Bengen's new book (yet) but have read numerous reviews/opinions, and listened to podcasts about the book and its conclusions, including interviews with Bengen. Beyond widening the band of reasonable stock allocation to a range from 45% to 75% (thank you!) his model includes international, small cap, micro cap, T bills... am I missing something? that's right, mid-cap. Of course there's more asset class details than in 1994, we have better access to more granular information and computer power for analysis and portfolio building. This suggest some value to individuals considering something other than a basic 50/50 or 60/40 total stock/total bonds index portfolio. And it's resulted in a new estimated safe withdrawal rate of 4.7%. When I review my own efforts at investing over nearly a half century, I see many (thankfully small) deviations from my earliest "random walker" style. These haven't been because of emotion or plain foolishness so much as working with people and institutions. Maybe you remember the very limited choices available in your first, 1980's 401k plan? (Un)fortunately, now that I'm retired, I can do lots more reading and talking and listening. Not convinced at all that it helps my portfolio, other than the constant reminders to keep my hands off.
Post: Risky Business
Link to comment from August 30, 2025
Dear Jonathan, It's likely beyond your wildest imagination how many people wide and far keep you in their hearts and thoughts, wishing you and your family love and comfort at this difficult juncture. I remain grateful for the gift of your financial advice over decades. Like others, I now find myself and my family financially secure in no small measure due to your repeated sound advice. I have been successful enough to help my own kids start Roth-IRAs. I'll be sending a similar sized charitable contribution to the Jonathan Clements Getting Going on Savings Initiative which you've envisioned to extend your impact to young adults whose parents have less of a chance to get their kids going financially. That this fund exists at all is a reflection of your "humble" nature. https://boglecenter.net/gettinggoing/
Post: Risky Business
Link to comment from August 30, 2025
Congrats on getting rid of the Electrolux (did you buy a new vacuum?) Decluttering and downsizing are something of down tasks. It helps to acknowledge that you can hardly give away this stuff. Still, it's nice to have a fresh and less cluttered home. In our town every household is allowed two pickups a year of "household waste". That removes a sizable 9x4x4 foot pile of unwanted material twice a year. It's picked up by our sanitation department. With luck, any neighbor can rebuild their pile at least once if whoever happens to drive by thinks it's "good" junk. Attending a few estate sales and open houses can confirm our human nature to keep things too long and what is expected by the next inhabitants of our space. I'm inspired by your post. I'll go into the shed and get rid of sprinkler parts for a system that barely works and I'm no longer interested in maintaining. Good enough to donate? Doubtful!
Post: On the Downslope of Life?
Link to comment from August 30, 2025